The Company's Board of Directors approved the repurchase of up to 20 million shares of common stock. The share repurchases will be made at the discretion of the Company following the close of the United Financial Bancorp acquisition. The Board of Directors also declared a $0.1775 per common share quarterly dividend payable August 15, 2019 to shareholders of record on August 1, 2019. Based on the closing stock price on July 17, 2019, the dividend yield on People's United Financial common stock is 4.4 percent.
People's United Bank, N.A. is a subsidiary of People's United Financial, Inc., a diversified, community-focused financial services company headquartered in the Northeast with more than $51 billion in assets. Founded in 1842, People’s United Bank offers commercial and retail banking through a network of over 400 retail locations in Connecticut, New York, Massachusetts, Vermont, New Hampshire and Maine, as well as wealth management and insurance solutions. The company also provides specialized commercial services to customers nationwide.
2Q 2019 Financial Highlights
- Net income totaled $133.2 million, or $0.33 per common share.
- Net income available to common shareholders totaled $129.7 million.
- Operating earnings totaled $134.8 million, or $0.34 per common share (see page 16 of the Financial Schedule).
- Net interest income totaled $348.1 million in 2Q19 compared to $332.8 million in 1Q19.
- Net interest margin decreased eight basis points from 1Q19 to 3.12% reflecting:
- Higher yields on the loan portfolio (increase of six basis points).
- One additional calendar day in 2Q19 (increase of two basis points).
- Higher rates on deposits and borrowings (decrease of 15 basis points).
- Lower yields on the securities portfolio (decrease of one basis point).
- Provision for loan losses totaled $7.6 million.
- Net loan charge-offs totaled $4.5 million.
- Net loan charge-off ratio of 0.05% in 2Q19.
- Non-interest income totaled $106.3 million in 2Q19 compared to $94.6 million in 1Q19.
- Customer interest rate swap income increased $4.6 million.
- Commercial banking lending fees increased $2.4 million.
- Bank service charges increased $1.2 million.
- Insurance revenue decreased $1.8 million.
- At June 30, 2019, assets under discretionary management totaled $9.3 billion.
- Non-interest expense totaled $278.4 million in 2Q19 compared to $277.2 million in 1Q19.
- Operating non-interest expense totaled $271.9 million in 2Q19 (see page 16 of the Financial Schedule).
- Compensation and benefits expense, excluding $1.5 million of merger-related expenses in both 2Q19 and 1Q 19, increased $5.9 million, primarily reflecting additional personnel costs resulting from the BSB Bancorp acquisition, partially offset by lower payroll and benefit-related costs in 2Q19.
- Professional and outside services expense, excluding $4.7 million and $1.2 million of merger-related expenses in 2Q19 and 1Q19, respectively, increased $1.4 million.
- Intangible amortization expense increased $1.3 million.
- Other non-interest expense includes merger-related expenses of $0.2 million and $11.9 million in 2Q19 and 1Q19, respectively.
- The efficiency ratio was 55.8% for 2Q19 compared to 57.3% for 1Q19 and 58.4% for 2Q18 (see page 16 of the Financial Schedule).
- The effective income tax rate was 20.9% for 2Q19 and 20.8% for the first six months of 2019, compared to 18.8% for the full-year of 2018.
- The rate in 2018 reflects a $9.2 million benefit recognized in connection with tax reform.
- Commercial loans totaled $27.0 billion at June 30, 2019, an increase of $1.6 billion from
March 31, 2019.
- Organic growth of $620 million.
- The mortgage warehouse portfolio increased $340 million.
- The equipment financing portfolio increased $145 million.
- The New York multifamily portfolio decreased $59 million.
- Average commercial loans totaled $26.5 billion in 2Q19, an increase of $1.6 billion from 1Q19.
- The average mortgage warehouse portfolio increased $320 million.
- The average equipment financing portfolio increased $153 million.
- The average New York multifamily portfolio decreased $44 million.
- Commercial deposits totaled $15.1 billion at June 30, 2019 compared to $13.5 billion at March 31, 2019.
- Increase reflects, in part, a $500 million short-term deposit.
- The ratio of originated non-performing commercial loans to originated commercial loans was 0.48% at June 30, 2019 compared to 0.45% at March 31, 2019.
- Non-performing commercial assets, excluding acquired non-performing loans, totaled $117.6 million at June 30, 2019 compared to $111.1 million at March 31, 2019.
- For the originated commercial loan portfolio, the allowance for loan losses as a percentage of loans was 0.91% at both June 30, 2019 and March 31, 2019.
- The originated commercial allowance for loan losses represented 190% of originated non-performing commercial loans at June 30, 2019 compared to 202% at March 31, 2019.
- Residential mortgage loans totaled $9.5 billion at June 30, 2019, an increase of $1.4 billion from March 31, 2019.
- Average residential mortgage loans totaled $9.7 billion in 2Q19, an increase of $1.5 billion from 1Q19.
- Home equity loans totaled $2.0 billion at June 30, 2019, an increase of $114 million from March 31, 2019.
- Average home equity loans totaled $2.0 billion in 2Q19, an increase of $105 million from 1Q19.
- Retail deposits totaled $24.4 billion at June 30, 2019 compared to $23.4 billion at March 31, 2019.
- The ratio of originated non-performing residential mortgage loans to originated residential mortgage loans was 0.57% at June 30, 2019 compared to 0.52% at March 31, 2019.
- The ratio of originated non-performing home equity loans to originated home equity loans was 0.86% at June 30, 2019 compared to 0.81% at March 31, 2019.
On July 18, 2019, at 5 p.m., Eastern Time, People's United Financial will host a conference call to discuss this earnings announcement. The call may be heard through www.peoples.com by selecting "Investor Relations" in the "About Us" section on the home page, and then selecting "Conference Calls" in the "News and Events" section. Additional materials relating to the call may also be accessed at People's United Bank's web site. The call will be archived on the web site and available for approximately 90 days.
Certain statements contained in this release are forward-looking in nature. These include all statements about People's United Financial's plans, objectives, expectations and other statements that are not historical facts, and usually use words such as "expect," "anticipate," "believe," "should" and similar expressions. Such statements represent management's current beliefs, based upon information available at the time the statements are made, with regard to the matters addressed. All forward-looking statements are subject to risks and uncertainties that could cause People's United Financial's actual results or financial condition to differ materially from those expressed in or implied by such statements. Factors of particular importance to People’s United Financial include, but are not limited to: (1) changes in general, international, national or regional economic conditions; (2) changes in interest rates; (3) changes in loan default and charge-off rates; (4) changes in deposit levels; (5) changes in levels of income and expense in non-interest income and expense related activities; (6) changes in accounting and regulatory guidance applicable to banks; (7) price levels and conditions in the public securities markets generally; (8) competition and its effect on pricing, spending, third-party relationships and revenues; (9) the successful integration of acquisitions; and (10) changes in regulation resulting from or relating to financial reform legislation. People's United Financial does not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.