People's United Financial — Investor Presentation (November 2020)
44 slides from People's United Financial's investor presentation, Nov 10, 2020
Slide 1: A Premium Brand Investor Presentation
A Premium Brand Investor Presentation November 2020 Exhibit 99.1
Slide 2: Forward-Looking Statement
Forward-Looking Statement Certain statements contained in this presentation are forward-looking in nature. These include all statements about People's United Financial, Inc. (“People’s United”) plans, objectives, expectations and other statements that are not historical facts, and usually use words
Slide 3: A Premium Brand
A Premium Brand Leading market position in one of the best commercial banking markets in the U.S. Exceptional risk management & asset quality Customer centric approach to banking Diversified portfolio of products & services Enhanced digital capabilities Relationship profitability focus Consistent ca
Slide 4: Corporate Overview
Founded in 1842, People’s United is a diversified, community-focused financial services company with leading positions across the large and attractive banking markets of the northeastern U.S. Expertise in Consumer, Business, Commercial Banking, and Wealth Management Assets Loans Deposits Branches Ma
Slide 5: Seasoned Leadership Team
Seasoned Leadership Team Collectively over 300 years of banking experience Jack Barnes Chairman & Chief Executive Officer 30+ People’s United Bank (SEVP, CAO), Chittenden, FDIC Kristy Berner EVP, General Counsel & Corporate Secretary 10+ People’s United Bank, Key Bank, First Niagara, Hodgson Russ, L
Slide 6: People's United Expansion (Acquisitions: 2010 – Present)
c People’s United Expansion (Acquisitions: 2010 – Present) Balancing organic growth with thoughtful M&A Financial Federal New York, NY (Equipment Finance) 2010 Smithtown, NY 2010 North Andover, MA 2010 2010 Lowell, MA 2011 Danvers, MA 2012 -- 57 Branches -- New York City Metro Area New York, NY (Wea
Slide 7: Long History of Relationship Management
Long-term relationships with customers; average tenure of our top 25 relationships is over 17 years Local decision making; customers relationships are with local management Single point of contact with customers; break down silos to present a full range of solutions comparable to that of larger bank
Slide 8: Diversified Loan Portfolio
c Diversified Loan Portfolio CAGR: 10% Commercial Real Estate $13.7 / 30% Equipment Financing $4.9 / 11% Residential Mortgage $9.1 / 20% Commercial & Industrial $15.3 / 34% Home Equity & Other Consumer $2.2 / 5% Successful geographic expansion, organic growth, thoughtful acquisitions, investment in
Slide 9: Diversified Loan Portfolio by Segment
c Home Equity Loans 9% Other 5% Packaging 2% Manufacturing 8% Wholesale Trade 5% Hospitality & Entertainment 7% Health Services 5% Other 7% Transportation/ Utility 3% (At September 30, 2020, end of period balances) Residential (Multi-Family) 32% Retail 27% Office Buildings 18% Other 6% Health Care 4
Slide 10: Diversified Loan Portfolio by Geography
c Leveraging investments in New York Metro and Greater Boston, while also strengthening multi-product relationships across heritage markets and expanding national businesses Diversified Loan Portfolio by Geography $26.6 $29.7 $32.6 $28.4 $35.2 $43.6 $45.2 1Northern New England includes Maine, New Ha
Slide 11: Sustained Exceptional Asset Quality
c 0.16% PBCT Median, excluding PBCT = 0.57% Source: SNL Financial Sustained Exceptional Asset Quality Remain focused on maintaining exceptional asset quality, which is a result of our conservative, well-defined underwriting approach and high-quality, cycle-tested customer base Sustaining exceptional
Slide 12: High Quality Securities Portfolio
c FHLB, Federal Reserve Bank Stock & Other $0.3 / 3% High Quality Securities Portfolio ($ in billions, end of period balances at December 31, unless noted otherwise) Agency MBS comprised of 10-year, 15-year, 20-year and 30-year pass-through securities, and 5-year, 7-year and 10-year CMBS, constitute
Slide 13: Emphasizing Deposit Gathering Across the Franchise
c Emphasizing Deposit Gathering Across the Franchise CAGR: 12% Strong deposit market positions across our footprint and significant growth opportunities in New York Metro and Massachusetts ($ in billions, end of period deposit balances at December 31) Leading Deposit Market Shares2 #4 in New England
Slide 14: Focusing on Revenue Growth: Net-Interest Income
Focusing on Revenue Growth: Net-Interest Income CAGR: 8% ($ in millions) 2.98% 2.88% 3.09% Net Interest Margin 2.80% 3.12% 3.14% Nine Months Ended September 30 2019 2020 3.14% 3.05% Net interest income has benefited from organic growth and acquisitions
Slide 15: Focusing on Revenue Growth: Non-Interest Income
c Growth driven by a broad array of non-interest income generating businesses Focusing on Revenue Growth: Non-Interest Income CAGR: 5% ($ in millions) Aspire for 30% of total revenues to be derived from non-interest income Bank Service Charges: $73 / 23% Operating Lease Income: $37 / 12% Other: $49
Slide 16: Enhancing Wealth Management Business
c Enhancing Wealth Management Business CAGR: 9% Discretionary Assets Under Management ($ in billions, end of period balances at December 31, unless noted otherwise) Some of the country’s most attractive demographic markets for potential Wealth clients are within the footprint of People’s United 1 Ac
Slide 17: Deeply Ingrained Culture of Controlling Costs
c ($ in millions) Deeply Ingrained Culture of Controlling Costs Thoughtfully managing expenses and continuing to make strategic investments in digital capabilities, product and service offerings, and talent *Closed acquisitions of Suffolk Bancorp and LEAF Commercial Capital in 2017; Vend Lease and F
Slide 18: Continuing to Strengthen the Earnings Power of the Company
Continuing to Strengthen the Earnings Power of the Company CAGR: 11% Our consistent, customer-centric approach to banking combined with a broad array of products, services and technology offerings differentiates People’s United and further enhances profitability $1.04 Income Per Common Share Operati
Slide 19: Consistent Return of Capital
c One our most important objectives is having the capital strength to protect the dividend Consistent Return of Capital Our prudent management of capital has enabled us to grow the business organically and invest strategically in the franchise, while also providing a consistent cash return of capita
Slide 20: Reducing Common Dividend Payout Ratio Through Earnings Growth
Second Step Conversion April 2007 ($ in millions) The common dividend per share was not adjusted despite the share count increase from the 2007 second step conversion and led to an outsized common dividend payout ratio Reducing Common Dividend Payout Ratio Through Earnings Growth 23% 38% 48% 87% 141
Slide 21: Moving Forward
c Moving Forward Seaport District Branch – Boston, Massachusetts Penn Station Branch – Manhattan, New York Leverage investments in New York Metro and Greater Boston areas, while continuing to strengthen multi-product relationships across heritage markets and grow national businesses Build upon recen
Slide 22: Shareholder Focused Corporate Governance Structure
c Shareholder Focused Corporate Governance Structure Board of Directors with a broad array of experience, expertise and qualifications Nine of the Company’s eleven directors are independent Independent members of Board meet regularly in executive session Each member of the Audit, Compensation, and N
Slide 23: Community Partnership Matters
c Helping communities across our footprint to grow and thrive is good for our business Community Partnership Matters $3.8 Million $5.4 Million Nearly 750 Workshops $135.6 Million Over 32,000 Hours In grants awarded by People’s United Community Foundations* to over 600 nonprofit organizations In char
Slide 24: Third Quarter 2020 Results
SS Third Quarter 2020 Results
Slide 25: Third Quarter 2020 Overview
1 Net interest income on a fully taxable equivalent basis was $398.7 million, a decrease of $14.3 million or 3%. Third Quarter 2020 Overview Net Income of $144.6 Million, or $0.34 per Common Share Operating earnings: $144.7 million, or $0.34 per common share, an increase of $43.7 million or $0.10 pe
Slide 26: Allowance for Credit Losses (ACL)
Allowance for Credit Losses (ACL) 3Q 2020 ACL reflects consideration of a baseline economic forecast and a more adverse scenario, each prepared as of late September. Baseline scenario includes modest improvement in most key economic variables compared to the baseline scenario employed at the end of
Slide 27: Net Interest Income
Net Interest Income1 ($ in millions) $405.6 $391.4 1 Net interest income on a fully taxable equivalent basis for 2Q 2020 and 3Q 2020 was $413.0 million and $398.7 million, respectively. ($14.2) or (4%) Linked-Quarter Change ($21.6) $5.7 $2.5 $1.4 ($2.2)
Slide 28: Net Interest Margin
Net Interest Margin 3.05% 2.97% (8) bps Linked-Quarter Change 4 bps 2 bps 1 bp (15 bps)
Slide 29: Loans: Average Balances
Loans: Average Balances $44,853 ($ in millions) $45,153 Linked-Quarter Change Linked-quarter change ($300) million or (1%) $524 ($413) ($242) ($111) ($58)
Slide 30: Deposits: Average Balances
Deposits: Average Balances ($ in millions) $49,542 $48,447 Linked-quarter change +$1.1 billion or 2% Average Deposits Linked-Quarter Change $1,270 ($1,374) $901 $298
Slide 31: Non-Interest Income
Non-Interest Income ($ in millions) $89.6 $101.1 +$11.5 or 13% Linked-Quarter Change ($1.5) $2.1 $4.2 $1.4 $0.7 $0.7 $0.6 $3.3
Slide 32: Non-Interest Expense
Non-Interest Expense ($ in millions) $293.6 $304.0 ($10.4) or (3%) Ex. Merger-Related Expenses: $3.5 or 1% Linked-Quarter Change ($13.9) ($0.6) $0.6 $0.4 $0.5 ($0.3) $2.9
Slide 33: Efficiency Ratio Quarterly Trend
Efficiency Ratio Quarterly Trend
Slide 34: Asset Quality
Asset Quality 1 PBCT ratios for periods prior to January 1, 2020 have been restated to reflect the total loan portfolio (originated & acquired) Notes: Source: SNL Financial Top 50 Banks represents the largest 50 banks by total assets in each respective quarter. PBCT Peer Group (Median) Top 50 Banks
Slide 35: Returns
Returns Return on Average Assets Return on Average Tangible Common Equity Returns calculated on an operating basis 14.4% 1.13% 15.2% 13.2% 0.96% 9.5% 0.65% 13.4%
Slide 36: Capital Ratios
Capital Ratios Sep. 30, 2019 Dec. 31, 2019 Mar. 31, 2020 Jun. 30, 2020 Sep. 30, 2020 People’s United Financial, Inc. Tang. Com. Equity/Tang. Assets 7.8% 8.0% 7.4% 7.3% (2) 7.5% (2) Tier 1 Leverage 8.7% 9.1% (1) 8.4% 8.0% (3) 8.2% (3) Common Equity Tier 1 10.1% 10.2% 9.5% 9.8% 9.9% Tier 1 Risk-Based
Slide 37: Appendix
Appendix
Slide 38: Total Loan Forbearance
Total Loan Forbearance (incl. First & Second Deferrals) (Balances at September 30, 2020; $ in millions) Loan Forbearance By Business Segment Loan Forbearance By Commercial Property Type / Industry Note: Commercial real estate retail balances include Business Banking loans
Slide 39: Loan Risk Profile
Loan Risk Profile ($ in millions) 1 MW / ABL = Mortgage Warehouse / Asset Based Lending 2 Includes loans 30-89 days past due and non-performing loans
Slide 40: Interest Rate Risk Profile
Interest Rate Risk Profile 1Yield curve twist pivot point is 18 month point on yield curve. Short End defined as overnight to 18 months. Long End defined as terms greater than 18 months. Immediate Parallel Shock Est. Change in NII Yield Curve Twist1 Est. Change in NII Sep. 30, 2020 Jun. 30, 2020 Net
Slide 41: Peer Group
Peer Group Firm Ticker City State 1 Citizens Financial Group, Inc. CFG Providence RI 2 Comerica Inc. CMA Dallas TX 3 First Horizon National Corp. FHN Memphis TN 4 F.N.B. Corp. FNB Pittsburgh PA 5 Huntington Bancshares, Inc. HBAN Columbus OH 6 KeyCorp KEY Cleveland OH 7 M&T Bank Corp. MTB Buffalo NY
Slide 42: Non-GAAP Financial Measures and Reconciliation to GAAP
Non-GAAP Financial Measures and Reconciliation to GAAP In addition to evaluating People’s United Financial Inc. ("People's United") results of operations in accordance with U.S. generally accepted accounting principles (“GAAP”), management routinely supplements its evaluation with an analysis of cer
Slide 43: Non-GAAP Financial Measures and Reconciliation to GAAP
Non-GAAP Financial Measures and Reconciliation to GAAP (i) non-recurring gains/losses; (ii) merger-related expenses, including acquisition integration and other costs; (iii) writedowns of banking house assets and related lease termination costs; (iv) severance-related costs; and (v) charges related
Slide 44: For more information, investors may contact
For more information, investors may contact: Andrew S. Hersom (203) 338-4581 [email protected]
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