first_imgPeople’s United Bank,People’s United Financial, Inc (Nasdaq: PBCT) today announced net income of $24.9 million, or $0.07 per share, for the fourth quarter of 2009, compared to $26.8 million, or $0.08 per share, for the third quarter of 2009, and $33.7 million, or $0.10 per share, for the fourth quarter of 2008.  Fourth quarter 2009 earnings reflect a 3.19 percent net interest margin, unchanged from the third quarter of 2009, despite continued pressure associated with the historically low interest rate environment and the company’s asset sensitive balance sheet, and a modest increase in non-interest expenses.  For the year ended December 31, 2009, net income totaled $101.2 million, or $0.30 per share, compared to $137.8 million, or $0.42 per share, for 2008. People’s is the parent company of Chittenden Bank.Included in fourth quarter 2009 results are system conversion and merger-related expenses totaling $4.5 million (included in non-interest expense).  After taxes, these expenses reduced 2009 fourth quarter net income by $3.1 million, or $0.01 per share.  Excluding the effect of these expenses, net income would have been $28.0 million, or $0.08 per share, for the fourth quarter of 2009.The Board of Directors of People’s United Financial declared a $0.1525 per share quarterly dividend, payable February 15, 2010 to shareholders of record on February 1, 2010.  Based on the closing stock price on January 20, 2010, the dividend yield on People’s United Financial common stock is 3.7 percent.”Our pending acquisition of Financial Federal reflects our strategic focus on expansion through opportunistic acquisitions,” stated Philip R. Sherringham, President and Chief Executive Officer.  “At the same time, we remain committed to organic growth throughout our franchise.  Our performance during 2009 reflects continued growth in our core loan portfolios as well as deposits in spite of a clearly very challenging economic environment.  Year-over-year core commercial and home equity lending portfolios increased five percent and deposits grew eight percent.  In addition, the pillars of our financial position strong asset quality and prudent management of our excess capital have served us well in these challenging times.”Sherringham added, “We feel our asset quality has held up very well on both a relative and absolute basis through the recent recessionary cycle and continue to believe that most of the bad news is substantially behind us.  The strength of our capital and liquidity, asset quality and earnings, as well as the fact that our balance sheet remains funded almost entirely by deposits and stockholders’ equity, continue to set us apart from most in the industry.””On an operating basis, excluding system conversion and merger-related costs, earnings were $28 million, or 8 cents per share this quarter,” said Paul D. Burner, Senior Executive Vice President and Chief Financial Officer.  “Significant drivers of the company’s performance this quarter were a stable net interest margin, modest loan growth across our strategic lending businesses, and lower net loan charge-offs.  In spite of a 19 basis point reduction in our cost of deposits, the net interest margin was unchanged from the third quarter due to the combined effects of a 15 basis point decline in the yield on average earning assets and a 6 percent annualized increase in average deposits.”Commenting on asset quality, Burner stated, “Non-performing loans decreased $7 million this quarter, a further sign of what we believe is stabilization across the loan portfolio.  Our continued modest level of net loan charge-offs in this current economic environment remains a testament to our disciplined underwriting standards.”Fourth quarter net loan charge-offs totaled $13.6 million compared to $16.0 million in the third quarter of 2009.  Net loan charge-offs as a percent of average loans on an annualized basis were 0.38 percent in the fourth quarter of 2009 compared to 0.44 percent in this year’s third quarter.  For the full year, net loan charge-offs as a percent of average loans were 0.29 percent compared to 0.10 percent in 2008.  The level of the allowance for loan losses is unchanged from September 30, 2009.At December 31, 2009, non-performing loans totaled $168.8 million and the ratio of non-performing loans to total loans was 1.19 percent, compared to $175.7 million and 1.23 percent, respectively, at September 30, 2009.  Non-performing assets totaled $205.6 million at December 31, 2009, a $12.9 million increase from September 30, 2009.  Non-performing assets equaled 1.44 percent of total loans, REO and repossessed assets at December 31, 2009 compared to 1.35 percent at September 30, 2009.  At December 31, 2009, the allowance for loan losses as a percentage of total loans was 1.21 percent and as a percentage of non-performing loans was 102 percent, compared to 1.21 percent and 98 percent, respectively, at September 30, 2009.For the fourth quarter of 2009, return on average tangible assets was 0.51 percent and return on average tangible stockholders’ equity was 2.8 percent, compared to 0.55 percent and 3.0 percent, respectively, for the third quarter of 2009.  At December 31, 2009, People’s United Financial’s tangible equity ratio stood at 18.2 percent.Conference CallOn January 22, 2010, at 11 a.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(link is external) by selecting “Investor Relations” in the “About People’s” 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.Selected Financial TermsIn addition to evaluating People’s United Financial’s results of operations in accordance with U.S. generally accepted accounting principles (“GAAP”), management routinely supplements this evaluation with an analysis of certain non-GAAP financial measures, such as the efficiency and tangible equity ratios, and tangible book value per share.  Management believes these non-GAAP financial measures provide information useful to investors in understanding People’s United Financial’s underlying operating performance and trends, and facilitates comparisons with the performance of other banks and thrifts.  Further, the efficiency ratio is used by management in its assessment of financial performance specifically as it relates to non-interest expense control, while the tangible equity ratio and tangible book value per share are used to analyze the relative strength of People’s United Financial’s capital position.The efficiency ratio, which represents an approximate measure of the cost required by People’s United Financial to generate a dollar of revenue, is the ratio of (i) total non-interest expense (excluding goodwill impairment charges, amortization of acquisition-related intangibles and fair value adjustments, losses on real estate assets and nonrecurring expenses) (the numerator) to (ii) net interest income on a fully taxable equivalent basis (excluding fair value adjustments) plus total non-interest income (including the fully taxable equivalent adjustment on bank-owned life insurance income, and excluding gains and losses on sales of assets, other than residential mortgage loans, and nonrecurring income) (the denominator).  People’s United Financial generally considers an item of income or expense to be nonrecurring if it is not similar to an item of income or expense of a type incurred within the last two years and is not similar to an item of income or expense of a type reasonably expected to be incurred within the following two years.The tangible equity ratio is the ratio of (i) tangible stockholders’ equity (total stockholders’ equity less goodwill and other acquisition-related intangibles) (the numerator) to (ii) tangible assets (total assets less goodwill and other acquisition-related intangibles) (the denominator).  Tangible book value per share is calculated by dividing tangible stockholders’ equity by common shares outstanding (total common shares issued, less common shares classified as treasury shares and unallocated ESOP common shares).Source: BRIDGEPORT, Conn., Jan. 21, 2010 /PRNewswire-FirstCall/ —last_img