PBCT Total Return for 2006 Tops 47 Percent
BRIDGEPORT, Conn., Jan. 18 /PRNewswire-FirstCall/ -- People's Bank
(Nasdaq: PBCT), an $11 billion financial services company, today announced
net income of $39.3 million, or $0.28 per share, for the fourth quarter of
2006, a 12 percent increase compared to $35.2 million, or $0.25 per share,
for the fourth quarter of 2005. Income from continuing operations increased
13 percent to $38.7 million, or $0.27 per share, from $34.3 million, or
$0.24 per share, for the year-ago quarter.
For the year ended December 31, 2006, net income totaled $124.0
million, or $0.87 per share, compared to $137.1 million, or $0.97 per
share, for 2005. Included in this year's results are net security losses
($27.4 million) related to significant balance sheet restructuring
activities in the third and second quarters, and an income tax benefit
related to certain prior-year tax matters ($2.4 million). The net impact of
these items reduced 2006 net income by $15.8 million, or $0.11 per share.
Results for 2005 included a gain on the sale of three branches ($8.1
million), a gain from the resolution of a significant contingency related
to the sale of the credit card portfolio in 2004 ($9.7 million), an income
tax benefit ($2.0 million), a goodwill impairment charge ($2.0 million) and
expenses incurred in connection with the repurchase of subordinated notes
($2.7 million) and the accelerated vesting of stock options ($0.7 million).
The net impact of these items increased 2005 net income by $9.3 million, or
$0.07 per share.
For the fourth quarter of 2006, return on average assets was 1.49
percent and return on average stockholders' equity was 11.6 percent,
compared to 1.30 percent and 11.1 percent, respectively, for the year-ago
quarter. Return on average assets would have been 1.40 percent for the
fourth quarter of 2006, excluding the previously mentioned $2.4 million
income tax benefit.
People's Board of Directors declared a $0.25 per share quarterly
dividend on People's common stock, payable February 15, 2007, to
shareholders of record on February 1, 2007. People's Mutual Holdings, which
owns 82.0 million shares of People's Bank common stock, will accept
dividends on only 2.2 percent of its shares. Based on the closing stock
price on January 17, 2007, the dividend yield on People's Bank common stock
is 2.3 percent.
President and Chief Executive Officer John A. Klein stated, "The bank's
performance this quarter reflects another increase in the net interest
margin, our 13th consecutive increase. Our third quarter balance sheet
restructuring activities contributed, in part, to the current quarter's
margin improvement. The year-over-year 26 basis point increase in the net
interest margin to 4.01 percent also reflects the bank's asset-sensitive
position and the substitution of securities with higher-yielding loans."
Klein continued, "Our average commercial banking, home equity and
residential mortgage loan portfolios increased a combined $824 million, or
10 percent, since the fourth quarter of 2005. Our commercial banking loan
portfolio grew 9 percent and the home equity loan portfolio grew 6 percent,
while our residential mortgage loans grew 12 percent."
"As previously disclosed, we sold our entire debt securities portfolio
during the third quarter of 2006," said Philip R. Sherringham, Executive
Vice President and Chief Financial Officer. "This transaction contributed
to the continued improvement in the bank's net interest margin, as well as
an improvement in our efficiency ratio to below 60 percent this quarter."
Average securities declined $1.3 billion, or 88 percent, on a
year-over-year basis.
Commenting on asset quality, Sherringham added, "Fourth quarter net
loan charge-offs totaled $1.4 million, or 0.06 percent of average loans on
an annualized basis, compared to $3.3 million, or 0.16 percent annualized
in the fourth quarter of last year." At December 31, 2006, non-performing
assets totaled $22.7 million, a $0.2 million, or 1 percent, decrease from
September 30, 2006. Non-performing assets equaled 0.24 percent of total
loans, REO and repossessed assets, compared to 0.25 percent at September
30, 2006. The allowance for loan losses as a percentage of non-performing
loans was 328 percent at December 31, 2006, compared to 355 percent at
September 30, 2006. The allowance for loan losses as a percentage of total
loans was 0.79 percent at December 31, 2006, compared to 0.81 percent at
September 30, 2006.
Selected Financial Terms
In addition to evaluating People's results of operations in accordance
with generally accepted accounting principles ("GAAP"), management
routinely supplements this evaluation with an analysis of certain non-GAAP
financial measures, such as core deposits, purchased funds and the
efficiency ratio. Management believes these non-GAAP financial measures
provide information useful to investors in understanding People's
underlying operating performance and trends, and facilitates comparisons
with the performance of other banks and thrifts.
Core deposits is a measure of stable funding sources and is defined as
total deposits, other than brokered certificates of deposit (acquired in
the wholesale market), municipal deposits (which are seasonally variable by
nature) and non-interest-bearing deposits utilized for the operation of
People's businesses. Purchased funds include borrowings, brokered
certificates of deposit and municipal deposits.
The efficiency ratio, which represents an approximate measure of the
cost required by People's to generate a dollar of revenue, is the ratio of
total non-interest expense (excluding goodwill impairment, amortization of
acquisition-related intangibles, losses on real estate assets and
nonrecurring expenses) to net interest income plus total non-interest
income (adjusted for gains and losses on sales of assets other than
residential mortgage loans and excluding other items that may recur from
time to time but that are deemed to occur irregularly or infrequently).
People's generally considers an expense to be "nonrecurring" if it is not
similar to an expense of a type incurred within the last two years and is
not similar to an expense of a type reasonably expected to be incurred
within the following two years. Management considers the efficiency ratio
to be more representative of People's ongoing operating efficiency, as the
excluded items are generally related to external market conditions and
non-routine transactions.
Conference Call
On January 19, 2007, at 11 a.m., Eastern Time, People's will host a
conference call to discuss this earnings announcement. The call may be
heard through http://www.peoples.com 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 Web site. The call
will be archived on the Web site and available for approximately 90 days.
4Q Financial Highlights (4Q 2006 compared with 4Q 2005 unless otherwise
indicated)
Summary
* Net income totaled $39.3 million, or $0.28 per share.
* Net interest income increased $2.8 million, or 3%.
-- Net interest margin increased 26 basis points from 4Q05 and
improved 12 basis points from 3Q06 to 4.01%.
* Provision for loan losses decreased $3.9 million.
-- Net loan charge-offs decreased $1.9 million (4Q05 included a
$2.3 million charge-off related to one commercial banking loan).
* Non-interest income, excluding the $8.1 million gain on sale of three
branches in 4Q05, increased $1.3 million, or 3%.
-- Bank-owned life insurance income increased $1.2 million.
* Non-interest expense, excluding charges of $2.7 million related to the
repurchase of subordinated notes and $0.7 million for the accelerated
vesting of stock options in 4Q05, decreased $1.5 million, or 2%.
* Income tax expense was reduced by $2.4 million in 4Q06 related to
certain prior-year tax matters and by $2.0 million in 4Q05 resulting
from the completion of a federal tax audit.
* Total stockholders' equity at December 31, 2006 was reduced by
$40 million resulting from the adoption of SFAS No. 158.
Commercial Banking
* Average commercial banking loans grew $334 million, or 9%.
* Average commercial non-interest-bearing deposits totaled $929 million.
* Non-performing commercial banking assets increased $0.5 million, or 3%,
from September 30, 2006.
-- Non-performing commercial loans increased $8.9 million from
September 30, 2006, reflecting one loan totaling $10.6 million that
was classified as non-performing.
-- Non-performing commercial real estate finance loans decreased
$6.4 million from September 30, 2006, reflecting the repayment of
one loan totaling $5.5 million.
* The ratio of non-performing commercial banking loans to total commercial
banking loans was 0.34% at December 31, 2006, compared to 0.29% at
September 30, 2006 and 0.33% at December 31, 2005.
* Net loan charge-offs totaled $0.8 million, or 0.08% annualized, of
average commercial banking loans, compared to $2.5 million, or 0.28%
annualized, in 4Q05.
Consumer Financial Services
* Average residential mortgage loans increased $414 million, or 12%.
-- People's purchased $170 million of residential mortgage loans
towards the end of 1Q06.
* Average home equity loan portfolios increased $76 million, or 6%.
* Average consumer non-interest-bearing deposits totaled $1.1 billion.
Treasury
* Average securities declined $1.3 billion, or 88%.
-- Sold $835 million of debt securities in 3Q06 and $266 million in
2Q06.
* Average securities made up 2% of average earning assets compared to 14%
in 4Q05.
* The 7.20% subordinated notes ($43.5 million) matured on December 1,
2006.
People's Bank is a diversified financial services company providing
consumer and commercial banking services, in addition to insurance, trust
and financial advisory services.
Access People's Bank on the World Wide Web at http://www.peoples.com.
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People's Bank and Subsidiaries
FINANCIAL HIGHLIGHTS
Three Months Ended
Dec. Sept. June March Dec.
(dollars in millions, except per 31, 30, 30, 31, 31,
share data) 2006 2006 2006 2006 2005
Operating Data:
Net interest income $96.1 $96.2 $96.1 $94.0 $93.3
Provision for loan losses 1.4 4.1 0.2 (2.3) 5.3
Fee-based revenues 39.5 38.2 37.5 37.8 39.8
Net security losses - (23.2) (4.0) - -
All other non-interest income (1) 5.8 5.5 5.7 4.6 12.3
Non-interest expense 85.6 87.1 86.6 87.6 90.5
Income from continuing operations 38.7 16.9 32.2 33.9 34.3
Income from discontinued operations 0.6 0.1 0.7 0.9 0.9
Net income 39.3 17.0 32.9 34.8 35.2
Selected Statistical Data:
Net interest margin (2) 4.01% 3.89% 3.82% 3.77% 3.75%
Return on average assets (2) 1.49 0.63 1.20 1.28 1.30
Return on average stockholders'
equity (2) 11.6 5.1 10.1 10.8 11.1
Efficiency ratio 59.7 61.5 61.7 62.3 62.3
Per Common Share Data:
Diluted earnings per share $0.28 $0.12 $0.23 $0.24 $0.25
Dividends paid per share (3) 0.25 0.25 0.25 0.22 0.22
Total dividend payout ratio (3) 39.3% 91.0% 46.9% 39.0% 38.6%
Book value (end of period) $9.41 $9.51 $9.34 $9.21 $9.10
Tangible book value (end of
period) 8.67 8.77 8.60 8.46 8.35
Stock price:
High 45.40 41.15 34.50 33.83 33.57
Low 39.24 31.89 30.87 30.00 28.85
Close (end of period) 44.62 39.61 32.85 32.75 31.06
Average diluted shares
outstanding (in millions) 142.48 142.34 142.18 142.04 141.96
(1) Includes an $8.1 million gain on sale of branches for the three
months ended December 31, 2005.
(2) Annualized.
(3) Reflects the waiver of dividends on the substantial majority of the
common shares owned by People's Mutual Holdings.
Years Ended
(dollars in millions, except per December 31, December 31,
share data) 2006 2005
Operating Data:
Net interest income $382.4 $369.7
Provision for loan losses 3.4 8.6
Fee-based revenues 153.0 151.5
Net security losses (27.2) (0.1)
All other non-interest income (1) 21.6 21.9
Non-interest expense 346.9 344.4
Income from continuing operations 121.7 125.9
Income from discontinued operations (2) 2.3 11.2
Net income 124.0 137.1
Selected Statistical Data:
Net interest margin 3.87% 3.68%
Return on average assets 1.15 1.27
Return on average stockholders' equity 9.4 11.1
Efficiency ratio 61.3 62.8
Per Common Share Data:
Diluted earnings per share $0.87 $0.97
Dividends paid per share (3) 0.97 0.85
Total dividend payout ratio (3) 48.3% 38.3%
Book value (end of period) $9.41 $9.10
Tangible book value (end of period) 8.67 8.35
Stock price:
High 45.40 33.75
Low 30.00 23.99
Close (end of period) 44.62 31.06
Average diluted shares outstanding
(in millions) 142.34 141.76
(1) Includes an $8.1 million gain on sale of branches for the year ended
December 31, 2005.
(2) Includes an after-tax gain on sale of $6.2 million for the year
ended December 31, 2005 related to the sale of People's credit card
business in March 2004.
(3) Reflects the waiver of dividends on the substantial majority of the
common shares owned by People's Mutual Holdings.
As of and for the Three Months Ended
Dec. Sept. June March Dec.
(dollars in millions) 31, 30, 30, 31, 31,
2006 2006 2006 2006 2005
Financial Condition Data:
General:
Total assets $10,687 $10,612 $11,005 $11,081 $10,933
Loans 9,372 9,185 9,034 8,759 8,573
Securities, net 77 202 901 1,258 1,363
Allowance for loan losses 74 74 74 74 75
Deposits 9,083 8,979 9,203 9,252 9,083
Core deposits 8,958 8,843 9,058 9,058 8,873
Borrowings 4 14 221 251 295
Purchased funds 47 61 270 360 424
Subordinated notes 65 109 109 109 109
Stockholders' equity (1) 1,340 1,351 1,326 1,306 1,289
Non-performing assets 23 23 28 24 22
Net loan charge-offs
(recoveries) 1.4 4.1 0.2 (1.3) 3.3
Average Balances:
Loans $9,247 $9,083 $8,898 $8,555 $8,438
Securities 166 669 1,070 1,325 1,438
Earning assets 9,586 9,889 10,049 9,980 9,952
Total assets 10,553 10,778 10,939 10,865 10,800
Deposits 8,923 8,897 9,119 8,990 8,966
Funding liabilities 9,030 9,275 9,463 9,407 9,366
Stockholders' equity 1,355 1,331 1,308 1,292 1,273
Ratios:
Net loan charge-offs
(recoveries) to
average loans
(annualized) 0.06% 0.18% 0.01% -0.06% 0.16%
Non-performing assets to
total loans, REO and
repossessed assets 0.24 0.25 0.31 0.28 0.26
Allowance for loan losses
to non-performing loans 327.9 354.9 266.8 322.0 352.5
Allowance for loan losses
to total loans 0.79 0.81 0.82 0.84 0.87
Average stockholders'
equity to average assets 12.8 12.3 12.0 11.9 11.8
Stockholders' equity to
total assets 12.5 12.7 12.1 11.8 11.8
Tier 1 leverage capital(2) 12.0 11.8 11.5 11.4 11.2
Tier 1 risk-based capital(2) 14.9 14.7 14.8 15.0 14.8
Total risk-based capital(2) 16.2 16.2 16.4 16.5 16.4
(1) Stockholders' equity at December 31, 2006 reflects a $40 million
reduction due to People's adoption of SFAS No. 158.
(2) December 31, 2006 capital ratios are preliminary. Calculated in
accordance with Federal Deposit Insurance Corporation regulations
for all periods prior to September 30, 2006 and in accordance with
Office of Thrift Supervision regulations for all subsequent periods.
People's Bank and Subsidiaries
CONSOLIDATED STATEMENTS OF CONDITION
Dec. 31, Sept. 30, Dec. 31,
(in millions) 2006 2006 2005
Assets
Cash and due from banks $344.1 $355.8 $391.6
Short-term investments 224.6 179.6 31.9
Total cash and cash equivalents 568.7 535.4 423.5
Securities:
Trading account securities, at fair
value 29.6 29.5 27.3
Securities available for sale, at
fair value 46.8 171.3 1,334.3
Securities held to maturity, at
amortized cost 1.1 1.1 1.4
Total securities 77.5 201.9 1,363.0
Securities purchased under agreements
to resell - - 25.0
Loans:
Residential mortgage 3,900.1 3,877.7 3,507.9
Commercial 2,363.6 2,197.4 2,029.2
Commercial real estate finance 1,786.7 1,799.3 1,778.3
Consumer 1,321.3 1,310.5 1,257.5
Total loans 9,371.7 9,184.9 8,572.9
Less allowance for loan losses (74.0) (74.0) (75.0)
Total loans, net 9,297.7 9,110.9 8,497.9
Bank-owned life insurance 212.6 211.2 154.6
Premises and equipment, net 136.8 134.1 140.1
Goodwill and other acquisition-
related intangibles 105.0 105.3 106.1
Other assets 288.7 313.3 222.3
Total assets $10,687.0 $10,612.1 $10,932.5
Liabilities
Deposits:
Non-interest-bearing $2,294.4 $2,172.4 $2,353.1
Savings, interest-bearing checking
and money market 3,205.2 3,286.1 3,767.4
Time 3,583.0 3,520.1 2,962.1
Total deposits 9,082.6 8,978.6 9,082.6
Borrowings:
Federal funds purchased 4.1 13.6 269.9
Federal Home Loan Bank advances - - 25.0
Total borrowings 4.1 13.6 294.9
Subordinated notes 65.3 108.8 108.6
Other liabilities 195.4 159.7 157.8
Total liabilities 9,347.4 9,260.7 9,643.9
Stockholders' Equity
Common stock (without par value;
450.0 shares, 450.0 shares and 150.0
shares authorized; 142.2 shares, 142.1
shares and 141.6 shares issued and
outstanding) 142.2 142.1 141.6
Additional paid-in capital 182.9 177.8 172.0
Retained earnings 1,062.4 1,038.6 998.4
Accumulated other comprehensive loss (47.9) (7.1) (23.4)
Total stockholders' equity 1,339.6 1,351.4 1,288.6
Total liabilities and
stockholders' equity $10,687.0 $10,612.1 $10,932.5
People's Bank and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended
Dec. Sept. June March Dec.
31, 30, 30, 31, 31,
(in millions, except per share data) 2006 2006 2006 2006 2005
Interest and dividend income:
Residential mortgage $50.0 $47.7 $45.4 $42.1 $40.7
Commercial 39.2 38.0 36.1 33.2 31.0
Commercial real estate finance 33.5 32.2 31.0 29.3 29.8
Consumer 23.5 23.0 21.6 20.2 18.9
Total interest on loans 146.2 140.9 134.1 124.8 120.4
Securities 2.2 6.7 9.2 11.9 12.6
Short-term investments 2.2 1.6 0.7 0.8 0.5
Securities purchased under agreements
to resell - 0.2 0.3 0.3 0.3
Total interest and dividend income 150.6 149.4 144.3 137.8 133.8
Interest expense:
Deposits 52.1 47.1 42.9 38.0 34.8
Borrowings 0.2 3.7 2.8 3.3 2.8
Subordinated notes 2.2 2.4 2.5 2.5 2.9
Total interest expense 54.5 53.2 48.2 43.8 40.5
Net interest income 96.1 96.2 96.1 94.0 93.3
Provision for loan losses 1.4 4.1 0.2 (2.3) 5.3
Net interest income after provision
for loan losses 94.7 92.1 95.9 96.3 88.0
Non-interest income:
Fee-based revenues:
Service charges on deposit accounts 19.4 20.1 20.0 18.3 19.8
Insurance revenue 7.1 6.6 5.8 7.8 7.6
Brokerage commissions 3.0 2.9 3.2 3.1 2.6
Other fees 10.0 8.6 8.5 8.6 9.8
Total fee-based revenues 39.5 38.2 37.5 37.8 39.8
Net security losses - (23.2) (4.0) - -
Bank-owned life insurance 2.8 2.2 2.2 1.9 1.6
Net gains on sales of residential
mortgage loans 0.5 0.5 0.6 0.4 0.9
Gain on sale of branches - - - - 8.1
Other non-interest income 2.5 2.8 2.9 2.3 1.7
Total non-interest income 45.3 20.5 39.2 42.4 52.1
Non-interest expense:
Compensation and benefits 49.4 51.3 50.3 51.9 49.7
Occupancy and equipment 15.4 15.6 15.4 15.8 16.5
Professional and outside service fees 6.5 5.8 6.1 5.9 6.9
Liability restructuring costs - - - - 2.7
Other non-interest expense 14.3 14.4 14.8 14.0 14.7
Total non-interest expense 85.6 87.1 86.6 87.6 90.5
Income from continuing operations
before income tax expense 54.4 25.5 48.5 51.1 49.6
Income tax expense 15.7 8.6 16.3 17.2 15.3
Income from continuing operations 38.7 16.9 32.2 33.9 34.3
Discontinued operations:
Income from discontinued operations,
net of tax 0.6 0.1 0.7 0.9 0.9
Income from discontinued operations 0.6 0.1 0.7 0.9 0.9
Net income $39.3 $17.0 $32.9 $34.8 $35.2
Diluted earnings per common share:
Income from continuing operations $0.27 $0.11 $0.23 $0.24 $0.24
Income from discontinued operations 0.01 0.01 - - 0.01
Net income 0.28 0.12 0.23 0.24 0.25
People's Bank and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME
Years Ended
Dec. 31, Dec. 31,
(in millions, except per share data) 2006 2005
Interest and dividend income:
Residential mortgage $185.2 $154.7
Commercial 146.5 108.7
Commercial real estate finance 126.0 116.2
Consumer 88.3 65.8
Total interest on loans 546.0 445.4
Securities 30.0 60.0
Short-term investments 5.3 1.5
Securities purchased under
agreements to resell 0.8 1.0
Total interest and dividend income 582.1 507.9
Interest expense:
Deposits 180.1 117.5
Borrowings 10.0 9.4
Subordinated notes 9.6 11.3
Total interest expense 199.7 138.2
Net interest income 382.4 369.7
Provision for loan losses 3.4 8.6
Net interest income after
provision for loan losses 379.0 361.1
Non-interest income:
Fee-based revenues:
Service charges on deposit accounts 77.8 72.4
Insurance revenue 27.3 28.0
Brokerage commissions 12.2 11.7
Other fees 35.7 39.4
Total fee-based revenues 153.0 151.5
Net security losses (27.2) (0.1)
Bank-owned life insurance 9.1 3.3
Net gains on sales of residential
mortgage loans 2.0 4.0
Gain on sale of branches - 8.1
Other non-interest income 10.5 6.5
Total non-interest income 147.4 173.3
Non-interest expense:
Compensation and benefits 202.9 195.5
Occupancy and equipment 62.2 62.4
Professional and outside service fees 24.3 26.1
Liability restructuring costs - 2.7
Goodwill impairment charge - 2.0
Other non-interest expense 57.5 55.7
Total non-interest expense 346.9 344.4
Income from continuing operations
before income tax expense 179.5 190.0
Income tax expense 57.8 64.1
Income from continuing operations 121.7 125.9
Discontinued operations:
Income from discontinued
operations, net of tax 2.3 5.0
Gain on sale of discontinued
operations, net of tax - 6.2
Income from discontinued operations 2.3 11.2
Net income $124.0 $137.1
Diluted earnings per common share:
Income from continuing operations $0.85 $0.89
Income from discontinued operations 0.02 0.08
Net income 0.87 0.97
People's Bank and Subsidiaries
AVERAGE BALANCE, INTEREST AND YIELD/RATE ANALYSIS (1)
December 31, 2006 September 30, 2006
Three months ended Average Yield/ Average Yield/
(dollars in millions) Balance Interest Rate Balance Interest Rate
Earning assets:
Short-term investments $173.2 $2.2 5.13% $120.5 $1.6 5.30%
Securities purchased
under agreements
to resell - - - 16.9 0.2 5.03
Securities (2) 166.4 2.2 5.39 668.5 6.7 4.00
Loans:
Residential mortgage 3,908.9 50.0 5.12 3,838.3 47.7 4.98
Commercial 2,228.0 39.2 7.04 2,157.0 38.0 7.03
Commercial real estate
finance 1,792.3 33.5 7.48 1,785.1 32.2 7.22
Consumer 1,317.4 23.5 7.11 1,302.5 23.0 7.08
Total loans 9,246.6 146.2 6.32 9,082.9 140.9 6.21
Total earning assets $9,586.2 $150.6 6.28% $9,888.8 $149.4 6.04%
Funding liabilities:
Deposits:
Non-interest-bearing
deposits $2,040.2 $- -% $2,058.2 $- -%
Savings, interest-
bearing checking
and money market 3,210.8 12.4 1.55 3,376.9 12.5 1.48
Time 3,585.5 39.6 4.42 3,367.7 34.3 4.07
Total core deposits 8,836.5 52.0 2.35 8,802.8 46.8 2.12
Non-core deposits (3) 86.6 0.1 0.65 94.7 0.3 1.43
Total deposits 8,923.1 52.1 2.34 8,897.5 47.1 2.12
Borrowings:
Federal funds
purchased 12.8 0.2 5.44 147.0 2.0 5.37
Federal Home Loan Bank
advances - - - 121.5 1.7 5.39
Total borrowings 12.8 0.2 5.44 268.5 3.7 5.38
Subordinated notes 94.1 2.2 9.31 108.7 2.4 9.03
Total funding
liabilities $9,030.0 $54.5 2.42% $9,274.7 $53.2 2.29%
Excess of earning assets
over funding
liabilities $556.2 $614.1
Net interest
income/spread $96.1 3.86% $96.2 3.75%
Net interest margin 4.01% 3.89%
(1) Average yields earned and rates paid are annualized.
(2) Average balances and yields for securities available for sale are
based on amortized cost.
(3) Includes $72.9 million, $78.3 million and $84.6 million of
non-interest-bearing deposits for the three months ended
December 31, 2006, September 30, 2006 and December 31, 2005,
respectively.
People's Bank and Subsidiaries
AVERAGE BALANCE, INTEREST AND YIELD/RATE ANALYSIS (1)
December 31, 2005
Three months ended Average Yield/
(dollars in millions) Balance Interest Rate
Earning assets:
Short-term investments $50.9 $0.5 3.93%
Securities purchased under
agreements to resell 25.0 0.3 4.61
Securities (2) 1,437.7 12.6 3.53
Loans:
Residential mortgage 3,495.0 40.7 4.66
Commercial 1,935.5 31.0 6.40
Commercial real estate finance 1,750.5 29.8 6.80
Consumer 1,257.4 18.9 6.03
Total loans 8,438.4 120.4 5.71
Total earning assets $9,952.0 $133.8 5.38%
Funding liabilities:
Deposits:
Non-interest-bearing deposits $2,139.1 $- -%
Savings, interest-bearing checking
and money market 3,808.5 11.9 1.25
Time 2,843.7 22.1 3.12
Total core deposits 8,791.3 34.0 1.55
Non-core deposits (3) 174.8 0.8 2.00
Total deposits 8,966.1 34.8 1.56
Borrowings:
Federal funds purchased 274.3 2.7 3.97
Federal Home Loan Bank advances 6.7 0.1 4.00
Total borrowings 281.0 2.8 3.97
Subordinated notes 119.4 2.9 9.64
Total funding liabilities $9,366.5 $40.5 1.73%
Excess of earning assets
over funding liabilities $585.5
Net interest income/spread $93.3 3.65%
Net interest margin 3.75%
(1) Average yields earned and rates paid are annualized.
(2) Average balances and yields for securities available for sale are
based on amortized cost.
(3) Includes $72.9 million, $78.3 million and $84.6 million of non-
interest-bearing deposits for the three months ended
December 31, 2006, September 30, 2006 and December 31, 2005,
respectively.
People's Bank and Subsidiaries
AVERAGE BALANCE, INTEREST AND YIELD/RATE ANALYSIS
December 31, 2006 December 31, 2005
Years ended Average Yield/ Average Yield/
(dollars in millions) Balance Interest Rate Balance Interest Rate
Earning assets:
Short-term investments $106.6 $5.3 4.97% $54.5 $1.5 2.86%
Securities purchased
under agreements to
resell 16.6 0.8 4.98 22.8 1.0 4.22
Securities (1) 803.8 30.0 3.74 1,737.8 60.3 3.47
Loans:
Residential mortgage 3,758.8 185.2 4.93 3,413.3 154.7 4.53
Commercial 2,135.7 146.5 6.86 1,825.5 108.7 5.95
Commercial real
estate finance 1,765.1 126.0 7.14 1,790.5 116.2 6.49
Consumer 1,288.3 88.3 6.85 1,203.3 65.8 5.47
Total loans 8,947.9 546.0 6.10 8,232.6 445.4 5.41
Total earning
assets $9,874.9 $582.1 5.90% $10,047.7 $508.2 5.06%
Funding liabilities:
Deposits:
Non-interest-bearing
deposits $2,090.7 $- -% $2,142.0 $- -%
Savings, interest-
bearing checking and
money market 3,464.3 49.2 1.42 4,023.4 42.6 1.06
Time 3,308.7 128.8 3.89 2,648.8 72.6 2.74
Total core deposits 8,863.7 178.0 2.01 8,814.2 115.2 1.31
Non-core deposits (2) 118.4 2.1 1.85 167.2 2.3 1.40
Total deposits 8,982.1 180.1 2.01 8,981.4 117.5 1.31
Borrowings:
Federal funds
purchased 158.2 7.6 4.78 250.5 7.9 3.19
Federal Home Loan
Bank advances 47.2 2.4 5.15 50.3 1.4 2.73
Repurchase agreements - - - 1.7 0.1 2.41
Total borrowings 205.4 10.0 4.87 302.5 9.4 3.11
Subordinated notes 105.0 9.6 9.10 121.2 11.3 9.29
Total funding
liabilities $9,292.5 $199.7 2.15% $9,405.1 $138.2 1.47%
Excess of earning
assets over funding
liabilities $582.4 $642.6
Net interest
income/spread $382.4 3.75% $370.0 3.59%
Net interest margin 3.87% 3.68%
(1) Average balances and yields for securities available for sale are
based on amortized cost.
(2) Includes $78.0 million and $89.7 million of non-interest-bearing
deposits for the years ended December 31, 2006 and 2005,
respectively.
People's Bank and Subsidiaries
NON-PERFORMING ASSETS
Dec. Sept. June March Dec.
31, 30, 30, 31, 31,
(dollars in millions) 2006 2006 2006 2006 2005
Non-accrual loans:
Commercial $11.9 $3.0 $6.9 $1.1 $1.3
Residential mortgage 6.7 7.8 4.8 5.1 6.7
PCLC 2.1 2.1 2.6 2.9 6.2
Consumer 1.7 1.3 1.1 1.1 1.3
Commercial real estate finance 0.2 6.6 12.3 12.8 5.8
Total non-accrual loans 22.6 20.8 27.7 23.0 21.3
Real estate owned ("REO") and
repossessed assets, net 0.1 2.1 0.4 1.3 0.7
Total non-performing assets $22.7 $22.9 $28.1 $24.3 $22.0
Non-performing loans as a percentage of
total loans 0.24% 0.23% 0.31% 0.26% 0.25%
Non-performing assets as a percentage
of total loans, REO and repossessed
assets 0.24 0.25 0.31 0.28 0.26
Non-performing assets as a percentage
of stockholders' equity and allowance
for loan losses 1.61 1.61 2.01 1.76 1.62
Allowance for loan losses as a
percentage of non-performing loans 327.9 354.9 266.8 322.0 352.5
Allowance for loan losses as a
percentage of total loans 0.79 0.81 0.82 0.84 0.87
People's Bank and Subsidiaries
ALLOWANCE FOR LOAN LOSSES
Three Months Ended
Dec. Sept. June March Dec.
31, 30, 30, 31, 31,
(in millions) 2006 2006 2006 2006 2005
Balance at beginning of period $74.0 $74.0 $74.0 $75.0 $73.0
Charge-offs (2.0) (4.7) (1.1) (1.5) (4.1)
Recoveries 0.6 0.6 0.9 2.8 0.8
Net loan (charge-offs) recoveries (1.4) (4.1) (0.2) 1.3 (3.3)
Provision for loan losses 1.4 4.1 0.2 (2.3) 5.3
Balance at end of period $74.0 $74.0 $74.0 $74.0 $75.0
People's Bank and Subsidiaries
NET LOAN CHARGE-OFFS (RECOVERIES)
Three Months Ended
Dec. Sept. June March Dec.
31, 30, 30, 31, 31,
(in millions) 2006 2006 2006 2006 2005
Commercial $0.8 $3.9 $- $0.1 $-
Consumer 0.6 0.3 0.3 0.6 0.9
PCLC - - - 0.3 2.5
Residential mortgage - (0.1) 0.1 - (0.1)
Commercial real estate finance - - (0.2) (2.3) -
Total $1.4 $4.1 $0.2 $(1.3) $3.3
SOURCE People's Bank
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Related links:
http://www.peoples.com
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CONTACT:
Vincent J. Calabrese, Senior Vice President
and Controller, +1-203-338-4114, Fax - +1-203-338-2362,
vince.calabrese@peoples.com; or Valerie C. Carlson, Vice
President, Corporate Communications, +1-203-338-2351, Fax -
+1-203-338-3461, valerie.carlson@peoples.com
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