Income from Continuing Operations Increases 10 Percent
BRIDGEPORT, Conn., July 20 /PRNewswire-FirstCall/ -- People's Bank
(Nasdaq: PBCT), an $11 billion financial services company, today announced
net income of $32.9 million, or $0.23 per share, for the second quarter of
2006, compared to $37.0 million, or $0.26 per share, for the second quarter
of 2005. The current quarter's results include a previously-disclosed $4.0
million pre- tax loss from the sale of securities, while the 2005 quarter's
results include pre-tax income of $9.7 million from the resolution of a
significant contingency related to the sale of People's credit card
portfolio (reported in income from discontinued operations) and a $2.0
million goodwill impairment charge.
Income from continuing operations for the second quarter of 2006
increased 10 percent to $32.2 million, or $0.23 per share, from $29.4
million, or $0.21 per share, for the year-ago quarter. Income from
continuing operations excluding security losses and the goodwill impairment
charge would have been $34.8 million, or $0.25 per share, compared to $31.4
million, or $0.22 per share, for the year-ago period, a 14 percent
increase.
For the second quarter of 2006, return on average assets was 1.20
percent and return on average stockholders' equity was 10.1 percent,
compared to 1.36 percent and 12.0 percent, respectively, for the year-ago
quarter. Return on average assets would have been 1.30 percent for the
second quarter of 2006 excluding the loss on sale of securities.
People's Board of Directors declared a $0.25 per share quarterly
dividend on People's common stock, payable August 15, 2006, to shareholders
of record on August 1, 2006. 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 July 19,
2006, the dividend yield on People's Bank common stock is 3.0 percent.
President and Chief Executive Officer John A. Klein stated, "Our
results for the second quarter demonstrate our continuing earnings
momentum. The consecutive double digit quarterly improvement in earnings
from continuing operations in 2006, when compared to the corresponding 2005
quarters, highlights the strength of the bank's franchise."
Klein added, "We continue to generate significant loan growth across
our commercial and consumer businesses. For example, our average commercial
banking loan portfolio increased $105 million, or 11 percent annualized,
from the first quarter of 2006."
Klein concluded, "As reported in a recent regulatory filing, we
received approval from the Office of Thrift Supervision regarding our plans
to convert to a federal savings bank charter. We are optimistic that all
necessary regulatory approvals will be received in time to complete the
charter conversion prior to the end of the third quarter. A special meeting
of People's Bank shareholders to vote on approving the charter conversion
is scheduled for August 15, 2006. And regarding our announced expansion
plans into Westchester County, New York, we are on track to have 7 branches
opened by the end of 2007."
"Key drivers of the bank's performance this quarter were another
increase in the net interest margin and ongoing strong asset quality," said
Philip R. Sherringham, Executive Vice President and Chief Financial
Officer. "The year- over-year 16 basis point improvement in the net
interest margin reflects the bank's asset-sensitive position, the ongoing
substitution of securities with higher-yielding loans and a partial benefit
from the sale of securities during the second quarter. Average loans
increased $714 million, or 9 percent, year- over-year, while average
securities declined $838 million, or 44 percent."
Commenting on asset quality, Sherringham added, "Second quarter net
loan charge-offs totaled $0.2 million, or 0.01 percent of average loans on
an annualized basis, compared to $0.9 million, or 0.04 percent,
respectively, in the second quarter of last year."
At June 30, 2006, non-performing assets totaled $28.1 million, a $3.8
million, or 16 percent, increase from March 31, 2006. One commercial loan
totaling $4.9 million was classified as non-performing in the second
quarter of 2006. Non-performing assets equaled 0.31 percent of total loans,
REO and repossessed assets, compared to 0.29 percent at June 30, 2005. The
allowance for loan losses as a percentage of non-performing loans was 267
percent at June 30, 2006, compared to 312 percent at June 30, 2005. The
allowance for loan losses as a percentage of total loans was 0.82 percent
at June 30, 2006, compared to 0.88 percent a year ago.
Selected Financial Terms
In addition to presenting financial information in accordance with
generally accepted accounting principles ("GAAP"), certain non-GAAP
information is also presented, such as operating revenue and the efficiency
ratio. Operating revenue is based on income from continuing operations
reduced by gains and losses other than from the sale of residential
mortgage loans and excluding other items that may recur from time to time
but that are deemed to occur irregularly or infrequently. Management
considers this measure to be more representative of People's ongoing
profitability, as the excluded items are generally related to external
market conditions and non-routine transactions.
The efficiency ratio, which is derived in part from operating revenue
and represents an approximate measure of the cost required by People's to
generate a dollar of revenue, is the ratio of operating expense to
operating revenue. Operating expense equals People's total non-interest
expense, excluding goodwill impairment, amortization of acquisition-related
intangibles, losses on real estate assets and nonrecurring expenses.
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.
This release contains information about People's core deposits and
purchased funds (both non-GAAP measures). Core deposits, a measure of
stable funding sources, equal 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 and municipal deposits.
Conference Call
On July 21, 2006, 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.
2Q Financial Highlights (2Q 2006 compared with 2Q 2005 unless otherwise
indicated)
Summary
- Net income totaled $32.9 million, or $0.23 per share.
- Income from continuing operations increased $2.8 million, or 10%.
- Net interest income increased $3.4 million, or 4%.
-- Net interest margin increased 16 basis points from 2Q05 and improved
5 basis points from 1Q06 to 3.82%.
-- 2Q06 margin negatively affected by 2 basis points due to the Federal
Home Loan Bank of Boston changing the timing on declaring dividends
on its stock.
- Provision for loan losses decreased $0.7 million.
-- Net loan charge-offs decreased $0.7 million.
- Non-interest income, excluding net security gains and losses, increased
$4.3 million, or 11%.
-- Included in 2Q06 is $2.2 million ($3.4 million on a taxable-
equivalent basis) related to the bank's investment in bank-owned life
insurance.
-- Other non-interest income in 2Q06 included $0.7 million from the
redemption of MasterCard Incorporated Class B Common Stock.
- Non-interest expense, excluding the goodwill impairment charge from
2Q05, increased $2.6 million, or 3%.
Commercial Banking
- Average commercial banking loans grew $263 million, or 7%.
- Average commercial non-interest-bearing deposits totaled $948 million.
- The ratio of non-performing commercial banking loans to total commercial
banking loans was 0.55% at June 30, 2006, compared to 0.42% at June 30,
2005.
-- Non-performing loans increased $6.4 million, or 42%, from June 30,
2005.
- Net loan recoveries totaled $0.2 million, or 0.03% of average commercial
banking loans.
Consumer Financial Services
- Average residential mortgage loans increased $356 million, or 10%.
-- People's purchased $170 million of residential mortgage loans towards
the end of 1Q06.
- Average home equity loan portfolios increased $119 million, or 10%.
- Average consumer non-interest-bearing deposits totaled $1.2 billion.
Treasury
- Average securities and short-term investments declined $835 million, or
42%.
-- Sold $266 million of securities in 2Q06, resulting in a $4.0 million
loss.
-- Securities made up 11% of average earning assets compared to 19% in
2Q05.
- The debt securities portfolio totaled $847 million at June 30, 2006, a
$744 million, or 47%, decrease from a year ago.
People's Bank is a diversified financial services company providing
consumer and commercial banking services, in addition to insurance, trust
and financial advisory services. The bank is a leader in supermarket
banking, with 73 of its 156 branches located in Super Stop & Shop stores.
Through its subsidiaries, People's provides brokerage and financial
advisory services, asset management, equipment financing and insurance
services.
Certain statements contained in this release are forward-looking in
nature. These include all statements about People's plans, objectives,
expectations and other statements that are not historical facts, and
usually use words such as "expect," "anticipate," "believe" 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 actual results or
financial condition to differ materially from those expressed in or implied
by such statements. Factors of particular importance to People's include,
but are not limited to: (1) changes in general economic conditions,
including interest rates; (2) potential improvements or deterioration in
credit quality; (3) competition among providers of financial services; (4)
residential mortgage and secondary market activity; (5) changes in
accounting and regulatory guidance applicable to banks; and (6) price
levels and conditions in the public securities markets generally. People's
does not undertake any obligation to update or revise any forward-looking
statements, whether as a result of new information, future events or
otherwise.
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People's Bank and Subsidiaries
FINANCIAL HIGHLIGHTS
Three Months Ended
June March Dec. Sept. June
(dollars in millions, except per 30, 31, 31, 30, 30,
share data) 2006 2006 2005 2005 2005
Operating Data:
Net interest income $96.1 $94.0 $93.3 $92.5 $92.7
Provision for loan losses 0.2 (2.3) 5.3 1.1 0.9
Fee-based revenues 37.5 37.8 39.8 39.6 36.6
Net security gains (losses) (4.0) - - (0.1) 0.1
All other non-interest income (1) 5.7 4.6 12.3 5.0 2.3
Non-interest expense 86.6 87.6 90.5 86.2 86.0
Income from continuing operations 32.2 33.9 34.3 32.4 29.4
Income from discontinued
operations, net of tax 0.7 0.9 0.9 1.1 1.4
Gain on sale of discontinued
operations, net of tax - - - - 6.2
Net income 32.9 34.8 35.2 33.5 37.0
Selected Statistical Data:
Net interest margin (2) 3.82% 3.77% 3.75% 3.70% 3.66%
Return on average assets (2) 1.20 1.28 1.30 1.24 1.36
Return on average stockholders'
equity (2) 10.1 10.8 11.1 10.7 12.0
Efficiency ratio 61.7 62.3 62.3 62.2 63.4
Per Common Share Data:
Basic earnings per share $0.23 $0.24 $0.25 $0.24 $0.26
Diluted earnings per share 0.23 0.24 0.25 0.24 0.26
Dividends paid per share (3) 0.25 0.22 0.22 0.22 0.22
Dividend payout ratio (3) 46.9% 39.0% 38.6% 40.3% 36.5%
Book value (end of period) $9.34 $9.22 $9.10 $8.95 $8.84
Tangible book value (end of
period) 8.60 8.47 8.35 8.20 8.09
Stock price:
High 34.50 33.83 33.57 33.75 30.48
Low 30.87 30.00 28.85 28.17 26.27
Close (end of period) 32.85 32.75 31.06 28.98 30.24
Average diluted shares
outstanding (in millions) 142.18 142.04 141.96 141.88 141.72
(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.
People's Bank and Subsidiaries
FINANCIAL HIGHLIGHTS
Six Months Ended
June 30, June 30,
(dollars in millions, except per share data) 2006 2005
Operating Data:
Net interest income $190.1 $183.9
Provision for loan losses (2.1) 2.2
Fee-based revenues 75.3 72.1
Net security losses (4.0) -
All other non-interest income 10.3 4.6
Non-interest expense 174.2 167.7
Income from continuing operations 66.1 59.2
Income from discontinued operations,
net of tax 1.6 3.0
Gain on sale of discontinued operations,
net of tax - 6.2
Net income 67.7 68.4
Selected Statistical Data:
Net interest margin (1) 3.80% 3.64%
Return on average assets (1) 1.24 1.26
Return on average stockholders' equity (1) 10.4 11.2
Efficiency ratio 62.0 63.1
Per Common Share Data:
Basic earnings per share $0.47 $0.49
Diluted earnings per share 0.47 0.48
Dividends paid per share (2) 0.47 0.41
Dividend payout ratio (2) 42.8% 37.1%
Book value (end of period) $9.34 $8.84
Tangible book value (end of period) 8.60 8.09
Stock price:
High 34.50 30.48
Low 30.00 23.99
Close (end of period) 32.85 30.24
Average diluted shares outstanding
(in millions) 142.13 141.58
(1) Annualized.
(2) Reflects the waiver of dividends on the substantial majority of the
common shares owned by People's Mutual Holdings.
People's Bank and Subsidiaries
FINANCIAL HIGHLIGHTS - Continued
As of and for the Three Months Ended
June 30, March 31, Dec. 31, Sept. 30, June 30,
(dollars in millions) 2006 2006 2005 2005 2005
Financial Condition Data:
General:
Total assets $11,005 $11,081 $10,933 $10,891 $10,931
Loans 9,034 8,759 8,573 8,383 8,288
Allowance for loan losses 74 74 75 73 73
Securities, net 901 1,258 1,363 1,498 1,658
Deposits 9,203 9,252 9,083 9,086 9,177
Core deposits 9,058 9,058 8,873 8,858 8,978
Borrowings 221 251 295 271 234
Purchased funds 270 360 424 404 313
Subordinated notes 109 109 109 122 122
Stockholders' equity 1,326 1,306 1,289 1,268 1,251
Non-performing assets 28 24 22 20 24
Net loan charge-offs
(recoveries) 0.2 (1.3) 3.3 1.1 0.9
Average Balances:
Loans $8,898 $8,555 $8,438 $8,318 $8,184
Securities 1,070 1,325 1,438 1,580 1,908
Earning assets 10,049 9,980 9,952 9,992 10,171
Total assets 10,939 10,865 10,800 10,849 10,878
Deposits 9,119 8,990 8,966 9,060 9,050
Funding liabilities 9,463 9,407 9,366 9,426 9,475
Stockholders' equity 1,308 1,292 1,273 1,253 1,228
Ratios:
Net loan charge-offs
(recoveries) to
average loans (1) 0.01% (0.06)% 0.16% 0.05% 0.04%
Non-performing assets to
total loans, REO and
repossessed assets 0.31 0.28 0.26 0.24 0.29
Allowance for loan losses
to non-performing loans 266.8 322.0 352.5 379.6 312.3
Allowance for loan losses
to total loans 0.82 0.84 0.87 0.87 0.88
Average stockholders'
equity to average assets 12.0 11.9 11.8 11.5 11.3
Stockholders' equity to
total assets 12.1 11.8 11.8 11.6 11.4
Tier 1 leverage
capital (2) 11.5 11.4 11.2 11.0 10.7
Tier 1 risk-based
capital (2) 14.8 14.9 14.8 14.9 14.8
Total risk-based
capital (2) 16.4 16.5 16.4 17.0 16.8
(1) Annualized.
(2) June 30, 2006 capital ratios are preliminary.
People's Bank and Subsidiaries
CONSOLIDATED STATEMENTS OF CONDITION
June 30, March 31, June 30,
(in millions) 2006 2006 2005
Assets
Cash and due from banks $400.0 $376.3 $375.4
Short-term investments 45.8 59.1 57.9
Total cash and cash equivalents 445.8 435.4 433.3
Securities:
Trading account securities, at fair
value 29.8 30.2 34.1
Securities available for sale, at
fair value 869.8 1,227.1 1,622.0
Securities held to maturity, at
amortized cost 1.1 1.1 1.4
Total securities 900.7 1,258.4 1,657.5
Securities purchased under agreements
to resell 25.0 25.0 25.0
Loans:
Residential mortgage 3,804.1 3,702.7 3,440.9
Commercial 2,159.4 2,074.1 1,854.0
Commercial real estate finance 1,786.7 1,729.6 1,790.6
Consumer 1,283.5 1,252.9 1,202.9
Total loans 9,033.7 8,759.3 8,288.4
Less allowance for loan losses (74.0) (74.0) (73.0)
Total loans, net 8,959.7 8,685.3 8,215.4
Premises and equipment, net 135.2 137.2 140.8
Goodwill and other acquisition-
related intangibles 105.6 105.8 106.8
Bank-owned life insurance 209.0 206.6 151.2
Other assets 223.7 227.4 200.8
Total assets $11,004.7 $11,081.1 $10,930.8
Liabilities
Deposits:
Non-interest-bearing $2,342.8 $2,326.2 $2,370.4
Savings, interest-bearing checking
and money market 3,560.2 3,707.2 4,092.8
Time 3,300.2 3,219.0 2,713.4
Total deposits 9,203.2 9,252.4 9,176.6
Borrowings:
Federal funds purchased 116.0 251.0 208.9
Federal Home Loan Bank advances 105.0 - 25.0
Total borrowings 221.0 251.0 233.9
Subordinated notes 108.7 108.7 121.9
Other liabilities 145.5 162.6 147.9
Total liabilities 9,678.4 9,774.7 9,680.3
Stockholders' Equity
Common stock (without par value;
150.0 shares authorized; 142.0 shares,
141.8 shares and 141.4 shares issued
and outstanding) 142.0 141.8 141.4
Additional paid-in capital 176.2 174.2 167.0
Retained earnings 1,037.1 1,019.6 956.8
Accumulated other comprehensive loss (29.0) (29.2) (14.7)
Total stockholders' equity 1,326.3 1,306.4 1,250.5
Total liabilities and stockholders'
equity $11,004.7 $11,081.1 $10,930.8
People's Bank and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended
June March Dec. Sept. June
(in millions, except per 30, 31, 31, 30, 30,
share data) 2006 2006 2005 2005 2005
Interest and dividend income:
Residential mortgage $45.4 $42.1 $40.7 $39.1 $38.1
Commercial real estate finance 31.0 29.3 29.8 29.3 29.0
Commercial 36.1 33.2 31.0 28.4 25.9
Consumer 21.6 20.2 18.9 17.3 15.5
Total interest on loans 134.1 124.8 120.4 114.1 108.5
Securities 9.2 11.9 12.6 13.7 16.5
Short-term investments 0.7 0.8 0.5 0.5 0.3
Securities purchased under
agreements to resell 0.3 0.3 0.3 0.3 0.3
Total interest and dividend
income 144.3 137.8 133.8 128.6 125.6
Interest expense:
Deposits 42.9 38.0 34.8 31.2 27.9
Borrowings 2.8 3.3 2.8 2.1 2.2
Subordinated notes 2.5 2.5 2.9 2.8 2.8
Total interest expense 48.2 43.8 40.5 36.1 32.9
Net interest income 96.1 94.0 93.3 92.5 92.7
Provision for loan losses 0.2 (2.3) 5.3 1.1 0.9
Net interest income after
provision for loan losses 95.9 96.3 88.0 91.4 91.8
Non-interest income:
Fee-based revenues:
Service charges on deposit
accounts 20.0 18.3 19.8 19.9 17.3
Insurance revenue 5.8 7.8 7.6 7.1 5.9
Brokerage commissions 3.6 3.3 2.9 3.0 3.7
Other fees 8.1 8.4 9.5 9.6 9.7
Total fee-based revenues 37.5 37.8 39.8 39.6 36.6
Bank-owned life insurance 2.2 1.9 1.6 1.6 0.1
Net security gains (losses) (4.0) - - (0.1) 0.1
Net gains on sales of residential
mortgage loans 0.6 0.4 0.9 1.5 1.0
Gain on sale of branches - - 8.1 - -
Other non-interest income 2.9 2.3 1.7 1.9 1.2
Total non-interest income 39.2 42.4 52.1 44.5 39.0
Non-interest expense:
Compensation and benefits 50.3 51.9 49.7 49.7 48.4
Occupancy and equipment 15.4 15.8 16.5 15.5 14.7
Professional and outside
service fees 6.1 5.9 6.9 6.5 6.7
Liability restructuring costs - - 2.7 - -
Goodwill impairment charge - - - - 2.0
Other non-interest expense 14.8 14.0 14.7 14.5 14.2
Total non-interest expense 86.6 87.6 90.5 86.2 86.0
Income from continuing
operations before income
tax expense 48.5 51.1 49.6 49.7 44.8
Income tax expense 16.3 17.2 15.3 17.3 15.4
Income from continuing
operations 32.2 33.9 34.3 32.4 29.4
Discontinued operations:
Income from discontinued
operations, net of tax 0.7 0.9 0.9 1.1 1.4
Gain on sale of discontinued
operations, net of tax - - - - 6.2
Income from discontinued
operations 0.7 0.9 0.9 1.1 7.6
Net income $32.9 $34.8 $35.2 $33.5 $37.0
Diluted earnings per common share:
Income from continuing
operations $0.23 $0.24 $0.24 $0.23 $0.21
Income from discontinued
operations - - 0.01 0.01 0.05
Net income 0.23 0.24 0.25 0.24 0.26
People's Bank and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME
Six Months Ended
June 30, June 30,
(in millions, except per share data) 2006 2005
Interest and dividend income:
Residential mortgage $87.5 $74.9
Commercial real estate finance 60.3 57.1
Commercial 69.3 49.3
Consumer 41.8 29.6
Total interest on loans 258.9 210.9
Securities 21.1 33.7
Short-term investments 1.5 0.5
Securities purchased under
agreements to resell 0.6 0.4
Total interest and dividend income 282.1 245.5
Interest expense:
Deposits 80.9 51.5
Borrowings 6.1 4.5
Subordinated notes 5.0 5.6
Total interest expense 92.0 61.6
Net interest income 190.1 183.9
Provision for loan losses (2.1) 2.2
Net interest income after provision
for loan losses 192.2 181.7
Non-interest income:
Fee-based revenues:
Service charges on deposit accounts 38.3 32.7
Insurance revenue 13.6 13.3
Brokerage commissions 6.9 6.8
Other fees 16.5 19.3
Total fee-based revenues 75.3 72.1
Bank-owned life insurance 4.1 0.1
Net security losses (4.0) -
Net gains on sales of residential
mortgage loans 1.0 1.6
Other non-interest income 5.2 2.9
Total non-interest income 81.6 76.7
Non-interest expense:
Compensation and benefits 102.2 96.1
Occupancy and equipment 31.2 30.5
Professional and outside service fees 12.0 12.7
Goodwill impairment charge - 2.0
Other non-interest expense 28.8 26.4
Total non-interest expense 174.2 167.7
Income from continuing operations
before income tax expense 99.6 90.7
Income tax expense 33.5 31.5
Income from continuing operations 66.1 59.2
Discontinued operations:
Income from discontinued operations,
net of tax 1.6 3.0
Gain on sale of discontinued operations,
net of tax - 6.2
Income from discontinued operations 1.6 9.2
Net income $67.7 $68.4
Diluted earnings per common share:
Income from continuing operations $0.47 $0.42
Income from discontinued operations - 0.06
Net income 0.47 0.48
People's Bank and Subsidiaries
AVERAGE BALANCE, INTEREST AND YIELD/RATE ANALYSIS (1)
June 30, 2006 March 31, 2006
Three months ended Average Yield/ Average Yield/
(dollars in millions) Balance Interest Rate Balance Interest Rate
Earning assets:
Short-term investments $57.0 $0.7 4.66% $74.4 $0.8 4.35%
Securities purchased
under agreements to
resell 25.0 0.3 5.06 25.0 0.3 4.82
Securities (2) 1,069.5 9.2 3.46 1,325.2 11.9 3.59
Loans:
Residential mortgage 3,754.0 45.4 4.83 3,528.9 42.1 4.77
Commercial real
estate finance 1,750.6 31.0 7.09 1,731.3 29.3 6.77
Commercial 2,120.6 36.1 6.81 2,035.0 33.2 6.53
Consumer 1,272.4 21.6 6.80 1,259.9 20.2 6.41
Total loans 8,897.6 134.1 6.03 8,555.1 124.8 5.84
Total earning
assets $10,049.1 $144.3 5.74% $9,979.7 $137.8 5.52%
Funding liabilities:
Deposits:
Non-interest-bearing
deposits $2,153.7 $- -% $2,111.7 $- -%
Savings, interest-
bearing checking
and money market 3,600.7 12.5 1.38 3,675.1 11.8 1.28
Time 3,241.6 29.7 3.67 3,033.1 25.2 3.32
Total core deposits 8,996.0 42.2 1.88 8,819.9 37.0 1.68
Non-core deposits (3) 123.1 0.7 2.35 170.3 1.0 2.32
Total deposits 9,119.1 42.9 1.88 8,990.2 38.0 1.69
Borrowings:
Federal funds
purchased 199.8 2.4 4.84 276.1 3.0 4.35
Federal Home Loan
Bank advances 35.4 0.4 5.02 31.7 0.3 4.44
Total borrowings 235.2 2.8 4.87 307.8 3.3 4.36
Subordinated notes 108.7 2.5 9.04 108.7 2.5 9.04
Total funding
liabilities $9,463.0 $48.2 2.04% $9,406.7 $43.8 1.86%
Excess of earning
assets over funding
liabilities $586.1 $573.0
Net interest income/spread $96.1 3.70% $94.0 3.66%
Net interest margin 3.82% 3.77%
(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 $82.1 million, $78.6 million and $89.2 million of
non-interest-bearing core deposits for the three months ended June
30, 2006, March 31, 2006 and June 30, 2005, respectively.
People's Bank and Subsidiaries
AVERAGE BALANCE, INTEREST AND YIELD/RATE ANALYSIS (1)
June 30, 2005
Three months ended Average Yield/
(dollars in millions) Balance Interest Rate
Earning assets:
Short-term investments $53.7 $0.3 2.54%
Securities purchased under
agreements to resell 25.0 0.3 4.00
Securities (2) 1,907.7 16.8 3.52
Loans:
Residential mortgage 3,398.3 38.1 4.48
Commercial real estate finance 1,817.5 29.0 6.38
Commercial 1,790.5 25.9 5.78
Consumer 1,177.8 15.5 5.27
Total loans 8,184.1 108.5 5.30
Total earning assets $10,170.5 $125.9 4.95%
Funding liabilities:
Deposits:
Non-interest-bearing deposits $2,167.6 $- -%
Savings, interest-bearing checking
and money market 4,131.5 10.7 1.03
Time 2,594.8 16.7 2.57
Total core deposits 8,893.9 27.4 1.23
Non-core deposits (3) 156.1 0.5 1.32
Total deposits 9,050.0 27.9 1.23
Borrowings:
Federal funds purchased 239.3 1.7 2.89
Federal Home Loan Bank advances 64.2 0.5 3.01
Total borrowings 303.5 2.2 2.92
Subordinated notes 121.9 2.8 9.18
Total funding liabilities $9,475.4 $32.9 1.39%
Excess of earning assets
over funding liabilities $695.1
Net interest income/spread $93.0 3.56%
Net interest margin 3.66%
(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 $82.1 million, $78.6 million and $89.2 million of
non-interest-bearing core deposits for the three months ended
June 30, 2006, March 31, 2006 and June 30, 2005, respectively.
People's Bank and Subsidiaries
AVERAGE BALANCE, INTEREST AND YIELD/RATE ANALYSIS (1)
June 30, 2006 June 30, 2005
Six months ended Average Yield/ Average Yield/
(dollars in millions) Balance Interest Rate Balance Interest Rate
Earning assets:
Short-term investments $65.7 $1.5 4.49% $48.8 $0.5 2.22%
Securities purchased
under agreements to
resell 25.0 0.6 4.94 20.6 0.4 3.86
Securities (2) 1,196.6 21.1 3.53 1,970.7 34.0 3.44
Loans:
Residential mortgage 3,642.1 87.5 4.80 3,349.7 74.9 4.47
Commercial real
estate finance 1,741.0 60.3 6.93 1,822.2 57.1 6.28
Commercial 2,078.0 69.3 6.68 1,749.2 49.3 5.63
Consumer 1,266.2 41.8 6.60 1,163.6 29.6 5.08
Total loans 8,727.3 258.9 5.93 8,084.7 210.9 5.22
Total earning
assets $10,014.6 $282.1 5.63% $10,124.8 $245.8 4.85%
Funding liabilities:
Deposits:
Non-interest-bearing
deposits $2,132.8 $- -% $2,134.3 $- -%
Savings, interest-
bearing checking
and money market 3,637.7 24.3 1.33 4,162.4 19.9 0.95
Time 3,137.9 54.9 3.50 2,503.6 30.7 2.45
Total core deposits 8,908.4 79.2 1.78 8,800.3 50.6 1.15
Non-core deposits (3) 146.6 1.7 2.33 148.9 0.9 1.16
Total deposits 9,055.0 80.9 1.79 8,949.2 51.5 1.15
Borrowings:
Federal funds purchased 237.7 5.4 4.56 244.8 3.2 2.64
Federal Home Loan
Bank advances 33.6 0.7 4.74 94.6 1.2 2.64
Repurchase agreements - - - 3.4 0.1 2.39
Total borrowings 271.3 6.1 4.58 342.8 4.5 2.64
Subordinated notes 108.7 5.0 9.04 121.9 5.6 9.18
Total funding
liabilities $9,435.0 $92.0 1.95% $9,413.9 $61.6 1.31%
Excess of earning
assets over funding
liabilities $579.6 $710.9
Net interest income/spread $190.1 3.68% $184.2 3.54%
Net interest margin 3.80% 3.64%
(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 $80.4 million and $85.3 million of non-interest-bearing core
deposits for the six months ended June 30, 2006 and June 30, 2005,
respectively.
People's Bank and Subsidiaries
NON-PERFORMING ASSETS
June March Dec. Sept. June
30, 31, 31, 30, 30,
(dollars in millions) 2006 2006 2005 2005 2005
Non-accrual loans:
Commercial real estate finance $12.3 $12.8 $5.8 $5.9 $5.9
Commercial 6.9 1.1 1.3 2.3 2.5
Residential mortgage 4.8 5.1 6.7 3.9 6.7
PCLC 2.6 2.9 6.2 5.9 7.0
Consumer 1.1 1.1 1.3 1.2 1.2
Total non-accrual loans 27.7 23.0 21.3 19.2 23.3
Real estate owned ("REO") and
repossessed assets, net 0.4 1.3 0.7 0.9 0.9
Total non-performing assets $28.1 $24.3 $22.0 $20.1 $24.2
Non-performing loans as a
percentage of total loans 0.31% 0.26% 0.25% 0.23% 0.28%
Non-performing assets as a
percentage of total loans,
REO and repossessed assets 0.31 0.28 0.26 0.24 0.29
Non-performing assets as a
percentage of stockholders' equity
and allowance for loan losses 2.01 1.76 1.62 1.50 1.83
Allowance for loan losses as a
percentage of non-performing
loans 266.8 322.0 352.5 379.6 312.3
Allowance for loan losses as a
percentage of total loans 0.82 0.84 0.87 0.87 0.88
People's Bank and Subsidiaries
ALLOWANCE FOR LOAN LOSSES
Three Months Ended
June March Dec. Sept. June
30, 31, 31, 30, 30,
(in millions) 2006 2006 2005 2005 2005
Balance at beginning of period $74.0 $75.0 $73.0 $73.0 $73.0
Charge-offs (1.1) (1.5) (4.1) (1.6) (1.7)
Recoveries 0.9 2.8 0.8 0.5 0.8
Net loan (charge-offs)
recoveries (0.2) 1.3 (3.3) (1.1) (0.9)
Provision for loan losses 0.2 (2.3) 5.3 1.1 0.9
Balance at end of period $74.0 $74.0 $75.0 $73.0 $73.0
People's Bank and Subsidiaries
NET LOAN CHARGE-OFFS (RECOVERIES)
Three Months Ended
June March Dec. Sept. June
30, 31, 31, 30, 30,
(in millions) 2006 2006 2005 2005 2005
Consumer $0.3 $0.6 $0.9 $0.6 $0.8
Residential mortgage 0.1 - (0.1) - -
PCLC - 0.3 2.5 0.1 -
Commercial - 0.1 - 0.4 0.1
Commercial real estate finance (0.2) (2.3) - - -
Total $0.2 $(1.3) $3.3 $1.1 $0.9
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, both of People's
Bank
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