BRIDGEPORT, Conn., Oct. 21 /PRNewswire-FirstCall/ -- People's Bank
(Nasdaq: PBCT), an $11 billion financial services company, today announced net
income of $27.5 million, or $0.29 per share, for the third quarter of 2004,
compared to $14.9 million, or $0.16 per share, for the third quarter of 2003.
Prior period per share information has been restated to reflect the three-for-
two stock split completed in May 2004.
People's Board of Directors declared a $0.29 per share quarterly dividend
on People's common stock, payable Nov. 15, 2004, to stockholders of record on
Nov. 1, 2004. People's Mutual Holdings, which owns 54.7 million shares of
People's Bank common stock, will accept dividends on only 3 percent of its
shares. Based on the closing stock price on October 20, 2004, the dividend
yield on People's Bank common stock is 3.2 percent.
"Results for the quarter continue to reflect the positive impact from the
balance sheet restructuring completed earlier this year," said John A. Klein,
president and chief executive officer. "Continued healthy growth in our core
commercial and consumer banking businesses and a significant improvement in
the net interest margin generated substantially improved results, with net
income up 85 percent compared to the third quarter of 2003 and a return on
average assets exceeding 1 percent.
"Our average commercial banking, home equity and residential mortgage loan
portfolios increased a combined $583 million, or 9 percent, from year-ago
levels," added Klein. Average savings, money market and interest-bearing
checking balances increased $296 million, or 7 percent, compared to the third
quarter of 2003. Klein continued, "We are also pleased by the growth in
average non-interest-bearing deposits, which increased by $181 million, or
9 percent on a year-over-year basis."
Klein stated, "These results further demonstrate the significant value of
the bank's franchise in Connecticut, one of the most attractive banking
markets in the nation. People's remains the only major bank in Connecticut
that is uniquely focused on the state's consumers and businesses."
"Other key drivers of the bank's performance this quarter were an
anticipated increase in the net interest margin and outstanding asset
quality," said Philip R. Sherringham, executive vice president and chief
financial officer. "The 24 basis point improvement in the net interest margin
from last quarter reflects the bank's slightly asset sensitive position and
the benefit of redeploying short-term investments to fund loan growth and to
purchase higher-yielding securities."
Commenting on asset quality, Sherringham added, "Bankwide asset quality
remains strong, with third quarter net loan charge-offs of only $2.3 million,
a 42 percent improvement from the third quarter of last year. Annualized net
loan charge-offs as a percent of average loans for the quarter were
0.12 percent, compared to 0.23 percent a year ago." Non-performing assets
equaled 0.45 percent of total loans, REO and other assets at September 30,
2004 compared to 0.50 percent a year ago.
"Given the net growth in our loan portfolio, we added $2.0 million to the
allowance for loan losses this quarter," stated Sherringham. The allowance for
loan losses as a percent of total loans was 0.99 percent at both September 30,
2004 and June 30, 2004.
Sherringham continued, "Expense control continues to be a significant area
of focus, as evidenced by a 270 basis point improvement in our efficiency
ratio from last quarter. In fact, non-interest expense increased a modest
$0.3 million compared to the third quarter of 2003 and was essentially flat
compared with last quarter, despite additional costs for Sarbanes-Oxley
compliance this quarter."
Selected Financial Terms
Due to the sale of the credit card business in the first quarter of this
year, information related to that business for all periods presented is now
reported in discontinued operations.
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 consists of the sum of net interest income and total
non-interest income 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 ability
to generate revenues, 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 how much it costs People's to generate a dollar of revenue, is the ratio of
total adjusted non-interest expense to operating revenue. Total adjusted non-
interest expense equals People's total non-interest expense, excluding
amortization of acquisition-related intangibles, losses on real estate assets
and other items that may recur from time to time but that are deemed to occur
irregularly or infrequently.
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 certain other non-interest-bearing
deposits. Purchased funds include borrowings, brokered certificates of deposit
and municipal deposits.
Conference Call
On October 22, 2004, 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, News and
Events, Conference Calls. 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.
3Q Financial Highlights (3Q 2004 compared with 3Q 2003 unless otherwise
indicated)
Summary
* Net income totaled $27.5 million, or $0.29 per share.
* Income from continuing operations increased $8.7 million after-tax.
* Additional gain on credit card sale of $3.0 million from the
resolution of certain contingencies included in income from
discontinued operations.
* Provision for loan losses increased $0.3 million.
* Allowance for loan losses increased $2.0 million from June 30, 2004.
* Net loan charge-offs decreased $1.7 million.
* Net interest income increased $17.5 million.
* Net interest margin improved 24 basis points from 2Q04 and increased
63 basispoints from 3Q03 to 3.47%.
* Non-interest income decreased $3.2 million.
* Net gains on sales of residential mortgage loans decreased $4.2
million.
* Net security gains of $0.2 million compared to $0.8 million.
* Other non-interest income includes $1.8 million of credit card-
related servicing income.
* Non-interest expense increased $0.3 million.
* Compensation and benefits increased $0.9 million.
* Advertising and promotion declined $0.6 million.
* Occupancy and equipment decreased $0.6 million.
* Professional and outside service fees include $0.6 million of costs
relating to Sarbanes-Oxley compliance.
* Effective income tax rate for 3Q04 equaled 35.3%, up from 22.6% for
2Q04.
* Income tax expense in 2Q04 was reduced by $4.0 million as a result of
the completion of a federal tax audit.
Commercial Banking
* Average commercial banking loans grew $267 million, or 9%.
* Average commercial non-interest-bearing deposits surpassed $1.0 billion
this quarter and increased $75 million, or 8%.
* The ratio of non-performing commercial banking loans to total commercial
banking loans was 0.76% at September 30, 2004 compared to 0.75% at June
30, 2004.
* Non-performing assets increased $1.4 million, or 6%, from June 30,
2004.
* Net loan charge-offs totaled $0.7 million or 0.09% of average commercial
banking loans.
Consumer Financial Services
* Average home equity loans increased $260 million, or 38%.
* Average consumer non-interest-bearing deposits grew $106 million, or
11%.
* Average residential mortgage loans increased $56 million, or 2%.
Treasury
* Securities and short-term investments totaled $2.3 billion at September
30, 2004, a$403 million decrease from September 30, 2003.
* Debt securities decreased $256 million.
* Short-term investments decreased $34 million.
* Other equity securities decreased $115 million.
People's Bank is a diversified financial services company providing
consumer and commercial banking services, in addition to insurance and
financial advisory services. The bank is a leader in supermarket banking, with
65 of its 154 branches located in Super Stop & Shop stores. Through its
subsidiaries, People's provides brokerage and financial advisory services,
asset management, equipment leasing and financing, and insurance services.
Certain statements contained in this release are forward-looking in
nature. These include all statements about our 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 (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.
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
Sept. June March Dec. Sept.
30, 30, 31, 31, 30,
(dollars in millions, except per 2004 2004 2004 2003 2003
share data)
Operating Data:
Net interest income - FTE $85.8 $80.1 $73.4 $72.4 $68.5
Provision for loan losses 4.3 7.1 (0.1) 4.0 4.0
Fee-based revenues 35.0 34.6 37.0 36.7 34.8
Net security gains (losses) 0.2 (0.1) (4.8) 0.5 0.8
All other non-interest income 3.5 4.5 2.3 2.3 6.3
Non-interest expense (1) 83.8 83.7 227.7 86.9 83.5
Gain on sale of discontinued
operations, net of tax 2.0 0.2 196.3 - -
Net income 27.5 25.0 119.2 17.4 14.9
Selected Statistical Data:
Net interest margin (2) 3.47% 3.23% 3.03% 3.01% 2.84%
Return on average assets (2) 1.04 0.94 4.25 0.60 0.51
Return on average stockholders'
equity (2) 9.5 8.7 45.6 7.1 6.2
Efficiency ratio 66.7 69.4 74.7 77.3 75.7
Per Common Share Data: (3)
Basic earnings per share $0.29 $0.27 $1.28 $0.19 $0.16
Diluted earnings per share 0.29 0.27 1.27 0.19 0.16
Dividends paid per share (4) 0.29 0.29 0.26 0.26 0.26
Total dividend payout ratio (4) 42.8% 47.0% 8.7% 59.8% 69.5%
Book value (end of period) $12.63 $12.34 $12.38 $10.77 $10.60
Tangible book value (end of
period) 11.53 11.24 11.27 9.55 9.37
Stock price:
High 37.00 33.73 31.37 22.67 20.87
Low 30.00 27.58 21.66 19.82 18.34
Close (end of period) 35.73 31.15 30.99 21.70 20.00
(1) Includes liability restructuring costs totaling $133.4 million for
the three months ended March 31, 2004.
(2) Annualized.
(3) Restated for the three-for-two stock split completed in May 2004.
(4) 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
Nine Months Ended
Sept. 30, Sept. 30,
(dollars in millions, except per 2004 2003
share data)
Operating Data:
Net interest income - FTE $239.3 $211.8
Provision for loan losses 11.3 12.7
Fee-based revenues 106.6 106.4
Net security losses (4.7) (1.1)
All other non-interest income 10.3 21.3
Non-interest expense (1) 395.2 258.8
Gain on sale of discontinued
operations, net of tax 198.5 -
Net income 171.7 46.4
Selected Statistical Data:
Net interest margin (2) 3.25% 2.85%
Return on average assets (2) 2.12 0.52
Return on average stockholders'
equity (2) 20.5 6.5
Efficiency ratio 70.1 76.1
Per Common Share Data: (3)
Basic earnings per share $1.84 $0.50
Diluted earnings per share 1.83 0.50
Dividends paid per share (4) 0.84 0.76
Total dividend payout ratio (4) 19.8% 65.1%
Book value (end of period) $12.63 $10.60
Tangible book value (end of period) 11.53 9.37
Stock price:
High 37.00 20.87
Low 21.66 16.17
Close (end of period) 35.73 20.00
(1) Includes liability restructuring costs totaling $133.4 million and
$1.2 million for the nine months ended September 30, 2004 and
September 30, 2003, respectively.
(2) Annualized.
(3) Restated for the three-for-two stock split completed in May 2004.
(4) 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
Sept. 30, June 30, March 31, Dec. 31, Sept. 30,
(dollars in millions) 2004 2004 2004 2003 2003
Financial Condition Data:
General:
Total assets $10,541 $10,660 $10,669 $11,672 $11,763
Loans 7,597 7,342 7,233 7,105 7,004
Allowance for loan
losses 75 73 68 71 71
Securities, net 2,210 2,537 2,065 2,405 2,578
Deposits 8,812 8,949 8,793 8,714 8,693
Core deposits 8,550 8,758 8,578 8,461 8,391
Borrowings 222 225 296 1,516 1,656
Purchased funds 389 334 434 1,711 1,852
Subordinated notes 122 122 122 253 253
Stockholders' equity 1,184 1,157 1,159 1,002 984
Non-performing assets 34 35 33 34 35
Net loan charge-offs 2.3 2.4 2.1 4.0 4.0
Ratios:
Net loan charge-offs to
average loans (1) 0.12% 0.13% 0.11% 0.23% 0.23%
Non-performing assets to
total loans,
REO and other assets 0.45 0.48 0.46 0.48 0.50
Allowance for loan losses
to non-performing loans 225.5 212.4 209.5 208.4 200.8
Allowance for loan losses
to total loans 0.99 0.99 0.94 0.99 1.01
Average stockholders'
equity to average assets 11.0 10.8 9.3 8.5 8.2
Stockholders' equity to
total assets 11.2 10.9 10.9 8.6 8.4
Tier 1 leverage capital
(2) 10.3 10.0 9.4 8.0 7.8
Tier 1 risk-based capital
(2) 15.0 15.1 14.6 9.9 9.5
Total risk-based capital
(2) 17.3 17.5 16.9 13.1 12.9
(1) Annualized.
(2) September 30, 2004 capital ratios are preliminary.
People's Bank and Subsidiaries
CONSOLIDATED STATEMENTS OF CONDITION
Sept. 30, June 30, Sept. 30,
(in millions) 2004 2004 2003
Assets
Cash and due from banks $310.7 $343.9 $316.7
Short-term investments 49.2 53.3 83.6
Total cash and cash equivalents 359.9 397.2 400.3
Securities:
Trading account securities, at fair
value 12.0 12.2 10.1
Securities available for sale, at
fair value 2,196.1 2,523.8 2,566.8
Securities held to maturity, at
amortized cost 1.4 1.4 1.4
Total securities 2,209.5 2,537.4 2,578.3
Loans:
Residential mortgage 3,195.5 3,144.5 3,076.5
Commercial real estate finance 1,813.0 1,761.2 1,689.1
Commercial 1,503.9 1,423.6 1,282.5
Consumer 1,085.0 1,012.9 955.6
Total loans 7,597.4 7,342.2 7,003.7
Less allowance for loan losses (75.0) (73.0) (70.5)
Total loans, net 7,522.4 7,269.2 6,933.2
Premises and equipment, net 143.7 144.2 151.3
Goodwill and other acquisition-
related intangibles 110.8 111.6 114.2
Other assets 194.5 199.9 236.7
Assets of discontinued operations - - 1,348.8
Total assets $10,540.8 $10,659.5 $11,762.8
Liabilities
Deposits:
Non-interest-bearing $2,205.6 $2,277.4 $2,079.0
Savings, interest-bearing checking
and money market 4,286.5 4,403.8 4,054.0
Time 2,320.3 2,268.0 2,559.6
Total deposits 8,812.4 8,949.2 8,692.6
Borrowings:
Federal funds purchased 222.1 225.4 500.1
Federal Home Loan Bank advances - - 949.5
Repurchase agreements - - 206.8
Total borrowings 222.1 225.4 1,656.4
Subordinated notes 121.7 121.7 252.8
Other liabilities 200.4 206.6 177.2
Total liabilities 9,356.6 9,502.9 10,779.0
Stockholders' Equity
Common stock (without par value;
150.0 shares, 150.0 shares and 100.0
shares authorized; 93.7 shares,
93.7 shares and 92.8 shares issued
and outstanding) 93.7 93.7 92.8
Additional paid-in capital 200.6 199.1 179.4
Retained earnings 897.6 881.9 752.8
Accumulated other comprehensive loss (7.7) (18.1) (41.2)
Total stockholders' equity 1,184.2 1,156.6 983.8
Total liabilities and
stockholders' equity $10,540.8 $10,659.5 $11,762.8
People's Bank and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended
Sept. June March Dec. Sept.
30, 30, 31, 31, 30,
(in millions, except per share data) 2004 2004 2004 2003 2003
Interest and dividend income:
Residential mortgage $35.0 $32.6 $34.7 $34.5 $32.6
Commercial real estate finance 26.4 25.5 25.1 26.0 26.0
Commercial 18.4 17.3 16.8 16.4 16.5
Consumer 11.6 10.9 11.4 12.2 12.9
Total interest on loans 91.4 86.3 88.0 89.1 88.0
Securities 19.4 17.3 18.5 20.5 18.6
Short-term investments 0.1 1.1 0.7 0.2 0.6
Total interest and dividend
income 110.9 104.7 107.2 109.8 107.2
Interest expense:
Deposits 21.5 21.3 21.6 22.8 23.9
Borrowings 0.9 0.6 10.9 15.0 15.2
Subordinated notes 2.8 2.8 5.0 5.7 5.7
Interest allocated to discontinued
operations - - (3.6) (5.8) (5.8)
Total interest expense 25.2 24.7 33.9 37.7 39.0
Net interest income 85.7 80.0 73.3 72.1 68.2
Provision for loan losses 4.3 7.1 (0.1) 4.0 4.0
Net interest income after
provision for loan losses 81.4 72.9 73.4 68.1 64.2
Non-interest income:
Fee-based revenues:
Service charges on deposit
accounts 17.8 17.7 16.9 17.3 17.4
Insurance revenue 6.4 5.1 8.4 7.5 5.5
Brokerage commissions 3.0 3.3 3.6 3.4 3.2
Other fees 7.8 8.5 8.1 8.5 8.7
Total fee-based revenues 35.0 34.6 37.0 36.7 34.8
Net security gains (losses) 0.2 (0.1) (4.8) 0.5 0.8
Net gains on sales of residential
mortgage loans 0.7 1.3 1.0 1.4 4.9
Other non-interest income 2.8 3.2 1.3 0.9 1.4
Total non-interest income 38.7 39.0 34.5 39.5 41.9
Non-interest expense:
Compensation and benefits 46.5 46.5 55.4 47.1 45.6
Occupancy and equipment 17.6 17.5 17.9 19.0 18.2
Professional and outside service
fees 6.8 5.6 5.6 6.6 6.6
Liability restructuring costs - - 133.4 - -
Other non-interest expense 12.9 14.1 15.4 14.2 13.1
Total non-interest expense 83.8 83.7 227.7 86.9 83.5
Income (loss) from continuing
operations before income tax
expense (benefit) 36.3 28.2 (119.8) 20.7 22.6
Income tax expense (benefit) 12.8 5.8 (41.7) 7.2 7.8
Income (loss) from continuing
operations 23.5 22.4 (78.1) 13.5 14.8
Discontinued operations:
Income from discontinued operations,
net of tax 2.0 2.4 1.0 3.9 0.1
Gain on sale of discontinued
operations, net of tax 2.0 0.2 196.3 - -
Income from discontinued
operations 4.0 2.6 197.3 3.9 0.1
Net income $27.5 $25.0 $119.2 $17.4 $14.9
Diluted earnings per common share:
Income (loss) from continuing
operations $0.25 $0.24 $(0.83) $0.14 $0.16
Income from discontinued operations 0.04 0.03 2.10 0.05 -
Net income 0.29 0.27 1.27 0.19 0.16
People's Bank and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME
Nine Months Ended
Sept. 30, Sept. 30,
(in millions, except per share data) 2004 2003
Interest and dividend income:
Residential mortgage $102.3 $107.2
Commercial real estate finance 77.0 77.0
Commercial 52.5 49.9
Consumer 33.9 42.9
Total interest on loans 265.7 277.0
Securities 55.2 63.9
Short-term investments 1.9 3.4
Total interest and dividend
income 322.8 344.3
Interest expense:
Deposits 64.4 79.6
Borrowings 12.4 54.0
Subordinated notes 10.6 17.1
Interest allocated to discontinued
operations (3.6) (15.8)
Total interest expense 83.8 134.9
Net interest income 239.0 209.4
Provision for loan losses 11.3 12.7
Net interest income after
provision for loan losses 227.7 196.7
Non-interest income:
Fee-based revenues:
Service charges on deposit
accounts 52.4 51.4
Insurance revenue 19.9 18.6
Brokerage commissions 9.9 10.1
Other fees 24.4 26.3
Total fee-based revenues 106.6 106.4
Net security losses (4.7) (1.1)
Net gains on sales of residential
mortgage loans 3.0 13.5
Other non-interest income 7.3 7.8
Total non-interest income 112.2 126.6
Non-interest expense:
Compensation and benefits 148.4 140.1
Occupancy and equipment 53.0 55.8
Professional and outside service fees 18.0 19.4
Liability restructuring costs 133.4 1.2
Other non-interest expense 42.4 42.3
Total non-interest expense 395.2 258.8
Income (loss) from continuing
operations before income tax
expense (benefit) (55.3) 64.5
Income tax expense (benefit) (23.1) 15.3
Income (loss) from continuing operations (32.2) 49.2
Discontinued operations:
Income (loss) from discontinued
operations, net of tax 5.4 (2.8)
Gain on sale of discontinued
operations, net of tax 198.5 -
Income (loss) from discontinued
operations 203.9 (2.8)
Net income $171.7 $46.4
Diluted earnings per common share:
Income (loss) from continuing operations $(0.34) $0.53
Income (loss) from discontinued operations 2.17 (0.03)
Net income 1.83 0.50
People's Bank and Subsidiaries
AVERAGE BALANCE, INTEREST AND YIELD/RATE ANALYSIS (1)
September 30, 2004 June 30, 2004
Three months ended Average Yield/ Average Yield/
(dollars in millions) Balance Interest Rate Balance Interest Rate
Earning assets:
Short-term investments $50.9 $0.1 1.11% $424.7 $1.2 1.11%
Securities (2) 2,373.4 19.4 3.28 2,219.8 17.3 3.11
Loans:
Residential
mortgage 3,179.5 35.0 4.40 3,131.0 32.6 4.17
Commercial real
estate finance 1,777.2 26.5 5.96 1,736.3 25.5 5.88
Commercial 1,446.7 18.4 5.09 1,409.7 17.3 4.93
Consumer 1,051.8 11.6 4.40 990.1 10.9 4.38
Total loans 7,455.2 91.5 4.91 7,267.1 86.3 4.75
Total earning
assets $9,879.5 $111.0 4.49% $9,911.6 $104.8 4.23%
Funding liabilities:
Deposits:
Non-interest-
bearing deposits $2,119.9 $- -% $2,092.7 $- - %
Savings, interest-
bearing checking
and money market 4,327.9 8.8 0.81 4,348.0 8.6 0.80
Time 2,219.4 12.5 2.25 2,245.5 12.4 2.20
Total core
deposits 8,667.2 21.3 0.98 8,686.2 21.0 0.97
Non-core deposits 160.2 0.2 0.60 172.6 0.3 0.54
Total deposits 8,827.4 21.5 0.98 8,858.8 21.3 0.96
Borrowings:
Federal funds
purchased 230.7 0.8 1.37 266.0 0.6 0.94
Federal Home
Loan Bank advances 35.8 0.1 1.54 - - -
Repurchase agreements - - - - - -
Total borrowings 266.5 0.9 1.39 266.0 0.6 0.94
Subordinated notes 121.7 2.8 9.19 121.7 2.8 9.19
Funding liabilities
allocated to
discontinued
operations (3) - - - - - -
Total funding
liabilities $9,215.6 $25.2 1.10% $9,246.5 $24.7 1.07%
Excess of earning assets
over funding
liabilities $663.9 $665.1
Net interest
income/spread (4) $85.8 3.39% $80.1 3.16%
Net interest margin 3.47% 3.23%
(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) Represents an allocation of funding liabilities and interest expense
to discontinued operations.
(4) The FTE adjustment was $0.1 million for the three months ended
September 30, 2004, $0.1 million for the three months ended June 30,
2004, and $0.3 million for the three months ended September 30, 2003.
People's Bank and Subsidiaries
AVERAGE BALANCE, INTEREST AND YIELD/RATE ANALYSIS (1)
September 30, 2003
Three months ended Average Yield/
(dollars in millions) Balance Interest Rate
Earning assets:
Short-term investments $197.1 $0.8 1.60%
Securities (2) 2,452.0 18.7 3.06
Loans:
Residential mortgage 3,122.9 32.6 4.17
Commercial real estate
finance 1,682.2 26.0 6.20
Commercial 1,275.2 16.5 5.17
Consumer 931.5 12.9 5.53
Total loans 7,011.8 88.0 5.02
Total earning assets $9,660.9 $107.5 4.45%
Funding liabilities:
Deposits:
Non-interest-bearing
deposits $1,939.2 $- - %
Savings, interest-
bearing checking
and money market 4,027.7 8.0 0.80
Time 2,448.2 15.5 2.53
Total core deposits 8,415.1 23.5 1.12
Non-core deposits 284.9 0.4 0.52
Total deposits 8,700.0 23.9 1.10
Borrowings:
Federal funds
purchased 517.5 1.3 1.05
Federal Home Loan Bank
advances 897.7 12.5 5.54
Repurchase agreements 202.2 1.4 2.78
Total borrowings 1,617.4 15.2 3.76
Subordinated notes 252.7 5.7 9.04
Funding liabilities
allocated to
discontinued
operations (3) (1,305.8) (5.8) 1.78
Total funding
liabilities $9,264.3 $39.0 1.68%
Excess of earning assets
over funding
liabilities $396.6
Net interest
income/spread (4) $68.5 2.77%
Net interest margin 2.84%
(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) Represents an allocation of funding liabilities and interest expense
to discontinued operations.
(4) The FTE adjustment was $0.1 million for the three months ended
September 30, 2004, $0.1 million for the three months ended June
30, 2004, and $0.3 million for the three months ended September
30, 2003.
People's Bank and Subsidiaries
AVERAGE BALANCE, INTEREST AND YIELD/RATE ANALYSIS (1)
September 30, 2004 September 30, 2003
Nine months ended Average Yield/ Average Yield/
(dollars in millions) Balance Interest Rate Balance Interest Rate
Earning assets:
Short-term investments $247.3 $2.1 1.15% $327.5 $4.4 1.81%
Securities (2) 2,294.9 55.2 3.21 2,702.8 65.2 3.22
Loans:
Residential mortgage 3,141.1 102.3 4.34 3,057.8 107.2 4.67
Commercial real
estate finance 1,740.4 77.1 5.91 1,631.3 77.1 6.30
Commercial 1,399.5 52.5 5.01 1,253.2 49.9 5.31
Consumer 1,007.7 33.9 4.47 934.2 42.9 6.12
Total loans 7,288.7 265.8 4.86 6,876.5 277.1 5.37
Total earning
assets $9,830.9 $323.1 4.38% $9,906.8 $346.7 4.67%
Funding liabilities:
Deposits:
Non-interest-bearing
deposits $2,063.3 $- - % $1,877.9 $- - %
Savings, interest-
bearing checking
and money market 4,284.3 25.8 0.80 3,933.5 27.2 0.92
Time 2,258.5 37.8 2.23 2,525.4 50.8 2.68
Total core
deposits 8,606.1 63.6 0.99 8,336.8 78.0 1.25
Non-core deposits 172.1 0.8 0.65 291.3 1.6 0.74
Total deposits 8,778.2 64.4 0.98 8,628.1 79.6 1.23
Borrowings:
Federal funds
purchased 259.3 2.1 1.07 548.9 8.3 2.02
Federal Home Loan Bank
advances 228.8 9.3 5.40 1,099.6 41.3 5.00
Repurchase agreements 48.3 1.0 2.90 200.8 4.4 2.93
Total borrowings 536.4 12.4 3.08 1,849.3 54.0 3.89
Subordinated notes 154.8 10.6 9.15 252.6 17.1 9.04
Funding liabilities
allocated to
discontinued
operations (3) (272.0) (3.6) 1.77 (1,076.0) (15.8) 1.97
Total funding
liabilities $9,197.4 $83.8 1.22% $9,654.0 $134.9 1.86%
Excess of earning assets
over funding
liabilities $633.5 $252.8
Net interest
income/spread (4) $239.3 3.16% $211.8 2.81%
Net interest margin 3.25% 2.85%
(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) Represents an allocation of funding liabilities and interest expense
to discontinued operations.
(4) The FTE adjustment was $0.3 million for the nine months ended
September 30, 2004 and $2.4 million for the nine months ended
September 30, 2003.
People's Bank and Subsidiaries
NON-PERFORMING ASSETS
Sept. June March Dec. Sept.
30, 30, 31, 31, 30,
(dollars in millions) 2004 2004 2004 2003 2003
Non-accrual loans:
Commercial $12.0 $12.1 $8.4 $8.5 $9.6
Commercial real estate finance 13.2 11.7 11.9 11.4 12.3
Residential mortgage 7.2 8.8 9.9 11.4 10.7
Consumer 0.9 1.8 2.4 2.5 2.5
Total non-accrual loans 33.3 34.4 32.6 33.8 35.1
Real estate owned ("REO") and other
assets, net 1.1 0.8 0.9 0.5 0.2
Total non-performing assets $34.4 $35.2 $33.5 $34.3 $35.3
Non-performing loans as a percentage of
total loans 0.44% 0.47% 0.45% 0.48% 0.50%
Non-performing assets as a percentage
of total loans, REO and other assets 0.45 0.48 0.46 0.48 0.50
Non-performing assets as a percentage
of stockholders' equity and allowance
for loan losses 2.73 2.86 2.73 3.20 3.34
Allowance for loan losses as a
percentage of non-performing loans 225.5 212.4 209.5 208.4 200.8
Allowance for loan losses as a
percentage of total loans 0.99 0.99 0.94 0.99 1.01
People's Bank and Subsidiaries
ALLOWANCE FOR LOAN LOSSES
Three Months Ended
Sept. June March Dec. Sept.
30, 30, 31, 31, 30,
(in millions) 2004 2004 2004 2003 2003
Balance at beginning of period $73.0 $68.3 $70.5 $70.5 $70.5
Charge-offs (3.2) (3.2) (3.4) (4.8) (4.9)
Recoveries 0.9 0.8 1.3 0.8 0.9
Net loan charge-offs (2.3) (2.4) (2.1) (4.0) (4.0)
Provision for loan losses 4.3 7.1 (0.1) 4.0 4.0
Balance at end of period $75.0 $73.0 $68.3 $70.5 $70.5
People's Bank and Subsidiaries
NET LOAN CHARGE-OFFS (RECOVERIES)
Three Months Ended
Sept. June March Dec. Sept.
30, 30, 31, 31, 30,
(in millions) 2004 2004 2004 2003 2003
Consumer $1.6 $2.2 $2.4 $2.9 $3.3
Commercial 0.7 0.1 (0.2) 1.1 0.7
Residential mortgage - 0.1 - - -
Commercial real estate finance - - (0.1) - -
Total $2.3 $2.4 $2.1 $4.0 $4.0
SOURCE People's Bank
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Related links:
http://www.peoples.com
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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