PR Newswire | Apr 22, 2021 04:01PM EDT

or $0.33 per Common Share

04/22 15:00 CDT

People's United Financial Reports First Quarter Net Income of $144.5 Million, or $0.33 per Common ShareOperating Earnings of $0.37 per Common ShareAnnounces Common Dividend Increase for 28th Consecutive Year-- Announced merger with M&T Bank Corporation, which is expected to close in the fourth quarter of 2021.-- Sustained excellent asset quality as evidenced by net loan charge-offs to average total loans of 12 basis points, and provision for credit losses resulting in a net benefit of $13.6 million.-- Maintained strong deposit inflows as period-end balances increased $1.3 billion or three percent linked-quarter.-- Reached agreement with Stop & Shop on the timing of the exit from all New York in-store branch and ATM locations, which will begin in the third quarter of 2021 with a full exit occurring over four quarters. BRIDGEPORT, Conn., April 22, 2021

BRIDGEPORT, Conn., April 22, 2021 /PRNewswire/ -- People's United Financial, Inc. (NASDAQ: PBCT) today reported results for the first quarter of 2021. These results along with comparison periods are summarized below:

($ in millions, except per common share data)

Three Months Ended

Mar. 31, 2021 Dec. 31, 2020 Mar. 31, 2020

Net income (loss) $ 144.5 $ (145.3) $ 130.4

Net income (loss) available

to common shareholders 141.0 (148.8) 126.9

Per common share 0.33 (0.35) 0.30

Operating earnings^1 156.5 147.7 141.1

Per common share 0.37 0.35 0.33

Net interest income $ 385.9 $ 382.8 $ 396.0

Net interest margin 2.74% 2.84% 3.12%

Non-interest income 94.6 178.2 123.8

Operating non-interest income^1 94.6 102.3 123.8

Non-interest expense $ 311.9 $ 646.4 $ 320.1

Operating non-interest expense^1 292.3 288.5 302.2

Efficiency ratio 56.6% 55.5% 54.0%

Average balances

Loans $ 42,854 $ 44,061 $ 43,460

Deposits 52,876 50,674 44,163

Period-end balances

Loans 42,770 43,869 44,284

Deposits 53,475 52,138 44,741

^1See Non-GAAP Financial Measures and Reconciliation to GAAP.

"Our first quarter results marked a solid start to the year and further highlighted the strengths of the franchise," said Jack Barnes, Chairman and Chief Executive Officer. "In February, we announced the merger with M&T, a like-minded partner that has a similar culture, approach to service, complementary offerings, and minimal geographic overlap. This transaction will bring together two high-performing and well-respected institutions to create a leading U.S. super regional bank. The combined company will provide customers greater access to branches, expert bankers, innovative solutions, and enhanced digital capabilities. We are excited about the opportunities ahead and building upon the legacy forged by People's United over 178 years. Importantly, as we work towards the close of the merger, our focus remains steadfast on delivering value to customers, supporting communities, and caring for colleagues."

"We are pleased with the Company's financial performance in the first quarter," stated David Rosato, Senior Executive Vice President and Chief Financial Officer. "Operating income of $156.5 million, increased six percent linked-quarter and generated an operating return of average tangible common equity of 13.8 percent. These results included modestly higher net interest income, continued well-controlled expenses, and a negative provision for credit losses primarily driven by an improved economic outlook. Net interest margin of 2.74 percent was 10 basis points lower than the fourth quarter due to lower yields in the securities portfolio, two fewer calendars days and increased excess liquidity. These headwinds were partially offset by a further reduction in deposits costs for the seventh consecutive quarter, and stable loan yields. The loan-to-deposit ratio concluded the quarter at 80 percent as loans decreased $1.1 billion or three percent from December 31, while deposits grew $1.3 billion or three percent. The decline in period-end loans was largely driven by $586 million in lower retail balances, and a $431 million reduction in mortgage warehouse from a record level at year-end. Conversely, the loan portfolio benefited from a net increase in PPP balances of $288 million and continued solid results in LEAF. Deposit growth reflected federal stimulus payments, PPP funds and strong inflows in our municipal business."

As of and for the Three Months Ended

Mar. 31, 2021 Dec. 31, 2020 Mar. 31, 2020

Asset Quality

Net loan charge-offs 0.12% 0.12% 0.10% to average total loans

Non-performing loans 0.83% 0.75% 0.54% as a percentage of total loans

Returns

Return on average assets^1 0.90% (0.93%) 0.89%

Return on average tangible common equity^1 12.5% (13.4%) 11.8%

Capital Ratios

People's United Financial, Inc.

Tangible common equity / tangible assets 7.4% 7.5% 7.4%

Tier 1 leverage 8.3% 8.3% 8.4%

Common equity tier 1 10.9% 10.5% 9.5%

Tier 1 risk-based 11.4% 11.0% 10.0%

Total risk-based 12.8% 12.4% 11.3%

People's United Bank, N.A.

Tier 1 leverage 8.7% 8.7% 8.9%

Common equity tier 1 12.1% 11.5% 10.7%

Tier 1 risk-based 12.1% 11.5% 10.7%

Total risk-based 13.3% 12.8% 12.0%

^1See Non-GAAP Financial Measures and Reconciliation to GAAP.

The Company's Board of Directors voted to increase the common stock dividend to an annual rate of $0.73 per share. Based on the closing stock price on April 21, 2021, the dividend yield on People's United Financial common stock is 4.1 percent. The quarterly dividend of $0.1825 per share is payable May 15, 2021 to shareholders of record on May 3, 2021.

People's United Bank, N.A. is a subsidiary of People's United Financial, Inc., a diversified, community-focused financial services company headquartered in the Northeast with over $64 billion in assets. Founded in 1842, People's United Bank offers commercial and retail banking through a network of more than 400 retail locations in Connecticut, New York, Massachusetts, Vermont, New Hampshire and Maine, as well as wealth management solutions. The company also provides specialized commercial services to customers nationwide.

1Q 2021 Financial HighlightsSummary

* Net income totaled $144.5 million, or $0.33 per common share. * Net income available to common shareholders totaled $141.0 million. * Operating earnings totaled $156.5 million, or $0.37 per common share (See Non-GAAP Financial Measures and Reconciliation to GAAP).

* Net interest income totaled $385.9 million in 1Q21 compared to $382.8 million in 4Q20. * Includes $29.6 million associated with PPP loans in 1Q21 ($24.6 million in net fees and $5.0 million in net interest income).

* Net interest margin decreased ten basis points from 4Q20 to 2.74% reflecting: * Lower rates on deposits (increase of five basis points). * Higher yields on the loan portfolio (increase of three basis points). * Lower yields on the securities portfolio (decrease of 11 basis points). * Two less calendar days in 1Q21 (decrease of four basis points). * Excess liquidity resulting from deposits at the Federal Reserve Bank (decrease of three basis points). * PPP loans had a ten basis point favorable impact on the net interest margin in 1Q21.

* Provision for credit losses on loans totaled $(13.6) million. * Allowance for credit losses on loans decreased $26.0 million. * Net loan charge-offs totaled $12.4 million. * Net loan charge-off ratio of 0.12%.

* Non-interest income totaled $94.6 million in 1Q21 compared to $178.2 million in 4Q20. * Operating non-interest income totaled $94.6 million in 1Q21 and $102.3 million in 4Q20 (See Non-GAAP Financial Measures and Reconciliation to GAAP). * Investment management fees increased $1.0 million. * Customer interest rate swap income decreased $2.1 million. * Commercial banking lending fees decreased $1.9 million. * Operating lease income decreased $1.6 million. * Included in non-interest income in 4Q20 is a $75.9 million net gain on the sale of People's United Insurance Agency, Inc. (See Non-GAAP Financial Measures and Reconciliation to GAAP). * At March 31, 2021, assets under discretionary management totaled $9.8 billion.

* Non-interest expense totaled $311.9 million in 1Q21 compared to $646.4 million in 4Q20. * Operating non-interest expense totaled $292.3 million in 1Q21 and $288.5 million in 4Q20 (See Non-GAAP Financial Measures and Reconciliation to GAAP). * Compensation and benefits expense increased $6.2 million, primarily reflecting seasonally higher payroll and benefit-related costs in 1Q21. * Occupancy and equipment expense, excluding $0.3 million of non-operating expenses in 4Q20, decreased $1.5 million. * Professional and outside services expense, excluding $9.4 million and $0.8 million of non-operating expenses in 1Q21 and 4Q20, respectively, increased $0.1 million. * Regulatory assessment expense increased $1.2 million. * Other non-interest expense includes non-operating expenses totaling $10.1 million in 1Q21 and $3.8 million in 4Q20. * The efficiency ratio was 56.6% for 1Q21 compared to 55.5% for 4Q20 and 54.0% for 1Q20 (See Non-GAAP Financial Measures and Reconciliation to GAAP).

* The effective income tax rate was 20.7% for 1Q21 compared to 37.0% for the full-year of 2020. * The full-year 2020 effective income tax rate reflects the impact of a non-deductible goodwill impairment charge for which no tax benefit was realized. Excluding non-deductible goodwill impairment, the effective income tax rate was 18.4% for the full-year of 2020.

Commercial Banking

* Commercial loans totaled $32.7 billion at March 31, 2021, a $514 million decrease from December 31, 2020. * PPP loans increased $288 million ($965 million in initial funding less $677 million in loan forgiveness). * The mortgage warehouse portfolio decreased $431 million. * The New York multifamily portfolio decreased $39 million. * The equipment financing portfolio decreased $3 million.

* Average commercial loans totaled $32.5 billion in 1Q21, a $575 million decrease from 4Q20. * PPP loans decreased $5 million. * The average mortgage warehouse portfolio decreased $59 million. * The average New York multifamily portfolio decreased $53 million. * The average equipment financing portfolio increased $20 million.

* Commercial deposits totaled $23.3 billion at March 31, 2021 compared to $22.9 billion at December 31, 2020. * The ratio of non-accrual commercial loans to total commercial loans was 0.85% at March 31, 2021 compared to 0.74% at December 31, 2020. * Non-performing commercial assets totaled $286.1 million at March 31, 2021 compared to $255.2 million at December 31, 2020. * For the commercial loan portfolio, the allowance for credit losses as a percentage of commercial loans was 0.77% at March 31, 2021 compared to 0.91% at December 31, 2020. * The commercial allowance for credit losses represented 90% of non-accrual commercial loans at March 31, 2021 compared to 123% at December 31, 2020.

Retail Banking

* Residential mortgage loans totaled $8.1 billion at March 31, 2021, a $452 million decrease from December 31, 2020. * Average residential mortgage loans totaled $8.3 billion in 1Q21, a $493 million decrease from 4Q20.

* Home equity loans totaled $1.9 billion at March 31, 2021, a $123 million decrease from December 31, 2020. * Average home equity loans totaled $1.9 billion in 1Q21, a $128 million decrease from 4Q20.

* Retail deposits totaled $30.2 billion at March 31, 2021 compared to $29.2 billion at December 31, 2020. * The ratio of non-accrual residential mortgage loans to residential mortgage loans was 0.71% at March 31, 2021 compared to 0.73% at December 31, 2020. * The ratio of non-accrual home equity loans to home equity loans was 1.00% at March 31, 2021 compared to 1.03% at December 31, 2020. * For the retail loan portfolio, the allowance for credit losses as a percentage of retail loans was 1.48% at March 31, 2021 compared to 1.14% at December 31, 2020. * The retail allowance for credit losses represented 195% of non-accrual retail loans at March 31, 2021 compared to 146% at December 31, 2020.

Certain statements contained in this release are forward-looking in nature. These include all statements about People's United Financial's plans, objectives, expectations and other statements that are not historical facts, and usually use words such as "expect," "anticipate," "believe," "should" 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 United Financial'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 United Financial include, but are not limited to: (1) changes in general, international, national or regional economic conditions; (2) changes in interest rates; (3) changes in loan default and charge-off rates; (4) changes in deposit levels; (5) changes in levels of income and expense in non-interest income and expense related activities; (6) changes in accounting and regulatory guidance applicable to banks; (7) price levels and conditions in the public securities markets generally; (8) competition and its effect on pricing, spending, third-party relationships and revenues; (9) the pending merger with M&T Bank Corporation; (10) changes in regulation resulting from or relating to financial reform legislation; and (11) the COVID-19 pandemic and its effect on the economic and business environment in which we operate. People's United Financial 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 Information About People's United Financial at www.peoples.com.

People's United Financial, Inc.

FINANCIAL HIGHLIGHTS

As of and for the Three Months Ended

March 31, Dec. 31, Sept. 30, June 30, March 31,

(dollars in millions, except per common share data) 2021 2020 2020 2020 2020

Earnings Data:

Net interest income (fully taxable equivalent) $ 393.5 $ 390.2 $ 398.7 $ 413.0 $ 403.7

Net interest income 385.9 382.8 391.4 405.6 396.0

Provision for credit losses (13.6) 14.7 26.8 80.8 33.5

Non-interest income (1) 94.6 178.2 101.1 89.6 123.8

Non-interest expense (1) 311.9 646.4 293.6 304.0 320.1

Income (loss) before income tax expense 182.2 (100.1) 172.1 110.4 166.2

Net income (loss) 144.5 (145.3) 144.6 89.9 130.4

Net income (loss) available to common shareholders (1) 141.0 (148.8) 141.1 86.4 126.9

Selected Statistical Data:

Net interest margin (2) 2.74 % 2.84 % 2.97 % 3.05 % 3.12 %

Return on average assets (1), (2) 0.90 (0.93) 0.94 0.58 0.89

Return on average common equity (2) 7.7 (7.8) 7.5 4.6 6.7

Return on average tangible common equity (1), (2) 12.5 (13.4) 13.1 8.1 11.8

Efficiency ratio (1) 56.6 55.5 53.8 53.5 54.0

Common Share Data:

Earnings per common share:

Basic $ 0.34 $ (0.36) $ 0.34 $ 0.21 $ 0.30

Diluted (1) 0.33 (0.35) 0.34 0.21 0.30

Dividends paid per common share 0.1800 0.1800 0.1800 0.1800 0.1775

Common dividend payout ratio (1) 53.7 % (50.8) % 53.6 % 87.4 % 60.9 %

Book value per common share $ 17.42 $ 17.56 $ 18.11 $ 17.95 $ 17.87

Tangible book value per common share (1) 10.70 10.77 10.37 10.18 10.07

Stock price:

High 19.40 13.58 12.36 13.99 17.00

Low 12.66 9.98 9.74 9.37 10.40

Close 17.90 12.93 10.31 11.57 11.05

Common shares outstanding (in millions) (1) 427.22 424.68 424.67 424.59 424.47

Weighted average diluted common shares (in millions) 422.58 420.39 420.29 420.15 429.77

(1) See Non-GAAP Financial Measures and Reconciliation to GAAP.

(2) Annualized.

People's United Financial, Inc.

FINANCIAL HIGHLIGHTS - Continued

As of and for the Three Months Ended

March 31, Dec. 31, Sept. 30, June 30, March 31,

(dollars in millions) 2021 2020 2020 2020 2020

Financial Condition Data:

Total assets $ 64,173 $ 63,092 $ 60,871 $ 61,510 $ 60,433

Loans 42,770 43,870 45,231 45,452 44,284

Securities 10,445 9,191 8,270 8,233 8,552

Short-term investments 4,992 3,766 439 987 744

Allowance for credit losses on loans 399 425 424 414 342

Goodwill and other acquisition-related intangible assets 2,835 2,846 3,244 3,254 3,264

Deposits 53,475 52,138 49,637 49,934 44,741

Borrowings 1,156 1,148 1,237 1,782 5,911

Notes and debentures 1,003 1,010 1,012 1,015 1,013

Stockholders' equity 7,592 7,603 7,831 7,763 7,726

Total risk-weighted assets (1):

People's United Financial, Inc. 44,302 45,075 45,756 45,657 46,408

People's United Bank, N.A. 44,256 45,016 45,685 45,615 46,397

Non-accrual loans 353 329 306 296 240

Net loan charge-offs 12.4 13.4 17.3 8.5 10.6

Average Balances:

Loans $ 42,854 $ 44,061 $ 44,853 $ 45,153 $ 43,460

Securities (2) 9,561 8,390 7,922 8,240 8,022

Short-term investments 5,000 2,582 842 774 290

Total earning assets 57,415 55,034 53,617 54,168 51,772

Total assets 64,057 62,396 61,293 61,841 58,604

Deposits 52,876 50,674 49,542 48,447 44,163

Borrowings 1,143 1,233 1,283 2,911 4,353

Notes and debentures 1,008 1,011 1,014 1,014 1,000

Total funding liabilities 55,027 52,918 51,839 52,372 49,515

Stockholders' equity 7,606 7,884 7,801 7,757 7,804

Ratios:

Net loan charge-offs to average total loans (annualized) 0.12 % 0.12 % 0.15 % 0.08 % 0.10 %

Non-performing assets to total loans, real estate owned

and repossessed assets 0.85 0.78 0.71 0.69 0.59

Allowance for credit losses on loans to:

Total loans 0.93 0.97 0.94 0.91 0.77

Non-accrual loans 113.0 129.1 138.4 139.8 142.2

Average stockholders' equity to average total assets 11.9 12.6 12.7 12.5 13.3

Stockholders' equity to total assets 11.8 12.1 12.9 12.6 12.8

Tangible common equity to tangible assets (3) 7.4 7.5 7.5 7.3 7.4

Total risk-based capital (1):

People's United Financial, Inc. 12.8 12.4 11.8 11.8 11.3

People's United Bank, N.A. 13.3 12.8 12.3 12.3 12.0

(1) March 31, 2021 amounts and ratios are preliminary.

(2) Average balances for securities are based on amortized cost.

(3) See Non-GAAP Financial Measures and Reconciliation to GAAP.

People's United Financial, Inc.

CONSOLIDATED STATEMENTS OF CONDITION

March 31, Dec. 31, March 31,

(in millions) 2021 2020 2020

Assets

Cash and due from banks $ 464.2 $ 477.3 $ 507.6

Short-term investments 4,992.1 3,766.0 744.3

Securities:

Debt securities available-for-sale, at fair value 6,160.6 4,925.5 4,276.6

Debt securities held-to-maturity, at amortized cost 4,016.8 3,993.8 3,861.5

Federal Reserve Bank and Federal Home Loan Bank stock, at cost 266.2 266.6 407.2

Equity securities, at fair value 1.5 5.3 6.2

Total securities 10,445.1 9,191.2 8,551.5

Loans held-for-sale 10.1 26.5 19.2

Loans:

Commercial and industrial (1) 14,288.2 14,982.3 12,045.7

Commercial real estate (1) 13,520.1 13,336.9 14,651.6

Equipment financing 4,927.2 4,930.0 5,012.7

Total Commercial Portfolio 32,735.5 33,249.2 31,710.0

Residential mortgage 8,067.2 8,518.9 10,081.9

Home equity and other consumer 1,967.0 2,101.4 2,492.1

Total Retail Portfolio 10,034.2 10,620.3 12,574.0

Total loans 42,769.7 43,869.5 44,284.0

Less allowance for credit losses on loans (399.1) (425.1) (341.7)

Total loans, net 42,370.6 43,444.4 43,942.3

Goodwill and other acquisition-related intangible assets 2,834.6 2,845.9 3,264.0

Bank-owned life insurance 713.1 711.6 707.6

Premises and equipment, net 269.5 276.7 300.8

Other assets 2,073.2 2,352.2 2,396.0

Total assets $ 64,172.5 $ 63,091.8 $ 60,433.3

Liabilities

Deposits:

Non-interest-bearing $ 16,266.5 $ 15,881.7 $ 10,526.0

Savings 6,517.7 6,029.7 5,136.0

Interest-bearing checking and money market 25,782.8 24,567.5 20,238.9

Time 4,908.3 5,658.8 8,840.2

Total deposits 53,475.3 52,137.7 44,741.1

Borrowings:

Federal Home Loan Bank advances 569.7 569.7 4,489.7

Customer repurchase agreements 436.2 452.9 301.1

Federal funds purchased 150.0 125.0 1,120.0

Total borrowings 1,155.9 1,147.6 5,910.8

Notes and debentures 1,003.3 1,009.6 1,012.6

Other liabilities 945.8 1,194.1 1,043.3

Total liabilities 56,580.3 55,489.0 52,707.8

Stockholders' Equity

Preferred stock 244.1 244.1 244.1

Common stock 5.4 5.3 5.3

Additional paid-in capital 7,693.9 7,663.6 7,644.4

Retained earnings 1,426.9 1,363.6 1,514.5

Unallocated common stock of ESOP, at cost (113.8) (115.6) (121.1)

Accumulated other comprehensive loss (195.3) (89.2) (92.7)

Treasury stock, at cost (1,469.0) (1,469.0) (1,469.0)

Total stockholders' equity 7,592.2 7,602.8 7,725.5

Total liabilities and stockholders' equity $ 64,172.5 $ 63,091.8 $ 60,433.3

(1) In the first quarter of 2021, the Company completed a portfolio review toensure consistent classification of certain

commercial loans across the Company's franchise and conformity to industrypractice for such loans. As a result,

approximately $350 million of loans secured by non-owner-occupiedcommercial properties were prospectively

reclassified, in March 2021, from commercial and industrial loans tocommercial real estate loans. Prior period

balances were not restated to conform to the current presentation.

People's United Financial, Inc.

CONSOLIDATED STATEMENTS OF INCOME

Three Months Ended

March 31, Dec. 31, Sept. 30, June 30, March 31,

(in millions, except per common share data) 2021 2020 2020 2020 2020

Interest and dividend income:

Commercial and industrial $ 116.1 $ 111.3 $ 110.7 $ 112.4 $ 106.4

Commercial real estate 98.8 106.1 110.5 122.4 149.6

Equipment financing 62.8 62.1 65.4 67.6 68.2

Residential mortgage 69.9 74.9 82.1 84.8 90.4

Home equity and other consumer 16.5 18.7 19.9 20.1 28.0

Total interest on loans 364.1 373.1 388.6 407.3 442.6

Securities 51.4 47.2 47.5 49.8 51.2

Short-term investments 1.2 0.8 0.4 0.2 2.0

Loans held-for-sale 0.3 0.4 0.3 0.3 3.3

Total interest and dividend income 417.0 421.5 436.8 457.6 499.1

Interest expense:

Deposits 22.7 30.1 36.5 41.7 78.9

Borrowings 1.2 1.3 1.5 2.0 15.4

Notes and debentures 7.2 7.3 7.4 8.3 8.8

Total interest expense 31.1 38.7 45.4 52.0 103.1

Net interest income 385.9 382.8 391.4 405.6 396.0

Provision for credit losses on loans (13.6) 14.7 27.1 80.8 33.5

Provision for credit losses on securities - - (0.3) - -

Net interest income after provision for credit losses 399.5 368.1 364.6 324.8 362.5

Non-interest income:

Bank service charges 23.5 24.7 24.5 20.3 28.0

Investment management fees 19.9 18.9 18.8 17.4 18.1

Commercial banking lending fees 13.6 15.5 12.7 10.6 12.1

Operating lease income 11.3 12.9 12.4 11.8 12.6

Cash management fees 9.2 9.1 8.8 8.1 7.4

Customer interest rate swap income, net 0.1 2.2 1.2 2.7 8.8

Gain on sale of business, net of expenses (1) - 75.9 - - -

Other non-interest income 17.0 19.0 22.7 18.7 36.8

Total non-interest income 94.6 178.2 101.1 89.6 123.8

Non-interest expense:

Compensation and benefits 172.8 166.6 166.5 167.8 173.9

Occupancy and equipment 49.1 50.9 49.1 48.0 51.0

Professional and outside services 33.6 24.9 24.1 25.7 38.5

Amortization of other acquisition-related intangible assets 11.0 9.7 10.2 10.2 10.7

Regulatory assessments 8.1 6.9 8.4 8.7 8.7

Operating lease expense 7.8 8.5 9.3 8.8 9.8

Goodwill impairment - 353.0 - - -

Other non-interest expense 29.5 25.9 26.0 34.8 27.5

Total non-interest expense (1) 311.9 646.4 293.6 304.0 320.1

Income (loss) before income tax expense 182.2 (100.1) 172.1 110.4 166.2

Income tax expense 37.7 45.2 27.5 20.5 35.8

Net income (loss) 144.5 (145.3) 144.6 89.9 130.4

Preferred stock dividend 3.5 3.5 3.5 3.5 3.5

Net income (loss) available to common shareholders $ 141.0 $ (148.8) $ 141.1 $ 86.4 $ 126.9

Earnings per common share:

Basic $ 0.34 $ (0.36) $ 0.34 $ 0.21 $ 0.30

Diluted 0.33 (0.35) 0.34 0.21 0.30

(1) The gain on sale of business, net of expenses, is considered non-operatingincome. Total non-interest expense includes

$19.6 million,$357.9 million, $4.6 million, $18.5 million and $17.9 millionof non-operating expenses for the three months ended

March 31, 2021, December 31, 2020, September 30, 2020, June 30, 2020 andMarch 31, 2020, respectively. See Non-GAAP

Financial Measures and Reconciliation to GAAP.

People's United Financial, Inc.

AVERAGE BALANCE SHEET, INTEREST AND YIELD/RATE ANALYSIS (1)

March 31, 2021 December 31, 2020 March 31, 2020

Three months ended Average Yield/ Average Yield/ Average Yield/

(dollars in millions) Balance Interest Rate Balance Interest Rate Balance Interest Rate

Assets:

Short-term investments $ 5,000.0 $ 1.2 0.10% $ 2,582.1 $ 0.8 0.12% $ 289.8 $ 2.0 2.70%

Securities (2) 9,560.6 56.7 2.37 8,390.2 52.3 2.50 8,021.8 56.0 2.80

Loans:

Commercial real estate 13,281.3 98.8 2.98 13,574.3 106.1 3.13 14,715.3 149.6 4.07

Commercial and industrial 14,319.6 118.4 3.31 14,621.8 113.6 3.11 10,866.6 109.8 4.04

Equipment financing 4,887.7 62.8 5.13 4,867.5 62.1 5.10 4,915.6 68.2 5.55

Residential mortgage 8,328.3 70.2 3.37 8,821.0 75.3 3.41 10,236.3 90.5 3.54

Home equity and other consumer 2,037.1 16.5 3.23 2,176.6 18.7 3.44 2,726.1 30.7 4.51

Total loans 42,854.0 366.7 3.42 44,061.2 375.8 3.41 43,459.9 448.8 4.13

Total earning assets 57,414.6 $ 424.6 2.96% 55,033.5 $ 428.9 3.12% 51,771.5 $ 506.8 3.92%

Other assets 6,642.1 7,362.6 6,832.2

Total assets $ 64,056.7 $ 62,396.1 $ 58,603.7

Liabilities and stockholders' equity:

Deposits:

Non-interest-bearing $ 15,820.0 $ - - % $ 14,742.6 $ - - % $ 10,077.8 $ - - %

Savings, interest-bearing checking

and money market 31,820.1 12.8 0.16 29,978.3 14.7 0.20 24,940.7 44.1 0.71

Time 5,236.4 9.9 0.75 5,953.5 15.4 1.03 9,144.6 34.8 1.52

Total deposits 52,876.5 22.7 0.17 50,674.4 30.1 0.24 44,163.1 78.9 0.71

Borrowings:

Federal Home Loan Bank advances 569.7 1.0 0.72 571.8 1.1 0.77 2,430.6 9.8 1.61

Customer repurchase agreements 422.8 0.2 0.13 447.6 0.2 0.15 328.0 0.5 0.67

Federal funds purchased 150.6 - 0.09 213.3 - 0.09 1,593.9 5.1 1.28

Total borrowings 1,143.1 1.2 0.42 1,232.7 1.3 0.43 4,352.5 15.4 1.42

Notes and debentures 1,007.8 7.2 2.87 1,010.8 7.3 2.89 999.5 8.8 3.51

Total funding liabilities 55,027.4 $ 31.1 0.23% 52,917.9 $ 38.7 0.29% 49,515.1 $ 103.1 0.83%

Other liabilities 1,423.4 1,594.2 1,284.3

Total liabilities 56,450.8 54,512.1 50,799.4

Stockholders' equity 7,605.9 7,884.0 7,804.3

Total liabilities and

stockholders' equity $ 64,056.7 $ 62,396.1 $ 58,603.7

Net interest income/spread (3) $ 393.5 2.73% $ 390.2 2.83% $ 403.7 3.09%

Net interest margin 2.74% 2.84% 3.12%

(1) Average yields earned and rates paid are annualized.

(2) Average balances and yields for securities are based on amortized cost.

(3) The fully taxable equivalent adjustment was $7.6 million, $7.4 million and$7.7 million for the three months ended

March 31, 2021, December 31, 2020 and March 31, 2020, respectively.

People's United Financial, Inc.

NON-PERFORMING ASSETS

March 31, Dec. 31, Sept. 30, June 30, March 31,

(dollars in millions) 2021 2020 2020 2020 2020

Non-accrual loans:

Commercial:

Commercial real estate $ 90.2 $ 60.4 $ 85.3 $ 73.6 $ 53.5

Commercial and industrial 69.2 76.4 86.7 88.8 55.6

Equipment financing 118.1 109.3 49.0 48.6 42.5

Total Commercial 277.5 246.1 221.0 211.0 151.6

Retail:

Residential mortgage 56.9 62.3 62.9 62.6 66.6

Home equity 18.7 20.5 22.1 22.5 22.1

Other consumer 0.2 0.2 0.2 0.1 0.1

Total Retail 75.8 83.0 85.2 85.2 88.8

Total non-accrual loans (1) 353.3 329.1 306.2 296.2 240.4

Real estate owned:

Commercial 3.5 3.6 3.6 7.3 7.3

Residential 1.5 3.2 1.9 4.9 9.5

Total real estate owned 5.0 6.8 5.5 12.2 9.5

Repossessed assets 5.4 5.7 9.7 6.2 4.6

Total non-performing assets $ 363.7 $ 341.6 $ 321.4 $ 314.6 $ 254.5

Non-accrual loans as a percentage of total loans 0.83 % 0.75 % 0.68 % 0.65 % 0.54 %

Non-performing assets as a percentage of:

Total loans, real estate owned and repossessed assets 0.85 0.78 0.71 0.69 0.59

Tangible stockholders' equity and allowance

for credit losses 7.05 6.59 6.41 6.39 5.45

(1) Reported net of government guarantees totaling $2.5 million at March 31,2021, $2.5 million at December 31, 2020,

$2.4 million at September 30, 2020, $2.9 million at June 30, 2020 and$1.2 million at March 31, 2020.

People's United Financial, Inc.

PROVISION AND ALLOWANCE FOR CREDIT LOSSES ON LOANS

Three Months Ended

March 31, Dec. 31, Sept 30, June 30, March 31,

(dollars in millions) 2021 2020 2020 2020 2020

Allowance for credit losses on loans:

Balance at beginning of period $ 425.1 $ 423.8 $ 414.0 $ 341.7 $ 246.6

CECL transition adjustment - - - - 72.2

Balance at beginning of period, adjusted 425.1 423.8 414.0 341.7 318.8

Charge-offs (17.8) (16.7) (19.3) (10.3) (12.6)

Recoveries 5.4 3.3 2.0 1.8 2.0

Net loan charge-offs (12.4) (13.4) (17.3) (8.5) (10.6)

Provision for credit losses on loans (13.6) 14.7 27.1 80.8 33.5

Balance at end of period $ 399.1 $ 425.1 $ 423.8 $ 414.0 $ 341.7

Allowance for credit losses on loans

as a percentage of:

Total loans 0.93 % 0.97 % 0.94 % 0.91 % 0.77 %

Non-accrual loans 113.0 129.1 138.4 139.8 142.2

NET LOAN CHARGE-OFFS (RECOVERIES)

Three Months Ended

March 31, Dec. 31, Sept. 30, June 30, March 31,

(dollars in millions) 2021 2020 2020 2020 2020

Commercial:

Commercial real estate $ 5.8 $ 0.1 $ 4.1 $ 1.8 $ 3.4

Commercial and industrial (0.5) 6.6 6.9 - 1.0

Equipment financing 7.2 6.8 6.2 5.2 3.9

Total 12.5 13.5 17.2 7.0 8.3

Retail:

Residential mortgage (0.3) (0.3) (0.2) - 0.8

Home equity (0.2) - - 0.6 0.1

Other consumer 0.4 0.2 0.3 0.9 1.4

Total (0.1) (0.1) 0.1 1.5 2.3

Total net loan charge-offs $ 12.4 $ 13.4 $ 17.3 $ 8.5 $ 10.6

Net loan charge-offs to

average total loans (annualized) 0.12 % 0.12 % 0.15 % 0.08 % 0.10 %

People's United Financial, Inc.

NON-GAAP FINANCIAL MEASURES AND RECONCILIATION TO GAAP

In addition to evaluating People's United Financial Inc. ("People'sUnited") results of operations in accordance with

U.S. generally accepted accounting principles ("GAAP"), management routinelysupplements its evaluation with an analysis

of certain non-GAAP financial measures, such as the efficiency and tangiblecommon equity ratios, tangible book value per

common share and operating earnings metrics. Management believes these non-GAAPfinancial measures provide

information useful to investors in understanding People's United's underlyingoperating performance and trends, and

facilitates comparisons with the performance of other financial institutions.Further, the efficiency ratio and operating

earnings metrics are used by management in its assessment of financialperformance, including non-interest expense

control, while the tangible common equity ratio and tangible book value percommon share are used to analyze the

relative strength of People's United's capital position.

The efficiency ratio, which represents an approximate measure of the costrequired by People's United to generate a

dollar of revenue, is the ratio of (i) total non-interest expense (excludingoperating lease expense, goodwill impairment

charges, amortization of other acquisition-related intangible assets, losses onreal estate assets and non-recurring

expenses) (the numerator) to (ii) net interest income on a fully taxableequivalent ("FTE") basis plus total non-interest

income (including the FTE adjustment on bank-owned life insurance ("BOLI")income, the netting of operating lease

expense and excluding gains and losses on sales of assets other thanresidential mortgage loans and acquired loans, and

non-recurring income) (the denominator). People's United generally considers anitem of income or expense to be

non-recurring if it is not similar to an item of income or expense of a typeincurred within the last two years and is not

similar to an item of income or expense of a type reasonably expected to beincurred within the following two years.

Operating earnings exclude from net income available to commonshareholders those items that management considers

to be of such a non-recurring or infrequent nature that, by excluding suchitems (net of income taxes), People's United's

results can be measured and assessed on a more consistent basis from period toperiod. Items excluded from operating

earnings, which include, but are not limited to: (i) non-recurring gains/losses; (ii) merger-related expenses, including

acquisition integration and other costs; (iii) writedowns of banking houseassets and related lease termination costs;

(iv) severance-related costs; and (v) charges related to executive-levelmanagement separation costs, are generally also

excluded when calculating the efficiency ratio. Operating earnings per commonshare ("EPS") is derived by determining the

per common share impact of the respective adjustments to arrive at operatingearnings and adding (subtracting) such

amounts to (from) diluted EPS, as reported. Operating return on average assetsis calculated by dividing operating earnings

(annualized) by average total assets. Operating return on average tangiblecommon equity is calculated by dividing

operating earnings (annualized) by average tangible common equity. Theoperating common dividend payout ratio is

calculated by dividing common dividends paid by operating earnings for therespective period.

Pre-provision net revenue is a useful financial measure as it enables anassessment of the Company's ability to generate

earnings to cover credit losses through a credit cycle as well as providing anadditional basis for comparing the Company's

results of operation between periods by isolating the impact of the provisionfor credit losses, which can vary significantly

between periods.

The tangible common equity ratio is the ratio of (i) tangible common equity(total stockholders' equity less preferred

stock, goodwill and other acquisition-related intangible assets) (thenumerator) to (ii) tangible assets (total assets less

goodwill and other acquisition-related intangible assets) (the denominator).Tangible book value per common share is

calculated by dividing tangible common equity by common shares (total commonshares issued, less common shares

classified as treasury shares and unallocated Employee Stock Ownership Plan("ESOP") common shares).

In light of diversity in presentation among financial institutions, themethodologies used by People's United for

determining the non-GAAP financial measures discussed above may differ fromthose used by other financial

institutions.

People's United Financial, Inc.

NON-GAAP FINANCIAL MEASURES AND RECONCILIATION TO GAAP - Continued

OPERATING NON-INTEREST EXPENSE AND EFFICIENCY RATIO

Three Months Ended

March 31, Dec. 31, Sept. 30, June 30, March 31,

(dollars in millions) 2021 2020 2020 2020 2020

Total non-interest expense $ 311.9 $ 646.4 $ 293.6 $ 304.0 $ 320.1

Adjustments to arrive at operating

non-interest expense:

Stop & Shop contract termination costs (12.1) - - - -

Merger-related expenses (7.5) (4.9) (4.6) (18.5) (17.9)

Goodwill impairment - (353.0) - - -

Total (19.6) (357.9) (4.6) (18.5) (17.9)

Operating non-interest expense 292.3 288.5 289.0 285.5 302.2

Adjustments:

Amortization of other acquisition-related

intangible assets (11.0) (9.7) (10.2) (10.2) (10.7)

Operating lease expense (7.8) (8.5) (9.3) (8.8) (9.8)

Other (1) (1.7) (1.3) (5.1) (1.9) (1.9)

Total non-interest expense for

efficiency ratio $ 271.8 $ 269.0 $ 264.4 $ 264.6 $ 279.8

Net interest income (FTE basis) $ 393.5 $ 390.2 $ 398.7 $ 413.0 $ 403.7

Total non-interest income 94.6 178.2 101.1 89.6 123.8

Total revenues 488.1 568.4 499.8 502.6 527.5

Adjustments:

Operating lease expense (7.8) (8.5) (9.3) (8.8) (9.8)

BOLI FTE adjustment 0.6 0.9 0.8 1.0 0.8

Gain on sale of business, net of expenses - (75.9) - - -

Other (2) (1.1) - (0.1) - (0.3)

Total revenues for efficiency ratio $ 479.8 $ 484.9 $ 491.2 $ 494.8 $ 518.2

Efficiency ratio 56.6% 55.5% 53.8% 53.5% 54.0%

(1) Items classified as "other" and deducted from non-interest expense forpurposes of calculating the

efficiency ratio include certain franchise taxes and real estate ownedexpenses.

(2) Items classified as "other" and deducted from total revenues for purposesof calculating the efficiency

ratio include, as applicable, asset write-offs and gains/lossesassociated with the sale of branch locations.

PRE-PROVISION NET REVENUE

Three Months Ended

March 31, Dec. 31, Sept. 30, June 30, March 31,

(in millions) 2021 2020 2020 2020 2020

Net interest income $ 385.9 $ 382.8 $ 391.4 $ 405.6 $ 396.0

Non-interest income 94.6 178.2 101.1 89.6 123.8

Non-interest expense (311.9) (646.4) (293.6) (304.0) (320.1)

Pre-provision net revenue 168.6 (85.4) 198.9 191.2 199.7

Non-operating income - (75.9) - - -

Non-operating expense 19.6 357.9 4.6 18.5 17.9

Operating pre-provision net revenue $ 188.2 $ 196.6 $ 203.5 $ 209.7 $ 217.6

People's United Financial, Inc.

NON-GAAP FINANCIAL MEASURES AND RECONCILIATION TO GAAP - Continued

OPERATING EARNINGS

Three Months Ended

March 31, Dec. 31, Sept. 30, June 30, March 31,

(dollars in millions, except per common share data) 2021 2020 2020 2020 2020

Net income (loss) available to common shareholders $ 141.0 $ (148.8) $ 141.1 $ 86.4 $ 126.9

Adjustments to arrive at operating earnings:

Stop & Shop contract termination costs 12.1 - - - -

Merger-related expenses 7.5 4.9 4.6 18.5 17.9

Goodwill impairment (1) - 353.0 - - -

Gain on sale of business, net of expenses - (75.9) - - -

Total pre-tax adjustments 19.6 282.0 4.6 18.5 17.9

Tax effect (1) (4.1) 14.5 (1.0) (3.9) (3.7)

Total adjustments, net of tax 15.5 296.5 3.6 14.6 14.2

Operating earnings $ 156.5 $ 147.7 $ 144.7 $ 101.0 $ 141.1

Diluted EPS, as reported $ 0.33 $ (0.35) $ 0.34 $ 0.21 $ 0.30

Adjustments to arrive at operating EPS:

Stop & Shop contract termination costs 0.02 - - - -

Merger-related expenses 0.02 0.01 - 0.03 0.03

Goodwill impairment (1) - 0.83 - - -

Gain on sale of business, net of expenses - (0.14) - - -

Total adjustments per common share 0.04 0.70 - 0.03 0.03

Operating EPS $ 0.37 $ 0.35 $ 0.34 $ 0.24 $ 0.33

Average total assets $ 64,057 $ 62,396 $ 61,293 $ 61,841 $ 58,603

Operating return on

average assets (annualized) 0.98% 0.95% 0.94% 0.65% 0.96%

(1) The goodwill impairment charge for the three months ended December 31, 2020is non-tax-deductible.

OPERATING RETURN ON AVERAGE TANGIBLE COMMON EQUITY

Three Months Ended

March 31, Dec. 31, Sept. 30, June 30, March 31,

(dollars in millions) 2021 2020 2020 2020 2020

Operating earnings $ 156.5 $ 147.7 $ 144.7 $ 101.0 $ 141.1

Average stockholders' equity $ 7,606 $ 7,884 $ 7,801 $ 7,757 $ 7,804

Less: Average preferred stock 244 244 244 244 244

Average common equity 7,362 7,640 7,557 7,513 7,560

Less: Average goodwill and average other

acquisition-related intangible assets 2,842 3,213 3,249 3,259 3,269

Average tangible common equity $ 4,520 $ 4,427 $ 4,308 $ 4,254 $ 4,291

Operating return on average tangible

common equity (annualized) 13.8% 13.3% 13.4% 9.5% 13.2%

People's United Financial, Inc.

NON-GAAP FINANCIAL MEASURES AND RECONCILIATION TO GAAP - Continued

OPERATING COMMON DIVIDEND PAYOUT RATIO

Three Months Ended

March 31, Dec. 31, Sept. 30, June 30, March 31,

(dollars in millions) 2021 2020 2020 2020 2020

Common dividends paid $ 75.7 $ 75.6 $ 75.7 $ 75.5 $ 77.3

Operating earnings $ 156.5 $ 147.7 $ 144.7 $ 101.0 $ 141.1

Operating common dividend payout ratio 48.4% 51.2% 52.3% 74.8% 54.8%

TANGIBLE COMMON EQUITY RATIO

March 31, Dec. 31, Sept. 30, June 30, March 31,

(dollars in millions) 2021 2020 2020 2020 2020

Total stockholders' equity $ 7,592 $ 7,603 $ 7,831 $ 7,763 $ 7,726

Less: Preferred stock 244 244 244 244 244

Common equity 7,348 7,359 7,587 7,519 7,482

Less: Goodwill and other

acquisition-related intangible assets 2,835 2,846 3,244 3,254 3,264

Tangible common equity $ 4,513 $ 4,513 $ 4,343 $ 4,265 $ 4,218

Total assets $ 64,172 $ 63,092 $ 60,871 $ 61,510 $ 60,433

Less: Goodwill and other

acquisition-related intangible assets 2,835 2,846 3,244 3,254 3,264

Tangible assets $ 61,337 $ 60,246 $ 57,627 $ 58,256 $ 57,169

Tangible common equity ratio 7.4% 7.5% 7.5% 7.3% 7.4%

TANGIBLE BOOK VALUE PER COMMON SHARE

March 31, Dec. 31, Sept. 30, June 30, March 31,

(in millions, except per common share data) 2021 2020 2020 2020 2020

Tangible common equity $ 4,513 $ 4,513 $ 4,343 $ 4,265 $ 4,218

Common shares issued 536.20 533.68 533.67 533.59 533.47

Less: Shares classified as treasury shares 108.98 109.00 109.00 109.00 109.00

Common shares outstanding 427.22 424.68 424.67 424.59 424.47

Less: Unallocated ESOP shares 5.49 5.57 5.66 5.75 5.84

Common shares 421.73 419.11 419.01 418.84 418.63

Tangible book value per common share $ 10.70 $ 10.77 $ 10.18 $ 10.07 $ 10.07

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SOURCE People's United Financial, Inc.