PR Newswire | Jul 15, 2021 04:02PM EDT

or $0.39 per Common Share

07/15 15:01 CDT

People's United Financial Reports Second Quarter Net Income of $170.8 Million, or $0.39 per Common ShareOperating Earnings of $0.41 per Common Share-- Shareholder approval received for the announced merger with M&T Bank Corporation.-- Return on average assets of 1.07 percent, or 1.10 percent on an operating basis, and return on average tangible common equity of 14.7 percent, or 15.4 percent on an operating basis.-- Asset quality remained excellent as evidenced by net loan charge-offs to average total loans of 10 basis points, and provision for credit losses on loans resulting in a net benefit of $40.7 million.-- Non-interest income increased 5 percent linked-quarter and 10 percent year-over-year driven by broad-based growth. BRIDGEPORT, Conn., July 15, 2021

BRIDGEPORT, Conn., July 15, 2021 /PRNewswire/ -- People's United Financial, Inc. (NASDAQ: PBCT) today reported results for the second quarter of 2021. These results along with comparison periods are summarized below:

($ in millions, except per common sharedata)

Three Months Ended

Jun. 30, 2021 Mar. 31, 2021 Jun. 30, 2020

Net income $ $ 144.5 $ 89.9 170.8

Net income available 167.3 141.0 86.4 to common shareholders

Per common share 0.39 0.33 0.21

Operating earnings^1 176.1 156.5 101.0

Per common share 0.41 0.37 0.24

Net interest income $ $ 385.9 $ 405.6 380.9

Net interest margin 2.70% 2.74% 3.05%

Non-interest income 99.0 94.6 89.6

Non-interest expense $ $ 311.9 $ 304.0 305.0

Operating non-interest 293.8 292.3 285.5expense^1

Efficiency ratio 57.4% 56.6% 53.5%

Average balances

Loans $ 41,683 $ 42,854 $ 45,153

Deposits 53,041 52,876 48,447

Period-end balances

Loans 41,366 42,770 45,452

Deposits 52,581 53,475 49,934

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

"We are pleased with the overwhelming shareholder approval received during the quarter for the announced merger with M&T," said Jack Barnes, Chairman and Chief Executive Officer. "The vote reflects investor confidence in the value of merging two market-leading financial institutions, and in the ability of the combined company to better serve clients across some of the most populated and attractive banking markets in the nation. While preparations for the transaction's close and integration move forward, our most important objective remains servicing the needs of customers, communities, and colleagues. Looking to the future, we are excited about executing on the growth opportunities ahead and building upon the extraordinary legacy of People's United."

"We delivered another quarter of strong financial performance," stated David Rosato, Senior Executive Vice President and Chief Financial Officer. "Record quarterly operating income of $176.1 million, increased 12.5 percent linked-quarter and generated an operating return on average tangible equity of 15.4 percent. These results, which further highlight the strengths of the franchise, included higher fee revenues, well-controlled expenses, and a negative provision for credit losses primarily driven by further improvements in the economic outlook. The growth in fee revenues was broad-based with notable increases in swap income, and our wealth and cash management businesses. We are pleased with our ability to hold net interest margin relatively steady for the quarter considering the current economic environment. The margin of 2.70 percent was only four basis points below the first quarter as the unfavorable impact of lower yields in the securities portfolio and increased excess liquidity was largely offset by a reduction in deposit costs for the eighth consecutive quarter, an additional calendar day and continued stable loan yields."

Rosato continued, "Period-end loans and deposits decreased three percent and two percent, respectively, from the close of the first quarter. The $1.4 billion decline in period-end loans was driven by the forgiveness of $970 million in PPP balances, $530 million in lower retail balances, and a $130 million reduction in mortgage warehouse. Conversely, the loan portfolio benefited from strong results in our specialized industry verticals within C&I and LEAF. The $894 million decline in period-end deposits was equally attributable to lower brokered deposit balances and seasonal outflows in our municipal business. Importantly, non-interest-bearing deposits continued to grow, up three percent linked-quarter and now account for 32 percent of total period-end balances. Finally, capital ratios remain strong and improved linked-quarter for both the Bank and Holding Company."

As of and for the Three Months Ended

Jun. 30, 2021 Mar. 31, Jun. 30, 2021 2020

Asset Quality

Net loan charge-offs 0.10% 0.12% 0.08% to average total loans

Non-performing loans 0.79% 0.83% 0.65% as a percentage of total loans

Returns

Return on average assets^1 1.07% 0.90% 0.58%

Return on average tangible common 14.7% 12.5% 8.1%equity^1

Capital Ratios

People's United Financial, Inc.

Tangible common equity / tangible 7.7% 7.4% 7.3%assets

Tier 1 leverage 8.4% 8.3% 8.0%

Common equity tier 1 11.3% 11.0% 9.8%

Tier 1 risk-based 11.8% 11.6% 10.3%

Total risk-based 13.1% 12.9% 11.8%

People's United Bank, N.A.

Tier 1 leverage 8.8% 8.7% 8.5%

Common equity tier 1 12.3% 12.2% 10.9%

Tier 1 risk-based 12.3% 12.2% 10.9%

Total risk-based 13.5% 13.5% 12.3%

^1See Non-GAAP Financial Measures and Reconciliationto GAAP.

The Board of Directors declared a $0.1825 per common share quarterly dividend payable August 15, 2021 to shareholders of record on August 1, 2021. Based on the closing stock price on July 14, 2021, the dividend yield on People's United Financial common stock is 4.4 percent.

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 $63 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.

2Q 2021 Financial Highlights

Summary

* Net income totaled $170.8 million, or $0.39 per common share. * Net income available to common shareholders totaled $167.3 million. * Operating earnings totaled $176.1 million, or $0.41 per common share (See Non-GAAP Financial Measures and Reconciliation to GAAP).

* Net interest income totaled $380.9 million in 2Q21 compared to $385.9 million in 1Q21. * Includes $24.9 million associated with PPP loans in 2Q21 ($20.0 million in net fees and $4.9 million in net interest income).

* Net interest margin decreased four basis points from 1Q21 to 2.70% reflecting: * Lower rates on deposits (increase of four basis points). * One additional calendar day in 2Q21 (increase of two basis points). * Lower yields on the securities portfolio (decrease of six basis points). * Lower yields on the loan portfolio (decrease of four basis points). * Excess liquidity resulting from deposits at the Federal Reserve Bank (decrease of two basis points). * PPP loans had a seven basis point favorable impact on the net interest margin in 2Q21.

* Provision for credit losses on loans totaled $(40.7) million. * Allowance for credit losses on loans decreased $51.0 million. * Net loan charge-offs totaled $10.3 million. * Net loan charge-off ratio of 0.10%.

* Non-interest income totaled $99.0 million in 2Q21 compared to $94.6 million in 1Q21. * Customer interest rate swap income increased $2.3 million. * Investment management fees increased $1.6 million. * Bank service charges increased $1.4 million. * At June 30, 2021, assets under discretionary management totaled $10.1 billion.

* Non-interest expense totaled $305.0 million in 2Q21 compared to $311.9 million in 1Q21. * Operating non-interest expense totaled $293.8 million in 2Q21 and $292.3 million in 1Q21 (See Non-GAAP Financial Measures and Reconciliation to GAAP). * Compensation and benefits expense increased $4.8 million, primarily reflecting higher incentive-related accruals offset by lower payroll costs in 2Q21. * Amortization of other acquisition-related intangible assets decreased $2.2 million. * Professional and outside services expense, excluding $6.0 million and $9.4 million of non-operating expenses in 2Q21 and 1Q21, respectively, decreased $0.2 million. * Other non-interest expense includes non-operating expenses totaling $5.0 million in 2Q21 and $10.1 million in 1Q21. * The efficiency ratio was 57.4% for 2Q21 compared to 56.6% for 1Q21 and 53.5% for 2Q20 (See Non-GAAP Financial Measures and Reconciliation to GAAP).

* The effective income tax rate was 20.8% for both 2Q21 and the first six months of 2021, 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 $31.9 billion at June 30, 2021, an $874 million decrease from March 31, 2021. * PPP loans decreased $884 million ($86 million in initial funding less $970 million in loan forgiveness). * The mortgage warehouse portfolio decreased $130 million. * The New York multifamily portfolio decreased $62 million. * The equipment financing portfolio increased $64 million.

* Average commercial loans totaled $31.9 billion in 2Q21, a $550 million decrease from 1Q21. * The average mortgage warehouse portfolio decreased $349 million. * Average PPP loans decreased $160 million. * The average New York multifamily portfolio decreased $49 million. * The average equipment financing portfolio increased $46 million.

* Commercial deposits totaled $24.9 billion at June 30, 2021 compared to $23.3 billion at March 31, 2021. * The ratio of non-accrual commercial loans to total commercial loans was 0.82% at June 30, 2021 compared to 0.85% at March 31, 2021. * Non-performing commercial assets totaled $269.2 million at June 30, 2021 compared to $286.1 million at March 31, 2021. * For the commercial loan portfolio, the allowance for credit losses as a percentage of commercial loans was 0.76% at June 30, 2021 compared to 0.77% at March 31, 2021. * The commercial allowance for credit losses represented 93% of non-accrual commercial loans at June 30, 2021 compared to 90% at March 31, 2021.

Retail Banking

* Residential mortgage loans totaled $7.6 billion at June 30, 2021, a $441 million decrease from March 31, 2021. * Average residential mortgage loans totaled $7.8 billion in 2Q21, a $500 million decrease from 1Q21.

* Home equity loans totaled $1.8 billion at June 30, 2021, an $84 million decrease from March 30, 2021. * Average home equity loans totaled $1.8 billion in 2Q21, a $112 million decrease from 1Q21.

* Retail deposits totaled $27.7 billion at June 30, 2021 compared to $30.2 billion at March 31, 2021. * The ratio of non-accrual residential mortgage loans to residential mortgage loans was 0.65% at June 30, 2021 compared to 0.71% at March 31, 2021. * The ratio of non-accrual home equity loans to home equity loans was 1.01% at June 30, 2021 compared to 1.00% at March 31, 2021. * For the retail loan portfolio, the allowance for credit losses as a percentage of retail loans was 1.13% at June 30, 2021 compared to 1.48% at March 31, 2021. * The retail allowance for credit losses represented 158% of non-accrual retail loans at June 30, 2021 compared to 195% at March 31, 2021.

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

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

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

Earnings Data:

Net interest income (fully taxable equivalent) $ 388.7 $ 393.5 $ 390.2 $ 398.7 $ 413.0

Net interest income 380.9 385.9 382.8 391.4 405.6

Provision for credit losses (40.8) (13.6) 14.7 26.8 80.8

Non-interest income (1) 99.0 94.6 178.2 101.1 89.6

Non-interest expense (1) 305.0 311.9 646.4 293.6 304.0

Income (loss) before income tax expense 215.7 182.2 (100.1) 172.1 110.4

Net income (loss) 170.8 144.5 (145.3) 144.6 89.9

Net income (loss) available to common shareholders 167.3 141.0 (148.8) 141.1 86.4(1)

Selected Statistical Data:

Net interest margin (2) 2.70 % 2.74 % 2.84 % 2.97 % 3.05 %

Return on average assets (1), (2) 1.07 0.90 (0.93) 0.94 0.58

Return on average common equity (2) 9.1 7.7 (7.8) 7.5 4.6

Return on average tangible common equity (1), (2) 14.7 12.5 (13.4) 13.1 8.1

Efficiency ratio (1) 57.4 56.6 55.5 53.8 53.5

Common Share Data:

Earnings (loss) per common share:

Basic $ 0.40 $ 0.34 $ (0.36) $ 0.34 $ 0.21

Diluted (1) 0.39 0.33 (0.35) 0.34 0.21

Dividends paid per common share 0.1825 0.1800 0.1800 0.1800 0.1800

Common dividend payout ratio (1) 46.2 % 53.7 % (50.8) % 53.6 % 87.4 %

Book value per common share $ 17.77 $ 17.42 $ 17.56 $ 18.11 $ 17.95

Tangible book value per common share (1) 11.08 10.70 10.77 10.37 10.18

Stock price:

High 19.62 19.40 13.58 12.36 13.99

Low 16.75 12.66 9.98 9.74 9.37

Close 17.14 17.90 12.93 10.31 11.57

Common shares outstanding (in millions) (1) 427.77 427.22 424.68 424.67 424.59

Weighted average diluted common shares (in 425.08 422.58 420.39 420.29 420.15millions)

(1) See Non-GAAP Financial Measures andReconciliation to GAAP.

(2) Annualized.

People's United Financial, Inc.

FINANCIAL HIGHLIGHTS

As of and for the

Six Months Ended

June 30,

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

Earnings Data:

Net interest income (fully taxable $ 782.2 $ 816.7equivalent)

Net interest income 766.8 801.6

Provision for credit losses (54.4) 114.3

Non-interest income 193.6 213.4

Non-interest expense (1) 616.9 624.1

Income before income tax expense 397.9 276.6

Net income 315.3 220.3

Net income available to common shareholders 308.3 213.3(1)

Selected Statistical Data:

Net interest margin (2) 2.72 % 3.08 %

Return on average assets (1), (2) 0.99 0.73

Return on average common equity (2) 8.4 5.7

Return on average tangible common equity (1), 13.6 10.0(2)

Efficiency ratio (1) 57.0 53.7

Common Share Data:

Earnings per common share:

Basic $ 0.73 $ 0.50

Diluted (1) 0.73 0.50

Dividends paid per common share 0.3625 0.3575

Common dividend payout ratio (1) 49.6 % 71.7 %

Book value per common share $ 17.77 $ 17.95

Tangible book value per common share (1) 11.08 10.18

Stock price:

High 19.62 17.00

Low 12.66 9.37

Close 17.14 11.57

Common shares oustanding (in millions) (1) 427.77 424.59

Weighted average diluted common shares (in 423.91 424.82millions)

(1) See Non-GAAP Financial Measures andReconciliation to GAAP.

(2) Annualized.

People's United Financial, Inc.

FINANCIAL HIGHLIGHTS - Continued



As of and for the Three Months Ended

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

(dollars in millions) 2021 2021 2020 2020 2020

Financial Condition Data:

Total assets $ 63,341 $ 64,172 $ 63,092 $ 60,871 $ 61,510

Loans 41,366 42,770 43,870 45,231 45,452

Securities 10,597 10,445 9,191 8,270 8,233

Short-term investments 5,249 4,992 3,766 439 987

Allowance for credit losses on loans 348 399 425 424 414

Goodwill and other acquisition-related intangible assets 2,826 2,835 2,846 3,244 3,254

Deposits 52,581 53,475 52,138 49,637 49,934

Borrowings 952 1,156 1,148 1,237 1,782

Notes and debentures 1,002 1,003 1,010 1,012 1,015

Stockholders' equity 7,750 7,592 7,603 7,831 7,763

Total risk-weighted assets (1):

People's United Financial, Inc. 43,656 43,833 45,075 45,756 45,657

People's United Bank, N.A. 43,625 43,812 45,016 45,685 45,615

Non-accrual loans 328 353 329 306 296

Net loan charge-offs 10.3 12.4 13.4 17.3 8.5

Average Balances:

Loans $ 41,683 $ 42,854 $ 44,061 $ 44,853 $ 45,153

Securities (2) 10,418 9,561 8,390 7,922 8,240

Short-term investments 5,469 5,000 2,582 842 774

Total earning assets 57,570 57,415 55,034 53,617 54,168

Total assets 63,930 64,057 62,396 61,293 61,841

Deposits 53,041 52,876 50,674 49,542 48,447

Borrowings 1,012 1,143 1,233 1,283 2,911

Notes and debentures 1,003 1,008 1,011 1,014 1,014

Total funding liabilities 55,056 55,027 52,918 51,839 52,372

Stockholders' equity 7,634 7,606 7,884 7,801 7,757

Ratios:

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

Non-performing assets to total loans, real estate owned

and repossessed assets 0.82 0.85 0.78 0.71 0.69

Allowance for credit losses on loans to:

Total loans 0.84 0.93 0.97 0.94 0.91

Non-accrual loans 106.1 113.0 129.1 138.4 139.8

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

Stockholders' equity to total assets 12.2 11.8 12.1 12.9 12.6

Tangible common equity to tangible assets (3) 7.7 7.4 7.5 7.5 7.3

Total risk-based capital (1):

People's United Financial, Inc. 13.1 12.9 12.4 11.8 11.8

People's United Bank, N.A. 13.5 13.5 12.8 12.3 12.3

(1) June 30, 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

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

(in millions) 2021 2021 2020 2020

Assets

Cash and due from banks $ 516.3 $ 464.2 $ 477.3 $ 491.9

Short-term investments 5,249.4 4,992.1 3,766.0 987.4

Securities:

Debt securities available-for-sale, at fair value 6,328.6 6,160.6 4,925.5 4,080.3

Debt securities held-to-maturity, at amortized cost 4,003.1 4,016.8 3,993.8 3,848.6

Federal Reserve Bank and Federal Home Loan Bank stock, at cost 264.9 266.2 266.6 298.3

Equity securities, at fair value - 1.5 5.3 5.8

Total securities 10,596.6 10,445.1 9,191.2 8,233.0

Loans held-for-sale 5.4 10.1 26.5 12.2

Loans:

Commercial and industrial (1) 13,627.4 14,288.2 14,982.3 13,999.5

Commercial real estate (1) 13,243.2 13,520.1 13,336.9 14,593.9

Equipment financing 4,990.9 4,927.2 4,930.0 4,880.1

Total Commercial Portfolio 31,861.5 32,735.5 33,249.2 33,473.5

Residential mortgage 7,626.2 8,067.2 8,518.9 9,623.7

Home equity and other consumer 1,877.9 1,967.0 2,101.4 2,354.3

Total Retail Portfolio 9,504.1 10,034.2 10,620.3 11,978.0

Total loans 41,365.6 42,769.7 43,869.5 45,451.5

Less allowance for credit losses on loans (348.1) (399.1) (425.1) (414.0)

Total loans, net 41,017.5 42,370.6 43,444.4 45,037.5

Goodwill and other acquisition-related intangible assets 2,825.8 2,834.6 2,845.9 3,253.7

Bank-owned life insurance 713.7 713.1 711.6 708.1

Premises and equipment, net 261.8 269.5 276.7 285.7

Other assets 2,154.2 2,073.2 2,352.2 2,500.2

Total assets $ 63,340.7 $ 64,172.5 $ 63,091.8 $ 61,509.7

Liabilities

Deposits:

Non-interest-bearing $ 16,722.8 $ 16,266.5 $ 15,881.7 $ 13,656.9

Savings 6,710.2 6,517.7 6,029.7 5,759.4

Interest-bearing checking and money market 24,705.9 25,782.8 24,567.5 22,943.6

Time 4,442.3 4,908.3 5,658.8 7,574.4

Total deposits 52,581.2 53,475.3 52,137.7 49,934.3

Borrowings:

Federal Home Loan Bank advances 569.7 569.7 569.7 1,289.7

Customer repurchase agreements 382.5 436.2 452.9 342.1

Federal funds purchased - 150.0 125.0 150.0

Total borrowings 952.2 1,155.9 1,147.6 1,781.8

Notes and debentures 1,001.6 1,003.3 1,009.6 1,014.5

Other liabilities 1,056.1 945.8 1,194.1 1,016.1

Total liabilities 55,591.1 56,580.3 55,489.0 53,746.7

Stockholders' Equity

Preferred stock 244.1 244.1 244.1 244.1

Common stock 5.4 5.4 5.3 5.3

Additional paid-in capital 7,709.4 7,693.9 7,663.6 7,651.2

Retained earnings 1,516.5 1,426.9 1,363.6 1,524.6

Unallocated common stock of ESOP, at cost (112.0) (113.8) (115.6) (119.3)

Accumulated other comprehensive loss (144.8) (195.3) (89.2) (73.9)

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

Total stockholders' equity 7,749.6 7,592.2 7,602.8 7,763.0

Total liabilities and stockholders' equity $ 63,340.7 $ 64,172.5 $ 63,091.8 $ 61,509.7

(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

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

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

Interest and dividend income:

Commercial and industrial $ 107.9 $ 116.1 $ 111.3 $ 110.7 $ 112.4

Commercial real estate 101.6 98.8 106.1 110.5 122.4

Equipment financing 62.5 62.8 62.1 65.4 67.6

Residential mortgage 64.4 69.9 74.9 82.1 84.8

Home equity and other consumer 16.2 16.5 18.7 19.9 20.1

Total interest on loans 352.6 364.1 373.1 388.6 407.3

Securities 52.4 51.4 47.2 47.5 49.8

Short-term investments 1.3 1.2 0.8 0.4 0.2

Loans held-for-sale - 0.3 0.4 0.3 0.3

Total interest and dividend income 406.3 417.0 421.5 436.8 457.6

Interest expense:

Deposits 17.1 22.7 30.1 36.5 41.7

Borrowings 1.1 1.2 1.3 1.5 2.0

Notes and debentures 7.2 7.2 7.3 7.4 8.3

Total interest expense 25.4 31.1 38.7 45.4 52.0

Net interest income 380.9 385.9 382.8 391.4 405.6

Provision for credit losses on loans (40.7) (13.6) 14.7 27.1 80.8

Provision for credit losses on securities (0.1) - - (0.3) -

Net interest income after provision for credit losses 421.7 399.5 368.1 364.6 324.8

Non-interest income:

Bank service charges 24.9 23.5 24.7 24.5 20.3

Investment management fees 21.5 19.9 18.9 18.8 17.4

Commercial banking lending fees 14.1 13.6 15.5 12.7 10.6

Operating lease income 11.2 11.3 12.9 12.4 11.8

Cash management fees 9.6 9.2 9.1 8.8 8.1

Customer interest rate swap income, net 2.4 0.1 2.2 1.2 2.7

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

Other non-interest income 15.3 17.0 19.0 22.7 18.7

Total non-interest income 99.0 94.6 178.2 101.1 89.6

Non-interest expense:

Compensation and benefits 177.6 172.8 166.6 166.5 167.8

Occupancy and equipment 50.0 49.1 50.9 49.1 48.0

Professional and outside services 30.0 33.6 24.9 24.1 25.7

Amortization of other acquisition-related intangible assets 8.8 11.0 9.7 10.2 10.2

Regulatory assessments 7.8 8.1 6.9 8.4 8.7

Operating lease expense 7.6 7.8 8.5 9.3 8.8

Goodwill impairment - - 353.0 - -

Other non-interest expense 23.2 29.5 25.9 26.0 34.8

Total non-interest expense (1) 305.0 311.9 646.4 293.6 304.0

Income (loss) before income tax expense 215.7 182.2 (100.1) 172.1 110.4

Income tax expense 44.9 37.7 45.2 27.5 20.5

Net income (loss) 170.8 144.5 (145.3) 144.6 89.9

Preferred stock dividend 3.5 3.5 3.5 3.5 3.5

Net income (loss) available to common shareholders $ 167.3 $ 141.0 $ (148.8) $ 141.1 $ 86.4

Earnings (loss) per common share:

Basic $ 0.40 $ 0.34 $ (0.36) $ 0.34 $ 0.21

Diluted 0.39 0.33 (0.35) 0.34 0.21

(1) The gain on sale of business, net of expenses, is considered non-operatingincome. Total non-interest expense includes $11.2 million, $19.6 million,$357.9 million, $4.6 million and $18.5million of non-operating expenses for the three months ended June 30, 2021, March 31, 2021, December 31, 2020, September 30, 2020 andJune 30, 2020, respectively. See Non-GAAP Financial Measures and Reconciliation to GAAP.

People's United Financial, Inc.

CONSOLIDATED STATEMENTS OF INCOME

Six Months Ended

June 30,

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

Interest and dividend income:

Commercial and industrial $ 224.0 $ 218.8

Commercial real estate 200.4 272.0

Equipment financing 125.3 135.8

Residential mortgage 134.3 175.2

Home equity and other consumer 32.7 48.1

Total interest on loans 716.7 849.9

Securities 103.8 101.0

Short-term investments 2.5 2.2

Loans held-for-sale 0.3 3.6

Total interest and dividend income 823.3 956.7

Interest expense:

Deposits 39.8 120.6

Borrowings 2.3 17.4

Notes and debentures 14.4 17.1

Total interest expense 56.5 155.1

Net interest income 766.8 801.6

Provision for credit losses on loans (54.3) 114.3

Provision for credit losses on securities (0.1) -

Net interest income after provision for credit losses 821.2 687.3

Non-interest income:

Bank service charges 48.4 48.3

Investment management fees 41.4 35.5

Commercial banking lending fees 27.7 22.7

Operating lease income 22.5 24.4

Cash management fees 18.8 15.5

Customer interest rate swap income, net 2.5 11.5

Other non-interest income 32.3 55.5

Total non-interest income 193.6 213.4

Non-interest expense:

Compensation and benefits 350.4 341.7

Occupancy and equipment 99.1 99.0

Professional and outside services 63.6 64.2

Amortization of other acquisition-related intangible assets 19.8 20.9

Regulatory assessments 15.9 17.4

Operating lease expense 15.4 18.6

Other non-interest expense 52.7 62.3

Total non-interest expense (1) 616.9 624.1

Income before income tax expense 397.9 276.6

Income tax expense 82.6 56.3

Net income 315.3 220.3

Preferred stock dividend 7.0 7.0

Net income available to common shareholders $ 308.3 $ 213.3

Earnings per common share:

Basic $ $ 0.73 0.50

Diluted 0.73 0.50

(1) Total non-interest expense includes $30.8 million and $36.4 million ofnon-operating expenses for

the six months ended June 30, 2021 and 2020, respectively. See Non-GAAPFinancial Measures and

Reconciliation to GAAP.

People's UnitedFinancial, Inc.

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

June 30, 2021 March 31, 2021 June 30, 2020

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

(dollars in Balance Interest Rate Balance Interest Rate Balance Interest Ratemillions)

Assets:

Short-term $ 5,468.5 $ 1.3 0.09% $ 5,000.0 $ 1.2 0.10% $ 774.0 $ 0.2 0.14%investments

Securities (2) 10,418.3 57.6 2.21 9,560.6 56.7 2.37 8,240.4 54.8 2.66

Loans:

Commercial real 13,434.9 101.6 3.02 13,281.3 98.8 2.98 14,095.2 122.4 3.48estate

Commercial and 13,570.0 110.5 3.26 14,319.6 118.4 3.31 13,895.6 114.8 3.30industrial

Equipment 4,933.7 62.5 5.07 4,887.7 62.8 5.13 4,933.8 67.6 5.48financing

Residential 7,828.0 64.4 3.29 8,328.3 70.2 3.37 9,821.4 85.1 3.46mortgage

Home equity and 1,916.2 16.2 3.39 2,037.1 16.5 3.23 2,407.1 20.1 3.34other consumer

Total loans 41,682.8 355.2 3.41 42,854.0 366.7 3.42 45,153.1 410.0 3.63

Total earning 57,569.6 $ 414.1 2.88% 57,414.6 $ 424.6 2.96% 54,167.5 $ 465.0 3.43%assets

Other assets 6,360.5 6,642.1 7,673.9

Total assets $ 63,930.1 $ 64,056.7 $ 61,841.4

Liabilities andstockholders'equity:

Deposits:

$ 16,324.6 $ - - % $ 15,820.0 $ - % $ 12,852.8 $ - %Non-interest-bearing - -

Savings,interest-bearingchecking

and money market 32,088.4 10.1 0.13 31,820.1 12.8 0.16 27,402.5 17.0 0.25

Time 4,627.6 7.0 0.61 5,236.4 9.9 0.75 8,191.4 24.7 1.21

Total deposits 53,040.6 17.1 0.13 52,876.5 22.7 0.17 48,446.7 41.7 0.34

Borrowings:

Federal Home Loan 569.7 1.0 0.70 569.7 1.0 0.72 1,858.8 1.5 0.32Bank advances

Customerrepurchase 379.6 - 0.11 422.8 0.2 0.13 357.2 0.2 0.24agreements

Federal funds 62.6 0.1 0.09 150.6 - 0.09 695.5 0.3 0.15purchased

Total borrowings 1,011.9 1.1 0.44 1,143.1 1.2 0.42 2,911.5 2.0 0.27

Notes and debentures 1,003.6 7.2 2.89 1,007.8 7.2 2.87 1,013.8 8.3 3.29

Total funding 55,056.1 $ 25.4 0.19% 55,027.4 $ 31.1 0.23% 52,372.0 $ 52.0 0.40%liabilities

Other liabilities 1,239.8 1,423.4 1,712.6

Total 56,295.9 56,450.8 54,084.6liabilities

Stockholders' equity 7,634.2 7,605.9 7,756.8

Totalliabilities and

stockholders' $ 63,930.1 $ 64,056.7 $ 61,841.4equity

Net interest income/ $ 388.7 2.69% $ 393.5 2.73% $ 413.0 3.03%spread (3)

Net interest margin 2.70% 2.74% 3.05%

(1) Average yields earned and rates paid areannualized.

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

(3) The fully taxable equivalent adjustment was $7.8 million, $7.6 millionand $7.4 million for the three months ended June 30, 2021, March 31, 2021 andJune 30, 2020, respectively.

People's United Financial, Inc.

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

June 30, 2021 June 30, 2020

Six months ended Average Yield Average Yield / /

(dollars in millions) Balance Interest Rate Balance Interest Rate

Assets:

Short-term investments $ 5,235.5 $ 2.5 0.10% $ 531.9 $ 2.2 0.84%

Securities (2) 9,991.9 114.3 2.29 8,131.1 110.8 2.73

Loans:

Commercial real estate 13,358.6 200.4 3.00 14,405.2 272.0 3.78

Commercial and industrial 13,942.7 228.9 3.28 12,381.1 224.6 3.63

Equipment financing 4,910.8 125.3 5.10 4,924.7 135.8 5.51

Residential mortgage 8,076.8 134.6 3.33 10,028.9 175.6 3.50

Home equity and other consumer 1,976.3 32.7 3.31 2,566.6 50.8 3.96

Total loans 42,265.2 721.9 3.42 44,306.5 858.8 3.88

Total earning assets 57,492.6 $ 838.7 2.92% 52,969.5 $ 971.8 3.67%

Other assets 6,500.5 7,253.0

Total assets $ 63,993.1 $ 60,222.5

Liabilities and stockholders' equity:

Deposits:

Non-interest-bearing $ 16,073.7 $ - % $ 11,465.3 $ - - % -

Savings, interest-bearing checking

and money market 31,955.0 22.9 0.14 26,171.6 61.1 0.47

Time 4,930.3 16.9 0.69 8,668.0 59.5 1.37

Total deposits 52,959.0 39.8 0.15 46,304.9 120.6 0.52

Borrowings:

Federal Home Loan Bank advances 569.7 2.0 0.71 2,144.7 11.3 1.05

Customer repurchase agreements 401.0 0.2 0.12 342.6 0.7 0.44

Federal funds purchased 106.4 0.1 0.09 1,144.7 5.4 0.93

Total borrowings 1,077.1 2.3 0.43 3,632.0 17.4 0.96

Notes and debentures 1,005.7 14.4 2.88 1,006.7 17.1 3.40

Total funding liabilities 55,041.8 $ 56.5 0.21% 50,943.6 $ 155.1 0.61%

Other liabilities 1,331.1 1,498.4

Total liabilities 56,372.9 52,442.0

Stockholders' equity 7,620.2 7,780.5

Total liabilities and

stockholders' equity $ 63,993.1 $ 60,222.5

Net interest income/spread (3) $ 782.2 2.71% $ 816.7 3.06%

Net interest margin 2.72% 3.08%

(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 $15.4 million and $15.1 millionfor the six months ended June 30, 2021 and 2020, respectively.

People's United Financial, Inc.

NON-PERFORMING ASSETS

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

(dollars in millions) 2021 2021 2020 2020 2020

Non-accrual loans:

Commercial:

Commercial real estate $ 96.1 $ 90.2 $ 60.4 $ 85.3 $ 73.6

Commercial and industrial 57.0 69.2 76.4 86.7 88.8

Equipment financing 107.2 118.1 109.3 49.0 48.6

Total Commercial 260.3 277.5 246.1 221.0 211.0

Retail:

Residential mortgage 49.5 56.9 62.3 62.9 62.6

Home equity 18.1 18.7 20.5 22.1 22.5

Other consumer 0.1 0.2 0.2 0.2 0.1

Total Retail 67.7 75.8 83.0 85.2 85.2

Total non-accrual loans (1) 328.0 353.3 329.1 306.2 296.2

Real estate owned:

Commercial 3.5 3.5 3.6 3.6 7.3

Residential 1.6 1.5 3.2 1.9 4.9

Total real estate owned 5.1 5.0 6.8 5.5 12.2

Repossessed assets 5.6 5.4 5.7 9.7 6.2

Total non-performing assets $ 338.7 $ 363.7 $ 341.6 $ 321.4 $ 314.6

Non-accrual loans as a percentage of total loans 0.79 % 0.83 % 0.75 % 0.68 % 0.65 %

Non-performing assets as a percentage of:

Total loans, real estate owned and repossessed assets 0.82 0.85 0.78 0.71 0.69

Tangible stockholders' equity and allowance

for credit losses 6.43 7.05 6.59 6.41 6.39

(1) Reported net of government guarantees totaling $1.2 million at June 30,2021, $2.5 million at March 31, 2021, $2.5 million at December 31, 2020, $2.4 million at September 30, 2020 and$2.9 million at June 30, 2020

.

People's United Financial, Inc.

PROVISION AND ALLOWANCE FOR CREDIT LOSSES ON LOANS



Three Months Ended

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

(dollars in millions) 2021 2021 2020 2020 2020

Allowance for credit losses on loans:

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

Charge-offs (13.9) (17.8) (16.7) (19.3) (10.3)

Recoveries 3.6 5.4 3.3 2.0 1.8

Net loan charge-offs (10.3) (12.4) (13.4) (17.3) (8.5)

Provision for credit losses on loans (40.7) (13.6) 14.7 27.1 80.8

Balance at end of period $ 348.1 $ 399.1 $ 425.1 $ 423.8 $ 414.0

Allowance for credit losses on loans

as a percentage of:

Total loans 0.84 % 0.93 % 0.97 % 0.94 % 0.91 %

Non-accrual loans 106.1 113.0 129.1 138.4 139.8

NET LOAN CHARGE-OFFS (RECOVERIES)

Three Months Ended

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

(dollars in millions) 2021 2021 2020 2020 2020

Commercial:

Commercial real estate $ 0.8 $ 5.8 $ 0.1 $ 4.1 $ 1.8

Commercial and industrial 3.0 (0.5) 6.6 6.9 -

Equipment financing 6.9 7.2 6.8 6.2 5.2

Total 10.7 12.5 13.5 17.2 7.0

Retail:

Residential mortgage (0.4) (0.3) (0.3) (0.2) -

Home equity (0.2) (0.2) - - 0.6

Other consumer 0.2 0.4 0.2 0.3 0.9

Total (0.4) (0.1) (0.1) 0.1 1.5

Total net loan charge-offs $ 10.3 $ 12.4 $ 13.4 $ 17.3 $ 8.5

Net loan charge-offs to

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

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 Six Months Ended

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

(dollars in millions) 2021 2021 2020 2020 2020 2021 2020

Total non-interest expense $ 305.0 $ 311.9 $ 646.4 $ 293.6 $ 304.0 $ 616.9 $ 624.1

Adjustments to arrive at operating

non-interest expense:

Merger-related expenses (9.2) (7.5) (4.9) (4.6) (18.5) (16.7) (36.4)

Stop & Shop contract termination costs (2.0) (12.1) - - - (14.1) -

Goodwill impairment charge - - (353.0) - - - -

Total (11.2) (19.6) (357.9) (4.6) (18.5) (30.8) (36.4)

Operating non-interest expense 293.8 292.3 288.5 289.0 285.5 586.1 587.7

Adjustments:

Amortization of other acquisition-related

intangible assets (8.8) (11.0) (9.7) (10.2) (10.2) (19.8) (20.9)

Operating lease expense (7.6) (7.8) (8.5) (9.3) (8.8) (15.4) (18.6)

Other (1) (1.3) (1.7) (1.3) (5.1) (1.9) (3.0) (3.8)

Total non-interest expense for

efficiency ratio $ 276.1 $ 271.8 $ 269.0 $ 264.4 $ 264.6 $ 547.9 $ 544.4

Net interest income (FTE basis) $ 388.7 $ 393.5 $ 390.2 $ 398.7 $ 413.0 $ 782.2 $ 816.7

Total non-interest income 99.0 94.6 178.2 101.1 89.6 193.6 213.4

Total revenues 487.7 488.1 568.4 499.8 502.6 975.8 1,030.1

Adjustments:

Operating lease expense (7.6) (7.8) (8.5) (9.3) (8.8) (15.4) (18.6)

BOLI FTE adjustment 0.7 0.6 0.9 0.8 1.0 1.3 1.8

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

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

Total revenues for efficiency ratio $ 480.8 $ 479.8 $ 484.9 $ 491.2 $ 494.8 $ 960.6 $ 1,013.0

Efficiency ratio 57.4% 56.6% 55.5% 53.8% 53.5% 57.0% 53.7%

(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 Six Months Ended

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

(in millions) 2021 2021 2020 2020 2020 2021 2020

Net interest income $ 380.9 $ 385.9 $ 382.8 $ 391.4 $ 405.6 $ 766.8 $ 801.6

Non-interest income 99.0 94.6 178.2 101.1 89.6 193.6 213.4

Non-interest expense (305.0) (311.9) (646.4) (293.6) (304.0) (616.9) (624.1)

Pre-provision net revenue 174.9 168.6 (85.4) 198.9 191.2 343.5 390.9

Non-operating income - - (75.9) - - - -

Non-operating expense 11.2 19.6 357.9 4.6 18.5 30.8 36.4

Operating pre-provision net revenue $ 186.1 $ 188.2 $ 196.6 $ 203.5 $ 209.7 $ 374.3 $ 427.3

People's United Financial, Inc.

NON-GAAP FINANCIAL MEASURES AND RECONCILIATION TO GAAP - Continued

OPERATING EARNINGS



Three Months Ended Six Months Ended

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

(dollars in millions, except per common share data) 2021 2021 2020 2020 2020 2021 (1) 2020

Net income (loss) available to common shareholders $ 167.3 $ 141.0 $ (148.8) $ 141.1 $ 86.4 $ 308.3 $ 213.3

Adjustments to arrive at operating earnings:

Merger-related expenses 9.2 7.5 4.9 4.6 18.5 16.7 36.4

Stop & Shop contract termination costs 2.0 12.1 - - - 14.1 -

Goodwill impairment charge (2) - - 353.0 - - - -

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

Total pre-tax adjustments 11.2 19.6 282.0 4.6 18.5 30.8 36.4

Tax effect (2) (2.4) (4.1) 14.5 (1.0) (3.9) (6.5) (7.7)

Total adjustments, net of tax 8.8 15.5 296.5 3.6 14.6 24.3 28.7

Operating earnings $ 176.1 $ 156.5 $ 147.7 $ 144.7 $ 101.0 $ 332.6 $ 242.0

Diluted EPS, as reported $ $ $ (0.35) $ 0.34 $ 0.21 $ 0.73 $ 0.50 0.39 0.33

Adjustments to arrive at operating EPS:

Merger-related expenses 0.02 0.02 0.01 - 0.03 0.04 0.07

Stop & Shop contract termination costs - 0.02 - - - 0.02 -

Goodwill impairment charge (2) - - 0.83 - - - -

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

Total adjustments per common share 0.02 0.04 0.70 - 0.03 0.06 0.07

Operating EPS $ $ $ 0.35 $ 0.34 $ 0.24 $ 0.79 $ 0.57 0.41 0.37

Average total assets $ 63,930 $ 64,057 $ 62,396 $ 61,293 $ 61,841 $ 63,993 $ 60,223

Operating return on

average assets (annualized) 1.10% 0.98% 0.95% 0.94% 0.65% 1.04% 0.80%

(1) The sum of the quarterly amounts for certain line items may not equal thesix months amounts due to rounding.

(2) 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 Six Months Ended

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

(dollars in millions) 2021 2021 2020 2020 2020 2021 2020

Operating earnings $ 176.1 $ 156.5 $ 147.7 $ 144.7 $ 101.0 $ 332.6 $ 242.0

Average stockholders' equity $ 7,634 $ 7,606 $ 7,884 $ 7,801 $ 7,757 $ 7,620 $ 7,781

Less: Average preferred stock 244 244 244 244 244 244 244

Average common equity 7,390 7,362 7,640 7,557 7,513 7,376 7,537

Less: Average goodwill and average other

acquisition-related intangible assets 2,831 2,842 3,213 3,249 3,259 2,836 3,264

Average tangible common equity $ 4,559 $ 4,520 $ 4,427 $ 4,308 $ 4,254 $ 4,540 $ 4,273

Operating return on average tangible

common equity (annualized) 15.4% 13.8% 13.3% 13.4% 9.5% 14.7% 11.3%

People's United Financial, Inc.

NON-GAAP FINANCIAL MEASURES AND RECONCILIATION TO GAAP - Continued

OPERATING COMMON DIVIDEND PAYOUT RATIO

Six Months Ended Three Months Ended

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

(dollars in millions) 2021 2021 2020 2020 2020 2021 2020

Common dividends paid $ 77.3 $ 75.7 $ 75.6 $ 75.7 $ 75.5 $ 153.0 $ 152.8

Operating earnings $ 176.1 $ 156.5 $ 147.7 $ 144.7 $ 101.0 $ 332.6 $ 242.0

Operating common dividend payout ratio 43.9% 48.4% 51.2% 52.3% 74.8% 46.0% 63.1%

TANGIBLE COMMON EQUITY RATIO

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

(dollars in millions) 2021 2021 2020 2020 2020

Total stockholders' equity $ 7,750 $ 7,592 $ 7,603 $ 7,831 $ 7,763

Less: Preferred stock 244 244 244 244 244

Common equity 7,506 7,348 7,359 7,587 7,519

Less: Goodwill and other

acquisition-related intangible assets 2,826 2,835 2,846 3,244 3,254

Tangible common equity $ 4,680 $ 4,513 $ 4,513 $ 4,343 $ 4,265

Total assets $ 63,341 $ 64,172 $ 63,092 $ 60,871 $ 61,510

Less: Goodwill and other

acquisition-related intangible assets 2,826 2,835 2,846 3,244 3,254

Tangible assets $ 60,515 $ 61,337 $ 60,246 $ 57,627 $ 58,256

Tangible common equity ratio 7.7% 7.4% 7.5% 7.5% 7.3%

TANGIBLE BOOK VALUE PER COMMON SHARE

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

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

Tangible common equity $ 4,680 $ 4,513 $ 4,513 $ 4,343 $ 4,265

Common shares issued 536.75 536.20 533.68 533.67 533.59

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

Common shares outstanding 427.77 427.22 424.68 424.67 424.59

Less: Unallocated ESOP shares 5.40 5.49 5.57 5.66 5.75

Common shares 422.37 421.73 419.11 419.01 418.84

Tangible book value per common share $ 11.08 $ 10.70 $ 10.77 $ 10.18 $ 10.07

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SOURCE People's United Financial