PR Newswire | Jan 20, 2022 04:01PM EST

or $0.34 per Common Share

01/20 15:00 CST

People's United Financial Reports Fourth Quarter Net Income of $149.9 Million, or $0.34 per Common ShareOperating Earnings of $0.36 per Common Share- Received approval from the New York State Department of Financial Services and Connecticut Department of Banking for the announced merger with M&T Bank Corporation. Approval remains pending from the Board of Governors of the Federal Reserve- Sustained excellent asset quality as evidenced by net loan charge-offs to average total loans of three basis points, and a provision for credit losses on loans of ($5.9) million- Generated positive operating leverage reflected by a 270-basis point linked quarter improvement in the efficiency ratio to 54.1 percent due to lower expenses- Declared quarterly dividend of $0.1825 per common share payable February 15, 2022, to shareholders of record on February 1, 2022 BRIDGEPORT, Conn., Jan. 20, 2022

BRIDGEPORT, Conn., Jan. 20, 2022 /PRNewswire/ -- People's United Financial, Inc. (NASDAQ: PBCT) today reported results for the fourth quarter and full year of 2021. These results along with comparison periods are summarized below:

($ in millions, except per common share data)

Three Months Ended Twelve Months Ended

Dec. 31, 2021 Sep. 30, 2021 Dec. 31, 2020 Dec. 31, 2021 Dec. 31, 2020

Net income (loss) $ 149.9 $ 139.7 $ (145.3) $ 604.9 $ 219.6

Net income (loss) available 146.4 136.2 (148.8) 590.8 205.5 to common shareholders

Per common share 0.34 0.32 (0.35) 1.39 0.49

Operating earnings^1 154.9 141.1 147.7 628.6 534.6

Per common share 0.36 0.33 0.35 1.48 1.27

Net interest income $ 362.0 $ 370.3 $ 382.8 $ 1,499.1 $ 1,575.8

Net interest margin 2.51% 2.64% 2.84% 2.65% 2.99%

Non-interest income 99.6 100.4 178.2 393.6 492.7

Operating non-interest income^1 99.6 100.4 102.3 393.6 416.8

Non-interest expense $ 277.7 $ 289.2 $ 646.4 $ 1,183.8 $ 1,564.1

Operating non-interest expense^1 267.0 282.9 288.5 1,136.0 1,165.2

Efficiency ratio 54.1% 56.8% 55.5% 56.2% 54.2%

Average balances

Loans $ 38,110 $ 39,934 $ 44,061 $ 40,630 $ 44,382

Deposits 54,084 52,822 50,674 53,208 48,217

Period-end balances

Loans 37,851 39,526 43,870

Deposits 53,755 52,871 52,138

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

"Our performance in 2021 was strong, particularly given the low interest rate environment and ongoing impact of the pandemic," said Jack Barnes, Chairman and Chief Executive Officer. "We are pleased to report record full year operating earnings of $628.6 million, which increased 18 percent from a year ago and generated an operating return on average tangible common equity of 13.6 percent. These results are a testament to the resiliency of the People's United business model, which is built upon a conservative underwriting philosophy, an unwavering commitment to servicing the financial needs of customers, and steadfast community support. As we wait for the approval of the merger from the Federal Reserve, we continue to work diligently with our M&T partners on integration planning. As such, a seamless transition is expected for our clients and colleagues once the transaction is closed. Finally, I want to express my gratitude to all our employees for their efforts and dedication as we move towards our next chapter and further build upon the impressive legacy forged by People's United over 179 years.

"Our fourth quarter financial performance delivered a solid finish to the year," said David Rosato, Senior Executive Vice President and Chief Financial Officer. "Operating earnings of $154.9 million increased ten percent from the third quarter, or nine percent on a per common share basis. These results benefited from a negative provision for credit losses driven by better credit metrics and improved economic outlook. In addition, operating pre-provision net revenue grew four percent linked quarter due to lower expenses and stable fee income, partially offset by a modest decline in net interest income. Net interest margin of 2.51 percent was 13 basis points lower than the third quarter, mostly attributable to a further increase in excess liquidity resulting from continued strong deposit inflows. Conversely, the margin benefited from improved loan yields and a slight reduction in deposit costs."

Rosato continued, "The loan-to-deposit ratio concluded the quarter at 70 percent as the total loan portfolio decreased $1.7 billion or four percent from September 30, while deposits grew $884 million or two percent.

Loan growth continued to experience headwinds during the quarter as period-end loans, excluding forgiveness of PPP balances, declined approximately $1.2 billion, primarily due to lower commercial real estate and mortgage warehouse balances of $726 million and $365 million, respectively, as well as a $335 million reduction in the retail portfolio. These decreases were partially offset by strong results in LEAF and certain specialty businesses. Deposits ended the quarter at a record level, and linked quarter growth was driven by an increase in non-interest-bearing balances of $1.6 billion, or ten percent. Finally, capital ratios remain strong for both the Bank and Holding Company."

($ in millions, except per share common share data)

As of and for the Three Months Ended

Dec. 31, 2021 Sep. 30, 2021 Dec. 31, 2020

Asset Quality

Net loan charge-offs 0.03% 0.08% 0.12%to average total loans

Non-performing loans 0.76% 0.81% 0.75%as a percentage of total loans

Returns

Return on average assets^1 0.92% 0.87% (0.93%)

Return on average tangible common equity^1 12.4% 11.6% (13.4%)

Capital Ratios

People's United Financial, Inc.

Tangible common equity / tangible assets 7.8% 7.8% 7.5%

Tier 1 leverage 8.5% 8.6% 8.3%

Common equity tier 1 12.2% 11.7% 10.5%

Tier 1 risk-based 12.7% 12.3% 11.0%

Total risk-based 13.9% 13.4% 12.4%

People's United Bank, N.A.

Tier 1 leverage 8.6% 8.8% 8.7%

Common equity tier 1 12.9% 12.6% 11.5%

Tier 1 risk-based 12.9% 12.6% 11.5%

Total risk-based 14.0% 13.6% 12.8%

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

The Board of Directors declared a $0.1825 per common share quarterly dividend payable February 15, 2022, to shareholders of record on February 1, 2022. Based on the closing stock price on January 19, 2022, the dividend yield on People's United Financial common stock is 3.6 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 approximately $65 billion in assets. Founded in 1842, People's United Bank offers commercial and retail banking through a network of nearly 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.

4Q 2021 Financial Highlights

Summary

* Net income totaled $149.9 million, or $0.34 per common share. * Net income available to common shareholders totaled $146.4 million. * Operating earnings totaled $154.9 million, or $0.36 per common share (see Non-GAAP Financial Measures and Reconciliation to GAAP).

* Net interest income totaled $362.0 million in 4Q21 compared to $370.3 million in 3Q21. * Includes $22.4 million associated with PPP loans in 4Q21 ($21.0 million in net fees and $1.4 million in net interest income).

* Net interest margin decreased 13 basis points from 3Q21 to 2.51% reflecting: * Higher yields on the loan portfolio (increase of one basis point). * Lower rates on deposits (increase of one basis point). * Lower yields on the securities portfolio (decrease of 15 basis points). * Excess liquidity resulting from deposits at the Federal Reserve Bank had a 14 basis point negative impact on the net interest margin in 4Q21. * PPP loans had a 13 basis point favorable impact on the net interest margin in 4Q21.

* Provision for credit losses on loans totaled $(5.9) million. * Allowance for credit losses on loans decreased $8.8 million. * Net loan charge-offs totaled $2.9 million. * Net loan charge-off ratio of 0.03%.

* Non-interest income totaled $99.6 million in 4Q21 compared to $100.4 million in 3Q21. * Commercial banking lending fees increased $4.5 million. * Customer interest rate swap income decreased $0.6 million. * Other non-interest income in 3Q21 includes $3.9 million of net gains on building sales. * At December 31, 2021, assets under discretionary management totaled $9.4 billion.

* Non-interest expense totaled $277.7 million in 4Q21 compared to $289.2 million in 3Q21. * Operating non-interest expense totaled $267.0 million in 4Q21 and $282.9 million in 3Q21 (see Non-GAAP Financial Measures and Reconciliation to GAAP). * Compensation and benefits expense decreased $6.2 million, primarily reflecting lower payroll and benefit-related costs in 4Q21. * Professional and outside services expense, excluding $2.4 million and $4.1 million of non-operating expenses in 4Q21 and 3Q21, respectively, increased $2.2 million. * Regulatory assessments expense decreased $0.9 million. * Other non-interest expense includes non-operating expenses totaling $8.4 million in 4Q21 and $1.6 million in 3Q21. * The efficiency ratio was 54.1% for 4Q21 compared to 56.8% for 3Q21 and 55.5% for 4Q20 (see Non-GAAP Financial Measures and Reconciliation to GAAP).

* The effective income tax rate was 21.1% for 4Q21 and 20.1% for the full-year 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 $29.1 billion at December 31, 2021, a $1.3 billion decrease from September 30, 2021. * PPP loans decreased $504 million. * The mortgage warehouse portfolio decreased $365 million. * The New York multifamily portfolio decreased $69 million. * The equipment financing portfolio increased $103 million.

* Average commercial loans totaled $29.2 billion in 4Q21, a $1.4 billion decrease from 3Q21. * Average PPP loans decreased $653 million. * The average mortgage warehouse portfolio decreased $287 million. * The average New York multifamily portfolio decreased $71 million. * The average equipment financing portfolio increased $54 million.

* Commercial deposits totaled $26.6 billion at December 31, 2021 compared to $25.9 billion at September 30, 2021. * The ratio of non-accrual commercial loans to total commercial loans was 0.80% at December 31, 2021 compared to 0.84% at September 30, 2021. * Non-performing commercial assets totaled $235.6 million at December 31, 2021 compared to $262.1 million at September 30, 2021. * For the commercial loan portfolio, the allowance for credit losses as a percentage of commercial loans was 0.69% at December 31, 2021 compared to 0.75% at September 30, 2021. * The commercial allowance for credit losses represented 87% of non-accrual commercial loans at December 31, 2021 compared to 90% at September 30, 2021.

Retail Banking

* Residential mortgage loans totaled $7.0 billion at December 31, 2021, a $266 million decrease from September 30, 2021. * Average residential mortgage loans totaled $7.1 billion in 4Q21, a $310 million decrease from 3Q21.

* Home equity loans totaled $1.6 billion at December 31, 2021, a $65 million decrease from September 30, 2021. * Average home equity loans totaled $1.7 billion in 4Q21, a $76 million decrease from 3Q21.

* Retail deposits totaled $27.2 billion at December 31, 2021 compared to $27.0 billion at September 30, 2021. * The ratio of non-accrual residential mortgage loans to residential mortgage loans was 0.60% at December 31, 2021 compared to 0.68% at September 30, 2021. * The ratio of non-accrual home equity loans to home equity loans was 0.89% at December 31, 2021 compared to 0.96% at September 30, 2021. * For the retail loan portfolio, the allowance for credit losses as a percentage of retail loans was 1.63% at December 31, 2021 compared to 1.36% at September 30, 2021. * The retail allowance for credit losses represented 251% of non-accrual retail loans at December 31, 2021 compared to 187% at September 30, 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

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

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

Earnings Data:

Net interest income (fully taxable equivalent) $ 369.6 $ 377.9 $ 388.7 $ 393.5 $ 390.2

Net interest income 362.0 370.3 380.9 385.9 382.8

Provision for credit losses (6.0) 12.1 (40.8) (13.6) 14.7

Non-interest income (1) 99.6 100.4 99.0 94.6 178.2

Non-interest expense (1) 277.7 289.2 305.0 311.9 646.4

Income (loss) before income tax expense 189.9 169.4 215.7 182.2 (100.1)

Net income (loss) 149.9 139.7 170.8 144.5 (145.3)

Net income (loss) available to common shareholders (1) 146.4 136.2 167.3 141.0 (148.8)

Selected Statistical Data:

Net interest margin (2) 2.51 % 2.64 % 2.70 % 2.74 % 2.84 %

Return on average assets (1), (2) 0.92 0.87 1.07 0.90 (0.93)

Return on average common equity (2) 7.8 7.2 9.1 7.7 (7.8)

Return on average tangible common equity (1), (2) 12.4 11.6 14.7 12.5 (13.4)

Efficiency ratio (1) 54.1 56.8 57.4 56.6 55.5

Common Share Data:

Earnings (loss) per common share:

Basic $ 0.35 $ 0.32 $ 0.40 $ 0.34 $ (0.36)

Diluted (1) 0.34 0.32 0.39 0.33 (0.35)

Dividends paid per common share 0.1825 0.1825 0.1825 0.1800 0.1800

Common dividend payout ratio (1) 52.9 % 56.8 % 46.2 % 53.7 % (50.8) %

Book value per common share $ 18.12 $ 17.85 $ 17.77 $ 17.42 $ 17.56

Tangible book value per common share (1) 11.47 11.18 11.08 10.70 10.77

Stock price:

High 19.05 18.08 19.62 19.40 13.58

Low 16.20 15.18 16.75 12.66 9.98

Close 17.82 17.47 17.14 17.90 12.93

Common shares outstanding (in millions) (1) 427.92 427.77 427.77 427.22 424.68

Weighted average diluted common shares (in millions) 425.45 424.77 425.08 422.58 420.39

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

(2) Annualized.

People's United Financial, Inc.

FINANCIAL HIGHLIGHTS

As of and for the

Twelve Months Ended

December 31,

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

Earnings Data:

Net interest income (fully taxable equivalent) $ 1,529.7 $ 1,605.6

Net interest income 1,499.1 1,575.8

Provision for credit losses (48.3) 155.8

Non-interest income (1) 393.6 492.7

Non-interest expense (1) 1,183.8 1,564.1

Income before income tax expense 757.2 348.6

Net income 604.9 219.6

Net income available to common shareholders (1) 590.8 205.5

Selected Statistical Data:

Net interest margin 2.65 % 2.99 %

Return on average assets (1) 0.94 0.36

Return on average common equity 7.9 2.7

Return on average tangible common equity (1) 12.8 4.8

Efficiency ratio (1) 56.2 54.2

Common Share Data:

Earnings per common share:

Basic $ 1.40 $ 0.49

Diluted (1) 1.39 0.49

Dividends paid per common share 0.7275 0.7175

Common dividend payout ratio (1) 52.1 % 148.0 %

Book value per common share $ 18.12 $ 17.56

Tangible book value per common share (1) 11.47 10.77

Stock price:

High 19.62 17.00

Low 12.66 9.37

Close 17.82 12.93

Common shares oustanding (in millions) (1) 427.92 424.68

Weighted average diluted common shares (in millions) 424.54 422.55

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

People's United Financial, Inc.

FINANCIAL HIGHLIGHTS - Continued

As of and for the Three Months Ended

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

(dollars in millions) 2021 2021 2021 2021 2020

Financial Condition Data:

Total assets $ 64,642 $ 63,673 $ 63,341 $ 64,172 $ 63,092

Loans 37,851 39,526 41,366 42,770 43,870

Securities 10,751 10,541 10,597 10,445 9,191

Short-term investments 10,269 7,723 5,249 4,992 3,766

Allowance for credit losses on loans 344 352 348 399 425

Goodwill and other acquisition-related intangible assets 2,809 2,817 2,826 2,835 2,846

Deposits 53,755 52,871 52,581 53,475 52,138

Borrowings 958 977 952 1,156 1,148

Notes and debentures 993 999 1,002 1,003 1,010

Stockholders' equity 7,902 7,783 7,750 7,592 7,603

Total risk-weighted assets (1):

People's United Financial, Inc. 41,810 42,721 43,654 43,833 45,075

People's United Bank, N.A. 41,801 42,716 43,623 43,812 45,016

Non-accrual loans 289 321 328 353 329

Net loan charge-offs 2.9 7.7 10.3 12.4 13.4

Average Balances:

Loans $ 38,110 $ 39,934 $ 41,683 $ 42,854 $ 44,061

Securities (2) 10,422 10,432 10,418 9,561 8,390

Short-term investments 10,417 6,999 5,469 5,000 2,582

Total earning assets 58,949 57,365 57,570 57,415 55,034

Total assets 65,142 63,876 63,930 64,057 62,396

Deposits 54,084 52,822 53,041 52,876 50,674

Borrowings 974 940 1,012 1,143 1,233

Notes and debentures 996 1,002 1,003 1,008 1,011

Total funding liabilities 56,054 54,764 55,056 55,027 52,918

Stockholders' equity 7,790 7,779 7,634 7,606 7,884

Ratios:

Net loan charge-offs to average total loans (annualized) 0.03 % 0.08 % 0.10 % 0.12 % 0.12 %

Non-performing assets to total loans, real estate owned

and repossessed assets 0.78 0.83 0.82 0.85 0.78

Allowance for credit losses on loans to:

Total loans 0.91 0.89 0.84 0.93 0.97

Non-accrual loans 119.1 109.9 106.1 113.0 129.1

Average stockholders' equity to average total assets 12.0 12.9 11.9 11.9 12.6

Stockholders' equity to total assets 12.2 12.2 12.2 11.8 12.1

Tangible common equity to tangible assets (3) 7.8 7.8 7.7 7.4 7.5

Total risk-based capital (1):

People's United Financial, Inc. 13.9 13.4 13.1 12.9 12.4

People's United Bank, N.A. 14.0 13.6 13.5 13.5 12.8

(1) December 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

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

(in millions) 2021 2021 2021 2020

Assets

Cash and due from banks $ 320.5 $ 410.6 $ 516.3 $ 477.3

Short-term investments 10,268.8 7,723.0 5,249.4 3,766.0

Securities:

Debt securities available-for-sale, at fair value 6,644.0 6,257.0 6,328.6 4,925.5

Debt securities held-to-maturity, at amortized cost 3,841.5 3,929.8 4,003.1 3,993.8

Federal Reserve Bank and Federal Home Loan Bank stock, at cost 264.6 264.7 264.9 266.6

Equity securities, at fair value - - - 5.3

Total securities 10,750.1 10,451.5 10,596.6 9,191.2

Loans held-for-sale 8.8 9.8 5.4 26.5

Loans:

Commercial and industrial (1) 12,052.1 12,769.0 13,627.4 14,982.3

Commercial real estate (1) 11,936.7 12,662.6 13,243.2 13,336.9

Equipment financing 5,143.1 5,040.3 4,990.9 4,930.0

Total Commercial Portfolio 29,131.9 30,471.9 31,861.5 33,249.2

Residential mortgage 7,004.3 7,269.8 7,626.2 8,518.9

Home equity and other consumer 1,715.1 1,784.1 1,877.9 2,101.4

Total Retail Portfolio 8,719.4 9,053.9 9,504.1 10,620.3

Total loans 37,851.3 39,525.8 41,365.6 43,869.5

Less allowance for credit losses on loans (343.6) (352.4) (348.1) (425.1)

Total loans, net 37,507.7 39,173.4 41,017.5 43,444.4

Goodwill and other acquisition-related intangible assets 2,808.6 2,816.9 2,825.8 2,845.9

Bank-owned life insurance 710.7 716.5 713.7 711.6

Premises and equipment, net 241.8 249.9 261.8 276.7

Other assets 2,025.4 2,121.0 2,154.2 2,352.2

Total assets $ 64,642.4 $ 63,672.6 $ 63,340.7 $ 63,091.8

Liabilities

Deposits:

Non-interest-bearing $ 17,941.1 $ 16,334.6 $ 16,722.8 $ 15,881.7

Savings 6,733.7 6,685.4 6,710.2 6,029.7

Interest-bearing checking and money market 25,383.8 25,614.7 24,705.9 24,567.5

Time 3,696.7 4,236.6 4,442.3 5,658.8

Total deposits 53,755.3 52,871.3 52,581.2 52,137.7

Borrowings:

Federal Home Loan Bank advances 562.6 569.6 569.7 569.7

Customer repurchase agreements 395.2 407.8 382.5 452.9

Federal funds purchased - - - 125.0

Total borrowings 957.8 977.4 952.2 1,147.6

Notes and debentures 992.8 999.4 1,001.6 1,009.6

Other liabilities 1,034.7 1,041.5 1,056.1 1,194.1

Total liabilities 56,740.6 55,889.6 55,591.1 55,489.0

Stockholders' Equity

Preferred stock 244.1 244.1 244.1 244.1

Common stock 5.4 5.4 5.4 5.3

Additional paid-in capital 7,723.3 7,714.9 7,709.4 7,663.6

Retained earnings 1,643.2 1,574.7 1,516.5 1,363.6

Unallocated common stock of ESOP, at cost (108.4) (110.2) (112.0) (115.6)

Accumulated other comprehensive loss (136.8) (176.9) (144.8) (89.2)

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

Total stockholders' equity 7,901.8 7,783.0 7,749.6 7,602.8

Total liabilities and stockholders' equity $ 64,642.4 $ 63,672.6 $ 63,340.7 $ 63,091.8

In the first quarter of 2021, the Company completed a portfolio review to ensure consistent classification of certain commercial loans across the Company's franchise and conformity to industry practice for such loans. As(1) a result, approximately $350 million of loans secured by non-owner-occupied commercial properties were prospectively reclassified, in March 2021, from commercial and industrial loans to commercial 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

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

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

Interest and dividend income:

Commercial and industrial $ 103.3 $ 104.3 $ 107.9 $ 116.1 $ 111.3

Commercial real estate 90.2 96.5 101.6 98.8 106.1

Equipment financing 62.9 62.3 62.5 62.8 62.1

Residential mortgage 57.2 58.8 64.4 69.9 74.9

Home equity and other consumer 14.3 15.2 16.2 16.5 18.7

Total interest on loans 327.9 337.1 352.6 364.1 373.1

Securities 52.1 53.8 52.4 51.4 47.2

Short-term investments 4.2 2.8 1.3 1.2 0.8

Loans held-for-sale - 0.1 - 0.3 0.4

Total interest and dividend income 384.2 393.8 406.3 417.0 421.5

Interest expense:

Deposits 13.8 15.1 17.1 22.7 30.1

Borrowings 1.2 1.2 1.1 1.2 1.3

Notes and debentures 7.2 7.2 7.2 7.2 7.3

Total interest expense 22.2 23.5 25.4 31.1 38.7

Net interest income 362.0 370.3 380.9 385.9 382.8

Provision for credit losses on loans (5.9) 12.0 (40.7) (13.6) 14.7

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

Net interest income after provision for credit losses 368.0 358.2 421.7 399.5 368.1

Non-interest income:

Bank service charges 25.8 25.9 24.9 23.5 24.7

Investment management fees 20.5 21.1 21.5 19.9 18.9

Commercial banking lending fees 16.3 11.8 14.1 13.6 15.5

Operating lease income 11.6 10.6 11.2 11.3 12.9

Cash management fees 9.3 9.6 9.6 9.2 9.1

Customer interest rate swap income, net 1.2 1.8 2.4 0.1 2.2

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

Other non-interest income 14.9 19.6 15.3 17.0 19.0

Total non-interest income 99.6 100.4 99.0 94.6 178.2

Non-interest expense:

Compensation and benefits 161.5 167.7 177.6 172.8 166.6

Occupancy and equipment 47.2 50.2 50.0 49.1 50.9

Professional and outside services 28.1 27.6 30.0 33.6 24.9

Amortization of other acquisition-related intangible assets 8.3 8.9 8.8 11.0 9.7

Operating lease expense 6.9 7.0 7.6 7.8 8.5

Regulatory assessments 5.7 6.6 7.8 8.1 6.9

Goodwill impairment (1) - - - - 353.0

Other non-interest expense 20.0 21.2 23.2 29.5 25.9

Total non-interest expense (1) 277.7 289.2 305.0 311.9 646.4

Income (loss) before income tax expense 189.9 169.4 215.7 182.2 (100.1)

Income tax expense 40.0 29.7 44.9 37.7 45.2

Net income (loss) 149.9 139.7 170.8 144.5 (145.3)

Preferred stock dividend 3.5 3.5 3.5 3.5 3.5

Net income (loss) available to common shareholders $ 146.4 $ 136.2 $ 167.3 $ 141.0 $ (148.8)

Earnings (loss) per common share:

Basic $ 0.35 $ 0.32 $ 0.40 $ 0.34 $ (0.36)

Diluted 0.34 0.32 0.39 0.33 (0.35)

The gain on sale of business, net of expenses, is considered non-operating income and goodwill impairment is considered a non-operating expense. Total non-interest expense also includes $10.7 million, $6.3 million, $11.2(1) million, $19.6 million and $4.9 million of non-operating expenses for the three months ended December 31, 2021, September 30, 2021, June 30, 2021, March 31, 2021 and December 31, 2020, respectively. See Non-GAAP Financial Measures and Reconciliation to GAAP.

People's United Financial, Inc.

CONSOLIDATED STATEMENTS OF INCOME

Twelve Months Ended

December 31,

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

Interest and dividend income:

Commercial and industrial $ 431.6 $ 440.8

Commercial real estate 387.1 488.6

Equipment financing 250.5 263.3

Residential mortgage 250.3 332.2

Home equity and other consumer 62.2 86.7

Total interest on loans 1,381.7 1,611.6

Securities 209.7 195.7

Short-term investments 9.5 3.4

Loans held-for-sale 0.4 4.3

Total interest and dividend income 1,601.3 1,815.0

Interest expense:

Deposits 68.7 187.2

Borrowings 4.7 20.2

Notes and debentures 28.8 31.8

Total interest expense 102.2 239.2

Net interest income 1,499.1 1,575.8

Provision for credit losses on loans (48.2) 156.1

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

Net interest income after provision for credit losses 1,547.4 1,420.0

Non-interest income:

Bank service charges 100.1 97.5

Investment management fees 83.0 73.2

Commercial banking lending fees 55.8 50.9

Operating lease income 44.7 49.7

Cash management fees 37.7 33.4

Customer interest rate swap income, net 5.5 14.9

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

Other non-interest income 66.8 97.2

Total non-interest income 393.6 492.7

Non-interest expense:

Compensation and benefits 679.6 674.8

Occupancy and equipment 196.5 199.0

Professional and outside services 119.3 113.2

Amortization of other acquisition-related intangible assets 37.0 40.8

Operating lease expense 29.3 36.4

Regulatory assessments 28.2 32.7

Goodwill impairment (1) - 353.0

Other non-interest expense 93.9 114.2

Total non-interest expense (1) 1,183.8 1,564.1

Income before income tax expense 757.2 348.6

Income tax expense 152.3 129.0

Net income 604.9 219.6

Preferred stock dividend 14.1 14.1

Net income available to common shareholders $ 590.8 $ 205.5

Earnings per common share:

Basic $ 1.40 $ 0.49

Diluted 1.39 0.49

The gain on sale of business, net of expenses, is considered non-operating income and goodwill impairment is considered a non-operating expense. Total(1) non-interest expense also includes $47.8 million and $45.9 million of non-operating expenses for the twelve months ended December 31, 2021 and 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)

December 31, 2021 September 30, 2021 December 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 $ 10,417.1 $ 4.2 0.16% $ 6,999.3 $ 2.8 0.16% $ 2,582.1 $ 0.8 0.12%

Securities (2) 10,422.1 57.3 2.20 10,432.0 59.1 2.27 8,390.2 52.3 2.50

Loans:

Commercial real estate 12,278.8 90.2 2.94 12,906.9 96.5 2.99 13,574.3 106.1 3.13

Commercial and industrial 11,898.3 105.7 3.55 12,759.6 106.6 3.34 14,621.8 113.6 3.11

Equipment financing 5,055.6 62.9 4.97 5,001.7 62.3 4.99 4,867.5 62.1 5.10

Residential mortgage 7,127.8 57.2 3.21 7,437.6 58.9 3.16 8,821.0 75.3 3.41

Home equity and other consumer 1,749.3 14.3 3.28 1,828.2 15.2 3.32 2,176.6 18.7 3.44

Total loans 38,109.8 330.3 3.47 39,934.0 339.5 3.40 44,061.2 375.8 3.41

Total earning assets 58,949.0 $ 391.8 2.66% 57,365.3 $ 401.4 2.80% 55,033.5 $ 428.9 3.12%

Other assets 6,192.5 6,511.1 7,362.6

Total assets $ 65,141.5 $ 63,876.4 $ 62,396.1

Liabilities and stockholders' equity:

Deposits:

Non-interest-bearing $ 17,849.1 $ - - % $ 16,469.5 $ - - % $ 14,742.6 $ - - %

Savings, interest-bearing checking

and money market 32,218.9 8.6 0.11 32,030.8 8.9 0.11 29,978.3 14.7 0.20

Time 4,015.7 5.2 0.51 4,322.2 6.2 0.57 5,953.5 15.4 1.03

Total deposits 54,083.7 13.8 0.10 52,822.5 15.1 0.11 50,674.4 30.1 0.24

Borrowings:

Federal Home Loan Bank advances 569.5 1.1 0.78 569.6 1.1 0.79 571.8 1.1 0.77

Customer repurchase agreements 404.8 0.1 0.10 370.5 0.1 0.10 447.6 0.2 0.15

Federal funds purchased - - - - - - 213.3 - 0.09

Total borrowings 974.3 1.2 0.50 940.1 1.2 0.52 1,232.7 1.3 0.43

Notes and debentures 996.4 7.2 2.89 1,001.7 7.2 2.85 1,010.8 7.3 2.89

Total funding liabilities 56,054.4 $ 22.2 0.16% 54,764.3 $ 23.5 0.17% 52,917.9 $ 38.7 0.29%

Other liabilities 1,297.2 1,332.8 1,594.2

Total liabilities 57,351.6 56,097.1 54,512.1

Stockholders' equity 7,789.9 7,779.3 7,884.0

Total liabilities and

stockholders' equity $ 65,141.5 $ 63,876.4 $ 62,396.1

Net interest income/spread (3) $ 369.6 2.50% $ 377.9 2.63% $ 390.2 2.83%

Net interest margin 2.51% 2.64% 2.84%

(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, $7.6 million and$7.4 million for the three months ended December 31, 2021, September 30, 2021and December 31, 2020, respectively.

People's United Financial, Inc.

AVERAGE BALANCE SHEET, INTEREST AND YIELD/RATE ANALYSIS

December 31, 2021 December 31, 2020

Twelve months ended Average Yield/ Average Yield/

(dollars in millions) Balance Interest Rate Balance Interest Rate

Assets:

Short-term investments $ 6,986.1 $ 9.5 0.14% $ 1,125.1 $ 3.4 0.31%

Securities (1) 10,211.3 230.7 2.26 8,143.7 215.7 2.65

Loans:

Commercial real estate 12,972.5 387.1 2.98 14,057.6 488.6 3.48

Commercial and industrial 13,129.2 441.2 3.36 13,456.8 451.0 3.35

Equipment financing 4,970.2 250.5 5.04 4,898.2 263.3 5.38

Residential mortgage 7,676.5 250.7 3.27 9,569.2 333.3 3.48

Home equity and other consumer 1,881.8 62.2 3.31 2,400.5 89.5 3.73

Total loans 40,630.2 1,391.7 3.43 44,382.3 1,625.7 3.66

Total earning assets 57,827.6 $ 1,631.9 2.82% 53,651.1 $ 1,844.8 3.44%

Other assets 6,425.5 7,387.0

Total assets $ 64,253.1 $ 61,038.1

Liabilities and stockholders' equity:

Deposits:

Non-interest-bearing $ 16,621.0 $ - - % $ 12,864.4 $ - - %

Savings, interest-bearing checking

and money market 32,040.6 40.4 0.13 27,831.9 92.2 0.33

Time 4,546.5 28.3 0.62 7,520.6 95.0 1.26

Total deposits 53,208.1 68.7 0.13 48,216.9 187.2 0.39

Borrowings:

Federal Home Loan Bank advances 569.6 4.3 0.75 1,371.2 13.7 1.00

Customer repurchase agreements 394.3 0.4 0.11 379.0 1.1 0.29

Federal funds purchased 52.8 - 0.09 688.2 5.4 0.79

Total borrowings 1,016.7 4.7 0.47 2,438.4 20.2 0.83

Notes and debentures 1,002.3 28.8 2.87 1,009.5 31.8 3.15

Total funding liabilities 55,227.1 $ 102.2 0.19% 51,664.8 $ 239.2 0.46%

Other liabilities 1,323.0 1,561.5

Total liabilities 56,550.1 53,226.3

Stockholders' equity 7,703.0 7,811.8

Total liabilities and

stockholders' equity $ 64,253.1 $ 61,038.1

Net interest income/spread (2) $ 1,529.7 2.63% $ 1,605.6 2.98%

Net interest margin 2.65% 2.99%

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

(2) The fully taxable equivalent adjustment was $30.6 million and $29.8 millionfor the twelve months ended December 31, 2021 and 2020, respectively.

People's United Financial, Inc.

NON-PERFORMING ASSETS

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

(dollars in millions) 2021 2021 2021 2021 2020

Non-accrual loans:

Commercial:

Commercial real estate $ 104.8 $ 98.7 $ 96.1 $ 90.2 $ 60.4

Commercial and industrial 43.9 57.2 57.0 69.2 76.4

Equipment financing 83.3 99.2 107.2 118.1 109.3

Total Commercial 232.0 255.1 260.3 277.5 246.1

Retail:

Residential mortgage 41.8 49.1 49.5 56.9 62.3

Home equity 14.6 16.3 18.1 18.7 20.5

Other consumer 0.1 - 0.1 0.2 0.2

Total Retail 56.5 65.4 67.7 75.8 83.0

Total non-accrual loans (1) 288.5 320.5 328.0 353.3 329.1

Real estate owned:

Residential 1.4 1.6 1.6 1.5 3.2

Commercial - - 3.5 3.5 3.6

Total real estate owned 1.4 1.6 5.1 5.0 6.8

Repossessed assets 3.7 7.4 5.6 5.4 5.7

Total non-performing assets $ 293.6 $ 329.5 $ 338.7 $ 363.7 $ 341.6

Non-accrual loans as a percentage of total loans 0.76 % 0.81 % 0.79 % 0.83 % 0.75 %

Non-performing assets as a percentage of:

Total loans, real estate owned and repossessed assets 0.78 0.83 0.82 0.85 0.78

Tangible stockholders' equity and allowance

for credit losses 5.40 6.20 6.43 7.05 6.59

(1) Reported net of government guarantees totaling $2.9 million at December 31,2021, $1.1 million at September 30, 2021, $1.2 million at June 30, 2021, $2.5million at March 31, 2021 and $2.5 million at December 31, 2020.

People's United Financial, Inc.

PROVISION AND ALLOWANCE FOR CREDIT LOSSES ON LOANS

Three Months Ended

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

(dollars in millions) 2021 2021 2021 2021 2020

Allowance for credit losses on loans:

Balance at beginning of period $ 352.4 $ 348.1 $ 399.1 $ 425.1 $ 423.8

Charge-offs (6.5) (13.2) (13.9) (17.8) (16.7)

Recoveries 3.6 5.5 3.6 5.4 3.3

Net loan charge-offs (2.9) (7.7) (10.3) (12.4) (13.4)

Provision for credit losses on loans (5.9) 12.0 (40.7) (13.6) 14.7

Balance at end of period $ 343.6 $ 352.4 $ 348.1 $ 399.1 $ 425.1

Allowance for credit losses on loans

as a percentage of:

Total loans 0.91 % 0.89 % 0.84 % 0.93 % 0.97 %

Non-accrual loans 119.1 109.9 106.1 113.0 129.1

NET LOAN CHARGE-OFFS (RECOVERIES)

Three Months Ended

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

(dollars in millions) 2021 2021 2021 2021 2020

Commercial:

Commercial real estate $ 0.2 $ 3.7 $ 0.8 $ 5.8 $ 0.1

Commercial and industrial (0.3) 0.3 3.0 (0.5) 6.6

Equipment financing 4.2 4.2 6.9 7.2 6.8

Total 4.1 8.2 10.7 12.5 13.5

Retail:

Residential mortgage (0.6) (0.7) (0.4) (0.3) (0.3)

Home equity (0.8) (0.1) (0.2) (0.2) -

Other consumer 0.2 0.3 0.2 0.4 0.2

Total (1.2) (0.5) (0.4) (0.1) (0.1)

Total net loan charge-offs $ 2.9 $ 7.7 $ 10.3 $ 12.4 $ 13.4

Net loan charge-offs to

average total loans (annualized) 0.03 % 0.08 % 0.10 % 0.12 % 0.12 %

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 acceptedaccounting principles ("GAAP"), management routinely supplements its evaluationwith an analysis of certain non-GAAP financial measures, such as the efficiencyand tangible common equity ratios, tangible book value per common share andoperating earnings metrics. Management believes these non-GAAP financialmeasures provide information useful to investors in understanding People'sUnited's underlying operating performance and trends, and facilitatescomparisons with the performance of other financial institutions. Further, theefficiency ratio and operating earnings metrics are used by management in itsassessment of financial performance, including non-interest expense control,while the tangible common equity ratio and tangible book value per common shareare used to analyze the relative strength of People's United's capitalposition.

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 (excluding operating lease expense, goodwillimpairment charges, amortization of other acquisition-related intangibleassets, losses on real estate assets and non-recurring expenses) (thenumerator) to (ii) net interest income on a fully taxable equivalent ("FTE")basis plus total non-interest income (including the FTE adjustment onbank-owned life insurance ("BOLI") income, the netting of operatinglease expense and excluding gains and losses on sales of assets other thanresidential mortgage loans and acquired loans, and non-recurring income) (thedenominator). People's United generally considers an item of income or expenseto be non-recurring if it is not similar to an item of income or expense of atype incurred within the last two years and is not similar to an item of incomeor expense of a type reasonably expected to be incurred within the followingtwo years.

Operating earnings exclude from net income available to commonshareholders those items that management considers to be of such anon-recurring or infrequent nature that, by excluding such items (net of incometaxes), People's United's results can be measured and assessed on a moreconsistent basis from period to period. 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 house assets and related lease termination costs; (iv) severance-related costs; and (v) charges related to executive-levelmanagement separation costs, are generally also excluded when calculating theefficiency ratio. Operating earnings per common share ("EPS") is derived bydetermining the per common share impact of the respective adjustments to arriveat operating earnings and adding (subtracting) such amounts to (from) dilutedEPS, as reported. Operating return on average assets is calculated by dividingoperating earnings (annualized) by average total assets. Operating return onaverage tangible common equity is calculated by dividing operating earnings(annualized) by average tangible common equity. The operating common dividendpayout ratio is calculated by dividing common dividends paid by operatingearnings for the respective 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 lossesthrough a credit cycle as well as providing an additional basis for comparingthe Company's results of operation between periods by isolating the impact ofthe provision for 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 otheracquisition-related intangible assets) (the numerator) to (ii) tangible assets(total assets less goodwill and other acquisition-related intangible assets)(the denominator). Tangible book value per common share is calculated bydividing tangible common equity by common shares (total common shares issued,less common shares classified as treasury shares and unallocated Employee StockOwnership Plan ("ESOP") common shares).

In light of diversity in presentation among financial institutions, themethodologies used by People's United for determining the non-GAAP financialmeasures discussed above may differ from those used by other financialinstitutions.

People's United Financial, Inc.

NON-GAAP FINANCIAL MEASURES AND RECONCILIATION TO GAAP - Continued

OPERATING NON-INTEREST EXPENSE AND EFFICIENCY RATIO

Three Months Ended Twelve Months Ended

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

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

Total non-interest expense $ 277.7 $ 289.2 $ 305.0 $ 311.9 $ 646.4 $ 1,183.8 $ 1,564.1

Adjustments to arrive at operating

non-interest expense:

Stop & Shop contract termination costs (8.5) (1.6) (2.0) (12.1) - (24.2) -

Merger-related expenses (2.2) (4.7) (9.2) (7.5) (4.9) (23.6) (45.9)

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

Total (10.7) (6.3) (11.2) (19.6) (357.9) (47.8) (398.9)

Operating non-interest expense 267.0 282.9 293.8 292.3 288.5 1,136.0 1,165.2

Adjustments:

Amortization of other acquisition-related

intangible assets (8.3) (8.9) (8.8) (11.0) (9.7) (37.0) (40.8)

Operating lease expense (6.9) (7.0) (7.6) (7.8) (8.5) (29.3) (36.4)

Other (1) (1.2) (1.2) (1.3) (1.7) (1.3) (5.4) (10.2)

Total non-interest expense for

efficiency ratio $ 250.6 $ 265.8 $ 276.1 $ 271.8 $ 269.0 $ 1,064.3 $ 1,077.8

Net interest income (FTE basis) $ 369.6 $ 377.9 $ 388.7 $ 393.5 $ 390.2 $ 1,529.7 $ 1,605.6

Total non-interest income 99.6 100.4 99.0 94.6 178.2 393.6 492.7

Total revenues 469.2 478.3 487.7 488.1 568.4 1,923.3 2,098.3

Adjustments:

Operating lease expense (6.9) (7.0) (7.6) (7.8) (8.5) (29.3) (36.4)

BOLI FTE adjustment 0.7 1.0 0.7 0.6 0.9 3.0 3.5

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

Other (2) 0.2 (4.0) - (1.1) - (4.9) (0.4)

Total revenues for efficiency ratio $ 463.2 $ 468.3 $ 480.8 $ 479.8 $ 484.9 $ 1,892.1 $ 1,989.1

Efficiency ratio 54.1% 56.8% 57.4% 56.6% 55.5% 56.2% 54.2%

(1) Items classified as "other" and deducted from non-interest expense forpurposes of calculating the efficiency ratio include certain franchise taxesand real estate owned expenses.

(2) Items classified as "other" and added to (deducted from) total revenuesfor purposes of calculating the efficiency ratio include, as applicable, assetwrite-offs and gains/losses associated with the sale of branch locations.

PRE-PROVISION NET REVENUE

Three Months Ended Twelve Months Ended

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

(in millions) 2021 2021 2021 2021 2020 2021 2020

Net interest income $ 362.0 $ 370.3 $ 380.9 $ 385.9 $ 382.8 $ 1,499.1 $ 1,575.8

Non-interest income 99.6 100.4 99.0 94.6 178.2 393.6 492.7

Non-interest expense (277.7) (289.2) (305.0) (311.9) (646.4) (1,183.8) (1,564.1)

Pre-provision net revenue 183.9 181.5 174.9 168.6 (85.4) 708.9 504.4

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

Non-operating expense 10.7 6.3 11.2 19.6 357.9 47.8 398.9

Operating pre-provision net revenue $ 194.6 $ 187.8 $ 186.1 $ 188.2 $ 196.6 $ 756.7 $ 827.4

People's United Financial, Inc.

NON-GAAP FINANCIAL MEASURES AND RECONCILIATION TO GAAP - Continued

OPERATING EARNINGS

Three Months Ended Twelve Months Ended

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

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

Net income (loss) available to common shareholders $ 146.4 $ 136.2 $ 167.3 $ 141.0 $ (148.8) $ 590.8 $ 205.5

Adjustments to arrive at operating earnings:

Stop & Shop contract termination costs 8.5 1.6 2.0 12.1 - 24.2 -

Merger-related expenses 2.2 4.7 9.2 7.5 4.9 23.6 45.9

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

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

Total pre-tax adjustments 10.7 6.3 11.2 19.6 282.0 47.8 323.0

Tax effect (2) (2.2) (1.4) (2.4) (4.1) 14.5 (10.0) 6.1

Total adjustments, net of tax 8.5 4.9 8.8 15.5 296.5 37.8 329.1

Operating earnings $ 154.9 $ 141.1 $ 176.1 $ 156.5 $ 147.7 $ 628.6 $ 534.6

Diluted EPS, as reported $ 0.34 $ 0.32 $ 0.39 $ 0.33 $ (0.35) $ 1.39 $ 0.49

Adjustments to arrive at operating EPS:

Stop & Shop contract termination costs 0.02 - - 0.02 - 0.04 -

Merger-related expenses - 0.01 0.02 0.02 0.01 0.05 0.09

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

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

Total adjustments per common share 0.02 0.01 0.02 0.04 0.70 0.09 0.78

Operating EPS $ 0.36 $ 0.33 $ 0.41 $ 0.37 $ 0.35 $ 1.48 $ 1.27

Average total assets $ 65,142 $ 63,876 $ 63,930 $ 64,057 $ 62,396 $ 64,253 $ 61,038

Operating return on

average assets (annualized) 0.95% 0.88% 1.10% 0.98% 0.95% 0.98% 0.88%

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

(2) The goodwill impairment charge for the three and twelve months endedDecember 31, 2020 is non-tax-deductible.

OPERATING RETURN ON AVERAGE TANGIBLE COMMON EQUITY

Three Months Ended Twelve Months Ended

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

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

Operating earnings $ 154.9 $ 141.1 $ 176.1 $ 156.5 $ 147.7 $ 628.6 $ 534.6

Average stockholders' equity $ 7,790 $ 7,779 $ 7,634 $ 7,606 $ 7,884 $ 7,703 $ 7,812

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

Average common equity 7,546 7,535 7,390 7,362 7,640 7,459 7,568

Less: Average goodwill and average other

acquisition-related intangible assets 2,813 2,822 2,831 2,842 3,213 2,827 3,247

Average tangible common equity $ 4,733 $ 4,713 $ 4,559 $ 4,520 $ 4,427 $ 4,632 $ 4,321

Operating return on average tangible

common equity (annualized) 13.1% 12.0% 15.4% 13.8% 13.3% 13.6% 12.4%

People's United Financial, Inc.

NON-GAAP FINANCIAL MEASURES AND RECONCILIATION TO GAAP - Continued

OPERATING COMMON DIVIDEND PAYOUT RATIO

Three Months Ended Twelve Months Ended

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

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

Common dividends paid $ 77.4 $ 77.4 $ 77.3 $ 75.7 $ 75.6 $ 307.8 $ 304.1

Operating earnings $ 154.9 $ 141.1 $ 176.1 $ 156.5 $ 147.7 $ 628.6 $ 534.6

Operating common dividend payout ratio 50.0% 54.8% 43.9% 48.4% 51.2% 49.0% 56.9%

TANGIBLE COMMON EQUITY RATIO

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

(dollars in millions) 2021 2021 2021 2021 2020

Total stockholders' equity $ 7,902 $ 7,783 $ 7,750 $ 7,592 $ 7,603

Less: Preferred stock 244 244 244 244 244

Common equity 7,658 7,539 7,506 7,348 7,359

Less: Goodwill and other

acquisition-related intangible assets 2,809 2,817 2,826 2,835 2,846

Tangible common equity $ 4,849 $ 4,722 $ 4,680 $ 4,513 $ 4,513

Total assets $ 64,642 $ 63,673 $ 63,341 $ 64,172 $ 63,092

Less: Goodwill and other

acquisition-related intangible assets 2,809 2,817 2,826 2,835 2,846

Tangible assets $ 61,833 $ 60,856 $ 60,515 $ 61,337 $ 60,246

Tangible common equity ratio 7.8% 7.8% 7.7% 7.4% 7.5%

TANGIBLE BOOK VALUE PER COMMON SHARE

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

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

Tangible common equity $ 4,849 $ 4,722 $ 4,680 $ 4,513 $ 4,513

Common shares issued 536.90 536.75 536.75 536.20 533.68

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

Common shares outstanding 427.92 427.77 427.77 427.22 424.68

Less: Unallocated ESOP shares 5.23 5.31 5.40 5.49 5.57

Common shares 422.69 422.46 422.37 421.73 419.11

Tangible book value per common share $ 11.47 $ 11.18 $ 11.08 $ 10.70 $ 10.77

View original content to download multimedia: https://www.prnewswire.com/news-releases/peoples-united-financial-reports-fourth-quarter-net-income-of-149-9-million-or-0-34-per-common-share-301465131.html

SOURCE People's United Bank