First Quarter 2020 Results
April 23, 2020
1
Forward-Looking Statement
Certain statements contained in this presentation are forward-looking in nature. These include all statements about People's United
Financial, Inc. (“People’s United”) 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’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 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 successful integration of acquisitions; (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 environments in which
we operate. People's United does not undertake any obligation to update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise.
2
Response to COVID-19
Supporting Our Customers
• Waiving certain fees on case-by-case basis
• Offering loan forbearance
― Granted forbearance on 7,654 loans1
o Commercial: 1,280
o Equipment finance: 4,244
o Retail: 2,130
• Participating in the CARES Act Paycheck Protection Program (PPP)
― Over 9,600 loans totaling more than $2.1 billion submitted to the SBA and approved1
• Providing individualized support for customers with consumer and business loans
• Issuing a 90-day foreclosure moratorium on eligible consumer residential loans
• Postponed planned fee changes previously scheduled for April 1st
Caring For Our Communities
• Engaging with community organizations and government officials to ensure coordinated approach to relief efforts
• Distributing, through the Bank and its charitable foundations, funding for COVID-19 relief efforts. Granted more than $3.5 million in support
― Providing monetary support to response funds and non-profits that are meeting the basic needs of vulnerable populations, including low-income residents, first responders, healthcare workers, and small businesses
• Donated more than 1,000 N95 face masks to local hospitals in need
Protecting Our Employees
• Instituted a Company-wide prevention and social distancing policy
• Reduced branch hours and implemented appointment only banking to reduce potential spread of COVID-19
• Enabled non-branch employees to work from home
• Providing additional paid-time-off for front line employees and those in positions where telecommuting is not possible
• Covering 100% of the cost for COVID-19 testing and related treatment for employees and dependents covered under the Company’s health plan
• Enhanced cleaning of facilities
1 As of April 21, 2020
31 Net interest income on a fully taxable equivalent basis was $404 million, an increase of $13 million or 3%.Note: acquisition of United Financial closed on Nov. 1, 2019. 1Q 2020 includes a full quarter of United’s results.
First Quarter 2020 Overview
Net income of $130.4 million, or $0.30 per Common Share
Operating Earnings of $0.33 per Common Share
• Net interest income1 of $396 million, an increase of $13 million or 3%
• Net interest margin of 3.12%, a decrease of 2 basis points
• Average loans of $43.5 billion, an increase of $1.5 billion or 3%
• Period-end loans of $44.3 billion, an increase of $688 million or 2%
• Average deposits of $44.2 billion, an increase of $2.0 billion or 5%
• Period-end deposits of $44.7 billion, an increase of $1.2 billion or 3%
• Non-interest income of $124 million, a decrease of <$ 1 million or <1%
‒ On an operating basis, non-interest income increased $7 million or 6%
• Non-interest expense of $320 million, a decrease of $6 million or 2%
‒ On an operating basis, non-interest expense increased $16 million or 5%
• Efficiency ratio of 54.0%, an increase of 30 basis points
‒ Compared to the prior year quarter, the efficiency ratio improved 330 basis points
• Net loan charge-offs of 0.10%, an increase of 4 basis points
• Provision of $33.5 million, reflecting the application of CECL and the impact of COVID-19
(Comparisons versus fourth quarter 2019, unless noted otherwise)
c
4
0.00%
0.25%
0.50%
0.75%
1.00%
1.25%
0.16%
PBCT
Median, excluding PBCT = 0.53%
Source: SNL Financial
Average Annual Net Charge-Offs / Average LoansPeer Group Comparison (2008-2019)
Loans: Long History of Exceptional Asset Quality
• Franchise-wide focus on sustaining exceptional asset quality
• As we have grown People’s United, our conservative and well-defined underwriting approach has not changed
― Average tenure of our senior credit officers is over 30 years
• High quality, cycle-tested customer base
― Our local market expertise helps to identify and develop long-term relationships with highly coveted, strong business owners/operators
― Many of our customers were with People’s United during the financial crisis. Average tenure of our top 25 largest relationships is over 17 years
• Driven by our unwavering commitment to sustaining exceptional asset quality, regardless of the credit environment, People’s United entered the COVID-19 crisis in a position of strength
c
Home Equity Loans10%
Other6%
Packaging2%
Manufacturing7%
Wholesale Trade5%
Hospitality & Entertainment
7% Health Services5%
Other7%
Transportation/Utility3%
5
(At March 31, 2020, end of period balances)
Residential(Multi-Family)
35%
Retail26%
Office Buildings17%
Other6%Health Care
4%Industrial /
Manufacturing5%
Finance & Insurance
26%
Service17%
Manufacturing10% Wholesale
Trade11%
Retail Trade6% Transportation
/ Utility24%
Construction14%
Rental & Leasing
11%
Service14%
RE, Rental &Leasing
9%
Commercial Real Estate: $14.7 billion Commercial & Industrial: $12.0 billion Equipment Financing: $5.0 billion
Residential Mortgage: $10.1 billion Home Equity & Other Consumer: $2.5 billion
Health Services9%
Other6%
• Originated weighted average FICO score – 1Q 2020
‒ Residential mortgage: 757
‒ Home equity: 770
• Originated weighted average LTV – 1Q 2020
‒ Residential mortgage: 68%
‒ Home equity: 60%
• 58% of home equity originations during past 3 years in first lien position
Fixed Rate32%
Adjustable Rate68%
Commercial
Retail
Home EquityLines of Credit
84%
Printing4%
Waste Management4%
Retail Trade 3%
Loans: Diversified Portfolio
Construction3%
c
6
Loans: Exposure to Sectors Significantly Impacted by COVID-19(Data as of March 31, 2020, end of period balances)
Hospitality: $1.0 billion
• Majority of the portfolio is flagged by major hotel brands
• Most of the properties in the hotel portfolio are managed/owned by operators in this space as their primary business
• Portfolio is primarily located in the main cities within our footprint: e.g. NYC, Boston, Portsmouth, Burlington
• Top 10 clients account for over 70% of Commercial Real Estate hotel exposure. Each cycle-tested and have extensive hotel experience
Restaurants: $540 million
• Half of the portfolio is managed in the Franchise Finance specialized industry vertical within C&I
• Traditional C&I manages 35% of restaurant exposure
• Equipment Finance manages 15% of restaurant exposure
• Nearly half of total restaurant exposure is quick service restaurants, which have experienced a lesser degree of disruption
Retail: $4.7 billion
• No material exposure to enclosed retail malls
• More than half of total retail exposure is grocery anchored, pharmacy, big box home improvement and gas stations / convenience stores
Airlines, Cruise Lines, Casinos, Energy, Student Loans, Auto Lending, Consumer Credit Cards: immaterial or no exposure
7
Adoption & Application of CECL
• Day 1 - Adoption of CECL effective January 1, 2020 increased the ACL by $72.2 million, or 29%, and the reserve for unfunded commitments by $14.5 million
Due to CECL:― PCD loans that meet the definition of nonperforming are now included in nonperforming disclosures resulting in a $67 million
increase in reported NPLs in 1Q 2020
― All loans (originated and acquired) are now included in reported credit quality ratios (pro-forma comparable ACL/Loans coverage ratio at 12/31/19 = 57 bps)
• Day 2 - Application of CECL for the quarter ended March 31, 2020 further increased the ACL by $22.9 million, or 9%
1 MWL = Mortgage Warehouse Lending and ABL = Asset Based Lending, included in C&I portfolio segment prior to January 1, 2020.
------- Reserve Build -------
Allowance for Credit Losses (ACL)
December 31, CECL Adoption January 1, CECL Application March 31,
Loan Portfolio Segment 2019 Impact 2020 Impact 2020
CRE 76.9$ 3.6$ 80.5$ 6.1$ 86.6$
C&I 92.5 (20.7) 71.8 1.9 73.7
Equipment Finance 47.4 (1.7) 45.7 3.4 49.1
MWL / ABL 1
- 2.6 2.6 (0.2) 2.4
Total Commercial 216.8$ (16.2)$ 200.6$ 11.2$ 211.8$
Residential Mortgage 20.0$ 54.9$ 74.9$ 8.7$ 83.6$
Home Equity 7.7 30.5 38.2 3.0 41.2
Other Consumer 1.0 4.1 5.1 - 5.1
Total Retail 28.7$ 89.5$ 118.2$ 11.7$ 129.9$
Acquired Loans 1.1$ (1.1)$ -$ -$ -$
Total 246.6$ 72.2$ 318.8$ 22.9$ 341.7$
($ in millions)
8
Adoption & Application of CECL
• Key drivers underlying the 1Q 2020 ACL:
― Quantitative modeling reflects a Baseline economic forecast as of late March and is reflective of a “U” shaped recovery in the second half of 2020
o Forecast is inclusive of COVID-19 pandemic and government response at that time
― Reasonable & supportable forecast period: 2 years
― 1-year straight-line reversion to historical losses
• Regulatory capital: elected to delay the impact of the transition for 2 years (phased in over 3 years beginning in 2022)
1 MWL = Mortgage Warehouse Lending and ABL = Asset Based Lending.
Allowance for Credit Losses (ACL)
($ in millions, at March 31, 2020)
Loan Portfolio Segment Balance % of Balances ACL ACL/Loans NPLs ACL/NPLs
CRE 14,651.6$ 33% 86.6$ 0.59% 53.5$ 161.9%
C&I 9,097.7 21% 73.7 0.81% 54.5 135.2%
Equipment Finance 5,012.7 11% 49.1 0.98% 42.5 115.5%
MWL / ABL 1
2,948.0 7% 2.4 0.08% 1.1 218.2%
Total Commercial 31,710.0$ 72% 211.8$ 0.67% 151.6$ 139.7%
Residential Mortgage 10,081.9$ 23% 83.6$ 0.83% 66.6$ 125.5%
Home Equity 2,350.1 5% 41.2 1.75% 22.1 186.4%
Other Consumer 142.0 0% 5.1 3.59% 0.1 5100.0%
Total Retail 12,574.0$ 28% 129.9$ 1.03% 88.8$ 146.3%
Total 44,284.0$ 100% 341.7$ 0.77% 240.4$ 142.2%
4Q 2019 Deposits Investments Borrowings Loans Calendar Day 1Q 2020
9
Net Interest Income1
($ in millions)
$382.7 $396.0
1 Net interest income on a fully taxable equivalent basis for 4Q 2019 and 1Q 2020 was $390.3 million and $403.7 million, respectively.
+$13.3 or 3%
Linked-Quarter Change
$6.9 $4.4 $2.8 $1.4
($2.2)
10
Net Interest Margin
4Q 2019 Deposits Borrowings Loans Calendar Day 1Q 2020
3.14% 3.12%
(2) bps
Linked-Quarter Change
6 bps 2 bps
(8 bps) (2 bps)
Loans: Average Balances
11
$13,793 $14,715
$10,805 $10,867
$4,785$4,916
$10,019$10,236
$2,604$2,726
4Q 2019 CommercialReal Estate
ResidentialMortgage
EquipmentFinance
Home Equity& Other Consumer
Commercial& Industrial
1Q 2020
Commercial Real Estate Commercial & Industrial Equipment Finance Residential Mortgage Home Equity & Other Consumer
$43,460
($ in millions)
$42,006
Linked-Quarter Change
Linked-quarter change+$1.454 billion or 3%
$922 $217 $131 $122 $62
12
Funding & Liquidity
$18,784 $19,943
$9,594 $10,077
$8,927 $9,145
$4,890 $4,998
4Q 2019 Interest-Bearing Checking& Money Market
Non-InterestBearing
Time Savings 1Q 2020
Interest-Bearing Checking & Money Market Non-Interest-Bearing Time Savings
($ in millions)
$44,163$42,195
Linked-quarter change+$1.968 billion or 5%
$1,159 $483 $218 $108
Average DepositsLinked-Quarter Change
Strong funding and liquidity profile
• Secured borrowing capacity1
Federal Home Loan Bank: $4,184
Unpledged Securities: $3,800
Total Capacity: $7,984
• Since the end of the first quarter 2020, deposit balances have increased $2.61 billion1
1 As of April 20, 2020
13
Non-Interest Income($ in millions)
4Q 2019 Non-Operating Net Gains onSales of Loans
Insurance CustomerInterest RateSwap Income
InvestmentManagement
Fees
BankServiceCharges
CommercialBanking
Lending Fees
Other 1Q 2020
$124.2 $123.8
($0.4) or <(1%)
Linked-Quarter Change
1 Non-operating represents a 4Q 2019 gain, net of expenses, on the sale of eight branches in central Maine.2 Net gains on sales of loans is primarily driven by the 1Q 2020 sale of loans held-for-sale previously acquired in the United Financial transaction.
1
$15.3 $3.4
($0.9) ($0.8)
($7.6)
($1.2)
($8.9)
2
$0.3
14
Non-Interest Expense($ in millions)
4Q 2019 Non-Operating Occupancy&
Equipment
Compensation&
Benefits
RegulatoryAssessments
Amortization ofOther Acquisition-Related Intangible
Assets
Other 1Q 2020
$320.1
$325.7
Ex. Non-Operating Expenses: +$15.6 or 5%
Linked-Quarter Change
1
1 Non-operating expenses include:- Merger-related costs in 4Q 2019 and 1Q 2020 of $22.6 million and $17.9 million, respectively.- Intangible asset write-off in 4Q 2019 of $16.5 million related to the liquidation of the Company’s public mutual funds.
($21.2)
$1.4 $0.9
($1.1)
$9.6 $4.8
15
Efficiency Ratio
57.3%
55.8%
56.8%
53.7%54.0%
1Q 2019 2Q 2019 3Q 2019 4Q 2019 1Q 2020
Quarterly Trend
16
Asset Quality
1 PBCT ratios for periods prior to January 1, 2020 have been restated to reflect the total loan portfolio (originated & acquired)
Notes: Source: SNL FinancialTop 50 Banks represents the largest 50 banks by total assets in each respective quarter.
0.59 0.55 0.520.57 0.59
0.84 0.830.78 0.80
0.76 0.76 0.78 0.75
0.0
0.5
1.0
1.5
1Q 2019 2Q 2019 3Q 2019 4Q 2019 1Q 2020
0.06 0.05 0.06 0.06
0.100.10
0.16
0.19
0.160.17
0.23
0.26
0.18
0.0
0.1
0.2
0.3
1Q 2019 2Q 2019 3Q 2019 4Q 2019 1Q 2020
PBCT Peer Group (Median) Top 50 Banks (Median)
PBCT Peer Group (Median) Top 50 Banks (Median)
Non-Performing Assets / Loans & REO (%)1
Net Charge-offs / Average Loans
17
Returns
0.96%
1.04% 1.05% 0.98%0.89%
1Q 2019 2Q 2019 3Q 2019 4Q 2019 1Q 2020
13.0%
14.1% 14.0%12.8%
11.8%
1Q 2019 2Q 2019 3Q 2019 4Q 2019 1Q 2020
Return on Average Assets Return on Average Tangible Common Equity
Returns calculated on an operating basis
14.4%1.03% 14.6%1.06%
14.4%
1.13%
15.2%
13.2%
0.96%
18
Capital Ratios
Mar. 31, 2019 Jun. 30, 2019 Sep. 30, 2019 Dec. 31, 2019 Mar. 31, 2020
People’s United Financial, Inc.
Tang. Com. Equity/Tang. Assets 7.7% 7.7% 7.8% 8.0% 7.4%
Tier 1 Leverage 8.8% 8.7% 8.7% 9.1%1 8.4%
Common Equity Tier 1 10.2% 10.1% 10.1% 10.2% 9.5%
Tier 1 Risk-Based 10.8% 10.7% 10.7% 10.7% 10.0%
Total Risk-Based 12.4% 12.0% 12.0% 12.0% 11.3%
People’s United Bank, N.A.
Tier 1 Leverage 9.0% 8.9% 8.8% 9.3%1 8.9%
Common Equity Tier 1 11.2% 11.0% 10.8% 10.9% 10.7%
Tier 1 Risk-Based 11.2% 11.0% 10.8% 10.9% 10.7%
Total Risk-Based 12.9% 12.4% 12.2% 12.1% 12.0%
1 Adjusting for a full quarter of United assets, the pro forma Tier 1 Leverage Ratio at December 31, 2019 is 8.9%.
19
Appendix
20
Response to COVID-19 (Data as of April 21, 2020; $ in millions)
Loan ForbearanceBy Business Segment
Loan ForbearanceBy Commercial Property Type / Industry
Number of Loans $ - Outstanding
Commercial Real Estate 371 1,266$
Commercial & Industrial 909 623
Equipment Finance 4,244 426
Total Commercial 5,524 2,315$
Residential Mortgage 1,460 642$
Home Equity 580 79
Other Consumer 90 1
Total Retail 2,130 722$
Total 7,654 3,037$
Number of Loans $ - Outstanding
By Property Type
Hospitality/Entertainment 82 610$
Retail 83 314
Residential 95 155
Office Building 61 107
Industrial/Manufacturing 23 59
Special Use 10 12
Other 17 9
Subtotal 371 1,266$
By Industry
Transportation & Utilities 774 240$
Services 1,597 229
Real Estate, Rental & Leasing 375 132
Manufacturing 374 101
Retail Trade 253 65
Arts, Entertainment & Recreation 182 62
Health Care & Social Assistance 500 46
Wholesale Trade 243 39
Construction 317 37
Printing 79 35
Other 459 63
Subtotal 5,153 1,049$
Total 5,524 2,315$
21
Interest Rate Risk Profile
1Yield curve twist pivot point is 18 month point on yield curve. Short End defined as overnight to 18 months.
Long End defined as terms greater than 18 months.
-0.4%
2.1%3.9%
5.2%
2.0%3.5%
4.8%
Down 25 Up 100 Up 200 Up 300
-0.1%
0.1%
-0.3%
2.1%0.6%
1.6%
Short End -25 Short End +100 Long End -25 Long End +100
Immediate Parallel ShockEst. Change in NII
Yield Curve Twist1
Est. Change in NII
Mar. 31, 2020 Dec. 31, 2019
Net Interest Income (NII) Sensitivity
22
Loans By State
$7,205 $7,546 $7,779 $7,781 $9,222 $10,910 $10,823
$4,728 $4,954 $5,363 $5,616$6,212
$9,622 $9,605$5,146 $5,578 $5,762
$7,378$7,168
$7,788 $7,815
$4,123$4,164
$4,167$4,163
$4,160
$4,228 $4,253
$904$1,155
$1,503$1,649
$1,921
$2,187 $2,164
$4,486 $5,014
$5,171
$5,988
$6,558
$8,861 $9,624
Dec. 31, 2014 Dec. 31, 2015 Dec. 31, 2016 Dec. 31, 2017 Dec. 31, 2018 Dec. 31, 2019 Mar. 31, 2020
Connecticut Massachusetts New York Northern New England New Jersey Other
$26,592
$29,745
$32,575
$28,411
($ in millions, end of period balances)
Breakdown
$35,241
$43,596 $44,284
23
Deposits By State
$14,768 $16,093 $17,072 $17,640 $20,230
$26,268 $27,011
$3,067$3,299
$3,357$4,013
$4,451
$5,936$6,059
$3,205$3,456
$3,527
$5,195
$5,371
$5,493$5,705
$5,098
$5,569$5,905
$6,208
$6,107
$5,893$5,966
Dec. 31, 2014 Dec. 31, 2015 Dec. 31, 2016 Dec. 31, 2017 Dec. 31, 2018 Dec. 31, 2019 Mar. 31, 2020
Connecticut Massachusetts New York Northern New England
$26,138
$29,861
$33,056
$28,417
($ in millions, end of period balances)
Breakdown
$36,159
$43,590 $44,741
24
Peer Group
Firm Ticker City State
1 Associated Banc-Corp ASB Green Bay WI
2 BankUnited Inc. BKU Miami Lakes FL
3 Citizens Financial Group, Inc. CFG Providence RI
4 Comerica Inc. CMA Dallas TX
5 First Horizon National Corp. FHN Memphis TN
6 F.N.B. Corp. FNB Pittsburgh PA
7 Huntington Bancshares, Inc. HBAN Columbus OH
8 KeyCorp KEY Cleveland OH
9 M&T Bank Corp. MTB Buffalo NY
10 New York Community Bancorp NYCB Westbury NY
11 Signature Bank SBNY New York NY
12 Sterling Bancorp STL Montebello NY
13 Valley National Bancorp VLY Wayne NJ
14 Webster Financial Corp. WBS Waterbury CT
15 Zions Bancorp. ZION Salt Lake City UT