First Quarter 2019 Results April 18, 2019 Forward-Looking Statement - - PowerPoint PPT Presentation

First Quarter 2019 Results

April 18, 2019

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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-

• ff 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; and (10) changes in regulation resulting from or relating to financial reform legislation. 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.

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1 Net interest income on a fully taxable equivalent basis was $340 million, an increase of <$1 million of <1%.

First Quarter 2019 Overview

Net income of $114.6 million, or $0.30 per Common Share

Operating Earnings of $0.33 per Common Share Announces Increase in the Common Dividend to an Annual Rate of $0.71 Per Share

• Completed the acquisition of BSB Bancorp on April 1st
• Results include merger-related expenses of $15.0 million ($11.9 million after-tax), or $0.03 per common share
• Net interest income1 of $333 million, an increase of <$1 million or <1%
• Net interest margin of 3.20%, an increase of 3 basis points
• Average loan balances of $35.0 billion, an increase of $30 million or <1%

‒ Excluding the runoff transactional portion of the New York multifamily portfolio, balances increased $79 million or <1%

• Period-end loan balances of $35.5 billion, an increase of $274 million or 1%

‒ Excluding the runoff transactional portion of the New York multifamily portfolio, balances increased $301 million or 1%

• Average deposit balances of $36.5 billion, an increase of $491 million or 1%
• Period-end deposit balances of $36.9 billion, an increase of $742 million or 2%
• Non-interest incomeof $95 million, an increase of $6 million or 7%
• Non-interest expense (excluding merger-related expenses) of $262 million, an increase of $7 million or 3%
• Efficiency ratio of 57.3%, an increase of 220 basis points, but an improvement of 210 basis points from first quarter 2018
• Net loan charge-offs of 0.06%, an improvement of 3 basis points

(Comparisons versus fourth quarter 2018, unless noted otherwise)

4Q 2018 Loans Borrowings Deposits Calendar Days Investments 1Q 2019 3

Net Interest Income1

($ in millions)

$332.6 $332.8

1 Net interest income on a fully taxable equivalent basis for 4Q 2018 and 1Q 2019 was $339.5 million and $340.0 million, respectively.

+$0.2 or <1%

Linked-Quarter Change

$15.4 ($12.2) $1.8 ($4.0) ($0.8)

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Net Interest Margin

4Q 2018 Loans Borrowings Investments Deposits Calendar Days 1Q 2019

3.17% 3.20%

+3 bps

Linked-Quarter Change

15 bps (11 bps) 2 bps 1 bp (4 bps)

Loans: Average Balances

5 $11,688 $11,588 $8,880 $8,974 $4,243 $4,358 $8,166 $8,153 $2,039 $1,973

4Q 2018 Equipment Finance Commercial & Industrial Commercial Real Estate Home Equity & Other Consumer Residential Mortgage 1Q 2019

Commercial Real Estate Commercial & Industrial Equipment Finance Residential Mortgage Home Equity & Other Consumer

$35,046

($ in millions)

$35,016

Linked-Quarter Change

Linked-quarter change +$30 million or <1%

$115 $94 ($100) ($66) ($13)

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Deposits: Average Balances

$16,410 $16,922 $8,576 $8,301 $6,761 $7,131 $4,212 $4,096

4Q 2018 Interest-Bearing Checking & Money Market Time Non-Interest Bearing Savings 1Q 2019

Interest-Bearing Checking & Money Market Non-Interest-Bearing Time Savings ($ in millions)

$36,450 $35,959

Linked-Quarter Change

Linked-quarter change +$491 million or 1%

$512 ($275) $370 ($116)

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Non-Interest Income

($ in millions)

4Q 2018 Net Security Losses Insurance Revenue Customer Interest Rate Swap Income Commercial Banking Lending Fees Bank Service Charges Other 1Q 2019

$88.7 $94.6 ($4.0) $10.0

+$5.9 or 7%

Linked-Quarter Change

1 4Q 2018 included $10.0 million of security losses which were considered non-operating and incurred as a tax planning strategy in response to tax-reform benefits recognized in the period.

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$3.8 ($1.8) ($1.7) ($0.4)

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Non-Interest Expense

($ in millions)

4Q 2018 Merger-Related Expenses Compensation & Benefits Professional & Outside Services Other 1Q 2019

$277.2 $262.7

• Ex. Merger-Related Expenses: +$7.5 or 3%

Linked-Quarter Change

$7.0 $5.9 $1.1 $0.5

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Efficiency Ratio

59.4% 58.4% 56.7% 55.1% 57.3%

1Q 2018 2Q 2018 3Q 2018 4Q 2018 1Q 2019

Quarterly Trend

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Asset Quality

1Non-performing assets (excluding acquired non-performing loans) as a percentage of originated loans plus all REO and repossessed assets; acquired non-performing loans excluded as risk of

loss has been considered by virtue of (i) our estimate of acquisition-date fair value, (ii) the existence of an FDIC loss sharing agreement, and/or (iii) allowance for loan losses established subsequent to acquisition Notes: Source: SNL Financial Top 50 Banks represents the largest 50 banks by total assets in each respective quarter. 0.58 0.62 0.57 0.61 0.54 1.17 0.99 1.05 0.80 1.03 0.97 0.91 0.84 0.0 0.5 1.0 1.5 2.0

1Q 2018 2Q 2018 3Q 2018 4Q 2018 1Q 2019

0.06 0.06 0.09 0.09 0.06 0.18 0.15 0.12 0.17 0.20 0.20 0.16 0.23 0.0 0.1 0.2 0.3

1Q 2018 2Q 2018 3Q 2018 4Q 2018 1Q 2019

• 2Ex. acquired loan charge-offs, PBCT’s charge-off ratio was 0.04%, 0.07%, 0.07%, 0.03% & 0.04% in 1Q 2019, 4Q 2018, 3Q 2018, 2Q 2018 & 1Q 2018, respectively

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 Loans2

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Returns

0.98% 1.00% 1.06% 1.11% 0.96% 1Q 2018 2Q 2018 3Q 2018 4Q 2018 1Q 2019 13.8% 13.9% 14.5% 14.9% 13.0% 1Q 2018 2Q 2018 3Q 2018 4Q 2018 1Q 2019

Return on Average Assets Return on Average Tangible Common Equity

• 1st quarter 2019 returns were meaningfully impacted by merger-related expenses of $15.0 million ($11.9 million after-tax)

Returns calculated on an operating basis

14.4% 1.03%

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Capital Ratios

• Mar. 31, 2018
• Jun. 30, 2018
• Sep. 30, 2018
• Dec. 31, 2018
• Mar. 31, 2019

People’s United Financial, Inc.

• Tang. Com. Equity/Tang. Assets

7.3% 7.3% 7.6% 7.6% 7.7% Tier 1 Leverage 8.5% 8.6% 8.7% 8.7% 8.8% Common Equity Tier 1 10.1% 10.0% 10.3% 10.3% 10.2% Tier 1 Risk-Based 10.8% 10.8% 11.1% 10.9% 10.8% Total Risk-Based 12.6% 12.5% 12.8% 12.5% 12.4% People’s United Bank, N.A. Tier 1 Leverage 8.6% 9.1% 9.2% 9.0% 9.0% Common Equity Tier 1 11.0% 11.4% 11.6% 11.4% 11.2% Tier 1 Risk-Based 11.0% 11.4% 11.6% 11.4% 11.2% Total Risk-Based 12.9% 13.4% 13.6% 13.2% 12.9%

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Announced in January Update

(No Change to People’s United Stand-alone Goals)

Loans1 (average & period-end) Growth range: 3% - 5% Growth range: 10% - 12% Deposits (average & period-end) Growth range: 3% - 5% Growth range: 10% - 12% Net Interest Income Growth range: 10% - 12% Growth range: 13% - 15% Net Interest Margin2 3.15% - 3.25% 3.10% - 3.20% Non-Interest Income

(Operating)

Growth range: 2% - 4% No Change Non-Interest Expense3

(Operating)

$1.040 billion - $1.060 billion $1.060 billion - $1.080 billion Credit Maintain excellent credit quality

Provision in the range of $35 million - $45 million

No Change Effective Tax Rate 20% - 22% No Change Capital Maintain strong capital levels

Common equity tier 1 capital ratio in the range of 10.0% - 10.5%

No Change

Full Year 2019 Goals – Updated to Include the Acquisition of BSB Bancorp

1 Excludes the transactional portion of the New York multifamily portfolio which is in runoff mode. 2 Assumes no increase in the fed funds rate. 3 Assumes an increase of approximately $12 million in expenses as a result of adopting the new lease accounting standard on January 1, 2019,

which limits the type of lease origination costs eligible for deferral in the Company’s equipment financing businesses.

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Appendix

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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.

• 9.6%
• 3.8%

3.1% 5.7% 8.0%

• 9.9%
• 3.6%

2.8% 5.3% 7.6% Down 200 Down 100 Up 100 Up 200 Up 300

• 1.6%

1.7%

• 2.0%

1.5%

• 1.7%

1.6%

• 1.8%

1.3% Short End -100 Short End +100 Long End -100 Long End +100

Immediate Parallel Shock

• Est. Change in NII

Yield Curve Twist1

• Est. Change in NII
• Mar. 31, 2019
• Dec. 31, 2018

Net Interest Income (NII) Sensitivity

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Loans By State

$6,891 $7,205 $7,546 $7,779 $7,781 $9,222 $9,197 $4,381 $5,146 $5,578 $5,762 $7,378 $7,168 $7,189 $4,313 $4,728 $4,954 $5,363 $5,616 $6,212 $6,149 $1,827 $1,828 $1,854 $1,840 $1,790 $1,763 $1,745 $838 $904 $1,155 $1,503 $1,649 $1,921 $2,001 $1,327 $1,364 $1,346 $1,371 $1,424 $1,471 $1,465 $896 $931 $964 $956 $949 $926 $902 $3,917 $4,486 $5,014 $5,171 $5,988 $6,558 $6,867

• Dec. 31, 2013
• Dec. 31, 2014
• Dec. 31, 2015
• Dec. 31, 2016
• Dec. 31, 2017
• Dec. 31, 2018
• Mar. 31, 2019

Connecticut New York Massachusetts Vermont New Jersey New Hampshire Maine Other

$24,390 $26,592 $29,745 $32,575 $28,411

($ in millions, end of period balances)

State Breakdown

$35,241 $35,515

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Deposits By State

$11,559 $14,768 $16,093 $17,072 $17,640 $20,230 $20,529 $2,913 $3,205 $3,456 $3,527 $5,195 $5,371 $5,722 $3,132 $3,067 $3,299 $3,357 $4,013 $4,451 $4,416 $2,694 $2,761 $2,966 $3,083 $3,191 $3,140 $3,209 $1,370 $1,395 $1,531 $1,616 $1,679 $1,710 $1,703 $889 $942 $1,072 $1,206 $1,338 $1,257 $1,322

• Dec. 31, 2013
• Dec. 31, 2014
• Dec. 31, 2015
• Dec. 31, 2016
• Dec. 31, 2017
• Dec. 31, 2018
• Mar. 31, 2019

Connecticut New York Massachusetts Vermont New Hampshire Maine

$22,557 $26,138 $29,861 $33,056 $28,417

($ in millions, end of period balances)

State Breakdown

$36,159 $36,901

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Asset Quality

Originated Portfolio Coverage Detail as of March 31, 2019

Note – ALLLs: Commercial: $205 million, Retail: $32 million, Total: $237 million.

0.91% 0.37% 0.76%

Commercial Retail Total

0.45% 0.58% 0.49%

Commercial Retail Total

202% 64% 157%

Commercial Retail Total

ALLLs / Loans NPLs / Loans ALLLs / NPLs

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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

For more information, investors may contact: Andrew S. Hersom (203) 338-4581 andrew.hersom@peoples.com