People's United Financial (PBCT) 10-Q 10 May 10 2010 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information
	3 Months Ended Mar. 31, 2010	Apr. 30, 2010
Document Type	10-Q
Amendment Flag	false
Document Period End Date	2010-03-31
Document Fiscal Year Focus	2,010
Document Fiscal Period Focus	Q1
Trading Symbol	PBCT
Entity Registrant Name	People's United Financial, Inc.
Entity Central Index Key	0001378946
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		374,751,032

Consolidated Statements of Cond

Consolidated Statements of Condition (USD $)
In Millions	Mar. 31, 2010	Dec. 31, 2009
Assets
Cash and due from banks	296.3	$326
Short-term investments (note 3)	2527.3	3,092
Total cash and cash equivalents	2823.6	3,418
Securities purchased under agreements to resell		400
Securities (note 3):
Trading account securities, at fair value	75.7	75.7
Securities available for sale, at fair value	724.1	739.7
Securities held to maturity, at amortized cost (fair value of $55.3 million at both dates)	55.3	55.3
Federal Home Loan Bank stock, at cost	31.1	31.1
Total securities	886.2	901.8
Loans (note 4):
Commercial real estate	5442.1	5399.4
Commercial	5178.3	4042.5
Residential mortgage	2468.3	2546.9
Consumer	2222.6	2,245
Total loans	15311.3	14233.8
Less allowance for loan losses	-172.5	-172.5
Total loans, net	15138.8	14061.3
Goodwill (notes 2 and 7)	1517.7	1261.7
Other acquisition-related intangibles (note 7)	248.8	253.5
Premises and equipment	258.2	264.5
Bank-owned life insurance	236.9	235.1
Other assets (note 11)	477.9	461.3
Total assets	21588.1	21257.2
Deposits:
Non-interest-bearing	3313.3	3,509
Savings, interest-bearing checking and money market	7641.5	7327.9
Time	4442.6	4608.7
Total deposits	15397.4	15445.6
Borrowings:
Repurchase agreements	164.1	144.1
Federal Home Loan Bank advances	10.5	14.8
Total borrowings	174.6	158.9
Subordinated notes	182.2	181.8
Other liabilities (note 11)	355.3	370.2
Total liabilities	16109.5	16156.5
Stockholders' Equity
Common stock ($0.01 par value; 1.95 billion shares authorized; 374.8 million shares and 348.2 million shares issued)	3.8	3.5
Additional paid-in capital	4924.6	4511.3
Retained earnings	874.5	914.5
Treasury stock, at cost (3.2 million shares at both dates)	-58.2	-58.6
Accumulated other comprehensive loss (note 5)	-72.8	-74.8
Unallocated common stock of Employee Stock Ownership Plan, at cost (9.3 million shares and 9.4 million shares) (note 1)	-193.3	-195.2
Total stockholders' equity	5478.6	5100.7
Total liabilities and stockholders' equity	21588.1	21257.2

1_Consolidated Statements of Co

Consolidated Statements of Condition (Parenthetical) (USD $)
In Millions, except Share data	Mar. 31, 2010	Dec. 31, 2009
Securities held to maturity, fair value	55.3	55.3
Common stock, par value	0.01	0.01
Common stock, shares authorized	1,950,000,000	1,950,000,000
Common stock, shares issued	374,800,000	348,200,000
Treasury stock, shares	3,200,000	3,200,000
Unallocated common stock of Employee Stock Ownership Plan, shares	9,300,000	9,400,000

Consolidated Statements of Inco

Consolidated Statements of Income (USD $)
In Millions, except Per Share data	3 Months Ended Mar. 31, 2010	3 Months Ended Mar. 31, 2009
Interest and dividend income:
Commercial real estate	74.1	$69
Commercial	58.2	50.6
Residential mortgage	28.6	40.7
Consumer	22.8	23.9
Total interest on loans	183.7	184.2
Securities	8.1	9.3
Short-term investments	1.7	1.7
Securities purchased under agreements to resell	0.1
Total interest and dividend income	193.6	195.2
Interest expense:
Deposits	29.7	48.2
Borrowings	0.5	0.4
Subordinated notes	3.8	3.8
Total interest expense	34	52.4
Net interest income	159.6	142.8
Provision for loan losses	9.5	7.9
Net interest income after provision for loan losses	150.1	134.9
Non-interest income:
Investment management fees	7.9	7.5
Insurance revenue	7.3	8.3
Brokerage commissions	2.8	3.3
Total wealth management income	18	19.1
Bank service charges	31.2	30.4
Merchant services income	5.8	5.8
Bank-owned life insurance	1.8	1.6
Net security gains (note 3)		5.4
Net gains on sales of residential mortgage loans	2.8	1.9
Other non-interest income	11	8
Total non-interest income	70.6	72.2
Non-interest expense:
Compensation and benefits	96.3	88.7
Occupancy and equipment	29.8	28
Professional and outside service fees	13.6	10.7
Merchant services expense	4.8	4.9
Merger-related expenses (note 2)	14.7
Other non-interest expense (notes 7 and 12)	41.1	38.8
Total non-interest expense	200.3	171.1
Income before income tax expense	20.4	36
Income tax expense	6.8	11.8
Net income (note 12)	13.6	24.2
Earnings per common share (notes 6 and 12):
Basic	0.04	0.07
Diluted	0.04	0.07

Consolidated Statements of Chan

Consolidated Statements of Changes in Stockholders' Equity (USD $)
In Millions	Common Stock	Additional Paid-In Capital	Retained Earnings	Treasury Stock	Accumulated Other Comprehensive Loss	Unallocated ESOP Common Stock	Total
Beginning Balance at Dec. 31, 2008	3.5	4485.1	1020.9	-57.9	-75.4	-202.4	5173.8
Comprehensive income:
Net income			24.2				24.2
Other comprehensive income, net of tax					0.7		0.7
Total comprehensive income							24.9
Cash dividends on common stock ($0.1525 per share in 2010 and $0.15 per share in 2009)			-50.2				-50.2
Restricted stock awards		6.9		-2.6			4.3
ESOP common stock committed to be released (note 1)			-0.3			1.8	1.5
Stock options and related tax benefits		1.9					1.9
Ending Balance at Mar. 31, 2009	3.5	4493.9	994.6	-60.5	-74.7	-200.6	5156.2
Beginning Balance at Dec. 31, 2009	3.5	4511.3	914.5	-58.6	-74.8	-195.2	5100.7
Comprehensive income:
Net income			13.6				13.6
Other comprehensive income, net of tax					2		2
Total comprehensive income							15.6
Common stock issued in the Financial Federal acquisition, net of acquisition costs (note 2)	0.3	405.2					405.5
Cash dividends on common stock ($0.1525 per share in 2010 and $0.15 per share in 2009)			-51.2				-51.2
Restricted stock awards		6	-0.1	0.4			6.3
ESOP common stock committed to be released (note 1)			-0.4			1.9	1.5
Common stock repurchased and retired			-1.9				-1.9
Stock options and related tax benefits		2.1					2.1
Ending Balance at Mar. 31, 2010	3.8	4924.6	874.5	-58.2	-72.8	-193.3	5478.6

2_Consolidated Statements of Ch

Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) (USD $)
	3 Months Ended Mar. 31, 2010	3 Months Ended Mar. 31, 2009
Cash dividends on common stock, per share	0.1525	0.15

Consolidated Statements of Cash

Consolidated Statements of Cash Flows (USD $)
In Millions	3 Months Ended Mar. 31, 2010	3 Months Ended Mar. 31, 2009
Cash Flows from Operating Activities:
Net income	13.6	24.2
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses	9.5	7.9
Depreciation and amortization of premises and equipment	9.4	7.6
Amortization of leased equipment	3.3	2.9
Amortization of other acquisition-related intangibles	4.7	5.2
Net security gains		-5.4
Net gains on sales of residential mortgage loans	-2.8	-1.9
ESOP common stock committed to be released	1.5	1.5
Expense related to share-based awards	6.3	6
Originations of loans held-for-sale	-185.3	-223.6
Proceeds from sales of loans held-for-sale	204.5	156.7
Net decrease in trading account securities		5.1
Net changes in other assets and liabilities	-40.8	41.7
Net cash provided by operating activities	23.9	27.9
Cash Flows from Investing Activities:
Net decrease in securities purchased under agreements to resell	400
Proceeds from sales of other securities		5.6
Proceeds from principal repayments of securities available for sale	29.8	1482.2
Proceeds from principal repayments of securities held to maturity		0.1
Purchases of securities available for sale	-7.7	(414)
Proceeds from sales of loans		2.7
Net loan principal collections (disbursements)	118.1	-30.7
Purchases of premises and equipment	-2.9	(6)
Purchases of leased equipment	-0.5	-10.2
Net cash paid in sales of branches		-8.9
Proceeds from sales of real estate owned	4.4	0.9
Cash paid, net of cash acquired, in acquisition of Financial Federal	-291.6
Net cash provided by investing activities	249.6	1021.7
Cash Flows from Financing Activities:
Net (decrease) increase in deposits	-48.2	586.1
Net increase (decrease) in borrowings with terms of three months or less	20	-2.3
Repayments of borrowings with terms of more than three months	-786.7	-0.3
Cash dividends paid on common stock	-51.2	-50.2
Common stock repurchased and retired	-1.9
Proceeds from stock options exercised, including excess income tax benefits	0.1	0.1
Net cash (used in) provided by financing activities	-867.9	533.4
Net (decrease) increase in cash and cash equivalents	-594.4	1,583
Cash and cash equivalents at beginning of period	3,418	1483.9
Cash and cash equivalents at end of period	2823.6	3066.9
Supplemental Information:
Interest payments	36.9	55.4
Income tax payments	1.2	1.2
Real estate properties acquired by foreclosure	4.3	4.9

Cash Flow, Supplemental Disclos

Cash Flow, Supplemental Disclosures
	3 Months Ended Mar. 31, 2010
Cash Flow, Supplemental Disclosures	The fair values of non-cash assets acquired, excluding goodwill, and liabilities assumed in the Financial Federal Corporation acquisition on February 19, 2010 were $1.27 billion and $832.3 million, respectively. Common stock and additional paid-in capital (net of issuance costs) increased by $405.5 million as a result of the acquisition.

GENERAL

GENERAL
	3 Months Ended Mar. 31, 2010
GENERAL	NOTE 1. GENERAL In the opinion of management, the accompanying unaudited consolidated financial statements of Peoples United Financial, Inc. (Peoples United Financial or the company) have been prepared to reflect all adjustments necessary to present fairly the financial position and results of operations as of the dates and for the periods shown. All significant intercompany transactions and balances are eliminated in consolidation. Certain reclassifications have been made to prior period amounts to conform to the current period presentation. In preparing the consolidated financial statements, management is required to make significant estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. Actual results could differ from managements current estimates, as a result of changing conditions and future events. The current economic environment has increased the degree of uncertainty inherent in these significant estimates. Note 1 to Peoples United Financials audited consolidated financial statements included in the Annual Report on Form 10-K for the year ended December31, 2009, as supplemented by this Quarterly Report on Form 10-Q for the period ended March31, 2010, provides disclosure of Peoples United Financials significant accounting policies. Several accounting estimates are particularly critical and are susceptible to significant near-term change, including the allowance for loan losses, the valuation of derivative financial instruments, and asset impairment judgments, such as other-than-temporary declines in the value of securities and the recoverability of goodwill and other intangible assets. These significant accounting policies and critical estimates are reviewed with the Audit Committee of the Board of Directors. The judgments used by management in applying these critical accounting policies may be affected by a further and prolonged deterioration in the economic environment, which may result in changes to future financial results. For example, subsequent evaluations of the loan portfolio, in light of the factors then prevailing, may result in significant changes in the allowance for loan losses in future periods, and the inability to collect outstanding principal may result in increased loan losses. Certain information and footnote disclosures normally included in consolidated financial statements prepared in conformity with U.S. generally accepted accounting principles have been omitted or condensed. As a result, the accompanying consolidated financial statements should be read in conjunction with Peoples United Financials Annual Report on Form 10-K for the year ended December31, 2009. The results of operations for the three months ended March31, 2010 are not necessarily indicative of the results of operations that may be expected for the entire year or any other interim period. Bank-Owned Life Insurance Bank-owned life insurance (BOLI) represents the cash surrender value of life insurance policies purchased on the lives of certain management-level employees. BOLI funds are invested in separate accounts and are supported by a stable wrap agreement to fully insulate

ACQUISITION OF FINANCIAL FEDERA

ACQUISITION OF FINANCIAL FEDERAL CORPORATION
	3 Months Ended Mar. 31, 2010
ACQUISITION OF FINANCIAL FEDERAL CORPORATION	NOTE 2. ACQUISITION OF FINANCIAL FEDERAL CORPORATION On February19, 2010, Peoples United Financial completed its acquisition of Financial Federal Corporation (Financial Federal), a financial services company providing collateralized lending, financing and leasing services nationwide to small and medium sized businesses. On the closing date, Financial Federal had total assets of $1.28 billion. Total consideration paid in the Financial Federal acquisition of approximately $699 million consisted of approximately $293 million in cash and 26.0million shares of Peoples United Financial common stock with a fair value of approximately $406 million. Cash consideration was paid at the rate of $11.27 per share of Financial Federal common stock and stock consideration was paid at the rate of one share of Peoples United Financial common stock per share of Financial Federal common stock. The acquisition was accounted for as a purchase. Accordingly, Financial Federals assets and liabilities were recorded by Peoples United Financial at their estimated fair values as of the closing date and Peoples United Financials results of operations for the period ended March31, 2010 include the results of Financial Federal beginning with the closing date. Included in the Consolidated Statements of Income for the three months ended March 31, 2010 are approximately $10 million of interest income and approximately $5 million of net income attributable to Financial Federal since the acquisition date. Merger-related expenses totaling $14.7 million (including (i) investment advisory, legal, accounting and valuation services, (ii) debt prepayment costs and (iii) compensatory charges) were recorded in the first quarter of 2010. The excess of the acquisition cost over the estimated fair value of the net assets acquired has been recorded as goodwill. There were no specifically-identifiable intangible assets in the Financial Federal acquisition. The acquisition-date estimated fair value of the assets acquired and liabilities assumed is summarized as follows: (in millions) Assets: Cash and cash equivalents $ 1.9 Loans, net 1,226.1 Premises and equipment 1.6 Goodwill (1) 259.0 Other assets 42.7 Total assets $ 1,531.3 Liabilities: Borrowings $ 801.5 Other liabilities 30.8 Total liabilities $ 832.3 Total acquisition cost $ 699.0 (1) All goodwill was allocated to the Commercial Banking business segment. Net deferred tax assets totaling $18.4 million were established in connection with recording the related purchase accounting adjustments (other than goodwill). All borrowings assumed by Peoples United Financial were repaid prior to March 31, 2010. The above summary includes adjustments to record Financial Federals assets and liabilities at their respective fair values based on managements best estimate using the information available at this time. Increases or decreases in fair value of certain balance sheet amounts and other items of Financial Federal as compared to the information presented may result in further ch

SECURITIES AND SHORT-TERM INVES

SECURITIES AND SHORT-TERM INVESTMENTS
	3 Months Ended Mar. 31, 2010
SECURITIES AND SHORT-TERM INVESTMENTS	NOTE 3. SECURITIES AND SHORT-TERM INVESTMENTS The amortized cost, gross unrealized gains and losses, and fair value of Peoples United Financials securities are as follows: As of March31, 2010 (in millions) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Trading account securities $ 75.7 $ $ $ 75.7 Securities available for sale: Debt securities: U.S. Treasury and agency 11.8 11.8 GSE residential mortgage-backed securities 707.5 6.0 (1.7 ) 711.8 State and municipal 0.3 0.3 Total debt securities 719.6 6.0 (1.7 ) 723.9 Equity securities 0.2 0.2 Total securities available for sale 719.8 6.0 (1.7 ) 724.1 Securities held to maturity: Debt securities: Corporate 55.0 55.0 Other 0.3 0.3 Total securities held to maturity 55.3 55.3 FHLB stock 31.1 31.1 Total securities $ 881.9 $ 6.0 $ (1.7 ) $ 886.2 As of December31, 2009 (in millions) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Trading account securities $ 75.7 $ $ $ 75.7 Securities available for sale: Debt securities: U.S. Treasury and agency 10.7 0.1 10.8 GSE residential mortgage-backed securities 729.9 2.6 (4.4 ) 728.1 State and municipal 0.3 0.3 Total debt securities 740.9 2.7 (4.4 ) 739.2 Equity securities 0.5 0.5 Total securities available for sale 741.4 2.7 (4.4 ) 739.7 Securities held to maturity: Debt securities: Corporate 55.0 55.0 Other 0.3 0.3 Total securities held to maturity 55.3 55.3 FHLB stock 31.1 31.1 Total securities $ 903.5 $ 2.7 $ (4.4 ) $ 901.8 At March31, 2010, five government-sponsored enterprise (GSE) residential mortgage-backed debt securities classified as available for sale, with a fair value of $296.9 million, had unrealized losses totaling $1.7 million for a period of less than 12 months that were directly related to changes in interest rates. Eight state and municipal securities classified as available for sale with a fair value of $0.3 million had continuous unrealized losses for a period greater than 12 months totaling less than $25,000 at March 31, 2010. Management co

LOANS

LOANS
	3 Months Ended Mar. 31, 2010
LOANS	NOTE 4. LOANS The components of Peoples United Financials loan portfolio are summarized as follows: (in millions) March31, 2010 December31, 2009 Commercial real estate: Retail $ 1,416.3 $ 1,388.4 Office buildings 1,324.5 1,289.9 Residential 736.2 756.3 Industrial/manufacturing 658.8 662.4 Hospitality and entertainment 518.3 523.2 Mixed/Special use 254.4 270.5 Land 168.0 161.4 Self storage 130.0 127.4 Health care 49.0 71.1 Other properties 186.6 173.9 Total commercial real estate 5,442.1 5,399.4 Commercial and industrial: Service 596.6 595.0 Finance, insurance and real estate 585.4 609.7 Manufacturing 523.4 514.5 Wholesale distribution 225.6 244.4 Retail sales 198.6 192.7 Health services 181.1 181.7 Construction 128.0 128.2 Public administration 80.3 85.3 Transportation/utility 75.8 77.8 Arts/entertainment/recreation 68.2 67.3 Agriculture 31.1 31.0 Other 80.9 78.1 Total commercial and industrial (1) 2,775.0 2,805.7 Equipment financing: Transportation/utility 730.5 355.8 Construction 546.5 Printing 393.5 407.1 General manufacturing 180.0 170.9 Waste 170.7 Retail sales 127.3 128.4 Packaging 88.2 88.0 Service 40.0 37.8 Food services 35.2 Health services 25.3 24.6 Wholesale distribution 24.4 24.2 Other 41.7 Total equipment financing (1) 2,403.3 1,236.8 Residential mortgage: Adjustable rate 2,187.8 2,244.5 Fixed rate 280.5 302.4 Total residential mortgage 2,468.3 2,546.9 Consumer: Home equity credit lines 1,741.8 1,740.2 Second mortgages 232.0 246.1 Indirect auto 193.9 207.3 Other 54.9 51.4 Total consumer 2,222.6 2,245.0 Total loans $ 15,311.3 $ 14,233.8 (1) Reported as commercial loans in the Consolidated Statements of Condition. Residential mortgage loans at March31, 2010 and December31, 2009 included loans held for sale (substantially all to be sold servicing released) of $54.9 million and $71.3 million, respectively, which approximate fair value.

COMPREHENSIVE INCOME

COMPREHENSIVE INCOME
	3 Months Ended Mar. 31, 2010
COMPREHENSIVE INCOME	NOTE 5. COMPREHENSIVE INCOME Comprehensive income represents the sum of net income and items of other comprehensive income or loss that are reported directly in stockholders equity on an after-tax basis. These items include: (i)net actuarial gains and losses, prior service credits and costs, and transition assets and obligations related to Peoples United Financials pension and other postretirement benefit plans; (ii)net unrealized gains or losses on securities available for sale; and (iii)net gains or losses on derivatives accounted for as cash flow hedges. Peoples United Financials total comprehensive income for the three months ended March31, 2010 and 2009 is reported in the Consolidated Statements of Changes in Stockholders Equity. The components of accumulated other comprehensive loss, which are included in Peoples United Financials stockholders equity on an after-tax basis, are as follows: (in millions) March31, 2010 December31, 2009 Net actuarial loss and other amounts related to pension and other postretirement benefit plans $ (86.2 ) $ (87.6 ) Net gain on derivatives accounted for as cash flow hedges 10.6 13.9 Net unrealized gain (loss) on securities available for sale 2.8 (1.1 ) Total accumulated other comprehensive loss $ (72.8 ) $ (74.8 ) The decrease in total accumulated other comprehensive loss from December31, 2009 consisted of an after-tax increase in the net unrealized gain on securities available for sale ($3.9 million) and an after-tax decrease in the net actuarial loss and other amounts related to pension and other postretirement benefit plans ($1.4 million), partially offset by an after-tax decrease in the net gain on derivatives accounted for as cash flow hedges ($3.3 million). Other comprehensive income, which is presented net of tax, totaled $2.0 million for the three months ended March31, 2010. There are no other-than-temporary impairment losses recognized in accumulated other comprehensive loss at March31, 2010 or December 31, 2009. (see Note 3).

EARNINGS PER COMMON SHARE

EARNINGS PER COMMON SHARE
	3 Months Ended Mar. 31, 2010
EARNINGS PER COMMON SHARE	NOTE 6. EARNINGS PER COMMON SHARE The following is an analysis of Peoples United Financials basic and diluted earnings per share (EPS), reflecting the application of the two-class method, as described below: ThreeMonthsEnded (in millions, except per share data) March31, 2010 March31, 2009 Net income $ 13.6 $ 24.2 Dividends on participating securities (0.5 ) (0.4 ) Income attributable to common shareholders $ 13.1 $ 23.8 Average common shares outstanding for basic EPS 344.6 331.6 Effect of dilutive equity-based awards 0.2 0.6 Average common and common-equivalent shares for diluted EPS 344.8 332.2 Basic EPS $ 0.04 $ 0.07 Diluted EPS $ 0.04 $ 0.07 Effective January1, 2009, in accordance with new accounting requirements issued by the Financial Accounting Standards Board (the FASB), unvested share-based payment awards, which include the right to receive non-forfeitable dividends or dividend equivalents, are considered to participate with common stock in undistributed earnings for purposes of computing EPS. Accordingly, companies that issue share-based payment awards considered to be participating securities, including Peoples United Financial, are required to calculate basic and diluted EPS amounts under the two-class method. Restricted stock awards granted by Peoples United Financial are considered participating securities pursuant to this guidance. Calculations of EPS under the two-class method (i)exclude any dividends paid or owed on participating securities and any undistributed earnings considered to be attributable to participating securities from the numerator and (ii)exclude the dilutive impact of the participating securities from the denominator. EPS amounts for the three months ended March31, 2010 and 2009 have been presented in accordance with these requirements. All unallocated ESOP common shares and all common shares accounted for as treasury shares have been excluded from the calculation of basic and diluted earnings per share. A total of 10.7million and 9.6million anti-dilutive equity-based awards were excluded from the calculation of diluted EPS for the three months ended March31, 2010 and 2009, respectively.

GOODWILL AND OTHER ACQUISITION-

GOODWILL AND OTHER ACQUISITION-RELATED INTANGIBLE ASSETS
	3 Months Ended Mar. 31, 2010
GOODWILL AND OTHER ACQUISITION-RELATED INTANGIBLE ASSETS	NOTE 7. GOODWILL AND OTHER ACQUISITION-RELATED INTANGIBLE ASSETS Peoples United Financials goodwill totaled $1.52 billion and $1.26 billion at March31, 2010 and December31, 2009, respectively (see Note 2). At March31, 2010, goodwill was allocated to Peoples United Financials business segments as follows: Commercial Banking ($872.9 million), Retail Banking and Small Business ($595.0 million), and Wealth Management ($49.8 million). Peoples United Financials other acquisition-related intangible assets totaled $248.8 million and $253.5 million at March31, 2010 and December31, 2009, respectively. At March31, 2010, the carrying amounts of other acquisition-related intangible assets were as follows: core deposits intangible ($87.0 million); trust relationship intangible ($36.3 million); insurance relationship intangible ($2.8 million); and trade name intangible ($122.7 million). Trade name intangibles recognized by Peoples United Financial are deemed to have indefinite useful lives and, accordingly, are not amortized. Amortization expense of other acquisition-related intangible assets, which is included in other non-interest expense in the Consolidated Statements of Income, totaled $4.7 million and $5.2 million for the three months ended March31, 2010 and 2009, respectively. The estimated aggregate amortization expense attributable to other acquisition-related intangible assets for the full-year of 2010 and each of the next five years is as follows: $18.4 million in 2010; $16.8 million in 2011; $15.5 million in 2012; $14.9 million in 2013; $13.7 million in 2014; and $13.1 million in 2015.

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES
	3 Months Ended Mar. 31, 2010
COMMITMENTS AND CONTINGENCIES	NOTE 8. COMMITMENTS AND CONTINGENCIES In the normal course of business, Peoples United Financial has various outstanding commitments and contingent liabilities that are not required to be and, therefore, have not been reflected in the consolidated financial statements. In addition, in the normal course of business, Peoples United Financial is subject to various legal proceedings. Management has discussed the nature of these legal proceedings with legal counsel. In the opinion of management, Peoples United Financials financial condition and results of operations will not be affected materially as a result of the outcome of such commitments, contingent liabilities and legal proceedings.

BUSINESS SEGMENT INFORMATION

BUSINESS SEGMENT INFORMATION
	3 Months Ended Mar. 31, 2010
BUSINESS SEGMENT INFORMATION	NOTE 9. BUSINESS SEGMENT INFORMATION See Business Segment Results included in Item2 for segment information for the three months ended March31, 2010 and 2009.

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS
	3 Months Ended Mar. 31, 2010
FAIR VALUE MEASUREMENTS	NOTE 10. FAIR VALUE MEASUREMENTS Accounting standards related to fair value measurements define fair value, provide a framework for measuring fair value, and establish related disclosure requirements. Broadly, fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. Accordingly, an exit price approach is required in determining fair value. In support of this principle, a fair value hierarchy has been established that prioritizes the inputs used to measure fair value, requiring entities to maximize the use of market or observable inputs (as more reliable measures) and minimize the use of unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs generally require significant management judgment. The three levels within the fair value hierarchy are as follows: Level 1Unadjusted quoted market prices for identical assets or liabilities in active markets that the entity has the ability to access at the measurement date (such as active exchange-traded equity securities and most U.S. and government agency debt securities). Level 2Observable inputs other than quoted prices included in Level 1, such as: quoted prices for similar assets or liabilities in active markets (such as U.S. agency and GSE issued mortgage-backed securities); quoted prices for identical or similar assets or liabilities in inactive markets (such as corporate and municipal bonds that trade infrequently); and other inputs that: (i)are observable for substantially the full term of the asset or liability (e.g. interest rates, yield curves, prepayment speeds, default rates, etc.); or (ii)can be corroborated by observable market data (such as interest rate and currency derivatives and certain other securities). Level 3Valuation techniques that require unobservable inputs that are supported by little or no market activity and are significant to the fair value measurement of the asset or liability (such as pricing models, discounted cash flow methodologies and similar techniques that typically reflect managements own estimates of the assumptions a market participant would use in pricing the asset or liability). Peoples United Financial maintains policies and procedures to value assets and liabilities using the most relevant data available. Described below are the valuation methodologies used by Peoples United Financial and the resulting fair value measurement of those financial instruments reported at fair value on both a recurring and a non-recurring basis. Recurring Fair Value Measurements Investments in Debt and Equity Securities When available, Peoples United Financial uses quoted market prices for identical securities received from a third party nationally recognized pricing service, to determine the fair value of investment securities such as U.S. Treasury and agency securities that are included in Level 1. When quoted market price

DERIVATIVE INSTRUMENTS AND HEDG

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
	3 Months Ended Mar. 31, 2010
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES	NOTE 11. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES Peoples United Financial uses derivative financial instruments as components of its market risk management (principally to manage interest rate risk). Certain other derivatives are entered into in connection with transactions with commercial customers. Derivatives are not used for speculative purposes. All derivatives are recognized as either assets or liabilities and are measured at fair value. Until a derivative is settled, favorable changes in fair values result in unrealized gains that are recognized as assets, while unfavorable changes result in unrealized losses that are recognized as liabilities. Peoples United Financial generally applies hedge accounting to its derivatives used for market risk management purposes. Hedge accounting is permitted only if specific criteria are met, including a requirement that a highly effective relationship exist between the derivative instrument and the hedged item, both at inception of the hedge and on an ongoing basis. The hedge accounting method depends upon whether the derivative instrument is classified as a fair value hedge (i.e. hedging an exposure related to a recognized asset or liability, or a firm commitment) or a cash flow hedge (i.e. hedging an exposure related to the variability of future cash flows associated with a recognized asset or liability, or a forecasted transaction). Changes in the fair value of effective fair value hedges are recognized in current earnings (with the change in fair value of the hedged asset or liability also recorded in earnings). Changes in the fair value of effective cash flow hedges are recognized in other comprehensive income or loss until earnings are affected by the variability in cash flows of the designated hedged item. Ineffective portions of hedge results are recognized in current earnings. Changes in the fair value of derivatives for which hedge accounting is not applied are recognized in current earnings. Peoples United Financial formally documents at inception all relationships between the derivative instruments and the hedged items, as well as its risk management objectives and strategies for undertaking the hedge transactions. This process includes linking all derivatives that are designated as hedges to specific assets and liabilities, or to specific firm commitments or forecasted transactions. Peoples United Financial also formally assesses, both at inception of the hedge and on an ongoing basis, whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in the fair values or cash flows of the hedged items. If it is determined that a derivative is not highly effective or has ceased to be a highly effective hedge, Peoples United Financial would discontinue hedge accounting prospectively. Gains or losses resulting from the termination of a derivative accounted for as a cash flow hedge remain in accumulated other comprehensive income or loss and are amortized to earnings over the remaining period of the former hedging relationship, provided the hedged item continues to be outstanding. Peoples United Financial uses the dollar offset

REVISED FINANCIAL RESULTS

REVISED FINANCIAL RESULTS
	3 Months Ended Mar. 31, 2010
REVISED FINANCIAL RESULTS	NOTE 12. REVISED FINANCIAL RESULTS In the third quarter of 2009, management identified an error relating to an unintentional under-accrual of certain operating expenses. As a result, operating results for the first two quarters of 2009 and the fourth quarter of 2008 were revised to reflect the recognition of additional non-interest expense. The effect of these revisions was immaterial to each period (no change in diluted earnings per share for the second quarter of 2009 and a one cent reduction in diluted earnings per share for both the first quarter of 2009 and the fourth quarter of 2008). Net income for the three months ended June30, 2009,March31, 2009 and December31, 2008 was reduced by $2.1 million, $2.5 million and $1.7 million, respectively, reflecting increases in other non-interest expense of $3.1 million, $3.5 million and $2.7 million for the respective periods (less related income taxes). The revision of fourth quarter 2008 results also increased other liabilities and reduced retained earnings by $1.7 million at December31, 2008.

NEW ACCOUNTING STANDARDS

NEW ACCOUNTING STANDARDS
	3 Months Ended Mar. 31, 2010
NEW ACCOUNTING STANDARDS	NOTE 13. NEW ACCOUNTING STANDARDS Transfers of Financial Assets In June 2009, the FASB issued new requirements related to the accounting for transfers of financial assets, including securitization transactions. These requirements: (i)eliminate the concept of a qualifying special-purpose entity; (ii)change the requirements for derecognizing financial assets; and (iii)require additional disclosures, the objective of which is to enhance information reported to users of financial statements by providing greater transparency about transfers of financial assets and an entitys continuing involvement in transferred financial assets. These requirements were effective January1, 2010 for Peoples United Financial. Transfers of financial assets occurring on or after the effective date are subject to the new requirements. Adoption did not have a significant impact on the companys Consolidated Financial Statements. Variable Interest Entities In June 2009, the FASB issued new requirements to improve financial reporting by companies involved with variable interest entities. These requirements: (i)amend existing guidance for determining whether an entity meets the definition of a variable interest entity; (ii)amend the criteria for identification of the primary beneficiary of a variable interest entity by requiring a qualitative analysis rather than a quantitative analysis; and (iii)require continuous reassessments of whether an enterprise is the primary beneficiary of a variable interest entity. Under the new requirements, the identification of the primary beneficiary focuses on which enterprise has the power to direct the activities of a variable interest entity which, in turn, most significantly impacts the entitys economic performance. These requirements were effective January1, 2010 for Peoples United Financial. Adoption did not have a significant impact on the companys Consolidated Financial Statements. Fair Value Measurement Disclosures In January 2010, the FASB amended its standards related to disclosure of fair value measurements to require: (i)disclosure of amounts transferred in and out of the Level 1 and 2 fair value measurement categories; (ii)a reconciliation, presented on a gross basis rather than a net basis, of activity in the Level 3 fair value measurement category; (iii)greater disaggregation of the assets and liabilities for which fair value measurements are presented; and (iv)more robust disclosure of the valuation techniques and inputs used to measure assets and liabilities in the Level 2 and 3 fair value measurement categories. The new requirements were effective January1, 2010 for Peoples United Financial, with the exception of the requirement related to the Level 3 activity reconciliation, which is effective for fiscal years beginning after December15, 2010 (January 1, 2011 for Peoples United Financial). The applicable disclosures have been provided in Note 10. Loan Modifications In March 2010, the Emerging Issues Task Force (EITF) of the FASB reached a consensus that a modified loan in a pool of purchased credit-impaired loans should remain in the pool even if the modification would otherwise be considered a

SUBSEQUENT EVENT

SUBSEQUENT EVENT
	3 Months Ended Mar. 31, 2010
SUBSEQUENT EVENT	NOTE 14. SUBSEQUENT EVENT On April16, 2010, Peoples United Bank (the Bank), a subsidiary of Peoples United Financial, entered into a definitive purchase and assumption agreement (the Agreement) with the Federal Deposit Insurance Corporation (the FDIC) pursuant to which the Bank assumed all of the deposits, certain assets and the banking operations of Butler Bank, located in Lowell, Massachusetts, with four branches in the greater Boston market. The Agreement also provides for loss-share coverage by the FDIC, up to certain limits, on all acquired loans and foreclosed real estate. The transaction resulted in the acquisition of approximately $229 million in total assets and approximately $225 million in total deposits. The Bank did not pay the FDIC a premium to assume the deposits of Butler Bank.