People's United Financial (PBCT) 8-K Results of Operations and Financial Condition

Fourth Quarter and Full Year 2014 Results

January 15, 2015

NASDAQ: PBCT

Exhibit 99.2

1

Forward-Looking Statement

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,

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;

and

(9)

changes

in

regulation

resulting

from

or

relating

to

financial

reform

legislation.

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.

2

Full Year 2014 Overview

•

Operating earnings of $245 million or $0.82 per share, an increase from $241 million or $0.77

per share

–

Fifth consecutive year of growth in operating earnings per share

•

Net interest income

1

of $912 million, an increase of 3%

•

Net interest margin of 3.09%, a decrease of 22 basis points

•

Loan growth of $2.2 billion, or 9%, to $26.6 billion

•

Deposit growth of $3.6 billion, or 16% to $26.1 billion

–

Excluding brokered deposits, deposit growth of $1.1 billion, or 5%

•

Non-interest income, excluding the $20.6 million gain on the merchant services joint venture, of

$330 million compared to $342 million

•

Efficiency ratio was 62.1%, an improvement from 62.3%

•

Asset quality remained strong with net loan charge-offs at 0.12%, compared to 0.19%

(All comparisons versus full year 2013)

1

Net interest income on a fully taxable equivalent basis was $931

million, an increase of 3%.

•

Operating expenses remained flat at $832 million

3

Full Year 2014: Goals Versus Actuals

Goals

Actual

Loan Growth

High single digits to mid-teens

9%

Deposit Growth

Mid-teens

(including $2.0 billion in brokered deposits)

16%

(including $2.6 billion in brokered deposits)

Net Interest Margin

3.10% -

3.20%

3.09%

Net Interest Income

$930 million -

$960 million

$912 million¹

Non-Interest Income

Maintain fee income levels

$330 million²

Operating Expenses

$830 million -

$840 million

$832 million

Asset Quality

Excellent credit quality

Excellent credit quality

Capital Levels

Strong capital levels

Strong capital levels

1

Net

interest

income

on

a

fully

taxable

equivalent

basis

was

$931

million.

2

Excludes $20.6 million non-operating gain on merchant services joint venture.

4

Net Interest Income

1

($ in millions)

Annual Change

Annual Change

$65.1

$7.2

($46.1)

($3.1)

$888.6

$911.9

$0.2

1

Net

interest

income

on

a

fully

taxable

equivalent

basis

for

2013

and

2014

was

$905.8

million

and

$931.1

million,

respectively.

5

Net Interest Margin

Annual Change

Annual Change

(0.21%)

(0.01%)

3.31%

3.09%

6

Non-Interest Income

($ in millions)

Annual Change

Annual Change

$20.6

$7.1

($5.8)

$341.7

($11.9)

$330.2

($6.6)

Operating

Non-Operating

1

Non-operating income represents the 2Q 2014 gain on the merchant services joint venture, net of related expenses

$4.4

$1.3

$20.6

$20.6

$350.8

$341.7

-

1

7

Non-Interest Expense

($ in millions)

Annual Change

Annual Change

($3.2)

$826.3

$8.2

$6.1

$832.0

$12.7

$839.0

$841.5

Operating

Non-Operating

$9.5

($2.4)

($1.2)

($5.0)

8

2015 Goals

•

Loan growth in the high-single to low-double digits

•

Deposit growth in the mid to high-single digits

•

Net interest income growth in the low to mid-single digits

•

Net interest margin range of 2.85% -

2.95%

•

Non-interest income

1

growth in the low-single digits

•

Full year operating expense range of $835 million to $845 million

•

Maintain excellent credit quality & strong capital levels

1

Adjusted for 2014 non-operating gain on the merchant services joint venture

9

Fourth Quarter 2014 Overview

•

Operating

earnings

of

$65.1

million

or

$0.22

per

share,

compared

to

$63.0

million

or

$0.21

per

share

•

Net interest income

1

of $228 million, consistent with the third quarter of 2014

•

Net interest margin of 3.00%, a decrease of 5 basis points

•

Loan growth of $638 million, 10% annualized growth rate

•

Deposit growth of $877 million, 14% annualized growth rate

–

Excluding brokered deposits, deposit growth of $472 million, 8% annualized growth rate

•

Non-interest income of $86.8 million, increased from $84.0 million

•

Operating expenses remained flat at $207 million

•

Efficiency ratio was 61.3%, improved from 61.4%

•

Net loan charge-offs were 0.13%, consistent with the third quarter 2014

(All comparisons versus third quarter 2014)

1

Net interest income on a fully taxable equivalent basis was $233

million, consistent with the third quarter of 2014.

10

Net Interest Income

1

($ in millions)

Linked Quarter Change

Linked Quarter Change

$2.2

$0.4

($1.9)

($1.5)

$228.5

$228.1

$0.4

1

Net interest income on a fully taxable equivalent basis for 3Q 2014 and 4Q 2014 was $233.3 million and

$233.2 million, respectively.

11

Net Interest Margin

Linked Quarter Change

Linked Quarter Change

(0.05%)

(0.02%)

0.01%

0.01%

3.05%

3.00%

12

Loans

($ in millions)

Linked Quarter Change

Linked Quarter Change

$554

$213

($129)

$25,954

$26,592

Annualized linked quarter change: +9.8%

13

Deposits

Linked Quarter Change

Linked Quarter Change

$709

$168

Retail

2

$18,217

($ in millions)

Annualized linked quarter change: +13.9%

Commercial

1

$7,044

Commercial

1

$7,212

$25,261

$26,138

Retail

2

$18,926

1

Commercial includes Municipal deposits of $1,397 at 09/30/2014 and $1,458 at 12/31/2014

2

Retail includes brokered deposits of $2,228 at 09/30/2014 and $2,633 at 12/31/2014

14

Non-Interest Income

($ in millions)

Linked Quarter Change

Linked Quarter Change

$2.5

$2.4

$84.0

$1.4

$86.8

($2.2)

($1.3)

15

Non-Interest Expense

($ in millions)

Linked Quarter Change

Linked Quarter Change

($1.0)

$206.7

$0.9

$0.5

$207.1

$2.1

$208.8

$207.7

Operating

Non-Operating

$0.6

($1.5)

16

Efficiency Ratio

17

Asset Quality

NPAs

/

Loans

&

REO

(%)

1

1

Non-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

Source:

SNL

Financial

and

Company

filings

Notes:

Top

50

Banks

represents

the

largest

50

banks

by

total

assets

in

each

respective

quarter

PBCT

Peer Group (Median)

Top 50 Banks (Median)

18

Asset Quality

Net Charge-Offs / Average Loans (%) ¹

1

Excluding

acquired

loan

charge-offs,

PBCT’s

charge-off

ratio

was

0.13%,

0.12%,

0.09%,

0.09%,

and

0.17%

in

4Q

2014,

3Q

2014,

2Q

2014,

1Q

2014,

and

4Q

2013,

respectively

Source:

SNL

Financial

and

Company

filings

Notes:

Top

50

Banks

represents

the

largest

50

banks

by

total

assets

in

each

respective

quarter

PBCT

Peer Group (Median)

Top 50 Banks (Median)

19

Growing Future Earnings Per Share

Loans

Deposits

Deposits per Share

Loans per Share

Loans ($ in billions)

Deposits ($ in billions)

20

Operating Return on Average Assets

21

Operating Return on Average Tangible Equity

22

Capital Ratios

Notes:

1.

Leverage

(core)

Capital

represents

Tier

1

Capital

(total

stockholder’s

equity,

excluding:

(i)

after-tax

net

unrealized

gains

(losses)

on

certain

securities

classified

as

available

for

sale;

(ii)

goodwill

and

other

acquisition-related

intangibles;

and

(iii)

the

amount

recorded

in

accumulated

other

comprehensive

income

(loss)

relating

to

pension

and

other

postretirement

benefits),

divided

by

Adjusted

Total

Assets

(period

end

total

assets

less

goodwill

and

other

acquisition-related

intangibles)

2.

Tier

1

Common

represents

Common

Equity

Tier

1

Capital

(calculated

in

accordance

with

the

Basel

III

Final

Rule

issued

in

July

2013)

divided

by

Total

Risk-Weighted

Assets

3.

Tier

1

Risk-Based

Capital

represents

Tier

1

Capital

divided

by

Total

Risk-Weighted

Assets

4.

Total

Risk-Based

Capital

represents

Tier

1

Capital

plus

subordinated

notes

and

debentures,

up

to

certain

limits,

and

the

allowance

for

loan

losses,

up

to

1.25%

of

total

risk

weighted

assets,

divided

by

Total

Risk-Weighted

Assets

5.

Well

capitalized

limits

under

current

capital

rules

for

the

Bank

are:

Leverage

Ratio,

5%;

Tier

1

Risk-Based

Capital,

6%;

and

Total

Risk-Based

Capital,

10%

4Q 2013

1Q 2014

2Q 2014

3Q 2014

4Q 2014

People’s United Financial

Tang. Com. Equity/Tang. Assets

7.9%

8.0%

7.9%

7.8%

7.5%

Leverage Ratio

1, 5

8.3%

8.4%

8.3%

8.1%

7.9%

Tier 1 Common ²

10.2%

10.1%

10.0%

9.9%

9.8%

Tier 1 Risk-Based Capital

3, 5

10.2%

10.1%

10.0%

9.9%

9.8%

Total Risk-Based Capital

4, 5

11.3%

11.2%

12.5%

12.3%

12.2%

People’s United Bank

Leverage Ratio

1, 5

9.1%

9.1%

9.0%

8.8%

8.5%

Tier 1 Risk-Based Capital

3, 5

11.1%

11.0%

10.8%

10.7%

10.5%

Total Risk-Based Capital

4, 5

12.4%

12.2%

13.5%

13.3%

13.1%

23

Interest Rate Risk Profile

Net Interest Income (NII) Sensitivity

1

Yield

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.

Immediate Parallel Shock

Est. Change in NII

Yield Curve Twist

1

Est. Change in NII

Dec. 31, 2014

Sept. 30, 2014

24

Summary

Sustainable Competitive Advantages

•

Premium brand built over 170 years

•

High quality Northeast footprint characterized by wealth, density and

commercial activity

•

Strong leadership team

•

Superior asset quality

•

Focus on relationship-based banking

•

Growing

loans

and

deposits

within

footprint

–

in

two

of

the

largest

MSAs

in

the

country

(New

York

City,

#1

and

Boston,

#10)

•

Improving profitability

•

Strong capital base

Appendix

********

********

26

Asset Quality

Originated Portfolio Coverage Detail as of December 31, 2014

ALLLs / Loans

ALLLs / Loans

NPLs / Loans

NPLs / Loans

ALLLs / NPLs

ALLLs / NPLs

Note

–

ALLLs:

Commercial:

$169

million,

Retail:

$19

million,

Total:

$188

million

27

Acquired Loan Portfolio

•

Acquired loans initially recorded at fair value (inclusive of related credit mark) without carryover of historical ALLL

•

Accounting model is cash-flow based:

–

Contractual

cash

flows

(principal

&

interest)

less

expected

cash

flows

(principal

&

interest)

=

non-accretable

difference

(effectively

utilized

to

absorb

actual

portfolio

losses)

–

Expected

cash

flows

(principal

&

interest)

less

fair

value

=

accretable

yield

–

Expected

cash

flows

are

regularly

reassessed

and

compared

to

actual

cash

collections

As of 12/31/14

(in $ millions)

Carrying

Amount

a, b

Carrying Amount Component

b

NPLs

c

Non-Accretable

Difference/NPLs

Charge-offs

Incurred Since

Acquisition

d

Accretable

Yield

Non-Accretable

Difference

Danvers (7/1/11)

$554.6

$169.2

$9.4

$35.7

26%

$27.5

Smithtown (11/30/10)

313.2

181.1

89.7

54.9

163%

130.2

Others (various dates)

183.1

46.0

15.9

13.0

122%

33.6

Total

$1,050.9

$396.3

$115.0

$103.6

(a)

Initial carrying amounts of acquired portfolios are as follows: FinFed, $1.2BN; Butler, $141MM; RiverBank, $518MM; Smithtown, $1.6BN; and Danvers, $1.9BN.

(b)

Carrying amount and related components reflect loan sale, settlement and payoff activity which have occurred since acquisition.

(c)

Represent contractual amounts; loans meet People’s United Financial’s definition of a non-performing loan but are not subject to classification as non-accrual in

the same manner as originated loans. Rather, these loans are considered to be accruing loans because their interest income relates to the accretable yield

recognized at the pool level and not to contractual interest payments at the loan level.

(d)

Includes approximately $9.5MM of charge-offs applied against reserves established subsequent to acquisition.

28

Acquired Loan Portfolio

($ in millions)

Amortization of Original Discount on Acquired Loan Portfolio

1

Adjusted

to

include

the

discount

on

acquired

loans

(the

difference

between

the

outstanding

balance

of

the

acquired

loan

portfolio

and

the

carrying

amount

of

the

acquired

loan

portfolio)

Impact on Net Interest Margin

Impact on Earnings Per Share

4Q14 Total Accretion (All interest income on acquired loans)

17

Interest Income from Amortization of Original Discount on Acq. Loan Portfolio

4.8

4Q14 Average Acquired Loan Portfolio

1,121

4Q14 Effective Tax Rate

33.5%

Effective Yield on Acquired Loan Portfolio

6.07%

4Q14 Earnings from Amortiz. of Original Discount on Acq. Loan Portfolio

3.2

Weighted Average Coupon on Acquired Loan Portfolio

4.35%

4Q14 Weighted Average Shares Outstanding

298.6

Incremental Yield Attributable to Amortiz. of Discount on Acq. Loan Portfolio

1.72%

4Q14 EPS Impact from Amortiz. of Discount on Acq. Loan Portfolio

$0.01

Incremental Interest Income from Amortiz. of Discount on Acq. Loan Portfolio

4.8

4Q14 Average Earning Assets

31,130

Add: Average unamortized loan discount

1

139

Adjusted 4Q14 Average Earning Assets

1

31,269

Impact on Overall Net Interest Margin (bps)

6

Net Interest Margin

3.00%

Adjusted Net Interest Margin

2.94%

Amortization of Original Discount on Acquired Loan Portfolio

Amortization of Original Discount on Acquired Loan Portfolio

29

Operating Dividend Payout Ratio

30

Peer Group

Firm

Ticker

City

State

1

Associated

ASB

Green Bay

WI

2

BancorpSouth

BXS

Tupelo

MS

3

City National

CYN

Los Angeles

CA

4

Comerica

CMA

Dallas

TX

5

Commerce

CBSH

Kansas City

MO

6

Cullen/Frost

CFR

San Antonio

TX

7

East West

EWBC

Pasadena

CA

8

First Niagara

FNFG

Buffalo

NY

9

FirstMerit

FMER

Akron

OH

10

Fulton

FULT

Lancaster

PA

11

Huntington

HBAN

Columbus

OH

12

M&T

MTB

Buffalo

NY

13

New York Community

NYCB

Westbury

NY

14

Signature

SBNY

New York

NY

15

Susquehanna

SUSQ

Lititz

PA

16

Synovus

SNV

Columbus

GA

17

Valley National

VLY

Wayne

NJ

18

Webster

WBS

Waterbury

CT

19

Wintrust

WTFC

Lake Forest

IL

20

Zions

ZION

Salt Lake City

UT

For more information, investors may contact:

Andrew S. Hersom

(203) 338-4581

andrew.hersom@ peoples.com

NASDAQ: PBCT