PBCT - Earnings call transcript Q4 2020 | People's United Financial, Inc.

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Operator

Good day, ladies and gentlemen. And welcome to the People's United Financial, Inc. Fourth Quarter and Full Year 2020 Earnings Conference Call. My name is Joelle, and I will be your coordinator for today. At this time, all participants are in a listen-only mode.

there a remarks, Instructions]. session prepared the will question-and-answer be [Operator Following

over Hersom, a being Relations ahead, like would presentation is this for to Mr. for the As Inc. conference sir. I People's recorded United reminder, please of Vice Senior President replay Financial, purposes. turn to Investor Andrew go now

Andrew Hersom

and thank for us joining you afternoon, Good today.

Accounting remember Investor call Rosato, Kirk Chairman Jack. which Officer. fourth is XXXX results On Hoyt, Corporate year and Executive that, Web to Strategic the Chief Tengel, presentation, Slide full over to Chief the call on With Planning; Officer; quarter Please the Relations President; our on forward-looking to and turn Chief statement Officer; posted Development this and and David review site refer Walters, of X Jack Barnes, Financial www.peoples.com/investors. to our Jeff are I'll Jeff

Jack Barnes

safe you and Thank loved ones you, us joining Andrew, today remaining healthy. and everyone good and your appreciate We and hope afternoon. are

Let's begin full on by overview the turning to Slide X. year

the is execution $X.XX in declined net the income, up increased solid Agency of revenues. Operating Preprovision results, of the per revenue operating Insurance Total full Belmont's ended pleased of end the revenues the year included points basis success acquisitions realizing United and sale our of from range across $X.XX were projected by net and modestly gain increased higher fee to share and ago, by Notably, of People's million expenses of the XX.X%, caused from million $XXX full continued XXXX, note respectively. to or uncertain million, marking in year share year was the of November its with United, $X.XXX $X.XX operating year consecutive outlook the and The of offset year a $XX.X of billion realized or lowered performance -- especially increase income common important earnings. and increased nearly of the environment of the to basis, $X.XX. expenses recent which in light income provided X%. to It interest pandemic. were reflect completed controlling resilience million seventh which and acquisitions $XX a per reflecting expenses partially XXXX with year and emphasis ago net we in in and operating common of ago not economic strong XXX expenses earnings million along billion, Full lower financial customers. year by below $X savings results Net a a a People's of employees the includes operating year revenues level billion. XX% core net XX% Operating of the are $X.XX $XXX from ratio $XXX X% we We on of our lower on pretax is cost up efficiency operations. and driven X.X%, improvement. United

deposits and increased and year XXXX. the end X% sheet. loans balance respectively to end XX% Turning Period from

economic has provided commercial within loans. mortgages approximately by experienced our decreased activity provided decline by offset by million. businesses as economy lease C&I sheet the limited impact doubled XX% PPP, funding nearly growth. lease People's on leveraged balance the billion, The X%, acquisition. quality in funding a the from achieve synergies end commercial asset the strong liquidity period XXXX yielding year. XXXX $XXX due of and higher XXXX, terrific retail both middle while evident from at of and balance was more real the balances and our which business portfolio ended or warehouse been yields. throughout to to Demand the loan pandemic the while $X.X other United million has of the up a the approximately in Excluding year. portfolios. mortgage of to remixed than Conversely, a PPP addition franchise. market and maintaining estate bank with on was focus reduction loan the growth, portfolio prior LEAF balances ended balances planned Mortgage commercial high billion, retail $X.X of and of LEAF’s excellent the and record successfully acquired to the and time $X we was which reduced significant by $X The we approximately modestly XXXX, driven from due increased at mostly billion, balances with warehouse LEAF, growth lower billion $XXX in residential

customer quality remained loans as indicative portfolios to year. of offs excellent the the the XX charge points Asset company's average net relationships. approach basis total deep These were full are results underwriting, loan to diversified and for conservative

deferrals, pleased at reduction ended the of million the loan from or loans, We close of X.X% or the quarter. continued $XXX total which the of at are third loans by in billion X.X% down particularly total year $X.X

since Additionally, deferrals end. have continued year to decline

Approximately our customer deferrals of or navigate modifications The to these remain past base real economic concentration commercial $XXX deferral largest and million As times. total We loans. in were of hospitality to with discussed less to our committed of total estate billion $X the intentions Consistent provided supporting sector are received of need quarter, majority down high assistance. difficult in help within the XXth, further second the than loans expected. with post January in as modifications X.X% quality we them modifications. customers

on Moving Slide to X.

technology to digitally to continually convenience create capabilities driven preferences value, provide and our consumer efficiencies. we experiences, enhanced more deliver have As evolve

online customers and mobile utilizing platforms As our a are their needs. result, for banking increasingly

today Stop contracts our digital branches, New & & accelerating shopping branch to the XXX operate in in-store these XX York. Given in announced New in shifts XX Stop decision banking and and trends upon not York expiration. Shop in retail We renew Connecticut behaviors, existing with we Shop and Connecticut

expires & terms renewal in XXXX January the York are Our discussions year ongoing. New while at goes on Connecticut contract mid of to Shop end with contract XXXX. Currently, the Stop

& to the providing Stop two the same while provided us over provides Although, more across and bank Shop our opportunity decision our its customers our further to decades, branch of personalized relationship meaningful channels. network, this level than the of has optimize value each services

enable network. or a both. in-person, cost branch, mobile the combination a they customers achieved with renewing in and branch wants serving overtime virtually savings remained addition, manner In capabilities to of interact through our by will these contracts in not which at it’d our traditional investment committed platforms digital be to in and We whether us, online further

platforms, We behavior. will to traditional very proximity of & confident retention profile customer deposit adoption store strong and our increasing Stop are in between due and footprint of retail portfolio locations digital be the branches, shopping and traditional in branch expanded Shop trends customer

store in locations. half domiciled total balances XX% branches our approximately customers of and the the of in comprise of York, in deposit of New While Connecticut only these are branches and XX%

store are branch actually branch addition, of in branch XX% only in XXXX. customers states deposit XX% customers visited of only with these that carry are two that an our in balances associated in-store In traditional balances Furthermore, customers.

online As and previously mentioned, year-over-year. platforms. mobile has increased increasingly our significantly are utilizing Digital engagement customers

customers. those experienced are digitally have active channel. with at & digital are store of customers branches XX% but branches a and balances more that utilize deposit Stop traditional in are XX% XXXX not than only digital used associated active log-ons up the mobile XX%, Shop are increase our deposit up wallet customers in Notably, mobile mobile we enrollments XX% increased XXX% transactions XX%, in example, have For and did

high level Importantly, the strength in-store model our of overtime and overlap created of between our and traditional spoke branches. branch hub we a built

As of of such, one Shop domiciled deposits of of Stop miles XX% and & within branch five our traditional Shop our & our are XX% branches Stop locations.

bank better footprint in in have Farmington of as recent York New acquisitions these addition, convenient number well up branch as and and providing optimized of In customers states, and greater our Connecticut, facilities. expanded in a Suffolk drive United traditional

apparent. inside trends more stores. have pickup changing pandemic, curbside retail options, and the have during shopping impacted has delivery availability Finally, of become The traffic foot which in become prominent behavior

wholesale here in David discuss share grocery stores the convenience discount grocery results. Additionally, increased quarter fourth and have while spend, stores the is stores traditional has to clubs that, With share of of their declined.

David Rosato

losses X% I for earnings share of Operating the on overview of a Slide the on concluded increased with will fourth begin decreased million Provision an basis, the consecutive from partially million Operating up modestly points fourth revenue expenses. year to credit quarter. Jack. for slightly linked We for lower were allowance quarter. X per third points by in lower due $XXX.X earnings excluding loans basis you, net quarter quarter. common and points further with loans solid $XX.X credit by interest income a second to loans. higher Thank XX quarter the income, million $X.XX, X% X strengthened $X.XX. financial total offset $XXX.X of performance declined the net On operating preprovision basis or XXX basis and to PPP to the losses fee

the tax is revaluation of a it $X.X the Finally, quarter effective in related to fourth tax rate deferred benefit the to state important reflected million note assets. certain

interest from Moving to quarter. was of billion Slide $XX.X X. included end net which income unfavorably the the million The million forgiven $X.X the decreased driven the by deposit Notably, the of which beginning decline income. in a during These million reflect or by $X.X impacted borrowings by third XXXX, Net million over the $X.X Lower lower portfolio, interest the $X interest headwind interest $XXX.X interest loan growth quarter. benefited quarter, Net result $XX also a in X% income interest during income costs, fees million. million. related we consists $XX.X basis $X.X by period partially loans billion million benefited on balances higher to net million This year. PPP portfolio of which as net income by securities have $XXX,XXX. in reduced net and collectively from results of of in since deposit by $X offset was income and borrowings

than the third also In in displayed As unfavorably the net loan Lower securities X due than X XXX points remained yield. excess respectively. points. increased impacted XX margin Slide portfolio primarily which was the on lower lower points yields basis portfolio, unfavorably margin liquidity, margin the X quarter, total the basis the portfolios by and basis by business to X, new of points yields loan basis and impacted interest

improved fourth basis benefited quarter points by to costs discipline the points margin XX points. offset modestly quarter quarter, third continued spreads basis consecutive deposit pricing, credit deposit the negative in XX basis lower Xth the and yields of quarter. in business were to costs. deposit marking these compared X the our managing in Average largest The effects new was the in However, which

the impact X favorable net margin Finally, interest point on PPP had basis a for quarter.

while respectively to market by balances New quarter, which end X% lowered commercial LEAF. $XXX Mortgage at $XXX balances million, our new year. million the approximately million, Turning up Slide third X. September be The attributable quarter estate mortgages, XXth by end down were run-off mode, results down loans or to planned balances which loans million the continues balances from retail limited benefited strong loans record the grew run-off economic from period mortgage in end $XX warehouse decreased for warehouse linked X% included driven balances relationships. balances billion of and combined Average impacted robust million third decreased transactional and York addition origination down $X.X end mortgage or of the loans a and multifamily loans to activity basis, portfolio which customer reduction million million low C&I a quarter. retail On decline portfolios. real X%. activity. in demand is and million and third by reduction quarter to quarter. from million reduced $XXX of ended average our X% the the quarter and middle $XXX as $XXX loan portfolio, to the period the due at Balances LEAF’s were to $XXX period due continue million, residential billion, our in businesses forgiveness be on mostly by in from $XXX PPP the portion and for a growth close Conversely, period closed in $X.X balances $XXX $XXX from and Commercial the a

to United $XXX end $XX have from run-off million In addition, we chosen million the for was and balance $XXX since XXth decline September a period-end the of million, XXXX. year loans

as based end deposit X. Slide was $X.X period helped third period The ratio or on CDs Average customer with commercial preference billion quarter, rolled $XXX up to a to deposits our balances the while environment. and this of The basis from as time $X.X XX%, retail all interest balances time off. and higher Moving to deposits uncertain exception on billion Both were time were average municipal linked lower balances up Average down the $XXX end while deposits were to decrease balances quarter, of or end for across loan in balances categories reflection during balances grew is growth, businesses. broad X% liquidity the low across X%. which and million increased million. economic rate decreased costs a period

from more period XX% of $XX end of billion quarter billion XX% non-interest bearing for $XX.X Non-interest consecutive than period deposits the total for bearing from a seventh the Importantly, end of year. for Balances end the the ago. billion deposits up increased and were up account year third quarter. now balances, $X.X

of quarter. $XX.X $XXX.X increased Noninterest Turning million XX% to income or X. linked million Slide

we of As referenced million gain. a the $XX.X United realizing completed People's earlier, Agency sale Insurance

preloan Excluding this million operating or by bank was X% income driven noninterest of primarily income an operating higher fees, $X.X the and lease $XXX.X noninterest in customer income lending $XXX,XXX. commercial were which by $X benefited This swap income prepayment, management of million up million, $X.X quarter. third cash by grew gain, driven interest fees, million collectively increase from increase rate which and higher

costs, the income Slide offset the equity other due to million non-interest occupancy mark $XXX.X million XXX,XXX $X.X nonoperating to expense; November. fourth linked expense services; increase in million sale quarter. in professional $XXX,XXX $X.X On in the they quarter in compared $X.X primarily decreased XX, in to and early insurance The noninterest included of million a noninterest to increases market $XXX,XXX of reduction an equipment. in were quarter, and was The of $XXX,XXX addition, one was of of other In due security and following PUIA and these $X.X million, third categories; outside the revenues up position. largest to

were decreased noninterest the XX.X% of to in Conversely, from $XXX,XXX $X.X due was third seasonality and occupancy benefited Slide of linked expense and which Noninterest and lower million higher million $X.X $X.X primarily XXX increased to projects. and of The lease and previous million points down modestly $XXX.X costs, operating of unfavorably the lower quarter, respectively nonoperating the expense expense costs impacted related Excluding noninterest by compared regulatory $XXX,XXX assessments professional ratio equipment quarter. quarter. expense, million basis due of Briefly services on and timing XX. outside efficiency to revenues. to

diligent last operating be management stated and to I our As in this quarter, environment. we will move remain on enhancing rate low interest leverage we very of in current focused continue as expenses forward

As excellent. Jack mentioned remains quality asset our earlier,

Leasing impacted of The assets points points to the compared REO business motor primarily basis coach pandemic, As percentage to displayed higher charge-offs Capital and points has and net linked loan was significantly total Slide portfolio a as improved XX, average People's basis third by equipment our X X the on to due within was basis XX quarter. the been tourism. coach Nonperforming This of basis segment XX loans points quarter. of decline and in motor attributable increase the to finance. was

Looking at it the fourth favorable gain the returns. sale Slide evidenced related a had PUIA impact is XX, on to quarter significant

X equity an Operating return However, down XX.X%. basis with from XX of basis, increased average basis operating average quarter. on points consistent on assets the operating third was returns of return generally on slightly while were tangible point, XX.X%

X.X% the risk the Tier again and ratios X.X%, for given for compared adjusting ratio end X Finally of quarter management. long compared PPP to Slide leverage important X.X%. loans, It diversified the mix our on Bank history to to holding be at is X.X% pro-forma capital company XX, continue for to is business and strong exceptional note,

Additionally, approximately ratio compared the reported TCE X.X% X.X%. the excluding PPP to is

assessment. go Before I over turning the still XXXX goodwill mention wanted we the annual performing call over to of impairment are that to our Jack outlook, in process our to

valuations company's no to fall, the the decline complete represent could or complexities is date October but including pandemic, and of the impairment effects the analysis about low current recorded earnings, a tangible rate Additional potential brought charge projected assessment Bank's and on equity. on interest a cash effect would time the Xst. goodwill environment stock to given last necessary charge in particularly macroeconomic and material the have liquidity balances, be Any annual non-cash by of

The be With it SEC. annual In addition, well-capitalized Jack. and included to expense. goodwill like affected potential I'd on regulatory non-cash are calculation be analysis because other the in to not Form will filing ratios of would intangible turn this our assets XX-K not of with completed our the the that, over prior report to capital regulatory capital, by

Jack Barnes

David. you, Thank

are society protocols. Looking ongoing we economy pleased the improve continues we continue to trends particular, distancing as cautiously pandemic. despite social optimistic about forward, activity to In to the banking adjust are

bit will help to accelerate in are also vaccines latter the We year. hopeful of potentially a the economic help the restore of half improvement normalcy and

However, remains. of a lot uncertainty

the year with XXXX exceptional mind, interest and we that digital customers. surge to today of net margin. income the our backdrop the announcement deliver in rate franchise Shop note me an position growth, and have confident challenging store to renew contracts financial not branch our let is Stop impact listed XXXX With in important XX. backdrop It service XXXX results. on existing outlook as our capabilities not full on to in will maintain loan on virus execution nationwide we very decision & for While outline for strong low the invest in a a our further the in across of in are present strength, interest these and our Despite operations, entered prolonged resilience to recent headwinds, environment Slide

at grow on period basis, end balances end. loans of balances billion X% the PPP to We range in totaling PPP $X.X expect year excluding to zero

the be in half loans expectation of forgiven current will is Our XXXX. first these

we X%. balances Secondly, in and measures. end in the to period XXXX uncertainty up of a range deposit of significant to This government expectation X% anticipated change growth deposit stimulus additional reflective is down of

excludes to expect net adjusted XXX Embedded margin of is capabilities one during interest funds billion million and is to margin $X.XX income $X.XXX noninterest X% from which XXXX, of change United commitment $XX from $X.XX different many expense, We X%. of and grow an the interest no invest net of million $XXX from X% sale million, outlook United transaction. the People's billion Operating expense. range to assumption in as an to interest digital of in the range reflects in which billion of excludes in acquired outlook income be of costs, $XX is in the the PUIA the noninterest raise noninterest to factors, Fed XXX. compared is this derived our further customers. range $XX net million which which the base the excludes X% to for related income Operating enhance in of This to merger continued year. from Insurance to in expense This the expectation to in range of to in convenience be decrease of the anticipated of expected efficiencies XXXX to gains operating is range loans

of a also million. $XX quality maintain wider We of by compared excellent pandemic. continued uncertainty to the outlook caused expect to indicative provision million is with range year's The the $XX prior credit to range in

tax rate the for be to XX% to our in anticipate effective of year we XX%. addition, the In range

you portion with capital the We'll of to our concludes expectation strong that common that to of year end an remarks. in you XX.X%. proceed the happy prepared range maintain levels That have. capital at answer be to Q&A may to XX% plan please X equity be call. Tier questions holding will we company ratio any Operator, Finally,

Operator

Casey question comes Haire with Instructions] [Operator First Jefferies. from

Elan Zanger

on Zanger is This Casey. Elan for

earlier to some following could season trying in that Maybe of will on for out? the just Shop be there Stop maybe Granted, impacts, I us about a you understand a shake side, kind attrition, reallocated how 'XX but up I financial commentary, Thanks. help think feel it's expense deposit of think mentioned get of Just expenses. investment can the the & 'XX event. some like the you

David Rosato

to for it us, impact Shops, we out, have range. the Thank strategic run et states, or in combined much to an -- in it and have the When is & including in This total a XXXX. look rent, doesn't is recognizing. the for decision an you doesn't equipment, big million but million really of Stop $XX a $XX cost cetera, comp number impact

as rundown there's large over contractual So his in Jack opportunity us a comments, for time for And that. this. in periods there's said

for financial engagement. risk higher of that deposit prepared statistics about complexion it. time on very of from recent perspective, spent over our seeing of that the We with And do fact of can went attrition a reasonable gives So opportunity network, branch digital the lot through there's traditional this his time. about substantially have of large a us a confidence The decision in this and comments us lot which a thinking Jack of we some acquisitions small a time. changed levels over

Jack Barnes

closing a branches, we've been customers, record of track and to at We branches. pretty have optimizing nearby redirecting retaining successful basically really branch system them over time, the long

and kind we've so are And that And replicate We've York. lot branch. our a branches described a system spoke gives branch & over fairly that the Shop years some our we to of way it in of Connecticut established were is of to Stop many close really approach the traditional able a New that and in hub confidence. us to

these and model now contracts have as strategic in and into world has and going business spoke changed, we this So the that a recognized take advantage hub customers' we've we preferences risk feel need that and intentionally always as of to And step. the expiration stores, we take created the changed of approach.

Elan Zanger

growth key loan the the as the resi look what on going some net and still the growth 'XX? United switching of There's There are I expected just to at headwinds. book. in over multifamily in side. are And we for runoffs drivers loan guess, kind

David Rosato

et is the had industry would we've continued it's balance whether specialized I some they led particularly of equipment as lending, the -- finance talked banking, is past, in success verticals go sheet fund we've down in say, franchise by about that the and the that cetera. declining a Growth process, our where as to we, want planned be an sheet, balance a for the we gotten XXXX, strategy sheet. residential In we to portfolio. our mortgage we perspective, allocation of faced headwind were also of the when from That a remixing balance we've

start XXXX, we look a we'll see banner of mortgage universe. warehouse growth the but had in line. are there part year, low, as out So mortgage in some the rates obviously, for forward, to a residential Mortgage refinance opportunities still are large

we book. fairly able hold in reduced activity we I So to say, commercial business. by in that think estate continued offset will our be balances positives, well are would real Those

Operator

Our from with Point. next Rochester question Compass comes Dave

Dave Rochester

Just left runoff York and you of this in you City that on New in are have in loans in What terms maybe? question, runoff that or what acquired multifamily. guys last for expecting year

David Rosato

New was million. at the multifamily the year So $XXX ended York

will that And in year million. the 'XX. be runoff United million. in million think $XXX ended runoff year probably in next down $XXX the of of came to section $XXX We then portfolio that So we million the $XXX portfolio,

year. So million to that be $XXX the about there million. came We down $XXX think $XXX million last will runoff

Dave Rochester

guide net the that? of loan And all includes the

DavidRosato

it Yes, does.

DaveRochester

upside know just the from hikes. the you're shape I was the then NIM guide And wondering assumes about assuming I rate then not curve. XQ assuming And guide. it the looks like NIM. talked of on for the you what

build, just something maybe liquidity of what fees unwind excess the wondering or this that if an some of see you just or So PPP that? driving like it's forgiveness

David Rosato

most up, I Well, hit what Dave. of you I think to was bring going on

So for year. no rate the in funds to the as said, is, on predicated change XXX million the XXX Fed is Jack

yield We bit a a the more curve seen steepening we'll have as modest the unfolds. think see year and of

components sitting the on on of in So quarter look we're margin short the the the came money release, had, $X.X the the to term really points. liquidity, that is The investment about, excess is the thinking that we Some we that Fed the right XX basis if right? was fourth one in see you reality at fourth bear quarter. line were that billion at in now the press you'll up

the negative to the some we that So securities the are basis of the in in market. excess X the securities quarter, a deploy $X We portfolio 'XX, billion and fourth margin. grew that in point had to continuing fourth impact liquidity quarter into about

we'll So X to able drag point basis of that be there. reverse some

of the in think offset in first fees, we'll positive of as, year. talked of the payoff get half the we Jack's think I that the some benefit which about comments, probably PPP will the in

better about billion So book to about loan rate, our little but really equipment change going get cash and is portfolio. it's book not half of loan fixed that fairly And in that of the nicely. half to floating each and we much, of is there's flows a yield $X in reinvestment finance quarter, on there expect half the loan

XXX of that the over some are basis and up little on excess to some guidance. XXX drivers thinking we're picking about liquidity of major margin points a deploying that that that and excess So around liquidity

Dave Rochester

year bake does at so the securities way that in point guide, And roughly? for in growth the much NII how for this

David Rosato

billion there's, it, 'XX, dollar's about growth. For net call another

Dave Rochester

real capital looks It already range. CETX then you're quick. the to top of at switching just target your And like maybe

terms just thinking was maybe I So M&A. of about wondering you're what buybacks or in

your so with. you're may top you You've the if got have need guide do something support and loan growth to money, range at that. of more already extra some you're making your in to you'll some But

David Rosato

insurance outlook The announced are about reality in levels. is, we about feel the we sale, was an wanted XX from range the range, think this, didn't that and equity perspective. change true, points top I we or when at of to to guidance talked Yes, and we we boost the the last quarter

a board is planned certainly It's in guidance. once board regular just and something in might over course those about capital with our it the one It's around. think is not definitely not of to continue that periodic about We discussions buybacks that management talk have our our the year. and that of happen while today. tools But to we

Dave Rochester

any And M&A, thoughts there? updated on then

Jack Barnes

and environment there. I have there's continue lot no say And updated a with out happened would I to discussions And think that's people. we the at been obviously, thoughts. look

think certainly as challenges their consider and the at to at I people least that here. to environment around fight to alternatives continuing causing away opposed look the strategic

Operator

Your Mark from Fitzgibbon Sandler. next question comes with Piper

Mark Fitzgibbon

Just how of this, locations you exit apologize I follow-ups mentioned in-store can the if of thing. in XXXX? And in-store a many couple the you but quick on

Jack Barnes

How XXXX? in many close we can

Mark Fitzgibbon

Yes.

JackBarnes

fingertips with move end well that's closed. By right share we those this. Stop to and agreed here, schedule, will with orderly & years summary think we was as And both of of XXXX, and XX on that both But actively about talking are is we there we'll Shop, unwind, laid through indicated been we kind begin all we're that I but agreement would we county, one, and don’t that a be an the discussions. kind through also parties Mark, that won't that's It 'XX, go have years but we if out will and schedules big ago, an upon original following where it's working might ago they all continue actually believe some was them there agreed of footprint with with XX And that reach 'XX. them. we those by

Mark Fitzgibbon

partner. bring they'll Jack, another in Presumably,

else you to somebody have in of dark of time So curious, there? close these move stay branches before could I for after sort guess I'm period a do them

Jack Barnes

as have branches Mark, not expecting awfully and thing on And that. industry No. the time. closely, anybody on for We will that's view That for across spending And in-store we to pretty traditional market will, some closed big they watch imagine. be we're so an in-store can by. you take our decline presence is

we're move confident said customers be So branches and successful. to we'll traditional the those we

Jack Barnes

about to of securities touched correctly And you of that $X that short term upon then, billion the put billion the I in work expect had I'm David, curious portfolio? to you Did investments. $X hear

David Rosato

Mark. Yes,

in on we grew $X billion billion year, in the So and up a securities portfolio $X.X $X.X we end about At liquidity, that net of the change was the billion. of sitting basis QX. the quarter, on in were

we billion, in -- of of $X.X deploy least thinking about current now, XXXX. $X about So half first at billion half that is our will the right

Mark Fitzgibbon

envision things doing transaction? the going a question. Jack, there. sounds out follow-up that bigger a then just of kind like consider? of that you sort something to you on MOE lot lastly, And on would M&A Could Is it there's of

Jack Barnes

something landscape would those that not say that eventually and -- the at with definitely say, not. way I that I on there's and good but I possible. we it M&A. are our execution and look on And consider guess this least those time low would very an certainly, say wouldn't that as appropriate right I difficult track on going the absolutely but we're it really felt in if there was I I about record potential taking our we like partner, would say the But would at -- we probabilities. are would well, all focus some talented thing would feel I confident

Operator

McGratty comes from question Chris KBW. with next Our

Chris McGratty

going I right. to want I am I for Stop make Shop, sorry get back just sure the the to impact &

one, that. think year I expenses you're closures And before million the that the to branch how we've $XX this would reinvestment, nothing potential next is you maybe reinvested. guys to others I zip number million about of action, in about year savings seen net guess, right about the to do said but thinking from I it? Am gets savings $XX XX% related way XXXX? in this be any that code and think

David Rosato

$XX to in totality states. Stop is that cost million & So Shop all-in for million the our of both branches $XX

did what that would from be all So that’s but not say percentage cost savings. a opportunity reinvested comp in. of specifically the is and We that benefits, occupancy,

Jack Barnes

the in us investing to to capabilities XXXX again year. in would that of XX%. feel like We're our today of very this the need use think I here I wouldn't is that simply we we sit steadily committed we've years, it's use Yes, thought capabilities would the as we're already but don't follow and much. it, give point to making I going some for digital certainly

Chris McGratty

that would net a So it. 'XX benefit event. I be got

Jack Barnes

more event, about that event. think 'XX only a We 'XX not a as

Chris McGratty

Just on the one more PPP.

thoughts gave the then on fees the million. are the two round of I and think numbers left was participation? what What's about in $XX the you secondarily, on quarter, what the

David Rosato

impact XXXX, interest $XX fees in So and total million. the income interest net of was

amount, obviously, same it the in period of was of that $XX the books That quarters, forgiven the second, 'XX. was over the number about ramping million. two will over the quarters all that making third, first just what be is remains year it's Now up time. three and on assumption that about We're

Chris McGratty

That's Okay. total and fees, between correct? the the X%

David Rosato

yes. total. the Yes, That's

just at not today. right the internally, been calling sharing going we're on two It's in PPP embedded around that's to days III now actually what's it up. So thoughts our only ramp we're starting and we're outlook we've now. are And that not

Jack Barnes

morning, less needing good themselves XXX,XXX the our our with on I'll are portal, approximately our applications utilization actually not small I applications customers of engage just size, in mostly technology was the X,XXX and than and making to bankers. share, this already it think

active. going early but but we know. to expecting it's near be seems I, don't to PPP So not We're be anywhere it's

Operator

Zerbe So question Stanley. Ken our next from with Morgan comes

Ken Zerbe

little been a as as I branches, definitely definitely always more but helpful. you, where just marketing branches & you you might more tool. going have aspect marketing theoretical specifically, just about shop see don't are the into question great Like that do sort they're think presence I them obviously, Stop have mind. much, that, in there, out banks how guys Shop, peoples, for locations. not to When business if at of I I a growing about say, and used And Maybe about it's think I free thinking of it's brand because very people say many you having it? of more without how Like that

Jack Barnes

brand incredibly visibility digital technology it's our the to growing about lot fast. products through et use talk And cetera. with We in on so and and well, the digital terms have doing, And more and phone what do of we're up And computer very messaging noting for even ramping by, cars a that. bigger in as historically marketing just our is business, the bigger the doing thing that what foundation that, right, Well, doing the appreciate other the we are community. cell traditional and you're as coming much a going signage saying think space, I in us also the much people more is offers Yes. we're and what presence. to mean committed the and and well. so and meaning I has our community to I more and branches always activities

Ken Zerbe

question. just And a then separate

impairment test a maybe risk that see me guard. might are of In write-down caught environment off most doing, a of bit any I just potentially parts subject that terms we that Can be I of about would you goodwill guess little the goodwill what talk your you're wouldn't write at the write-downs. or goodwill down? business expect in that this

David Rosato

be So we and say tried an this to to accounting is this press that prepared exercise. date what release in do remarks happens those October Xst. The the is we

we that which of to process, the us, has on at to part do -- process relative a complicated is value. book market point with assessment, us market $X.X there a billion X times day price, and stock $XX.XX trading peers, to the X all to So for cap analysis of about a cap. were had X.X peers Also tangible X.X

So it. that of a piece is

in we the you that So that run units documents. public exercise report our over that accounting assessment,

businesses. commercial, just and retail three that's So our management, operating wealth

is It's date it's that's complicated. evaluation So a assessments these the happen but every year. date it difficult

billion our at XX/XX, team up dealing with. an work a at were cap to. year-end, What's at And by If wouldn't wouldn't a date date it proven a we but auditors we this be it But around It's is the for to minimum. billion that somewhat we're and outside us. doing charge. we often that impairment an the to we of had $X.X There point. difficult $X.X that was right? market be interesting another with we're possibility doing this that more Sometimes from and be have valuation issue, working

Operator

RBC comes with Capital Steven Markets. Duong question next from Your

Steven Duong

deposits, of cost that Do of climb fall to I you'd continues this below year, just wanted to touch basis lower. the end XX by on think it you total the margin, your points?

David Rosato

think of possible. industry to preserve what company, experiencing we're then think one needs massive inflows margin. If it the only that these do my -- continue is and I our not to we into to I see can that, who's word, Yes, the deposits obviously

this differential current CDs offering meaningful on a us make book, the the book to bearing preference So worthwhile. There's And elsewhere large CD -- a to going know are there's the There's industry money low, noninterest it's those an amongst and is market that's that's rates money that issue. so clear go opportunities the -- and our possible. because our for But why customers there's the accounts or that's in going are little of role rolling for We rates liquidity that is any is is really for with is what to book lower. is rates, contractual pickup it down between wait because on. customers. enough even very pricing that industry part off

So that's the answer long think possible. to, I yes, it's

Steven Duong

down these that now you considerably. all going forward have with or taken stable is expect I And go we guys further? it know to down your Do deposits, -- borrowings still be can you FHLB to going

David Rosato

good The on advances at they're all rates. and point are this now home are that book advances relatively the loan term at

and So we modest really to do any haven't spent time them incurring a prepaying lot about charge of that. thinking

exact be change that's how year. might term this be structure probably don't come will whatever relatively modest. But I will of the much and know it it the is, So off all

Steven Duong

in, that's last if I steepening -- one on NIM that further assuming And guidance. a not just squeeze the just could in yield Is one your curve?

David Rosato

on I modest. a bit more year. up. Well, short it's I That's market But we steepening call a And to the is this to say rates coming the current was would in it is for have what market expectation telling the say trying seen it's not forwards. little is us. Fed but modest curve going last relatively is steepening months. That's based two What yield what the just are move of

Operator

question next with Breese Our Matthew Stephens, Inc. from comes

Matthew Breese

the Maybe guidance for this outlook. just going appreciate I and provision the on to provision the the year. credit

the bit deferrals this more insight a as the little how on just front. might or Just and clear curious given charge-offs sharp color you comfort Could give trend us in think reduction the credit year? you to

Jack Barnes

XX pre the say you but hit. in situations. been pandemic kind all delinquency we're through has now, looking unique really pleasing we've on Right to get we're a here banks this is good. been we would about where once And a people last it's charge-off with gone, But The high anomaly shift have like of and not in performance them months all. our at really perspective, dramatic think past, when at those I dealt troubled level. experience while how not from that a about of a and think what were, the has situations. year at Most really Actually, we

MatthewBreese

take you level And then mind, the increasingly that the in pandemic might mirror? as for get CECL that the reserve it in one to put with long to How is is. rearview day where considering back

David Rosato

on. one tough a to guess That's

Jack Barnes

clearly it I as low that. first bring and XX always time range. within provision steady. just spread a XX We is we're couple we've clear. that we're there. out able comfortable $XX put from million, quarters extra better. with getting which the of company. done and Charge-offs estimate agree been with for We to down. Yes, perspectivethat the normally, are expense We've always an And last that That's spread the the things us relatively We have for provision been ever

CECL do reserves. scenario economic that banks we We've is another that unfold. a that unfolds XXXX release some of forecast to start yet. it's way our will at to which probably be been is really want think We conservative just point. saying but in little to hope in seen this You've We driven, viewpoint driven. reluctant And

Matthew Breese

the bigger M&A. just hoping to that you in. be across going you you be some on provide markets color to back Maybe could I footprint then in, was want better And to your want

advantage a and take of there those what you where had would was order you a stack it, If markets? are target

Jack Barnes

to there. not ready go Well,

And opportunities whole deals will we've for our we've at we markets said always at we're done, footprint look look could know market as and and of to our it. that markets look do always and aware in across You adjacent. also

Matthew Breese

just lot on the technology. With a discussion, these couple of stable We something hear weeks community your to letter a And and that for not been a payments, ask wanted this. banks all regional pertained in your then get all as of I just made don't And from what the digital certainly coins of there? Is digital It last one me. pursuing? blockchain, just were you for the OCC ago. thoughts lot curious investments you've banks, thoughts talking about

Jack Barnes

Yes.

not We developing, pursuing working it's on. attention like that all I others. but how that's we're don't it. anything pay been Certainly have not know

Operator

next question David Your from with Bishop Global Securities. comes Seaport

David Bishop

a you'd expecting some mentioned higher the rate you're to roll-off rate. question, it First of a lower benefit that from at CDs

that what of in curious differential on portfolio? is terms Just offering yields the CD

David Rosato

current that have head, my think significant. of I is quite exact the differential numbers, Top don't or but Dave, about so. basis I XXX points It's

up probably on rates offering term dependent to maybe are only XX XX gets Our or basis point.

David Bishop

across strength, noted fee side I the it's on fee the income. terms building been then commercial of know And and year lending the in

Just maybe some the commentary Thanks. in terms of for into fees XXXX? outlook commercial banking

David Rosato

commercial I'd up. from hate news estate, fees. Even news the mean, were there. in lose payoff mostly bad prepayment thank some is benefit we recognizing. banking balance. news fees for year, in fee. pandemic Yes. We We the the lending commercial and good say real did like the you a to There's bad I

I healthcare, our group more earning that's of when call So even think deals, those out that's we've it's to our the We're fees servicing this build good even warehouse or mortgage experienced whether syndication efforts on our piece fees credit leading group. that fees news, capabilities. deals. year. The banking to commercial We're news, of banking in good our those and in that's every one some about bad that the hard fund nice we is, news year seen

stronger. fee subdued. down to our swap million those year origination aggregate tough are subdued, commercial in every for $X the a customer continue generation were get We also activities interest stand for It's ready rate year was about Last year-over-year. we interest when activity business. activities capabilities just and And have. we So are

type As those fees soon quickly. as resumption come the strongly activity that will a of levels come back of see and they fees. back, And are we'll

Operator

there Instructions]. are like Ladies for to this Mr. call questions the I'd remarks. time, since in now closing queue the turn there Barnes no no questions further queue, Sir, [Operator gentlemen, in at the to and are over

Jack Barnes

which People's we the a uncertain for the closing, XXXX results strong provided quarter are to our of finish environment of especially resilience a caused light fourth franchise. performance, pandemic. pleased by and reflect These in United, In the our economic with solid strength

about our successfully committed be network providing branch in to across environment. good and we are a ahead, stay trends and delivering Thank personalized all, have importantly, to confident to and you, ability operating economic evening. digital cautiously our value service Most customers any XXXX and convenience healthy in platforms. optimistic continue execute remain in Looking to we both and

Operator

This Thank concludes for in the conference. your presentation. you participation today's

disconnect. You now may Good day.

People's United Financial (PBCT) 22 Jan 212020 Q4 Earnings call transcript