“We are pleased with our first quarter performance and continued success enhancing profitability,” said Jack Barnes, People’s United chairman and CEO. “Operating earnings of $123 million grew 18% from a year ago and operating return on average tangible common equity of 14.4% improved 60 basis points. Total revenues increased 11% year-over-year due to both higher net interest income and non-interest income. The quarter benefited from the First Connecticut acquisition and further net interest margin expansion primarily resulting from higher yields on new business. With the acquisition of BSB Bancorp complete, we are excited to leverage our expanded customer and employee base to build upon our strong organic growth in Massachusetts, particularly in the Greater Boston area. Integration has gone very well, core systems conversion will take place in the third quarter, and we remain confident in achieving the transaction’s attractive financial returns. In addition, we are proud to announce an increase to our common dividend for the 26th consecutive year, which demonstrates our commitment to deliver shareholder value through a consistent return of capital.”
The company’s board of directors voted to increase the common stock dividend to an annual rate of $0.71 per share. Based on the closing stock price on April 17, 2019, the dividend yield on People’s United Financial common stock is 4.1%. The quarterly dividend of $0.1775 per share is payable May 15, 2019 to shareholders of record on May 1, 2019.
Other highlights from Q1/2019 included:
Net interest income of $332.8 million, compared to $332.6 million in Q4/18
Net interest margin increased three basis points from Q4/18 to 3.20% reflecting higher yields on the loan portfolio (increase of 15 basis points), higher yields on the securities portfolio (increase of one basis point) and higher rates on deposits and borrowings (net decrease of nine basis points)
Non-interest income of $94.6 million compared to $88.7 million in Q4/18
An effective income tax rate of 20.8% for Q1/19 and 18.8% for the full-year of 2018, reflecting a $9.2 million benefit recognized in connection with tax reform.
Commercial loans of $25.4 billion at March 31, 2019, an increase of $334 million from December 31, 2018.
Average commercial loans of $24.9 billion, an increase of $108 million from Q4/18, with the average equipment financing portfolio increasing $115 million, the average mortgage warehouse portfolio decreasing $91 million and the average New York multifamily portfolio decreasing $48 million
Founded in 1842, People’s United Bank is a diversified, community-focused financial services company headquartered in the Northeast with more than $48 billion in assets. The bank offers commercial and retail banking through a network of over 400 retail locations in Connecticut, New York, Massachusetts, Vermont, New Hampshire and Maine.
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