UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2021

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 001-33326

People's United Financial, Inc.

(Exact name of registrant as specified in its charter)

Delaware	20-8447891
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
850 Main Street
Bridgeport, Connecticut	06604
(Address of principal executive offices)	(Zip Code)
(203) 338-7171
(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value per share	PBCT	NASDAQ Global Select Market
Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series A, $0.01 par value per share	PBCTP	NASDAQ Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days. Yes  ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes ☒   No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	☒	Accelerated filer	☐	Smaller reporting company	☐
Non-accelerated filer	☐			Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     Yes  ☐    No  ☒

As of July 31, 2021, there were 427,954,775 shares of the registrant’s common stock outstanding.

People’s United Financial Inc.

Form 10-Q

Table of Contents

Part I – Financial Information			Page
	Item 1.	Financial Statements (Unaudited)
		Consolidated Statements of Condition as of June 30, 2021 and December 31, 2020	1
		Consolidated Statements of Income for the Three and Six Months Ended June 30, 2021 and 2020	2
		Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2021 and 2020	3
		Consolidated Statements of Changes in Stockholders’ Equity for the Three and Six Months Ended June 30, 2021 and 2020	4
		Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2021 and 2020	6
		Notes to Consolidated Financial Statements	7
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	53
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	94
	Item 4.	Controls and Procedures	95
Part II – Other Information
	Item 1.	Legal Proceedings	95
	Item 1A.	Risk Factors	95
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	95
	Item 3.	Defaults Upon Senior Securities	96
	Item 4.	Mine Safety Disclosures	96
	Item 5.	Other Information	96
	Item 6.	Exhibits	96
Index to Exhibits			97
Signatures			98

Part 1 - Financial Information

Item 1 - Financial Statements

People’s United Financial, Inc.

Consolidated Statements of Condition - (Unaudited)

(in millions)	June 30, 2021		December 31, 2020
Assets
Cash and due from banks	$	516.3	$	477.3
Short-term investments	5,249.4		3,766.0
Total cash and cash equivalents (note 2)	5,765.7		4,243.3
Securities (note 2):
Debt securities available-for-sale, at fair value	6,328.6		4,925.5
Debt securities held-to-maturity, at amortized cost and net of allowance for credit losses    of $1.5 million and $1.6 million (fair value of $4.24 billion and $4.27 billion)	4,003.1		3,993.8
Federal Reserve Bank and Federal Home Loan Bank stock, at cost	264.9		266.6
Equity securities, at fair value	—		5.3
Total securities	10,596.6		9,191.2
Loans held-for-sale	5.4		26.5
Loans (notes 3, 4 and 5):
Commercial and industrial	13,627.4		14,982.3
Commercial real estate	13,243.2		13,336.9
Equipment financing	4,990.9		4,930.0
Total Commercial Portfolio	31,861.5		33,249.2
Residential mortgage	7,626.2		8,518.9
Home equity and other consumer	1,877.9		2,101.4
Total Retail Portfolio	9,504.1		10,620.3
Total loans	41,365.6		43,869.5
Less allowance for credit losses on loans	(348.1)		(425.1)
Total loans, net	41,017.5		43,444.4
Goodwill (note 8)	2,680.8		2,680.8
Bank-owned life insurance	713.7		711.6
Premises and equipment, net	261.8		276.7
Other acquisition-related intangible assets (note 8)	145.0		165.1
Other assets (notes 1, 2, 3, 5 and 13)	2,154.2		2,352.2
Total assets	$	63,340.7	$	63,091.8
Liabilities
Deposits:
Non-interest-bearing	$	16,722.8	$	15,881.7
Savings	6,710.2		6,029.7
Interest-bearing checking and money market	24,705.9		24,567.5
Time	4,442.3		5,658.8
Total deposits	52,581.2		52,137.7
Borrowings:
Federal Home Loan Bank advances	569.7		569.7
Customer repurchase agreements	382.5		452.9
Federal funds purchased	—		125.0
Total borrowings	952.2		1,147.6
Notes and debentures	1,001.6		1,009.6
Other liabilities (notes 1, 4, 5 and 13)	1,056.1		1,194.1
Total liabilities	55,591.1		55,489.0
Commitments and contingencies (notes 1, 5 and 10)
Stockholders’ Equity (notes 1, 6 and 9)
Preferred stock ($0.01 par value; 50.0 million shares authorized;    10.0 million shares issued and outstanding at both dates)	244.1		244.1
Common stock ($0.01 par value; 1.95 billion shares authorized;    536.8 million shares and 533.7 million shares issued)	5.4		5.3
Additional paid-in capital	7,709.4		7,663.6
Retained earnings	1,516.5		1,363.6
Unallocated common stock of Employee Stock Ownership Plan, at cost    (5.4 million shares and 5.6 million shares)	(112.0)		(115.6)
Accumulated other comprehensive loss	(144.8)		(89.2)
Treasury stock, at cost (109.0 million shares at both dates)	(1,469.0)		(1,469.0)
Total stockholders’ equity	7,749.6		7,602.8
Total liabilities and stockholders’ equity	$	63,340.7	$	63,091.8

See accompanying notes to consolidated financial statements.

1

People’s United Financial, Inc.

Consolidated Statements of Income - (Unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
(in millions, except per common share data)	2021		2020		2021		2020
Interest and dividend income:
Commercial and industrial	$	107.9	$	112.4	$	224.0	$	218.8
Commercial real estate	101.6		122.4		200.4		272.0
Equipment financing	62.5		67.6		125.3		135.8
Residential mortgage	64.4		84.8		134.3		175.2
Home equity and other consumer	16.2		20.1		32.7		48.1
Total interest on loans	352.6		407.3		716.7		849.9
Securities	52.4		49.8		103.8		101.0
Short-term investments	1.3		0.2		2.5		2.2
Loans held-for-sale	—		0.3		0.3		3.6
Total interest and dividend income	406.3		457.6		823.3		956.7
Interest expense:
Deposits	17.1		41.7		39.8		120.6
Borrowings	1.1		2.0		2.3		17.4
Notes and debentures	7.2		8.3		14.4		17.1
Total interest expense	25.4		52.0		56.5		155.1
Net interest income	380.9		405.6		766.8		801.6
Provision for credit losses on loans (note 4)	(40.7)		80.8		(54.3)		114.3
Provision for credit losses on securities (note 2)	(0.1)		—		(0.1)		—
Net interest income after provision for credit losses	421.7		324.8		821.2		687.3
Non-interest income:
Bank service charges	24.9		20.3		48.4		48.3
Investment management fees	21.5		17.4		41.4		35.5
Commercial banking lending fees	14.1		10.6		27.7		22.7
Operating lease income (note 5)	11.2		11.8		22.5		24.4
Cash management fees	9.6		8.1		18.8		15.5
Other non-interest income (note 2)	17.7		21.4		34.8		67.0
Total non-interest income	99.0		89.6		193.6		213.4
Non-interest expense:
Compensation and benefits	177.6		167.8		350.4		341.7
Occupancy and equipment	50.0		48.0		99.1		99.0
Professional and outside services	30.0		25.7		63.6		64.2
Amortization of other acquisition-related intangible assets (note 8)	8.8		10.2		19.8		20.9
Regulatory assessments	7.8		8.7		15.9		17.4
Operating lease expense	7.6		8.8		15.4		18.6
Other non-interest expense	23.2		34.8		52.7		62.3
Total non-interest expense	305.0		304.0		616.9		624.1
Income before income tax expense	215.7		110.4		397.9		276.6
Income tax expense (note 1)	44.9		20.5		82.6		56.3
Net income	170.8		89.9		315.3		220.3
Preferred stock dividend	3.5		3.5		7.0		7.0
Net income available to common shareholders	$	167.3	$	86.4	$	308.3	$	213.3
Earnings per common share (note 7):
Basic	$	0.40	$	0.21	$	0.73	$	0.50
Diluted	0.39		0.21		0.73		0.50

See accompanying notes to consolidated financial statements.

2

People’s United Financial, Inc.

Consolidated Statements of Comprehensive Income - (Unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
(in millions)	2021		2020		2021		2020
Net income	$	170.8	$	89.9	$	315.3	$	220.3
Other comprehensive income (loss), net of tax:
Net actuarial gains and losses related to pension and other    postretirement plans	5.1		1.6		5.5		3.2
Net unrealized gains and losses on debt securities    available-for-sale	44.3		18.4		(64.2)		90.0
Amortization of unrealized losses on debt securities    transferred to held-to-maturity	0.9		1.0		2.2		2.0
Net unrealized gains and losses on derivatives accounted    for as cash flow hedges	0.2		(2.2)		0.9		(2.2)
Total other comprehensive income (loss),    net of tax (note 6)	50.5		18.8		(55.6)		93.0
Total comprehensive income	$	221.3	$	108.7	$	259.7	$	313.3

See accompanying notes to consolidated financial statements.

3

People’s United Financial, Inc.

Consolidated Statements of Changes in Stockholders’ Equity - (Unaudited) 

Three months ended June 30, 2021 (in millions, except per common share data)	Preferred Stock		Common Stock		Additional Paid-In Capital		Retained Earnings		Unallocated ESOP (1) Common Stock		Accumulated Other Comprehensive Loss		Treasury Stock		Total Stockholders’ Equity
Balance at March 31, 2021	$	244.1	$	5.4	$	7,693.9	$	1,426.9	$	(113.8)	$	(195.3)	$	(1,469.0)	$	7,592.2
Net income	—		—		—		170.8		—		—		—		170.8
Total other comprehensive income,    net of tax (note 6)	—		—		—		—		—		50.5		—		50.5
Cash dividend on common stock    ($0.1825 per share)	—		—		—		(77.3)		—		—		—		(77.3)
Cash dividend on preferred stock	—		—		—		(3.5)		—		—		—		(3.5)
Restricted stock and performance-based    share awards	—		—		6.6		—		—		—		—		6.6
ESOP common stock committed to be    released (note 9)	—		—		—		(0.3)		1.8		—		—		1.5
Common stock repurchased and    retired upon vesting of restricted    stock awards	—		—		—		(0.1)		—		—		—		(0.1)
Stock options exercised	—		—		8.9		—		—		—		—		8.9
Balance at June 30, 2021	$	244.1	$	5.4	$	7,709.4	$	1,516.5	$	(112.0)	$	(144.8)	$	(1,469.0)	$	7,749.6
Six months ended June 30, 2021 (in millions, except per common share data)	Preferred Stock		Common Stock		Additional Paid-In Capital		Retained Earnings		Unallocated ESOP Common Stock		Accumulated Other Comprehensive Loss		Treasury Stock		Total Stockholders’ Equity
Balance at December 31, 2020	$	244.1	$	5.3	$	7,663.6	$	1,363.6	$	(115.6)	$	(89.2)	$	(1,469.0)	$	7,602.8
Net income	—		—		—		315.3		—		—		—		315.3
Total other comprehensive loss,    net of tax (note 6)	—		—		—		—		—		(55.6)		—		(55.6)
Cash dividends on common stock    ($0.3625 per share)	—		—		—		(153.0)		—		—		—		(153.0)
Cash dividends on preferred stock	—		—		—		(7.0)		—		—		—		(7.0)
Restricted stock and performance-based    share awards	—		—		8.4		—		—		—		—		8.4
ESOP common stock committed to be    released (note 9)	—		—		—		(0.7)		3.6		—		—		2.9
Common stock repurchased and    retired upon vesting of restricted    stock awards	—		—		—		(1.7)		—		—		—		(1.7)
Stock options exercised	—		0.1		37.4		—		—		—		—		37.5
Balance at June 30, 2021	$	244.1	$	5.4	$	7,709.4	$	1,516.5	$	(112.0)	$	(144.8)	$	(1,469.0)	$	7,749.6

(1) Employee Stock Ownership Plan

Three months ended June 30, 2020 (in millions, except per common share data)	Preferred Stock		Common Stock		Additional Paid-In Capital		Retained Earnings		Unallocated ESOP Common Stock		Accumulated Other Comprehensive Loss		Treasury Stock		Total Stockholders’ Equity
Balance at March 31, 2020	$	244.1	$	5.3	$	7,644.4	$	1,514.5	$	(121.1)	$	(92.7)	$	(1,469.0)	$	7,725.5
Net income	—		—		—		89.9		—		—		—		89.9
Total other comprehensive income,    net of tax (note 6)	—		—		—		—		—		18.8		—		18.8
Cash dividend on common stock    ($0.18 per share)	—		—		—		(75.5)		—		—		—		(75.5)
Cash dividend on preferred stock	—		—		—		(3.5)		—		—		—		(3.5)
Restricted stock and performance-based    share awards	—		—		5.0		—		—		—				5.0
ESOP common stock committed to be    released (note 9)	—		—		—		(0.8)		1.8		—		—		1.0
Stock options exercised	—		—		1.8		—		—		—		—		1.8
Balance at June 30, 2020	$	244.1	$	5.3	$	7,651.2	$	1,524.6	$	(119.3)	$	(73.9)	$	(1,469.0)	$	7,763.0
Six months ended June 30, 2020 (in millions, except per common share data)	Preferred Stock		Common Stock		Additional Paid-In Capital		Retained Earnings		Unallocated ESOP Common Stock		Accumulated Other Comprehensive Loss		Treasury Stock		Total Stockholders’ Equity
Balance at December 31, 2019	$	244.1	$	5.3	$	7,639.4	$	1,512.8	$	(122.9)	$	(166.9)	$	(1,164.6)	$	7,947.2
Net income	—		—		—		220.3		—		—		—		220.3
Total other comprehensive income,    net of tax (note 6)	—		—		—		—		—		93.0		—		93.0