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People's United (PBCT) Q4 Earnings Beat, Revenues Decline
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People's United Financial Inc. reported fourth-quarter 2021 operating earnings of 36 cents per share, which outpaced the Zacks Consensus Estimate of 31 cents. The bottom line is above the year-ago quarter’s 35 cents.
The quarterly results reflect controlled expenses and increasing deposit balance. Benefits from the provision for credit losses and a strong capital position also supported the financials. However, a decline in net interest income (NII) and reduced loans were headwinds.
Net income available to common shareholders was $146.4 million compared with a net loss of $148.8 million reported in the prior-year quarter.
For 2021, the net income available to common shareholders was $590.8 million compared with the $205.5 million reported in 2020. Operating earnings per share were $1.48, up from the prior year’s $1.27. The same surpassed the consensus estimate of $1.42.
Revenues Fall on Lower NII, Deposits Rise
Total revenues (comprising net interest income and non-interest income) were down 417.7% year over year to $461.6 million in the fourth quarter. The top line beat the Zacks Consensus Estimate of $458.2 million.
In 2021, total revenues were down 8.5% from the prior-year level to $2.07 billion.
NII, on a fully taxable basis, totaled $369.6 million, down 5.3% year over year. The net interest margin (annualized) declined to 2.51% from the prior-year quarter’s level to 2.84%.
Non-interest income declined 44.1% year over year to $99.6 million. A rise in bank service charges, investment management fees, and cash management fees was offset by a decline in operating lease income, net customer interest rate swap income and other non-interest income.
Non-interest expenses decreased 57% on a year-over-year basis to $277.7 million. A decline in occupancy and equipment costs, amortization of other acquisition-related intangible assets, operating lease expenses and other non-interest expenses led to the fall.
The company’s efficiency ratio was 54.1% compared with the prior-year quarter’s 55.5%. A decline in the ratio indicates higher profitability.
As of Dec 31, 2021, total loans were $37.85 billion, down 4.2% from the prior quarter. Also, total deposits rose 1.7% on a sequential basis to $53.76 billion.
Credit Quality Improves
Provision for credit losses was negative $5.9 million against $14.7 million in the year-ago quarter. Also, Net loan charge-offs declined 78.4% year over year to $2.9 million. Net loan charge-offs, as a percentage of average total loans, were 0.03% on an annualized basis, contracting 9 bps.
As of Dec 31, 2021, non-performing assets were $293.6 million, down 14.1% year over year. However, the ratio of non-performing loans to total loans expanded 1 bp from the year-earlier quarter’s level to 0.76%.
Capital Position & Profitability Ratios Strong
As of Dec 31, 2021, the total risk-based capital ratio increased to 13.9% from 12.4% recorded in the year-earlier period. The tangible equity ratio of 7.8% was up from 7.5% in the year-ago period.
Return on average tangible stockholders’ equity was 12.4%, while return on average assets was 0.92% as of Dec 31, 2021. Both ratios were negative in the prior-year quarter.
Our Viewpoint
PBCT put up a decent performance in the fourth quarter. Though a fall in revenues and a decline in loan balance might restrict bottom-line expansion in the upcoming quarters, People’s United’s efforts to strengthen its deposit franchise are encouraging. This is likely to continue in the near future, supported by the company’s strong balance sheet position and controlled expenses.
People's United Financial, Inc. Price, Consensus and EPS Surprise
State Street’s (STT - Free Report) fourth-quarter 2021 adjusted earnings of $2.00 per share outpaced the Zacks Consensus Estimate of $1.91. The bottom line was 18.3% higher than the prior-year level.
State Street’s results reflected investment servicing wins, provision benefits and improvement in fee income. However, a rise in expenses, a fall in net interest revenues and lower interest rates were the undermining factors.
BOK Financial’s (BOKF - Free Report) earnings per share of $1.71 missed the Zacks Consensus Estimate of $1.81. The bottom line decreased 22.6% from the prior-year quarter.
Results were undermined by lower fees and commissions, and a decline in the loan balance. Nonetheless, lower expenses, higher net interest revenues and provision benefits were tailwinds for BOKF.
F.N.B. Corporation’s (FNB - Free Report) fourth-quarter 2021 adjusted earnings per share of 30 cents met the Zacks Consensus Estimate. The bottom line reflects a rise of 7.1% from the prior-year quarter.
F.N.B. Corporation’s results were primarily aided by a rise in fee income, lower expenses and provision benefits. However, a fall in NII was the undermining factor.
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People's United (PBCT) Q4 Earnings Beat, Revenues Decline
People's United Financial Inc. reported fourth-quarter 2021 operating earnings of 36 cents per share, which outpaced the Zacks Consensus Estimate of 31 cents. The bottom line is above the year-ago quarter’s 35 cents.
The quarterly results reflect controlled expenses and increasing deposit balance. Benefits from the provision for credit losses and a strong capital position also supported the financials. However, a decline in net interest income (NII) and reduced loans were headwinds.
Net income available to common shareholders was $146.4 million compared with a net loss of $148.8 million reported in the prior-year quarter.
For 2021, the net income available to common shareholders was $590.8 million compared with the $205.5 million reported in 2020. Operating earnings per share were $1.48, up from the prior year’s $1.27. The same surpassed the consensus estimate of $1.42.
Revenues Fall on Lower NII, Deposits Rise
Total revenues (comprising net interest income and non-interest income) were down 417.7% year over year to $461.6 million in the fourth quarter. The top line beat the Zacks Consensus Estimate of $458.2 million.
In 2021, total revenues were down 8.5% from the prior-year level to $2.07 billion.
NII, on a fully taxable basis, totaled $369.6 million, down 5.3% year over year. The net interest margin (annualized) declined to 2.51% from the prior-year quarter’s level to 2.84%.
Non-interest income declined 44.1% year over year to $99.6 million. A rise in bank service charges, investment management fees, and cash management fees was offset by a decline in operating lease income, net customer interest rate swap income and other non-interest income.
Non-interest expenses decreased 57% on a year-over-year basis to $277.7 million. A decline in occupancy and equipment costs, amortization of other acquisition-related intangible assets, operating lease expenses and other non-interest expenses led to the fall.
The company’s efficiency ratio was 54.1% compared with the prior-year quarter’s 55.5%. A decline in the ratio indicates higher profitability.
As of Dec 31, 2021, total loans were $37.85 billion, down 4.2% from the prior quarter. Also, total deposits rose 1.7% on a sequential basis to $53.76 billion.
Credit Quality Improves
Provision for credit losses was negative $5.9 million against $14.7 million in the year-ago quarter. Also, Net loan charge-offs declined 78.4% year over year to $2.9 million. Net loan charge-offs, as a percentage of average total loans, were 0.03% on an annualized basis, contracting 9 bps.
As of Dec 31, 2021, non-performing assets were $293.6 million, down 14.1% year over year. However, the ratio of non-performing loans to total loans expanded 1 bp from the year-earlier quarter’s level to 0.76%.
Capital Position & Profitability Ratios Strong
As of Dec 31, 2021, the total risk-based capital ratio increased to 13.9% from 12.4% recorded in the year-earlier period. The tangible equity ratio of 7.8% was up from 7.5% in the year-ago period.
Return on average tangible stockholders’ equity was 12.4%, while return on average assets was 0.92% as of Dec 31, 2021. Both ratios were negative in the prior-year quarter.
Our Viewpoint
PBCT put up a decent performance in the fourth quarter. Though a fall in revenues and a decline in loan balance might restrict bottom-line expansion in the upcoming quarters, People’s United’s efforts to strengthen its deposit franchise are encouraging. This is likely to continue in the near future, supported by the company’s strong balance sheet position and controlled expenses.
People's United Financial, Inc. Price, Consensus and EPS Surprise
People's United Financial, Inc. price-consensus-eps-surprise-chart | People's United Financial, Inc. Quote
Currently, People’s United carries a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Banks
State Street’s (STT - Free Report) fourth-quarter 2021 adjusted earnings of $2.00 per share outpaced the Zacks Consensus Estimate of $1.91. The bottom line was 18.3% higher than the prior-year level.
State Street’s results reflected investment servicing wins, provision benefits and improvement in fee income. However, a rise in expenses, a fall in net interest revenues and lower interest rates were the undermining factors.
BOK Financial’s (BOKF - Free Report) earnings per share of $1.71 missed the Zacks Consensus Estimate of $1.81. The bottom line decreased 22.6% from the prior-year quarter.
Results were undermined by lower fees and commissions, and a decline in the loan balance. Nonetheless, lower expenses, higher net interest revenues and provision benefits were tailwinds for BOKF.
F.N.B. Corporation’s (FNB - Free Report) fourth-quarter 2021 adjusted earnings per share of 30 cents met the Zacks Consensus Estimate. The bottom line reflects a rise of 7.1% from the prior-year quarter.
F.N.B. Corporation’s results were primarily aided by a rise in fee income, lower expenses and provision benefits. However, a fall in NII was the undermining factor.