Financial stock to watch: People’s United Financial, Inc. (NASDAQ: PBCT)

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People’s United Financial, Inc. (NASDAQ: PBCT) Operating earnings for the fourth quarter of FY 19 increased 17% to $158.8 million compared to linked quarter and reflects the acquisition of United, improved net interest margin and positive operating leverage. The transaction closed in October and included about $104 million in loans, $262 million in deposits and $240 million of assets under management.

The company delivered the net interest income of $382.7 million, which is an increase of 10% from the third quarter. The loan portfolio contributed $23.2 million to the increase, due to higher balances. The inclusion of United added approximately $35 million to net interest income for the fourth quarter.

PBCT in the fourth quarter of FY 19 has reported the adjusted earnings per share of 37 cents, while adjusted revenue of $506.90 million in the fourth quarter of FY 19, beating the analysts’ estimates for revenue by 3.93%.

Additionally, the company has declared a $0.1775 per common share quarterly dividend payable February 15, 2020 to shareholders of record on February 1, 2020.

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For fiscal 2020, the company expects to grow the core loan portfolio in the range of 2% to 4% and anticipates the runoff of the select United portfolios to be in the range of $300 million to $400 million for the full year. The company expects net interest income to increase in the range of 9% to 11% and the net interest margin to be in the range of 3% to 3.1%. The non-interest income on an operating basis is expected to grow in the range of 2% to 4% from $424 million in 2019. Operating non-interest expenses which exclude merger-related costs, are expected to be in the range of $1.19 billion to $1.22 billion as compared to the $1.097 billion in 2019. PBCT expects to maintain excellent credit quality with a provision to be in the range of $40 million to $50 million. The company plans to maintain strong capital levels with an expectation that at year end, holding company common equity Tier 1 capital ratio to be in the range of 10% to 10.5%.

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