3. Peoples United Financial
Shares of Peoples United Financial (PBCT - Get Report) of Bridgeport, Conn., closed at $11.94, down 2% year-to-date, after declining 4% last year.
Based on a quarterly payout of 16 cents, the shares have a dividend yield of 5.36%.
The shares trade for 1.4 times tangible book value, and for 15 times the consensus 2013 EPS estimate of 82 cents.
Peoples United had $28.6 billion in total assets as of Sept. 30. The company reported third-quarter net income of $62.2 million, or 18 cents a share, declining from $64.6 million, or 19 cents a share, in the second quarter, but increasing from $51.5 million, or 14 cents a share, in the third quarter of 2011. The sequential earnings decline reflected an increase in the provision for loan loss reserves to $15.1 million from $10.6 million, as the company made a special $5.7 million provision for losses on acquired loans, after acquiring 57 branches from Royal Bank of Scotland Group PLC (RBS) subsidiary RBS Citizens NA.Peoples United saw its net interest income decline to $234.8 million in the third quarter, from $235.6 million the previous quarter, and $237.7 million a year earlier, as the net interest margin narrowed to 3.89% from 3.96% in the second quarter, and 4.07% in the third quarter of 2011. Third-quarter noninterest income totaled $81.4 million, increasing from $75.7 million the previous quarter, but declining from $84.7 million a year earlier, when the company booked $8.6 million in securities gains. The sequential increase in noninterest income reflected increases in brokerage fees and in gains on the sale of residential mortgage loans. Average loans grew by 1% sequentially and 4% year-over-year, to $20.7 billion in the third quarter. The company's third-quarter operating ROA was 0.88%, declining from 0.93% the previous quarter, but increasing from 0.77% a year earlier. First United reported that the third-quarter return on average tangible equity was 8.3%, declining from 8.5% in the second quarter, but increasing from 6.1% in the third quarter of 2011. Peoples United repurchased 13.5 million common shares for $164 million during the first three quarters, and had 4.5 million shares authorized for buybacks under its repurchase plan. Sandler O'Neill analyst Mark Fitzgibbon rates Peoples United a "Hold," with a price target of $12.50, and said on Oct. 18 that third-quarter "operating results were generally in line with our expectations," and that "we have a difficult time seeing the company get to a double digit return on capital anytime soon." Fitzgibbon also said that "as a result of the balance sheet growth, stock buybacks and dividends, the
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