People's United (PBCT) in Bridgeport, Conn., reported a dip in quarterly profits as income from sales of residential mortgage loans fell.
The company earned $59.3 million in the fourth quarter, down 3% from the same period in 2012. Its earnings per share of 20 cents were on track with the estimates of analysts polled by Bloomberg.
A 5% decrease in noninterest income, which fell to $80.2 million, helped drive the company's lower quarterly profits. Gains from the sale of residential mortgage loans plunged to $1 million down 83% from the fourth quarter of 2012.
Net interest income stayed essentially flat at $224.9 million; income from interest on loans also remained level. The company's net interest margin fell 40 basis points, to 3.24%, because of reduced income from acquired loans and lower new loan volumes.
Noninterest expense ticked up 0.6%, to $208.7 million. Compensation and benefits costs rose 10%.
People's United continued to see improvement in asset quality, cutting its loan-loss provision by 17%, to $10 million. Net loan chargeoffs totaled $10.4 million, roughly half of which was covered by reserves. Net loan chargeoffs as a percentage of average total loans on an annualized basis were 0.18%.
"We certainly are pleased with the sustained improvement in asset quality," Chief Financial Officer Kirk Walters said in the release. "Our low loan chargeoff ratio is a reflection of the company's historically strong underwriting standards, the economic strength of the geography in which we operate and the resilience of our customers."
People's United has $33 billion of assets and 410 branches in Connecticut, New York, Massachusetts, Vermont, New Hampshire and Maine.