| 
Changing market dynamics and accounting standards will not change People’s United Bank’s strategy around mergers and acquisitions, bank executives said during the bank’s third quarter earnings conference call on Thursday.
People’s United Financial Inc. and People’s United Bank Chairman and CEO Jack Barnes said mergers and acquisitions have given the bank opportunities to build deposits, gain market share and deepen relationships in the markets it serves.
“We think that’s all been very valuable and will continue to pay dividends for us,” Barnes said.
He was responding to a question about whether changing dynamics and market response would lead the bank to reconsider mergers and acquisitions as a tool for creating shareholder value. Declining interest rates will be a factor when considering future merger activity, Barnes said.
After recently acquiring Belmont Savings Bank and Farmington Bank, People’s United expects to acquire United Bank this quarter.
The new current expected credit loss standard (CECL) also will not change the bank’s merger and acquisitions strategy, said CFO David Rosato, though it will change short-term deal metrics.
“The thoughtful M&A we’re doing is a long-term perspective about gaining market share and getting and growing new customer bases,” Rosato said.
People’s United’s parent company on Thursday reported third-quarter earnings of $135.1 million.
On a per-share basis, the Bridgeport, Connecticut-based company said it had profit of 33 cents. Earnings, adjusted for costs related to mergers and acquisitions, came to 34 cents per share.
The results beat Wall Street expectations. The average estimate of seven analysts surveyed by Zacks Investment Research was for earnings of 33 cents per share.
The holding company for People’s United Bank posted revenue of $576.9 million in the period. Its adjusted revenue was $454.7 million, missing Wall Street forecasts. Three analysts surveyed by Zacks expected $455.5 million.
People’s United shares have increased 9 percent since the beginning of the year, while the Standard & Poor’s 500 index has risen 20 percent. In the final minutes of trading on Thursday, shares hit $15.74, a drop of nearly 4 percent in the last 12 months.
The Associated Press contributed to this report.
