There is only one “Neutron Jack,” but in the second half of 2011, Jack Barnes quietly discharged his own job cuts at People”™s United Financial Inc.
The Bridgeport-based bank cut an undisclosed number of jobs in Fairfield County, with a spokeswoman not specifying how many. People”™s United plans to close 15 branches this year, without saying where, in a bid to reduce expenses and gain efficiency, and also states it would jettison unneeded office space.
“It was a pretty significant reduction while still growing many, many revenue lines and not impacting the revenue growth,” said Kirk Walter, CFO of People”™s United, in a conference call with investment analysts.
Walters said in addition to the cuts in the fourth quarter, the bank has identified additional moves that will result in $9 million in annual savings, without specifying what is coming.
People”™s United Financial Inc. earned $43 million in the fourth quarter and $199 million for the year, up from $32 million and $86 million in the fourth quarter and full year of 2010.
New rules under the Dodd-Frank Wall Street Reform and Consumer Protection Act cost People”™s United $5 million.
“At this point, we”™ve been seeing the loan growth in a very balanced way,” said Jack Barnes, CEO of People”™s United. “As you drill into those activities, whether it”™s by business line or geography, we”™re really making some steady headway on all fronts ”¦ Very promising pace in the Boston area, very nice progress in Maine ”¦ Less pace, but steady progress, as we get familiar with Long Island and that new market as well.”
Back in Fairfield County, a modest, general expansion was interrupted in the fourth quarter last year, when a noticeable number of layoffs occurred, according to Jim Fagan, managing director of Cushman & Wakefield in Stamford.
“My gut tells me that”™s an event and not a trend,” Fagan said, speaking to members of BOMA International in Stamford late last month.
Fagan said he was not aware of any job cuts at People”™s United and did not furnish names of companies that did so.
Despite an economy improving by fits and starts since July 2010, when Barnes replaced former People”™s United CEO Philip Sherringham, People”™s United stock is down about 10 percent in the intervening months. Under Sherringham, the bank was thought to be contemplating a larger deal akin to its 2008 buy of Chittenden Corp., the northern New England bank where Barnes once worked; or Financial Federal Corp., an equipment lease finance company based in New York City which People”™s United absorbed two years ago.
Instead, in Barnes”™ brief tenure People”™s United has elected to expand its Northeast franchise through a number of smaller acquisitions.
Excluding loans acquired in acquisitions, People”™s United increased commercial banking loans by $470 million across its territory of New England and portions of metropolitan New York.
While People”™s United increased the net charge-offs from bad commercial loans to $11.8 million, it reduced its allowance for commercial bank loans to 1.4 percent of loans outstanding, down from 1.5 percent in the third quarter. Walters said on Long Island, People”™s United has been able to recover more than it expected in settling bad loans, after its 2010 acquisition of Smithtown Bank.
