People”™s United to buy
Citizens branches
People”™s United Bank is buying 56 branches of Citizens Bank, eight in Westchester County. Most of the branches ”“ 52 ”“ are in Stop & Shop supermarkets. People”™s will assume $325 million in deposits associated with these branches. All Citizens branches on Long Island and in New York City are part of the deal, which is all-cash and valued at $3.25 million.
People”™s will pay Citizens a 1 percent premium on the assumed deposits.
All workers at the acquired Citizens branches will be offered comparable jobs at People”™s United. The deal is expected to close late in the second quarter.
“This acquisition (will) introduce the convenience of our in-store banking to customers on Long Island and in Westchester County,” said Jack Barnes, president and CEO of People”™s United Financial. “The new branches add an additional source of core deposit funding to the bank.”
HED:
Spinoffs spell loss for ITT
After spinning off its defense and water businesses, ITT Corp. had a loss from continuing operations for 2011, but reported a profit on a pro forma basis.
The loss from continuing operations was $6.23 a share. But adjusted pro forma income from continuing operations was $150 million, or $1.60 a share, up 23 percent from 2010. That excludes special items and includes pro forma adjustments. Special items include costs of the spinoffs, including debt extinguishment, as well as tax items and asbestos-related costs. Pro forma adjustments relate to the interest expense from the extinguishment of debt.
The effects of the spinoffs resulted in a fourth quarter loss of $5.86 a share from continuing operations. In the quarter, pro forma income from continuing operations was $34 million, or 36 cents a share, up 20 percent from a year ago.
Revenue for 2011 was up 11 percent to $2.1 billion. In emerging markets, revenue was up 19 percent, and ITT reported revenue gains in core markets such as oil and gas, transportation and aerospace.
For 2012, ITT expects to earn $1.62 to $1.72 a share. Revenue is expected up 5 to 7 percent with 10 percent growth in emerging markets driven by oil and gas in the Middle East and South America and automotive gains in China.
HED:
AboveNet posts profit
AboveNet, a provider of high-bandwidth communications networks based in White Plains, said earnings and revenue rose for the fourth quarter and all of 2011 because of increasing demand for its Ethernet services. Ethernet has largely replaced competing wired local area network technologies.
Net income for the fourth quarter rose to $24 million, or 90 cents a share, from $82 million, or 85 cents, a year earlier. Revenue rose 12.5 percent to $121 million from $108 million in last year”™s quarter. For the year, net income was almost $73 million, or $2.71 a share, up from $69 million, or $2.65, a year earlier. Revenue for 2011 was $472 million, up 15 percent from $409 million in 2010. For 2012, the company says it expects revenues in the range of $515 million to $525 million. Equipment sales rose sharply in 2011, to $8.8 million from $3.4 million.
Separately, in an SEC filing dated Feb. 23, the shareholder Corvex Management, led by Keith Meister, said it intends to nominate its own slate of directors, which includes Meister, to the board. Corvex wants the company to take steps to boost shareholder value, or pursue a sale.
HED:
Swiss Re profit rises
Swiss Re, the second largest reinsurance company, reported earnings rose to $2.6 billion, or $7.68 a share, in 2011, despite exceptional losses from natural catastrophes. In 2010, Swiss Re, based in Zurich with U.S. headquarters in Armonk, earned $863 million, or $2.52 a share.
The company”™s property and casualty division was hit hard by the large number of natural catastrophes during the year, in the U.S., Asia, Australia and New Zealand. The unit”™s operating earnings for the year tumbled 48 percent from $2.5 billion to $1.3 billion as a result, and also because of a drop in investment income.
In the life and health division, operating earnings fell by almost half to $464 million from $810 million because of volatility in financial markets.
As for the company”™s investment stance, its exposure to sovereign debt in Europe was cut during the fourth quarter to $59 million at the end of the year from $74 million at the end of September. Swiss Re had no exposure to Greek sovereign debt in 2011.
