Through pandemic’s jarring impacts, Barnes kept People’s United on track

Photo | Contributed Jack Barnes is the CEO and Chairman of People’s United Financial.

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By Matt Pilon

Back in late 2019, People’s United Financial CEO and Chairman Jack Barnes was focused on a seamless integration of his newly acquired United Financial Bancorp, building his Bridgeport-based bank’s stature in Greater Hartford, and of course, continuing to grow deposits, loans and profits.

It would be trite to say that 2020 didn’t play out as predicted, but considering the staggering impacts of the COVID-19 pandemic on human health and the economy, People’s United performed admirably, achieving many of the goals on Barnes’ pre-pandemic checklist, the bank exec said in a recent interview recapping the year.

People’s United became the largest Connecticut-based bank by deposits in 2019, and in 2020 it further increased its market share lead over rival Webster Bank, receiving a boost from acquired United Bank accounts as well as organic deposit growth.

Barnes said the United Bank integration this year went “exactly as planned.”

“We were very pleased and successful in our ability to retain United Bank deposit customers and commercial banking relationships due to our well-established brand in the market, relationship-based approach to service, personalized solutions and banking technology,” Barnes said.

Check out our other 2020 5 We Watched Profiles.

People’s United has also managed to squeeze out the operational and financial efficiencies it had forecasted to shareholders ahead of the purchase last year, he added.

It did that in part by closing 18 branches after the transaction was complete. As of early December, People’s United had 168 standalone brick-and-mortar and full-service retail branches (such as those located in Stop & Shops) across Connecticut, representing approximately 40% of its overall branch footprint spanning New England and New York.

While the pandemic pushed more customers to online banking and reduced foot traffic at most bank branches, Barnes said People’s United remains committed to its brick-and-mortar network, as many customers still prefer the physical locations, which are increasingly augmented by technology.

At the same time, People’s United strengthened its digital backbone, creating a “business transformation office” — geared toward making customers’ online banking experiences more seamless and secure — and naming its first-ever chief transformation officer, Ravi Vakacherla.

And while People’s United took a break in 2020 from buying banks, it did sell off a piece of its business, Hartford-based People’s United Insurance Agency, which was bought by Florida-based AssuredPartners for $120 million.

Profits hold up

The COVID-19 crisis forced People’s United to take swift action to protect the health of its employees and customers. It retrofitted branch counters with plexiglass windows to block virus transmission, implemented strict cleaning protocols, temporarily limited walk-in branch traffic, allowed employees whose jobs allowed for it to work from home, and provided additional paid time off and other benefits to those whose roles didn’t.

Meantime, by the midpoint of 2020, People’s United had granted more than $7 billion in forbearance on loan payments to struggling borrowers, particularly those in hard-hit sectors like hospitality and retail. Forbearance plummeted quickly from that peak, reaching $1.6 billion by September, which was a hopeful sign of improving financial health for area businesses and consumers.

Though the country continues to claw back job losses, the pandemic decimated U.S. bank earnings this year, cutting them by more than 50% (and 37% in Connecticut) for the first nine months of 2020 compared to the same period in 2019, according to Federal Deposit Insurance Corp. data.

While its stock price and market capitalization have fallen this year along with many other banks, People’s United fared better in bolstering its bottom line, posting $354.4 million in profits through the first three quarters of 2020, down only 5% from a year earlier.

The bank is known among financial analysts for its strict loan underwriting and credit quality standards, and Barnes said those were a blessing during the unforeseen and nearly instant crisis that continues into 2021 with large-scale vaccinations still months away.

“Our historical approach to conservative underwriting has served us well through the last three quarters and we are confident as we move through what will hopefully be the end of the pandemic in 2021, our customers will continue to manage well through this event with our ongoing support and guidance,” Barnes said.

The pandemic has presented plenty of challenges, but Barnes said it’s also created some bright spots.

The bank helped its customers navigate challenges in an uncertain time, which is likely to engender loyalty. People’s United provided nearly 19,000 Paycheck Protection Program loans to employers (including more than 9,000 in Connecticut, making it the top PPP lender here) and granted billions of dollars worth of loan payment forbearance to borrowers.

“That has been particularly meaningful and impactful to our customers,” Barnes said.

Navigating the year was difficult, but Barnes said he is pleased overall with how he and his team have handled the situation.

“There are always lessons learned in any type of environment, pandemic or not, but there are no major regrets, in fact just the opposite,” he said.

Check out our other 2020 5 We Watched Profiles.