People’s United Bank,People’s United Financial, Inc (NASDAQ: PBCT) today reported net income of $58.5 million, or $0.19 per share, for the third quarter of 2013, compared to $62.2 million, or $0.18 per share, for the third quarter of 2012, and $62.1 million, or $0.20 per share, for the second quarter of 2013. Operating earnings were $60.8 million, or $0.20 per share, for the third quarter of 2013, compared to $64.4 million, or $0.19 per share, for the third quarter of 2012, and $62.4 million, or $0.20 per share, for the second quarter of 2013.The Company’s Board of Directors declared a $0.1625 per share quarterly dividend, payable November 15, 2013 to shareholders of record on November 1, 2013. Based on the closing stock price on October 16, 2013, the dividend yield on People’s United Financial common stock is 4.4 percent.During the third quarter of 2013 the Company repurchased 2.1 million shares of People’s United Financial common stock at a weighted average price of $14.33 per share and, during the first nine months of 2013, the Company repurchased 24.5 million shares of common stock at a weighted average price of $13.39 per share. Under the existing share repurchase authorization, 8.9 million shares of common stock remain available for repurchase.”Our performance this quarter reflects the continued benefits from strategic investments in people, products and services, as well as an expanded geographic footprint developed over the past three years,” stated Jack Barnes, President and Chief Executive Officer. “Ongoing progress in loan and deposit growth, both this quarter and over the past 12 quarters, is a tribute to both our relationship managers and customers. We remain focused on delivering shareholder value by leveraging opportunities within existing markets, including strengthening our position in the Boston and New York MSAs.””On an operating basis, earnings were $61 million, or 20 cents per share, this quarter,” stated Kirk W. Walters, Senior Executive Vice President and Chief Financial Officer. “The net interest margin reflects the impact of continued strong loan originations, while non-interest income demonstrates the ongoing improvement in most of our fee-based businesses. Cost control remains an important area of focus. The modest increase in operating expenses this quarter primarily reflects higher payroll-related costs, professional and outside service fees, and real estate owned expenses.”Walters concluded, “We certainly are pleased with the sustained improvement in asset quality. Our low loan charge-off 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. Of particular note, acquired non-performing loans have declined $27 million, or 20 percent annualized, and originated non-performing loans have declined $16 million, or 8 percent annualized, from December 31, 2012.”Net loan charge-offs as a percentage of average total loans on an annualized basis were 0.17 percent in the third quarter of 2013 compared to 0.19 percent in the second quarter of 2013 and 0.18 percent in the third quarter of 2012. For the originated loan portfolio, non-performing loans equaled 1.10 percent of loans at September 30, 2013, compared to 1.18 percent at June 30, 2013 and 1.45 percent at September 30, 2012. Non-performing assets (excluding acquired non-performing loans) equaled 1.26 percent of originated loans, REO and repossessed assets at September 30, 2013, compared to 1.33 percent at June 30, 2013 and 1.59 percent at September 30, 2012.Operating return on average assets was 0.78 percent for the third quarter of 2013, compared to 0.81 percent for the second quarter of 2013 and 0.91 percent for the third quarter of 2012. Operating return on average tangible stockholders’ equity was 9.8 percent for the third quarter of 2013, compared to 9.3 percent for the second quarter of 2013 and 8.6 percent for the third quarter of 2012.At September 30, 2013, People’s United Financial’s tier 1 common and total risk-based capital ratios were 11.4 percent and 12.6 percent, respectively, and the tangible equity ratio stood at 8.5 percent. People’s United Bank’s tier 1 and total risk-based capital ratios were 11.8 percent and 13.2 percent, respectively, at September 30, 2013.People’s United Financial, a diversified financial services company with $32 billion in assets, provides commercial and retail banking, as well as wealth management services through a network of 410 branches in Connecticut, New York,Massachusetts, Vermont, New Hampshire and Maine. Through its subsidiaries, People’s United Financial provides equipment financing, brokerage and insurance services. Assets managed and administered, which are not reported as assets of People’s United Financial, totaled $15.5 billion at September 30, 2013.3Q 2013 Financial HighlightsSummaryNet income was $58.5 million, or $0.19 per share.Operating earnings were $60.8 million, or $0.20 per share.Net interest income totaled $223.5 million in 3Q13 compared to $220.9 million in 2Q13.Interest income on acquired loans decreased $4.6 million from 2Q13 to $29.4 million.Net interest margin decreased 3 basis points from 2Q13 to 3.30%.The effect of one more calendar day in 3Q13 benefited the margin by 2 basis points.The effect of new loan volume at lower rates reduced the margin by 6 basis points.Provision for loan losses totaled $12.1 million.Net loan charge-offs totaled $9.6 million, of which $6.4 million related to loans with specific reserves established in prior periods.Reflects a $6.3 million increase in the originated allowance for loan losses due to loan growth.Includes a provision for loan losses on acquired loans of $2.6 million, relating almost entirely to a single credit.Non-interest income was $84.0 million in 3Q13 compared to $86.1 million in 2Q13.Insurance revenue increased $2.0 million from 2Q13, primarily reflecting the seasonal nature of insurance renewals.Bank service charges increased $1.2 million from 2Q13, in part due to the seasonal nature of certain fee categories.Operating lease income increased $0.6 million from 2Q13.Net gains on sales of acquired loans totaled $5.8 million in 2Q13 (none in 3Q13).Assets under administration and those under full discretionary management, neither of which are reported as assets of People’s United Financial, totaled $10.5 billion and $5.0 billion, respectively, at September 30, 2013.Non-interest expense totaled $212.5 million in 3Q13 compared to $205.8 million in 2Q13.Operating non-interest expense was $209.2 million in 3Q13 compared to $205.4 million in 2Q13. Excluding operating lease expense and amortization of acquisition-related intangible assets, operating non-interest expense totaled $194.9 million in 3Q13 compared to $191.2 million in 2Q13.Compensation and benefits expense increased $2.5 million from 2Q13, primarily reflecting higher payroll-related costs in 3Q13.Compared to 2Q13, professional and outside service fees increased $1.2 million and real estate owned expenses increased $0.5 million.Efficiency ratio in 3Q13 increased to 63.6% from 62.7% in 2Q13, primarily reflecting the increase in total operating expenses.Effective income tax rate was 29.5% for 3Q13 and 31.5% for the first nine months of 2013, compared to 32.4% for the full-year of 2012.Commercial BankingCommercial banking loans increased $212 million, or 5% annualized, from June 30, 2013.Average commercial banking loans totaled $16.6 billion in 3Q13, an increase of $436 million, or 11% annualized, from 2Q13.The ratio of originated non-performing commercial banking loans to originated commercial banking loans was 1.01% at September 30, 2013 compared to 1.10% at June 30, 2013.Non-performing commercial banking assets, excluding acquired non-performing loans, totaled $177.1 millionat September 30, 2013 compared to $183.8 million at June 30, 2013.Net loan charge-offs totaled $7.2 million, or 0.17% annualized, of average commercial banking loans in 3Q13, compared to $6.9 million, or 0.17% annualized, in 2Q13.For the originated commercial banking portfolio, the allowance for loan losses as a percentage of loans was 1.02% atSeptember 30, 2013 compared to 1.05% at June 30, 2013.The commercial banking originated allowance for loan losses represented 101% of originated non-performing commercial banking loans at September 30, 2013, compared to 96% at June 30, 2013.Commercial deposits totaled $6.3 billion at September 30, 2013 compared to $5.8 billion at June 30, 2013.Retail BankingResidential mortgage loans increased $152 million, or 15% annualized, from June 30, 2013.Average residential mortgage loans totaled $4.1 billion in 3Q13, an increase of $109 million, or 11% annualized, from 2Q13.The ratio of originated non-performing residential mortgage loans to originated residential mortgage loans was 1.51% at September 30, 2013 compared to 1.58% at June 30, 2013.Net loan charge-offs totaled $0.4 million, or 0.04% annualized, of average residential mortgage loans in 3Q13, compared to $2.3 million, or 0.23% annualized, in 2Q13.Home equity loans increased $5 million from June 30, 2013.Average home equity loans totaled $2.0 billion in 3Q13, unchanged from 2Q13.The ratio of originated non-performing home equity loans to originated home equity loans was 1.00% atSeptember 30, 2013 compared to 1.06% at June 30, 2013.Net loan charge-offs totaled $1.6 million, or 0.30% annualized, of average home equity loans in 3Q13, compared to $1.4 million, or 0.28% annualized, in 2Q13.Retail deposits totaled $15.9 billion at September 30, 2013 compared to $16.2 billion at June 30, 2013.Conference CallOn October 17, 2013, at 5 p.m., Eastern Time, People’s United Financial will host a conference call to discuss this earnings announcement. The call may be heard through www.peoples.com(link is external) by selecting “Investor Relations” in the “About Us” section on the home page, and then selecting “Conference Calls” in the “News and Events” section. Additional materials relating to the call may also be accessed at People’s United Bank’s web site. The call will be archived on the web site and available for approximately 90 days.Certain statements contained in this release are forward-looking in nature. These include all statements about People’s United Financial’s plans, objectives, expectations and other statements that are not historical facts, and usually use words such as “expect,” “anticipate,” “believe,” “should” and similar expressions. Such statements represent management’s current beliefs, based upon information available at the time the statements are made, with regard to the matters addressed. All forward-looking statements are subject to risks and uncertainties that could cause People’s United Financial’s actual results or financial condition to differ materially from those expressed in or implied by such statements. Factors of particular importance to People’s United Financial include, but are not limited to: (1) changes in general, national or regional economic conditions; (2) changes in interest rates; (3) changes in loan default and charge-off rates; (4) changes in deposit levels; (5) changes in levels of income and expense in non-interest income and expense related activities; (6) residential mortgage and secondary market activity; (7) changes in accounting and regulatory guidance applicable to banks; (8) price levels and conditions in the public securities markets generally; (9) competition and its effect on pricing, spending, third-party relationships and revenues; (10) the successful integration of acquisitions; and (11) changes in regulation resulting from or relating to financial reform legislation. People’s United Financial does not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.Access Information About People’s United Financial at www.peoples.com(link is external). Commercial real estate7,771.2262.74.517,027.3279.45.30 Short-term investments$ 159.5$ 0.20.20%$ 400.7$ 0.70.24% People’s United Financial, Inc. Three months endedAverage operating net interest income (annualized) by average total earning assets. Residential mortgage3,906.037.63.84 Loans: September 30, 2013, June 30, 2013 and September 30, 2012, respectively. Net interest income$ 223.5$ 220.9$ 219.3$ 225.1$ 234.8 Provision for loan losses18.104.22.1682.015.1 Non-interest income84.086.182.984.381.4 Non-interest expense212.5205.8212.0207.4208.9 Operating non-interest expense (1)209.2205.4204.0204.5205.7 Income before income tax expense82.992.077.890.092.2 Net income58.562.152.561.262.2 Operating earnings (1)60.862.457.963.264.4 Three Months EndedNine Months Ended Retail repurchase agreements522.214.171.124126.96.36.199 Residential mortgage4,047.2104.83.453,830.5110.53.84 (2) Annualized. Operating earnings exclude from net income those items that management considers to be of such a non-recurringor infrequent nature that, by excluding such items (net of income taxes), People’s United Financial’s results can bemeasured and assessed on a more consistent basis from period to period. Items excluded from operating earnings,which include, but are not limited to: (i) merger-related expenses, including acquisition integration and other costs;(ii) charges related to executive-level management separation costs; (iii) severance-related costs; and FINANCIAL HIGHLIGHTS – Continued General: September 30,(dollars in millions, except per share data)20132012Earnings Data: $711.83.90% NON-GAAP FINANCIAL MEASURES AND RECONCILIATION TO GAAP – continued Total funding liabilities25,485.9$ 87.30.46%22,253.1$ 79.30.48% Time4,567.036.91.085,105.538.71.01 Liabilities and stockholders’ equity: (3) See Non-GAAP financial measures and reconciliation to GAAP. Non-interest-bearing$ 4,973.0$ — %$ 4,576.5$ — % Federal Home Loan Bank advances2,3188.8.131.521,778.32.00.44 average assets (annualized)0.78%0.81%0.77%0.87%0.91%0.79%0.91% Yield/ Sept. 30,June 30,March 31,Dec. 31,Sept. 30,Sept. 30,Sept. 30,(dollars in millions)2013201320132012201220132012Operating earnings$ 60.8$ 62.4$ 57.9$ 63.2$ 64.4$ 181.1$ 190.7 Commercial banking originated allowance Trading account securities, at fair value184.108.40.206.3 Securities available for sale, at fair value4,194.84,439.94,532.33,651.0 Securities held to maturity, at amortized cost220.127.116.116.2 Federal Home Loan Bank stock, at cost121.9115.473.773.7 Total securities4,379.14,617.84,668.73,787.2Loans held for sale28.568.377.060.0Loans: Other assets3,689.4 TANGIBLE EQUITY RATIO Common shares307.72309.59320.65331.27335.95 Total loans22,341.4690.64.1220,573.6731.14.74 Net loan charge-offs to average total loans (annualized)0.17%0.19%0.24%0.19%0.18% Non-performing assets to originated loans, non-interest expense: (dollars in millions)BalanceInterestRateBalanceInterestRate Stockholders’ equity5,160.8 Sept. 30,June 30,March 31,Dec. 31,Sept. 30, Total loans20,759.0241.84.66 Consumer2,18.104.22.168 AVERAGE BALANCE SHEET, INTEREST AND YIELD/RATE ANALYSIS (1) Operating return on People’s United Financial, Inc. (3) Includes commercial and industrial loans and equipment financing loans. Operating earnings$ 60.8$ 62.4$ 57.9$ 63.2$ 64.4$ 181.1$ 190.7 Notes and debentures639.05.93.69622.214.171.124 (iv) writedowns of banking house assets, are generally also excluded when calculating the efficiency ratio. Total borrowings3,4126.96.36.1993,059.62.60.34 Federal Home Loan Bank advances2,370.62,206.41,178.3629.3 Federal funds purchased704.0931.0619.0479.0 Retail repurchase agreements539.5487.7588.2415.0 Other borrowings7.31.01.01.0 Total borrowings3,621.43,626.12,386.51,524.3Notes and debentures639.0638.9659.0160.4Other liabilities 423.0420.2489.6421.3 Total liabilities26,873.026,667.025,285.623,468.6 Savings, interest-bearing checking and money market12,281.924.50.2711,454.030.10.35 Operating net interest margin (5) TANGIBLE BOOK VALUE PER SHARE Operating dividend payout ratio82.7%83.2%91.2%84.8%84.3%85.6%86.2% operating earnings for the respective period. (in millions, except per share data)20132013201320122012 Three Months Ended Borrowings: Federal funds purchased2188.8.131.52 Compensation and benefits 106.9104.4108.297.4106.7 Occupancy and equipment 36.736.937.937.936.5 Professional and outside service fees16.114.913.916.815.8 Operating lease expense184.108.40.206.56.8 Amortization of other acquisition-related intangible assets220.127.116.11.76.7 Other non-interest expense38.535.438.041.136.4 Total non-interest expense (1)212.5205.8212.0207.4208.9 Income before income tax expense82.992.077.890.092.2Income tax expense 24.429.925.328.830.0 Net income$ 58.5$ 62.1$ 52.5$ 61.2$ 62.2 Three months endedAverage Sept. 30,June 30,March 31,Dec. 31,Sept. 30,Sept. 30,Sept. 30,(dollars in millions, except per share data)2013201320132012201220132012Net income, as reported$ 58.5$ 62.1$ 52.5$ 61.2$ 62.2$ 173.1$ 184.1Adjustments to arrive at operating earnings: (1) Total non-interest expense includes $3.3 million, $0.4 million, $8.0 million, $2.9 million and $3.2 million of non-operating expenses for the three months ended Sept. 30, 2013, June 30, 2013, March 31, 2013, Dec. 31, 2012 and Sept. 30, 2012, respectively. See Non-GAAP financial measures and reconciliation to GAAP. CONSOLIDATED STATEMENTS OF INCOME Net loan charge-offs to NON-GAAP FINANCIAL MEASURES AND RECONCILIATION TO GAAP – continued $227.83.27% 22,629.7 and money market11,661.79.00.31 (3) Includes commercial and industrial loans and equipment financing loans. 3.82% Sept. 30,June 30,March 31,Dec. 31,Sept. 30,(dollars in millions)20132013201320122012Commercial Banking: Total deposits21,318.104.22.168 Three Months EndedNine Months Ended net interest income: September 30, 2013June 30, 2013 Yield/Average Tangible assets$ 29,377$ 29,205$ 28,451$ 28,170$ 26,416 OPERATING NON-INTEREST EXPENSE AND EFFICIENCY RATIO Assets: Total loans22,915.6232.54.0622,369.2230.04.11 Securities (2)4,528.924.02.124,556.924.32.13 Consumer2,140.918.63.482,138.618.73.49 September 30, 2012 earnings per share: Sept. 30,June 30,March 31,Dec. 31,Sept. 30,(in millions, except per share data)20132013201320122012Interest and dividend income: Securities (2)4,544.572.82.133,109.459.32.54 Commercial real estate$ 69.8$ 70.2$ 86.5$ 84.4$ 88.5 Commercial and industrial66.768.650.954.864.6 Equipment financing21.227.824.827.237.4 Total157.7166.6162.2166.4190.5Retail: margin is cost recovery income on acquired loans. Operating net interest margin is calculated by dividing Other assets3,592.3 stockholders’ equity$ 31,216.2 Total assets$ 31,216.2 charges, amortization of other acquisition-related intangible assets, losses on real estate assets and non-recurringexpenses) (the numerator) to (ii) net interest income on a fully taxable equivalent (“FTE”) basis plus total Federal Home Loan Bank advances322.214.171.124 Sept. 30,June 30,March 31,Dec. 31,Sept. 30,Sept. 30,Sept. 30,(dollars in millions)2013201320132012201220132012Dividends paid$ 50.3$ 51.9$ 52.8$ 53.6$ 54.3$ 155.0$ 164.3 Non-interest-bearing$ 5,077.0$ — %$ 4,960.8$ — % Savings, interest-bearing checking and money market12,4126.96.36.19912,3188.8.131.52 Time4,507.111.91.054,558.212.21.07 Net interest margin Deposits 20.120.520.821.922.1 Borrowings 184.108.40.206.01.8 Notes and debentures220.127.116.11.01.6 Total interest expense28.729.229.426.925.5 Net interest income223.5220.9219.3225.1234.8Provision for loan losses 18.104.22.1682.015.1 Net interest income after provision for loan losses211.4211.7206.9213.1219.7Non-interest income: Residential mortgage59.559.666.865.060.6 Home equity19.921.022.221.014.6 Other consumer0.10.10.20.30.3 Total79.580.789.286.375.5 Total originated non-performing loans (1)237.2247.3251.4252.7266.0REO: Assets: Commercial (3)8,470.288.74.198,424.689.44.25 Retail repurchase agreements422.214.171.124 Total assets$ 28,234.3 Nine Months Ended NON-GAAP FINANCIAL MEASURES AND RECONCILIATION TO GAAP – continued Other liabilities425.8 September 30, 2013September 30, 2012 Yield/ AVERAGE BALANCE SHEET, INTEREST AND YIELD/RATE ANALYSIS (1) of originated loans1.10%1.18%1.25%1.30%1.45%Non-performing assets as a percentage of: Less: Goodwill and other Total stockholders’ equity$ 4,638$ 4,678$ 4,886$ 5,039$ 5,107 Average total assets$ 31,216$ 30,799$ 30,178$ 28,991$ 28,234$ 30,735$ 27,818 Basic and diluted earnings per common share$ 0.55$ 0.54 Short-term investments$ 179.4$ -0.21%$ 152.4$ 0.10.18% Sept. 30,June 30,March 31,Dec. 31,Sept. 30,Sept. 30,Sept. 30,(dollars in millions)2013201320132012201220132012Net interest income (FTE basis)$ 227.8$ 225.2$ 223.3$ 228.6$ 237.8$ 676.3$ 711.8Adjustments to arrive at operating (2) Average balances and yields for securities available for sale are based on amortized cost. The tangible equity ratio is the ratio of (i) tangible stockholders’ equity (total stockholders’ equity less goodwill and other acquisition-related intangible assets) (the numerator) to (ii) tangible assets (total assets less goodwill andother acquisition-related intangible assets) (the denominator). Tangible book value per share is calculated by People’s United Financial, Inc. 3.33% 425.8 3.30% Commercial real estate6,952.291.35.25 Tangible equity ratio8.5%8.7%9.6%10.2%11.2% (2) Represents acquired loans that meet People’s United Financial’s definition of a non-performing loan but are not, under the accounting model for acquired loans, subject to classification as non-accrual in the same manner as originated loans. Because acquired loans are initially recorded at an amount estimated to be collectible, losses on such loans, when incurred, are first applied against the non-accretable difference established in purchase accounting and then to any allowance for loan losses recognized subsequent to acquisition. Residential mortgage0.42.31.91.71.3 Home equity126.96.36.199.70.6 Other consumer0.40.20.30.40.3 Total188.8.131.52.82.2 Total$ 9.6$ 10.8$ 13.1$ 10.0$ 9.4 (4) The fully taxable equivalent adjustment was $4.3 million, $4.3 million and $3.0 million for the three months ended AVERAGE BALANCE SHEET, INTEREST AND YIELD/RATE ANALYSIS (1) Allowance for loan losses on acquired loans: Residential14.616.016.917.27.2 Commercial13.310.99.611.412.6 Total REO27.926.926.528.619.8Repossessed assets184.108.40.206.38.2 Total non-performing assets$ 271.2$ 280.5$ 285.1$ 289.6$ 294.0 for loan losses as a percentage of (1) See Non-GAAP financial measures and reconciliation to GAAP. Notes and debentures650.318.33.75160.05.44.53 3,734.5 Commercial real estate$ (0.1)$ 4.7$ 6.1$ 2.5$ 3.5 Commercial and industrial220.127.116.11.72.6 Equipment financing0.90.7(0.4)1.01.1 Total18.104.22.168.27.2Retail: Assets: Liabilities and stockholders’ equity: Securities (2)3,607.721.52.38 3,720.3 Time4,985.913.11.05 Net interest margin (2)3.30%3.33%3.38%3.63%3.89% Operating net interest margin (1), (2)3.303.333.383.633.82 Return on average assets (2)0.750.810.700.850.88 Operating return on average assets (1), (2)0.780.810.770.870.91 Return on average tangible assets (2)0.800.870.750.910.95 Return on average stockholders’ equity (2)22.214.171.124.84.8 Return on average tangible stockholders’ equity (2)126.96.36.199.38.3 Operating return on average tangible Short-term investments$ 107.7$ -0.17% Originated loans, REO and repossessed assets1.261.331.421.481.59 Tangible stockholders’ equity and originated Total liabilities and stockholders’ equity$ 30,734.8 (1) Reported net of government guarantees totaling $19.8 million at Sept. 30, 2013, $20.4 million at June 30, 2013, $9.9 million at March 31, 2013, $9.7 million at Dec. 31, 2012 and $14.1 million at Sept. 30, 2012. Sept. 30,June 30,March 31,Dec. 31,Sept. 30,(dollars in millions, except per share data)20132013201320122012Earnings Data: (dollars in millions)20132013201320122012 Notes and debentures160.31.64.07 Deposits: (5) See Non-GAAP financial measures and reconciliation to GAAP. Savings, interest-bearing checking Tangible stockholders’ equity$ 2,504$ 2,538$ 2,739$ 2,885$ 2,947 The efficiency ratio, which represents an approximate measure of the cost required by People’s United Financialto generate a dollar of revenue, is the ratio of (i) total non-interest expense (excluding goodwill impairment High15.6713.79 Low12.2211.20 Close (end of period)14.3812.14 Common shares (end of period) (in millions)307.72335.95 Weighted average diluted common shares (in millions)315.37340.69 Sept. 30,June 30,March 31,Dec. 31,Sept. 30, Other borrowings 2.7-0.7021.60.20.99 Other borrowings 11.10.11.03 Ratios: stockholders’ equity$ 28,234.3 September 30,(in millions, except per share data)20132012Interest and dividend income: Commercial (3)7,737.693.14.81 (4) The fully taxable equivalent adjustment was $12.6 million and $8.2 million for the nine months ended September 30, 2013 and 2012, respectively. $676.33.30% Total funding liabilities22,708.6$ 25.50.45% Other liabilities364.9 Net interest margin Other borrowings 5.9-0.371.0-1.75 Unallocated ESOP shares188.8.131.528.368.45 Compensation and benefits 319.5321.5 Occupancy and equipment 111.5104.0 Professional and outside service fees44.948.6 Operating lease expense22.918.8 Amortization of other acquisition-related intangible assets19.620.1 Other non-interest expense111.9110.2 Total non-interest expense (1)630.3623.2 Income before income tax expense252.7272.7Income tax expense 79.688.6 Net income$ 173.1$ 184.1 Total earning assets27,045.4$763.63.76%24,083.7$791.14.38% In light of diversity in presentation among financial institutions, the methodologies used by People’s United (1) Total non-interest expense includes $11.7 million and $9.8 million of non-operating expenses for the nine months ended September 30, 2013 and 2012, respectively. See Non-GAAP financial measures and reconciliation to GAAP. stockholders’ equity (1), (2)9.08.4 Efficiency ratio (1)63.562.1 Net interest income/spread (4) NON-GAAP FINANCIAL MEASURES AND RECONCILIATION TO GAAP 3.89% Federal Home Loan Bank advances1,8184.108.40.2063220.127.116.11 People’s United Financial, Inc. 4,824.9 In addition to evaluating People’s United Financial’s results of operations in accordance with U.S. generally People’s United Financial, Inc. (1) Items classified as “other” and deducted from non-interest expense for purposes of calculating the efficiency ratio include, as applicable, certain franchise taxes, real estate owned expenses, contract termination costs and non-recurring expenses.(2) Items classified as “other” and added to (deducted from) total revenues for purposes of calculating the efficiency ratio include, as applicable, asset write-offs and gains associated with the sale of branch locations. Total liabilities26,594.1 BOLI FTE adjustment0.60.40.40.18.104.22.168 Other (2)-(0.2)(0.7)(0.7)-(0.9)- Total$ 312.4$ 311.5$ 305.9$ 312.8$ 319.9$ 929.8$ 943.5 Efficiency ratio63.6%62.7%64.1%63.0%61.4%63.5%62.1% as a percentage of originated retail loans0.310.310.320.360.35Total originated allowance for loan losses NET LOAN CHARGE-OFFS (RECOVERIES) $ 27,818.2 acquisition-related intangible assets2,1342,1402,1472,1542,160 Loans: OPERATING EARNINGS average total loans (annualized)0.17%0.19%0.24%0.19%0.18%People’s United Financial, Inc. Sept. 30,June 30,March 31,Dec. 31,Sept. 30,(dollars in millions)20132013201320122012Originated non-performing loans: 3.33% People’s United Financial, Inc. Non-interest-bearing$ 4,724.6$ — % Total assets$ 31,511$ 31,345$ 30,598$ 30,324$ 28,576 Loans 23,22722,86622,16121,73721,040 Securities4,3794,6184,7164,6693,787 Short-term investments14812012713164 Allowance for loan losses188186187188186 Goodwill and other acquisition-related intangible assets2,1342,1402,1472,1542,160 Deposits22,19021,98221,79221,75121,363 Borrowings3,6213,6262,8492,3861,524 Notes and debentures639639659659160 Stockholders’ equity4,6384,6784,8865,0395,107 Total risk-weighted assets (1)23,73123,49822,91822,76421,682 Non-performing assets (2)271281285290294 Net loan charge-offs9.610.813.110.09.4 376.6 Total assets$ 30,734.8 arrive at operating earnings and adding (subtracting) such amounts to (from) GAAP earnings per share. Operatingreturn on average assets is calculated by dividing operating earnings (annualized) by average total assets. Operatingreturn on average tangible stockholders’ equity is calculated by dividing operating earnings (annualized) by averagetangible stockholders’ equity. The operating dividend payout ratio is calculated by dividing dividends paid by Average Balances: People’s United Financial, Inc. Bank service charges95.595.8 Investment management fees27.626.0 Insurance revenue24.525.1 Brokerage commissions10.09.3 Operating lease income25.122.7 Net gains on sales of residential mortgage loans13.810.0 Net gains on sales of acquired loans5.80.7 Merchant services income, net3.83.6 Bank-owned life insurance3.04.3 Other non-interest income43.932.0 Total non-interest income253.0229.5Non-interest expense: People’s United Financial, Inc. $ 30,798.8 Loans: 5,188.5 Consumer2,142.556.13.492,180.260.53.71 Basic and diluted earnings per share$ 0.19$ 0.20$ 0.16$ 0.18$ 0.18 Operating earnings per share (1)0.200.200.180.190.19 Dividends paid per share0.16250.16250.160.160.16 Dividend payout ratio86.0%83.6%100.6%87.4%87.3% Operating dividend payout ratio (1)82.783.291.284.884.3 Book value per share (end of period)$ 15.07$ 15.11$ 15.24$ 15.21$ 15.20 Tangible book value per share (end of period) (1)22.214.171.1248.718.77 Stock price: Retail repurchase agreements5126.96.36.19979.61.00.27 3.94% Total borrowings3,013.77.60.349188.8.131.52 Net interest margin, as reported (1)3.30%3.33%3.38%3.63%3.89%3.33%3.94%Adjustments to arrive at operating Common stock184.108.40.206.9Additional paid-in capital 5,272.75,268.85,261.35,263.9Retained earnings770.5763.1756.2750.1Treasury stock, at cost(1,039.0)(1,009.3)(712.2)(656.2)Accumulated other comprehensive loss(202.5)(178.8)(96.9)(79.0)Unallocated common stock of Employee Stock Ownership Plan, at cost(168.0)(169.8)(173.5)(175.3) Total stockholders’ equity4,637.64,677.95,038.85,107.4 Total liabilities and stockholders’ equity$ 31,510.6$ 31,344.9$ 30,324.4$ 28,576.0 Average total earning assets$ 27,624$ 27,079$ 26,421$ 25,206$ 24,474$ 27,045$ 24,084(1) Annualized. FINANCIAL HIGHLIGHTS Deposits 61.468.8 Borrowings 7.65.1 Notes and debentures18.35.4 Total interest expense87.379.3 Net interest income663.7703.6Provision for loan losses 33.737.2 Net interest income after provision for loan losses630.0666.4Non-interest income: Total earning assets27,623.9$256.53.71%27,078.5$254.43.76% Stockholders’ equity4,815.8 Basic and diluted earnings per common share$ 0.19$ 0.20$ 0.16$ 0.18$ 0.18 Average stockholders’ equity$ 4,622$ 4,825$ 5,005$ 5,107$ 5,161$ 4,816$ 5,188Less: Average goodwill and average other Balance at beginning of period8.29.810.510.54.8 Charge-offs(0.1)(0.7)(3.3)– Provision for loan losses2.6(0.9)2.6-5.7 Balance at end of period10.78.29.810.510.5 Total allowance for loan losses$ 188.2$ 185.7$ 187.3$ 188.0$ 186.0 Sept. 30,June 30,Dec. 31,Sept. 30,(in millions)2013201320122012Assets Loans acquired in connection with business combinations are initially recorded at fair value, determined basedupon an estimate of expected cash flows, including a reduction for estimated credit losses, and without carryoverof the respective portfolio’s historical allowance for loan losses. A decrease in expected cash flows in subsequentperiods may indicate that a loan is impaired, which would require the establishment of an allowance for loanlosses. As such, selected asset quality metrics have been highlighted to distinguish between the ‘originated’portfolio and the ‘acquired’ portfolio. Deposits: Nine Months Ended Acquired non-performing loans (contractual amount) (2)$ 154.2$ 159.0$ 180.7$ 181.6$ 202.0 3.30% Commercial real estate8,148.390.04.427,757.587.24.50 Net interest margin Basic and diluted earnings per share$ 0.55$ 0.54 Operating earnings per share (1)0.580.57 Dividends paid per share0.48500.4775 Dividend payout ratio89.5%89.3% Operating dividend payout ratio (1)85.686.2 Book value per share (end of period)$ 15.07$ 15.20 Tangible book value per share (end of period) (1)8.148.77 Stock price: (4) The fully taxable equivalent adjustment was $4.3 million, $4.3 million and $3.0 million for the three months ended September 30, 2013, June 30, 2013 and September 30, 2012, respectively. (2) Average balances and yields for securities available for sale are based on amortized cost. Operating return on average tangible Three Months EndedNine Months Ended (3) Includes commercial and industrial loans and equipment financing loans. Originated loans (2)0.820.850.880.910.95 Originated non-performing loans (2)74.871.870.670.366.0 Average stockholders’ equity to average total assets14.815.716.617.618.3 Stockholders’ equity to total assets14.714.916.016.617.9 Tangible stockholders’ equity to tangible assets (3)220.127.116.110.211.2 Total risk-based capital (1)12.612.813.714.715.6 (1) Average yields earned and rates paid are annualized. OPERATING RETURN ON AVERAGE TANGIBLE STOCKHOLDERS’ EQUITY Total liabilities25,919.0 Yield/Average (dollars in millions)BalanceInterestRateBalanceInterestRate (1) See Non-GAAP financial measures and reconciliation to GAAP.(2) Annualized. Common Share Data: Sept. 30,June 30,March 31,Dec. 31,Sept. 30,Sept. 30,Sept. 30,(dollars in millions)2013201320132012201220132012Total non-interest expense$ 212.5$ 205.8$ 212.0$ 207.4$ 208.9$ 630.3$ 623.2Adjustments to arrive at operating OPERATING DIVIDEND PAYOUT RATIO Total liabilities and Tangible book value per share$ 8.14$ 8.20$ 8.54$ 8.71$ 8.77 allowance for loan losses10.1210.339.789.459.41 Operating net interest margin excludes from the net interest margin those items that management considers tobe of such a discrete nature that, by excluding such items, People’s United Financial’s net interest margin can bemeasured and assessed on a more consistent basis from period to period. Excluded from operating net interest Other assets3,759.9 People’s United Financial, Inc. Federal funds purchased637.00.90.19104.60.20.23 Three Months Ended Sept. 30,June 30,March 31,Dec. 31,Sept. 30,(dollars in millions)20132013201320122012Allowance for loan losses on originated loans: Common Share Data: Total deposits22,066.420.10.3621,835.420.50.38 Borrowings: Writedowns of banking house assets0.01-0.02–0.03- Severance-related costs—0.01–0.01 Acquisition integration and other costs—-0.01-0.02 Total adjustments per share0.01-0.020.010.010.030.03 Operating earnings per share$ 0.20$ 0.20$ 0.18$ 0.19$ 0.19$ 0.58$ 0.57 Stockholders’ equity4,622.1 Net interest income/spread (4) (1) Average yields earned and rates paid are annualized. originated commercial banking loans1.02%1.05%1.11%1.13%1.22%Retail originated allowance for loan losses Three Months EndedNine Months Ended Three Months Ended Originated non-performing loans as a percentage CONSOLIDATED STATEMENTS OF CONDITION (5) See Non-GAAP financial measures and reconciliation to GAAP. Net interest income/spread (4) (dollars in millions)BalanceInterestRate Three Months Ended acquisition-related intangible assets2,1372,1442,1512,1572,1642,1442,167Average tangible stockholders’ equity$ 2,485$ 2,681$ 2,854$ 2,950$ 2,997$ 2,672$ 3,021 Total liabilities and accepted accounting principles (“GAAP”), management routinely supplements their evaluation with an analysis ofcertain non-GAAP financial measures, such as the efficiency and tangible equity ratios, tangible book value per Selected Statistical Data: of People’s United Financial’s capital position. CONSOLIDATED STATEMENTS OF INCOME share and operating earnings metrics. Management believes these non-GAAP financial measures provide informationuseful to investors in understanding People’s United Financial’s underlying operating performance and trends, andfacilitates comparisons with the performance of other banks and thrifts. Further, the efficiency ratio and operatingearnings metrics are used by management in its assessment of financial performance, including non-interest expensecontrol, while the tangible equity ratio and tangible book value per share are used to analyze the relative strength non-interest income (including the FTE adjustment on bank-owned life insurance (“BOLI”) income, and excludinggains and losses on sales of assets other than residential mortgage loans and acquired loans, and non-recurring income) (the denominator). People’s United Financial generally considers an item of income or expense to be non-recurring ifit is not similar to an item of income or expense of a type incurred within the last two years and is not similar to anitem of income or expense of a type reasonably expected to be incurred within the following two years. $ 30,798.8 25,973.9 Operating earnings per share is derived by determining the per share impact of the respective adjustments to $237.83.85% Cost recovery income—-(0.07)-(0.05) Total adjustments—-(0.07)-(0.05) Operating net interest margin (1)3.30%3.33%3.38%3.63%3.82%3.33%3.89% classified as treasury shares and unallocated Employee Stock Ownership Plan (“ESOP”) common shares). OPERATING NET INTEREST MARGIN High15.6715.0013.6112.5012.55 Low14.0712.6212.2211.3611.20 Close (end of period)14.3814.9013.4212.0912.14 Common shares (end of period) (in millions)307.72309.59320.65331.27335.95 Weighted average diluted common shares (in millions)307.56313.52325.21331.39336.48 $ 27,818.2 As of and for the Three Months Ended Financial for determining the non-GAAP financial measures discussed above may differ from those used by otherfinancial institutions. 3.89% 3.33% People’s United Financial, Inc. Total funding liabilities26,168.3$ 28.70.44%25,548.1$ 29.20.46% Other liabilities433.1 Federal funds purchased518.104.22.16888.00.40.19 Commercial$ 86.4$ 87.2$ 86.7$ 90.7$ 91.3 Commercial real estate90.087.285.586.091.3 Residential mortgage34.734.334.534.637.1 Consumer18.618.718.819.519.8 Total interest on loans229.7227.4225.5230.8239.5 Securities22.022.222.720.720.3 Loans held for sale0.50.40.40.40.5 Short-term investments-0.10.10.1- Total interest and dividend income252.2250.1248.7252.0260.3Interest expense: real estate owned and repossessed assets (2)1.261.331.421.481.59 Originated allowance for loan losses to: People’s United Financial, Inc. $225.23.30% intangible assets(6.5)(6.6)(6.5)(6.7)(6.7)(19.6)(20.1) Other (1)(4.0)(3.4)(1.5)(0.6)(2.7)(8.9)(7.2) Total$ 198.7$ 195.4$ 196.0$ 197.2$ 196.3$ 590.1$ 586.1 Net interest income (FTE basis)$ 227.8$ 225.2$ 223.3$ 228.6$ 237.8$ 676.3$ 711.8Total non-interest income84.086.182.984.381.4253.0229.5 Total revenues311.8311.3306.2312.9319.2929.3941.3Adjustments: Cash and due from banks$ 447.3$ 379.6$ 470.0$ 358.3Short-term investments147.9119.5131.463.7 Total cash and cash equivalents595.2499.1601.4422.0Securities: Amortization of other acquisition-related People’s United Financial, Inc. FINANCIAL HIGHLIGHTS – Continued Commercial (3)8,380.5267.04.257,535.6280.74.97 Originated loans0.820.850.880.910.95 Originated non-performing loans74.871.870.670.366.0 PROVISION AND ALLOWANCE FOR LOAN LOSSES Bank service charges33.322.214.171.1243.0 Investment management fees9.29.49.08.98.7 Insurance revenue126.96.36.199.79.5 Brokerage commissions188.8.131.52.92.8 Operating lease income184.108.40.206.58.3 Net gains on sales of residential mortgage loans220.127.116.11.13.6 Net gains on sales of acquired loans-5.8-0.3- Merchant services income, net18.104.22.168.31.2 Bank-owned life insurance22.214.171.124.11.3 Other non-interest income13.913.9126.96.36.199 Total non-interest income84.086.182.984.381.4Non-interest expense: Earnings per share, as reported$ 0.19$ 0.20$ 0.16$ 0.18$ 0.18$ 0.55$ 0.54Adjustments to arrive at operating Balance at beginning of period$ 177.5$ 177.5$ 177.5$ 175.5$ 175.5 Charge-offs(10.7)(12.0)(11.3)(11.6)(11.1) Recoveries188.8.131.52.61.7 Net loan charge-offs(9.5)(10.1)(9.8)(10.0)(9.4) Provision for loan losses9.510.19.812.09.4 Balance at end of period177.5177.5177.5177.5175.5 Writedowns of banking house assets(2.8)-(6.2)–(9.0)- Severance-related costs(0.5)(0.4)(1.5)(2.9)(0.9)(2.4)(4.4) Acquisition integration and other costs–(0.3)-(2.3)(0.3)(5.4) Total(3.3)(0.4)(8.0)(2.9)(3.2)(11.7)(9.8) Operating non-interest expense209.2205.4204.0204.5205.7618.6613.4 Selected Statistical Data: Total liabilities23,073.5 Less: Goodwill and other (5) See Non-GAAP financial measures and reconciliation to GAAP. Three Months EndedNine Months Ended acquisition-related intangible assets2,1342,1402,1472,1542,160 Net interest margin (2)3.33%3.94% Operating net interest margin (1), (2)3.333.89 Return on average assets (2)0.750.88 Operating return on average assets (1), (2)0.790.91 Return on average tangible assets (2)0.810.96 Return on average stockholders’ equity (2)4.84.7 Return on average tangible stockholders’ equity (2)8.68.1 Operating return on average tangible stockholders’ equity (annualized)9.8%9.3%8.1%8.6%8.6%9.0%8.4% People’s United Financial, Inc. Loans$ 22,916$ 22,369$ 21,727$ 21,211$ 20,758 Securities4,5294,5574,5483,8673,608 Short-term investments179153146128108 Total earning assets27,62427,07926,42125,20624,474 Total assets31,21630,79930,17828,99128,234 Deposits22,06621,83521,55821,55721,372 Total funding liabilities26,16825,54824,72623,48722,709 Stockholders’ equity4,6224,8255,0055,1075,161 Liabilities and stockholders’ equity: 3.33% Non-interest-bearing$ 5,105.7$ 5,116.0$ 5,084.3$ 4,746.9 Savings, interest-bearing checking and money market12,657.512,278.611,959.811,729.0 Time4,426.44,587.24,706.44,886.7 Total deposits22,189.621,981.821,750.521,362.6Borrowings: Tangible stockholders’ equity$ 2,504$ 2,538$ 2,739$ 2,885$ 2,947 Total borrowings1,184.108.40.206 NON-PERFORMING ASSETS Total earning assets24,474.4$263.34.30% Net interest income$ 663.7$ 703.6 Provision for loan losses33.737.2 Non-interest income253.0229.5 Non-interest expense630.3623.2 Operating non-interest expense (1)618.6613.4 Income before income tax expense252.7272.7 Net income173.1184.1 Operating earnings (1)181.1190.7 Liabilities Operating net interest margin (5) Cost recovery income—-(4.1)-(8.8) Total adjustments—-(4.1)-(8.8) Operating net interest income$ 227.8$ 225.2$ 223.3$ 228.6$ 233.7$ 676.3$ 703.0 (1) Average yields earned and rates paid are annualized. Nine months endedAverage Writedowns of banking house assets2.8-6.2–9.0- Severance-related costs0.50.41.52.220.127.116.11 Acquisition integration and other costs–0.3-18.104.22.168 Total pre-tax adjustments3.30.48.02.22.214.171.124Tax effect(1.0)(0.1)(2.6)(0.9)(1.0)(3.7)(3.2) Total adjustments, net of tax126.96.36.199.02.28.06.6 Operating earnings$ 60.8$ 62.4$ 57.9$ 63.2$ 64.4$ 181.1$ 190.7 Commercial8,457.28,560.88,400.07,951.7 Commercial real estate8,393.18,077.37,294.27,032.8 Residential mortgage4,235.84,084.23,886.13,891.3 Consumer2,141.32,143.92,156.32,164.2 Total loans23,227.422,866.221,736.621,040.0 Less allowance for loan losses(188.2)(185.7)(188.0)(186.0) Total loans, net23,039.222,680.521,548.620,854.0Goodwill and other acquisition-related intangible assets2,133.82,140.42,153.52,160.3Premises and equipment314.2320.1330.4334.7Bank-owned life insurance338.3337.2336.5335.5Other assets682.3681.5608.3622.3 Total assets$ 31,510.6$ 31,344.9$ 30,324.4$ 28,576.0 Operating net interest margin (5) Yield/ (2) Average balances and yields for securities available for sale are based on amortized cost. Commercial Banking: (1) Consolidated. Residential mortgage4,188.8.131.524,048.534.73.43 stockholders’ equity (1), (2)184.108.40.206.68.6 Efficiency ratio (1)63.662.764.163.061.4 Commercial$ 260.3$ 279.4 Commercial real estate262.7275.2 Residential mortgage103.5109.1 Consumer56.160.5 Total interest on loans682.6724.2 Securities66.956.6 Loans held for sale1.31.4 Short-term investments0.20.7 Total interest and dividend income751.0782.9Interest expense: Total assets$ 31,511$ 31,345$ 30,598$ 30,324$ 28,576 dividing tangible stockholders’ equity by common shares (total common shares issued, less common shares Stockholders’ Equity Total deposits21,821.961.40.3721,136.068.80.43 Deposits: Sept. 30,June 30,March 31,Dec. 31,Sept. 30,(dollars in millions)20132013201320122012Financial Condition Data: (2) Excludes acquired loans. as a percentage of: Borrowings: Common shares issued396.44396.32396.24395.81395.88 Less: Shares classified as treasury shares80.6278.5467.3156.1851.48 Deposits: net interest margin (1): People’s United Financial, Inc. SOURCE BRIDGEPORT, Conn., Oct. 17, 2013 /PRNewswire/ — People’s United Financial, Inc www.peoples.com(link is external)
Middlebury College,Bennington College,Vermont Business Magazine Forbes has debuted a new list of colleges touted for their entrepreneurial programs, and Middlebury College has landed very close to the top. In its list of “America’s Most Entrepreneurial Colleges 2015,” Forbes ranks Middlebury second out of 50, just behind first-place Cooper Union. Bennington College was fourth on the list. In the past, Forbes has ranked universities that support entrepreneurism, but the new list recognizes a growing trend among liberal arts colleges. “Top research universities aren’t the only startup launchpads,” writes Liyan Chen. “The Cooper Union (New York City), which tops our Most Entrepreneurial College List this year, boasts more founders and owners among alumni and students on LinkedIn than Stanford University and MIT (adjusted for student body size). Middlebury, which ranks second on our list, is one of many small liberal arts colleges reinventing themselves as modern-day startup incubators.”On Middlebury, Forbes wrote: “The four-week immersion program MiddCore has brought in over 40 entrepreneur mentors such as Peet’s Coffee and Tea CEO Dave Burwick.”Bennington College. CourtesyOn Bennington College, Forbes wrote: “Students often start ventures during Field Work Terms–four seven-week winter terms required for graduation.”In a related article, Chen features Middlebury alumna Emily Nunez Cavness ’12, who, with her sister Betsy, launched the company Sword and Plough, which recycles surplus military materials into stylish handbags, tote bags, and other items. Cavness credits her work with Middlebury’s Center for Social Entrepreneurship for the success of the company, noting that without that support, “Sword & Plough would have remained just another interesting idea rather than an exciting reality.”Read the full article, “How Liberal Arts Colleges Reinvent Themselves as Startup Factories”View the Forbes list of “America’s Most Entrepreneurial Colleges 2015” Source: Middlebury College. 7.30.2015. VERY TOP PHOTO: Middlebury graduation file photo by Stephen Mease.
Northstar Vermont Yankee,The spent fuel pool at Vermont Yankee nuclear power plant holds 2,996 spent fuel assemblies, each measuring about 7 inches by 7 inches, that are awaiting a move to dry cask storage. Photo courtesy NRCby Mike Faher vtdigger.org(link is external) Entergy can eliminate a direct emergency data link between Vermont Yankee and the federal government, the Nuclear Regulatory Commission has decided. By unanimous vote on Thursday, NRC commissioners denied Vermont’s appeal of Entergy’s deactivation of the Emergency Response Data System – also known as the ERDS – at the Vernon plant. While state officials argued that the system is important given the risk of radiological accidents from spent fuel stored at the plant, the NRC says the data system is required only at facilities with operating reactors. Vermont Yankee ceased producing power December 29.“Compared to a reactor accident, a spent-fuel pool accident is a slower-moving event with far fewer parameters…to monitor, fewer kinds of potential accidents and more time available to take mitigative and corrective actions,” the NRC decision stated, adding that there is a lower risk of accidents decommissioned plants.RELATED STORY: State slams Vermont Yankee emergency-planning changesVermont Yankee spokesman Martin Cohn said the ruling “confirms that our position on this issue is correct,” in an email statement.“We are pleased that the Nuclear Regulatory Commission rejected the filing from the state of Vermont and affirmed the earlier ruling by the Atomic Safety and Licensing Board,” Cohn wrote. “We remain focused on the safety of the facility and the community.”Vermont Public Service Board Commissioner Chris Recchia said he was disappointed, adding there was a “fundamental disagreement” between the NRC and the state over the danger presented by Yankee’s spent fuel.Internal alert systems Vermont Yankee aren’t enough, he said. “The problem is that, if something happens at the site, you don’t want to have to be at the site to figure out what’s going on,” Recchia said.Thursday’s ruling does not affect the ongoing dispute over other, more dramatic emergency changes proposed at Vermont Yankee.Entergy is seeking reduction of the Emergency Planning Zone – now a wide circle touching three states – to the boundaries of the plant site itself. Along with that would come the end of mandatory funding for emergency operations in the affected towns and states.Those changes are still up in the air, as Vermont officials have appealed Entergy’s proposals.Rather, the NRC decision on Thursday is strictly limited to the emergency system in question – which is a relatively obscure mechanism at Vermont Yankee, but one the state took issue with.The origins of the Emergency Response Data System can be traced to Pennsylvania’s Three Mile Island nuclear accident in 1979, after which the NRC “recognized a need to improve its ability to acquire accurate and timely data on reactor-plant conditions during emergencies,” according to federal documents.Hence ERDS was established by the nuclear commission in 1991 to create a “direct electronic data link” between nuclear-plant operators and the commission’s operations center for monitoring remotely. The rule, however, exempted “all nuclear power facilities that are shut down permanently or indefinitely” from participating in the emergency response system.That wording is key in the Yankee case, as Entergy maintained its was no longer needed after the Vernon plant ceased operations.The NRC’s staff has agreed with that stance, and the agency produced guidance saying administrators of a shuttered nuclear plant – after performing their own analysis of emergency systems – may retire the alert system without seeking commission approval.That’s what happened at Vermont Yankee: Entergy when it shut down the system in February.The state asked that Entergy either continue to maintain the system, or provide a similar, alternative one for as long as spent fuel remains at the site.In January, a majority of the licensing board – an arm of the Nuclear Regulatory Commission – rejected Vermont’s arguments as inadmissible. To require continued operation of the alert system at a reactor that’s been permanently shut down would be “inconsistent” with federal regulations, the majority opinion stated.Vermont officials appealed the ruling, reaching back to the NRC’s initial 1991 rule. The state argued that exemption from the alert system applied only to nuclear plants that were shuttered at the time that rule was made – not to plants that had yet to shut down in subsequent years.The NRC commissioners disagreed and, on Thursday morning, held a brief voting meeting to deny Vermont’s appeal. The commissioners’ written opinion finds that Vermont has raised issues that are beyond the scope of the current proceeding.Commissioners also say the state “misreads” regulations for shut-down nuclear plants. Given the decreased risk for serious accidents at a plant where the reactor has been de-fueled, the commissioners write, it makes sense that there would be no need for the emergency data alerts.“Without an operating reactor in the picture, the entire focus of the licensee’s staff can be on the spent fuel pool. And once a reactor has shut down, the potential for a release from a spent fuel pool will diminish with time as the decay heat of the fuel drops, given that no fresh spent fuel will be added to the pool. It is reasonable, therefore, to read the (ERDS) rule exemption as applying to facilities that have permanently shut down reactor operations and defueled their reactors.”While there was no formal dissent to Thursday’s ruling, there was a footnote: NRC Commissioner Jeff Baran said he does not necessarily agree with the government’s current ERDS regulations and urged a review as the NRC undertakes new rule-making for decommissioning nuclear plants.“I am sympathetic to the state of Vermont’s view that licensees should maintain those aspects of ERDS that transmit spent fuel pool conditions or are relevant to a potential spent fuel pool accident until the spent fuel is removed from the pool or there is no reasonable risk of a zirconium fire,” Baran wrote.
Stephen R. Theroux, President and Chief Executive Officer, said, “Our participation in the SBLF program provided the opportunity to enhance our lending to small businesses throughout our markets in New Hampshire and Vermont. Under the program, we were able to increase our small business lending by more than 40%, funding more than $120 million in qualified small business loans during the initial measurement period, without placing pressure on our underlying capital levels. As we exit the program, we reflect on the SBLF program as a success for the Company, the Bank, our customers, and our stockholders.”About Lake Sunapee Bank Group Lake Sunapee Bank Group is the holding company of Lake Sunapee Bank, fsb, a federally chartered savings bank that provides a wide range of life-cycle banking and financial services. Lake Sunapee Bank has four wholly owned subsidiaries: Lake Sunapee Financial Services Corp.; Lake Sunapee Group, Inc., which owns and maintains all buildings and investment properties; McCrillis & Eldredge Insurance, Inc., a full-line independent insurance agency; and Charter Holding Corp., which wholly owns Charter Trust Company, a trust services and wealth management company. Lake Sunapee Bank Group, through its direct and indirect subsidiaries, operates 30 offices in New Hampshire in Grafton, Hillsborough, Merrimack and Sullivan counties and 16 offices in Vermont in Orange, Rutland and Windsor counties.NEWPORT, NH–(Marketwired – December 03, 2015) – Lake Sunapee Bank Group Vermont Business Magazine Lake Sunapee Bank Group (NASDAQ: LSBG(link is external)), the holding company for Lake Sunapee Bank, fsb, today announced that it has redeemed the remaining $8.0 million of its outstanding preferred securities issued under the US Treasury’s Small Business Lending Fund program. The redemption was funded with retained earnings. Following the redemption, the Company has no preferred securities outstanding under the SBLF program.
by Vermont Senators Richard Mazza, Robert Starr, and Peg Flory In recent years, the political winds of promised change have blown in and out of Vermont like a nor’easter. But as the dust has settled, we seem to be falling short, in some important areas, of the open, pragmatic, good governing Vermont that we all know and love. Recent issuances from Vermont’s government have overridden fiduciary responsibility and due process in favor of special interest campaigns and political gestures.For instance, in 2010 the Senate led by then-Senate Pro Tem Peter Shumlin prevented the Vermont Public Service Board from ruling on Vermont Yankee’s application to continue to operate. We three, along with then-Senator Phil Scott, alone voted to let the PSB rule. Then as now, we believed in the importance of due process.It is ironic, to say the least, that Gov. Shumlin is now invoking carbon reduction as a reason for short-cutting the due process of our pension fund investment system. For 42 years Vermont Yankee was an instate goldmine of very low-carbon electricity. We, along with Sen. Scott, also lamented the loss of more than 600 well-paying jobs, the ripple effect of that loss on the Windham County economy, and millions of dollars in local and state tax revenue.The eventual, unfortunate decision to close Vermont Yankee has now increased the state’s carbon footprint, as Vermont uses more fossil fuels for energy generation. State government officials at the time called the loss of high paying jobs and expanded tax base “hard news,” as if nothing could have been done to prevent the closure and its consequences. But this was just one of the many conscious steps taken away from Vermont’s history of good governance. Today some in state government seem too willing to do an end run around legislatively-required due process, to the detriment of the prosperity and quality of life of our people.In recent months another proposal has been laid on the table: to divest the state’s pension funds from fossil fuels, or alternatively, its limited coal and ExxonMobil assets. State Treasurer Beth Pearce and her Investment Committee have stressed again and again the millions of dollars in financial losses the state would incur, as well as the committee’s primary fiduciary responsibility to protect state retirees’ livelihood. Pearce has repeatedly called divestment a “bad practice,”saying “My first priority is to protect the 49,000 active, vested and retired members of the system, the beneficiaries, and the taxpayers who put dollars into that system.” While the proposal might have the semblance of tackling “big issues,” by making a “statement,” it sadly boils down to lost returns and nomeasurable impact of the fossil fuel industry or climate change. We need a practical approach to governance in Vermont that puts the taxpayers, retirees, employees and their families first.Vermont’s next governor must make Vermont more affordable for families and employers by building out a strong economy and raising wages. Lt. Gov. Scott’s position on Vermont Yankee and divestment embody his pragmatic approach to improving Vermont’s business climate and combating income reduction caused by state government. We ask our next governor, whomever he or she may be, to commit to such prosperity-based decision-making and pragmatic, good governance.Sen. Mazza (D) represents Colchester and Grand Isle County. Sen. Starr (D) represents Essex and Orleans County. Sen. Flory (R) represents Rutland County.February 16, 2016
Vermont Business Magazine Weekly unemployment claims stayed at a very low level last week after a steep drop the week before. Overall, claims are running higher in 2016 than in 2015. For the week of August 27, 2016, there were 385 claims, down 4 from the previous week’s total and 38 more than they were a year ago. By industry, claims were up for Manufacturing, as they were two weeks ago. Services, the usual leader, led the way with 38 percent of all claims, which for actual claims was a steep drop from last week (56 percent). Altogether 4,254 new and continuing claims were filed, a decrease of 130 from a week ago, and 131 more than a year ago.The Department processed 0 First Tier claims for benefits under Emergency Unemployment Compensation, 2008 (EUC08).Vermont’s unemployment rate held at 3.2 percent in July, as the labor force and total employment decreased, along with an increase in the number of unemployed. Overall this was a worse report than for June, despite no change in the actual rate. SEE STORY.The Unemployment Weekly Report can be found at: http://www.vtlmi.info/(link is external). Previously released Unemployment Weekly Reports and other UI reports can be found at: http://www.vtlmi.info/lmipub.htm#uc(link is external)NOTE: Employment (nonfarm payroll) – A count of all persons who worked full- or part-time or received pay from a nonagricultural employer for any part of the pay period which included the 12th of the month. Because this count comes from a survey of employers, persons who work for two different companies would be counted twice. Therefore, nonfarm payroll employment is really a count of the number of jobs, rather than the number of persons employed. Persons may receive pay from a job if they are temporarily absent due to illness, bad weather, vacation, or labor-management dispute. This count is based on where the jobs are located, regardless of where the workers reside, and is therefore sometimes referred to as employment “by place of work.” Nonfarm payroll employment data are collected and compiled based on the Current Employment Statistics (CES) survey, conducted by the Vermont Department of Labor. This count was formerly referred to as nonagricultural wage and salary employment.
Vermont Business Magazine Québec, Vermont and the State of New York today announced that they will continue to work together to restore and protect the waters and natural resources of Lake Champlain. Meeting in Crown Point, NY, the Minister of Sustainable Development, Environment and the Fight against Climate Change, David Heurtel, on behalf of the Premier of Québec, together with the Governor of Vermont, Phil Scott, officials from the Environmental Protection Agency (EPA), and representatives from the states of New York and Vermont, joined Monday in the signing ceremony for the fourth edition of the Lake Champlain Action Plan, entitled Opportunities for Action: An Evolving Plan for the Future of Lake Champlain.Québec fully supports the Action Plan and contributes to its management as a member of the Steering Committee of the Lake Champlain Basin Program (LCBP) responsible for reviewing and implementing it. An accompanying message from the Premier of Québec confirms its commitment to implement the updated Management Plan alongside its Vermont and New York State partners.The plan itself and the formation of the Steering Committee charged with implementing it stem from the Environmental Cooperation Agreement on the Management of Lake Champlain, signed in 1988 by the Gouvernement du Québec, the State of Vermont and the State of New York, which recognized the need for concerted action to protect Lake Champlain, reduce pollution and restore the lake’s ecosystems.During his visit, Minister Heurtel held discussions with the Governor of Vermont, Phil Scott, and the Secretary for Natural Resources of Vermont, Julie Moore, on issues related to the protection of our common natural resources and the importance of collaboration to obtain concrete results in the fight against climate change. He also held meetings with EPA officials.Quotes:”The Gouvernement du Québec is an active player in the management of shared waters and the protection of natural resources. The renewal of this action plan illustrates the high degree of collaboration between Québec and its American partners for the protection of Lake Champlain, its ecosystems and its present and future uses. The Lake Champlain Basin is a public asset that we must all share. We are determined to carry forward the efforts deployed over numerous years to ensure the best quality of life for our children. Let’s do it for them!”David Heurtel, Minister of Sustainable Development, Environment and the Fight against Climate ChangeHighlights:Québec participates actively in the sound management of the water resources of Lake Champlain, the Great Lakes and the St. Lawrence River. For years, it has collaborated with various states in managing their shared watershed, for example through the LCBP, the Great Lakes Commission, the Conference of Governors and Premiers of the Great Lakes and St. Lawrence, the Great Lakes Legislative Caucus and the Great Lakes and St. Lawrence Water Resources Compact.Related link:The Lake Champlain Action Plan can be consulted on the website of the LCBP http://www.lcbp.org/about-us/opportunities-for-action/(link is external) VBM vermontbiz.comSOURCE CROWN POINT, NY, June 19, 2017 /CNW Telbec/ – Cabinet du ministre du Développement durable, de l’Environnement et de la Lutte contre les changements climatiques
Vermont Business Magazine A majority of college administrators in a new survey say that more students believe marijuana to be “safe,” drawing concern that changing attitudes about marijuana might have downstream effects on college campuses. Administrators say the number of students with marijuana-related problems has either increased (37 percent) or stayed the same (32 percent), while almost none say such problems have lessened. And while they report a variety of negative impacts of marijuana use, and acknowledge the need to address the problem, they are also dealing with gaps in information and policy. A Presidents’ Panel with the associated presentation event included University of Vermont President Tom Sullivan.These are among the findings in a groundbreaking new survey of higher education officials by the Mary Christie Foundation and the Hazelden Betty Ford Institute for Recovery Advocacy in conjunction with the National Association of System Heads (NASH). The survey of 744 professionals in academic affairs, student affairs and student health was conducted by The MassINC Polling Group and released today at a national forum on college student substance use at the University of Maryland College Park.According to the survey results, administrators agree colleges should implement strategies to reduce student marijuana use, but relatively few think their own campuses are emphasizing the issue. Survey respondents said barriers to tackling the problem include lack of information about effective approaches, and limited coordination and training. Their responses also indicated more awareness of the problem among officials on the front lines of student health compared to those in academic affairs or other administrative roles.”This survey underscores what many of us have been worried about: although data show that consistent marijuana use is a serious threat to students’ wellbeing and academic performance, there is a lack of urgency to address the problem in meaningful ways,” said Robert Caret, Chancellor of the University System of Maryland, Vice Chairman of the Mary Christie Foundation, and Chairman of NASH. “While is it encouraging that administrators see a role for colleges in addressing this issue, we need more active leadership to share information and coordinate the response.” Public health experts have long warned that regular marijuana use among college students can lead to impaired memory, lack of motivation (i.e., skipped classes), and problems with information processing and executive functioning. Marijuana use also overlaps significantly with excessive drinking and other substance use, rather than being a substitute, and is associated with mental health problems and an increased risk for psychosis in vulnerable individuals, among other health risks. The survey demonstrated significant knowledge gaps on these issues among college administrators, but the need for training to learn more was clearly acknowledged.Between 2014 and 2016, the annual prevalence of marijuana use among college students increased by 14 percent. In addition, the perception of harm and risk associated with regular marijuana smoking among 18- to 22-year-olds has decreased from about 58 percent in 2000 to about 33 percent in 2015, just as more states have legalized marijuana for medical and recreational use.”Colleges find themselves on the front lines of this shift in attitudes and are playing catchup, in terms of education and training, as problems continue to grow,” said Nick Motu, Vice President of the Hazelden Betty Ford Institute for Recovery Advocacy. “We know marijuana is not benign, and we need to continue to educate our young people on the risks of marijuana use and help those who develop problems. This is a serious issue for students, their families and our wider society as schools prepare students for the demands of a rapidly changing and highly competitive workplace.”Among the key findings:Seven in 10 administrators said that the number of students with marijuana-related problems on campus had either increased (37 percent) or stayed the same (32 percent) over the past three years. A majority (54 percent) of respondents believe the number of students who perceive marijuana to be safe has increased over the past three years.A majority (55 percent) report marijuana use in college residence halls; 41 percent have observed academic problems related to marijuana use, and 36 percent have seen student mental health issues. 63 percent agreed that students who use marijuana are more academically disengaged than non-users.Eight in ten (79 percent) believe college campuses should implement policies and programs to effectively reduce marijuana among college students, but only a third think their campus is putting a great deal (5 percent) or a fair amount (28 percent) of emphasis on preventing marijuana use right now.Majorities think that a lack of resources, coordination and information are barriers to successful marijuana prevention and enforcement on campus. Student opposition is also seen as a concern. There is a large gap in knowledge and perception of the issue between administrators on the frontlines of combatting substance abuse (health and wellness, prevention, residential life, and campus safety) and those a step removed (academic and student affairs). Majorities of the first group think that marijuana use is a serious problem on their campuses, while majorities of the latter group think it is not.One way to address this gap could be to improve training and information sharing. Majorities of all types of administrators are interested in receiving training on how to handle various aspects of marijuana use among students, including impacts on student health and well-being and academic success.Administrators say marijuana is not treated as seriously as alcohol. Screening for marijuana use is less common than screening for alcohol, and administrators are not fully aware of research that shows marijuana is associated with as many academic problems as drinking and that a majority of marijuana users also drink to excess. Experts are urging colleges to collect more regular data regarding the scope and consequences of student marijuana use and to utilize evidence-based public health approaches to intervention. They are also calling for better coordination among college departments and top-down communication that puts all those who support students on the same page.”The primary mission of every institution of higher education is to promote student success,” said Dr. Amelia Arria, Director of the Center on Young Adult Health and Development at the University of Maryland School of Public Health. “These new data from the unique vantage point of college administrators indicate that marijuana use is a barrier to student achievement. Therefore, leaders of these institutions should intensify their efforts to develop comprehensive, scientifically-informed solutions to reduce student substance use.”The new survey was released at today’s national forum entitled, “College Substance Use: New Solutions to a Perennial Problem,” at the University of Maryland College Park. National leaders in higher education, policymaking and substance use prevention and treatment convened to discuss the latest trends, challenges and innovations in preventing and addressing substance use on America’s college campuses.Hosted by the Mary Christie Foundation, the Hazelden Betty Ford Institute for Recovery Advocacy and the University of Maryland School of Public Health, the event featured a panel of five university presidents, and several notable speakers. The Presidents’ Panel consisted of:Marty Meehan (President of the University of Massachusetts)Kim Schatzel (President of Towson University)Wayne Frederick (President of Howard University)Gregory Crawford (President of Miami University)Tom Sullivan (President of the University of Vermont)Video of the entire event can be viewed at www.wirestream.tv/customer/studiobdc/2017/10-17/(link is external), and the full survey results are available at marychristiefoundation.org/reports/(link is external).About the PollThese results are based on a national survey of college campus officials conducted online between September 4 and 25, 2017. Seven-hundred forty-four officials began the survey, and 523 completed it. Respondents were contacted via an email distributed by the National Association of System Heads (NASH) to its members, to be shared with relevant administrators on campuses. The survey was also distributed to members of the American College Health Association (ACHA) via their listserv. The final data were weighted to better match the distribution of higher education institutions across census regions, using data from the National Center for Education Statistics. The poll was conducted by The MassINC Polling Group for the Mary Christie Foundation and the Hazelden Betty Ford Institute for Recovery Advocacy in conjunction with NASH.About the Mary Christie FoundationThe Mary Christie Foundation is a thought leadership and philanthropic organization dedicated to the health and wellness of teens and young adults. With world-renowned experts in health care policy, public health, behavioral health and higher education, the Foundation contributes to the examination and resolution of the most pressing, and often overlooked, health issues facing young people. Learn more at www.marychristiefoundation.org(link is external).About the Hazelden Betty Ford Institute for Recovery AdvocacyOur mission is to provide a trusted national voice on all issues related to addiction prevention, treatment and recovery and to facilitate conversation among those in recovery, those still suffering and society at large. We are committed to smashing stigma, shaping public policy and educating people everywhere about the problems of addiction and the promise of recovery. The Hazelden Betty Ford Institute for Recovery Advocacy is part of the Hazelden Betty Ford Foundation, the nation’s largest nonprofit treatment provider. Learn more at www.HBFinstitute.org(link is external) and on Twitter @hbfinstitute(link is external).SOURCE COLLEGE PARK, Md., Oct. 17, 2017 /PRNewswire-USNewswire/ — Hazelden Betty Ford Foundation www.HBFinstitute.org(link is external)
National Bank of Middlebury,Vermont Business Magazine National Bank of Middlebury has been awarded an “Outstanding” performance evaluation for Community Reinvestment Act. The CRA categorization is an evaluation of a banking institution’s record of meeting the credit needs of its entire community including low and moderate-income neighborhoods.The criteria for the rating is as follows:The level of lending as related to loan-to-deposit (LTD) ratio compared to local and national peer averagesDistribution of originated and purchased loans made within the institution’s assessment area (AA)Overall borrower distribution of loans among borrowers of different income levels and businesses of different sizesInstitution’s responsiveness to community development needs in the AAThe National Bank of Middlebury is a $358 million independent community bank headquartered in Middlebury. The bank is a wholly owned subsidiary of Middlebury National Corporation. The Bank has one-third ownership in an operating subsidiary, CommunityFinancial Services, LLC, which was created in partnership with two other financial institutions for the purpose of offering trust and investment services to bank customers. Affiliate activity was not considered as part of this evaluation.In addition to the Bank’s main office in Middlebury, VT, the Bank has six full service branches located in Brandon, VT; Bristol, VT; Hinesburg, VT; Middlebury, VT; and Vergennes, VT. Additionally, the Bank operates nine automated teller machines (ATMs), which include three stand-alone ATMs with one located at the Middlebury drive-up location and two ATMs located on the Middlebury College campus.NBM is a full service, intrastate institution, offering a standard array of traditional loan and deposit products for retail and business customers. Additionally, NBM offers a variety of consumer and commercial products and services including personal and business checking and savings accounts, mortgage loans, commercial loans, and electronic banking. The Bank’s website, www.nbmvt.com(link is external), provides a listing and description of its loan and deposit services.The Bank offers a variety of different account access alternatives including telephone banking, online banking with bill pay options, mobile banking, and e-statements. In addition to the above services for personal account customers, the Bank also offers account access alternatives for its business customers, including eCorp (online banking for business customers), eDeposit (remote deposit capture), merchant credit card processing, automated clearinghouse (ACH) origination, and bill pay service.Source: NBM. 10.1.2018
by Don Turner I’ve previously written about how our unfunded pension liabilities are Vermont’s sleeping giant. We owe our state employees and teachers about $4.5 billion more than we have in the bank. We’ve seen two credit-rating downgrades in one year. Our “funded ratio” (the ratio of assets to liabilities) is only about 64.3 percent, below the national average(link is external). We’ve lived through years of underfunding where, until 2008, the state made payments as low as 38.4 percent of what was recommended(link is external) by professional actuaries. We’re forced to spend hundreds of millions on required principal and interest(link is external) that would have otherwise gone towards higher education, child care, or any number of meaningful programs. And the projected rates of return on our pension investments are still far below actual returns(link is external). These are the facts.It’s true that, over the past few years, we’ve taken modest steps to reverse these trends, including dedicating more toward paying down this enormous debt. But so long as we refuse to have a serious conversation about fundamental pension system reform, these investments are like trying to bail out a boat without addressing the leak. It won’t work. First, we need to plug the hole.And to do that, we need to have a serious conversation about pension reform. Specifically, we need to look at switching the pension system for new hires to a defined contribution structure. Currently, most state employees are covered under a “defined benefit” program, which guarantees specific retirement payments and benefits. Defined contribution plans place invested contributions into an investment fund that the employee can control.The problem is that defined benefit plans with generous benefit structures (like Vermont’s) can lead to expensive consequences that generate massive unfunded liabilities–which is exactly what we’re experiencing now.Let me be clear: I am not advocating for taking away the defined benefit plans guaranteed to Vermont’s state employees and teachers. All those in their current pension plans should be able to remain in them. We have an obligation to keep the promises we’ve made; not break them. Rather, I’m suggesting we change the pension structure only for new hires. Additionally, existing hires should be given the choice to opt-into a defined contribution plan. This proposal has been endorsed by Vermont pension-guru David Coates(link is external), former Governor and Treasurer Jim Douglas(link is external) (who oversaw multiple upgrades to Vermont’s credit rating), and has also been suggested by the Vermont Business Roundtable(link is external).Even the 2009 special pension commission chaired by Former Democratic Treasurer Jeb Spaulding reported that, while the majority of the commission did not want to implement a defined contribution plan at that time, “the majority did recommend further consideration of this issue in the future.”(link is external) It’s been 10 years since then; today is the future.Some, including Treasurer Pearce, stand in opposition to defined contribution plans. However, this stance remains in stark contrast to the growing number of states who are switching in-mass to defined contribution (or in some cases, defined benefit-defined contribution hybrid) plans. In a country that was once dominated by defined benefit plans, now over a third of U.S. states have moved away from them and towards full defined contribution or hybrid plans(link is external).Of the five states with the lowest funded ratios (according to Pew), four of them have moved to defined contribution or hybrid plans over the last 20 years in recognition of their need for structural reform. The only one that hasn’t is Illinois, whose pension crisis has progressively worsened, leading the state to near junk-bond status.(link is external)Additionally, the Treasurer’s assertions rely largely on some studies suggesting that defined benefit programs have better investment performance. But other studies(link is external) suggest defined contribution plans’ annualized net returns exceeds that of defined benefit plans for the 10 years preceding 2016. Look at it this way: The State of Vermont already offers a defined contribution plan for some 600 or so exempt state employees. It’s unfunded liability? Zero. That’s pretty compelling next to a $4.5 billion unfunded liability for our defined benefit plans.I’m not keen to rely on the Treasurer’s “expertise” on this matter. In fact, under Treasurer Pearce’s watch, we’ve seen our funded ratio decline, our credit rating get downgraded (twice), and our pension investment performances continue to struggle. Pearce also deployed and defended the disastrous “select-and-ultimate” rate system(link is external) from 2012 to 2015, which drastically reduced General Fund support for the pension system(link is external). We need a new perspective; not the same failed policies that got us into this mess.Contrary to what the Treasurer suggests, not only could a hybrid-defined contribution program save the state money, but it could also provide real benefits to plan participants. The vesting period (the amount of time an employee has to work before they’re eligible to receive all contributions) would be shorter. Workers would have easier portability of benefits. And employees would have more control over where their retirement funds are invested.Critics say that employees’ retirement funds would be left up to the whims of the market.But today, with ETFs, mutual funds, and government-guarenteed treasury bills readily accessible to even amateur investors, these claims are unfounded. Investment choice and control is especially useful for advocates of pension “divestment” from fossil fuels. If an employee has a moral objection to investing in a certain industry, they could choose to invest elsewhere with a defined contribution plan. Not so with today’s defined benefit program.We have an obligation to have this debate in a meaningful way, without the draconian attacks that will undoubtedly be thrown. We need to do what’s right for the state: for taxpayers, workers, and other residents alike. Not what’s in the best interest of the union bosses. Down the road, we can invest millions more in areas of shared priorities, from broadband to child care, if we have the courage to stop the bleeding now. Let’s have this conversation, and make meaningful change toward the positive fiscal health of our state’s future.Don Turner is a former Republican State Representative from Milton, former House Minority Leader, current Milton Town Manager and longtime member of the Milton Fire and Rescue departments. He was a candidate for lieutenant governor in 2018.