People’s United Financial, the biggest Connecticut-based bank, says its temporary deferrals of loan payments for borrowers needing lenience because of COVID-19 have plummeted since the end of June.
As of Sept. 11, total loan forbearance for the $61-billion asset regional bank totaled $1.6 billion. That’s down from more than $7.1 billion at the June 30 close of the second quarter.
“While we remain committed to supporting customers during these challenging economic times, we are pleased by the reduction in loans needing relief,” People’s United CEO and Chairman Jack Barnes said in a statement Tuesday.
The $1.6 billion in current loan deferrals is mostly made up of agreements that were extended beyond their initial period, while just under $250 million of the loans are in their first deferral period, the bank said.
“As expected, the largest concentration of second deferrals is in the hospitality sector,” Barnes said. “However, we have confidence that the strength and experience of the hotel owner-operators in our portfolio should enable them to successfully navigate the pandemic-driven industry slowdown. Overall, the significant improvement in forbearance and sustained excellent credit quality further reflect our long-held, conservative underwriting approach and high quality, cycle-tested customer base.”
People’s United disclosed in its most recent earnings report, in July, that it had received forbearance requests for approximately half of its loan volume related to retail commercial real estate, hotels and restaurants — sectors that comprise about 11% of People’s United’s $45-billion total loan portfolio.
The announcement of the improving deferral situation on Tuesday morning didn’t do much for the bank’s stock price, which closed Tuesday afternoon at $10.59 per share, down a penny from its opening price.
