In the first full quarter since announcing in late February its sale to Buffalo-based M&T Bank, People’s United Bank saw earnings almost double compared to the same quarter last year.

Bridgeport, Connecticut-based People’s United had second quarter net income of $170.8 million, or $0.39 per common share, an increase of 90 percent compared to the second quarter of 2020, when net income was $89.9 million, or $0.21 per common share. The bank’s first quarter net income was $144.5 million.

David Rosato, People’s United’s senior executive vice president and chief financial officer said in a statement that the bank had record quarterly operating income of $176.1 million, an increase of 12.5 percent over the first quarter. The results included higher fee revenues and a negative provision for credit losses of $40.7 million, which Rosato said was primarily driven by further improvements in the economic outlook.

The growth in fee revenues was broad-based, Rosato said, and included increases in swap income and the wealth and cash management businesses.

The net interest margin was 2.70 percent in the second quarter, down 4 basis points from the first quarter. Rosato said the impact of lower yields in the securities portfolio and increased excess liquidity was largely offset by reduced deposit costs and continued stable loan yields. People’s United has seen deposits costs decrease for eight consecutive quarter, Rosato said. Paycheck Protection Program loans had a favorable impact of 7 basis points on the second quarter net interest margin.

“We are pleased with our ability to hold net interest margin relatively steady for the quarter considering the current economic environment,” Rosato said.

Net interest income totaled $380.9 million in the second quarter compared to $385.9 million in the first quarter. The second quarter results include $24.9 million related to PPP loans, with $20.0 million in net fees and $4.9 million in net interest income.

Total deposits were $52.58 billion in the second quarter compared to $53.48 billion in the first quarter and $49.93 billion in the second quarter of 2020. Commercial deposits totaled $24.9 billion on June 30 compared to $23.3 billion on March 31. Retail deposits were $27.7 billion on June 30 and $30.2 on March 31.

Rosato attributed the decline in total deposits since the first quarter to lower brokered deposit balances and seasonal outflows in our municipal business.

“Importantly, non-interest-bearing deposits continued to grow, up 3 percent linked-quarter and now account for 32 percent of total period-end balances,” Rosato added.

Total loans were $41.37 billion in the second quarter compared to $42.77 billion in the first quarter and $45.45 billion in the second quarter of 2020. Commercial loans totaled $31.9 billion in the second quarter, down $874 million since March 31.

The decline in total loans since the end of the first quarter was driven by the forgiveness of $970 million in PPP balances, Rosato said, as well as $530 million in lower retail balances and a $130 million reduction in mortgage warehouse. He added that the loan portfolio benefited from strong results in the bank’s specialized industry verticals within C&I and LEAF.

People’s United announced merger plans with M&T Bank on Feb. 22. Shareholders of both banks approved the deal in May. The transaction is still waiting for regulatory approval.

“We are pleased with the overwhelming shareholder approval received during the quarter for the announced merger with M&T,” Jack Barnes, People’s United’s chairman and CEO, said in the earnings statement. “The vote reflects investor confidence in the value of merging two market-leading financial institutions, and in the ability of the combined company to better serve clients across some of the most populated and attractive banking markets in the nation. While preparations for the transaction’s close and integration move forward, our most important objective remains servicing the needs of customers, communities, and colleagues. Looking to the future, we are excited about executing on the growth opportunities ahead and building upon the extraordinary legacy of People’s United.”