Le Lézard
Classified in: Business
Subjects: ERN, CCA

Webster Reports Second Quarter 2018 Earnings


WATERBURY, Conn., July 19, 2018 /PRNewswire/ -- Webster Financial Corporation (NYSE: WBS), the holding company for Webster Bank, N.A. and its HSA Bank division, today announced earnings applicable to common shareholders of $79.5 million, or $0.86 per diluted share, for the quarter ended June 30, 2018 compared to $59.5 million, or $0.64 per diluted share, for the quarter ended June 30, 2017. Adjusting for $7.2 million related to an accrual for deposit insurance assessments for periods prior to 2018 and $1.4 million of banking center optimization expenses, earnings per diluted share would have been $0.92.

"Webster's second quarter results reflect continued progress in executing on our strategic priorities," said John R. Ciulla, president and chief executive officer. "We achieved record levels of performance as a result of double-digit pre-provision net revenue growth in all three lines of business."

Highlights for the second quarter of 2018:

"Year-over-year revenue growth exceeded 10 percent for the second consecutive quarter, led by a 30 basis point increase in the net interest margin," said Glenn MacInnes, executive vice president and chief financial officer. "Our balance sheet structure positions us well for future growth."

Line of Business performance compared to the second quarter of 2017:

Commercial Banking

Webster's Commercial Banking segment serves middle market, commercial real estate, asset-based lending, equipment finance, private banking, and treasury and payment solutions clients. As of June 30, 2018, Commercial Banking had $9.9 billion in loans and leases and $3.7 billion in deposit balances.

Commercial Banking Operating Results:



Three months ended June 30,

(In thousands)

2018

2017

Net interest income

$88,458

$78,946

Non-interest income

15,041

12,532

Operating revenue

103,499

91,478

Non-interest expense

42,979

37,304

Pre-tax, pre-provision net revenue

$60,520

$54,174





At June 30,

(In millions)

2018

2017

Loans and leases

$9,936

$9,215

Deposits

$3,681

$3,826

Pre-tax, pre-provision net revenue increased $6.3 million to $60.5 million in the quarter as compared to prior year. Net interest income increased $9.5 million to $88.5 million, primarily due to loan growth and higher loan and deposit margins.  Non-interest income increased $2.5 million to $15.0 million, primarily due to greater client interest rate hedging activity in the quarter as compared to prior year. Non-interest expense increased $5.7 million to $43.0 million, primarily due to investments in people and technology.

HSA Bank
Webster's HSA Bank division offers a comprehensive consumer-directed healthcare solution that includes health savings accounts, health reimbursement arrangements, flexible spending accounts and commuter benefits. Health savings accounts are distributed nationwide directly to employers and individual consumers, as well as through national and regional insurance carriers, benefit consultants and financial advisors. As of June 30, 2018, HSA Bank had $7.0 billion in total footings comprising $5.5 billion in deposit balances and $1.5 billion in assets under administration through linked investment accounts.

HSA Bank Operating Results:



Three months ended June 30,

(In thousands)

2018

2017

Net interest income

$35,265

$25,574

Non-interest income

22,882

19,750

Operating revenue

58,147

45,324

Non-interest expense

31,220

28,750

Pre-tax net revenue

$26,927

$16,574




At June 30,

(In millions)

2018

2017

Number of accounts

2,674

2,368

Deposits

$5,518

$4,828

Linked investment accounts*

1,476

1,076

Total footings

$6,994

$5,904

*Linked investment accounts are held off balance sheet

Pre-tax net revenue increased $10.4 million to $26.9 million in the quarter as compared to prior year. Net interest income increased $9.7 million to $35.3 million, due to a 14 percent growth in deposits and a 20 percent improvement in deposit spreads. Non-interest income increased $3.1 million to $22.9 million, primarily due to growth in accounts over the past year. Non-interest expense increased $2.5 million to $31.2 million, primarily due to account growth and continued investment in the business including expanded distribution.

Community Banking
Community Banking serves consumer and business banking customers primarily throughout southern New England and into Westchester County, New York. Community Banking is comprised of the Personal Banking and Business Banking operating segments, as well as a distribution network consisting of 163 banking centers and 329 ATMs, a customer care center, and a full range of web and mobile-based banking services.

As of June 30, 2018, Community Banking had $8.1 billion in loans and $11.8 billion in deposit balances.

Community Banking Operating Results:



Three months ended June 30,

(In thousands)

2018

2017

Net interest income

$101,902

$95,902

Non-interest income

26,378

28,058

Operating revenue

128,280

123,960

Non-interest expense

95,197

94,322

Pre-tax, pre-provision net revenue

$33,083

$29,638





At June 30,

(In millions)

2018

2017

Loans

$8,090

$8,058

Deposits

$11,796

$11,423

Pre-tax, pre-provision net revenue increased $3.4 million to $33.1 million in the quarter as compared to prior year. Net interest income increased $6.0 million to $101.9 million, primarily due to growth in loan and deposit balances, coupled with improved interest rate spreads on deposits. Non-interest income decreased $1.7 million primarily driven by lower mortgage production and related returns on mortgage banking activities, offset by growth in fees from investment services and other miscellaneous fee income. Non-interest expense increased $0.9 million as a result of higher compensation-related expenses, investments in technology and risk management; partially offset by reductions in other expense categories.

Consolidated financial performance:

Quarterly net interest income compared to the second quarter of 2017:

Quarterly provision for loan losses:

Quarterly non-interest income compared to the second quarter of 2017:

Quarterly non-interest expense compared to the second quarter of 2017:

Quarterly income taxes compared to the second quarter of 2017:

Investment securities:

Loans:

Asset quality:

Deposits and borrrowings:

Capital:

 

***

 

Webster Financial Corporation is the holding company for Webster Bank, National Association and its HSA Bank division. With $27.0 billion in assets, Webster provides business and consumer banking, mortgage, financial planning, trust, and investment services through 163 banking centers and 329 ATMs. Webster also provides mobile and Internet banking. Webster Bank owns the asset-based lending firm Webster Business Credit Corporation; the equipment finance firm Webster Capital Finance Corporation; and HSA Bank, a division of Webster Bank, which provides health savings account trustee and administrative services. Webster Bank is a member of the FDIC and an equal housing lender. For more information about Webster, including past press releases and the latest annual report, visit the Webster website at www.websterbank.com.

Conference Call

A conference call covering Webster's 2018 second quarter earnings announcement will be held today, Thursday, July 19, 2018 at 9:00 a.m. (Eastern) and may be heard through Webster's Investor Relations website at www.wbst.com, or in listen-only mode by calling 877-407-8289 or 201-689-8341 internationally. The call will be archived on the website and available for future retrieval.

 

Forward-Looking Statements

This release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Act"). Forward-looking statements can be identified by words such as "believes," "anticipates," "expects," "intends," "targeted," "continue," "remain," "will," "should," "may," "plans," "estimates," and similar references to future periods; however, such words are not the exclusive means of identifying such statements. Examples of forward-looking statements include, but are not limited to: (i) projections of revenues, expenses, income or loss, earnings or loss per share, and other financial items; (ii) statements of plans, objectives, and expectations of Webster or its management or Board of Directors; (iii) statements of future economic performance; and (iv) statements of assumptions underlying such statements. Forward-looking statements are based on Webster's current expectations and assumptions regarding its business, the economy, and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict. Webster's actual results may differ materially from those contemplated by the forward-looking statements, which are neither statements of historical fact nor guarantees or assurances of future performance. Factors that could cause actual results to differ from those discussed in the forward-looking statements include, but are not limited to: (1) local, regional, national, and international economic conditions and the impact they may have on us and our customers and our assessment of that impact; (2) volatility and disruption in national and international financial markets; (3) government intervention in the U.S. financial system; (4) changes in the level of nonperforming assets and charge-offs; (5) changes in estimates of future reserve requirements based upon the periodic review thereof under relevant regulatory and accounting requirements; (6) adverse conditions in the securities markets that lead to impairment in the value of securities in our investment portfolio; (7) inflation, interest rate, securities market, and monetary fluctuations; (8) the timely development and acceptance of new products and services and perceived overall value of these products and services by customers; (9) changes in consumer spending, borrowings, and savings habits; (10) technological changes and cyber-security matters; (11) the ability to increase market share and control expenses; (12) changes in the competitive environment among banks, financial holding companies, and other financial services providers; (13) the effect of changes in laws and regulations (including laws and regulations concerning taxes, banking, securities, and insurance) with which we and our subsidiaries must comply, including the Dodd-Frank Wall Street Reform and Consumer Protection Act; (14) the effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Public Company Accounting Oversight Board, the Financial Accounting Standards Board, and other accounting standard setters; (15) the costs and effects of legal and regulatory developments including the resolution of legal proceedings or regulatory or other governmental inquiries and the results of regulatory examinations or reviews; (16) our success at managing the risks involved in the foregoing items and (17) the other factors that are described in the Company's Annual Report on Form 10-K and Quarterly Reports on Form 10-Q under the headings "Risk Factors" and 'Management Discussion and Analysis of Financial Condition and Results of Operation." Any forward-looking statement made by the Company in this release speaks only as of the date on which it is made. Factors or events that could cause the Company's actual results to differ may emerge from time to time, and it is not possible for the Company to predict all of them. The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.


Non-GAAP Financial Measures

In addition to results presented in accordance with GAAP, this press release contains certain non-GAAP financial measures. A reconciliation of net income and other performance ratios, as adjusted, is included in the accompanying selected financial highlights table.

We believe that providing certain non-GAAP financial measures provides investors with information useful in understanding our financial performance, our performance trends and financial position. We utilize these measures for internal planning and forecasting purposes. We, as well as securities analysts, investors, and other interested parties, also use these measures to compare peer company operating performance. We believe that our presentation and discussion, together with the accompanying reconciliations, provides a complete understanding of factors and trends affecting our business and allows investors to view performance in a manner similar to management. These non-GAAP measures should not be considered a substitute for GAAP basis measures and results, and we strongly encourage investors to review our consolidated financial statements in their entirety and not to rely on any single financial measure. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names.  

 

 

WEBSTER FINANCIAL CORPORATION
Selected Financial Highlights (unaudited)





At or for the Three Months Ended



(In thousands, except per share data)


June 30,
2018



March 31,
2018



December 31,
2017



September 30,
2017



June 30,
2017




















Income and performance ratios:

















Net income

$

81,682


$

80,225


$

69,893


$

64,496


$

61,579



Earnings applicable to common shareholders


79,489



78,083



67,710



62,426



59,485



Earnings per diluted common share


0.86



0.85



0.73



0.67



0.64



Return on average assets


1.22

%


1.20

%


1.05

%


0.98

%


0.94


%

Return on average tangible common shareholders' equity (non-GAAP)


15.76



15.73



13.85



12.99



12.65



Return on average common shareholders' equity


12.22



12.15



10.66



9.95



9.63



Non-interest income as a percentage of total revenue


23.31



24.30



24.37



24.68



24.61




















Asset quality:

















Allowance for loan and lease losses

$

207,322


$

205,349


$

199,994


$

201,803


$

199,578



Nonperforming assets


146,047



140,090



132,646



168,962



170,390



Allowance for loan and lease losses / total loans and leases


1.15

%


1.15

%


1.14

%


1.16

%


1.16


%

Net charge-offs / average loans and leases (annualized)


0.19



0.13



0.34



0.18



0.16



Nonperforming loans and leases / total loans and leases


0.78



0.75



0.72



0.94



0.96



Nonperforming assets / total loans and leases plus OREO


0.81



0.79



0.76



0.97



0.99



Allowance for loan and lease losses / nonperforming loans and leases


148.00



152.95



158.00



123.32



119.96




















Other ratios:

















Tangible equity (non-GAAP)


8.29

%


8.21

%


8.23

%


8.03

%


7.95


%

Tangible common equity (non-GAAP)


7.75



7.65



7.67



7.55



7.47



Tier 1 risk-based capital (a)


11.77



11.75



11.91



11.65



11.51



Total risk-based capital (a)


13.25



13.24



13.40



13.17



13.02



Common equity tier 1 risk-based capital (a)


11.03



10.99



11.14



10.99



10.84



Shareholders' equity / total assets


10.21



10.15



10.20



10.01



9.95



Net interest margin


3.57



3.44



3.33



3.30



3.27



Efficiency ratio (non-GAAP)


57.78



59.76



59.48



59.18



60.65




















Equity and share related:

















Common equity

$

2,616,686


$

2,571,105


$

2,556,902


$

2,516,077


$

2,482,416



Book value per common share


28.40



27.94



27.76



27.34



26.93



Tangible book value per common share (non-GAAP)


22.25



21.78



21.59



21.16



20.74



Common stock closing price


63.70



55.40



56.16



52.55



52.22



Dividends declared per common share


0.33



0.26



0.26



0.26



0.26




















Common shares issued and outstanding


92,151



92,016



92,101



92,034



92,195



Weighted-average common shares outstanding - Basic


91,893



91,921



92,058



92,125



92,092



Weighted-average common shares outstanding - Diluted


92,173



92,254



92,400



92,503



92,495




















(a) Presented as projected for June 30, 2018 and actual for the remaining periods.



 

 

WEBSTER FINANCIAL CORPORATION
Consolidated Balance Sheets (unaudited)

(In thousands)


June 30,
2018



March 31,
2018



June 30,
2017

Assets:









Cash and due from banks

$

228,628


$

164,927


$

231,808

Interest-bearing deposits


70,654



45,899



33,662

Securities:









 Available for sale


2,780,581



2,773,506



2,807,966

 Held to maturity


4,356,219



4,408,321



4,219,198

   Total securities


7,136,800



7,181,827



7,027,164

Loans held for sale


18,645



19,727



39,407

Loans and Leases:









 Commercial


6,504,521



6,278,502



5,729,844

 Commercial real estate


4,580,200



4,544,831



4,556,208

 Residential mortgages


4,455,580



4,459,862



4,388,308

 Consumer


2,485,695



2,522,380



2,599,318

   Total loans and leases


18,025,996



17,805,575



17,273,678

Allowance for loan and lease losses


(207,322)



(205,349)



(199,578)

   Loans and leases, net


17,818,674



17,600,226



17,074,100

Federal Home Loan Bank and Federal Reserve Bank stock


141,293



125,328



155,505

Premises and equipment, net


127,973



127,196



131,833

Goodwill and other intangible assets, net


566,061



567,023



569,964

Cash surrender value of life insurance policies


537,431



535,391



524,674

Deferred tax asset, net


106,910



99,199



80,942

Accrued interest receivable and other assets


283,668



285,404



305,871

Total Assets

$

27,036,737


$

26,752,147


$

26,174,930










Liabilities and Shareholders' Equity:









Deposits:









 Demand

$

4,151,259


$

4,074,992


$

4,074,819

 Health savings accounts


5,517,929



5,487,627



4,828,145

 Interest-bearing checking


2,637,346



2,624,885



2,669,207

 Money market


2,016,453



2,344,526



2,316,460

 Savings


4,180,666



4,299,759



4,473,925

 Certificates of deposit


2,478,589



2,275,897



1,795,871

 Brokered certificates of deposit


361,114



277,356



299,670

   Total deposits


21,343,356



21,385,042



20,458,097

Securities sold under agreements to repurchase and other borrowings


862,568



931,299



872,692

Federal Home Loan Bank advances


1,576,956



1,202,030



1,767,757

Long-term debt


225,894



225,830



225,640

Accrued expenses and other liabilities


266,240



291,804



245,618

Total liabilities


24,275,014



24,036,005



23,569,804

Preferred stock


145,037



145,037



122,710

Common shareholders' equity


2,616,686



2,571,105



2,482,416

   Total shareholders' equity


2,761,723



2,716,142



2,605,126

Total Liabilities and Shareholders' Equity

$

27,036,737


$

26,752,147


$

26,174,930

 

 

WEBSTER FINANCIAL CORPORATION
Consolidated Statements of Income (unaudited)



Three Months Ended June 30,



Six Months Ended June 30,

(In thousands, except per share data)


2018



2017



2018



2017

Interest income:












Interest and fees on loans and leases

$

207,820


$

174,456


$

401,040


$

342,264

Interest and dividends on securities


52,523



52,130



105,082



103,686

Loans held for sale


148



203



290



519

Total interest income


260,491



226,789



506,412



446,469

Interest expense:












Deposits


20,225



14,679



38,381



28,114

Borrowings


15,256



14,323



28,853



27,904

Total interest expense


35,481



29,002



67,234



56,018

Net interest income


225,010



197,787



439,178



390,451

Provision for loan and lease losses


10,500



7,250



21,500



17,750

Net interest income after provision for loan and lease losses


214,510



190,537



417,678



372,701

Non-interest income:












Deposit service fees


40,859



38,192



81,310



75,198

Loan and lease related fees


6,333



6,344



13,329



13,552

Wealth and investment services


8,456



7,877



16,326



15,150

Mortgage banking activities


1,235



3,351



2,379



5,617

Increase in cash surrender value of life insurance policies


3,643



3,648



7,215



7,223

Other income


7,848



5,265



16,562



10,979



68,374



64,677



137,121



127,719

Impairment loss on securities recognized in earnings


?



(126)



?



(126)

Total non-interest income


68,374



64,551



137,121



127,593

Non-interest expense:












Compensation and benefits


93,052



86,394



187,817



173,893

Occupancy


15,842



16,034



30,987



32,213

Technology and equipment


24,604



22,458



48,466



44,066

Marketing


4,889



4,615



8,441



10,056

Professional and outside services


4,381



3,507



9,169



7,783

Intangible assets amortization


962



1,028



1,924



2,083

Loan workout expenses


844



755



1,420



1,363

Deposit insurance


13,687



6,625



20,404



13,357

Other expenses


22,198



23,003



43,446



43,389

Total non-interest expense


180,459



164,419



352,074



328,203

Income before income taxes


102,425



90,669



202,725



172,091

Income tax expense


20,743



29,090



40,818



51,041

Net income


81,682



61,579



161,907



121,050

 Preferred stock dividends and other


(2,193)



(2,094)



(4,334)



(4,224)

 Earnings applicable to common shareholders

$

79,489


$

59,485


$

157,573


$

116,826













Weighted-average common shares outstanding - Diluted


92,173



92,495



92,236



92,470













Earnings per common share:












Basic

$

0.87


$

0.65


$

1.71


$

1.27

Diluted


0.86



0.64



1.71



1.26

 

 

WEBSTER FINANCIAL CORPORATION
Five Quarter Consolidated Statements of Income (unaudited)



Three Months Ended

(In thousands, except per share data)


June 30,
2018



March 31,
2018



December 31,
2017



September 30,
2017



June 30,
2017

Interest income:















Interest and fees on loans and leases

$

207,820


$

193,220


$

185,172


$

181,130


$

174,456

Interest and dividends on securities


52,523



52,559



50,735



49,584



52,130

Loans held for sale


148



142



208



307



203

Total interest income


260,491



245,921



236,115



231,021



226,789

Interest expense:















Deposits


20,225



18,156



17,379



16,760



14,679

Borrowings


15,256



13,597



13,804



13,357



14,323

Total interest expense


35,481



31,753



31,183



30,117



29,002

Net interest income


225,010



214,168



204,932



200,904



197,787

Provision for loan and lease losses


10,500



11,000



13,000



10,150



7,250

Net interest income after provision for loan and lease losses


214,510



203,168



191,932



190,754



190,537

Non-interest income:















Deposit service fees


40,859



40,451



37,618



38,321



38,192

Loan and lease related fees


6,333



6,996



6,550



6,346



6,344

Wealth and investment services


8,456



7,870



8,155



7,750



7,877

Mortgage banking activities


1,235



1,144



1,899



2,421



3,351

Increase in cash surrender value of life insurance policies


3,643



3,572



3,684



3,720



3,648

Other income


7,848



8,714



8,133



7,288



5,265



68,374



68,747



66,039



65,846



64,677

Impairment loss on securities recognized in earnings


?



?



?



?



(126)

Total non-interest income


68,374



68,747



66,039



65,846



64,551

Non-interest expense:















Compensation and benefits


93,052



94,765



94,217



88,395



86,394

Occupancy


15,842



15,145



13,533



14,744



16,034

Technology and equipment


24,604



23,862



22,818



22,580



22,458

Marketing


4,889



3,552



3,320



4,045



4,615

Professional and outside services


4,381



4,788



5,045



4,030



3,507

Intangible assets amortization


962



962



977



1,002



1,028

Loan workout expenses


844



576



891



840



755

Deposit insurance


13,687



6,717



5,948



6,344



6,625

Other expenses


22,198



21,248



24,300



19,843



23,003

Total non-interest expense


180,459



171,615



171,049



161,823



164,419

Income before income taxes


102,425



100,300



86,922



94,777



90,669

Income tax expense


20,743



20,075



17,029



30,281



29,090

Net income


81,682



80,225



69,893



64,496



61,579

 Preferred stock dividends and other


(2,193)



(2,142)



(2,183)



(2,070)



(2,094)

 Earnings applicable to common shareholders

$

79,489


$

78,083


$

67,710


$

62,426


$

59,485
















Weighted-average common shares outstanding - Diluted


92,173



92,254



92,400



92,503



92,495
















Earnings per common share:















Basic

$

0.87


$

0.85


$

0.74


$

0.68


$

0.65

Diluted


0.86



0.85



0.73



0.67



0.64


 

 

WEBSTER FINANCIAL CORPORATION
Consolidated Average Balances, Interest, Yields and Rates, and Net Interest Margin on a Fully Tax-equivalent Basis (unaudited)




Three Months Ended June 30,




2018






2017


(Dollars in thousands)


Average balance



Interest



Yield/rate






Average balance



Interest


Yield/rate


Assets:





















Interest-earning assets:





















Loans and leases

$

17,886,685


$

208,490



4.63

%




$

17,266,424


$

175,421


4.04

%

Securities (a)


7,142,572



52,277



2.90






7,030,120



53,569


3.04


Federal Home Loan and Federal Reserve Bank stock


133,114



1,546



4.66






165,087



1,563


3.80


Interest-bearing deposits


66,339



247



1.47






64,812



169


1.03


Loans held for sale


15,211



148



3.90






22,956



203


3.53


 Total interest-earning assets


25,243,921


$

262,708



4.13

%





24,549,399


$

230,925


3.74

%

Non-interest-earning assets


1,631,032












1,633,049







 Total Assets

$

26,874,953











$

26,182,448




























Liabilities and Shareholders' Equity:





















Interest-bearing liabilities:





















Demand deposits

$

4,109,165


$

?



?

%




$

3,979,330


$

?


?

%

Health savings accounts


5,519,917



2,735



0.20






4,822,188



2,392


0.20


Interest-bearing checking, money market and savings


9,041,286



7,859



0.35






9,479,595



6,331


0.27


Certificates of deposit


2,732,709



9,631



1.41






2,057,335



5,956


1.16


 Total deposits


21,403,077



20,225



0.38






20,338,448



14,679


0.29























Securities sold under agreements to repurchase and other borrowings


869,238



3,998



1.82






844,837



3,583


1.68


Federal Home Loan Bank advances


1,399,344



8,471



2.39






1,997,069



8,156


1.62


Long-term debt


225,863



2,787



4.94






225,604



2,584


4.58


 Total borrowings


2,494,445



15,256



2.42






3,067,510



14,323


1.85


 Total interest-bearing liabilities


23,897,522


$

35,481



0.59

%





23,405,958


$

29,002


0.49

%

Non-interest-bearing liabilities


223,076












179,268







 Total liabilities


24,120,598












23,585,226




























Preferred stock


145,037












122,710







Common shareholders' equity


2,609,318












2,474,512







Total shareholders' equity


2,754,355












2,597,222







 Total Liabilities and Shareholders' Equity

$

26,874,953











$

26,182,448







Tax-equivalent net interest income





227,227












201,923




Less: tax-equivalent adjustments





(2,217)












(4,136)




 Net interest income




$

225,010











$

197,787




 Net interest margin








3.57

%










3.27

%






















(a) For purposes of the yield computation, unrealized gains (losses) on securities available for sale are excluded from the average balance.


 

 

WEBSTER FINANCIAL CORPORATION
Consolidated Average Balances, Interest, Yields and Rates, and Net Interest Margin on a Fully Tax-equivalent Basis (unaudited)




Six Months Ended June 30,




2018






2017


(Dollars in thousands)


Average balance



Interest



Yield/rate






Average balance



Interest


Yield/rate


Assets:





















Interest-earning assets:





















Loans and leases

$

17,821,094


$

402,354



4.50

%




$

17,154,412


$

344,150


4.00

%

Securities (a)


7,150,495



104,766



2.91






7,050,583



106,420


3.01


Federal Home Loan and Federal Reserve Bank stock


133,177



3,001



4.54






173,601



3,250


3.78


Interest-bearing deposits


59,563



448



1.50






66,476



299


0.89


Loans held for sale


15,768



290



3.68






29,560



519


3.51


 Total interest-earning assets


25,180,097


$

510,859



4.04

%





24,474,632


$

454,638


3.71

%

Non-interest-earning assets


1,636,345












1,637,865







 Total Assets

$

26,816,442











$

26,112,497




























Liabilities and Shareholders' Equity:





















Interest-bearing liabilities:





















Demand deposits

$

4,136,115


$

?



?

%




$

3,957,403


$

?


?

%

Health savings accounts


5,473,715



5,359



0.20






4,779,245



4,684


0.20


Interest-bearing checking, money market and savings


9,191,181



15,572



0.34






9,402,581



11,819


0.25


Certificates of deposit


2,596,683



17,450



1.35






2,040,024



11,611


1.15


 Total deposits


21,397,694



38,381



0.36






20,179,253



28,114


0.28























Securities sold under agreements to repurchase and other borrowings


872,516



7,638



1.74






874,871



7,123


1.62


Federal Home Loan Bank advances


1,355,830



15,752



2.31






2,066,551



15,649


1.51


Long-term debt


225,831



5,463



4.84






225,572



5,132


4.55


 Total borrowings


2,454,177



28,853



2.34






3,166,994



27,904


1.75


 Total interest-bearing liabilities


23,851,871


$

67,234



0.57

%





23,346,247


$

56,018


0.48

%

Non-interest-bearing liabilities


226,011












187,858







 Total liabilities


24,077,882












23,534,105




























Preferred stock


145,099












122,710







Common shareholders' equity


2,593,461












2,455,682







Total shareholders' equity


2,738,560












2,578,392







 Total Liabilities and Shareholders' Equity

$

26,816,442











$

26,112,497







Tax-equivalent net interest income





443,625












398,620




Less: tax-equivalent adjustments





(4,447)












(8,169)




 Net interest income




$

439,178











$

390,451




 Net interest margin








3.51

%










3.25

%






















(a) For purposes of the yield computation, unrealized gains (losses) on securities available for sale are excluded from the average balance.


 

 

WEBSTER FINANCIAL CORPORATION
Five Quarter Loan and Lease Balances (unaudited)

(Dollars in thousands)


June 30,
2018



March 31,
2018



December 31,
2017



September 30,
2017



June 30,
2017

Loan and Lease Balances (actual):















Commercial non-mortgage

$

5,544,685


$

5,404,231


$

5,084,148


$

5,031,481


$

4,868,641

Asset-based lending


959,836



874,271



834,779



883,599



861,203

Commercial real estate


4,580,200



4,544,831



4,523,828



4,464,917



4,556,208

Residential mortgages


4,455,580



4,459,862



4,490,878



4,499,441



4,388,308

Consumer


2,485,695



2,522,380



2,590,225



2,566,983



2,599,318

Total Loan and Lease Balances


18,025,996



17,805,575



17,523,858



17,446,421



17,273,678

Allowance for loan and lease losses


(207,322)



(205,349)



(199,994)



(201,803)



(199,578)

Loans and Leases, net

$

17,818,674


$

17,600,226


$

17,323,864


$

17,244,618


$

17,074,100
















Loan and Lease Balances (average):















Commercial non-mortgage

$

5,470,677


$

5,306,412


$

5,080,267


$

4,990,146


$

4,891,446

Asset-based lending


897,564



864,895



876,070



859,289



864,247

Commercial real estate


4,549,969



4,538,429



4,446,162



4,475,207



4,550,595

Residential mortgages


4,460,904



4,476,057



4,498,707



4,455,932



4,340,656

Consumer


2,507,571



2,568,980



2,600,970



2,583,945



2,619,480

Total Loan and Lease Balances


17,886,685



17,754,773



17,502,176



17,364,519



17,266,424

Allowance for loan and lease losses


(207,718)



(201,575)



(202,632)



(202,628)



(201,852)

Loans and Leases, net

$

17,678,967


$

17,553,198


$

17,299,544


$

17,161,891


$

17,064,572



WEBSTER FINANCIAL CORPORATION
Five Quarter Nonperforming Assets (unaudited)

(Dollars in thousands)


June 30,
2018



March 31,
2018



December 31,
2017



September 30,
2017



June 30,
2017

Nonperforming loans and leases:















Commercial non-mortgage

$

40,240


$

46,843


$

39,795


$

59,512


$

68,977

Asset-based lending


1,197



1,571



589



8,558



?

Commercial real estate


9,606



3,884



4,484



11,066



11,168

Residential mortgages


50,654



44,496



44,407



45,597



46,018

Consumer


38,390



37,465



37,307



38,915



40,206

Total nonperforming loans and leases

$

140,087


$

134,259


$

126,582


$

163,648


$

166,369
















Other real estate owned and repossessed assets:















Commercial non-mortgage

$

148


$

218


$

305


$

328


$

33

Residential mortgages


3,271



2,785



3,110



2,843



2,513

Consumer


2,541



2,828



2,649



2,143



1,475

Total other real estate owned and repossessed assets

$

5,960


$

5,831


$

6,064


$

5,314


$

4,021

Total nonperforming assets

$

146,047


$

140,090


$

132,646


$

168,962


$

170,390



WEBSTER FINANCIAL CORPORATION
Five Quarter Past Due Loans and Leases (unaudited)

(Dollars in thousands)


June 30,
2018



March 31,
2018



December 31,
2017



September 30,
2017



June 30,
2017

Past due 30-89 days:















Commercial non-mortgage

$

7,508


$

4,749


$

8,167


$

3,169


$

2,793

Asset-based lending


?



?



?



?



?

Commercial real estate


719



1,103



551



1,783



1,013

Residential mortgages


10,861



17,337



13,771



11,700



9,831

Consumer


14,354



17,602



22,394



15,942



14,360

Total past due 30-89 days


33,442



40,791



44,883



32,594



27,997

Past due 90 days or more and accruing


62



845



887



934



1,185

Total past due loans and leases

$

33,504


$

41,636


$

45,770


$

33,528


$

29,182



WEBSTER FINANCIAL CORPORATION
Five Quarter Changes in the Allowance for Loan and Lease Losses (unaudited)



For the Three Months Ended

(Dollars in thousands)


June 30,
2018



March 31,
2018



December 31,
2017



September 30,
2017



June 30,
2017

Beginning balance

$

205,349


$

199,994


$

201,803


$

199,578


$

199,107

Provision


10,500



11,000



13,000



10,150



7,250

Charge-offs:















Commercial non-mortgage


5,697



1,542



387



3,123



2,315

Asset-based lending


?



?



2,572



?



?

Commercial real estate


40



77



8,324



749



100

Residential mortgages


754



917



560



585



623

Consumer


4,907



5,074



6,174



6,197



5,602

Total charge-offs


11,398



7,610



18,017



10,654



8,640

Recoveries:















Commercial non-mortgage


923



135



1,231



545



330

Asset-based lending


?



?



33



?



?

Commercial real estate


9



2



144



10



4

Residential mortgages


325



385



100



280



407

Consumer


1,614



1,443



1,700



1,894



1,120

Total recoveries


2,871



1,965



3,208



2,729



1,861

Total net charge-offs


8,527



5,645



14,809



7,925



6,779

Ending balance

$

207,322


$

205,349


$

199,994


$

201,803


$

199,578

 

 

WEBSTER FINANCIAL CORPORATION
Reconciliations to GAAP Financial Measures




















The Company evaluates its business based on certain ratios that utilize tangible equity, a non-GAAP financial measure. Return on average tangible common shareholders' equity measures the Company's net income available to common shareholders, adjusted for the tax-effected amortization of intangible assets, as a percentage of average shareholders' equity less average preferred stock and average goodwill and intangible assets. The tangible equity ratio represents shareholders' equity less goodwill and intangible assets divided by total assets less goodwill and intangible assets. The tangible common equity ratio represents shareholders' equity less preferred stock and goodwill and intangible assets divided by total assets less goodwill and intangible assets. Tangible book value per common share represents shareholders' equity less preferred stock and goodwill and intangible assets divided by common shares outstanding at the end of the period.




















The efficiency ratio, which measures the costs expended to generate a dollar of revenue, is calculated excluding foreclosed property expense, amortization of intangibles, gain or loss on securities, and other non-recurring items. Core deposits express total deposits less time deposits. Accordingly, these are also non-GAAP financial measures.




















The Company believes the use of these non-GAAP financial measures provides additional clarity in assessing the results of the Company. Other companies may define or calculate supplemental financial data differently. See the tables below for reconciliations of these non-GAAP financial measures with financial measures defined by GAAP.






















At or for the Three Months Ended



(In thousands, except per share data)


June 30,
2018



March 31,
2018



December 31,
2017



September 30,
2017



June 30,
2017



Return on average tangible common shareholders' equity:

















Net income (GAAP)

$

81,682


$

80,225


$

69,893


$

64,496


$

61,579



Less: Preferred stock dividends (GAAP)


1,969



1,947



2,112



2,024



2,024



Add: Intangible assets amortization, tax-effected (GAAP)


760



760



635



651



668



Income adjusted for preferred stock dividends and intangible assets amortization (non-GAAP)

$

80,473


$

79,038


$

68,416


$

63,123


$

60,223



Income adjusted for preferred stock dividends and intangible assets amortization, annualized basis (non-GAAP)

$

321,892


$

316,152


$

273,664


$

252,492


$

240,892



Average shareholders' equity (non-GAAP)

$

2,754,355


$

2,722,591


$

2,675,733


$

2,635,312


$

2,597,222



Less: Average preferred stock (non-GAAP)


145,037



145,161



131,707



122,710



122,710



Average goodwill and other intangible assets (non-GAAP)


566,522



567,547



568,546



569,538



570,560



Average tangible common shareholders' equity (non-GAAP)

$

2,042,796


$

2,009,883


$

1,975,480


$

1,943,064


$

1,903,952



 Return on average tangible common shareholders' equity (non-GAAP)


15.76

%


15.73

%


13.85

%


12.99

%


12.65

%



















Efficiency ratio:

















Non-interest expense (GAAP)

$

180,459


$

171,615


$

171,049


$

161,823


$

164,419



Less: Foreclosed property activity (GAAP)


(106)



85



(97)



(72)



(143)



Intangible assets amortization (GAAP)


962



962



977



1,002



1,028



Other expenses (non-GAAP)


8,599



?



6,106



213



1,587



Non-interest expense (non-GAAP)

$

171,004


$

170,568


$

164,063


$

160,680


$

161,947



Net interest income (GAAP)

$

225,010


$

214,168


$

204,932


$

200,904


$

197,787



Add: Tax-equivalent adjustment (non-GAAP)


2,217



2,230



4,444



4,340



4,136



Non-interest income (GAAP)


68,374



68,747



66,039



65,846



64,551



Other (non-GAAP)


359



295



421



431



555



Income (non-GAAP)

$

295,960


$

285,440


$

275,836


$

271,521


$

267,029



 Efficiency ratio (non-GAAP)


57.78

%


59.76

%


59.48

%


59.18

%


60.65

%



















Tangible equity:

















Shareholders' equity (GAAP)

$

2,761,723


$

2,716,142


$

2,701,958


$

2,638,787


$

2,605,126



Less: Goodwill and other intangible assets (GAAP)


566,061



567,023



567,984



568,962



569,964



Tangible shareholders' equity (non-GAAP)

$

2,195,662


$

2,149,119


$

2,133,974


$

2,069,825


$

2,035,162



Total assets (GAAP)

$

27,036,737


$

26,752,147


$

26,487,645


$

26,350,182


$

26,174,930



Less: Goodwill and other intangible assets (GAAP)


566,061



567,023



567,984



568,962



569,964



Tangible assets (non-GAAP)

$

26,470,676


$

26,185,124


$

25,919,661


$

25,781,220


$

25,604,966



Tangible equity (non-GAAP)


8.29

%


8.21

%


8.23

%


8.03

%


7.95

%



















Tangible common equity:

















Tangible shareholders' equity (non-GAAP)

$

2,195,662


$

2,149,119


$

2,133,974


$

2,069,825


$

2,035,162



Less: Preferred stock (GAAP)


145,037



145,037



145,056



122,710



122,710



Tangible common shareholders' equity (non-GAAP)

$

2,050,625


$

2,004,082


$

1,988,918


$

1,947,115


$

1,912,452



Tangible assets (non-GAAP)

$

26,470,676


$

26,185,124


$

25,919,661


$

25,781,220


$

25,604,966



Tangible common equity (non-GAAP)


7.75

%


7.65

%


7.67

%


7.55

%


7.47

%



















Tangible book value per common share:

















Tangible common shareholders' equity (non-GAAP)

$

2,050,625


$

2,004,082


$

1,988,918


$

1,947,115


$

1,912,452



Common shares outstanding


92,151



92,016



92,101



92,034



92,195



Tangible book value per common share (non-GAAP)

$

22.25


$

21.78


$

21.59


$

21.16


$

20.74




















Core deposits:

















Total deposits

$

21,343,356


$

21,385,042


$

20,993,729


$

20,855,235


$

20,458,097



Less: Certificates of deposit


2,478,589



2,275,897



2,187,756



1,918,817



1,795,871



Brokered certificates of deposit


361,114



277,356



280,652



299,674



299,670



Core deposits (non-GAAP)

$

18,503,653


$

18,831,789


$

18,525,321


$

18,636,744


$

18,362,556



 

Media Contact 

Investor Contact

Alice Ferreira, 203-578-2610

Terry Mangan, 203-578-2318

[email protected] 

[email protected]

 

 

SOURCE Webster Financial Corporation


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