Webster Reports Increased 2012 Third Quarter Earnings

Net Income Grows by 9 Percent over Second Quarter

Oct 12, 2012, 07:55 ET from Webster Financial Corporation

WATERBURY, Conn., Oct. 12, 2012 /PRNewswire/ -- Webster Financial Corporation (NYSE: WBS), the holding company for Webster Bank, N.A., today announced net income available to common shareholders of $44.4 million, or $.48 per diluted share, for the quarter ended September 30, 2012 compared to $40.6 million, or $.44 per diluted share, for the quarter ended June 30, 2012 and $41.4 million, or $.45 per diluted share, for the quarter ended September 30, 2011. 

Highlights for the quarter or at September 30 include:

Combined growth in commercial and commercial real estate loans of $229.3 million or 4.1 percent from June 30, and $649.2 million or 12.7 percent from a year ago.

Deposit growth of $439.5 million or 3.1 percent linked quarter and $827.5 million or 6.1 percent over prior year. Transaction account deposits now represent an all time high of 39.3 percent of total deposits.

Continued improvement in asset quality as evidenced by a 3.5 percent reduction in nonperforming assets and an 11.9 percent decline in commercial classified loans, both from June 30, and reductions of 30.2 percent and 38.3 percent from a year ago.

Continued achievement of positive operating leverage of 2.5 percent as core revenue grew by 1.8 percent and core expenses declined by 0.7 percent from the second quarter.

Return on assets, return on equity and return on tangible equity improved to 0.92 percent, 9.18 percent and 12.65 percent, respectively, compared to 0.86 percent, 8.62 percent and 11.99 percent, respectively, in the second quarter

Webster Chairman and Chief Executive Officer James C. Smith said, "Webster's momentum continued to build in the third quarter. Loans and deposits grew, revenues increased while expenses declined, asset quality trends remain favorable and earnings regained pre-recession levels. Our investments in business banking, mortgage banking and other relationship development initiatives are positively influencing operating results."

Net interest income

  • Net interest income was $144.9 million for the quarter compared to $144.4 million in the second quarter.
  • Net interest margin was 3.28 percent compared to 3.32 percent in the second quarter as the yield on interest-earning assets declined 12 basis points, primarily on securities, and the cost of funds declined 9 basis points.  
  • Average interest-earning assets grew by 1.4 percent from the second quarter and totaled $18.1 billion compared to $17.8 billion in the second quarter. 
  • Average loans grew by $187.6 million or 1.6 percent from the second quarter.

Webster President and Chief Operating Officer Jerry Plush noted, "A double-digit increase in commercial and commercial real estate loans over the past year and growth in lower-cost transaction deposits have contributed to improving operating results. We achieved positive operating leverage again and continued improvement in our efficiency ratio from 63.7 percent in the second quarter to 62.3 percent as a result of increased revenue and disciplined expense management."

Provision for loan losses

  • The Company recorded a provision of $5.0 million in the quarter, the same as in the second quarter and in the year ago period.
  • Net charge-offs were $17.7 million in the quarter compared to $16.5 million for the second quarter and $28.9 million a year ago.
  • The allowance for loan losses represented 114 percent of nonperforming loans compared to 117 percent in the prior quarter.

Noninterest income

  • Total noninterest income increased $1.1 million compared to the second quarter. Included in noninterest income is $0.8 million of securities gains in the third quarter and $2.5 million in the second quarter.
  • The $2.9 million increase in core noninterest income compared to the second quarter reflects an increase of $2.9 million in mortgage banking activities attributable to favorable spreads on loans originated for sale. Deposit service fees increased by $1.0 million. Loan fees increased by $0.5 million.
  • Other income decreased $1.6 million primarily from $0.5 million of direct investment write-downs compared to $0.5 million of direct investment income in the second quarter.

Noninterest expense

  • Total noninterest expense decreased $3.3 million compared to the second quarter. Included in noninterest expense are net one time costs of $0.6 million in the third quarter and $3.2 million in the second quarter.
  • Total noninterest expense excluding one time costs decreased $0.6 million from the second quarter and increased $3.6 million from a year ago. The decrease compared to the second quarter is driven by a combined reduction of $2.6 million in technology, marketing, professional services and loan workout expenses offset by an increase of $2.5 million in compensation and benefits expense. The increase in compensation and benefits is primarily the result of compensation tied to stock valuation, including increases of $0.6 million in cash award plan expense and $0.5 million in deferred compensation. The cash award plan vests during the fourth quarter, which will eliminate expense volatility from this plan in future quarters. Gains on foreclosed and repossessed assets were $0.4 million in the third quarter and $0.7 million in the second quarter.

Income taxes

  • The Company recorded $19.5 million of income tax expense in the quarter on the $64.5 million of pre-tax income applicable to continuing operations in the period. The effective tax rate for the quarter was 30.2 percent, compared to 30.7 percent for the second quarter, and reflects a net tax benefit of $0.3 million that was specific to the period.

Investment securities

  • Total investment securities were $6.3 billion at September 30, 2012 and $6.2 billion at June 30, 2012. The carrying value of the available for sale portfolio included $68.9 million in net unrealized gains compared to net unrealized gains of $46.7 million at June 30, while the carrying value of the held to maturity portfolio does not reflect $179.2 million in net unrealized gains compared to net unrealized gains of $158.4 million at June 30.

Loans

  • Total loans were $11.7 billion at September 30, 2012 compared to $11.5 billion at June 30, 2012 and are reflective of continued growth in commercial and commercial real estate loans. In the quarter, commercial and commercial real estate loans increased by $152.8 million and $76.5 million, respectively. Residential mortgage and consumer loans decreased by $7.7 million and $34.0 million, respectively.
  • Loan originations for portfolio in the third quarter were $835.6 million compared to $973.0 million in the second quarter and $716.2 million a year ago. In addition to loan originations for portfolio, $207.7 million of residential loans were originated and sold with servicing retained in the quarter compared to $198.3 million in the second quarter and $69.5 million a year ago.

Asset quality

  • Total nonperforming loans declined to $162.6 million, or 1.39 percent of total loans, at September 30, 2012 compared to $169.2 million, or 1.47 percent, at June 30, 2012. Included in nonperforming loans were paying loans totaling $16.8 million at September 30 compared to $17.0 million at June 30. Also included in nonperforming loans are $4.6 million in consumer liquidating loans compared to $4.5 million at June 30.
  • Past due loans increased to $67.4 million at September 30 compared to $65.9 million at June 30 attributable to one commercial real estate loan that is no longer past due subsequent to the end of the third quarter. Past due loans represented 0.57 percent of total loans at both September 30 and June 30. Past due loans for the continuing portfolios were $62.5 million at September 30 compared to $61.5 million at June 30. Past due loans for the liquidating portfolio were $4.9 million at September 30 compared to $4.4 million at June 30.
  • Other real estate owned (OREO) totaled $4.9 million compared to $4.4 million at June 30.

Deposits and borrowings

  • Total deposits were $14.4 billion at September 30, 2012 compared to $14.0 billion at June 30, 2012. Increases of $175.2 million in demand, $20.1 million in interest-bearing checking and $406.6 million in money market deposits were offset by declines of $74.3 million in savings and $88.2 million in certificates of deposit. Core to total deposits and loans to deposits were 81.8 percent and 81.4 percent, respectively, compared to 80.6 percent and 82.6 percent at June 30.
  • Total borrowings were $3.1 billion at September 30 compared to $3.2 billion at June 30.

Capital

  • The tangible common equity and Tier 1 common equity to risk-weighted assets ratios were 7.39 percent and 11.09 percent, respectively, at September 30, 2012 compared to 7.22 percent and 10.97 percent, respectively, at June 30, 2012.
  • Book value and tangible book value per common share were $22.24 and $16.13, respectively, at September 30 compared to $21.65 and $15.53, respectively, at June 30.
  • Return on average shareholders' equity and return on average tangible equity were 9.18 percent and 12.65 percent, respectively, at September 30 compared to 8.62 percent and 11.99 percent, respectively, at June 30.

Webster Financial Corporation is the holding company for Webster Bank, National Association. With $20 billion in assets, Webster provides business and consumer banking, mortgage, financial planning, trust and investment services through 167 banking offices, 466 ATMs, 293 of which are owned by Webster and 173 of which are branded, telephone banking, mobile banking, and the Internet. Webster Bank owns the asset based lending firm Webster Business Credit Corporation; the equipment finance firm Webster Capital Finance Corporation; and provides health savings account trustee and administrative services through HSA Bank, a division of Webster Bank. Member FDIC and 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 third quarter earnings announcement will be held today, Friday, October 12, 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 1-877-407-8289 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 non-performing 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; (11) the ability to increase market share and control expenses; (12) changes in the competitive environment among banks, financial holding companies, and other financial service 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 those under the Dodd-Frank Wall Street Reform and Consumer Protection Act and the Basel III update to the Basel Accords that is under development; (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; and (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 heading "Risk Factors."  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. Specifically, we provide measures based on what we believe are our operating earnings on a consistent basis and exclude non-core operating items which affect the GAAP reporting of results of operations. 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

Sept. 30,

June 30,

March 31,

Dec. 31,

Sept. 30,

(In thousands, except per share data)

2012

2012

2012

2011

2011

Income and performance ratios, (annualized):

Income attributable to Webster Financial Corp.

$        44,993

$        41,240

$        38,938

$       40,384

$       42,231

Net income available to common shareholders

44,378

40,625

38,323

39,591

41,400

Net income per diluted common share 

0.48

0.44

0.42

0.43

0.45

Return on average shareholders' equity

9.18

%

8.62

%

8.30

%

8.67

%

9.14

%

Return on average tangible equity

12.65

11.99

11.65

12.21

12.92

Return on average assets

0.92

0.86

0.82

0.88

0.94

Noninterest income as a percentage of total revenue

25.07

24.70

23.48

23.05

23.98

Efficiency ratio

62.25

63.75

65.63

65.83

62.22

Asset quality:

Allowance for loan losses

$   186,089

$   198,757

$   210,288

$   233,487

$   257,352

Nonperforming assets

167,524

173,621

184,218

193,047

239,945

Allowance for loan losses / total loans

1.59

%

1.72

%

1.86

%

2.08

%

2.33

%

Net charge-offs / average loans (annualized)

0.61

0.58

0.96

0.95

1.05

Nonperforming loans / total loans

1.39

1.47

1.58

1.68

2.00

Nonperforming assets / total loans plus OREO

1.43

1.50

1.63

1.72

2.17

Allowance for loan losses / nonperforming loans

114.44

117.44

117.96

124.14

116.43

Other ratios (annualized):

Tangible equity ratio

7.54

%

7.38

%

7.29

%

7.18

%

7.32

%

Tangible common equity ratio

7.39

7.22

7.14

7.03

7.16

Tier 1 risk-based capital ratio(b)

11.89

12.82

12.86

13.05

13.04

Total risk-based capital(b)

13.15

14.08

14.12

14.61

14.60

Tier 1 common equity / risk-weighted assets(b)

11.09

10.97

10.96

11.08

11.01

Shareholders' equity / total assets

10.05

9.94

9.90

9.86

10.08

Interest rate spread

3.26

3.29

3.33

3.36

3.45

Net interest margin

3.28

3.32

3.36

3.39

3.49

Share and equity related:

Common equity

$ 1,954,739

$  1,902,609

$ 1,866,003

$ 1,816,835

$ 1,807,330

Book value per common share

22.24

21.65

21.24

20.74

20.65

Tangible book value per common share

16.13

15.53

15.10

14.57

14.47

Common stock closing price

23.70

21.66

22.67

20.39

15.30

Dividends declared per common share 

0.10

0.10

0.05

0.05

0.05

Common shares outstanding

87,899

87,885

87,849

87,600

87,507

Basic shares (weighted average)

87,394

87,291

87,216

87,097

87,046

Diluted shares ( weighted average)

91,884

91,543

91,782

90,929

91,205

Footnotes:

(a)

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

(b)

The ratios presented are projected for September 30, 2012 and actual for the remaining periods presented.

(c)

Certain previously reported information has been corrected to reflect the deferment of certain commercial loan fees.

 

 

WEBSTER FINANCIAL CORPORATION

Consolidated Balance Sheets  (unaudited)

September 30,

June 30,

September 30,

(In thousands)

2012

2012

2011

Assets:

Cash and due from banks

$        164,556

$        197,229

$        168,776

Interest-bearing deposits

79,763

73,598

87,240

Investment securities:

  Available for sale, at fair value

3,120,354

3,153,580

2,500,151

  Held to maturity

3,142,160

3,076,226

3,106,013

Total securities

6,262,514

6,229,806

5,606,164

Loans held for sale

91,207

89,228

28,266

Loans:

  Commercial

3,138,807

2,985,993

2,841,242

  Commercial real estate

2,627,893

2,551,427

2,276,295

  Residential mortgages

3,292,948

3,300,617

3,150,286

  Consumer

2,668,004

2,701,960

2,782,263

Total loans

11,727,652

11,539,997

11,050,086

Allowance for loan losses

(186,089)

(198,757)

(257,352)

Loans, net

11,541,563

11,341,240

10,792,734

Prepaid FDIC premiums

21,673

27,062

42,424

Federal Home Loan Bank and Federal Reserve Bank stock

142,595

142,595

143,874

Premises and equipment, net

135,394

137,420

148,274

Goodwill and other intangible assets, net

541,399

542,783

546,974

Cash surrender value of life insurance policies

414,797

312,117

305,901

Deferred tax asset, net

74,098

79,011

98,588

Accrued interest receivable and other assets

260,103

257,660

254,796

Total Assets

$ 19,729,662

$    19,429,749

$    18,224,011

Liabilities and Equity:

Deposits:

  Demand

$     2,786,525

$     2,611,297

$     2,292,673

  Interest-bearing checking

2,883,216

2,863,076

2,440,464

  Money market

2,340,717

1,934,137

2,225,841

  Savings

3,776,280

3,850,549

3,689,377

  Certificates of deposit

2,507,647

2,595,816

2,818,527

  Brokered certificates of deposit

119,052

119,052

119,052

 Total deposits

14,413,437

13,973,927

13,585,934

Securities sold under agreements to repurchase and other short-term borrowings

 

1,310,015

1,203,378

1,220,905

Federal Home Loan Bank advances

1,452,660

1,529,102

760,964

Long-term debt

335,678

472,928

554,478

Accrued expenses and other liabilities

234,194

318,866

255,884

Total liabilities

17,745,984

17,498,201

16,378,165

Webster Financial Corporation shareholders' equity

1,983,678

1,931,548

1,836,269

Noncontrolling interests

-

-

9,577

Total equity

1,983,678

1,931,548

1,845,846

Total Liabilities and Equity

$ 19,729,662

$    19,429,749

$    18,224,011

See Selected Financial Highlights for footnotes.

 

 

WEBSTER FINANCIAL CORPORATION

Consolidated Statements of Operations (unaudited)

Three Months Ended

Nine Months Ended

September

September

(In thousands, except per share data)

2012

2011

2012

2011

Interest income:

Interest and fees on loans and leases

$  121,367

$ 121,322

$363,487

$365,660

Interest and dividends on securities

50,194

52,974

155,659

160,345

Loans held for sale

655

266

1,810

865

Total interest income

172,216

174,562

520,956

526,870

Interest expense:

Deposits

14,543

18,930

45,701

63,540

Borrowings

12,783

13,947

42,619

40,571

Total interest expense

27,326

32,877

88,320

104,111

Net interest income

144,890

141,685

432,636

422,759

Provision for loan losses

5,000

5,000

14,000

20,000

Net interest income after provision for loan losses

139,890

136,685

418,636

402,759

Noninterest income:

Deposit service fees

24,728

27,074

71,810

78,509

Loan related fees

4,039

5,308

12,473

15,341

Wealth and investment services

7,186

6,486

21,656

20,662

Mortgage banking activities

6,515

1,324

14,522

3,811

Increase in cash surrender value of life insurance policies

2,680

2,642

7,758

7,751

Net gain on investment securities

810

-

3,347

2,024

Other income

2,521

1,857

8,252

6,698

Total noninterest income

48,479

44,691

139,818

134,796

Noninterest expense:

Compensation and benefits

66,126

61,897

198,332

194,501

Occupancy

12,462

13,150

37,922

40,741

Technology and equipment expense

15,118

15,141

46,721

45,667

Marketing

4,529

4,144

13,723

13,916

Professional and outside services

2,790

3,125

8,869

8,368

Intangible assets amortization

1,384

1,397

4,178

4,191

Foreclosed and repossessed asset expenses

118

726

761

2,320

Foreclosed and repossessed asset gains 

(409)

(722)

(1,743)

(243)

Loan workout expenses

1,693

2,012

5,718

5,591

Deposit insurance 

5,675

4,472

17,107

16,171

Other expenses

13,805

14,392

42,238

43,032

123,291

119,734

373,826

374,255

Debt prepayment penalties

391

-

4,040

-

Write-down for expedited asset disposition

-

-

-

5,073

Contract termination and severance

136

1,555

863

2,615

Branch and facility optimization

69

2,183

150

3,315

Costs for warrant registration

-

-

-

350

Provision (benefit) for litigation and settlements

-

(254)

-

232

Loan repurchase and unfunded commitment reserve benefit, net

-

-

-

(1,436)

Total noninterest expense

123,887

123,218

378,879

384,404

Income from continuing operations before income taxes 

64,482

58,158

179,575

153,151

Income tax expense

19,489

15,927

54,404

44,152

Income from continuing operations 

44,993

42,231

125,171

108,999

Income from discontinued operations, net of tax

-

-

-

1,995

Consolidated net income

44,993

42,231

125,171

110,994

Less: Net loss attributable to noncontrolling interests

-

-

-

(1)

Net income attributable to Webster Financial Corp.

44,993

42,231

125,171

110,995

Preferred stock dividends

(615)

(831)

(1,845)

(2,493)

Net income available to common shareholders

$    44,378

$   41,400

$123,326

$108,502

   Diluted shares (weighted average)

91,884

91,205

91,754

91,954

Net income per common share available to common shareholders:

Basic

   Income from continuing operations

$        0.51

$       0.48

$     1.41

$     1.22

   Net income

0.51

0.48

1.41

1.24

Diluted

   Income from continuing operations

0.48

0.45

1.34

1.15

   Net income

0.48

0.45

1.34

1.17

 See Selected Financial Highlights for footnotes.

 

 

WEBSTER FINANCIAL CORPORATION

Five Quarter Consolidated Statements of Operations (unaudited)

Three Months Ended

Sept. 30,

June 30,

March 31,

Dec. 31,

Sept. 30,

(In thousands, except per share data)

2012

2012

2012

2011

2011

Interest income:

Interest and fees on loans and leases

$   121,367

$   121,379

$   120,741

$     121,223

$   121,322

Interest and dividends on securities

50,194

52,597

52,868

51,260

52,974

Loans held for sale

655

657

498

370

266

Total interest income

172,216

174,633

174,107

172,853

174,562

Interest expense:

Deposits

14,543

15,102

16,056

17,268

18,930

Borrowings

12,783

15,153

14,683

14,576

13,947

Total interest expense

27,326

30,255

30,739

31,844

32,877

Net interest income

144,890

144,378

143,368

141,009

141,685

Provision for loan losses

5,000

5,000

4,000

2,500

5,000

Net interest income after provision for loan losses

139,890

139,378

139,368

138,509

136,685

Noninterest income:

Deposit service fees

24,728

23,719

23,363

24,286

27,074

Loan related fees

4,039

3,565

4,869

4,896

5,308

Wealth and investment services

7,186

7,249

7,221

5,759

6,486

Mortgage banking activities

6,515

3,624

4,383

1,094

1,324

Increase in cash surrender value of life insurance policies

2,680

2,561

2,517

2,609

2,642

Net gain on investment securities

810

2,537

-

-

-

Other income

2,521

4,098

1,633

3,602

1,857

Total noninterest income

48,479

47,353

43,986

42,246

44,691

Noninterest expense:

Compensation and benefits

66,126

63,587

68,619

68,146

61,897

Occupancy

12,462

12,578

12,882

13,125

13,150

Technology and equipment expense

15,118

16,021

15,582

15,054

15,141

Marketing

4,529

5,094

4,100

4,540

4,144

Professional and outside services

2,790

3,387

2,692

2,835

3,125

Intangible assets amortization

1,384

1,397

1,397

1,397

1,397

Foreclosed and repossessed asset expenses

118

176

467

730

726

Foreclosed and repossessed asset gains 

(409)

(670)

(664)

(63)

(722)

Loan workout expenses

1,693

2,201

1,824

1,956

2,012

Deposit insurance 

5,675

5,723

5,709

4,756

4,472

Other expenses

13,805

14,443

13,990

12,864

14,392

123,291

123,937

126,598

125,340

119,734

Debt prepayment penalties

391

2,515

1,134

5,203

-

Write-down for expedited asset disposition

-

-

-

1,187

-

Contract termination and severance

136

727

-

2,485

1,555

Branch and facility optimization

69

-

81

1,689

2,183

Preferred stock redemption costs

-

-

-

423

-

Provision (benefit) for litigation and settlements

-

-

-

(9,755)

(254)

Total noninterest expense

123,887

127,179

127,813

126,572

123,218

Income from continuing operations before income taxes 

64,482

59,552

55,541

54,183

58,158

Income tax expense

19,489

18,312

16,603

13,799

15,927

Income from continuing operations 

44,993

41,240

38,938

40,384

42,231

Income from discontinued operations, net of tax

-

-

-

-

-

Consolidated net income

44,993

41,240

38,938

40,384

42,231

Less: Net loss attributable to noncontrolling interests

-

-

-

-

-

Net income attributable to Webster Financial Corp.

44,993

41,240

38,938

40,384

42,231

Preferred stock dividends

(615)

(615)

(615)

(793)

(831)

Net income available to common shareholders

$     44,378

$     40,625

$     38,323

$      39,591

$     41,400

   Diluted shares (weighted average)

91,884

91,543

91,782

90,929

91,205

Net income per common share available to common shareholders:

Basic

   Income from continuing operations

$        0.51

$        0.46

$        0.44

$          0.45

$        0.48

   Net income 

0.51

0.46

0.44

0.45

0.48

Diluted

   Income from continuing operations

0.48

0.44

0.42

0.43

0.45

   Net income

0.48

0.44

0.42

0.43

0.45

  See Selected Financial Highlights for footnotes.

 

 

WEBSTER FINANCIAL CORPORATION

Five Quarter Interest Rate Spreads and Margin  (unaudited)

Three Months Ended

September 30,

June 30,

March 31,

December 31,

September 30,

2012 

2012

2012

2011

2011

Interest rate spread

Yield on interest-earning assets

3.88

%

4.00

%

4.06

%

4.13

%

4.27

%

Cost of interest-bearing liabilities

0.62

0.71

0.73

0.77

0.82

    Interest rate spread

3.26

%

3.29

%

3.33

%

3.36

%

3.45

%

    Net interest margin

3.28

%

3.32

%

3.36

%

3.39

%

3.49

%

Consolidated Average Balances, Yields, and Rates Paid   (unaudited)

Three Months Ended September 30,

2012

2011 (c)

 Fully tax- 

 Fully tax- 

Average

 equivalent 

Average

 equivalent 

(Dollars in thousands)

balance

Interest 

 yield/rate 

balance

Interest 

 yield/rate 

Assets:

Interest-earning assets:

Loans

$ 11,608,334

$      121,367

4.14

%

$ 11,023,674

$      121,322

4.36

%

Investment securities(a)

6,145,414

53,010

3.48

5,344,987

55,916

4.22

Loans held for sale

82,006

655

3.19

25,593

266

4.17

Federal Home Loan and Federal Reserve Bank stock

142,595

879

2.45

143,874

823

2.27

Interest-bearing deposits

91,502

45

0.19

89,273

33

0.14

   Total interest-earning assets

18,069,851

175,956

3.88

16,627,401

178,360

4.27

Noninterest-earning assets

1,420,460

1,326,641

   Total assets

$ 19,490,311

$ 17,954,042

Liabilities and Shareholders' Equity:

Interest-bearing liabilities:

Deposits:

Demand

2,726,790

$                -

-

%

$   2,358,392

$                -

-

%

Savings, interest checking, and money market

8,935,878

5,137

0.23

8,402,300

7,308

0.35

Certificates of deposit

2,677,939

9,406

1.40

2,997,188

11,622

1.54

        Total deposits

14,340,607

14,543

0.40

13,757,880

18,930

0.55

Securities sold under agreements to repurchase and other short-term borrowings

 

1,171,787

 

5,594

 

1.87

 

1,112,177

 

4,384

 

1.54

Federal Home Loan Bank advances

1,433,037

3,942

1.08

465,475

3,551

2.99

Long-term debt

361,468

3,247

3.59

557,585

6,012

4.31

Total borrowings

2,966,292

12,783

1.70

2,135,237

13,947

2.58

Total interest-bearing liabilities

17,306,899

27,326

0.62

15,893,117

32,877

0.82

Noninterest-bearing liabilities

222,929

202,682

Total liabilities

17,529,828

16,095,799

Noncontrolling interests

-

9,577

Webster Financial Corp. shareholders' equity

1,960,483

1,848,666

   Total liabilities and equity

$ 19,490,311

$ 17,954,042

Tax-equivalent net interest income

148,630

145,483

Less: tax-equivalent adjustment

(3,740)

(3,798)

Net interest income

$      144,890

$      141,685

Interest rate spread

3.26

%

3.45

%

Net interest margin

3.28

%

3.49

%

See Selected Financial Highlights for footnotes.

 

 

WEBSTER FINANCIAL CORPORATION

Consolidated Average Balances, Yields, and Rates Paid   (unaudited)

Nine Months Ended September 30,

2012

2011 (c)

 Fully tax- 

 Fully tax- 

Average

 equivalent 

Average

 equivalent 

(Dollars in thousands)

balance

Interest

 yield/rate 

balance

Interest

 yield/rate 

Assets:

Interest-earning assets:

Loans

$        11,435,430

$    363,487

4.21

%

$      11,024,732

$       365,660

4.40

%

Investment securities(a)

6,076,750

164,187

3.63

5,330,255

169,155

4.27

Loans held for sale

67,411

1,810

3.58

25,725

865

4.49

Federal Home Loan and Federal Reserve Bank stock

142,912

2,636

2.46

143,874

2,486

2.31

Interest-bearing deposits

78,852

107

0.18

121,020

190

0.21

Total interest-earning assets

17,801,355

532,227

3.98

16,645,606

538,356

4.31

Noninterest-earning assets

1,399,566

1,325,336

Total assets

$        19,200,921

$      17,970,942

Liabilities and Shareholders' Equity:

Interest-bearing liabilities:

Deposits:

Demand

$          2,572,851

$              -

-

%

$        2,249,378

$               -

-

%

Savings, interest checking, and money market

8,747,401

16,216

0.25

8,572,577

27,445

0.43

Certificates of deposit

2,739,829

29,485

1.44

3,076,384

36,095

1.57

        Total deposits

14,060,081

45,701

0.43

13,898,339

63,540

0.61

Securities sold under agreements to repurchase and other short-term borrowings

 

1,182,817

 

15,388

 

1.71

 

999,843

 

11,723

 

1.55

Federal Home Loan Bank advances

1,380,393

12,932

1.23

474,094