Webster Reports Strong 2012 Second Quarter Earnings

Net Income Grows by 22 Percent over Prior Year

13 Jul, 2012, 07:55 ET from Webster Financial Corporation

WATERBURY, Conn., July 13, 2012 /PRNewswire/ -- Webster Financial Corporation (NYSE: WBS), the holding company for Webster Bank, N.A., today announced net income available to common shareholders of $40.6 million, or $.44 per diluted share, for the quarter ended June 30, 2012 compared to $38.3 million, or $.42 per diluted share, for the quarter ended March 31, 2012 and $33.4 million, or $.36 per diluted share, for the quarter ended June 30, 2011. 

Highlights for the quarter or at June 30 include:

Combined growth in commercial and commercial real estate loans of $222.6 million or 4.2 percent from March 31, and $467.2 million or 9.2 percent from a year ago.

Growth of $176.0 million or 3.3 percent in transaction account deposits from March 31 and $673.5 million or 14.0 percent from a year ago, which represent 39.2 percent of total deposits compared to 38.0 percent at March 31 and 35.0 percent a year ago.

Net interest income increased $1.0 million compared to the first quarter and $3.5 million from a year ago; net interest margin was 3.32 percent compared to 3.36 percent in the first quarter and 3.48 percent a year ago.

Core noninterest income increased $0.8 million in the quarter and $0.3 million from a year ago reflecting expanded revenues from corporate finance products in franchise activities.

Noninterest expense before one time costs of $123.9 million compared to $126.6 million in the first quarter and $126.0 million a year ago; continued achievement of positive operating leverage as core revenue grew 1.0 percent and core expenses declined 1.9 percent from the first quarter.

Continued improvement in asset quality as evidenced by a 5.8 percent reduction in nonperforming assets and a 12.0 percent decline in commercial classified loans, both from March 31, and reductions of 30.6 percent and 36.2 percent from a year ago.

Provision for loan losses of $5.0 million compared to $4.0 million in the first quarter and $5.0 million a year ago, reflective of continued portfolio growth and asset quality improvement.

Webster Chairman and Chief Executive Officer James C. Smith said, "Webster turned in a solid second quarter by most any measure. Loan growth, asset quality, operating efficiency, and earnings all showed meaningful improvement as the southern New England economy continues to recover."

Net interest income

  • Net interest income was $144.4 million for the quarter compared to $143.4 million in the first quarter.
  • Net interest margin was 3.32 percent compared to 3.36 percent in the first quarter as the yield on interest-earning assets declined 6 basis points, primarily on securities, and the cost of funds declined 2 basis points.  
  • Average interest-earning assets grew by 1.8 percent from the first quarter and totaled $17.8 billion compared to $17.5 billion in the first quarter. 

Webster President and Chief Operating Officer Jerry Plush noted, "Loan originations were 69 percent higher than a year ago and totaled over $1 billion in the quarter. We ended the quarter with strong loan pipelines, which should bode well for the balance of the year. Our emphasis on growing transaction accounts continues to pay off as demand and interest-bearing checking deposits now represent almost 40 percent of total deposits. The growth in our loan portfolio, coupled with an increase in lower cost transaction deposits, enabled us to grow net interest income in a challenging interest rate environment."

Provision for loan losses

  • The Company recorded a provision of $5.0 million in the quarter compared to $4.0 million in the first quarter and $5.0 million a year ago.
  • Net charge-offs were $16.5 million in the quarter compared to $27.2 million for the first quarter and $21.7 million a year ago.
  • The allowance for loan losses represented 117 percent of nonperforming loans compared to 118 percent in the prior quarter.

Noninterest income

  • Total noninterest income increased $3.4 million compared to the first quarter. Included in noninterest income in the second quarter is $2.5 million of securities gains.
  • The $0.8 million increase in core noninterest income compared to the first quarter reflects an increase of $1.0 million in corporate finance products revenue included in other income. Direct investment income was $1.3 million higher as the first quarter included write-downs of $0.8 million. Deposit service fees increased $0.4 million compared to the first quarter while loan fees and mortgage banking decreased $1.3 million and $0.8 million, respectively. The lower loan fees were due in part to fewer prepayment penalties and a mortgage servicing right impairment of $0.3 million in the quarter.

Noninterest expense

  • Total noninterest expense decreased $0.6 million compared to the first quarter. Included in noninterest expense are net one time costs of $3.2 million in the second quarter and $1.2 million in the first quarter. Included in net one time costs in the second quarter is $2.5 million in debt prepayment expense in connection with the prepayment of $49.0 million in FHLB advances.
  • Total noninterest expense excluding one time costs decreased $2.7 million from the first quarter and $2.0 million from a year ago. The decrease compared to the first quarter is driven by a reduction of $5.0 million in compensation and benefits offset by an increase of $1.0 million in marketing and additional expense in technology. Gains on foreclosed and repossessed assets were $0.7 million in both the second and the first quarters.

Income taxes

  • The Company recorded $18.3 million of income tax expense in the quarter on the $59.6 million of pre-tax income applicable to continuing operations in the period. The effective tax rate for the quarter was 30.7 percent compared to 29.9 percent for the first quarter, which included $0.5 million of tax benefits specific to that period.

Investment securities

  • Total investment securities were $6.2 billion at both June 30, 2012 and March 31, 2012. The carrying value of the available for sale portfolio included $46.7 million in net unrealized gains compared to net unrealized gains of $43.4 million at March 31, while the carrying value of the held to maturity portfolio does not reflect $158.4 million in net unrealized gains compared to net unrealized gains of $154.9 million at March 31.

Loans

  • Total loans were $11.5 billion at June 30, 2012 compared to $11.3 billion at March 31, 2012 and are reflective of continued growth in commercial, commercial real estate and residential mortgages. In the quarter, commercial and commercial real estate loans increased by $97.0 million and $125.6 million, respectively. Residential mortgage loans increased by $30.4 million while consumer loans declined by $25.2 million.
  • Loan originations for portfolio in the second quarter were $973.0 million compared to $790.8 million in the first quarter and $643.3 million a year ago. Originations for the second quarter consisted of $393.0 million in commercial, $261.0 million in commercial real estate, $162.0 million in residential and $157.0 million in consumer.
  • In addition to loan originations for portfolio, $198.3 million of residential loans were originated and sold with servicing retained in the quarter compared to $131.4 million in the first quarter and $47.1 million a year ago.

Asset quality

  • Total nonperforming loans declined to $169.2 million, or 1.47 percent of total loans, at June 30, 2012 compared to $178.3 million, or 1.58 percent, at March 31, 2012. Included in nonperforming loans were paying loans totaling $17.0 million at June 30 compared to $18.1 million at March 31. Also included in nonperforming loans are $4.5 million in consumer liquidating loans compared to $3.9 million at March 31.
  • Past due loans increased to $65.9 million at June 30 compared to $60.0 million at March 31. Past due loans for the continuing portfolios were $61.5 million at June 30 compared to $54.7 million at March 31. Past due loans for the liquidating portfolio were $4.4 million at June 30 compared to $5.3 million at March 31.
  • Other real estate owned (OREO) totaled $4.4 million compared to $6.0 million at June 30.

Deposits and borrowings

  • Total deposits were $14.0 billion at June 30, 2012 compared to $13.9 billion at March 31, 2012. Increases of $119.9 million in demand, $56.1 million in interest-bearing checking and $15.3 million in savings deposits were offset by declines of $110.9 in money market and $51.0 million in certificates of deposit. Core to total deposits and loans to deposits were 81 percent and 83 percent, respectively, compared to 80 percent and 81 percent at March 31.
  • Total borrowings were $3.2 billion at June 30 compared to $3.1 billion at March 31. Borrowings represented 16 percent of total assets at both June 30 and March 31.

Capital

  • The tangible common equity and Tier 1 common equity to risk-weighted assets ratios were 7.22 percent and 10.95 percent, respectively, at June 30, 2012 compared to 7.14 percent and 10.96 percent, respectively, at March 31, 2012.
  • Book value and tangible book value per common share were $21.65 and $15.53, respectively, at June 30 compared to $21.24 and $15.10, respectively, at March 31.
  • Return on average shareholders' equity and return on average tangible equity were 8.49 percent and 11.81 percent, respectively, at June 30 and 8.17 percent and 11.46 percent, respectively, at March 31.

Webster Financial Corporation is the holding company for Webster Bank, National Association. With $19 billion in assets, Webster provides business and consumer banking, mortgage, financial planning, trust and investment services through 167 banking offices, 464 ATMs, 290 of which are owned by Webster and 174 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 second quarter earnings announcement will be held today, Friday, July 13, 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

June 30,

March 31,

Dec. 31,

Sept. 30,

June 30,

(In thousands, except per share data)

2012

2012

2011

2011

2011

Income and performance ratios, (annualized):

Net income available to common shareholders

$       40,625

$       38,323

$       39,591

$      41,400

$       33,353

Net income per diluted common share 

0.44

0.42

0.43

0.45

0.36

Return on average shareholders' equity

8.49

%

8.17

%

8.50

%

8.96

%

7.27

%

Return on average tangible equity

11.81

11.46

11.97

12.67

10.31

Return on average assets

0.85

0.81

0.86

0.92

0.74

Noninterest income as a percentage of total revenue

24.70

23.48

23.05

23.98

24.69

Efficiency ratio

63.75

65.63

65.83

62.22

65.02

Asset quality:

Allowance for loan losses

$      198,757

$      210,288

$      233,487

$     257,352

$     281,243

Nonperforming assets

173,621

184,218

193,047

239,945

250,084

Allowance for loan losses / total loans

1.72

%

1.86

%

2.08

%

2.33

%

2.55

%

Net charge-offs / average loans (annualized)

0.58

0.96

0.95

1.05

0.79

Nonperforming loans / total loans

1.47

1.58

1.68

2.00

2.07

Nonperforming assets / total loans plus OREO

1.50

1.63

1.72

2.17

2.27

Allowance for loan losses / nonperforming loans

117.44

117.96

124.14

116.43

123.22

Other ratios (annualized):

Tangible equity ratio

7.38

%

7.29

%

7.18

%

7.32

%

7.46

%

Tangible common equity ratio

7.22

7.14

7.03

7.16

7.29

Tier 1 risk-based capital ratio(b)

12.80

12.86

13.05

13.04

12.89

Total risk-based capital(b)

14.06

14.12

14.61

14.60

14.47

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

10.95

10.96

11.08

11.01

10.74

Shareholders' equity / total assets

9.94

9.90

9.86

10.08

10.27

Interest rate spread

3.29

3.33

3.36

3.45

3.44

Net interest margin

3.32

3.36

3.39

3.49

3.48

Share and equity related:

Common equity

$   1,902,609

$   1,866,003

$   1,816,835

$  1,807,330

$  1,800,215

Book value per common share

21.65

21.24

20.74

20.65

20.57

Tangible book value per common share

15.53

15.10

14.57

14.47

14.38

Common stock closing price

21.66

22.67

20.39

15.30

21.02

Dividends declared per common share 

0.10

0.05

0.05

0.05

0.05

Common shares issued and outstanding

87,885

87,849

87,600

87,507

87,532

Basic shares (average)

87,291

87,216

87,097

87,046

86,986

Diluted shares (average)

91,543

91,782

90,929

91,205

92,184

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 June 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)

June 30,

March 31,

June 30,

(In thousands)

2012

2012

2011(c)

Assets:

Cash and due from banks

$ 197,229

$ 173,027

$ 196,181

Interest-bearing deposits

73,598

77,921

57,863

Investment securities:

    Available for sale, at fair value

3,153,580

3,144,867

2,143,072

    Held to maturity

3,076,226

3,079,654

3,123,510

Total securities

6,229,806

6,224,521

5,266,582

Loans held for sale

89,228

59,615

21,650

Loans:

    Commercial

2,985,993

2,888,977

2,846,699

    Commercial real estate

2,551,427

2,425,797

2,223,477

    Residential mortgages

3,300,617

3,270,213

3,139,408

    Consumer

2,701,960

2,727,163

2,802,907

Total loans

11,539,997

11,312,150

11,012,491

Allowance for loan losses

(198,757)

(210,288)

(281,243)

Loans, net

11,341,240

11,101,862

10,731,248

Prepaid FDIC premiums

27,062

32,507

46,546

Federal Home Loan Bank and Federal Reserve Bank stock

142,595

142,595

143,874

Premises and equipment, net

137,420

141,088

152,009

Goodwill and other intangible assets, net

542,783

544,180

548,370

Cash surrender value of life insurance policies

312,117

309,556

303,258

Deferred tax asset, net

79,011

81,676

92,127

Accrued interest receivable and other assets

257,660

245,594

243,173

Total Assets

$ 19,429,749

$ 19,134,142

$ 17,802,881

Liabilities and Equity:

Deposits:

          Demand

$ 2,611,297

$ 2,491,442

$ 2,323,266

Interest-bearing checking

2,863,076

2,806,950

2,477,625

          Money market

1,934,137

2,045,090

2,081,503

          Savings

3,850,549

3,835,180

3,773,417

          Certificates of deposit

2,595,816

2,646,783

2,939,648

          Brokered certificates of deposit

119,052

119,052

121,068

Total deposits

13,973,927

13,944,497

13,716,527

Securities sold under agreements to repurchase and

other short-term borrowings

1,203,378

1,268,589

1,079,866

Federal Home Loan Bank advances

1,529,102

1,352,466

403,131

Long-term debt

472,928

474,318

566,677

Accrued expenses and other liabilities

318,866

199,330

197,949

Total liabilities

17,498,201

17,239,200

15,964,150

Webster Financial Corporation shareholders' equity

1,931,548

1,894,942

1,829,154

Noncontrolling interests

-

-

9,577

Total equity

1,931,548

1,894,942

1,838,731

Total Liabilities and Equity

$ 19,429,749

$ 19,134,142

$ 17,802,881

See Selected Financial Highlights for footnotes.

 

WEBSTER FINANCIAL CORPORATION

Consolidated Statements of Operations (unaudited)

Three Months Ended

Six Months Ended

June

June

(In thousands, except per share data)

2012

2011

2012

2011

Interest income:

Interest and fees on loans and leases

$ 121,379

$ 122,395

$ 242,120

$ 244,338

Interest and dividends on securities

52,597

53,527

105,465

107,371

Loans held for sale

657

177

1,155

599

    Total interest income

174,633

176,099

348,740

352,308

Interest expense:

Deposits

15,102

21,841

31,158

44,610

Borrowings

15,153

13,345

29,836

26,624

    Total interest expense

30,255

35,186

60,994

71,234

    Net interest income

144,378

140,913

287,746

281,074

Provision for loan losses

5,000

5,000

9,000

15,000

    Net interest income after provision for loan losses

139,378

135,913

278,746

266,074

Noninterest income:

Deposit service fees

23,719

26,095

47,082

51,435

Loan related fees

3,565

5,590

8,434

10,033

Wealth and investment services

7,249

7,454

14,470

14,176

Mortgage banking activities

3,624

1,234

8,007

2,487

Increase in cash surrender value of life insurance policies

2,561

2,576

5,078

5,109

Net gain on investment securities

2,537

1,647

2,537

2,024

Other income

4,098

1,593

5,731

4,841

    Total noninterest income

47,353

46,189

91,339

90,105

Noninterest expense:

Compensation and benefits

63,587

65,592

132,206

132,604

Occupancy

12,578

12,856

25,460

27,591

Technology and equipment expense

16,021

15,134

31,603

30,526

Marketing

5,094

4,252

9,194

9,772

Professional and outside services

3,387

2,813

6,079

5,243

Intangible assets amortization

1,397

1,397

2,794

2,794

Foreclosed and repossessed asset expenses

176

710

643

1,594

Foreclosed and repossessed asset (gains) write-downs

(670)

794

(1,334)

479

Loan workout expenses

2,201

1,779

4,025

3,579

Deposit insurance

5,723

5,918

11,432

11,699

Other expenses

14,443

14,716

28,433

28,640

123,937

125,961

250,535

254,521

Debt prepayment penalties

2,515

-

3,649

-

Write-down for expedited asset disposition

-

5,073

-

5,073

Contract termination and severance

727

1,060

727

1,060

Branch and facility optimization

-

859

81

1,132

Costs for warrant registration

-

350

-

350

Provision for litigation and settlements

-

194

-

486

Loan repurchase and unfunded commitment reserve benefit, net

-

(1,436)

-

(1,436)

    Total noninterest expense

127,179

132,061

254,992

261,186

Income from continuing operations before income taxes

59,552

50,041

115,093

94,993

Income tax expense

18,312

15,857

34,915

28,225

    Income from continuing operations

41,240

34,184

80,178

66,768

Income from discontinued operations, net of tax

-

-

-

1,995

    Consolidated net income

41,240

34,184

80,178

68,763

Less: Net loss attributable to noncontrolling interests

-

-

-

(1)

    Net income attributable to Webster Financial Corp.

41,240

34,184

80,178

68,764

Preferred stock dividends

(615)

(831)

(1,230)

(1,662)

    Net income available to common shareholders

$ 40,625

$ 33,353

$ 78,948

$ 67,102

Diluted shares (average)

91,543

92,184

91,669

92,368

Net income per common share available to common shareholders:

Basic

    Income from continuing operations

$ 0.46

$ 0.38

$ 0.90

$ 0.75

    Net income

0.46

0.38

0.90

0.77

Diluted

    Income from continuing operations

0.44

0.36

0.86

0.70

    Net income

0.44

0.36

0.86

0.72

See Selected Financial Highlights for footnotes.

 

WEBSTER FINANCIAL CORPORATION

Five Quarter Consolidated Statements of Operations (unaudited)

Three Months Ended

June 30,

March 31,

Dec. 31,

Sept. 30,

June 30,

(In thousands, except per share data)

2012

2012

2011

2011

2011

Interest income:

Interest and fees on loans and leases

$121,379

$120,741

$121,223

$121,322

$122,395

Interest and dividends on securities

52,597

52,868

51,260

52,974

53,527

Loans held for sale

657

498

370

266

177

    Total interest income

174,633

174,107

172,853

174,562

176,099

Interest expense:

Deposits

15,102

16,056

17,268

18,930

21,841

Borrowings

15,153

14,683

14,576

13,947

13,345

   Total interest expense

30,255

30,739

31,844

32,877

35,186

   Net interest income

144,378

143,368

141,009

141,685

140,913

Provision for loan losses

5,000

4,000

2,500

5,000

5,000

   Net interest income after provision for loan losses

139,378

139,368

138,509

136,685

135,913

Noninterest income:

Deposit service fees

23,719

23,363

24,286

27,074

26,095

Loan related fees

3,565

4,869

4,896

5,308

5,590

Wealth and investment services

7,249

7,221

5,759

6,486

7,454

Mortgage banking activities

3,624

4,383

1,094

1,324

1,234

Increase in cash surrender value of life insurance policies

2,561

2,517

2,609

2,642

2,576

Net gain on investment securities

2,537

-

-

-

1,647

Other income

4,098

1,633

3,602

1,857

1,593

   Total noninterest income

47,353

43,986

42,246

44,691

46,189

Noninterest expense:

Compensation and benefits

63,587

68,619

68,146

61,897

65,592

Occupancy

12,578

12,882

13,125

13,150

12,856

Technology and equipment expense

16,021

15,582

15,054

15,141

15,134

Marketing

5,094

4,100

4,540

4,144

4,252

Professional and outside services

3,387

2,692

2,835

3,125

2,813

Intangible assets amortization

1,397

1,397

1,397

1,397

1,397

Foreclosed and repossessed asset expenses

176

467

730

726

710

Foreclosed and repossessed asset (gains) write-downs 

(670)

(664)

(63)

(722)

794

Loan workout expenses

2,201

1,824

1,956

2,012

1,779

Deposit insurance 

5,723

5,709

4,756

4,472

5,918

Other expenses

14,443

13,990

12,864

14,392

14,716

123,937

126,598

125,340

119,734

125,961

Debt prepayment penalties

2,515

1,134

5,203

-

-

Write-down for expedited asset disposition

-

-

1,187

-

5,073

Contract termination and severance

727

-

2,485

1,555

1,060

Branch and facility optimization

-

81

1,689

2,183

859

Preferred stock redemption costs

-

-

423

-

-

Costs for warrant registration

-

-

-

-

350

Provision (benefit) for litigation and settlements

-

-

(9,755)

(254)

194

Loan repurchase and unfunded commitment reserve benefit, net

-

-

-

-

(1,436)

  Total noninterest expense

127,179

127,813

126,572

123,218

132,061

Income from continuing operations before income taxes 

59,552

55,541

54,183

58,158

50,041

Income tax expense

18,312

16,603

13,799

15,927

15,857

   Income from continuing operations 

41,240

38,938

40,384

42,231

34,184

Income from discontinued operations, net of tax

-

-

-

-

-

   Consolidated net income

41,240

38,938

40,384

42,231

34,184

Less: Net loss attributable to noncontrolling interests

-

-

-

-

-

  Net income attributable to Webster Financial Corp.

41,240

38,938

40,384

42,231

34,184

Preferred stock dividends

(615)

(615)

(793)

(831)

(831)

   Net income available to common shareholders

$40,625

$38,323

$39,591

$41,400

$33,353

   Diluted shares (average)

91,543

91,782

90,929

91,205

92,184

Net income per common share available to common shareholders:

Basic

   Income from continuing operations

$0.46

$0.44

$0.45

$0.48

$0.38

   Net income 

0.46

0.44

0.45

0.48

0.38

Diluted

   Income from continuing operations

0.44

0.42

0.43

0.45

0.36

   Net income

0.44

0.42

0.43

0.45

0.36

See Selected Financial Highlights for footnotes.

 

 

WEBSTER FINANCIAL CORPORATION

Five Quarter Interest Rate Spreads and Margin  (unaudited)

Three Months Ended

June 30,

March 31,

December 31,

September 30,

June 30,

2012 

2012

2011

2011

2011

Interest rate spread

Yield on interest-earning assets

4.00

%

4.06

%

4.13

%

4.27

%

4.33

%

Cost of interest-bearing liabilities

0.71

0.73

0.77

0.82

0.89

    Interest rate spread

3.29

%

3.33

%

3.36

%

3.45

%

3.44

%

    Net interest margin

3.32

%

3.36

%

3.39

%

3.49

%

3.48

%

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

Three Months Ended June 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

$  11,420,721

$       121,379

4.23

%

$ 10,991,890

$       122,395

4.44

%

Investment securities(a)

6,122,745

55,497

3.65

5,244,359

56,395

4.34

Loans held for sale

68,362

657

3.85

14,814

177

4.78

Federal Home Loan and Federal Reserve Bank stock

142,595

881

2.48

143,874

832

2.32

Interest-bearing deposits

67,480

32

0.19

212,172

123

0.23

   Total interest-earning assets

17,821,903

178,446

4.00

16,607,109

179,922

4.33

Noninterest-earning assets

1,383,932

1,313,712

   Total assets

$  19,205,835

$ 17,920,821

Liabilities and Shareholders' Equity:

Interest-bearing liabilities:

   Deposits:

     Demand

2,554,873

$                -

-

%

$   2,225,819

$                -

-

%

     Savings, interest checking, and money market

8,676,206

5,285

0.24

8,675,135

9,554

0.44

     Certificates of deposit

2,732,024

9,817

1.45

3,122,527

12,287

1.58

        Total deposits

13,963,103

15,102

0.43

14,023,481

21,841

0.62

Securities sold under agreements to repurchase

  and other short-term borrowings

1,210,234

5,360

1.75

891,344

3,777

1.68

Federal Home Loan Bank advances

1,447,347

4,426

1.21

403,223

3,295

3.23

Long-term debt

473,602

5,367

4.53

568,868

6,273

4.41

   Total borrowings

3,131,183

15,153

1.92

1,863,435

13,345

2.85

   Total interest-bearing liabilities

17,094,286

30,255

0.71

15,886,916

35,186

0.89

Noninterest-bearing liabilities

197,224

188,395

   Total liabilities

17,291,510

16,075,311

Noncontrolling interests

-

9,577

Webster Financial Corp. shareholders' equity

1,914,325

1,835,933

   Total liabilities and equity

$  19,205,835

$ 17,920,821

Tax-equivalent net interest income

148,191

144,736

Less: tax-equivalent adjustment

(3,813)

(3,823)

Net interest income

$       144,378

$       140,913

Interest rate spread

3.29

%

3.44

%

Net interest margin

3.32

%

3.48

%

See Selected Financial Highlights for footnotes.

 

 

WEBSTER FINANCIAL CORPORATION

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

Six Months Ended June 30,

2012

2011 (c)

 Fully tax- 

 Fully tax-