Webster Reports 2015 Second Quarter Earnings

Jul 16, 2015, 07:30 ET from Webster Financial Corporation

WATERBURY, Conn., July 16, 2015 /PRNewswire/ -- Webster Financial Corporation (NYSE: WBS), the holding company for Webster Bank, N.A., today announced record net income available to common shareholders of $50.5 million, or $0.55 per diluted share, for the quarter ended June 30, 2015 compared to $45.2 million, or $0.50 per diluted share, for the quarter ended June 30, 2014.

"We're pleased to report another strong quarterly performance, marked by record net income and record loan originations led by business loans and residential mortgages," said James C. Smith, chairman and chief executive officer. "It's clear our strategic investments are delivering value for customers and shareholders alike, as Webster bankers excel in service to our customers and communities. Our progress and success are made possible by the continuing confidence of our customers, which we deeply appreciate."

Highlights for the second quarter of 2015 compared to the second quarter of 2014:

  • Record quarterly net income of $52.5 million, including a net tax benefit of $3.7 million.
  • Overall loan growth of $1.5 billion, or 11.3 percent, with double-digit growth in commercial, commercial real estate and residential mortgage loans.
  • Increase in the allowance for loan losses of $13.0 million, or 8.4 percent.
  • Deposit growth of $2.1 billion, or 13.8 percent, primarily reflecting HSA Bank's strong organic growth and its recent acquisition.
  • Record core revenue of $222.9 million increased 9.9 percent and contributed to core pre-provision net revenue of $85.9 million, or a 6.8 percent improvement.
  • Record net interest income of $163.5 million.
  • Efficiency ratio of 59.94 percent represents the ninth consecutive quarter at or below 60 percent.
  • Annualized return on average tangible common shareholders' equity of 12.49 percent.

"Webster continued to demonstrate expense discipline during the quarter, maintaining an efficiency ratio at or below 60 percent for the ninth consecutive quarter while investing in growth opportunities," said Glenn MacInnes, executive vice president and chief financial officer. "Our balance sheet is well-positioned for the anticipated rise in interest rates as the economy continues to strengthen."

Quarterly net interest income compared to the second quarter of 2014:

  • Net interest income was $163.5 million compared to $155.1 million.
  • Net interest margin was 3.05 percent compared to 3.19 percent. The yield on interest-earning assets declined by 16 basis points, while the cost of funds declined by 2 basis points.
  • Average interest-earning assets totaled $21.7 billion and grew by $2.0 billion, or 10.1 percent.
  • Average loans grew by $1.4 billion, or 10.5 percent.

Quarterly provision for loan losses:

  • The Company recorded a provision for loan losses of $12.75 million compared to $9.75 million in the first quarter and $9.25 million a year ago. The increase compared to each period reflects ongoing growth in the loan portfolio.
  • Net charge-offs were $6.9 million compared to $7.0 million in the prior quarter and $8.0 million a year ago. The ratio of net charge-offs to average loans on an annualized basis was 0.19 percent compared to 0.20 percent in the prior quarter and 0.24 percent a year ago.
  • The allowance for loan losses represented 1.14 percent of total loans compared to 1.14 percent at March 31, 2015 and 1.17 percent at June 30, 2014. The allowance for loan losses represented 100 percent of nonperforming loans compared to 106 percent at March 31 and 108 percent a year ago.

Quarterly non-interest income compared to the second quarter of 2014:

  • Total non-interest income was $59.9 million compared to $47.6 million, an increase of $12.3 million. Excluding securities gains and other-than-temporary impairment charges, a year-over-year increase of $11.7 million in core non-interest income reflects increases of $8.2 million in deposit service fees of which $8.9 million related to HSA Bank, primarily from the acquisition, $2.0 million in mortgage banking activities, $0.9 million in loan related fees, and $0.8 million in other income.

Quarterly non-interest expense compared to the second quarter of 2014:

  • Total non-interest expense was $137.4 million compared to $122.5 million, an increase of $15.0 million. Included in non-interest expense are $0.8 million of net one-time costs, which consisted primarily of branch and facility optimization and severance expenses. There were $0.5 million of net one-time costs in the year-ago quarter.
  • Non-interest expense, excluding one-time costs, increased $14.7 million with $9.8 million of the increase related to HSA Bank, primarily from the acquisition. The remaining $4.9 million increase reflects higher base compensation due to merit increases, incentives, group insurance, and professional and outside services.

Quarterly income taxes compared to the second quarter of 2014:

  • The Company recorded $20.7 million of income tax expense compared to $23.2 million, a decrease of $2.5 million. The effective tax rate was 28.2 percent, reflecting a $3.7 million net tax benefit, compared to 32.6 percent a year ago.
  • The $3.7 million net tax benefit included a net non-cash benefit of $4.4 million from a change in the estimated realizability of the Company's state deferred tax assets, and a related increase in expense of $0.7 million, including $0.4 million attributable to the first quarter.

Investment securities:

  • Total investment securities were $6.9 billion compared to $6.9 billion at March 31, 2015 and $6.5 billion a year ago. The carrying value of the available-for-sale portfolio included $14.9 million of net unrealized gains compared to $36.9 million at March 31 and $33.6 million a year ago, while the carrying value of the held-to-maturity portfolio does not reflect $50.6 million of net unrealized gains compared to $99.8 million at March 31 and $73.7 million a year ago.

Loans:

  • Total loans were $14.8 billion compared to $14.3 billion at March 31, 2015 and $13.3 billion a year ago. Compared to March 31, residential mortgage, commercial, commercial real estate, and consumer loans increased by $239.2 million, $123.9 million, $107.2 million, and $37.0 million, respectively.
  • Compared to a year ago, commercial, commercial real estate, residential mortgage, and consumer loans increased by $499.3 million, $478.4 million, $467.4 million, and $57.1 million, respectively.
  • Loan originations for portfolio were $1.363 billion compared to $1.062 billion in the first quarter and $1.069 billion a year ago. In addition, $147 million of residential loans were originated for sale in the quarter compared to $87 million in the prior quarter and $73 million a year ago.

Asset quality:

  • Past due loans were $32.4 million compared to $45.1 million at March 31, 2015 and $47.7 million a year ago. Loans past due 90 days and still accruing decreased $0.2 million from the prior quarter and increased $0.1 million from the prior year.
  • Total nonperforming loans increased to $167.9 million, or 1.14 percent of total loans, compared to $152.2 million, or 1.07 percent, at March 31 and $143.8 million, or 1.08 percent, a year ago. Total paying nonperforming loans were $48.7 million compared to $53.8 million at March 31 and $37.6 million a year ago.

Deposits and borrowings:

  • Total deposits were $17.3 billion compared to $17.5 billion and $15.2 billion a year ago. Core to total deposits were 87.8 percent compared to 87.4 percent at March 31, and 84.8 percent a year ago. Loans to deposits were 85.4 percent compared to 81.3 percent at March 31 and 87.3 percent a year ago.
  • Total borrowings were $3.8 billion compared to $2.9 billion at March 31 and $3.8 billion a year ago.

Capital:

  • The return on average tangible common shareholders' equity and the return on average common shareholders' equity were 12.49 percent and 9.03 percent, respectively, compared to 11.51 percent and 8.53 percent, respectively, in the second quarter of 2014.
  • The tangible equity and tangible common equity ratios were 7.81 percent and 7.27 percent, respectively, compared to 8.34 percent and 7.62 percent, respectively, at June 30, 2014. The Common Equity Tier 1 Capital ratio was 11.04 percent compared to 11.40 percent a year ago.
  • Book value and tangible book value per common share were $24.55 and $18.23, respectively, compared to $23.64 and $17.72, respectively, a year ago.

Webster Financial Corporation is the holding company for Webster Bank, National Association. With $23.6 billion in assets, Webster provides business and consumer banking, mortgage, financial planning, trust, and investment services through 165 banking centers, 314 ATMs, 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 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 2015 second quarter earnings announcement will be held today, Thursday, July 16, 2015 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 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. 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.

Media Contact

Investor Contact

Bob Guenther, 203-578-2391

Mangan, 203-578-2318

rguenther@websterbank.com  

tmangan@websterbank.com  

 

 

WEBSTER FINANCIAL CORPORATION Selected Financial Highlights (unaudited)

At or for the Three Months Ended

(In thousands, except per share data)

June 30, 2015

March 31, 2015

December 31, 2014

September 30, 2014

June 30, 2014

Income and performance ratios (annualized):

Net income

$             52,503

$               49,722

$               51,006

$               50,457

$               47,834

Net income available to common shareholders

50,479

47,083

48,367

47,818

45,195

Net income per diluted common share

0.55

0.52

0.53

0.53

0.50

Return on average assets

0.90%

0.88%

0.93%

0.94%

0.90%

Return on average tangible common shareholders' equity

12.49

11.82

11.74

11.86

11.51

Return on average common shareholders' equity

9.03

8.57

8.84

8.87

8.53

Non-interest income as a percentage of total revenue

26.80

26.60

25.08

24.44

23.48

Efficiency ratio

59.94

59.76

58.59

58.91

59.21

Asset quality:

Allowance for loan losses

$          167,860

$             161,970

$             159,264

$             156,482

$             154,868

Nonperforming assets

172,825

157,546

136,397

144,314

150,490

Allowance for loan losses / total loans

1.14%

1.14%

1.15%

1.16%

1.17%

Net charge-offs / average loans (annualized)

0.19

0.20

0.20

0.24

0.24

Nonperforming loans / total loans

1.14

1.07

0.93

1.03

1.08

Nonperforming assets / total loans plus OREO

1.17

1.10

0.98

1.07

1.13

Allowance for loan losses / nonperforming loans

100.00

106.39

122.62

112.51

107.73

Other ratios (annualized):

Tangible equity

7.81%

7.87%

8.14%

8.35%

8.34%

Tangible common equity

7.27

7.20

7.45

7.64

7.62

Tier 1 risk-based capital (a), (b)

11.91

12.01

12.95

13.06

12.97

Total risk-based capital (a), (b)

13.33

13.44

14.06

14.17

14.09

Common equity tier 1 risk-based capital (a), (b)

11.04

10.93

11.43

11.50

11.40

Shareholders' equity / total assets

10.07

10.19

10.31

10.59

10.61

Net interest margin

3.05

3.10

3.17

3.17

3.19

Share and equity related:

Common equity

$       2,256,985

$          2,203,926

$          2,171,166

$          2,159,344

$          2,132,973

Book value per common share

24.55

24.29

23.99

23.93

23.64

Tangible book value per common share

18.23

17.87

18.10

18.02

17.72

Common stock closing price

39.55

37.05

32.53

29.14

31.54

Dividends declared per common share

0.23

0.20

0.20

0.20

0.20

Common shares issued and outstanding

91,919

90,715

90,512

90,248

90,246

Basic shares (weighted average)

90,713

90,251

90,045

89,888

89,776

Diluted shares (weighted average)

91,302

90,841

90,741

90,614

90,528

(a) The ratios presented are projected for June 30, 2015 and actual for the remaining periods presented.

(b) Calculated under the Basel III capital standard at June 30,2015 and March 31, 2015 and under the Basel I capital standard for the remaining periods presented.

 

 

WEBSTER FINANCIAL CORPORATION Consolidated Balance Sheets (unaudited)

(In thousands)

June 30, 2015

March 31, 2015

June 30, 2014 (a)

Assets:

Cash and due from banks

$          205,650

$             233,970

$             287,917

Interest-bearing deposits

142,083

119,297

18,620

Investment securities:

 Available for sale, at fair value

2,837,158

2,968,109

2,980,031

 Held to maturity

4,064,022

3,923,189

3,478,803

    Total securities

6,901,180

6,891,298

6,458,834

Loans held for sale

63,535

45,866

31,671

Loans:

 Commercial

4,567,345

4,443,446

4,068,089

 Commercial real estate

3,770,252

3,663,071

3,291,892

 Residential mortgages

3,833,489

3,594,272

3,366,092

 Consumer

2,606,440

2,569,437

2,549,307

    Total loans

14,777,526

14,270,226

13,275,380

Allowance for loan losses

(167,860)

(161,970)

(154,868)

    Loans, net

14,609,666

14,108,256

13,120,512

Federal Home Loan Bank and Federal Reserve Bank stock

180,290

193,290

168,595

Premises and equipment, net

123,828

123,548

119,840

Goodwill and other intangible assets, net

580,908

582,751

533,402

Cash surrender value of life insurance policies

446,423

443,225

436,445

Deferred tax asset, net

79,257

61,136

57,462

Accrued interest receivable and other assets

287,966

304,051

291,186

Total Assets

$     23,620,786

$        23,106,688

$        21,524,484

Liabilities and Equity:

Deposits:

 Demand

$       3,547,356

$          3,450,316

$          3,249,996

 Interest-bearing checking

2,214,973

2,267,350

2,073,652

 Health savings accounts

3,665,019

3,529,301

1,754,986

 Money market

1,757,095

2,114,300

1,844,014

 Savings

3,998,169

3,978,655

3,973,109

 Certificates of deposit

1,811,864

1,905,943

2,029,008

 Brokered certificates of deposit

299,790

299,785

278,080

    Total deposits

17,294,266

17,545,650

15,202,845

Securities sold under agreements to repurchase and other borrowings

1,014,504

1,083,877

1,401,259

Federal Home Loan Bank advances

2,509,285

1,584,357

2,217,324

Long-term debt

226,297

226,267

226,178

Accrued expenses and other liabilities

196,739

310,962

192,256

    Total liabilities

21,241,091

20,751,113

19,239,862

Preferred stock

122,710

151,649

151,649

Common shareholders' equity

2,256,985

2,203,926

2,132,973

    Webster Financial Corporation shareholders' equity

2,379,695

2,355,575

2,284,622

Total Liabilities and Equity

$     23,620,786

$        23,106,688

$        21,524,484

(a) Certain previously reported information reflects the retrospective application of ASU No. 2014-01, "Accounting for Investments in Qualified Affordable Housing Projects."

 

 

WEBSTER FINANCIAL CORPORATION Consolidated Statements of Income (unaudited)

Three Months Ended June 30,

Six Months Ended June 30,

(In thousands, except per share data)

2015

2014

2015

2014 (a)

Interest income:

Interest and fees on loans and leases

$          135,694

$             125,771

$          266,417

$             249,781

Interest and dividends on securities

50,844

51,511

102,523

105,103

Loans held for sale

432

215

942

392

  Total interest income

186,970

177,497

369,882

355,276

Interest expense:

Deposits

11,533

10,851

23,075

21,495

Borrowings

11,926

11,524

23,532

23,358

  Total interest expense

23,459

22,375

46,607

44,853

  Net interest income

163,511

155,122

323,275

310,423

Provision for loan losses

12,750

9,250

22,500

18,250

  Net interest income after provision for loan losses

150,761

145,872

300,775

292,173

Non-interest income:

Deposit service fees

34,493

26,302

67,118

51,014

Loan related fees

5,729

4,890

11,408

9,372

Wealth and investment services

8,784

8,829

16,673

17,667

Mortgage banking activities

2,517

513

4,078

1,288

Increase in cash surrender value of life insurance policies

3,197

3,296

6,349

6,554

Net gain on investment securities

486

529

4,336

Other income

4,645

3,839

11,586

7,354

59,851

47,669

117,741

97,585

Loss on write-down of investment securities to fair value

(73)

(161)

  Total non-interest income

59,851

47,596

117,741

97,424

Non-interest expense:

Compensation and benefits

74,043

65,711

144,907

132,082

Occupancy

11,680

11,491

25,276

24,250

Technology and equipment expense

20,224

15,737

39,472

30,747

Marketing

4,245

4,249

8,421

7,429

Professional and outside services

2,875

1,269

5,328

3,971

Intangible assets amortization

1,843

669

3,131

1,837

Foreclosed and repossessed asset expenses

146

134

315

592

Foreclosed and repossessed asset gains

(537)

(574)

(1)

(834)

Loan workout expenses

801

801

1,679

1,853

Deposit insurance

5,492

5,565

11,733

10,876

Other expenses

15,817

16,898

29,983

33,398

136,629

121,950

270,244

246,201

Severance, contract, and other

521

267

811

289

Acquisition costs

18

527

Branch and facility optimization

278

258

(46)

448

  Total non-interest expense

137,446

122,475

271,536

246,938

Income before income taxes

73,166

70,993

146,980

142,659

Income tax expense

20,663

23,159

44,755

44,396

  Net income

52,503

47,834

102,225

98,263

Preferred stock dividends

(2,024)

(2,639)

(4,663)

(5,278)

  Net income available to common shareholders

$             50,479

$               45,195

$             97,562

$               92,985

Diluted shares (average)

91,302

90,528

91,070

90,584

Net income per common share available to common shareholders:

Basic

$                 0.55

$                   0.50

$                 1.07

$                   1.03

Diluted

0.55

0.50

1.07

1.02

(a) Certain previously reported information reflects the retrospective application of ASU No. 2014-01, "Accounting for Investments in Qualified Affordable Housing Projects."

 

 

 

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

Three Months Ended

(In thousands, except per share data)

June 30, 2015

March 31, 2015

December 31, 2014

September 30, 2014

June 30, 2014

Interest income:

Interest and fees on loans and leases

$          135,694

$             130,723

$             132,604

$             129,227

$             125,771

Interest and dividends on securities

50,844

51,679

50,921

50,448

51,511

Loans held for sale

432

510

226

239

215

  Total interest income

186,970

182,912

183,751

179,914

177,497

Interest expense:

Deposits

11,533

11,542

11,322

11,345

10,851

Borrowings

11,926

11,606

11,781

11,199

11,524

  Total interest expense

23,459

23,148

23,103

22,544

22,375

  Net interest income

163,511

159,764

160,648

157,370

155,122

Provision for loan losses

12,750

9,750

9,500

9,500

9,250

  Net interest income after provision for loan losses

150,761

150,014

151,148

147,870

145,872

Non-interest income:

Deposit service fees

34,493

32,625

25,928

26,489

26,302

Loan related fees

5,729

5,679

8,361

5,479

4,890

Wealth and investment services

8,784

7,889

8,517

8,762

8,829

Mortgage banking activities

2,517

1,561

977

1,805

513

Increase in cash surrender value of life insurance policies

3,197

3,152

3,278

3,346

3,296

Net gain on investment securities

486

43

1,121

42

Other income

4,645

6,941

6,492

5,071

3,839

59,851

57,890

54,674

50,994

47,669

Loss on write-down of investment securities to fair value

(899)

(85)

(73)

  Total non-interest income

59,851

57,890

53,775

50,909

47,596

Non-interest expense:

Compensation and benefits

74,043

70,864

71,220

66,849

65,711

Occupancy

11,680

13,596

11,518

11,557

11,491

Technology and equipment expense

20,224

19,248

15,827

15,419

15,737

Marketing

4,245

4,176

3,918

4,032

4,249

Professional and outside services

2,875

2,453

1,855

2,470

1,269

Intangible assets amortization

1,843

1,288

416

432

669

Foreclosed and repossessed asset expenses

146

169

244

387

134

Foreclosed and repossessed asset (gains) losses

(537)

536

(238)

(225)

(574)

Loan workout expenses

801

878

685

969

801

Deposit insurance

5,492

6,241

5,856

5,938

5,565

Other expenses

15,817

14,166

16,158

17,083

16,898

136,629

133,615

127,459

124,911

121,950

Severance, contract, and other

521

290

633

42

267

Acquisition costs

18

509

396

144

Branch and facility optimization

278

(324)

276

(599)

258

Provision for litigation and settlements

1,400

  Total non-interest expense

137,446

134,090

130,164

124,498

122,475

Income before income taxes

73,166

73,814

74,759

74,281

70,993

Income tax expense

20,663

24,092

23,753

23,824

23,159

  Net income

52,503

49,722

51,006

50,457

47,834

Preferred stock dividends

(2,024)

(2,639)

(2,639)

(2,639)

(2,639)

  Net income available to common shareholders

$             50,479

$               47,083

$               48,367

$               47,818

$               45,195

Diluted shares (average)

91,302

90,841

90,741

90,614

90,528

Net income per common share available to common shareholders:

Basic

$                 0.55

$                   0.52

$                   0.54

$                   0.53

$                   0.50

Diluted

0.55

0.52

0.53

0.53

0.50

 

 

 

WEBSTER FINANCIAL CORPORATION Consolidated Average Balances, Yields, and Rates Paid (unaudited)

Three Months Ended June 30,

2015

2014

(Dollars in thousands)

Average balance

Interest

Fully tax- equivalent yield/rate

Average balance (b)

Interest

Fully tax- equivalent yield/rate

Assets:

 Interest-earning assets:

 Loans

$     14,508,701

$          136,223

3.74%

$        13,129,865

$             126,292

3.83%

 Investment securities (a)

6,854,413

51,483

3.02

6,411,407

52,604

3.29

 Federal Home Loan and Federal Reserve Bank stock

192,707

1,379

2.87

166,350

1,158

2.79

 Interest-bearing deposits

124,769

79

0.25

16,792

11

0.27

 Loans held for sale

50,382

432

3.43

20,099

215

4.27

    Total interest-earning assets

21,730,972

$          189,596

3.48%

19,744,513

$             180,280

3.64%

 Non-interest-earning assets

1,657,980

1,507,081

    Total assets

$     23,388,952

$        21,251,594

Liabilities and Shareholders' Equity:

 Interest-bearing liabilities:

  Deposits:

 Demand

$       3,450,633

$                      —

—%

$          3,099,114

$                      —

—%

 Savings, interest checking, and money market

11,767,724

5,300

0.18

9,752,872

4,413

0.18

 Certificates of deposit

2,163,918

6,233

1.16

2,280,571

6,438

1.13

 Total deposits

17,382,275

11,533

0.27

15,132,557

10,851

0.29

 Securities sold under agreements to repurchase and other borrowings

1,111,385

4,186

1.49

1,412,820

5,082

1.42

 Federal Home Loan Bank advances

2,092,840

5,329

1.01

2,035,813

4,002

0.78

 Long-term debt

226,277

2,411

4.26

249,276

2,440

3.91

    Total borrowings

3,430,502

11,926

1.38

3,697,909

11,524

1.24

    Total interest-bearing liabilities

20,812,777

$             23,459

0.45%

18,830,466

$               22,375

0.47%

 Non-interest-bearing liabilities

197,323

150,319

    Total liabilities

21,010,100

18,980,785

 Preferred stock

142,109

151,649

 Common shareholders' equity

2,236,743

2,119,160

 Webster Financial Corp. shareholders' equity

2,378,852

2,270,809

    Total liabilities and equity

$     23,388,952

$        21,251,594

 Tax-equivalent net interest income

166,137

157,905

 Less: tax-equivalent adjustment

(2,626)

(2,783)

    Net interest income

$          163,511

$             155,122

    Net interest margin

3.05%

3.19%

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

(b) Certain previously reported information reflects the retrospective application of ASU No. 2014-01, "Accounting for Investments in Qualified Affordable Housing Projects."

 

 

 

WEBSTER FINANCIAL CORPORATION Consolidated Average Balances, Yields, and Rates Paid (unaudited)

Six Months Ended June 30,

2015

2014

(Dollars in thousands)

Average balance

Interest

Fully tax- equivalent yield/rate

Average balance (b)

Interest

Fully tax- equivalent yield/rate

Assets:

 Interest-earning assets:

 Loans

$     14,253,012

$          267,477

3.75%

$        12,992,371

$             250,804

3.85%

 Investment securities (a)

6,775,633

103,909

3.08

6,416,165

107,529

3.36

 Federal Home Loan and Federal Reserve Bank stock

192,997

2,695

2.82

162,675

2,325

2.88

 Interest-bearing deposits

112,393

142

0.25

16,373

22

0.27

 Loans held for sale

45,551

942

4.14

19,119

392

4.10

   Total interest-earning assets

21,379,586

$          375,165

3.51%

19,606,703

$             361,072

3.68%

 Non-interest-earning assets

1,650,845

1,509,416

   Total assets

$     23,030,431

$        21,116,119

Liabilities and Shareholders' Equity:

 Interest-bearing liabilities:

   Deposits:

  Demand

$       3,452,428

$                      —

—%

$          3,098,058

$                      —

—%

  Savings, interest checking, and money market

11,655,056

10,136

0.18

9,798,648

8,932

0.18

  Certificates of deposit

2,203,169

12,939

1.18

2,265,510

12,563

1.12

  Total deposits

17,310,653

23,075

0.27

15,162,216

21,495

0.29

Securities sold under agreements to repurchase and other borrowings

1,154,962

8,573

1.48

1,382,301

10,287

1.48

Federal Home Loan Bank advances

1,764,602

10,150

1.14

1,879,609

7,849

0.83

Long-term debt

226,263

4,809

4.25

278,966

5,222

3.74

   Total borrowings

3,145,827

23,532

1.49

3,540,876

23,358

1.31

   Total interest-bearing liabilities

20,456,480

$             46,607

0.46%

18,703,092

$               44,853

0.48%

Non-interest-bearing liabilities

209,493

158,049

   Total liabilities

20,665,973

18,861,141

Preferred stock

146,853

151,649

Common shareholders' equity

2,217,605

2,103,329

Webster Financial Corp. shareholders' equity

2,364,458

2,254,978

   Total liabilities and equity

$     23,030,431

$        21,116,119

Tax-equivalent net interest income

328,558

316,219

Less: tax-equivalent adjustment

(5,283)

(5,796)

   Net interest income

$          323,275

$             310,423

   Net interest margin

3.07%

3.22%

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

(b) Certain previously reported information reflects the retrospective application of ASU No. 2014-01, "Accounting for Investments in Qualified Affordable Housing Projects."

 

 

WEBSTER FINANCIAL CORPORATION Five Quarter Loan Balances (unaudited)

(Dollars in thousands)

June 30, 2015

March 31, 2015

December 31, 2014

September 30, 2014

June 30, 2014

Loan Balances (actuals):

 Continuing Portfolio:

   Commercial non-mortgage

$       3,310,863

$          3,183,218

$          3,087,940

$          2,984,949

$          2,978,576

   Equipment financing

545,441

543,636

537,751

490,150

464,948

   Asset-based lending

711,041

716,592

661,330

647,042

624,565

   Commercial real estate

3,770,252

3,663,071

3,554,428

3,354,107

3,291,892

   Residential mortgages

3,833,489

3,594,272

3,509,174

3,455,353

3,366,091

   Consumer

2,520,970

2,480,270

2,457,345

2,485,870

2,449,730

   Total continuing portfolio

14,692,056

14,181,059

13,807,968

13,417,471

13,175,802

   Allowance for loan losses

(159,501)

(152,825)

(149,813)

(145,818)

(143,440)

   Total continuing portfolio, net

14,532,555

14,028,234

13,658,155

13,271,653

13,032,362

Liquidating Portfolio:

   National Construction Lending Center (NCLC)

1

1

1

   Consumer

85,470

89,167

92,056

96,030

99,577

   Total liquidating portfolio

85,470

89,167

92,057

96,031

99,578

   Allowance for loan losses

(8,359)

(9,145)

(9,451)

(10,664)

(11,428)

   Total liquidating portfolio, net

77,111

80,022

82,606

85,367

88,150

Total Loan Balances (actuals)

14,777,526

14,270,226

13,900,025

13,513,502

13,275,380

Allowance for loan losses

(167,860)

(161,970)

(159,264)

(156,482)

(154,868)

Loans, net

$     14,609,666

$        14,108,256

$        13,740,761

$        13,357,020

$        13,120,512

Loan Balances (average):

 Continuing Portfolio:

   Commercial non-mortgage

$       3,247,527

$          3,096,762

$          3,036,412

$          2,987,403

$          2,963,150

   Equipment financing

542,112

542,067

509,331

478,333

459,140

   Asset-based lending

709,985

675,218

647,952

621,856

612,170

   Commercial real estate

3,705,895

3,574,826

3,452,954

3,329,767

3,195,746

   Residential mortgages

3,711,096

3,546,098

3,483,444

3,409,010

3,361,276

   Consumer

2,504,668

2,468,422

2,491,359

2,467,839

2,437,452

   Total continuing portfolio

14,421,283

13,903,393

13,621,452

13,294,208

13,028,934

   Allowance for loan losses

(156,698)

(153,790)

(150,706)

(146,863)

(143,811)

   Total continuing portfolio, net

14,264,585

13,749,603

13,470,746

13,147,345

12,885,123

Liquidating Portfolio:

   NCLC

1

1

1

53

   Consumer

87,418

91,088

94,069

97,661

100,878

   Total liquidating portfolio

87,418

91,089

94,070

97,662

100,931

   Allowance for loan losses

(8,359)

(9,145)

(9,451)

(10,664)

(11,428)

   Total liquidating portfolio, net

79,059

81,944

84,619

86,998

89,503

Total Loan Balances (average)

14,508,701

13,994,482

13,715,522

13,391,870

13,129,865

Allowance for loan losses

(165,057)

(162,935)

(160,157)

(157,527)

(155,239)

Loans, net

$     14,343,644

$        13,831,547

$        13,555,365

$        13,234,343

$        12,974,626

 

 

 

WEBSTER FINANCIAL CORPORATION Five Quarter Nonperforming Assets (unaudited)

(Dollars in thousands)

June 30, 2015

March 31, 2015

December 31, 2014

September 30, 2014

June 30, 2014

Nonperforming loans:

 Continuing Portfolio:

   Commercial non-mortgage

$               43,081

$               27,057

$                 6,436

$               12,421

$               14,152

   Equipment financing

301

285

518

1,659

863

   Asset-based lending

   Commercial real estate

26,893

25,814

18,675

18,341

19,023

   Residential mortgages

58,663

61,274

64,022

67,541

67,722

   Consumer

34,236

33,696

35,770

34,566

36,526

   Nonperforming loans - continuing portfolio

163,174

148,126

125,421

134,528

138,286

Liquidating Portfolio:

   Consumer

4,682

4,117

4,460

4,560

5,475

Total nonperforming loans

$             167,856

$             152,243

$             129,881

$             139,088

$             143,761

Other real estate owned and repossessed assets:

 Continuing Portfolio:

   Commercial

$                      —

$                      —

$                 2,899

$                 2,899

$                 3,238

   Repossessed equipment

100

100

100

   Residential

3,930

3,051

2,280

1,712

2,748

   Consumer

1,039

2,252

1,237

515

643

   Total continuing portfolio

4,969

5,303

6,516

5,226

6,729

Liquidating Portfolio:

   Total liquidating portfolio

Total other real estate owned and repossessed assets

$                 4,969

$                 5,303

$                 6,516

$                 5,226

$                 6,729

Total nonperforming assets

$             172,825

$             157,546

$             136,397

$             144,314

$             150,490

 

 

 

WEBSTER FINANCIAL CORPORATION Five Quarter Past Due Loans (unaudited)

(Dollars in thousands)

June 30, 2015

March 31, 2015

December 31, 2014

September 30, 2014

June 30, 2014

Past due 30-89 days:

 Continuing Portfolio:

   Commercial non-mortgage

$               1,778

$                 3,992

$                 2,099

$                 8,795

$                 5,045

   Equipment financing

517

789

701

433

290

   Asset-based lending

   Commercial real estate

1,547

3,962

2,714

1,625

1,610

   Residential mortgages

12,315

13,966

17,216

15,980

17,826

   Consumer

13,053

18,459

15,867

15,852

18,956

   Past due 30-89 days - continuing portfolio

29,210

41,168

38,597

42,685

43,727

Liquidating Portfolio:

   Consumer

1,299

1,820

1,658

1,419

2,105

Total past due 30-89 days

30,509

42,988

40,255

44,104

45,832

Loans past due 90 days or more and accruing

1,923

2,109

2,087

1,980

1,828

Total past due loans

$             32,432

$               45,097

$               42,342

$               46,084

$               47,660

 

 

 

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

For the Three Months Ended

(Dollars in thousands)

June 30, 2015

March 31, 2015

December 31, 2014

September 30, 2014

June 30, 2014

Beginning balance

$          161,970

$             159,264

$             156,482

$             154,868

$             153,600

 Provision

12,750

9,750

9,500

9,500

9,250

Charge-offs continuing portfolio:

   Commercial non-mortgage

2,541

255

4,097

2,738

3,685

   Equipment financing

15

15

84

491

20

   Asset-based lending

   Commercial real estate

1,091

3,153

246

139

447

   Residential mortgages

1,461

1,953

1,346

1,870

1,840

   Consumer

3,531

3,634

3,648

5,078

4,075

   Charge-offs continuing portfolio

8,639

9,010

9,421

10,316

10,067

Charge-offs liquidating portfolio:

   NCLC

2

   Consumer

322

662

563

1,251

1,211

   Charge-offs liquidating portfolio

322

664

563

1,251

1,211

Total charge-offs

8,961

9,674

9,984

11,567

11,278

Recoveries continuing portfolio:

   Commercial non-mortgage

527

989

1,258

967

1,121

   Equipment financing

102

143

702

336

397

   Asset-based lending

2

26

50

   Commercial real estate

52

202

217

120

69

   Residential mortgages

365

104

291

250

495

   Consumer

849

821

636

1,770

923

   Recoveries continuing portfolio

1,897

2,285

3,104

3,493

3,005

Recoveries liquidating portfolio:

   NCLC

4

4

5

11

12

   Consumer

200

341

157

177

279

   Recoveries liquidating portfolio

204

345

162

188

291

Total recoveries

2,101

2,630

3,266

3,681

3,296

Total net charge-offs

6,860

7,044

6,718

7,886

7,982

Ending balance

$          167,860

$             161,970

$             159,264

$             156,482

$             154,868

 

 

 

WEBSTER FINANCIAL CORPORATION Reconciliations to GAAP Financial Measures

The Company evaluates its business based on the following 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-affected amortization of intangible assets, as a percentage of average common shareholders' equity less goodwill and intangible assets (excluding mortgage servicing rights). The tangible equity ratio represents total ending shareholders' equity less goodwill and intangible assets (excluding mortgage servicing rights) divided by total assets less goodwill and intangible assets (excluding mortgage servicing rights). The tangible common equity ratio represents ending common shareholders' equity less goodwill and intangible assets (excluding mortgage servicing rights) divided by total assets less goodwill and intangible assets (excluding mortgage servicing rights). Tangible book value per common share represents ending common shareholders' equity less goodwill and intangible assets (excluding mortgage servicing rights) divided by ending common shares outstanding.

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. Accordingly, this is also a non-GAAP financial measure.

See the tables below for reconciliations of these non-GAAP financial measures with financial measures defined by GAAP for the three months ended June 30, 2015, March 31, 2015, December 31, 2014, September 30, 2014, and June 30, 2014. 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.

At or for the Three Months Ended

(Dollars in thousands, except per share data)

June 30, 2015

March 31, 2015

December 31, 2014

September 30, 2014

June 30, 2014

Reconciliation of net income available to common shareholders to net income used for computing the return on average tangible common shareholders' equity ratio

Net income available to common shareholders

$             50,479

$               47,083

$               48,367

$               47,818

$               45,195

Amortization of intangibles (tax-affected @ 35%)

1,198

837

270

281

435

  Quarterly net income adjusted for amortization of intangibles

51,677

47,920

48,637

48,099

45,630

  Annualized net income used in the return on average tangible common   shareholders' equity ratio

$           206,708

$             191,680

$             194,548

$             192,396

$             182,520

Reconciliation of average common shareholders' equity to average tangible common shareholders' equity

Average common shareholders' equity

$        2,236,743

$          2,198,254

$          2,189,191

$          2,155,246

$          2,119,160

Average goodwill

(538,373)

(537,147)

(529,887)

(529,887)

(529,887)

Average intangible assets (excluding mortgage servicing rights)

(43,538)

(39,559)

(2,862)

(3,294)

(3,762)

  Average tangible common shareholders' equity

$        1,654,832

$          1,621,548

$          1,656,442

$          1,622,065

$          1,585,511

Reconciliation of period-end shareholders' equity to period-end tangible shareholders' equity

Shareholders' equity

$        2,379,695

$          2,355,575

$          2,322,815

$          2,310,993

$          2,284,622

Goodwill

(538,373)

(538,373)

(529,887)

(529,887)

(529,887)

Intangible assets (excluding mortgage servicing rights)

(42,535)

(44,378)

(2,666)

(3,082)

(3,515)

  Tangible shareholders' equity

$        1,798,787

$          1,772,824

$          1,790,262

$          1,778,024

$          1,751,220

Reconciliation of period-end common shareholders' equity to period-end tangible common shareholders' equity

Shareholders' equity

$        2,379,695

$          2,355,575

$          2,322,815

$          2,310,993

$          2,284,622

Preferred stock

(122,710)

(151,649)

(151,649)

(151,649)

(151,649)

Common shareholders' equity

2,256,985

2,203,926

2,171,166

2,159,344

2,132,973

Goodwill

(538,373)

(538,373)

(529,887)

(529,887)

(529,887)

Intangible assets (excluding mortgage servicing rights)

(42,535)

(44,378)

(2,666)

(3,082)

(3,515)

  Tangible common shareholders' equity

$        1,676,077

$          1,621,175

$          1,638,613

$          1,626,375

$          1,599,571

Reconciliation of period-end assets to period-end tangible assets

Assets

$      23,620,786

$        23,106,688

$        22,533,172

$        21,827,045

$        21,524,484

Goodwill

(538,373)

(538,373)

(529,887)

(529,887)

(529,887)

Intangible assets (excluding mortgage servicing rights)

(42,535)

(44,378)

(2,666)

(3,082)

(3,515)

  Tangible assets

$      23,039,878

$        22,523,937

$        22,000,619

$        21,294,076

$        20,991,082

Book value per common share

Common shareholders' equity

$        2,256,985

$          2,203,926

$          2,171,166

$          2,159,344

$          2,132,973

Ending common shares issued and outstanding (in thousands)

91,919

90,715

90,512

90,248

90,246

  Book value per share of common stock

$               24.55

$                 24.29

$                 23.99

$                 23.93

$                 23.64

Tangible book value per common share

Tangible common shareholders' equity

$        1,676,077

$          1,621,175

$          1,638,613

$          1,626,375

$          1,599,571

Ending common shares issued and outstanding (in thousands)

91,919

90,715

90,512

90,248

90,246

  Tangible book value per common share

$               18.23

$                 17.87

$                 18.10

$                 18.02

$                 17.72

Reconciliation of non-interest expense to non-interest expense used in the efficiency ratio

Non-interest expense

$           137,446

$             134,090

$             130,164

$             124,498

$             122,475

Foreclosed property expense

(146)

(169)

(244)

(387)

(134)

Intangible assets amortization

(1,843)

(1,288)

(416)

(432)

(669)

Other expense

(280)

(1,011)

(2,467)

638

49

  Non-interest expense used in the efficiency ratio

$           135,177

$             131,622

$             127,037

$             124,317

$             121,721

Reconciliation of income to income used in the efficiency ratio

Net interest income before provision for loan losses

$           163,511

$             159,764

$             160,648

$             157,370

$             155,122

Fully taxable-equivalent adjustment

2,626

2,657

2,628

2,700

2,783

Non-interest income

59,851

57,890

53,775

50,909

47,596

Net gain on investment securities

(486)

(43)

(1,121)

(42)

Other

899

85

73

  Income used in the efficiency ratio

$           225,502

$             220,268

$             216,829

$             211,022

$             205,574

 

 

 

SOURCE Webster Financial Corporation



RELATED LINKS

http://www.websterbank.com