Webster Reports 2017 First Quarter Earnings
WATERBURY, Conn., April 21, 2017 /PRNewswire/ -- Webster Financial Corporation (NYSE: WBS), the holding company for Webster Bank, N.A., today announced earnings applicable to common shareholders of $57.3 million, or $0.62 per diluted share, for the quarter ended March 31, 2017 compared to $44.9 million, or $0.49 per diluted share, for the quarter ended March 31, 2016.
"Record net income was driven by $1.1 billion in commercial loan growth year-over-year, fully funded by HSA and transactional account deposit growth," said James C. Smith, chairman and chief executive officer. "Our 30th consecutive quarter of year-over-year revenue growth benefited from rising interest rates. The solid results reflect sustained progress in executing sound growth strategies that maximize value for customers and shareholders."
Highlights for the first quarter of 2017 compared to the first quarter of 2016:
- Revenue of $255.7 million, an increase of 7.3 percent, including a record level of net interest income of $192.7 million, and non-interest income of $63.0 million.
- Loan growth of $1.2 billion, or 7.8 percent, with growth of $1.1 billion in commercial and commercial real estate loans.
- Deposit growth of $1.5 billion, or 8.1 percent, with growth of $1.2 billion in health savings account and transactional deposits.
- Net charge-off ratio of 0.13 percent.
- Annualized return on average tangible common shareholders' equity (non-GAAP) of 12.47 percent.
- Net interest margin of 3.22 percent, up 11 basis points.
- Effective tax rate of 27 percent benefited from an accounting change.
"We are beginning to realize the transformational benefits of our balance sheet management strategies as evidenced by the 11 basis point increase in the net interest margin," said Glenn MacInnes, executive vice president and chief financial officer. "Credit quality remains stable and we continue to execute on our strategic roadmap, with a disciplined approach to investing in our business, driving sustainable long-term shareholder value."
Quarterly net interest income compared to the first quarter of 2016:
- Net interest income was $192.7 million compared to $176.2 million.
- Net interest margin was 3.22 percent compared to 3.11 percent. The yield on interest-earning assets increased by 11 basis points, while the cost of funds remained flat.
- Average interest-earning assets totaled $24.4 billion and grew by $1.4 billion, or 6.2 percent.
- Average loans totaled $17.0 billion and grew by $1.2 billion, or 7.9 percent.
Quarterly provision for loan losses:
- The Company recorded a provision for loan losses of $10.5 million compared to $12.5 million in the prior quarter and $15.6 million a year ago.
- Net charge-offs were $5.7 million compared to $6.1 million in the prior quarter and $16.4 million a year ago. The ratio of net charge-offs to average loans on an annualized basis was 0.13 percent compared to 0.15 percent in the prior quarter and 0.41 percent a year ago.
- The allowance for loan losses represented 1.16 percent of total loans compared to 1.14 percent at December 31, 2016 and 1.10 percent at March 31, 2016. The allowance for loan losses represented 115 percent of nonperforming loans compared to 145 percent at December 31, 2016 and 124 percent at March 31, 2016.
Quarterly non-interest income compared to the first quarter of 2016:
- Total non-interest income was $63.1 million compared to $62.4 million, an increase of $0.7 million. This reflects increases of $2.2 million in loan and lease fees and $2.1 million in deposit service fees offset by a decrease of $2.0 million in HSA other income related to an adjustment of an acquisition receivable and a decrease of $1.8 million in client swap activity.
Quarterly non-interest expense compared to the first quarter of 2016:
- Total non-interest expense was $163.7 million compared to $152.4 million, an increase of $11.3 million. The increase reflects $7.6 million in compensation and benefits, $1.7 million in technology and equipment, $1.5 million in professional and outside services, and $1.1 million due to continued facility optimization, offset by a slight decline in other expenses.
Quarterly income taxes compared to the first quarter of 2016:
- Income tax expense was $22.0 million compared to $23.4 million and the effective tax rate was 27.0 percent compared to 33.2 percent.
- The lower effective tax rate in the quarter resulted from a change in the accounting rules for equity-based compensation that took effect on January 1, 2017, which reduced tax expense in the current quarter by $4.8 million.
Investment securities:
- Total investment securities were $7.1 billion compared to $7.2 billion at December 31, 2016 and $7.1 billion at March 31, 2016. The carrying value of the available-for-sale portfolio included $28.2 million of net unrealized losses compared to $24.7 million of net unrealized losses at December 31, 2016 and $1.6 million of net unrealized gains at March 31, 2016. The carrying value of the held-to-maturity portfolio does not reflect $41.6 million of net unrealized losses compared to $35.5 million of net unrealized losses at December 31, 2016, and $82.2 million of net unrealized gains at March 31, 2016.
Loans:
- Total loans were $17.1 billion compared to $17.0 billion at December 31, 2016 and $15.9 billion at March 31, 2016. Compared to December 31, 2016, commercial, commercial real estate, and residential mortgage loans increased by $62.7 million, $19.7 million, and $36.0 million, respectively, while consumer loans decreased by $50.4 million.
- Compared to a year ago, commercial, commercial real estate, and residential mortgage loans increased by $663.9 million, $483.6 million, and $181.4 million, respectively, while consumer loans decreased by $92.8 million.
- Loan originations for portfolio were $1.107 billion compared to $1.686 billion in the prior quarter and $0.9 billion a year ago. In addition, $73 million of residential loans were originated for sale in the quarter compared to $132 million in the prior quarter and $73 million a year ago.
Asset quality:
- Total nonperforming loans were $173.8 million, or 1.02 percent of total loans, compared to $134.0 million, or 0.79 percent, at December 31, 2016 and $140.7 million, or 0.89 percent, at March 31, 2016. Total paying nonperforming loans were $73.5 million compared to $38.4 million at December 31, 2016 and $43.7 million at March 31, 2016.
- Past due loans were $32.1 million compared to $42.0 million at December 31, 2016 and $55.7 million at March 31, 2016. Included in past due loans are loans past due 90 days or more and still accruing, which were flat with the prior quarter and decreased $2.6 million from the prior year.
Deposits and borrowings:
- Total deposits were $20.2 billion compared to $19.3 billion at December 31, 2016 and $18.7 billion at March 31, 2016. Core deposits to total deposits were 90.0 percent compared to 89.5 percent at December 31, 2016 and 89.2 percent at March 31, 2016. Loans to deposits were 84.5 percent compared to 88.2 percent at December 31, 2016 and 84.7 percent at March 31, 2016.
- Total borrowings were $3.0 billion compared to $4.0 billion at December 31, 2016 and $3.5 billion at March 31, 2016.
Capital:
- The return on average tangible common shareholders' equity and the return on average common shareholders' equity were 12.47 percent and 9.43 percent, respectively, compared to 10.63 percent and 7.80 percent, respectively, in the first quarter of 2016.
- The tangible equity and tangible common equity ratios were 7.82 percent and 7.34 percent, respectively, compared to 7.63 percent and 7.13 percent, respectively, at March 31, 2016. The common equity tier 1 risk-based capital ratio was 10.73 percent compared to 10.61 percent at March 31, 2016.
- Book value and tangible book value per common share were $26.45 and $20.26, respectively, compared to $25.24 and $18.95, respectively, at March 31, 2016.
Webster Financial Corporation is the holding company for Webster Bank, National Association. With $26.0 billion in assets, Webster provides business and consumer banking, mortgage, financial planning, trust, and investment services through 175 banking centers and 349 ATMs. Webster also provides mobile and Internet banking. Webster Bank owns the asset-based lending firm Webster Business Credit Corporation; the equipment finance firm Webster Capital Finance Corporation; and HSA Bank, a division of Webster Bank, which provides health savings account trustee and administrative services. Webster Bank is a member of the FDIC and an equal housing lender. For more information about Webster, including past press releases and the latest annual report, visit the Webster website at www.websterbank.com.
Conference Call
A conference call covering Webster's 2017 first quarter earnings announcement will be held today, Friday, April 21, 2017 at 9:00 a.m. (Eastern) and may be heard through Webster's Investor Relations website at www.wbst.com, or in listen-only mode by calling 877-407-8289 or 201-689-8341 internationally. The call will be archived on the website and available for future retrieval.
Forward-Looking Statements
This release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Act"). Forward-looking statements can be identified by words such as "believes," "anticipates," "expects," "intends," "targeted," "continue," "remain," "will," "should," "may," "plans," "estimates," and similar references to future periods; however, such words are not the exclusive means of identifying such statements. Examples of forward-looking statements include, but are not limited to: (i) projections of revenues, expenses, income or loss, earnings or loss per share, and other financial items; (ii) statements of plans, objectives, and expectations of Webster or its management or Board of Directors; (iii) statements of future economic performance; and (iv) statements of assumptions underlying such statements. Forward-looking statements are based on Webster's current expectations and assumptions regarding its business, the economy, and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict. Webster's actual results may differ materially from those contemplated by the forward-looking statements, which are neither statements of historical fact nor guarantees or assurances of future performance. Factors that could cause actual results to differ from those discussed in the forward-looking statements include, but are not limited to: (1) local, regional, national, and international economic conditions and the impact they may have on us and our customers and our assessment of that impact; (2) volatility and disruption in national and international financial markets; (3) government intervention in the U.S. financial system; (4) changes in the level of nonperforming assets and charge-offs; (5) changes in estimates of future reserve requirements based upon the periodic review thereof under relevant regulatory and accounting requirements; (6) adverse conditions in the securities markets that lead to impairment in the value of securities in our investment portfolio; (7) inflation, interest rate, securities market, and monetary fluctuations; (8) the timely development and acceptance of new products and services and perceived overall value of these products and services by customers; (9) changes in consumer spending, borrowings, and savings habits; (10) technological changes and cyber-security matters; (11) the ability to increase market share and control expenses; (12) changes in the competitive environment among banks, financial holding companies, and other financial services providers; (13) the effect of changes in laws and regulations (including laws and regulations concerning taxes, banking, securities, and insurance) with which we and our subsidiaries must comply, including the Dodd-Frank Wall Street Reform and Consumer Protection Act; (14) the effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Public Company Accounting Oversight Board, the Financial Accounting Standards Board, and other accounting standard setters; (15) the costs and effects of legal and regulatory developments including the resolution of legal proceedings or regulatory or other governmental inquiries and the results of regulatory examinations or reviews; (16) our success at managing the risks involved in the foregoing items and (17) the other factors that are described in the Company's Annual Report on Form 10-K and Quarterly Reports on Form 10-Q under the headings "Risk Factors" and 'Management Discussion and Analysis of Financial Condition and Results of Operation." Any forward-looking statement made by the Company in this release speaks only as of the date on which it is made. Factors or events that could cause the Company's actual results to differ may emerge from time to time, and it is not possible for the Company to predict all of them. The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.
Non-GAAP Financial Measures
In addition to results presented in accordance with GAAP, this press release contains certain non-GAAP financial measures. A reconciliation of net income and other performance ratios, as adjusted, is included in the accompanying selected financial highlights table.
We believe that providing certain non-GAAP financial measures provides investors with information useful in understanding our financial performance, our performance trends and financial position. We utilize these measures for internal planning and forecasting purposes. We, as well as securities analysts, investors, and other interested parties, also use these measures to compare peer company operating performance. We believe that our presentation and discussion, together with the accompanying reconciliations, provides a complete understanding of factors and trends affecting our business and allows investors to view performance in a manner similar to management. These non-GAAP measures should not be considered a substitute for GAAP basis measures and results, and we strongly encourage investors to review our consolidated financial statements in their entirety and not to rely on any single financial measure. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names.
| WEBSTER FINANCIAL CORPORATION |
|||||||
| At or for the Three Months Ended |
|||||||
| (In thousands, except per share data) |
March 31, |
December 31, |
September 30, |
June 30, |
March 31, |
||
| Income and performance ratios: |
|||||||
| Net income |
$ 59,471 |
$ 57,660 |
$ 51,817 |
$ 50,603 |
$ 47,047 |
||
| Earnings applicable to common shareholders |
57,342 |
55,501 |
49,634 |
48,398 |
44,921 |
||
| Earnings per diluted common share |
0.62 |
0.60 |
0.54 |
0.53 |
0.49 |
||
| Return on average assets |
0.91 % |
0.89 % |
0.82 % |
0.81 % |
0.76 % |
||
| Return on average tangible common shareholders' equity (non-GAAP) |
12.47 |
12.31 |
11.24 |
11.25 |
10.63 |
||
| Return on average common shareholders' equity |
9.43 |
9.26 |
8.36 |
8.31 |
7.80 |
||
| Non-interest income as a percentage of total revenue |
24.65 |
27.60 |
26.93 |
26.89 |
26.15 |
||
| Asset quality: |
|||||||
| Allowance for loan and lease losses |
$ 199,107 |
$ 194,320 |
$ 187,925 |
$ 180,428 |
$ 174,201 |
||
| Nonperforming assets |
177,935 |
137,946 |
132,350 |
137,347 |
145,787 |
||
| Allowance for loan and lease losses / total loans and leases |
1.16 % |
1.14 % |
1.13 % |
1.11 % |
1.10 % |
||
| Net charge-offs / average loans and leases (annualized) |
0.13 |
0.15 |
0.16 |
0.19 |
0.41 |
||
| Nonperforming loans and leases / total loans and leases |
1.02 |
0.79 |
0.77 |
0.82 |
0.89 |
||
| Nonperforming assets / total loans and leases plus OREO |
1.04 |
0.81 |
0.80 |
0.84 |
0.92 |
||
| Allowance for loan and lease losses / nonperforming loans and leases |
114.54 |
144.98 |
146.57 |
135.75 |
123.79 |
||
| Other ratios: |
|||||||
| Tangible equity (non-GAAP) |
7.82 % |
7.67 % |
7.74 % |
7.75 % |
7.63 % |
||
| Tangible common equity (non-GAAP) |
7.34 |
7.19 |
7.25 |
7.25 |
7.13 |
||
| Tier 1 risk-based capital (a) |
11.40 |
11.19 |
11.16 |
11.19 |
11.33 |
||
| Total risk-based capital (a) |
12.93 |
12.68 |
12.64 |
12.66 |
12.80 |
||
| Common equity tier 1 risk-based capital (a) |
10.73 |
10.52 |
10.48 |
10.50 |
10.61 |
||
| Shareholders' equity / total assets |
9.85 |
9.69 |
9.80 |
9.86 |
9.77 |
||
| Net interest margin |
3.22 |
3.11 |
3.10 |
3.08 |
3.11 |
||
| Efficiency ratio (non-GAAP) |
62.10 |
63.13 |
61.43 |
61.47 |
62.00 |
||
| Equity and share related: |
|||||||
| Common equity |
$ 2,437,648 |
$ 2,404,302 |
$ 2,388,919 |
$ 2,354,256 |
$ 2,312,076 |
||
| Book value per common share |
26.45 |
26.17 |
26.06 |
25.68 |
25.24 |
||
| Tangible book value per common share (non-GAAP) |
20.26 |
19.94 |
19.80 |
19.41 |
18.95 |
||
| Common stock closing price |
50.04 |
54.28 |
38.01 |
33.95 |
35.90 |
||
| Dividends declared per common share |
0.25 |
0.25 |
0.25 |
0.25 |
0.23 |
||
| Common shares issued and outstanding |
92,154 |
91,868 |
91,687 |
91,677 |
91,617 |
||
| Weighted-average common shares outstanding - Basic |
91,886 |
91,572 |
91,365 |
91,244 |
91,328 |
||
| Weighted-average common shares outstanding - Diluted |
92,342 |
92,099 |
91,857 |
91,745 |
91,809 |
||
| (a) Presented as projected for March 31, 2017 and actual for the remaining periods. |
|||||||
| WEBSTER FINANCIAL CORPORATION |
|||||||
| (In thousands) |
March 31, |
December 31, |
March 31, |
||||
| Assets: |
|||||||
| Cash and due from banks |
$ 184,044 |
$ 190,663 |
$ 198,174 |
||||
| Interest-bearing deposits |
38,150 |
29,461 |
27,805 |
||||
| Securities: |
|||||||
| Available for sale |
2,897,060 |
2,991,091 |
3,080,469 |
||||
| Held to maturity |
4,212,050 |
4,160,658 |
4,012,289 |
||||
| Total securities |
7,109,110 |
7,151,749 |
7,092,758 |
||||
| Loans held for sale |
28,698 |
67,577 |
30,425 |
||||
| Loans and Leases: |
|||||||
| Commercial |
5,639,244 |
5,576,560 |
4,975,332 |
||||
| Commercial real estate |
4,530,507 |
4,510,846 |
4,046,911 |
||||
| Residential mortgages |
4,290,685 |
4,254,682 |
4,109,243 |
||||
| Consumer |
2,634,063 |
2,684,500 |
2,726,869 |
||||
| Total loans and leases |
17,094,499 |
17,026,588 |
15,858,355 |
||||
| Allowance for loan and lease losses |
(199,107) |
(194,320) |
(174,201) |
||||
| Loans and leases, net |
16,895,392 |
16,832,268 |
15,684,154 |
||||
| Federal Home Loan Bank and Federal Reserve Bank stock |
163,557 |
194,646 |
188,347 |
||||
| Premises and equipment, net |
134,551 |
137,413 |
134,212 |
||||
| Goodwill and other intangible assets, net |
570,992 |
572,047 |
576,145 |
||||
| Cash surrender value of life insurance policies |
521,427 |
517,852 |
506,746 |
||||
| Deferred tax asset, net |
76,869 |
84,391 |
81,191 |
||||
| Accrued interest receivable and other assets |
280,126 |
294,462 |
412,134 |
||||
| Total Assets |
$ 26,002,916 |
$ 26,072,529 |
$ 24,932,091 |
||||
| Liabilities and Shareholders' Equity: |
|||||||
| Deposits: |
|||||||
| Demand |
$ 3,913,058 |
$ 4,021,061 |
$ 3,625,605 |
||||
| Interest-bearing checking |
2,607,060 |
2,528,274 |
2,421,692 |
||||
| Health savings accounts |
4,793,734 |
4,362,503 |
4,084,190 |
||||
| Money market |
2,452,726 |
2,047,121 |
2,319,588 |
||||
| Savings |
4,456,980 |
4,320,090 |
4,244,383 |
||||
| Certificates of deposit |
1,718,193 |
1,724,906 |
1,727,934 |
||||
| Brokered certificates of deposit |
299,906 |
299,902 |
301,131 |
||||
| Total deposits |
20,241,657 |
19,303,857 |
18,724,523 |
||||
| Securities sold under agreements to repurchase and other borrowings |
807,573 |
949,526 |
910,149 |
||||
| Federal Home Loan Bank advances |
1,922,832 |
2,842,908 |
2,363,131 |
||||
| Long-term debt |
225,577 |
225,514 |
225,323 |
||||
| Accrued expenses and other liabilities |
244,919 |
223,712 |
274,179 |
||||
| Total liabilities |
23,442,558 |
23,545,517 |
22,497,305 |
||||
| Preferred stock |
122,710 |
122,710 |
122,710 |
||||
| Common shareholders' equity |
2,437,648 |
2,404,302 |
2,312,076 |
||||
| Total shareholders' equity |
2,560,358 |
2,527,012 |
2,434,786 |
||||
| Total Liabilities and Shareholders' Equity |
$ 26,002,916 |
$ 26,072,529 |
$ 24,932,091 |
||||
| WEBSTER FINANCIAL CORPORATION |
|||||||
| Three Months Ended March 31, |
|||||||
| (In thousands, except per share data) |
2017 |
2016 |
|||||
| Interest income: |
|||||||
| Interest and fees on loans and leases |
$ 167,808 |
$ 149,808 |
|||||
| Interest and dividends on securities |
51,556 |
52,254 |
|||||
| Loans held for sale |
316 |
273 |
|||||
| Total interest income |
219,680 |
202,335 |
|||||
| Interest expense: |
|||||||
| Deposits |
13,435 |
12,299 |
|||||
| Borrowings |
13,581 |
13,884 |
|||||
| Total interest expense |
27,016 |
26,183 |
|||||
| Net interest income |
192,664 |
176,152 |
|||||
| Provision for loan and lease losses |
10,500 |
15,600 |
|||||
| Net interest income after provision for loan and lease losses |
182,164 |
160,552 |
|||||
| Non-interest income: |
|||||||
| Deposit service fees |
37,006 |
34,925 |
|||||
| Loan and lease related fees |
7,208 |
5,044 |
|||||
| Wealth and investment services |
7,273 |
7,195 |
|||||
| Mortgage banking activities |
2,266 |
3,260 |
|||||
| Increase in cash surrender value of life insurance policies |
3,575 |
3,653 |
|||||
| Gain on investment securities, net |
— |
320 |
|||||
| Other income |
5,714 |
8,126 |
|||||
| 63,042 |
62,523 |
||||||
| Impairment loss on securities recognized in earnings |
— |
(149) |
|||||
| Total non-interest income |
63,042 |
62,374 |
|||||
| Non-interest expense: |
|||||||
| Compensation and benefits |
88,276 |
80,710 |
|||||
| Occupancy |
16,179 |
15,069 |
|||||
| Technology and equipment |
21,608 |
19,938 |
|||||
| Marketing |
5,441 |
4,924 |
|||||
| Professional and outside services |
4,276 |
2,811 |
|||||
| Intangible assets amortization |
1,055 |
1,554 |
|||||
| Loan workout expenses |
608 |
965 |
|||||
| Deposit insurance |
6,732 |
6,786 |
|||||
| Other expenses |
19,609 |
19,688 |
|||||
| Total non-interest expense |
163,784 |
152,445 |
|||||
| Income before income taxes |
81,422 |
70,481 |
|||||
| Income tax expense |
21,951 |
23,434 |
|||||
| Net income |
59,471 |
47,047 |
|||||
| Preferred stock dividends and other |
(2,129) |
(2,126) |
|||||
| Earnings applicable to common shareholders |
$ 57,342 |
$ 44,921 |
|||||
| Weighted-average common shares outstanding - Diluted |
92,342 |
91,809 |
|||||
| Earnings per common share: |
|||||||
| Basic |
$ 0.62 |
$ 0.49 |
|||||
| Diluted |
0.62 |
0.49 |
|||||
| WEBSTER FINANCIAL CORPORATION |
|||||||
| Three Months Ended |
|||||||
| (In thousands, except per share data) |
March 31, |
December 31, |
September 30, |
June 30, |
March 31, |
||
| Interest income: |
|||||||
| Interest and fees on loans and leases |
$ 167,808 |
$ 161,978 |
$ 157,071 |
$ 152,171 |
$ 149,808 |
||
| Interest and dividends on securities |
51,556 |
49,011 |
48,204 |
49,967 |
52,254 |
||
| Loans held for sale |
316 |
443 |
440 |
293 |
273 |
||
| Total interest income |
219,680 |
211,432 |
205,715 |
202,431 |
202,335 |
||
| Interest expense: |
|||||||
| Deposits |
13,435 |
12,591 |
12,594 |
12,374 |
12,299 |
||
| Borrowings |
13,581 |
13,582 |
12,924 |
13,152 |
13,884 |
||
| Total interest expense |
27,016 |
26,173 |
25,518 |
25,526 |
26,183 |
||
| Net interest income |
192,664 |
185,259 |
180,197 |
176,905 |
176,152 |
||
| Provision for loan and lease losses |
10,500 |
12,500 |
14,250 |
14,000 |
15,600 |
||
| Net interest income after provision for loan and lease losses |
182,164 |
172,759 |
165,947 |
162,905 |
160,552 |
||
| Non-interest income: |
|||||||
| Deposit service fees |
37,006 |
35,132 |
35,734 |
34,894 |
34,925 |
||
| Loan and lease related fees |
7,208 |
6,018 |
9,253 |
6,266 |
5,044 |
||
| Wealth and investment services |
7,273 |
6,970 |
7,593 |
7,204 |
7,195 |
||
| Mortgage banking activities |
2,266 |
3,300 |
4,322 |
3,753 |
3,260 |
||
| Increase in cash surrender value of life insurance policies |
3,575 |
3,699 |
3,743 |
3,664 |
3,653 |
||
| Gain on investment securities, net |
— |
— |
— |
94 |
320 |
||
| Other income |
5,714 |
15,498 |
5,767 |
9,200 |
8,126 |
||
| 63,042 |
70,617 |
66,412 |
65,075 |
62,523 |
|||
| Impairment loss on securities recognized in earnings |
— |
— |
— |
— |
(149) |
||
| Total non-interest income |
63,042 |
70,617 |
66,412 |
65,075 |
62,374 |
||
| Non-interest expense: |
|||||||
| Compensation and benefits |
88,276 |
88,038 |
83,148 |
80,231 |
80,710 |
||
| Occupancy |
16,179 |
16,195 |
15,004 |
14,842 |
15,069 |
||
| Technology and equipment |
21,608 |
20,815 |
19,753 |
19,376 |
19,938 |
||
| Marketing |
5,441 |
5,488 |
4,622 |
4,669 |
4,924 |
||
| Professional and outside services |
4,276 |
3,441 |
4,795 |
3,754 |
2,811 |
||
| Intangible assets amortization |
1,055 |
1,082 |
1,493 |
1,523 |
1,554 |
||
| Loan workout expenses |
608 |
378 |
1,133 |
530 |
965 |
||
| Deposit insurance |
6,732 |
6,410 |
6,177 |
6,633 |
6,786 |
||
| Other expenses |
19,609 |
20,024 |
19,972 |
21,220 |
19,688 |
||
| Total non-interest expense |
163,784 |
161,871 |
156,097 |
152,778 |
152,445 |
||
| Income before income taxes |
81,422 |
81,505 |
76,262 |
75,202 |
70,481 |
||
| Income tax expense |
21,951 |
23,845 |
24,445 |
24,599 |
23,434 |
||
| Net income |
59,471 |
57,660 |
51,817 |
50,603 |
47,047 |
||
| Preferred stock dividends and other |
(2,129) |
(2,159) |
(2,183) |
(2,205) |
(2,126) |
||
| Earnings applicable to common shareholders |
$ 57,342 |
$ 55,501 |
$ 49,634 |
$ 48,398 |
$ 44,921 |
||
| Weighted-average common shares outstanding - Diluted |
92,342 |
92,099 |
91,857 |
91,745 |
91,809 |
||
| Earnings per common share: |
|||||||
| Basic |
$ 0.62 |
$ 0.61 |
$ 0.54 |
$ 0.53 |
$ 0.49 |
||
| Diluted |
0.62 |
0.60 |
0.54 |
0.53 |
0.49 |
||
| WEBSTER FINANCIAL CORPORATION |
|||||||
| Three Months Ended March 31, |
|||||||
| 2017 |
2016 |
||||||
| (Dollars in thousands) |
Average balance |
Interest |
Yield/rate |
Average balance |
Interest |
Yield/rate |
|
| Assets: |
|||||||
| Interest-earning assets: |
|||||||
| Loans and leases |
$ 17,041,156 |
$ 168,729 |
3.97 % |
$ 15,798,897 |
$ 150,536 |
3.79 % |
|
| Securities (a) |
7,071,274 |
52,851 |
2.98 |
6,895,407 |
53,012 |
3.07 |
|
| Federal Home Loan and Federal Reserve Bank stock |
182,211 |
1,687 |
3.76 |
188,347 |
1,417 |
3.03 |
|
| Interest-bearing deposits |
68,157 |
130 |
0.77 |
57,337 |
72 |
0.49 |
|
| Loans held for sale |
36,239 |
316 |
3.49 |
26,623 |
273 |
4.10 |
|
| Total interest-earning assets |
24,399,037 |
$ 223,713 |
3.67 % |
22,966,611 |
$ 205,310 |
3.56 % |
|
| Non-interest-earning assets (b) |
1,642,732 |
1,822,608 |
|||||
| Total Assets |
$ 26,041,769 |
$ 24,789,219 |
|||||
| Liabilities and Shareholders' Equity: |
|||||||
| Interest-bearing liabilities: |
|||||||
| Demand deposits |
$ 3,935,232 |
$ — |
—% |
$ 3,665,928 |
$ — |
—% |
|
| Savings, interest checking, and money market deposits |
14,060,535 |
7,780 |
0.22 |
12,761,677 |
6,615 |
0.21 |
|
| Certificates of deposit |
2,022,522 |
5,655 |
1.13 |
2,057,650 |
5,684 |
1.11 |
|
| Total deposits |
20,018,289 |
13,435 |
0.27 |
18,485,255 |
12,299 |
0.27 |
|
| Securities sold under agreements to repurchase and other borrowings |
905,239 |
3,540 |
1.56 |
1,048,997 |
4,173 |
1.57 |
|
| Federal Home Loan Bank advances |
2,136,804 |
7,493 |
1.40 |
2,337,746 |
7,247 |
1.23 |
|
| Long-term debt |
225,541 |
2,548 |
4.52 |
226,191 |
2,464 |
4.36 |
|
| Total borrowings |
3,267,584 |
13,581 |
1.66 |
3,612,934 |
13,884 |
1.52 |
|
| Total interest-bearing liabilities |
23,285,873 |
$ 27,016 |
0.47 % |
22,098,189 |
$ 26,183 |
0.47 % |
|
| Non-interest-bearing liabilities (b) |
196,542 |
258,476 |
|||||
| Total liabilities |
23,482,415 |
22,356,665 |
|||||
| Preferred stock |
122,710 |
122,710 |
|||||
| Common shareholders' equity |
2,436,644 |
2,309,844 |
|||||
| Total shareholders' equity (b) |
2,559,354 |
2,432,554 |
|||||
| Total Liabilities and Shareholders' Equity |
$ 26,041,769 |
$ 24,789,219 |
|||||
| Tax-equivalent net interest income |
196,697 |
179,127 |
|||||
| Less: tax-equivalent adjustments |
(4,033) |
(2,975) |
|||||
| Net interest income |
$ 192,664 |
$ 176,152 |
|||||
| Net interest margin |
3.22 % |
3.11 % |
|||||
| (a) For purposes of the yield computation, unrealized gains (losses) on securities available for sale are excluded from the average balance. |
|||||||
| (b) Previously reported 2016 average balance has been modified to reflect immaterial correction to HSA Bank results. |
|||||||
| WEBSTER FINANCIAL CORPORATION |
|||||||
| (Dollars in thousands) |
March 31, |
December 31, |
September 30, |
June 30, |
March 31, |
||
| Loan and Lease Balances (actuals): |
|||||||
| Commercial non-mortgage |
$ 4,171,246 |
$ 4,135,625 |
$ 3,976,931 |
$ 3,798,436 |
$ 3,607,176 |
||
| Equipment financing |
619,861 |
635,629 |
621,696 |
618,343 |
596,572 |
||
| Asset-based lending |
848,137 |
805,306 |
802,871 |
779,046 |
771,584 |
||
| Commercial real estate |
4,530,507 |
4,510,846 |
4,280,513 |
4,191,087 |
4,046,911 |
||
| Residential mortgages |
4,290,685 |
4,254,682 |
4,234,047 |
4,156,665 |
4,109,243 |
||
| Consumer |
2,634,063 |
2,684,500 |
2,707,343 |
2,728,452 |
2,726,869 |
||
| Total Loan and Lease Balances (actuals) |
17,094,499 |
17,026,588 |
16,623,401 |
16,272,029 |
15,858,355 |
||
| Allowance for loan and lease losses |
(199,107) |
(194,320) |
(187,925) |
(180,428) |
(174,201) |
||
| Loans and Leases, net |
$ 16,895,392 |
$ 16,832,268 |
$ 16,435,476 |
$ 16,091,601 |
$ 15,684,154 |
||
| Loan and Lease Balances (average): |
|||||||
| Commercial non-mortgage |
$ 4,148,625 |
$ 4,053,728 |
$ 3,921,609 |
$ 3,726,394 |
$ 3,605,483 |
||
| Equipment financing |
625,306 |
630,546 |
615,473 |
607,259 |
600,123 |
||
| Asset-based lending |
845,269 |
780,587 |
744,319 |
765,605 |
750,328 |
||
| Commercial real estate |
4,479,379 |
4,343,949 |
4,224,602 |
4,099,855 |
4,019,260 |
||
| Residential mortgages |
4,279,662 |
4,252,106 |
4,200,357 |
4,137,879 |
4,101,396 |
||
| Consumer |
2,662,915 |
2,694,492 |
2,717,282 |
2,742,356 |
2,722,307 |
||
| Total Loan and Lease Balances (average) |
17,041,156 |
16,755,408 |
16,423,642 |
16,079,348 |
15,798,897 |
||
| Allowance for loan and lease losses |
(198,308) |
(192,565) |
(185,886) |
(180,835) |
(179,911) |
||
| Loans and Leases, net |
$ 16,842,848 |
$ 16,562,843 |
$ 16,237,756 |
$ 15,898,513 |
$ 15,618,986 |
||
| Note: The presentation of loan information above, and on the tables that follow, no longer presents liquidating portfolio information separately. |
|||||||
| WEBSTER FINANCIAL CORPORATION |
|||||||
| (Dollars in thousands) |
March 31, |
December 31, |
September 30, |
June 30, |
March 31, |
||
| Nonperforming loans and leases: |
|||||||
| Commercial non-mortgage |
$ 74,483 |
$ 38,550 |
$ 27,398 |
$ 28,700 |
$ 32,517 |
||
| Equipment financing |
703 |
225 |
202 |
480 |
868 |
||
| Asset-based lending |
— |
— |
— |
— |
— |
||
| Commercial real estate |
9,793 |
10,521 |
14,379 |
13,923 |
15,381 |
||
| Residential mortgages |
46,792 |
47,201 |
49,117 |
52,437 |
53,700 |
||
| Consumer |
42,054 |
37,538 |
37,122 |
37,372 |
38,256 |
||
| Total nonperforming loans and leases |
$ 173,825 |
$ 134,035 |
$ 128,218 |
$ 132,912 |
$ 140,722 |
||
| Other real estate owned and repossessed assets: |
|||||||
| Commercial |
$ — |
$ — |
$ 308 |
$ — |
$ — |
||
| Repossessed equipment |
82 |
— |
70 |
220 |
342 |
||
| Residential |
2,296 |
2,625 |
2,987 |
3,395 |
3,329 |
||
| Consumer |
1,732 |
1,286 |
767 |
820 |
1,394 |
||
| Total other real estate owned and repossessed assets |
$ 4,110 |
$ 3,911 |
$ 4,132 |
$ 4,435 |
$ 5,065 |
||
| Total nonperforming assets |
$ 177,935 |
$ 137,946 |
$ 132,350 |
$ 137,347 |
$ 145,787 |
||
| WEBSTER FINANCIAL CORPORATION |
|||||||
| (Dollars in thousands) |
March 31, |
December 31, |
September 30, |
June 30, |
March 31, |
||
| Past due 30-89 days: |
|||||||
| Commercial non-mortgage |
$ 1,685 |
$ 1,949 |
$ 2,522 |
$ 2,050 |
$ 7,265 |
||
| Equipment financing |
1,298 |
1,596 |
3,477 |
404 |
594 |
||
| Asset-based lending |
— |
— |
— |
— |
— |
||
| Commercial real estate |
2,072 |
8,173 |
1,229 |
3,017 |
20,730 |
||
| Residential mortgages |
11,530 |
11,202 |
11,081 |
9,632 |
10,456 |
||
| Consumer |
14,762 |
18,293 |
15,449 |
13,845 |
13,233 |
||
| Total past due 30-89 days |
31,347 |
41,213 |
33,758 |
28,948 |
52,278 |
||
| Past due 90 days or more and accruing |
747 |
749 |
5,459 |
5,738 |
3,391 |
||
| Total past due loans and leases |
$ 32,094 |
$ 41,962 |
$ 39,217 |
$ 34,686 |
$ 55,669 |
||
| WEBSTER FINANCIAL CORPORATION |
|||||||
| For the Three Months Ended |
|||||||
| (Dollars in thousands) |
March 31, |
December 31, |
September 30, |
June 30, |
March 31, |
||
| Beginning balance |
$ 194,320 |
$ 187,925 |
$ 180,428 |
$ 174,201 |
$ 174,990 |
||
| Provision |
10,500 |
12,500 |
14,250 |
14,000 |
15,600 |
||
| Charge-offs: |
|||||||
| Commercial non-mortgage |
123 |
1,067 |
2,561 |
3,525 |
11,208 |
||
| Equipment financing |
185 |
44 |
300 |
70 |
151 |
||
| Asset-based lending |
— |
— |
— |
— |
— |
||
| Commercial real estate |
102 |
161 |
— |
995 |
1,526 |
||
| Residential mortgages |
732 |
1,099 |
1,304 |
638 |
1,594 |
||
| Consumer |
6,474 |
6,433 |
5,259 |
4,556 |
4,421 |
||
| Total charge-offs |
7,616 |
8,804 |
9,424 |
9,784 |
18,900 |
||
| Recoveries: |
|||||||
| Commercial non-mortgage |
322 |
439 |
370 |
315 |
455 |
||
| Equipment financing |
14 |
95 |
240 |
156 |
45 |
||
| Asset-based lending |
— |
44 |
— |
1 |
2 |
||
| Commercial real estate |
7 |
151 |
194 |
212 |
74 |
||
| Residential mortgages |
237 |
348 |
554 |
133 |
721 |
||
| Consumer |
1,323 |
1,622 |
1,313 |
1,194 |
1,214 |
||
| Total recoveries |
1,903 |
2,699 |
2,671 |
2,011 |
2,511 |
||
| Total net charge-offs |
5,713 |
6,105 |
6,753 |
7,773 |
16,389 |
||
| Ending balance |
$ 199,107 |
$ 194,320 |
$ 187,925 |
$ 180,428 |
$ 174,201 |
||
| WEBSTER FINANCIAL CORPORATION |
|||||||
| The Company evaluates its business based on certain ratios that utilize tangible equity, a non-GAAP financial measure. Return on average tangible common shareholders' equity |
|||||||
| 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 |
|||||||
| 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 |
|||||||
| At or for the Three Months Ended |
|||||||
| (In thousands, except per share data) |
March 31, |
December 31, |
September 30, |
June 30, |
March 31, |
||
| Return on average tangible common shareholders' equity: |
|||||||
| Net income (GAAP) |
$ 59,471 |
$ 57,660 |
$ 51,817 |
$ 50,603 |
$ 47,047 |
||
| Less: Preferred stock dividends (GAAP) |
2,024 |
2,024 |
2,024 |
2,024 |
2,024 |
||
| Add: Intangible assets amortization, tax-affected at 35% (GAAP) |
686 |
703 |
970 |
990 |
1,010 |
||
| Income adjusted for preferred stock dividends and intangible assets amortization |
$ 58,133 |
$ 56,339 |
$ 50,763 |
$ 49,569 |
$ 46,033 |
||
| Income adjusted for preferred stock dividends and intangible assets amortization, |
$ 232,532 |
$ 225,356 |
$ 203,052 |
$ 198,276 |
$ 184,132 |
||
| Average shareholders' equity (non-GAAP) |
$ 2,559,354 |
$ 2,526,099 |
$ 2,503,960 |
$ 2,460,763 |
$ 2,432,554 |
||
| Less: Average preferred stock (non-GAAP) |
122,710 |
122,710 |
122,710 |
122,710 |
122,710 |
||
| Average goodwill and other intangible assets (non-GAAP) |
571,611 |
572,682 |
573,978 |
575,483 |
577,029 |
||
| Average tangible common shareholders' equity (non-GAAP) |
$ 1,865,033 |
$ 1,830,707 |
$ 1,807,272 |
$ 1,762,570 |
$ 1,732,815 |
||
| Return on average tangible common shareholders' equity (non-GAAP) |
12.47 % |
12.31 % |
11.24 % |
11.25 % |
10.63 % |
||
| Efficiency ratio: |
|||||||
| Non-interest expense (GAAP) |
$ 163,784 |
$ 161,871 |
$ 156,097 |
$ 152,778 |
$ 152,445 |
||
| Less: Foreclosed property activity (GAAP) |
74 |
(90) |
45 |
(123) |
(158) |
||
| Intangible assets amortization (GAAP) |
1,055 |
1,082 |
1,493 |
1,523 |
1,554 |
||
| Other expenses (non-GAAP) |
1,123 |
1,243 |
793 |
260 |
1,217 |
||
| Non-interest expense (non-GAAP) |
$ 161,532 |
$ 159,636 |
$ 153,766 |
$ 151,118 |
$ 149,832 |
||
| Net interest income (GAAP) |
$ 192,664 |
$ 185,259 |
$ 180,197 |
$ 176,905 |
$ 176,152 |
||
| Add: Tax-equivalent adjustment (non-GAAP) |
4,033 |
3,902 |
3,478 |
3,282 |
2,975 |
||
| Non-interest income (GAAP) |
63,042 |
70,617 |
66,412 |
65,075 |
62,374 |
||
| Less: Gain on investment securities, net (GAAP) |
— |
— |
— |
94 |
320 |
||
| Other (non-GAAP) |
(391) |
(408) |
(236) |
(655) |
(481) |
||
| One-time gain on the sale of an asset (GAAP) |
— |
(7,331) |
— |
— |
— |
||
| Income (non-GAAP) |
$ 260,130 |
$ 252,855 |
$ 250,323 |
$ 245,823 |
$ 241,662 |
||
| Efficiency ratio (non-GAAP) |
62.10 % |
63.13 % |
61.43 % |
61.47 % |
62.00 % |
||
| Tangible equity: |
|||||||
| Shareholders' equity (GAAP) |
$ 2,560,358 |
$ 2,527,012 |
$ 2,511,629 |
$ 2,476,966 |
$ 2,434,786 |
||
| Less: Goodwill and other intangible assets (GAAP) |
570,992 |
572,047 |
573,129 |
574,622 |
576,145 |
||
| Tangible shareholders' equity (non-GAAP) |
$ 1,989,366 |
$ 1,954,965 |
$ 1,938,500 |
$ 1,902,344 |
$ 1,858,641 |
||
| Total assets (GAAP) |
$ 26,002,916 |
$ 26,072,529 |
$ 25,633,617 |
$ 25,120,466 |
$ 24,932,091 |
||
| Less: Goodwill and other intangible assets (GAAP) |
570,992 |
572,047 |
573,129 |
574,622 |
576,145 |
||
| Tangible assets (non-GAAP) |
$ 25,431,924 |
$ 25,500,482 |
$ 25,060,488 |
$ 24,545,844 |
$ 24,355,946 |
||
| Tangible equity (non-GAAP) |
7.82 % |
7.67 % |
7.74 % |
7.75 % |
7.63 % |
||
| Tangible common equity: |
|||||||
| Tangible shareholders' equity (non-GAAP) |
$ 1,989,366 |
$ 1,954,965 |
$ 1,938,500 |
$ 1,902,344 |
$ 1,858,641 |
||
| Less: Preferred stock (GAAP) |
122,710 |
122,710 |
122,710 |
122,710 |
122,710 |
||
| Tangible common shareholders' equity (non-GAAP) |
$ 1,866,656 |
$ 1,832,255 |
$ 1,815,790 |
$ 1,779,634 |
$ 1,735,931 |
||
| Tangible assets (non-GAAP) |
$ 25,431,924 |
$ 25,500,482 |
$ 25,060,488 |
$ 24,545,844 |
$ 24,355,946 |
||
| Tangible common equity (non-GAAP) |
7.34 % |
7.19 % |
7.25 % |
7.25 % |
7.13 % |
||
| Tangible book value per common share: |
|||||||
| Tangible common shareholders' equity (non-GAAP) |
$ 1,866,656 |
$ 1,832,255 |
$ 1,815,790 |
$ 1,779,634 |
$ 1,735,931 |
||
| Common shares outstanding |
92,154 |
91,868 |
91,687 |
91,677 |
91,617 |
||
| Tangible book value per common share (non-GAAP) |
$ 20.26 |
$ 19.94 |
$ 19.80 |
$ 19.41 |
$ 18.95 |
||
| Core deposits: |
|||||||
| Total deposits |
$ 20,241,657 |
$ 19,303,857 |
$ 19,200,908 |
$ 18,828,468 |
$ 18,724,523 |
||
| Less: Certificates of deposit |
1,718,193 |
1,724,906 |
1,721,056 |
1,701,307 |
1,727,934 |
||
| Brokered certificates of deposit |
299,906 |
299,902 |
299,887 |
299,883 |
301,131 |
||
| Core deposits (non-GAAP) |
$ 18,223,558 |
$ 17,279,049 |
$ 17,179,965 |
$ 16,827,278 |
$ 16,695,458 |
||
| Media Contact |
Investor Contact |
| Alice Ferreira, 203-578-2610 |
Terry Mangan, 203-578-2318 |
SOURCE Webster Financial Corporation
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