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Webster Reports Strong 2012 First Quarter Earnings

Net Income Grows by 14 Percent over Prior Year


News provided by

Webster Financial Corporation

Apr 17, 2012, 08:00 ET

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WATERBURY, Conn., April 17, 2012 /PRNewswire/ -- Webster Financial Corporation (NYSE: WBS), the holding company for Webster Bank, N.A., today announced net income available to common shareholders of $38.3 million, or $.42 per diluted share, for the quarter ended March 31, 2012 compared to $39.6 million, or $.43 per diluted share, for the quarter ended December 31, 2011 and $33.7 million, or $.36 per diluted share, for the quarter ended March 31, 2011.  

Highlights for the quarter or at March 31 include:

Combined growth in commercial non-mortgage and commercial real estate loans of $81 million or 2.0 percent from December 31, and $478 million or 12.2 percent from a year ago.

Growth of $246.2 million or 4.9 percent in transaction account deposits from December 31 and $743.0 million or 16.3 percent from a year ago, which represent 38.0 percent of total deposits compared to 37.0 percent at year end and 32.3 percent a year ago.

Net interest income increased $2.4 million compared to the fourth quarter, and net interest margin was 3.36 percent compared to 3.39 percent in the fourth quarter and 3.46 percent a year ago.

Core noninterest income increased $1.7 million in the quarter and $0.5 million from a year ago led by strength in mortgage banking and wealth and investment services.

Noninterest expense before one time costs of $126.6 million compared to $125.3 million in the fourth quarter and $128.6 million a year ago; positive operating leverage achieved as core revenue grew 2.3 percent compared to an increase of 1.7 percent in core expenses from the fourth quarter.

Continued improvement in asset quality as evidenced by a 4.6 percent reduction in nonperforming assets and a 9.5 percent decline in commercial classified loans, both from December 31, and reductions of 36.6 percent and 34.9 percent from a year ago.

Provision for loan losses of $4.0 million compared to $2.5 million in the fourth quarter and $10.0 million a year ago, reflective of overall asset quality and portfolio growth.

Webster Chairman and Chief Executive Officer James C. Smith said, "Our operating results continue to improve, reflecting solid execution of strategic initiatives and continuing improvement in credit quality.  Strong commercial and residential lending drove loan growth and higher non-interest income as we are winning new customers across our footprint.  By adapting well in a rapidly changing banking environment, Webster thrives as a strong, community-focused regional bank."

Net interest income

  • Net interest income was $143.4 million for the quarter compared to $141.0 million in the fourth quarter.
  • Net interest margin was 3.36 percent compared to 3.39 percent in the fourth quarter as the yield on interest-earning assets declined 7 basis points, primarily on securities, and the cost of funds declined 4 basis points.  
  • Average interest-earning assets grew by 2.8 percent from December 31, 2011 and totaled $17.5 billion compared to $17.0 billion in the fourth quarter.  

Provision for loan losses

  • The Company recorded a provision of $4.0 million in the quarter compared to $2.5 million in the fourth quarter and $10.0 million a year ago.
  • Net charge-offs were $27.2 million in the quarter compared to $26.4 million for the fourth quarter and $33.7 million a year ago.
  • The allowance for loan losses represented 118 percent of nonperforming loans compared to 124 percent in the prior quarter.

Webster President and Chief Operating Officer Jerry Plush noted, "We are pleased to report continued asset quality improvement, as nonperforming loans and classified assets fell six percent and nine percent, respectively.  Our allowance for loan losses over total loans ended the quarter at 1.86 percent and exceeded the level of nonperforming loans by 18 percent."

Noninterest income

  • Total noninterest income increased $1.7 million compared to the fourth quarter. Wealth and investment services and mortgage banking increased $1.5 million and $3.3 million, respectively, while deposit service fees and other income decreased $0.9 million and $2.0 million, respectively.

Noninterest expense

  • Total noninterest expense increased $1.2 million compared to the fourth quarter. Included in noninterest expense in each quarter is $1.2 million of net one time costs.
  • The $1.9 million increase in noninterest expense apart from one time costs and gains on foreclosed and repossessed assets compared to the fourth quarter primarily reflects increases of $1.0 million in deposit insurance and $1.1 million in other expenses. Gains on foreclosed and repossessed assets were $0.7 million compared to $0.1 million in the fourth quarter.

Income taxes

  • The Company recorded $16.6 million of income tax expense in the quarter on the $55.5 million of pre-tax income applicable to continuing operations in the period. The effective tax rate for the quarter was 29.9 percent compared to 25.5 percent for the fourth quarter. The lower rate in the fourth quarter reflects $1.9 million of tax benefits in that period.

Investment securities

  • Total investment securities were $6.2 billion at March 31, 2012 compared to $5.8 billion at December 31, 2011. The carrying value of the available for sale portfolio included $43.4 million in net unrealized gains compared to net unrealized gains of $25.3 million at December 31, while the carrying value of the held to maturity portfolio does not reflect $154.9 million in net unrealized gains compared to net unrealized gains of $156.8 million at December 31.

Loans

  • Total loans were $11.3 billion at March 31, 2012 compared to $11.2 billion at December 31, 2011 and are reflective of continued growth in commercial, commercial real estate and residential mortgages. In the quarter, commercial non-mortgage, asset based lending and commercial real estate loans increased by $39.7 million, $16.9 million and $44.0 million, respectively, while equipment finance and residential development loans declined by $28.2 million and $3.1 million, respectively. Residential mortgage loans increased by $50.3 million, while consumer loans in the continuing portfolio declined by $26.8 million and consumer loans in the liquidating portfolio declined by $6.1 million.
  • Originations for the first quarter were $790.8 million compared to $971.7 million in the fourth quarter and $548.3 million a year ago. Originations for the first quarter consisted of $245.0 million in commercial non-mortgage, $35.8 million in equipment finance, $63.3 million in asset based lending, $150.5 million in commercial real estate, $0.9 million in residential development, $168.9 million in residential and $126.4 million in consumer.

Asset quality

  • Total nonperforming loans declined to $178.3 million, or 1.58 percent of total loans, at March 31, 2012 compared to $188.1 million, or 1.68 percent, at December 31, 2011. Included in nonperforming loans were paying loans totaling $18.1 million at March 31 compared to $32.4 million at December 31. Also included in nonperforming loans are $3.9 million in consumer liquidating loans compared to $5.1 million at December 31.
  • Past due loans declined to $60.0 million at March 31 compared to $61.7 million at December 31. Past due loans for the continuing portfolios were $54.7 million at March 31 compared to $57.1 million at December 31. Past due loans for the liquidating portfolio were $5.3 million at March 31 compared to $4.5 million at December 31.
  • Other real estate owned (OREO) totaled $6.0 million compared to $5.0 million at December 31.

Deposits and borrowings

  • Total deposits were $13.9 billion at March 31, 2012 compared to $13.7 billion at December 31, 2011. Increases of $17.7 million in demand, $228.4 million in interest-bearing checking, $24.0 million in money market and $87.1 million in savings deposits were offset by a decline of $68.8 million in certificates of deposit. Core to total deposits and loans to deposits were 80 percent and 81 percent, respectively, compared to 79 percent and 82 percent at December 31.
  • Total borrowings were $3.1 billion at March 31 compared to $3.0 billion at December 31. Borrowings represented 16 percent of total assets at both March 31 and December 31.

Capital

  • The tangible common equity and Tier 1 common equity to risk-weighted assets ratios were 7.14 percent and 10.89 percent, respectively, at March 31.
  • Book value and tangible book value per common share were $21.24 and $15.10, respectively, at March 31.
  • Return on average shareholders' equity was 8.30 percent and return on average tangible equity was 11.65 percent 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 168 banking offices, 466 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 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 first quarter earnings announcement will be held today, Tuesday, April 17, 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


March 31,

Dec. 31,

Sept. 30,

June 30,

March 31,

(In thousands, except per share data)

2012

2011

2011

2011

2011












Net income and performance ratios (annualized):






















Net income attributable to Webster Financial Corp.

$      38,938


$      40,384


$      42,231


$      34,184


$      34,580


Net income available to common shareholders

38,323


39,591


41,400


33,353


33,749


Net income per diluted common share

0.42


0.43


0.45


0.36


0.36


Return on average shareholders' equity

8.30

%

8.67

%

9.14

%

7.45

%

7.74

%

Return on average tangible equity

11.65


12.21


12.92


10.57


11.12


Return on average assets

0.82


0.88


0.94


0.76


0.77













Income and performance ratios, (annualized), from continuing operations:






















Income from continuing operations  attributable to Webster Financial Corp.

$      38,938


$      40,384


$      42,231


$      34,184


$      32,585


Net income available to common shareholders

38,323


39,591


41,400


33,353


31,754


Net income from continuing operations per diluted common share

0.42


0.43


0.45


0.36


0.34


Return on average shareholders' equity

8.30

%

8.67

%

9.14

%

7.45

%

7.29

%

Return on average tangible equity

11.65


12.21


12.92


10.57


10.48


Return on average assets

0.82


0.88


0.94


0.76


0.72


Noninterest income as a percentage of total revenue

23.48


23.05


23.98


24.69


23.86


Efficiency ratio (a)

65.63


65.83


62.22


65.02


67.49













Asset quality:






















Allowance for loan losses

$    210,288


$    233,487


$    257,352


$    281,243


$    297,948


Nonperforming assets

184,218


193,047


239,945


250,084


290,349


Allowance for loan losses / total loans

1.86

%

2.08

%

2.33

%

2.55

%

2.71

%

Net charge-offs / average loans (annualized)

0.96


0.95


1.05


0.79


1.22


Nonperforming loans / total loans

1.58


1.68


2.00


2.07


2.38


Nonperforming assets / total loans plus OREO

1.63


1.72


2.17


2.27


2.63


Allowance for loan losses / nonperforming loans

117.96


124.14


116.43


123.22


113.78













Other ratios (annualized):






















Tangible equity ratio

7.29

%

7.18

%

7.32

%

7.46

%

7.28

%

Tangible common equity ratio

7.14


7.03


7.16


7.29


7.12


Tier 1 risk-based capital ratio (c)

12.78


13.05


13.04


12.89


12.64


Total risk-based capital (c)

14.04


14.61


14.60


14.47


14.22


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

10.89


11.08


11.06


10.79


10.53


Shareholders' equity / total assets

9.90


9.86


10.08


10.27


10.08


Interest rate spread

3.33


3.36


3.45


3.44


3.42


Net interest margin

3.36


3.39


3.49


3.48


3.46













Share and equity related:






















Common equity

$ 1,866,003


$ 1,816,835


$ 1,807,330


$ 1,800,215


$ 1,782,211


Book value per common share

21.24


20.74


20.65


20.57


20.37


Tangible book value per common share

15.10


14.57


14.47


14.38


14.17


Common stock closing price

22.67


20.39


15.30


21.02


21.43


Dividends declared per common share

0.05


0.05


0.05


0.05


0.01













Common shares issued and outstanding

87,849


87,600


87,507


87,532


87,474


Basic shares (average)

87,216


87,097


87,046


86,986


86,896


Diluted shares (average)

91,782


90,929


91,205


92,184


92,554













Footnotes:






















(a)  Calculated using SNL's methodology - noninterest expense (excluding foreclosed property expenses, intangible amortization, goodwill impairments, and other charges) as a percentage of net interest income (FTE basis) plus noninterest income (excluding gain/loss on securities and other charges).  

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

(c)  The ratios presented are projected for the three month reporting period ending March 31, 2012 and actual for the remaining reporting periods presented.

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

WEBSTER FINANCIAL CORPORATION

Consolidated Balance Sheets  (unaudited)




March 31,


December 31,


March 31,

(In thousands)

2012


2011


2011 (d)



Assets:















Cash and due from banks

$      173,027


$      195,957


$      170,691


Interest-bearing deposits

77,921


96,062


104,982










Investment securities:








Available for sale, at fair value

3,144,867


2,874,764


2,195,109



Held to maturity

3,079,654


2,973,727


3,211,047



  Total securities

6,224,521


5,848,491


5,406,156










Loans held for sale

59,615


57,391


10,809










Loans:







 Commercial

2,888,977


2,860,597


2,830,777


 Commercial real estate

2,425,797


2,384,889


2,215,320


 Residential mortgages

3,270,213


3,219,889


3,150,269


 Consumer

2,727,163


2,760,029


2,811,568



  Total loans

11,312,150


11,225,404


11,007,934


Allowance for loan losses

(210,288)


(233,487)


(297,948)



  Loans, net

11,101,862


10,991,917


10,709,986










Prepaid FDIC premiums

32,507


37,946


52,121


Federal Home Loan Bank and Federal Reserve Bank stock

142,595


143,874


143,874


Premises and equipment, net

141,088


147,379


155,464


Goodwill and other intangible assets, net

544,180


545,577


549,767


Cash surrender value of life insurance policies

309,556


307,039


300,683


Deferred tax asset, net

81,676


105,665


97,399


Accrued interest receivable and other assets

245,594


237,042


259,088










Total Assets

$ 19,134,142


$ 18,714,340


$ 17,961,020










Liabilities and Equity:















Deposits:







 Demand

$   2,491,442


$   2,473,693


$   2,183,665



Interest-bearing checking

2,806,950


2,578,520


2,371,707


 Money market

2,045,090


2,021,056


2,696,076


 Savings

3,835,180


3,748,121


3,721,445


 Certificates of deposit

2,646,783


2,715,583


3,030,707


 Brokered certificates of deposit

119,052


119,052


121,068



  Total deposits

13,944,497


13,656,025


14,124,668










Securities sold under agreements to repurchase and








other short-term borrowings

1,268,589


1,164,706


857,394


Federal Home Loan Bank advances

1,352,466


1,252,609


403,297


Long-term debt

474,318


552,589


570,637


Accrued expenses and other liabilities

199,330


242,637


184,297



  Total liabilities

17,239,200


16,868,566


16,140,293










Webster Financial Corporation shareholders' equity

1,894,942


1,845,774


1,811,150


Noncontrolling interests

-


-


9,577



  Total equity

1,894,942


1,845,774


1,820,727


















Total Liabilities and Equity

$ 19,134,142


$ 18,714,340


$ 17,961,020










See Selected Financial Highlights for footnotes.






WEBSTER FINANCIAL CORPORATION

Consolidated Statements of Operations (unaudited)



 Three Months Ended 



March

(In thousands, except per share data)

2012


2011







Interest income:





Interest and fees on loans and leases

$ 120,741


$ 121,943


Interest and dividends on securities

52,868


53,844


Loans held for sale

498


422


  Total interest income

174,107


176,209







Interest expense:





Deposits

16,056


22,769


Borrowings

14,683


13,279


  Total interest expense

30,739


36,048







  Net interest income

143,368


140,161


Provision for loan losses

4,000


10,000


  Net interest income after provision for loan losses

139,368


130,161







Noninterest income:





Deposit service fees

23,363


25,340


Loan related fees

4,869


4,443


Wealth and investment services

7,221


6,722


Mortgage banking activities

4,383


1,253


Increase in cash surrender value of life insurance policies

2,517


2,533


Net gain on investment securities

-


377


Other income

1,633


3,248


   Total noninterest income

43,986


43,916







Noninterest expense:





Compensation and benefits

68,619


67,012


Occupancy

12,882


14,735


Technology and equipment expense

15,582


15,392


Marketing

4,100


5,520


Professional and outside services

2,692


2,430


Intangible assets amortization

1,397


1,397


Foreclosed and repossessed asset expenses

467


884


Foreclosed and repossessed asset (gains) write-downs

(664)


(315)


Loan workout expenses

1,824


1,800


Deposit insurance

5,709


5,781


Other expenses

13,990


13,924



126,598


128,560


Debt prepayment penalties

1,134


-


Branch and facility optimization

81


273


Provision (benefit) for litigation and settlements

-


292


  Total noninterest expense

127,813


129,125







Income from continuing operations before income taxes

55,541


44,952


Income tax expense

16,603


12,368


  Income from continuing operations

38,938


32,584


Income from discontinued operations, net of tax

-


1,995


  Consolidated net income

38,938


34,579


Less: Net (loss) income attributable to noncontrolling interests

-


(1)


 Net income attributable to Webster Financial Corp.

38,938


34,580


Preferred stock dividends

(615)


(831)


  Net income available to common shareholders

$   38,323


$   33,749







  Diluted shares (average)

91,782


92,554







Net income per common share available to common shareholders:





Basic





  Income from continuing operations

$       0.44


$       0.36


  Net income

0.44


0.38


Diluted





  Income from continuing operations

0.42


0.34


  Net income

0.42


0.36


See Selected Financial Highlights for footnotes.




WEBSTER FINANCIAL CORPORATION



Five Quarter Consolidated Statements of Operations (unaudited)







Three Months Ended


















March 31,


Dec. 31,


Sept. 30,


June 30,


March 31,




(In thousands, except per share data)

2012


2011


2011


2011


2011

















Interest income:













Interest and fees on loans and leases

$        120,741


$        121,223


$        121,322


$          122,395


$        121,943




Interest and dividends on securities

52,868


51,260


52,974


53,527


53,844




Loans held for sale

498


370


266


177


422




Total interest income

174,107


172,853


174,562


176,099


176,209

















Interest expense:













Deposits

16,056


17,268


18,930


21,841


22,769




Borrowings

14,683


14,576


13,947


13,345


13,279




Total interest expense

30,739


31,844


32,877


35,186


36,048

















Net interest income

143,368


141,009


141,685


140,913


140,161




Provision for loan losses

4,000


2,500


5,000


5,000


10,000




  Net interest income after provision for loan losses

139,368


138,509


136,685


135,913


130,161

















Noninterest income:













Deposit service fees

23,363


24,286


27,074


26,095


25,340




Loan related fees

4,869


4,896


5,308


5,590


4,443




Wealth and investment services

7,221


5,759


6,486


7,454


6,722




Mortgage banking activities

4,383


1,094


1,324


1,234


1,253




Increase in cash surrender value of life insurance policies

2,517


2,609


2,642


2,576


2,533




Net gain on investment securities

-


-


-


1,647


377




Other income

1,633


3,602


1,857


1,593


3,248




Total noninterest income

43,986


42,246


44,691


46,189


43,916

















Noninterest expense:













Compensation and benefits

68,619


68,146


61,897


65,592


67,012




Occupancy

12,882


13,125


13,150


12,856


14,735




Technology and equipment expense

15,582


15,054


15,141


15,134


15,392




Marketing

4,100


4,540


4,144


4,252


5,520




Professional and outside services

2,692


2,835


3,125


2,813


2,430




Intangible assets amortization

1,397


1,397


1,397


1,397


1,397




Foreclosed and repossessed asset expenses

467


730


726


710


884




Foreclosed and repossessed asset (gains) write-downs

(664)


(63)


(722)


794


(315)




Loan workout expenses

1,824


1,956


2,012


1,779


1,800




Deposit insurance

5,709


4,756


4,472


5,918


5,781




Other expenses

13,990


12,864


14,392


14,716


13,924





126,598


125,340


119,734


125,961


128,560




Debt prepayment penalties

1,134


5,203


-


-


-




Write-down for expedited asset disposition

-


1,187


-


5,073


-




Contract termination and severance

-


2,485


1,555


1,060


-




Branch and facility optimization

81


1,689


2,183


859


273




Preferred stock redemption costs

-


423


-


-


-




Costs for warrant registration

-


-


-


350


-




Provision (benefit) for litigation and settlements

-


(9,755)


(254)


194


292




Loan repurchase and unfunded commitment reserve benefit, net

-


-


-


(1,436)


-




Total noninterest expense

127,813


126,572


123,218


132,061


129,125

















Income from continuing operations before income taxes

55,541


54,183


58,158


50,041


44,952




Income tax expense

16,603


13,799


15,927


15,857


12,368




  Income from continuing operations

38,938


40,384


42,231


34,184


32,584




Income from discontinued operations, net of tax

-


-


-


-


1,995




  Consolidated net income

38,938


40,384


42,231


34,184


34,579




Less: Net (loss) income attributable to noncontrolling interests

-


-


-


-


(1)




 Net income attributable to Webster Financial Corp.

38,938


40,384


42,231


34,184


34,580




Preferred stock dividends

(615)


(793)


(831)


(831)


(831)




  Net income available to common shareholders

$          38,323


$          39,591


$          41,400


$            33,353


$          33,749

















  Diluted shares (average)

91,782


90,929


91,205


92,184


92,554

















Net income per common share available to common shareholders:









Basic













  Income from continuing operations

$              0.44


$              0.45


$              0.48


$                0.38


$              0.36




  Net income

0.44


0.45


0.48


0.38


0.38




Diluted













  Income from continuing operations

0.42


0.43


0.45


0.36


0.34




  Net income

0.42


0.43


0.45


0.36


0.36




 See Selected Financial Highlights for footnotes.








WEBSTER FINANCIAL CORPORATION

















Five Quarter Interest Rate Spreads and Margin  (unaudited)









Three Months Ended





March 31,


December 31,


September 30,


June 30,


March 31,






2012


2011


2011


2011


2011



















Interest rate spread














Yield on interest-earning assets

4.06

%

4.13

%

4.27

%

4.33

%

4.33

%




Cost of interest-bearing liabilities

0.73


0.77


0.82


0.89


0.91





   Interest rate spread

3.33

%

3.36

%

3.45

%

3.44

%

3.42

%


















   Net interest margin

3.36

%

3.39

%

3.49

%

3.48

%

3.46

%

















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
















Three Months Ended March 31,

2012


2011 (d)








Fully tax-






Fully tax-




Average




equivalent


Average




equivalent


(Dollars in thousands)

balance


Interest


yield/rate


balance


Interest


yield/rate
















Assets:














Interest-earning assets:














Loans

$         11,275,333


$              120,741


4.27

%

$         11,059,479


$              121,943


4.42

%


Investment securities (b)

5,961,336


55,680


3.76


5,402,046


56,844


4.23



Loans held for sale

51,705


498


3.85


36,891


422


4.57



Federal Home Loan and Federal Reserve Bank stock

143,551


876


2.45


143,874


831


2.34



Interest-bearing deposits

77,435


30


0.15


61,308


34


0.22



  Total interest-earning assets

17,509,360


177,825


4.06


16,703,598


180,074


4.33



Noninterest-earning assets

1,394,077






1,335,610







  Total assets

$         18,903,437






$         18,039,208




















Liabilities and Shareholders' Equity:














Interest-bearing liabilities:














  Deposits:














    Demand

2,435,197


$                        -


-

%

$           2,161,761


$                        -


-

%


    Savings, interest checking, and money market

8,628,048


5,794


0.27


8,642,941


10,583


0.50



    Certificates of deposit

2,810,203


10,262


1.47


3,110,684


12,186


1.59



       Total deposits

13,873,448


16,056


0.47


13,915,386


22,769


0.66



Securities sold under agreements to repurchase














 and other short-term borrowings

1,166,550


4,434


1.50


994,718


3,562


1.43



Federal Home Loan Bank advances

1,260,217


4,564


1.43


554,562


3,355


2.42



Long-term debt

507,116


5,685


4.48


581,578


6,362


4.38



  Total borrowings

2,933,883


14,683


1.99


2,130,858


13,279


2.49



  Total interest-bearing liabilities

16,807,331


30,739


0.73


16,046,244


36,048


0.91



Noninterest-bearing liabilities

219,332






196,361







  Total liabilities

17,026,663






16,242,605





















Noncontrolling interests

-






9,635





















Webster Financial Corp. shareholders' equity

1,876,774






1,786,968







  Total liabilities and equity

$         18,903,437






$         18,039,208







Tax-equivalent net interest income



147,086






144,026





Less: tax-equivalent adjustment



(3,718)






(3,865)



















Net interest income



$              143,368






$              140,161



















Interest rate spread





3.33

%





3.42

%


Net interest margin





3.36

%





3.46

%






























See Selected Financial Highlights for footnotes.








WEBSTER FINANCIAL CORPORATION















Five Quarter Loan Balances (unaudited)






March 31,


Dec. 31,


Sept. 30,


June 30,


March 31,

(Dollars in thousands)

2012


2011


2011


2011


2011













Loan Balances (actuals):










  Continuing Portfolio:












  Commercial non-mortgage

$   1,972,205


$   1,932,542


$   1,812,685


$   1,787,920


$   1,704,362



  Equipment financing

446,585


474,804


518,369


578,117


643,388



  Asset based lending

470,187


453,251


510,188


480,662


483,027



  Commercial real estate

2,389,206


2,345,241


2,225,250


2,170,279


2,159,211



  Residential development

36,591


39,648


51,045


53,198


56,109



  Residential mortgages

3,270,212


3,219,888


3,150,285


3,139,407


3,150,268



  Consumer

2,585,685


2,612,476


2,627,385


2,641,102


2,642,533



     Total continuing

11,170,671


11,077,850


10,895,207


10,850,685


10,838,898



     Allowance for loan losses

(180,413)


(203,612)


(227,477)


(243,543)


(258,140)



     Total continuing, net

10,990,258


10,874,238


10,667,730


10,607,142


10,580,758

  Liquidating Portfolio:












   National Construction Lending Center (NCLC)

1


1


1


1


1



   Consumer

141,478


147,553


154,878


161,805


169,035



     Total liquidating portfolio

141,479


147,554


154,879


161,806


169,036



     Allowance for loan losses

(29,875)


(29,875)


(29,875)


(37,700)


(39,808)



     Total liquidating, net

111,604


117,679


125,004


124,106


129,228













Total Loan Balances (actuals)

11,312,150


11,225,404


11,050,086


11,012,491


11,007,934

Allowance for loan losses

(210,288)


(233,487)


(257,352)


(281,243)


(297,948)

Loans, net

$ 11,101,862


$ 10,991,917


$ 10,792,734


$ 10,731,248


$ 10,709,986

























Loan Balances (average):










  Continuing Portfolio:












  Commercial non-mortgage

$   1,970,656


$   1,868,885


$   1,798,644


$   1,747,658


$   1,686,222



  Equipment finance

458,111


495,667


551,732


621,447


688,767



  Asset based lending

474,264


492,982


497,426


472,837


488,181



  Commercial real estate

2,336,576


2,254,970


2,185,662


2,154,215


2,144,018



  Residential development

38,401


49,182


51,051


54,757


58,152



  Residential mortgages

3,253,199


3,186,885


3,145,086


3,133,742


3,158,754



  Consumer

2,598,758


2,622,378


2,635,911


2,641,621


2,662,454



     Total continuing

11,129,965


10,970,949


10,865,512


10,826,277


10,886,548



     Allowance for loan losses

(201,592)


(219,566)


(247,551)


(255,412)


(280,589)



     Total continuing, net

10,928,373


10,751,383


10,617,961


10,570,865


10,605,959

  Liquidating Portfolio:












   NCLC

1


1


1


1


1



   Consumer

145,367


151,422


158,161


165,612


172,929



     Total liquidating portfolio

145,368


151,423


158,162


165,613


172,930



     Allowance for loan losses

(29,875)


(29,875)


(29,875)


(37,700)


(39,808)



     Total liquidating, net

115,493


121,548


128,287


127,913


133,122













Total Loan Balances (average)

11,275,333


11,122,372


11,023,674


10,991,890


11,059,478

Allowance for loan losses

(231,467)


(249,441)


(277,426)


(293,112)


(320,397)

Loans, net

$ 11,043,866


$ 10,872,931


$ 10,746,248


$ 10,698,778


$ 10,739,081













See Selected Financial Highlights for footnotes.



WEBSTER FINANCIAL CORPORATION



Five Quarter Nonperforming Assets (unaudited)






March 31,


Dec. 31,


Sept. 30,


June 30,


March 31,

(Dollars in thousands)

2012


2011


2011


2011


2011













Nonperforming loans:










  Continuing Portfolio:












Commercial non-mortgage

$          31,547


$          27,884


$          39,386


$          46,327


$          40,534



Equipment financing

4,868


7,154


8,439


11,313


16,602



Asset based lending

1,475


1,880


5,126


3,650


5,062



Commercial real estate

25,131


32,197


42,461


38,794


47,095



Residential development

6,140


6,762


16,611


16,173


17,300



Residential mortgages

79,110


82,052


79,285


82,189


95,750



Consumer

26,098


25,059


24,228


24,674


31,722


Nonperforming loans - continuing portfolio

174,369


182,988


215,536


223,120


254,065













  Liquidating Portfolio:












NCLC

-


-


-


-


-



Consumer

3,896


5,091


5,492


5,116


7,802


Nonperforming loans - liquidating portfolio

3,896


5,091


5,492


5,116


7,802

Total nonperforming loans

$        178,265


$        188,079


$        221,028


$        228,236


$        261,867













Other real estate owned and repossessed assets:










  Continuing Portfolio:












Commercial non-mortgage

$            2,051


$            1,961


$          12,961


$          13,577


$          19,959



Repossessed equipment

674


123


1,421


2,115


1,486



Asset based lending

-


-


-


-


-



Commercial real estate

-


-


-


-


-



Residential development

-


-


-


-


-



Residential

2,648


1,947


3,343


4,772


5,056



Consumer

580


805


1,021


725


978


Total continuing

5,953


4,836


18,746


21,189


27,479













  Liquidating Portfolio:












NCLC

-


132


171


659


1,003



Consumer

-


-


-


-


-


Total liquidating

-


132


171


659


1,003

Total other real estate owned and repossessed assets

$            5,953


$            4,968


$          18,917


$          21,848


$          28,482

Total nonperforming assets

$        184,218


$        193,047


$        239,945


$        250,084


$        290,349

















































See Selected Financial Highlights for footnotes.



WEBSTER FINANCIAL CORPORATION


Five Quarter Past Due Loans (unaudited)





March 31,


Dec. 31,


Sept. 30,


June 30,


March 31,

(Dollars in thousands)

2012


2011


2011


2011


2011













Past due 30-89 days:






















Accruing loans:










  Continuing Portfolio:












Commercial non-mortgage

$            6,938


$            4,619


$            7,428


$            8,568


$            8,746



Equipment financing

4,099


4,800


5,054


7,155


10,520



Asset based lending

-


-


-


-


-



Commercial real estate

1,101


1,766


2,969


4,670


22,229



Residential development

-


-


664


500


-



Residential mortgages

22,915


24,361


23,730


18,631


19,080



Consumer

19,592


20,847


18,867


18,989


17,457


Past Due 30-89 days - continuing portfolio

54,645


56,393


58,712


58,513


78,032













  Liquidating Portfolio:












NCLC

-


-


-


-


-



Consumer

5,263


4,538


4,653


6,134


5,966


Past Due 30-89 days - liquidating portfolio

5,263


4,538


4,653


6,134


5,966













Accruing loans past due 90 days or more

43


724


764


1,417


97













Total past due loans

$          59,951


$          61,655


$          64,129


$          66,064


$          84,095