Market Overview

Webster Financial Tanks on Weak Earnings

Related WBS
Earnings Scheduled For January 17, 2014
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Webster Financial (NYSE: WBS) has opened the week down after missing first quarter estimates on both EPS and revenue.

The Waterbury, Connecticut-based firm's EPS grew nearly five percent to $0.44, but rounded out shy of the $0.46 analysts hoped for.

Revenue finished up 1.7 percent year-over-year at $145.8 million, but fell short of the $147.6 million Wall Street consensus.

Commercial Loans Rise, Consumer Loans Decline

Webster's commercial loans grew around 16 percent to $3.35 billion during the first quarter. And, its commercial real estate loans jumped 15 percent to $2.79 billion.

Meanwhile, the company's residential mortgage loans climbed very slightly to $3.29 billion.

However, the New England bank chain's consumer loan business dropped 5.5 percent to $2.58 billion.

Overall, Webster's loan business increased 6.6 percent year-over-year.

Deposits Increase

Deposits increased approximately five percent to $14.62 billion.

Borrowers Paying Up

Past-due loans decreased over 33 percent year-over-year to $40 million. All categories except commercial real estate contributed to the decline. This is in line with the improving economy, given that the two lowest unemployment rates in the last four years were in February and March.

Fitch Reaffirms Rating

On February 19, Zacks reported that Fitch reaffirmed its Stable rating of Webster, citing improved credit quality and profitability metrics.

Webster Gets Huskier

On January 24, former NBA player and current University of Connecticut basketball coach Kevin Ollie was announced as a spokesperson for Webster. His contract covers three seasons and consists of personal appearances and media endorsements for the company.

TD to Score a New CEO

On April 3, a key competitor of Webster - Toronto-Dominion Bank (NYSE: TD) - announced its CEO William Edmund Clark will retire effective November 1, 2014. He will remain as a director until the company's 2015 annual meeting.

Clark will be replaced by current Group Head, US Personal and Commercial Banking, TD Bank Group and President and CEO, TD Bank, America's Most Convenient Bank® Bharat Masrani. Masrani will become the company's COO on July 1, 2013 before ultimately assuming the role of CEO upon Clark's retirement.

Market Reaction

Webster has held consistently in the low $20s for all but a few days over the past 15 months. It continues to do so as the week opens, but is at its lowest point since April 5. After closing at $23.71 on Friday, the stock has dipped near the $23 mark in the very early hours of trading.

Webster Financial is down over two percent on Monday.

Posted-In: Bharat Masrani Ed Clark Kevin Ollie ZacksEarnings News Reiteration Analyst Ratings Best of Benzinga

 

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