Webster Reports First Quarter 2019 Earnings Of $1.06 Per Share

WATERBURY, Conn., April 18, 2019 /PRNewswire/ -- Webster Financial Corporation WBS, the holding company for Webster Bank, N.A. and its HSA Bank division, today announced earnings applicable to common shareholders of $97.5 million, or $1.06 per diluted share, for the quarter ended March 31, 2019 compared to $78.1 million, or $0.85 per diluted share, for the quarter ended March 31, 2018.

"The first quarter represented our 38th consecutive quarter of year-over-year revenue growth as we continue to execute on our strategic priorities," said John R. Ciulla, president and chief executive officer. "Our disciplined approach to capital allocation aligns with our overarching goal to deliver for our customers while maximizing economic profit over time."

Highlights for the first quarter of 2019 compared to prior year:

  • Revenue of $310.2 million, an increase of 9.6 percent, including net interest income of $241.6 million, an increase of 12.8 percent.
  • Loan growth of $1.0 billion, or 5.7 percent; all of the growth was in commercial and commercial real estate loans, which increased 9.4 percent.
  • Deposit growth of $1.4 billion, or 6.4 percent, with growth of $722 million, or 13.1 percent at HSA Bank.
  • Net interest margin of 3.74 percent, up 30 basis points.
  • Pre-tax, pre-provision net revenue growth of $23.2 million, or 20.8 percent, led by HSA Bank's growth of 40.4 percent.
  • Efficiency ratio of 55.9 percent (non-GAAP) compared to 59.8 percent.
  • Annualized return on average common shareholders' equity of 14.01 percent compared to 12.15 percent; annualized return on average tangible common shareholders' equity (non-GAAP) of 17.70 percent compared to 15.73 percent.

"We have now earned in excess of our cost of capital for eight consecutive quarters," said Glenn MacInnes, executive vice president and chief financial officer. "We continue to report strong performance measured by positive operating leverage, net interest margin expansion and disciplined expense management, leading to an efficiency ratio below 56 percent for the quarter."

Line of Business performance compared to the first quarter of 2018

Commercial Banking

Webster's Commercial Banking segment serves middle market, commercial real estate, asset-based lending, equipment finance, private banking, and treasury and payment solutions clients. As of March 31, 2019, Commercial Banking had $10.6 billion in loans and leases and $4.2 billion in deposit balances.

Commercial Banking Operating Results:

 



Three months ended March 31,



Percent

Favorable/

(In thousands)

2019

2018



(Unfavorable)

Net interest income

$90,510

$84,651



6.9%

Non-interest income

14,011

15,316



(8.5)

Operating revenue

104,521

99,967



4.6

Non-interest expense

44,618

41,245



(8.2)

Pre-tax, pre-provision net revenue

$59,903

$58,722



2.0













At March 31,



Percent

Increase/

(In millions)

2019

2018



(Decrease)

Loans and leases

$10,631

$9,686



9.8%

Deposits

4,191

4,041



3.7

 

Pre-tax, pre-provision net revenue increased $1.2 million to $59.9 million in the quarter as compared to prior year. Net interest income increased $5.9 million to $90.5 million, primarily due to loan growth and higher deposit margins.  Non-interest income decreased $1.3 million to $14.0 million, primarily due to lower client interest rate hedging activity. Non-interest expense increased $3.4 million to $44.6 million, primarily due to investments in people and technology.

HSA Bank

Webster's HSA Bank division offers a comprehensive consumer-directed healthcare solution that includes health savings accounts, health reimbursement arrangements, flexible spending accounts and commuter benefits. Health savings accounts are distributed nationwide directly to employers and individual consumers, as well as through national and regional insurance carriers, benefit consultants and financial advisors. As of March 31, 2019, HSA Bank had $7.9 billion in total footings comprising $6.2 billion in deposit balances and $1.7 billion in assets under administration through linked investment accounts.

HSA Bank Operating Results:

 



Three months ended March 31,



Percent

Favorable/

(In thousands)

2019

2018



(Unfavorable)

Net interest income

$41,741

$32,924



26.8%

Non-interest income

25,576

22,669



12.8

Operating revenue

67,317

55,593



21.1

Non-interest expense

33,522

31,515



(6.4)

Pre-tax net revenue

$33,795

$24,078



40.4











At March 31,



Percent

Increase/

(Dollars in millions)

2019

2018



(Decrease)

Number of accounts (thousands)

2,933

2,643



11.0%

Deposits

$6,209

$5,488



13.1

Linked investment accounts*

1,703

1,364



24.9

Total footings

$7,912

$6,852



15.5



 *Linked investment accounts are held off balance sheet

                                        

Pre-tax net revenue increased $9.7 million to $33.8 million in the quarter as compared to prior year. Net interest income increased $8.8 million to $41.7 million, due to 13 percent growth in deposits and 12 percent improvement in deposit spreads. Non-interest income increased $2.9 million to $25.6 million, primarily due to 11 percent growth  in accounts over the past year. Non-interest expense increased $2.0 million to $33.5 million, primarily due to account growth and expanded distribution.

Community Banking

Community Banking serves consumer and business banking customers primarily throughout southern New England and into Westchester County, New York. Community Banking is comprised of the Personal Banking and Business Banking operating segments, as well as a distribution network consisting of 157 banking centers and 315 ATMs, a customer care center, and a full range of web and mobile-based banking services.

As of March 31, 2019, Community Banking had $8.2 billion in loans and $12.3 billion in deposit balances.

Community Banking Operating Results:

 



Three months ended March 31,



Percent

Favorable/

(In thousands)

2019

2018



(Unfavorable)

Net interest income

$101,360

$98,928



2.5%

Non-interest income

25,382

25,195



0.7

Operating revenue

126,742

124,123



2.1

Non-interest expense

95,075

96,829



1.8

Pre-tax, pre-provision net revenue

$31,667

$27,294



16.0













At March 31,



Percent

Increase/

(In millions)

2019

2018



(Decrease)

Loans

$8,183

$8,121



0.8%

Deposits

12,271

11,580



6.0

 

Pre-tax, pre-provision net revenue increased $4.4 million to $31.7 million in the quarter as compared to prior year. Net interest income increased $2.4 million to $101.4 million, primarily due to growth in deposit balances, coupled with improved interest rate spreads on deposits. Non-interest income was up $0.2 million due to increased deposit and loan related fee income. Non-interest expense decreased $1.8 million to $95.1 million resulting from savings in occupancy and lower marketing expenses.

Consolidated financial performance:

Quarterly net interest income compared to the first quarter of 2018:

  • Net interest income was $241.6 million compared to $214.2 million.
  • Net interest margin was 3.74 percent compared to 3.44 percent. The yield on interest-earning assets increased by 48 basis points, and the cost of funds increased by 20 basis points.
  • Average interest-earning assets totaled $26.0 billion and grew by $884 million, or 3.5 percent.
  • Average loans totaled $18.5 billion and grew by $754 million, or 4.3 percent.
  • Average deposits totaled $22.5 billion and grew by $1.1 billion, or 5.3 percent.

Quarterly provision for loan losses:

  • The provision for loan losses was $8.6 million, compared to $10.0 million in the prior quarter and $11.0 million a year ago.
  • Net charge-offs were $9.6 million, compared to $9.5 million in the prior quarter and $5.6 million a year ago. The ratio of net charge-offs to average loans on an annualized basis was 0.21 percent, compared to 0.21 percent in the prior quarter and 0.13 percent a year ago.
  • The allowance for loan losses represented 1.12 percent of total loans at March 31, 2019, compared to 1.15 percent at December 31, 2018 and 1.15 percent at March 31, 2018. The allowance for loan losses represented 133 percent of nonperforming loans compared to 137 percent at December 31, 2018 and 153 percent at March 31, 2018.

Quarterly non-interest income compared to the first quarter of 2018:

  • Total non-interest income was $68.6 million, compared to $68.7 million, a decrease of $0.1 million. This reflects a decrease in other of $3.1 million primarily related to client hedging income, offset by an increase of $2.9 million in HSA fee income driven by account fees and interchange due to account growth, and an increase of $0.8 million in loan related fees primarily due to prepayment fees.

Quarterly non-interest expense compared to the first quarter of 2018:

  • Total non-interest expense was $175.7 million, compared to $171.6 million, an increase of $4.1 million. This reflects increases of $3.0 million in compensation and benefits due to annual merit increases and other benefits, $1.8 million in technology/equipment primarily due to higher service contracts to support infrastructure, and $1.3 million in professional and outside services, offset by a decrease of $2.3 million in deposit insurance primarily related to a fully funded deposit insurance fund.

Quarterly income taxes compared to the first quarter of 2018:

  • Income tax expense was $26.1 million, compared to $20.1 million and the effective tax rate was 20.8 percent, compared to 20.0 percent.
  • The higher effective tax rate in the quarter reflects a slightly lower level of discrete tax benefits recognized during the period compared to a year ago coupled with a higher level of pre-tax income in the quarter compared to the year-ago period.

Investment securities:

  • Total investment securities were $7.5 billion, compared to $7.2 billion at December 31, 2018 and $7.2 billion at March 31, 2018. The carrying value of the available-for-sale portfolio included $58.6 million of net unrealized losses, compared to $95.9 million at December 31, 2018 and $74.0 million at March 31, 2018. The carrying value of the held-to-maturity portfolio does not reflect $46.8 million of net unrealized losses, compared to $116.3 million at December 31, 2018, and $111.3 million at March 31, 2018.

Loans:

  • Total loans were $18.8 billion, compared to $18.5 billion at December 31, 2018 and $17.8 billion at March 31, 2018. Compared to December 31, 2018, residential mortgages increased by $215.2 million, commercial loans increased by $125.9 million, and commercial real estate loans increased by $64.7 million while consumer loans decreased by $57.0 million.
  • Compared to a year ago, commercial loans increased by $572.4 million, commercial real estate loans increased by $447.0 million, and residential mortgages increased by $171.9 million while consumer loans decreased by $182.6 million.
  • Loan originations for portfolio were $1.132 billion, compared to $1.611 billion in the prior quarter and $1.111 billion a year ago. In addition, $33 million of residential loans were originated for sale in the quarter, compared to $30 million in the prior quarter and $43 million a year ago.

Asset quality:

  • Total nonperforming loans were $158.9 million, or 0.84 percent of total loans, compared to $154.8 million, or 0.84 percent, at December 31, 2018 and $134.3 million, or 0.75 percent, at March 31, 2018. Total paying nonperforming loans were $38.6 million, compared to $42.5 million at December 31, 2018 and $32.2 million at March 31, 2018.
  • Past due loans were $50.5 million, compared to $34.3 million at December 31, 2018 and $41.6 million at March 31, 2018.

Deposits and borrowings:

  • Total deposits were $22.8 billion, compared to $21.9 billion at December 31, 2018 and $21.4 billion at March 31, 2018. Core deposits to total deposits were 85.3 percent, compared to 85.4 percent at December 31, 2018 and 88.1 percent at March 31, 2018. The loan to deposit ratio was 82.7 percent, compared to 84.5 percent at December 31, 2018 and 83.3 percent at March 31, 2018.
  • Total borrowings were $2.2 billion, compared to $2.6 billion at December 31, 2018 and $2.4 billion at March 31, 2018.

Capital:

  • The return on average common shareholders' equity and the return on average tangible common shareholders' equity were 14.01 percent and 17.70 percent, respectively, compared to 12.15 percent and 15.73 percent, respectively, in the first quarter of 2018.
  • The tangible equity and tangible common equity ratios were 8.68 percent and 8.16 percent, respectively, compared to 8.21 percent and 7.65 percent, respectively, at March 31, 2018. The common equity tier 1 risk-based capital ratio was 11.46 percent, compared to 10.99 percent at March 31, 2018.
  • Book value and tangible book value per common share were $30.62 and $24.51, respectively, compared to $27.94 and $21.78, respectively, at March 31, 2018.

Webster Financial Corporation is the holding company for Webster Bank, National Association and its HSA Bank division. With $28.2 billion in assets, Webster provides business and consumer banking, mortgage, financial planning, trust, and investment services through 157 banking centers and 315 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 2019 first quarter earnings announcement will be held today, Thursday, April 18, 2019 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 impact of recent changes with respect to the recognition of credit losses; (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

Selected Financial Highlights (unaudited)













































At or for the Three Months Ended



(In thousands, except per share data)



March 31, 2019







December 31, 2018







September 30, 2018







June 30, 2018







March 31, 2018















































Income and performance ratios:









































Net income

$

99,736





$

98,838





$

99,673





$

81,682





$

80,225





Earnings applicable to common shareholders



97,549







96,666







97,460







79,489







78,083





Earnings per diluted common share



1.06







1.05







1.06







0.86







0.85





Return on average assets



1.44

%





1.44

%





1.47

%





1.22

%





1.20



%

Return on average tangible common shareholders' equity (non-GAAP)



17.70







18.22







18.88







15.76







15.73





Return on average common shareholders' equity



14.01







14.31







14.74







12.22







12.15





Non-interest income as a percentage of total revenue



22.12







23.58







23.88







23.31







24.30















































Asset quality:









































Allowance for loan and lease losses

$

211,389





$

212,353





$

211,832





$

207,322





$

205,349





Nonperforming assets



164,431







161,617







157,967







146,047







140,090





Allowance for loan and lease losses / total loans and leases



1.12

%





1.15

%





1.16

%





1.15

%





1.15



%

Net charge-offs / average loans and leases (annualized)



0.21







0.21







0.13







0.19







0.13





Nonperforming loans and leases / total loans and leases



0.84







0.84







0.83







0.78







0.75





Nonperforming assets / total loans and leases plus OREO



0.87







0.87







0.86







0.81







0.79





Allowance for loan and lease losses / nonperforming loans and leases



133.01







137.22







138.76







148.00







152.95















































Other ratios:









































Tangible equity (non-GAAP)



8.68

%





8.59

%





8.41

%





8.29

%





8.21



%

Tangible common equity (non-GAAP)



8.16







8.05







7.86







7.75







7.65





Tier 1 risk-based capital (a)



12.17







12.16







11.96







11.74







11.75





Total risk-based capital (a)



13.60







13.63







13.44







13.21







13.24





Common equity tier 1 risk-based capital (a)



11.46







11.44







11.23







10.99







10.99





Shareholders' equity / total assets



10.50







10.45







10.30







10.21







10.15





Net interest margin



3.74







3.66







3.61







3.57







3.44





Efficiency ratio (non-GAAP)



55.93







56.19







57.41







57.78







59.76















































Equity and share related:









































Common equity

$

2,821,218





$

2,741,478





$

2,671,161





$

2,616,686





$

2,571,105





Book value per common share



30.62







29.72







28.96







28.40







27.94





Tangible book value per common share (non-GAAP)



24.51







23.60







22.83







22.25







21.78





Common stock closing price



50.67







49.29







58.96







63.70







55.40





Dividends declared per common share



0.33







0.33







0.33







0.33







0.26















































Common shares issued and outstanding



92,125







92,247







92,230







92,151







92,016





Weighted-average common shares outstanding - Basic



91,962







91,971







91,959







91,893







91,921





Weighted-average common shares outstanding - Diluted



92,165







92,202







92,208







92,173







92,254















































(a) Presented as projected for March 31, 2019 and actual for the remaining periods.









































 

WEBSTER FINANCIAL CORPORATION

Consolidated Balance Sheets (unaudited)





















(In thousands)



March 31, 2019







December 31, 2018







March 31, 2018

Assets:





















Cash and due from banks

$

167,587





$

260,422





$

164,927

Interest-bearing deposits



53,072







69,077







45,899

Securities:





















Available for sale



2,977,316







2,898,730







2,773,506

Held to maturity



4,480,160







4,325,420







4,408,321

Total securities



7,457,476







7,224,150







7,181,827

Loans held for sale



20,615







11,869







19,727

Loans and Leases:





















Commercial



6,850,942







6,725,003







6,278,502

Commercial real estate



4,991,825







4,927,145







4,544,831

Residential mortgages



4,631,787







4,416,637







4,459,862

Consumer



2,339,736







2,396,704







2,522,380

Total loans and leases



18,814,290







18,465,489







17,805,575

Allowance for loan and lease losses



(211,389)







(212,353)







(205,349)

Loans and leases, net



18,602,901







18,253,136







17,600,226

Federal Home Loan Bank and Federal Reserve Bank stock



106,674







149,286







125,328

Premises and equipment, net



279,580







124,850







127,196

Goodwill and other intangible assets, net



563,176







564,137







567,023

Cash surrender value of life insurance policies



546,094







543,616







535,391

Deferred tax asset, net



76,576







96,516







99,199

Accrued interest receivable and other assets



364,378







313,256







285,404

Total Assets

$

28,238,129





$

27,610,315





$

26,752,147























Liabilities and Shareholders' Equity:





















Deposits:





















Demand

$

4,224,144





$

4,162,446





$

4,074,992

Health savings accounts



6,209,213







5,740,601







5,487,627

Interest-bearing checking



2,560,975







2,518,472







2,624,885

Money market



2,299,229







2,100,084







2,344,526

Savings



4,102,740







4,140,696







4,299,759

Certificates of deposit



3,273,120







2,961,564







2,275,897

Brokered certificates of deposit



81,507







234,982







277,356

Total deposits



22,750,928







21,858,845







21,385,042

Securities sold under agreements to repurchase and other borrowings



688,065







581,874







931,299

Federal Home Loan Bank advances



951,730







1,826,808







1,202,030

Long-term debt



524,303







226,021







225,830

Accrued expenses and other liabilities



356,848







230,252







291,804

Total liabilities



25,271,874







24,723,800







24,036,005

Preferred stock



145,037







145,037







145,037

Common shareholders' equity



2,821,218







2,741,478







2,571,105

Total shareholders' equity



2,966,255







2,886,515







2,716,142

Total Liabilities and Shareholders' Equity

$

28,238,129





$

27,610,315





$

26,752,147

 

WEBSTER FINANCIAL CORPORATION

Consolidated Statements of Income (unaudited)

















Three Months Ended March 31,

(In thousands, except per share data)



2019







2018

Interest income:













Interest and fees on loans and leases

$

228,764





$

193,220

Interest and dividends on securities



57,278







52,559

Loans held for sale



148







142

Total interest income



286,190







245,921

Interest expense:













Deposits



31,020







18,156

Borrowings



13,619







13,597

Total interest expense



44,639







31,753

Net interest income



241,551







214,168

Provision for loan and lease losses



8,600







11,000

Net interest income after provision for loan and lease losses



232,951







203,168

Non-interest income:













Deposit service fees



43,024







40,451

Loan and lease related fees



7,819







6,996

Wealth and investment services



7,651







7,870

Mortgage banking activities



764







1,144

Increase in cash surrender value of life insurance policies



3,584







3,572

Other income



5,770







8,714

Total non-interest income



68,612







68,747

Non-interest expense:













Compensation and benefits



97,785







94,765

Occupancy



14,696







15,145

Technology and equipment



25,697







23,862

Marketing



3,328







3,552

Professional and outside services



6,048







4,788

Intangible assets amortization



962







962

Loan workout expenses



660







576

Deposit insurance



4,430







6,717

Other expenses



22,080







21,248

Total non-interest expense



175,686







171,615

Income before income taxes



125,877







100,300

Income tax expense



26,141







20,075

Net income



99,736







80,225

Preferred stock dividends and other



(2,187)







(2,142)

Earnings applicable to common shareholders

$

97,549





$

78,083















Weighted-average common shares outstanding - Diluted



92,165







92,254















Earnings per common share:













Basic

$

1.06





$

0.85

Diluted



1.06







0.85

 

WEBSTER FINANCIAL CORPORATION

Five Quarter Consolidated Statements of Income (unaudited)









































Three Months Ended

(In thousands, except per share data)



March 31, 2019







December 31, 2018







September 30, 2018







June 30, 2018







March 31, 2018

Interest income:





































Interest and fees on loans and leases

$

228,764





$

225,961





$

215,448





$

207,820





$

193,220

Interest and dividends on securities



57,278







54,301







52,707







52,523







52,559

Loans held for sale



148







130







208







148







142

Total interest income



286,190







280,392







268,363







260,491







245,921

Interest expense:





































Deposits



31,020







27,629







24,397







20,225







18,156

Borrowings



13,619







15,632







13,594







15,256







13,597

Total interest expense



44,639







43,261







37,991







35,481







31,753

Net interest income



241,551







237,131







230,372







225,010







214,168

Provision for loan and lease losses



8,600







10,000







10,500







10,500







11,000

Net interest income after provision for loan and lease losses



232,951







227,131







219,872







214,510







203,168

Non-interest income:





































Deposit service fees



43,024







40,272







40,601







40,859







40,451

Loan and lease related fees



7,819







7,914







10,782







6,333







6,996

Wealth and investment services



7,651







8,105







8,412







8,456







7,870

Mortgage banking activities



764







740







1,305







1,235







1,144

Increase in cash surrender value of life insurance policies



3,584







3,693







3,706







3,643







3,572

Other income



5,770







12,439







7,478







7,848







8,714

Total non-interest income



68,612







73,163







72,284







68,374







68,747

Non-interest expense:





































Compensation and benefits



97,785







97,039







96,640







93,052







94,765

Occupancy



14,696







13,974







14,502







15,842







15,145

Technology and equipment



25,697







24,858







24,553







24,604







23,862

Marketing



3,328







4,345







4,052







4,889







3,552

Professional and outside services



6,048







6,201







4,930







4,381







4,788

Intangible assets amortization



962







962







961







962







962

Loan workout expenses



660







1,150







681







844







576

Deposit insurance



4,430







4,651







9,694







13,687







6,717

Other expenses



22,080







21,579







22,770







22,198







21,248

Total non-interest expense



175,686







174,759







178,783







180,459







171,615

Income before income taxes



125,877







125,535







113,373







102,425







100,300

Income tax expense



26,141







26,697







13,700







20,743







20,075

Net income



99,736







98,838







99,673







81,682







80,225

Preferred stock dividends and other



(2,187)







(2,172)







(2,213)







(2,193)







(2,142)

Earnings applicable to common shareholders

$

97,549





$

96,666





$

97,460





$

79,489





$

78,083







































Weighted-average common shares outstanding - Diluted



92,165







92,202







92,208







92,173







92,254







































Earnings per common share:





































Basic

$

1.06





$

1.05





$

1.06





$

0.87





$

0.85

Diluted



1.06







1.05







1.06







0.86







0.85

   

WEBSTER FINANCIAL CORPORATION

Consolidated Average Balances, Interest, Yields and Rates, and Net Interest Margin on a Fully Tax-equivalent Basis

(unaudited)





















































Three Months Ended March 31,







2019















2018



(Dollars in thousands)



Average balance







Interest







Yield/rate















Average balance





Interest



Yield/rate



Assets:

















































Interest-earning assets:

















































Loans and leases

$

18,509,174





$

229,385







4.96

%











$

17,754,773



$

193,864



4.37

%

Securities (a)



7,308,946







56,954







3.09















7,158,505





52,489



2.91



Federal Home Loan and Federal Reserve Bank stock



113,016







1,712







6.14















133,241





1,455



4.43



Interest-bearing deposits



55,372







329







2.37















52,711





201



1.52



Loans held for sale



13,451







148







4.40















16,330





142



3.49



Total interest-earning assets



25,999,959





$

288,528







4.43

%













25,115,560



$

248,151



3.95

%

Non-interest-earning assets



1,795,430































1,641,721













Total Assets

$

27,795,389





























$

26,757,281































































Liabilities and Shareholders' Equity:

















































Interest-bearing liabilities:

















































Demand deposits

$

4,191,870





$

-







-

%











$

4,163,364



$

-



-

%

Health savings accounts



6,140,062







2,949







0.19















5,427,000





2,624



0.20



Interest-bearing checking, money market and savings



8,958,522







12,793







0.58















9,342,743





7,713



0.33



Certificates of deposit



3,244,714







15,278







1.91















2,459,145





7,819



1.29



Total deposits



22,535,168







31,020







0.56















21,392,252





18,156



0.34





















































Securities sold under agreements to repurchase and other borrowings



597,107







2,752







1.84















875,829





3,640



1.66



Federal Home Loan Bank advances



1,119,035







7,785







2.78















1,311,832





7,281



2.22



Long-term debt



249,169







3,082







4.95















225,799





2,676



4.74



Total borrowings



1,965,311







13,619







2.77















2,413,460





13,597



2.25



Total interest-bearing liabilities



24,500,479





$

44,639







0.74

%













23,805,712



$

31,753



0.54

%

Non-interest-bearing liabilities



359,257































228,978













Total liabilities



24,859,736































24,034,690































































Preferred stock



145,037































145,161













Common shareholders' equity



2,790,616































2,577,430













Total shareholders' equity



2,935,653































2,722,591













Total Liabilities and Shareholders' Equity

$

27,795,389





























$

26,757,281













Tax-equivalent net interest income











243,889





























216,398







Less: tax-equivalent adjustments











(2,338)





























(2,230)







Net interest income









$

241,551



























$

214,168







Net interest margin



















3.74

%























3.44

%



















































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

















































 

WEBSTER FINANCIAL CORPORATION

Five Quarter Loan and Lease Balances (unaudited)





































(Dollars in thousands)



March 31, 2019







December 31, 2018







September 30, 2018







June 30, 2018







March 31, 2018

Loan and Lease Balances (actual):





































Commercial non-mortgage

$

5,811,309





$

5,755,832





$

5,724,405





$

5,544,685





$

5,404,231

Asset-based lending



1,039,633







969,171







969,045







959,836







874,271

Commercial real estate



4,991,825







4,927,145







4,771,325







4,580,200







4,544,831

Residential mortgages



4,631,787







4,416,637







4,415,063







4,455,580







4,459,862

Consumer



2,339,736







2,396,704







2,441,181







2,485,695







2,522,380

Total Loan and Lease Balances



18,814,290







18,465,489







18,321,019







18,025,996







17,805,575

Allowance for loan and lease losses



(211,389)







(212,353)







(211,832)







(207,322)







(205,349)

Loans and Leases, net

$

18,602,901





$

18,253,136





$

18,109,187





$

17,818,674





$

17,600,226







































Loan and Lease Balances (average):





































Commercial non-mortgage

$

5,776,334





$

5,754,153





$

5,597,831





$

5,470,677





$

5,306,412

Asset-based lending



1,016,069







964,575







944,120







897,564







864,895

Commercial real estate



4,930,035







4,862,419







4,620,741







4,549,969







4,538,429

Residential mortgages



4,415,434







4,419,826







4,434,056







4,460,904







4,476,057

Consumer



2,371,302







2,423,414







2,464,094







2,507,571







2,568,980

Total Loan and Lease Balances



18,509,174







18,424,387







18,060,842







17,886,685







17,754,773

Allowance for loan and lease losses



(214,966)







(214,453)







(208,102)







(207,718)







(201,575)

Loans and Leases, net

$

18,294,208





$

18,209,934





$

17,852,740





$

17,678,967





$

17,553,198







































WEBSTER FINANCIAL CORPORATION

Five Quarter Nonperforming Assets (unaudited)





































(Dollars in thousands)



March 31, 2019







December 31, 2018







September 30, 2018







June 30, 2018







March 31, 2018

Nonperforming loans and leases:





































Commercial non-mortgage

$

66,754





$

62,265





$

58,366





$

40,240





$

46,843

Asset-based lending



218







224







1,066







1,197







1,571

Commercial real estate



7,449







8,243







7,255







9,606







3,884

Residential mortgages



49,267







49,069







49,348







50,654







44,496

Consumer 



35,245







34,949







36,621







38,390







37,465

Total nonperforming loans and leases

$

158,933





$

154,750





$

152,656





$

140,087





$

134,259







































Other real estate owned and repossessed assets:





































Commercial non-mortgage

$

861





$

407





$

83





$

148





$

218

Residential mortgages



2,769







4,679







3,944







3,271







2,785

Consumer



1,868







1,781







1,284







2,541







2,828

Total other real estate owned and repossessed assets

$

5,498





$

6,867





$

5,311





$

5,960





$

5,831

Total nonperforming assets

$

164,431





$

161,617





$

157,967





$

146,047





$

140,090







































WEBSTER FINANCIAL CORPORATION

Five Quarter Past Due Loans and Leases (unaudited)





































(Dollars in thousands)



March 31, 2019







December 31, 2018







September 30, 2018







June 30, 2018







March 31, 2018

Past due 30-89 days:





































Commercial non-mortgage

$

19,152





$

2,615





$

6,186





$

7,508





$

4,749

Asset-based lending



-







-







-







-







-

Commercial real estate



2,283







1,514







2,746







719







1,103

Residential mortgages



12,865







12,789







14,499







10,861







17,337

Consumer



16,174







17,324







15,631







14,354







17,602

Total past due 30-89 days



50,474







34,242







39,062







33,442







40,791

Past due 90 days or more and accruing



-







104







139







62







845

Total past due loans and leases

$

50,474





$

34,346





$

39,201





$

33,504





$

41,636







































WEBSTER FINANCIAL CORPORATION

Five Quarter Changes in the Allowance for Loan and Lease Losses (unaudited)









































For the Three Months Ended

(Dollars in thousands)



March 31, 2019







December 31, 2018







September 30, 2018







June 30, 2018







March 31, 2018

Beginning balance

$

212,353





$

211,832





$

207,322





$

205,349





$

199,994

Provision



8,600







10,000







10,500







10,500







11,000

Charge-offs:





































Commercial non-mortgage



7,837







10,239







876







5,523







1,542

Asset-based lending



-







289







-







174







-

Commercial real estate



973







22







1,922







40







77

Residential mortgages



251







910







874







754







917

Consumer



3,972







4,384







4,863







4,907







5,074

Total charge-offs



13,033







15,844







8,535







11,398







7,610

Recoveries:





































Commercial non-mortgage



569







2,993







376







749







69

Asset-based lending



229







21







66







174







66

Commercial real estate



6







7







143







9







2

Residential mortgages



178







1,137







133







325







385

Consumer



2,487







2,207







1,827







1,614







1,443

Total recoveries



3,469







6,365







2,545







2,871







1,965

Total net charge-offs



9,564







9,479







5,990







8,527







5,645

Ending balance

$

211,389





$

212,353





$

211,832





$

207,322





$

205,349

 

WEBSTER FINANCIAL CORPORATION

Reconciliations to GAAP Financial Measures















































































The Company evaluates its business based on certain ratios that utilize non-GAAP financial measures. The Company believes the use of these non-GAAP financial measures provides additional clarity in assessing the results and financial position of the Company. Other companies may define or calculate supplemental financial data differently.











































The efficiency ratio, which measures the costs expended to generate a dollar of revenue, is calculated excluding certain non-operational items. Return on average tangible common shareholders' equity measures the Company's net income available to common shareholders, adjusted for the tax-effected amortization of intangible assets, as a percentage of average shareholders' equity less average preferred stock and average goodwill and intangible assets. The tangible equity ratio represents shareholders' equity less goodwill and intangible assets divided by total assets less goodwill and intangible assets. The tangible common equity ratio represents shareholders' equity less preferred stock and goodwill and intangible assets divided by total assets less goodwill and intangible assets. Tangible book value per common share represents shareholders' equity less preferred stock and goodwill and intangible assets divided by common shares outstanding at the end of the period. Core deposits express total deposits less time deposits. See the tables below for reconciliations of these non-GAAP financial measures with financial measures defined by GAAP.















































At or for the Three Months Ended



(In thousands, except per share data)



March 31, 2019







December 31, 2018







September 30, 2018







June 30, 2018







March 31, 2018











































Efficiency ratio:







































Non-interest expense (GAAP)

$

175,686





$

174,759





$

178,783





$

180,459





$

171,615



Less: Foreclosed property activity (GAAP)



(253)







191







(309)







(106)







85



         Intangible assets amortization (GAAP)



962







962







961







962







962



         Other expenses (non-GAAP)



7







320







2,959







8,599







0



       Non-interest expense (non-GAAP)

$

174,970





$

173,286





$

175,172





$

171,004





$

170,568



Net interest income (GAAP)

$

241,551





$

237,131





$

230,372





$

225,010





$

214,168



Add: Tax-equivalent adjustment (non-GAAP)



2,338







2,407







2,172







2,217







2,230



         Non-interest income (GAAP)



68,612







73,163







72,284







68,374







68,747



         Other (non-GAAP)



342







282







308







359







295



Less: Gain on the sale of banking centers (GAAP)



0







4,596







0







0







0



Income (non-GAAP)

$

312,843





$

308,387





$

305,136





$

295,960





$

285,440



Efficiency ratio (non-GAAP)



55.93

%





56.19

%





57.41

%





57.78

%





59.76

%









































Return on average tangible common shareholders' equity:







































Net income (GAAP)

$

99,736





$

98,838





$

99,673





$

81,682





$

80,225



Less: Preferred stock dividends (GAAP)



1,969







1,969







1,968







1,969







1,947



Add: Intangible assets amortization, tax-effected (GAAP)



760







760







759







760







760



Income adjusted for preferred stock dividends and intangible assets amortization (non-GAAP)

$

98,527





$

97,629





$

98,464





$

80,473





$

79,038



Income adjusted for preferred stock dividends and intangible assets amortization, annualized basis (non-GAAP)

$

394,108





$

390,516





$

393,856





$

321,892





$

316,152



Average shareholders' equity (non-GAAP)

$

2,935,653





$

2,853,176





$

2,796,809





$

2,754,355





$

2,722,591



Less: Average preferred stock (non-GAAP)



145,037







145,037







145,037







145,037







145,161



         Average goodwill and other intangible assets (non-GAAP)



563,646







564,601







565,559







566,522







567,547



Average tangible common shareholders' equity (non-GAAP)

$

2,226,970





$

2,143,538





$

2,086,213





$

2,042,796





$

2,009,883



Return on average tangible common shareholders' equity (non-GAAP)



17.70

%





18.22

%





18.88

%





15.76

%





15.73

%









































Tangible equity:







































Shareholders' equity (GAAP)

$

2,966,255





$

2,886,515





$

2,816,198





$

2,761,723





$

2,716,142



Less: Goodwill and other intangible assets (GAAP)



563,176







564,137







565,099







566,061







567,023



Tangible shareholders' equity (non-GAAP)

$

2,403,079





$

2,322,378





$

2,251,099





$

2,195,662





$

2,149,119



Total assets (GAAP)

$

28,238,129





$

27,610,315





$

27,346,317





$

27,036,737





$

26,752,147



Less: Goodwill and other intangible assets (GAAP)



563,176







564,137







565,099







566,061







567,023



Tangible assets (non-GAAP)

$

27,674,953





$

27,046,178





$

26,781,218





$

26,470,676





$

26,185,124



Tangible equity (non-GAAP)



8.68

%





8.59

%





8.41

%





8.29

%





8.21

%









































Tangible common equity:







































Tangible shareholders' equity (non-GAAP)

$

2,403,079





$

2,322,378





$

2,251,099





$

2,195,662





$

2,149,119



Less: Preferred stock (GAAP)



145,037







145,037







145,037







145,037







145,037



Tangible common shareholders' equity (non-GAAP)

$

2,258,042





$

2,177,341





$

2,106,062





$

2,050,625





$

2,004,082



Tangible assets (non-GAAP)

$

27,674,953





$

27,046,178





$

26,781,218





$

26,470,676





$

26,185,124



Tangible common equity (non-GAAP)



8.16

%





8.05

%





7.86

%





7.75

%





7.65

%









































Tangible book value per common share:







































Tangible common shareholders' equity (non-GAAP)

$

2,258,042





$

2,177,341





$

2,106,062





$

2,050,625





$

2,004,082



Common shares outstanding



92,125







92,247







92,230







92,151







92,016



Tangible book value per common share (non-GAAP)

$

24.51





$

23.60





$

22.83





$

22.25





$

21.78











































Core deposits:







































Total deposits

$

22,750,928





$

21,858,845





$

21,997,623





$

21,343,356





$

21,385,042



Less: Certificates of deposit



3,273,120







2,961,564







2,746,884







2,478,589







2,275,897



 Brokered certificates of deposit



81,507







234,982







348,368







361,114







277,356



Core deposits (non-GAAP)

$

19,396,301





$

18,662,299





$

18,902,371





$

18,503,653





$

18,831,789



 

Media Contact



Investor Contact

Alice Ferreira, 203-578-2610



Terry Mangan, 203-578-2318

acferreira@websterbank.com



tmangan@websterbank.com

Cision View original content:http://www.prnewswire.com/news-releases/webster-reports-first-quarter-2019-earnings-of-1-06-per-share-300834391.html

SOURCE Webster Financial Corporation

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