Webster Reports Record Second Quarter 2017 Earnings

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WATERBURY, Conn., July 21, 2017 /PRNewswire/ -- Webster Financial Corporation WBS, the holding company for Webster Bank, N.A., today announced earnings applicable to common shareholders of $59.5 million, or $0.64 per diluted share, for the quarter ended June 30, 2017 compared to $48.4 million, or $0.53 per diluted share, for the quarter ended June 30, 2016.

"Webster again reported solid business and financial performance, with record levels of net interest income and pre-provision net revenue resulting in record net income and earnings per share growth of over 20 percent from a year ago," said James C. Smith, chairman and chief executive officer. "Our investments in strategic growth initiatives are producing positive results for shareholders as Webster bankers excel in service to our customers and communities."

Highlights for the second quarter of 2017 compared to the second quarter of 2016:

  • Record earnings applicable to common shareholders of $59.5 million.
  • Revenue of $262.5 million, an increase of 8.5 percent, including net interest income of $197.8 million, a record level, and non-interest income of $64.6 million.
  • Loan growth of $1.0 billion, or 6.2 percent, with growth of $899 million in commercial and commercial real estate loans.
  • Deposit growth of $1.6 billion, or 8.7 percent, with growth of $1.0 billion in health savings account and transactional deposits.
  • Annualized return on common shareholders' equity of 9.63 percent
  • Annualized return on average tangible common shareholders' equity (non-GAAP) of 12.65 percent.
  • Net interest margin of 3.27 percent, up 19 basis points.

"Solid loan and deposit growth are producing positive results as the yield on earning assets increased 22 basis points from a year ago while the cost of funds increased only 3 basis points," said Glenn MacInnes, executive vice president and chief financial officer. "This resulted in the net interest margin increasing by 19 basis points, which contributed to record total revenue in the quarter."

Quarterly net interest income compared to the second quarter of 2016:

  • Net interest income was $197.8 million compared to $176.9 million.
  • Net interest margin was 3.27 percent compared to 3.08 percent. The yield on interest-earning assets increased by 22 basis points, and the cost of funds increased by 3 basis points.
  • Average interest-earning assets totaled $24.5 billion and grew by $1.3 billion, or 5.5 percent.
  • Average loans totaled $17.3 billion and grew by $1.2 billion, or 7.4 percent.

Quarterly provision for loan losses:

  • The Company recorded a provision for loan losses of $7.3 million compared to $10.5 million in the prior quarter and $14.0 million a year ago.
  • Net charge-offs were $6.8 million compared to $5.7 million in the prior quarter and $7.8 million a year ago. The ratio of net charge-offs to average loans on an annualized basis was 0.16 percent compared to 0.13 percent in the prior quarter and 0.19 percent a year ago.
  • The allowance for loan losses represented 1.16 percent of total loans at both June 30, 2017 and March 31, 2017, and 1.11 percent at June 30, 2016. The allowance for loan losses represented 120 percent of nonperforming loans compared to 115 percent at March 31, 2017 and 136 percent at June 30, 2016.

Quarterly non-interest income compared to the second quarter of 2016:

  • Total non-interest income was $64.6 million compared to $65.1 million, a decrease of $0.5 million. This reflects a decrease of $3.9 million in other income primarily from a reduction in revenues from client hedging activity, offset by an increase of $3.3 million in deposit service fees.

Quarterly non-interest expense compared to the second quarter of 2016:

  • Total non-interest expense was $164.4 million compared to $152.8 million, an increase of $11.6 million. This reflects increases of $7.1 million in compensation and benefits partially related to strategic hires, $3.1 million investment in technology and equipment, and $1.2 million in occupancy.

Quarterly income taxes compared to the second quarter of 2016:

  • Income tax expense was $29.1 million compared to $24.6 million and the effective tax rate was 32.1 percent compared to 32.7 percent.

Investment securities:

  • Total investment securities were $7.0 billion compared to $7.1 billion at March 31, 2017 and $6.8 billion at June 30, 2016. The carrying value of the available-for-sale portfolio included $23.1 million of net unrealized losses compared to $28.2 million of net unrealized losses at March 31, 2017 and $19.5 million of net unrealized gains at June 30, 2016. The carrying value of the held-to-maturity portfolio does not reflect $21.8 million of net unrealized losses compared to $41.6 million of net unrealized losses at March 31, 2017, and $106.8 million of net unrealized gains at June 30, 2016.

Loans:

  • Total loans were $17.3 billion compared to $17.1 billion at March 31, 2017 and $16.3 billion at June 30, 2016. Compared to March 31, 2017, residential mortgage loans increased by $97.6 million, commercial loans increased by $90.6 million, and commercial real estate loans increased by $25.7 million, while consumer loans decreased by $34.7 million.
  • Compared to a year ago, commercial loans increased by $534.0 million, commercial real estate loans increased by $365.1 million, and residential mortgage loans increased by $231.6 million, while consumer loans decreased by $129.1 million.
  • Loan originations for portfolio were $1.374 billion compared to $1.107 billion in the prior quarter and $1.314 billion a year ago. In addition, $74 million of residential loans were originated for sale in the quarter compared to $73 million in the prior quarter and $109 million a year ago.

Asset quality:

  • Total nonperforming loans were $166.4 million, or 0.96 percent of total loans, compared to $173.8 million, or 1.02 percent, at March 31, 2017 and $132.9 million, or 0.82 percent, at June 30, 2016. Total paying nonperforming loans were $75.6 million compared to $73.5 million at March 31, 2017 and $33.8 million at June 30, 2016.
  • Past due loans were $29.2 million compared to $32.1 million at March 31, 2017 and $34.7 million at June 30, 2016. Included in past due loans are loans past due 90 days or more and still accruing, which increased $0.4 million from March 31, 2017 and decreased $4.6 million from the prior year.

Deposits and borrowings:

  • Total deposits were $20.5 billion compared to $20.2 billion at March 31, 2017 and $18.8 billion at June 30, 2016. Core deposits to total deposits were 89.8 percent compared to 90.0 percent at March 31, 2017 and 89.4 percent at June 30, 2016. Loans to deposits were 84.4 percent compared to 84.5 percent at March 31, 2017 and 86.4 percent at June 30, 2016.
  • Total borrowings were $2.9 billion compared to $3.0 billion at March 31, 2017 and $3.6 billion at June 30, 2016.

Capital:

  • The return on average tangible common shareholders' equity and the return on average common shareholders' equity were 12.65 percent and 9.63 percent, respectively, compared to 11.25 percent and 8.31 percent, respectively, in the second quarter of 2016.
  • The tangible equity and tangible common equity ratios were 7.95 percent and 7.47 percent, respectively, compared to 7.75 percent and 7.25 percent, respectively, at June 30, 2016. The common equity tier 1 risk-based capital ratio was 10.81 percent compared to 10.50 percent at June 30, 2016.
  • Book value and tangible book value per common share were $26.93 and $20.74, respectively, compared to $25.68 and $19.41, respectively, at June 30, 2016.

***

Webster Financial Corporation is the holding company for Webster Bank, National Association. With $26.2 billion in assets, Webster provides business and consumer banking, mortgage, financial planning, trust, and investment services through 167 banking centers and 343 ATMs. Webster also provides mobile and Internet banking. Webster Bank owns the asset-based lending firm Webster Business Credit Corporation; the equipment finance firm Webster Capital Finance Corporation; and HSA Bank, a division of Webster Bank, which provides health savings account trustee and administrative services. Webster Bank is a member of the FDIC and an equal housing lender. For more information about Webster, including past press releases and the latest annual report, visit the Webster website at www.websterbank.com.

Conference Call

A conference call covering Webster's 2017 second quarter earnings announcement will be held today, Friday, July 21, 2017 at 9:00 a.m. (Eastern) and may be heard through Webster's Investor Relations website at www.wbst.com, or in listen-only mode by calling 877-407-8289 or 201-689-8341 internationally. The call will be archived on the website and available for future retrieval.

Forward-Looking Statements

This release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Act"). Forward-looking statements can be identified by words such as "believes," "anticipates," "expects," "intends," "targeted," "continue," "remain," "will," "should," "may," "plans," "estimates," and similar references to future periods; however, such words are not the exclusive means of identifying such statements. Examples of forward-looking statements include, but are not limited to: (i) projections of revenues, expenses, income or loss, earnings or loss per share, and other financial items; (ii) statements of plans, objectives, and expectations of Webster or its management or Board of Directors; (iii) statements of future economic performance; and (iv) statements of assumptions underlying such statements. Forward-looking statements are based on Webster's current expectations and assumptions regarding its business, the economy, and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict. Webster's actual results may differ materially from those contemplated by the forward-looking statements, which are neither statements of historical fact nor guarantees or assurances of future performance. Factors that could cause actual results to differ from those discussed in the forward-looking statements include, but are not limited to: (1) local, regional, national, and international economic conditions and the impact they may have on us and our customers and our assessment of that impact; (2) volatility and disruption in national and international financial markets; (3) government intervention in the U.S. financial system; (4) changes in the level of nonperforming assets and charge-offs; (5) changes in estimates of future reserve requirements based upon the periodic review thereof under relevant regulatory and accounting requirements; (6) adverse conditions in the securities markets that lead to impairment in the value of securities in our investment portfolio; (7) inflation, interest rate, securities market, and monetary fluctuations; (8) the timely development and acceptance of new products and services and perceived overall value of these products and services by customers; (9) changes in consumer spending, borrowings, and savings habits; (10) technological changes and cyber-security matters; (11) the ability to increase market share and control expenses; (12) changes in the competitive environment among banks, financial holding companies, and other financial services providers; (13) the effect of changes in laws and regulations (including laws and regulations concerning taxes, banking, securities, and insurance) with which we and our subsidiaries must comply, including the Dodd-Frank Wall Street Reform and Consumer Protection Act; (14) the effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Public Company Accounting Oversight Board, the Financial Accounting Standards Board, and other accounting standard setters; (15) the costs and effects of legal and regulatory developments including the resolution of legal proceedings or regulatory or other governmental inquiries and the results of regulatory examinations or reviews; (16) our success at managing the risks involved in the foregoing items and (17) the other factors that are described in the Company's Annual Report on Form 10-K and Quarterly Reports on Form 10-Q under the headings "Risk Factors" and 'Management Discussion and Analysis of Financial Condition and Results of Operation." Any forward-looking statement made by the Company in this release speaks only as of the date on which it is made. Factors or events that could cause the Company's actual results to differ may emerge from time to time, and it is not possible for the Company to predict all of them. The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.

Non-GAAP Financial Measures

In addition to results presented in accordance with GAAP, this press release contains certain non-GAAP financial measures. A reconciliation of net income and other performance ratios, as adjusted, is included in the accompanying selected financial highlights table.

We believe that providing certain non-GAAP financial measures provides investors with information useful in understanding our financial performance, our performance trends and financial position. We utilize these measures for internal planning and forecasting purposes. We, as well as securities analysts, investors, and other interested parties, also use these measures to compare peer company operating performance. We believe that our presentation and discussion, together with the accompanying reconciliations, provides a complete understanding of factors and trends affecting our business and allows investors to view performance in a manner similar to management. These non-GAAP measures should not be considered a substitute for GAAP basis measures and results, and we strongly encourage investors to review our consolidated financial statements in their entirety and not to rely on any single financial measure. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names.




Media Contact


Investor Contact

Alice Ferreira, 203-578-2610


Terry Mangan, 203-578-2318

acferreira@websterbank.com


tmangan@websterbank.com

 

 

WEBSTER FINANCIAL CORPORATION
Selected Financial Highlights (unaudited)


At or for the Three Months Ended

(In thousands, except per share data)

June 30,
2017

March 31,
2017

December 31,
2016

September 30,
2016

June 30,
2016







Income and performance ratios:






Net income

$              61,579

$              59,471

$              57,660

$              51,817

$              50,603

Earnings applicable to common shareholders

59,485

57,342

55,501

49,634

48,398

Earnings per diluted common share

0.64

0.62

0.60

0.54

0.53

Return on average assets

0.94 %

0.91 %

0.89 %

0.82 %

0.81 %

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

12.65

12.47

12.31

11.24

11.25

Return on average common shareholders' equity

9.63

9.43

9.26

8.36

8.31

Non-interest income as a percentage of total revenue

24.61

24.65

27.60

26.93

26.89







Asset quality:






Allowance for loan and lease losses

$            199,578

$            199,107

$            194,320

$            187,925

$            180,428

Nonperforming assets

170,390

177,935

137,946

132,350

137,347

Allowance for loan and lease losses / total loans and leases

1.16 %

1.16 %

1.14 %

1.13 %

1.11 %

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

0.16

0.13

0.15

0.16

0.19

Nonperforming loans and leases / total loans and leases

0.96

1.02

0.79

0.77

0.82

Nonperforming assets / total loans and leases plus OREO

0.99

1.04

0.81

0.80

0.84

Allowance for loan and lease losses / nonperforming loans and leases

119.96

114.54

144.98

146.57

135.75







Other ratios:






Tangible equity (non-GAAP)

7.95 %

7.82 %

7.67 %

7.74 %

7.75 %

Tangible common equity (non-GAAP)

7.47

7.34

7.19

7.25

7.25

Tier 1 risk-based capital (a)

11.48

11.42

11.19

11.16

11.19

Total risk-based capital (a)

12.99

12.95

12.68

12.64

12.66

Common equity tier 1 risk-based capital (a)

10.81

10.75

10.52

10.48

10.50

Shareholders' equity / total assets

9.95

9.85

9.69

9.80

9.86

Net interest margin

3.27

3.22

3.11

3.10

3.08

Efficiency ratio (non-GAAP)

60.65

62.10

63.13

61.43

61.47







Equity and share related:






Common equity

$         2,482,416

$         2,437,648

$         2,404,302

$         2,388,919

$         2,354,256

Book value per common share

26.93

26.45

26.17

26.06

25.68

Tangible book value per common share (non-GAAP)

20.74

20.26

19.94

19.80

19.41

Common stock closing price

52.22

50.04

54.28

38.01

33.95

Dividends declared per common share

0.26

0.25

0.25

0.25

0.25







Common shares issued and outstanding

92,195

92,154

91,868

91,687

91,677

Weighted-average common shares outstanding - Basic

92,092

91,886

91,572

91,365

91,244

Weighted-average common shares outstanding - Diluted

92,495

92,342

92,099

91,857

91,745







(a) Presented as projected for June 30, 2017 and actual for the remaining periods.

 

 

WEBSTER FINANCIAL CORPORATION
Consolidated Balance Sheets (unaudited)

(In thousands)

June 30,
2017

March 31,
2017

June 30,
2016

Assets:




Cash and due from banks

$            231,808

$            184,044

$            224,964

Interest-bearing deposits

33,662

38,150

38,091

Securities:




Available for sale

2,807,966

2,897,060

2,921,950

Held to maturity

4,219,198

4,212,050

3,920,974

Total securities

7,027,164

7,109,110

6,842,924

Loans held for sale

39,407

28,698

53,353

Loans and Leases:




Commercial

5,729,844

5,639,244

5,195,825

Commercial real estate

4,556,208

4,530,507

4,191,087

Residential mortgages

4,388,308

4,290,685

4,156,665

Consumer

2,599,318

2,634,063

2,728,452

Total loans and leases

17,273,678

17,094,499

16,272,029

Allowance for loan and lease losses

(199,578)

(199,107)

(180,428)

Loans and leases, net

17,074,100

16,895,392

16,091,601

Federal Home Loan Bank and Federal Reserve Bank stock

155,505

163,557

185,104

Premises and equipment, net

131,833

134,551

134,482

Goodwill and other intangible assets, net

569,964

570,992

574,622

Cash surrender value of life insurance policies

524,674

521,427

510,410

Deferred tax asset, net

80,942

76,869

79,886

Accrued interest receivable and other assets

305,871

280,126

385,029

Total Assets

$       26,174,930

$       26,002,916

$       25,120,466





Liabilities and Shareholders' Equity:




Deposits:




Demand

$         4,074,819

$         3,913,058

$         3,958,484

Interest-bearing checking

2,669,207

2,607,060

2,438,661

Health savings accounts

4,828,145

4,793,734

4,155,760

Money market

2,316,460

2,452,726

1,987,295

Savings

4,473,925

4,456,980

4,287,078

Certificates of deposit

1,795,871

1,718,193

1,701,307

Brokered certificates of deposit

299,670

299,906

299,883

Total deposits

20,458,097

20,241,657

18,828,468

Securities sold under agreements to repurchase and other borrowings

872,692

807,573

899,691

Federal Home Loan Bank advances

1,767,757

1,922,832

2,463,057

Long-term debt

225,640

225,577

225,387

Accrued expenses and other liabilities

245,618

244,919

226,897

Total liabilities

23,569,804

23,442,558

22,643,500

Preferred stock

122,710

122,710

122,710

Common shareholders' equity

2,482,416

2,437,648

2,354,256

Total shareholders' equity

2,605,126

2,560,358

2,476,966

Total Liabilities and Shareholders' Equity

$       26,174,930

$       26,002,916

$       25,120,466





 

 

WEBSTER FINANCIAL CORPORATION
Consolidated Statements of Income (unaudited)


Three Months Ended June 30,

Six Months Ended June 30,

(In thousands, except per share data)

2017

2016

2017

2016

Interest income:





Interest and fees on loans and leases

$            174,456

$            152,171

$            342,264

$            301,979

Interest and dividends on securities

52,130

49,967

103,686

102,221

Loans held for sale

203

293

519

566

Total interest income

226,789

202,431

446,469

404,766

Interest expense:





Deposits

14,679

12,374

28,114

24,673

Borrowings

14,323

13,152

27,904

27,036

Total interest expense

29,002

25,526

56,018

51,709

Net interest income

197,787

176,905

390,451

353,057

Provision for loan and lease losses

7,250

14,000

17,750

29,600

Net interest income after provision for loan and lease losses

190,537

162,905

372,701

323,457

Non-interest income:





Deposit service fees

38,192

34,894

75,198

69,819

Loan and lease related fees

6,344

6,266

13,552

11,310

Wealth and investment services

7,877

7,204

15,150

14,399

Mortgage banking activities

3,351

3,753

5,617

7,013

Increase in cash surrender value of life insurance policies

3,648

3,664

7,223

7,317

Gain on investment securities, net

94

414

Other income

5,265

9,200

10,979

17,326


64,677

65,075

127,719

127,598

Impairment loss on securities recognized in earnings

(126)

(126)

(149)

Total non-interest income

64,551

65,075

127,593

127,449

Non-interest expense:





Compensation and benefits

87,354

80,231

175,630

160,941

Occupancy

16,034

14,842

32,213

29,911

Technology and equipment

22,458

19,376

44,066

39,314

Marketing

4,615

4,669

10,056

9,593

Professional and outside services

3,507

3,754

7,783

6,565

Intangible assets amortization

1,028

1,523

2,083

3,077

Loan workout expenses

755

530

1,363

1,495

Deposit insurance

6,625

6,633

13,357

13,419

Other expenses

22,043

21,220

41,652

40,908

Total non-interest expense

164,419

152,778

328,203

305,223

Income before income taxes

90,669

75,202

172,091

145,683

Income tax expense

29,090

24,599

51,041

48,033

Net income

61,579

50,603

121,050

97,650

Preferred stock dividends and other

(2,094)

(2,205)

(4,224)

(4,368)

Earnings applicable to common shareholders

$              59,485

$              48,398

$            116,826

$              93,282






Weighted-average common shares outstanding - Diluted

92,495

91,745

92,470

91,726






Earnings per common share:





Basic

$                  0.65

$                  0.53

$                  1.27

$                  1.02

Diluted

0.64

0.53

1.26

1.02

 

 

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


Three Months Ended

(In thousands, except per share data)

June 30,
2017

March 31,
2017

December 31,
2016

September 30,
2016

June 30,
2016

Interest income:






Interest and fees on loans and leases

$            174,456

$            167,808

$            161,978

$            157,071

$            152,171

Interest and dividends on securities

52,130

51,556

49,011

48,204

49,967

Loans held for sale

203

316

443

440

293

Total interest income

226,789

219,680

211,432

205,715

202,431

Interest expense:






Deposits

14,679

13,435

12,591

12,594

12,374

Borrowings

14,323

13,581

13,582

12,924

13,152

Total interest expense

29,002

27,016

26,173

25,518

25,526

Net interest income

197,787

192,664

185,259

180,197

176,905

Provision for loan and lease losses

7,250

10,500

12,500

14,250

14,000

Net interest income after provision for loan and lease losses

190,537

182,164

172,759

165,947

162,905

Non-interest income:






Deposit service fees

38,192

37,006

35,132

35,734

34,894

Loan and lease related fees

6,344

7,208

6,018

9,253

6,266

Wealth and investment services

7,877

7,273

6,970

7,593

7,204

Mortgage banking activities

3,351

2,266

3,300

4,322

3,753

Increase in cash surrender value of life insurance policies

3,648

3,575

3,699

3,743

3,664

Gain on investment securities, net

94

Other income

5,265

5,714

15,498

5,767

9,200


64,677

63,042

70,617

66,412

65,075

Impairment loss on securities recognized in earnings

(126)

Total non-interest income

64,551

63,042

70,617

66,412

65,075

Non-interest expense:






Compensation and benefits

87,354

88,276

88,038

83,148

80,231

Occupancy

16,034

16,179

16,195

15,004

14,842

Technology and equipment

22,458

21,608

20,815

19,753

19,376

Marketing

4,615

5,441

5,488

4,622

4,669

Professional and outside services

3,507

4,276

3,441

4,795

3,754

Intangible assets amortization

1,028

1,055

1,082

1,493

1,523

Loan workout expenses

755

608

378

1,133

530

Deposit insurance

6,625

6,732

6,410

6,177

6,633

Other expenses

22,043

19,609

20,024

19,972

21,220

Total non-interest expense

164,419

163,784

161,871

156,097

152,778

Income before income taxes

90,669

81,422

81,505

76,262

75,202

Income tax expense

29,090

21,951

23,845

24,445

24,599

Net income

61,579

59,471

57,660

51,817

50,603

Preferred stock dividends and other

(2,094)

(2,129)

(2,159)

(2,183)

(2,205)

Earnings applicable to common shareholders

$              59,485

$              57,342

$              55,501

$              49,634

$              48,398







Weighted-average common shares outstanding - Diluted

92,495

92,342

92,099

91,857

91,745







Earnings per common share:






Basic

$                  0.65

$                  0.62

$                  0.61

$                  0.54

$                  0.53

Diluted

0.64

0.62

0.60

0.54

0.53

 

 

WEBSTER FINANCIAL CORPORATION
Consolidated Average Balances, Interest, Yields and Rates, and Net Interest Margin on a Fully Tax-equivalent Basis (unaudited)


Three Months Ended June 30,


2017


2016

(Dollars in thousands)

Average balance

Interest

Yield/rate


Average balance

Interest

Yield/rate

Assets:








Interest-earning assets:








Loans and leases

$       17,266,424

$            175,421

4.04 %


$       16,079,348

$            152,937

3.79 %

Securities (a)

7,030,120

53,569

3.04


6,904,166

50,986

2.95

Federal Home Loan and Federal Reserve Bank stock

165,087

1,563

3.80


192,664

1,420

2.96

Interest-bearing deposits

64,812

169

1.03


61,929

77

0.49

Loans held for sale

22,956

203

3.53


37,104

293

3.15

Total interest-earning assets

24,549,399

$            230,925

3.74 %


23,275,211

$            205,713

3.52 %

Non-interest-earning assets

1,633,049




1,728,222



Total Assets

$       26,182,448




$       25,003,433











Liabilities and Shareholders' Equity:








Interest-bearing liabilities:








Demand deposits

$         3,979,330

$                —

—%


$         3,728,684

$                —

—%

Savings, interest checking, and money market deposits

14,301,783

8,723

0.24


13,009,331

6,861

0.21

Certificates of deposit

2,057,335

5,956

1.16


2,015,120

5,513

1.10

Total deposits

20,338,448

14,679

0.29


18,753,135

12,374

0.27









Securities sold under agreements to repurchase and other borrowings

844,837

3,583

1.68


872,189

3,379

1.53

Federal Home Loan Bank advances

1,997,069

8,156

1.62


2,525,500

7,291

1.14

Long-term debt

225,604

2,584

4.58


225,351

2,482

4.41

Total borrowings

3,067,510

14,323

1.85


3,623,040

13,152

1.44

Total interest-bearing liabilities

23,405,958

$              29,002

0.49 %


22,376,175

$              25,526

0.46 %

Non-interest-bearing liabilities

179,268




166,495



Total liabilities

23,585,226




22,542,670











Preferred stock

122,710




122,710



Common shareholders' equity

2,474,512




2,338,053



Total shareholders' equity

2,597,222




2,460,763



Total Liabilities and Shareholders' Equity

$       26,182,448




$       25,003,433



Tax-equivalent net interest income


201,923




180,187


Less: tax-equivalent adjustments


(4,136)




(3,282)


Net interest income


$            197,787




$            176,905


Net interest margin



3.27 %




3.08 %









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

 

 

WEBSTER FINANCIAL CORPORATION
Consolidated Average Balances, Interest, Yields and Rates, and Net Interest Margin on a Fully Tax-equivalent Basis (unaudited)


Six Months Ended June 30,


2017


2016

(Dollars in thousands)

Average balance

Interest

Yield/rate


Average balance

Interest

Yield/rate

Assets:








Interest-earning assets:








Loans and leases

$       17,154,412

$            344,150

4.00 %


$       15,939,123

$            303,473

3.79 %

Securities (a)

7,050,583

106,420

3.01


6,899,787

103,998

3.01

Federal Home Loan and Federal Reserve Bank stock

173,601

3,250

3.78


190,505

2,837

3.00

Interest-bearing deposits

66,476

299

0.89


59,633

149

0.49

Loans held for sale

29,560

519

3.51


31,863

566

3.55

Total interest-earning assets

24,474,632

$            454,638

3.71 %


23,120,911

$            411,023

3.54 %

Non-interest-earning assets

1,637,865




1,776,231



Total Assets

$       26,112,497




$       24,897,142











Liabilities and Shareholders' Equity:








Interest-bearing liabilities:








Demand deposits

$         3,957,403

$                —

—%


$         3,697,306

$                —

—%

Savings, interest checking, and money market deposits

14,181,826

16,503

0.23


12,885,504

13,476

0.21

Certificates of deposit

2,040,024

11,611

1.15


2,036,385

11,197

1.11

Total deposits

20,179,253

28,114

0.28


18,619,195

24,673

0.27









Securities sold under agreements to repurchase and other borrowings

874,871

7,123

1.62


960,593

7,552

1.56

Federal Home Loan Bank advances

2,066,551

15,649

1.51


2,431,623

14,538

1.18

Long-term debt

225,572

5,132

4.55


225,771

4,946

4.38

Total borrowings

3,166,994

27,904

1.75


3,617,987

27,036

1.48

Total interest-bearing liabilities

23,346,247

$              56,018

0.48 %


22,237,182

$              51,709

0.46 %

Non-interest-bearing liabilities

187,858




212,526



Total liabilities

23,534,105




22,449,708











Preferred stock

122,710




122,710



Common shareholders' equity

2,455,682




2,324,724



Total shareholders' equity

2,578,392




2,447,434



Total Liabilities and Shareholders' Equity

$       26,112,497




$       24,897,142



Tax-equivalent net interest income


398,620




359,314


Less: tax-equivalent adjustments


(8,169)




(6,257)


Net interest income


$            390,451




$            353,057


Net interest margin



3.25 %




3.10 %









(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)

June 30,
2017

March 31,
2017

December 31,
2016

September 30,
2016

June 30,
2016

Loan and Lease Balances (actual):






Commercial non-mortgage

$         4,282,968

$         4,171,246

$         4,135,625

$         3,976,931

$         3,798,436

Equipment financing

585,673

619,861

635,629

621,696

618,343

Asset-based lending

861,203

848,137

805,306

802,871

779,046

Commercial real estate

4,556,208

4,530,507

4,510,846

4,280,513

4,191,087

Residential mortgages

4,388,308

4,290,685

4,254,682

4,234,047

4,156,665

Consumer

2,599,318

2,634,063

2,684,500

2,707,343

2,728,452

Total Loan and Lease Balances

17,273,678

17,094,499

17,026,588

16,623,401

16,272,029

Allowance for loan and lease losses

(199,578)

(199,107)

(194,320)

(187,925)

(180,428)

Loans and Leases, net

$       17,074,100

$       16,895,392

$       16,832,268

$       16,435,476

$       16,091,601







Loan and Lease Balances (average):






Commercial non-mortgage

$         4,288,612

$         4,148,625

$         4,053,728

$         3,921,609

$         3,726,394

Equipment financing

602,834

625,306

630,546

615,473

607,259

Asset-based lending

864,247

845,269

780,587

744,319

765,605

Commercial real estate

4,550,595

4,479,379

4,343,949

4,224,602

4,099,855

Residential mortgages

4,340,656

4,279,662

4,252,106

4,200,357

4,137,879

Consumer

2,619,480

2,662,915

2,694,492

2,717,282

2,742,356

Total Loan and Lease Balances

17,266,424

17,041,156

16,755,408

16,423,642

16,079,348

Allowance for loan and lease losses

(201,852)

(198,308)

(192,565)

(185,886)

(180,835)

Loans and Leases, net

$       17,064,572

$       16,842,848

$       16,562,843

$       16,237,756

$       15,898,513

 

 

WEBSTER FINANCIAL CORPORATION
Five Quarter Nonperforming Assets (unaudited)

(Dollars in thousands)

June 30,
2017

March 31,
2017

December 31,
2016

September 30,
2016

June 30,
2016

Nonperforming loans and leases:






Commercial non-mortgage

$              68,430

$              74,483

$              38,550

$              27,398

$              28,700

Equipment financing

547

703

225

202

480

Asset-based lending

Commercial real estate

11,168

9,793

10,521

14,379

13,923

Residential mortgages

46,018

46,792

47,201

49,117

52,437

Consumer

40,206

42,054

37,538

37,122

37,372

Total nonperforming loans and leases

$            166,369

$            173,825

$            134,035

$            128,218

$            132,912







Other real estate owned and repossessed assets:






Commercial

$                —

$                —

$                —

$                   308

$                    —

Repossessed equipment

33

82

70

220

Residential

2,513

2,296

2,625

2,987

3,395

Consumer

1,475

1,732

1,286

767

820

Total other real estate owned and repossessed assets

$                4,021

$                4,110

$                3,911

$                4,132

$                4,435

Total nonperforming assets

$            170,390

$            177,935

$            137,946

$            132,350

$            137,347

 

 

WEBSTER FINANCIAL CORPORATION
Five Quarter Past Due Loans and Leases (unaudited)

(Dollars in thousands)

June 30,
2017

March 31,
2017

December 31,
2016

September 30,
2016

June 30,
2016

Past due 30-89 days:






Commercial non-mortgage

$                1,910

$                1,685

$                1,949

$                2,522

$                2,050

Equipment financing

883

1,298

1,596

3,477

404

Asset-based lending

Commercial real estate

1,013

2,072

8,173

1,229

3,017

Residential mortgages

9,831

11,530

11,202

11,081

9,632

Consumer

14,360

14,762

18,293

15,449

13,845

Total past due 30-89 days

27,997

31,347

41,213

33,758

28,948

Past due 90 days or more and accruing

1,185

747

749

5,459

5,738

Total past due loans and leases

$              29,182

$              32,094

$              41,962

$              39,217

$              34,686







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


For the Three Months Ended

(Dollars in thousands)

June 30,
2017

March 31,
2017

December 31,
2016

September 30,
2016

June 30,
2016

Beginning balance

$            199,107

$            194,320

$            187,925

$            180,428

$            174,201

Provision

7,250

10,500

12,500

14,250

14,000

Charge-offs:






Commercial non-mortgage

2,196

123

1,067

2,561

3,525

Equipment financing

119

185

44

300

70

Asset-based lending

Commercial real estate

100

102

161

995

Residential mortgages

623

732

1,099

1,304

638

Consumer

5,602

6,474

6,433

5,259

4,556

Total charge-offs

8,640

7,616

8,804

9,424

9,784

Recoveries:






Commercial non-mortgage

317

322

439

370

315

Equipment financing

13

14

95

240

156

Asset-based lending

44

1

Commercial real estate

4

7

151

194

212

Residential mortgages

407

237

348

554

133

Consumer

1,120

1,323

1,622

1,313

1,194

Total recoveries

1,861

1,903

2,699

2,671

2,011

Total net charge-offs

6,779

5,713

6,105

6,753

7,773

Ending balance

$            199,578

$            199,107

$            194,320

$            187,925

$            180,428

 

WEBSTER FINANCIAL CORPORATION
Reconciliations to GAAP Financial Measures

The Company evaluates its business based on certain ratios that utilize tangible equity, a non-GAAP financial measure. Return on average tangible common shareholders' equity measures the Company's net income available to common shareholders, adjusted for the tax-affected 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.

The efficiency ratio, which measures the costs expended to generate a dollar of revenue, is calculated excluding foreclosed property expense, amortization of intangibles, gain or loss on securities, and other non-recurring items. Core deposits express total deposits less time deposits. Accordingly, these are also non-GAAP financial measures.

The Company believes the use of these non-GAAP financial measures provides additional clarity in assessing the results of the Company. Other companies may define or calculate supplemental financial data differently. 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)

June 30,
2017

March 31,
2017

December 31,
2016

September 30,
2016

June 30,
2016

Return on average tangible common shareholders' equity:






Net income (GAAP)

$              61,579

$              59,471

$              57,660

$              51,817

$              50,603

Less: Preferred stock dividends (GAAP)

2,024

2,024

2,024

2,024

2,024

Add: Intangible assets amortization, tax-affected at 35% (GAAP)

668

686

703

970

990

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

$              60,223

$              58,133

$              56,339

$              50,763

$              49,569

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

$            240,892

$            232,532

$            225,356

$            203,052

$            198,276

Average shareholders' equity (non-GAAP)

$         2,597,222

$         2,559,354

$         2,526,099

$         2,503,960

$         2,460,763

Less: Average preferred stock (non-GAAP)

122,710

122,710

122,710

122,710

122,710

Average goodwill and other intangible assets (non-GAAP)

570,560

571,611

572,682

573,978

575,483

Average tangible common shareholders' equity (non-GAAP)

$         1,903,952

$         1,865,033

$         1,830,707

$         1,807,272

$         1,762,570

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

12.65 %

12.47 %

12.31 %

11.24 %

11.25 %







Efficiency ratio:






Non-interest expense (GAAP)

$            164,419

$            163,784

$            161,871

$            156,097

$            152,778

Less: Foreclosed property activity (GAAP)

(143)

74

(90)

45

(123)

Intangible assets amortization (GAAP)

1,028

1,055

1,082

1,493

1,523

Other expenses (non-GAAP)

1,587

1,123

1,243

793

260

Non-interest expense (non-GAAP)

$            161,947

$            161,532

$            159,636

$            153,766

$            151,118

Net interest income (GAAP)

$            197,787

$            192,664

$            185,259

$            180,197

$            176,905

Add: Tax-equivalent adjustment (non-GAAP)

4,136

4,033

3,902

3,478

3,282

Non-interest income (GAAP)

64,551

63,042

70,617

66,412

65,075

Less: Gain on investment securities, net (GAAP)

94

Other (non-GAAP)

(555)

(391)

(408)

(236)

(655)

One-time gain on the sale of an asset (GAAP)

(7,331)

Income (non-GAAP)

$            267,029

$            260,130

$            252,855

$            250,323

$            245,823

Efficiency ratio (non-GAAP)

60.65 %

62.10 %

63.13 %

61.43 %

61.47 %







Tangible equity:






Shareholders' equity (GAAP)

$         2,605,126

$         2,560,358

$         2,527,012

$         2,511,629

$         2,476,966

Less: Goodwill and other intangible assets (GAAP)

569,964

570,992

572,047

573,129

574,622

Tangible shareholders' equity (non-GAAP)

$         2,035,162

$         1,989,366

$         1,954,965

$         1,938,500

$         1,902,344

Total assets (GAAP)

$       26,174,930

$       26,002,916

$       26,072,529

$       25,633,617

$       25,120,466

Less: Goodwill and other intangible assets (GAAP)

569,964

570,992

572,047

573,129

574,622

Tangible assets (non-GAAP)

$       25,604,966

$       25,431,924

$       25,500,482

$       25,060,488

$       24,545,844

Tangible equity (non-GAAP)

7.95 %

7.82 %

7.67 %

7.74 %

7.75 %







Tangible common equity:






Tangible shareholders' equity (non-GAAP)

$         2,035,162

$         1,989,366

$         1,954,965

$         1,938,500

$         1,902,344

Less: Preferred stock (GAAP)

122,710

122,710

122,710

122,710

122,710

Tangible common shareholders' equity (non-GAAP)

$         1,912,452

$         1,866,656

$         1,832,255

$         1,815,790

$         1,779,634

Tangible assets (non-GAAP)

$       25,604,966

$       25,431,924

$       25,500,482

$       25,060,488

$       24,545,844

Tangible common equity (non-GAAP)

7.47 %

7.34 %

7.19 %

7.25 %

7.25 %







Tangible book value per common share:






Tangible common shareholders' equity (non-GAAP)

$         1,912,452

$         1,866,656

$         1,832,255

$         1,815,790

$         1,779,634

Common shares outstanding

92,195

92,154

91,868

91,687

91,677

Tangible book value per common share (non-GAAP)

$                20.74

$                20.26

$                19.94

$                19.80

$                19.41







Core deposits:






Total deposits

$       20,458,097

$       20,241,657

$       19,303,857

$       19,200,908

$       18,828,468

Less: Certificates of deposit

1,795,871

1,718,193

1,724,906

1,721,056

1,701,307

Brokered certificates of deposit

299,670

299,906

299,902

299,887

299,883

Core deposits (non-GAAP)

$       18,362,556

$       18,223,558

$       17,279,049

$       17,179,965

$       16,827,278

 

 

View original content:http://www.prnewswire.com/news-releases/webster-reports-record-second-quarter-2017-earnings-300492082.html

SOURCE Webster Financial Corporation

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