News Article

Webster Reports First Quarter 2021 Earnings Of $1.17 Per Diluted Share

April 19, 2021 at 6:50 AM EDT

WATERBURY, Conn., April 19, 2021 /PRNewswire/ -- Webster Financial Corporation (NYSE: WBS), the holding company for Webster Bank, N.A. and its HSA Bank division, today announced earnings applicable to common shareholders of $105.5 million, or $1.17 per diluted share, for the quarter ended March 31, 2021, compared to $36.0 million, or $0.39 per diluted share, for the quarter ended March 31, 2020. Earnings per diluted share would have been $1.25 for the quarter ended March 31, 2021, adjusting for $9.4 million ($6.9 million after tax) of charges related to strategic optimization initiatives.

"We continued to make meaningful progress on our strategic initiatives during a solid first quarter," said John R. Ciulla, chairman and chief executive officer. "Our focus remains on delivering for our customers, communities, bankers and shareholders."

Highlights for the first quarter of 2021:

  • Revenue of $300.5 million.
  • Loan growth of $0.4 billion, or 2.0 percent from a year ago, led by commercial and commercial real estate, which increased 7.9 percent.
  • Originated $533.0 million of second round Paycheck Protection Program (PPP) loans.
  • Results include a Current Expected Credit Loss (CECL) benefit of $25.8 million with a reserve decrease of $31.1 million compared to the prior quarter, resulting in an allowance coverage of 1.54 percent, or 1.64 percent excluding $1.3 billion of PPP loans.
  • Deposit growth of $4.0 billion, or 16.2 percent from a year ago, with growth of $1.8 billion in demand deposits and $719.0 million in HSA deposits.
  • Results include $9.4 million of charges related to strategic optimization initiatives.
  • Net interest margin of 2.92 percent.
  • Efficiency ratio (non-GAAP) of 58.5 percent.

"First quarter results were favorably impacted by positive credit trends and an improving economic outlook resulting in a meaningful release of loan reserve," said Glenn MacInnes, executive vice president and chief financial officer. "While near term our liquidity position results in net interest margin compression, it along with our strong capital level positions us well for future growth."

Line of Business performance compared to the first quarter of 2020

Effective January 1, 2021 Webster realigned certain of its business banking and investment services related operations from Retail Banking to Commercial Banking to deliver operational efficiencies and better serve its customers.  As a result $1.9 billion of loans, $2.2 billion of deposits, and $3.9 billion of assets under administration (off balance sheet) were moved from Retail Banking to Commercial Banking. Prior period results have been restated accordingly.

Commercial Banking

Webster's Commercial Banking segment serves businesses that have more than $2 million of revenue through our business banking, middle market, asset-based lending, equipment finance, commercial real estate, sponsor finance, and treasury services business units. Additionally, our Wealth group provides wealth management solutions to business owners, operators, and consumers within our targeted markets and retail footprint. As of March 31, 2021, Commercial Banking had $14.4 billion in loans and leases and $8.4 billion in deposit balances.

Commercial Banking Operating Results:






Percent


Three months ended March 31,


Favorable/

(In thousands)


2021

2020


(Unfavorable)

Net interest income


$142,038


$117,584




20.8

%


Non-interest income


25,177


22,415




12.3



Operating revenue


167,215


139,999




19.4



Non-interest expense


64,836


65,220




0.6



Pre-tax, pre-provision net revenue


$102,379


$74,779




36.9
















Percent



At March 31,


Increase/

(In millions)


2021

2020


(Decrease)

Loans and leases


$14,413


$13,681




5.4

%


Deposits


8,417


6,809




23.6



AUA / AUM (off balance sheet)


6,694


5,270




27.0



Pre-tax, pre-provision net revenue increased $27.6 million to $102.4 million in the quarter as compared to prior year. Net interest income increased $24.5 million to $142.0 million, primarily driven by PPP loan fee accretion and growth in loans and deposits. Non-interest income increased $2.8 million to $25.2 million driven by higher loan related fees and trust and investment service fees. Non-interest expense decreased $0.4 million to $64.8 million.

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, 2021, HSA Bank had $10.6 billion in total footings comprising $7.5 billion in deposit balances and $3.1 billion in assets under administration through linked investment accounts.

HSA Bank Operating Results:






Percent


Three months ended March 31,


Favorable/

(In thousands)


2021

2020


(Unfavorable)

Net interest income


$42,109


$42,673




(1.3)

%


Non-interest income


27,005


26,383




2.4



Operating revenue


69,114


69,056




0.1



Non-interest expense


36,250


37,078




2.2



Pre-tax, net revenue


$32,864


$31,978




2.8
















Percent



At March 31,


Increase/

(Dollars in millions)


2021

2020


(Decrease)

Number of accounts (thousands)


3,040


3,119




(2.5)

%










Deposits


$7,455


$6,736




10.7



Linked investment accounts (off balance sheet)


3,118


1,855




68.1



Total footings


$10,574


$8,591




23.1



Pre-tax net revenue increased $0.9 million to $32.9 million in the quarter as compared to prior year. Net interest income decreased $0.6 million to $42.1 million, due to a decline in deposit spreads partially offset by a 10.7 percent growth in deposits.  Non-interest income increased $0.6 million to $27.0 million, due primarily to increases in investment and notional account fees. Non-interest expense decreased $0.8 million to $36.3 million, primarily due to reduced travel expenses.

Retail Banking

Retail Banking serves consumer and business banking customers primarily throughout southern New England and into Westchester County, New York. Retail Banking is comprised of the Consumer Lending and Small Business Banking business units, as well as a distribution network consisting of 148 banking centers and 280 ATMs, a customer care center, and a full range of web and mobile-based banking services. As of March 31, 2021, Retail Banking had $6.9 billion in loans and $12.6 billion in deposit balances.

Retail Banking Operating Results:






Percent


Three months ended March 31,


Favorable/

(In thousands)


2021

2020


(Unfavorable)

Net interest income


$88,813


$81,199




9.4

%


Non-interest income


16,071


18,443




(12.9)



Operating revenue


104,884


99,642




5.3



Non-interest expense


76,124


80,290




5.2



Pre-tax, pre-provision net revenue


$28,760


$19,352




48.6
















Percent



At March 31,


Increase/

(In millions)


2021

2020


(Decrease)

Loans


$6,888


$7,211




(4.5)

%


Deposits


12,611


10,873




16.0



Pre-tax, pre-provision net revenue increased $9.4 million to $28.8 million in the quarter as compared to prior year. Net interest income increased $7.6 million to $88.8 million, driven by PPP loan fee accretion and deposit growth, partially offset by lower consumer loan balances. Non-interest income decreased $2.4 million to $16.1 million resulting from lower deposit-related service charges and fee income from mortgage banking activities, partially offset by higher loan servicing fee income. Non-interest expense decreased $4.2 million to $76.1 million driven by lower employee-related, occupancy, and marketing expenses.

Consolidated financial performance:

Quarterly net interest income compared to the first quarter of 2020:

  • Net interest income was $223.8 million compared to $230.8 million.
  • Net interest margin was 2.92 percent compared to 3.23 percent. The yield on interest-earning assets declined by 76 basis points, and the cost of interest-bearing liabilities declined by 48 basis points.
  • Average interest-earning assets totaled $31.1 billion and grew by $2.3 billion, or 7.9 percent.
  • Average loans totaled $21.5 billion and grew by $1.2 billion, or 5.7 percent.
  • Average deposits totaled $28.3 billion and grew by $4.2 billion, or 17.4 percent.

Quarterly provision for credit losses:

  • The provision for credit losses reflects a $25.8 million benefit in the quarter, contributing to a $31.1 million decrease in the allowance for credit losses on loans and leases. The decrease in the allowance reflects improvements to the forecasted economic outlook and favorable credit trends resulting in a release of reserves. The provision for credit losses reflected a $1 million benefit in the prior quarter and an expense of $76.0 million a year ago.
  • Net charge-offs were $5.3 million, compared to $9.4 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 0.10 percent, compared to 0.17 percent in the prior quarter and 0.15 percent a year ago.
  • The allowance for credit losses on loans and leases represented 1.54 percent of total loans at March 31, 2021, compared to 1.66 percent at December 31, 2020 and 1.60 percent at March 31, 2020. Excluding $1.3 billion of risk free PPP loans, the coverage ratio was 1.64 percent at March 31, 2021, compared to 1.76 percent at December 31, 2020. The allowance represented 218 percent of nonperforming loans at March 31, 2021 compared to 214 percent at December 31, 2020 and 206 percent at March 31, 2020.

Quarterly non-interest income compared to the first quarter of 2020:

  • Total non-interest income was $76.8 million compared to $73.4 million, an increase of $3.4 million. This primarily reflects an increase of $2.9 million due to fair value adjustments; $1.5 million in miscellaneous fee income; $1.8 million in loan and lease fees primarily related to higher syndication fees; and $0.6 million in HSA fee income driven primarily by higher account service fees. These increases were partially offset by a $2.3 million decrease in deposit service fees driven by lower overdraft and service related fees and a $1.2 million decrease in the mark to market on customer derivatives and swap related fees.

Quarterly non-interest expense compared to the first quarter of 2020:

  • Total non-interest expense was $188.0 million compared to $178.8 million, an increase of $9.2 million. This primarily reflects strategic optimization initiative charges of $9.4 million: $2.0 million in compensation and benefits; $2.6 million in occupancy; and $4.8 million in professional and outside services. Excluding these charges, non-interest expense was flat when compared to the first quarter a year ago.

Quarterly income taxes compared to the first quarter of 2020:

  • Income tax expense was $30.2 million compared to $11.1 million and the effective tax rate was 21.8 percent compared to 22.6 percent.
  • The lower effective tax rate in the quarter reflects the recognition of net discrete tax benefits during the period, partially offset by the effects of increased pre-tax income in 2021 compared to 2020.

Investment securities:

  • Total investment securities were $8.9 billion, compared to $8.9 billion at December 31, 2020 and $8.5 billion at March 31, 2020. The carrying value of the available-for-sale portfolio included $51.3 million of net unrealized gains, compared to $92.5 million at December 31, 2020 and $3.1 million of net unrealized gains at March 31, 2020. The carrying value of the held-to-maturity portfolio does not reflect $162.6 million of net unrealized gains, compared to $267.2 million at December 31, 2020 and $156.3 million of net unrealized gains at March 31, 2020.

Loans:

  • Total loans were $21.3 billion, compared to $21.6 billion at December 31, 2020 and $20.9 billion at March 31, 2020. Compared to December 31, 2020, commercial real estate loans increased by $15.4 million while commercial loans decreased by $140.4 million, residential mortgages decreased by $113.1 million, and consumer loans decreased by $101.8 million.
  • Compared to a year ago, commercial real estate loans increased by $215.6 million while commercial loans, excluding PPP loans, decreased by $436.6 million, consumer loans decreased by $354.7 million and residential mortgages decreased by $322.6 million. PPP loans totaled $1.3 billion at March 31, 2021.
  • Loan originations for the portfolio were $1.807 billion ($1.274 billion excluding PPP loan originations), compared to $1.804 billion in the prior quarter and $1.195 billion a year ago. In addition, $81 million of residential loans were originated for sale in the quarter, compared to $125 million in the prior quarter and $60 million a year ago.

Asset quality:

  • Total nonperforming loans were $150.4 million, or 0.71 percent of total loans, compared to $168.0 million, or 0.78 percent of total loans, at December 31, 2020 and $162.3 million, or 0.78 percent of total loans, at March 31, 2020. Total paying nonperforming loans were $53.2 million, compared to $59.7 million at December 31, 2020 and $61.9 million at March 31, 2020.
  • Past due loans were $20.4 million, compared to $32.9 million at December 31, 2020 and $37.0 million at March 31, 2020.

Deposits and borrowings:

  • Total deposits were $28.5 billion, compared to $27.3 billion at December 31, 2020 and $24.5 billion at March 31, 2020. Core deposits to total deposits were 92.2 percent, compared to 90.9 percent at December 31, 2020 and 87.8 percent at March 31, 2020. The loan to deposit ratio was 74.8 percent, compared to 79.2 percent at December 31, 2020 and 85.2 percent at March 31, 2020.
  • Total borrowings were $1.2 billion, compared to $1.7 billion at December 31, 2020 and $3.6 billion at March 31, 2020.

Capital:

  • The return on average common shareholders' equity and the return on average tangible common shareholders' equity were 13.65 percent and 16.79 percent, respectively, compared to 4.75 percent and 5.95 percent, respectively, in the first quarter of 2020.
  • The tangible equity and tangible common equity ratios were 8.30 percent and 7.85 percent, respectively, compared to 8.14 percent and 7.67 percent, respectively, at March 31, 2020. The common equity tier 1 risk-based capital ratio was 11.89 percent, compared to 10.95 percent at March 31, 2020.
  • Book value and tangible book value per common share were $34.60 and $28.41, respectively, compared to $32.66 and $26.46, respectively, at March 31, 2020.

Webster Financial Corporation is the holding company for Webster Bank, National Association and its HSA Bank division. With $33.3 billion in assets, Webster provides business and consumer banking, mortgage, financial planning, trust, and investment services through 148 banking centers and 280 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 first quarter 2021 earnings announcement will be held today, Monday, April 19, 2021 at 8:30 a.m. Eastern Time. To listen to the live call, please dial 877-407-8289 or 201-689-8341, for international callers. The webcast, along with related slides, will be available on the Webster website (www.wbst.com). A replay of the conference call will be available for one week via the website listed above, beginning at approximately 11:00 a.m. (Eastern) on April 19, 2021. To access the replay, dial 877-660-6853 or 201-612-7415, for international callers. The replay conference ID number is 13718870.

Media Contact
Alice Ferreira, 203-578-2610
acferreira@websterbank.com

Investor Contact
Kristen Manginelli, 203-578-2307
kmanginelli@websterbank.com

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) our ability to successfully execute our business plan and strategic initiatives, and manage our risks; (2) local, regional, national, and international economic conditions and the impact they may have on us and our customers; (3) volatility and disruption in national and international financial markets; (4) the potential adverse effects of the ongoing novel coronavirus (COVID-19) pandemic and any governmental or societal responses thereto, including the deployment and efficacy of COVID-19 vaccines, or any other unusual and infrequently occurring events; (5) changes in the level of nonperforming assets and charge-offs; (6) changes in estimates of future reserve requirements based upon the periodic review thereof under relevant regulatory and accounting requirements; (7) adverse conditions in the securities markets that lead to impairment in the value of our investment securities; (8) inflation, changes in interest rate, and monetary fluctuations; (9) the timely development and acceptance of new products and services and the perceived value of those products and services by customers; (10) changes in deposit flows, consumer spending, borrowings, and savings habits; (11) our ability to implement new technologies and maintain secure and reliable technology systems; (12) the effects of any cyber threats, attacks or events or fraudulent activity; (13) performance by our counterparties and vendors; (14) our ability to increase market share and control expenses; (15) changes in the competitive environment among banks, financial holding companies, and other financial services providers; (16) our ability to successfully achieve the anticipated cost reductions from branch consolidations and any higher than anticipated costs or delays in implementing the consolidation plan; (17) changes in laws and regulations (including those concerning banking, taxes, dividends, securities, insurance, and healthcare) with which we and our subsidiaries must comply, including recent and potential legislative and regulatory changes in response to the COVID-19 pandemic such as the CARES Act and the rules and regulations that may be promulgated thereunder; (18) the effect of changes in accounting policies and practices applicable to us, including changes in our allowance for loan and lease losses and other impacts of recently adopted accounting guidance regarding the recognition of credit losses; (19) legal and regulatory developments including the resolution of legal proceedings or regulatory or other governmental inquiries and the results of regulatory examinations or reviews; (20) our ability to appropriately address social, environmental, and sustainability concerns that may arise from our business activities; and (21) 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, 2021




December 31, 2020




September 30, 2020




June 30, 2020




March 31, 2020






















Income and performance ratios:




















Net income

$

108,078



$

60,044



$

69,281



$

53,097



$

38,199


Earnings applicable to common shareholders


105,530




57,715




66,890




50,729




36,021


Earnings per diluted common share


1.17




0.64




0.75




0.57




0.39


Return on average assets


1.31

%



0.73

%



0.84

%



0.65

%



0.50

%

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


16.79




9.31




10.91




8.47




5.95


Return on average common shareholders' equity


13.65




7.51




8.80




6.79




4.75


Non-interest income as a percentage of total revenue


25.54




26.14




25.50




21.12




24.12






















Asset quality:




















Allowance for credit losses on loans and leases

$

328,351



$

359,431



$

369,811



$

358,522



$

334,931


Nonperforming assets


152,808




170,314




167,314




178,381




169,120


Allowance for credit losses on loans and leases / total loans and leases


1.54

%



1.66

%



1.69

%



1.64

%



1.60

%

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


0.10




0.17




0.21




0.30




0.15


Nonperforming loans and leases / total loans and leases


0.71




0.78




0.74




0.79




0.78


Nonperforming assets / total loans and leases plus OREO


0.72




0.79




0.77




0.82




0.81


Allowance for credit losses on loans and leases / nonperforming loans and leases


218.29




213.94




227.39




207.17




206.37






















Other ratios:




















Tangible equity (non-GAAP)


8.30

%



8.35

%



8.19

%



8.14

%



8.14

%

Tangible common equity (non-GAAP)


7.85




7.90




7.75




7.69




7.67


Tier 1 risk-based capital (a)


12.55




11.99




11.88




11.82




11.60


Total risk-based capital (a)


14.09




13.59




13.47




13.42




13.10


Common equity tier 1 risk-based capital (a)


11.89




11.35




11.23




11.17




10.95


Shareholders' equity / total assets


9.84




9.92




9.76




9.71




9.76


Net interest margin


2.92




2.83




2.88




2.99




3.23


Efficiency ratio (non-GAAP)


58.46




60.27




59.99




60.04




58.03






















Equity and share related:




















Common equity

$

3,127,891



$

3,089,588



$

3,074,653



$

3,029,742



$

2,945,205


Book value per common share


34.60




34.25




34.09




33.59




32.66


Tangible book value per common share (non-GAAP)


28.41




28.04




27.86




27.40




26.46


Common stock closing price


55.11




42.15




26.41




28.61




22.90


Dividends declared per common share


0.40




0.40




0.40




0.40




0.40


Common shares issued and outstanding


90,410




90,199




90,204




90,194




90,172


Weighted-average common shares outstanding - Basic


89,809




89,645




89,630




89,485




90,936


Weighted-average common shares outstanding - Diluted


90,108




89,915




89,738




89,570




91,206























(a) Presented as projected for March 31, 2021 and actual for the remaining periods. In accordance with regulatory capital rules, the Company elected an option to delay the estimated impact of CECL on its regulatory capital for two years followed by a three year transition period
ending December 31, 2024. As a result, capital ratios and amounts as of March 31, 2021 exclude the impact of the increased allowance for credit losses on loans, held-to-maturity debt securities and unfunded loan commitments attributed to the adoption of CECL.



WEBSTER FINANCIAL CORPORATION
Consolidated Balance Sheets (unaudited)

(In thousands)


March 31, 2021




December 31, 2020




March 31, 2020

Assets:











Cash and due from banks

$

160,703



$

193,501



$

198,458

Interest-bearing deposits


1,210,958




69,603




69,482

Securities:











Available for sale


3,313,980




3,326,776




3,016,631

Held to maturity


5,568,093




5,568,188




5,486,206

Total securities


8,882,073




8,894,964




8,502,837

Allowance for credit losses on investment securities held-to-maturity


(308)




(299)




(312)

Securities, net


8,881,765




8,894,665




8,502,525

Loans held for sale


17,262




14,012




22,448

Loans and Leases:











Commercial


8,437,487




8,577,898




7,565,947

Commercial real estate


6,338,056




6,322,637




6,122,474

Residential mortgages


4,668,945




4,782,016




4,991,512

Consumer


1,856,895




1,958,664




2,211,591

Total loans and leases


21,301,383




21,641,215




20,891,524

Allowance for credit losses on loans and leases


(328,351)




(359,431)




(334,931)

Loans and leases, net


20,973,032




21,281,784




20,556,593

Federal Home Loan Bank and Federal Reserve Bank stock


77,674




77,594




141,327

Premises and equipment, net


220,982




226,743




268,420

Goodwill and other intangible assets, net


559,617




560,756




559,328

Cash surrender value of life insurance policies


567,298




564,195




554,231

Deferred tax asset, net


80,235




81,286




80,318

Accrued interest receivable and other assets


509,511




626,551




701,744

Total Assets

$

33,259,037



$

32,590,690



$

31,654,874












Liabilities and Shareholders' Equity:











Deposits:











Demand

$

6,680,114



$

6,155,592



$

4,883,436

Health savings accounts


7,455,181




7,120,017




6,736,178

Interest-bearing checking


3,792,309




3,652,763




3,007,069

Money market


3,015,565




2,940,215




2,477,304

Savings


5,304,532




4,979,031




4,418,689

Certificates of deposit


2,234,133




2,487,818




2,891,161

Brokered certificates of deposit


-




-




100,000

Total deposits


28,481,834




27,335,436




24,513,837

Securities sold under agreements to repurchase and other borrowings


498,378




995,355




1,262,749

Federal Home Loan Bank advances


138,554




133,164




1,773,399

Long-term debt


566,480




567,663




571,212

Accrued expenses and other liabilities


300,863




324,447




443,435

Total liabilities


29,986,109




29,356,065




28,564,632

Preferred stock


145,037




145,037




145,037

Common shareholders' equity


3,127,891




3,089,588




2,945,205

Total shareholders' equity


3,272,928




3,234,625




3,090,242

Total Liabilities and Shareholders' Equity

$

33,259,037



$

32,590,690



$

31,654,874












 

WEBSTER FINANCIAL CORPORATION
Consolidated Statements of Income (unaudited)







Three Months Ended March 31,

(In thousands, except per share data)










2021




2020

Interest income:















Interest and fees on loans and leases









$

190,536



$

216,187

Interest and dividends on securities










44,947




58,108

Loans held for sale










91




175

Total interest income










235,574




274,470

Interest expense:















Deposits










6,439




27,843

Borrowings










5,371




15,826

Total interest expense










11,810




43,669

Net interest income










223,764




230,801

Provision for credit losses










(25,750)




76,000

Net interest income after provision for loan and lease losses










249,514




154,801

Non-interest income:















Deposit service fees










40,469




42,570

Loan and lease related fees










8,313




6,496

Wealth and investment services










9,403




8,739

Mortgage banking activities










2,642




2,893

Increase in cash surrender value of life insurance policies










3,533




3,580

Gain on investment securities, net










-




8

Other income










12,397




9,092

Total non-interest income










76,757




73,378

Non-interest expense:















Compensation and benefits










107,600




101,887

Occupancy










15,650




14,485

Technology and equipment










28,516




27,837

Marketing










2,504




3,502

Professional and outside services










9,776




5,663

Intangible assets amortization










1,139




962

Loan workout expenses










394




493

Deposit insurance










3,956




4,725

Other expenses










18,447




19,282

Total non-interest expense










187,982




178,836

Income before income taxes










138,289




49,343

Income tax expense










30,211




11,144

Net income










108,078




38,199

Preferred stock dividends and other










(2,548)




(2,178)

Earnings applicable to common shareholders









$

105,530



$

36,021
















Weighted-average common shares outstanding - Diluted










90,108




91,206
















Earnings per common share:















Basic









$

1.18



$

0.40

Diluted










1.17




0.39
















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



Three Months Ended

(In thousands, except per share data)


March 31, 2021




December 31, 2020




September 30, 2020




June 30, 2020




March 31, 2020

Interest income:



















Interest and fees on loans and leases

$

190,536



$

189,010



$

188,001



$

196,521



$

216,187

Interest and dividends on securities


44,947




46,874




51,009




55,570




58,108

Loans held for sale


91




181




229




184




175

Total interest income


235,574




236,065




239,239




252,275




274,470

Interest expense:



















Deposits


6,439




8,651




12,598




18,805




27,843

Borrowings


5,371




10,485




7,385




9,063




15,826

Total interest expense


11,810




19,136




19,983




27,868




43,669

Net interest income


223,764




216,929




219,256




224,407




230,801

Provision for credit losses


(25,750)




(1,000)




22,750




40,000




76,000

Net interest income after provision for loan and lease losses


249,514




217,929




196,506




184,407




154,801

Non-interest income:



















Deposit service fees


40,469




38,345




39,278




35,839




42,570

Loan and lease related fees


8,313




9,095




6,568




6,968




6,496

Wealth and investment services


9,403




8,820




8,255




7,102




8,739

Mortgage banking activities


2,642




4,110




7,087




4,205




2,893

Increase in cash surrender value of life insurance policies


3,533




3,662




3,695




3,624




3,580

Gain on investment securities, net


-




-




-




-




8

Other income


12,397




12,731




10,177




2,338




9,092

Total non-interest income


76,757




76,763




75,060




60,076




73,378

Non-interest expense:



















Compensation and benefits


107,600




122,754




104,019




99,731




101,887

Occupancy


15,650




28,024




14,275




14,245




14,485

Technology and equipment


28,516




29,122




27,846




27,468




27,837

Marketing


2,504




3,485




3,852




3,286




3,502

Professional and outside services


9,776




11,380




9,223




6,158




5,663

Intangible assets amortization


1,139




1,147




1,089




962




962

Loan workout expenses


394




261




612




392




493

Deposit insurance


3,956




4,372




4,204




5,015




4,725

Other expenses


18,447




18,985




18,876




19,327




19,282

Total non-interest expense


187,982




219,530




183,996




176,584




178,836

Income before income taxes


138,289




75,162




87,570




67,899




49,343

Income tax expense


30,211




15,118




18,289




14,802




11,144

Net income


108,078




60,044




69,281




53,097




38,199

Preferred stock dividends and other


(2,548)




(2,329)




(2,391)




(2,368)




(2,178)

Earnings applicable to common shareholders

$

105,530



$

57,715



$

66,890



$

50,729



$

36,021




















Weighted-average common shares outstanding - Diluted


90,108




89,915




89,738




89,570




91,206




















Earnings per common share:



















Basic

$

1.18



$

0.64



$

0.75



$

0.57



$

0.40

Diluted


1.17




0.64




0.75




0.57




0.39


 

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,




2021








2020


(Dollars in thousands)


Average balance




Interest




Yield/rate








Average balance



Interest


Yield/rate


Assets:

























Interest-earning assets:

























Loans and leases

$

21,481,320



$

191,288




3.57

%






$

20,324,799


$

216,918


4.24

%

Investment securities (a)


8,890,075




46,277




2.12








8,319,747



58,408


2.85


Federal Home Loan and Federal Reserve Bank stock


77,632




237




1.24








126,364



1,251


3.98


Interest-bearing deposits (b)


680,367




176




0.10








68,307



191


1.11


Loans held for sale


14,351




91




2.54








22,297



175


3.14


Total interest-earning assets


31,143,745



$

238,069




3.08

%







28,861,514


$

276,943


3.84

%

Non-interest-earning assets


1,982,315
















1,930,996







Total Assets

$

33,126,060















$

30,792,510
































Liabilities and Shareholders' Equity:

























Interest-bearing liabilities:

























Demand deposits

$

6,436,858



$

-




-

%






$

4,516,906


$

-


-

%

Health savings accounts


7,451,175




1,607




0.09








6,761,358



3,296


0.20


Interest-bearing checking, money market and savings


11,995,473




1,720




0.06








9,716,974



12,403


0.51


Certificates of deposit


2,371,026




3,112




0.53








3,067,557



12,144


1.59


Total deposits


28,254,532




6,439




0.09








24,062,795



27,843


0.47



























Securities sold under agreements to repurchase and other borrowings


522,728




635




0.49








1,296,925



3,730


1.14


Federal Home Loan Bank advances