News Release

Print Page << Back
Webster Reports Fourth Quarter 2017 Earnings

WATERBURY, Conn., Jan. 23, 2018 /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 $67.7 million, or $0.73 per diluted share, for the quarter ended December 31, 2017 compared to $55.5 million, or $0.60 per diluted share, for the quarter ended December 31, 2016.

"Webster ended 2017 in a position of financial strength from which we continue to execute on our key strategic priorities. We are pleased to report that our earnings have exceeded our cost of capital for the third consecutive quarter," said John Ciulla, president and chief executive officer. "In addition to this being our thirty-third consecutive quarter of year-over-year revenue growth, we exceeded $1 billion in annual total revenue for the first time in Webster's history. These achievements were driven by the quality and dedication of our bankers."

Highlights for the fourth quarter of 2017:

  • Revenue of $271.0 million, an increase of 5.9 percent from a year ago, including net interest income of $204.9 million, a record level.
  • Earnings applicable to common shareholders of $67.7 million includes the previously announced $7.8 million net tax benefit related to the new federal tax legislation and state deferred tax asset revaluations.
  • Annualized return on average common shareholders' equity of 10.66 percent; annualized return on average tangible common shareholders' equity (non-GAAP) of 13.85 percent.
  • Year-over-year pre-tax, pre-provision net revenue growth of 6.3 percent, led by HSA Bank's growth of 47.1 percent.
  • Net interest margin of 3.33 percent, up 22 basis points from a year ago.
  • Loan growth of $497 million, or 2.9 percent from a year ago, with growth of $355 million in commercial and commercial real estate loans.
  • HSA Bank's deposits grew $676 million and total deposits grew $1.7 billion, or 8.8 percent from a year ago.

"Our balance sheet structure continues to provide a competitive advantage," said Glenn MacInnes, executive vice president and chief financial officer. "Webster's strong capital position, ample liquidity, and business momentum position us well for future growth."

Line of Business performance compared to the fourth quarter of 2016:

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 December 31, 2017, Commercial Banking had $9.3 billion in loans and leases and $4.1 billion in deposit balances.

Commercial Banking Operating Results:


Three months ended December 31,

(In thousands)

2017

2016

Net interest income

$83,275

$76,174

Non-interest income

16,031

15,434

Operating revenue

99,306

91,608

Non-interest expense

40,282

35,043

Pre-tax, pre-provision net revenue

$59,024

$56,565





           At December 31,

(In millions)

2017

2016

Loans and leases

$9,324

$9,069

Deposits

4,123

3,593

 

Pre-tax, pre-provision net revenue increased $2.5 million to $59.0 million in the quarter as compared to prior year. Net interest income increased $7.1 million to $83.3 million, primarily due to loan growth and higher loan spreads.  Non-interest income increased $0.6 million to $16.0 million primarily due to greater syndication fees and trust fees in the quarter as compared to prior year. Non-interest expense increased $5.2 million to $40.3 million, primarily due to investments in people and product enhancements.

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 December 31, 2017, HSA Bank had $6.3 billion in total footings comprising $5.0 billion in deposit balances and $1.3 billion in assets under administration through linked investment accounts.

HSA Bank Operating Results:


Three months ended December 31,

(In thousands)

2017

2016

Net interest income

$ 28,365

$20,967

Non-interest income

18,986

16,741

Operating revenue

47,351

37,708

Non-interest expense

28,932

25,186

Pre-tax net revenue

$18,419

$12,522




            At December 31,

(In millions)

2017

2016

Number of accounts

2,461

2,091

Deposits

$5,039

$4,363

Linked investment accounts*

1,268

878

Total footings

$6,307

$5,241

*Linked investment accounts are held off balance sheet

                                                 

Pre-tax net revenue increased $5.9 million to $18.4 million in the quarter as compared to prior year. Net interest income increased $7.4 million to $28.4 million due primarily to growth in deposits and improved deposit spreads. Non-interest income increased $2.2 million to $19.0 million primarily due to growth in accounts over the past year. Non-interest expense increased $3.7 million to $28.9 million primarily due to costs associated with supporting the growth in total accounts 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 167 banking centers and 334 ATMs, a customer care center, and a full range of web and mobile-based banking services.

As of December 31, 2017, Community Banking had $8.2 billion in loans and $11.5 billion in deposit balances.

Community Banking Operating Results:


Three months ended December 31,

(In thousands)

2017

2016

Net interest income

$97,349

$92,951

Non-interest income

26,852

26,949

Operating revenue

124,201

119,900

Non-interest expense

91,095

93,087

Pre-tax, pre-provision net revenue

$33,106

$26,813





             At December 31,

(In millions)

2017

2016

Loans

$8,200

$7,959

Deposits

11,476

10,971

 

Pre-tax, pre-provision net revenue increased $6.3 million to $33.1 million in the quarter as compared to prior year. Net interest income increased $4.4 million to $97.3 million primarily due to growth in loan and deposit balances as well as improved interest rate spreads. Non-interest income was flat at $26.9 million primarily driven by increases in fees from investment services offset by lower revenue in mortgage banking activities. Non-interest expense decreased $2.0 million as a result of lower net costs due to banking center optimization, coupled with lower direct marketing expenses.

Consolidated financial performance:

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

  • Net interest income was $204.9 million compared to $185.3 million.
  • Net interest margin was 3.33 percent compared to 3.11 percent. The yield on interest-earning assets increased by 29 basis points, and the cost of funds increased by 7 basis points.
  • Average interest-earning assets totaled $24.8 billion and grew by $0.7 billion, or 2.9 percent.
  • Average loans totaled $17.5 billion and grew by $0.7 billion, or 4.5 percent.

Quarterly provision for loan losses:

  • The Company recorded a provision for loan losses of $13.0 million compared to $10.2 million in the prior quarter and $12.5 million a year ago.
  • Net charge-offs were $14.8 million compared to $7.9 million in the prior quarter and $6.1 million a year ago. The increase is primarily due to an increase in commercial charge-offs. The ratio of net charge-offs to average loans on an annualized basis was 0.34 percent compared to 0.18 percent in the prior quarter and 0.15 percent a year ago.
  • The allowance for loan losses represented 1.14 percent of total loans at December 31, 2017 compared to 1.16 percent at September 30, 2017 and 1.14 percent at December 31, 2016. The allowance for loan losses represented 158 percent of nonperforming loans compared to 123 percent at September 30, 2017 and 145 percent at December 31, 2016.

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

  • Total non-interest income was $66.0 million compared to $70.6 million, a decrease of $4.6 million. This reflects decreases of $7.4 million in other income and $1.4 million in mortgage banking activities, offset by increases of $2.5 million in deposit service fees and $1.2 million in wealth and investment services.

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

  • Total non-interest expense was $171.0 million compared to $161.9 million, an increase of $9.1 million. This reflects increases of $7.1 million in compensation and benefits, $3.4 million in other expenses and $2.0 million in technology and equipment, offset by decreases of $2.7 million in occupancy and $2.2 million in marketing.   

Quarterly income taxes compared to the fourth quarter of 2016:

  • Income tax expense was $17.0 million compared to $23.8 million and the effective tax rate was 19.6 percent compared to 29.3 percent.
  • The 19.6 percent tax rate includes the $7.8 million net benefit related to the new federal tax legislation and state deferred tax asset revaluations, and a $2.1 million benefit specific to the period.

Investment securities:

  • Total investment securities were $7.1 billion compared to $7.1 billion at September 30, 2017 and $7.2 billion at December 31, 2016. The carrying value of the available-for-sale portfolio included $37.1 million of net unrealized losses compared to $21.7 million of net unrealized losses at September 30, 2017 and $24.7 million of net unrealized losses at December 31, 2016. The carrying value of the held-to-maturity portfolio does not reflect $31.0 million of net unrealized losses compared to $15.6 million of net unrealized losses at September 30, 2017, and $35.5 million of net unrealized losses at December 31, 2016.

Loans:

  • Total loans were $17.5 billion compared to $17.4 billion at September 30, 2017 and $17.0 billion at December 31, 2016. Compared to September 30, 2017, commercial loans increased by $3.8 million, commercial real estate loans increased by $58.9 million, and consumer loans increased by $23.2 million, while residential loans decreased by $8.6 million.
  • Compared to a year ago, commercial loans increased by $342.4 million, residential loans increased by $236.2 million, and commercial real estate loans increased by $13.0 million, while consumer loans decreased by $94.3 million.
  • Loan originations for portfolio were $1.302 billion compared to $1.085 billion in the prior quarter and $1.686 billion a year ago. In addition, $60 million of residential loans were originated for sale in the quarter compared to $80 million in the prior quarter and $132 million a year ago.

Asset quality:

  • Total nonperforming loans were $126.6 million, or 0.72 percent of total loans, compared to $163.6 million, or 0.94 percent, at September 30, 2017 and $134.0 million, or 0.79 percent, at December 31, 2016. Total paying nonperforming loans were $33.2 million compared to $72.0 million at September 30, 2017 and $38.4 million at December 31, 2016.
  • Past due loans were $45.8 million compared to $33.5 million at September 30, 2017 and $42.0 million at December 31, 2016.

Deposits and borrowings:

  • Total deposits were $21.0 billion compared to $20.9 billion at September 30, 2017 and $19.3 billion at December 31, 2016. Core deposits to total deposits were 88.2 percent compared to 89.4 percent at September 30, 2017 and 89.5 percent at December 31, 2016. The loan to deposit ratio was 83.5 percent compared to 83.7 percent at September 30, 2017 and 88.2 percent at December 31, 2016.
  • Total borrowings were $2.5 billion compared to $2.6 billion at September 30, 2017 and $4.0 billion at December 31, 2016.

Capital:

  • The return on average common shareholders' equity and the return on average tangible common shareholders' equity were 10.66 percent and 13.85 percent, respectively, compared to 9.26 percent and 12.31 percent, respectively, in the fourth quarter of 2016.
  • The tangible equity and tangible common equity ratios were 8.23 percent and 7.67 percent, respectively, compared to 7.67 percent and 7.19 percent, respectively, at December 31, 2016. The common equity tier 1 risk-based capital ratio was 11.14 percent compared to 10.52 percent at December 31, 2016.
  • Book value and tangible book value per common share were $27.76 and $21.59 respectively, compared to $26.17 and $19.94, respectively, at December 31, 2016.

Webster Financial Corporation is the holding company for Webster Bank, National Association and its HSA Bank division. With $26.5 billion in assets, Webster provides business and consumer banking, mortgage, financial planning, trust, and investment services through 167 banking centers and 334 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 fourth quarter earnings announcement will be held today, Tuesday, January 23, 2018 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)


December 31,
2017



September 30,
2017



June 30,
2017



March 31,
2017



December 31,
2016




















Income and performance ratios:

















Net income

$

69,893


$

64,496


$

61,579


$

59,471


$

57,660



Earnings applicable to common shareholders


67,710



62,426



59,485



57,342



55,501



Earnings per diluted common share


0.73



0.67



0.64



0.62



0.60



Return on average assets


1.05

%


0.98

%


0.94

%


0.91

%


0.89


%

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


13.85



12.99



12.65



12.47



12.31



Return on average common shareholders' equity


10.66



9.95



9.63



9.43



9.26



Non-interest income as a percentage of total revenue


24.37



24.68



24.61



24.65



27.60




















Asset quality:

















Allowance for loan and lease losses

$

199,994


$

201,803


$

199,578


$

199,107


$

194,320



Nonperforming assets


132,646



168,962



170,390



177,935



137,946



Allowance for loan and lease losses / total loans and leases


1.14

%


1.16

%


1.16

%


1.16

%


1.14


%

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


0.34



0.18



0.16



0.13



0.15



Nonperforming loans and leases / total loans and leases


0.72



0.94



0.96



1.02



0.79



Nonperforming assets / total loans and leases plus OREO


0.76



0.97



0.99



1.04



0.81



Allowance for loan and lease losses / nonperforming loans and leases


158.00



123.32



119.96



114.54



144.98




















Other ratios:

















Tangible equity (non-GAAP)


8.23

%


8.03

%


7.95

%


7.82

%


7.67


%

Tangible common equity (non-GAAP)


7.67



7.55



7.47



7.34



7.19



Tier 1 risk-based capital (a)


11.91



11.65



11.51



11.42



11.19



Total risk-based capital (a)


13.40



13.17



13.02



12.95



12.68



Common equity tier 1 risk-based capital (a)


11.14



10.99



10.84



10.75



10.52



Shareholders' equity / total assets


10.20



10.01



9.95



9.85



9.69



Net interest margin


3.33



3.30



3.27



3.22



3.11



Efficiency ratio (non-GAAP)


59.48



59.18



60.65



62.10



63.13




















Equity and share related:

















Common equity

$

2,556,902


$

2,516,077


$

2,482,416


$

2,437,648


$

2,404,302



Book value per common share


27.76



27.34



26.93



26.45



26.17



Tangible book value per common share (non-GAAP)


21.59



21.16



20.74



20.26



19.94



Common stock closing price


56.16



52.55



52.22



50.04



54.28



Dividends declared per common share


0.26



0.26



0.26



0.25



0.25




















Common shares issued and outstanding


92,101



92,034



92,195



92,154



91,868



Weighted-average common shares outstanding - Basic


92,058



92,125



92,092



91,886



91,572



Weighted-average common shares outstanding - Diluted


92,400



92,503



92,495



92,342



92,099




















(a) Presented as projected for December 31, 2017 and actual for the remaining periods.



 

 

 

WEBSTER FINANCIAL CORPORATION
Consolidated Balance Sheets (unaudited)

(In thousands)


December 31,
2017



September 30,
2017



December 31,
2016

Assets:









Cash and due from banks

$

231,158


$

215,244


$

190,663

Interest-bearing deposits


25,628



26,992



29,461

Securities:









     Available for sale


2,638,037



2,591,162



2,991,091

     Held to maturity


4,487,392



4,497,311



4,160,658

       Total securities


7,125,429



7,088,473



7,151,749

Loans held for sale


20,888



32,855



67,577

Loans and Leases:









     Commercial


5,918,927



5,915,080



5,576,560

     Commercial real estate


4,523,828



4,464,917



4,510,846

     Residential mortgages


4,490,878



4,499,441



4,254,682

     Consumer


2,590,225



2,566,983



2,684,500

       Total loans and leases


17,523,858



17,446,421



17,026,588

Allowance for loan and lease losses


(199,994)



(201,803)



(194,320)

       Loans and leases, net


17,323,864



17,244,618



16,832,268

Federal Home Loan Bank and Federal Reserve Bank stock


151,566



136,340



194,646

Premises and equipment, net


130,001



130,358



137,413

Goodwill and other intangible assets, net


567,984



568,962



572,047

Cash surrender value of life insurance policies


531,820



528,136



517,852

Deferred tax asset, net


92,630



82,895



84,391

Accrued interest receivable and other assets


286,677



295,309



294,462

Total Assets

$

26,487,645


$

26,350,182


$

26,072,529










Liabilities and Shareholders' Equity:









Deposits:









     Demand

$

4,191,496


$

4,138,206


$

4,021,061

     Interest-bearing checking


2,736,952



2,581,266



2,528,274

     Health savings accounts


5,038,681



4,891,024



4,362,503

     Money market


2,209,492



2,598,187



2,047,121

     Savings


4,348,700



4,428,061



4,320,090

     Certificates of deposit


2,187,756



1,918,817



1,724,906

     Brokered certificates of deposit


280,652



299,674



299,902

       Total deposits


20,993,729



20,855,235



19,303,857

Securities sold under agreements to repurchase and other borrowings


643,269



902,902



949,526

Federal Home Loan Bank advances


1,677,105



1,507,681



2,842,908

Long-term debt


225,767



225,704



225,514

Accrued expenses and other liabilities


245,817



219,873



223,712

       Total liabilities


23,785,687



23,711,395



23,545,517

Preferred stock


145,056



122,710



122,710

Common shareholders' equity


2,556,902



2,516,077



2,404,302

       Total shareholders' equity


2,701,958



2,638,787



2,527,012

Total Liabilities and Shareholders' Equity

$

26,487,645


$

26,350,182


$

26,072,529










 

 

 

WEBSTER FINANCIAL CORPORATION
Consolidated Statements of Income (unaudited)



Three Months Ended December 31,



Twelve Months Ended December 31,

(In thousands, except per share data)


2017



2016



2017



2016

Interest income:












Interest and fees on loans and leases

$

185,172


$

161,978


$

708,566


$

621,028

Interest and dividends on securities


50,735



49,011



204,005



199,436

Loans held for sale


208



443



1,034



1,449

     Total interest income


236,115



211,432



913,605



821,913

Interest expense:












Deposits


17,379



12,591



62,253



49,858

Borrowings


13,804



13,582



55,065



53,542

     Total interest expense


31,183



26,173



117,318



103,400

     Net interest income


204,932



185,259



796,287



718,513

Provision for loan and lease losses


13,000



12,500



40,900



56,350

     Net interest income after provision for loan and lease losses


191,932



172,759



755,387



662,163

Non-interest income:












Deposit service fees


37,618



35,132



151,137



140,685

Loan and lease related fees


6,550



6,018



26,448



26,581

Wealth and investment services


8,155



6,970



31,055



28,962

Mortgage banking activities


1,899



3,300



9,937



14,635

Increase in cash surrender value of life insurance policies


3,684



3,699



14,627



14,759

Gain on investment securities, net








414

Other income


8,133



15,498



26,400



38,591



66,039



70,617



259,604



264,627

Impairment loss on securities recognized in earnings






(126)



(149)

     Total non-interest income


66,039



70,617



259,478



264,478

Non-interest expense:












Compensation and benefits


95,104



88,038



359,926



332,127

Occupancy


13,533



16,195



60,490



61,110

Technology and equipment


22,818



20,815



89,464



79,882

Marketing


3,320



5,488



17,421



19,703

Professional and outside services


5,045



3,441



16,858



14,801

Intangible assets amortization


977



1,082



4,062



5,652

Loan workout expenses


891



378



3,094



3,006

Deposit insurance


5,948



6,410



25,649



26,006

Other expenses


23,413



20,024



84,111



80,904

     Total non-interest expense


171,049



161,871



661,075



623,191

Income before income taxes


86,922



81,505



353,790



303,450

Income tax expense


17,029



23,845



98,351



96,323

     Net income


69,893



57,660



255,439



207,127

       Preferred stock dividends and other


(2,183)



(2,159)



(8,608)



(8,704)

       Earnings applicable to common shareholders

$

67,710


$

55,501


$

246,831


$

198,423













     Weighted-average common shares outstanding - Diluted


92,400



92,099



92,356



91,856













Earnings per common share:












     Basic

$

0.74


$

0.61


$

2.68


$

2.17

     Diluted


0.73



0.60



2.67



2.16













 

 

 

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



Three Months Ended

(In thousands, except per share data)


December 31,
2017



September 30,
2017



June 30,
2017



March 31,
2017



December 31,
2016

Interest income:















Interest and fees on loans and leases

$

185,172


$

181,130


$

174,456


$

167,808


$

161,978

Interest and dividends on securities


50,735



49,584



52,130



51,556



49,011

Loans held for sale


208



307



203



316



443

     Total interest income


236,115



231,021



226,789



219,680



211,432

Interest expense:















Deposits


17,379



16,760



14,679



13,435



12,591

Borrowings


13,804



13,357



14,323



13,581



13,582

     Total interest expense


31,183



30,117



29,002



27,016



26,173

     Net interest income


204,932



200,904



197,787



192,664



185,259

Provision for loan and lease losses


13,000



10,150



7,250



10,500



12,500

     Net interest income after provision for loan and lease losses


191,932



190,754



190,537



182,164



172,759

Non-interest income:















Deposit service fees


37,618



38,321



38,192



37,006



35,132

Loan and lease related fees


6,550



6,346



6,344



7,208



6,018

Wealth and investment services


8,155



7,750



7,877



7,273



6,970

Mortgage banking activities


1,899



2,421



3,351



2,266



3,300

Increase in cash surrender value of life insurance policies


3,684



3,720



3,648



3,575



3,699

Gain on investment securities, net










Other income


8,133



7,288



5,265



5,714



15,498



66,039



65,846



64,677



63,042



70,617

Impairment loss on securities recognized in earnings






(126)





     Total non-interest income


66,039



65,846



64,551



63,042



70,617

Non-interest expense:















Compensation and benefits


95,104



89,192



87,354



88,276



88,038

Occupancy


13,533



14,744



16,034



16,179



16,195

Technology and equipment


22,818



22,580



22,458



21,608



20,815

Marketing


3,320



4,045



4,615



5,441



5,488

Professional and outside services


5,045



4,030



3,507



4,276



3,441

Intangible assets amortization


977



1,002



1,028



1,055



1,082

Loan workout expenses


891



840



755



608



378

Deposit insurance


5,948



6,344



6,625



6,732



6,410

Other expenses


23,413



19,046



22,043



19,609



20,024

     Total non-interest expense


171,049



161,823



164,419



163,784



161,871

Income before income taxes


86,922



94,777



90,669



81,422



81,505

Income tax expense


17,029



30,281



29,090



21,951



23,845

     Net income


69,893



64,496



61,579



59,471



57,660

       Preferred stock dividends and other


(2,183)



(2,070)



(2,094)



(2,129)



(2,159)

       Earnings applicable to common shareholders

$

67,710


$

62,426


$

59,485


$

57,342


$

55,501
















     Weighted-average common shares outstanding - Diluted


92,400



92,503



92,495



92,342



92,099
















Earnings per common share:















     Basic

$

0.74


$

0.68


$

0.65


$

0.62


$

0.61

     Diluted


0.73



0.67



0.64



0.62



0.60

 

 

 

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




Three Months Ended December 31,




2017






2016


(Dollars in thousands)


Average balance



Interest



Yield/rate






Average balance



Interest


Yield/rate


Assets:





















Interest-earning assets:





















Loans and leases

$

17,502,176


$

186,375



4.20

%




$

16,755,408


$

162,901


3.84

%

Securities (a)


7,095,241



52,494



2.95






7,058,135



50,187


2.85


Federal Home Loan and Federal Reserve Bank stock


141,226



1,256



3.53






189,338



1,724


3.62


Interest-bearing deposits


62,544



226



1.41






57,912



79


0.53


Loans held for sale


24,657



208



3.39






55,938



443


3.16


Total interest-earning assets


24,825,844


$

240,559



3.83

%





24,116,731


$

215,334


3.54

%

Non-interest-earning assets


1,679,135












1,708,317







Total Assets

$

26,504,979











$

25,825,048




























Liabilities and Shareholders' Equity:





















Interest-bearing liabilities:





















Demand deposits

$

4,197,461


$



%




$

4,005,076


$


%

Savings, interest checking, and money market deposits


14,446,859



10,167



0.28






13,257,671



6,850


0.21


Certificates of deposit


2,311,321



7,212



1.24






2,026,121



5,741


1.13


Total deposits


20,955,641



17,379



0.33






19,288,868



12,591


0.26























Securities sold under agreements to repurchase and other borrowings


851,987



3,395



1.56






960,960



3,529


1.44


Federal Home Loan Bank advances


1,571,976



7,777



1.94






2,631,478



7,516


1.12


Long-term debt


225,736



2,632



4.67






225,478



2,537


4.50


Total borrowings


2,649,699



13,804



2.05






3,817,916



13,582


1.40


Total interest-bearing liabilities


23,605,340


$

31,183



0.52

%





23,106,784


$

26,173


0.45

%

Non-interest-bearing liabilities


223,906












192,165







Total liabilities


23,829,246












23,298,949




























Preferred stock


131,707












122,710







Common shareholders' equity


2,544,026












2,403,389







Total shareholders' equity


2,675,733












2,526,099







Total Liabilities and Shareholders' Equity

$

26,504,979











$

25,825,048







Tax-equivalent net interest income





209,376












189,161




Less: tax-equivalent adjustments





(4,444)












(3,902)




Net interest income




$

204,932











$

185,259




Net interest margin








3.33

%










3.11

%






















(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)




Twelve Months Ended December 31,




2017






2016


(Dollars in thousands)


Average balance



Interest



Yield/rate






Average balance



Interest


Yield/rate


Assets:





















Interest-earning assets:





















Loans and leases

$

17,295,027


$

712,794



4.12

%




$

16,266,101


$

624,300


3.84

%

Securities (a)


7,047,744



210,044



2.97






6,910,649



203,467


2.95


Federal Home Loan and Federal Reserve Bank stock


155,949



5,988



3.84






188,854



6,039


3.20


Interest-bearing deposits


63,397



698



1.10






57,747



295


0.51


Loans held for sale


29,680



1,034



3.49






44,560



1,449


3.25


Total interest-earning assets


24,591,797


$

930,558



3.78

%





23,467,911


$

835,550


3.56

%

Non-interest-earning assets


1,669,370












1,753,316







Total Assets

$

26,261,167











$

25,221,227




























Liabilities and Shareholders' Equity:





















Interest-bearing liabilities:





















Demand deposits

$

4,079,493


$



%




$

3,853,700


$


%

Savings, interest checking, and money market deposits


14,348,404



36,899



0.26






13,072,577



27,331


0.21


Certificates of deposit


2,137,574



25,354



1.19






2,027,029



22,527


1.11


Total deposits


20,565,471



62,253



0.30






18,953,306



49,858


0.26























Securities sold under agreements to repurchase and other borrowings


876,660



14,365



1.64






947,858



14,528


1.53


Federal Home Loan Bank advances


1,764,347



30,320



1.72






2,413,309



29,033


1.20


Long-term debt


225,639



10,380



4.60






225,607



9,981


4.42


Total borrowings


2,866,646



55,065



1.92






3,586,774



53,542


1.49


Total interest-bearing liabilities


23,432,117


$

117,318



0.50

%





22,540,080


$

103,400


0.46

%

Non-interest-bearing liabilities


211,775












199,730







Total liabilities


23,643,892












22,739,810




























Preferred stock


124,978












122,710







Common shareholders' equity


2,492,297












2,358,707







Total shareholders' equity


2,617,275












2,481,417







Total Liabilities and Shareholders' Equity

$

26,261,167











$

25,221,227







Tax-equivalent net interest income





813,240












732,150




Less: tax-equivalent adjustments





(16,953)












(13,637)




Net interest income




$

796,287











$

718,513




Net interest margin








3.30

%










3.12

%






















(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)


December 31,
2017



September 30,
2017



June 30,
2017



March 31,
2017



December 31,
2016

Loan and Lease Balances (actual):















     Commercial non-mortgage

$

4,533,915


$

4,464,704


$

4,282,968


$

4,171,246


$

4,135,625

     Equipment financing


550,233



566,777



585,673



619,861



635,629

     Asset-based lending


834,779



883,599



861,203



848,137



805,306

     Commercial real estate


4,523,828



4,464,917



4,556,208



4,530,507



4,510,846

     Residential mortgages


4,490,878



4,499,441



4,388,308



4,290,685



4,254,682

     Consumer


2,590,225



2,566,983



2,599,318



2,634,063



2,684,500

Total Loan and Lease Balances


17,523,858



17,446,421



17,273,678



17,094,499



17,026,588

Allowance for loan and lease losses


(199,994)



(201,803)



(199,578)



(199,107)



(194,320)

Loans and Leases, net

$

17,323,864


$

17,244,618


$

17,074,100


$

16,895,392


$

16,832,268
















Loan and Lease Balances (average):















     Commercial non-mortgage

$

4,525,843


$

4,416,834


$

4,288,612


$

4,148,625


$

4,053,728

     Equipment financing


554,424



573,312



602,834



625,306



630,546

     Asset-based lending


876,070



859,289