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Webster Reports Fourth Quarter 2018 Earnings Of $1.05 Per Share

WATERBURY, Conn., Jan. 24, 2019 /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 $96.7 million, or $1.05 per diluted share, for the quarter ended December 31, 2018 compared to $67.7 million, or $0.73 per diluted share, for the quarter ended December 31, 2017. Adjusting for $4.6 million related to a gain on the sale of six banking centers, earnings per diluted share would have been $1.01.

"Webster's results in the fourth quarter and in all of 2018 demonstrate the positive outcomes in executing our long-term strategy," said John R. Ciulla, president and chief executive officer. "Fourth quarter revenues grew more than 14 percent from a year ago while revenue growth was 13 percent for all of 2018, and we earned well in excess of our cost of capital."

Highlights for the fourth quarter of 2018 compared to prior year:

  • Revenue of $310.3 million, an increase of 14.5 percent, including net interest income of $237.1 million, an increase of 15.7 percent.
  • Loan growth of $942 million, or 5.4 percent, with growth of $1.2 billion, or 11.6 percent, in commercial and commercial real estate loans.
  • Deposit growth of $865 million, or 4.1 percent, with growth of $702 million, or 13.9 percent at HSA Bank.
  • Net interest margin of 3.66 percent, up 33 basis points.
  • Pre-tax, pre-provision net revenue growth of $35.6 million, or 35.6 percent, led by HSA Bank's growth of 56.6 percent.
  • Efficiency ratio of 56.2 percent (non-GAAP) compared to 59.5 percent.
  • Annualized return on average common shareholders' equity of 14.31 percent compared to 10.66 percent; annualized return on average tangible common shareholders' equity (non-GAAP) of 18.22 percent compared to 13.85 percent.

"Continued investments in our businesses and disciplined expense control has generated positive operating leverage," said Glenn MacInnes, executive vice president and chief financial officer. "Revenue growth has exceeded expense growth over the past seven quarters, and our full year 2018 efficiency ratio of 57.7 percent improved more than 250 basis points from a year ago."

Line of Business performance compared to the fourth quarter of 2017:

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, 2018, Commercial Banking had $10.4 billion in loans and leases and $4.0 billion in deposit balances.

Commercial Banking Operating Results:


Three months ended December 31,

(In thousands)

2018

2017

Net interest income

$92,156

$83,275

Non-interest income

16,103

16,031

Operating revenue

108,259

99,306

Non-interest expense

45,324

40,283

Pre-tax, pre-provision net revenue

$62,935

$59,023





           At December 31,

(In millions)

2018

2017

Loans and leases

$10,438

$9,324

Deposits

$4,031

$4,123

Pre-tax, pre-provision net revenue increased $3.9 million to $62.9 million in the quarter as compared to prior year. Net interest income increased $8.9 million to $92.2 million, primarily due to loan growth and higher deposit margins.  Non-interest income was flat to prior year at $16.1 million. Non-interest expense increased $5.0 million to $45.3 million, primarily due to investments in people and technology.

HSA Bank 
Webster's HSA Bank division offers a comprehensive consumer-directed healthcare solution that includes health savings accounts, health reimbursement arrangements, flexible spending accounts and commuter benefits. Health savings accounts are distributed nationwide directly to employers and individual consumers, as well as through national and regional insurance carriers, benefit consultants and financial advisors. As of December 31, 2018, HSA Bank had $7.2 billion in total footings comprising $5.7 billion in deposit balances and $1.5 billion in assets under administration through linked investment accounts.

HSA Bank Operating Results:


Three months ended December 31,

(In thousands)

2018

2017

Net interest income

$38,335

$28,365

Non-interest income

21,613

18,986

Operating revenue

59,948

47,351

Non-interest expense

31,106

28,932

Pre-tax net revenue

$28,842

$18,419




            At December 31,

(In millions)

2018

2017

Number of accounts

2,722

2,461

Deposits

$5,741

$5,039

Linked investment accounts*

1,460

1,268

Total footings

$7,201

$6,307

*Linked investment accounts are held off balance sheet

Pre-tax net revenue increased $10.4 million to $28.8 million in the quarter as compared to prior year. Net interest income increased $10.0 million to $38.3 million, due to 14 percent growth in deposits and 18 percent improvement in deposit spreads. Non-interest income increased $2.6 million to $21.6 million, primarily due to 10.6 percent growth  in accounts over the past year. Non-interest expense increased $2.2 million to $31.1 million, primarily due to account growth and expanded distribution.

Community Banking 
Community Banking serves consumer and business banking customers primarily throughout southern New England and into Westchester County, New York. Community Banking is comprised of the Personal Banking and Business Banking operating segments, as well as a distribution network consisting of 157 banking centers and 316 ATMs, a customer care center, and a full range of web and mobile-based banking services.

As of December 31, 2018, Community Banking had $8.0 billion in loans and $11.9 billion in deposit balances.

Community Banking Operating Results:


Three months ended December 31,

(In thousands)

2018

2017

Net interest income

$102,087

$97,349

Non-interest income

31,248

26,852

Operating revenue

133,335

124,201

Non-interest expense

96,804

91,095

Pre-tax, pre-provision net revenue

$36,531

$33,106





             At December 31,

(In millions)

2018

2017

Loans

$8,028

$8,200

Deposits

$11,857

$11,476

Pre-tax, pre-provision net revenue increased $3.4 million to $36.5 million in the quarter as compared to prior year. Net interest income increased $4.7 million to $102.1 million, primarily due to growth in deposit balances, coupled with improved interest rate spreads on deposits. Non-interest income increased $4.4 million to $31.2 million resulting from net proceeds from the sale of six banking centers, coupled with growth in deposit and loan fees, partially offset by lower mortgage production and related returns on mortgage banking activities. Non-interest expense increased $5.7 million to $96.8 million as a result of higher compensation-related expenses and continued investments in technology.


Consolidated financial performance:

Quarterly net interest income compared to the fourth quarter of 2017:

  • Net interest income was $237.1 million compared to $204.9 million.
  • Net interest margin was 3.66 percent compared to 3.33 percent. The yield on interest-earning assets increased by 49 basis points, and the cost of funds increased by 18 basis points.
  • Average interest-earning assets totaled $25.8 billion and grew by $952 million, or 3.8 percent.
  • Average loans totaled $18.4 billion and grew by $922 million, or 5.3 percent.
  • Average deposits totaled $21.9 billion and grew by $0.9 billion, or 4.1 percent.

Quarterly provision for loan losses:

  • The provision for loan losses was $10.0 million, compared to $10.5 million in the prior quarter and $13.0 million a year ago.
  • Net charge-offs were $9.5 million, compared to $6.0 million in the prior quarter and $14.8 million a year ago. The increase from prior quarter is primarily due to increased commercial non-mortgage charge-offs. The ratio of net charge-offs to average loans on an annualized basis was 0.21 percent, compared to 0.13 percent in the prior quarter and 0.34 percent a year ago.
  • The allowance for loan losses represented 1.15 percent of total loans at December 31, 2018, compared to 1.16 percent at September 30, 2018 and 1.14 percent at December 31, 2017. The allowance for loan losses represented 137 percent of nonperforming loans compared to 139 percent at September 30, 2018 and 158 percent at December 31, 2017.

Quarterly non-interest income compared to the fourth quarter of 2017:

  • Total non-interest income was $73.2 million, compared to $66.0 million, an increase of $7.1 million. This reflects an increase in other of $4.3 million driven by a $4.6 million gain related to the sale of six branches, $2.6 million in HSA fee income driven by account growth of 11 percent, and $1.4 million in loan related fees due to prepayment, line of credit and loan servicing fees, and is offset by a decrease of $1.2 million in mortgage banking activities driven by lower originations.

Quarterly non-interest expense compared to the fourth quarter of 2017:

  • Total non-interest expense was $174.8 million, compared to $171.0 million, an increase of $3.8 million. This reflects an increase of $2.8 million in compensation and benefits due to strategic hires, annual merit increase and higher medical costs, $2.0 million in technology/equipment due to higher service contracts to support infrastructure and depreciation, and $1.0 million increase in marketing due to advertising and promotions, offset by a decrease of $1.3 million in deposit insurance primarily related to a surcharge assessment ending as of the end of the third quarter of 2018. Additionally, the prior year included $3.8 million in preferred stock redemption costs and $2.6 million for a one time cash bonus paid to employees.

Quarterly income taxes compared to the fourth quarter of 2017:

  • Income tax expense was $26.7 million, compared to $17.0 million and the effective tax rate was 21.3 percent, compared to 19.6 percent.
  • The higher effective tax rate in the quarter reflects discrete tax benefits recognized a year ago, including the $7.8 million net benefit related to the state deferred tax asset revaluations and the Tax Cuts and Jobs Act (TCJA) enacted during that period, partially offset by the reduction of the U.S. corporate tax rate in 2018 as a result of the TCJA.

Investment securities:

  • Total investment securities were $7.2 billion, compared to $7.2 billion at September 30, 2018 and $7.1 billion at December 31, 2017. The carrying value of the available-for-sale portfolio included $95.9 million of net unrealized losses, compared to $105.1 million at September 30, 2018 and $37.1 million at December 31, 2017. The carrying value of the held-to-maturity portfolio does not reflect $116.3 million of net unrealized losses, compared to $168.1 million at September 30, 2018, and $31.0 million at December 31, 2017.

Loans:

  • Total loans were $18.5 billion, compared to $18.3 billion at September 30, 2018 and $17.5 billion at December 31, 2017. Compared to September 30, 2018, commercial real estate loans increased by $155.8 million, commercial loans increased by $31.6 million, and residential mortgages increased by $1.6 million while consumer loans decreased by $44.5 million.
  • Compared to a year ago, commercial loans increased by $806.1 million and commercial real estate loans increased by $403.3 million, while consumer loans decreased by $193.5 million and residential mortgages decreased by $74.2 million.
  • Loan originations for portfolio were $1.611 billion, compared to $1.375 billion in the prior quarter and $1.302 billion a year ago. In addition, $30 million of residential loans were originated for sale in the quarter, compared to $55 million in the prior quarter and $60 million a year ago.

Asset quality:

  • Total nonperforming loans were $154.8 million, or 0.84 percent of total loans, compared to $152.7 million, or 0.83 percent, at September 30, 2018 and $126.6 million, or 0.72 percent, at December 31, 2017. Total paying nonperforming loans were $42.5 million, compared to $28.9 million at September 30, 2018 and $33.2 million at December 31, 2017.
  • Past due loans were $34.3 million, compared to $39.2 million at September 30, 2018 and $45.8 million at December 31, 2017.

Deposits and borrowings:

  • Total deposits were $21.9 billion, compared to $22.0 billion at September 30, 2018 and $21.0 billion at December 31, 2017. Core deposits to total deposits were 85.4 percent, compared to 85.9 percent at September 30, 2018 and 88.2 percent at December 31, 2017. The loan to deposit ratio was 84.5 percent, compared to 83.3 percent at September 30, 2018 and 83.5 percent at December 31, 2017.
  • Total borrowings were $2.6 billion, compared to $2.2 billion at September 30, 2018 and $2.5 billion at December 31, 2017.

Capital:

  • The return on average common shareholders' equity and the return on average tangible common shareholders' equity were 14.31 percent and 18.22 percent, respectively, compared to 10.66 percent and 13.85 percent, respectively, in the fourth quarter of 2017.
  • The tangible equity and tangible common equity ratios were 8.59 percent and 8.05 percent, respectively, compared to 8.23 percent and 7.67 percent, respectively, at December 31, 2017. The common equity tier 1 risk-based capital ratio was 11.44 percent, compared to 11.14 percent at December 31, 2017.
  • Book value and tangible book value per common share were $29.72 and $23.60, respectively, compared to $27.76 and $21.59, respectively, at December 31, 2017.

 

Webster Financial Corporation is the holding company for Webster Bank, National Association and its HSA Bank division. With $27.6 billion in assets, Webster provides business and consumer banking, mortgage, financial planning, trust, and investment services through 157 banking centers and 316 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 2018 fourth quarter earnings announcement will be held today, Thursday, January 24, 2019 at 9:00 a.m. (Eastern) and may be heard through Webster's Investor Relations website at www.wbst.com, or in listen-only mode by calling 877-407-8289 or 201-689-8341 internationally. The call will be archived on the website and available for future retrieval.

Forward-Looking Statements

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

Non-GAAP Financial Measures

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

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

 

WEBSTER FINANCIAL CORPORATION
Selected Financial Highlights (unaudited)






















At or for the Three Months Ended


(In thousands, except per share data)


December 31,
2018




September 30,
2018




June 30,
2018




March 31,
2018




December 31,
2017






















Income and performance ratios:




















Net income

$

98,838



$

99,673



$

81,682



$

80,225



$

69,893


Earnings applicable to common shareholders


96,666




97,460




79,489




78,083




67,710


Earnings per diluted common share


1.05




1.06




0.86




0.85




0.73


Return on average assets


1.44

%



1.47

%



1.22

%



1.20

%



1.05

 

%

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


18.22




18.88




15.76




15.73




13.85


Return on average common shareholders' equity


14.31




14.74




12.22




12.15




10.66


Non-interest income as a percentage of total revenue


23.58




23.88




23.31




24.30




24.37






















Asset quality:




















Allowance for loan and lease losses

$

212,353



$

211,832



$

207,322



$

205,349



$

199,994


Nonperforming assets


161,617




157,967




146,047




140,090




132,646


Allowance for loan and lease losses / total loans and leases


1.15

%



1.16

%



1.15

%



1.15

%



1.14

%

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


0.21




0.13




0.19




0.13




0.34


Nonperforming loans and leases / total loans and leases


0.84




0.83




0.78




0.75




0.72


Nonperforming assets / total loans and leases plus OREO


0.87




0.86




0.81




0.79




0.76


Allowance for loan and lease losses / nonperforming loans and leases


137.22




138.76




148.00




152.95




158.00






















Other ratios:




















Tangible equity (non-GAAP)


8.59

%



8.41

%



8.29

%



8.21

%



8.23

 

%

Tangible common equity(non-GAAP)


8.05




7.86




7.75




7.65




7.67


Tier 1 risk-based capital (a)


12.17




11.96




11.74




11.75




11.91


Total risk-based capital (a)


13.63




13.44




13.21




13.24




13.40


Common equity tier 1 risk-based capital (a)


11.44




11.23




10.99




10.99




11.14


Shareholders' equity / total assets


10.45




10.30




10.21




10.15




10.20


Net interest margin


3.66




3.61




3.57




3.44




3.33


Efficiency ratio (non-GAAP)


56.19




57.41




57.78




59.76




59.48






















Equity and share related:




















Common equity

$

2,741,478



$

2,671,161



$

2,616,686



$

2,571,105



$

2,556,902


Book value per common share


29.72




28.96




28.40




27.94




27.76


Tangible book value per common share(non-GAAP)


23.60




22.83




22.25




21.78




21.59


Common stock closing price


49.29




58.96




63.70




55.40




56.16


Dividends declared per common share


0.33




0.33




0.33




0.26




0.26






















Common shares issued and outstanding


92,247




92,230




92,151




92,016




92,101


Weighted-average common shares outstanding - Basic


91,971




91,959




91,893




91,921




92,058


Weighted-average common shares outstanding - Diluted


92,202




92,208




92,173




92,254




92,400






















(a) Presented as projected for December 31, 2018 and actual for the remaining periods.













 

 

WEBSTER FINANCIAL CORPORATION
Consolidated Balance Sheets (unaudited)











(In thousands)


December 31,
2018




September 30,
2018




December 31,
2017

Assets:











Cash and due from banks

$

260,422



$

222,234



$

231,158

Interest-bearing deposits


69,077




99,746




25,628

Securities:











Available for sale


2,898,730




2,823,953




2,638,037

Held to maturity


4,325,420




4,332,458




4,487,392

Total securities


7,224,150




7,156,411




7,125,429

Loans held for sale


11,869




17,137




20,888

Loans and Leases:











Commercial


6,725,003




6,693,450




5,918,927

Commercial real estate


4,927,145




4,771,325




4,523,828

Residential mortgages


4,416,637




4,415,063




4,490,878

Consumer


2,396,704




2,441,181




2,590,225

Total loans and leases


18,465,489




18,321,019




17,523,858

Allowance for loan and lease losses


(212,353)




(211,832)




(199,994)

Loans and leases, net


18,253,136




18,109,187




17,323,864

Federal Home Loan Bank and Federal Reserve Bank stock


149,286




133,740




151,566

Premises and equipment, net


124,850




128,507




130,001

Goodwill and other intangible assets, net


564,137




565,099




567,984

Cash surrender value of life insurance policies


543,616




539,923




531,820

Deferred tax asset, net


96,516




92,910




92,630

Accrued interest receivable and other assets


313,256




281,423




286,677

Total Assets

$

27,610,315



$

27,346,317



$

26,487,645












Liabilities and Shareholders' Equity:











Deposits:











Demand

$

4,162,446



$

4,231,505



$

4,191,496

Health savings accounts


5,740,601




5,599,596




5,038,681

Interest-bearing checking


2,518,472




2,587,679




2,736,952

Money market


2,100,084




2,376,649




2,209,492

Savings


4,140,696




4,106,942




4,348,700

Certificates of deposit


2,961,564




2,746,884




2,187,756

Brokered certificates of deposit


234,982




348,368




280,652

Total deposits


21,858,845




21,997,623




20,993,729

Securities sold under agreements to repurchase and other borrowings


581,874




564,488




643,269

Federal Home Loan Bank advances


1,826,808




1,441,884




1,677,105

Long-term debt


226,021




225,957




225,767

Accrued expenses and other liabilities


230,252




300,167




245,817

Total liabilities


24,723,800




24,530,119




23,785,687

Preferred stock


145,037




145,037




145,056

Common shareholders' equity


2,741,478




2,671,161




2,556,902

Total shareholders' equity


2,886,515




2,816,198




2,701,958

Total Liabilities and Shareholders' Equity

$

27,610,315



$

27,346,317



$

26,487,645

 

 

 

WEBSTER FINANCIAL CORPORATION
Consolidated Statements of Income (unaudited)

















Three Months Ended December 31,




Twelve Months Ended December 31,

(In thousands, except per share data)


2018




2017




2018




2017

Interest income:















Interest and fees on loans and leases

$

225,961



$

185,172



$

842,449



$

708,566

Interest and dividends on securities


54,301




50,735




212,090




204,005

Loans held for sale


130




208




628




1,034

Total interest income


280,392




236,115




1,055,167




913,605

Interest expense:















Deposits


27,629




17,379




90,407




62,253

Borrowings


15,632




13,804




58,079




55,065

Total interest expense


43,261




31,183




148,486




117,318

Net interest income


237,131




204,932




906,681




796,287

Provision for loan and lease losses


10,000




13,000




42,000




40,900

Net interest income after provision for loan and lease losses


227,131




191,932




864,681




755,387

Non-interest income:















Deposit service fees


40,272




37,618




162,183




151,137

Loan and lease related fees


7,914




6,550




32,025




26,448

Wealth and investment services


8,105




8,155




32,843




31,055

Mortgage banking activities


740




1,899




4,424




9,937

Increase in cash surrender value of life insurance policies


3,693




3,684




14,614




14,627

Other income


12,439




8,133




36,479




26,400



73,163




66,039




282,568




259,604

Impairment loss on securities recognized in earnings


-




-




-




(126)

Total non-interest income


73,163




66,039




282,568




259,478

Non-interest expense:















Compensation and benefits


97,039




94,217




381,496




356,505

Occupancy


13,974




13,533




59,463




60,490

Technology and equipment


24,858




22,818




97,877




89,464

Marketing


4,345




3,320




16,838




17,421

Professional and outside services


6,201




5,045




20,300




16,858

Intangible assets amortization


962




977




3,847




4,062

Loan workout expenses


1,150




891




3,251




3,094

Deposit insurance


4,651




5,948




34,749




25,649

Other expenses


21,579




24,300




87,795




87,532

Total non-interest expense


174,759




171,049




705,616




661,075

Income before income taxes


125,535




86,922




441,633




353,790

Income tax expense


26,697




17,029




81,215




98,351

Net income


98,838




69,893




360,418




255,439

Preferred stock dividends and other


(2,172)




(2,183)




(8,715)




(8,608)

Earnings applicable to common shareholders

$

96,666



$

67,710



$

351,703



$

246,831
















Weighted-average common shares outstanding - Diluted


92,202




92,400




92,227




92,356
















Earnings per common share:















Basic

$

1.05



$

0.74



$

3.83



$

2.68

Diluted


1.05




0.73




3.81




2.67
















 

 

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





















Three Months Ended

(In thousands, except per share data)


December 31,
2018




September 30,
2018




June 30,
2018




March 31,
2018




December 31,
2017

Interest income:



















Interest and fees on loans and leases

$

225,961



$

215,448



$

207,820



$

193,220



$

185,172

Interest and dividends on securities


54,301




52,707




52,523




52,559




50,735

Loans held for sale


130




208




148




142




208

Total interest income


280,392




268,363




260,491




245,921




236,115

Interest expense:



















Deposits


27,629




24,397




20,225




18,156




17,379

Borrowings


15,632




13,594




15,256




13,597




13,804

Total interest expense


43,261




37,991




35,481




31,753




31,183

Net interest income


237,131




230,372




225,010




214,168




204,932

Provision for loan and lease losses


10,000




10,500




10,500




11,000




13,000

Net interest income after provision for loan and lease losses


227,131




219,872




214,510




203,168




191,932

Non-interest income:



















Deposit service fees


40,272




40,601




40,859




40,451




37,618

Loan and lease related fees


7,914




10,782




6,333




6,996




6,550

Wealth and investment services


8,105




8,412




8,456




7,870




8,155

Mortgage banking activities


740




1,305




1,235




1,144




1,899

Increase in cash surrender value of life insurance policies


3,693




3,706




3,643




3,572




3,684

Other income


12,439




7,478




7,848




8,714




8,133



73,163




72,284




68,374




68,747




66,039

Impairment loss on securities recognized in earnings


-




-




-




-




-

Total non-interest income


73,163




72,284




68,374




68,747




66,039

Non-interest expense:



















Compensation and benefits


97,039




96,640




93,052




94,765




94,217

Occupancy


13,974




14,502




15,842




15,145




13,533

Technology and equipment


24,858




24,553




24,604




23,862




22,818

Marketing


4,345




4,052




4,889




3,552




3,320

Professional and outside services


6,201




4,930




4,381




4,788




5,045

Intangible assets amortization


962




961




962




962




977

Loan workout expenses


1,150




681




844




576




891

Deposit insurance


4,651




9,694




13,687




6,717




5,948

Other expenses


21,579




22,770




22,198




21,248




24,300

Total non-interest expense


174,759




178,783




180,459




171,615




171,049

Income before income taxes


125,535




113,373




102,425




100,300




86,922

Income tax expense


26,697




13,700




20,743




20,075




17,029

Net income


98,838




99,673




81,682




80,225




69,893

Preferred stock dividends and other


(2,172)




(2,213)




(2,193)




(2,142)




(2,183)

Earnings applicable to common shareholders

$

96,666



$

97,460



$

79,489



$

78,083



$

67,710




















Weighted-average common shares outstanding - Diluted


92,202




92,208




92,173




92,254




92,400




















Earnings per common share:



















Basic

$

1.05



$

1.06



$

0.87



$

0.85



$

0.74

Diluted


1.05




1.06




0.86




0.85




0.73

 

 

 

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,




2018








2017


(Dollars in thousands)


Average balance




Interest




Yield/rate








Average balance



Interest


Yield/rate


Assets:

























Interest-earning assets:

























Loans and leases

$

18,424,387



$

226,727




4.85

%






$

17,502,176


$

186,375


4.20

%

Securities (a)


7,144,118




54,119




2.99








7,095,241



52,494


2.95


Federal Home Loan and Federal Reserve Bank stock


137,535




1,480




4.27








141,226



1,256


3.53


Interest-bearing deposits


61,313




343




2.19








62,544



226


1.41


Loans held for sale


10,258




130




5.04








24,657



208


3.39


Total interest-earning assets


25,777,611



$

282,799




4.32

%







24,825,844


$

240,559


3.83

%

Non-interest-earning assets


1,625,706
















1,679,135







Total Assets

$

27,403,317















$

26,504,979
































Liabilities and Shareholders' Equity:

























Interest-bearing liabilities:

























Demand deposits

$

4,209,456



$

-




-

%






$

4,197,461


$

-


-

%

Health savings accounts


5,633,993




2,828




0.20








4,928,861



2,479


0.20


Interest-bearing checking, money market and savings


8,945,051




11,160




0.49








9,517,998



7,688


0.32


Certificates of deposit


3,136,831




13,641




1.72








2,311,321



7,212


1.24


Total deposits


21,925,331




27,629




0.50








20,955,641



17,379


0.33



























Securities sold under agreements to repurchase and other borrowings


668,660




2,769




1.62








851,987



3,395


1.56


Federal Home Loan Bank advances


1,491,071




10,024




2.63








1,571,976



7,777


1.94


Long-term debt


225,990




2,839




5.03








225,736



2,632


4.67


Total borrowings


2,385,721




15,632




2.57








2,649,699



13,804


2.05


Total interest-bearing liabilities


24,311,052



$

43,261




0.70

%







23,605,340


$

31,183


0.52

%

Non-interest-bearing liabilities


239,089
















223,906







Total liabilities


24,550,141
















23,829,246
































Preferred stock


145,037
















131,707







Common shareholders' equity


2,708,139
















2,544,026







Total shareholders' equity


2,853,176
















2,675,733







Total Liabilities and Shareholders' Equity

$

27,403,317















$

26,504,979







Tax-equivalent net interest income






239,538















209,376




Less: tax-equivalent adjustments






(2,407)















(4,444)




Net interest income





$

237,131














$

204,932




Net interest margin










3.66

%












3.33

%


























(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,




2018








2017


(Dollars in thousands)


Average balance




Interest




Yield/rate








Average balance



Interest


Yield/rate


Assets:

























Interest-earning assets:

























Loans and leases

$

18,033,587



$

845,146




4.69

%






$

17,295,027


$

712,794


4.12

%

Securities (a)


7,137,326




211,227




2.93