News Article

Webster Reports Third Quarter 2021 Earnings Of $1.03 Per Diluted Share

October 21, 2021 at 7:30 AM EDT

WATERBURY, Conn., Oct. 21, 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 $93.2 million, or $1.03 per diluted share, for the quarter ended September 30, 2021, compared to $66.9 million, or $0.75 per diluted share, for the quarter ended September 30, 2020. Earnings per diluted share would have been $1.08 for the quarter ended September 30, 2021, adjusting for a net $5.8 million ($4.3 million after tax) of merger related costs and strategic optimization initiatives.

"Webster delivered strong financial performance as evidenced by linked quarter loan growth of 2.7%, excluding PPP, and deposit growth of 4.1%," said John R. Ciulla, chairman and chief executive officer. "While we continue to deliver for clients, communities, colleagues and shareholders, integration plans for our merger with Sterling are well established and we are prepared to execute the transaction upon receipt of all regulatory approvals."

Highlights for the third quarter of 2021:

  • Revenue of $313.5 million, an increase of 6.5 percent compared to a year ago.
  • Loan growth of 2.7 percent linked quarter, excluding Paycheck Protection Program (PPP) loans, led by commercial and residential which increased 3.3 percent.
  • Current Expected Credit Loss (CECL) provision of $7.8 million with a reserve increase of $7.0 million compared to the prior quarter primarily driven by loan growth, resulting in an allowance coverage of 1.46 percent, or 1.49 percent excluding $0.4 billion of PPP loans.
  • Deposit growth of $1.2 billion or 4.1 percent linked quarter, with growth of $741.6 million in demand and interest-bearing checking deposits and $516.4 million in money market deposits.
  • Charges related to merger and strategic optimization initiatives totaled $5.8 million.
  • Net interest margin of 2.80 percent.
  • Efficiency ratio (non-GAAP) of 54.8 percent.

"Credit quality and economic conditions continued to improve, supporting favorable trends for non-performing loans and net charge-offs in the quarter," said Glenn MacInnes, executive vice president and chief financial officer. "The strength of our balance sheet continues to position us well for the future."

Line of Business performance compared to the third quarter of 2020

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 September 30, 2021, Commercial Banking had $14.7 billion in loans and leases and $10.2 billion in deposit balances.

Commercial Banking Operating Results:






Percent


Three months ended September 30,


Favorable/

(In thousands)


2021

2020


(Unfavorable)

Net interest income


$152,556


$132,026




15.5

%


Non-interest income


30,076


20,710




45.2



Operating revenue


182,632


152,736




19.6



Non-interest expense


64,917


66,482




2.4



Pre-tax, pre-provision net revenue


$117,715


$86,254




36.5
















Percent



At September 30,


Increase/

(In millions)


2021

2020


(Decrease)

Loans and leases


$14,655


$14,544




0.8

%


Deposits


10,219


8,326




22.7



AUA / AUM (off balance sheet)


7,041


6,000




17.4



Pre-tax, pre-provision net revenue increased $31.5 million to $117.7 million in the quarter as compared to prior year. Net interest income increased $20.5 million to $152.6 million, primarily driven by PPP loan fee acceleration associated with PPP loan forgiveness, loan rates, and deposit growth. Non-interest income increased $9.4 million to $30.1 million, driven by higher syndication fees, fair value adjustments on direct investments, and trust and investment service fees. Non-interest expense decreased $1.6 million to $64.9 million, primarily driven by lower support costs.


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 September 30, 2021, HSA Bank had $10.7 billion in total footings comprising $7.3 billion in deposit balances and $3.4 billion in assets under administration through linked investment accounts.

HSA Bank Operating Results:






Percent


Three months ended September 30,


Favorable/

(In thousands)


2021

2020


(Unfavorable)

Net interest income


$42,074


$39,861




5.6

%


Non-interest income


24,756


27,235




(9.1)



Operating revenue


66,830


67,096




(0.4)



Non-interest expense


32,800


34,789




5.7



Pre-tax, net revenue


$34,030


$32,307




5.3
















Percent



At September 30,


Increase/

(Dollars in millions)


2021

2020


(Decrease)

Number of accounts (thousands)


3,003


2,968




1.2

%










Deposits


$7,329


$6,976




5.1



Linked investment accounts (off balance sheet)


3,427


2,454




39.6



Total footings


$10,756


$9,430




14.1



Pre-tax net revenue increased $1.7 million to $34.0 million in the quarter as compared to prior year. Net interest income increased $2.2 million to $42.1 million, due to growth in deposits. Non-interest income decreased $2.5 million to $24.8 million, primarily due to decreases in third-party administrator closure fees. Non-interest expense decreased $2.0 million to $32.8 million, primarily due to reduced compensation and benefits 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 (businesses that have less than $2 million of revenue) business units, as well as a distribution network consisting of 130 banking centers and 254 ATMs, a customer care center, and a full range of web and mobile-based banking services. As of September 30, 2021, Retail Banking had $6.9 billion in loans and $12.5 billion in deposit balances.

Retail Banking Operating Results:






Percent


Three months ended September 30,


Favorable/

(In thousands)


2021

2020


(Unfavorable)

Net interest income


$98,028


$83,609




17.2

%


Non-interest income


16,998


21,359




(20.4)



Operating revenue


115,026


104,968




9.6



Non-interest expense


73,480


80,119




8.3



Pre-tax, pre-provision net revenue


$41,546


$24,849




67.2
















Percent



At September 30,


Increase/

(In millions)


2021

2020


(Decrease)

Loans


$6,925


$7,308




(5.2)

%


Deposits


12,475


11,623




7.3



Pre-tax, pre-provision net revenue increased $16.7 million to $41.5 million in the quarter as compared to prior year. Net interest income increased $14.4 million to $98.0 million, driven by PPP loan fee acceleration associated with PPP loan forgiveness, deposit balance growth, and lower interest paid on deposits, partially offset by lower consumer loan balances. Non-interest income decreased $4.4 million to $17.0 million, resulting from lower mortgage banking fee income, partially offset by higher deposit service fees. Non-interest expense decreased $6.6 million to $73.5 million, driven by lower employee-related, occupancy, technology and equipment, and marketing expenses.


Consolidated financial performance:

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

  • Net interest income was $229.7 million compared to $219.3 million.
  • Net interest margin was 2.80 percent compared to 2.88 percent. The yield on interest-earning assets declined by 21 basis points, and the cost of interest-bearing liabilities declined by 14 basis points.
  • Average interest-earning assets totaled $32.9 billion and grew by $2.0 billion, or 6.5 percent.
  • Average loans totaled $21.5 billion and declined by $0.3 billion, or 1.5 percent.
  • Average deposits totaled $29.8 billion and grew by $2.9 billion, or 10.8 percent.

Quarterly provision for credit losses:

  • The provision for credit losses reflects a $7.8 million provision in the quarter, contributing to a $7.0 million increase in the allowance for credit losses on loans and leases. The increase in the allowance is based primarily on loan growth. The provision for credit losses reflected a $21.5 million benefit in the prior quarter compared to an expense of $22.8 million a year ago.
  • Net charge-offs (recoveries) were $0.9 million, compared to $(1.2) million in the prior quarter and $11.5 million a year ago. The ratio of net charge-offs (recoveries) to average loans on an annualized basis was 0.02 percent, compared to (0.02) percent in the prior quarter and 0.21 percent a year ago.
  • The allowance for credit losses on loans and leases represented 1.46 percent of total loans at September 30, 2021, compared to 1.43 percent at June 30, 2021 and 1.69 percent at September 30, 2020. Excluding $0.4 billion of risk free PPP loans, the coverage ratio was 1.49 percent at September 30, 2021, compared to 1.49 percent at June 30, 2021 excluding $0.8 billion of risk free PPP loans, and 1.80 percent at September 30, 2020 excluding $1.4 billion of risk free PPP loans. The allowance represented 309 percent of nonperforming loans at September 30, 2021 compared to 255 percent at June 30, 2021 and 227 percent at September 30, 2020.

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

  • Total non-interest income was $83.8 million compared to $75.1 million, an increase of $8.7 million. This primarily reflects an increase of $9.0 million in other due to fair value adjustments on direct investments; $4.3 million in loan related fees driven by higher syndication and prepayment fees; $1.8 million in deposit service fees driven by higher overdraft and cash management fees; and $1.7 million primarily due to increased investment activity. These increases were partially offset by a $5.6 million decrease in mortgage banking activities which is in line with our strategic choice to originate loans for portfolio along with lower spreads on loans originated for sale and a $2.5 million decrease in HSA fee income due to prior year closure fees from third-party administrator custodial accounts and lower account service related charges.

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

  • Total non-interest expense was $180.2 million compared to $184.0 million, a decrease of $3.8 million. Total non-interest expense includes a net $5.8 million of merger and strategic initiative related charges compared to $4.8 million of strategic initiatives a year ago. Excluding those charges, total non-interest expense decreased $4.8 million reflecting a $2.5 million decrease in compensation and benefits, a $1.8 million decrease in occupancy, and a $0.9 million decrease in the reserve for unfunded lines.

Quarterly income taxes compared to the third quarter of 2020:

  • Income tax expense was $29.8 million compared to $18.3 million, and the effective tax rate was 23.7 percent compared to 20.9 percent. The higher effective tax rate in the quarter primarily reflects the effects of increased pre-tax income in 2021 compared to 2020.

Investment securities:

  • Total investment securities were $9.4 billion, compared to $8.9 billion at June 30, 2021 and $9.0 billion at September 30, 2020. The carrying value of the available-for-sale portfolio included $44.7 million of net unrealized gains, compared to $49.3 million at June 30, 2021 and $103.1 million at September 30, 2020. The carrying value of the held-to-maturity portfolio does not reflect $152.9 million of net unrealized gains, compared to $170.5 million at June 30, 2021 and $283.0 million at September 30, 2020.

Loans:

  • Total loans were $21.6 billion, compared to $21.5 billion at June 30, 2021 and $21.9 billion at September 30, 2020. Compared to June 30, 2021, commercial real estate loans increased by $112.0 million while commercial loans (excluding PPP loans) increased by $189.0 million, residential mortgages increased by $311.2 million, consumer loans decreased by $59.3 million, and PPP loans decreased by $447.5 million.
  • Compared to a year ago, commercial real estate loans increased by $215.1 million and commercial loans (excluding PPP loans) increased by $502.5 million, while consumer loans decreased by $315.1 million and residential mortgages increased by $281.7 million. PPP loans totaled $0.4 billion at September 30, 2021.
  • Loan originations for the portfolio were $1.987 billion, compared to $2.333 billion ($2.269 billion excluding PPP loan originations) in the prior quarter and $1.560 billion ($1.525 billion excluding PPP loan originations) a year ago. In addition, $57 million of residential loans were originated for sale in the quarter, compared to $55 million in the prior quarter and $149 million a year ago.

Asset quality:

  • Total nonperforming loans were $101.8 million, or 0.47 percent of total loans, compared to $120.7 million, or 0.56 percent of total loans, at June 30, 2021 and $162.6 million, or 0.74 percent of total loans, at September 30, 2020. As of September 30, 2021, $40.3 million of nonperforming loans were contractually current.
  • Past due loans were $17.1 million, compared to $18.4 million at June 30, 2021 and $21.8 million at September 30, 2020.

Deposits and borrowings:

  • Total deposits were $30.0 billion, compared to $28.8 billion at June 30, 2021 and $26.9 billion at September 30, 2020. Core deposits to total deposits were 93.7 percent, compared to 93.0 percent at June 30, 2021 and 90.5 percent at September 30, 2020. The loan to deposit ratio was 71.9 percent, compared to 74.4 percent at June 30, 2021 and 81.2 percent at September 30, 2020.
  • Total borrowings were $1.3 billion, compared to $1.2 billion at June 30, 2021 and $2.3 billion at September 30, 2020.

Capital:

  • The return on average common shareholders' equity and the return on average tangible common shareholders' equity were 11.61 percent and 14.16 percent, respectively, compared to 8.80 percent and 10.91 percent, respectively, in the third quarter of 2020.
  • The tangible equity and tangible common equity ratios were 8.12 percent and 7.71 percent, respectively, compared to 8.19 percent and 7.75 percent, respectively, at September 30, 2020. The common equity tier 1 risk-based capital ratio was 11.77 percent, compared to 11.23 percent at September 30, 2020.
  • Book value and tangible book value per common share were $35.78 and $29.63, respectively, compared to $34.09 and $27.86, respectively, at September 30, 2020.

Webster Financial Corporation is the holding company for Webster Bank, National Association and its HSA Bank division. With $35.4 billion in assets, Webster provides business and consumer banking, mortgage, financial planning, trust, and investment services through 130 banking centers and 254 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 third quarter 2021 earnings announcement will be held today, Thursday, October 21, 2021 at 9:00 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 October 21, 2021. To access the replay, dial 877-660-6853, or 201-612-7415 for international callers. The replay conference ID number is 13723032.

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 complete the merger with Sterling Bancorp and realize the anticipated benefits of the merger; (2) our ability to successfully execute our business plan and strategic initiatives, and manage any risks or uncertainties; (3) our ability to successfully achieve the anticipated cost reductions and operating efficiencies from our completed branch consolidations and other strategic initiatives, including process automation, organization simplification, and spending reductions, and avoid any higher than anticipated costs or delays in the ongoing implementation; (4) local, regional, national, and international economic conditions and the impact they may have on us and our customers; (5) volatility and disruption in national and international financial markets; (6) the potential adverse effects of the ongoing novel coronavirus (COVID-19) pandemic and any governmental or societal responses thereto, or other unusual and infrequently occurring events; (7) changes in the level of nonperforming assets and charge-offs; (8) changes in estimates of future reserve requirements based upon the periodic review thereof under relevant regulatory and accounting requirements; (9) adverse conditions in the securities markets that lead to impairment in the value of our investment securities; (10) inflation, changes in interest rates (including the replacement of LIBOR as an interest rate benchmark), and monetary fluctuations; (11) the timely development and acceptance of new products and services and the perceived value of those products and services by customers; (12) changes in deposit flows, consumer spending, borrowings, and savings habits; (13) our ability to implement new technologies and maintain secure and reliable technology systems; (14) the effects of any cyber threats, attacks or events or fraudulent activity; (15) performance by our counterparties and vendors; (16) our ability to increase market share and control expenses; (17) changes in the competitive environment among banks, financial holding companies, and other financial services providers; (18) changes in laws and regulations (including those concerning banking, taxes, dividends, securities, insurance, and healthcare) with which we and our subsidiaries must comply; (19) the effect of changes in accounting policies and practices applicable to us, including impacts of recently adopted accounting guidance; (20) legal and regulatory developments including the resolution of legal proceedings or regulatory or other governmental inquiries and the results of regulatory examinations or reviews; (21) our ability to appropriately address social, environmental, and sustainability concerns that may arise from our business activities; and (22) 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)


September 30, 2021




June 30, 2021




March 31, 2021




December 31, 2020




September 30, 2020
























Income and performance ratios:





















Net income

$

95,713



$

94,035



$

108,078



$

60,044



$

69,281



Earnings applicable to common shareholders


93,171




91,555




105,530




57,715




66,890



Earnings per diluted common share


1.03




1.01




1.17




0.64




0.75



Return on average assets


1.10

%



1.12

%



1.31

%



0.73

%



0.84

%


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


14.16




14.26




16.79




9.31




10.91



Return on average common shareholders' equity


11.61




11.63




13.65




7.51




8.80



Non-interest income as a percentage of total revenue


26.73




24.77




25.54




26.14




25.50
























Asset quality:





















Allowance for credit losses on loans and leases

$

314,922



$

307,945



$

328,351



$

359,431



$

369,811



Nonperforming assets


104,209




123,497




152,808




170,314




167,314



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


1.46

%



1.43

%



1.54

%



1.66

%



1.69

%


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


0.02




(0.02)




0.10




0.17




0.21



Nonperforming loans and leases / total loans and leases


0.47




0.56




0.71




0.78




0.74



Nonperforming assets / total loans and leases plus OREO


0.48




0.57




0.72




0.79




0.77



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


309.44




255.05




218.29




213.94




227.39
























Other ratios:





















Tangible equity (non-GAAP)


8.12

%



8.35

%



8.30

%



8.35

%



8.19

%


Tangible common equity (non-GAAP)


7.71




7.91




7.85




7.90




7.75



Tier 1 risk-based capital (a)


12.39




12.30




12.55




11.99




11.88



Total risk-based capital (a)


13.79




13.70




14.08




13.59




13.47



Common equity tier 1 risk-based capital (a)


11.77




11.66




11.89




11.35




11.23



Shareholders' equity / total assets


9.57




9.86




9.84




9.92




9.76



Net interest margin


2.80




2.82




2.92




2.83




2.88



Efficiency ratio (non-GAAP)


54.84




56.64




58.46




60.27




59.99
























Equity and share related:





















Common equity

$

3,241,152



$

3,184,668



$

3,127,891



$

3,089,588



$

3,074,653



Book value per common share


35.78




35.15




34.60




34.25




34.09



Tangible book value per common share (non-GAAP)


29.63




28.99




28.41




28.04




27.86



Common stock closing price


54.46




53.34




55.11




42.15




26.41



Dividends declared per common share


0.40




0.40




0.40




0.40




0.40



Common shares issued and outstanding


90,588




90,594




90,410




90,199




90,204



Weighted-average common shares outstanding - Basic


90,038




90,027




89,809




89,645




89,630



Weighted-average common shares outstanding - Diluted


90,232




90,221




90,108




89,915




89,738

























(a) Presented as preliminary for September 30, 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 September 30, 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)


September 30, 2021




June 30, 2021




September 30, 2020


Assets:












Cash and due from banks

$

161,369



$

193,430



$

181,524


Interest-bearing deposits


2,442,790




1,386,463




60,276


Securities:












Available for sale


3,410,443




3,262,893




3,304,217


Held to maturity, net


5,986,308




5,623,243




5,723,128


Total securities, net


9,396,751




8,886,136




9,027,345


Loans held for sale


24,969




4,335




29,018


Loans and Leases:












Commercial


8,159,127




8,417,719




8,612,549


Commercial real estate


6,522,679




6,410,672




6,307,567


Residential mortgages


5,167,527




4,856,302




4,885,821


Consumer


1,731,002




1,790,308




2,046,086


Total loans and leases


21,580,335




21,475,001




21,852,023


Allowance for credit losses on loans and leases


(314,922)




(307,945)




(369,811)


Loans and leases, net


21,265,413




21,167,056




21,482,212


Federal Home Loan Bank and Federal Reserve Bank stock


75,936




76,874




89,611


Premises and equipment, net


209,573




215,716




250,535


Goodwill and other intangible assets, net


557,360




558,485




561,902


Cash surrender value of life insurance policies


572,368




570,380




561,021


Deferred tax asset, net


96,489




78,268




76,695


Accrued interest receivable and other assets


571,240




616,609




674,304


Total Assets

$

35,374,258



$

33,753,752



$

32,994,443














Liabilities and Shareholders' Equity:












Deposits:












Demand

$

7,154,835



$

6,751,373



$

6,136,814


Health savings accounts


7,329,405




7,323,421




6,976,280


Interest-bearing checking


4,181,825




3,843,725




3,390,921


Money market


3,958,700




3,442,319




3,069,098


Savings


5,517,189




5,471,584




4,777,000


Certificates of deposit


1,884,373




2,014,544




2,570,440


Total deposits


30,026,327




28,846,966




26,920,553


Securities sold under agreements to repurchase and other borrowings


655,871




507,124




1,301,822


Federal Home Loan Bank advances


113,334




138,444




433,243


Long-term debt


564,114




565,297




568,846


Accrued expenses and other liabilities


628,423




366,216




550,289


Total liabilities


31,988,069




30,424,047




29,774,753


Preferred stock


145,037




145,037




145,037


Common shareholders' equity


3,241,152




3,184,668




3,074,653


Total shareholders' equity


3,386,189




3,329,705




3,219,690


Total Liabilities and Shareholders' Equity

$

35,374,258



$

33,753,752



$

32,994,443














 

WEBSTER FINANCIAL CORPORATION
Consolidated Statements of Income (unaudited)




Three Months Ended September 30,




Nine Months Ended September 30,


(In thousands, except per share data)


2021




2020




2021




2020


Interest income:
















Interest and fees on loans and leases

$

196,273



$

188,001



$

572,728



$

600,709


Interest and dividends on securities


43,362




51,009




133,895




164,687


Loans held for sale


57




229




201




588


Total interest income


239,692




239,239




706,824




765,984


Interest expense:
















Deposits


4,571




12,598




16,104




59,246


Borrowings


5,430




7,385




16,413




32,274


Total interest expense


10,001




19,983




32,517




91,520


Net interest income


229,691




219,256




674,307




674,464


Provision for credit losses


7,750




22,750




(39,500)




138,750


Net interest income after provision for loan and lease losses


221,941




196,506




713,807




535,714


Non-interest income:
















Deposit service fees


40,258




39,278




122,166




117,687


Loan and lease related fees


10,881




6,568




27,056




20,032


Wealth and investment services


9,985




8,255




29,475




24,096


Mortgage banking activities


1,525




7,087




5,486




14,185


Increase in cash surrender value of life insurance policies


3,666




3,695




10,802




10,899


Gain on investment securities, net


-




-




-




8


Other income


17,460




10,177




38,249




21,607


Total non-interest income


83,775




75,060




233,234




208,514


Non-interest expense:
















Compensation and benefits


105,352




104,019




310,706




305,637


Occupancy


12,430




14,275




42,090




43,005


Technology and equipment


28,441




27,846




84,081




83,151


Marketing


3,721




3,852




9,452




10,640


Professional and outside services


7,074




9,223




37,875




21,044


Intangible assets amortization


1,124




1,089




3,395




3,013


Loan workout expenses


203




612




924




1,497


Deposit insurance


3,855




4,204




11,560




13,944


Other expenses


18,037




18,876




55,164




57,485


Total non-interest expense


180,237




183,996




555,247




539,416


Income before income taxes


125,479




87,570




391,794




204,812


Income tax expense


29,766




18,289




93,968




44,235


Net income


95,713




69,281




297,826




160,577


Preferred stock dividends and other


(2,542)




(2,391)




(7,567)




(6,819)


Earnings applicable to common shareholders

$

93,171



$

66,890



$

290,259



$

153,758


















Weighted-average common shares outstanding - Diluted


90,232




89,738




90,186




90,235


















Earnings per common share:
















Basic

$

1.03



$

0.75



$

3.23



$

1.71


Diluted


1.03




0.75




3.22




1.70


 

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



Three Months Ended

(In thousands, except per share data)


September 30, 2021




June 30, 2021




March 31, 2021




December 31, 2020




September 30, 2020

Interest income:



















Interest and fees on loans and leases

$

196,273



$

185,919



$

190,536



$

189,010



$

188,001

Interest and dividends on securities


43,362




45,586




44,947




46,874




51,009

Loans held for sale


57




53




91




181




229

Total interest income


239,692




231,558




235,574




236,065




239,239

Interest expense:



















Deposits


4,571




5,094




6,439




8,651




12,598

Borrowings


5,430




5,612




5,371




10,485




7,385

Total interest expense


10,001




10,706




11,810




19,136




19,983

Net interest income


229,691




220,852




223,764




216,929




219,256

Provision for credit losses


7,750




(21,500)




(25,750)




(1,000)




22,750

Net interest income after provision for loan and lease losses


221,941




242,352




249,514




217,929




196,506

Non-interest income:



















Deposit service fees


40,258




41,439




40,469




38,345




39,278

Loan and lease related fees


10,881




7,862




8,313




9,095




6,568

Wealth and investment services


9,985




10,087




9,403




8,820




8,255

Mortgage banking activities


1,525




1,319




2,642




4,110




7,087

Increase in cash surrender value of life insurance policies


3,666




3,603




3,533




3,662




3,695

Other income


17,460




8,392




12,397




12,731




10,177

Total non-interest income


83,775




72,702




76,757




76,763




75,060

Non-interest expense:



















Compensation and benefits


105,352




97,754




107,600




122,754




104,019

Occupancy


12,430




14,010




15,650




28,024




14,275

Technology and equipment


28,441




27,124




28,516




29,122




27,846

Marketing


3,721




3,227




2,504




3,485




3,852

Professional and outside services


7,074




21,025




9,776




11,380




9,223

Intangible assets amortization


1,124




1,132




1,139




1,147




1,089

Loan workout expenses


203




327




394




261




612

Deposit insurance


3,855




3,749




3,956




4,372




4,204

Other expenses


18,037




18,680




18,447




18,985




18,876

Total non-interest expense


180,237




187,028




187,982




219,530




183,996

Income before income taxes


125,479




128,026




138,289




75,162




87,570

Income tax expense


29,766




33,991




30,211




15,118




18,289

Net income


95,713




94,035




108,078




60,044




69,281

Preferred stock dividends and other


(2,542)




(2,480)




(2,548)




(2,329)




(2,391)

Earnings applicable to common shareholders

$

93,171



$

91,555



$

105,530



$

57,715



$

66,890




















Weighted-average common shares outstanding - Diluted


90,232




90,221




90,108




89,915




89,738




















Earnings per common share:



















Basic

$

1.03



$

1.02



$

1.18



$

0.64



$

0.75

Diluted


1.03




1.01




1.17




0.64




0.75

 

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




Three Months Ended September 30,




2021








2020


(Dollars in thousands)


Average balance




Interest




Yield/rate








Average balance



Interest


Yield/rate


Assets:

























Interest-earning assets:

























Loans and leases

$

21,538,513



$

197,015




3.60

%






$

21,870,740


$

188,865


3.40

%

Investment securities (a)


8,911,291




43,868




2.01








8,762,692



52,154


2.47


Federal Home Loan and Federal
Reserve Bank
stock


76,212




290




1.51








91,232



600


2.62


Interest-bearing deposits (b)


2,334,986




896




0.15








102,059



26


0.10


Loans held for sale


11,328




57




2.03








31,211



229


2.94


Total interest-earning assets


32,872,330



$

242,126




2.92

%







30,857,934


$

241,874


3.13

%

Non-interest-earning assets


2,021,962
















2,057,503







Total Assets

$

34,894,292















$

32,915,437
































Liabilities and Shareholders' Equity:

























Interest-bearing liabilities:

























Demand deposits

$

7,182,116



$

-




-

%






$

6,228,436


$

-


-

%

Health savings accounts


7,346,239




1,463




0.08








6,953,641



2,073


0.12


Interest-bearing checking, money
market and savings


13,363,703




1,794




0.05








11,167,653



3,983


0.14


Certificates of deposit


1,957,286




1,314




0.27








2,589,888



6,542


1.00


Total deposits


29,849,344




4,571




0.06








26,939,618



12,598


0.19



























Securities sold under agreements to
repurchase and other borrowings


544,311




721




0.52








1,225,616



608


0.19


Federal Home Loan Bank advances


120,714




492




1.59








449,085



2,528


2.20


Long-term debt (a)


564,692




4,217




3.22








569,425



4,249


3.25


Total borrowings


1,229,717




5,430




1.82








2,244,126



7,385


1.33


Total interest-bearing liabilities


31,079,061



$

10,001




0.13

%