Webster Financial : 4Q22 Earnings Call

Earnings

Conference Call

Fourth Quarter 2022

January 26, 2023

WEBSTER FINANCIAL CORPORATION

Fourth Quarter 2022 Highlights

REPORTEDADJUSTED

• Reported results include merger/initiative related charges of $50.4 million pre-tax
• Adjusted results highlight strong performance
• • Loan growth in diverse segments
  • Asset repricing continues to outpace deposits
  • LQ growth in NII of 9.3%
  • LQ growth in PPNR of 9.5%
  • Efficiency ratio of 40%
• NIM expanded 20 bps to 3.74%
• Announced acquisition of interLINK will further diversify our funding sources
• • ~$9 billion of managed funds increases liquidity options
• Strong capital position; provides optionality
• • CET1 of 10.7%
  • TCE of 7.4%

Note: Adjusted results are non-GAAP. See non-GAAP reconciliation on pages 6 and 33 through 35.

$356.2M

PPNR

$240.6M

NET INCOME AVAILABLE TO COMMON

$1.38

DILUTED EPS

1.40%

ROAA

12.54%

ROACE

19.93%

ROATCE

$406.6M

PPNR

$277.6M

NET INCOME AVAILABLE TO COMMON

$1.60

DILUTED EPS

1.61%

ROAA

14.47%

ROACE

22.92%

ROATCE

WEBSTER FINANCIAL CORPORATION

2

Full Year 2022 Highlights

($ in millions, unless noted)

Adjusted EPS +15.9%

$5.62

$4.85

$4.42

$3.72

2021	2022
Reported EPS	Adjusted EPS

Net Interest Margin:

2.84%3.49%

Adjusted ROATCE:

16.83%19.84%

Key Results

• Reported GAAP EPS of $3.72, down 15.8% from prior year primarily related to merger related charges
• Adjusted EPS of $5.62, up 15.9%
• Significant increase in profitability reflects the strength of the merger and balance sheet positioning
• Adjusted return on average tangible common equity of 19.8%
• Full year efficiency ratio of 43.4%
• Post-mergerloan growth of 15%

WEBSTER FINANCIAL CORPORATION

3

Overview of interLINK

interLINK Business Overview within Webster

• interLINK is a tech-enabled deposit management platform administering ~$9 billion of deposits from over 520 thousand retail brokerage accounts
• Leverages in-house technology to orchestrate the precise movement of cash from brokerage accounts to insured deposit institutions ("IDIs") in compliance with FDIC and other banking regulations

520k

Brokerage Accounts

Deposits

Broker Dealers

Deposits &

Withdrawal

Instructions

Manages

Allocation

Instructions

Fund

Liquidity

Needs

Relationship Management

		50+ IDIs
		IDI deposits from each
Excess
Deposits	brokerage account
		< $250K

Strategically Aligned; Complementary Capabilities

Managed Deposits ($bn)

Adds tech-enabled deposit gathering platform complementary to our already differentiated channels

Stable source of core deposits: 100% historical Broker Dealer retention and majority of clients in long-term contracts

Adds flexibility to size liquidity based on near term needs; highly scalable technology with low operating expenses

Potential for significant growth, serving an addressable market of >$500bn of deposits1

Limited integration risk and no credit risk

WEBSTER FINANCIAL CORPORATION

4

Source: Company information.

• Estimated based on publicly known administered deposits of market participants.

Tech-Enabled Core Deposit Gathering Platform Complementary to Our Already Differentiated Channels

Consumer Bank /

•	200+ financial centers
	serving consumers and
	small businesses in the
	highly populated
Business	Northeast I-95 corridor
Description	and Long-Island
•	Complemented by online
	platform (BrioDirect)

Commercial Bank					Corporate
• Sophisticated treasury		•	Longstanding top 3		• Specialized treasury		• Tech-enabled cash
services offering for			players nationally, with		activities		sweep program
commercial clients			strong growth				administrator for Broker-
• Full credit and deposit			characteristics				Dealers
relationships with		•	Offers a comprehensive
targeted deposit			consumer-directed
gathering in select			healthcare solution
verticals including law
firms, NFP, property
mgmt, and municipal

	Volume of	$23.6bn	$19.6bn	$7.9bn		$2.9bn		~$9bn managed
	Deposits	44% of Total	36% of Total	15% of Total		5% of Total		up to 75% available
								to Webster over time
	•	Branch deposits are	• Lower cost, operating	• High growth, sticky, low	•	Low operating cost	•	Access to core
		sticky and low cost,	deposits	cost	•	Sticky deposits		deposits
		complemented by low					•	Significant flexibility;
	Key Benefits	all-in cost digital channel						deposit onboarding
								based on near term
								liquidity needs
							•	Highly scalable with
								low operating costs
WEBSTER FINANCIAL CORPORATION						5
Source: Company information.