WEBSTER FINANCIAL CORPORATION 
By In the news release, "Webster Reports 2011 Fourth Quarter Results," issued today,
Webster Reports 2011 Fourth Quarter Results
Net Income Grows by 63 Percent over Prior Year
WATERBURY, Conn., Jan. 19, 2012 /PRNewswire/ -- Webster Financial Corporation (NYSE: WBS), the holding company for Webster Bank, N.A., today announced net income available to common shareholders of $39.6 million, or $.43 per diluted share, for the quarter ended December 31, 2011 compared to $41.4 million, or $.45 per diluted share, for the quarter ended September 30, 2011 and $24.3 million, or $.29 per diluted share, for the quarter ended December 31, 2010.
Highlights for the quarter or at December 31 include:
Significant improvement in asset quality as evidenced by a 19.5 percent reduction in nonperforming assets and a 12.2 percent decline in commercial classified loans, both from September 30, and reductions of 36.0 percent and 34.0 percent from a year ago.
Combined growth in commercial non-mortgage and commercial real estate loans of $239.8 million or 5.9 percent from September 30, and $491.3 million or 13.0 percent from a year ago.
Growth of $319.1 million or 6.7 percent in transaction account deposits from September 30 and $641.0 million or 14.5 percent from a year ago, which represent 37.0 percent of total deposits compared to 34.8 percent in the third quarter and 32.4 percent a year ago.
Net interest income was down $0.7 million in the quarter, and net interest margin was 3.39 percent compared to 3.49 percent in the third quarter and 3.42 percent a year ago.
Noninterest expense before one time costs of $125.3 million compared to $119.7 million in the third quarter and $128.2 million a year ago. The 2011 fourth quarter included $5.6 million in higher compensation expense tied to stock valuation, a significant portion of which was driven by Webster's rising stock price in the quarter.
Provision for loan losses of $2.5 million compared to $5.0 million in the third quarter and $15.0 million a year ago, reflective of continued improvement in asset quality.
Webster Chairman and Chief Executive Officer James C. Smith said, "Fourth quarter results cap a year of meaningful, across-the-board progress for Webster, with particularly strong improvement in credit metrics. Among our strategic priorities, higher transaction balances are funding business loan growth, and our emphasis on relationship banking over account acquisition is producing more value for our clients. We are winning business banking customers across our footprint. Still, we have much to do to sustain our progress and improve financial performance in 2012, with special emphasis on improving the ratio of expenses to revenue."
Prior period information
-- Certain previously reported information has been corrected to reflect
the deferral of certain commercial loan fees. Comparisons to prior
periods in this press release reflect this correction.
Net interest income
-- Net interest income was $141.0 million for the quarter compared to
$141.7 million in the third quarter.
-- Net interest margin was 3.39 percent compared to 3.49 percent in the
third quarter; the yield on interest-earning assets declined 14 basis
points, primarily on securities, and the cost of funds declined 5 basis
points, each as compared to the third quarter.
-- Average interest-earning assets grew by 2.4 percent from September 30,
2011 and totaled $17.0 billion compared to $16.6 billion in the third
quarter.
Provision for loan losses
-- The Company recorded a provision of $2.5 million in the quarter compared
to $5.0 million in the third quarter and $15.0 million a year ago,
reflective of continued improvement in asset quality trends.
-- Net charge-offs were $26.4 million in the quarter compared to $28.9
million for the third quarter and $33.7 million a year ago.
-- The allowance for loan losses represented 124 percent of nonperforming
loans compared to 116 percent in the prior quarter.
Webster President and Chief Operating Officer Jerry Plush noted, "The continued favorable trend in all asset quality measures enabled us to record provision expense well below net charge-offs this quarter while maintaining even stronger coverage ratios. The emphasis we have placed in reducing nonperforming loan, OREO and classified asset levels has resulted in reduced provision and other workout related expenses compared to prior quarters. While we believe that further improvement in classified asset levels is likely in future periods and may favorably influence provision expense, the provision necessary each quarter will be dependent on economic outcomes and the level of risk inherent in continued loan growth."
Noninterest income
-- Total noninterest income decreased $2.4 million compared to the third
quarter, of which $2.8 million occurred in deposit service fees. This
decline in deposit services fees reflects Federal Reserve Board rules
implementing the Durbin Amendment in the Dodd-Frank Act that took effect
on October 1, 2011.
Noninterest expense
-- Total noninterest expense increased $3.4 million compared to the third
quarter. Included in noninterest expense is $1.2 million of net one time
costs in the fourth quarter and $3.5 million of such costs in the third
quarter.
-- The $5.6 million increase in noninterest expense apart from one time
costs compared to the third quarter is primarily the result of a $6.2
million increase in compensation and benefits. This increase in
compensation and benefits is primarily the result of compensation tied
to stock valuation, including increases of $3.4 million in cash award
plan expense and $2.2 million in deferred compensation. Volatility
around cash award plan expense should be less in future quarters given
the maturity of a portion of the plan during the fourth quarter. In
addition, included in noninterest expense was $0.1 million in gains on
foreclosed and repossessed assets compared to $0.7 million of such gains
in the third quarter.
Income taxes
-- The Company recorded $13.8 million of income tax expense in the quarter
on the $54.2 million of pre-tax income applicable to continuing
operations in the period. The effective tax rate for the quarter was
25.5 percent compared to 27.4 percent for the third quarter, while the
effective rate for all of 2011 was 28.0 percent. The lower rates in the
fourth and third quarters reflect tax benefits specific to each of $1.9
million and $1.6 million, respectively.
Investment securities
-- Total investment securities were $5.8 billion at December 31, 2011
compared to $5.6 billion at September 30, 2011. The carrying value of
the available for sale portfolio included $25.3 million in net
unrealized gains compared to net unrealized gains of $30.0 million at
September 30, while the carrying value of the held to maturity portfolio
does not reflect $156.8 million in net unrealized gains compared to net
unrealized gains of $155.7 million at September 30.
Loans
-- Total loans were $11.2 billion at December 31, 2011 compared to $11.1
billion at September 30, 2011 and are reflective of strong growth in
commercial, commercial real estate and residential mortgages. In the
quarter, commercial non-mortgage and commercial real estate loans
increased by $119.9 million and $120.0 million, respectively, while
equipment finance, asset based lending and residential development loans
declined by $43.6 million, $56.9 million and $11.4 million,
respectively. Residential mortgage loans increased by $69.6 million,
while consumer loans in the continuing portfolio declined by $14.9
million and consumer loans in the liquidating portfolio declined by $7.3
million.
-- Originations for the fourth quarter were $971.7 million compared to
$716.2 million in the third quarter, an increase of 35.7 percent.
Originations for the fourth quarter consisted of $275.2 million in
commercial non-mortgage, $23.9 million in equipment finance, $39.5
million in asset based lending, $294.3 million in commercial real
estate, $1.7 million in residential development, $205.2 million in
residential and $131.9 million in consumer. Total originations for the
year were $2.9 billion compared to $2.5 billion in 2010.
Asset quality
-- Total nonperforming loans declined to $188.1 million, or 1.68 percent of
total loans, at December 31, 2011 compared to $221.0 million, or 2.00
percent, at September 30, 2011. Included in nonperforming loans were
paying loans totaling $32.4 million at December 31 compared to $55.8
million at September 30. Also included in nonperforming loans are $5.1
million in consumer liquidating loans compared to $5.5 million at
September 30.
-- Past due loans declined to $61.7 million at December 31 compared to
$64.1 million at September 30. Past due loans for the continuing
portfolios were $57.1 million at December 31 compared to $59.5 million
at September 30. Past due loans for the liquidating portfolio were $4.5
million at December 31 compared to $4.7 million at September 30.
-- Other real estate owned (OREO) declined to $5.0 million compared to
$18.9 million at September 30.
Deposits and borrowings
-- Total deposits were $13.7 billion at December 31, 2011 compared to $13.6
billion at September 30, 2011. Increases of $181.0 million in demand,
$138.1 million in interest-bearing checking and $58.7 million in savings
deposits were offset by declines of $204.8 million in money market
deposits and $102.9 million in certificates of deposit. Core to total
deposits and loans to deposits were 79 percent and 82 percent,
respectively, compared to 78 percent and 81 percent at September 30.
-- Total borrowings were $3.0 billion at December 31 compared to $2.5
billion at September 30. The increase in borrowings funded growth in
loans and investment securities in the quarter. Borrowings represented
16 percent of total assets at December 31 compared to 14 percent at
September 30.
Capital
-- The tangible common equity and Tier 1 common equity to risk-weighted
assets ratios were 7.00 percent and 11.00 percent, respectively, as of
December 31.
***
Webster Financial Corporation is the holding company for Webster Bank, National Association. With $19 billion in assets, Webster provides business and consumer banking, mortgage, financial planning, trust and investment services through 168 banking offices, 473 ATMs, telephone banking, mobile banking, and the Internet. Webster Bank owns the asset based lending firm Webster Business Credit Corporation; the equipment finance firm Webster Capital Finance Corporation; and provides health savings account trustee and administrative services through HSA Bank, a division of Webster Bank. Member FDIC and 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 fourth quarter earnings announcement will be held today, Thursday, January 19, 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 1-877-407-8289 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 non-performing 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; (11) the ability to increase market share and control expenses; (12) changes in the competitive environment among banks, financial holding companies, and other financial service 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 those under the recently enacted Dodd-Frank Wall Street Reform and Consumer Protection Act and the Basel III update to the Basel Accords that is under development; (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; and (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 heading "Risk Factors." 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. Specifically, we provide measures based on what we believe are our operating earnings on a consistent basis and exclude non-core operating items which affect the GAAP reporting of results of operations. 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
Bob Guenther 203-578-2391 Terry Mangan 203-578-2318
rguenther@websterbank.com tmangan@websterbank.com
WEBSTER FINANCIAL CORPORATION
Selected Financial Highlights
(unaudited)
-----------------------------
At or for the Three Months Ended
--------------------------------
Dec. 31, Sept. 30, June 30, March 31, Dec. 31,
(In thousands, except per
share data) 2011 2011 (d) 2011 (d) 2011 (d) 2010 (d)
------------------------- ---- ------- ------- ------- -------
Net income and performance ratios
(annualized):
---------------------------------
Net income attributable to Webster
Financial Corp. $40,384 $42,231 $34,184 $34,580 $31,957
Net income available to common
shareholders 39,591 41,400 33,353 33,749 24,347
Net income per diluted common share 0.43 0.45 0.36 0.36 0.29
Return on average shareholders'
equity 8.67% 9.12% 7.43% 7.72% 6.97%
Return on average tangible
equity 12.21 12.88 10.54 11.09 9.92
Return on average assets 0.88 0.94 0.76 0.77 0.72
Income and performance ratios, (annualized), from continuing operations:
------------------------------------------------------------------------
Income from continuing operations
attributable to Webster Financial
Corp. $40,384 $42,231 $34,184 $32,585 $31,863
Net income available to common
shareholders 39,591 41,400 33,353 31,754 24,253
Net income from continuing operations
per diluted common share 0.43 0.45 0.36 0.34 0.30
Return on average shareholders'
equity 8.67% 9.12% 7.43% 7.28% 6.95%
Return on average tangible
equity 12.21 12.88 10.54 10.45 9.89
Return on average assets 0.88 0.94 0.76 0.72 0.72
Noninterest income as a percentage of
total revenue 23.05 23.98 24.69 23.86 24.73
Efficiency ratio(a) 65.83 62.22 65.02 67.49 68.32
Asset quality:
--------------
Allowance for loan losses $233,487 $257,352 $281,243 $297,948 $321,665
Nonperforming assets 193,047 239,945 250,084 290,349 301,804
Allowance for loan losses /
total loans 2.08% 2.33% 2.55% 2.71% 2.92%
Net charge-offs /average loans
(annualized) 0.95 1.05 0.79 1.22 1.24
Nonperforming loans /total
loans 1.68 2.00 2.07 2.38 2.48
Nonperforming assets /total loans
plus OREO 1.72 2.17 2.27 2.63 2.73
Allowance for loan losses /
nonperforming loans 124.14 116.43 123.22 113.78 117.58
Other ratios (annualized):
--------------------------
Tangible capital ratio 7.16% 7.29% 7.42% 7.24% 6.97%
Tangible common equity ratio 7.00 7.13 7.26 7.08 6.80
Tier 1 risk-based capital
ratio(c) 12.96 13.09 12.94 12.69 12.12
Total risk-based capital(c) 14.52 14.65 14.51 14.27 13.99
Tier 1 common equity /risk-weighted
assets(c) 11.00 11.06 10.79 10.53 9.92
Shareholders' equity /total
assets 9.86 10.08 10.27 10.08 9.81
Interest rate spread 3.36 3.45 3.44 3.42 3.38
Net interest margin 3.39 3.49 3.48 3.46 3.42
Share and equity related:
-------------------------
Common equity $1,816,835 $1,807,309 $1,800,192 $1,782,211 $1,740,296
Book value per common share 20.74 20.65 20.57 20.37 19.97
Tangible book value per common share 14.57 14.47 14.38 14.17 13.73
Common stock closing price 20.39 15.30 21.02 21.43 19.70
Dividends declared per common share 0.05 0.05 0.05 0.01 0.01
Common shares issued and outstanding 87,600 87,507 87,532 87,474 87,160
Basic shares (average) 87,097 87,046 86,986 86,896 78,663
Diluted shares (average) 90,929 91,205 92,184 92,554 82,766
Footnotes:
----------
Calculated using SNL's
methodology -noninterest
expense (excluding foreclosed
property expenses, intangible
amortization, goodwill
impairments, and other charges)
as a percentage of net interest
income (FTE basis) plus
noninterest income (excluding
gain/loss on securities and
(a) other charges).
For purposes of the yield
computation, unrealized gains
(losses) on securities
available for sale are excluded
(b) from the average balance.
The ratios presented are
projected for the three month
reporting period ending
December 31, 2011 and actual,
subject to the correction noted
in footnote (d), for the
remaining reporting periods
(c) presented.
(d) Certain previously reported
information has been corrected
to reflect the deferment of
certain commercial loan fees.
WEBSTER FINANCIAL CORPORATION
Consolidated Balance Sheets (unaudited)
--------------------------------------
December 31, September 30, December 31,
(In thousands) 2011 2011 (d) 2010 (d)
------------- ---- ------- -------
Assets:
Cash and due
from banks $195,957 $168,776 $159,849
Interest-
bearing
deposits 96,062 87,240 52,811
Investment
securities:
Trading, at fair value - - 11,554
Available for sale, at fair
value 2,874,764 2,500,151 2,413,776
Held to maturity 2,973,727 3,106,013 3,072,453
--------- --------- ---------
Total securities 5,848,491 5,606,164 5,497,783
Loans held for
sale 57,391 28,266 52,224
Loans:
Commercial 2,860,597 2,841,242 2,814,495
Commercial real
estate 2,384,889 2,276,295 2,196,989
Residential
mortgages 3,219,889 3,150,286 3,147,492
Consumer 2,760,029 2,782,263 2,859,221
--------
Total loans 11,225,404 11,050,086 11,018,197
Allowance for
loan losses (233,487) (257,352) (321,665)
------------
Loans, net 10,991,917 10,792,734 10,696,532
Prepaid FDIC
premiums 37,946 42,424 57,548
Federal Home
Loan Bank and
Federal
Reserve Bank
stock 143,874 143,874 143,874
Premises and
equipment, net 147,379 148,274 157,724
Goodwill and
other
intangible
assets, net 545,577 546,974 551,164
Cash surrender
value of life
insurance
policies 307,039 305,901 298,149
Deferred tax
asset, net 105,665 98,588 107,029
Accrued
interest
receivable and
other assets 237,042 254,796 259,194
------------
Total Assets $18,714,340 $18,224,011 $18,033,881
============
Liabilities and
Equity:
Deposits:
Demand $2,473,693 $2,292,673 $2,216,987
2,578,520 2,440,464 2,194,239
Interest-
bearing
checking
Money market 2,021,056 2,225,841 2,460,918
Savings 3,748,121 3,689,377 3,586,732
Certificates of
deposit 2,715,583 2,818,527 3,071,030
Brokered
certificates
of deposit 119,052 119,052 78,879
Total deposits 13,656,025 13,585,934 13,608,785
Securities sold
under
agreements to
repurchase and
other short-term borrowings 1,164,706 1,220,905 1,091,477
Federal Home
Loan Bank
advances 1,252,609 760,964 768,005
Long-term debt 552,589 554,478 582,837
Accrued
expenses and
other
liabilities 242,637 255,905 203,898
Total liabilities 16,868,566 16,378,186 16,255,002
Webster
Financial
Corporation
shareholders'
equity 1,845,774 1,836,248 1,769,235
Noncontrolling
interests - 9,577 9,644
---------------
Total equity 1,845,774 1,845,825 1,778,879
--------- --------- ---------
Total
Liabilities
and Equity $18,714,340 $18,224,011 $18,033,881
============
See Selected
Financial
Highlights for
footnotes.
WEBSTER FINANCIAL CORPORATION
Consolidated Statements of
Operations (unaudited)
--------------------------
Three Months Ended Twelve Months Ended
December December
-------- --------
(In thousands, except per share
data) 2011 2010 (d) 2011 2010 (d)
------------------------------- ---- ------- ---- -------
Interest income:
Interest and fees on loans and leases $121,223 $122,621 $486,883 $493,244
Interest and dividends on securities 51,260 51,652 211,605 214,433
Loans held for sale 370 433 1,235 970
Total interest income 172,853 174,706 699,723 708,647
Interest expense:
Deposits 17,268 23,787 80,808 112,629
Borrowings 14,576 13,892 55,147 58,747
Total interest expense 31,844 37,679 135,955 171,376
Net interest income 141,009 137,027 563,768 537,271
Provision for loan losses 2,500 15,000 22,500 115,000
Net interest income after provision for
loan losses 138,509 122,027 541,268 422,271
Noninterest income:
Deposit service fees 24,286 25,026 102,795 108,977
Loan related fees 4,896 4,532 20,237 20,286
Wealth and investment services 5,759 6,652 26,421 24,925
Mortgage banking activities 1,094 2,222 4,905 4,169
Increase in cash surrender value of
life insurance policies 2,609 2,650 10,360 10,517
Net gain on investment securities - 2,295 2,024 22,387
Other income 3,602 1,639 10,300 9,964
Total noninterest income 42,246 45,016 177,042 201,225
Noninterest expense:
Compensation and benefits 68,146 63,941 262,647 245,343
Occupancy 13,125 13,871 53,866 55,634
Technology and equipment expense 15,054 16,044 60,721 62,855
Marketing 4,540 4,317 18,456 18,968
Professional and outside services 2,835 4,515 11,203 14,721
Intangible assets amortization 1,397 1,397 5,588 5,588
Foreclosed and repossessed asset
expenses 730 1,319 3,050 5,616
Foreclosed and repossessed asset
(gains) write-downs (63) 48 (306) 5,157
Loan workout expenses 1,956 2,228 7,547 9,830
Deposit insurance 4,756 5,407 20,927 24,535
Other expenses 12,864 15,117 55,896 56,251
125,340 128,204 499,595 504,498
Debt prepayment penalties 5,203 - 5,203 -
Write-down for expedited asset
disposition 1,187 - 6,260 -
Contract termination and severance 2,485 646 5,100 1,832
Branch and facility optimization 1,689 4,307 5,004 4,307
Preferred stock redemption costs 423 - 423 -
Costs for warrant registration - - 350 -
Provision (benefit) for litigation and
settlements (9,755) - (9,523) 22,476
Loan repurchase and unfunded commitment
reserve benefit, net - - (1,436) -
Fraud (recovery) loss - (5,195) - 5,861
Total noninterest expense 126,572 127,962 510,976 538,974
Income from continuing operations
before income taxes 54,183 39,081 207,334 84,522
Income tax expense 13,799 7,219 57,951 12,358
Income from continuing operations 40,384 31,862 149,383 72,164
Income from discontinued operations,
net of tax - 94 1,995 94
Consolidated net income 40,384 31,956 151,378 72,258
Less: Net (loss) income attributable to
noncontrolling interests - (1) (1) 3
Net income attributable to Webster
Financial Corp. 40,384 31,957 151,379 72,255
Preferred stock dividends (793) (3,469) (3,286) (18,086)
Preferred stock accretion and
accounting adjustments - (4,141) - (6,830)
Net income available to common
shareholders $39,591 $24,347 $148,093 $47,339
Diluted shares (average) 90,929 82,766 91,688 82,172
Net income per common share available
to common shareholders:
Basic
Income from continuing operations $0.45 $0.31 $1.67 $0.60
Net income 0.45 0.31 1.69 0.60
Diluted
Income from continuing operations 0.43 0.29 1.59 0.57
Net income 0.43 0.29 1.61 0.57
See Selected Financial Highlights for
footnotes.
WEBSTER FINANCIAL CORPORATION
Five Quarter Consolidated Statements of Operations (unaudited)
-------------------------------------------------------------
Three Months Ended
------------------
Dec. 31, Sept. 30, June 30, March 31, Dec. 31,
(In thousands, except per share
data) 2011 2011 (d) 2011 (d) 2011 (d) 2010 (d)
------------------------------- ---- ------- ------- ------- -------
Interest income:
Interest and fees on loans and
leases $121,223 $121,322 $122,395 $121,943 $122,621
Interest and dividends on
securities 51,260 52,974 53,527 53,844 51,652
Loans held for sale 370 266 177 422 433
Total interest income 172,853 174,562 176,099 176,209 174,706
------- ------- ------- ------- -------
Interest expense:
Deposits 17,268 18,930 21,841 22,769 23,787
Borrowings 14,576 13,947 13,345 13,279 13,892
Total interest expense 31,844 32,877 35,186 36,048 37,679
------ ------ ------ ------ ------
Net interest income 141,009 141,685 140,913 140,161 137,027
Provision for loan losses 2,500 5,000 5,000 10,000 15,000
Net interest income after provision for loan
losses 138,509 136,685 135,913 130,161 122,027
------- ------- ------- ------- -------
Noninterest income:
Deposit service fees 24,286 27,074 26,095 25,340 25,026
Loan related fees 4,896 5,308 5,590 4,443 4,532
Wealth and investment services 5,759 6,486 7,454 6,722 6,652
Mortgage banking activities 1,094 1,324 1,234 1,253 2,222
Increase in cash surrender value of life
insurance policies 2,609 2,642 2,576 2,533 2,650
Net gain on investment
securities - - 1,647 377 2,295
Other income 3,602 1,857 1,593 3,248 1,639
Total noninterest income 42,246 44,691 46,189 43,916 45,016
------ ------ ------ ------ ------
Noninterest expense:
Compensation and benefits 68,146 61,897 65,592 67,012 63,941
Occupancy 13,125 13,150 12,856 14,735 13,871
Technology and equipment
expense 15,054 15,141 15,134 15,392 16,044
Marketing 4,540 4,144 4,252 5,520 4,317
Professional and outside
services 2,835 3,125 2,813 2,430 4,515
Intangible assets amortization 1,397 1,397 1,397 1,397 1,397
Foreclosed and repossessed asset
expenses 730 726 710 884 1,319
Foreclosed and repossessed asset (gains) write-
downs (63) (722) 794 (315) 48
Loan workout expenses 1,956 2,012 1,779 1,800 2,228
Deposit insurance 4,756 4,472 5,918 5,781 5,407
Other expenses 12,864 14,392 14,716 13,924 15,117
------ ------ ------ ------ ------
125,340 119,734 125,961 128,560 128,204
Debt prepayment penalties 5,203 - - - -
Write-down for expedited asset
disposition 1,187 - 5,073 - -
Contract termination and
severance 2,485 1,555 1,060 - 646
Branch and facility
optimization 1,689 2,183 859 273 4,307
Preferred stock redemption
costs 423 - - - -
Costs for warrant registration - - 350 - -
Provision (benefit) for litigation and
settlements (9,755) (254) 194 292 -
Loan repurchase and unfunded commitment reserve
benefit, net - - (1,436) - -
Fraud recovery - - - - (5,195)
Total noninterest expense 126,572 123,218 132,061 129,125 127,962
------- ------- ------- ------- -------
Income from continuing operations before income
taxes 54,183 58,158 50,041 44,952 39,081
Income tax expense 13,799 15,927 15,857 12,368 7,219
------ ------ ------ ------ -----
Income from continuing
operations 40,384 42,231 34,184 32,584 31,862
Income from discontinued operations, net
of tax - - - 1,995 94
Consolidated net income 40,384 42,231 34,184 34,579 31,956
Less: Net (loss) income attributable to
noncontrolling interests - - - (1) (1)
--- --- --- --- ---
Net income attributable to Webster Financial
Corp. 40,384 42,231 34,184 34,580 31,957
Preferred stock dividends (793) (831) (831) (831) (3,469)
Preferred stock accretion and accounting
adjustments - - - - (4,141)
Net income available to common shareholders $39,591 $41,400 $33,353 $33,749 $24,347
======= ======= ======= ======= =======
Diluted shares (average) 90,929 91,205 92,184 92,554 82,766
Net income per common share available to common shareholders:
Basic
Income from continuing
operations $0.45 $0.47 $0.38 $0.37 $0.31
Net income 0.45 0.47 0.38 0.39 0.31
Diluted
Income from continuing
operations 0.43 0.45 0.36 0.34 0.29
Net income 0.43 0.45 0.36 0.36 0.29
See Selected Financial Highlights for
footnotes.
WEBSTER FINANCIAL CORPORATION
Five Quarter Interest Rate Spreads and Margin (unaudited)
--------------------------------------------------------
Three Months Ended
------------------
December 31, September 30, June 30, March 31, December 31,
2011 2011 (d) 2011 (d) 2011 (d) 2010 (d)
---- ------- ------- ------- -------
Interest rate spread
--------------------
Yield on interest-
earning assets 4.13% 4.27% 4.33% 4.33% 4.33%
Cost of interest-bearing
liabilities 0.77 0.82 0.89 0.91 0.95
---- ---- ---- ---- ----
Interest rate spread 3.36% 3.45% 3.44% 3.42% 3.38%
==== ==== ==== ==== ====
Net interest margin 3.39% 3.49% 3.48% 3.46% 3.42%
==== ==== ==== ==== ====
Consolidated Average Balances, Yields, and Rates Paid (unaudited)
----------------------------------------------------------------
Three Months Ended December 31, 2011 2010 (d)
------------------------------- ---- -------
Fully tax- Fully tax-
Average equivalent Average equivalent
(Dollars in thousands) balance Interest yield/rate balance Interest yield/rate
--------------------- ------- -------- ---------- ------- -------- ----------
Assets:
Interest-earning assets:
Loans $11,122,372 $121,223 4.31% $10,898,554 $122,621 4.46%
Investment securities(b) 5,638,172 54,414 3.88 5,267,983 54,716 4.19
Loans held for sale 35,321 370 4.18 39,913 433 4.34
Federal Home Loan and Federal Reserve Bank
stock 143,874 831 2.29 143,874 761 2.10
Interest-bearing deposits 86,156 26 0.12 59,880 36 0.24
Total interest-earning assets 17,025,895 176,864 4.13 16,410,204 178,567 4.33
Noninterest-earning assets 1,371,923 1,367,699
Total assets $18,397,818 $17,777,903
Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Deposits:
Demand 2,364,594 $ - - % $1,985,664 $ - - %
Savings, interest checking, and money
market 8,420,850 6,302 0.30 8,368,949 10,769 0.51
Certificates of deposit 2,899,642 10,966 1.50 3,181,917 13,018 1.62
Total deposits 13,685,086 17,268 0.50 13,536,530 23,787 0.70
Securities sold under agreements to
repurchase
and other short-term borrowings 1,212,019 4,450 1.44 1,086,312 3,728 1.34
Federal Home Loan Bank advances 854,539 4,151 1.90 513,943 3,782 2.88
Long-term debt 553,684 5,975 4.32 583,920 6,382 4.37
Total borrowings 2,620,242 14,576 2.20 2,184,175 13,892 2.51
Total interest-bearing liabilities 16,305,328 31,844 0.77 15,720,705 37,679 0.95
Noninterest-bearing liabilities 221,096 214,492
Total liabilities 16,526,424 15,935,197
Noncontrolling interests 7,703 9,649
Webster Financial Corp. shareholders'
equity 1,863,691 1,833,058
Total liabilities and equity $18,397,818 $17,777,904
Tax-equivalent net interest income 145,020 140,888
Less: tax-equivalent adjustment (4,011) (3,861)
Net interest income $141,009 $37,027
Interest rate spread 3.36% 3.38%
---
Net interest margin 3.39% 3.42%
---
See Selected Financial Highlights for
footnotes.
WEBSTER FINANCIAL CORPORATION
Consolidated Average Balances, Yields, and Rates Paid (unaudited)
----------------------------------------------------------------
Twelve Months Ended December
31, 2011 2010(d)
---------------------------- ---- ------
Fully tax- Fully tax-
Average equivalent Average equivalent
(Dollars in thousands) balance Interest yield/rate balance Interest yield/rate
--------------------- ------- -------- ---------- ------- -------- ----------
Assets:
Interest-earning assets:
Loans $11,054,100 $486,883 4.40% $10,904,698 $493,244 4.52%
Investment securities(b) 5,407,867 223,568 4.16 5,254,314 225,918 4.32
Loans held for sale 28,144 1,235 4.39 21,758 970 4.46
Federal Home Loan and
Federal Reserve Bank
stock 143,874 3,318 2.31 142,896 2,983 2.09
Interest-bearing deposits 112,232 216 0.19 151,756 389 0.26
Total interest-earning assets 16,746,217 715,220 4.28 16,475,422 723,504 4.40
Noninterest-earning assets 1,335,374 1,382,429
Total assets $,081,591 $17,857,851
Liabilities and Shareholders'
Equity:
Interest-bearing liabilities:
Deposits:
Demand $2,278,419 $ - - % $1,789,161 $ - - %
Savings, interest
checking, and
money market 8,534,333 33,747 0.40 8,458,169 49,251 0.58
Certificates of deposit 3,031,835 47,061 1.55 3,490,017 63,378 1.82
Total deposits 13,844,587 80,808 0.58 13,737,347 112,629 0.82
Securities sold
under agreements
to repurchase
and other short-term borrowings 1,053,323 16,173 1.54 899,203 15,900 1.77
Federal Home Loan Bank advances 569,987 14,352 2.52 567,711 17,628 3.11
Long-term debt 565,331 24,622 4.36 586,546 25,219 4.30
Total borrowings 2,188,641 55,147 2.52 2,053,460 58,747 2.86
Total interest-bearing liabilities 16,033,228 135,955 0.85 15,790,807 171,376 1.09
Noninterest-bearing liabilities 202,205 184,264
Total liabilities 16,235,433 15,975,071
Noncontrolling interests 9,119 9,643
Webster Financial
Corporation
shareholders' equity 1,837,039 1,873,137
Total liabilities and equity $18,081,591 $17,857,851
Tax-equivalent net interest income 579,265 552,128
Less: tax-equivalent adjustment (15,497) (14,857)
Net interest income $563,768 $537,271
Interest rate spread 3.43% 3.31%
---
Net interest margin 3.47% 3.36%
---
See Selected
Financial Highlights
for footnotes.
WEBSTER FINANCIAL CORPORATION
Five Quarter Loan Balances (unaudited)
Dec. 31, Sept. 30, June 30, March 31, Dec. 31,
(Dollars in thousands) 2011 2011 (d) 2011 (d) 2011 (d) 2010 (d)
--------------------- ---- ------- ------- ------- -------
Loan Balances (actuals):
Continuing Portfolio:
Commercial non-mortgage $1,932,542 $1,812,685 $1,787,920 $1,704,362 $1,649,172
Equipment financing 474,804 518,369 578,117 643,388 710,925
Asset based lending 453,251 510,188 480,662 483,027 454,398
Commercial real estate 2,345,241 2,225,250 2,170,279 2,159,211 2,137,315
Residential development 39,648 51,045 53,198 56,109 59,674
Residential mortgages 3,219,888 3,150,285 3,139,407 3,150,268 3,147,491
Consumer 2,612,476 2,627,385 2,641,102 2,642,533 2,682,645
--------- --------- --------- --------- ---------
Total continuing 11,077,850 10,895,207 10,850,685 10,838,898 10,841,620
Allowance for loan losses (203,612) (227,477) (243,543) (258,140) (278,665)
Total continuing, net 10,874,238 10,667,730 10,607,142 10,580,758 10,562,955
---------- ---------- ---------- ---------- ----------
Liquidating Portfolio:
National
Construction
Lending Center
(NCLC) 1 1 1 1 1
Consumer 147,553 154,878 161,805 169,035 176,576
------- ------- ------- ------- -------
Total liquidating portfolio 147,554 154,879 161,806 169,036 176,577
Allowance for loan losses (29,875) (29,875) (37,700) (39,808) (43,000)
Total liquidating, net 117,679 125,004 124,106 129,228 133,577
------- ------- ------- ------- -------
Total Loan Balances (actuals) 11,225,404 11,050,086 11,012,491 11,007,934 11,018,197
Allowance for loan losses (233,487) (257,352) (281,243) (297,948) (321,665)
Loans, net $10,991,917 $10,792,734 $10,731,248 $10,709,986 $10,696,532
=========== =========== =========== =========== ===========
Loan Balances (average):
Continuing Portfolio:
Commercial non-mortgage $1,868,885 $1,798,644 $1,747,658 $1,686,222 $1,565,198
Equipment finance 495,667 551,732 621,447 688,767 733,611
Asset based lending 492,982 497,426 472,837 488,181 488,639
Commercial real estate 2,254,970 2,185,662 2,154,215 2,144,018 2,048,659
Residential development 49,182 51,051 54,757 58,152 62,223
Residential mortgages 3,186,885 3,145,086 3,133,742 3,158,754 3,124,899
Consumer 2,622,378 2,635,911 2,641,621 2,662,454 2,693,191
--------- --------- --------- --------- ---------
Total continuing 10,970,949 10,865,512 10,826,277 10,886,548 10,716,420
Allowance for loan losses (219,566) (247,551) (255,412) (280,589) (288,003)
Total continuing, net 10,751,383 10,617,961 10,570,865 10,605,959 10,428,417
---------- ---------- ---------- ---------- ----------
Liquidating Portfolio:
NCLC 1 1 1 1 1,246
Consumer 151,422 158,161 165,612 172,929 180,888
------- ------- ------- ------- -------
Total liquidating portfolio 151,423 158,162 165,613 172,930 182,134
Allowance for loan losses (29,875) (29,875) (37,700) (39,808) (43,000)
Total liquidating, net 121,548 128,287 127,913 133,122 139,134
------- ------- ------- ------- -------
Total Loan Balances (average) 11,122,372 11,023,674 10,991,890 11,059,478 10,898,554
Allowance for loan losses (249,441) (277,426) (293,112) (320,397) (331,003)
Loans, net $10,872,931 $10,746,248 $10,698,778 $10,739,081 $10,567,551
=========== =========== =========== =========== ===========
See Selected Financial Highlights for
footnotes.
WEBSTER FINANCIAL CORPORATION
Five Quarter Nonperforming Assets (unaudited)
Dec. 31, Sept. 30, June 30, March 31, Dec. 31,
(Dollars in thousands) 2011 2011 2011 2011 2010
--------------------- ---- ---- ---- ---- ----
Nonperforming loans:
Continuing Portfolio:
Commercial non-mortgage $27,884 $39,386 $46,327 $40,534 $34,366
Equipment financing 7,154 8,439 11,313 16,602 20,482
Asset based lending 1,880 5,126 3,650 5,062 7,832
Commercial real estate 32,197 42,461 38,794 47,095 51,991
Residential development 6,762 16,611 16,173 17,300 15,477
Residential mortgages 82,052 79,285 82,189 95,750 99,128
Consumer 25,059 24,228 24,674 31,722 34,575
Nonperforming
loans -
continuing
portfolio 182,988 215,536 223,120 254,065 263,851
Liquidating Portfolio:
NCLC - - - - -
Consumer 5,091 5,492 5,116 7,802 9,722
Nonperforming
loans -
liquidating
portfolio 5,091 5,492 5,116 7,802 9,722
Total nonperforming loans $188,079 $221,028 $228,236 $261,867 $273,573
-------- -------- -------- -------- --------
Other real estate owned and repossessed assets:
Continuing Portfolio:
Commercial non-mortgage $1,961 $12,961 $13,577 $19,959 $20,033
Repossessed equipment 123 1,421 2,115 1,486 1,023
Asset based lending - - - - -
Commercial real estate - - - - -
Residential development - - - - -
Residential 1,947 3,343 4,772 5,056 5,794
Consumer 805 1,021 725 978 937
----- --- --- ---
Total continuing 4,836 18,746 21,189 27,479 27,787
Liquidating Portfolio:
NCLC 132 171 659 1,003 444
Consumer - - - - -
Total
liquidating 132 171 659 1,003 444
Total other real estate owned and repossessed assets $4,968 $18,917 $21,848 $28,482 $28,231
------ ------- ------- ------- -------
Total nonperforming assets $193,047 $239,945 $250,084 $290,349 $301,804
======== ======== ======== ======== ========
See Selected Financial Highlights for footnotes.
WEBSTER FINANCIAL CORPORATION
Five Quarter Past Due Loans (unaudited)
Dec. 31, Sept. 30 June 30, March 31, Dec. 31,
(Dollars in thousands) 2011 2011 2011 2011 2010
--------------------- ---- ---- ---- ---- ----
Past due 30-89 days:
Accruing loans:
Continuing Portfolio:
Commercial non-mortgage $4,619 $7,428 $8,568 $8,746 $5,201
Equipment financing 4,800 5,054 7,155 10,520 7,937
Asset based lending - - - - -
Commercial real estate 1,766 2,969 4,670 22,229 11,006
Residential development - 664 500 - 194
Residential mortgages 24,361 23,730 18,631 19,080 21,513
Consumer 20,847 18,867 18,989 17,457 21,539
Past Due 30-89
days -
continuing
portfolio 56,393 58,712 58,513 78,032 67,390
Liquidating Portfolio:
NCLC - - - - -
Consumer 4,538 4,653 6,134 5,966 6,128
Past Due 30-89
days -
liquidating
portfolio 4,538 4,653 6,134 5,966 6,128
Accruing loans past due 90 days or more 724 764 1,417 97 91
--- --- ----- --- ---
Total past due loans $61,655 $64,129 $66,064 $84,095 $73,609
======= ======= ======= ======= =======
See Selected Financial Highlights for
footnotes.
WEBSTER FINANCIAL CORPORATION
Five Quarter Changes in the Allowance for Loan Losses(unaudited)
---------------------------------------------------------------
For the Three Months Ended
--------------------------
Dec. 31, Sept. 30, June 30, March 31, Dec. 31,
(Dollars in thousands) 2011 2011 2011 2011 2010
--------------------- ---- ---- ---- ---- ----
Beginning balance $257,352 $281,243 $297,948 $321,665 $340,341
Provision 2,500 5,000 5,000 10,000 15,000
Charge-offs continuing portfolio:
Commercial non-mortgage 6,684 11,311 4,911 10,611 4,955
Equipment financing 55 551 413 1,134 4,079
Asset based lending 2,150 3,317 450 500 1,500
Commercial real estate 7,768 3,377 3,765 7,169 5,466
Residential development 453 - - 191 871
Residential mortgages 2,548 2,591 2,951 3,318 3,998
Consumer 7,551 8,874 8,843 10,354 9,732
----- ----- ----- ------ -----
Charge-offs
continuing
portfolio 27,209 30,021 21,333 33,277 30,601
Charge-offs liquidating portfolio:
NCLC 7 61 16 32 1,566
Consumer 3,958 3,734 5,049 4,634 5,004
Charge-offs
liquidating
portfolio 3,965 3,795 5,065 4,666 6,570
Total charge-offs 31,174 33,816 26,398 37,943 37,171
------ ------ ------ ------ ------
Recoveries continuing portfolio:
Commercial non-mortgage 1,215 858 1,150 487 824
Equipment financing 1,161 2,240 1,579 1,469 1,042
Asset based lending 195 273 171 929 94
Commercial real estate 96 36 406 - -
Residential development 5 - - - -
Residential mortgages 135 357 96 67 284
Consumer 1,721 998 1,079 1,086 971
Recoveries
continuing
portfolio 4,528 4,762 4,481 4,038 3,215
Recoveries liquidating portfolio:
NCLC 177 17 23 61 194
Consumer 104 146 189 127 86
Recoveries
liquidating
portfolio 281 163 212 188 280
Total recoveries 4,809 4,925 4,693 4,226 3,495
----- ----- ----- ----- -----
Total net charge-offs 26,365 28,891 21,705 33,717 33,676
------ ------ ------ ------ ------
Ending balance $233,487 $257,352 $281,243 $297,948 $321,665
======== ======== ======== ======== ========
See Selected Financial Highlights for
footnotes.
SOURCE Webster Financial Corporation
