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18.04.2019 13:30
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Webster Reports First Quarter 2019 Earnings Of $1.06 Per Share

DRUCKEN

WATERBURY, Conn., April 18, 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 $97.5 million, or $1.06 per diluted share, for the quarter ended March 31, 2019 compared to $78.1 million, or $0.85 per diluted share, for the quarter ended March 31, 2018.

"The first quarter represented our 38th consecutive quarter of year-over-year revenue growth as we continue to execute on our strategic priorities," said John R. Ciulla, president and chief executive officer. "Our disciplined approach to capital allocation aligns with our overarching goal to deliver for our customers while maximizing economic profit over time."

Highlights for the first quarter of 2019 compared to prior year:

  • Revenue of $310.2 million, an increase of 9.6 percent, including net interest income of $241.6 million, an increase of 12.8 percent.
  • Loan growth of $1.0 billion, or 5.7 percent; all of the growth was in commercial and commercial real estate loans, which increased 9.4 percent.
  • Deposit growth of $1.4 billion, or 6.4 percent, with growth of $722 million, or 13.1 percent at HSA Bank.
  • Net interest margin of 3.74 percent, up 30 basis points.
  • Pre-tax, pre-provision net revenue growth of $23.2 million, or 20.8 percent, led by HSA Bank's growth of 40.4 percent.
  • Efficiency ratio of 55.9 percent (non-GAAP) compared to 59.8 percent.
  • Annualized return on average common shareholders' equity of 14.01 percent compared to 12.15 percent; annualized return on average tangible common shareholders' equity (non-GAAP) of 17.70 percent compared to 15.73 percent.

"We have now earned in excess of our cost of capital for eight consecutive quarters," said Glenn MacInnes, executive vice president and chief financial officer. "We continue to report strong performance measured by positive operating leverage, net interest margin expansion and disciplined expense management, leading to an efficiency ratio below 56 percent for the quarter."

Line of Business performance compared to the first quarter of 2018

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 March 31, 2019, Commercial Banking had $10.6 billion in loans and leases and $4.2 billion in deposit balances.

Commercial Banking Operating Results:

 


Three months ended March 31,


Percent

Favorable/

(In thousands)

2019

2018


(Unfavorable)

Net interest income

$90,510

$84,651


6.9%

Non-interest income

14,011

15,316


(8.5)

Operating revenue

104,521

99,967


4.6

Non-interest expense

44,618

41,245


(8.2)

Pre-tax, pre-provision net revenue

$59,903

$58,722


2.0







At March 31,


Percent

Increase/

(In millions)

2019

2018


(Decrease)

Loans and leases

$10,631

$9,686


9.8%

Deposits

4,191

4,041


3.7

 

Pre-tax, pre-provision net revenue increased $1.2 million to $59.9 million in the quarter as compared to prior year. Net interest income increased $5.9 million to $90.5 million, primarily due to loan growth and higher deposit margins.  Non-interest income decreased $1.3 million to $14.0 million, primarily due to lower client interest rate hedging activity. Non-interest expense increased $3.4 million to $44.6 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 March 31, 2019, HSA Bank had $7.9 billion in total footings comprising $6.2 billion in deposit balances and $1.7 billion in assets under administration through linked investment accounts.

HSA Bank Operating Results:

 


Three months ended March 31,


Percent

Favorable/

(In thousands)

2019

2018


(Unfavorable)

Net interest income

$41,741

$32,924


26.8%

Non-interest income

25,576

22,669


12.8

Operating revenue

67,317

55,593


21.1

Non-interest expense

33,522

31,515


(6.4)

Pre-tax net revenue

$33,795

$24,078


40.4






At March 31,


Percent

Increase/

(Dollars in millions)

2019

2018


(Decrease)

Number of accounts (thousands)

2,933

2,643


11.0%

Deposits

$6,209

$5,488


13.1

Linked investment accounts*

1,703

1,364


24.9

Total footings

$7,912

$6,852


15.5


 *Linked investment accounts are held off balance sheet

                                        

Pre-tax net revenue increased $9.7 million to $33.8 million in the quarter as compared to prior year. Net interest income increased $8.8 million to $41.7 million, due to 13 percent growth in deposits and 12 percent improvement in deposit spreads. Non-interest income increased $2.9 million to $25.6 million, primarily due to 11 percent growth  in accounts over the past year. Non-interest expense increased $2.0 million to $33.5 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 315 ATMs, a customer care center, and a full range of web and mobile-based banking services.

As of March 31, 2019, Community Banking had $8.2 billion in loans and $12.3 billion in deposit balances.

Community Banking Operating Results:

 


Three months ended March 31,


Percent

Favorable/

(In thousands)

2019

2018


(Unfavorable)

Net interest income

$101,360

$98,928


2.5%

Non-interest income

25,382

25,195


0.7

Operating revenue

126,742

124,123


2.1

Non-interest expense

95,075

96,829


1.8

Pre-tax, pre-provision net revenue

$31,667

$27,294


16.0







At March 31,


Percent

Increase/

(In millions)

2019

2018


(Decrease)

Loans

$8,183

$8,121


0.8%

Deposits

12,271

11,580


6.0

 

Pre-tax, pre-provision net revenue increased $4.4 million to $31.7 million in the quarter as compared to prior year. Net interest income increased $2.4 million to $101.4 million, primarily due to growth in deposit balances, coupled with improved interest rate spreads on deposits. Non-interest income was up $0.2 million due to increased deposit and loan related fee income. Non-interest expense decreased $1.8 million to $95.1 million resulting from savings in occupancy and lower marketing expenses.

Consolidated financial performance:

Quarterly net interest income compared to the first quarter of 2018:

  • Net interest income was $241.6 million compared to $214.2 million.
  • Net interest margin was 3.74 percent compared to 3.44 percent. The yield on interest-earning assets increased by 48 basis points, and the cost of funds increased by 20 basis points.
  • Average interest-earning assets totaled $26.0 billion and grew by $884 million, or 3.5 percent.
  • Average loans totaled $18.5 billion and grew by $754 million, or 4.3 percent.
  • Average deposits totaled $22.5 billion and grew by $1.1 billion, or 5.3 percent.

Quarterly provision for loan losses:

  • The provision for loan losses was $8.6 million, compared to $10.0 million in the prior quarter and $11.0 million a year ago.
  • Net charge-offs were $9.6 million, compared to $9.5 million in the prior quarter and $5.6 million a year ago. The ratio of net charge-offs to average loans on an annualized basis was 0.21 percent, compared to 0.21 percent in the prior quarter and 0.13 percent a year ago.
  • The allowance for loan losses represented 1.12 percent of total loans at March 31, 2019, compared to 1.15 percent at December 31, 2018 and 1.15 percent at March 31, 2018. The allowance for loan losses represented 133 percent of nonperforming loans compared to 137 percent at December 31, 2018 and 153 percent at March 31, 2018.

Quarterly non-interest income compared to the first quarter of 2018:

  • Total non-interest income was $68.6 million, compared to $68.7 million, a decrease of $0.1 million. This reflects a decrease in other of $3.1 million primarily related to client hedging income, offset by an increase of $2.9 million in HSA fee income driven by account fees and interchange due to account growth, and an increase of $0.8 million in loan related fees primarily due to prepayment fees.

Quarterly non-interest expense compared to the first quarter of 2018:

  • Total non-interest expense was $175.7 million, compared to $171.6 million, an increase of $4.1 million. This reflects increases of $3.0 million in compensation and benefits due to annual merit increases and other benefits, $1.8 million in technology/equipment primarily due to higher service contracts to support infrastructure, and $1.3 million in professional and outside services, offset by a decrease of $2.3 million in deposit insurance primarily related to a fully funded deposit insurance fund.

Quarterly income taxes compared to the first quarter of 2018:

  • Income tax expense was $26.1 million, compared to $20.1 million and the effective tax rate was 20.8 percent, compared to 20.0 percent.
  • The higher effective tax rate in the quarter reflects a slightly lower level of discrete tax benefits recognized during the period compared to a year ago coupled with a higher level of pre-tax income in the quarter compared to the year-ago period.

Investment securities:

  • Total investment securities were $7.5 billion, compared to $7.2 billion at December 31, 2018 and $7.2 billion at March 31, 2018. The carrying value of the available-for-sale portfolio included $58.6 million of net unrealized losses, compared to $95.9 million at December 31, 2018 and $74.0 million at March 31, 2018. The carrying value of the held-to-maturity portfolio does not reflect $46.8 million of net unrealized losses, compared to $116.3 million at December 31, 2018, and $111.3 million at March 31, 2018.

Loans:

  • Total loans were $18.8 billion, compared to $18.5 billion at December 31, 2018 and $17.8 billion at March 31, 2018. Compared to December 31, 2018, residential mortgages increased by $215.2 million, commercial loans increased by $125.9 million, and commercial real estate loans increased by $64.7 million while consumer loans decreased by $57.0 million.
  • Compared to a year ago, commercial loans increased by $572.4 million, commercial real estate loans increased by $447.0 million, and residential mortgages increased by $171.9 million while consumer loans decreased by $182.6 million.
  • Loan originations for portfolio were $1.132 billion, compared to $1.611 billion in the prior quarter and $1.111 billion a year ago. In addition, $33 million of residential loans were originated for sale in the quarter, compared to $30 million in the prior quarter and $43 million a year ago.

Asset quality:

  • Total nonperforming loans were $158.9 million, or 0.84 percent of total loans, compared to $154.8 million, or 0.84 percent, at December 31, 2018 and $134.3 million, or 0.75 percent, at March 31, 2018. Total paying nonperforming loans were $38.6 million, compared to $42.5 million at December 31, 2018 and $32.2 million at March 31, 2018.
  • Past due loans were $50.5 million, compared to $34.3 million at December 31, 2018 and $41.6 million at March 31, 2018.

Deposits and borrowings:

  • Total deposits were $22.8 billion, compared to $21.9 billion at December 31, 2018 and $21.4 billion at March 31, 2018. Core deposits to total deposits were 85.3 percent, compared to 85.4 percent at December 31, 2018 and 88.1 percent at March 31, 2018. The loan to deposit ratio was 82.7 percent, compared to 84.5 percent at December 31, 2018 and 83.3 percent at March 31, 2018.
  • Total borrowings were $2.2 billion, compared to $2.6 billion at December 31, 2018 and $2.4 billion at March 31, 2018.

Capital:

  • The return on average common shareholders' equity and the return on average tangible common shareholders' equity were 14.01 percent and 17.70 percent, respectively, compared to 12.15 percent and 15.73 percent, respectively, in the first quarter of 2018.
  • The tangible equity and tangible common equity ratios were 8.68 percent and 8.16 percent, respectively, compared to 8.21 percent and 7.65 percent, respectively, at March 31, 2018. The common equity tier 1 risk-based capital ratio was 11.46 percent, compared to 10.99 percent at March 31, 2018.
  • Book value and tangible book value per common share were $30.62 and $24.51, respectively, compared to $27.94 and $21.78, respectively, at March 31, 2018.

Webster Financial Corporation is the holding company for Webster Bank, National Association and its HSA Bank division. With $28.2 billion in assets, Webster provides business and consumer banking, mortgage, financial planning, trust, and investment services through 157 banking centers and 315 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 2019 first quarter earnings announcement will be held today, Thursday, April 18, 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)


March 31, 2019




December 31, 2018




September 30, 2018




June 30, 2018




March 31, 2018
























Income and performance ratios:





















Net income

$

99,736



$

98,838



$

99,673



$

81,682



$

80,225



Earnings applicable to common shareholders


97,549




96,666




97,460




79,489




78,083



Earnings per diluted common share


1.06




1.05




1.06




0.86




0.85



Return on average assets


1.44

%



1.44

%



1.47

%



1.22

%



1.20


%

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


17.70




18.22




18.88




15.76




15.73



Return on average common shareholders' equity


14.01




14.31




14.74




12.22




12.15



Non-interest income as a percentage of total revenue


22.12




23.58




23.88




23.31




24.30
























Asset quality:





















Allowance for loan and lease losses

$

211,389



$

212,353



$

211,832



$

207,322



$

205,349



Nonperforming assets


164,431




161,617




157,967




146,047




140,090



Allowance for loan and lease losses / total loans and leases


1.12

%



1.15

%



1.16

%



1.15

%



1.15


%

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


0.21




0.21




0.13




0.19




0.13



Nonperforming loans and leases / total loans and leases


0.84




0.84




0.83




0.78




0.75



Nonperforming assets / total loans and leases plus OREO


0.87




0.87




0.86




0.81




0.79



Allowance for loan and lease losses / nonperforming loans and leases


133.01




137.22




138.76




148.00




152.95
























Other ratios:





















Tangible equity (non-GAAP)


8.68

%



8.59

%



8.41

%



8.29

%



8.21


%

Tangible common equity (non-GAAP)


8.16




8.05




7.86




7.75




7.65



Tier 1 risk-based capital (a)


12.17




12.16




11.96




11.74




11.75



Total risk-based capital (a)


13.60




13.63




13.44




13.21




13.24



Common equity tier 1 risk-based capital (a)


11.46




11.44




11.23




10.99




10.99



Shareholders' equity / total assets


10.50




10.45




10.30




10.21




10.15



Net interest margin


3.74




3.66




3.61




3.57




3.44



Efficiency ratio (non-GAAP)


55.93




56.19




57.41




57.78




59.76
























Equity and share related:





















Common equity

$

2,821,218



$

2,741,478



$

2,671,161



$

2,616,686



$

2,571,105



Book value per common share


30.62




29.72




28.96




28.40




27.94



Tangible book value per common share (non-GAAP)


24.51




23.60




22.83




22.25




21.78



Common stock closing price


50.67




49.29




58.96




63.70




55.40



Dividends declared per common share


0.33




0.33




0.33




0.33




0.26
























Common shares issued and outstanding


92,125




92,247




92,230




92,151




92,016



Weighted-average common shares outstanding - Basic


91,962




91,971




91,959




91,893




91,921



Weighted-average common shares outstanding - Diluted


92,165




92,202




92,208




92,173




92,254
























(a) Presented as projected for March 31, 2019 and actual for the remaining periods.





















 

WEBSTER FINANCIAL CORPORATION
Consolidated Balance Sheets (unaudited)











(In thousands)


March 31, 2019




December 31, 2018




March 31, 2018

Assets:











Cash and due from banks

$

167,587



$

260,422



$

164,927

Interest-bearing deposits


53,072




69,077




45,899

Securities:











Available for sale


2,977,316




2,898,730




2,773,506

Held to maturity


4,480,160




4,325,420




4,408,321

Total securities


7,457,476




7,224,150




7,181,827

Loans held for sale


20,615




11,869




19,727

Loans and Leases:











Commercial


6,850,942




6,725,003




6,278,502

Commercial real estate


4,991,825




4,927,145




4,544,831

Residential mortgages


4,631,787




4,416,637




4,459,862

Consumer


2,339,736




2,396,704




2,522,380

Total loans and leases


18,814,290




18,465,489




17,805,575

Allowance for loan and lease losses


(211,389)




(212,353)




(205,349)

Loans and leases, net


18,602,901




18,253,136




17,600,226

Federal Home Loan Bank and Federal Reserve Bank stock


106,674




149,286




125,328

Premises and equipment, net


279,580




124,850




127,196

Goodwill and other intangible assets, net


563,176




564,137




567,023

Cash surrender value of life insurance policies


546,094




543,616




535,391

Deferred tax asset, net


76,576




96,516




99,199

Accrued interest receivable and other assets


364,378




313,256




285,404

Total Assets

$

28,238,129



$

27,610,315



$

26,752,147












Liabilities and Shareholders' Equity:











Deposits:











Demand

$

4,224,144



$

4,162,446



$

4,074,992

Health savings accounts


6,209,213




5,740,601




5,487,627

Interest-bearing checking


2,560,975




2,518,472




2,624,885

Money market


2,299,229




2,100,084




2,344,526

Savings


4,102,740




4,140,696




4,299,759

Certificates of deposit


3,273,120




2,961,564




2,275,897

Brokered certificates of deposit


81,507




234,982




277,356

Total deposits


22,750,928




21,858,845




21,385,042

Securities sold under agreements to repurchase and other borrowings


688,065




581,874




931,299

Federal Home Loan Bank advances


951,730




1,826,808




1,202,030

Long-term debt


524,303




226,021




225,830

Accrued expenses and other liabilities


356,848




230,252




291,804

Total liabilities


25,271,874




24,723,800




24,036,005

Preferred stock


145,037




145,037




145,037

Common shareholders' equity


2,821,218




2,741,478




2,571,105

Total shareholders' equity


2,966,255




2,886,515




2,716,142

Total Liabilities and Shareholders' Equity

$

28,238,129



$

27,610,315



$

26,752,147

 

WEBSTER FINANCIAL CORPORATION
Consolidated Statements of Income (unaudited)









Three Months Ended March 31,

(In thousands, except per share data)


2019




2018

Interest income:







Interest and fees on loans and leases

$

228,764



$

193,220

Interest and dividends on securities


57,278




52,559

Loans held for sale


148




142

Total interest income


286,190




245,921

Interest expense:







Deposits


31,020




18,156

Borrowings


13,619




13,597

Total interest expense


44,639




31,753

Net interest income


241,551




214,168

Provision for loan and lease losses


8,600




11,000

Net interest income after provision for loan and lease losses


232,951




203,168

Non-interest income:







Deposit service fees


43,024




40,451

Loan and lease related fees


7,819




6,996

Wealth and investment services


7,651




7,870

Mortgage banking activities


764




1,144

Increase in cash surrender value of life insurance policies


3,584




3,572

Other income


5,770




8,714

Total non-interest income


68,612




68,747

Non-interest expense:







Compensation and benefits


97,785




94,765

Occupancy


14,696




15,145

Technology and equipment


25,697




23,862

Marketing


3,328




3,552

Professional and outside services


6,048




4,788

Intangible assets amortization


962




962

Loan workout expenses


660




576

Deposit insurance


4,430




6,717

Other expenses


22,080




21,248

Total non-interest expense


175,686




171,615

Income before income taxes


125,877




100,300

Income tax expense


26,141




20,075

Net income


99,736




80,225

Preferred stock dividends and other


(2,187)




(2,142)

Earnings applicable to common shareholders

$

97,549



$

78,083








Weighted-average common shares outstanding - Diluted


92,165




92,254








Earnings per common share:







Basic

$

1.06



$

0.85

Diluted


1.06




0.85

 

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





















Three Months Ended

(In thousands, except per share data)


March 31, 2019




December 31, 2018




September 30, 2018




June 30, 2018




March 31, 2018

Interest income:



















Interest and fees on loans and leases

$

228,764



$

225,961



$

215,448



$

207,820



$

193,220

Interest and dividends on securities


57,278




54,301




52,707




52,523




52,559

Loans held for sale


148




130




208




148




142

Total interest income


286,190




280,392




268,363




260,491




245,921

Interest expense:



















Deposits


31,020




27,629




24,397




20,225




18,156

Borrowings


13,619




15,632




13,594




15,256




13,597

Total interest expense


44,639




43,261




37,991




35,481




31,753

Net interest income


241,551




237,131




230,372




225,010




214,168

Provision for loan and lease losses


8,600




10,000




10,500




10,500




11,000

Net interest income after provision for loan and lease losses


232,951




227,131




219,872




214,510




203,168

Non-interest income:



















Deposit service fees


43,024




40,272




40,601




40,859




40,451

Loan and lease related fees


7,819




7,914




10,782




6,333




6,996

Wealth and investment services


7,651




8,105




8,412




8,456




7,870

Mortgage banking activities


764




740




1,305




1,235




1,144

Increase in cash surrender value of life insurance policies


3,584




3,693




3,706




3,643




3,572

Other income


5,770




12,439




7,478




7,848




8,714

Total non-interest income


68,612




73,163




72,284




68,374




68,747

Non-interest expense:



















Compensation and benefits


97,785




97,039




96,640




93,052




94,765

Occupancy


14,696




13,974




14,502




15,842




15,145

Technology and equipment


25,697




24,858




24,553




24,604




23,862

Marketing


3,328




4,345




4,052




4,889




3,552

Professional and outside services


6,048




6,201




4,930




4,381




4,788

Intangible assets amortization


962




962




961




962




962

Loan workout expenses


660




1,150




681




844




576

Deposit insurance


4,430




4,651




9,694




13,687




6,717

Other expenses


22,080




21,579




22,770




22,198




21,248

Total non-interest expense


175,686




174,759




178,783




180,459




171,615

Income before income taxes


125,877




125,535




113,373




102,425




100,300

Income tax expense


26,141




26,697




13,700




20,743




20,075

Net income


99,736




98,838




99,673




81,682




80,225

Preferred stock dividends and other


(2,187)




(2,172)




(2,213)




(2,193)




(2,142)

Earnings applicable to common shareholders

$

97,549



$

96,666



$

97,460



$

79,489



$

78,083




















Weighted-average common shares outstanding - Diluted


92,165




92,202




92,208




92,173




92,254




















Earnings per common share:



















Basic

$

1.06



$

1.05



$

1.06



$

0.87



$

0.85

Diluted


1.06




1.05




1.06




0.86




0.85

   

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



























Three Months Ended March 31,




2019








2018


(Dollars in thousands)


Average balance




Interest




Yield/rate








Average balance



Interest


Yield/rate


Assets:

























Interest-earning assets:

























Loans and leases

$

18,509,174



$

229,385




4.96

%






$

17,754,773


$

193,864


4.37

%

Securities (a)


7,308,946




56,954




3.09








7,158,505



52,489


2.91


Federal Home Loan and Federal Reserve Bank stock


113,016




1,712




6.14








133,241



1,455


4.43


Interest-bearing deposits


55,372




329




2.37








52,711



201


1.52


Loans held for sale


13,451




148




4.40








16,330



142


3.49


Total interest-earning assets


25,999,959



$

288,528




4.43

%







25,115,560


$

248,151


3.95

%

Non-interest-earning assets


1,795,430
















1,641,721







Total Assets

$

27,795,389















$

26,757,281
































Liabilities and Shareholders' Equity:

























Interest-bearing liabilities:

























Demand deposits

$

4,191,870



$

-




-

%






$

4,163,364


$

-


-

%

Health savings accounts


6,140,062




2,949




0.19








5,427,000



2,624


0.20


Interest-bearing checking, money market and savings


8,958,522




12,793




0.58








9,342,743



7,713


0.33


Certificates of deposit


3,244,714




15,278




1.91








2,459,145



7,819


1.29


Total deposits


22,535,168




31,020




0.56








21,392,252



18,156


0.34



























Securities sold under agreements to repurchase and other borrowings


597,107




2,752




1.84








875,829



3,640


1.66


Federal Home Loan Bank advances


1,119,035




7,785




2.78








1,311,832



7,281


2.22


Long-term debt


249,169




3,082




4.95








225,799



2,676


4.74


Total borrowings


1,965,311




13,619




2.77








2,413,460



13,597


2.25


Total interest-bearing liabilities


24,500,479



$

44,639




0.74

%







23,805,712


$

31,753


0.54

%

Non-interest-bearing liabilities


359,257
















228,978







Total liabilities


24,859,736
















24,034,690
































Preferred stock


145,037
















145,161







Common shareholders' equity


2,790,616
















2,577,430







Total shareholders' equity


2,935,653
















2,722,591







Total Liabilities and Shareholders' Equity

$

27,795,389















$

26,757,281







Tax-equivalent net interest income






243,889















216,398




Less: tax-equivalent adjustments






(2,338)















(2,230)




Net interest income





$

241,551














$

214,168




Net interest margin










3.74

%












3.44

%


























(a) For purposes of the yield computation, unrealized gains (losses) on securities available for sale are excluded from the average balance.

























 

WEBSTER FINANCIAL CORPORATION
Five Quarter Loan and Lease Balances (unaudited)



















(Dollars in thousands)


March 31, 2019




December 31, 2018




September 30, 2018




June 30, 2018




March 31, 2018

Loan and Lease Balances (actual):



















Commercial non-mortgage

$

5,811,309



$

5,755,832



$

5,724,405



$

5,544,685



$

5,404,231

Asset-based lending


1,039,633




969,171




969,045




959,836




874,271

Commercial real estate


4,991,825




4,927,145




4,771,325




4,580,200




4,544,831

Residential mortgages


4,631,787




4,416,637




4,415,063




4,455,580




4,459,862

Consumer


2,339,736




2,396,704




2,441,181




2,485,695




2,522,380

Total Loan and Lease Balances


18,814,290




18,465,489




18,321,019




18,025,996




17,805,575

Allowance for loan and lease losses


(211,389)




(212,353)




(211,832)




(207,322)




(205,349)

Loans and Leases, net

$

18,602,901



$

18,253,136



$

18,109,187



$

17,818,674



$

17,600,226




















Loan and Lease Balances (average):



















Commercial non-mortgage

$

5,776,334



$

5,754,153



$

5,597,831



$

5,470,677



$

5,306,412

Asset-based lending


1,016,069




964,575




944,120




897,564




864,895

Commercial real estate


4,930,035




4,862,419




4,620,741




4,549,969




4,538,429

Residential mortgages


4,415,434




4,419,826




4,434,056




4,460,904




4,476,057

Consumer


2,371,302




2,423,414




2,464,094




2,507,571




2,568,980

Total Loan and Lease Balances


18,509,174




18,424,387




18,060,842




17,886,685




17,754,773

Allowance for loan and lease losses


(214,966)




(214,453)




(208,102)




(207,718)




(201,575)

Loans and Leases, net

$

18,294,208



$

18,209,934



$

17,852,740



$

17,678,967



$

17,553,198




















WEBSTER FINANCIAL CORPORATION
Five Quarter Nonperforming Assets (unaudited)



















(Dollars in thousands)


March 31, 2019




December 31, 2018




September 30, 2018




June 30, 2018




March 31, 2018

Nonperforming loans and leases:



















Commercial non-mortgage

$

66,754



$

62,265



$

58,366



$

40,240



$

46,843

Asset-based lending


218




224




1,066




1,197




1,571

Commercial real estate


7,449




8,243




7,255




9,606




3,884

Residential mortgages


49,267




49,069




49,348




50,654




44,496

Consumer 


35,245




34,949




36,621




38,390




37,465

Total nonperforming loans and leases

$

158,933



$

154,750



$

152,656



$

140,087



$

134,259




















Other real estate owned and repossessed assets:



















Commercial non-mortgage

$

861



$

407



$

83



$

148



$

218

Residential mortgages


2,769




4,679




3,944




3,271




2,785

Consumer


1,868




1,781




1,284




2,541




2,828