Webster Reports 2016 First Quarter Earnings

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April 19, 2016 7:30 AM UTC

WATERBURY, Conn., April 19, 2016 /PRNewswire/ -- Webster Financial Corporation (NYSE: WBS), the holding company for Webster Bank, N.A., today announced earnings applicable to common shareholders of $46.5 million, or $0.51 per diluted share, for the quarter ended March 31, 2016 compared to $46.9 million, or $0.52 per diluted share, for the quarter ended March 31, 2015.

"Solid quarterly results underscore Webster's sustained progress in executing growth strategies that maximize value to customers and shareholders.  Both loans and revenue grew more than 10 percent, and total assets neared $25 billion," said James C. Smith, chairman and chief executive officer. "Our recent Boston expansion is gaining momentum, as new deposits recently surpassed $100 million.  Webster bankers continued to excel in service to customers and communities."

Highlights for the first quarter of 2016 compared to the first quarter of 2015:

  • Record core revenue of $240.1 million, an increase of 10.3 percent, including a record level of net interest income of $176.2 million.
  • Loan growth of $1.6 billion, or 11.1 percent, with double-digit growth in commercial, commercial real estate and residential mortgage loans.
  • Deposit growth of $1.2 billion, or 6.7 percent, primarily reflecting HSA Bank's strong organic growth.
  • Efficiency ratio of 61.29 percent would have been 58.92 percent excluding the Boston expansion related expenses.
  • Annualized return on average tangible common shareholders' equity of 10.97 percent.

"We continue to demonstrate expense discipline as evidenced by our ability to deliver on our efficiency commitments," said Glenn MacInnes, executive vice president and chief financial officer. "Excluding Boston expansion related expenses, the efficiency ratio has been at or below 60% for twelve consecutive quarters."

Quarterly net interest income compared to the first quarter of 2015:

  • Net interest income was $176.2 million compared to $159.8 million.
  • Net interest margin was 3.11 percent compared to 3.10 percent. The yield on interest-earning assets increased by 3 basis points, while the cost of funds increased by 1 basis point.
  • Net interest margin increased 3 basis points on a linked-quarter basis.
  • Average interest-earning assets totaled $23.0 billion and grew by $1.9 billion, or 9.2 percent.
  • Average loans totaled $15.8 billion and grew by $1.8 billion, or 12.9 percent.

Quarterly provision for loan losses:

  • The Company recorded a provision for loan losses of $15.6 million compared to $13.8 million in the fourth quarter of 2015 and $9.8 million a year ago.
  • Net charge-offs were $16.4 million compared to $11.8 million in the prior quarter and $7.0 million a year ago. The ratio of net charge-offs to average loans on an annualized basis was 0.41 percent compared to 0.31 percent in the prior quarter and 0.20 percent a year ago. The increase in net charge-offs was primarily in the commercial segment.
  • The allowance for loan losses represented 1.10 percent of total loans compared to 1.12 percent at December 31, 2015 and 1.14 percent at March 31, 2015. The allowance for loan losses represented 124 percent of nonperforming loans compared to 125 percent at December 31 and 106 percent a year ago.

Quarterly non-interest income compared to the first quarter of 2015:

  • Total non-interest income was $64.0 million compared to $57.9 million, an increase of $6.1 million. Excluding securities gains and other-than-temporary impairment charges, a year-over-year increase of $6.0 million in core non-interest income reflects increases of $3.8 million in deposit service fees primarily related to HSA Bank, $1.4 million in other income and $1.1 million in mortgage banking activities.

Quarterly non-interest expense compared to the first quarter of 2015:

  • Total non-interest expense was $151.7 million compared to $134.1 million, an increase of $17.6 million.
  • Non-interest expense, excluding one-time costs, related primarily to the upcoming closure of four banking center offices increased $16.9 million with $5.7 million of the increase related to the Boston expansion and $3.7 million related to growth at HSA Bank. The remaining $7.5 million increase reflects higher compensation expense and other expenses.

Quarterly income taxes compared to the first quarter of 2015:

  • Income tax expense was $24.2 million compared to $24.1 million. The effective tax rate was 33.2 percent compared to 32.6 percent, which included a $0.5 million net tax benefit specific to that period.

Investment securities:

  • Total investment securities were $7.1 billion compared to $6.9 billion at both December 31, 2015 and a year ago. The carrying value of the available-for-sale portfolio included $1.6 million of net unrealized gains compared to net unrealized losses of $10.3 million at December 31 and net unrealized gains of $36.9 million a year ago, while the carrying value of the held-to-maturity portfolio does not reflect $82.2 million of net unrealized gains compared to $38.5 million at December 31 and $99.8 million a year ago.

Loans:

  • Total loans were $15.9 billion compared to $15.7 billion at December 31, 2015 and $14.3 billion a year ago. Compared to December 31, commercial, commercial real estate, residential mortgage, and consumer loans increased by $58.8 million, $55.3 million, $48.2 million, and $24.3 million, respectively.
  • Compared to a year ago, commercial, residential mortgage, commercial real estate, and consumer loans increased by $531.9 million, $515.0 million, $383.8 million, and $157.4 million, respectively.
  • Loan originations for portfolio were $899 million compared to $1.534 billion in the prior quarter and $1.062 billion a year ago. In addition, $73 million of residential loans were originated for sale in the quarter compared to $98 million in the prior quarter and $87 million a year ago.

Asset quality:

  • Total nonperforming loans were $140.7 million, or 0.89 percent of total loans, compared to $139.9 million, or 0.89 percent, at December 31, 2015 and $152.2 million, or 1.07 percent, a year ago. Total paying nonperforming loans were $43.7 million compared to $48.7 million at December 31 and $53.8 million a year ago.
  • Past due loans were $55.7 million compared to $39.2 million at December 31 and $45.1 million a year ago. Loans past due 90 days and still accruing increased $1.3 million from both the prior quarter and prior year.

Deposits and borrowings:

  • Total deposits were $18.7 billion compared to $18.0 billion at December 31, 2015 and $17.5 billion a year ago. Core to total deposits were 89.2 percent compared to 88.4 percent at December 31 and 87.4 percent a year ago. Loans to deposits were 84.7 percent compared to 87.3 percent at December 31 and 81.3 percent a year ago.
  • Total borrowings were $3.5 billion compared to $4.0 billion at December 31 and $2.9 billion a year ago.

Capital:

  • The return on average tangible common shareholders' equity and the return on average common shareholders' equity were 10.97 percent and 8.06 percent, respectively, compared to 11.82 percent and 8.57 percent, respectively, in the first quarter of 2015.
  • The tangible equity and tangible common equity ratios were 7.64 percent and 7.14 percent, respectively, compared to 7.89 percent and 7.22 percent, respectively, at March 31, 2015. The common equity tier 1 risk-based capital ratio was 10.63 percent compared to 10.93 percent a year ago.
  • Book value and tangible book value per common share were $25.27 and $18.98, respectively, compared to $24.29 and $17.87, respectively, a year ago.

Webster Financial Corporation is the holding company for Webster Bank, National Association. With $24.9 billion in assets, Webster provides business and consumer banking, mortgage, financial planning, trust, and investment services through 180 banking centers and 352 ATMs. Webster also provides telephone banking, mobile banking, 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 2016 first quarter earnings announcement will be held today, Tuesday, April 19, 2016 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 Dodd-Frank Wall Street Reform and Consumer Protection Act; (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. 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

[email protected]

[email protected]

 

 

WEBSTER FINANCIAL CORPORATIONSelected Financial Highlights (unaudited)

At or for the Three Months Ended

(In thousands, except per share data)

March 31, 2016

December 31, 2015

September 30, 2015

June 30, 2015

March 31, 2015

Income and performance ratios (annualized):

Net income

$             48,617

$              52,579

$              51,536

$              52,503

$              49,722

Earnings applicable to common shareholders

46,486

50,414

49,341

50,277

46,937

Earnings per diluted common share

0.51

0.55

0.54

0.55

0.52

Return on average assets

0.78 %

0.86 %

0.86 %

0.90 %

0.88 %

Return on average tangible common shareholders' equity

10.97

11.99

11.89

12.49

11.82

Return on average common shareholders' equity

8.06

8.79

8.68

9.03

8.57

Non-interest income as a percentage of total revenue

26.66

25.82

26.78

26.80

26.60

Efficiency ratio

61.29

59.87

59.49

59.88

59.69

Asset quality:

Allowance for loan and lease losses

$          174,201

$            174,990

$            172,992

$            167,860

$            161,970

Nonperforming assets

145,787

144,970

164,387

172,825

157,546

Allowance for loan and lease losses / total loans and leases

1.10 %

1.12 %

1.14 %

1.14 %

1.14 %

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

0.41

0.31

0.21

0.19

0.20

Nonperforming loans and leases / total loans and leases

0.89

0.89

1.04

1.14

1.07

Nonperforming assets / total loans and leases plus OREO

0.92

0.92

1.08

1.17

1.10

Allowance for loan and lease losses / nonperforming loans and leases

123.79

125.05

108.80

100.00

106.39

Other ratios (annualized):

Tangible equity

7.64 %

7.64 %

7.78 %

7.82 %

7.89 %

Tangible common equity

7.14

7.13

7.26

7.28

7.22

Tier 1 risk-based capital (a)

11.33

11.54

11.62

11.80

12.01

Total risk-based capital (a)

12.80

12.92

13.02

13.21

13.44

Common equity tier 1 risk-based capital (a)

10.63

10.71

10.78

10.94

10.93

Shareholders' equity / total assets

9.78

9.80

10.01

10.09

10.22

Net interest margin

3.11

3.08

3.04

3.05

3.10

Share and equity related:

Common equity

$       2,315,257

$         2,292,861

$         2,279,835

$         2,256,985

$         2,203,926

Book value per common share

25.27

25.01

24.87

24.55

24.29

Tangible book value per common share

18.98

18.71

18.55

18.23

17.87

Common stock closing price

35.90

37.19

35.63

39.55

37.05

Dividends declared per common share

0.23

0.23

0.23

0.23

0.20

Common shares issued and outstanding

91,617

91,677

91,663

91,919

90,715

Weighted average common shares outstanding - basic

91,328

91,419

91,458

90,713

90,251

Weighted average common shares outstanding - diluted

91,809

91,956

92,007

91,302

90,841

(a) The ratios presented are projected for March 31, 2016 and actual for the remaining periods.

 

 

WEBSTER FINANCIAL CORPORATIONConsolidated Balance Sheets (unaudited)

(In thousands)

March 31, 2016

December 31, 2015 (b)

March 31, 2015 (b)

Assets:

Cash and due from banks

$          198,174

$            199,693

$            163,495

Interest-bearing deposits

27,805

155,907

119,297

Investment securities:

Available for sale

3,080,469

2,984,631

2,968,109

Held to maturity

4,012,289

3,923,052

3,923,189

Total securities

7,092,758

6,907,683

6,891,298

Loans held for sale (a)

30,425

37,091

45,866

Loans and Leases:

Commercial

4,975,332

4,916,525

4,443,446

Commercial real estate

4,046,911

3,991,649

3,663,071

Residential mortgages

4,109,243

4,061,001

3,594,272

Consumer

2,726,869

2,702,560

2,569,437

Total loans and leases

15,858,355

15,671,735

14,270,226

Allowance for loan and lease losses

(174,201)

(174,990)

(161,970)

Loans and leases, net

15,684,154

15,496,745

14,108,256

Federal Home Loan Bank and Federal Reserve Bank stock

188,347

188,347

193,290

Premises and equipment, net

134,212

129,426

123,548

Goodwill and other intangible assets, net

576,145

577,699

582,751

Cash surrender value of life insurance policies

506,746

503,093

443,225

Deferred tax asset, net

81,191

101,578

61,136

Accrued interest receivable and other assets

415,552

345,625

319,922

Total Assets

$     24,935,509

$       24,642,887

$       23,052,084

Liabilities and Equity:

Deposits:

Demand

$       3,625,605

$         3,713,063

$         3,450,316

Interest-bearing checking

2,421,692

2,369,971

2,267,350

Health savings accounts

4,084,190

3,802,313

3,529,301

Money market

2,319,588

1,933,460

2,114,300

Savings

4,244,383

4,047,817

3,978,655

Certificates of deposit

1,727,934

1,762,847

1,905,943

Brokered certificates of deposit

301,131

323,307

299,785

Total deposits

18,724,523

17,952,778

17,545,650

Securities sold under agreements to repurchase and other borrowings

910,149

1,151,400

1,083,877

Federal Home Loan Bank advances

2,363,131

2,664,139

1,584,357

Long-term debt

225,323

225,260

225,069

Accrued expenses and other liabilities

274,416

233,739

257,556

Total liabilities

22,497,542

22,227,316

20,696,509

Preferred stock

122,710

122,710

151,649

Common shareholders' equity

2,315,257

2,292,861

2,203,926

Webster Financial Corporation shareholders' equity

2,437,967

2,415,571

2,355,575

Total Liabilities and Equity

$     24,935,509

$       24,642,887

$       23,052,084

(a) A policy election was made effective in the first quarter 2016. As a result, the March 31, 2016 balance includes loans originated for sale which are accounted for under the fair value option of ASU 820.

(b) Amounts revised for an immaterial correction for cash collateral relating to derivatives, reclassified from cash and due from banks impacting other assets and other liabilities.

 

WEBSTER FINANCIAL CORPORATIONConsolidated Statements of Income (unaudited)

Three Months Ended March 31,

(In thousands, except per share data)

2016

2015

Interest income:

Interest and fees on loans and leases

$         149,808

$            130,723

Interest and dividends on securities

52,254

51,679

Loans held for sale

273

510

  Total interest income

202,335

182,912

Interest expense:

Deposits

12,299

11,542

Borrowings

13,884

11,606

  Total interest expense

26,183

23,148

  Net interest income

176,152

159,764

Provision for loan and lease losses

15,600

9,750

  Net interest income after provision for loan and lease losses

160,552

150,014

Non-interest income:

Deposit service fees

36,382

32,625

Loan and lease related fees

5,675

5,679

Wealth and investment services

7,195

7,889

Mortgage banking activities

2,629

1,561

Increase in cash surrender value of life insurance policies

3,653

3,152

Net gain on investment securities

320

43

Other income

8,319

6,941

64,173

57,890

Loss on write-down of investment securities to fair value

(149)

—

  Total non-interest income

64,024

57,890

Non-interest expense:

Compensation and benefits

80,309

70,864

Occupancy

14,253

13,596

Technology and equipment expense

19,235

19,248

Marketing

4,924

4,176

Professional and outside services

2,811

2,453

Intangible assets amortization

1,554

1,288

Loan workout expenses

965

878

Deposit insurance

6,786

6,241

Other expenses

19,688

14,871

150,525

133,615

Severance, contract, and other

401

290

Acquisition costs

—

509

Branch and facility optimization

816

(324)

  Total non-interest expense

151,742

134,090

Income before income taxes

72,834

73,814

Income tax expense

24,217

24,092

  Net income

48,617

49,722

  Preferred stock dividends and other

(2,131)

(2,785)

  Earnings applicable to common shareholders

$            46,486

$              46,937

Weighted-average common shares outstanding - diluted

91,809

90,841

Earnings per common share:

   Basic

$                0.51

$                  0.52

   Diluted

0.51

0.52

 

 

WEBSTER FINANCIAL CORPORATIONFive Quarter Consolidated Statements of Income (unaudited)

Three Months Ended

(In thousands, except per share data)

March 31, 2016

December 31, 2015

September 30, 2015

June 30, 2015

March 31, 2015

Interest income:

Interest and fees on loans and leases

$          149,808

$            145,504

$            140,520

$            135,694

$            130,723

Interest and dividends on securities

52,254

52,365

51,121

50,844

51,679

Loans held for sale

273

291

357

432

510

   Total interest income

202,335

198,160

191,998

186,970

182,912

Interest expense:

Deposits

12,299

11,476

11,480

11,533

11,542

Borrowings

13,884

13,344

12,508

11,926

11,606

   Total interest expense

26,183

24,820

23,988

23,459

23,148

   Net interest income

176,152

173,340

168,010

163,511

159,764

Provision for loan and lease losses

15,600

13,800

13,000

12,750

9,750

   Net interest income after provision for loan and lease losses

160,552

159,540

155,010

150,761

150,014

Non-interest income:

Deposit service fees

36,382

34,231

35,229

34,493

32,625

Loan and lease related fees

5,675

5,881

8,305

5,729

5,679

Wealth and investment services

7,195

8,052

7,761

8,784

7,889

Mortgage banking activities

2,629

2,276

1,441

2,517

1,561

Increase in cash surrender value of life insurance policies

3,653

3,383

3,288

3,197

3,152

Net gain on investment securities

320

80

—

486

43

Other income

8,319

6,474

5,513

4,645

6,941

64,173

60,377

61,537

59,851

57,890

Loss on write-down of investment securities to fair value

(149)

(28)

(82)

—

—

   Total non-interest income

64,024

60,349

61,455

59,851

57,890

Non-interest expense:

Compensation and benefits

80,309

79,232

73,378

74,043

70,864

Occupancy

14,253

11,573

11,987

11,680

13,596

Technology and equipment expense

19,235

19,218

21,336

20,224

19,248

Marketing

4,924

3,533

4,099

4,245

4,176

Professional and outside services

2,811

2,932

2,896

2,875

2,453

Intangible assets amortization

1,554

1,588

1,621

1,843

1,288

Loan workout expenses

965

775

719

801

878

Deposit insurance

6,786

6,242

6,067

5,492

6,241

Other expenses

19,688

18,179

17,960

15,426

14,871

150,525

143,272

140,063

136,629

133,615

Severance, contract, and other

401

254

34

521

290

Acquisition costs

—

(386)

—

18

509

Branch and facility optimization

816

24

(243)

278

(324)

  Total non-interest expense

151,742

143,164

139,854

137,446

134,090

Income before income taxes

72,834

76,725

76,611

73,166

73,814

Income tax expense

24,217

24,146

25,075

20,663

24,092

   Net income

48,617

52,579

51,536

52,503

49,722

   Preferred stock dividends and other

(2,131)

(2,165)

(2,195)

(2,226)

(2,785)

   Earnings applicable to common shareholders

$             46,486

$              50,414

$              49,341

$              50,277

$              46,937

Weighted-average common shares outstanding - diluted

91,809

91,956

92,007

91,302

90,841

Earnings per common share:

  Basic

$                 0.51

$                  0.55

$                  0.54

$                  0.55

$                  0.52

  Diluted

0.51

0.55

0.54

0.55

0.52

 

WEBSTER FINANCIAL CORPORATIONConsolidated Average Balances, Yields, and Rates Paid (unaudited)

Three Months Ended March 31,

2016

2015

(Dollars in thousands)

Average balance

Interest

Fully tax- equivalent yield/rate

Average balance

Interest

Fully tax- equivalent yield/rate

Assets:

Interest-earning assets:

Loans and leases

$     15,798,897

$         150,536

3.79 %

$       13,994,482

$            131,254

3.76 %

Investment securities (a)

6,895,407

53,012

3.07

6,695,978

52,426

3.15

Federal Home Loan and Federal Reserve Bank stock

188,347

1,417

3.03

193,290

1,316

2.76

Interest-bearing deposits

57,337

72

0.49

99,879

63

0.25

Loans held for sale

26,623

273

4.10

40,666

510

5.02

Total interest-earning assets

22,966,611

$         205,310

3.56 %

21,024,295

$            185,569

3.54 %

Non-interest-earning assets

1,826,026

1,619,996

Total assets

$     24,792,637

$       22,644,291

Liabilities and Shareholders' Equity:

Interest-bearing liabilities:

Deposits:

Demand

$       3,665,928

$                     —

—%

$         3,454,242

$                     —

—%

Savings, interest checking, and money market

12,761,677

6,615

0.21

11,541,135

4,836

0.17

Certificates of deposit

2,057,650

5,684

1.11

2,242,857

6,706

1.21

Total deposits

18,485,255

12,299

0.27

17,238,234

11,542

0.27

Securities sold under agreements to repurchase and other borrowings

1,048,997

4,173

1.57

1,199,025

4,387

1.46

Federal Home Loan Bank advances

2,337,746

7,247

1.23

1,432,717

4,821

1.35

Long-term debt

226,191

2,464

4.36

226,248

2,398

4.24

Total borrowings

3,612,934

13,884

1.52

2,857,990

11,606

1.62

Total interest-bearing liabilities

22,098,189

$            26,183

0.47 %

20,096,224

$              23,148

0.46 %

Non-interest-bearing liabilities

258,713

198,164

Total liabilities

22,356,902

20,294,388

Preferred stock

122,710

151,649

Common shareholders' equity

2,313,025

2,198,254

Webster Financial Corporation shareholders' equity

2,435,735

2,349,903

Total liabilities and equity

$     24,792,637

$       22,644,291

Tax-equivalent net interest income

179,127

162,421

Less: tax-equivalent adjustment

(2,975)

(2,657)

Net interest income

$         176,152

$            159,764

Net interest margin

3.11 %

3.10 %

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

 

 

WEBSTER FINANCIAL CORPORATIONFive Quarter Loan and Lease Balances (unaudited)

(Dollars in thousands)

March 31, 2016

December 31, 2015

September 30, 2015

June 30, 2015

March 31, 2015

Loan and Lease Balances (actuals):

Continuing Portfolio:

Commercial non-mortgage

$       3,607,176

$         3,562,784

$         3,423,775

$         3,310,863

$         3,183,218

Equipment financing

596,572

600,526

552,850

545,441

543,636

Asset-based lending

771,584

753,215

716,204

711,041

716,592

Commercial real estate

4,046,911

3,991,649

3,857,155

3,770,252

3,663,071

Residential mortgages

4,109,243

4,061,001

4,015,839

3,833,489

3,594,272

Consumer

2,649,644

2,622,998

2,568,009

2,520,970

2,480,270

Total continuing portfolio

15,781,130

15,592,173

15,133,832

14,692,056

14,181,059

Allowance for loan and lease losses

(167,769)

(167,626)

(165,341)

(159,501)

(152,825)

Total continuing portfolio, net

15,613,361

15,424,547

14,968,491

14,532,555

14,028,234

Liquidating Portfolio:

Consumer

77,225

79,562

82,693

85,470

89,167

Allowance for loan and lease losses

(6,432)

(7,364)

(7,651)

(8,359)

(9,145)

Total liquidating portfolio, net

70,793

72,198

75,042

77,111

80,022

Total Loan and Lease Balances (actuals)

15,858,355

15,671,735

15,216,525

14,777,526

14,270,226

Allowance for loan and lease losses

(174,201)

(174,990)

(172,992)

(167,860)

(161,970)

Loans and Leases, net

$     15,684,154

$       15,496,745

$       15,043,533

$       14,609,666

$       14,108,256

Loan and Lease Balances (average):

Continuing Portfolio:

Commercial non-mortgage

$       3,605,483

$         3,482,862

$         3,363,074

$         3,247,527

$         3,096,762

Equipment financing

600,123

570,686

549,310

542,112

542,067

Asset-based lending

750,328

721,662

712,811

709,985

675,218

Commercial real estate

4,019,260

3,955,012

3,804,904

3,705,895

3,574,826

Residential mortgages

4,101,396

4,039,341

3,950,654

3,711,096

3,546,098

Consumer

2,643,792

2,601,955

2,544,789

2,504,668

2,468,422

Total continuing portfolio

15,720,382

15,371,518

14,925,542

14,421,283

13,903,393

Allowance for loan and lease losses

(173,479)

(170,724)

(163,421)

(156,698)

(153,790)

Total continuing portfolio, net

15,546,903

15,200,794

14,762,121

14,264,585

13,749,603

Liquidating Portfolio:

National Construction Lending Center (NCLC)

—

—

—

—

1

Consumer

78,515

81,058

84,449

87,418

91,088

Total liquidating portfolio

78,515

81,058

84,449

87,418

91,089

Allowance for loan and lease losses

(6,432)

(7,364)

(7,651)

(8,359)

(9,145)

Total liquidating portfolio, net

72,083

73,694

76,798

79,059

81,944

Total Loan and Lease Balances (average)

15,798,897

15,452,576

15,009,991

14,508,701

13,994,482

Allowance for loan and lease losses

(179,911)

(178,088)

(171,072)

(165,057)

(162,935)

Loans and Leases, net

$     15,618,986

$       15,274,488

$       14,838,919

$       14,343,644

$       13,831,547

 

 

WEBSTER FINANCIAL CORPORATIONFive Quarter Nonperforming Assets (unaudited)

(Dollars in thousands)

March 31, 2016

December 31, 2015

September 30, 2015

June 30,2015

March 31, 2015

Nonperforming loans and leases:

Continuing Portfolio:

Commercial non-mortgage

$             32,517

$              27,086

$              40,235

$              43,081

$              27,057

Equipment financing

868

706

403

301

285

Asset-based lending

—

—

—

—

—

Commercial real estate

15,381

20,211

23,828

26,893

25,814

Residential mortgages

53,700

54,101

57,603

58,663

61,274

Consumer

34,581

33,972

32,969

34,236

33,696

Nonperforming loans and leases - continuing portfolio

137,047

136,076

155,038

163,174

148,126

Liquidating Portfolio:

Consumer

3,675

3,865

3,965

4,682

4,117

Total nonperforming loans and leases

$          140,722

$            139,941

$            159,003

$            167,856

$            152,243

Other real estate owned and repossessed assets:

Continuing Portfolio:

Repossessed equipment

$               342

$                  —

$                     —

$                     —

$                     —

Residential

3,329

3,788

4,078

3,930

3,051

Consumer

1,394

1,241

1,306

1,039

2,252

Total other real estate owned and repossessed assets

$               5,065

$                5,029

$                5,384

$                4,969

$                5,303

Total nonperforming assets

$          145,787

$            144,970

$            164,387

$            172,825

$            157,546

 

WEBSTER FINANCIAL CORPORATIONFive Quarter Past Due Loans and Leases (unaudited)

(Dollars in thousands)

March 31, 2016

December 31, 2015

September 30, 2015

June 30, 2015

March 31, 2015

Past due 30-89 days:

Continuing Portfolio:

Commercial non-mortgage

$               7,265

$                4,052

$                4,415

$                1,778

$                3,992

Equipment financing

594

602

739

517

789

Asset-based lending

—

—

—

—

—

Commercial real estate

20,730

2,250

1,939

1,547

3,962

Residential mortgages

10,456

15,032

15,222

12,315

13,966

Consumer

12,414

14,225

15,850

13,053

18,459

Past due 30-89 days - continuing portfolio

51,459

36,161

38,165

29,210

41,168

Liquidating Portfolio:

Consumer

819

1,036

953

1,299

1,820

Total past due 30-89 days

52,278

37,197

39,118

30,509

42,988

Past due 90 days or more and accruing

3,391

2,051

2,228

1,923

2,109

Total past due loans and leases

$             55,669

$              39,248

$              41,346

$              32,432

$              45,097

 

WEBSTER FINANCIAL CORPORATIONFive Quarter Changes in the Allowance for Loan and Lease Losses (unaudited)

Three Months Ended

(Dollars in thousands)

March 31, 2016

December 31, 2015

September 30, 2015

June 30, 2015

March 31, 2015

Beginning balance

$          174,990

$            172,992

$            167,860

$            161,970

$            159,264

Provision

15,600

13,800

13,000

12,750

9,750

Charge-offs continuing portfolio:

Commercial non-mortgage

11,208

6,522

2,204

2,541

255

Equipment financing

151

244

—

15

15

Asset-based lending

—

—

—

—

—

Commercial real estate

1,526

1,988

1,346

1,091

3,153

Residential mortgages

1,594

1,504

1,588

1,461

1,953

Consumer

4,101

4,379

3,991

3,531

3,634

Charge-offs continuing portfolio

18,580

14,637

9,129

8,639

9,010

Charge-offs liquidating portfolio:

NCLC

—

—

—

—

2

Consumer

320

320

840

322

662

Charge-offs liquidating portfolio

320

320

840

322

664

Total charge-offs

18,900

14,957

9,969

8,961

9,674

Recoveries continuing portfolio:

Commercial non-mortgage

455

441

558

527

989

Equipment financing

45

1,083

32

102

143

Asset-based lending

2

38

157

2

26

Commercial real estate

74

325

69

52

202

Residential mortgages

720

115

280

365

104

Consumer

905

948

852

849

821

Recoveries continuing portfolio

2,201

2,950

1,948

1,897

2,285

Recoveries liquidating portfolio:

NCLC

1

1

1

4

4

Consumer

309

204

152

200

341

Recoveries liquidating portfolio

310

205

153

204

345

Total recoveries

2,511

3,155

2,101

2,101

2,630

Total net charge-offs

16,389

11,802

7,868

6,860

7,044

Ending balance

$          174,201

$            174,990

$            172,992

$            167,860

$            161,970

 

 

WEBSTER FINANCIAL CORPORATIONReconciliations to GAAP Financial Measures

The Company evaluates its business based on the following ratios that utilize tangible equity, a non-GAAP financial measure. Return on average tangible common shareholders' equity measures the Company's net income available to common shareholders, adjusted for the tax-affected amortization of intangible assets, as a percentage of average common shareholders' equity less goodwill and intangible assets (excluding mortgage servicing rights). The tangible equity ratio represents total ending shareholders' equity less goodwill and intangible assets (excluding mortgage servicing rights) divided by total assets less goodwill and intangible assets (excluding mortgage servicing rights). The tangible common equity ratio represents ending common shareholders' equity less goodwill and intangible assets (excluding mortgage servicing rights) divided by total assets less goodwill and intangible assets (excluding mortgage servicing rights). Tangible book value per common share represents ending common shareholders' equity less goodwill and intangible assets (excluding mortgage servicing rights) divided by ending common shares outstanding.

The efficiency ratio, which measures the costs expended to generate a dollar of revenue, is calculated excluding foreclosed property expense, amortization of intangibles, gain or loss on securities, and other non-recurring items. Accordingly, this is also a non-GAAP financial measure.

The Company believes the use of these non-GAAP financial measures provides additional clarity in assessing the results of the Company. Other companies may define or calculate supplemental financial data differently. See the tables below for reconciliations of these non-GAAP financial measures with financial measures defined by GAAP.

At or for the Three Months Ended

(In thousands, except per share data)

March 31, 2016

December 31, 2015

September 30, 2015

June 30, 2015

March 31, 2015

Reconciliation of net income to annualized net income used in the return on average tangible common shareholders' equity ratio

Net income

$             48,617

$              52,579

$              51,536

$              52,503

$              49,722

Preferred stock dividends

(2,024)

(2,024)

(2,024)

(2,024)

(2,639)

Amortization of intangibles (tax-affected @ 35%)

1,010

1,032

1,054

1,198

837

   Quarterly net income adjusted for amortization of intangibles

47,603

51,587

50,566

51,677

47,920

   Annualized net income used in the return on average tangible common    shareholders' equity ratio

$          190,412

$            206,348

$            202,264

$            206,708

$            191,680

Reconciliation of average common shareholders' equity to average tangible common shareholders' equity

Average common shareholders' equity

$       2,313,025

$         2,299,493

$         2,280,960

$         2,236,743

$         2,198,254

Average goodwill

(538,373)

(538,373)

(538,373)

(538,373)

(537,147)

Average intangible assets (excluding mortgage servicing rights)

(38,656)

(40,225)

(41,845)

(43,538)

(39,559)

   Average tangible common shareholders' equity

$       1,735,996

$         1,720,895

$         1,700,742

$         1,654,832

$         1,621,548

Reconciliation of period-end shareholders' equity to period-end tangible shareholders' equity

Shareholders' equity

$       2,437,967

$         2,415,571

$         2,402,545

$         2,379,695

$         2,355,575

Goodwill

(538,373)

(538,373)

(538,373)

(538,373)

(538,373)

Intangible assets (excluding mortgage servicing rights)

(37,772)

(39,326)

(40,914)

(42,535)

(44,378)

   Tangible shareholders' equity

$       1,861,822

$         1,837,872

$         1,823,258

$         1,798,787

$         1,772,824

Reconciliation of period-end common shareholders' equity to period-end tangible common shareholders' equity

Common shareholders' equity

$       2,315,257

$         2,292,861

$         2,279,835

$         2,256,985

$         2,203,926

Goodwill

(538,373)

(538,373)

(538,373)

(538,373)

(538,373)

Intangible assets (excluding mortgage servicing rights)

(37,772)

(39,326)

(40,914)

(42,535)

(44,378)

   Tangible common shareholders' equity

$       1,739,112

$         1,715,162

$         1,700,548

$         1,676,077

$         1,621,175

Reconciliation of period-end assets to period-end tangible assets

Assets

$     24,935,509

$       24,642,887

$       24,008,834

$       23,595,076

$       23,052,084

Goodwill

(538,373)

(538,373)

(538,373)

(538,373)

(538,373)

Intangible assets (excluding mortgage servicing rights)

(37,772)

(39,326)

(40,914)

(42,535)

(44,378)

   Tangible assets

$     24,359,364

$       24,065,188

$       23,429,547

$       23,014,168

$       22,469,333

Book value per common share

Common shareholders' equity

$       2,315,257

$         2,292,861

$         2,279,835

$         2,256,985

$         2,203,926

Ending common shares issued and outstanding

91,617

91,677

91,663

91,919

90,715

   Book value per common share

$               25.27

$                25.01

$                24.87

$                24.55

$                24.29

Tangible book value per common share

Tangible common shareholders' equity

$       1,739,112

$         1,715,162

$         1,700,548

$         1,676,077

$         1,621,175

Ending common shares issued and outstanding

91,617

91,677

91,663

91,919

90,715

   Tangible book value per common share

$               18.98

$                18.71

$                18.55

$                18.23

$                17.87

Reconciliation of non-interest expense to non-interest expense used in the efficiency ratio

Non-interest expense

$          151,742

$            143,164

$            139,854

$            137,446

$            134,090

Foreclosed property activities

158

(1)

(202)

391

(705)

Intangible assets amortization

(1,554)

(1,588)

(1,621)

(1,843)

(1,288)

Other expense

(1,217)

108

209

(817)

(475)

   Non-interest expense used in the efficiency ratio

$          149,129

$            141,683

$            138,240

$            135,177

$            131,622

Income used in the efficiency ratio

Net interest income before provision for loan losses

$          176,152

$            173,340

$            168,010

$            163,511

$            159,764

Fully taxable-equivalent adjustment ("FTE")

2,975

2,738

2,596

2,626

2,657

Non-interest income

64,024

60,349

61,455

59,851

57,890

Net gain on investment securities

(320)

(80)

—

(486)

(43)

Other

481

303

324

242

242

   Income used in the efficiency ratio

$          243,312

$            236,650

$            232,385

$            225,744

$            220,510

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/webster-reports-2016-first-quarter-earnings-300253524.html

SOURCE Webster Financial Corporation


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