WEBSTER FINANCIAL CORPORATION 
By WATERBURY, Conn., April 17, 2014 /PRNewswire/ -- Webster Financial Corporation (NYSE: WBS), the holding company for Webster Bank, N.A., today announced net income available to common shareholders of $47.8 million, or $0.53 per diluted share, for the quarter ended March 31, 2014 compared to $39.2 million, or $0.44 per diluted share, for the quarter ended March 31, 2013.
Highlights for the quarter or at March 31 include:
-- Earnings per diluted share, excluding security gains and one-time items,
would be $0.50 compared to $0.45 a year ago.
-- Combined growth in commercial and commercial real estate loans of $975.7
million, or 15.9 percent, from a year ago. Overall loan growth of $992.7
million, or 8.3 percent, from a year ago.
-- Deposit growth of $416.1 million, or 2.9 percent, from a year ago.
-- An efficiency ratio of 60.34 percent improved by 182 basis points from a
year ago. Positive operating leverage of 3.4 percent year over year.
-- Record net interest income of $155.3 million. Highest pre-tax income
since the third quarter of 2004.
"Webster reported a solid first quarter performance as net income topped $50 million for the first time," said James C. Smith, chairman and chief executive officer. "Commercial loan growth continues to lead the way, propelling net interest income to another new high. Transaction account balances grew, and asset quality improved further. Our continued loan growth reflects the gradually improving economy and our success in building deep, lasting customer relationships."
Net interest income (compared to prior year)
-- Net interest income was $155.3 million compared to $145.8 million.
-- Net interest margin was 3.26 percent compared to 3.23 percent. The yield
on interest-earning assets declined by 4 basis points, while the cost of
funds declined by 6 basis points.
-- Average interest-earning assets totaled $19.5 billion and grew by $920.1
million, or 5.0 percent.
-- Average loans grew by $828.8 million, or 6.9 percent.
Provision for loan losses
-- The Company recorded a provision for loan losses of $9.0 million
compared to $9.0 million in the prior quarter and $7.5 million a year
earlier.
-- Net charge-offs were $8.0 million compared to $14.0 million in the
fourth quarter and $16.8 million in the year-ago period. The ratio of
net charge-offs to average loans on an annualized basis was 0.25 percent
compared to 0.45 percent in the fourth quarter and 0.56 percent a year
ago.
-- The allowance for loan losses represented 1.18 percent of total loans at
March 31, 2014 compared to 1.20 percent at December 31, 2013 and 1.40
percent at March 31, 2013. The allowance for loan losses represented 106
percent of nonperforming loans at March 31, 2014 compared to 94 percent
at December 31 and 84 percent a year ago, with the increase reflecting
the reclassification of $17.6 million of residential and consumer loans
as accruing in the quarter under regulatory guidance.
Non-interest income (compared to prior year)
-- Total non-interest income was $49.8 million compared to $48.3 million,
an increase of $1.5 million; of this increase, $4.3 million was related
to the sale of certain investment securities that Webster recorded
impairment on in the prior quarter due to the Volcker Rule of the
Dodd-Frank Act.
-- Excluding the securities gains and a nominal other than temporary
impairment charge, a $2.6 million year-over-year decrease in core
non-interest income reflects a decrease of $6.3 million in mortgage
banking activities, which was offset by increases of $2.1 million in
other income which included $1.4 million increase in client
transactions, $1.1 million in wealth and investment services, and $0.7
million in deposit service fees.
Non-interest expense (compared to prior year)
-- Total non-interest expense of $124.6 million compared to $125.5 million,
a decrease of $0.9 million. Included in non-interest expense are $0.2
million of net one-time costs. These costs primarily consisted of branch
and facility optimization and severance expenses. There were $1.6
million of net one-time costs in the year-ago quarter.
-- Foreclosed and repossessed asset expenses were $0.5 million compared to
$0.2 million, while net gains on foreclosed and repossessed assets were
flat compared to the prior year at $0.3 million.
Glenn MacInnes, chief financial officer, said, "Year-over-year positive operating leverage of 3.4 percent resulted in an improvement of 182 basis points in our efficiency ratio to 60.3 percent. We continue to be disciplined in our investments in order to enhance operating results."
Income taxes
-- The Company recorded $21.1 million of income tax expense in the first
quarter. The effective tax rate was 29.5 percent compared to 31.0
percent a year ago and reflects a $2.0 million net tax benefit specific
to the quarter.
Investment securities
-- Total investment securities were $6.5 billion at March 31, 2014 and $6.4
billion a year ago. The carrying value of the available-for-sale
portfolio included $8.8 million in net unrealized gains compared to
$64.5 million a year ago, while the carrying value of the
held-to-maturity portfolio does not reflect $30.2 million in net
unrealized gains compared to $130.9 million a year ago.
Loans
-- Total loans were $13.0 billion at March 31, 2014 compared to $12.7
billion at December 31, 2013 and $12.0 billion at March 31, 2013. In the
quarter, commercial and commercial real estate loans increased by $226.2
million and $85.3 million, respectively, while residential mortgage and
consumer loans decreased by $4.9 million and $11.6 million,
respectively.
-- Compared to a year ago, commercial, commercial real estate, and
residential mortgage loans increased by $623.0 million, $352.7 million,
and $69.5 million, respectively. Consumer loans decreased by $52.4
million.
-- Loan originations for portfolio in the first quarter were $880 million
compared to $1,094 million in the fourth quarter and $690 million a year
ago. In addition, $59 million of residential loans were originated for
sale in the quarter compared to $95 million in the prior quarter and
$229 million a year ago.
Asset quality
-- Past due loans were $48.0 million at quarter end compared to $52.9
million at December 31 and $40.0 million a year ago. Compared to
December 31, past due consumer and commercial real estate loans
decreased $3.9 million and $2.2 million, respectively. Past due
commercial non-mortgage, residential mortgage loans, and equipment
financing increased $3.8 million, $0.7 million, and $0.3 million,
respectively. Loans past due 90 days and still accruing decreased $3.7
million. Compared to a year ago, all loan categories contributed to the
increase except for equipment financing, which decreased $0.3 million.
-- Past due loans represented 0.37 percent of total loans at quarter end,
0.42 percent at December 31, and 0.33 percent a year ago. Past due loans
for the continuing portfolio were $45.7 million at quarter end compared
to $51.1 million at December 31 and $37.2 million a year ago. Past due
loans for the liquidating portfolio were $2.3 million at March 31
compared to $1.8 million at December 31 and $2.8 million a year ago.
-- Total nonperforming loans decreased to $145.1 million, or 1.12 percent
of total loans, at year end compared to $162.9 million, or 1.28 percent,
at December 31, and $198.8 million, or 1.66 percent, a year ago.
Included in nonperforming loans at quarter end were $26.8 million of
residential and consumer loans classified as nonaccrual under regulatory
guidance that took effect in the fourth quarter of 2012. This compares
to $43.7 million of such loans at December 31 and $44.0 million a year
ago. The decrease reflects the reclassification of $17.6 million of
residential and consumer loans as accruing in the quarter under
regulatory guidance. Total paying nonperforming loans at March 31 were
$35.7 million compared to $48.8 million at December 31 and $55.3 million
a year ago.
Deposits and borrowings
-- Total deposits were $15.0 billion at quarter end compared to $14.9
billion at December 31 and $14.6 billion a year ago. Compared to
December 31, increases of $210.3 million in interest-bearing checking,
$77.6 million inbrokered certificates of deposit, and $56.2 million in
savings, were offset by declines of $99.5 million in demand, $34.6
million in money market deposits, and $24.5 million in certificates of
deposit. Compared to a year ago, increases of $391.4 million in
interest-bearing checking, $179.3 million in demand deposits, $81.3
million in brokered certificates of deposit, and $34.8 million in
savings were offset by declines of $237.9 million in certificates of
deposit and $32.7 million in money market deposits.
-- Core to total deposits were 84.8 percent compared to 85.0 percent at
December 31 and 83.3 percent a year ago. Loans to deposits were 86.4
percent compared to 85.5 percent at December 31 and 82.1 percent a year
ago.
-- Total borrowings were $3.7 billion at quarter end compared to $3.6
billion at December 31 and $3.2 billion a year ago.
Capital (compared to prior year)
-- The tangible equity and tangible common equity ratios were 8.26 percent
and 7.53 percent, respectively, at quarter end compared to 8.12 percent
and 7.35 percent, respectively. The Tier 1 common equity to
risk-weighted assets ratio was 11.46 percent at quarter end compared to
11.06 percent.
-- Book value and tangible book value per common share were $23.13 and
$17.21, respectively, at quarter end compared to $21.90 and $15.93,
respectively.
Webster Financial Corporation is the holding company for Webster Bank, National Association. With $21 billion in assets, Webster provides business and consumer banking, mortgage, financial planning, trust and investment services through 168 banking centers, 310 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 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 atwww.websterbank.com.
Conference Call
A conference call covering Webster's 2014 first quarter earnings announcement will be held today, Thursday, April 17, 2014 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 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
--------------------------------
(In thousands, except per share data) March 31, December 31, September 30, June 30, March 31,
2014 2013 2013 2013 2013
--- ---- ---- ---- ---- ----
Income and performance ratios (annualized):
-------------------------------------------
Net income attributable to Webster Financial Corp. $50,423 $43,754 $47,305 $46,373 $42,117
Net income available to common shareholders 47,784 41,115 44,666 43,734 39,231
Net income per diluted common share 0.53 0.45 0.49 0.48 0.44
Return on average assets 0.96 % 0.85 % 0.93 % 0.92 % 0.84 %
Return on average tangible common shareholders' equity 12.51 11.14 12.43 12.26 11.28
Return on average common shareholders' equity 9.16 8.06 8.93 8.78 8.01
Non-interest income as a percentage of total revenue 24.29 22.34 23.57 26.22 24.88
Efficiency ratio 60.34 59.30 60.07 59.98 62.16
Asset quality:
--------------
Allowance for loan losses $153,600 $152,573 $157,545 $163,442 $167,840
Nonperforming assets 152,900 171,607 185,566 190,539 203,355
Allowance for loan losses / total loans 1.18 % 1.20 % 1.26 % 1.33 % 1.40 %
Net charge-offs / average loans (annualized) 0.25 0.45 0.47 0.43 0.56
Nonperforming loans / total loans 1.12 1.28 1.42 1.52 1.66
Nonperforming assets / total loans plus OREO 1.18 1.35 1.49 1.56 1.69
Allowance for loan losses / nonperforming loans 105.84 93.65 88.73 87.55 84.42
Other ratios (annualized):
--------------------------
Tangible equity ratio 8.26 % 8.24 % 8.13 % 8.03 % 8.12 %
Tangible common equity ratio 7.53 7.49 7.37 7.27 7.35
Tier 1 risk-based capital ratio (a) 13.07 13.07 13.05 12.93 12.75
Total risk-based capital (a) 14.20 14.21 14.25 14.19 14.01
Tier 1 common equity / risk-weighted assets (a) 11.46 11.43 11.38 11.24 11.06
Shareholders' equity / total assets 10.58 10.59 10.52 10.47 10.58
Net interest margin 3.26 3.27 3.23 3.23 3.23
Share and equity related:
-------------------------
Common equity $2,087,980 $2,057,539 $2,016,010 $1,975,826 $1,976,482
Book value per common share 23.13 22.77 22.34 21.88 21.90
Tangible book value per common share 17.21 16.85 16.40 15.93 15.93
Common stock closing price 31.06 31.18 25.53 25.68 24.26
Dividends declared per common share 0.15 0.15 0.15 0.15 0.10
Common shares issued and outstanding 90,269 90,367 90,245 90,289 90,237
Basic shares (weighted average) 89,880 89,887 89,759 89,645 85,501
Diluted shares (weighted average) 90,658 90,602 90,423 90,087 89,662
(a) The ratios presented are projected for March 31, 2014 and actual for the remaining periods presented.
WEBSTER FINANCIAL CORPORATION
Consolidated Balance Sheets (unaudited)
--------------------------------------
(In thousands) March 31, December 31, March 31,
2014 2013 2013
--- ---- ---- ----
Assets:
Cash and due from banks $251,886 $223,616 $118,657
Interest-bearing deposits 29,893 23,674 51,352
Investment securities:
Available for sale, at fair value 3,008,856 3,106,931 3,318,238
Held to maturity 3,448,195 3,358,721 3,111,169
--------- --------- ---------
Total securities 6,457,051 6,465,652 6,429,407
Loans held for sale 14,631 20,802 96,706
Loans:
Commercial 3,969,508 3,743,301 3,346,483
Commercial real estate 3,143,612 3,058,362 2,790,954
Residential mortgages 3,356,539 3,361,425 3,287,072
Consumer 2,525,083 2,536,688 2,577,523
--------- --------- ---------
Total loans 12,994,742 12,699,776 12,002,032
Allowance for loan losses (153,600) (152,573) (167,840)
-------- -------- --------
Loans, net 12,841,142 12,547,203 11,834,192
Prepaid FDIC premiums - - 16,644
Federal Home Loan Bank and Federal Reserve Bank stock 166,133 158,878 158,878
Premises and equipment, net 121,473 121,605 127,609
Goodwill and other intangible assets, net 534,070 535,238 538,915
Cash surrender value of life insurance policies 433,793 430,535 420,562
Deferred tax asset, net 55,316 65,109 55,656
Accrued interest receivable and other assets 270,357 260,687 261,960
Total Assets $21,175,745 $20,852,999 $20,110,538
----------- ----------- -----------
Liabilities and Equity:
Deposits:
Demand $3,028,625 $3,128,152 $2,849,355
Interest-bearing checking 3,677,917 3,467,601 3,286,540
Money market 2,133,036 2,167,593 2,165,744
Savings 3,920,171 3,863,930 3,885,394
Certificates of deposit 2,054,541 2,079,027 2,292,441
Brokered certificates of deposit 225,699 148,117 144,408
------- ------- -------
Total deposits 15,039,989 14,854,420 14,623,882
Securities sold under agreements to repurchase and other borrowings 1,147,882 1,331,662 1,033,767
Federal Home Loan Bank advances 2,203,606 2,052,421 1,902,563
Long-term debt 376,412 228,365 230,709
Accrued expenses and other liabilities 168,227 176,943 191,486
------- ------- -------
Total liabilities 18,936,116 18,643,811 17,982,407
---------- ---------- ----------
Preferred stock 151,649 151,649 151,649
Common shareholders' equity 2,087,980 2,057,539 1,976,482
--------- --------- ---------
Webster Financial Corporation shareholders' equity 2,239,629 2,209,188 2,128,131
--------- --------- ---------
Total Liabilities and Equity $21,175,745 $20,852,999 $20,110,538
----------- ----------- -----------
WEBSTER FINANCIAL CORPORATION
Consolidated Statements of Income (unaudited)
--------------------------------------------
Three Months Ended March
31,
------------------------
(In thousands, except per
share data) 2014 2013
------------------------- ---- ----
Interest income:
Interest and fees on loans and
leases $124,010 $120,692
Interest and dividends on
securities 53,592 48,754
Loans held for sale 177 637
Total interest income 177,779 170,083
------- -------
Interest expense:
Deposits 10,644 12,850
Borrowings 11,834 11,437
Total interest expense 22,478 24,287
------ ------
Net interest income 155,301 145,796
Provision for loan losses 9,000 7,500
Net interest income after
provision for loan losses 146,301 138,296
------- -------
Non-interest income:
Deposit service fees 24,712 23,994
Loan related fees 4,482 4,585
Wealth and investment services 8,838 7,766
Mortgage banking activities 753 7,031
Increase in cash surrender
value of life insurance
policies 3,258 3,384
Net gain on investment
securities 4,336 106
Other income 3,537 1,412
49,916 48,278
Loss on write-down of
investment securities to fair
value (88) -
Total non-interest income 49,828 48,278
------ ------
Non-interest expense:
Compensation and benefits 66,371 66,050
Occupancy 12,759 12,879
Technology and equipment
expense 15,010 15,353
Marketing 3,180 4,811
Professional and outside
services 2,702 2,150
Intangible assets amortization 1,168 1,242
Foreclosed and repossessed
asset expenses 458 175
Foreclosed and repossessed
asset gains (260) (284)
Loan workout expenses 1,052 1,974
Deposit insurance 5,311 5,174
Other expenses 16,654 14,375
------ ------
124,405 123,899
Debt prepayment penalties - 43
Severance, contract, and other 22 1,494
Branch and facility
optimization 190 99
---
Total non-interest expense 124,617 125,535
------- -------
Income before income taxes 71,512 61,039
Income tax expense 21,089 18,922
------ ------
Net income attributable to
Webster Financial Corp. 50,423 42,117
Preferred stock dividends (2,639) (2,886)
Net income available to common
shareholders $47,784 $39,231
------- -------
Diluted shares (average) 90,658 89,662
Net income per common share
available to common
shareholders:
Basic $0.53 $0.46
Diluted 0.53 0.44
WEBSTER FINANCIAL CORPORATION
Five Quarter Consolidated Statements of Income (unaudited)
---------------------------------------------------------
Three Months Ended
------------------
(In thousands, except per share data) March 31, December 31, September 30, June 30, March 31,
2014 2013 2013 2013 2013
--- ---- ---- ---- ---- ----
Interest income:
Interest and fees on loans and leases $124,010 $124,110 $123,257 $121,313 $120,692
Interest and dividends on securities 53,592 51,294 47,923 48,229 48,754
Loans held for sale 177 307 573 551 637
Total interest income 177,779 175,711 171,753 170,093 170,083
------- ------- ------- ------- -------
Interest expense:
Deposits 10,644 10,800 10,908 12,024 12,850
Borrowings 11,834 11,027 10,858 11,008 11,437
Total interest expense 22,478 21,827 21,766 23,032 24,287
------ ------ ------ ------ ------
Net interest income 155,301 153,884 149,987 147,061 145,796
Provision for loan losses 9,000 9,000 8,500 8,500 7,500
Net interest income after provision for loan losses 146,301 144,884 141,487 138,561 138,296
------- ------- ------- ------- -------
Non-interest income:
Deposit service fees 24,712 25,182 25,170 24,622 23,994
Loan related fees 4,482 5,930 5,840 5,505 4,585
Wealth and investment services 8,838 9,990 8,095 8,920 7,766
Mortgage banking activities 753 2,775 665 5,888 7,031
Increase in cash surrender value of life insurance policies 3,258 3,422 3,516 3,448 3,384
Net gain on investment securities 4,336 4 269 333 106
Other income 3,537 4,238 2,702 3,535 1,412
49,916 51,541 46,257 52,251 48,278
Loss on write-down of investment securities to fair value (88) (7,277) - - -
---
Total non-interest income 49,828 44,264 46,257 52,251 48,278
------ ------ ------ ------ ------
Non-interest expense:
Compensation and benefits 66,371 68,155 64,862 65,768 66,050
Occupancy 12,759 12,084 11,994 11,837 12,879
Technology and equipment expense 15,010 14,583 14,895 15,495 15,353
Marketing 3,180 3,225 3,649 3,817 4,811
Professional and outside services 2,702 3,601 2,254 1,527 2,150
Intangible assets amortization 1,168 1,193 1,242 1,242 1,242
Foreclosed and repossessed asset expenses 458 400 432 331 175
Foreclosed and repossessed asset gains (260) (229) (532) (250) (284)
Loan workout expenses 1,052 1,370 1,296 1,576 1,974
Deposit insurance 5,311 5,116 5,300 5,524 5,174
Other expenses 16,654 15,547 15,407 15,800 14,375
------ ------ ------ ------ ------
124,405 125,045 120,799 122,667 123,899
Debt prepayment penalties - - - - 43
Severance, contract, and other 22 389 1,482 919 1,494
Branch and facility optimization 190 1,205 - 18 99
---
Total non-interest expense 124,617 126,639 122,281 123,604 125,535
------- ------- ------- ------- -------
Income before income taxes 71,512 62,509 65,463 67,208 61,039
Income tax expense 21,089 18,755 18,158 20,835 18,922
------
Net income attributable to Webster Financial Corp. 50,423 43,754 47,305 46,373 42,117
Preferred stock dividends (2,639) (2,639) (2,639) (2,639) (2,886)
Net income available to common shareholders $47,784 $41,115 $44,666 $43,734 $39,231
------- ------- ------- ------- -------
Diluted shares (average) 90,658 90,602 90,423 90,087 89,662
Net income per common share available to common shareholders:
Basic $0.53 $0.46 $0.50 $0.49 $0.46
Diluted 0.53 0.45 0.49 0.48 0.44
WEBSTER FINANCIAL CORPORATION
Consolidated Average Balances, Yields, and Rates Paid (unaudited)
----------------------------------------------------------------
Three Months Ended March 31,
----------------------------
2014 2013
---- ----
(Dollars in thousands) Average Interest Fully tax- Average Interest Fully tax-
balance equivalent balance equivalent
yield/rate yield/rate
--- ----------
Assets:
Interest-earning assets:
Loans $12,853,349 $124,512 3.88 % $12,024,588 $121,061 4.04 %
Investment securities (a) 6,420,976 54,925 3.43 6,194,885 51,015 3.33
Federal Home Loan and Federal Reserve Bank stock 158,959 1,167 2.98 156,261 847 2.20
Interest-bearing deposits 15,949 11 0.27 82,215 46 0.22
Loans held for sale 18,128 177 3.92 89,334 637 2.85
------ --- ---- ------ --- ----
Total interest-earning assets 19,467,361 $180,792 3.72 % 18,547,283 $173,606 3.76 %
Non-interest-earning assets 1,511,631 1,504,196
Total assets $20,978,992 $20,051,479
----------- -----------
Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Deposits:
Demand $3,096,991 $ - -% $2,836,051 $ - -%
Savings, interest checking, and money market 9,844,931 4,519 0.19 9,318,300 4,622 0.20
Certificates of deposit 2,250,283 6,125 1.10 2,500,450 8,228 1.33
Total deposits 15,192,205 10,644 0.28 14,654,801 12,850 0.36
---------- ------ ---- ---------- ------ ----
Securities sold under agreements to repurchase and other borrowings 1,351,444 5,205 1.54 1,091,437 5,055 1.85
Federal Home Loan Bank advances 1,721,669 3,847 0.89 1,747,858 4,539 1.04
Long-term debt 308,985 2,782 3.60 247,077 1,843 2.98
Total borrowings 3,382,098 11,834 1.40 3,086,372 11,437 1.48
--------- ------ ---- --------- ------ ----
Total interest-bearing liabilities 18,574,303 $22,478 0.49 % 17,741,173 $24,287 0.55 %
Non-interest-bearing liabilities 165,861 199,369
Total liabilities 18,740,164 17,940,542
---------- ----------
Preferred stock 151,649 151,649
Common shareholders' equity 2,087,179 1,959,288
--------- ---------
Webster Financial Corp. shareholders' equity 2,238,828 2,110,937
Total liabilities and equity $20,978,992 $20,051,479
----------- -----------
Tax-equivalent net interest income 158,314 149,319
Less: tax-equivalent adjustment (3,013) (3,523)
Net interest income $155,301 $145,796
-------- --------
Net interest margin 3.26 % 3.23 %
----- -----
(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 Balances (unaudited)
-------------------------------------
(Dollars in thousands) March 31, December 31, September 30, June 30, March 31,
2014 2013 2013 2013 2013
--- ---- ---- ---- ---- ----
Loan Balances (actuals):
Continuing Portfolio:
Commercial non-mortgage $2,926,223 $2,723,566 $2,573,293 $2,515,288 $2,397,774
Equipment financing 457,670 460,450 425,827 400,658 404,597
Asset-based lending 585,615 559,285 612,106 591,981 544,112
Commercial real estate 3,143,612 3,058,362 2,983,863 2,866,814 2,790,954
Residential mortgages 3,356,538 3,361,424 3,350,576 3,313,832 3,287,071
Consumer 2,422,377 2,431,786 2,423,829 2,445,792 2,461,595
--------- --------- --------- --------- ---------
Total continuing portfolio 12,892,035 12,594,873 12,369,494 12,134,365 11,886,103
Allowance for loan losses (141,352) (137,821) (139,734) (142,402) (146,020)
Total continuing portfolio, net 12,750,683 12,457,052 12,229,760 11,991,963 11,740,083
---------- ---------- ---------- ---------- ----------
Liquidating Portfolio:
National Construction Lending Center (NCLC) 1 1 1 1 1
Consumer 102,706 104,902 108,470 111,927 115,928
------- ------- ------- ------- -------
Total liquidating portfolio 102,707 104,903 108,471 111,928 115,929
Allowance for loan losses (12,248) (14,752) (17,811) (21,040) (21,820)
------- ------- ------- ------- -------
Total liquidating portfolio, net 90,459 90,151 90,660 90,888 94,109
------ ------ ------ ------ ------
Total Loan Balances (actuals) 12,994,742 12,699,776 12,477,965 12,246,293 12,002,032
Allowance for loan losses (153,600) (152,573) (157,545) (163,442) (167,840)
Loans, net $12,841,142 $12,547,203 $12,320,420 $12,082,851 $11,834,192
----------- ----------- ----------- ----------- -----------
Loan Balances (average):
Continuing Portfolio:
Commercial non-mortgage $2,853,516 $2,625,654 $2,517,496 $2,422,156 $2,422,372
Equipment financing 456,391 436,328 413,975 398,084 407,849
Asset-based lending 562,443 587,039 599,387 566,623 528,797
Commercial real estate 3,080,575 3,003,837 2,885,767 2,811,583 2,771,608
Residential mortgages 3,364,746 3,359,186 3,342,516 3,295,192 3,286,946
Consumer 2,431,900 2,429,354 2,433,705 2,454,041 2,488,154
--------- --------- --------- --------- ---------
Total continuing portfolio 12,749,571 12,441,398 12,192,846 11,947,679 11,905,726
Allowance for loan losses (143,676) (141,460) (145,849) (148,037) (153,710)
Total continuing portfolio, net 12,605,895 12,299,938 12,046,997 11,799,642 11,752,016
---------- ---------- ---------- ---------- ----------
Liquidating Portfolio:
NCLC 1 1 1 1 1
Consumer 103,777 106,794 109,620 113,871 118,861
------- ------- ------- ------- -------
Total liquidating portfolio 103,778 106,795 109,621 113,872 118,862
Allowance for loan losses (12,248) (14,752) (17,811) (21,040) (21,820)
Total liquidating portfolio, net 91,530 92,043 91,810 92,832 97,042
------ ------ ------ ------ ------
Total Loan Balances (average) 12,853,349 12,548,193 12,302,467 12,061,551 12,024,588
Allowance for loan losses (155,924) (156,212) (163,660) (169,077) (175,530)
Loans, net $12,697,425 $12,391,981 $12,138,807 $11,892,474 $11,849,058
----------- ----------- ----------- ----------- -----------
WEBSTER FINANCIAL CORPORATION
Five Quarter Nonperforming Assets(unaudited)
-------------------------------------------
(Dollars in thousands) March 31, December 31, September 30, June 30, March 31,
2014(a) 2013 2013 2013 2013
--- ------ ---- ---- ---- ----
Nonperforming loans:
Continuing Portfolio:
Commercial non-mortgage $12,869 $10,933 $17,471 $17,285 $16,328
Equipment financing 1,325 1,141 1,669 1,852 2,801
Asset-based lending - - - - -
Commercial real estate 20,009 17,663 20,215 21,035 29,277
Residential mortgages 66,373 81,370 86,099 94,208 94,711
Consumer 38,670 45,573 45,587 44,717 48,370
Nonperforming loans - continuing portfolio 139,246 156,680 171,041 179,097 191,487
------- ------- ------- ------- -------
Liquidating Portfolio:
Consumer 5,875 6,245 6,517 7,594 7,323
Total nonperforming loans $145,121 $162,925 $177,558 $186,691 $198,810
-------- -------- -------- -------- --------
Other real estate owned and repossessed assets:
Continuing Portfolio:
Commercial $3,466 $3,618 $3,728 $404 $404
Repossessed equipment 123 134 193 505 995
Residential 3,721 4,648 3,601 2,485 2,629
Consumer 469 282 486 454 517
Total continuing portfolio 7,779 8,682 8,008 3,848 4,545
----- ----- ----- ----- -----
Liquidating Portfolio:
Total liquidating portfolio - - - - -
Total other real estate owned and repossessed assets $7,779 $8,682 $8,008 $3,848 $4,545
------ ------ ------ ------ ------
Total nonperforming assets $152,900 $171,607 $185,566 $190,539 $203,355
-------- -------- -------- -------- --------
(a) The decreases reflect the reclassification of $17.6 million of residential and consumer loans as accruing in the quarter under regulatory guidance.
WEBSTER FINANCIAL CORPORATION
Five Quarter Past Due Loans(unaudited)
-------------------------------------
(Dollars in thousands) March 31, December 31, September 30, June 30, March 31,
2014 2013 2013 2013 2013
--- ---- ---- ---- ---- ----
Past due 30-89 days:
Continuing Portfolio:
Commercial non-mortgage $7,913 $4,100 $2,982 $10,891 $3,788
Equipment financing 698 362 455 783 1,000
Asset-based lending - - - - -
Commercial real estate 2,680 4,897 547 2,722 1,328
Residential mortgages 18,966 18,285 20,803 16,056 16,571
Consumer 14,552 18,926 15,966 15,976 14,538
Past due 30-89 days - continuing portfolio 44,809 46,570 40,753 46,428 37,225
------ ------ ------ ------ ------
Liquidating Portfolio:
Consumer 2,325 1,806 2,726 1,902 2,794
Total past due 30-89 days 47,134 48,376 43,479 48,330 40,019
------ ------ ------ ------ ------
Loans past due 90 days or more and accruing 850 4,501 4,811 1,498 -
--- ----- ----- ----- ---
Total past due loans $47,984 $52,877 $48,290 $49,828 $40,019
------- ------- ------- ------- -------
WEBSTER FINANCIAL CORPORATION
Five Quarter Changes in the Allowance for Loan Losses(unaudited)
---------------------------------------------------------------
For the Three Months Ended
--------------------------
(Dollars in thousands) March 31, December 31, September 30, June 30, March 31,
2014 2013 2013 2013 2013
--- ---- ---- ---- ---- ----
Beginning balance $152,573 $157,545 $163,442 $167,840 $177,129
Provision 9,000 9,000 8,500 8,500 7,500
Charge-offs continuing portfolio:
Commercial non-mortgage 3,148 5,383 3,245 6,156 4,339
Equipment financing - 178 10 4 87
Asset-based lending - 3 - - -
Commercial real estate 2,405 5,086 4,069 2,510 3,760
Residential mortgages 1,158 2,744 3,800 2,112 2,936
Consumer 4,517 4,402 4,525 5,374 7,358
Charge-offs continuing portfolio 11,228 17,796 15,649 16,156 18,480
------ ------ ------ ------ ------
Charge-offs liquidating portfolio:
NCLC - - - - -
Consumer 369 1,070 1,302 1,957 3,049
Charge-offs liquidating portfolio 369 1,070 1,302 1,957 3,049
Total charge-offs 11,597 18,866 16,951 18,113 21,529
------ ------ ------ ------ ------
Recoveries continuing portfolio:
Commercial non-mortgage 949 2,029 424 998 901
Equipment financing 800 630 683 904 828
Asset-based lending 23 11 2 60 698
Commercial real estate 479 750 105 552 241
Residential mortgages 108 445 141 435 205
Consumer 865 769 1,002 1,571 1,437
Recoveries continuing portfolio 3,224 4,634 2,357 4,520 4,310
----- ----- ----- ----- -----
Recoveries liquidating portfolio:
NCLC 152 115 11 5 45
Consumer 248 145 186 690 385
Recoveries liquidating portfolio 400 260 197 695 430
Total recoveries 3,624 4,894 2,554 5,215 4,740
----- ----- ----- ----- -----
Total net charge-offs 7,973 13,972 14,397 12,898 16,789
Ending balance $153,600 $152,573 $157,545 $163,442 $167,840
-------- -------- -------- -------- --------
WEBSTER FINANCIAL CORPORATION
Reconciliations 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.
See the tables below for reconciliations of these non-GAAP financial measures with financial measures defined by GAAP for the three months ended March 31, 2014, December 31, 2013, September 30, 2013, June 30, 2013, and March 31, 2013. 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.
At or for the Three Months Ended
--------------------------------
(Dollars in thousands) March 31, December 31, September 30, June 30, March 31,
2014 2013 2013 2013 2013
--- ---- ---- ---- ---- ----
Reconciliation of net income available to common shareholders to net income used for computing the return on average tangible common
shareholders' equity ratio
-------------------------------------------------------------------------------------------------------------------------------------
Net income available to common shareholders $47,784 $41,115 $44,666 $43,734 $39,231
Amortization of intangibles (tax-affected @ 35%) 759 775 807 807 807
--- --- --- --- ---
Quarterly net income adjusted for amortization of intangibles 48,543 41,890 45,473 44,541 40,038
Annualized net income used in the return on average tangible common shareholders' equity ratio $194,172 $167,560 $181,982 $178,164 $160,152
-------- -------- -------- -------- --------
Reconciliation of average common shareholders' equity to average tangible common shareholders' equity
-----------------------------------------------------------------------------------------------------
Average common shareholders' equity $2,087,179 $2,040,435 $2,000,018 $1,991,600 $1,959,288
Average goodwill (529,887) (529,887) (529,887) (529,887) (529,887)
Average intangible assets (excluding mortgage servicing rights) (4,754) (5,922) (7,151) (8,391) (9,635)
------ ------ ------ ------ ------
Average tangible common shareholders' equity $1,552,538 $1,504,626 $1,462,980 $1,453,322 $1,419,766
---------- ---------- ---------- ---------- ----------
Reconciliation of period-end shareholders' equity to period-end tangible shareholders' equity
---------------------------------------------------------------------------------------------
Shareholders' equity $2,239,629 $2,209,188 $2,167,659 $2,127,475 $2,128,131
Goodwill (529,887) (529,887) (529,887) (529,887) (529,887)
Intangible assets (excluding mortgage servicing rights) (4,183) (5,351) (6,544) (7,786) (9,028)
Tangible shareholders' equity $1,705,559 $1,673,950 $1,631,228 $1,589,802 $1,589,216
---------- ---------- ---------- ---------- ----------
Reconciliation of period-end common shareholders' equity to period-end tangible common shareholders' equity
-----------------------------------------------------------------------------------------------------------
Shareholders' equity $2,239,629 $2,209,188 $2,167,659 $2,127,475 $2,128,131
Preferred stock (151,649) (151,649) (151,649) (151,649) (151,649)
-------- -------- -------- -------- --------
Common shareholders' equity 2,087,980 2,057,539 2,016,010 1,975,826 1,976,482
Goodwill (529,887) (529,887) (529,887) (529,887) (529,887)
Intangible assets (excluding mortgage servicing rights) (4,183) (5,351) (6,544) (7,786) (9,028)
Tangible common shareholders' equity $1,553,910 $1,522,301 $1,479,579 $1,438,153 $1,437,567
---------- ---------- ---------- ---------- ----------
Reconciliation of period-end assets to period-end tangible assets
-----------------------------------------------------------------
Assets $21,175,745 $20,852,999 $20,609,554 $20,329,238 $20,110,538
Goodwill (529,887) (529,887) (529,887) (529,887) (529,887)
Intangible assets (excluding mortgage servicing rights) (4,183) (5,351) (6,544) (7,786) (9,028)
Tangible assets $20,641,675 $20,317,761 $20,073,123 $19,791,565 $19,571,623
----------- ----------- ----------- ----------- -----------
Book value per common share
---------------------------
Common shareholders' equity $2,087,980 $2,057,539 $2,016,010 $1,975,826 $1,976,482
Ending common shares issued and outstanding (in thousands) 90,269 90,367 90,245 90,289 90,237
Book value per share of common stock $23.13 $22.77 $22.34 $21.88 $21.90
------ ------ ------ ------ ------
Tangible book value per common share
------------------------------------
Tangible common shareholders' equity $1,553,910 $1,522,301 $1,479,579 $1,438,153 $1,437,567
Ending common shares issued and outstanding (in thousands) 90,269 90,367 90,245 90,289 90,237
Tangible book value per common share $17.21 $16.85 $16.40 $15.93 $15.93
------ ------ ------ ------ ------
Reconciliation of non-interest expense to non-interest expense used in the efficiency ratio
-------------------------------------------------------------------------------------------
Non-interest expense $124,617 $126,639 $122,281 $123,604 $125,535
Foreclosed property expense (458) (400) (432) (331) (175)
Intangible assets amortization (1,168) (1,193) (1,242) (1,242) (1,242)
Other expense 48 (1,365) (950) (687) (1,352)
Non-interest expense used in the efficiency ratio $123,039 $123,681 $119,657 $121,344 $122,766
-------- -------- -------- -------- --------
Reconciliation of income to income used in the efficiency ratio
---------------------------------------------------------------
Net interest income before provision for loan losses $155,301 $153,884 $149,987 $147,061 $145,796
Fully taxable-equivalent adjustment 3,013 3,150 3,211 3,337 3,523
Non-interest income 49,828 44,264 46,257 52,251 48,278
Net gain on investment securities (4,336) (4) (269) (333) (106)
Other 88 7,277 - - -
Income used in the efficiency ratio $203,894 $208,571 $199,186 $202,316 $197,491
-------- -------- -------- -------- --------
SOURCE Webster Financial Corporation
