WEBSTER FINANCIAL CORPORATION WATERBURY, Conn., Jan. 21, 2016 /PRNewswire/ -- Webster Financial Corporation (NYSE: WBS), the holding company for Webster Bank, N.A., today announced net income available to common shareholders of $50.6 million, or $0.55 per diluted share, for the quarter ended December 31, 2015 compared to $48.4 million, or $0.53 per diluted share, for the quarter ended December 31, 2014.
For the full year 2015, net income available to common shareholders was $197.6 million, or $2.15 per diluted share, compared to $189.2 million, or $2.08 per diluted share, for the full year 2014.
"Webster's record net income for the fourth quarter and full year 2015 showcase our sustained progress in executing growth strategies that maximize value to customers and shareholders," said James C. Smith, chairman and chief executive officer. "Record quarterly loan originations and net interest margin expansion helped produce our 25(th) consecutive quarter of year-over-year core revenue growth. Record full year 2015 loan originations of $5.6 billion were 19 percent higher than a year ago, as Webster bankers excelled in service to our customers and communities."
Highlights for the fourth quarter of 2015 compared to the fourth quarter of 2014:
-- Record quarterly pre-provision net revenue of $90.3 million, an increase
of 4.2 percent.
-- Loan growth of $1.8 billion, or 12.8 percent, with double-digit growth
in commercial, commercial real estate and residential mortgage loans.
-- Deposit growth of $2.3 billion, or 14.7 percent, primarily reflecting
HSA Bank's strong organic growth and its January 2015 acquisition.
-- Record core revenue of $233.6 million, an increase of 9.1 percent,
including a record level of net interest income of $173.3 million.
-- Efficiency ratio of 59.87 percent represents the eleventh consecutive
quarter at or below 60 percent.
-- Annualized return on average tangible common shareholders' equity of
11.99 percent.
"We've now achieved eleven consecutive quarters with the efficiency ratio at or below 60 percent," said Glenn MacInnes, executive vice president and chief financial officer. "We've accomplished this even as we continue to invest in our future."
Quarterly net interest income compared to the fourth quarter of 2014:
-- Net interest income was $173.3 million compared to $160.6 million.
-- Net interest margin was 3.08 percent compared to 3.17 percent. The yield
on interest-earning assets declined by 10 basis points, while the cost
of funds declined by 2 basis points.
-- Net interest margin increased 4 basis points on a linked-quarter basis.
-- Average interest-earning assets totaled $22.7 billion and grew by $2.2
billion, or 10.8 percent.
-- Average loans grew by $1.7 billion, or 12.7 percent.
Quarterly provision for loan losses:
-- The Company recorded a provision for loan losses of $13.8 million
compared to $13.0 million in the third quarter and $9.5 million a year
ago. The increase compared to each period primarily reflects continued
growth in the loan portfolio.
-- Net charge-offs were $11.8 million compared to $7.9 million in the prior
quarter and $6.7 million a year ago. The ratio of net charge-offs to
average loans on an annualized basis was 0.31 percent compared to 0.21
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 1.12 percent of total loans
compared to 1.14 percent at September 30, 2015 and 1.15 percent at
December 31, 2014. The allowance for loan losses represented 125 percent
of nonperforming loans compared to 109 percent at September 30 and 123
percent a year ago.
Quarterly non-interest income compared to the fourth quarter of 2014:
-- Total non-interest income was $60.3 million compared to $53.8 million,
an increase of $6.6 million. Excluding securities gains and
other-than-temporary impairment charges, a year-over-year increase of
$6.7 million in core non-interest income reflects increases of $8.3
million in deposit service fees related to HSA Bank and $1.3 million in
mortgage banking activities, offset by decreases of $2.5 million in loan
related fees and $0.5 million in wealth and investment services.
Quarterly non-interest expense compared to the fourth quarter of 2014:
-- Total non-interest expense was $143.2 million compared to $130.2
million, an increase of $13.0 million.
-- Non-interest expense, excluding one-time costs, increased $15.8 million
with $8.9 million of the increase related to HSA Bank. The remaining
$6.9 million increase reflects higher compensation expense, professional
and outside services, and other.
Quarterly income taxes compared to the fourth quarter of 2014:
-- Income tax expense was $24.1 million compared to $23.8 million. The
effective tax rate was 31.5 percent compared to 31.8 percent, and the
current quarter included a $1.2 million net tax benefit specific to the
period compared to $0.1 million a year ago.
Investment securities:
-- Total investment securities were $6.9 billion compared to $7.0 billion
at September 30, 2015 and $6.7 billion a year ago. The carrying value of
the available-for-sale portfolio included $10.3 million of net
unrealized losses compared to net unrealized gains of $16.0 million at
September 30 and $25.9 million a year ago, while the carrying value of
the held-to-maturity portfolio does not reflect $38.5 million of net
unrealized gains compared to $72.3 million at September 30 and $75.8
million a year ago.
Loans:
-- Total loans were $15.7 billion compared to $15.2 billion at September
30, 2015 and $13.9 billion a year ago. Compared to September 30,
commercial, commercial real estate, consumer, and residential mortgage
loans increased by $223.7 million, $134.5 million, $51.9 million, and
$45.2 million, respectively.
-- Compared to a year ago, commercial, residential mortgage, commercial
real estate, and consumer loans increased by $629.5 million, $551.8
million, $437.2 million, and $153.2 million, respectively.
-- Loan originations for portfolio were $1.534 billion compared to $1.207
billion in the third quarter and $1.378 billion a year ago. In addition,
$98 million of residential loans were originated for sale in the quarter
compared to $117 million in the prior quarter and $87 million a year
ago.
Asset quality:
-- Past due loans were $39.2 million compared to $41.3 million at September
30, 2015 and $42.3 million a year ago. Loans past due 90 days and still
accruing decreased $0.2 million from the prior quarter and were flat to
the prior year.
-- Total nonperforming loans decreased to $139.9 million, or 0.89 percent
of total loans, compared to $159.0 million, or 1.04 percent, at
September 30 and $129.9 million, or 0.93 percent, a year ago. Total
paying nonperforming loans were $48.7 million compared to $45.0 million
at September 30 and $30.5 million a year ago.
Deposits and borrowings:
-- Total deposits were $18.0 billion compared to $17.6 billion at September
30, 2015 and $15.7 billion a year ago. Core to total deposits were 88.4
percent compared to 88.3 percent at September 30 and 85.5 percent a year
ago. Loans to deposits were 87.3 percent compared to 86.5 percent at
September 30 and 88.8 percent a year ago.
-- Total borrowings were $4.0 billion compared to $3.8 billion at September
30 and $4.3 billion a year ago.
Capital:
-- The return on average tangible common shareholders' equity and the
return on average common shareholders' equity were 11.99 percent and
8.79 percent, respectively, compared to 11.74 percent and 8.84 percent,
respectively, in the fourth quarter of 2014.
-- The tangible equity and tangible common equity ratios were 7.63 percent
and 7.12 percent, respectively, compared to 8.14 percent and 7.45
percent, respectively, at December 31, 2014. The common equity tier 1
risk-based capital ratio was 10.71 percent compared to 11.43 percent a
year ago.
-- Book value and tangible book value per common share were $25.01 and
$18.71, respectively, compared to $23.99 and $18.10, respectively, a
year ago.
Webster Financial Corporation is the holding company for Webster Bank, National Association. With $24.7 billion in assets, Webster provides business and consumer banking, mortgage, financial planning, trust, and investment services through 178 banking centers and 353 ATMs, with an additional 2 banking centers scheduled to open soon in greater Boston (subject to regulatory approval). 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 2015 fourth quarter earnings announcement will be held today, Thursday, January 21, 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
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) December 31, September 30, June 30, March 31, December 31,
2015 2015 2015 2015 2014
--- ---- ---- ---- ---- ----
Income and performance ratios (annualized):
-----------------------------------
Net income $52,579 $51,536 $52,503 $49,722 $51,006
Net income available
to common
shareholders 50,555 49,512 50,479 47,083 48,367
Net income per
diluted common
share 0.55 0.54 0.55 0.52 0.53
Return on average
assets 0.86 % 0.86 % 0.90 % 0.88 % 0.93 %
Return on average
tangible common
shareholders'
equity 11.99 11.89 12.49 11.82 11.74
Return on average
common
shareholders'
equity 8.79 8.68 9.03 8.57 8.84
Non-interest income
as a percentage of
total revenue 25.82 26.78 26.80 26.60 25.08
Efficiency ratio 59.87 59.49 59.88 59.69 58.54
Asset quality:
--------------
Allowance for loan
and lease losses $174,990 $172,992 $167,860 $161,970 $159,264
Nonperforming assets 144,970 164,387 172,825 157,546 136,397
Allowance for loan
and lease losses /
total loans and
leases 1.12 % 1.14 % 1.14 % 1.14 % 1.15 %
Net charge-offs /
average loans and
leases (annualized) 0.31 0.21 0.19 0.20 0.20
Nonperforming loans
and leases /total
loans and leases 0.89 1.04 1.14 1.07 0.93
Nonperforming assets
/total loans and
leases plus OREO 0.92 1.08 1.17 1.10 0.98
Allowance for loan
and lease losses /
nonperforming loans
and leases 125.05 108.80 100.00 106.39 122.62
Other ratios (annualized):
--------------------------
Tangible equity 7.63 % 7.76 % 7.81 % 7.87 % 8.14 %
Tangible common
equity 7.12 7.24 7.27 7.20 7.45
Tier 1 risk-based
capital (a), (b) 11.54 11.62 11.80 12.01 12.95
Total risk-based
capital (a), (b) 12.91 13.02 13.21 13.44 14.06
Common equity tier 1
risk-based capital
(a), (b) 10.71 10.78 10.94 10.93 11.43
Shareholders' equity
/total assets 9.79 9.98 10.07 10.19 10.31
Net interest margin 3.08 3.04 3.05 3.10 3.17
Share and equity related:
-------------------------
Common equity $2,292,861 $2,279,835 $2,256,985 $2,203,926 $2,171,166
Book value per
common share 25.01 24.87 24.55 24.29 23.99
Tangible book value
per common share 18.71 18.55 18.23 17.87 18.10
Common stock closing
price 37.19 35.63 39.55 37.05 32.53
Dividends declared
per common share 0.23 0.23 0.23 0.20 0.20
Common shares issued
and outstanding 91,677 91,663 91,919 90,715 90,512
Basic shares
(weighted average) 91,419 91,458 90,713 90,251 90,045
Diluted shares
(weighted average) 91,956 92,007 91,302 90,841 90,741
(a) The ratios presented are projected for December 31, 2015 and actual for the remaining periods.
(b) Calculated under the Basel III capital standard for the 2015 periods and under the Basel I capital standard for the 2014 period.
WEBSTER FINANCIAL CORPORATION
Consolidated Balance Sheets (unaudited)
--------------------------------------
(In thousands) December 31, September 30, December 31,
2015 2015 2014
--- ---- ---- ----
Assets:
Cash and due from banks $251,258 $251,898 $261,544
Interest-bearing deposits 155,907 19,257 132,695
Investment securities:
Available for sale, at fair
value 2,984,631 3,015,417 2,793,873
Held to maturity 3,923,052 3,951,208 3,872,955
--------- --------- ---------
Total securities 6,907,683 6,966,625 6,666,828
Loans held for sale 37,091 38,331 67,952
Loans and Leases:
Commercial 4,916,525 4,692,829 4,287,021
Commercial real estate 3,991,649 3,857,155 3,554,428
Residential mortgages 4,061,001 4,015,839 3,509,175
Consumer 2,702,560 2,650,702 2,549,401
--------- --------- ---------
Total loans and leases 15,671,735 15,216,525 13,900,025
Allowance for loan and
lease losses (174,990) (172,992) (159,264)
-------- -------- --------
Loans and leases, net 15,496,745 15,043,533 13,740,761
Federal Home Loan Bank and
Federal Reserve Bank stock 188,347 184,280 193,290
Premises and equipment, net 129,426 127,216 121,933
Goodwill and other
intangible assets, net 577,699 579,287 532,553
Cash surrender value of
life insurance policies 503,093 449,711 440,073
Deferred tax asset, net 101,578 84,743 73,873
Accrued interest receivable
and other assets 328,993 324,901 301,670
-------
Total Assets $24,677,820 $24,069,782 $22,533,172
----------- ----------- -----------
Liabilities and Equity:
Deposits:
Demand $3,713,063 $3,551,229 $3,598,872
Interest-bearing checking 2,369,971 2,183,267 2,155,047
Health savings accounts 3,802,313 3,643,557 1,824,799
Money market 1,933,460 2,186,383 1,908,522
Savings 4,047,817 3,956,054 3,892,778
Certificates of deposit 1,762,847 1,762,046 1,971,567
Brokered certificates of
deposit 323,307 299,694 300,020
------- ------- -------
Total deposits 17,952,778 17,582,230 15,651,605
Securities sold under
agreements to repurchase
and other borrowings 1,151,400 1,002,018 1,250,756
Federal Home Loan Bank
advances 2,664,139 2,609,212 2,859,431
Long-term debt 226,356 226,327 226,237
Accrued expenses and other
liabilities 267,576 247,450 222,328
------- ------- -------
Total liabilities 22,262,249 21,667,237 20,210,357
---------- ---------- ----------
Preferred stock 122,710 122,710 151,649
Common shareholders' equity 2,292,861 2,279,835 2,171,166
--------- --------- ---------
Webster Financial
Corporation shareholders'
equity 2,415,571 2,402,545 2,322,815
--------- --------- ---------
Total Liabilities and
Equity $24,677,820 $24,069,782 $22,533,172
----------- ----------- -----------
WEBSTER FINANCIAL CORPORATION
Consolidated Statements of Income (unaudited)
--------------------------------------------
Three Months Ended December 31, Twelve Months Ended December 31,
------------------------------- --------------------------------
(In thousands, except
per share data) 2015 2014 2015 2014 (a)
--------------------- ---- ---- ---- -------
Interest income:
Interest and fees on
loans and leases $145,504 $132,604 $552,441 $511,612
Interest and dividends
on securities 52,365 50,921 206,009 206,472
Loans held for sale 291 226 1,590 857
Total interest income 198,160 183,751 760,040 718,941
------- ------- ------- -------
Interest expense:
Deposits 11,476 11,322 46,031 44,162
Borrowings 13,344 11,781 49,384 46,338
Total interest expense 24,820 23,103 95,415 90,500
------ ------ ------ ------
Net interest income 173,340 160,648 664,625 628,441
Provision for loan and
lease losses 13,800 9,500 49,300 37,250
Net interest income
after provision for
loan and lease losses 159,540 151,148 615,325 591,191
------- ------- ------- -------
Non-interest income:
Deposit service fees 34,231 25,928 136,578 103,431
Loan and lease related
fees 5,881 8,361 25,594 23,212
Wealth and investment
services 8,052 8,517 32,486 34,946
Mortgage banking
activities 2,276 977 7,795 4,070
Increase in cash
surrender value of
life insurance
policies 3,383 3,278 13,020 13,178
Net gain on investment
securities 80 1,121 609 5,499
Other income 6,474 6,492 23,573 18,917
60,377 54,674 239,655 203,253
Loss on write-down of
investment securities
to fair value (28) (899) (110) (1,145)
Total non-interest
income 60,349 53,775 239,545 202,108
------ ------ ------- -------
Non-interest expense:
Compensation and
benefits 79,232 71,220 297,517 270,151
Occupancy 11,573 11,518 48,836 47,325
Technology and
equipment expense 19,218 15,827 80,026 61,993
Marketing 3,533 3,918 16,053 15,379
Professional and
outside services 2,932 1,855 11,156 8,296
Intangible assets
amortization 1,588 416 6,340 2,685
Foreclosed and
repossessed asset
expenses 242 244 827 1,223
Foreclosed and
repossessed asset
gains (241) (238) (310) (1,297)
Loan workout expenses 775 685 3,173 3,507
Deposit insurance 6,242 5,856 24,042 22,670
Other expenses 18,178 16,158 65,919 66,639
------ ------ ------ ------
143,272 127,459 553,579 498,571
Severance, contract,
and other 254 633 1,099 964
Acquisition costs (386) 396 141 540
Branch and facility
optimization 24 276 (265) 125
Provision for
litigation and
settlements - 1,400 - 1,400
Total non-interest
expense 143,164 130,164 554,554 501,600
------- ------- ------- -------
Income before income
taxes 76,725 74,759 300,316 291,699
Income tax expense 24,146 23,753 93,976 91,973
------ ------ ------ ------
Net income 52,579 51,006 206,340 199,726
Preferred stock
dividends (2,024) (2,639) (8,711) (10,556)
Net income available
to common
shareholders $50,555 $48,367 $197,629 $189,170
------- ------- -------- --------
Diluted shares
(average) 91,956 90,741 91,533 90,620
Net income per common share available to common shareholders:
Basic $0.55 $0.54 $2.17 $2.10
Diluted 0.55 0.53 2.15 2.08
(a) Certain previously reported information reflects the retrospective application of ASU No. 2014-01, "Accounting for Investments in Qualified Affordable Housing Projects."
WEBSTER FINANCIAL CORPORATION
Five Quarter Consolidated Statements of Income (unaudited)
---------------------------------------------------------
Three Months Ended
------------------
(In thousands, except per share data) December 31, September 30, June 30, March 31, December 31,
2015 2015 2015 2015 2014
--- ---- ---- ---- ---- ----
Interest income:
Interest and fees on loans and leases $145,504 $140,520 $135,694 $130,723 $132,604
Interest and dividends on securities 52,365 51,121 50,844 51,679 50,921
Loans held for sale 291 357 432 510 226
Total interest income 198,160 191,998 186,970 182,912 183,751
------- ------- ------- ------- -------
Interest expense:
Deposits 11,476 11,480 11,533 11,542 11,322
Borrowings 13,344 12,508 11,926 11,606 11,781
Total interest expense 24,820 23,988 23,459 23,148 23,103
------ ------ ------ ------ ------
Net interest income 173,340 168,010 163,511 159,764 160,648
Provision for loan and lease losses 13,800 13,000 12,750 9,750 9,500
Net interest income after provision for loan
and lease losses 159,540 155,010 150,761 150,014 151,148
------- ------- ------- ------- -------
Non-interest income:
Deposit service fees 34,231 35,229 34,493 32,625 25,928
Loan and lease related fees 5,881 8,305 5,729 5,679 8,361
Wealth and investment services 8,052 7,761 8,784 7,889 8,517
Mortgage banking activities 2,276 1,441 2,517 1,561 977
Increase in cash surrender value of life
insurance policies 3,383 3,288 3,197 3,152 3,278
Net gain on investment securities 80 - 486 43 1,121
Other income 6,474 5,513 4,645 6,941 6,492
60,377 61,537 59,851 57,890 54,674
Loss on write-down of investment securities
to fair value (28) (82) - - (899)
---
Total non-interest income 60,349 61,455 59,851 57,890 53,775
------ ------ ------ ------ ------
Non-interest expense:
Compensation and benefits 79,232 73,378 74,043 70,864 71,220
Occupancy 11,573 11,987 11,680 13,596 11,518
Technology and equipment expense 19,218 21,336 20,224 19,248 15,827
Marketing 3,533 4,099 4,245 4,176 3,918
Professional and outside services 2,932 2,896 2,875 2,453 1,855
Intangible assets amortization 1,588 1,621 1,843 1,288 416
Foreclosed and repossessed asset expenses 242 270 146 169 244
Foreclosed and repossessed asset (gains)
losses (241) (68) (537) 536 (238)
Loan workout expenses 775 719 801 878 685
Deposit insurance 6,242 6,067 5,492 6,241 5,856
Other expenses 18,178 17,758 15,817 14,166 16,158
------ ------ ------ ------ ------
143,272 140,063 136,629 133,615 127,459
Severance, contract, and other 254 34 521 290 633
Acquisition costs (386) - 18 509 396
Branch and facility optimization 24 (243) 278 (324) 276
Provision for litigation and settlements - - - - 1,400
--- -----
Total non-interest expense 143,164 139,854 137,446 134,090 130,164
------- ------- ------- ------- -------
Income before income taxes 76,725 76,611 73,166 73,814 74,759
Income tax expense 24,146 25,075 20,663 24,092 23,753
------
Net income 52,579 51,536 52,503 49,722 51,006
Preferred stock dividends (2,024) (2,024) (2,024) (2,639) (2,639)
------
Net income available to common shareholders $50,555 $49,512 $50,479 $47,083 $48,367
------- ------- ------- ------- -------
Diluted shares (average) 91,956 92,007 91,302 90,841 90,741
Net income per common share available to
common shareholders:
Basic $0.55 $0.54 $0.55 $0.52 $0.54
Diluted 0.55 0.54 0.55 0.52 0.53
WEBSTER FINANCIAL CORPORATION
Consolidated Average Balances, Yields, and Rates Paid (unaudited)
----------------------------------------------------------------
Three Months Ended December 31,
-------------------------------
2015 2014
---- ----
(Dollars in thousands) Average Interest Fully Average Interest Fully
balance tax-equivalent balance (b) tax-equivalent
yield/rate yield/rate
--- ----------
Assets:
Interest-earning assets:
Loans and leases $15,452,576 $146,091 3.73 % $13,715,522 $133,141 3.83 %
Investment securities (a) 6,930,635 52,591 3.04 6,522,767 51,778 3.19
Federal Home Loan and Federal Reserve Bank stock 186,367 1,862 3.96 177,324 1,206 2.70
Interest-bearing deposits 87,019 63 0.28 43,864 28 0.25
Loans held for sale 33,021 291 3.53 25,427 226 3.55
------ --- ---- ------ --- ----
Total interest-earning assets 22,689,618 $200,898 3.51 % 20,484,904 $186,379 3.61 %
Non-interest-earning assets 1,723,575 1,545,268
Total assets $24,413,193 $22,030,172
----------- -----------
Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Deposits:
Demand $3,693,704 $ - -% $3,364,956 $ - -%
Savings, interest checking, and money market 12,072,461 5,686 0.19 9,912,875 4,359 0.17
Certificates of deposit 2,066,989 5,790 1.11 2,288,075 6,963 1.21
Total deposits 17,833,154 11,476 0.26 15,565,906 11,322 0.29
---------- ------ ---- ---------- ------ ----
Securities sold under agreements to repurchase and other
borrowings 1,132,700 4,150 1.43 1,282,805 4,514 1.38
Federal Home Loan Bank advances 2,566,447 6,759 1.03 2,444,900 4,857 0.78
Long-term debt 226,337 2,435 4.30 226,218 2,410 4.26
Total borrowings 3,925,484 13,344 1.34 3,953,923 11,781 1.17
--------- ------ ---- --------- ------ ----
Total interest-bearing liabilities 21,758,638 $24,820 0.45 % 19,519,829 $23,103 0.47 %
Non-interest-bearing liabilities 232,352 169,503
Total liabilities 21,990,990 19,689,332
---------- ----------
Preferred stock 122,710 151,649
Common shareholders' equity 2,299,493 2,189,191
--------- ---------
Webster Financial Corporation shareholders' equity 2,422,203 2,340,840
Total liabilities and equity $24,413,193 $22,030,172
----------- -----------
Tax-equivalent net interest income 176,078 163,276
Less: tax-equivalent adjustment (2,738) (2,628)
Net interest income $173,340 $160,648
-------- --------
Net interest margin 3.08 % 3.17 %
----- -----
(a) For purposes of the yield computation, unrealized gains (losses) on securities available for sale are excluded from the average balance.
(b) Certain previously reported information reflects the retrospective application of ASU No. 2014-01, "Accounting for Investments in Qualified Affordable Housing Projects."
WEBSTER FINANCIAL CORPORATION
Consolidated Average Balances, Yields, and Rates Paid (unaudited)
----------------------------------------------------------------
Twelve Months Ended December 31,
--------------------------------
2015 2014
---- ----
(Dollars in thousands) Average Interest Fully Average Interest Fully
balance tax-equivalent balance (b) tax-equivalent
yield/rate yield/rate
--- ----------
Assets:
Interest-earning assets:
Loans and leases $14,746,168 $554,632 3.76 % $13,275,340 $513,705 3.87 %
Investment securities (a) 6,846,297 207,675 3.04 6,446,799 210,721 3.28
Federal Home Loan and Federal Reserve Bank stock 188,631 6,479 3.43 168,036 4,719 2.81
Interest-bearing deposits 107,569 281 0.26 24,376 63 0.26
Loans held for sale 41,101 1,590 3.87 22,642 857 3.78
------ ----- ---- ------ --- ----
Total interest-earning assets 21,929,766 $770,657 3.52 % 19,937,193 $730,065 3.67 %
Non-interest-earning assets 1,673,793 1,523,768
Total assets $23,603,559 $21,460,961
----------- -----------
Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Deposits:
Demand $3,564,751 $ - -% $3,216,777 $ - -%
Savings, interest checking, and money market 11,846,049 21,472 0.18 9,863,703 17,800 0.18
Certificates of deposit 2,138,778 24,559 1.15 2,280,668 26,362 1.16
Total deposits 17,549,578 46,031 0.26 15,361,148 44,162 0.29
---------- ------ ---- ---------- ------ ----
Securities sold under agreements to repurchase and
other borrowings 1,144,963 16,861 1.47 1,353,308 19,388 1.43
Federal Home Loan Bank advances 2,084,496 22,858 1.10 2,038,749 16,909 0.83
Long-term debt 226,292 9,665 4.27 252,368 10,041 3.98
Total borrowings 3,455,751 49,384 1.43 3,644,425 46,338 1.27
--------- ------ ---- --------- ------ ----
Total interest-bearing liabilities 21,005,329 $95,415 0.45 % 19,005,573 $90,500 0.48 %
Non-interest-bearing liabilities 209,333 165,689
Total liabilities 21,214,662 19,171,262
---------- ----------
Preferred stock 134,682 151,649
Common shareholders' equity 2,254,215 2,138,050
--------- ---------
Webster Financial Corporation shareholders' equity 2,388,897 2,289,699
Total liabilities and equity $23,603,559 $21,460,961
----------- -----------
Tax-equivalent net interest income 675,242 639,565
Less: tax-equivalent adjustment (10,617) (11,124)
Net interest income $664,625 $628,441
-------- --------
Net interest margin 3.08 % 3.21 %
----- -----
(a) For purposes of the yield computation, unrealized gains (losses) on securities available for sale are excluded from the average balance.
(b) Certain previously reported information reflects the retrospective application of ASU No. 2014-01, "Accounting for Investments in Qualified Affordable Housing Projects."
WEBSTER FINANCIAL CORPORATION
Five Quarter Loan and Lease Balances (unaudited)
-----------------------------------------------
(Dollars in thousands) December 31, September 30, June 30, March 31, December 31,
2015 2015 2015 2015 2014
--- ---- ---- ---- ---- ----
Loan and Lease
Balances (actuals):
Continuing Portfolio:
Commercial non-
mortgage $3,562,784 $3,423,775 $3,310,863 $3,183,218 $3,087,940
Equipment financing 600,526 552,850 545,441 543,636 537,751
Asset-based lending 753,215 716,204 711,041 716,592 661,330
Commercial real estate 3,991,649 3,857,155 3,770,252 3,663,071 3,554,428
Residential mortgages 4,061,001 4,015,839 3,833,489 3,594,272 3,509,174
Consumer 2,622,998 2,568,009 2,520,970 2,480,270 2,457,345
--------- --------- --------- --------- ---------
Total continuing
portfolio 15,592,173 15,133,832 14,692,056 14,181,059 13,807,968
Allowance for loan and
lease losses (167,626) (165,341) (159,501) (152,825) (149,813)
Total continuing
portfolio, net 15,424,547 14,968,491 14,532,555 14,028,234 13,658,155
---------- ---------- ---------- ---------- ----------
Liquidating Portfolio:
National Construction
Lending Center (NCLC) - - - - 1
Consumer 79,562 82,693 85,470 89,167 92,056
------ ------ ------ ------ ------
Total liquidating
portfolio 79,562 82,693 85,470 89,167 92,057
Allowance for loan and
lease losses (7,364) (7,651) (8,359) (9,145) (9,451)
------ ------ ------ ------ ------
Total liquidating
portfolio, net 72,198 75,042 77,111 80,022 82,606
------ ------ ------ ------ ------
Total Loan and Lease
Balances (actuals) 15,671,735 15,216,525 14,777,526 14,270,226 13,900,025
Allowance for loan and
lease losses (174,990) (172,992) (167,860) (161,970) (159,264)
Loans and Leases, net $15,496,745 $15,043,533 $14,609,666 $14,108,256 $13,740,761
----------- ----------- ----------- ----------- -----------
Loan and Lease
Balances (average):
Continuing Portfolio:
Commercial non-
mortgage $3,482,862 $3,363,074 $3,247,527 $3,096,762 $3,036,412
Equipment financing 570,686 549,310 542,112 542,067 509,331
Asset-based lending 721,662 712,811 709,985 675,218 647,952
Commercial real estate 3,955,012 3,804,904 3,705,895 3,574,826 3,452,954
Residential mortgages 4,039,341 3,950,654 3,711,096 3,546,098 3,483,444
Consumer 2,601,955 2,544,789 2,504,668 2,468,422 2,491,359
--------- --------- --------- --------- ---------
Total continuing
portfolio 15,371,518 14,925,542 14,421,283 13,903,393 13,621,452
Allowance for loan and
lease losses (170,724) (163,421) (156,698) (153,790) (150,706)
Total continuing
portfolio, net 15,200,794 14,762,121 14,264,585 13,749,603 13,470,746
---------- ---------- ---------- ---------- ----------
Liquidating Portfolio:
NCLC - - - 1 1
Consumer 81,058 84,449 87,418 91,088 94,069
------ ------ ------ ------ ------
Total liquidating
portfolio 81,058 84,449 87,418 91,089 94,070
Allowance for loan and
lease losses (7,364) (7,651) (8,359) (9,145) (9,451)
Total liquidating
portfolio, net 73,694 76,798 79,059 81,944 84,619
------ ------ ------ ------ ------
Total Loan and Lease
Balances (average) 15,452,576 15,009,991 14,508,701 13,994,482 13,715,522
Allowance for loan and
lease losses (178,088) (171,072) (165,057) (162,935) (160,157)
-------- -------- -------- --------
Loans and Leases, net $15,274,488 $14,838,919 $14,343,644 $13,831,547 $13,555,365
----------- ----------- ----------- ----------- -----------
WEBSTER FINANCIAL CORPORATION
Five Quarter Nonperforming Assets (unaudited)
--------------------------------------------
(Dollars in thousands) December 31, September 30, June 30, March 31, December 31,
2015 2015 2015 2015 2014
--- ---- ---- ---- ---- ----
Nonperforming loans and
leases:
Continuing Portfolio:
Commercial non-mortgage $27,086 $40,235 $43,081 $27,057 $6,436
Equipment financing 706 403 301 285 518
Asset-based lending - - - - -
Commercial real estate 20,211 23,828 26,893 25,814 18,675
Residential mortgages 54,101 57,603 58,663 61,274 64,022
Consumer 33,972 32,969 34,236 33,696 35,770
------
Nonperforming loans and
leases -continuing
portfolio 136,076 155,038 163,174 148,126 125,421
------- ------- ------- ------- -------
Liquidating Portfolio:
Consumer 3,865 3,965 4,682 4,117 4,460
Total nonperforming loans
and leases $139,941 $159,003 $167,856 $152,243 $129,881
-------- -------- -------- -------- --------
Other real estate owned
and repossessed assets:
Continuing Portfolio:
Commercial $ - $ - $ - $ - $2,899
Repossessed equipment - - - - 100
Residential 3,788 4,078 3,930 3,051 2,280
Consumer 1,241 1,306 1,039 2,252 1,237
Total continuing portfolio 5,029 5,384 4,969 5,303 6,516
----- ----- ----- ----- -----
Liquidating Portfolio:
Total liquidating
portfolio - - - - -
Total other real estate
owned and repossessed
assets $5,029 $5,384 $4,969 $5,303 $6,516
------ ------ ------ ------ ------
Total nonperforming assets $144,970 $164,387 $172,825 $157,546 $136,397
-------- -------- -------- -------- --------
WEBSTER FINANCIAL CORPORATION
Five Quarter Past Due Loans and Leases (unaudited)
-------------------------------------------------
(Dollars in
thousands) December 31, September 30, June 30, March 31, December 31,
2015 2015 2015 2015 2014
--- ---- ---- ---- ---- ----
Past due 30-89 days:
Continuing Portfolio:
Commercial non-
mortgage $4,052 $4,415 $1,778 $3,992 $2,099
Equipment financing 602 739 517 789 701
Asset-based lending - - - - -
Commercial real
estate 2,250 1,939 1,547 3,962 2,714
Residential mortgages 15,032 15,222 12,315 13,966 17,216
Consumer 14,225 15,850 13,053 18,459 15,867
Past due 30-89 days -
continuing portfolio 36,161 38,165 29,210 41,168 38,597
------ ------ ------ ------ ------
Liquidating Portfolio:
Consumer 1,036 953 1,299 1,820 1,658
Total past due 30-89
days 37,197 39,118 30,509 42,988 40,255
------ ------ ------ ------ ------
Past due 90 days or
more and accruing 2,051 2,228 1,923 2,109 2,087
----- ----- ----- ----- -----
Total past due loans
and leases $39,248 $41,346 $32,432 $45,097 $42,342
------- ------- ------- ------- -------
WEBSTER FINANCIAL CORPORATION
Five Quarter Changes in the Allowance for Loan and Lease Losses (unaudited)
--------------------------------------------------------------------------
For the Three Months Ended
--------------------------
(Dollars in
thousands) December 31, September 30, June 30, March 31, December 31,
2015 2015 2015 2015 2014
--- ---- ---- ---- ---- ----
Beginning balance $172,992 $167,860 $161,970 $159,264 $156,482
Provision 13,800 13,000 12,750 9,750 9,500
Charge-offs
continuing
portfolio:
Commercial non-
mortgage 6,522 2,204 2,541 255 4,097
Equipment financing 244 - 15 15 84
Asset-based lending - - - - -
Commercial real
estate 1,988 1,346 1,091 3,153 246
Residential mortgages 1,504 1,588 1,461 1,953 1,346
Consumer 4,379 3,991 3,531 3,634 3,648
Charge-offs
continuing portfolio 14,637 9,129 8,639 9,010 9,421
------ ----- ----- ----- -----
Charge-offs
liquidating
portfolio:
NCLC - - - 2 -
Consumer 320 840 322 662 563
Charge-offs
liquidating
portfolio 320 840 322 664 563
Total charge-offs 14,957 9,969 8,961 9,674 9,984
------ ----- ----- ----- -----
Recoveries continuing
portfolio:
Commercial non-
mortgage 441 558 527 989 1,258
Equipment financing 1,083 32 102 143 702
Asset-based lending 38 157 2 26 -
Commercial real
estate 325 69 52 202 217
Residential mortgages 115 280 365 104 291
Consumer 948 852 849 821 636
Recoveries continuing
portfolio 2,950 1,948 1,897 2,285 3,104
----- ----- ----- ----- -----
Recoveries
liquidating
portfolio:
NCLC 1 1 4 4 5
Consumer 204 152 200 341 157
Recoveries
liquidating
portfolio 205 153 204 345 162
Total recoveries 3,155 2,101 2,101 2,630 3,266
----- ----- ----- ----- -----
Total net charge-offs 11,802 7,868 6,860 7,044 6,718
------ ----- ----- ----- -----
Ending balance $174,990 $172,992 $167,860 $161,970 $159,264
-------- -------- -------- -------- --------
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.
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
--------------------------------
(Dollars in thousands,
except per share data) December 31, September 30, June 30, March 31, December 31,
2015 2015 2015 2015 2014
--- ---- ---- ---- ---- ----
Reconciliation of net income available to common
shareholders to annualized net income used in the return
on average tangible common shareholders' equity ratio
----------------------------------------------------------
Net income available to
common shareholders $50,555 $49,512 $50,479 $47,083 $48,367
Amortization of
intangibles (tax-
affected @ 35%) 1,032 1,054 1,198 837 270
----- ----- ----- --- ---
Quarterly net income
adjusted for
amortization of
intangibles 51,587 50,566 51,677 47,920 48,637
Annualized net income
used in the return on
average tangible
common shareholders'
equity ratio $206,348 $202,264 $206,708 $191,680 $194,548
-------- -------- -------- -------- --------
Reconciliation of average common shareholders' equity to
average tangible common shareholders' equity
--------------------------------------------------------
Average common
shareholders' equity $2,299,493 $2,280,960 $2,236,743 $2,198,254 $2,189,191
Average goodwill (538,373) (538,373) (538,373) (537,147) (529,887)
Average intangible
assets (excluding
mortgage servicing
rights) (40,225) (41,845) (43,538) (39,559) (2,862)
------- ------- ------- -------
Average tangible common
shareholders' equity $1,720,895 $1,700,742 $1,654,832 $1,621,548 $1,656,442
---------- ---------- ---------- ---------- ----------
Reconciliation of period-end shareholders' equity to
period-end tangible shareholders' equity
----------------------------------------------------
Shareholders' equity $2,415,571 $2,402,545 $2,379,695 $2,355,575 $2,322,815
Goodwill (538,373) (538,373) (538,373) (538,373) (529,887)
Intangible assets
(excluding mortgage
servicing rights) (39,326) (40,914) (42,535) (44,378) (2,666)
Tangible shareholders'
equity $1,837,872 $1,823,258 $1,798,787 $1,772,824 $1,790,262
---------- ---------- ---------- ---------- ----------
Reconciliation of period-end common shareholders' equity to
period-end tangible common shareholders' equity
-----------------------------------------------------------
Common shareholders'
equity $2,292,861 $2,279,835 $2,256,985 $2,203,926 $2,171,166
Goodwill (538,373) (538,373) (538,373) (538,373) (529,887)
Intangible assets
(excluding mortgage
servicing rights) (39,326) (40,914) (42,535) (44,378) (2,666)
Tangible common
shareholders' equity $1,715,162 $1,700,548 $1,676,077 $1,621,175 $1,638,613
---------- ---------- ---------- ---------- ----------
Reconciliation of period-end assets to period-end tangible
assets
----------------------------------------------------------
Assets $24,677,820 $24,069,782 $23,620,786 $23,106,688 $22,533,172
Goodwill (538,373) (538,373) (538,373) (538,373) (529,887)
Intangible assets
(excluding mortgage
servicing rights) (39,326) (40,914) (42,535) (44,378) (2,666)
Tangible assets $24,100,121 $23,490,495 $23,039,878 $22,523,937 $22,000,619
----------- ----------- ----------- ----------- -----------
Book value per common share
---------------------------
Common shareholders'
equity $2,292,861 $2,279,835 $2,256,985 $2,203,926 $2,171,166
Ending common shares
issued and outstanding
(in thousands) 91,677 91,663 91,919 90,715 90,512
Book value per common
share $25.01 $24.87 $24.55 $24.29 $23.99
------ ------ ------ ------ ------
Tangible book value per common share
------------------------------------
Tangible common
shareholders' equity $1,715,162 $1,700,548 $1,676,077 $1,621,175 $1,638,613
Ending common shares
issued and outstanding
(in thousands) 91,677 91,663 91,919 90,715 90,512
Tangible book value per
common share $18.71 $18.55 $18.23 $17.87 $18.10
------ ------ ------ ------ ------
Reconciliation of non-interest expense to non-interest
expense used in the efficiency ratio
------------------------------------------------------
Non-interest expense $143,164 $139,854 $137,446 $134,090 $130,164
Foreclosed property
expense (242) (270) (146) (169) (244)
Intangible assets
amortization (1,588) (1,621) (1,843) (1,288) (416)
Other expense 349 277 (280) (1,011) (2,467)
Non-interest expense
used in the efficiency
ratio $141,683 $138,240 $135,177 $131,622 $127,037
-------- -------- -------- -------- --------
Income used in the efficiency ratio
-----------------------------------
Net interest income
before provision for
loan losses $173,340 $168,010 $163,511 $159,764 $160,648
Fully taxable-
equivalent adjustment 2,738 2,596 2,626 2,657 2,628
Non-interest income 60,349 61,455 59,851 57,890 53,775
Net gain on investment
securities (80) - (486) (43) (1,121)
Other 303 324 242 242 1,085
Income used in the
efficiency ratio $236,650 $232,385 $225,744 $220,510 $217,015
-------- -------- -------- -------- --------
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/webster-reports-2015-fourth-quarter-earnings-300207714.html
SOURCE Webster Financial Corporation
