WEBSTER FINANCIAL CORPORATION WATERBURY, Conn., April 19, 2016 /PRNewswire/ -- Webster Financial Corporation (NYSE: WBS), the holding company for Webster Bank, N.A., today announced earnings applicable to common shareholders of $46.5 million, or $0.51 per diluted share, for the quarter ended March 31, 2016 compared to $46.9 million, or $0.52 per diluted share, for the quarter ended March 31, 2015.
"Solid quarterly results underscore Webster's sustained progress in executing growth strategies that maximize value to customers and shareholders. Both loans and revenue grew more than 10 percent, and total assets neared $25 billion," said James C. Smith, chairman and chief executive officer. "Our recent Boston expansion is gaining momentum, as new deposits recently surpassed $100 million. Webster bankers continued to excel in service to customers and communities."
Highlights for the first quarter of 2016 compared to the first quarter of 2015:
-- Record core revenue of $240.1 million, an increase of 10.3 percent,
including a record level of net interest income of $176.2 million.
-- Loan growth of $1.6 billion, or 11.1 percent, with double-digit growth
in commercial, commercial real estate and residential mortgage loans.
-- Deposit growth of $1.2 billion, or 6.7 percent, primarily reflecting HSA
Bank's strong organic growth.
-- Efficiency ratio of 61.29 percent would have been 58.92 percent
excluding the Boston expansion related expenses.
-- Annualized return on average tangible common shareholders' equity of
10.97 percent.
"We continue to demonstrate expense discipline as evidenced by our ability to deliver on our efficiency commitments," said Glenn MacInnes, executive vice president and chief financial officer. "Excluding Boston expansion related expenses, the efficiency ratio has been at or below 60% for twelve consecutive quarters."
Quarterly net interest income compared to the first quarter of 2015:
-- Net interest income was $176.2 million compared to $159.8 million.
-- Net interest margin was 3.11 percent compared to 3.10 percent. The yield
on interest-earning assets increased by 3 basis points, while the cost
of funds increased by 1 basis point.
-- Net interest margin increased 3 basis points on a linked-quarter basis.
-- Average interest-earning assets totaled $23.0 billion and grew by $1.9
billion, or 9.2 percent.
-- Average loans totaled $15.8 billion and grew by $1.8 billion, or 12.9
percent.
Quarterly provision for loan losses:
-- The Company recorded a provision for loan losses of $15.6 million
compared to $13.8 million in the fourth quarter of 2015 and $9.8 million
a year ago.
-- Net charge-offs were $16.4 million compared to $11.8 million in the
prior quarter and $7.0 million a year ago. The ratio of net charge-offs
to average loans on an annualized basis was 0.41 percent compared to
0.31 percent in the prior quarter and 0.20 percent a year ago. The
increase in net charge-offs was primarily in the commercial segment.
-- The allowance for loan losses represented 1.10 percent of total loans
compared to 1.12 percent at December 31, 2015 and 1.14 percent at March
31, 2015. The allowance for loan losses represented 124 percent of
nonperforming loans compared to 125 percent at December 31 and 106
percent a year ago.
Quarterly non-interest income compared to the first quarter of 2015:
-- Total non-interest income was $64.0 million compared to $57.9 million,
an increase of $6.1 million. Excluding securities gains and
other-than-temporary impairment charges, a year-over-year increase of
$6.0 million in core non-interest income reflects increases of $3.8
million in deposit service fees primarily related to HSA Bank, $1.4
million in other income and $1.1 million in mortgage banking activities.
Quarterly non-interest expense compared to the first quarter of 2015:
-- Total non-interest expense was $151.7 million compared to $134.1
million, an increase of $17.6 million.
-- Non-interest expense, excluding one-time costs, related primarily to the
upcoming closure of four banking center offices increased $16.9 million
with $5.7 million of the increase related to the Boston expansion and
$3.7 million related to growth at HSA Bank. The remaining $7.5 million
increase reflects higher compensation expense and other expenses.
Quarterly income taxes compared to the first quarter of 2015:
-- Income tax expense was $24.2 million compared to $24.1 million. The
effective tax rate was 33.2 percent compared to 32.6 percent, which
included a $0.5 million net tax benefit specific to that period.
Investment securities:
-- Total investment securities were $7.1 billion compared to $6.9 billion
at both December 31, 2015 and a year ago. The carrying value of the
available-for-sale portfolio included $1.6 million of net unrealized
gains compared to net unrealized losses of $10.3 million at December 31
and net unrealized gains of $36.9 million a year ago, while the carrying
value of the held-to-maturity portfolio does not reflect $82.2 million
of net unrealized gains compared to $38.5 million at December 31 and
$99.8 million a year ago.
Loans:
-- Total loans were $15.9 billion compared to $15.7 billion at December 31,
2015 and $14.3 billion a year ago. Compared to December 31, commercial,
commercial real estate, residential mortgage, and consumer loans
increased by $58.8 million, $55.3 million, $48.2 million, and $24.3
million, respectively.
-- Compared to a year ago, commercial, residential mortgage, commercial
real estate, and consumer loans increased by $531.9 million, $515.0
million, $383.8 million, and $157.4 million, respectively.
-- Loan originations for portfolio were $899 million compared to $1.534
billion in the prior quarter and $1.062 billion a year ago. In addition,
$73 million of residential loans were originated for sale in the quarter
compared to $98 million in the prior quarter and $87 million a year ago.
Asset quality:
-- Total nonperforming loans were $140.7 million, or 0.89 percent of total
loans, compared to $139.9 million, or 0.89 percent, at December 31, 2015
and $152.2 million, or 1.07 percent, a year ago. Total paying
nonperforming loans were $43.7 million compared to $48.7 million at
December 31 and $53.8 million a year ago.
-- Past due loans were $55.7 million compared to $39.2 million at December
31 and $45.1 million a year ago. Loans past due 90 days and still
accruing increased $1.3 million from both the prior quarter and prior
year.
Deposits and borrowings:
-- Total deposits were $18.7 billion compared to $18.0 billion at December
31, 2015 and $17.5 billion a year ago. Core to total deposits were 89.2
percent compared to 88.4 percent at December 31 and 87.4 percent a year
ago. Loans to deposits were 84.7 percent compared to 87.3 percent at
December 31 and 81.3 percent a year ago.
-- Total borrowings were $3.5 billion compared to $4.0 billion at December
31 and $2.9 billion a year ago.
Capital:
-- The return on average tangible common shareholders' equity and the
return on average common shareholders' equity were 10.97 percent and
8.06 percent, respectively, compared to 11.82 percent and 8.57 percent,
respectively, in the first quarter of 2015.
-- The tangible equity and tangible common equity ratios were 7.64 percent
and 7.14 percent, respectively, compared to 7.89 percent and 7.22
percent, respectively, at March 31, 2015. The common equity tier 1
risk-based capital ratio was 10.63 percent compared to 10.93 percent a
year ago.
-- Book value and tangible book value per common share were $25.27 and
$18.98, respectively, compared to $24.29 and $17.87, respectively, a
year ago.
Webster Financial Corporation is the holding company for Webster Bank, National Association. With $24.9 billion in assets, Webster provides business and consumer banking, mortgage, financial planning, trust, and investment services through 180 banking centers and 352 ATMs. Webster also provides telephone banking, mobile banking, and Internet banking. Webster Bank owns the asset-based lending firm Webster Business Credit Corporation; the equipment finance firm Webster Capital Finance Corporation; and HSA Bank, a division of Webster Bank, which provides health savings account trustee and administrative services. Webster Bank is a member of the FDIC and an equal housing lender. For more information about Webster, including past press releases and the latest annual report, visit the Webster website at www.websterbank.com.
Conference Call
A conference call covering Webster's 2016 first quarter earnings announcement will be held today, Tuesday, April 19, 2016 at 9:00 a.m. (Eastern) and may be heard through Webster's Investor Relations website at www.wbst.com, or in listen-only mode by calling 877-407-8289 or 201-689-8341 internationally. The call will be archived on the website and available for future retrieval.
Forward-Looking Statements
This release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Act"). Forward-looking statements can be identified by words such as "believes," "anticipates," "expects," "intends," "targeted," "continue," "remain," "will," "should," "may," "plans," "estimates," and similar references to future periods; however, such words are not the exclusive means of identifying such statements. Examples of forward-looking statements include, but are not limited to: (i) projections of revenues, expenses, income or loss, earnings or loss per share, and other financial items; (ii) statements of plans, objectives, and expectations of Webster or its management or Board of Directors; (iii) statements of future economic performance; and (iv) statements of assumptions underlying such statements. Forward-looking statements are based on Webster's current expectations and assumptions regarding its business, the economy, and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict. Webster's actual results may differ materially from those contemplated by the forward-looking statements, which are neither statements of historical fact nor guarantees or assurances of future performance. Factors that could cause actual results to differ from those discussed in the forward-looking statements include, but are not limited to: (1) local, regional, national, and international economic conditions and the impact they may have on us and our customers and our assessment of that impact; (2) volatility and disruption in national and international financial markets; (3) government intervention in the U.S. financial system; (4) changes in the level of nonperforming assets and charge-offs; (5) changes in estimates of future reserve requirements based upon the periodic review thereof under relevant regulatory and accounting requirements; (6) adverse conditions in the securities markets that lead to impairment in the value of securities in our investment portfolio; (7) inflation, interest rate, securities market, and monetary fluctuations; (8) the timely development and acceptance of new products and services and perceived overall value of these products and services by customers; (9) changes in consumer spending, borrowings, and savings habits; (10) technological changes and cyber-security matters; (11) the ability to increase market share and control expenses; (12) changes in the competitive environment among banks, financial holding companies, and other financial services providers; (13) the effect of changes in laws and regulations (including laws and regulations concerning taxes, banking, securities, and insurance) with which we and our subsidiaries must comply, including the Dodd-Frank Wall Street Reform and Consumer Protection Act; (14) the effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Public Company Accounting Oversight Board, the Financial Accounting Standards Board, and other accounting standard setters; (15) the costs and effects of legal and regulatory developments including the resolution of legal proceedings or regulatory or other governmental inquiries and the results of regulatory examinations or reviews; (16) our success at managing the risks involved in the foregoing items and (17) the other factors that are described in the Company's Annual Report on Form 10-K and Quarterly Reports on Form 10-Q under the headings "Risk Factors" and 'Management Discussion and Analysis of Financial Condition and Results of Operation." Any forward-looking statement made by the Company in this release speaks only as of the date on which it is made. Factors or events that could cause the Company's actual results to differ may emerge from time to time, and it is not possible for the Company to predict all of them. The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.
Non-GAAP Financial Measures
In addition to results presented in accordance with GAAP, this press release contains certain non-GAAP financial measures. A reconciliation of net income and other performance ratios, as adjusted, is included in the accompanying selected financial highlights table.
We believe that providing certain non-GAAP financial measures provides investors with information useful in understanding our financial performance, our performance trends and financial position. Specifically, we provide measures based on what we believe are our operating earnings on a consistent basis and exclude non-core operating items which affect the GAAP reporting of results of operations. We utilize these measures for internal planning and forecasting purposes. We, as well as securities analysts, investors, and other interested parties, also use these measures to compare peer company operating performance. We believe that our presentation and discussion, together with the accompanying reconciliations, provides a complete understanding of factors and trends affecting our business and allows investors to view performance in a manner similar to management. These non-GAAP measures should not be considered a substitute for GAAP basis measures and results, and we strongly encourage investors to review our consolidated financial statements in their entirety and not to rely on any single financial measure. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names.
Media Contact Investor Contact
Bob Guenther, 203-578-2391 Terry Mangan, 203-578-2318
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,
2016 2015 2015 2015 2015
--- ---- ---- ---- ---- ----
Income and performance ratios (annualized):
-------------------------------------------
Net income $48,617 $52,579 $51,536 $52,503 $49,722
Earnings applicable to common shareholders 46,486 50,414 49,341 50,277 46,937
Earnings per diluted common share 0.51 0.55 0.54 0.55 0.52
Return on average assets 0.78 % 0.86 % 0.86 % 0.90 % 0.88 %
Return on average tangible common shareholders' equity 10.97 11.99 11.89 12.49 11.82
Return on average common shareholders' equity 8.06 8.79 8.68 9.03 8.57
Non-interest income as a percentage of total revenue 26.66 25.82 26.78 26.80 26.60
Efficiency ratio 61.29 59.87 59.49 59.88 59.69
Asset quality:
--------------
Allowance for loan and lease losses $174,201 $174,990 $172,992 $167,860 $161,970
Nonperforming assets 145,787 144,970 164,387 172,825 157,546
Allowance for loan and lease losses / total loans and leases 1.10 % 1.12 % 1.14 % 1.14 % 1.14 %
Net charge-offs / average loans and leases (annualized) 0.41 0.31 0.21 0.19 0.20
Nonperforming loans and leases / total loans and leases 0.89 0.89 1.04 1.14 1.07
Nonperforming assets / total loans and leases plus OREO 0.92 0.92 1.08 1.17 1.10
Allowance for loan and lease losses / nonperforming loans and leases 123.79 125.05 108.80 100.00 106.39
Other ratios (annualized):
--------------------------
Tangible equity 7.64 % 7.64 % 7.78 % 7.82 % 7.89 %
Tangible common equity 7.14 7.13 7.26 7.28 7.22
Tier 1 risk-based capital (a) 11.33 11.54 11.62 11.80 12.01
Total risk-based capital (a) 12.80 12.92 13.02 13.21 13.44
Common equity tier 1 risk-based capital (a) 10.63 10.71 10.78 10.94 10.93
Shareholders' equity / total assets 9.78 9.80 10.01 10.09 10.22
Net interest margin 3.11 3.08 3.04 3.05 3.10
Share and equity related:
-------------------------
Common equity $2,315,257 $2,292,861 $2,279,835 $2,256,985 $2,203,926
Book value per common share 25.27 25.01 24.87 24.55 24.29
Tangible book value per common share 18.98 18.71 18.55 18.23 17.87
Common stock closing price 35.90 37.19 35.63 39.55 37.05
Dividends declared per common share 0.23 0.23 0.23 0.23 0.20
Common shares issued and outstanding 91,617 91,677 91,663 91,919 90,715
Weighted average common shares outstanding - basic 91,328 91,419 91,458 90,713 90,251
Weighted average common shares outstanding - diluted 91,809 91,956 92,007 91,302 90,841
(a) The ratios presented are projected for March 31, 2016 and actual for the remaining periods.
WEBSTER FINANCIAL CORPORATION
Consolidated Balance Sheets (unaudited)
--------------------------------------
(In thousands) March 31, December 31, March 31,
2016 2015 (b) 2015 (b)
--- ---- ------- -------
Assets:
Cash and due from banks $198,174 $199,693 $163,495
Interest-bearing deposits 27,805 155,907 119,297
Investment securities:
Available for sale 3,080,469 2,984,631 2,968,109
Held to maturity 4,012,289 3,923,052 3,923,189
--------- --------- ---------
Total securities 7,092,758 6,907,683 6,891,298
Loans held for sale (a) 30,425 37,091 45,866
Loans and Leases:
Commercial 4,975,332 4,916,525 4,443,446
Commercial real estate 4,046,911 3,991,649 3,663,071
Residential mortgages 4,109,243 4,061,001 3,594,272
Consumer 2,726,869 2,702,560 2,569,437
--------- --------- ---------
Total loans and leases 15,858,355 15,671,735 14,270,226
Allowance for loan and lease losses (174,201) (174,990) (161,970)
-------- -------- --------
Loans and leases, net 15,684,154 15,496,745 14,108,256
Federal Home Loan Bank and Federal Reserve Bank stock 188,347 188,347 193,290
Premises and equipment, net 134,212 129,426 123,548
Goodwill and other intangible assets, net 576,145 577,699 582,751
Cash surrender value of life insurance policies 506,746 503,093 443,225
Deferred tax asset, net 81,191 101,578 61,136
Accrued interest receivable and other assets 415,552 345,625 319,922
-------
Total Assets $24,935,509 $24,642,887 $23,052,084
----------- ----------- -----------
Liabilities and Equity:
Deposits:
Demand $3,625,605 $3,713,063 $3,450,316
Interest-bearing checking 2,421,692 2,369,971 2,267,350
Health savings accounts 4,084,190 3,802,313 3,529,301
Money market 2,319,588 1,933,460 2,114,300
Savings 4,244,383 4,047,817 3,978,655
Certificates of deposit 1,727,934 1,762,847 1,905,943
Brokered certificates of deposit 301,131 323,307 299,785
------- ------- -------
Total deposits 18,724,523 17,952,778 17,545,650
Securities sold under agreements to repurchase and other borrowings 910,149 1,151,400 1,083,877
Federal Home Loan Bank advances 2,363,131 2,664,139 1,584,357
Long-term debt 225,323 225,260 225,069
Accrued expenses and other liabilities 274,416 233,739 257,556
------- ------- -------
Total liabilities 22,497,542 22,227,316 20,696,509
---------- ---------- ----------
Preferred stock 122,710 122,710 151,649
Common shareholders' equity 2,315,257 2,292,861 2,203,926
--------- --------- ---------
Webster Financial Corporation shareholders' equity 2,437,967 2,415,571 2,355,575
--------- --------- ---------
Total Liabilities and Equity $24,935,509 $24,642,887 $23,052,084
----------- ----------- -----------
(a) A policy election was made effective in the first quarter 2016. As a result, the March 31, 2016 balance includes loans originated for sale which are accounted for under the fair value option of ASU 820.
(b) Amounts revised for an immaterial correction for cash collateral relating to derivatives, reclassified from cash and due from banks impacting other assets and other liabilities.
WEBSTER FINANCIAL CORPORATION
Consolidated Statements of Income (unaudited)
--------------------------------------------
Three Months Ended March 31,
----------------------------
(In thousands, except per share data) 2016 2015
------------------------------------ ---- ----
Interest income:
Interest and fees on loans and leases $149,808 $130,723
Interest and dividends on securities 52,254 51,679
Loans held for sale 273 510
Total interest income 202,335 182,912
------- -------
Interest expense:
Deposits 12,299 11,542
Borrowings 13,884 11,606
Total interest expense 26,183 23,148
------ ------
Net interest income 176,152 159,764
Provision for loan and lease losses 15,600 9,750
Net interest income after provision for loan and lease losses 160,552 150,014
------- -------
Non-interest income:
Deposit service fees 36,382 32,625
Loan and lease related fees 5,675 5,679
Wealth and investment services 7,195 7,889
Mortgage banking activities 2,629 1,561
Increase in cash surrender value of life insurance policies 3,653 3,152
Net gain on investment securities 320 43
Other income 8,319 6,941
64,173 57,890
Loss on write-down of investment securities to fair value (149) -
Total non-interest income 64,024 57,890
------ ------
Non-interest expense:
Compensation and benefits 80,309 70,864
Occupancy 14,253 13,596
Technology and equipment expense 19,235 19,248
Marketing 4,924 4,176
Professional and outside services 2,811 2,453
Intangible assets amortization 1,554 1,288
Loan workout expenses 965 878
Deposit insurance 6,786 6,241
Other expenses 19,688 14,871
------ ------
150,525 133,615
Severance, contract, and other 401 290
Acquisition costs - 509
Branch and facility optimization 816 (324)
Total non-interest expense 151,742 134,090
------- -------
Income before income taxes 72,834 73,814
Income tax expense 24,217 24,092
------ ------
Net income 48,617 49,722
Preferred stock dividends and other (2,131) (2,785)
Earnings applicable to common shareholders $46,486 $46,937
------- -------
Weighted-average common shares outstanding - diluted 91,809 90,841
Earnings per common share:
Basic $0.51 $0.52
Diluted 0.51 0.52
WEBSTER FINANCIAL 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,
2016 2015 2015 2015 2015
--- ---- ---- ---- ---- ----
Interest income:
Interest and fees on loans and leases $149,808 $145,504 $140,520 $135,694 $130,723
Interest and dividends on securities 52,254 52,365 51,121 50,844 51,679
Loans held for sale 273 291 357 432 510
Total interest income 202,335 198,160 191,998 186,970 182,912
------- ------- ------- ------- -------
Interest expense:
Deposits 12,299 11,476 11,480 11,533 11,542
Borrowings 13,884 13,344 12,508 11,926 11,606
Total interest expense 26,183 24,820 23,988 23,459 23,148
------ ------ ------ ------ ------
Net interest income 176,152 173,340 168,010 163,511 159,764
Provision for loan and lease losses 15,600 13,800 13,000 12,750 9,750
Net interest income after provision for loan and lease losses 160,552 159,540 155,010 150,761 150,014
------- ------- ------- ------- -------
Non-interest income:
Deposit service fees 36,382 34,231 35,229 34,493 32,625
Loan and lease related fees 5,675 5,881 8,305 5,729 5,679
Wealth and investment services 7,195 8,052 7,761 8,784 7,889
Mortgage banking activities 2,629 2,276 1,441 2,517 1,561
Increase in cash surrender value of life insurance policies 3,653 3,383 3,288 3,197 3,152
Net gain on investment securities 320 80 - 486 43
Other income 8,319 6,474 5,513 4,645 6,941
64,173 60,377 61,537 59,851 57,890
Loss on write-down of investment securities to fair value (149) (28) (82) - -
----
Total non-interest income 64,024 60,349 61,455 59,851 57,890
------ ------ ------ ------ ------
Non-interest expense:
Compensation and benefits 80,309 79,232 73,378 74,043 70,864
Occupancy 14,253 11,573 11,987 11,680 13,596
Technology and equipment expense 19,235 19,218 21,336 20,224 19,248
Marketing 4,924 3,533 4,099 4,245 4,176
Professional and outside services 2,811 2,932 2,896 2,875 2,453
Intangible assets amortization 1,554 1,588 1,621 1,843 1,288
Loan workout expenses 965 775 719 801 878
Deposit insurance 6,786 6,242 6,067 5,492 6,241
Other expenses 19,688 18,179 17,960 15,426 14,871
------ ------ ------ ------ ------
150,525 143,272 140,063 136,629 133,615
Severance, contract, and other 401 254 34 521 290
Acquisition costs - (386) - 18 509
Branch and facility optimization 816 24 (243) 278 (324)
Total non-interest expense 151,742 143,164 139,854 137,446 134,090
------- ------- ------- ------- -------
Income before income taxes 72,834 76,725 76,611 73,166 73,814
Income tax expense 24,217 24,146 25,075 20,663 24,092
------
Net income 48,617 52,579 51,536 52,503 49,722
Preferred stock dividends and other (2,131) (2,165) (2,195) (2,226) (2,785)
------
Earnings applicable to common shareholders $46,486 $50,414 $49,341 $50,277 $46,937
------- ------- ------- ------- -------
Weighted-average common shares outstanding - diluted 91,809 91,956 92,007 91,302 90,841
Earnings per common share:
Basic $0.51 $0.55 $0.54 $0.55 $0.52
Diluted 0.51 0.55 0.54 0.55 0.52
WEBSTER FINANCIAL CORPORATION
Consolidated Average Balances, Yields, and Rates Paid (unaudited)
----------------------------------------------------------------
Three Months Ended March 31,
----------------------------
2016 2015
---- ----
(Dollars in thousands) Average Interest Fully tax- Average Interest Fully tax- equivalent
yield/rate
balance equivalent balance
yield/rate
--- ---
Assets:
Interest-earning assets:
Loans and leases $15,798,897 $150,536 3.79 % $13,994,482 $131,254 3.76 %
Investment securities (a) 6,895,407 53,012 3.07 6,695,978 52,426 3.15
Federal Home Loan and Federal Reserve Bank stock 188,347 1,417 3.03 193,290 1,316 2.76
Interest-bearing deposits 57,337 72 0.49 99,879 63 0.25
Loans held for sale 26,623 273 4.10 40,666 510 5.02
------ --- ---- ------ --- ----
Total interest-earning assets 22,966,611 $205,310 3.56 % 21,024,295 $185,569 3.54 %
Non-interest-earning assets 1,826,026 1,619,996
Total assets $24,792,637 $22,644,291
----------- -----------
Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Deposits:
Demand $3,665,928 $ - -% $3,454,242 $ - -%
Savings, interest checking, and money market 12,761,677 6,615 0.21 11,541,135 4,836 0.17
Certificates of deposit 2,057,650 5,684 1.11 2,242,857 6,706 1.21
Total deposits 18,485,255 12,299 0.27 17,238,234 11,542 0.27
---------- ------ ---- ---------- ------ ----
Securities sold under agreements to repurchase and other borrowings 1,048,997 4,173 1.57 1,199,025 4,387 1.46
Federal Home Loan Bank advances 2,337,746 7,247 1.23 1,432,717 4,821 1.35
Long-term debt 226,191 2,464 4.36 226,248 2,398 4.24
Total borrowings 3,612,934 13,884 1.52 2,857,990 11,606 1.62
--------- ------ ---- --------- ------ ----
Total interest-bearing liabilities 22,098,189 $26,183 0.47 % 20,096,224 $23,148 0.46 %
Non-interest-bearing liabilities 258,713 198,164
Total liabilities 22,356,902 20,294,388
---------- ----------
Preferred stock 122,710 151,649
Common shareholders' equity 2,313,025 2,198,254
--------- ---------
Webster Financial Corporation shareholders' equity 2,435,735 2,349,903
Total liabilities and equity $24,792,637 $22,644,291
----------- -----------
Tax-equivalent net interest income 179,127 162,421
Less: tax-equivalent adjustment (2,975) (2,657)
Net interest income $176,152 $159,764
-------- --------
Net interest margin 3.11 % 3.10 %
----- -----
(a) For purposes of the yield computation, unrealized gains (losses) on securities available for sale are excluded from the average balance.
WEBSTER FINANCIAL CORPORATION
Five Quarter Loan and Lease Balances (unaudited)
-----------------------------------------------
(Dollars in thousands) March 31, December 31, September 30, June 30, March 31,
2016 2015 2015 2015 2015
--- ---- ---- ---- ---- ----
Loan and Lease Balances (actuals):
Continuing Portfolio:
Commercial non-mortgage $3,607,176 $3,562,784 $3,423,775 $3,310,863 $3,183,218
Equipment financing 596,572 600,526 552,850 545,441 543,636
Asset-based lending 771,584 753,215 716,204 711,041 716,592
Commercial real estate 4,046,911 3,991,649 3,857,155 3,770,252 3,663,071
Residential mortgages 4,109,243 4,061,001 4,015,839 3,833,489 3,594,272
Consumer 2,649,644 2,622,998 2,568,009 2,520,970 2,480,270
--------- --------- --------- --------- ---------
Total continuing portfolio 15,781,130 15,592,173 15,133,832 14,692,056 14,181,059
Allowance for loan and lease losses (167,769) (167,626) (165,341) (159,501) (152,825)
Total continuing portfolio, net 15,613,361 15,424,547 14,968,491 14,532,555 14,028,234
---------- ---------- ---------- ---------- ----------
Liquidating Portfolio:
Consumer 77,225 79,562 82,693 85,470 89,167
Allowance for loan and lease losses (6,432) (7,364) (7,651) (8,359) (9,145)
------ ------ ------ ------ ------
Total liquidating portfolio, net 70,793 72,198 75,042 77,111 80,022
------ ------ ------ ------ ------
Total Loan and Lease Balances (actuals) 15,858,355 15,671,735 15,216,525 14,777,526 14,270,226
Allowance for loan and lease losses (174,201) (174,990) (172,992) (167,860) (161,970)
Loans and Leases, net $15,684,154 $15,496,745 $15,043,533 $14,609,666 $14,108,256
----------- ----------- ----------- ----------- -----------
Loan and Lease Balances (average):
Continuing Portfolio:
Commercial non-mortgage $3,605,483 $3,482,862 $3,363,074 $3,247,527 $3,096,762
Equipment financing 600,123 570,686 549,310 542,112 542,067
Asset-based lending 750,328 721,662 712,811 709,985 675,218
Commercial real estate 4,019,260 3,955,012 3,804,904 3,705,895 3,574,826
Residential mortgages 4,101,396 4,039,341 3,950,654 3,711,096 3,546,098
Consumer 2,643,792 2,601,955 2,544,789 2,504,668 2,468,422
--------- --------- --------- --------- ---------
Total continuing portfolio 15,720,382 15,371,518 14,925,542 14,421,283 13,903,393
Allowance for loan and lease losses (173,479) (170,724) (163,421) (156,698) (153,790)
Total continuing portfolio, net 15,546,903 15,200,794 14,762,121 14,264,585 13,749,603
---------- ---------- ---------- ---------- ----------
Liquidating Portfolio:
National Construction Lending Center (NCLC) - - - - 1
Consumer 78,515 81,058 84,449 87,418 91,088
------ ------ ------ ------ ------
Total liquidating portfolio 78,515 81,058 84,449 87,418 91,089
Allowance for loan and lease losses (6,432) (7,364) (7,651) (8,359) (9,145)
Total liquidating portfolio, net 72,083 73,694 76,798 79,059 81,944
------ ------ ------ ------ ------
Total Loan and Lease Balances (average) 15,798,897 15,452,576 15,009,991 14,508,701 13,994,482
Allowance for loan and lease losses (179,911) (178,088) (171,072) (165,057) (162,935)
-------- -------- -------- --------
Loans and Leases, net $15,618,986 $15,274,488 $14,838,919 $14,343,644 $13,831,547
----------- ----------- ----------- ----------- -----------
WEBSTER FINANCIAL CORPORATION
Five Quarter Nonperforming Assets (unaudited)
--------------------------------------------
(Dollars in thousands) March 31, December 31, September 30, June 30, March 31,
2016 2015 2015 2015 2015
--- ---- ---- ---- ---- ----
Nonperforming loans and leases:
Continuing Portfolio:
Commercial non-mortgage $32,517 $27,086 $40,235 $43,081 $27,057
Equipment financing 868 706 403 301 285
Asset-based lending - - - - -
Commercial real estate 15,381 20,211 23,828 26,893 25,814
Residential mortgages 53,700 54,101 57,603 58,663 61,274
Consumer 34,581 33,972 32,969 34,236 33,696
------
Nonperforming loans and leases - continuing portfolio 137,047 136,076 155,038 163,174 148,126
------- ------- ------- ------- -------
Liquidating Portfolio:
Consumer 3,675 3,865 3,965 4,682 4,117
Total nonperforming loans and leases $140,722 $139,941 $159,003 $167,856 $152,243
-------- -------- -------- -------- --------
Other real estate owned and repossessed assets:
Continuing Portfolio:
Repossessed equipment $342 $ - $ - $ - $ -
Residential 3,329 3,788 4,078 3,930 3,051
Consumer 1,394 1,241 1,306 1,039 2,252
Total other real estate owned and repossessed assets $5,065 $5,029 $5,384 $4,969 $5,303
------ ------ ------ ------ ------
Total nonperforming assets $145,787 $144,970 $164,387 $172,825 $157,546
WEBSTER FINANCIAL CORPORATION
Five Quarter Past Due Loans and Leases (unaudited)
-------------------------------------------------
(Dollars in thousands) March 31, December 31, September 30, June 30, March 31,
2016 2015 2015 2015 2015
--- ---- ---- ---- ---- ----
Past due 30-89 days:
Continuing Portfolio:
Commercial non-mortgage $7,265 $4,052 $4,415 $1,778 $3,992
Equipment financing 594 602 739 517 789
Asset-based lending - - - - -
Commercial real estate 20,730 2,250 1,939 1,547 3,962
Residential mortgages 10,456 15,032 15,222 12,315 13,966
Consumer 12,414 14,225 15,850 13,053 18,459
Past due 30-89 days - continuing portfolio 51,459 36,161 38,165 29,210 41,168
------ ------ ------ ------ ------
Liquidating Portfolio:
Consumer 819 1,036 953 1,299 1,820
Total past due 30-89 days 52,278 37,197 39,118 30,509 42,988
------ ------ ------ ------ ------
Past due 90 days or more and accruing 3,391 2,051 2,228 1,923 2,109
----- ----- ----- ----- -----
Total past due loans and leases $55,669 $39,248 $41,346 $32,432 $45,097
------- ------- ------- ------- -------
WEBSTER FINANCIAL CORPORATION
Five Quarter Changes in the Allowance for Loan and Lease Losses (unaudited)
--------------------------------------------------------------------------
Three Months Ended
------------------
(Dollars in thousands) March 31, December 31, September 30, June 30, March 31,
2016 2015 2015 2015 2015
--- ---- ---- ---- ---- ----
Beginning balance $174,990 $172,992 $167,860 $161,970 $159,264
Provision 15,600 13,800 13,000 12,750 9,750
Charge-offs continuing portfolio:
Commercial non-mortgage 11,208 6,522 2,204 2,541 255
Equipment financing 151 244 - 15 15
Asset-based lending - - - - -
Commercial real estate 1,526 1,988 1,346 1,091 3,153
Residential mortgages 1,594 1,504 1,588 1,461 1,953
Consumer 4,101 4,379 3,991 3,531 3,634
Charge-offs continuing portfolio 18,580 14,637 9,129 8,639 9,010
------ ------ ----- ----- -----
Charge-offs liquidating portfolio:
NCLC - - - - 2
Consumer 320 320 840 322 662
Charge-offs liquidating portfolio 320 320 840 322 664
Total charge-offs 18,900 14,957 9,969 8,961 9,674
------ ------ ----- ----- -----
Recoveries continuing portfolio:
Commercial non-mortgage 455 441 558 527 989
Equipment financing 45 1,083 32 102 143
Asset-based lending 2 38 157 2 26
Commercial real estate 74 325 69 52 202
Residential mortgages 720 115 280 365 104
Consumer 905 948 852 849 821
Recoveries continuing portfolio 2,201 2,950 1,948 1,897 2,285
----- ----- ----- ----- -----
Recoveries liquidating portfolio:
NCLC 1 1 1 4 4
Consumer 309 204 152 200 341
Recoveries liquidating portfolio 310 205 153 204 345
Total recoveries 2,511 3,155 2,101 2,101 2,630
----- ----- ----- ----- -----
Total net charge-offs 16,389 11,802 7,868 6,860 7,044
------ ------ ----- ----- -----
Ending balance $174,201 $174,990 $172,992 $167,860 $161,970
-------- -------- -------- -------- --------
WEBSTER FINANCIAL 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
--------------------------------
(In thousands, except per share data) March 31, December 31, September 30, June 30, March 31,
2016 2015 2015 2015 2015
--- ---- ---- ---- ---- ----
Reconciliation of net income to annualized net income used in the return on average tangible
common shareholders' equity ratio
---------------------------------
Net income $48,617 $52,579 $51,536 $52,503 $49,722
Preferred stock dividends (2,024) (2,024) (2,024) (2,024) (2,639)
Amortization of intangibles (tax-affected @ 35%) 1,010 1,032 1,054 1,198 837
----- ----- ----- ----- ---
Quarterly net income adjusted for amortization of intangibles 47,603 51,587 50,566 51,677 47,920
Annualized net income used in the return on average tangible common $190,412 $206,348 $202,264 $206,708 $191,680
shareholders' equity ratio
---
Reconciliation of average common shareholders' equity to average tangible common shareholders' equity
-----------------------------------------------------------------------------------------------------
Average common shareholders' equity $2,313,025 $2,299,493 $2,280,960 $2,236,743 $2,198,254
Average goodwill (538,373) (538,373) (538,373) (538,373) (537,147)
Average intangible assets (excluding mortgage servicing rights) (38,656) (40,225) (41,845) (43,538) (39,559)
------- ------- ------- -------
Average tangible common shareholders' equity $1,735,996 $1,720,895 $1,700,742 $1,654,832 $1,621,548
---------- ---------- ---------- ---------- ----------
Reconciliation of period-end shareholders' equity to period-end tangible
shareholders' equity
--------------------
Shareholders' equity $2,437,967 $2,415,571 $2,402,545 $2,379,695 $2,355,575
Goodwill (538,373) (538,373) (538,373) (538,373) (538,373)
Intangible assets (excluding mortgage servicing rights) (37,772) (39,326) (40,914) (42,535) (44,378)
Tangible shareholders' equity $1,861,822 $1,837,872 $1,823,258 $1,798,787 $1,772,824
---------- ---------- ---------- ---------- ----------
Reconciliation of period-end common shareholders' equity to period-end tangible common shareholders' equity
-----------------------------------------------------------------------------------------------------------
Common shareholders' equity $2,315,257 $2,292,861 $2,279,835 $2,256,985 $2,203,926
Goodwill (538,373) (538,373) (538,373) (538,373) (538,373)
Intangible assets (excluding mortgage servicing rights) (37,772) (39,326) (40,914) (42,535) (44,378)
Tangible common shareholders' equity $1,739,112 $1,715,162 $1,700,548 $1,676,077 $1,621,175
---------- ---------- ---------- ---------- ----------
Reconciliation of period-end assets to period-end tangible assets
-----------------------------------------------------------------
Assets $24,935,509 $24,642,887 $24,008,834 $23,595,076 $23,052,084
Goodwill (538,373) (538,373) (538,373) (538,373) (538,373)
Intangible assets (excluding mortgage servicing rights) (37,772) (39,326) (40,914) (42,535) (44,378)
Tangible assets $24,359,364 $24,065,188 $23,429,547 $23,014,168 $22,469,333
----------- ----------- ----------- ----------- -----------
Book value per common share
---------------------------
Common shareholders' equity $2,315,257 $2,292,861 $2,279,835 $2,256,985 $2,203,926
Ending common shares issued and outstanding 91,617 91,677 91,663 91,919 90,715
Book value per common share $25.27 $25.01 $24.87 $24.55 $24.29
------ ------ ------ ------ ------
Tangible book value per common share
------------------------------------
Tangible common shareholders' equity $1,739,112 $1,715,162 $1,700,548 $1,676,077 $1,621,175
Ending common shares issued and outstanding 91,617 91,677 91,663 91,919 90,715
Tangible book value per common share $18.98 $18.71 $18.55 $18.23 $17.87
------ ------ ------ ------ ------
Reconciliation of non-interest expense to non-interest expense used in the efficiency ratio
-------------------------------------------------------------------------------------------
Non-interest expense $151,742 $143,164 $139,854 $137,446 $134,090
Foreclosed property activities 158 (1) (202) 391 (705)
Intangible assets amortization (1,554) (1,588) (1,621) (1,843) (1,288)
Other expense (1,217) 108 209 (817) (475)
Non-interest expense used in the efficiency ratio $149,129 $141,683 $138,240 $135,177 $131,622
-------- -------- -------- -------- --------
Income used in the efficiency ratio
-----------------------------------
Net interest income before provision for loan losses $176,152 $173,340 $168,010 $163,511 $159,764
Fully taxable-equivalent adjustment ("FTE") 2,975 2,738 2,596 2,626 2,657
Non-interest income 64,024 60,349 61,455 59,851 57,890
Net gain on investment securities (320) (80) - (486) (43)
Other 481 303 324 242 242
Income used in the efficiency ratio $243,312 $236,650 $232,385 $225,744 $220,510
-------- -------- -------- -------- --------
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SOURCE Webster Financial Corporation
