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WATERBURY, Conn., Oct. 14 /PRNewswire/ -- Webster Financial Corporation
(Nasdaq: WBST), holding company for Webster Bank, today reported operating
earnings of $20.1 million, or $.52 per diluted share, for the third quarter
ended Sept. 30, 1998, up 46 percent from $13.8 million, or $.35 per diluted
share, for the same period last year. Diluted earnings per share for 1998 and
1997 periods have been adjusted to reflect a two-for-one stock split effective
in April of this year.
''We are pleased to report higher earnings and continuing significant
progress in our evolution as a financial services provider,'' said James C.
Smith, Webster chairman and chief executive officer. ''In particular, we have
seen strong growth in income from fee-based services, including trust and
insurance services.''
Third Quarter Financial Highlights
Return on average shareholders' equity was 14.68 percent, up from
11.20 percent before acquisition-related expenses in the third quarter of
1997. Book value per common share at Sept. 30, 1998, was $14.91 compared to
$13.26 a year earlier. Webster had 37.9 million common shares outstanding at
Sept. 30, 1998.
Interest rate spread (the difference between the average yield on
interest-earning assets and the average rate paid on interest-bearing
liabilities) averaged 2.61 percent, up from 2.48 percent in the second quarter
of this year.
Income from fee-based services increased 44 percent to $12 million from
$8.3 million in the year-ago period, due in part to the acquisition of Damman
Insurance Associates, which now operates as a subsidiary of the corporation,
and due to expanded product offerings to Webster's growing customer base.
The ratio of noninterest expenses to average assets, excluding expenses
related to foreclosed property, acquisitions, capital securities and preferred
stock of a subsidiary corporation, improved to 1.81 percent from 1.87 percent
in the year earlier period.
''Webster continues to invest in its future with the goal of building
strong customer relationships that improve shareholder value,'' Smith said.
In the third quarter, Webster restructured its trust and investment services
operations and further expanded its commercial banking capabilities.
Income tax expense for the third quarter was $8.5 million, compared to
$4.4 million for the year-ago period. During the quarter, Webster recorded a
$2.5 million reduction in income tax expense, related to tax benefits from a
prior acquisition.
Nonaccrual assets declined to 0.39 percent of total assets at
Sept. 30, 1998, from 0.67 percent. The allowance for loan losses as a percent
of nonaccrual loans was 193 percent, up from 152 percent a year earlier.
Allowances for nonaccrual assets as a percent of nonaccrual assets were
159 percent, up from 110 percent.
Other Third Quarter 1998 Highlights
In August, Webster opened a new full-service branch at 64 South Main
Street in the highly desirable Wallingford market. The branch features
extended weekday hours and is also open on Saturday and Sunday.
In September, Webster Trust moved its headquarters to an existing Webster
building in centrally located Kensington. The new headquarters consolidates
what had been separate offices that resulted from acquisitions in the past two
years of a trust company and the trust operations of a savings bank. The
central location will facilitate the development of a clearer identity and
more cohesive culture for Webster Trust. Other initiatives under way include
the introduction of an improved customer records system and new approaches to
attracting and retaining customers.
Webster Financial Corporation, headquartered in Waterbury, Conn., is the
holding company for Webster Bank, which was founded in 1935. Webster Bank
delivers consumer, commercial, mortgage, insurance, and trust and investment
management services to individuals, families and businesses through a network
of more than 100 banking offices, three commercial banking centers, two
insurance offices, and more than 160 ATMs, in addition to telephone banking,
video banking and PC banking. Total assets at Sept. 30, 1998, were
$9.2 billion, total deposits were $5.6 billion and total loans were
$4.9 billion.
Webster Bank has the number one or number two deposit market share in its
primary markets of Hartford, New Haven and Litchfield counties. Webster is
also the second-largest mortgage lender in Connecticut and a leading,
full-service commercial lender. Webster Trust, the bank's trust and
investment management subsidiary, is the second-largest bank trust company
based in Connecticut.
WEBSTER FINANCIAL CORPORATION
Consolidated Statements of Condition (unaudited)
September 30, September 30,
(Dollars in thousands) 1998 1997
Assets:
Cash and Due From Depository
Institutions $ 127,795 $ 154,163
Interest-bearing Deposits 8,728 132,816
Securities:
Trading at Fair Value 97,849 94,222
Available for Sale, at Fair Value 3,150,556 2,801,099
Held to Maturity, (Market Value:
$444,726 for 1998) 439,836 444,980
Loans Receivable, Net 4,931,885 4,906,859
Accrued Interest Receivable 55,863 51,684
Premises and Equipment, Net 79,372 71,014
Foreclosed Properties, Net 6,153 16,395
Intangible Assets 81,037 80,829
Prepaid Expenses and Other Assets 184,612 63,706
Total Assets $9,163,686 $8,817,767
Liabilities and Shareholders' Equity:
Deposits $5,621,371 $5,650,442
Borrowed Funds 2,654,126 2,422,275
Accrued Expenses and Other
Liabilities 122,696 107,176
Total Liabilities 8,398,193 8,179,893
Corporation-Obligated Mandatorily
Redeemable Capital Securities
of Subsidiary Trust 150,000 143,858
Preferred Stock of Subsidiary
Corporation 49,577 --
Shareholders' Equity 565,916 494,016
Total Liabilities and
Shareholders' Equity $9,163,686 $8,817,767
WEBSTER FINANCIAL CORPORATION
Consolidated Statements of Income (unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
1998 1997 1998 1997
(Dollars in thousands, except per share data)
Interest Income:
Loans $ 95,056 $ 97,957 $287,949 $288,469
Securities and
Interest-bearing
Deposits 57,227 52,551 183,161 135,201
Total Interest
Income 152,283 150,508 471,110 423,670
Interest Expense:
Deposits 55,465 55,614 169,158 168,148
Borrowings 37,175 29,830 119,261 68,479
Total Interest
Expense 92,640 85,444 288,419 236,627
Net Interest
Income 59,643 65,064 182,691 187,043
Provision for Loan
Losses 1,500 10,828 5,300 22,138
Net Interest Income
After Provision 58,143 54,236 177,391 164,905
Noninterest Income:
Fees and Service
Charges 12,039 8,343 31,104 23,373
Gain on Sale of
Loans and Loan
Servicing, Net 235 194 2,800 551
Gain on Sale
of Securities,
Net 1,143 1,169 11,269 1,845
Other Noninterest
Income 2,977 1,189 8,357 4,308
Total Noninterest
Income 16,394 10,895 53,530 30,077
Noninterest Expenses:
Salaries and Employee
Benefits 19,640 19,572 58,396 57,741
Occupancy Expense
of Premises 4,251 4,174 12,018 12,184
Furniture and
Equipment
Expenses 4,352 3,321 12,990 10,231
Foreclosed Property
Expenses and
Provisions, Net 8 1,902 567 3,403
Intangible
Amortization 2,512 2,304 7,174 6,950
Marketing
Expenses 1,837 2,187 5,866 5,802
Other Operating
Expenses 8,651 8,316 25,721 25,518
41,251 41,776 122,732 121,829
Acquisition Related
Expenses 0 9,934 17,400 29,792
Capital Securities
Expense 3,692 3,660 11,046 7,706
Dividends on
Preferred Stock of
Subsidiary
Corporation 1,037 0 3,113 0
Total Noninterest
Expenses 45,980 55,370 154,291 159,327
Income Before Income
Taxes 28,557 9,761 76,630 35,655
Income Taxes 8,474 4,386 27,426 13,814
Net Income $ 20,083 $ 5,375 $ 49,204 $ 21,841
Net Income Per Common
Share Before Acquisition
Related Expenses:
Basic (a) $ 0.53 $ 0.37 $ 1.64 $ 1.21
Diluted (a) $ 0.52 $ 0.35 $ 1.61 $ 1.17
Net Income Per Common
Share After Acquisition
Related Expenses:
Basic (a) $ 0.53 $ 0.14 $ 1.30 $ 0.58
Diluted (a) $ 0.52 $ 0.14 $ 1.27 $ 0.56
(a) Earnings per share for 1998 and 1997 have been adjusted to reflect
a two-for-one stock split effective for shareholders of record on
April 6, 1998.
WEBSTER FINANCIAL CORPORATION
Selected Financial Highlights (unaudited)
At or For the At or For the
Three Months Ended Nine Months Ended
September 30, September 30,
1998 1997 1998 1997
(Dollars in thousands, except per share data)
Operating and Performance Ratios (annualized):
Return on Average
Shareholders' Equity
Before Acquisition
Related Expenses 14.68 % 11.20 % 15.77 % 12.58 %
Return on Average
Shareholders'
Equity 14.68 4.37 2.44 6.07
Return on Average
Assets Before
Acquisition Related
Expenses 0.88 0.65 0.89 0.75
Return on Average
Assets 0.88 0.25 0.70 0.36
Noninterest Expenses/
Average Assets 2.02 2.60 2.20 2.65
Noninterest Expenses
Excluding Foreclosed
Property, Acquisition
Related, Capital Sec.
& Preferred Dividend
Expenses/Average
Assets 1.81 1.87 1.74 1.97
Efficiency Ratio
(a) 59.37 54.79 58.44 55.29
Efficiency Ratio
(b) 52.91 49.93 52.04 51.71
Shareholders' Equity/
Total Assets 6.18 5.61 6.18 5.61
Interest Rate
Spread 2.61 2.98 2.59 3.05
Net Interest Margin 2.79 3.21 2.77 3.27
Loan
Originations $395,633 $ 289,304 $1,137,238 $855,108
Asset Quality:
Nonaccrual
Loans $29,579 $42,487 $29,579 $42,487
Nonaccrual
Assets 35,734 58,882 35,734 58,882
Allowance for Loan
Losses 57,000 64,763 57,000 64,763
Allowances for
Nonaccrual
Assets 57,312 65,848 57,312 65,848
Nonaccrual Assets/
Total Assets 0.39 % 0.67 % 0.39 % 0.67 %
Allowance for Loan
Losses/Nonaccrual
Loans 192.70 152.43 192.70 152.43
Allowances for
Nonaccrual Assets/
Nonaccrual Assets 159.00 109.81 159.00 109.81
Share Related: (c)
Book Value Per
Common Share $14.91 $13.26 $14.91 $13.26
Tangible Book Value
Per Common Share $12.78 $11.09 $12.78 $11.09
Common Stock Closing
Price $24.38 $29.38 $24.38 $29.38
Dividend Declared
Per Common Share $ 0.11 $ 0.10 $ 0.32 $0.30
Common Shares Issued
and Outstanding 37,943,394 37,262,139 37,943,394 37,262,139
Basic Shares 38,011,104 37,526,042 37,952,903 37,443,160
Diluted Shares 38,663,761 38,844,339 38,650,302 37,697,620
(a) Excludes Acquisition Related, Intangible Amortization and Foreclosed
Property Expenses.
(b) Excludes Acquisition Related, Intangible Amortization, Capital
Securities, Preferred Dividend and Foreclosed Property Expenses.
(c) Amounts for 1998 and 1997 have been adjusted to reflect a two-for-one
stock split for shareholders of record on April 6, 1998.
WEBSTER FINANCIAL CORPORATION
Consolidated Average Statements of Condition (unaudited)
Three Months Ended September 30,
1998
Interest Fully Tax
Average Income/ Equivalent
(Dollars in thousands) Balance Expense Yield/Rate
Assets:
Interest Earning Assets:
Loans $4,982,028 $95,056 7.60 %
Securities 3,642,054 57,227 6.28
Total Interest
Earning Assets 8,624,082 152,283 7.04
Noninterest Earning
Assets 493,081
Total Assets $9,117,163
Liabilities and Shareholders' Equity:
Interest Bearing Liabilities:
Interest-bearing
Deposits $5,314,678 55,465 4.14 %
Noninterest-bearing
Deposits 404,984 -- --
Federal Home Loan
Bank Advances 1,473,172 21,415 5.69
Repurchase Agreements
and Other Borrowings 1,042,378 14,845 5.57
Senior Notes 40,000 915 9.15
Total Interest
Bearing
Liabilities 8,275,212 92,640 4.43
Noninterest Bearing
Other Liabilities 95,013
Total Liabilities 8,370,225
Capital Securities and
Preferred Stock of
Subsidiary Corporation 199,577
Shareholders' Equity547,361
Total Liabilities and
Shareholders'
Equity $9,117,163
Net Interest Income $59,643
Interest Rate Spread 2.61 %
Net Interest Margin 2.79 %
Three Months Ended September 30,
1997
Interest Fully Tax
Average Income/ Equivalent
(Dollars in thousands) Balance Expense Yield/Rate
Assets:
Interest Earning Assets:
Loans $4,973,522 $97,957 7.85 %
Securities 3,150,578 52,551 6.67
Total Interest
Earning Assets 8,124,100 150,508 7.39
Noninterest
Earning Assets 387,940
Total Assets $8,512,040
Liabilities and Shareholders' Equity:
Interest Bearing Liabilities:
Interest-bearing
Deposits $5,343,519 55,614 4.15 %
Noninterest-bearing
Deposits 370,931 -- --
Federal Home Loan
Bank Advances 1,319,861 19,036 5.66
Repurchase Agreements
and Other Borrowings 710,055 9,879 5.45
Senior Notes 40,000 915 9.15
Total Interest
Bearing
Liabilities 7,784,366 85,444 4.41
Noninterest Bearing
Other Liabilities 86,519
Total Liabilities 7,870,885
Capital Securities and
Preferred Stock of
Subsidiary Corporation 148,970
Shareholders' Equity 492,185
Total Liabilities and
Shareholders'
Equity $8,512,040
Net Interest Income $65,064
Interest Rate Spread 2.98 %
Net Interest Margin 3.21 %
WEBSTER FINANCIAL CORPORATION
Retail and Wholesale Interest Rate Spreads
Three Months Ended
Sept. June March Dec. Sept.
1998 1998 1998 1997 1997
Retail Interest
Rate Spread
Yield on Loans 7.60% 7.66% 7.83% 7.86% 7.89%
Rate on Deposits 3.87 3.93 3.94 3.86 3.86
Spread 3.73% 3.73% 3.89% 4.00% 4.03%
Wholesale Interest
Rate Spread
Yield on Securities 6.28% 6.21% 6.31% 6.43% 6.63%
Rate on Borrowings 5.70 5.68 5.71 5.77 5.66
Spread 0.58% 0.53% 0.60% 0.66% 0.97%
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