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WATERBURY, Conn., April 21 /PRNewswire/ -- Webster Financial Corporation (Nasdaq: WBST
- news), holding company for Webster Bank, today reported an 18 percent increase in
earnings per share for the first quarter ended March 31, 1999. Net income for the quarter
rose to a record $21.8 million, or $.59 per diluted share, compared to $19.7 million, or
$.50 per diluted share, for the first quarter ended March 31, 1998.
The earnings increase is due primarily to higher non-interest income. Total noninterest
income for the quarter was $19.5 million for the quarter, a 27 percent increase, compared
to $15.3 million for the same period in 1998. Excluding gains on the sale of securities,
total noninterest income increased 45 percent to $17.8 million from $12.2 million in the
year-ago period due to revenue related to the acquisition of Damman Insurance Associates,
recurring sales of internet based mortgage loan originations and expanded product
offerings to Webster's growing customer base.
''Our results reflect our continuing progress in our evolution as a leading Connecticut
based financial services provider,'' said James C. Smith, Webster chairman and chief
executive officer. ''By building strong customer relationships, we have been successful in
building shareholder value. Webster bank has emerged as a progressive mid-size bank with
unlimited potential. We are also pleased that Standard & Poor's has raised Webster's
debt ratings to investment grade.''
Webster remains on target to complete the acquisitions of Maritime Bank & Trust of
Essex and Village Bancorp, Inc. of Ridgefield in the second quarter of this year.
First Quarter Financial Highlights
Return on average shareholders' equity for the first quarter was 16.3 percent, up from
14.6 percent in the first quarter of 1998.
Interest rate spread (the difference between the average yield on interest-earning
assets and the average rate paid on interest-bearing liabilities) was 2.91 percent in the
quarter, up from 2.82 percent in the fourth quarter of 1998 and 2.62 percent in the first
quarter of 1998.
''We have benefited from the third consecutive quarterly increase in the interest rate
spread,'' said John V. Brennan, chief financial officer. ''Higher core deposits, increases
in business loans and lower borrowing costs contributed to the spread improvement.''
Loan originations totaled $465 million for the quarter, up from $319 million in the
year ago period, including $71 million of mortgage loans originated via the Internet by
Webster subsidiary Access National Mortgage. Application volume for the internet mortgage
originator increased steadily through the quarter and reached $126 million.
The efficiency ratio improved to 50.35 percent in the first quarter from 51.76 percent
in the year-ago period.
Income tax expense for the first quarter was $11.2 million, a 34 percent effective tax
rate, compared to $11.6 million, a 37 percent effective tax rate, for the year-ago period,
due to tax benefits received from a new Connecticut passive investment corporation
subsidiary.
Nonaccrual assets declined to 0.34 percent of total assets at March 31, 1999, from 0.54
percent. The allowance for loan losses as a percent of nonaccrual loans was 211 percent,
up from 142 percent a year earlier. Allowances for nonaccrual assets as a percent of
nonaccrual assets were 188 percent, up from 117 percent.
Webster repurchased 1.8 million shares of common stock in the first quarter. The
repurchase is related to the pending acquisitions of Maritime Bank & Trust and Village
Bancorp. Webster had 35.9 million common shares outstanding at March 31, 1999.
Shareholders equity decreased $31.7 million to $512.7 million, primarily due to the
repurchase program.
Additional First Quarter Highlights:
In the first quarter, Standard & Poor's raised Webster Financial Corporation's
senior debt rating and long-term and short-term credit ratings. The corporation's senior
debt rating was raised to investment grade from BB+ to BBB-. Credit ratings for Webster's
subsidiaries -- Webster Bank, Webster Preferred Capital Corporation and Webster Capital
Trust 1 -- were also raised. Also in the first quarter, the credit rating agencies of
Fitch IBCA and Duff & Phelps issued ratings on the corporation's senior debt and
raised long-term and short-term credit ratings for Webster subsidiaries. Both agencies'
senior debt ratings were issued as investment grade, BBB. The upgrades were based on
Webster's solid capital levels, strong funding profile, improved financial performance,
and relatively low-risk but evolving loan portfolio.
In March, Webster Bank became only the third financial services institution to receive
ITAA*2000 certification from the Information Technology Association of America. ITAA, a
leading trade group on Year 2000 issues, performed a rigorous evaluation of Webster Bank's
approach to Year 2000 date conversion and indicated that the company has the core
capabilities needed to address the Year 2000 challenge. Webster Bank began addressing the
Year 2000 issue in 1996 and formed a Y2K Task Force in 1997.
In early March, Webster Bank signed as its advertising spokesman Connecticut Head
Basketball Coach Jim Calhoun, whose team went on to capture the NCAA national
championship. For the next three years, Calhoun will appear in television, radio, print
and direct-mailing advertising for the bank. The coach also will make appearances at
public events on behalf of Webster Bank and speak before bank employee gatherings.
In April, an enhanced investor relations section went live on the Webster bank website,
http://www.websterbank.com. The section can be accessed from the homepage by clicking on
the ''About Webster'' button, and then the ''Investor information'' button on that page.
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 170 ATMs, in
addition to telephone banking, video banking and PC banking. Total assets at March 31,
1999, were $8.8 billion, total deposits were $5.5 billion and total loans were $5.0
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's insurance subsidiary, Damman Insurance
Associates, is one of the largest agencies in the state. Webster's Access National
Mortgage subsidiary, found at http://www.discountmortgages.com on the Worldwide Web,
originates low-cost mortgages over the Internet for customers across the United States.
For more information on Webster, including past press releases and the latest Annual
Report, visit the Webster Bank website at http://www.websterbank.com.
WEBSTER FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF CONDITION
March 31, 1999
Consolidated Statements of Condition (unaudited)
March 31, March 31,
(Dollars in thousands) 1999 1998
Assets:
Cash and Due From Depository Institutions $141,315 $141,158
Interest-bearing Deposits 68,158 94,668
Securities:
Trading, at Fair Value 73,971 82,713
Available for Sale, at Fair Value 2,777,140 3,799,739
Held to Maturity, (Fair Value: $348,773
in 1999; $411,302 in 1998) 350,115 410,785
Loans Receivable:
Residential Loans 3,727,087 3,787,177
Commercial Real Estate Loans 429,379 390,668
Commercial and Industrial Loans 450,649 239,514
Home Equity Loans 430,516 462,016
Other Consumer Loans 39,133 79,258
Allowance for Loan Losses (56,754) (61,155)
Loans Receivable, Net 5,020,010 4,897,478
Accrued Interest Receivable 57,173 57,407
Premises and Equipment, Net 78,872 75,450
Foreclosed Properties, Net 3,230 10,240
Intangible Assets 77,952 75,465
Cash Surrender Value of Life Insurance 142,899 101,300
Prepaid Expenses and Other Assets 57,837 56,386
Total Assets $8,848,672 $9,802,789
Liabilities and Shareholders' Equity:
Deposits:
Checking and NOW $1,017,145 $665,210
Savings and MMDAs 1,468,503 1,662,447
Certificates of Deposit 3,026,543 3,464,664
Total Deposits 5,512,191 5,792,321
Borrowed Funds 2,534,278 3,095,208
Accrued Expenses and Other Liabilities 89,950 171,353
Total Liabilities 8,136,419 9,058,882
Corporation-Obligated Mandatorily Redeemable
Capital Securities of Subsidiary Trusts 150,000 150,000
Preferred Stock of Subsidiary Corporation 49,577 49,577
Shareholders' Equity 512,676 544,330
Total Liabilities and Shareholders'
Equity $8,848,672 $9,802,789
Consolidated Statements of Income (unaudited)
Three Months Ended March 31,
(Dollars in thousands,
except per share data) 1999 1998
Interest Income:
Loans $93,225 $97,858
Securities and Interest-bearing Deposits 52,684 61,341
Total Interest Income 145,909 159,199
Interest Expense:
Deposits 48,580 56,675
Borrowings 33,742 39,127
Total Interest Expense 82,322 95,802
Net Interest Income 63,587 63,397
Provision for Loan Losses 2,000 1,900
Net Interest Income After
Provision for Loan Losses 61,587 61,497
Noninterest Income:
Fees and Service Charges 12,886 9,513
Gain on Sale of Loans and Loan
Servicing, Net 805 266
Gain on Sale of Securities, Net 1,707 3,098
Other Noninterest Income 4,099 2,449
Total Noninterest Income 19,497 15,326
Noninterest Expenses:
Salaries and Employee Benefits 20,966 19,537
Occupancy Expense of Premises 4,337 3,875
Furniture and Equipment Expenses 4,682 4,367
Intangible Amortization 2,519 2,299
Marketing Expenses 2,147 1,889
Other Operating Expenses 8,736 8,796
43,387 40,763
Capital Securities Expense 3,661 3,662
Dividends on Preferred Stock of
Subsidiary Corporation 1,020 1,038
Total Noninterest Expenses 48,068 45,463
Income Before Income Taxes 33,016 31,360
Income Taxes 11,225 11,639
Net Income $21,791 $19,721
Net Income Per Common Share
Basic $0.60 $0.52
Diluted $0.59 $0.50
Selected Financial Highlights (unaudited)
At or For the
(Dollars in thousands, Three Months Ended March 31,
except per share data) 1999 1998
Operating and Performance Ratios (annualized):
Return on Average Shareholders' Equity 16.30% 14.59%
Return on Average Assets 0.97 0.84
Noninterest Expenses/Average Assets 2.15 1.94
Noninterest Expenses Excl. Foreclosed Property,
Acquisition Related, Non-recurring Tax, Capital Sec.
& Pref. Div. Expenses/Avg. Assets 1.94 1.72
Efficiency Ratio (a) 56.11 56.61
Efficiency Ratio (b) 50.35 51.76
Shareholders' Equity/Total Assets 5.79 5.55
Interest Rate Spread 2.91% 2.62%
Net Interest Margin 3.03% 2.87%
Loan Originations:
Residential $307,438 $237,860
Commercial 97,040 34,854
Consumer 61,250 46,719
Asset Quality:
Nonaccrual Loans $26,848 $43,077
Nonaccrual Assets 30,284 53,317
Allowance for Loan Losses 56,754 61,155
Allowances for Nonaccrual Assets 56,961 62,447
Nonaccrual Assets/Total Assets 0.34% 0.54%
Allowance for Loan Losses/Nonaccrual Loans 211.39 141.97
Allowances for Nonaccrual Assets/
Nonaccrual Assets 188.09 117.12
Share Related:
Book Value Per Common Share $14.27 $14.32
Tangible Book Value Per Common Share 12.10 12.33
Common Stock Closing Price 28.88 34.75
Dividend Declared Per Common Share 0.11 0.10
Common Shares Issued and Outstanding 35,919,989 38,024,570
Basic Shares 36,309,488 38,186,098
Diluted Shares 36,925,143 39,268,509
NOTE(a): Excludes Acquisition Related, Intangible Amortization and
Foreclosed Property Expenses.
NOTE(b): Excludes Acquisition Related, Intangible Amortization, Capital
Securities, Preferred Dividend and Foreclosed Property Expenses.
Retail and Wholesale Interest Rate Spreads (unaudited)
Three Months Ended, March December September June March
1999 1998 1998 1998 1998
Interest Rate Spread
Total Interest-Earning
Assets 6.98% 7.07% 7.04% 7.00% 7.18%
Total Interest-Bearing
Liabilities 4.07 4.25 4.43 4.52 4.56
Interest Rate Spread 2.91% 2.82% 2.61% 2.48% 2.62%
Net Interest Margin 3.03 2.96 2.79 2.64 2.87
Retail Interest Rate Spread
Yield on Loans 7.40% 7.56% 7.60% 7.66% 7.80%
Rate on Deposits 3.50 3.69 3.87 3.93 3.94
Spread 3.90% 3.87% 3.73% 3.73% 3.86%
Wholesale Interest Rate Spread
Yield on Securities 6.34% 6.40% 6.28% 6.21% 6.39%
Rate on Borrowings 5.27 5.48 5.70 5.68 5.80
Spread 1.07% 0.92% 0.58% 0.53% 0.59%
Consolidated Average Statements of Condition (unaudited)
Three Months Ended
March 31, 1999 1998
Fully Tax Fully Tax
Average Equivalent Average Equivalent
Balance Interest Yield Balance Interest Yield
Rate Rate
(Dollars in Thousands)
Assets:
Interest-Earning Assets:
Loans $5,056,637 $93,225 7.40% $5,025,015 $97,858 7.80%
Securities 3,324,126 52,684 6.34 3,843,314 61,341 6.39
Total Interest-
Earning
Assets 8,380,763 145,909 6.98 8,868,329 159,199 7.18
Noninterest-
Earning
Assets 575,326 515,357
Total
Assets $8,956,089 $9,383,686
Liabilities and Shareholders' Equity:
Interest-Bearing Liabilities:
Interest-bearing
Deposits $5,099,388 48,580 3.86% 5,377,465 56,675 4.27%
Noninterest-bearing
Deposits 447,760 --- --- 371,002 --- ---
Federal Home
Loan Bank
Advances 1,675,165 21,811 5.28 1,658,557 23,455 5.65
Repurchase Agreements
and Other
Borrowings 881,261 11,016 5.07 1,038,213 14,757 5.68
Senior Notes 40,000 915 9.15 40,000 915 9.15
Total Interest-Bearing
Liabilities 8,143,574 82,322 4.07 8,485,237 95,802 4.56
Noninterest-Bearing Other
Liabilities 77,996 159,537
Total
Liabilities 8,221,570 8,644,774
Capital Securities and Preferred
Stock of Subsidiary
Corporation 199,784 198,221
Shareholders'
Equity 534,735 540,691
Total Liabilities
and Shareholders'
Equity $8,956,089 $9,383,686
Net Interest
Income $63,587 $63,397
Interest Rate Spread 2.91% 2.62%
Net Interest Margin 3.03% 2.87%
SOURCE: Webster Financial Corporation