|
WATERBURY, Conn., Jan. 21 /PRNewswire/ -- Webster Financial Corporation
(Nasdaq: WBST), holding company for Webster Bank, today reported a 27 percent
increase in net operating income to $24.5 million, or $.64 per diluted share,
for the fourth quarter ended Dec. 31, 1998, compared to $19.3 million, or
$.50 per diluted share, for the fourth quarter ended Dec. 31, 1997. Net
income for the fourth quarter, which included a net non-recurring $3.2 million
income tax charge, was $21.3 million, compared to $19.3 million for the same
period in 1997. For the full year 1998, Webster reported a 35 percent increase in net
operating income to a record $86.9 million, or $2.25 per diluted share,
compared to $64.5 million, or $1.68 per diluted share, for the previous year.
Net income for 1998, including acquisition related expenses and non-recurring
tax items, was $70.5 million, or $1.83 per diluted share, compared to net
income for 1997 of $41.1 million, or $1.07 per diluted share, including non-
recurring items. Non-recurring items consisted of $18.9 million and
$39.7 million of acquisition-related expenses and provisions in 1998 and 1997,
respectively, and for 1998 the non-recurring $3.2 million income tax charge
mentioned above and discussed in later detail in this release. ''The year 1998 was our best ever. Our results reflect the significant
progress we have made in our evolution as a financial services provider,'' said
James C. Smith, Webster chairman and chief executive officer. ''Last year,
Webster successfully completed or announced five acquisitions, including three
banks, an insurance agency and an internet based mortgage company. By
building strong customer relationships, we are improving our position as a
leading Connecticut-based financial institution.'' Webster successfully completed the acquisition of Eagle Financial Corp.,
Damman Insurance Associates and Access National Mortgage Inc. in 1998. It
announced definitive agreements to acquire Maritime Bank & Trust of Essex and
Village Bancorp, Inc. of Ridgefield. Financial Highlights Return on average shareholders' equity, before acquisition-related and
other non-recurring tax items, for the fourth quarter was 17.5 percent, up
from 15.1 percent in the fourth quarter of 1997. Book value per common share
at Dec. 31, 1998, was $14.87 compared to $13.78 a year earlier. Webster had
37.3 million common shares outstanding at Dec. 31, 1998. Interest rate spread (the difference between the average yield on
interest-earning assets and the average rate paid on interest-bearing
liabilities) was 2.82 percent in the fourth quarter, up from 2.61 percent in
the third quarter. ''We are pleased to report another increase in the interest rate spread in
the fourth quarter,'' said John V. Brennan, chief financial officer. ''Lower
deposit and borrowing costs and increases in business loans and core deposits
contributed to the spread improvement.'' Income from fee-based services in the fourth quarter increased 40 percent
to $12.1 million from $8.6 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 in the fourth quarter,
excluding expenses related to foreclosed property, acquisitions, capital
securities and preferred stock of a subsidiary corporation, improved to
1.71 percent from 1.72 percent in the year earlier period. For the year, the
ratio improved to 1.73 percent from 1.95 percent in 1997. Income tax expense for the fourth quarter was $17.1 million, compared to
$11.9 million for the year-ago period, due to a net non-recurring tax expense
of $3.2 million related primarily to the planned incorporation of a
Connecticut passive investment corporation as a Webster subsidiary. The
charge is expected to be more than offset by future state tax benefits.
Without this charge the effective tax rate for the quarter and year would have
been 36 percent. Nonaccrual assets declined to 0.32 percent of total assets at
Dec. 31, 1998, from 0.59 percent. The allowance for loan losses as a percent
of nonaccrual loans was 217 percent, up from 141 percent a year earlier.
Allowances for nonaccrual assets as a percent of nonaccrual assets were
191 percent, up from 112 percent. 1998 Acquisitions and Announcements In April, Webster completed its acquisition of the $2.1 billion asset
Eagle Financial Corporation, holding company for Bristol, Conn.-based
Eagle Bank. Systems conversions were completed the same month.
In June, Webster completed its acquisition of Damman Insurance Associates, a
privately-owned Westport-based insurance agency. Damman is a full-service
retail agency providing property-casualty, life and group coverage to
commercial and individual customers. With offices in Westport and
Wallingford, Damman has 50 employees. In November, Webster announced a definitive agreement to acquire
Maritime Bank & Trust (Nasdaq: MTMB - news) for $26.67 per share in a tax-free,
stock-for-stock exchange valued at approximately $21 million. Maritime is a
state-chartered commercial bank headquartered in Essex with one branch each in
the towns of Old Lyme and Old Saybrook. It has total assets of $100 million. Also in November, Webster said it would acquire Village Bancorp, Inc.
(Nasdaq: VBNK - news), the holding company for Village Bank [OTC BB:VBKC - news] & Trust Company, for
$23.50 per share in a tax-free, stock-for-stock exchange valued at
approximately $46.4 million. Village is a state-chartered commercial bank
headquartered in Ridgefield with total assets of $230 million and six banking
offices in the communities of Danbury, Wilton, Westport, and New Milford. In December, Webster acquired Access National Mortgage Inc., a privately
held Internet-based mortgage lender. Webster has combined its lending
expertise with Access's already efficient and profitable Internet-based
operations to create a new mortgage origination subsidiary. Access, which can
be found on the Internet at www.discountmortgages.com, was founded in 1996 and
is based in Wilmington, Massachusetts. Access closed $350 million in first
mortgage loans in 1998. Additional 1998 Strategic Highlights In March, Webster launched a new corporate branding initiative with the
promise that ''No bank can make your banking simpler and easier than Webster.''
The initiative was developed directly from the company's strategic plan that
promises customers will receive simple, easy and hassle-free service in all
their interactions with the bank. Webster's new tag line for these branding
ads, which include television commercials running statewide, is
''Webster Bank. The Simpler. The Better.'' Also, in March, Webster's Board of Directors declared a two-for-one stock
split in the form of a stock dividend. The record date for the stock split
was April 6, 1998, and the distribution of the additional shares began on
April 14, 1998. In October, Webster announced that its Board of Directors had approved a
common stock repurchase program of up to $50 million. Webster expects to buy
back up to 2 million shares, or approximately 5 percent of the company's
38 million shares outstanding. In June, Webster's Board of Directors approved
a 500,000-share common stock repurchase program that was completed in the
fourth quarter. Also in June, Webster repurchased approximately
300,000 shares of Webster common stock related to the settlement of warrants
to purchase 600,000 shares issued to Fleet Financial Group in 1996 in
connection with Webster's purchase of 20 former Shawmut Bank branches divested
following the Fleet-Shawmut merger. In 1998, Webster repurchased 1.4 million
of its shares. Webster completed a bulk sale in June of $20.6 million of nonaccrual
residential assets, most of which had been associated with previous bank
acquisitions. There was no charge to earnings as a result of the sale. 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
location in centrally situated 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. 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 Dec. 31, 1998, were
$9.0 billion, total deposits were $5.7 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 FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF CONDITION
December 31, 1998
Consolidated Statements of Condition (unaudited)
December 31, December 31,
(Dollars in thousands) 1998 1997
Assets:
Cash and Due From
Depository Institutions $173,863 $151,322
Interest-bearing Deposits 3,560 77,104
Securities:
Trading at Fair Value 91,114 84,749
Available for Sale, at
Fair Value 2,969,822 3,092,287
Held to Maturity Securities,
(Market Value: $404,365
for 1998) 401,154 412,237
Loans Receivable:
Residential Loans 3,749,152 3,870,808
Commercial Real Estate Loans 416,203 384,067
Commercial Loans 401,772 244,360
Home Equity Loans 439,369 474,995
Other Consumer Loans 42,122 81,139
Allowance for Loan Losses (55,109) (59,518)
Loans Receivable, Net 4,993,509 4,995,851
Accrued Interest Receivable 55,012 52,658
Premises and Equipment, Net 79,324 71,887
Foreclosed Properties, Net 3,526 11,943
Intangible Assets 78,380 78,493
Prepaid Expenses
& Other Assets 184,653 67,356
Total Assets $9,033,917 $9,095,887
Liabilities and Shareholders' Equity:
Deposits $5,651,273 $5,719,030
Borrowed Funds 2,513,481 2,549,597
Accrued Expenses and
Other Liabilities 114,707 115,421
Total Liabilities 8,279,461 8,384,048
Corporation-Obligated
Mandatorily Redeemable
Capital Securities of
Subsidiary Trust 150,000 145,000
Preferred Stock of
Subsidiary Corporation 49,577 49,577
Shareholders' Equity 554,879 517,262
Total Liabilities and
Shareholders' Equity: $9,033,917 $9,095,887
WEBSTER FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
December 31, 1998
Consolidated Statements of Income(unaudited)
Three Months Ended Year Ended
December 31, December 31,
(Dollars in thousands,
except per share data) 1998 1997 1998 1997
Interest Income:
Loans $94,957 $97,947 $382,906 $386,416
Securities and
Interest-bearing
Deposits 56,386 57,237 239,547 192,438
Total Interest
Income 151,343 155,184 622,453 578,854
Interest Expense:
Deposits 52,130 55,331 221,288 223,479
Borrowings 36,469 35,846 155,730 104,325
Total Interest
Expense 88,599 91,177 377,018 327,804
Net Interest Income 62,744 64,007 245,435 251,050
Provision for
Loan Losses 1,500 2,675 6,800 24,813
Net Interest Income
After Provision 61,244 61,332 238,635 226,237
Noninterest Income:
Fees & Service
Charges 12,077 8,640 43,181 32,013
Gain on Sale of Loans
and Loan Servicing, Net 490 242 3,290 793
Gain on Sale
of Securities, Net 4,082 1,297 15,351 3,142
Other Noninterest
Income 3,984 2,008 12,341 6,316
Total Noninterest
Income 20,633 12,187 74,163 42,264
Noninterest Expenses:
Salaries & Employee
Benefits 18,465 16,628 76,861 74,369
Occupancy Expense
of Premises 4,277 4,224 16,295 16,408
Furniture & Equipment
Expenses 4,373 3,799 17,363 14,030
Foreclosed Property
Expenses and
Provisions, Net 9 781 576 4,184
Intangible
Amortization 2,468 2,299 9,642 9,249
Marketing Expenses 738 1,774 6,604 7,576
Other Operating
Expenses 8,468 9,084 34,189 34,602
38,798 38,589 161,530 160,418
Acquisition Related
Expenses --- --- 17,400 29,792
Capital Securities
Expense 3,662 3,662 14,708 11,368
Dividends on Preferred
Stock of Subsidiary
Corporation 1,038 85 4,151 85
Total Noninterest
Expenses 43,498 42,336 197,789 201,663
Income Before Income
Taxes 38,379 31,183 115,009 66,838
Income Taxes 17,118 11,911 44,544 25,725
Net Income $21,261 $19,272 $70,465 $41,113
Net Income Per Common
Share Before Acquisition
Related and Other
Non-Recurring Tax Expenses:
Basic (a) $0.65 $0.51 $2.29 $1.72
Diluted (a) $0.64 $0.50 $2.25 $1.68
Net Income Per Common
Share After Acquisition
Related and Other
Non-Recurring Tax Expenses:
Basic (a) $0.56 $0.51 $1.86 $1.10
Diluted (a) $0.56 $0.50 $1.83 $1.07
(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
December 31, 1998
Selected Financial Highlights (unaudited)
At or For the At or For the
Three Months Ended Year Ended
December 31, December 31,
(Dollars in thousands,
except per share data) 1998 1997 1998 1997
Operating and Performance Ratios (annualized):
Return on Average Shareholders'
Equity Before Acquisition
Related and Other
Non-Recurring
Tax Expenses 17.49% 15.14 % 16.22% 13.25%
Return on Average
Shareholders'
Equity 15.20 15.14 13.16 8.44
Return on Average Assets
Before Acquisition
Related and Other
Non-Recurring Tax
Expenses 1.08 0.88 0.94 0.78
Return on Average
Assets 0.94 0.88 0.76 0.50
Noninterest Expenses
/ Average Assets 1.91 1.93 2.13 2.45
Noninterest Expenses
Excl. Foreclosed Property,
Acquisition Related,
Non-recurring Tax,
Capital Sec. & Pref.
Div. Expenses/Avg.
Assets 1.71 1.72 1.73 1.95
Efficiency Ratio (a) 51.56 52.58 56.62 54.02
Efficiency Ratio (b) 45.65 47.68 50.35 50.12
Shareholders' Equity
/ Total Assets 6.14 5.69 6.14 5.69
Interest Rate Spread 2.82 2.88 2.64 3.00
Net Interest Margin 2.96 3.07 2.81 3.19
Loan Originations $457,452 $342,217 $1,594,690 $1,213,477
Asset Quality:
Nonaccrual Loans $25,379 $42,143 $25,379 $42,143
Nonaccrual Assets 28,905 54,086 28,905 54,086
Allowance for
Loan Losses 55,108 59,518 55,108 59,518
Allowances for
Nonaccrual Assets 55,315 60,700 55,315 60,700
Nonaccrual Assets
/Total Assets 0.32 % 0.59 % 0.32 % 0.59 %
Allowance for Loan
Losses/Nonaccrual
Loans 217.14 141.23 217.14 141.23
Allowances for Nonaccrual
Assets/Nonaccrual
Assets 191.37 112.23 191.37 112.23
Share Related: (c)
Book Value Per
Common Share $ 14.87 $ 13.78 $14.87 $ 13.78
Tangible Book Value
Per Common Share 12.77 11.69 12.77 11.69
Common Stock
Closing Price 27.44 33.25 27.44 33.25
Dividend Declared
Per Common Share 0.11 0.10 0.44 0.40
Common Shares Issued
and Outstanding 37,326,654 37,574,177 37,326,654 37,574,177
Basic Shares 37,718,086 37,687,715 37,899,897 37,445,418
Diluted Shares 38,294,889 38,883,695 38,570,553 38,473,196
WEBSTER FINANCIAL CORPORATION
December 31, 1998
Retail and Wholesale Interest Rate Spreads
(unaudited)
Three Months Ended, December September June March December
1998 1998 1998 1998 1997
Interest Rate Spread
Total Interest
Earning Assets 7.07% 7.04 % 7.00 % 7.18 % 7.38%
Total Interest Bearing
Liabilities 4.25 4.43 4.52 4.56 4.50
Interest Rate Spread 2.82 % 2.61 % 2.48 % 2.62 % 2.88%
Net Interest Margin 2.96 2.79 2.64 2.87 3.07
Retail Interest Rate Spread
Yield on Loans 7.56 % 7.60 % 7.66 % 7.80 % 7.84%
Rate on Deposits 3.69 3.87 3.93 3.94 3.86
Spread 3.87 % 3.73 % 3.73 % 3.86 % 3.98%
Wholesale Interest Rate Spread
Yield on Securities 6.40 % 6.28 % 6.21 % 6.39 % 6.71%
Rate on Borrowings 5.48 5.70 5.68 5.72 6.04
Spread 0.92 % 0.58 % 0.53 % 0.67 % 0.67%
Consolidated Average Statements of Condition(unaudited)
Three Months Ended
December 31, 1998 1997
Interest Fully Tax Interest Fully Tax
(Dollars in thousands)
Average Income/ Equivalent Average Income/ Equivalent
Balance Expense Yield/Rate Balance Expense Yield/Rate
Assets:
Interest Earning
Assets:
Loans $5,003,201 $94,957 7.56 % $4,979,629 $97,947 7.84%
Securities 3,525,974 56,386 6.40 3,407,344 57,237 6.71
Total Interest
Earning
Assets 8,529,175 151,343 7.07 8,386,973 155,184 7.38
Noninterest Earning
Assets 565,834 401,985
Total
Assets $9,095,009 $8,788,958
Liabilities and
Shareholders' Equity:
Interest Bearing Liabilities:
Interest-bearing
Deposits $5,187,779 52,130 3.99% 5,316,207 55,331 4.13%
Noninterest
-bearing
Deposits 427,571 --- --- 379,620 --- ---
Federal Home Loan
Bank
Advances 1,740,913 24,243 5.45 1,370,447 21,513 6.14
Repurchase
Agreements
and Other
Borrowings 850,969 11,311 5.36 913,600 13,418 5.75
Senior Notes 40,000 915 9.15 40,000 915 9.15
Total Interest
Bearing
Liabilities 8,247,232 88,599 4.25 8,019,874 91,177 4.50
Noninterest Bearing
Other
Liabilities 88,677 110,135
Total
Liabilities 8,335,909 8,130,009
Capital Securities and
Preferred Stock of
Subsidiary
Corporation 199,577 149,509
Shareholders'
Equity 559,523 509,440
Total Liabilities
and Shareholders'
Equity $9,095,009 $8,788,958
Net Interest Income $62,744 $64,007
Interest Rate Spread 2.82 % 2.88 %
Net Interest Margin 2.96 % 3.07 %
(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.
|