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WATERBURY, Conn.--(BUSINESS WIRE)--Oct. 18, 2000--Webster
Financial Corporation (Nasdaq:WBST), holding company for Webster Bank,
today reported a 20 percent increase in net income for the third
quarter ended Sept. 30, 2000.
Net income for the quarter rose to a record $31.6 million, or $.64
per diluted share, compared to $26.4 million, or $.57 per diluted
share, for the quarter ended Sept. 30, 1999. The increase in net
income is due in part to the acquisition of Mechanics Savings Bank,
which was completed in June 2000, and to expanded product offerings --
including insurance, trust and investment management services -- to
Webster's growing customer base. Prior period financial data have been
restated to reflect the December 1999 merger with New England
Community Bancorp, Inc., which was accounted for using the pooling of
interests method of accounting.
"As we celebrate Webster's 65th anniversary this month, I am
pleased to report record results," said James C. Smith, Webster
chairman and chief executive officer. "My father, Harold Webster
Smith, opened the bank during the Great Depression to help people buy
and build their homes. Today, we are a regional financial services
provider with $11 billion in assets and more than 2,000 employees. Our
company's strong roots enhance our capacity to grow and to be our
customers' trusted financial partner in the years to come."
Third Quarter Financial Highlights
Net interest margin (net interest income as a percentage of
average earnings assets) was 3.30 percent in the quarter, compared to
Total noninterest income for the quarter increased 51 percent to
$33.2 million, compared to $21.9 million for the same period in 1999.
Excluding income from gains on the sale of securities and loans, total
noninterest income increased 28 percent to $28.7 million from $22.4
million in the year-ago period due to revenue related to trust and
investment services, revenue from expanded insurance operations and
income from other fee-based services.
Return on average shareholders' equity for the third quarter was
Return on average assets for the third quarter was 1.12 percent,
up from 1.08 percent in the third quarter of 1999.
Asset quality remained strong in the quarter with nonaccrual
assets amounting to 0.43 percent of total assets compared to 0.48
percent of total assets in the year-ago quarter and 0.42 percent of
total assets in the second quarter. The allowance for loan losses as a
percent of nonaccrual loans was 200 percent, compared to 185 percent a
year earlier and 204 percent in the second quarter. Allowances for
nonaccrual assets as a percent of nonaccrual assets were 185 percent,
up from 157 percent in the year-ago quarter and unchanged from the
second quarter.
Book value per common share increased 20 percent to $16.95 from
$14.16 in the third quarter of 1999 due primarily to net income and
the issuance of 7.8 million common shares to Mechanics Savings Bank
shareholders. Shareholders equity of $828 million at Sept. 30, 2000,
represented 7.4 percent of total assets.
Webster had 48.9 million common shares outstanding at Sept. 30,
2000.
Recent News Highlights
In August, Webster completed its purchase and conversion of four
Connecticut branch offices from FleetBoston Financial that were
divested as the result of the Fleet-BankBoston merger. The branches,
with $138 million in deposits, are located in Brookfield, Guilford,
Meriden, and Thomaston. The transaction included the purchase of
deposits and loans for individual and small business customers of
these branches.
Also in August, Webster formed a strategic alliance with Princeton
eCom, a leading provider of electronic bill presentment and payment
services. The alliance will enable Webster to develop faster and
easier ways for websterbank.com customers to pay their bills
electronically.
In September, Webster Bank and Combio (formerly FSPNetwork Inc.),
a leading provider of Internet solutions, announced a strategic
alliance designed to further Webster's Internet strategy. Through this
alliance, Webster customers will not only enjoy the convenience of
electronic banking, but also will have access to the latest in portal
technology to view news and information on finance, sports,
entertainment, health, travel and weather in addition to e-shopping.
Earlier this month, Webster announced that it had reached a
definitive agreement to sell its Olde Port Bank division, consisting
of two bank branches in Portsmouth and Hampton, NH, to Granite Bank, a
state-chartered commercial bank, whose parent company is Granite State
Bankshares, Inc. (Nasdaq:GSBI) of Keene, NH. Terms of the transaction
were not disclosed. The two branch offices have a total of $47 million
in loans and $47 million in deposits. Webster acquired the former Olde
Port Bank & Trust with the purchase of New England Community Bancorp.
Connecticut-based Webster Bank provides business and consumer
banking, mortgage, insurance, trust and investment services through
more than 110 banking offices, 200 ATMs and the Internet
(www.websterbank.com). Webster's online mortgage subsidiary at
www.nowlending.com on the Worldwide Web originates low-cost mortgages
across the United States.
For more information on Webster, including past press releases and
the latest Annual Report, visit the Webster Bank website at
www.websterbank.com.
Conference Call
A conference call covering today's announcement will be held
today, Wednesday, Oct. 18, at 2:30 p.m., Eastern Time and may be heard
through Webster's investor relations website at www.wbst.com, or in
listen-only mode by calling 1-800-553-3540 (Access Code: 828456). The
call will be archived on the website and available for future
retrieval.
Statements in this press release regarding Webster Financial
Corporation's business that are not historical facts are "forward
looking statements" that involve risks and uncertainties. For a
discussion of such risks and uncertainties, which could cause actual
results to differ from those contained in the forward-looking
statement, see "Forward Looking Statements" in the Company's Annual
Report for the most recently ended fiscal year.
Webster Financial Corp.
----------------------------------------------------------------------
Consolidated Statements of Condition (unaudited)
----------------------------------------------------------------------
September 30, December 31,
(Dollars in thousands) 2000 1999
----------------------------------------------------------------------
Assets:
Cash and due from depository institutions $ 232,294 $ 245,783
Interest-bearing deposits 10,240 37,838
Securities:
Trading, at fair value - 50,854
Available for sale, at fair value 3,060,994 2,700,585
Held to maturity, (fair value: $258,503
in 2000; $300,282 in 1999) 275,006 315,462
Loans receivable:
Residential loans 4,215,112 3,898,943
Commercial and industrial loans 1,158,338 915,035
Commercial real estate loans 893,622 741,168
Home equity loans 584,747 492,684
Other consumer loans 97,863 47,064
Allowance for loan losses (88,917) (72,658)
---------------------------
Loans receivable, net 6,860,765 6,022,236
Accrued interest receivable 71,781 58,918
Premises and equipment, net 104,803 103,403
Foreclosed properties, net 3,389 4,909
Intangible assets 312,525 138,829
Cash surrender value of life insurance 171,973 148,252
Prepaid expenses and other assets 152,780 104,675
---------------------------
Total assets $ 11,256,550 $ 9,931,744
===========================
Liabilities and Shareholders' Equity:
Deposits:
Checking and NOW $ 1,565,898 $ 1,375,692
Savings and MMDAs 1,967,585 1,719,562
Certificates of deposit 3,497,420 3,095,837
---------------------------
Total deposits 7,030,903 6,191,091
Borrowed funds 3,085,703 2,788,445
Accrued expenses and other liabilities 112,385 116,964
---------------------------
Total liabilities 10,228,991 9,096,500
---------------------------
Corporation-obligated
mandatorily redeemable
capital securities of subsidiary trusts 150,000 150,000
Preferred stock of subsidiary corporation 49,577 49,577
Shareholders' equity 827,982 635,667
---------------------------
Total liabilities
and shareholders' equity $ 11,256,550 $ 9,931,744
=========================
----------------------------------------------------------------------
Consolidated Statements of Income (unaudited)
----------------------------------------------------------------------
Three months ended Nine months ended
September 30, September 30,
(Dollars in thousands,
except per share data) 2000 1999 2000 1999
----------------------------------------------------------------------
Interest income:
Loans $139,867 $110,640 $377,000 $321,684
Securities and
interest-bearing
deposits 57,733 51,539 165,189 160,334
-----------------------------------------
Total interest income 197,600 162,179 542,189 482,018
-----------------------------------------
Interest expense:
Deposits 60,376 49,548 162,445 153,209
Borrowings 51,414 34,783 138,631 101,834
-----------------------------------------
Total interest expense 111,790 84,331 301,076 255,043
-----------------------------------------
Net interest
income 85,810 77,848 241,113 226,975
Provision for
loan losses 3,200 2,245 8,600 6,678
-----------------------------------------
Net interest income
after provision
for loan losses 82,610 75,603 232,513 220,297
-----------------------------------------
Noninterest income:
Fees and
service charges 15,987 13,529 42,748 35,645
Trust and
investment services 4,837 3,309 13,566 6,674
Insurance commissions 3,685 1,692 10,909 5,360
Gain on sale
of loans and
loan servicing, net 2,560 1,006 3,503 4,104
Gain (loss)
on sale of
securities, net 1,871 (1,505) 7,829 2,413
Increase in cash
surrender value
of life insurance 2,271 2,181 6,233 5,910
Other noninterest
income 1,958 1,691 6,629 5,943
-----------------------------------------
Total noninterest
income 33,169 21,903 91,417 66,049
-----------------------------------------
Noninterest expenses:
Compensation
and benefits 31,235 27,796 90,751 78,030
Occupancy expense 6,573 5,005 17,651 15,255
Furniture and
equipment expense 6,090 5,543 18,830 16,051
Intangible amortization
expense 6,907 3,959 15,065 9,804
Marketing expense 1,778 2,263 6,577 6,966
Professional services
expense 1,688 1,757 5,171 7,027
Capital securities
expense 3,477 3,661 10,708 10,984
Dividends on preferred
stock of subsidiary
corporation 1,037 1,038 3,113 3,113
Other operating
expenses 9,816 8,114 26,888 25,824
-----------------------------------------
Total noninterest
expenses 68,601 59,136 194,754 173,054
-----------------------------------------
Income before
income taxes 47,178 38,370 129,176 113,292
Income taxes 15,595 11,973 42,675 37,572
-----------------------------------------
Net income $ 31,583 $ 26,397 $ 86,501 $ 75,720
=========================================
Net income per
common share:
Basic $0.65 $0.58 $1.92 $1.71
Diluted $0.64 $0.57 $1.90 $1.67
----------------------------------------------------------------------
Selected Financial Highlights (unaudited)
----------------------------------------------------------------------
At or for the Three At or for the Nine
Months Ended Months Ended
(Dollars in thousands, September 30, September 30,
except per share data) 2000 1999 2000 1999
----------------------------------------------------------------------
Operating and Performance Ratios
(annualized):
----------------------------------------------------------------------
GAAP earnings (a) $ 31,583 $ 26,397 $ 86,501 $ 75,720
Return on average
shareholders' equity 16.17% 16.65% 17.41% 16.31%
Return on average
shareholders'
equity before
non-recurring income (b) 16.17 16.65 17.19 16.31
Return on average assets 1.12 1.08 1.10 1.04
Return on average
assets before non-recurring
income (b) 1.12 1.08 1.09 1.04
Cash earnings $ 37,633 $ 29,569 $ 99,172 $ 83,160
Cash return on average
shareholders' equity (c) 19.26% 18.65% 19.96% 17.91%
Cash return on average
shareholders' equity before
non recurring income(d) 19.26 18.65 19.74 17.91
Noninterest expenses
/ average assets 2.44 2.42 2.48 2.37
Noninterest expenses
/ average assets (e) 2.04 2.07 2.12 2.04
Efficiency ratio (f) 54.11 55.52 56.24 56.99
Efficiency ratio (e) 50.16 50.79 51.92 52.06
Shareholders' equity
/ total assets 7.36 6.54 7.36 6.54
Interest-rate spread 3.18 3.25 3.15 3.18
Net interest margin 3.30 3.36 3.27 3.32
Loan originations:
Residential $ 150,970 $ 250,383 $ 500,740 $ 979,845
Commercial 162,756 142,065 492,223 426,441
Consumer 80,142 73,057 244,140 208,960
Asset Quality:
--------------
Nonaccrual loans $ 44,479 $ 39,424 $ 44,479 $ 39,424
Nonaccrual assets, net 47,868 46,442 47,868 46,442
Allowance for
loan losses 88,917 72,989 88,917 72,989
Allowances for
nonaccrual assets 89,138 73,251 89,138 73,251
Net loan charge-offs 483 908 3,321 2,529
Nonaccrual assets
/total assets 0.43% 0.48% 0.43% 0.48%
Allowance for loan losses
/nonaccrual loans 199.91 185.14 199.91 185.14
Allowances for nonaccrual
assets/nonaccrual assets 185.36 156.84 185.36 156.84
Share Related:
--------------
Book value per common share $ 16.95 $ 14.16 $ 16.95 $ 14.16
Tangible book value
per common share 10.55 11.08 10.55 11.08
Common stock closing price 26.94 25.50 26.94 25.50
Dividend declared
per common share $ 0.16 $ 0.12 $ 0.46 $ 0.35
Common shares issued
and outstanding 48,862,027 45,320,787 48,862,027 45,320,787
Basic shares 48,870,159 45,190,818 44,946,750 44,391,294
Diluted shares 49,438,353 45,952,470 45,460,378 45,281,168
(a) Net income applying General Accepted Accounting Principles.
(b) Excluding income from a one-time life insurance benefit of $1.1
million.
(c) Net income, excluding tax-effected intangible amortization,
divided by average shareholders' equity.
(d) Net income, excluding tax-effected intangible amortization and
income from a one-time life insurance benefit of $1.1 million,
divided by average shareholders' equity.
(e) Excludes acquisition-related, intangible amortization, capital
securities, preferred dividend, foreclosed property expenses and
non-recurring charges.
(f) Excludes acquisition-related, intangible amortization, foreclosed
property expenses and non-recurring charges.
----------------------------------------------------------------------
Retail and Wholesale Interest-Rate Spreads (unaudited)
----------------------------------------------------------------------
Three months ended, September June March December September
2000 2000 2000 1999 1999
----------------------------------------------------------------------
Interest-rate spread
--------------------
Total interest-earning
assets (a) 7.56% 7.32% 7.21% 7.14% 7.05%
Total interest-bearing
liabilities 4.38 4.14 4.11 3.91 3.80
---------------------------------------
Interest-rate spread 3.18% 3.18% 3.10% 3.23% 3.25%
Net interest margin 3.30 3.29 3.22 3.34 3.36
Retail interest-rate
spread
--------------------
Yield on loans 8.06% 7.79% 7.68% 7.57% 7.44%
Rate on deposits 3.44 3.25 3.27 3.23 3.15
---------------------------------------
Spread 4.62% 4.54% 4.41% 4.34% 4.29%
=======================================
Wholesale interest-rate
spread
-----------------------
Yield on securities (a) 6.58% 6.46% 6.35% 6.32% 6.27%
Rate on borrowings 6.43 6.13 5.85 5.57 5.28
---------------------------------------
Spread 0.15% 0.33% 0.50% 0.75% 0.99%
=======================================
----------------------------------------------------------------------
Consolidated Average Statements of Condition (unaudited)
----------------------------------------------------------------------
Three months ended September 30, 2000
----------------------------------------------------------------------
Fully tax
Average equivalent
(Dollars in thousands) balance Interest yield/rate
----------------------------------------------------------------------
Assets:
Interest-earning assets:
Loans $6,927,869 $139,867 8.06%
Securities and
interest-bearing deposits 3,413,888 57,733 6.58 (a)
-------------------------------
Total interest-earning
assets 10,341,757 197,600 7.56
Noninterest-earning assets 889,849
-------------------------------
Total assets $11,231,606
===============================
Liabilities and
Shareholders' Equity:
Interest-bearing liabilities:
Interest-bearing deposits $6,162,524 $60,376 3.90%
Noninterest-bearing deposits 815,308 - -
Federal Home Loan Bank advances 2,185,577 35,408 6.45
Repurchase agreements
and other borrowings 995,367 15,916 6.36
Senior notes - 90 -
-------------------------------
Total interest-bearing
liabilities 10,158,776 111,790 4.38
Noninterest-bearing other
liabilities 91,865
-------------------------------
Total liabilities 10,250,641
Capital securities and
preferred stock of
subsidiary corporation 199,577
Shareholders' Equity 781,388
-------------------------------
Total liabilities and
shareholders' equity $11,231,606
===============================
Net interest income $85,810
===============================
Interest-rate spread 3.18%
===============================
Net interest margin 3.30%
===============================
----------------------------------------------------------------------
Three months ended September 30, 1999
----------------------------------------------------------------------
Fully tax
Average equivalent
(Dollars in thousands) balance Interest yield/rate
----------------------------------------------------------------------
Assets:
Interest-earning assets:
Loans $5,900,836 $110,640 7.44%
Securities and
interest-bearing deposits 3,294,076 51,539 6.27 (a)
-------------------------------
Total interest-earning
assets 9,194,912 162,179 7.05
Noninterest-earning assets 572,709
-------------------------------
Total assets $9,767,621
===============================
Liabilities and
Shareholders' Equity:
Interest-bearing liabilities:
Interest-bearing deposits $5,611,017 $49,548 3.50%
Noninterest-bearing deposits 624,044 - -
Federal Home Loan Bank advances 1,611,180 21,910 5.40
Repurchase agreements
and other borrowings 963,736 11,958 4.92
Senior notes 40,000 915 9.15
-------------------------------
Total interest-bearing
liabilities 8,849,977 84,331 3.80
Noninterest-bearing other
liabilities 83,963
-------------------------------
Total liabilities 8,933,940
Capital securities and
preferred stock of
subsidiary corporation 199,577
Shareholders' Equity 634,104
-------------------------------
Total liabilities and
shareholders' equity $9,767,621
===============================
Net interest income $77,848
===============================
Interest-rate spread 3.25%
===============================
Net interest margin 3.36%
===============================
(a) For purposes of this computation, unrealized gains(losses) are
excluded from the average rate calculations.
----------------------------------------------------------------------
Consolidated Average Statements of Condition (unaudited)
----------------------------------------------------------------------
Nine months ended September 30, 2000
----------------------------------------------------------------------
Fully tax
Average equivalent
(Dollars in thousands) balance Interest yield/rate
----------------------------------------------------------------------
Assets:
Interest-earning assets:
Loans $ 6,406,198 $377,000 7.85%
Securities and
interest-bearing deposits 3,294,119 165,189 6.46(a)
-------------------------------
Total interest-earning
assets 9,700,317 542,189 7.37
Noninterest-earning assets 774,288
-------------------------------
Total assets $ 10,474,605
===============================
Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Interest-bearing deposits $ 5,790,577 $162,445 3.75%
Noninterest-bearing deposits 730,927 - -
Federal Home Loan Bank advances 1,986,311 91,473 6.15
Repurchase agreements
and other borrowings 1,001,440 45,238 6.03
Senior notes 26,423 1,920 9.69
-------------------------------
Total interest-bearing
liabilities 9,535,678 301,076 4.22
Noninterest-bearing
other liabilities 76,970
-------------------------------
Total liabilities 9,612,648
Capital securities and preferred
stock of subsidiary
corporation 199,577
Shareholders' Equity 662,380
-------------------------------
Total liabilities
and shareholders' equity $ 10,474,605
===============================
Net interest income $241,113
===============================
Interest-rate spread 3.15 %
===============================
Net interest margin 3.27 %
===============================
----------------------------------------------------------------------
Consolidated Average Statements of Condition (unaudited)
----------------------------------------------------------------------
Nine months ended September 30, 1999
----------------------------------------------------------------------
Fully tax
Average equivalent
(Dollars in thousands) balance Interest yield/rate
----------------------------------------------------------------------
Assets:
Interest-earning assets:
Loans $5,740,223 $321,684 7.49%
Securities and
interest-bearing deposits 3,399,011 160,334 6.31 (a)
-------------------------------
Total interest-earning
assets 9,139,234 482,018 7.04
Noninterest-earning assets 599,650
-------------------------------
Total assets $9,738,884
===============================
Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Interest-bearing deposits $5,617,071 $153,209 3.65%
Noninterest-bearing deposits 613,315 - -
Federal Home Loan Bank advances 1,586,206 63,040 5.31
Repurchase agreements
and other borrowings 976,412 36,049 4.94
Senior notes 40,000 2,745 9.15
-------------------------------
Total interest-bearing
liabilities 8,833,004 255,043 3.86
Noninterest-bearing
other liabilities 87,329
-------------------------------
Total liabilities 8,920,333
Capital securities and
preferred stock of
subsidiary corporation 199,577
Shareholders' Equity 618,974
-------------------------------
Total liabilities
and shareholders' equity $9,738,884
===============================
Net interest income $226,975
===============================
Interest-rate spread 3.18%
===============================
Net interest margin 3.32%
===============================
(a) For purposes of this computation, unrealized gains(losses) are
excluded from the average rate calculations.
--30--sds/ny* es/ny
CONTACT:
Webster Financial
Media: Michael G. Bazinet,
203/578-2391
mbazinet@websterbank.com
Investors: James M. Sitro,
203/578-2399
jsitro@websterbank.com
Investors: James Kalach,
203/578-2461
jkalach@websterbank.com