Click here for printable PDF format
Click here for financials in Excel
WATERBURY, Conn.--(BUSINESS WIRE)--April 19, 2000--Webster Financial Corporation (Nasdaq: WBST), holding company for Webster Bank, today reported a 13 percent increase in earnings per share for the first quarter ended March 31, 2000 and announced an increase in its regular quarterly cash dividend. Net income for the quarter rose to $26.8 million or $.61 per diluted share, compared to $24 million or $.54 per diluted share for the first quarter ended March 31, 1999. Prior period financial data have been restated to reflect the merger with New England Community Bancorp, Inc., which was accounted for using the pooling of interests method of accounting.
"Our results reflect continuing progress in our transformation to a diversified financial services provider," said James C. Smith, Webster chairman and chief executive officer. "We are committed to achieving a more commercial bank-like structure, increasing income from fee-based services, maintaining high asset quality, managing expenses and using a disciplined approach toward acquisitions to reach these objectives."
Webster remains on target to complete the acquisition of MECH Financial, parent company of Mechanics Savings Bank, by the end of the current quarter.
Webster also announced today that it is increasing its regular quarterly cash dividend to $.16 cents per common share, from $.14 per common share. The dividend is payable to May 16, 2000 to shareholders of record on May 2, 2000. This is the 51st consecutive quarterly cash dividend -- and the 10th dividend increase - since Webster first paid a dividend in 1987. It is the second dividend increase this year.
"Webster's strong results make it possible to increase the dividend for the second time this year while continuing to build shareholders' equity and support future growth," Smith said.
First Quarter Financial Highlights
Total noninterest income for the quarter was $27.6 million, a 28 percent increase, compared to $21.6 million for the same period in 1999. Excluding income from gains on the sale of securities and loans, total noninterest income increased 32 percent to $23.9 million from $18.1 million in the year-ago period due to revenue related to trust and investment services, insurance commissions and expanded product offerings to Webster's growing customer base.
Return on average shareholders' equity for the first quarter was 17.8 percent, up from 15.8 percent in the first quarter of 1999, while cash return on average shareholders' equity rose to 19.8 percent from 16.9 percent in the year-ago period.
Interest rate spread (the difference between the average yield on interest-earning assets and the average rate paid on interest-bearing liabilities) was 3.10 percent in the quarter, compared to 3.08 percent in the first quarter of 1999 and 3.23 percent in the fourth quarter of 1999. The compression in interest rate spread from the fourth quarter of 1999 is due to increases in short-term interest rates resulting in higher borrowing costs.
Nonaccrual assets remained unchanged from the first quarter of 1999 at 0.40 percent of total assets. The allowance for loan losses as a percent of nonaccrual loans was 208 percent, up from 202 percent a year earlier. Allowances for nonaccrual assets as a percent of nonaccrual assets were 186 percent, up from 175 percent.
Webster repurchased 2.8 million shares of common stock in the first quarter. The repurchase is related to the pending acquisition of MECH Financial Inc. Webster had 42.6 million common shares outstanding at March 31, 2000. Shareholders equity decreased $35.2 million from a year earlier to $600.5 million, primarily due to the previously announced share repurchase program.
Recent News Highlights
Through its wholly owned insurance subsidiary, Webster recently acquired two successful privately owned Connecticut agencies, The Levine Companies of Waterford and Norwich and Follis, Wylie & Lane of Hamden. Combined, the two agencies wrote more than $50 million in premiums, which generated $5 million in revenue, in 1999. Webster first entered the insurance agency business in 1998 through the purchase of Damman Insurance Associates of Westport and Wallingford.
Webster also recently announced that it has received from its primary regulator the highest rating awarded for its performance under the Community Reinvestment Act. This is Webster's fifth consecutive "Outstanding" rating from the Office of Thrift Supervision. The Office of Thrift Supervision rates financial institutions after a thorough review of each lender's record of meeting the credit needs of the entire community, including low- and moderate-income neighborhoods.
The Export-Import Bank of the United States this month chose Webster Bank as the Small Business Bank of the Year for "successful contributions to the US export effort and US job creation." In the past year, Webster approved $15 million in financing involving 18 domestic companies selling American-made products to Brazil, Mexico and Turkey. Ex-Im Bank is an independent US government agency that helps finance the sale of exports to developing nations throughout the world by providing loans, guarantees and insurance.
Pro forma for pending merger and branch purchase activity, Webster Bank has $11 billion in assets and operates through a network of more than 125 banking offices and 200 ATMs, in addition to video, Web and PC banking.
Webster is also a leading, full-service commercial and mortgage lender in Connecticut. Webster Trust, the bank's trust and investment management subsidiary, is one of the leading bank trust companies based in Connecticut. Webster's insurance subsidiary is one of the largest agencies in the state.
Webster's Nowlending subsidiary found at www.nowlending.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 www.websterbank.com.
Conference Call
A conference call covering this announcement will be held today, Wednesday, April 19, at 12 p.m., Eastern Time and may be heard through Webster's investor relations website at www.wbst.com. 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 Corporation
Consolidated Statements of Condition (unaudited)
----------------------------------------------------------------------
----------------------------------------------------------------------
March 31, December 31,
(Dollars in thousands) 2000 1999
----------------------------------------------------------------------
Assets:
Cash and due from
depository institutions $ 202,231 $ 245,783
Interest-bearing deposits 2,106 37,838
Securities:
Trading, at fair value 97,100 50,854
Available for sale, at fair
value 2,762,265 2,700,585
Held to maturity, (fair value:
$289,608 in 2000;
$300,282 in 1999) 302,762 315,462
Loans receivable:
Residential loans 3,882,362 3,898,943
Commercial real estate loans 729,729 741,168
Commercial and industrial loans 939,789 915,035
Home equity loans 504,978 492,684
Other consumer loans 43,246 47,064
Allowance for loan losses (74,561) (72,658)
--------------- -----------------
Loans receivable, net 6,025,543 6,022,236
Accrued interest receivable 63,262 58,918
Premises and equipment, net 107,095 103,403
Foreclosed properties, net 4,146 4,909
Intangible assets 140,887 138,829
Cash surrender value of life
insurance 150,210 148,252
Prepaid expenses and other
assets 203,367 104,675
--------------- -----------------
Total assets $ 10,060,974 $ 9,931,744
=============== =================
Liabilities and Shareholders'
Equity:
Deposits:
Checking and NOW $ 1,380,426 $ 1,375,692
Savings and MMDAs 1,730,279 1,719,562
Certificates of deposit 3,085,592 3,095,837
------------- -----------------
Total deposits 6,196,297 6,191,091
Borrowed funds 2,943,633 2,788,445
Accrued expenses and other
liabilities 120,986 116,964
-------------- -----------------
Total liabilities 9,260,916 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 600,481 635,667
-------------- -----------------
Total liabilities and
shareholders' equity $ 10,060,974 $ 9,931,744
============== =================
Webster Financial Corporation
----------------------------------------------------------------------
Consolidated Statements of Income (unaudited)
----------------------------------------------------------------------
Three months ended March 31,
(Dollars in thousands,
except per share data) 2000 1999
----------------------------------------------------------------------
Interest income:
Loans $116,481 $104,292
Securities and interest-bearing
deposits 53,162 55,734
------------- --------------
Total interest income 169,643 160,026
------------- --------------
Interest expense:
Deposits 49,982 52,808
Borrowings 43,389 34,532
------------- --------------
Total interest expense 93,371 87,340
------------- --------------
Net interest income 76,272 72,686
Provision for loan losses 2,200 2,165
------------- --------------
Net interest income after provision
for loan losses 74,072 70,521
------------- --------------
Noninterest income:
Fees and service charges 12,543 10,266
Trust and investment services 3,868 1,579
Insurance commissions 3,722 2,118
Gain on sale of loans and loan
servicing, net 607 1,562
Gain on sale of securities, net 3,050 1,882
Increase in cash surrender value
of life insurance 1,959 1,840
Other noninterest income 1,836 2,329
------------- --------------
Total noninterest income 27,585 21,576
------------- --------------
Noninterest expenses:
Salaries and employee benefits 28,983 24,830
Occupancy expense of premises 5,633 5,104
Furniture and equipment expenses 6,492 5,152
Intangible amortization 3,875 2,617
Marketing expenses 2,198 2,297
Professional services expenses 1,636 2,077
Capital securities expense 3,616 3,661
Dividends on preferred stock of
subsidiary corporation 1,038 1,020
Other operating expenses 8,078 8,888
------------- --------------
Total noninterest expenses 61,549 55,646
------------- --------------
Income before income taxes 40,108 36,451
Income taxes 13,297 12,478
------------- --------------
Net income $ 26,811 $ 23,973
============= ==============
Net income per common share:
Basic $0.61 $0.55
Diluted $0.61 $0.54
Webster Financial Corporation
----------------------------------------------------------------------
Retail and Wholesale Interest-Rate Spreads (unaudited)
----------------------------------------------------------------------
Three months ended, March December September June March
2000 1999 1999 1999 1999
----------------------------------------------------------------------
Interest-rate spread
--------------------
Total interest-earning
assets (a) 7.21% 7.14% 7.05% 7.02% 7.06%
Total interest-bearing
liabilities 4.11 3.91 3.80 3.79 3.98
------- ------ ------ ------ ------
Interest-rate spread 3.10% 3.23% 3.25% 3.23% 3.08%
Net interest margin 3.22 3.34 3.36 3.36 3.24
Retail interest-rate
spread
--------------------
Yield on loans 7.68% 7.57% 7.44% 7.46% 7.59%
Rate on deposits 3.27 3.23 3.15 3.25 3.46
------- ------ ------ ------ ------
Spread 4.41% 4.34% 4.29% 4.21% 4.13%
======= ====== ====== ====== ======
Wholesale interest-
rate spread
--------------------
Yield on securities (a) 6.35% 6.32% 6.27 % 6.30% 6.34%
Rate on borrowings 5.85 5.57 5.28 5.15 5.26
------- ------ ------ ------ ------
Spread 0.50% 0.75% 0.99 % 1.15% 1.08%
======= ====== ====== ====== ======
----------------------------------------------------------------------
Consolidated Average Statements of Condition (unaudited)
----------------------------------------------------------------------
Three months ended March 31, 2000 1999
Fully tax
Average equivalent Average
(Dollars in thousands) balance Interest yield/rate balance
----------------------------------------------------------------------
Assets:
Interest-earning assets:
Loans $6,078,613 $116,481 7.68 % $5,575,148
Securities and interest
-bearing deposits 3,233,024 53,162 6.35(a) 3,529,490
---------- -------- ------ ----------
Total interest-earning
assets 9,311,637 169,643 7.21 9,104,638
--------
Noninterest-earning
assets 682,901 635,444
---------- ----------
Total assets $9,994,538 $9,740,082
========== ==========
Liabilities and
Shareholders' Equity:
Interest-bearing
liabilities:
Interest-bearing
deposits $5,494,635 $49,982 3.66% $5,595,929
Noninterest-bearing
deposits 647,726 - - 592,090
Federal Home Loan Bank
advances 1,779,816 25,815 5.83 1,705,963
Repurchase agreements
and other borrowings 1,164,460 16,659 5.75 915,477
Senior notes 40,000 915 9.15 40,000
---------- ------- ----- ---------
Total interest-bearing
liabilities 9,126,637 93,371 4.11 8,849,459
Noninterest-bearing -------
other liabilities 64,359 82,176
---------- ---------
Total liabilities 9,190,996 8,931,635
Capital securities
and preferred stock of
subsidiary corporation 199,577 199,577
Shareholders' Equity 603,965 608,870
---------- ----------
Total liabilities and
shareholders' equity $9,994,538 $9,740,082
========== ==========
Net interest income $76,272
=======
Interest-rate spread 3.10%
=====
Net interest margin 3.22%
=====
Three months ended March 31, 1999
Fully tax
equivalent
Interest yield/rate
Loans $104,292 7.59 %
Securities and interest
-bearing deposits 55,734 6.34(a)
-------- -------
Total interest-earning
assets 160,026 7.06
--------
Noninterest-earning
assets
Total assets
Liabilities and
Shareholders' Equity:
Interest-bearing
liabilities:
Interest-bearing
deposits $52,808 3.83%
Noninterest-bearing
deposits - -
Federal Home Loan Bank
advances 22,260 5.29
Repurchase agreements
and other borrowings 11,357 5.03
Senior notes 915 9.15
------- ------
Total interest-bearing
liabilities 87,340 3.98
-------
Noninterest-bearing
other liabilities
Total liabilities
Capital securities
and preferred stock of
subsidiary corporation
Shareholders' Equity
Total liabilities and
shareholders' equity
Net interest income $72,686
========
Interest-rate spread 3.08%
======
Net interest margin 3.24%
======
(a) For purposes of this computation, unrealized gains(losses) are
excluded from the average rate calculations.
Webster Financial Corporation
----------------------------------------------------------------------
Selected Financial Highlights (unaudited)
----------------------------------------------------------------------
At or for the Three
Months Ended March 31,
(Dollars in thousands,
except per share data) 2000 1999
----------------------------------------------------------------------
Operating and Performance Ratios
(annualized):
--------------------------------
GAAP earnings $ 26,811 $ 23,973
Return on average
shareholders' equity 17.76 % 15.75 %
Retun on average assets 1.07 0.98
Cash earnings $ 29,975 $ 25,801
Cash return on average
shareholders' equity (a) 19.85 % 16.95 %
Noninterest expenses
/ average assets 2.46 2.29
Noninterest expenses
/ average assets (b) 2.12 1.99
Efficiency ratio (c) 57.98 57.95
Efficiency ratio (b) 53.30 52.84
Shareholders' equity
/ total assets 5.97 6.05
Interest-rate spread 3.10 3.08
Net interest margin 3.22 3.24
Loan originations:
Residential $ 160,214 $ 363,843
Commercial 90,239 134,612
Consumer 76,235 63,950
Asset Quality:
--------------------------------
Nonaccrual loans $ 35,923 $ 33,163
Nonaccrual assets, net 40,069 38,302
Allowance for loan losses 74,561 67,021
Allowances for nonaccrual
assets 74,783 67,228
Net loan charge-offs 297 349
Nonaccrual assets
/ total assets 0.40 % 0.40 %
Allowance for loan losses
/ nonaccrual loans 207.56 202.10
Allowances for nonaccrual assets
/ nonaccrual assets 185.61 174.58
Share Related:
--------------------------------
Book value per common share $ 14.08 $ 13.49
Tangible book value per common
share 10.78 11.58
Common stock closing price 23.00 28.88
Dividend declared per common
share $ 0.14 $ 0.11
Common shares issued
and outstanding 42,636,411 43,209,397
Basic shares 43,606,154 43,645,536
Diluted shares 44,151,130 44,407,471
(a) Net income, excluding intangible amortization, divided by average
shareholders' equity.
(b) Excludes acquisition-related, intangible amortization, capital
securities, preferred dividend, foreclosed property expenses and
non-recurring charges.
(c) Excludes acquisition-related, intangible amortization, foreclosed
property expenses and non-recurring charges.
CONTACT: Webster Financial Corporation, Waterbury
Media: Michael G. Bazinet, 203-578-2391
mbazinet@websterbank.com
Jim Kalach, 203-578-2461
jkalach@websterbank.com
or
Investors:
James M. Sitro, 203-578-2399
jsitro@websterbank.com