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WATERBURY, Conn.--(BUSINESS WIRE)--October 18, 2001--Webster
Financial Corporation (Nasdaq: WBST), the holding company for Webster
Bank, today reported an 11 percent increase in operating earnings for
the third quarter. For the nine months ended September 30, 2001,
operating earnings increased 20 percent over the same period a year
ago.
Operating earnings (defined as net income excluding nonrecurring
items) for the quarter rose to $35.0 million or $.70 per diluted
share, compared to $31.6 million or $.64 per diluted share for the
third quarter ended September 30, 2000. There were no nonrecurring
items in the 2001 and 2000 third quarters. For the first nine months
of 2001, operating earnings increased to $102.3 million or $2.06 per
diluted share, compared to $85.4 million or $1.88 per diluted share in
the year-ago period.
For the first nine months of 2001, net income was $96.5 million or
$1.94 per diluted share, compared to $86.5 million or $1.90 per
diluted share the prior year. The 2001 results included, net of taxes,
net non-recurring charges of $5.8 million compared to a benefit of
$1.1 million, net of taxes, in the year- ago period.
"We are pleased to report strong operating results as we move
forward to invest in our franchise and increase our geographic reach,"
said James C. Smith, chairman and chief executive officer. "Webster
today is a leading Connecticut-based financial services provider
dedicated to building strong customer relationships that increase
shareholder value."
The improvement in operating earnings continues to be driven by
increases in net interest income and growth in revenues from fee-based
services. Net interest income increased 9 percent in the third quarter
compared to a year ago, due primarily to the benefits of a lower
interest-rate environment. Revenue from fee-based services increased
21 percent in the third quarter compared to a year ago as a result of
growth in Webster's fee-based businesses and expanded product
offerings to Webster's growing customer base.
"Webster achieved strong results, despite slowing loan demand and
higher loan loss provisions," said William T. Bromage, president and
vice chairman. "Webster's strong results were driven by increases in
net interest income, growth in revenue from fee based services and
emphasis on expense control."
Financial Highlights
Net interest income for the quarter increased by 9.0 percent to
$93.6 million from $85.8 million in the year-ago period. For the first
nine months of 2001, net interest income increased by 12.7 percent to
$271.7 million from $241.1 million in the year-ago period. The
increase for the first nine months of 2001 is aided by a full period's
benefit of higher interest-earning assets from Mechanics Savings Bank,
which was acquired in June 2000. Both 2001 periods benefited from a
lower interest-rate environment.
Net interest margin (net interest income as a percentage of
average earning assets) was 3.54 percent in the third quarter,
compared to 3.30 percent in the year-ago period and 3.39 percent in
the second quarter of 2001. The improvement in the net interest margin
was driven by the lower interest-rate environment and by the
increasingly positive slope of the yield curve.
Revenue from fee-based services and other noninterest income,
excluding gains on the sale of securities, increased 21 percent in the
quarter to $37.9 million from $31.3 million in 2000. For the first
nine months of 2001, these revenues increased 35 percent to $111.6
million from $82.5 million in the year ago period. These increases are
due primarily to revenue related to Duff & Phelps, which offers
financial advisory services, to Webster Insurance and to expanded
product offerings to Webster's growing customer base. Income from
fee-based services as a percent of total revenue increased to 29
percent in the third quarter from 27 percent in the year-ago period.
The allowance for loan losses increased to $96.6 million or 1.40
percent of gross loans at September 30, 2001, from $88.9 million or
1.28 percent of gross loans in the year-ago period and $96.1 million
or 1.38 percent of gross loans in the second quarter. The provision
for loan losses for the quarter increased to $4.0 million from $3.2
million in the year ago period, due primarily to a rise in the level
of non-performing assets.
Nonperforming assets amounted to $60.2 million or 0.52 percent of
total assets at September 30, 2001, compared to $47.9 million or 0.43
percent a year earlier and $47.4 million or 0.40 percent in the second
quarter. It is too early to predict the longer-term impact the
September 11 tragedy will have on the economy and the extent it will
affect our business and retail borrowers. Webster has no direct credit
exposure to the airline and tourist industry.
Book value per common share increased to $20.63 from $19.18 at
June 30, 2001 due primarily to earnings and increases in the fair
value of available-for-sale securities. Shareholders' equity reached
$1 billion at the close of the third quarter, up from $890 million at
the end of 2000, representing 8.8% percent of total assets.
Recent Highlights
In September, Webster announced a concerted branch expansion
program, with initial focus on lower Fairfield County, as part of its
strategy to increase deposits and to expand its retail franchise in
Connecticut and contiguous states. During the next three years Webster
plans to establish at least 20 new branches as well as 35 ATM
locations as part of its "WE FIND A WAY" initiative to provide
increasing levels of service and convenience to our growing base of
consumers and businesses in Connecticut. Expansion will begin in 2002
in Fairfield County where Webster currently has 12 locations. Webster
will examine expansion opportunities in New London County and the
northern part of the Hartford/Springfield corridor as well as other
areas bordering Connecticut.
Also in September, Webster announced plans to repurchase 2.5
million common shares, or approximately 5 percent of Webster's
outstanding shares. With this announcement, Webster has completed nine
stock repurchases since the company became public in 1986.
Webster Financial Corporation is the holding company for Webster
Bank, which provides business and consumer banking, mortgage,
insurance, trust and investment services through more than 100 banking
offices, 210 ATMs and the Internet (www.websterbank.com). Webster
Financial Corporation owns Center Capital Corporation, an equipment
financing company headquartered in Farmington, Connecticut, and is
majority owner of Chicago-based Duff & Phelps, a leader in investment
banking and financial advisory services.
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, Thursday, October 18, at 1 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 1-800-521-5428 (Access Code: 1255790). 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
Selected Financial Highlights (unaudited)
At or for the Three At or for the Nine
Months Ended Months Ended
September 30, September 30,
(Dollars in thousands,
except per share data) 2001 2000 2001 2000
Operating income and
performance ratios before
nonrecurring items
(annualized) (a):
Operating income $ 35,031 $ 31,583 $ 102,274 $ 85,401
Operating income per
common share (diluted) 0.70 0.64 2.06 1.88
Return on average
shareholders' equity 14.35% 16.17% 14.55% 17.19%
Return on average assets 1.21 1.12 1.18 1.09
Fee income as a percentage
of total revenue 28.85 26.73 28.77 25.49
Efficiency ratio (b) 49.95 49.11 50.48 51.60
Net income and performance
ratios after nonrecurring items
(annualized):
Net income $ 35,031 $ 31,583 $ 96,518 $ 86,501
Net income per common
share (diluted) 0.70 0.64 1.94 1.90
Return on average
shareholders' equity 14.35% 16.17% 13.73% 17.41%
Return on average assets 1.21 1.12 1.12 1.10
Fee income as a percentage
of total revenue 28.85 26.73 29.12 25.74
Cash income and performance
ratios before nonrecurring items
(annualized) (c):
Cash income $ 41,868 $ 37,633 $ 122,459 $ 98,072
Cash income per common
share (diluted) 0.84 0.76 2.46 2.16
Cash return on average
shareholders' equity 17.15% 19.26% 17.42% 19.74%
Cash return on average
assets 1.45 1.34 1.42 1.25
Other ratios (annualized):
Shareholders' equity /
total assets 8.76% 7.36% 8.76% 7.36%
Interest-rate spread 3.43 3.18 3.34 3.15
Net interest margin 3.54 3.30 3.43 3.27
Asset quality:
Allowance for loan
losses $ 96,654 $ 88,917 $ 96,654 $ 88,917
Nonperforming assets, net 60,241 47,868 60,241 47,868
Net loan charge-offs 3,466 483 6,392 3,321
Allowance for loan losses /
gross loans 1.40% 1.28% 1.40% 1.28%
Nonperforming assets / total
assets 0.52 0.43 0.52 0.43
Allowance for loan losses /
nonperforming loans 167.36 199.91 167.36 199.91
Share related:
Book value per
common share $ 20.63 $ 16.95 $ 20.63 $ 16.95
Tangible book value per
common share 14.02 10.55 14.02 10.55
Common stock closing price 32.96 26.94 32.96 26.94
Dividend declared per
common share 0.17 0.16 0.50 0.46
Common shares issued and
outstanding 49,325,947 48,862,027 49,325,947 48,862,027
Basic shares
(average) 49,223,332 48,870,159 49,094,463 44,946,750
Diluted shares
(average) 49,928,543 49,438,353 49,760,573 45,460,378
(a) Excludes the following nonrecurring items for the 2001 period,
net of taxes: $352,000 related to net insurance proceeds (2nd Qtr),
$2.5 million of branch reconfiguration expenses (1st Qtr), $2.4
million related to the adoption of recent accounting standards for
derivative instruments and hedging activities (1st Qtr) and $1.2
million related to the early extinquishment of debt (1st Qtr).
Nonrecurring item for the 2000 period is $1.1 million of nontaxable
insurance proceeds (2nd Qtr).
(b) Excludes nonrecurring income and operating expense items
(refer to item a), intangible amortization, capital securities,
preferred dividend and foreclosed property expenses.
(c) Net income excluding tax-effected intangible amortization and
nonrecurring items (refer to item a).
Webster Financial Corporation
Consolidated Statements of Condition (unaudited)
September 30, June 30, September 30,
(Dollars in thousands) 2001 2001 2000(a)
Assets:
Cash and due from
depository institutions $255,620 $ 326,732 $ 232,294
Interest-bearing
deposits 1,782 11,278 10,240
Securities:
Trading, at fair value 147 - -
Available for sale,
at fair value 3,743,350 3,821,140 3,060,994
Held to maturity,
(fair value:$258,503
at 9/30/00) - - 275,006
Loans receivable:
Residential mortgages 3,755,401 3,943,841 4,215,112
Commercial and
industrial 1,358,904 1,329,669 1,052,920
Commercial real estate 952,914 975,698 999,040
Consumer 833,998 739,119 682,610
Gross loans receivable 6,901,217 6,988,327 6,949,682
Allowance for loan
losses (96,654) (96,135) (88,917)
Loans receivable, net 6,804,563 6,892,192 6,860,765
Accrued interest
receivable 61,808 64,090 71,781
Premises and equipment,
net 84,511 85,495 104,803
Intangible assets 326,396 334,159 312,525
Cash surrender value of
life insurance 161,690 159,479 171,973
Prepaid expenses and
other assets 182,384 123,997 156,169
Total assets $ 11,622,251 $11,818,562 $ 11,256,550
Liabilities and Shareholders' Equity:
Deposits:
Checking and NOW $ 1,568,905 $ 1,629,256 $ 1,565,898
Savings and MMDAs 2,309,147 2,217,910 1,990,509
Certificates of deposit 2,917,210 3,080,078 3,296,313
Total retail deposits 6,795,262 6,927,244 6,852,720
Treasury deposits 169,741 122,278 201,107
Total deposits 6,965,003 7,049,522 7,053,827
Borrowed funds 3,268,003 3,573,684 3,085,703
Accrued expenses and
other liabilities 211,839 88,877 89,461
Total liabilities 10,444,845 10,712,083 10,228,991
Corporation-obligated
mandatorily redeemable
capital securities of
subsidiary trusts 150,000 150,000 150,000
Preferred stock of
subsidiary corporation 9,577 9,577 49,577
Shareholders' equity 1,017,829 946,902 827,982
Total liabilities and
shareholders' equity $11,622,251 $11,818,562 $11,256,550
(a) Reflects reclassifications between certain loan categories.
Webster Financial Corporation
Consolidated Statements of Income (unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
(Dollars in thousands,
except per share data) 2001 2000 2001 2000
Interest income:
Loans $127,991 $139,867 $401,321 $377,000
Securities and
interest-bearing
deposits 60,572 57,733 178,311 165,189
Total interest income 188,563 197,600 579,632 542,189
Interest expense:
Deposits 53,627 60,376 170,765 162,445
Borrowings 41,385 51,414 137,161 138,631
Total interest expense 95,012 111,790 307,926 301,076
Net interest income 93,551 85,810 271,706 241,113
Provision for loan losses 4,000 3,200 10,400 8,600
Net interest income after
provision for loan losses 89,551 82,610 261,306 232,513
Noninterest income:
Deposit service fees 14,142 13,259 41,699 35,146
Loan and loan servicing fees 5,131 5,288 13,698 11,105
Trust and investment services 4,984 4,837 13,969 13,566
Financial advisory services 3,942 - 12,239 -
Insurance commissions 5,806 3,685 16,393 10,909
Gain on sale of securities,
net 2,566 1,871 8,609 7,829
Increase in cash surrender
value of life insurance 2,211 2,271 6,926 6,233
Other 1,709 1,958 6,695 5,529
Total noninterest income 40,491 33,169 120,228 90,317
Noninterest expenses:
Compensation and benefits 35,827 31,235 107,506 90,751
Occupancy 6,057 6,573 19,463 17,651
Furniture and equipment 7,032 6,090 20,903 18,830
Intangible amortization 7,888 6,907 23,338 15,065
Marketing 2,045 1,778 6,428 6,577
Professional services 2,896 1,688 7,008 5,171
Capital securities 3,616 3,477 10,847 10,708
Other 11,840 10,853 32,529 30,001
Total noninterest expenses 77,201 68,601 228,022 194,754
Income before income taxes and
nonrecurring items 52,841 47,178 153,512 128,076
Income taxes 17,810 15,595 51,238 42,675
Income before nonrecurring
items 35,031 31,583 102,274 85,401
Nonrecurring items,
net of taxes (a) - - (5,756) 1,100
Net income $ 35,031 $ 31,583 $ 96,518 $ 86,501
Net income per common share
before nonrecurring items:
Basic $0.71 $0.65 $2.08 $1.90
Diluted $0.70 $0.64 $2.06 $1.88
Net income per common share:
Basic $0.71 $0.65 $1.97 $1.92
Diluted $0.70 $0.64 $1.94 $1.90
(a) See footnotes to Selected Financial Highlights
WEBSTER FINANCIAL CORPORATION
Retail and Wholesale Interest-Rate Spreads (unaudited)
Three Months Ended September June March December September
2001 2001 2001 2000 2000
Interest-rate spread
Total interest-earning
assets (a) 7.06 % 7.28 % 7.55 % 7.62 % 7.56 %
Total interest-bearing
liabilities 3.63 3.96 4.32 4.43 4.38
Interest-rate spread 3.43 % 3.32 % 3.23 % 3.19 % 3.18 %
Net interest margin 3.54 3.39 3.35 3.32 3.30
Retail interest-rate spread
Yield on loans 7.33 % 7.61 % 7.99 % 8.12 % 8.06 %
Rate on deposits 3.06 3.34 3.52 3.52 3.44
Spread 4.27 % 4.27 % 4.47 % 4.60 % 4.62 %
Wholesale interest-rate spread
Yield on securities (a) 6.57 % 6.63 % 6.67 % 6.58 % 6.58 %
Rate on borrowings 4.79 5.18 5.98 6.53 6.43
Spread 1.78 % 1.45 % 0.69 % 0.05 % 0.15 %
Consolidated Average Statements of Condition (unaudited)
Three Months Ended September 30,
2001
Fully tax
(Dollars in thousands) Average equivalent
balance Interest yield/rate
Assets:
Interest-earning assets:
Loans $ 6,932,448 $ 127,994 7.33 %
Securities and interest-bearing
deposits 3,742,996 60,883 6.57 (a)
Total interest-earning
assets 10,675,444 188,877 7.06
Noninterest-earning assets 878,582
Total assets $ 11,554,026
Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Interest-bearing deposits $ 6,152,366 $ 53,627 3.46 %
Noninterest-bearing deposits 799,312 - -
Federal Home Loan Bank advances 1,932,931 26,810 5.43
Repurchase agreements
and other borrowings 1,326,400 11,785 3.48
Senior notes 126,000 2,790 8.86
Total interest-bearing
liabilities 10,337,009 95,012 3.63
Noninterest-bearing
liabilities 81,153
Total liabilities 10,418,162
Capital securities and
preferred stock of
subsidiary corporation 159,577
Shareholders' equity 976,287
Total liabilities and
shareholders' equity $ 11,554,026
Net interest income $ 93,865
Interest-rate spread 3.43 %
Net interest margin 3.54 %
Consolidated Average Statements of Condition (unaudited)
Three Months Ended September 30,
2000
Fully tax
(Dollars in thousands) Average equivalent
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
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 %
(a) For purposes of this computation, unrealized gains(losses) are
excluded from the average rate calculations.
WEBSTER FINANCIAL CORPORATION
Consolidated Average Statements of Condition (unaudited)
Nine Months Ended
September 30, 2001
Fully tax
Average equivalent
(Dollars in thousands) balance Interest yield/rate
Assets:
Interest-earning assets:
Loans $ 6,978,408 $ 401,330 7.64 %
Securities and interest-bearing
deposits 3,624,762 179,114 6.62(a)
Total interest-earning
assets 10,603,170 580,444 7.30
Noninterest-earning assets 905,852
Total assets $ 11,509,022
Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Interest-bearing deposits $ 6,108,950 $ 170,765 3.74 %
Noninterest-bearing deposits 806,022 - -
Federal Home Loan Bank advances 1,907,696 84,334 5.83
Repurchase agreements
and other borrowings 1,377,122 44,455 4.26
Senior notes 126,000 8,372 8.86
Total interest-bearing
liabilities 10,325,790 307,926 3.96
Noninterest-bearing
liabilities 84,035
Total liabilities 10,409,825
Capital securities and
preferred stock of subsidiary
corporation 161,775
Shareholders' equity 937,422
Total liabilities and
shareholders' equity $ 11,509,022
Net interest income $ 272,518
Interest-rate spread 3.34 %
Net interest margin 3.43 %
Consolidated Average Statements of Condition (unaudited)
Nine Months Ended
September 30, 2000
Fully tax
Average equivalent
balance Interest yield/rate
(Dollars in thousands)
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
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 %
(a) For purposes of this computation, unrealized gains (losses)
are excluded from the average rate calculations.
--30--jeh/ny* aw/ny emb/ny km/ny mem/ny muj/ny
| CONTACT: |
Webster |
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Media: Art House, 203/578-2391 |
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ahouse@websterbank.com |
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or |
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Investors: |
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James M. Sitro, 203/578-2399 |
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jsitro@websterbank.com |
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