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WATERBURY, Conn.--(BUSINESS WIRE)--April 19, 2001--Webster
Financial Corporation (Nasdaq: WBST), the holding company for Webster
Bank, today reported a 24 percent increase in operating earnings,
excluding non-recurring items, for the first quarter ended March 31,
2001. Operating earnings for the quarter rose to $33.1 million or $.67
per diluted share, compared to $26.8 million or $.61 per diluted share
for the first quarter ended March 31, 2000.
The improvement in operating earnings is due primarily to
increases in net interest income and higher revenue from fee-based
services. Revenue from fee-based services increased 47 percent in the
first quarter compared to a year ago as a result of financial advisory
services, trust and investment services, insurance commissions and
expanded product offerings to Webster's growing customer base.
''Our results demonstrate that the key to increasing shareholder
value is to continually create value for our customers,'' said James C.
Smith, chairman and chief executive officer. ''Our recently announced
insurance agencies and equipment financing company acquisitions do
just that by broadening and deepening our product offerings. Webster
Insurance is now the largest Connecticut-based agency and the addition
of Center Capital Corporation broadens Webster's commercial
offerings.''
Net income, including non-recurring items of $6.1 million, net of
taxes, for the first quarter was $27.0 million or $.54 per diluted
share, compared to $26.8 million or $.61 per diluted share in the year
ago period. Non-recurring items included charges of $2.4 million, net
of taxes, related to the adoption of recent accounting standards for
derivative instruments and hedging activities. As a result, Webster
elected to sell certain derivative instruments not qualifying for
hedge accounting treatment in the first quarter of 2001. Also included
in the 2001 results were non-recurring items, net of taxes, of $1.2
million related to early extinguishment of debt and $2.5 million
related to the previously announced reconfiguration of Webster's
branch network.
Financial Highlights
Net interest margin (net interest income as a percentage of
average earning assets) was 3.35 percent in the first quarter,
compared to 3.22 percent in the year-ago period and 3.32 percent in
the fourth quarter of 2000. The increase in the net interest margin
was due primarily to lower wholesale borrowing costs.
Revenue from fee-based services and other noninterest income
excluding gains on the sale of loans and securities, increased 47
percent to $35.1 million from $23.9 million in 2000 due primarily to
revenue related to insurance commissions, financial advisory fees from
Duff & Phelps, trust and investment services and expanded product
offerings to Webster's growing customer base. Income from fee-based
services as a percent of total revenue increased to 28.6 percent from
23.9 percent in the year ago period.
Asset quality remained strong in the quarter with nonaccrual
assets amounting to 0.43 percent of total assets at March 31, 2001,
compared to 0.40 percent a year earlier and 0.39 percent in the fourth
quarter. Allowances as a percent of total loans increased to 1.33
percent at March 31, 2001, from 1.22 percent in the year-ago period
and 1.31 percent in the fourth quarter, reflecting the increase in the
commercial loan portfolio.
Book value per common share increased to $18.85 from $18.19 at
Dec. 31, 2000 due primarily to earnings and increases in the fair
value of available-for-sale securities. Shareholders' equity reached
$925 million at the close of the first quarter, up from $890 million
at the end of 2000, representing 7.9% percent of total assets. Webster
had 49.1 million shares outstanding at March 31, 2001.
2001 Strategic Actions
Earlier this month Webster announced the acquisition of
Wolff-Zackin & Associates Inc. and Benefit Plans Design &
Administration Inc. both of Vernon, CT. Founded in 1954, Wolff-Zackin
& Associates is a multiple-lines insurance business specializing in
personal and corporate life products, property and casualty and
deferred compensation plans. Webster also acquired its sister company,
Benefit Plans Design & Administration Inc., which provides businesses
with pension, profit sharing, individual retirement account (IRA) and
401K investment plans. The company also provides group life,
disability income and medical and dental care plans for businesses.
Webster Insurance currently has a staff of 180 employees and writes in
excess of $220 million in premiums annually ranking it as the largest
Connecticut-based insurance agency.
In March, Webster announced the acquisition of Center Capital
Corporation, a privately held equipment financing company with assets
of $260 million headquartered in Farmington, CT. Center Capital
finances commercial and industrial equipment through installment sales
and leasing programs to customers in all 50 states.
Earlier this week Webster announced the appointment of William J.
Healy as Executive Vice President and Chief Financial Officer. Mr.
Healy was previously Executive Vice President and Chief Financial
Officer of Summit Bancorp headquartered in Princeton, New Jersey.
Connecticut-based Webster Bank provides business and consumer
banking, mortgage, insurance, trust and investment services through
more than 100 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, Thursday, April 19, 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 1-800-521-5461 (Access Code: 995103). 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)
March 31, December 31, March 31,
(Dollars in thousands) 2001 2000 2000
-------- ------------ ---------
Assets:
Cash and due from depository
institutions $237,141 $265,035 $202,231
Interest-bearing deposits 348 1,751 2,106
Securities:
Trading, at fair value 30 6 97,100
Available for sale, at fair
value 3,690,313 3,143,327 2,762,265
Held to maturity,
(fair value: $248,215 at
12/31/00 and $289,608
at 3/31/00) - 261,747 302,762
Loans receivable:
Residential mortgages 4,069,946 4,146,780 3,882,362
Commercial and industrial 1,480,745 1,207,398 939,789
Commercial real estate 867,789 857,033 729,729
Consumer 699,579 698,807 548,224
--------- --------- ---------
Gross Loans receivable 7,118,059 6,910,018 6,100,104
Allowance for loan losses (94,970) (90,809) (74,561)
--------- --------- ---------
Loans receivable, net 7,023,089 6,819,209 6,025,543
Accrued interest receivable 68,898 69,733 63,262
Premises and equipment, net 87,839 94,263 107,095
Foreclosed properties, net 2,762 3,295 4,146
Intangible assets 334,209 326,142 140,887
Cash surrender value of life
insurance 176,619 174,295 150,210
Prepaid expenses and other
assets 82,307 90,705 203,367
--------- --------- ---------
Total assets $11,703,555 $11,249,508 $10,060,974
========== ========== ==========
Liabilities and Shareholders'
Equity:
Deposits:
Checking and NOW $1,569,618 $1,603,671 $1,380,426
Savings and MMDAs 2,031,518 1,916,543 1,730,279
Certificates of deposit 3,325,573 3,421,308 3,085,592
---------- --------- ---------
Total deposits 6,926,709 6,941,522 6,196,297
Borrowed funds 3,422,933 3,030,225 2,943,633
Accrued expenses and other
liabilities 269,425 187,810 120,986
---------- --------- ---------
Total liabilities 10,619,067 10,159,557 9,260,916
---------- ---------- ---------
Corporation-obligated
mandatorily redeemable
capital securities
of subsidiary trusts 150,000 150,000 150,000
Preferred stock of subsidiary
corporation 9,577 49,577 49,577
Shareholders' equity 924,911 890,374 600,481
--------- ---------- ---------
Total liabilities and
shareholders' equity $11,703,555 $11,249,508 $10,060,974
========== ========== ==========
Consolidated Statements of Income (unaudited)
Three Months Ended
March 31,
(Dollars in thousands, except per share data) 2001 2000
---- ----
Interest income:
Loans $138,628 $116,481
Securities and interest-bearing deposits 57,984 53,162
-------- -------
Total interest income 196,612 169,643
-------- -------
Interest expense:
Deposits 59,436 49,982
Borrowings 49,465 43,389
-------- ------
Total interest expense 108,901 93,371
-------- ------
Net interest income 87,711 76,272
Provision for loan losses 3,200 2,200
-------- ------
Net interest income after provision for
loan losses 84,511 74,072
-------- ------
Noninterest income:
Fees and service charges 16,035 12,543
Trust and investment services 4,394 3,868
Financial advisory services 4,505 -
Insurance commissions 5,014 3,722
Gain on sale of loans and loan servicing, net 94 607
Gain on sale of securities, net 4,249 3,050
Increase in cash surrender value of life
insurance 2,324 1,959
Other 2,871 1,836
------- -------
Total noninterest income 39,486 27,585
------- -------
Noninterest expenses:
Compensation and benefits 35,617 28,983
Occupancy 6,880 5,633
Furniture and equipment 6,711 6,492
Intangible amortization 7,564 3,875
Marketing 2,090 2,198
Professional services 1,570 1,636
Capital securities 3,616 3,616
Dividends on preferred stock of subsidiary
corporation 339 1,038
Other 10,130 8,078
------- -------
Total noninterest expenses: 74,517 61,549
------- -------
Income before income taxes and
non-recurring items 49,480 40,108
Income taxes 16,389 13,297
------- -------
Income before non-recurring items 33,091 26,811
Non-recurring items, net of taxes (a) (6,108) -
------- -------
Net income $26,983 $26,811
======= =======
Net Income per common share before
non-recurring items:
Basic $0.68 $0.61
Diluted $0.67 $0.61
Net Income per common share:
Basic $0.55 $0.61
Diluted $0.54 $0.61
(a) Non-recurring items, net of taxes includes the following: $2.5
million of branch reconfiguration expenses, $2.4 million related
to the adoption of recent accounting standards for derivative
instruments and hedging activities and $1.2 million related to the
early extinquishment of debt.
Selected Financial Highlights (unaudited)
At or for the Three
Months Ended March 31,
(Dollars in thousands, except per share data) 2001 2000
---- ----
Operating and Performance Ratios (annualized):
----------------------------------------------
GAAP earnings (a) $26,983 $26,811
Return on average shareholders' equity
before non-recurring items (b) 14.64% 17.76%
Return on average shareholders' equity 11.94 17.76
Return on average assets before
non-recurring items (b) 1.17 1.07
Return on average assets 0.95 1.07
Cash earnings (c) $33,496 $29,975
Cash return on average shareholders' equity
before non-recurring items (d) 17.52% 19.85%
Cash return on average shareholders'
equity (e) 14.82 19.85
Fee income as a percentage of total revenue 28.61 23.88
Noninterest expenses / average assets (f) 2.23 2.12
Noninterest expenses / average assets 2.77 2.46
Efficiency ratio (f) 51.21 57.98
Efficiency ratio (g) 54.43 53.30
Shareholders' equity / total assets 7.90 5.97
Interest-rate spread 3.23 3.10
Net interest margin 3.35 3.22
Loan originations:
Residential $169,106 $160,214
Commercial 76,545 90,239
Consumer 96,859 76,235
Asset Quality:
--------------
Nonaccrual assets, net $49,893 $40,069
Allowance for loan losses 94,970 74,561
Net loan charge-offs 891 297
Nonaccrual assets / total assets 0.43% 0.40% %
Allowance for loan losses / gross loans 1.33 1.22
Share Related:
--------------
Book value per common share $18.85 $14.08
Tangible book value per common share 12.04 10.78
Common stock closing price 29.31 23.00
Dividend declared per common share $0.16 $0.14
Common shares issued and outstanding 49,077,409 42,636,411
Basic shares (average) 48,937,557 43,606,154
Diluted shares (average) 49,565,661 44,151,130
(a) Net income applying General Accepted Accounting Principles.
(b) Excludes the following non-recurring items, net of taxes: $2.5
million of branch reconfiguration expenses, $2.4 million related
to the adoption of recent accounting standards for derivative
instruments and hedging activities and $1.2 million related to the
early extinquishment of debt.
(c) Net income excluding tax-effected intangible amortization.
(d) Net income excluding tax-effected intangible amortization and the
following non-recurring items, net of taxes: $2.5 million of
branch reconfiguration expenses, $2.4 million related to the
adoption of recent accounting standards for derivative instruments
and hedging activities and $1.2 million related to the early
extinquishment of debt.
(e) Net income, excluding tax-effected intangible amortization divided
by average shareholders' equity.
(f) Excludes non-recurring items, intangible amortization, capital
securities, preferred dividend and foreclosed property expenses.
(g) Excludes non-recurring items, intangible amortization and
foreclosed property expenses.
Retail and Wholesale Interest-Rate Spreads (unaudited)
Three months ended, March December September June March
------------------- 2001 2000 2000 2000 2000
---- ---- ---- ---- ----
Interest-rate spread
Total interest-earning
assets (a) 7.55 % 7.62 % 7.56 % 7.32 % 7.21 %
Total interest-bearing
liabilities 4.32 4.43 4.38 4.14 4.11
---- ---- ---- ---- ----
Interest-rate spread 3.23 % 3.19 % 3.18 % 3.18 % 3.10 %
Net interest margin 3.35 3.32 3.30 3.29 3.22
Retail interest-rate
spread
Yield on loans 7.99 % 8.12 % 8.06 % 7.79 % 7.68 %
Rate on deposits 3.52 3.52 3.44 3.25 3.27
---- ---- ---- ---- ----
Spread 4.47 % 4.60 % 4.62 % 4.54 % 4.41 %
==== ==== ==== ==== ====
Wholesale interest-rate
spread
Yield on securities (a) 6.67 % 6.58 % 6.58 % 6.46 % 6.35 %
Rate on borrowings 5.98 6.53 6.43 6.13 5.85
---- ---- ---- ---- ----
Spread 0.69 % 0.05 % 0.15 % 0.33 % 0.50 %
==== ==== ==== ==== ====
Consolidated Average Statements of Condition (unaudited)
Three months ended March 31, 2001
---------------------------- ----
Fully tax
Average equivalent
(Dollars in thousands) balance Interest yield/rate
------- -------- ----------
Assets:
Interest-earning assets:
Loans $6,943,051 $ 138,631 7.99 %
Securities and interest-bearing
deposits 3,500,761 58,216 6.67(a)
----------- ----------- ----
Total interest-earning assets 10,443,812 196,847 7.55
-----------
Noninterest-earning assets 869,976
-----------
Total assets $11,313,788
===========
Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Interest-bearing deposits $6,051,782 $ 59,436 3.91 %
Noninterest-bearing deposits 801,781 - -
Federal Home Loan Bank advances 1,985,957 30,830 6.21
Repurchase agreements and other
borrowings 1,196,391 15,848 5.29
Senior notes 126,000 2,787 8.85
----------- ----------- ----
Total interest-bearing
liabilities 10,161,911 108,901 4.32
-----------
Noninterest-bearing liabilities 81,485
-----------
Total liabilities 10,243,396
Capital securities and preferred
stock of subsidiary corporation 166,244
Shareholders' Equity 904,148
-----------
Total liabilities and
shareholders' equity $11,313,788
===========
Net interest income $ 87,946
===========
Interest-rate spread 3.23 %
====
Net interest margin 3.35 %
====
Three months ended March 31, 2000
---------------------------- ----
Fully tax
Average equivalent
(Dollars in thousands) balance Interest yield/rate
------- -------- ----------
Assets:
Interest-earning assets:
Loans $6,078,613 $116,481 7.68 %
Securities and interest-bearing
deposits 3,233,024 53,162 6.35(a)
----------- ----------- ----
Total interest-earning assets 9,311,637 169,643 7.21
-----------
Noninterest-earning assets 682,901
-----------
Total assets $9,994,538
===========
Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Interest-bearing deposits $5,494,635 $49,982 3.66 %
Noninterest-bearing deposits 647,726 - -
Federal Home Loan Bank advances 1,779,816 25,815 5.83
Repurchase agreements and other
borrowings 1,164,460 16,659 5.75
Senior notes 40,000 915 9.15
----------- ----------- ----
Total interest-bearing
liabilities 9,126,637 93,371 4.11
-----------
Noninterest-bearing liabilities 64,359
-----------
Total liabilities 9,190,996
Capital securities and preferred
stock of subsidiary corporation 199,577
Shareholders' Equity 603,965
-----------
Total liabilities and
shareholders' equity $9,994,538
===========
Net interest income $76,272
===========
Interest-rate spread 3.10 %
====
Net interest margin 3.22 %
====
(a) For purposes of this computation, unrealized gains(losses) are
excluded from the average rate calculations.
Contact:
Webster Financial Corporation
Art House, 203/578-2391 (Media)
ahouse@websterbank.com
or
James M. Sitro, 203-578-2399 (Investors)
jsitro@websterbank.com
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