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WATERBURY, Conn.--(BUSINESS WIRE)--July 19, 2001--Webster
Financial Corporation (Nasdaq: WBST), the holding company for Webster
Bank, today reported a 26 percent increase in operating earnings for
the second quarter ended June 30, 2001. Operating earnings for the
quarter rose to $34.2 million or $.69 per diluted share, compared to
$27.0 million or $.63 per diluted share for the second quarter ended
June 30, 2000. For the first six months of 2001, operating earnings
increased to $67.2 million or $1.35 per diluted share, compared to
$53.8 million or $1.24 per diluted share in the year-ago period.
Operating earnings is defined as net income excluding non-recurring
items.
Consistent with the trend of recent quarters, the improvement in
operating earnings is due primarily to increases in net interest
income and revenue from fee-based services. Revenue from fee-based
services increased 44 percent in the second quarter compared to a year
ago as a result of financial advisory services, loan and loan
servicing fees, insurance commissions and expanded product offerings
to Webster's growing customer base.
"We are pleased to report strong operating results as we continue
to strengthen our franchise and enhance our capabilities as a leading
Connecticut-based financial services provider," said James C. Smith,
chairman and chief executive officer. "We remain dedicated to building
strong customer relationships that increase shareholder value."
Net income for the second quarter, including non-recurring items,
was $34.5 million or $.69 per diluted share, compared to $28.1 million
or $.66 per diluted share in the year-ago period. Both periods include
a net benefit from insurance proceeds.
For the first six months of 2001, net income was $61.5 million or
$1.24 per diluted share, compared to $54.9 million or $1.26 per
diluted share. The 2001 results included, net of taxes, net
non-recurring charges of $5.7 million compared to a benefit of $1.1
million, net of taxes, in the year-ago period.
Financial Highlights
Net interest income for the quarter increased by 14.4 percent to
$90.4 million from $79.0 million in the year-ago period. For the first
six months of 2001, net interest income increased by 14.7 percent to
$178.2 million from $155.3 million in the year-ago period. The
increase in net interest income is due primarily to a full year's
benefit of higher interest earning assets from Mechanics Savings Bank,
which was acquired in June 2000 using the purchase accounting method,
and to the benefits of a lower interest-rate environment.
Net interest margin (net interest income as a percentage of
average earning assets) was 3.39 percent in the second quarter,
compared to 3.29 percent in the year-ago period and 3.35 percent in
the first quarter of 2001. The improvement in the net interest margin
was due primarily to the benefits of a lower interest-rate
environment.
Revenue from fee-based services and other noninterest income,
excluding gains on the sale of securities, increased 44 percent in the
quarter to $38.5 million from $26.7 million in 2000. For the first six
months of 2001, these revenues also increased 44 percent compared to
the year-ago period. These increases are due primarily to revenue
related to loan and loan servicing fees, insurance commissions,
financial advisory fees from Duff & Phelps and expanded product
offerings to Webster's growing customer base. Income from fee-based
services as a percent of total revenue increased to 29.8 percent in
the second quarter from 25.2 percent in the year-ago period.
Asset quality remained sound in the quarter with nonaccrual assets
amounting to 0.40 percent of total assets at June 30, 2001, compared
to 0.42 percent a year earlier and 0.43 percent in the first quarter.
Allowances as a percent of total loans increased to 1.38 percent at
June 30, 2001, from 1.25 percent in the year-ago period and 1.33
percent in the first quarter.
Book value per common share increased to $19.18 from $18.85 at
March 31, 2001 due primarily to earnings and increases in the fair
value of available-for-sale securities. Shareholders' equity reached
$947 million at the close of the second quarter, up from $890 million
at the end of 2000, representing 8.0% percent of total assets. Webster
had 49.4 million shares outstanding at June 30, 2001.
Recent Highlights
Earlier this month Webster was named to the newly re-balanced
Russell 1000 Index, which measures the performance of the 1000 largest
companies in the Russell 3000 Index. The Russell 1000 Index represents
approximately 92% of the total market capitalization of the Russell
3000 Index and has a median market capitalization of $4.1 billion.
More than $177 billion is invested in index funds that use Russell's
U.S. indexes as their model.
Also in the quarter, Webster acquired Wolff-Zackin & Associates
Inc. and Benefits Plans Design & Administration Inc. both privately
owned Vernon, Connecticut-based insurance agencies. Webster Insurance
now 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.
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's
online mortgage subsidiary at www.nowlending.com on the Worldwide Web
originates low-cost mortgages across the United States. 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, July 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 1-800-521-5428 (Access Code: 1113058). 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 Six
Months Ended Months Ended
June 30 June 30,
2001 2000 2001 2000
(Dollars in thousands, except per share data)
Operating income and performance
ratios before non-recurring items
(annualized) (a):
Operating income $ 34,152 $ 27,007 $ 67,243 $ 53,818
Operating income per common
share (diluted) 0.69 0.63 1.35 1.24
Return on average shareholders'
equity 14.67% 17.99% 14.66% 17.87%
Return on average assets 1.17 1.06 1.17 1.07
Fee income as a percentage of
total revenue 29.83 25.22 29.26 24.79
Efficiency ratio (b) 49.51 53.08 50.33 53.19
Net income and performance
ratios after non-recurring items
(annualized):
Net income $ 34,504 $ 28,107 $ 61,487 $ 54,918
Net income per common share
(diluted) 0.69 0.66 1.24 1.26
Return on average shareholders'
equity 14.82% 18.72% 13.40% 18.24%
Return on average assets 1.18 1.10 1.07 1.09
Fee income as a percentage of
total revenue 30.83 25.80 29.78 25.19
Cash income and performance
ratios before non-recurring
items (annualized) (c):
Cash income $ 40,987 $ 30,579 $ 80,591 $ 60,554
Cash income per common share
(diluted) 0.82 0.71 1.62 1.39
Cash return on average
shareholders' equity 17.61% 20.37% 17.56% 20.11%
Cash return on average assets 1.41 1.20 1.40 1.20
Other ratios (annualized):
Shareholders' equity / total
assets 8.01% 7.04% 8.01% 7.04%
Interest-rate spread 3.32 3.18 3.27 3.14
Net interest margin 3.39 3.29 3.37 3.26
Asset Quality:
Nonaccrual assets, net $ 47,400 $ 46,436 $ 47,400 $ 46,436
Allowance for loan losses 96,135 86,199 96,135 86,199
Net loan charge-offs 2,035 2,541 2,926 3,023
Nonaccrual assets / total assets 0.40% 0.42% 0.40% 0.42%
Allowance for loan losses /
gross loans 1.38 1.25 1.38 1.25
Share related:
Book value per common share $ 19.18 $ 16.03 $ 19.18 $ 16.03
Tangible book value per common
share 12.41 9.88 12.41 9.88
Common stock closing price 32.78 22.19 32.78 22.19
Dividend declared per common
share $ 0.17 $ 0.16 $ 0.33 $ 0.30
Common shares issued and
outstanding 49,361,799 49,096,964 49,361,799 49,096,964
Basic shares (average) 49,119,360 42,381,243 49,028,961 42,963,488
Diluted shares (average) 49,783,527 42,851,477 49,675,196 43,449,533
(a) Excludes the following non-recurring 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 extinguishment of debt (1st Qtr).
Non-recurring item for the 2000 period is $1.1 million of non-taxable
insurance proceeds (2nd Qtr).
(b) Excludes non-recurring 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
non-recurring items (refer to item a).
Webster Financial Corporation
Consolidated Statements of Condition (unaudited)
June 30, March 31, June 30,
(Dollars in thousands) 2001 2001(a) 2000(a)
Assets:
Cash and due from depository
institutions $326,732 $ 237,141 $ 265,999
Interest-bearing deposits 11,278 348 1,415
Securities:
Trading, at fair value - 30 77,633
Available for sale, at fair
value 3,821,140 3,690,313 2,963,175
Held to maturity, (fair value:
$267,769 at 6/30/00) - - 287,829
Loans receivable:
Residential mortgages 3,943,841 4,069,946 4,268,372
Commercial and industrial 1,329,669 1,342,619 955,977
Commercial real estate 975,698 1,005,915 1,012,706
Consumer 739,119 699,579 669,335
--------- --------- ---------
Gross Loans receivable 6,988,327 7,118,059 6,906,390
Allowance for loan losses (96,135) (94,970) (86,199)
--------- --------- ---------
Loans receivable, net 6,892,192 7,023,089 6,820,191
Accrued interest receivable 64,090 68,898 67,593
Premises and equipment, net 85,495 87,839 109,975
Foreclosed properties, net 2,833 2,762 4,118
Intangible assets 334,159 334,209 302,037
Cash surrender value of life
insurance 159,479 176,619 169,702
Prepaid expenses and other assets 121,164 82,307 118,661
--------- --------- ---------
Total assets $ 11,818,562 $ 11,703,555 $ 11,188,328
============ ============ =============
Liabilities and Shareholders' Equity:
Deposits:
Checking and NOW $ 1,629,256 $ 1,569,618 $ 1,598,534
Savings and MMDAs 2,170,423 2,031,518 1,959,661
Certificates of deposit 3,080,078 3,191,377 3,316,141
----------- ------------ -------------
Total retail deposits 6,879,757 6,792,513 6,874,336
Treasury deposits 122,278 134,196 130,846
----------- ------------ -------------
Total deposits 7,002,035 6,926,709 7,005,182
Borrowed funds 3,573,684 3,422,933 3,023,381
Accrued expenses and other
liabilities 136,364 269,425 173,014
----------- ------------ -------------
Total liabilities 10,712,083 10,619,067 10,201,577
----------- ------------ -------------
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 946,902 924,911 787,174
------- ------- --------
Total liabilities and
shareholders equity $ 11,818,562 $11,703,555 $ 11,188,328
============ =========== =============
(a) Reflects reclassifications between certain loan categories.
Webster Financial Corporation
Consolidated Statements of Income (unaudited)
Three Months Ended Six Months Ended
June 30, June 30
(Dollars in thousands, except
per share data) 2001 2000 2001 2000
Interest income:
Loans $134,702 $120,652 $273,330 $237,133
Securities and interest-bearing
deposits 59,755 54,294 117,739 107,456
-------- --------- -------- -------
Total interest income 194,457 174,946 391,069 344,589
-------- --------- -------- -------
Interest expense:
Deposits 57,702 52,087 117,138 102,069
Borrowings 46,311 43,828 95,776 87,217
-------- --------- -------- -------
Total interest expense 104,013 95,915 212,914 189,286
-------- --------- -------- -------
Net interest income 90,444 79,031 178,155 155,303
Provision for loan losses 3,200 3,200 6,400 5,400
-------- --------- -------- -------
Net interest income after
provision for loan losses 87,244 75,831 171,755 149,903
-------- --------- -------- -------
Noninterest income:
Deposit service fees 14,325 11,790 27,557 21,887
Loan and loan servicing fees 5,670 2,764 8,567 5,817
Trust and investment services 4,591 4,861 8,985 8,729
Financial advisory services 3,792 - 8,297 -
Insurance commissions 5,573 3,502 10,587 7,224
Gain on sale of securities, net 1,794 2,908 6,043 5,958
Increase in cash surrender value of
life insurance 2,391 2,003 4,715 3,962
Other 2,115 1,735 4,986 3,571
-------- ------- -------- -------
Total noninterest income 40,251 29,563 79,737 57,148
-------- ------- -------- -------
Noninterest expenses:
Compensation and benefits 36,062 30,533 71,679 59,516
Occupancy 6,526 5,445 13,406 11,078
Furniture and equipment 7,160 6,248 13,871 12,740
Intangible amortization 7,886 4,283 15,450 8,158
Marketing 2,293 2,601 4,383 4,799
Professional services 2,542 1,847 4,112 3,483
Capital securities 3,615 3,615 7,231 7,231
Dividends on preferred stock of
subsidiaries corporation 215 1,038 554 2,076
Other 10,005 8,994 20,135 17,072
------- ------- -------- -------
Total noninterest expenses: 76,304 64,604 150,821 126,153
------- ------- -------- -------
Income before income taxes and
non-recurring items: 51,191 40,790 100,671 80,898
Income taxes 17,039 13,783 33,428 27,080
------- ------- -------- -------
Income before non-recurring
items 34,152 27,007 67,243 53,818
Non-recurring items, net of taxes
(a) 352 1,100 (5,756) 1,100
------- ------- -------- -------
Net income $ 34,504 $ 28,107 $ 61,487 $ 54,918
======== ======== ======== ========
Net income per common share before
non-recurring items:
Basic $ 0.70 $ 0.64 $ 1.37 $ 1.25
Diluted $ 0.69 $ 0.63 $ 1.35 $ 1.24
Net income per common share:
Basic $ 0.70 $ 0.66 $ 1.25 $ 1.28
Diluted $ 0.69 $ 0.66 $ 1.24 $ 1.26
(a) See Footnotes to Selected Financial Highlights.
Webster Financial Corporation
Retail and Wholesale Interest-Rate Spreads (unaudited)
Three Months Ended, June March December
2001 2001 2000
Interest-rate spread
Total interest-earning assets (a) 7.28 % 7.55 % 7.62 %
Total interest-bearing liabilities 3.96 4.32 4.43
------ ------ ------
Interest-rate spread 3.32 % 3.23 % 3.19 %
Net interest margin 3.39 3.35 3.32
Retail interest-rate spread
Yield on loans 7.61 % 7.99 % 8.12 %
Rate on deposits 3.34 3.52 3.52
------ ------ ------
Spread 4.27 % 4.47 % 4.60 %
====== ====== ======
Wholesale interest-rate spread
Yield on securities (a) 6.63 % 6.67 % 6.58 %
Rate on borrowings 5.18 5.98 6.53
------ ------ ------
Spread 1.45 % 0.69 % 0.05 %
====== ====== ======
Retail and Wholesale Interest-Rate Spreads (unaudited)
Three Months Ended, September June
2000 2000
Interest-rate spread
Total interest-earning assets (a) 7.56 % 7.32 %
Total interest-bearing liabilities 4.38 4.14
------ ------
Interest-rate spread 3.18 % 3.18 %
Net interest margin 3.30 3.29
Retail interest-rate spread
Yield on loans 8.06 % 7.79 %
Rate on deposits 3.44 3.25
------ ------
Spread 4.62 % 4.54 %
====== ======
Wholesale interest-rate spread
Yield on securities (a) 6.58 % 6.46 %
Rate on borrowings 6.43 6.13
------ ------
Spread 0.15 % 0.33 %
====== ======
Consolidated Average Statements of Condition (unaudited)
Three Months Ended June 30, 2001
Fully tax
Average equivalent
(Dollars in thousands) balance Interest yield/rate
Assets:
Interest-earning assets:
Loans $ 7,059,838 $ 134,705 7.61 %
Securities and interest-
bearing deposits 3,627,868 60,015 6.63(a)
------------ ------------ ----------
Total interest-earning
assets 10,687,706 194,720 7.28
------------
Noninterest-earning assets 968,906
------------
Total assets $ 11,656,612
============
Liabilities and
Shareholders' Equity:
Interest-bearing liabilities:
Interest-bearing deposits $ 6,121,596 $ 57,702 3.78 %
Noninterest-bearing deposits 817,000 - -
Federal Home Loan Bank
advances 1,804,783 26,695 5.85
Repurchase agreements and
other borrowings 1,607,148 16,821 4.14
Senior notes 126,000 2,795 8.87
----------- -------- ------
Total interest-bearing
liabilities 10,476,527 104,013 3.96
--------
Noninterest-bearing
liabilities 89,471
-----------
Total liabilities 10,565,998
Capital securities and
preferred stock of
subsidiary corporation 159,577
Shareholders' Equity 931,037
------------
Total liabilities and
shareholders' equity $ 11,656,612
============
Net interest income $ 90,707
========
Interest-rate spread 3.32 %
======
Net interest margin 3.39 %
======
2000
Fully tax
Average equivalent
balance Interest yield/rate
Loans $ 6,206,383 $ 120,652 7.79 %
Securities and interest-
bearing deposits 3,234,130 54,294 6.46(a)
------------ --------- -------
Total interest-earning
assets 9,440,513 174,946 7.32
---------
Noninterest-earning assets 748,840
------------
Total assets $ 10,189,353
============
Liabilities and
Shareholders' Equity:
Interest-bearing
liabilities: $ 5,710,483 $ 52,087 3.67 %
Noninterest-bearing deposits 728,820 - -
Federal Home Loan Bank
advances 1,991,351 30,250 6.11
Repurchase agreements and
other borrowings 844,559 12,663 6.03
Senior notes 39,561 915 9.25
----------- -------- -----
Total interest-bearing
liabilities 9,314,774 95,915 4.14
--------
Noninterest-bearing
liabilities 74,523
--------
Total liabilities 9,389,297
Capital securities and
preferred stock of
subsidiary corporation 199,577
Shareholders' Equity 600,479
--------
Total liabilities and
shareholders' equity $ 10,189,353
============
Net interest income $ 79,031
============
Interest-rate spread 3.18 %
========
Net interest margin 3.29 %
========
(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)
Six Months Ended June 30, 2001
Fully tax
(Dollars in Average equivalent
thousands) balance Interest yield/rate
Assets:
Interest-earning
assets:
Loans $ 7,001,769 $ 273,336 7.80 %
Securities and
interest-bearing
deposits 3,564,665 118,231 6.65(a)
---------- ------- -----
Total interest-
earning assets 10,566,434 391,567 7.41
Noninterest- -------
earning assets 919,713
----------
Total assets $ 11,486,147
==========
Liabilities and
Shareholders' Equity:
Interest-bearing
liabilities:
Interest-bearing
deposits $ 6,086,881 $ 117,138 3.88 %
Noninterest-bearing
deposits 809,433 - -
Federal Home Loan
Bank advances 1,894,870 57,525 6.04
Repurchase agreements
and other borrowings 1,402,904 32,669 4.63
Senior notes 126,000 5,582 8.86
--------- ------- -------
Total interest-bearing
liabilities 10,320,088 212,914 4.14
-------
Noninterest-bearing
liabilities 85,500
----------
Total liabilities 10,405,588
Capital securities
and preferred stock of
subsidiary corporation 162,892
Shareholders' Equity 917,667
----------
Total liabilities
and shareholders'
equity $ 11,486,147
==========
Net interest income $ 178,653
=======
Interest-rate spread 3.27 %
====
Net interest margin 3.37 %
====
Six Months Ended June 30, 2000
Fully tax
(Dollars in Average equivalent
thousands) balance Interest yield/rate
Assets:
Interest-earning
assets:
Loans $ 6,142,498 $ 237,133 7.74 %
Securities and
interest-bearing
deposits 3,233,577 107,456 6.40(a)
--------- ------- ----
Total interest-earning
assets 9,376,075 344,589 7.27
-------
Noninterest-earning
assets 715,871
----------
Total assets $ 10,091,946
==========
Liabilities and
Shareholders' Equity:
Interest-bearing
liabilities:
Interest-bearing
deposits $ 5,602,559 $ 102,069 3.66 %
Noninterest-bearing
deposits 688,273 - -
Federal Home Loan Bank
advances 1,885,583 56,065 5.98
Repurchase agreements
and other borrowings 1,004,509 29,322 5.87
Senior notes 39,780 1,830 9.20
--------- ------- ----
Total interest-
bearing liabilities 9,220,704 189,286 4.13
-------
Noninterest-bearing
liabilities 69,443
---------
Total liabilities 9,290,147
Capital securities and
preferred stock of
subsidiary corporation 199,577
Shareholders' Equity 602,222
----------
Total liabilities and
shareholders' equity $ 10,091,946
==========
Net interest income $ 155,303
=======
Interest-rate spread 3.14 %
====
Net interest margin 3.26 %
====
(a) For purposes of this computation, unrealized gains (losses)
are excluded from the average rate calculations.
CONTACT:
Webster
Media: Art House, 203/578-2391
ahouse@websterbank.com
Investors: James M. Sitro, 203/578-2399
jsitro@websterbank.com