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WATERBURY, Conn., Jul 24, 2002 (BUSINESS WIRE) -- Webster Financial Corporation
(Nasdaq: WBST), the holding company for Webster Bank, today reported a 19
percent increase in operating earnings for the second quarter ended June 30,
2002 to $40.7 million or $.82 per diluted share, compared to $34.2 million or
$.69 per diluted share for the year-ago period. For the first six months of
2002, operating earnings increased to $80.2 million or $1.62 per diluted share,
compared to $67.2 million or $1.35 per diluted share in the year-ago period.
Operating earnings are defined as net income excluding non-recurring items.
"We are pleased to report continued strong operating results and progress in
advancing our strategic plan for growth," said James C. Smith, Webster chairman
and chief executive officer. "Growth in loans and deposits and a widening net
interest margin combined with improved credit quality were primary factors
contributing to our strong second quarter results."
The increase in operating earnings for the quarter was driven by growth in
revenues, which rose 10 percent compared to the year-ago period. Most of the
revenue increase came as a result of growth in net interest income, which
increased 13 percent compared to the year-ago period due to the benefits of a
favorable interest-rate environment, significant increase in low-cost core
deposits and loan growth.
Total loans increased at a 13 percent annualized rate to $7.4 billion at the end
of the 2002 second quarter, from $7.0 billion at year end 2001, due primarily to
growth in the consumer portfolio. Total deposits increased at an annualized rate
of 8 percent to $7.3 billion at the end of the 2002 second quarter, from $7.1
billion at year-end 2001, due to growth in core deposits. Total assets are now
$12.5 billion, up from $11.9 billion at December 31, 2001.
Webster President and Chief Operating Officer William T. Bromage said, "The
growth in deposits of our three new branches in lower Fairfield County was
significantly greater than our initial projections. In addition, our recently
announced definitive agreement to acquire the asset-based lending division of
IBJ Whitehall Business Credit Corporation further accelerates our transformation
to a diversified financial services provider with a commercial bank-like
profile."
The second quarter and six months results reflect the adoption of a new
accounting standard eliminating the amortization of goodwill expense beginning
January 1, 2002. Had the new accounting standard been effective in the 2001
second quarter and six months period, operating earnings would have been $37.7
million or $.76 per diluted share and $74.1 million or $1.49 per diluted share,
respectively.
During the quarter the company completed a review of the carrying value of all
its goodwill and other intangible assets in compliance with the requirements of
Statement of Financial Accounting Standard ("SFAS") No. 142, "Goodwill and Other
Intangible Assets." As a result, the company determined that a portion of
goodwill related to the acquisition of Duff & Phelps LLC, a company involved in
merger and acquisition and valuation advisory services, was impaired.
Accordingly, a one-time transitional charge of $7.3 million after taxes was
taken retroactive to January 1, 2002, in accordance with the provisions of SFAS
No. 142.
For the first six months of 2002, including the impact of the one-time
transitional charge, net income was $72.9 or $1.47 per diluted share, compared
to $61.5 million or $1.24 per diluted share in the year-ago period. The 2001
results included, net of taxes, net non-recurring charges of $5.8 million.
Financial Highlights
Net interest income for the quarter increased 13 percent to $102.6 million from
$90.4 million in the year-ago period and compares to $96.5 million in the first
quarter of 2002. The increase was due primarily to the benefits of a lower
interest-rate environment and earning asset growth. The securities and loan
portfolios increased $334 million and $444 million, respectively, in the second
quarter compared to a year ago. On a linked-quarter comparison, the increase of
$193 million in the loan portfolios contributed to the growth in net interest
income. Net interest margin (net interest income as a percentage of average
earning assets) was 3.61 percent in the second quarter, compared to 3.39 percent
a year ago and up from 3.51 percent in the first quarter of 2002.
Revenue from fee-based services, excluding gains on the sale of securities,
increased to $39.2 million from $38.4 million in year-ago period. This increase
is due primarily to revenue related to loan and loan-servicing fees, higher
revenues at Webster Insurance and to expanded product offerings to Webster's
growing customer base. Income from fee-based services as a percent of total
revenue was 28 percent in the second quarter.
The allowance for loan losses increased to $99.7 million or 1.34 percent of
total loans at June 30, 2002, from $96.1 million or 1.38 percent of total loans
in the year-ago period and $98.9 million or 1.37 percent in the first quarter of
2002.
Nonperforming assets totaled $51.5 million or 0.41 percent of total assets at
June 30, 2002, down from $54.3 million or 0.44 percent in the first quarter and
compared to $47.4 million or 0.40 percent a year earlier. The allowance for loan
losses as a percent of nonaccrual loans was 206 percent, up from 197 percent in
the first quarter and was 216 percent at June 30, 2001.
Book value per common share increased 15 percent to $22.04 at June 30, 2002,
from $19.18 at June 30, 2001, due primarily to earnings and increases in the
fair value of available-for-sale securities. Shareholders' equity was $1.1
billion at the end of the second quarter, up from $947 million at the end of the
2001 first quarter, representing 8.6% percent of total assets.
Stock Option Accounting
Webster will begin to expense as compensation the cost of all stock options the
company grants, effective in the third quarter of 2002. All future employee
stock option grants will be expensed over the vesting period based on the fair
value at the date the options are granted. Webster previously disclosed the
impact of stock options on earnings in a footnote in its annual report.
The impact of including the cost of stock options in compensation expense would
be to reduce diluted earnings per share by approximately $.01 in 2002. The
anticipated fully phased-in cost of adopting this method will amount to
approximately $.10 per diluted share in 2005.
"While Webster has for many years disclosed in its annual report the impact of
stock options on earnings per share," Webster Chief Financial Officer William J.
Healy said, "Expensing stock options going forward will make the financial
statements more easily understood by investors."
Webster will continue to use the fair value method of calculating the value of
stock options required in Statement of Financial Accounting Standard ("SFAS")
No.123, "Accounting for Stock Based Compensation," which since its adoption in
1996 has permitted companies to either recognize the impact as compensation
expense or alternatively to disclose it in a footnote to the annual report.
Strategic Actions
In June, Webster opened its second branch in Stamford and first branch in
Darien, the third branch opening this year in its aggressive expansion plans to
open 20 branches principally in Fairfield County during the next three years.
Webster now has 15 branch locations in 10 Fairfield County towns.
In May, Webster announced that it had reached a definitive agreement to acquire
the asset-based lending division of IBJ Whitehall Business Credit Corporation.
In the transaction, Webster will acquire approximately $500 million of fully
performing loans, most of which are to customers in the Northeast. The
transaction, which is subject to regulatory filings and customary closing
conditions, is expected to close in the third quarter of 2002 and is expected to
be immediately accretive to earnings.
Webster strengthened its management team with three key executive appointments.
In May, Webster announced the appointment of Joseph Savage as Executive Vice
President for Commercial Banking. Prior to joining Webster, Mr. Savage was
Executive Vice President at CoBank in Denver, Colorado. Prior to joining CoBank,
Mr. Savage was the president of Keystone Ventures, LLC in Farmington,
Connecticut, and before his tenure with Keystone he was a senior vice president,
specialized lending for Shawmut Bank and served as president of Shawmut National
Ventures.
In June, Webster announced the appointment of Patrick T. Murphy as Executive
Vice President for Human Resources. Prior to joining Webster, Mr. Murphy was
Vice President, Human Resources at ING Aetna Financial Services in Hartford.
Prior to ING Aetna, Mr. Murphy was Vice President, Human Resources - Americas
for Lego Systems, Inc. He also spent thirteen years in a series of human
resource positions of increasing responsibility at Richardson-Vicks, a
subsidiary of Proctor and Gamble Company.
Also, in June Webster Financial Corporation announced the appointment of Jo
Keeler as Corporate Executive Vice President, Risk Management. Mr. Keeler had
joined Webster in August of 2001 as head of risk management for Webster Bank.
Prior to joining Webster, Mr. Keeler was an executive credit officer for
FleetBoston Financial in Boston.
Webster Financial Corporation is the holding company for Webster Bank and
Webster Insurance. With $12 billion in assets, Connecticut-based Webster Bank
provides business and consumer banking, mortgage, trust and investment services
through more than 100 banking offices, 210 ATMs and the Internet
(www.websteronline.com). Webster Financial Corporation is majority owner of
Chicago-based Duff & Phelps, LLC, a leader in valuation and financial advisory
services to middle-market companies, and Webster Bank owns Center Capital
Corporation, an equipment leasing and financing company headquartered in
Farmington, Connecticut and Webster Trust Company, N.A.
For more information on Webster, including past press releases and the latest
Annual Report, visit the Webster Bank website at www.websteronline.com.
Conference Call
A conference call covering today's announcement will be held today, Wednesday,
July 24, 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
1-800-482-2225 (Access Code: 2014138). 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 recent fiscal year.
Webster Financial Corp.
----------------------------------------------------------------------
Selected Financial Highlights (unaudited)
----------------------------------------------------------------------
At or for the Three At or for the Six
(Dollars in thousands, Months Ended June 30, Months Ended June 30,
except per share data) 2002 2001 2002 2001
----------------------------------------------------------------------
Operating income and
performance ratios
(annualized) (a):
-----------------------
As reported:
Operating income $ 40,721 $ 34,152 $ 80,157 $ 67,243
Operating income
per common share
(diluted) 0.82 0.69 1.62 1.35
Return on average
shareholders'
equity 15.50% 14.67% 15.49% 14.66%
Return on average
assets 1.33 1.17 1.33 1.17
Fee income as a
percentage of
total revenue 27.65 29.83 28.15 29.26
Efficiency ratio (b) 50.37 50.25 50.79 50.74
2001 adjusted for
SFAS 142:
Operating income $ 40,721 $ 37,726 $ 80,157 $ 74,069
Operating income
per common share
(diluted) 0.82 0.76 1.62 1.49
Return on average
shareholders'
equity 15.50% 16.21% 15.49% 16.14%
Return on average
assets 1.33 1.29 1.33 1.29
Net income and
performance ratios
after nonrecurring
items (annualized):
-----------------------
Net income $ 40,721 $ 34,504 $ 72,877 $ 61,487
Net income per common
share (diluted) 0.82 0.69 1.47 1.24
Return on average
shareholders'
equity 15.50% 14.82% 14.08% 13.40%
Return on average
assets 1.33 1.18 1.21 1.07
Cash income and
performance ratios
(annualized) (c):
-----------------------
Cash income $ 43,503 $ 40,987 $ 85,742 $ 80,591
Cash income per
common share
(diluted) 0.88 0.82 1.73 1.62
Cash return on
average shareholders'
equity 16.56% 17.61% 16.57% 17.56%
Cash return on
average assets 1.42 1.41 1.42 1.40
Other ratios
(annualized):
-----------------------
Shareholders'
equity / total assets 8.54% 8.01% 8.54% 8.01%
Interest-rate spread 3.52 3.32 3.47 3.27
Net interest margin 3.61 3.39 3.56 3.37
Share related:
-----------------------
Book value per
common share $ 22.04 $ 19.18 $ 22.04 $ 19.18
Tangible book value
per common share 15.81 12.41 15.81 12.41
Common stock closing
price 38.24 32.78 38.24 32.78
Dividends declared per
common share 0.19 0.17 0.36 0.33
Common shares issued
and outstanding 48,427,151 49,361,799 48,427,151 49,361,799
Basic shares
(average) 48,631,272 49,119,360 48,716,567 49,028,961
Diluted shares
(average) 49,584,886 49,783,527 49,583,738 49,675,196
(a) Excludes 2002 nonrecurring item which is SFAS 142 transitional
goodwill impairment adjustment of $7.3 million, net of taxes. 2001
items, net of taxes, are: $352 thousand related to net insurance
proceeds (Q2), $2.5 million of branch reconfiguration expenses
(Q1), $2.4 million expense related to the adoption of accounting
standards for derivative instruments and hedging activities (Q1)
and $1.2 million expense related to the early extinguishment of
debt (Q1).
(b) Excludes nonrecurring income and operating expense items (refer to
item (a)), intangible amortization, capital securities, preferred
dividend, minority interest, foreclosed property and repossession
expenses.
(c) Net income excluding tax-effected intangible amortization and
nonrecurring items (refer to item (a)). 2001 periods are adjusted
for SFAS 142.
----------------------------------------------------------------------
Consolidated Statements of Condition (unaudited)
----------------------------------------------------------------------
June 30, December 31, June 30,
(Dollars in thousands) 2002 2001 2001
----------------------------------------------------------------------
Assets:
Cash and due from depository
institutions $ 244,257 $ 218,908 $ 326,732
Short-term investments 55,539 35,937 11,278
Securities:
Trading, at fair value 163 - -
Available for sale, at
fair value 4,155,071 3,999,133 3,821,140
------------- ------------- -------------
Total securities 4,155,234 3,999,133 3,821,140
------------- ------------- -------------
Loans receivable:
Residential mortgages 3,653,742 3,530,201 3,943,841
Commercial and industrial 1,392,344 1,367,578 1,329,669
Commercial real estate 992,160 974,976 975,698
Consumer 1,394,497 1,094,463 739,119
------------- ------------- -------------
Total loans receivable 7,432,743 6,967,218 6,988,327
Allowance for loan losses (99,698) (97,307) (96,135)
------------- ------------- -------------
Loans, net 7,333,045 6,869,911 6,892,192
Accrued interest receivable 56,543 54,288 64,090
Premises and equipment, net 81,802 82,808 85,495
Intangible assets 301,361 320,051 334,159
Cash surrender value of
life insurance 167,492 163,023 159,479
Prepaid expenses and
other assets 95,106 113,323 123,997
------------- ------------- -------------
Total assets $ 12,490,379 $ 11,857,382 $ 11,818,562
============= ============= =============
Liabilities and
Shareholders' Equity:
Deposits:
Checking and NOW $ 1,793,480 $ 1,708,623 $ 1,629,256
Savings and MMDAs 2,743,220 2,430,691 2,170,423
Certificates of deposit 2,696,163 2,831,344 3,080,078
------------- ------------- -------------
Total retail deposits 7,232,863 6,970,658 6,879,757
Treasury deposits 104,726 95,813 122,278
------------- ------------- -------------
Total deposits 7,337,589 7,066,471 7,002,035
Borrowed funds 3,857,649 3,533,364 3,573,684
Accrued expenses and
other liabilities 83,376 91,503 136,364
------------- ------------- -------------
Total liabilities 11,278,614 10,691,338 10,712,083
------------- ------------- -------------
Corporation-obligated
mandatorily redeemable
capital securities
of subsidiary trusts 135,000 150,000 150,000
Preferred stock of
subsidiary corporation 9,577 9,577 9,577
Shareholders' equity 1,067,188 1,006,467 946,902
------------- ------------- -------------
Total liabilities and
shareholders' equity $ 12,490,379 $ 11,857,382 $ 11,818,562
============= ============= =============
----------------------------------------------------------------------
Consolidated Statements of Income (unaudited)
----------------------------------------------------------------------
Three Months Ended Six Months Ended
(Dollars in thousands, June 30, June 30,
except per share data) 2002 2001(b) 2002 2001(b)
----------------------------------------------------------------------
Interest income:
Loans $ 114,027 $ 134,702 $ 225,522 $ 273,330
Securities and
short-term
investments 59,340 59,755 118,938 117,739
---------- ---------- ---------- ----------
Total interest income 173,367 194,457 344,460 391,069
---------- ---------- ---------- ----------
Interest expense:
Deposits 37,005 57,702 76,618 117,138
Borrowings 33,797 46,311 68,794 95,776
---------- ---------- ---------- ----------
Total interest expense 70,802 104,013 145,412 212,914
---------- ---------- ---------- ----------
Net interest income 102,565 90,444 199,048 178,155
Provision for
loan losses 4,000 3,200 8,000 6,400
---------- ---------- ---------- ----------
Net interest income
after provision for
loan losses 98,565 87,244 191,048 171,755
---------- ---------- ---------- ----------
Noninterest income:
Deposit service fees 14,924 14,325 28,730 27,557
Loan and loan
servicing fees 6,255 5,670 11,478 8,567
Trust and investment
services 4,068 4,591 8,455 8,985
Financial advisory
services 4,357 3,792 8,316 8,297
Insurance revenue 6,376 5,573 13,812 10,587
Increase in cash
surrender value of
life insurance 2,267 2,391 4,469 4,715
Other 945 2,115 2,729 4,986
---------- ---------- ---------- ----------
Total fee revenue 39,192 38,457 77,989 73,694
Gain on sale of
securities, net 1,126 1,794 4,531 6,043
---------- ---------- ---------- ----------
Total noninterest
income 40,318 40,251 82,520 79,737
Noninterest expenses:
Compensation and
benefits 40,742 36,062 80,890 71,679
Occupancy 6,212 6,526 12,497 13,406
Furniture and
equipment 6,812 7,160 13,380 13,871
Intangible
amortization 4,280 7,886 8,593 15,450
Marketing 2,438 2,293 4,862 4,383
Professional services 2,820 2,542 5,147 4,112
Capital securities 3,537 3,615 7,153 7,231
Acquisition expenses 616 - 616 -
Other 11,859 10,220 23,371 20,689
---------- ---------- ---------- ----------
Total noninterest
expenses 79,316 76,304 156,509 150,821
---------- ---------- ---------- ----------
Income before income
taxes and
nonrecurring items 59,567 51,191 117,059 100,671
Income taxes 18,846 17,039 36,902 33,428
---------- ---------- ---------- ----------
Income before
nonrecurring items 40,721 34,152 80,157 67,243
Nonrecurring items,
net of taxes (a) - 352 (7,280) (5,756)
---------- ---------- ---------- ----------
Net income $ 40,721 $ 34,504 $ 72,877 $ 61,487
========== ========== ========== ==========
Net income per common
share before
nonrecurring items:
Basic $ 0.84 $ 0.70 $ 1.65 $ 1.37
Diluted 0.82 0.69 1.62 1.35
Net income per common
share:
Basic $ 0.84 $ 0.70 $ 1.50 $ 1.25
Diluted 0.82 0.69 1.47 1.24
(a) 2002 nonrecurring item is a SFAS No. 142 transitional goodwill
impairment adjustment of $7.3 million, net of taxes. 2001 items,
net of taxes, are: $352,000 related to net insurance proceeds
(Q2), $2.5 million of branch reconfiguration expenses (Q1), $2.4
million expense related to the adoption of SFAS No. 133 (Q1) and
$1.2 million expense related to early extinguishment of debt (Q1).
(b) Had the requirements of SFAS No. 142, been applied to the 2001
three and six month periods, intangible amortization expense would
have been $4,312 and $8,624, respectively, income before
nonrecurring items $37,726 and $74,069, respectively, and net
income $38,078 and $68,313, respectively. Net income per share
before nonrecurring items would have been: basic $.77 and $1.51
and diluted $.76 and $1.49, respectively. Net income per share
would have been: basic $.78 and $1.39 and diluted $.76 and $1.38,
respectively.
----------------------------------------------------------------------
Consolidated Statements of Income (unaudited)
----------------------------------------------------------------------
(Dollars in Three Months Ended
thousands,
except per June 30, March 31, Dec. 31, Sept. 30, June 30,
share data) 2002 2002 2001 2001 2001
----------------------------------------------------------------------
Interest income:
Loans $ 114,027 $ 111,495 $ 118,534 $ 127,991 $ 134,702
Securities and
short-term
investments 59,340 59,598 59,004 60,572 59,755
--------- --------- --------- --------- ---------
Total interest
income 173,367 171,093 177,538 188,563 194,457
--------- --------- --------- --------- ---------
Interest expense:
Deposits 37,005 39,613 45,570 53,627 57,702
Borrowings 33,797 34,997 36,260 41,385 46,311
--------- --------- --------- --------- ---------
Total interest
expense 70,802 74,610 81,830 95,012 104,013
--------- --------- --------- --------- ---------
Net interest
income 102,565 96,483 95,708 93,551 90,444
Provision for
loan losses 4,000 4,000 4,000 4,000 3,200
--------- --------- --------- --------- ---------
Net interest
income after
provision for
loan losses 98,565 92,483 91,708 89,551 87,244
--------- --------- --------- --------- ---------
Noninterest
income:
Deposit service
fees 14,924 13,806 14,362 14,142 14,325
Loan and loan
servicing fees 6,255 5,223 5,054 5,131 5,670
Trust and
investment
services 4,068 4,387 4,377 4,984 4,591
Financial
advisory
services 4,357 3,959 3,286 3,942 3,792
Insurance
revenue 6,376 7,436 5,358 5,806 5,573
Increase in
cash surrender
value of life
insurance 2,267 2,202 2,238 2,211 2,391
Other 945 1,784 2,094 1,709 2,115
--------- --------- --------- --------- ---------
Total fee
revenue 39,192 38,797 36,769 37,925 38,457
Gain on sale of
securities, net 1,126 3,405 2,012 2,566 1,794
--------- --------- --------- --------- ---------
Total
noninterest
income 40,318 42,202 38,781 40,491 40,251
Noninterest
expenses:
Compensation
and benefits 40,742 40,148 35,393 35,827 36,062
Occupancy 6,212 6,285 6,180 6,057 6,526
Furniture and
equipment 6,812 6,568 6,975 7,032 7,160
Intangible
amortization 4,280 4,313 7,889 7,888 7,886
Marketing 2,438 2,424 2,300 2,045 2,293
Professional
services 2,820 2,327 2,470 2,896 2,542
Capital
securities 3,537 3,616 3,615 3,616 3,615
Acquisition
expenses 616 - - - -
Other 11,859 11,512 12,320 11,840 10,220
--------- --------- --------- --------- ---------
Total
noninterest
expenses 79,316 77,193 77,142 77,201 76,304
--------- --------- --------- --------- ---------
Income before
income taxes
and
nonrecurring
items 59,567 57,492 53,347 52,841 51,191
Income taxes 18,846 18,056 17,914 17,810 17,039
--------- --------- --------- --------- ---------
Income before
nonrecurring
items 40,721 39,436 35,433 35,031 34,152
Nonrecurring
items, net
of taxes - (7,280) 1,237 - 352
--------- --------- --------- --------- ---------
Net income $ 40,721 $ 32,156 $ 36,670 $ 35,031 $ 34,504
========= ========= ========= ========= =========
Net income per
common share
before
nonrecurring
items:
Basic $0.84 $0.81 $0.72 $0.71 $0.70
Diluted 0.82 0.80 0.71 0.70 0.69
Net income per
common share
before
nonrecurring
items: (2001
restated for
SFAS 142)
Basic $0.84 $0.81 $0.80 $0.78 $0.77
Diluted $0.82 0.80 0.79 0.77 0.76
Net income per
common share:
Basic $0.84 $0.66 $0.75 $0.71 $0.70
Diluted 0.82 0.65 0.74 0.70 0.69
----------------------------------------------------------------------
Retail and Wholesale Interest-Rate Spreads (unaudited)
----------------------------------------------------------------------
Three Months Ended June March December September June
2002 2002 2001 2001 2001
----------------------------------------------------------------------
Interest-rate
spread
-----------------
Total
interest-earning
assets (a) 6.09% 6.24% 6.64% 7.06% 7.28%
Total
interest-bearing
liabilities 2.57 2.82 3.13 3.63 3.96
--------- --------- --------- --------- ---------
Interest-rate
spread 3.52% 3.42% 3.51% 3.43% 3.32%
Net interest
margin 3.61 3.51 3.61 3.54 3.39
Retail
interest-rate
spread
-----------------
Yield on loans 6.23% 6.39% 6.78% 7.33% 7.61%
Cost of
deposits 2.06 2.29 2.59 3.06 3.34
--------- --------- --------- --------- ---------
Spread 4.17% 4.10% 4.19% 4.27% 4.27%
========= ========= ========= ========= =========
Wholesale
interest-rate
spread
-----------------
Yield on
securities (a) 5.84% 5.98% 6.38% 6.57% 6.63%
Cost of
borrowings 3.56 3.85 4.24 4.79 5.18
--------- --------- --------- --------- ---------
Spread 2.28% 2.13% 2.14% 1.78% 1.45%
========= ========= ========= ========= =========
----------------------------------------------------------------------
Consolidated Average Statements of Condition (unaudited)
----------------------------------------------------------------------
Three Months Ended June 30, 2002
----------------------------------------------------------------------
Fully tax
Average equivalent-
(Dollars in thousands) balance Interest(b) yield/rate
----------------------------------------------------------------------
Assets:
Interest-earning assets:
Loans $ 7,300,691 $ 114,027 6.23%
Securities and
interest-bearing deposits 4,135,496 59,637 5.84(a)
------------- ------------- -------------
Total interest-earning
assets 11,436,187 173,664 6.09
-------------
Noninterest-earning
assets 822,701
-------------
Total assets $ 12,258,888
=============
Liabilities and
Shareholders' Equity:
Interest-bearing
liabilities:
Interest-bearing deposits $ 6,341,251 $ 37,005 2.34%
Noninterest-bearing
deposits 878,727 - -
Federal Home Loan Bank
advances 2,270,242 24,991 4.35
Repurchase agreements and
other borrowings 1,363,189 6,016 1.75
Senior notes 126,000 2,790 8.86
------------- ------------- -------------
Total interest-bearing
liabilities 10,979,409 70,802 2.57
Noninterest-bearing
liabilities 72,703
-------------
Total liabilities 11,052,112
Capital securities and
preferred stock of
subsidiary corporation 155,950
Shareholders' equity 1,050,826
-------------
Total liabilities and
shareholders' equity $ 12,258,888
=============
Less: tax-equivalent
adjustment (297)
-------------
Net interest income $102,565
=============
Interest-rate spread 3.52%
=============
Net interest margin 3.61%
=============
----------------------------------------------------------------------
Three Months Ended June 30, 2001
----------------------------------------------------------------------
Fully tax-
Average equivalent
(Dollars in thousands) balance Interest(b) 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
=============
Less: tax-equivalent
adjustment (263)
-------------
Net interest income $ 90,444
=============
Interest-rate spread 3.32%
=============
Net interest margin 3.39%
=============
(a) For purposes of this computation, unrealized gains(losses) are
excluded from the average balance for rate calculations.
(b) On a fully tax-equivalent basis.
----------------------------------------------------------------------
Consolidated Average Statements of Condition (unaudited)
----------------------------------------------------------------------
Six Months Ended June 30, 2002
----------------------------------------------------------------------
Fully tax
Average equivalent-
(Dollars in thousands) balance Interest(b) yield/rate
----------------------------------------------------------------------
Assets:
Interest-earning assets:
Loans $ 7,149,701 $ 225,522 6.31%
Securities and
interest-bearing
deposits 4,090,213 119,539 5.91(a)
------------- ------------- -------------
Total
interest-earning
assets 11,239,914 345,061 6.16
-------------
Noninterest-earning assets 851,768
-------------
Total assets $ 12,091,682
=============
Liabilities and
Shareholders' Equity:
Interest-bearing
liabilities:
Interest-bearing deposits $ 6,263,392 $ 76,618 2.47%
Noninterest-bearing
deposits 858,925 - -
Federal Home Loan Bank
advances 2,330,473 52,278 4.46
Repurchase agreements and
other borrowings 1,240,582 10,936 1.75
Senior notes 126,000 5,580 8.86
------------- ------------- -------------
Total interest-bearing
liabilities 10,819,372 145,412 2.69
Noninterest-bearing
liabilities 79,735
-------------
Total liabilities 10,899,107
Capital securities and
preferred stock of
subsidiary corporation 157,754
Shareholders' equity 1,034,821
-------------
Total liabilities and
shareholders' equity $ 12,091,682
=============
Less: tax-equivalent
adjustment (601)
-------------
Net interest income $ 199,048
=============
Interest-rate spread 3.47%
=============
Net interest margin 3.56%
=============
----------------------------------------------------------------------
Six Months Ended June 30, 2001
----------------------------------------------------------------------
Fully tax
Average equivalent-
(Dollars in thousands) balance Interest(b) 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
=============
Less: tax-equivalent
adjustment (498)
-------------
Net interest income $ 178,155
=============
Interest-rate spread 3.27%
=============
Net interest margin 3.37%
=============
(a) For purposes of this computation, unrealized gains (losses) are
excluded from the average balance rate calculations.
(b) On a fully tax-equivalent basis.
----------------------------------------------------------------------
Asset Quality and Allowance for Loan Losses (unaudited)
----------------------------------------------------------------------
(Dollars in thousands)
At or for the Three Months Ended,
-----------------------------------------------------
Nonperforming June 30, March 31, Dec. 31, Sept. 30, June 30,
Assets 2002 2002 2001 2001 2001
-------------- -----------------------------------------------------
Nonperforming
loans:
Commercial:
Business
banking $ 21,626 20,461 20,574 16,852 9,032
Specialized
industry 3,399 3,399 8,947 11,003 5,100
Lease
financing 6,531 7,510 7,333 6,733 6,295
-----------------------------------------------------
Total
commercial 31,556 31,370 36,854 34,588 20,427
Commercial
real estate 9,506 11,122 11,062 13,945 13,876
Residential 5,991 6,262 7,677 7,745 8,693
Consumer 1,409 1,545 1,823 1,474 1,571
-----------------------------------------------------
Total
nonperforming
loans 48,462 50,299 57,416 57,752 44,567
-----------------------------------------------------
Other real
estate owned
and
repossessed
assets:
Commercial 2,294 2,690 2,534 539 1,685
Residential 635 1,131 1,956 1,240 784
Consumer 170 205 548 710 364
-----------------------------------------------------
Total other
real estate
owned and
repossessed
assets 3,099 4,026 5,038 2,489 2,833
-----------------------------------------------------
Total
nonperforming
assets $ 51,561 54,325 62,454 60,241 47,400
=====================================================
Allowance for
Loan Losses
------------
Beginning
balance $ 98,930 97,307 96,654 96,135 94,970
Provision 4,000 4,000 4,000 4,000 3,200
Loan
charge-offs:
Commercial:
Specialized
industry 854 1,361 564 3,039 1,359
All other
commercial 2,498 541 2,518 365 552
-----------------------------------------------------
Total
commercial 3,352 1,902 3,082 3,404 1,911
Residential 187 362 249 325 134
Consumer 250 377 394 281 371
-----------------------------------------------------
Total
charge-
offs 3,789 2,641 3,725 4,010 2,416
Recoveries (557) (264) (378) (529) (381)
-----------------------------------------------------
Net
loan
charge-
offs 3,232 2,377 3,347 3,481 2,035
-----------------------------------------------------
Ending balance $ 99,698 98,930 97,307 96,654 96,135
=====================================================
----------------------------------------------------------------------
Asset Quality
Ratios:
--------------
Net charge-offs/
average loans
(annualized) 0.18% 0.14 0.19 0.20 0.12
Allowance for
loan losses /
gross loans 1.34 1.37 1.40 1.40 1.38
Nonperforming
assets /
total assets 0.41 0.44 0.53 0.52 0.40
Nonperforming
loans / total
loans 0.65 0.69 0.82 0.84 0.64
Allowance for
loan losses /
nonperforming
loans 205.72 196.68 169.48 167.36 215.71
CONTACT:
Webster Financial Corporation
Media:
Art House, 203/578-2391,
ahouse@websterbank.com
Clark Finley, 203/578-2429,
cfinley@websterbank.com
Investors:
James M. Sitro, 203/578-2399,
jsitro@websterbank.com
Copyright (C) 2002 Business Wire. All rights reserved.