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WATERBURY, Conn.--(BUSINESS WIRE)--July 16, 2003--Webster
Financial Corporation (NYSE: WBS), the holding company for Webster
Bank, today announced a seven percent increase in net income per
diluted share to $.88 for the second quarter, compared to $.82 in the
year-ago period. Net income totaled $40.6 million, compared to the
same amount in the year-ago period.
For the first six months of 2003, net income was $1.74 per diluted
share, compared to $1.47 in the year-ago period. Net income was $80.5
million, compared to $72.9 million in the year-ago period. Excluding
the cumulative effect of a change in accounting method in the 2002
first quarter, net income for the first six months of 2002 was $80.2
million or $1.62 per diluted share.
"We are pleased to report continued progress in executing
Webster's strategic plan for growth, including higher per share
earnings," stated Webster chairman and chief executive officer, James
C. Smith. "Webster continues to grow internally and through
value-creating acquisitions, such as our recently announced
partnership with North American Bank and Trust Company. Strong loan
and deposit growth, coupled with the strength of our fee-based
businesses, has mitigated the impact of lower yields on net interest
income. We are well positioned to benefit from a gradually improving
economy and the higher interest rates which will likely result."
Revenues and Expenses
Net interest income was $100.6 million in the second quarter,
compared to $102.6 million in the year-ago period and $104.7 million
in the first quarter. The decline resulted from significantly lower
interest rates during the second quarter as reflected in Webster's net
interest margin (annualized net interest income as a percentage of
average earning assets) of 3.10 percent compared to 3.61 percent in
the year-ago period and 3.30 percent in the first quarter of 2003. On
a linked-quarter basis, all of the decline in net interest income
resulted from a reduction of $6.0 million in interest income in the
securities portfolio. This reduction is attributable to $1.4 million
of incremental acceleration of premium amortization, significantly
lower reinvestment yields on cash flows and a modest reduction in the
portfolio. Webster has redeployed cash flows into investments with
shorter maturities, at significantly reduced yields, in anticipation
of rising interest rates.
In the second quarter of 2003, total noninterest income, including
securities gains, increased by 47 percent to $58.3 million, up from
$39.6 million in the year-ago period. Securities gains totaled $8.7
million in the second quarter compared to $1.1 million a year ago and
$2.6 million in the first quarter. On a linked-quarter basis, the $6.1
million increase in securities gains offset the $6.0 million reduction
of interest income in the securities portfolio. Unrealized gains in
the investment portfolio were $85.6 million at June 30, 2003.
Excluding securities gains and writedowns of mortgage servicing
rights, total fee revenue was $51.4 million in the second quarter,
compared to $38.5 million a year ago and $51.3 million in the first
quarter. Recent acquisitions contributed $5.3 million of fee-based
revenue growth compared to one year ago while the remaining $5.8
million came from core growth. Deposit service fees were up 17 percent
year over year, due primarily to growth in accounts. Insurance
revenues were up 57 percent due to the Mathog & Moniello acquisition
and increased premiums. Loan and loan servicing fees, excluding $1.8
million of writedowns of mortgage servicing rights, grew by 52%
largely as a result of the Whitehall acquisition. Net gains on sales
of loans and loan servicing were up $2.8 million, or 228 percent, due
to increased mortgage origination volume. Revenues at Duff & Phelps
and Wealth Management were up 20 percent and 11 percent, respectively.
Total noninterest expenses for the second quarter increased to
$93.2 million, up from $78.8 million one year ago and flat with the
first quarter. The increase in total noninterest expenses over the
prior year's period includes recent acquisitions that account for $4.7
million and the balance reflects strategic investments in core
businesses. Webster's strategic investments include, de novo branch
expansion activity, the High Performance Checking initiative, the
transformation of the Wealth Management business to a financial
planning and advice-driven model and the expansion of the mortgage
origination business.
Balance Sheet Growth
At June 30, 2003, total assets increased to $14.5 billion, up 16
percent from $12.5 billion one year ago and an increase of 1 percent
from the end of the 2003 first quarter. Total loans of $8.7 billion at
June 30, 2003 increased 19 percent from a year ago and 2 percent from
March 31, 2003. Loan growth over the past year is primarily
attributable to growth in the equipment finance, commercial real
estate and home equity portfolios, as well as the acquisition of the
Whitehall asset-based lending business in August of 2002.
"The second quarter demonstrates the success of our consumer and
commercial business development efforts," stated Webster president and
chief operating officer, William T. Bromage. "Webster's strategic
initiatives for growth continue to drive loan and deposit growth while
improving the mix."
At the end of the second quarter, commercial loans, including
commercial real estate, increased to $3.2 billion, up 32 percent from
$2.4 billion a year ago and 5 percent from $3.0 billion at the end of
the first quarter. Consumer loans totaled $2.0 billion, compared to
$1.4 billion one year ago and $1.8 billion at March 31, 2003, with
growth over the past year led by Webster's home equity product
offering. Commercial and consumer loans were 59 percent of total loans
at June 30, 2003, compared to 52 percent of total loans one year ago.
Webster's mortgage banking business generated $1.2 billion in
originations in the second quarter, compared to $0.5 billion a year
ago. For the first six months of 2003, mortgage originations totaled
$2.1 billion compared to $0.9 billion in the year-ago period. In the
first half of 2003, 72 percent of originations came from national
wholesale mortgage banking operations, while 28 percent came from
Webster's retail channel. All of Webster's national wholesale loan
originations are sold into the secondary markets. Net gains on sales
of loans and loan servicing totaled $4.1 million in the second quarter
of 2003, which represented an increase of $1.3 million on a
linked-quarter basis. This increase in gains acted as a natural hedge
against a linked-quarter increase of $1.0 million in writedowns of
mortgage servicing rights, which totaled $1.8 million in the second
quarter of 2003.
Total deposits were $8.1 billion at June 30, 2003, an increase of
10 percent from $7.3 billion a year ago and an increase of 4 percent
from $7.8 billion at March 31, 2003. Core deposits at June 30, 2003
represented 68 percent of total deposits, up from 62 percent a year
ago. Webster's growth in deposits was driven in part by its High
Performance Checking campaign initiated in August of 2002 and the
continuing success of its de novo branches in Fairfield County,
Connecticut.
Book value per common share of $24.09 at June 30, 2003 increased
by 9 percent from $22.05 one year ago and increased by 3 percent from
$23.47 at March 31, 2003. Tangible book value per share of $17.59 at
June 30, 2003 increased by 8 percent from $16.31 one year ago and by 4
percent from $16.92 at March 31, 2003.
Asset Quality
Nonperforming assets totaled $57.0 million or 0.39 percent of
total assets at June 30, 2003, compared to $51.6 million or 0.41
percent a year ago and $61.9 million or 0.43 percent at March 31,
2003. Classified loans were 1.3 percent of total loans at June 30,
2003 compared to 2.1 percent one year ago and 1.5 percent at March 31,
2003.
"Webster's credit quality demonstrates the impact of disciplined
underwriting and focused portfolio management during this period of
growth," stated Webster chief financial officer, William J. Healy.
"Credit quality continues to be among our highest priorities."
The allowance for loan losses totaled $119.2 million at June 30,
2003 compared to $99.7 million a year ago and $118.6 million at March
31, 2003. The allowance represented 1.37 percent of total loans at
June 30, 2003 compared to 1.36 percent a year ago and 1.39 percent at
March 31, 2003. The ratio of the allowance to nonperforming loans at
June 30, 2003 increased to 228 percent, compared to 206 percent a year
ago and 219 percent at March 31, 2003.
Webster's net loan charge-offs in the second quarter of 2003 were
$4.4 million, compared to $3.2 million in the year-ago period. The
annualized net charge-off ratio was 20 basis points in the 2003 second
quarter, compared to 18 basis points in the year-ago period.
Strategic Actions
In April, Webster announced an 11 percent increase in its regular
quarterly cash dividend to $.21 per common share from $.19 per common
share previously. On an annual basis, Webster reported that its
dividend rate increased from $.76 to $.84 per common share. The
announcement marked the 63rd consecutive quarterly dividend since
Webster first paid a dividend in 1987 and the 13th time Webster's
dividend had been increased.
Webster also announced in April the appointment of Zeynep Fredrick
as Executive Vice President, Information Technology and Operations.
Prior to joining Webster, Ms. Fredrick held positions of chief
information officer and senior vice president of technology for
AllFirst Bank of Baltimore, Maryland and senior vice president of IT
Operations and the Mergers, Acquisitions and Consolidations Group for
First National Bank in Maryland.
In June, Webster announced that it has reached a definitive
agreement for the acquisition of North American Bank and Trust Company
(Nasdaq: NAMB), in a combination cash and stock transaction valued at
approximately $30 million, or $11.25 per common share of North
American stock. The acquisition is expected to increase access and
convenience for both Webster and North American Bank customers and to
contribute positively to Webster's earnings per share in the first
year. Webster expects the transaction to close in the fourth quarter
of 2003.
Webster held its inaugural Investor Day presentation to analysts
and portfolio managers on June 11th, an event where Webster senior
officers delivered presentations on the histories and strategic plans
for Webster's various business lines. The audio webcast and
presentation slides are available at the Investor Relations section of
Webster's website, www.wbst.com.
Webster Financial Corporation is the holding company for Webster
Bank and Webster Insurance. With $14 billion in assets, Webster Bank
provides business and consumer banking, mortgage, insurance, trust and
investment services through 109 banking offices, 219 ATMs, a
Connecticut-based call center and the Internet. Webster Financial
Corporation is majority owner of Chicago-based Duff & Phelps, LLC, a
leader in financial advisory services. Webster Bank owns the
asset-based lending firm, Whitehall Business Credit Corporation,
Budget Installment Corp., Center Capital Corporation, an equipment
finance company headquartered in Farmington, Connecticut and Webster
Trust Company, N.A.
For more information about Webster, including past press releases
and the latest Annual Report, visit the Webster website at
www.websteronline.com.
Conference Call
A conference call covering today's announcement will be held
today, Wednesday, July 16, at 1:00 p.m. Eastern Daylight Time and may
be heard through Webster's investor relations website at www.wbst.com,
or in listen-only mode by calling 1-800-299-7635 (Access Code:
35765435). 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 that could cause actual
results to differ from those contained in the forward-looking
statement, see "Forward Looking Statements" in Webster's Annual Report
for 2002.
WEBSTER FINANCIAL CORPORATION
----------------------------------------------------------------------
Selected Financial Highlights (unaudited)
----------------------------------------------------------------------
At or for the Three At or for the Six
(In thousands, except Months Ended June 30, Months Ended June 30,
per share data) 2003 2002(a) 2003 2002(a)
----------------------------------------------------------------------
Net income and performance
ratios (annualized):
----------------------------
Net income $ 40,610 $ 40,572 $ 80,547 $ 72,907
Net income per diluted
common share 0.88 0.82 $1.74 1.47
Return on average
shareholders' equity 15.01 % 15.54 % 15.10 % 14.18 %
Return on average assets 1.15 1.32 1.16 1.21
Net income and performance
ratios before cumulative
effect of change in accounting
method (annualized):
----------------------------
Net income $ 40,610 $ 40,572 $ 80,547 $ 72,907
Cumulative effect of change
in accounting method (b) - - - 7,280
-------- -------- -------- --------
Net income before cumulative
effect of change in
accounting method 40,610 40,572 80,547 80,187
Net income per diluted
common share 0.88 0.82 1.74 1.62
Return on average
shareholders' equity 15.01 % 15.54 % 15.10 % 15.60 %
Return on average assets 1.15 1.32 1.16 1.33
Noninterest income as a
percentage of total revenue 36.68 27.86 35.18 28.95
Efficiency ratio (c) 58.65 55.45 58.73 55.34
Cash income and performance
ratios (annualized) (d):
----------------------------
Net income $ 40,610 $ 40,572 $ 80,547 $ 72,907
Cumulative effect of change
in accounting method (b) - - - 7,280
Tax-effected intangible
amortization 2,579 2,603 5,155 5,227
----- ----- ------ -----
Cash income 43,189 43,175 85,702 85,414
Cash income per diluted
common share 0.93 0.87 1.85 1.72
Cash return on average
shareholders' equity 15.96 % 16.54 % 16.07 % 16.62 %
Cash return on average assets 1.23 1.41 1.23 1.41
Asset Quality:
----------------------------
Allowance for loan losses $119,239 $ 99,698 $119,239 $ 99,698
Nonperforming assets 57,038 51,561 57,038 51,561
Allowance for loan losses /
total loans 1.37 % 1.36 % 1.37 % 1.36 %
Net charge-offs/ average
loans (annualized) 0.20 0.18 0.18 0.16
Nonperforming loans / total
loans 0.60 0.66 0.60 0.66
Nonperforming assets / total
assets 0.39 0.41 0.39 0.41
Allowance for loan losses /
nonperforming loans 228.06 205.72 228.06 205.72
Other ratios (annualized):
----------------------------
Shareholders' equity / total
assets 7.61 % 8.55 % 7.61 % 8.55 %
Interest-rate spread 3.06 3.52 3.16 3.47
Net interest margin 3.10 3.61 3.20 3.56
Share related:
----------------------------
Book value per common share $ 24.09 $ 22.05 $ 24.09 $ 22.05
Tangible book value per
common share 17.59 16.31 17.59 16.31
Common stock closing price 37.80 38.24 37.80 38.24
Dividends declared per
common share 0.21 0.19 0.40 0.36
Common shares issued and
outstanding 45,640 48,427 45,640 48,427
Basic shares (average) 45,446 48,631 45,453 48,717
Diluted shares (average) 46,242 49,585 46,217 49,584
Footnotes:
(a) Adjusted to reflect the adoption of SFAS No. 123, "Accounting for
Stock-Based Compensation", SFAS No. 142, "Goodwill and Other
Intangible Assets" and SFAS No. 147, "Acquisitions of Certain
Financial Institutions" during 2002.
(b) Cumulative effect of change in accounting method for 2002 is a
SFAS No. 142 transitional goodwill impairment charge of $11.2 million,
net of taxes, $7.3 million.
(c) Noninterest expense as a percentage of net interest income plus
noninterest income.
(d) Net income excluding tax-effected intangible amortization and
cumulative effect of change in accounting method.
(e) For purposes of this computation, unrealized gains (losses) are
excluded from the average balance for rate calculations.
----------------------------------------------------------------------
Consolidated Statements of Condition (unaudited)
----------------------------------------------------------------------
June 30, March 31, June 30,
(Dollars in thousands) 2003 2003 2002 (a)
----------------------------------------------------------------------
Assets:
Cash and due from depository
institutions $ 254,645 $ 238,370 $ 244,257
Short-term investments 20,671 13,696 55,539
Securities:
Trading, at fair value 3,893 10,924 163
Available for sale, at fair
value 4,395,400 4,497,686 4,155,071
------------ ------------ ------------
Total securities 4,399,293 4,508,610 4,155,234
Loans held for sale 321,055 321,637 109,795
Loans:
Residential mortgages 3,541,922 3,657,707 3,543,947
Commercial 2,010,109 1,947,167 1,392,344
Commercial real estate 1,144,429 1,062,891 992,160
Consumer 2,013,486 1,841,526 1,394,497
------------ ------------- -------------
Total loans 8,709,946 8,509,291 7,322,948
Allowance for loan losses (119,239) (118,596) (99,698)
------------ ------------- -------------
Loans, net 8,590,707 8,390,695 7,223,250
Accrued interest receivable 54,034 58,137 56,543
Premises and equipment, net 85,062 82,525 81,802
Goodwill and intangible assets 316,989 320,942 301,912
Cash surrender value of life
insurance 176,324 174,181 167,492
Prepaid expenses and other
assets 233,792 246,866 95,106
------------ ------------- -------------
Total assets $ 14,452,572 $ 14,355,659 $ 12,490,930
============ ============= =============
Liabilities and Shareholders'
Equity:
Deposits:
Checking and NOW $ 2,099,725 $ 1,965,636 $ 1,793,480
Savings and MMDAs 3,365,781 3,200,604 2,743,220
Certificates of deposit 2,526,429 2,543,060 2,696,163
------------ ------------ ------------
Total retail deposits 7,991,935 7,709,300 7,232,863
Treasury deposits 93,767 74,509 104,726
------------ ------------ ------------
Total deposits 8,085,702 7,783,809 7,337,589
Federal Home Loan Bank advances 2,185,830 2,885,098 2,196,984
Other borrowings 2,480,666 2,030,553 1,534,665
Senior notes and subordinated
debt 326,000 326,000 126,000
Accrued expenses and other
liabilities 155,233 128,921 83,392
------------- ------------ ------------
Total liabilities 13,233,431 13,154,381 11,278,630
Corporation-obligated
mandatorily redeemable
capital securities of
subsidiary trusts 110,255 121,255 135,000
Preferred stock of subsidiary
corporation 9,577 9,577 9,577
Shareholders' equity 1,099,309 1,070,446 1,067,723
------------- ------------ -------------
Total liabilities and
shareholders' equity $ 14,452,572 $ 14,355,659 $ 12,490,930
============ ============= =============
See Selected Financial Highlights for footnotes.
----------------------------------------------------------------------
Consolidated Statements of Income (unaudited)
----------------------------------------------------------------------
Three Months Ended Six Months Ended
(In thousands, except per June 30, June 30,
share data) 2003 2002(a) 2003 2002(a)
----------------------------------------------------------------------
Interest income:
Loans and loans held
for sale $ 118,965 $ 114,027 $ 236,667 $ 225,522
Securities and short-term
investments 45,772 59,340 97,517 118,938
--------- --------- --------- ---------
Total interest income 164,737 173,367 334,184 344,460
--------- --------- --------- ---------
Interest expense:
Deposits 28,750 37,005 58,168 76,618
Borrowings 35,368 33,797 70,721 68,794
--------- --------- --------- ---------
Total interest expense 64,118 70,802 128,889 145,412
--------- --------- --------- ---------
Net interest income 100,619 102,565 205,295 199,048
Provision for loan losses 5,000 4,000 10,000 8,000
--------- --------- --------- ---------
Net interest income after
provision for loan losses 95,619 98,565 195,295 191,048
--------- --------- --------- ---------
Noninterest income:
Deposit service fees 17,529 14,924 34,419 28,730
Insurance revenue 9,980 6,376 20,944 13,812
Loan and loan servicing fees 4,723 4,211 10,628 8,096
Financial advisory services 5,229 4,357 10,660 8,316
Wealth and investment
services 4,521 4,068 9,099 8,455
Gain on sale of loans and
loan servicing, net 4,066 1,239 6,837 1,632
Increase in cash surrender
value of life insurance 2,143 2,267 4,258 4,469
Other 1,423 1,047 3,284 3,057
--------- --------- --------- ---------
Total fee revenue 49,614 38,489 100,129 76,567
Gain on sale of securities,
net 8,666 1,126 11,299 4,531
--------- --------- --------- ---------
Total noninterest income 58,280 39,615 111,428 81,098
--------- --------- --------- ---------
Noninterest expenses:
Compensation and benefits 50,506 41,248 101,067 81,396
Occupancy 7,672 6,212 15,771 12,497
Furniture and equipment 7,575 6,812 15,096 13,380
Intangible amortization 3,968 4,004 7,930 8,042
Marketing 3,236 2,438 6,721 4,862
Professional services 2,994 2,820 5,472 5,147
Capital securities and
preferred stock dividend 2,958 3,753 6,096 7,585
Other 14,290 11,556 27,852 22,133
--------- --------- --------- ---------
Total noninterest expenses 93,199 78,843 186,005 155,042
--------- --------- --------- ---------
Income before income taxes
and cumulative effect of
change in accounting
method 60,700 59,337 120,718 117,104
Income taxes 20,090 18,765 40,171 36,917
--------- --------- --------- ---------
Income before cumulative
effect of change in
accounting method 40,610 40,572 80,547 80,187
Cumulative effect of change in
accounting method, net of
taxes - - - (7,280)
--------- --------- --------- ---------
Net income $ 40,610 $ 40,572 $ 80,547 $ 72,907
========= ========= ========= =========
Net income per common share
before cumulative effect
of change in accounting method:
Basic $ 0.89 $ 0.83 $ 1.77 $ 1.65
Diluted 0.88 0.82 1.74 1.62
Net income per common share:
Basic $ 0.89 $ 0.83 $ 1.77 $ 1.50
Diluted 0.88 0.82 1.74 1.47
See Selected Financial Highlights for footnotes.
----------------------------------------------------------------------
Consolidated Statements of Income (unaudited)
----------------------------------------------------------------------
(In thousands, Three Months Ended
except per June 30, March 31, Dec. 31, Sept. 30, June 30,
share data) 2003 2003 2002 2002 2002 (a)
----------------------------------------------------------------------
Interest income:
Loans and loans
held for sale $ 118,965 $ 117,702 $ 120,386 $ 118,492 $ 114,027
Securities and
short-term
investments 45,772 51,745 53,189 55,507 59,340
--------- --------- --------- --------- ---------
Total interest
income 164,737 169,447 173,575 173,999 173,367
--------- --------- --------- --------- ---------
Interest expense:
Deposits 28,750 29,418 33,375 36,169 37,005
Borrowings 35,368 35,353 36,110 35,240 33,797
--------- --------- --------- --------- ---------
Total interest
expense 64,118 64,771 69,485 71,409 70,802
--------- --------- --------- --------- ---------
Net interest
income 100,619 104,676 104,090 102,590 102,565
Provision for
loan losses 5,000 5,000 16,000 5,000 4,000
--------- --------- --------- --------- ---------
Net interest
income after
provision for
loan losses 95,619 99,676 88,090 97,590 98,565
--------- --------- --------- --------- ---------
Noninterest income:
Deposit service
fees 17,529 16,890 17,083 15,797 14,924
Insurance revenue 9,980 10,964 6,875 6,386 6,376
Loan and loan
servicing fees 4,723 5,905 6,089 4,346 4,211
Financial advisory
services 5,229 5,431 4,964 5,997 4,357
Wealth and investment
services 4,521 4,578 3,693 3,770 4,068
Gain on sale of
loans and loan
servicing, net 4,066 2,771 2,337 1,839 1,239
Increase in cash
surrender value
of life insurance 2,143 2,115 2,263 2,310 2,267
Other 1,423 1,861 1,129 750 1,047
--------- --------- --------- --------- ---------
Total fee revenue 49,614 50,515 44,433 41,195 38,489
Gain on sale of
securities, net 8,666 2,633 13,934 4,912 1,126
--------- --------- --------- --------- ---------
Total noninterest
income 58,280 53,148 58,367 46,107 39,615
Noninterest
expenses:
Compensation and
benefits 50,506 50,561 46,343 43,303 41,248
Occupancy 7,672 8,099 7,444 6,665 6,212
Furniture and
equipment 7,575 7,521 8,228 7,559 6,812
Intangible
amortization 3,968 3,962 3,997 3,978 4,004
Marketing 3,236 3,485 3,038 2,622 2,438
Professional
services 2,994 2,478 3,503 2,754 2,820
Capital securities
and preferred stock
dividend 2,958 3,138 3,355 3,449 3,753
Other 14,290 13,562 13,244 13,799 11,556
--------- --------- --------- --------- ---------
Total noninterest
expenses 93,199 92,806 89,152 84,129 78,843
--------- --------- --------- --------- ---------
Income before income taxes
and cumulative effect of
change in accounting
method 60,700 60,018 57,305 59,568 59,337
Income taxes 20,090 20,081 17,904 19,144 18,765
--------- --------- --------- --------- ---------
Income before
cumulative effect
of change in
accounting
method 40,610 39,937 39,401 40,424 40,572
Cumulative effect of
change in
accounting method,
net of taxes (b) - - - - -
--------- --------- --------- --------- ---------
Net income $ 40,610 $ 39,937 $ 39,401 $ 40,424 $40,572
========= ========= ========= ========= =========
Net income per common
share before cumulative
effect of change in
accounting method:
Basic $ 0.89 $ 0.88 $ 0.86 $ 0.85 $ 0.83
Diluted 0.88 0.86 0.85 0.84 0.82
Net income per
common share:
Basic $ 0.89 $ 0.88 $ 0.86 $ 0.85 $ 0.83
Diluted 0.88 0.86 0.85 0.84 0.82
See Selected Financial Highlights for footnotes.
----------------------------------------------------------------------
Retail and Wholesale Interest-Rate Spreads (unaudited)
----------------------------------------------------------------------
Three Months Ended, June March Dec. Sept. June
2003 2003 2002 2002 2002
----------------------------------------------------------------------
Interest-rate spread
--------------------
Total interest-earning
assets 5.06 % 5.35 % 5.61 % 5.93 % 6.09 %
Total interest-bearing
liabilities 2.00 2.09 2.26 2.48 2.57
----- ----- ----- ---- ----
Interest-rate spread 3.06 % 3.26 % 3.35 % 3.45 % 3.52 %
Net interest margin 3.10 3.30 3.39 3.52 3.61
Retail interest-rate spread
---------------------------
Yield on loans 5.30 % 5.52 % 5.71 % 6.01 % 6.23 %
Cost of deposits 1.46 1.57 1.77 1.96 2.06
----- ----- ----- ---- ----
Spread 3.84 % 3.95 % 3.94 % 4.05 % 4.17 %
===== ===== ===== ==== ====
Wholesale interest-rate
spread
-----------------------
Yield on securities 4.52 % 5.02 % 5.40 % 5.77 % 5.84 %
Cost of borrowings 2.88 2.90 3.07 3.40 3.56
----- ----- ----- ---- ----
Spread 1.64 % 2.12 % 2.33 % 2.37 % 2.28 %
===== ===== ===== ==== ====
----------------------------------------------------------------------
Consolidated Average Statements of Condition (unaudited)
----------------------------------------------------------------------
Three Months Ended June 30, 2003
----------------------------------------------------------------------
Fully tax-
Average equivalent
(Dollars in thousands) balance Interest yield/rate
----------------------------------------------------------------------
Assets:
Interest-earning assets:
Loans and loans held
for sale $ 8,951,987 $ 118,965 5.30 %
Securities and
short-term investments 4,170,243 46,142 4.52 (e)
------------- ---------- --------
Total interest-earning
assets 13,122,230 165,107 5.06
---------- --------
Noninterest-earning
assets 949,376
-------------
Total assets $ 14,071,606
=============
Liabilities and Shareholders'
Equity:
Interest-bearing
liabilities:
Interest-bearing deposits $ 6,925,879 $ 28,750 1.67 %
Noninterest-bearing
deposits 989,619 - -
Federal Home Loan Bank
advances 2,386,590 23,286 3.86
Repurchase agreements and
other borrowings 2,153,916 6,783 1.25
Senior notes and subordinated
debt 326,000 5,299 6.50
------------- ---------- --------
Total interest-bearing
liabilities 12,782,004 64,118 2.00
------------- ----------
Noninterest-bearing
liabilities 83,574
-------------
Total liabilities 12,865,578
Capital securities and
preferred stock of
subsidiary corporation 123,475
Shareholders' equity 1,082,553
-------------
Total liabilities and
shareholders' equity $ 14,071,606
=============
100,989
Less: tax-equivalent adjustment (370)
----------
Net interest income $ 100,619
==========
Interest-rate spread 3.06 %
=========
Net interest margin 3.10 %
=========
----------------------------------------------------------------------
Consolidated Average Statements of Condition (unaudited)
----------------------------------------------------------------------
Three Months Ended June 30, 2002
----------------------------------------------------------------------
Fully tax-
Average equivalent
(Dollars in thousands) balance (a) Interest yield/rate
----------------------------------------------------------------------
Assets:
Interest-earning assets:
Loans and loans held
for sale $ 7,300,691 $ 114,027 6.23 %
Securities and
short-term investments 4,135,496 59,637 5.84 (e)
------------- ---------- --------
Total interest-earning
assets 11,436,187 173,664 6.09
----------
Noninterest-earning assets 816,046
-------------
Total assets $ 12,252,233
=============
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 and subordinated
debt 126,000 2,790 8.86
------------- ---------- --------
Total interest-bearing
liabilities 10,979,409 70,802 2.57
----------
Noninterest-bearing
liabilities 72,719
-------------
Total liabilities 11,052,128
Capital securities and
preferred stock of
subsidiary corporation 155,950
Shareholders' equity 1,044,155
-------------
Total liabilities and
shareholders' equity $ 12,252,233
=============
102,862
Less: tax-equivalent adjustment (297)
---------
Net interest income $ 102,565
===========
Interest-rate spread 3.52 %
========
Net interest margin 3.61 %
========
See Selected Financial Highlights for footnotes.
----------------------------------------------------------------------
Consolidated Average Statements of Condition (unaudited)
----------------------------------------------------------------------
Six Months Ended June 30, 2003
----------------------------------------------------------------------
Fully tax-
Average equivalent
(Dollars in thousands) balance Interest yield/rate
----------------------------------------------------------------------
Assets:
Interest-earning
assets:
Loans and loans held
for sale $ 8,753,421 $ 236,667 5.41 %
Securities and
short-term investments 4,202,817 98,231 4.77 (e)
------------- ---------- --------
Total interest-earning
assets 12,956,238 334,898 5.20
----------
Noninterest-earning assets 942,439
-------------
Total assets $ 13,898,677
=============
Liabilities and Shareholders'
Equity:
Interest-bearing
liabilities:
Interest-bearing
deposits $ 6,786,871 $ 58,168 1.73 %
Noninterest-bearing
deposits 970,530 - -
Federal Home Loan Bank
advances 2,483,365 47,077 3.77
Repurchase agreements and
other borrowings 2,077,451 13,035 1.25
Senior notes and subordinated
debt 311,635 10,609 6.81
------------- ---------- --------
Total interest-bearing
liabilities 12,629,852 128,889 2.04
----------
Noninterest-bearing
liabilities 75,137
-------------
Total liabilities 12,704,989
Capital securities and
preferred stock of
subsidiary corporation 127,133
Shareholders' equity 1,066,555
-------------
Total liabilities and
shareholders' equity $ 13,898,677
=============
206,009
Less: tax-equivalent adjustment (714)
----------
Net interest income $ 205,295
===========
Interest-rate spread 3.16 %
========
Net interest margin 3.20 %
========
----------------------------------------------------------------------
Consolidated Average Statements of Condition (unaudited)
Six Months Ended June 30, 2002
----------------------------------------------------------------------
Fully tax-
Average equivalent
(Dollars in thousands) balance(a) Interest yield/rate
----------------------------------------------------------------------
Assets:
Interest-earning
assets:
Loans and loans held
for sale $ 7,149,701 $ 225,522 6.31 %
Securities and
short-term investments 4,090,213 119,539 5.91 (e)
------------- ---------- --------
Total interest-earning
assets 11,239,914 345,061 6.16
----------
Noninterest-earning
assets 845,076
-------------
Total assets $ 12,084,990
=============
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 and subordinated
debt 126,000 5,580 8.86
------------- ---------- --------
Total interest-bearing
liabilities 10,819,372 145,412 2.69
----------
Noninterest-bearing
liabilities 79,751
-------------
Total liabilities 10,899,123
Capital securities and
preferred stock of
subsidiary corporation 157,754
Shareholders' equity 1,028,113
-------------
Total liabilities and
shareholders' equity $ 12,084,990
=============
199,649
Less: tax-equivalent adjustment (601)
---------
Net interest income $ 199,048
==========
Interest-rate spread 3.47 %
========
Net interest margin 3.56 %
========
See Selected Financial Highlights for footnotes.
----------------------------------------------------------------------
Asset Quality (unaudited)
----------------------------------------------------------------------
At or for the Three Months Ended,
------------------------------------
(Dollars in June 30, March 31, Dec. 31, Sept. 30, June 30,
thousands) 2003 2003 2002 2002 2002
----------------------------------------------------------------------
Nonperforming Assets
--------------------
Nonperforming loans:
Commercial:
Commercial $ 27,881 $ 27,784 $ 16,001 $ 19,000 $ 21,626
Specialized industry 3,399 3,399 3,399 27,231 3,399
Equipment financing 8,722 8,960 6,586 5,559 6,531
-------------------------------------------------
Total commercial 40,002 40,143 25,986 51,790 31,556
Commercial real estate 4,920 6,910 9,109 10,124 9,506
Residential 6,596 5,712 7,263 5,521 5,991
Consumer 767 1,510 894 1,062 1,409
-------------------------------------------------
Total nonperforming
loans 52,285 54,275 43,252 68,497 48,462
-------------------------------------------------
Loans held for sale - 3,444 3,706 - -
-------------------------------------------------
Other real estate owned and
repossessed assets:
Commercial 4,224 3,967 2,568 3,007 2,294
Residential 520 234 477 686 635
Consumer 9 1 32 12 170
-------------------------------------------------
Total other real estate
owned and repossessed
assets 4,753 4,202 3,077 3,705 3,099
-------------------------------------------------
Total nonperforming
assets $ 57,038 $ 61,921 $ 50,035 $ 72,202 $ 51,561
=================================================
----------------------------------------------------------------------
Summary of Classified Loans
----------------------------
Substandard:
Accruing $ 62,064 $ 74,398 $ 70,245 $102,436 $106,281
Nonaccruing 44,313 45,005 38,994 62,170 43,634
-------------------------------------------------
Total substandard 106,377 119,403 109,239 164,606 149,915
Doubtful:
Accruing - - - 3 6
Nonaccruing 6,617 7,279 3,743 3,724 3,808
-------------------------------------------------
Total doubtful 6,617 7,279 3,743 3,727 3,814
Loss - - - - -
-------------------------------------------------
Total classified
loans $112,994 $126,682 $112,982 $168,333 $153,729
=================================================
Classified as a
percent of loans 1.3% 1.5% 1.4% 2.1% 2.1%
-------------------------------------------------
----------------------------------------------------------------------
Allowance for Loan Losses (unaudited)
----------------------------------------------------------------------
At or for the Three Months Ended,
-------------------------------------
(Dollars in June 30, March 31, Dec. 31, Sept. 30, June 30,
thousands) 2003 2003 2002 2002 2002
----------------------------------------------------------------------
Allowance for Loan Losses
-------------------------
Beginning balance $ 118,596 $ 116,804 $ 116,118 $ 99,698 $ 98,930
Allowance for purchased
loans - 146 - 16,338 -
Provision 5,000 5,000 16,000 5,000 4,000
Write-down of loans
transferred to held
for sale - - (12,432) - -
Charge-offs:
Residential 160 78 84 249 187
Commercial:
Specialized industry 327 - 2,569 1,892 854
All other
commercial 4,232 3,601 1,031 3,029 2,498
-------------------------------------------------
Total commercial 4,559 3,601 3,600 4,921 3,352
Commercial real estate - - - - -
Consumer 153 195 220 246 250
-------------------------------------------------
Total
charge-offs 4,872 3,874 3,904 5,416 3,789
Recoveries (515) (520) (1,022) (498) (557)
-------------------------------------------------
Net loan
charge-offs 4,357 3,354 2,882 4,918 3,232
-------------------------------------------------
Ending balance $ 119,239 $ 118,596 $ 116,804 $ 116,118 $ 99,698
=================================================
Asset Quality Ratios:
---------------------
Allowance for loan
losses / total loans 1.37 % 1.39 % 1.48 % 1.45 % 1.36%
Net charge-offs/ average
loans (annualized) 0.20 0.16 0.14 0.26 0.18
Nonperforming loans /
total loans 0.60 0.64 0.55 0.86 0.66
Nonperforming assets /
total assets 0.39 0.43 0.37 0.54 0.41
Allowance for loan
losses / nonperforming
loans 228.06 218.51 270.05 169.52 205.72
CONTACT: Webster Financial Corporation
Media Contact:
Clark Finley, 203-578-2429
cfinley@westerbank.com
or
Investor Contact:
Terry Mangan, 203-578-2318
tmangan@websterbank.com
SOURCE: Webster Financial Corporation