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WATERBURY, Conn.--(BUSINESS WIRE)--Oct. 15, 2003--Webster
Financial Corporation (NYSE:WBS), the holding company for Webster
Bank, today announced that net income per diluted share was $.89 for
the third quarter of 2003, compared to $.84 in the year-ago period, an
increase of six percent. Net income for the quarter totaled $41.3
million, compared to $40.4 million in the year-ago period.
For the first nine months of 2003, net income was $2.63 per
diluted share, compared to $2.31 in the year-ago period. Net income
was $121.9 million, compared to $113.3 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 nine months of 2002
was $120.6 million or $2.46 per diluted share.
"In a quarter marked by historic milestones for Webster, we are
pleased to report significant progress advanced on Webster's strategic
plan, including double-digit growth in core loans and deposits,
improved asset quality and a breakout acquisition opportunity," stated
Webster chairman and chief executive officer, James C. Smith. "Webster
is fast fulfilling its promise as a leading regional financial
services provider."
In a major step toward regional expansion, Webster announced last
week a definitive agreement to acquire FIRSTFED AMERICA BANCORP, INC.,
headquartered in Swansea, Massachusetts, the holding company for First
Federal Savings Bank of America. "This partnership creates new
opportunities for growth across southern New England, as we expand our
footprint from lower Fairfield County through Connecticut and Rhode
Island to southeastern Massachusetts," stated Smith.
After 68 years as a thrift institution, Webster applied in
September to the Office of the Comptroller of the Currency for a
national commercial bank charter.
Revenues and Expenses
Net interest income was $98.2 million in the third quarter of
2003, compared to $102.6 million in the year-ago period and $100.6
million in the second quarter. The decline resulted from continued
lower interest rates during the quarter and the acceleration of
prepayments on fixed rate loans and investments, with reinvestments
into lower yielding assets. Also impacting the quarter was the
implementation on July 1, 2003 of Statement of Financial Accounting
Standards (SFAS) No. 150, "Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity,"
which required the reclassification of $2.8 million of capital trust
securities expense from noninterest expense to interest expense.
Excluding the effect of SFAS No. 150, net interest income would have
grown slightly, compared to the second quarter, as a result of the
growth in the loan portfolio.
Webster's net interest margin (annualized net interest income as a
percentage of average earning assets) for the quarter was 2.91
percent, compared to 3.52 percent in the year-ago period and 3.10
percent in the second quarter. The implementation of SFAS No. 150
accounted for eight basis points of the decline in the net interest
margin during the quarter. Webster's margin is positioned to benefit
from an improving economy and the higher interest rates that likely
would result.
In the third quarter of 2003, total noninterest income, including
securities gains, increased by 40 percent to $64.5 million, up from
$46.1 million in the year-ago period. Securities gains totaled $4.6
million in the third quarter, compared to $4.9 million in the year-ago
period. Excluding securities gains, total fee revenue grew by 46
percent to $60.0 million from $41.2 million in the year-ago period.
Deposit service fees were up 13 percent year over year, due primarily
to growth in accounts. Insurance revenues were up 56 percent due
primarily to the Mathog & Moniello acquisition in the first quarter of
2003. Loan and loan servicing fees increased 78 percent to $7.8
million, due primarily to higher prepayment penalties, line usage fees
and the year-ago writedown of mortgage servicing rights. Net gains on
sales of loans and loan servicing totaled $9.8 million, compared to
$1.8 million a year ago, with $5.6 million of the gains due to
continued strength in mortgage origination volumes owing to record low
interest rates. The remaining balance of $4.2 million were gains from
the sale of telecommunications loans, which in December 2002 were
charged down to their realizable value and transferred to loans held
for sale.
Total noninterest expenses for the 2003 third quarter were $90.9
million, up from $84.1 million one year ago and a decrease from $93.2
million in the second quarter of 2003. Excluding the implementation of
SFAS No. 150 and reclassification of $2.8 million of capital trust
securities expense to interest expense, Webster's total noninterest
expenses would have been $93.7 million in the third quarter,
relatively unchanged from the second quarter. Webster expects that
core expenses will remain flat in the 2003 fourth quarter.
Balance Sheet Growth
At September 30, 2003, total assets were $14.6 billion, up 10
percent from $13.3 billion one year ago. Total loans of $9.1 billion
at September 30, 2003 increased 14 percent from $8.0 billion from a
year ago. Deposits totaled $8.1 billion at September 30, 2003 and grew
by approximately $800 million, or 11 percent, compared to a year ago.
"Webster's strategic plan has continued to drive loan and deposit
growth over the past year," stated Webster president and chief
operating officer, William T. Bromage. "In this challenging economic
climate, we have delivered on our promise to increase loans and
deposits faster than the market while maintaining our disciplined
approach to credit quality."
At the end of the third quarter, commercial loans, including
commercial real estate, were $3.2 billion, up 11 percent from $2.9
billion a year ago. Consumer loans increased 36 percent to $2.1
billion, compared to $1.6 billion one year ago, with growth over the
past year led by Webster's home equity product offering. Commercial
and consumer loans comprised 59 percent of total loans at September
30, 2003, compared to 56 percent a year ago.
Webster's mortgage banking business generated $1.3 billion in
mortgage originations in the third quarter, compared to $0.8 billion a
year ago. For the first nine months of 2003, mortgage originations
totaled $3.4 billion, an increase of 97 percent over the same period
in 2002. Webster now has regional mortgage offices in Atlanta,
Chicago, Phoenix and Seattle, in addition to its mortgage headquarters
in Cheshire, CT.
Total deposits were $8.1 billion at September 30, 2003, an
increase of 11 percent from $7.4 billion a year ago. Core deposits at
September 30, 2003 represented 67 percent of total deposits, up from
63 percent a year ago. Webster's growth in deposits was driven in part
by its High Performance Checking product initiated in August 2002 and
the continuing success of its de novo branches in Fairfield County,
Connecticut.
Book value per common share of $24.22 at September 30, 2003
increased from $22.43 one year ago. Tangible book value per share of
$17.73 at September 30, 2003 increased from $16.52 one year ago.
Asset Quality
Nonperforming assets totaled $46.1 million or 0.32 percent of
total assets at September 30, 2003, compared to $72.2 million or 0.54
percent a year ago and $57.0 million or 0.39 percent at June 30, 2003.
Classified loans decreased 35 percent to $109.4 million at September
30, 2003 from $168.3 million one year ago and decreased 3 percent from
$113.0 million at June 30, 2003. Classified loans were 1.2 percent of
total loans at the end of the third quarter, compared to 2.1 percent
one year ago and 1.3 percent at June 30, 2003.
"Webster follows a disciplined approach to portfolio management,"
stated Webster chief financial officer, William J. Healy. "Our ability
to identify and manage problem loans at an early stage has contributed
significantly to the improvement in our asset quality."
The allowance for loan losses totaled $117.7 million, or 1.29
percent of total loans at September 30, 2003, compared to $116.1
million, or 1.45 percent, a year ago and $119.2 million, or 1.37
percent, at June 30, 2003. The ratio of the allowance to nonperforming
loans at September 30, 2003 increased to 284 percent, compared to 170
percent a year ago and 228 percent at June 30, 2003. The increase is
due primarily to a 39 percent decline in nonperforming loans from a
year ago.
Webster's net loan charge-offs in the third quarter of 2003 were
$11.5 million, compared to $4.9 million in the year-ago period. The
annualized net charge-off ratio was 52 basis points in the 2003 third
quarter, compared to 26 basis points in the year-ago period. The
increase in net charge-offs is entirely attributable to a single
commercial nonperforming loan.
The provision for loan losses totaled $10.0 million in the third
quarter, compared to $5.0 million in both the year-ago period and the
second quarter of 2003. The $5.0 million increase over each period is
due primarily to the higher level of net charge-offs in the third
quarter. For the first nine months of 2003, the provision for loan
losses totaled $20.0 million while net loan charge-offs were $19.2
million.
Strategic Actions
Webster announced in July that its Board of Directors declared a
regular cash dividend of $.21 per common share, the 64th consecutive
dividend since Webster first paid a dividend in 1987, and authorized
the repurchase of up to approximately 2.3 million shares. The 2.3
million shares authorized for stock repurchase represented 5 percent
of the company's 45.6 million shares of outstanding stock.
Webster Insurance also announced in July the acquisition of LJF
Insurance Services, Inc., a full-service insurance agency with offices
in Southport and Norwalk, Connecticut.
In September, Webster Bank filed an application with the Office of
the Comptroller of the Currency to convert to a national bank charter.
Webster Bank currently is a federal savings bank regulated by the
Office of Thrift Supervision (OTS). As part of its conversion, Webster
also is filing an application with the Federal Reserve System to
become a financial holding company. Webster expects to complete the
conversion in late 2003 or early 2004.
Webster announced in September that it had completed a $75 million
capital trust preferred stock offering. The securities bear an
interest rate of three-month LIBOR plus 2.95 percent, and will mature
on September 17, 2033. The securities constitute new funding and
further strengthen Webster's existing capital.
On October 7, Webster announced a definitive agreement to acquire
FIRSTFED AMERICA BANCORP, INC. (AMEX:FAB), headquartered in Swansea,
Massachusetts and the holding company for First Federal Savings Bank
of America. The agreement is a combination stock and cash transaction
valued at approximately $465 million, or $24.50 per common share of
FIRSTFED stock, payable 60 percent in Webster stock and 40 percent in
cash. FIRSTFED reported $2.7 billion in assets and 26 branches at June
30, 2003. The combined bank would rank as the 46th largest in the
United States, with $16 billion in assets, market capitalization of
$2.2 billion and a 141-branch retail footprint in Connecticut,
Massachusetts and Rhode Island.
Also in October, Webster opened a new branch in Norwalk,
Connecticut, marking the fifth branch opening in its de novo branch
expansion plan into Fairfield County since February 2002.
Webster Financial Corporation is the holding company for Webster
Bank and Webster Insurance. With $14.6 billion in assets, Webster
provides business and consumer banking, mortgage, insurance, trust and
investment services through 110 banking offices, 220 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, the
insurance premium finance company, 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, October 15, 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 1-800-901-5217 (Access
Code: 62139638). 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 Nine
Months Ended Months Ended
(In thousands, except September 30, September 30,
per share data) 2003 2002 2003 2002
----------------------------------------------------------------------
Net income and performance
ratios (annualized):
-----------------------
Net income $ 41,315 $ 40,424 $ 121,862 $ 113,331
Net income per diluted
common share 0.89 0.84 2.63 2.31
Return on average
shareholders' equity 15.54 % 15.30 % 15.25 % 14.56 %
Return on average
assets 1.13 1.28 1.15 1.23
Net income and performance
ratios before cumulative
effect of change in
accounting method
(annualized):
-----------------------
Net income $ 41,315 $ 40,424 $ 121,862 $ 113,331
Cumulative effect of
change in accounting
method (a) - - - 7,280
--------- --------- --------- ---------
Net income before
cumulative effect of
change in accounting
method 41,315 40,424 121,862 120,611
Net income per diluted
common share 0.89 0.84 2.63 2.46
Return on average
shareholders' equity 15.54 % 15.30 % 15.25 % 15.50 %
Return on average
assets 1.13 1.28 1.15 1.31
Noninterest income as a
percentage of total
revenue 39.66 31.01 36.70 29.66
Efficiency ratio (b) 55.90 56.58 57.77 55.77
Cash income and
performance ratios
(annualized) (c):
-----------------------
Net income $ 41,315 $ 40,424 $ 121,862 $ 113,331
Cumulative effect of
change in accounting
method (b) - - - 7,280
Tax-effected intangible
amortization 2,601 2,586 7,755 7,813
--------- --------- --------- ---------
Cash income 43,916 43,010 129,617 128,424
Cash income per diluted
common share 0.95 0.89 2.80 2.62
Cash return on average
shareholders' equity 16.52 % 16.28 % 16.22 % 16.50 %
Cash return on average
assets 1.21 1.36 1.22 1.40
Asset Quality:
-----------------------
Allowance for loan
losses $ 117,707 $ 116,118 $ 117,707 $ 116,118
Nonperforming assets 46,063 72,202 46,063 72,202
Allowance for loan
losses / total loans 1.29 % 1.45 % 1.29 % 1.45 %
Net charge-offs/
average loans
(annualized) 0.52 0.26 0.30 0.19
Nonperforming loans /
total loans 0.46 0.86 0.46 0.86
Nonperforming assets /
total assets 0.32 0.54 0.32 0.54
Allowance for loan
losses / nonperforming
loans 283.61 169.52 283.61 169.52
Other ratios (annualized):
-----------------------
Shareholders' equity /
total assets 7.55 % 7.84 % 7.55 % 7.84 %
Interest-rate spread 2.88 3.45 3.07 3.46
Net interest margin 2.91 3.52 3.10 3.55
Share related:
-----------------------
Book value per common
share $ 24.22 $ 22.43 $ 24.22 $ 22.43
Tangible book value per
common share 17.73 16.52 17.73 16.52
Common stock closing
price 39.88 33.58 39.88 33.58
Dividends declared per
common share 0.21 0.19 0.61 0.55
Common shares issued
and outstanding 45,562 46,415 45,562 46,415
Basic shares (average) 45,444 47,303 45,450 48,240
Diluted shares (average) 46,313 48,121 46,249 49,091
Footnotes:
(a) 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.
(b) Noninterest expense as a percentage of net interest income
plus noninterest income.
(c) Net income excluding tax-effected intangible amortization and
cumulative effect of change in accounting method.
(d) For purposes of this computation, unrealized gains (losses)
are excluded from the average balance for rate calculations.
----------------------------------------------------------------------
Consolidated Statements of Condition (unaudited)
----------------------------------------------------------------------
September 30, June 30, September 30,
(Dollars in thousands) 2003 2003 2002
----------------------------------------------------------------------
Assets:
Cash and due from depository
institutions $ 214,566 $ 254,645 $ 212,606
Short-term investments 26,196 20,671 30,542
Securities:
Trading, at fair value 56 3,893 1,104
Available for sale, at fair
value 4,284,134 4,395,400 4,106,734
------------ ------------ ------------
Total securities 4,284,190 4,399,293 4,107,838
Loans held for sale 278,402 321,055 315,585
Loans:
Residential mortgages 3,758,106 3,541,922 3,538,632
Commercial 2,018,279 2,010,109 1,884,215
Commercial real estate 1,187,065 1,144,429 1,005,296
Consumer 2,131,878 2,013,486 1,562,849
------------ ------------ ------------
Total loans 9,095,328 8,709,946 7,990,992
Allowance for loan losses (117,707) (119,239) (116,118)
------------ ------------ ------------
Loans, net 8,977,621 8,590,707 7,874,874
Accrued interest receivable 53,091 54,034 58,480
Premises and equipment, net 85,521 85,062 82,667
Goodwill and intangible assets 315,556 316,989 297,054
Cash surrender value of life
insurance 178,474 176,324 169,803
Prepaid expenses and other
assets 195,166 233,792 124,124
------------ ------------ ------------
Total assets $ 14,608,783 $ 14,452,572 $ 13,273,573
============ ============ ============
Liabilities and Shareholders' Equity:
Deposits:
Demand deposits $ 1,017,870 $ 1,035,389 $ 911,283
NOW accounts 1,010,071 1,064,336 863,625
Money market accounts 2,301,148 2,249,805 1,871,007
Savings accounts 1,113,085 1,115,976 987,470
Certificates of deposit 2,590,513 2,555,442 2,637,066
------------ ------------ ------------
Total retail deposits 8,032,687 8,020,948 7,270,451
Treasury deposits 100,884 64,754 82,972
------------ ------------ ------------
Total deposits 8,133,571 8,085,702 7,353,423
Federal Home Loan Bank advances 2,149,762 2,185,830 2,362,298
Federal funds purchased and
securities sold under
agreements to repurchase 2,531,875 2,480,666 2,165,665
Other long-term debt 511,255 326,000 126,000
Accrued expenses and other
liabilities 169,301 155,233 82,679
------------ ------------ ------------
Total liabilities 13,495,764 13,233,431 12,090,065
Corporation-obligated
mandatorily redeemable
capital securities of
subsidiary trusts - 110,255 132,650
Preferred stock of subsidiary
corporation 9,577 9,577 9,577
Shareholders' equity 1,103,442 1,099,309 1,041,281
------------ ------------ ------------
Total liabilities and
shareholders' equity $ 14,608,783 $ 14,452,572 $ 13,273,573
============ ============ ============
See Selected Financial Highlights for footnotes.
----------------------------------------------------------------------
Consolidated Statements of Income (unaudited)
----------------------------------------------------------------------
Three Months Ended Nine Months Ended
(In thousands, except September 30, September 30,
per share data) 2003 2002 2003 2002
----------------------------------------------------------------------
Interest income:
Loans and loans held
for sale $ 119,646 $ 118,492 $ 356,313 $ 344,014
Securities and short-
term investments 42,050 55,507 139,567 174,445
--------- --------- --------- ---------
Total interest income 161,696 173,999 495,880 518,459
--------- --------- --------- ---------
Interest expense:
Deposits 26,824 36,169 84,992 112,787
Borrowings 36,717 35,240 107,438 104,034
--------- --------- --------- ---------
Total interest expense 63,541 71,409 192,430 216,821
--------- --------- --------- ---------
Net interest income 98,155 102,590 303,450 301,638
Provision for loan
losses 10,000 5,000 20,000 13,000
--------- --------- --------- ---------
Net interest income
after provision for
loan losses 88,155 97,590 283,450 288,638
--------- --------- --------- ---------
Noninterest income:
Deposit service fees 17,868 15,797 52,287 44,527
Insurance revenue 9,954 6,386 30,898 20,198
Loan and loan servicing
fees 7,755 4,346 18,383 12,442
Financial advisory
services 4,833 5,997 15,493 14,313
Wealth and investment
advisors 4,826 3,770 13,925 12,225
Gain on sale of loans
and loan servicing, net 9,829 1,839 16,666 3,471
Increase in cash
surrender value of life
insurance 2,150 2,310 6,408 6,779
Other 2,737 750 6,021 3,807
--------- --------- --------- ---------
Total fee revenue 59,952 41,195 160,081 117,762
Gain on sale of
securities, net 4,560 4,912 15,859 9,443
--------- --------- --------- ---------
Total noninterest
income 64,512 46,107 175,940 127,205
--------- --------- --------- ---------
Noninterest expenses:
Compensation and
benefits 51,592 43,303 152,659 124,699
Occupancy 7,457 6,665 23,228 19,162
Furniture and equipment 8,255 7,559 23,351 20,939
Intangible amortization 4,001 3,978 11,931 12,020
Marketing 2,729 2,622 9,450 7,484
Professional services 2,582 2,754 8,054 7,901
Capital securities and
preferred stock
dividend 216 3,449 6,312 11,034
Other 14,091 13,799 41,943 35,932
--------- --------- --------- ---------
Total noninterest
expenses 90,923 84,129 276,928 239,171
--------- --------- --------- ---------
Income before income
taxes and cumulative
effect of change in
accounting method 61,744 59,568 182,462 176,672
Income taxes 20,429 19,144 60,600 56,061
--------- --------- --------- ---------
Income before
cumulative effect of
change in accounting
method 41,315 40,424 121,862 120,611
Cumulative effect of
change in accounting
method, net of
taxes (a) - - - (7,280)
--------- --------- --------- ---------
Net income $ 41,315 $ 40,424 $ 121,862 $ 113,331
========= ========= ========= =========
Net income per common
share before cumulative
effect of change in
accounting method:
Basic $ 0.91 $ 0.85 $ 2.68 $ 2.50
Diluted 0.89 0.84 2.63 2.46
Net income per common
share:
Basic $ 0.91 $ 0.85 $ 2.68 $ 2.35
Diluted 0.89 0.84 2.63 2.31
See Selected Financial Highlights for footnotes.
----------------------------------------------------------------------
Consolidated Statements of Income (unaudited)
----------------------------------------------------------------------
Three Months Ended
(In thousands,
except per Sept. 30, June 30, March 31, Dec. 31, Sept. 30,
share data) 2003 2003 2003 2002 2002
---------------------------------------------------------------------
Interest income:
Loans and loans held
for sale $ 119,646 $ 118,965 $ 117,702 $ 120,386 $ 118,492
Securities and
short-term
investments 42,050 45,772 51,745 53,189 55,507
--------- --------- --------- --------- ---------
Total interest
income 161,696 164,737 169,447 173,575 173,999
--------- --------- --------- --------- ---------
Interest expense:
Deposits 26,824 28,750 29,418 33,375 36,169
Borrowings 36,717 35,368 35,353 36,110 35,240
--------- --------- --------- --------- ---------
Total interest
expense 63,541 64,118 64,771 69,485 71,409
--------- --------- --------- --------- ---------
Net interest income 98,155 100,619 104,676 104,090 102,590
Provision for loan
losses 10,000 5,000 5,000 16,000 5,000
--------- --------- --------- --------- ---------
Net interest income
after provision
for loan losses 88,155 95,619 99,676 88,090 97,590
--------- --------- --------- --------- ---------
Noninterest income:
Deposit service fees 17,868 17,529 16,890 17,083 15,797
Insurance revenue 9,954 9,980 10,964 6,875 6,386
Loan and loan
servicing fees 7,755 4,723 5,905 6,089 4,346
Financial advisory
services 4,833 5,229 5,431 4,964 5,997
Wealth and investment
advisors 4,826 4,521 4,578 3,693 3,770
Gain on sale of
loans and loan
servicing, net 9,829 4,066 2,771 2,337 1,839
Increase in cash
surrender value of
life insurance 2,150 2,143 2,115 2,263 2,310
Other 2,737 1,423 1,861 1,129 750
--------- --------- --------- --------- ---------
Total fee revenue 59,952 49,614 50,515 44,433 41,195
Gain on sale of
securities, net 4,560 8,666 2,633 13,934 4,912
--------- --------- --------- --------- ---------
Total noninterest
income 64,512 58,280 53,148 58,367 46,107
Noninterest expenses:
Compensation and
benefits 51,592 50,506 50,561 46,343 43,303
Occupancy 7,457 7,672 8,099 7,444 6,665
Furniture and
equipment 8,255 7,575 7,521 8,228 7,559
Intangible
amortization 4,001 3,968 3,962 3,997 3,978
Marketing 2,729 3,236 3,485 3,038 2,622
Professional services 2,582 2,994 2,478 3,503 2,754
Capital securities
and preferred stock
dividend 216 2,958 3,138 3,355 3,449
Other 14,091 14,290 13,562 13,244 13,799
--------- --------- --------- --------- ---------
Total noninterest
expenses 90,923 93,199 92,806 89,152 84,129
--------- --------- --------- --------- ---------
Income before income
taxes and cumulative
effect of change in
accounting method 61,744 60,700 60,018 57,305 59,568
Income taxes 20,429 20,090 20,081 17,904 19,144
--------- --------- --------- --------- ---------
Income before
cumulative effect
of change in
accounting method 41,315 40,610 39,937 39,401 40,424
Cumulative effect of
change in accounting
method, net of
taxes (a) - - - - -
--------- --------- --------- --------- ---------
Net income $ 41,315 $ 40,610 $ 39,937 $ 39,401 $ 40,424
========= ========= ========= ========= =========
Net income per common
share before
cumulative effect
of change in
accounting method:
Basic $ 0.91 $ 0.89 $ 0.88 $ 0.86 $ 0.85
Diluted 0.89 0.88 0.86 0.85 0.84
Net income per
common share:
Basic $ 0.91 $ 0.89 $ 0.88 $ 0.86 $ 0.85
Diluted 0.89 0.88 0.86 0.85 0.84
See Selected Financial Highlights for footnotes.
----------------------------------------------------------------------
Retail and Wholesale Interest-Rate Spreads (unaudited)
----------------------------------------------------------------------
Three Months Ended, September June March December September
2003 2003 2003 2002 2002
----------------------------------------------------------------------
Interest-rate spread
--------------------
Total interest-earning
assets 4.75 % 5.06 % 5.35 % 5.61 % 5.93 %
Total interest-bearing
liabilities 1.87 2.00 2.09 2.26 2.48
---- ---- ---- ---- ----
Interest-rate spread 2.88 % 3.06 % 3.26 % 3.35 % 3.45 %
Net interest margin 2.91 3.10 3.30 3.39 3.52
Retail interest-rate spread
---------------------------
Yield on loans and loans
held for sale 5.09 % 5.30 % 5.52 % 5.71 % 6.01 %
Cost of deposits 1.32 1.46 1.57 1.77 1.96
---- ---- ---- ---- ----
Spread 3.77 % 3.84 % 3.95 % 3.94 % 4.05 %
==== ==== ==== ==== ====
Wholesale interest-rate
spread
-----------------------
Yield on securities and
short-term investments 4.04 % 4.52 % 5.02 % 5.40 % 5.77 %
Cost of borrowings 2.70 2.88 2.90 3.07 3.40
---- ---- ---- ---- ----
Spread 1.34 % 1.64 % 2.12 % 2.33 % 2.37 %
==== ==== ==== ==== ====
----------------------------------------------------------------------
Consolidated Average Statements of Condition (unaudited)
----------------------------------------------------------------------
Three Months Ended September 30, 2003
----------------------------------------------------------------------
Fully tax-
Average equivalent
(Dollars in thousands) balance Interest yield/rate
----------------------------------------------------------------------
Assets:
Interest-earning assets:
Loans $ 8,953,970 $ 114,792 5.09 %
Loans held for sale 385,059 4,854 5.04
Securities 4,201,679 42,408 4.04 (d)
Short-term investments 18,593 56 1.18
------------ ---------- ----------
Total interest-earning
assets 13,559,301 162,110 4.75
----------
Noninterest-earning assets 1,017,648
------------
Total assets $ 14,576,949
============
Liabilities and Shareholders'
Equity:
Interest-bearing
liabilities:
Demand deposits $ 1,042,556 $ - - %
Savings, NOW and money
market deposits 4,393,262 9,851 0.89
Time deposits 2,642,488 16,973 2.55
------------ ---------- ----------
Total interest-bearing
deposits 8,078,306 26,824 1.32
Federal Home Loan Bank
advances 2,319,927 22,127 3.73
Fed funds and repurchase
agreements 2,576,065 7,486 1.14
Other long-term debt 447,643 7,104 6.35
------------ ---------- ----------
Total borrowings 5,343,635 36,717 2.70
------------ ---------- ----------
Total interest-bearing
liabilities 13,421,941 63,541 1.87
Noninterest-bearing
liabilities 81,836
------------
Total liabilities 13,503,777
Capital securities and
preferred stock of
subsidiary corporation 9,577
Shareholders' equity 1,063,595
------------
Total liabilities and
shareholders' equity $ 14,576,949
============
98,569
Less: tax-equivalent
adjustment (414)
----------
Net interest income $ 98,155
==========
Interest-rate spread 2.88 %
==========
Net interest margin 2.91 %
==========
----------------------------------------------------------------------
Consolidated Average Statements of Condition (unaudited)
----------------------------------------------------------------------
Three Months Ended September 30, 2002
----------------------------------------------------------------------
Fully tax-
Average equivalent
(Dollars in thousands) balance Interest yield/rate
----------------------------------------------------------------------
Assets:
Interest-earning assets:
Loans $ 7,636,246 $ 115,846 6.01 %
Loans held for sale 190,867 2,646 5.55
Securities 3,946,460 55,758 5.79 (d)
Short-term investments 14,712 49 1.30
------------ ---------- ----------
Total interest-earning
assets 11,788,285 174,299 5.93
----------
Noninterest-earning assets 857,424
------------
Total assets $ 12,645,709
============
Liabilities and Shareholders'
Equity:
Interest-bearing
liabilities:
Demand deposits $ 923,065 $ - - %
Savings, NOW and money
market deposits 3,617,743 13,190 1.45
Time deposits 2,769,955 22,979 3.29
------------ ---------- ----------
Total interest-bearing
deposits 7,310,763 36,169 1.96
Federal Home Loan Bank
advances 2,312,409 25,348 4.29
Fed funds and repurchase
agreements 1,619,238 7,102 1.72
Other long-term debt 126,000 2,790 8.86
------------ ---------- ----------
Total borrowings 4,057,647 35,240 3.40
------------ ---------- ----------
Total interest-bearing
liabilities 11,368,410 71,409 2.48
Noninterest-bearing
liabilities 76,724
------------
Total liabilities 11,445,134
Capital securities and
preferred stock of
subsidiary corporation 144,041
Shareholders' equity 1,056,534
------------
Total liabilities and
shareholders' equity $ 12,645,709
============
102,890
Less: tax-equivalent
adjustment (300)
----------
Net interest income $ 102,590
==========
Interest-rate spread 3.45 %
==========
Net interest margin 3.52 %
==========
See Selected Financial Highlights for footnotes.
----------------------------------------------------------------------
Consolidated Average Statements of Condition (unaudited)
----------------------------------------------------------------------
----------------------------------------------------------------------
Nine Months Ended September 30, 2003
----------------------------------------------------------------------
Fully tax-
Average equivalent
(Dollars in thousands) balance Interest yield/rate
----------------------------------------------------------------------
Assets:
Interest-earning assets:
Loans $ 8,608,235 $ 342,793 5.29 %
Loans held for sale 342,533 13,520 5.26
Securities 4,185,538 140,521 4.54 (d)
Short-term investments 23,161 174 0.99
------------ ---------- ----------
Total interest-earning
assets 13,159,467 497,008 5.05
----------
Noninterest-earning assets 967,783
------------
Total assets $ 14,127,250
============
Liabilities and Shareholders'
Equity:
Interest-bearing
liabilities:
Demand deposits $ 994,803 $ - - %
Savings, NOW and money
market deposits 4,218,937 32,403 1.03
Time deposits 2,651,806 52,589 2.65
------------ ---------- ----------
Total interest-bearing
deposits 7,865,546 84,992 1.44
Federal Home Loan Bank
advances 2,428,287 69,204 3.76
Fed funds and repurchase
agreements 2,245,481 20,521 1.21
Other long-term debt 357,469 17,713 6.61
------------ ---------- ----------
Total borrowings 5,031,237 107,438 2.82
------------ ---------- ----------
Total interest-bearing
liabilities 12,896,783 192,430 1.98
Noninterest-bearing
liabilities 77,393
------------
Total liabilities 12,974,176
Capital securities and
preferred stock of
subsidiary corporation 87,517
Shareholders' equity 1,065,557
------------
Total liabilities and
shareholders' equity $ 14,127,250
============
304,578
Less: tax-equivalent
adjustment (1,128)
----------
Net interest income $ 303,450
==========
Interest-rate spread 3.07 %
==========
Net interest margin 3.10 %
==========
----------------------------------------------------------------------
Consolidated Average Statements of Condition (unaudited)
----------------------------------------------------------------------
----------------------------------------------------------------------
Nine Months Ended September 30, 2002
----------------------------------------------------------------------
Fully tax-
Average equivalent
(Dollars in thousands) balance Interest yield/rate
----------------------------------------------------------------------
Assets:
Interest-earning assets:
Loans $ 7,254,589 $ 338,927 6.20 %
Loans held for sale 123,397 5,087 5.50
Securities 4,024,696 175,048 5.89 (d)
Short-term investments 22,031 298 1.78
------------ ---------- ----------
Total interest-earning
assets 11,424,713 519,360 6.08
----------
Noninterest-earning assets 849,422
------------
Total assets $ 12,274,135
============
Liabilities and Shareholders'
Equity:
Interest-bearing
liabilities:
Demand deposits $ 880,540 $ - - %
Savings, NOW and money
market deposits 3,458,844 36,725 1.42
Time deposits 2,846,438 76,062 3.57
------------ ---------- ----------
Total interest-bearing
deposits 7,185,822 112,787 2.10
Federal Home Loan Bank
advances 2,324,385 77,626 4.40
Fed funds and repurchase
agreements 1,368,187 18,038 1.74
Other long-term debt 126,000 8,370 8.86
------------ ---------- ----------
Total borrowings 3,818,572 104,034 3.60
------------ ---------- ----------
Total interest-bearing
liabilities 11,004,394 216,821 2.62
Noninterest-bearing
liabilities 78,913
------------
Total liabilities 11,083,307
Capital securities and
preferred stock of
subsidiary corporation 153,132
Shareholders' equity 1,037,696
------------
Total liabilities and
shareholders' equity $ 12,274,135
============
302,539
Less: tax-equivalent
adjustment (901)
----------
Net interest income $ 301,638
==========
Interest-rate spread 3.46 %
==========
Net interest margin 3.55 %
==========
See Selected Financial Highlights for footnotes.
----------------------------------------------------------------------
Asset Quality (unaudited)
----------------------------------------------------------------------
At or for the Three Months Ended,
--------------------------------
(Dollars in Sept. 30, June 30, March 31, Dec. 31, Sept. 30,
thousands) 2003 2003 2003 2002 2002
----------------------------------------------------------------------
Nonperforming Assets
--------------------
Nonperforming loans:
Commercial:
Commercial $ 17,024 $ 27,881 $ 27,784 $ 16,001 $ 19,000
Specialized
industry 6,493 3,399 3,399 3,399 27,231
Equipment financing 8,241 8,722 8,960 6,586 5,559
--------------------------------------------------
Total commercial 31,758 40,002 40,143 25,986 51,790
Commercial real
estate 1,940 4,920 6,910 9,109 10,124
Residential 7,087 6,596 5,712 7,263 5,521
Consumer 718 767 1,510 894 1,062
--------------------------------------------------
Total nonperforming
loans 41,503 52,285 54,275 43,252 68,497
--------------------------------------------------
Loans held for sale - - 3,444 3,706 -
--------------------------------------------------
Other real estate owned
and repossessed assets:
Commercial 4,019 4,224 3,967 2,568 3,007
Residential 541 520 234 477 686
Consumer - 9 1 32 12
--------------------------------------------------
Total other real estate
owned and repossessed
assets 4,560 4,753 4,202 3,077 3,705
--------------------------------------------------
Total nonperforming
assets $ 46,063 $ 57,038 $ 61,921 $ 50,035 $ 72,202
==================================================
----------------------------------------------------------------------
Summary of Classified Loans
---------------------------
Substandard:
Accruing $ 69,216 $ 62,064 $ 74,398 $ 70,245 $ 102,436
Nonaccruing 36,365 44,313 45,005 38,994 62,170
--------------------------------------------------
Total
substandard 105,581 106,377 119,403 109,239 164,606
Doubtful:
Accruing - - - - 3
Nonaccruing 3,792 6,617 7,279 3,743 3,724
--------------------------------------------------
Total doubtful 3,792 6,617 7,279 3,743 3,727
Loss - - - - -
--------------------------------------------------
Total classified
loans $ 109,373 $ 112,994 $ 126,682 $ 112,982 $ 168,333
==================================================
Classified as a
percent of loans 1.2% 1.3% 1.5% 1.4% 2.1%
--------------------------------------------------
----------------------------------------------------------------------
Allowance for Loan Losses (unaudited)
----------------------------------------------------------------------
At or for the Three Months Ended,
----------------------------------
(Dollars in Sept. 30, June 30, March 31, Dec. 31, Sept. 30,
thousands) 2003 2003 2003 2002 2002
----------------------------------------------------------------------
Allowance for Loan Losses
-------------------------
Beginning balance $ 119,239 $ 118,596 $ 116,804 $ 116,118 $ 99,698
Allowance for
purchased loans - - 146 - 16,338
Provision 10,000 5,000 5,000 16,000 5,000
Write-down of loans
transferred to held
for sale - - - (12,432) -
Charge-offs:
Residential 39 160 78 84 249
Commercial:
Specialized
industry 3,870 327 - 2,569 1,892
All other
commercial 9,361 4,232 3,601 1,031 3,029
---------------------------------------------------
Total
commercial 13,231 4,559 3,601 3,600 4,921
Commercial real
estate - - - - -
Consumer 122 153 195 220 246
---------------------------------------------------
Total charge-
offs 13,392 4,872 3,874 3,904 5,416
Recoveries (1,860) (515) (520) (1,022) (498)
---------------------------------------------------
Net loan charge-
offs 11,532 4,357 3,354 2,882 4,918
---------------------------------------------------
Ending balance $ 117,707 $ 119,239 $ 118,596 $ 116,804 $ 116,118
===================================================
Asset Quality Ratios:
---------------------
Allowance for loan
losses / total loans 1.29% 1.37 % 1.39 % 1.48 % 1.45 %
Net charge-offs/
average loans
(annualized) 0.52 0.20 0.16 0.14 0.26
Nonperforming loans
/ total loans 0.46 0.60 0.64 0.55 0.86
Nonperforming
assets / total
assets 0.32 0.39 0.43 0.37 0.54
Allowance for loan
losses /
nonperforming loans 283.61 228.06 218.51 270.05 169.52
CONTACT: Webster Financial Corporation, Waterbury
Media Contact:
Clark Finley, 203-578-2429
cfinley@websterbank.com
or
Investor Contact:
Terry Mangan, 203-578-2318
tmangan@websterbank.com
SOURCE: Webster Financial Corp.