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WATERBURY, Conn.--(BUSINESS WIRE)--July 15, 2004--Webster
Financial Corporation (NYSE: WBS), the holding company for Webster
Bank, today announced net income of $45.8 million in the second
quarter, compared to $40.6 million in the year-ago period, an increase
of 13 percent. Net income per diluted share was $.91 in the second
quarter, compared to $.88 in the year-ago period, an increase of 3
percent.
For the first six months of 2004, net income was $88.2 million
compared to $80.5 million in the year-ago period, an increase of 9
percent. Net income per diluted share was $1.81 compared to $1.74 in
the year-ago period, an increase of 4 percent.
"We are pleased to report higher quarterly earnings and continuing
progress in pursuit of Webster's strategic objectives. Continued
double-digit organic growth in loans and deposits, combined with
strength in our fee-based businesses, helped to offset effects of
continuing lower interest rates on asset yields," stated Webster
chairman and chief executive officer James C. Smith. "We achieved two
significant strategic milestones in the quarter. Webster converted to
a national commercial bank charter and became a bank holding company.
In addition, we completed our merger with FIRSTFED, making Webster the
largest independent bank headquartered in southern New England."
Webster previously announced the completion of its acquisition of
FIRSTFED AMERICA BANCORP, INC., which became effective on May 14,
2004. FIRSTFED had assets of $2.7 billion, including loans of $1.5
billion, and deposits of $1.5 billion with 26 branches and 33 ATM's.
FIRSTFED's results of operations are included in Webster's
consolidated financial statements subsequent to the date of
acquisition, and reflect the sale and de-leveraging of $750 million of
FIRSTFED's securities portfolio.
Revenues and Expenses
Total revenues (net interest income plus total noninterest income)
were $170.5 million in the second quarter, compared to $158.9 million
a year ago. Impacting the quarter and the first half of this year was
the implementation on December 31, 2003 of Financial Accounting
Standards Board Interpretation No. ("FIN") 46 (revised), which
required the reclassification of capital trust securities expense as
of January 1, 2004 from noninterest expenses to interest expense.
Adjusting the second quarter of 2003 for $2.7 million of this expense,
total revenues would have grown by $14.4 million, or 9 percent, from a
year ago.
Net interest income was $113.5 million in the second quarter of
2004, compared to $100.6 million in the year-ago period and $105.8
million in the first quarter. Adjusting for the effect of FIN 46R, net
interest income grew by $15.6 million, or 16 percent, from a year ago
and by $7.7 million, or 7 percent, from the first quarter. The
increase over the prior year reflects strong growth in the loan
portfolio funded predominantly by core deposits, while the increase
over the first quarter is mainly due to the FIRSTFED acquisition.
Webster's net interest margin (annualized net interest income as a
percentage of average earning assets) was 3.02 percent in the quarter
compared to FIN 46R-adjusted 3.01 percent in the year-ago period and
3.09 percent in the first quarter. The decline from the first quarter
reflects the continuing effect of lower interest rates on our asset
yields and the impact of FIRSTFED's lower net interest margin.
In the second quarter of 2004, total noninterest income was $57.1
million, compared to $58.3 million in the year-ago period, a decline
of 2 percent. Excluding securities gains, noninterest income increased
by 4 percent in the second quarter to $51.5 million from $49.6 million
in the year-ago period. Growth in the core fee categories of deposit
services, insurance, loan and servicing and wealth management offset a
$5.2 million decline in financial advisory services due to the sale of
Duff & Phelps in the first quarter. Excluding securities gains, the
acquisition of FIRSTFED and the sale of Duff & Phelps, noninterest
income increased by 7 percent in the second quarter compared to a year
ago.
Total noninterest expenses for the 2004 second quarter were $97.2
million, an increase of 4 percent from $93.2 million in the year-ago
period. Adjusting the prior year for the effect of FIN 46R, and
excluding FIRSTFED and Duff & Phelps, expenses grew by 6 percent in
the second quarter. These increases reflect continuing investment in
personnel, technology and de novo branches under our strategic plan
for growth.
Balance Sheet Growth
At June 30, 2004, total assets were $17.0 billion, up 18 percent
from $14.5 billion a year ago. Total loans of $11.3 billion at June
30, 2004 increased 30 percent from $8.7 billion the prior year, while
deposits were $10.4 billion, up 28 percent from $8.1 billion a year
ago. Excluding FIRSTFED, total loans increased by $1.0 billion, or 12
percent, over the past year, while total deposits increased $0.8
billion, or 10 percent.
"Strong organic growth in both our loans and deposits was
augmented by strategic acquisitions," stated Webster president and
chief operating officer William T. Bromage. "This success demonstrates
how the We Find a Way attitude of our employees is establishing
Webster as the trusted local provider of financial services in our
southern New England marketplace."
At the end of the second quarter, commercial loans, including
commercial real estate, were $4.0 billion, up 28 percent from $3.2
billion a year ago. Consumer loans, primarily home equity loans and
lines, increased 26 percent to $2.5 billion, compared to $2.0 billion
one year ago. Excluding FIRSTFED, commercial loans, including
commercial real estate, increased 12 percent while consumer loans
increased 13 percent.
Core deposits (consisting of checking, money market and savings
accounts) of $7.1 billion at June 30, 2004 increased by 30 percent
from one year ago and represented 68 percent of total deposits.
Excluding FIRSTFED, core deposits grew 12 percent. Webster's overall
growth in deposits has been driven in part by its High Performance
Checking products and the continuing success of its de novo branches
in Fairfield County, Connecticut and Westchester County, New York.
Book value per common share of $27.37 at June 30, 2004 increased
from $24.09 one year ago. Tangible book value per share of $15.02 at
June 30, 2004 decreased from $17.59 one year ago, principally
reflecting an increase in intangible assets related to the FIRSTFED
acquisition.
Asset Quality
Nonperforming assets totaled $47.7 million or 0.28 percent of
total assets at June 30, 2004, compared to $57.0 million or 0.39
percent a year ago and $41.3 million or 0.27 percent at March 31,
2004.
"We are pleased to report continued strong asset quality in the
second quarter," stated Webster chief financial officer William J.
Healy. "The loan loss reserve remains strong given Webster's loan
portfolio mix."
The allowance for loan losses was $146.5 million, or 1.30 percent
of total loans at June 30, 2004, compared to $119.2 million, or 1.37
percent, a year ago and $123.6 million, or 1.30 percent, at March 31,
2004. The ratio of the allowance to nonperforming loans at June 30,
2004 was 332 percent, compared to 228 percent a year ago and 338
percent at March 31, 2004.
The provision for loan losses totaled $5.0 million in the second
quarter, unchanged from a year ago. Net loan charge-offs were $2.2
million, compared to $4.4 million in the year-ago period. The
annualized net charge-off ratio was 0.08 percent of average loans in
the second quarter, compared to 0.20 percent a year ago.
Strategic Actions
In April, Webster announced a 10 percent increase in its annual
dividend to $.92 per common share, or $.23 on a quarterly basis. The
announcement marked the 67th consecutive quarterly dividend since
Webster first paid a dividend in 1987 and the 14th time the dividend
has been increased.
During the second quarter, Webster announced the opening of new
branches in Monroe and Danbury, CT and Scarsdale, NY. With the new
Monroe and Danbury offices, Webster now operates 19 branch locations
in 13 Fairfield County towns. The Scarsdale branch is Webster's first
branch in New York State under our plan to open 12 to 15 branches in
Westchester County over the next three years.
Webster held its second annual Investor Day presentation for
analysts and portfolio managers in Southbury, CT on June 10th. Webster
senior management delivered presentations on the corporation's
strategic objectives and business activities. The presentation slides
and a replay of the audio webcast are available at the Investor
Relations section of Webster's website, www.wbst.com.
Earlier this month, Webster announced the appointment of Denis W.
St. Marie to the position of executive vice president, Consumer
Finance, for Webster Bank, N.A. In this capacity, St. Marie is
responsible for residential and consumer lending, mortgage banking and
secondary marketing. Prior to joining Webster, St. Marie was president
of KeyMortgage Services, where he led the company's consumer lending
and mortgage operations centers and its national vendor management
company.
Webster Financial Corporation is the holding company for Webster
Bank, National Association and Webster Insurance. With $17 billion in
assets, Webster provides business and consumer banking, mortgage,
insurance, financial planning, trust and investment services through
147 banking offices, 268 ATMs, telephone banking and the Internet.
Webster Bank owns the asset-based lending firm Webster Business Credit
Corporation, the insurance premium finance company Budget Installment
Corp., and Center Capital Corporation, an equipment finance company
headquartered in Farmington, Connecticut.
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 Webster's 2004 second quarter earnings
announcement will be held today, Thursday, July 15, at 1:00 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
1-800-299-8538 (Access Code: 32555118). 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 2003.
Webster Financial Corporation
----------------------------------------------------------------------
Selected Financial Highlights (unaudited)
----------------------------------------------------------------------
At or for the Three At or for the Six
Months Ended June 30, Months Ended June 30,
(In thousands, except per
share data) 2004 2003 2004 2003
----------------------------------------------------------------------
Net income and performance
ratios (annualized):
----------------------------
Net income $ 45,843 $40,610 $ 88,166 $80,547
Net income per diluted
common share 0.91 0.88 1.81 1.74
Return on average
shareholders' equity 13.86 % 15.01 % 14.06 % 15.10 %
Return on average tangible
equity 22.13 20.69 20.70 20.91
Return on average assets 1.12 1.15 1.14 1.16
Noninterest income as a
percentage of total
revenue 33.47 36.68 33.77 35.18
Efficiency Ratio (a) 56.98 58.65 57.18 58.73
Cash income and performance
ratios (annualized) (b):
----------------------------
Net income $ 45,843 $40,610 $ 88,166 $80,547
Tax-effected stock-based
compensation 1,206 971 1,981 1,877
Tax-effected intangible
amortization 2,978 2,579 5,638 5,155
--------- --------- --------- ---------
Cash income 50,027 44,160 95,785 87,579
Cash income per diluted
common share 0.99 0.95 1.96 1.89
Cash return on average
shareholders' equity 15.12 % 16.32 % 15.27 % 16.42 %
Cash return on average
tangible equity 24.15 22.50 22.48 22.74
Cash return on average
assets 1.22 1.26 1.23 1.26
Asset quality:
----------------------------
Allowance for loan losses $146,511 $119,239 $146,511 $119,239
Nonperforming assets 47,658 57,038 47,658 57,038
Allowance for loan losses
/ total loans 1.30 % 1.37 % 1.30 % 1.37 %
Net charge-offs/ average
loans (annualized) 0.08 0.20 0.11 0.18
Nonperforming loans /
total loans 0.39 0.60 0.39 0.60
Nonperforming assets /
total assets 0.28 0.39 0.28 0.39
Allowance for loan losses /
nonperforming loans 332.24 228.06 332.24 228.06
Other ratios (annualized):
----------------------------
Shareholders' equity /
total assets 8.52 % 7.61 % 8.52 % 7.61 %
Interest-rate spread (c) 2.99 3.06 3.02 3.16
Net interest margin (c) 3.02 3.10 3.05 3.20
Share related:
----------------------------
Book value per common
share $ 27.37 $ 24.09 $ 27.37 $ 24.09
Tangible book value per
common share 15.02 17.59 15.02 17.59
Common stock closing price 47.02 37.80 47.02 37.80
Dividends declared per
common share 0.23 0.21 0.44 0.40
Common shares issued and
outstanding 53,016 45,640 53,016 45,640
Basic shares (average) 49,699 45,446 47,922 45,453
Diluted shares (average) 50,475 46,242 48,767 46,217
Footnotes:
(a) Noninterest expense as a percentage of net interest income plus
noninterest income.
(b) Cash income represents net income excluding the after tax effects
of non-cash charges related to the amortization of intangible
assets and stock-based compensation, which includes stock options
and restricted stock.
(c) Webster adopted FIN 46R on December 31, 2003, and in accordance
with its provisions, deconsolidated the capital trusts and
reported the associated liabilities as other long-term debt.
Commencing in 2004, the costs have been reclassified from
noninterest expenses to interest expense.
(d) 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,
(In thousands) 2004 2004 2003
----------------------------------------------------------------------
Assets:
Cash and due from depository
institutions $ 252,818 $ 230,137 $ 254,645
Short-term investments 39,887 22,130 20,671
Securities:
Trading, at fair value 1,944 2,845 3,893
Available for sale, at
fair value 3,853,154 4,231,102 4,395,400
Held-to-maturity
securities 284,392 200,531 -
------------ ------------ ------------
Total securities 4,139,490 4,434,478 4,399,293
Loans held for sale 153,396 135,771 321,055
Loans:
Residential mortgages 4,731,950 3,972,123 3,541,922
Commercial 2,455,512 2,101,195 2,010,109
Commercial real estate 1,572,289 1,288,509 1,144,429
Consumer 2,530,443 2,169,011 2,013,486
------------ ------------ ------------
Total loans 11,290,194 9,530,838 8,709,946
Allowance for loan losses (146,511) (123,613) (119,239)
------------ ------------ ------------
Loans, net 11,143,683 9,407,225 8,590,707
Accrued interest receivable 59,737 51,297 54,034
Premises and equipment, net 132,842 99,866 85,062
Goodwill and intangible
assets 681,252 322,483 316,989
Cash surrender value of life
insurance 224,082 182,511 176,324
Prepaid expenses and other
assets 198,683 204,372 233,792
------------ ------------ ------------
Total Assets $17,025,870 $15,090,270 $14,452,572
============ ============ ============
Liabilities and
Shareholders' Equity:
Deposits:
Demand deposits $ 1,362,339 $ 1,081,455 $ 1,035,389
NOW accounts 1,423,822 1,098,972 1,064,336
Money market deposit
accounts 2,013,894 1,779,468 1,544,692
Savings accounts 2,281,312 1,891,298 1,821,089
Certificates of deposit 3,184,991 2,676,910 2,526,429
------------ ------------ ------------
Total retail
deposits 10,266,358 8,528,103 7,991,935
Treasury deposits 106,564 109,979 93,767
------------ ------------ ------------
Total deposits 10,372,922 8,638,082 8,085,702
Federal Home Loan Bank
advances 2,731,332 2,437,014 2,185,830
Federal funds purchased
and securities sold under
agreements to repurchase 1,670,594 2,150,719 2,480,666
Other long-term debt (c) 695,417 532,760 326,000
Accrued expenses and other
liabilities 95,112 110,156 155,233
------------ ------------ ------------
Total liabilities 15,565,377 13,868,731 13,233,431
Corporation-obligated
mandatorily redeemable
capital securities of
subsidiary trusts (c) - - 110,255
Preferred stock of
subsidiary corporation 9,577 9,577 9,577
Shareholders' equity 1,450,916 1,211,962 1,099,309
------------ ------------ ------------
Total Liabilities and
Shareholders' Equity $17,025,870 $15,090,270 $14,452,572
============ ============ ============
See Selected Financial Highlights for footnotes.
----------------------------------------------------------------------
Consolidated Statements of Income (unaudited)
----------------------------------------------------------------------
Three Months Ended Six Months Ended
June 30, June 30,
(In thousands, except per
share data) 2004 2003 2004 2003
----------------------------------------------------------------------
Interest income:
Loans $129,084 $114,734 $247,675 $227,944
Securities and short-term
investments 45,162 45,772 89,770 97,517
Loans held for sale 2,139 4,231 3,209 8,723
--------- --------- --------- ---------
Total interest income 176,385 164,737 340,654 334,184
--------- --------- --------- ---------
Interest expense:
Deposits 29,172 28,750 55,002 58,168
Borrowings 33,746 35,368 66,379 70,721
--------- --------- --------- ---------
Total interest expense 62,918 64,118 121,381 128,889
--------- --------- --------- ---------
Net interest income 113,467 100,619 219,273 205,295
Provision for loan losses 5,000 5,000 10,000 10,000
--------- --------- --------- ---------
Net interest income after
provision for loan losses 108,467 95,619 209,273 195,295
--------- --------- --------- ---------
Noninterest income:
Deposit service fees 19,250 17,529 36,435 34,419
Insurance revenue 10,596 9,980 22,234 20,944
Loan and loan servicing
fees 7,305 4,723 13,954 10,628
Wealth and investment
services 5,849 4,521 10,965 9,099
Financial advisory services - 5,229 3,808 10,660
Gain on sale of loans and
loan servicing, net 5,321 4,066 6,346 6,837
Increase in cash surrender
value of life insurance 2,177 2,143 4,131 4,258
Other 964 1,423 2,812 3,284
--------- --------- --------- ---------
51,462 49,614 100,685 100,129
Gain on sale of securities,
net 5,616 8,666 11,116 11,299
--------- --------- --------- ---------
Total noninterest income 57,078 58,280 111,801 111,428
--------- --------- --------- ---------
Noninterest expenses:
Compensation and benefits 53,659 50,506 106,786 101,067
Occupancy 8,402 7,672 16,767 15,771
Furniture and equipment 8,993 7,575 16,634 15,096
Intangible amortization 4,582 3,968 8,674 7,930
Marketing 3,630 3,236 6,614 6,721
Professional services 2,938 2,994 5,837 5,472
Acquisition costs 265 6 265 6
Capital trust securities(c) - 2,743 - 5,665
Other 14,710 14,499 27,743 28,277
--------- --------- --------- ---------
Total noninterest expenses 97,179 93,199 189,320 186,005
--------- --------- --------- ---------
Income before income taxes 68,366 60,700 131,754 120,718
Income taxes 22,523 20,090 43,588 40,171
--------- --------- --------- ---------
Net income $ 45,843 $ 40,610 $ 88,166 $ 80,547
========= ========= ========= =========
Net income per common share:
Basic $ 0.92 $ 0.89 $ 1.84 $ 1.77
Diluted 0.91 0.88 1.81 1.74
See Selected Financial Highlights for footnotes.
----------------------------------------------------------------------
Consolidated Statements of Income (unaudited)
----------------------------------------------------------------------
(In thousands, Three Months Ended
except per share June 30, March 31, Dec. 31, Sept. 30, June 30,
data) 2004 2004 2003 2003 2003
----------------------------------------------------------------------
Interest income:
Loans $129,084 $118,591 $117,982 $114,750 $114,724
Securities and short-
term investments 45,162 44,608 43,065 42,050 45,772
Loans held for sale 2,139 1,070 1,791 4,896 4,241
--------- --------- --------- --------- ---------
Total interest
income 176,385 164,269 162,838 161,696 164,737
--------- --------- --------- --------- ---------
Interest expense:
Deposits 29,172 25,830 26,319 26,824 28,750
Borrowings 33,746 32,633 29,224 33,943 35,368
--------- --------- --------- --------- ---------
Total interest
expense 62,918 58,463 55,543 60,767 64,118
--------- --------- --------- --------- ---------
Net interest income 113,467 105,806 107,295 100,929 100,619
Provision for loan
losses 5,000 5,000 5,000 10,000 5,000
--------- --------- --------- --------- ---------
Net interest income
after provision for
loan losses 108,467 100,806 102,295 90,929 95,619
--------- --------- --------- --------- ---------
Noninterest income:
Deposit service
fees 19,250 17,185 17,731 17,868 17,529
Insurance revenue 10,596 11,638 9,077 9,954 9,980
Loan and loan
servicing fees 7,305 6,649 8,001 7,755 4,723
Wealth and
investment
services 5,849 5,116 4,416 4,826 4,521
Financial advisory
services - 3,808 7,265 4,833 5,229
Gain on sale of loans
and loan servicing,
net 5,321 1,025 2,854 9,829 4,066
Increase in cash
surrender value of
life insurance 2,177 1,954 2,082 2,150 2,143
Other 964 1,848 2,402 2,737 1,423
--------- --------- --------- --------- ---------
51,462 49,223 53,828 59,952 49,614
Gain on sale of
securities, net 5,616 5,500 2,715 4,560 8,666
--------- --------- --------- --------- ---------
Total noninterest
income 57,078 54,723 56,543 64,512 58,280
--------- --------- --------- --------- ---------
Noninterest expenses:
Compensation and
benefits 53,659 53,127 53,722 51,592 50,506
Occupancy 8,402 8,365 7,470 7,457 7,672
Furniture and
equipment 8,993 7,641 7,792 8,255 7,575
Intangible
amortization 4,582 4,092 4,067 4,001 3,968
Marketing 3,630 2,984 2,058 2,729 3,236
Professional
services 2,938 2,899 3,654 2,582 2,994
Capital trust
securities (c) - - 3,485 2,774 2,743
Acquisition costs 265 - 1,349 142 6
Other 14,710 13,033 14,683 14,165 14,499
--------- --------- --------- --------- ---------
Total noninterest
expenses 97,179 92,141 98,280 93,697 93,199
--------- --------- --------- --------- ---------
Income before
income taxes 68,366 63,388 60,558 61,744 60,700
Income taxes 22,523 21,065 19,172 20,429 20,090
--------- --------- --------- --------- ---------
Net income $ 45,843 $ 42,323 $ 41,386 $ 41,315 $ 40,610
========= ========= ========= ========= =========
Net income per
common share:
Basic $ 0.92 $ 0.92 $ 0.90 $ 0.91 $ 0.89
Diluted 0.91 0.90 0.89 0.89 0.88
See Selected Financial Highlights for footnotes.
----------------------------------------------------------------------
Retail and Wholesale Interest-Rate Spreads (unaudited)
----------------------------------------------------------------------
Three Months Ended, June March Dec. Sept. June
2004 2004 2003 2003 2003
----------------------------------------------------------------------
Interest-rate spread
--------------------
Total interest-earning assets 4.68% 4.78% 4.81% 4.75% 5.06%
Total interest-bearing liabilities 1.69 1.74 1.68 1.80 2.00
----- ----- ----- ----- -----
Interest-rate spread 2.99% 3.04% 3.13% 2.95% 3.06%
Net interest margin 3.02 3.09 3.18 2.99 3.10
Retail interest-rate spread
---------------------------
Yield on loans and loans held for sale 4.93% 5.05% 5.09% 5.09% 5.30%
Cost of deposits 1.23 1.24 1.26 1.32 1.46
----- ----- ----- ----- -----
Spread 3.70% 3.81% 3.83% 3.77% 3.84%
===== ===== ===== ===== =====
Wholesale interest-rate spread
------------------------------
Yield on securities and short-term
investments 4.09% 4.19% 4.17% 4.02% 4.52%
Cost of borrowings 2.50 2.56 2.41 2.55 2.88
----- ----- ----- ----- -----
Spread 1.59% 1.63% 1.76% 1.47% 1.64%
===== ===== ===== ===== =====
----------------------------------------------------------------------
Consolidated Average Statements of Condition (unaudited)
----------------------------------------------------------------------
Three Months Ended June 30, 2004
----------------------------------------------------------------------
Fully tax-
Average equivalent
(Dollars in thousands) balance Interest yield/rate
----------------------------------------------------------------------
Assets:
Interest-earning assets:
Loans $10,440,916 $129,084 4.93%
Securities 4,485,738 46,277 4.11(d)
Loans held for sale 169,092 2,139 5.06
Short-term investments 29,891 84 1.11
----------- -------- -----------
Total interest-earning assets 15,125,637 177,584 4.68
--------
Noninterest-earning assets 1,219,002
-----------
Total assets $16,344,639
===========
Liabilities and Shareholders'
Equity:
Interest-bearing liabilities:
Demand deposits $ 1,205,224 $ - -%
Savings, NOW and money market
deposit accounts 5,282,018 11,456 0.87
Time deposits 3,056,167 17,716 2.33
----------- -------- -----------
Total deposits 9,543,409 29,172 1.23
----------- -------- -----------
Federal Home Loan Bank advances 2,827,253 19,905 2.79
Fed funds and repurchase
agreements 1,860,747 4,888 1.04
Other long-term debt (c) 671,223 8,953 5.34
----------- -------- -----------
Total borrowings 5,359,223 33,746 2.50
----------- -------- -----------
Total interest-bearing
liabilities 14,902,632 62,918 1.69
--------
Noninterest-bearing liabilities 109,360
-----------
Total liabilities 15,011,992
Capital securities and preferred
stock of subsidiary
corporation (c) 9,577
Shareholders' equity 1,323,070
-----------
Total liabilities and
shareholders' equity $16,344,639
===========
114,666
Less: tax-equivalent adjustment (1,199)
--------
Net interest income $113,467
========
Interest-rate spread 2.99%
===========
Net interest margin 3.02%
===========
----------------------------------------------------------------------
Three Months Ended June 30, 2003
----------------------------------------------------------------------
Fully tax-
Average equivalent
(Dollars in thousands) balance Interest yield/rate
----------------------------------------------------------------------
Assets:
Interest-earning assets:
Loans $ 8,629,616 $114,736 5.30%
Securities 4,146,519 46,086 4.54(d)
Loans held for sale 322,371 4,229 5.25
Short-term investments 23,724 56 0.93
----------- -------- -----------
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:
Demand deposits $ 989,619 $ - -%
Savings, NOW and money market
deposit accounts 4,276,209 11,348 1.06
Time deposits 2,649,670 17,402 2.63
----------- -------- -----------
Total deposits 7,915,498 28,750 1.46
----------- -------- -----------
Federal Home Loan Bank advances 2,386,590 23,286 3.86
Fed funds and repurchase agreements 2,153,916 6,783 1.25
Other long-term debt (c) 326,000 5,299 6.50
----------- -------- -----------
Total borrowings 4,866,506 35,368 2.88
----------- -------- -----------
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 (c) 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%
===========
See Selected Financial Highlights for footnotes.
----------------------------------------------------------------------
Consolidated Average Statements of Condition (unaudited)
----------------------------------------------------------------------
Six Months Ended June 30, 2004
----------------------------------------------------------------------
Fully tax-
Average equivalent
(Dollars in thousands) balance Interest yield/rate
----------------------------------------------------------------------
Assets:
Interest-earning
assets:
Loans $ 9,904,542 $ 247,675 4.99 %
Loans held for sale 127,184 3,209 5.05
Securities 4,408,620 91,438 4.16 (d)
Short-term investments 32,825 150 0.90
------------- ------------- ------------
Total interest-
earning assets 14,473,171 342,472 4.73
-------------
Noninterest-earning
assets 1,054,197
-------------
Total assets $ 15,527,368
=============
Liabilities and
Shareholders' Equity:
Interest-bearing
liabilities:
Demand deposits $ 1,132,037 $ - - %
Savings, NOW and money
market deposit
accounts 4,910,528 20,440 0.84
Time deposits 2,922,958 34,562 2.38
------------- ------------- ------------
Total deposits 8,965,523 55,002 1.23
------------- ------------- ------------
Federal Home Loan Bank
advances 2,628,041 38,909 2.93
Fed funds and
repurchase agreements 1,977,133 10,319 1.03
Other long-term debt (c) 601,991 17,151 5.70
------------- ------------- ------------
Total borrowings 5,207,165 66,379 2.53
------------- ------------- ------------
Total interest-
bearing liabilities 14,172,688 121,381 1.71
-------------
Noninterest-bearing
liabilities 90,883
-------------
Total liabilities 14,263,571
Capital securities and
preferred stock of
subsidiary
corporation (c) 9,577
Shareholders' equity 1,254,220
-------------
Total liabilities
and shareholders'
equity $ 15,527,368
=============
221,091
Less: tax-equivalent
adjustment (1,818)
-------------
Net interest income $ 219,273
=============
Interest-rate spread 3.02 %
============
Net interest margin 3.05 %
============
Six Months Ended June 30, 2003
----------------------------------------------------------------------
Fully tax-
Average equivalent
(Dollars in thousands) balance Interest yield/rate
----------------------------------------------------------------------
Assets:
Interest-earning
assets:
Loans $ 8,428,441 $ 227,942 5.41 %
Loans held for sale 324,980 8,725 5.37
Securities 4,177,334 98,113 4.80 (d)
Short-term investments 25,483 118 0.92
------------- ------------- ------------
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:
Demand deposits $ 970,530 $ - - %
Savings, NOW and money
market deposit accounts 4,130,329 22,552 1.10
Time deposits 2,656,542 35,616 2.70
------------- ------------- ------------
Total deposits 7,757,401 58,168 1.51
------------- ------------- ------------
Federal Home Loan Bank
advances 2,483,365 47,077 3.77
Fed funds and
repurchase agreements 2,077,451 13,035 1.25
Other long-term debt (c) 311,635 10,609 6.81
------------- ------------- ------------
Total borrowings 4,872,451 70,721 2.89
------------- ------------- ------------
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 (c) 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 %
============
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) 2004 2004 2003 2003 2003
----------------------------------------------------------------------
Nonperforming Assets
--------------------
Nonperforming loans:
Commercial:
Commercial $ 15,895 $ 11,832 $ 14,266 $ 17,024 $ 27,881
Specialized
industry - 5,019 6,427 6,493 3,399
Equipment
financing 5,021 5,561 5,583 8,241 8,722
-------------------------------------------------
Total
commercial 20,916 22,412 26,276 31,758 40,002
Commercial real
estate 13,757 5,583 4,281 1,940 4,920
Residential 8,599 7,941 6,128 7,087 6,596
Consumer 826 604 959 718 767
-------------------------------------------------
Total nonperforming
loans 44,098 36,540 37,644 41,503 52,285
-------------------------------------------------
Other real estate owned
and repossessed assets:
Commercial 3,192 4,273 4,296 4,019 4,224
Residential 238 325 942 541 520
Consumer 130 124 - - 9
-------------------------------------------------
Total other real
estate owned and
repossessed assets 3,560 4,722 5,238 4,560 4,753
-------------------------------------------------
Total nonperforming
assets $ 47,658 $ 41,262 $ 42,882 $ 46,063 $ 57,038
=================================================
----------------------------------------------------------------------
Summary of Classified
Loans
---------------------
Substandard:
Accruing $ 90,421 $ 87,477 $ 72,638 $ 69,216 $ 62,064
Nonaccruing 39,600 31,595 29,403 36,365 44,313
-------------------------------------------------
Total
substandard 130,021 119,072 102,041 105,581 106,377
Doubtful:
Nonaccruing 3,286 4,377 6,791 3,792 6,617
Loss - - - - -
-------------------------------------------------
Total classified
loans $133,307 $123,449 $108,832 $109,373 $112,994
=================================================
Classified as a
percent of total
loans 1.2% 1.3% 1.2% 1.2% 1.3%
-------------------------------------------------
----------------------------------------------------------------------
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) 2004 2004 2003 2003 2003
----------------------------------------------------------------------
Allowance for Loan
Losses
------------------
Beginning balance $123,613 $121,674 $117,707 $119,239 $118,596
Allowance for
purchased loans 20,081 - 1,970 - -
Provision 5,000 5,000 5,000 10,000 5,000
Charge-offs:
Commercial:
Specialized
industry - 826 558 3,870 327
All other
commercial 2,646 2,249 2,949 9,361 4,232
-------------------------------------------------
Total commercial 2,646 3,075 3,507 13,231 4,559
Residential 187 983 330 39 160
Consumer 174 97 174 122 153
-------------------------------------------------
Total charge-offs 3,007 4,155 4,011 13,392 4,872
Recoveries (824) (1,094) (1,008) (1,860) (515)
-------------------------------------------------
Net loan charge-
offs 2,183 3,061 3,003 11,532 4,357
-------------------------------------------------
Ending balance $146,511 $123,613 $121,674 $117,707 $119,239
=================================================
Asset Quality
Ratios:
-------------
Allowance for loan
losses / total loans 1.30 % 1.30 % 1.32 % 1.29 % 1.37 %
Net charge-offs/
average loans
(annualized) 0.08 0.13 0.13 0.52 0.20
Nonperforming loans
/ total loans 0.39 0.38 0.41 0.46 0.60
Nonperforming assets
/ total assets 0.28 0.27 0.29 0.32 0.39
Allowance for loan
losses /
nonperforming loans 332.24 338.30 323.22 263.61 228.06
CONTACT: Webster Financial Corporation
Media
Meghan Thompson, 203-578-2287
mthompson@websterbank.com
or
Investors
Terry Mangan, 203-578-2318
tmangan@websterbank.com
SOURCE: Webster Financial Corporation