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WATERBURY, Conn.--(BUSINESS WIRE)--Jan. 22, 2004--Webster
Financial Corporation (NYSE: WBS), the holding company for Webster
Bank, today announced net income of $41.4 million in the fourth
quarter, compared to $39.4 million in the year-ago period, an increase
of 5 percent. Net income per diluted share also increased 5 percent to
$.89 in the fourth quarter, compared to $.85 in the year-ago period.
Included in the fourth quarter of 2003 are $1.3 million of
non-recurring merger expenses, or $.02 per diluted share, related to
the acquisition of North American Bank and Trust Company.
Net income in 2003 totaled $163.2 million, compared to $152.7
million in the prior year. Net income per diluted share was $3.52 in
2003, compared to $3.16 in the prior year, an increase of 11 percent.
Excluding the cumulative effect of a change in accounting method in
the 2002 first quarter, net income in 2002 was $160.0 million or $3.31
per diluted share.
"We are pleased to report solid quarterly results in a year of
significant achievement, including double-digit growth in loans and
deposits," stated Webster chairman and chief executive officer James
C. Smith. "The fourth quarter was marked by notable improvement in net
interest margin and exceptional asset quality."
"Upon the expected approval of Webster Bank's application for a
national bank charter, we will have completed our transformation to a
commercial bank. As the largest publicly-traded bank based in southern
New England, we are in the unique position to fill the competitive
need for a homegrown provider of banking, insurance and investment
services in our markets. We will build on this competitive advantage
to grow loans and deposits faster than the market and to drive revenue
from our fee-based businesses," Smith said.
Revenues and Expenses
Total revenues (net interest income plus total noninterest income)
were $163.8 million in the fourth quarter, compared to $162.5 million
a year ago. Total revenues, excluding securities gains, increased 8
percent to $161.1 million in the fourth quarter from $148.5 million a
year ago. For the full-year 2003, total revenues increased 9 percent
to $646.0 million. Total revenues, excluding securities gains,
increased 10 percent to $627.4 million for the full-year 2003. Revenue
growth over the past year has been led by increases in Webster's fee
revenue categories.
Net interest income was $107.3 million in the fourth quarter of
2003, compared to $104.1 million in the year-ago period and $100.9
million in the third quarter. The improvement reflects a reduction in
the amount of premium amortization within the securities portfolio
compared to the first three quarters of 2003 when Webster experienced
an acceleration of prepayments due to low market interest rates. Lower
funding costs for deposits and borrowings also contributed to the
higher level of net interest income during the quarter. Net interest
income in the full-year 2003 totaled $413.5 million, compared to
$405.7 million in 2002.
Webster's net interest margin (annualized net interest income as a
percentage of average earning assets) was 3.18 percent in the quarter,
compared to 3.39 percent in the year-ago period and 2.99 percent in
the third quarter. Webster's net interest margin for all of 2003 was
3.14 percent, compared to 3.50 percent for 2002. Strong loan growth in
2003 helped to offset compression of the net interest margin caused by
the lower interest rate environment over the course of the year.
In the fourth quarter of 2003, total noninterest income decreased
3 percent to $56.5 million, compared $58.4 million in the year-ago
period. Total fee revenue (total noninterest income excluding
securities gains) grew 21 percent in the fourth quarter to $53.8
million from the year-ago period. This growth was led by increases in
insurance revenues, loan and loan servicing fees and financial
advisory services. For the full-year 2003, total noninterest income
increased 25 percent to $232.5 million. Total fee revenue increased 32
percent to $213.9 million in 2003, due primarily to the growth of
deposit and loan service fees, insurance revenues and net gains on
sales of loans and loan servicing. In the fourth quarter, securities
gains totaled $2.7 million, compared to $13.9 million in the year-ago
period, and for the full-year 2003 totaled $18.6 million, compared to
$23.4 million in 2002.
Total noninterest expenses for the 2003 fourth quarter were $98.3
million, up from $89.2 million one year ago. Growth from the year-ago
period includes the $1.3 million of expenses from the acquisition of
North American Bank and Trust Company completed in November 2003. In
the entire 2003 year, total noninterest expenses were $378.0 million,
compared to $328.3 million in 2002, an increase of 15 percent that
reflects the impact of acquisitions and continuing investment in
personnel, technology and infrastructure to meet our strategic plan
for growth.
Balance Sheet Growth
At December 31, 2003, total assets were $14.6 billion, up 8
percent from $13.5 billion one year ago. Total loans of $9.2 billion
at December 31, 2003 increased 16 percent from $7.9 billion a year
ago. Deposits totaled $8.4 billion at December 31, 2003, up almost
$800 million, or 10 percent, compared to a year ago. Over the past
year, core deposit growth was especially strong at 14 percent.
"Our strategic initiatives have driven double-digit growth in
loans and deposits over the past year," stated Webster president and
chief operating officer William T. Bromage. "The strength of this
growth demonstrates customer recognition of the depth and breadth of
our product set and our ability to meet their financial needs."
At the end of the fourth quarter, commercial loans, including
commercial real estate, were $3.3 billion, up 17 percent from $2.8
billion a year ago. Consumer loans increased 26 percent to $2.1
billion, compared to $1.7 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 December 31,
2003, compared to 57 percent a year ago.
Core deposits (consisting of checking, money market and savings
accounts) of $5.6 billion at December 31, 2003 increased by 14 percent
from a year ago and represented 67 percent of total deposits, up from
65 percent at December 31, 2002. Webster's growth in deposits was
driven in part by its High Performance Checking products and the
continuing success of its de novo branches in Fairfield County,
Connecticut. During 2003, Webster continued its de novo expansion by
opening new branches in Norwalk, CT and Scarsdale, NY.
Book value per common share of $24.91 at December 31, 2003
increased from $22.69 one year ago. Tangible book value per share of
$18.18 at December 31, 2003 increased from $16.64 one year ago.
Asset Quality
Nonperforming assets totaled $42.9 million or 0.29 percent of
total assets at
December 31, 2003, compared to $50.0 million or 0.37 percent a
year ago and $46.1 million or 0.32 percent at September 30, 2003.
"Webster's disciplined approach to credit management has been a
hallmark of our institution through many economic cycles," stated
Webster chief financial officer William J. Healy. "Our efforts to
identify and address potential problem loans at an early stage
continue to drive our approach to portfolio management."
The allowance for loan losses totaled $121.7 million, or 1.32
percent of total loans at December 31, 2003, compared to $116.8
million, or 1.48 percent, a year ago and $117.7 million, or 1.29
percent, at September 30, 2003. The ratio of the allowance to
nonperforming loans at December 31, 2003 increased to 323 percent,
compared to 270 percent a year ago and 284 percent at September 30,
2003. The improvements in this ratio are due primarily to the decline
in nonperforming loans.
The provision for loan losses totaled $5.0 million in the fourth
quarter compared to $16.0 million in the year-ago period. The higher
provision in the fourth quarter of 2002 offset a write-down against
the allowance for loan losses of loans that were transferred to held
for sale in that quarter. The full-year 2003 provision for loan losses
totaled $25.0 million, compared to $29.0 million in the prior year.
Webster's net loan charge-offs in the fourth quarter of 2003 were
$3.0 million compared to $2.9 million in the year-ago period. The
annualized net charge-off ratio was 0.13 percent in the 2003 fourth
quarter, compared to 0.14 percent in the year-ago period. The
full-year 2003 charge-off ratio was 0.25 percent, compared to 0.18
percent in 2002.
Strategic Actions
Webster announced in December an agreement to acquire Phoenix
National Trust Company, which provides trust, custody and other
financial services. Upon completion of the transaction, Phoenix
National Trust will become part of Webster Bank's investment and trust
division, Webster Financial Advisors.
On November 7, 2003, Webster completed the acquisition of North
American Bank and Trust Company, a Connecticut state-chartered
commercial bank with $195 million in assets and 8 offices in the
Greater Waterbury area.
Webster expanded its footprint beyond Connecticut's borders when
it announced in October that it had reached a definitive agreement to
acquire FIRSTFED AMERICA BANCORP, INC. (AMEX: FAB), headquartered in
Swansea, Massachusetts, the holding company for First Federal Savings
Bank of America. FIRSTFED is a federally-chartered savings and loan
holding company with $2.5 billion in assets at September 30, 2003 and
26 branches, 19 in Massachusetts and 7 in Rhode Island. The combined
bank would rank among the 50 largest in the United States, with $16
billion in assets, market capitalization of $2.6 billion and a
142-branch retail footprint in Connecticut, Massachusetts and Rhode
Island. Webster expects the acquisition to close in the second quarter
of 2004.
In September, Webster Bank announced it filed an application with
the Office of the Comptroller of the Currency (OCC) to convert to a
national bank charter. Webster Bank has been a federal savings bank
regulated by the Office of Thrift Supervision (OTS). As part of the
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 the second quarter of 2004.
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, financial
planning, trust and investment services through 119 banking offices,
233 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 Webster 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 Webster's 2003 fourth quarter earnings
announcement will be held today, Thursday, January 22, 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: 21041266). 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 Twelve
Months Ended Months Ended
December 31, December 31,
(In thousands, except
per share data) 2003 2002 2003 2002
--------------------------------------------------------------------
Net income and
performance ratios
(annualized):
-----------------------
Net income $ 41,386 $ 39,401 $ 163,248 $ 152,732
Net income per diluted
common share 0.89 0.85 3.52 3.16
Return on average
shareholders' equity 14.92 % 15.41 % 15.16 % 14.78 %
Return on average
assets 1.15 1.18 1.15 1.22
Net income and
performance ratios
before cumulative
effect of change in
accounting method
(annualized):
-----------------------
Net income $ 41,386 $ 39,401 $ 163,248 $ 152,732
Cumulative effect of
change in accounting
method (a) - - - 7,280
------ ------ ------ ------
Net income before
cumulative effect of
change in accounting
method 41,386 39,401 163,248 160,012
Net income per diluted
common share 0.89 0.85 3.52 3.31
Return on average
shareholders' equity 14.92 % 15.41 % 15.16 % 15.48 %
Return on average
assets 1.15 1.18 1.15 1.28
Noninterest income as a
percentage of total
revenue 34.51 35.93 35.99 31.38
Efficiency ratio (b) 59.99 54.88 58.51 55.53
Cash income and
performance ratios
(annualized) (c):
-----------------------
Net income $ 41,386 $ 39,401 $ 163,248 $ 152,732
Cumulative effect of
change in accounting
method (a) - - - 7,280
Tax-effected stock-
based compensation 965 551 3,749 2,235
Tax-effected intangible
amortization 2,644 2,598 10,399 10,411
------ ------ ------- -------
Cash income 44,995 42,550 177,396 172,658
Cash income per diluted
common share 0.96 0.92 3.83 3.57
Cash return on average
shareholders' equity 16.22 % 16.64 % 16.48 % 16.70 %
Cash return on average
assets 1.25 1.28 1.25 1.38
Asset Quality:
-----------------------
Allowance for loan
losses $ 121,674 $ 116,804 $ 121,674 $ 116,804
Nonperforming assets 42,882 50,035 42,882 50,035
Allowance for loan
losses / total loans 1.32 % 1.48 % 1.32 % 1.48 %
Net charge-offs/
average loans
(annualized) 0.13 0.14 0.25 0.18
Nonperforming loans /
total loans 0.41 0.55 0.41 0.55
Nonperforming assets /
total assets 0.29 0.37 0.29 0.37
Allowance for loan
losses / nonperforming
loans 323.22 270.05 323.22 270.05
Other ratios
(annualized):
-----------------------
Shareholders' equity /
total assets 7.91 % 7.69 % 7.91 % 7.69 %
Interest-rate spread 3.13 3.35 3.10 3.43
Net interest margin 3.18 3.39 3.14 3.50
Share related:
-----------------------
Book value per common
share $ 24.91 $ 22.69 $ 24.91 $ 22.69
Tangible book value per
common share 18.18 16.64 18.18 16.64
Common stock closing
price 45.86 34.80 45.86 34.80
Dividends declared per
common share 0.21 0.19 0.82 0.74
Common shares issued
and outstanding 46,276 45,626 46,276 45,626
Basic shares (average) 45,814 45,640 45,542 47,584
Diluted shares (average) 46,699 46,321 46,362 48,392
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) Cash income represents net income excluding the after tax effects
of non-cash charges for cumulative effect of change in accounting
method, stock-based compensation, which includes stock options and
restricted stock, and amortization of intangible assets.
(d) Webster adopted FIN 46 on December 31, 2003, and in accordance
with its provisions, deconsolidated the capital trusts and reported
the associated liabilities as other long-term debt.
(e) For purposes of this computation, unrealized gains (losses) are
excluded from the average balance for rate calculations.
----------------------------------------------------------------------
Consolidated Statements of Condition (unaudited)
----------------------------------------------------------------------
December 31, September 30, December 31,
(In thousands) 2003 2003 2002
----------------------------------------------------------------------
Assets:
Cash and due from
depository institutions $ 209,234 $ 214,566 $ 266,463
Short-term investments 42,420 26,196 15,596
Securities:
Trading, at fair value 555 56 5,752
Available for sale, at
fair value 4,128,255 4,284,134 4,119,245
Held-to-maturity
securities 173,371 - -
------------- ------------- ------------
Total securities 4,302,181 4,284,190 4,124,997
Loans held for sale 89,830 278,402 405,157
Loans:
Residential mortgages 3,744,013 3,758,106 3,386,207
Commercial 2,040,921 2,018,279 1,798,898
Commercial real estate 1,281,516 1,187,065 1,029,332
Consumer 2,146,359 2,131,878 1,698,202
------------- ------------- ------------
Total loans 9,212,809 9,095,328 7,912,639
Allowance for loan losses (121,674) (117,707) (116,804)
------------- ------------- ------------
Loans, net 9,091,135 8,977,621 7,795,835
Accrued interest receivable 52,756 53,091 54,601
Premises and equipment, net 95,631 85,521 84,683
Goodwill and intangible
assets 330,929 315,556 297,359
Cash surrender value of
life insurance 180,556 178,474 172,066
Prepaid expenses and other
assets 174,018 195,166 251,247
------------- ------------- ------------
Total assets $ 14,568,690 $ 14,608,783 $ 13,468,004
============= ============= =============
Liabilities and
Shareholders' Equity:
Deposits:
Demand deposits $ 1,090,060 $ 1,017,870 $ 982,735
NOW accounts 1,052,690 1,010,071 945,145
Money market deposits
accounts 1,581,276 1,606,342 1,296,303
Savings accounts 1,869,398 1,807,891 1,691,292
Certificates of deposit 2,681,986 2,590,513 2,592,701
------------- ------------- ------------
Total retail deposits 8,275,410 8,032,687 7,508,176
Treasury deposits 96,725 100,884 97,946
------------- ------------- ------------
Total deposits 8,372,135 8,133,571 7,606,122
Federal Home Loan Bank
advances 2,511,495 2,149,762 2,163,029
Federal funds purchased and
securities sold under
agreements to repurchase 1,892,138 2,531,875 2,166,640
Other long-term debt 532,760 326,000 126,000
Accrued expenses and other
liabilities 97,690 169,301 239,923
------------- ------------- ------------
Total liabilities 13,406,218 13,310,509 12,301,714
Corporation-obligated
mandatorily redeemable
capital securities of
subsidiary trusts(d) - 185,255 121,255
Preferred stock of
subsidiary corporation 9,577 9,577 9,577
Shareholders' equity 1,152,895 1,103,442 1,035,458
------------- ------------- ------------
Total liabilities and
shareholders' equity $ 14,568,690 $ 14,608,783 $ 13,468,004
============= ============= =============
See Selected Financial Highlights for footnotes.
----------------------------------------------------------------------
Consolidated Statements of Income (unaudited)
----------------------------------------------------------------------
Three Months Ended Twelve Months Ended
December 31, December 31,
(In thousands, except per
share data) 2003 2002 2003 2002
----------------------------------------------------------------------
Interest income:
Loans and loans held for
sale $ 119,773 $ 120,386 $ 476,086 $ 464,400
Securities and short-term
investments 43,065 53,189 182,632 227,634
--------- --------- --------- ---------
Total interest income 162,838 173,575 658,718 692,034
--------- --------- --------- ---------
Interest expense:
Deposits 26,319 33,375 111,311 146,162
Borrowings 29,224 36,110 133,888 140,144
--------- --------- --------- ---------
Total interest expense 55,543 69,485 245,199 286,306
--------- --------- --------- ---------
Net interest income 107,295 104,090 413,519 405,728
Provision for loan losses 5,000 16,000 25,000 29,000
--------- --------- --------- ---------
Net interest income after
provision for loan losses 102,295 88,090 388,519 376,728
--------- --------- --------- ---------
Noninterest income:
Deposit service fees 17,731 17,083 70,018 61,610
Insurance revenue 9,077 6,875 39,975 27,073
Loan and loan servicing
fees 8,001 6,089 26,384 18,531
Financial advisory services 7,265 4,964 22,758 19,277
Wealth and investment
advisors 4,416 3,693 18,341 15,918
Gain on sale of loans and
loan servicing, net 2,854 2,337 19,520 5,808
Increase in cash surrender
value of life insurance 2,082 2,263 8,490 9,042
Other 2,402 1,129 8,423 4,936
--------- --------- --------- ---------
Total fee revenue 53,828 44,433 213,909 162,195
Gain on sale of securities,
net 2,715 13,934 18,574 23,377
--------- --------- --------- ---------
Total noninterest income 56,543 58,367 232,483 185,572
--------- --------- --------- ---------
Noninterest expenses:
Compensation and benefits 53,722 46,343 206,381 171,042
Occupancy 7,470 7,444 30,698 26,606
Furniture and equipment 7,792 8,228 31,143 29,167
Intangible amortization 4,067 3,997 15,998 16,017
Marketing 2,058 3,038 11,508 10,522
Professional services 3,654 3,503 11,708 11,404
Capital securities and
preferred stock dividend 3,701 3,355 12,787 14,388
Acquistion costs 1,349 - 1,497 1,965
Other 14,467 13,244 56,262 47,212
--------- --------- --------- ---------
Total noninterest expenses 98,280 89,152 377,982 328,323
--------- --------- --------- ---------
Income before income taxes
and cumulative effect of
change in accounting
method 60,558 57,305 243,020 233,977
Income taxes 19,172 17,904 79,772 73,965
--------- --------- --------- ---------
Income before cumulative
effect of change in
accounting method 41,386 39,401 163,248 160,012
Cumulative effect of change
in accounting method, net
of taxes (a) - - - (7,280)
--------- --------- --------- ---------
Net income $ 41,386 $ 39,401 $ 163,248 $ 152,732
========= ========= ========= =========
Net income per common share
before cumulative effect
of change in accounting
method:
Basic $ 0.90 $ 0.86 $ 3.58 $ 3.36
Diluted 0.89 0.85 3.52 3.31
Net income per common
share:
Basic $ 0.90 $ 0.86 $ 3.58 $ 3.21
Diluted 0.89 0.85 3.52 3.16
See Selected Financial Highlights for footnotes.
----------------------------------------------------------------------
Consolidated Statements of Income (unaudited)
----------------------------------------------------------------------
Three Months Ended
December September June March December
(In thousands, 31, 30, 30, 31, 31,
except per share data) 2003 2003 2003 2003 2002
---------------------------------------------------------------------
Interest income:
Loans and loans
held for sale $ 119,773 $ 119,646 $ 118,965 $ 117,702 $ 120,386
Securities and
short-term
investments 43,065 42,050 45,772 51,745 53,189
--------- --------- --------- --------- ---------
Total interest
income 162,838 161,696 164,737 169,447 173,575
--------- --------- --------- --------- ---------
Interest expense:
Deposits 26,319 26,824 28,750 29,418 33,375
Borrowings 29,224 33,943 35,368 35,353 36,110
--------- --------- --------- --------- ---------
Total interest
expense 55,543 60,767 64,118 64,771 69,485
--------- --------- --------- --------- ---------
Net interest
income 107,295 100,929 100,619 104,676 104,090
Provision for loan
losses 5,000 10,000 5,000 5,000 16,000
--------- --------- --------- --------- ---------
Net interest
income after
provision for
loan losses 102,295 90,929 95,619 99,676 88,090
--------- --------- --------- --------- ---------
Noninterest income:
Deposit service
fees 17,731 17,868 17,529 16,890 17,083
Insurance revenue 9,077 9,954 9,980 10,964 6,875
Loan and loan
servicing fees 8,001 7,755 4,723 5,905 6,089
Financial advisory
services 7,265 4,833 5,229 5,431 4,964
Wealth and
investment
advisors 4,416 4,826 4,521 4,578 3,693
Gain on sale of
loans and loan
servicing, net 2,854 9,829 4,066 2,771 2,337
Increase in cash
surrender value
of life insurance 2,082 2,150 2,143 2,115 2,263
Other 2,402 2,737 1,423 1,861 1,129
--------- --------- --------- --------- ---------
Total fee revenue 53,828 59,952 49,614 50,515 44,433
Gain on sale of
securities, net 2,715 4,560 8,666 2,633 13,934
--------- --------- --------- --------- ---------
Total noninterest
income 56,543 64,512 58,280 53,148 58,367
Noninterest expenses:
Compensation and
benefits 53,722 51,592 50,506 50,561 46,343
Occupancy 7,470 7,457 7,672 8,099 7,444
Furniture and
equipment 7,792 8,255 7,575 7,521 8,228
Intangible
amortization 4,067 4,001 3,968 3,962 3,997
Marketing 2,058 2,729 3,236 3,485 3,038
Professional
services 3,654 2,582 2,994 2,478 3,503
Capital securities
and preferred
stock dividend 3,701 2,990 2,958 3,138 3,355
Acquistion costs 1,349 142 6 - -
Other 14,467 13,949 14,284 13,562 13,244
--------- --------- --------- --------- ---------
Total noninterest
expenses 98,280 93,697 93,199 92,806 89,152
--------- --------- --------- --------- ---------
Income before
income taxes and
cumulative
effect of change
in accounting
method 60,558 61,744 60,700 60,018 57,305
Income taxes 19,172 20,429 20,090 20,081 17,904
--------- --------- --------- --------- ---------
Income before
cumulative
effect of
change in
accounting
method 41,386 41,315 40,610 39,937 39,401
Cumulative effect
of change in
accounting
method, net of
taxes - - - - -
--------- --------- --------- --------- ---------
Net income $ 41,386 $ 41,315 $ 40,610 $ 39,937 $ 39,401
========= ========= ========= ========= =========
Net income per
common share
before cumulative
effect of change
in accounting
method:
Basic $ 0.90 $ 0.91 $ 0.89 $ 0.88 $ 0.86
Diluted 0.89 0.89 0.88 0.86 0.85
Net income per
common share:
Basic $ 0.90 $ 0.91 $ 0.89 $ 0.88 $ 0.86
Diluted 0.89 0.89 0.88 0.86 0.85
See Selected Financial Highlights for footnotes.
----------------------------------------------------------------------
Retail and Wholesale Interest-Rate Spreads (unaudited)
----------------------------------------------------------------------
Three Months Ended, December September June March December
2003 2003 2003 2003 2002
----------------------------------------------------------------------
Interest-rate spread
--------------------
Total interest-
earning assets 4.81 % 4.75 % 5.06 % 5.35 % 5.61 %
Total interest-
bearing
liabilities 1.68 1.80 2.00 2.09 2.26
---- ---- ---- ---- ----
Interest-rate
spread 3.13 % 2.95 % 3.06 % 3.26 % 3.35 %
Net interest margin 3.18 2.99 3.10 3.30 3.39
Retail interest-rate
spread
--------------------
Yield on loans and
loans held for sale 5.09 % 5.09 % 5.30 % 5.52 % 5.71 %
Cost of deposits 1.26 1.32 1.46 1.57 1.77
---- ---- ---- ---- ----
Spread 3.83 % 3.77 % 3.84 % 3.95 % 3.94 %
==== ==== ==== ==== ====
Wholesale
interest-rate spread
---------------------
Yield on securities
and short-term
investments 4.17 % 4.02 % 4.52 % 5.02 % 5.40 %
Cost of borrowings 2.41 2.55 2.88 2.90 3.07
---- ---- ---- ---- ----
Spread 1.76 % 1.47 % 1.64 % 2.12 % 2.33 %
==== ==== ==== ==== ====
Consolidated Average Statements of Condition
(unaudited)
----------------------------------------------------------------------
Three Months Ended December 31, 2003
----------------------------------------------------------------------
Fully tax-
Average equivalent
(Dollars in balance Interest yield/rate
thousands)
----------------------------------------------------------------------
Assets:
Interest-earning assets:
Loans $ 9,206,436 $ 117,983 5.08 %
Loans held for sale 135,632 1,790 5.28
Securities 4,153,607 43,486 4.20 (e)
Short-term investments 32,791 76 0.91
------------ --------- -----------
Total interest-earning assets 13,528,466 163,335 4.81
---------
Noninterest-earning assets 903,477
------------
Total assets $ 14,431,943
============
Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Demand deposits $ 1,058,875 $ - - %
Savings, NOW and money market
deposit accounts 4,471,260 9,115 0.81
Time deposits 2,755,184 17,204 2.48
------------ --------- -----------
Total interest-bearing
deposits 8,285,319 26,319 1.26
------------ --------- -----------
Federal Home Loan Bank advances 2,299,456 19,641 3.34
Fed funds and repurchase
agreements 2,139,619 5,587 1.02
Other long-term debt 317,509 3,996 5.03
------------ --------- -----------
Total borrowings 4,756,584 29,224 2.41
------------ --------- -----------
Total interest-bearing
liabilities 13,041,903 55,543 1.68
Noninterest-bearing ---------
liabilities 85,714
------------
Total liabilities 13,127,617
Capital securities and
preferred stock of subsidiary
corporation 194,832
Shareholders' equity 1,109,494
------------
Total liabilities and
shareholders' equity $ 14,431,943
============
107,792
Less: tax-equivalent
adjustment (497)
---------
Net interest income $ 107,295
=========
Interest-rate spread 3.13 %
===========
Net interest margin 3.18 %
===========
See Selected Financial Highlights for footnotes.
Consolidated Average Statements of Condition
(unaudited)
----------------------------------------------------------------------
Three Months Ended December 31, 2002
----------------------------------------------------------------------
Fully tax-
Average equivalent
(Dollars in balance Interest yield/rate
thousands)
----------------------------------------------------------------------
Assets:
Interest-earning assets:
Loans $ 8,035,293 $ 115,746 5.72 %
Loans held for sale 339,742 4,642 5.47
Securities 4,028,148 53,445 5.42 (e)
Short-term investments 22,652 66 1.14
------------ --------- --------
Total interest-earning assets 12,425,835 173,899 5.61
---------
Noninterest-earning assets 922,021
------------
Total assets $ 13,347,856
============
Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Demand deposits $ 969,282 $ - - %
Savings, NOW and money market
deposit accounts 3,827,364 12,796 1.33
Time deposits 2,702,745 20,579 3.02
------------ --------- --------
Total interest-bearing
deposits 7,499,391 33,375 1.77
------------ --------- --------
Federal Home Loan Bank advances 2,377,163 25,163 4.14
Fed funds and repurchase
agreements 2,111,537 8,157 1.51
Other long-term debt 126,000 2,790 8.86
------------ --------- --------
Total borrowings 4,614,700 36,110 3.07
------------ --------- --------
Total interest-bearing
liabilities 12,114,091 69,485 2.26
Noninterest-bearing ---------
liabilities 71,552
------------
Total liabilities 12,185,643
Capital securities and
preferred stock of subsidiary
corporation 139,378
Shareholders' equity 1,022,835
------------
Total liabilities and
shareholders' equity $ 13,347,856
============
104,414
Less: tax-equivalent
adjustment (324)
---------
Net interest income $ 104,090
=========
Interest-rate spread 3.35 %
========
Net interest margin 3.39 %
========
See Selected Financial Highlights for footnotes.
----------------------------------------------------------------------
Consolidated Average Statements of Condition (unaudited)
----------------------------------------------------------------------
Twelve Months Ended December 31, 2003
----------------------------------------------------------------------
Fully tax-
Average equivalent
(Dollars in balance Interest yield/rate
thousands)
----------------------------------------------------------------------
Assets:
Interest-earning assets:
Loans $ 8,756,883 $ 460,677 5.26 %
Loans held for sale 292,514 15,409 5.27
Securities 4,177,490 184,007 4.45 (e)
Short-term investments 25,588 250 0.98
------------ --------- -----------
Total interest-earning
assets 13,252,475 660,343 5.00
---------
Noninterest-earning assets 951,575
------------
Total assets $ 14,204,050
============
Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Demand deposits $ 1,010,952 $ - - %
Savings, NOW and money market
deposit accounts 4,282,536 41,519 0.97
Time deposits 2,677,863 69,792 2.61
------------ --------- -----------
Total interest-bearing
deposits 7,971,351 111,311 1.40
------------ --------- -----------
Federal Home Loan Bank
advances 2,395,814 88,845 3.71
Fed funds and repurchase
agreements 2,218,799 26,108 1.18
Other long-term debt 316,736 18,935 5.98
------------ --------- -----------
Total borrowings 4,931,349 133,888 2.72
------------ --------- -----------
Total interest-bearing
liabilities 12,902,700 245,199 1.90
Noninterest-bearing ---------
liabilities 79,491
------------
Total liabilities 12,982,191
Capital securities and
preferred stock of subsidiary
corporation 145,227
Shareholders' equity 1,076,632
------------
Total liabilities and
shareholders' equity $ 14,204,050
============
415,144
Less: tax-equivalent adjustment (1,625)
---------
Net interest income $ 413,519
=========
Interest-rate spread 3.10 %
===========
Net interest margin 3.14 %
===========
See Selected Financial Highlights for footnotes.
----------------------------------------------------------------------
Consolidated Average Statements of Condition (unaudited)
----------------------------------------------------------------------
Twelve Months Ended December 31, 2002
----------------------------------------------------------------------
Fully tax-
Average equivalent
(Dollars in balance Interest yield/rate
thousands)
----------------------------------------------------------------------
Assets:
Interest-earning assets:
Loans $ 7,451,370 $ 454,673 6.10 %
Loans held for sale 177,928 9,729 5.47
Securities 4,025,566 228,493 5.77 (e)
Short-term investments 22,188 364 1.64
------------ --------- -----------
Total interest-earning
assets 11,677,052 693,259 5.97
---------
Noninterest-earning assets 867,310
------------
Total assets $ 12,544,362
============
Liabilities and Shareholders'
Equity:
Interest-bearing liabilities:
Demand deposits $ 902,908 $ - - %
Savings, NOW and money market
deposit accounts 3,551,731 49,521 1.39
Time deposits 2,810,220 96,641 3.44
------------ --------- -----------
Total interest-bearing
deposits 7,264,859 146,162 2.01
------------ --------- -----------
Federal Home Loan Bank
advances 2,337,688 102,789 4.40
Fed funds and repurchase
agreements 1,555,552 26,195 1.68
Other long-term debt 126,000 11,160 8.86
------------ --------- -----------
Total borrowings 4,019,240 140,144 3.49
------------ --------- -----------
Total interest-bearing
liabilities 11,284,099 286,306 2.54
Noninterest-bearing ---------
liabilities 76,914
------------
Total liabilities 11,361,013
Capital securities and
preferred stock of subsidiary
corporation 149,666
Shareholders' equity 1,033,683
------------
Total liabilities and
shareholders' equity $ 12,544,362
============
406,953
Less: tax-equivalent
adjustment (1,225)
---------
Net interest income $ 405,728
=========
Interest-rate spread 3.43 %
===========
Net interest margin 3.50 %
===========
See Selected Financial Highlights for footnotes.
----------------------------------------------------------------------
Asset Quality (unaudited)
----------------------------------------------------------------------
At or for the Three Months Ended,
---------------------------------------------
Dec. 31, Sept.30, June 30, March 31, Dec. 31,
(Dollars in thousands) 2003 2003 2003 2003 2002
----------------------------------------------------------------------
Nonperforming Assets
--------------------
Nonperforming loans:
Commercial:
Commercial $ 14,266 $ 17,024 $ 27,881 $ 27,784 $ 16,001
Specialized
industry 6,427 6,493 3,399 3,399 3,399
Equipment
financing 5,583 8,241 8,722 8,960 6,586
-----------------------------------------------
Total
commercial 26,276 31,758 40,002 40,143 25,986
Commercial real
estate 4,281 1,940 4,920 6,910 9,109
Residential 6,128 7,087 6,596 5,712 7,263
Consumer 959 718 767 1,510 894
-----------------------------------------------
Total nonperforming
loans 37,644 41,503 52,285 54,275 43,252
-----------------------------------------------
Loans held for sale - - - 3,444 3,706
-----------------------------------------------
Other real estate owned
and repossessed assets:
Commercial 4,296 4,019 4,224 3,967 2,568
Residential 942 541 520 234 477
Consumer - - 9 1 32
-----------------------------------------------
Total other real
estate owned and
repossessed assets 5,238 4,560 4,753 4,202 3,077
-----------------------------------------------
Total nonperforming
assets $ 42,882 $ 46,063 $ 57,038 $ 61,921 $ 50,035
===============================================
----------------------------------------------------------------------
Summary of Classified
Loans
---------------------
Substandard:
Accruing $ 72,638 $ 69,216 $ 62,064 $ 74,398 $ 70,245
Nonaccruing 29,403 36,365 44,313 45,005 38,994
-----------------------------------------------
Total substandard 102,041 105,581 106,377 119,403 109,239
Doubtful:
Nonaccruing 6,791 3,792 6,617 7,279 3,743
Loss - - - - -
-----------------------------------------------
Total classified
loans $108,832 $109,373 $112,994 $126,682 $112,982
===============================================
Classified as a percent
of total loans 1.2% 1.2% 1.3% 1.5% 1.4%
-----------------------------------------------
----------------------------------------------------------------------
Allowance for Loan Losses (unaudited)
----------------------------------------------------------------------
At or for the Three Months Ended,
---------------------------------------------
Dec. 31, Sept.30, June 30, March 31, Dec. 31,
( Dollars in thousands) 2003 2003 2003 2003 2002
----------------------------------------------------------------------
Allowance for Loan
Losses
-------------------
Beginning balance $117,707 $119,239 $118,596 $116,804 $116,118
Allowance for
purchased loans 1,970 - - 146 -
Provision 5,000 10,000 5,000 5,000 16,000
Write-down of loans
transferred to
held for sale - - - - (12,432)
Charge-offs:
Commercial:
Specialized
industry 558 3,870 327 - 2,569
All other commercial 2,949 9,361 4,232 3,601 1,031
-----------------------------------------------
Total commercial 3,507 13,231 4,559 3,601 3,600
Residential 330 39 160 78 84
Commercial real
estate - - - - -
Consumer 174 122 153 195 220
-----------------------------------------------
Total
charge-offs 4,011 13,392 4,872 3,874 3,904
Recoveries (1,008) (1,860) (515) (520) (1,022)
-----------------------------------------------
Net loan
charge-offs 3,003 11,532 4,357 3,354 2,882
-----------------------------------------------
Ending balance $121,674 $117,707 $119,239 $118,596 $116,804
===============================================
Asset Quality Ratios:
--------------------
Allowance for loan
losses / total loans 1.32 % 1.29 % 1.37 % 1.39 % 1.48 %
Net charge-offs/
average loans
(annualized) 0.13 0.52 0.20 0.16 0.14
Nonperforming loans /
total loans 0.41 0.46 0.60 0.64 0.55
Nonperforming assets /
total assets 0.29 0.32 0.39 0.43 0.37
Allowance for loan
losses /
nonperforming loans 323.22 283.61 228.06 218.51 270.05
CONTACT: Webster Financial Corporation
Media Contact:
Clark Finley, 203-578-2429
cfinley@websterbank.com
or
Investor Contact:
Terry Mangan, 203-578-2318
tmangan@websterbank.com
SOURCE: Webster Financial Corporation