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WATERBURY, Conn.--(BUSINESS WIRE)--Jan. 25, 2005--Webster
Financial Corporation (NYSE:WBS), the holding company for Webster
Bank, N.A., today announced net income of $16.3 million in the fourth
quarter compared to $41.4 million a year ago. For the full year, net
income was $153.8 million compared to $163.2 million the prior year.
The decline for the quarter and the year is entirely attributable to
Webster's previously announced fourth quarter balance sheet
de-leveraging program, which resulted in $32.4 million of after-tax
costs.
Net income per diluted share was $.30 in the fourth quarter
compared to $.89 the prior year. For the full year, net income per
share was $3.00 compared to $3.52 in 2003. Excluding the balance sheet
de-leveraging costs, net income per diluted share was $.90 in the
fourth quarter and $3.63 for the full year 2004.
As described in Webster's 2004 third quarter earnings release, a
balance sheet de-leveraging of $750 million was implemented and
completed during the fourth quarter. With this transaction, $750
million of securities were sold and the proceeds used to repay an
equal amount of borrowings. The de-leveraging resulted in $49.9
million of pre-tax costs consisting of $4.1 million in losses on the
sale of securities and $45.8 million in debt prepayment penalties.
The de-leveraging resulted in a decline in the securities
portfolio to 22 percent of assets at December 31, 2004 compared to 25
percent at September 30 while borrowings were reduced to 28 percent of
assets from 32 percent at September 30. The balance sheet
restructuring also strengthened Webster's capital position and
improved its ability to respond to rising interest rates by moving to
a modestly asset sensitive position.
"2004 was a transformational year for Webster," said Webster
Chairman and Chief Executive Officer James C. Smith. "We expanded our
franchise in four states, converted to a commercial bank charter and
grew to be the largest independent bank headquartered in southern New
England. Webster is well positioned as a leading financial services
provider in the markets we serve."
Revenues and Expenses
Total revenues (net interest income plus total noninterest income)
were $176.4 million in the fourth quarter, compared to $163.8 million
a year ago, an increase of 8 percent. For the full year 2004, total
revenues were $687.9 million for an increase of 6 percent from a year
ago. Impacting the quarter and the full year 2004 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 year
2003 for FIN 46R and excluding Duff & Phelps, which was sold in the
first quarter of 2004, total revenues would have grown by 15 percent
in the fourth quarter and 12 percent for the full year.
Net interest income was $127.6 million in the fourth quarter of
2004, compared to $107.3 million in the year-ago period and $121.3
million in the third quarter. Adjusting for FIN 46R, net interest
income grew by $23.8 million, or 23 percent, from a year ago and by
$6.3 million, or 5 percent, from the third quarter. Net interest
income for the full year 2004 was $468.2 million compared to an
adjusted $401.6 million in 2003, an increase of 17 percent. The
increases over the prior year reflect double-digit growth in earning
assets and a higher net interest margin, while the increase over the
third quarter is due entirely to a higher net interest margin.
Webster's net interest margin (annualized tax-equivalent net
interest income as a percentage of average earning assets) improved 19
basis points to 3.25 percent from 3.06 percent in the third quarter
and compares to 3.08 percent in the year-ago period adjusted for FIN
46R. The increases reflect the benefit of the fourth quarter
de-leveraging and the impact of higher interest rates on earning asset
yields. Webster's net interest margin for the full year 2004 was 3.11
percent compared to 3.05 percent adjusted for FIN 46R in 2003.
In the fourth quarter of 2004, total noninterest income was $48.8
million, compared to $56.5 million in the year-ago period. Excluding
securities transactions, noninterest income declined in the fourth
quarter to $51.5 million from $53.8 million in the year-ago period.
This decline is explained by the absence of revenue from Duff & Phelps
in the fourth quarter compared to $7.3 million a year ago. For the
full year 2004, noninterest income excluding securities gains and Duff
& Phelps increased by 5 percent from the year-ago period.
Webster's growth in core fees remains strong as revenues from
deposit services, insurance, loan and loan servicing and wealth
management grew by 12 percent in the fourth quarter and 11 percent for
the full year 2004. Gains on sales of loans and loan servicing
declined during the quarter and for the full year primarily as a
result of lower mortgage origination volumes. Other income of $2.7
million in the fourth quarter included $1.7 million of non-recurring
insurance proceeds.
Total noninterest expenses for the 2004 fourth quarter were $154.0
million compared to $98.3 million in the year-ago period, and $447.1
million for the full year 2004 compared to $378.0 million in 2003.
Adjusting for de-leveraging costs, acquisitions, Duff & Phelps, FIN
46R and $3.4 million of non-recurring items in the fourth quarter of
2004, total noninterest expenses increased approximately 5 percent for
both the quarter and the full year. This reflects continuing
investment in personnel, technology and de novo branches under our
strategic plan for growth.
Income tax expense was $2.1 million in the fourth quarter and
$68.9 million for the full year 2004. This reflects tax benefits of
$17.5 million from the balance sheet de-leveraging and $2.0 million
related to favorable resolution of audits in the fourth quarter.
Balance Sheet Trends
At December 31, 2004, total assets were $17.0 billion, up 17
percent from $14.6 billion a year ago. Total loans of $11.7 billion at
December 31, 2004 increased 27 percent from $9.2 billion the prior
year, while deposits were $10.6 billion, up 26 percent from $8.4
billion a year ago. Excluding FIRSTFED, total loans increased by $1.0
billion, or 11 percent, over the past year, while total deposits
increased $0.7 billion, or 8 percent.
"With solid growth of our core franchise from innovative additions
to our products and services, Webster is in an enhanced competitive
position in our markets," stated Webster President and Chief Operating
Officer William T. Bromage. "Even as we continue to grow loans and
deposits faster than the market, we will be especially focused on
increasing the net interest margin."
At the end of the fourth quarter, commercial loans including
commercial real estate were $4.3 billion, up 29 percent from $3.3
billion a year ago. Commercial real estate loans were $1.7 billion, up
34 percent. Consumer loans, primarily home equity loans and lines,
increased 23 percent to $2.6 billion compared to $2.1 billion a year
ago. Excluding FIRSTFED, commercial loans including commercial real
estate were up 14 percent, commercial real estate loans were up 17
percent, and consumer loans increased 11 percent.
Core deposits (consisting of checking, money market and savings
accounts) of $7.0 billion at December 31, 2004 increased by 26 percent
from a year ago and represented 66 percent of total deposits.
Excluding FIRSTFED, core deposits grew 8 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 $28.79 at December 31, 2004
increased from $24.91 one year ago. Tangible book value per share of
$16.30 at December 31, 2004 decreased from $18.18 one year ago,
principally reflecting an increase in intangible assets related to the
FIRSTFED acquisition.
Asset Quality
Nonperforming assets totaled $39.2 million or 0.23 percent of
total assets at December 31, 2004, compared to $42.9 million or 0.29
percent a year ago and $40.0 million or 0.22 percent at September 30,
2004.
"Our nonperforming assets declined during the quarter and were
below the levels of both a year ago and the prior quarter," stated
Webster Chief Financial Officer William J. Healy. "Webster maintains a
disciplined approach to credit risk management."
The allowance for loan losses was $150.1 million, or 1.28 percent
of total loans at December 31, 2004, compared to $121.7 million, or
1.32 percent, a year ago and $148.2 million, or 1.28 percent, at
September 30, 2004. The ratio of the allowance to nonperforming loans
at December 31, 2004 was 416 percent, compared to 323 percent a year
ago and 401 percent at September 30, 2004.
The provision for loan losses totaled $4.0 million in the fourth
quarter, $1.3 million more than net loan charge-offs of $2.7 million,
compared to a provision of $5.0 million and net loan charge-offs of
$3.0 million a year ago. The provision totaled $18.0 million for the
full year 2004, $7.7 million more than net loan charge-offs of $10.3
million, compared to a provision of $25.0 million and net loan
charge-offs of $22.2 million a year ago. The annualized net charge-off
ratio was 0.09 percent of average loans in the fourth quarter compared
to 0.13 percent a year ago, and 0.10 percent for the full year 2004
compared to 0.25 percent in 2003.
Webster Financial Corporation is the holding company for Webster
Bank, National Association and Webster Insurance. With $17.0 billion
in assets, Webster provides business and consumer banking, mortgage,
insurance, financial planning, trust and investment services through
152 banking offices, 289 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 fourth quarter earnings
announcement will be held today, Tuesday, January 25, 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
1-877-407-8291 or 201-689-8345 internationally. 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 At or for the
Three Months Ended Twelve Months Ended
(In thousands, except December 31, December 31,
per share data) 2004 2003 2004 2003
----------------------------------------------------------------------
Net income and performance
ratios (annualized):
----------------------------
Net income $ 16,306 $ 41,386 $153,833 $163,248
Net income per diluted
common share 0.30 0.89 3.00 3.52
Return on average
shareholders' equity 4.28 % 14.92 % 11.14 % 15.16 %
Return on average tangible
equity 7.50 20.59 18.03 20.98
Return on average assets 0.38 1.15 0.94 1.15
Noninterest income as a
percentage of total
revenue 27.67 34.51 31.94 35.99
Efficiency Ratio (a) 87.33 59.99 65.00 58.51
Net income and performance
ratios before deleveraging
charges (annualized):
----------------------------
Net income $ 16,306 $ 41,386 $153,833 $163,248
Debt prepayment penalties,
net of tax 29,745 - 29,745 -
Loss on sale of securities,
net of tax 2,702 - 2,702 -
-------- -------- -------- --------
Net income before
deleveraging charges 48,753 41,386 186,280 163,248
Net income per diluted
common share 0.90 0.89 3.63 3.52
Return on average
shareholders' equity 12.81 % 14.92 % 13.49 % 15.16 %
Return on average tangible
equity 22.43 20.59 21.84 20.98
Return on average assets 1.13 1.15 1.13 1.15
Noninterest income as a
percentage of total revenue 29.33 34.51 32.35 35.99
Efficiency Ratio (a) 59.97 59.99 58.00 58.51
Cash income and performance
ratios (annualized) (b):
----------------------------
Net income $ 16,306 $ 41,386 $153,833 $163,248
Stock-based compensation,
net of tax 1,248 965 4,490 3,749
Intangible amortization, net
of tax 3,149 2,644 11,924 10,399
-------- -------- -------- --------
Cash income 20,703 44,995 170,247 177,396
Cash income per diluted
common share 0.38 0.96 3.32 3.83
Cash return on average
shareholders' equity 5.44 % 16.22 % 12.33 % 16.48 %
Cash return on average
tangible equity 9.52 22.39 19.96 22.80
Cash return on average
assets 0.48 1.25 1.04 1.25
Cash income and performance
ratios before deleveraging
charges (annualized) (b)
----------------------------
Net income before
deleveraging charges $ 48,753 $ 41,386 $186,280 $163,248
Stock-based compensation,
net of tax 1,248 965 4,490 3,749
Intangible amortization, net
of tax 3,149 2,644 11,924 10,399
-------- -------- -------- --------
Cash income 53,150 44,995 202,694 177,396
Cash income per diluted
common share 0.98 0.96 3.95 3.83
Cash return on average
shareholders' equity 13.97 % 16.22 % 14.68 % 16.48 %
Cash return on average
tangible equity 24.45 22.39 23.76 22.80
Cash return on average
assets 1.23 1.25 1.23 1.25
Asset quality:
----------------------------
Allowance for loan losses $150,112 $121,674 $150,112 $121,674
Nonperforming assets 39,166 42,882 39,166 42,882
Allowance for loan losses /
total loans 1.28 % 1.32 % 1.28 % 1.32 %
Net charge-offs/ average
loans (annualized) 0.09 0.13 0.10 0.25
Nonperforming loans / total
loans 0.31 0.41 0.31 0.41
Nonperforming assets /
total assets 0.23 0.29 0.23 0.29
Allowance for loan losses /
nonperforming loans 415.50 323.22 415.50 323.22
Other ratios (annualized):
----------------------------
Tangible capital ratio 5.21 % 5.77 % 5.21 % 5.77 %
Shareholders' equity /
total assets 9.07 7.91 9.07 7.91
Interest-rate spread (c) 3.22 3.13 3.09 3.10
Net interest margin (c) 3.25 3.18 3.11 3.14
Share related:
----------------------------
Book value per common share $ 28.79 $ 24.91 $ 28.79 $ 24.91
Tangible book value per
common share 16.30 18.18 16.30 18.18
Common stock closing price 50.64 45.86 50.64 45.86
Dividends declared per
common share 0.23 0.21 0.90 0.82
Common shares issued and
outstanding 53,628 46,276 53,628 46,276
Basic shares (average) 53,187 45,814 50,506 45,542
Diluted shares (average) 54,045 46,699 51,352 46,362
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.
WEBSTER FINANCIAL CORPORATION
----------------------------------------------------------------------
Consolidated Statements of Condition (unaudited)
----------------------------------------------------------------------
December 31, September 30, December 31,
(In thousands) 2004 2004 2003
----------------------------------------------------------------------
Assets:
Cash and due from depository
institutions $ 248,825 $ 234,449 $ 209,234
Short-term investments 17,629 25,783 42,420
Securities:
Trading, at fair value - 2,635 555
Available for sale, at fair
value 2,494,406 4,164,056 4,128,255
Held-to-maturity securities 1,229,613 323,378 173,371
------------ ------------ ------------
Total securities 3,724,019 4,490,069 4,302,181
Loans held for sale 147,211 111,175 89,830
Loans:
Residential mortgages 4,775,344 4,773,284 3,744,013
Commercial 2,584,738 2,586,351 2,040,921
Commercial real estate 1,715,047 1,619,968 1,281,516
Consumer 2,637,646 2,595,629 2,146,359
------------ ------------ ------------
Total loans 11,712,775 11,575,232 9,212,809
Allowance for loan losses (150,112) (148,179) (121,674)
------------ ------------ ------------
Loans, net 11,562,663 11,427,053 9,091,135
Accrued interest receivable 63,406 65,812 52,756
Premises and equipment, net 149,069 136,385 95,631
Goodwill and intangible
assets 694,165 676,176 330,929
Cash surrender value of life
insurance 228,120 226,503 180,556
Prepaid expenses and other
assets 185,490 408,837 174,018
------------ ------------ ------------
Total Assets $17,020,597 $17,802,242 $14,568,690
============ ============ ============
Liabilities and Shareholders'
Equity:
Deposits:
Demand deposits $ 1,409,682 $ 1,356,924 $ 1,090,060
NOW accounts 1,368,213 1,271,553 1,052,690
Money market deposit
accounts 1,996,918 2,153,852 1,581,276
Savings accounts 2,253,073 2,243,949 1,869,398
Certificates of deposit 3,376,718 3,204,624 2,681,986
------------ ------------ ------------
Total retail deposits 10,404,604 10,230,902 8,275,410
Treasury deposits 166,684 208,521 96,725
------------ ------------ ------------
Total deposits 10,571,288 10,439,423 8,372,135
Federal Home Loan Bank
advances 2,590,335 3,021,503 2,511,495
Federal funds purchased and
securities sold under
agreements to repurchase 1,438,483 1,973,478 1,892,138
Other long-term debt (c) 670,015 695,316 532,760
Accrued expenses and other
liabilities 196,925 144,963 97,690
------------ ------------ ------------
Total liabilities 15,467,046 16,274,683 13,406,218
Preferred stock of
subsidiary corporation 9,577 9,577 9,577
Shareholders' equity 1,543,974 1,517,982 1,152,895
------------ ------------ ------------
Total Liabilities and
Shareholders' Equity $17,020,597 $17,802,242 $14,568,690
============ ============ ============
See Selected Financial Highlights for footnotes.
WEBSTER FINANCIAL CORPORATION
----------------------------------------------------------------------
Consolidated Statements of Income (unaudited)
----------------------------------------------------------------------
Three Months Ended Twelve Months Ended
December 31, December 31,
(In thousands, except per
share data) 2004 2003 2004 2003
----------------------------------------------------------------------
Interest income:
Loans $154,177 $117,983 $547,308 $460,677
Securities and short-term
investments 42,807 43,065 178,118 182,632
Loans held for sale 1,718 1,790 6,682 15,409
--------- --------- --------- ---------
Total interest income 198,702 162,838 732,108 658,718
--------- --------- --------- ---------
Interest expense:
Deposits 32,993 26,319 120,606 111,311
Borrowings 38,109 29,224 143,341 133,888
--------- --------- --------- ---------
Total interest expense 71,102 55,543 263,947 245,199
--------- --------- --------- ---------
Net interest income 127,600 107,295 468,161 413,519
Provision for loan losses 4,000 5,000 18,000 25,000
--------- --------- --------- ---------
Net interest income after
provision for loan losses 123,600 102,295 450,161 388,519
--------- --------- --------- ---------
Noninterest income:
Deposit service fees 20,712 17,731 77,743 70,018
Insurance revenue 10,348 9,077 43,506 39,975
Loan and loan servicing
fees 7,727 8,001 28,574 26,384
Wealth and investment
services 5,198 4,416 22,207 18,341
Financial advisory
services - 7,265 3,808 22,758
Gain on sale of loans and
loan servicing, net 2,492 2,854 13,305 19,520
Increase in cash surrender
value of life insurance 2,283 2,082 8,835 8,490
Other 2,692 2,402 7,416 8,423
--------- --------- --------- ---------
51,452 53,828 205,394 213,909
Gain on sale of
securities, net (2,646) 2,715 14,313 18,574
--------- --------- --------- ---------
Total noninterest income 48,806 56,543 219,707 232,483
--------- --------- --------- ---------
Noninterest expenses:
Compensation and benefits 57,428 53,722 219,820 206,381
Occupancy 9,909 7,470 35,820 30,698
Furniture and equipment 10,889 7,792 37,626 31,143
Intangible amortization 4,844 4,067 18,345 15,998
Marketing 2,533 2,058 13,380 11,508
Professional services 5,523 3,654 15,654 11,708
Acquisition costs 426 1,349 706 1,497
Debt prepayment penalties 45,761 - 45,761 -
Capital trust securities (c) - 3,485 - 11,924
Other 16,735 14,683 60,025 57,125
--------- --------- --------- ---------
Total noninterest expenses 154,048 98,280 447,137 377,982
--------- --------- --------- ---------
Income before income taxes 18,358 60,558 222,731 243,020
Income taxes 2,052 19,172 68,898 79,772
--------- --------- --------- ---------
Net income $ 16,306 $ 41,386 $153,833 $163,248
========= ========= ========= =========
Diluted shares (average) 54,045 46,699 51,352 46,362
Net income per common
share:
Basic $ 0.31 $ 0.90 $ 3.05 $ 3.58
Diluted 0.30 0.89 3.00 3.52
See Selected Financial Highlights for footnotes.
WEBSTER FINANCIAL CORPORATION
----------------------------------------------------------------------
Consolidated Statements of Income (unaudited)
----------------------------------------------------------------------
Three Months Ended
Dec. 31, Sept. 30, June 30, March 31, Dec. 31,
(In thousands,
except per share
data) 2004 2004 2004 2004 2003
----------------------------------------------------------------------
Interest income:
Loans $154,177 $145,456 $129,084 $118,591 $117,983
Securities and
short-term
investments 42,807 45,541 45,162 44,608 43,065
Loans held for sale 1,718 1,755 2,139 1,070 1,790
--------- --------- --------- --------- ---------
Total interest
income 198,702 192,752 176,385 164,269 162,838
--------- --------- --------- --------- ---------
Interest expense:
Deposits 32,993 32,611 29,172 25,830 26,319
Borrowings 38,109 38,853 33,746 32,633 29,224
--------- --------- --------- --------- ---------
Total interest
expense 71,102 71,464 62,918 58,463 55,543
--------- --------- --------- --------- ---------
Net interest
income 127,600 121,288 113,467 105,806 107,295
Provision for loan
losses 4,000 4,000 5,000 5,000 5,000
--------- --------- --------- --------- ---------
Net interest
income after
provision for
loan losses 123,600 117,288 108,467 100,806 102,295
--------- --------- --------- --------- ---------
Noninterest income:
Deposit service
fees 20,712 20,596 19,250 17,185 17,731
Insurance revenue 10,348 10,924 10,596 11,638 9,077
Loan and loan
servicing fees 7,727 6,893 7,305 6,649 8,001
Wealth and
investment
services 5,198 6,044 5,849 5,116 4,416
Financial advisory
services - - - 3,808 7,265
Gain on sale of
loans and loan
servicing, net 2,492 4,467 5,321 1,025 2,854
Increase in cash
surrender value of
life insurance 2,283 2,421 2,177 1,954 2,082
Other 2,692 1,912 964 1,848 2,402
--------- --------- --------- --------- ---------
51,452 53,257 51,462 49,223 53,828
Gain on sale of
securities, net (2,646) 5,843 5,616 5,500 2,715
--------- --------- --------- --------- ---------
Total noninterest
income 48,806 59,100 57,078 54,723 56,543
--------- --------- --------- --------- ---------
Noninterest
expenses:
Compensation and
benefits 57,428 55,606 53,659 53,127 53,722
Occupancy 9,909 9,144 8,402 8,365 7,470
Furniture and
equipment 10,889 10,103 8,993 7,641 7,792
Intangible
amortization 4,844 4,827 4,582 4,092 4,067
Marketing 2,533 4,233 3,630 2,984 2,058
Professional
services 5,523 4,294 2,938 2,899 3,654
Acquisition costs 426 - 265 - 1,349
Debt prepayment
penalties 45,761 - - - -
Capital trust
securities (c) - - - - 3,485
Other 16,735 15,562 14,710 13,033 14,683
--------- --------- --------- --------- ---------
Total noninterest
expenses 154,048 103,769 97,179 92,141 98,280
--------- --------- --------- --------- ---------
Income before
income taxes 18,358 72,619 68,366 63,388 60,558
Income taxes 2,052 23,258 22,523 21,065 19,172
--------- --------- --------- --------- ---------
Net income $ 16,306 $ 49,361 $ 45,843 $ 42,323 $ 41,386
========= ========= ========= ========= =========
Diluted shares
(average) 54,045 53,767 50,475 47,059 46,699
Net income per
common share:
Basic $ 0.31 $ 0.93 $ 0.92 $ 0.92 $ 0.90
Diluted 0.30 0.92 0.91 0.90 0.89
See Selected Financial Highlights for footnotes.
WEBSTER FINANCIAL CORPORATION
----------------------------------------------------------------------
Retail and Wholesale Interest-Rate Spreads (unaudited)
----------------------------------------------------------------------
Three Months Ended, December September June March December
2004 2004 2004 2004 2003
----------------------------------------------------------------------
Interest-rate
spread
------------------
Total interest-
earning assets 5.02 % 4.82 % 4.68 % 4.78 % 4.81 %
Total interest-
bearing liabilities 1.80 1.78 1.69 1.74 1.68
-------- -------- -------- -------- --------
Interest-rate
spread 3.22 % 3.04 % 2.99 % 3.04 % 3.13 %
Net interest
margin 3.25 3.06 3.02 3.09 3.18
Retail interest-
rate spread
------------------
Yield on loans and
loans held for sale 5.25 % 5.07 % 4.93 % 5.05 % 5.09 %
Cost of deposits 1.25 1.25 1.23 1.24 1.26
-------- -------- -------- -------- --------
Spread 4.00 % 3.82 % 3.70 % 3.81 % 3.83 %
======== ======== ======== ======== ========
Wholesale interest-
rate spread
-------------------
Yield on securities
and short-term
investments 4.37 % 4.18 % 4.09 % 4.19 % 4.17 %
Cost of borrowings 2.91 2.80 2.50 2.56 2.41
-------- -------- -------- -------- --------
Spread 1.46 % 1.38 % 1.59 % 1.63 % 1.76 %
======== ======== ======== ======== ========
----------------------------------------------------------------------
Consolidated Average Statements of Condition (unaudited)
----------------------------------------------------------------------
Three Months Ended December 31, 2004
----------------------------------------------------------------------
Fully tax-
Average equivalent
(Dollars in thousands) balance Interest yield/rate
----------------------------------------------------------------------
Assets:
Interest-earning assets:
Loans $11,649,909 $ 154,177 5.25 %
Securities 4,053,134 44,495 4.39 (d)
Loans held for sale 136,197 1,718 5.05
Short-term investments 25,772 134 2.03
------------ ------------ ------------
Total interest-earning
assets 15,865,012 200,524 5.02
------------
Noninterest-earning
assets 1,411,162
------------
Total assets $17,276,174
============
Liabilities and
Shareholders' Equity:
Interest-bearing
liabilities:
Demand deposits $ 1,399,592 $ - - %
Savings, NOW and money
market deposit accounts 5,643,515 12,340 0.87
Time deposits 3,434,389 20,653 2.39
------------ ------------ ------------
Total deposits 10,477,496 32,993 1.25
----------- ----------- ------------
Federal Home Loan Bank
advances 2,690,001 19,810 2.88
Fed funds and repurchase
agreements 1,778,435 8,455 1.86
Other long-term debt (c) 686,226 9,844 5.74
------------ ------------ ------------
Total borrowings 5,154,662 38,109 2.91
------------ ------------ ------------
Total interest-bearing
liabilities 15,632,158 71,102 1.80
------------
Noninterest-bearing
liabilities 112,063
------------
Total liabilities 15,744,221
Capital securities and
preferred stock of
subsidiary corporation (c) 9,577
Shareholders' equity 1,522,376
------------
Total liabilities and
shareholders' equity $17,276,174
============
129,422
Less: tax-equivalent
adjustment (1,822)
------------
Net interest income $ 127,600
============
Interest-rate spread 3.22 %
============
Net interest margin 3.25 %
============
See Selected Financial Highlights for footnotes.
Three Months Ended December 31, 2003
----------------------------------------------------------------------
Fully tax-
Average equivalent
(Dollars in thousands) balance Interest yield/rate
----------------------------------------------------------------------
Assets:
Interest-earning assets:
Loans $ 9,206,436 $ 117,983 5.08 %
Securities 4,153,607 43,486 4.20 (d)
Loans held for sale 135,632 1,790 5.28
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 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 (c) 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 (c) 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.
WEBSTER FINANCIAL CORPORATION
----------------------------------------------------------------------
Consolidated Average Statements of Condition (unaudited)
----------------------------------------------------------------------
Twelve Months Ended December 31, 2004
----------------------------------------------------------------------
Fully tax-
Average equivalent
(Dollars in thousands) balance Interest yield/rate
----------------------------------------------------------------------
Assets:
Interest-earning assets:
Loans $10,719,446 $547,308 5.11 %
Loans held for sale 129,945 6,682 5.14
Securities 4,331,385 183,028 4.23 (d)
Short-term investments 30,651 390 1.27
----------- -------- -----------
Total interest-earning assets 15,211,427 737,408 4.85
--------
Noninterest-earning assets 1,234,124
-----------
Total assets $16,445,551
===========
Liabilities and Shareholders'
Equity:
Interest-bearing liabilities:
Demand deposits $1,255,897 $ - - %
Savings, NOW and money market
deposit accounts 5,286,637 47,683 0.90
Time deposits 3,162,939 72,923 2.31
----------- -------- -----------
Total deposits 9,705,473 120,606 1.24
----------- -------- -----------
Federal Home Loan Bank advances 2,774,287 82,092 2.96
Fed funds and repurchase
agreements 1,834,605 24,693 1.35
Other long-term debt (c) 646,636 36,556 5.65
----------- -------- -----------
Total borrowings 5,255,528 143,341 2.73
----------- -------- -----------
Total interest-bearing
liabilities 14,961,001 263,947 1.76
--------
Noninterest-bearing liabilities 94,145
-----------
Total liabilities 15,055,146
Capital securities and preferred
stock of subsidiary corporation
(c) 9,577
Shareholders' equity 1,380,828
-----------
Total liabilities and
shareholders' equity $16,445,551
===========
473,461
Less: tax-equivalent adjustment (5,300)
--------
Net interest income $468,161
========
Interest-rate spread 3.09 %
===========
Net interest margin 3.11 %
===========
Twelve Months Ended December 31, 2003
----------------------------------------------------------------------
Fully tax-
Average equivalent
(Dollars in thousands) balance Interest yield/rate
----------------------------------------------------------------------
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 (d)
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 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 (c) 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
(c) 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.
WEBSTER FINANCIAL CORPORATION
----------------------------------------------------------------------
Asset Quality (unaudited)
----------------------------------------------------------------------
At or for the Three Months Ended
-------------------------------------------------
(Dollars in Dec. 31, Sept. 30, June 30, March 31, Dec. 31,
thousands) 2004 2004 2004 2004 2003
----------------------------------------------------------------------
Nonperforming Assets
--------------------
Nonperforming loans:
Commercial:
Commercial $14,624 $12,407 $15,895 $11,832 $14,266
Specialized
industry - - - 5,019 6,427
Equipment
financing 3,383 4,501 5,021 5,561 5,583
-------------------------------------------------
Total commercial 18,007 16,908 20,916 22,412 26,276
Commercial real
estate 8,431 11,157 13,757 5,583 4,281
Residential 7,796 7,695 8,599 7,941 6,128
Consumer 1,894 1,204 826 604 959
-------------------------------------------------
Total nonperforming
loans 36,128 36,964 44,098 36,540 37,644
-------------------------------------------------
Other real estate
owned and
repossessed assets:
Commercial 2,824 2,482 3,192 4,273 4,296
Residential 100 527 238 325 942
Consumer 114 20 130 124 -
-------------------------------------------------
Total other real
estate owned and
repossessed assets 3,038 3,029 3,560 4,722 5,238
-------------------------------------------------
Total nonperforming
assets $39,166 $39,993 $47,658 $41,262 $42,882
=================================================
----------------------------------------------------------------------
Summary of Classified
Loans
---------------------
Substandard:
Accruing $79,292 $89,463 $90,421 $87,477 $72,638
Nonaccruing 33,896 32,234 39,600 31,595 29,403
-------------------------------------------------
Total
substandard 113,188 121,697 130,021 119,072 102,041
Doubtful:
Nonaccruing 1,110 3,615 3,286 4,377 6,791
Loss - - - - -
-------------------------------------------------
Total classified
loans $114,298 $125,312 $133,307 $123,449 $108,832
=================================================
Classified as a
percent of total
loans 1.0% 1.1% 1.2% 1.3% 1.2%
-------------------------------------------------
WEBSTER FINANCIAL CORPORATION
----------------------------------------------------------------------
Allowance for Loan Losses (unaudited)
----------------------------------------------------------------------
At or for the Three Months Ended
-------------------------------------------------
(Dollars in Dec. 31, Sept. 30, June 30, March 31, Dec. 31,
thousands) 2004 2004 2004 2004 2003
----------------------------------------------------------------------
Allowance for Loan
Losses
------------------
Beginning balance $148,179 $146,511 $123,613 $121,674 $117,707
Allowance for
purchased loans 617 - 20,081 - 1,970
Provision 4,000 4,000 5,000 5,000 5,000
Charge-offs:
Commercial:
Specialized
industry - - - 826 558
All other
commercial 3,432 3,556 2,646 2,249 2,949
-------------------------------------------------
Total commercial 3,432 3,556 2,646 3,075 3,507
Residential 367 92 187 983 330
Consumer 147 195 174 97 174
-------------------------------------------------
Total charge-
offs 3,946 3,843 3,007 4,155 4,011
Recoveries (1,262) (1,511) (824) (1,094) (1,008)
-------------------------------------------------
Net loan charge-
offs 2,684 2,332 2,183 3,061 3,003
-------------------------------------------------
Ending balance $150,112 $148,179 $146,511 $123,613 $121,674
=================================================
Asset Quality Ratios:
---------------------
Allowance for loan
losses/total loans 1.28 % 1.28 % 1.30 % 1.30 % 1.32 %
Net charge-offs/
average loans
(annualized) 0.09 0.08 0.08 0.13 0.13
Nonperforming loans/
total loans 0.31 0.32 0.39 0.38 0.41
Nonperforming assets/
total assets 0.23 0.22 0.28 0.27 0.29
Allowance for loan
losses/nonperforming
loans 415.50 400.87 332.24 338.30 323.22
CONTACT: Webster Financial Corporation
Media Contact:
Meghan Thompson, 203-578-2287
mthompson@websterbank.com
or
Investor Contact:
Terry Mangan, 203-578-2318
tmangan@websterbank.com
SOURCE: Webster Financial Corporation