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Second Quarter Trends Compared To Prior Year:
- Commercial loans grow by 12 percent
- Deposits grow by 6 percent
- Noninterest income increases by 6 percent
- Wholesale borrowings decline to 22 percent of assets
WATERBURY, Conn., July 25 /PRNewswire-FirstCall/ -- Webster Financial
Corporation (NYSE: WBS), the holding company for Webster Bank, N.A., today
announced net income of $43.1 million in the second quarter compared to $46.3
million a year ago. Net income per diluted share was $.81 compared to $.85 a
year ago. For the first six months of 2006, net income was $87.0 million
compared to $93.8 million a year ago. Net income per share was $1.63 and $1.73
in the respective periods.
Among the factors impacting the quarter were a change in the timing of
dividends from the Federal Home Loan Bank of Boston (FHLB Boston) and the
continuing effects of a flattened yield curve. Webster did not record any
dividend income on its FHLB Boston investment during the quarter, but the FHLB
Boston has indicated that it expects to declare the equivalent of two dividend
payments in the third quarter. Earnings for the second quarter of 2006 would
have been $.02 per share higher had the dividend been recorded. The flattened
yield curve reduced wholesale spread revenues from investment securities
activities in the quarter, as the cost of borrowings exceeded the yield on
securities and reduced earnings per share by $.01 compared to a favorable
wholesale spread contribution of $.13 per share a year ago.
Cash net income, which adds stock-based compensation and intangible
amortization expenses back to net income, was $46.9 million, or $.88 per
share, compared to $51.1 million, or $.94 per share, in the year-ago quarter.
For the first six months, cash net income was $94.9 million, or $1.78 per
share, compared to $103.2 million, or $1.90 per share, a year ago.
"Solid growth in our core franchise activities underscores Webster's
strategic progress," stated Webster Chairman and Chief Executive Officer James
C. Smith. "Double-digit combined growth in commercial and consumer loans,
coupled with solid growth in deposits and fees and reductions in securities
and borrowings, further strengthens our balance sheet and improves earnings
quality. We're building on our position as the largest independent bank
headquartered in New England."
Commercial loans, including commercial real estate loans, were $5.0
billion at June 30, 2006, up 12 percent from a year ago. Commercial and
industrial loans were $3.2 billion, up 14 percent, and commercial real estate
loans were $1.8 billion, up 9 percent. Consumer loans, primarily home equity
loans and lines, increased 7 percent to $2.9 billion compared to $2.7 billion
a year ago. Commercial and consumer loans grew at a combined rate of 10
percent from a year ago while residential loans, which totaled $4.9 billion,
grew by 4 percent.
The company also noted that Webster Bank has reached an informal agreement
with the Office of the Comptroller of the Currency to address general bank
compliance, including bank secrecy act and related money laundering risks,
flood acts compliance and the internal audit program. These increased
compliance efforts, already well under way and receiving significant
management attention, are not expected to have a material impact on Webster's
operations or earnings.
Revenues
Total revenues, consisting of net interest income plus total noninterest
income, were $183.9 million in the second quarter compared to $183.5 million a
year ago. Net interest income totaled $126.8 million in the second quarter
compared to $129.8 million in the year-ago period, a decrease of 2 percent.
FHLB Boston's decision to defer the timing of dividends represented $1.8
million of the decline. Strong growth in higher yielding commercial and
consumer loans was offset by reduced wholesale spread revenue from the
securities portfolio.
Webster's net interest margin (annualized tax-equivalent net interest
income as a percentage of average earning assets) was 3.13 percent compared to
3.32 percent in the second quarter of 2005. The net interest margin would have
been 4 basis points higher in this quarter had FHLB Boston dividend income
been recorded as in prior periods. The decline from a year ago primarily
reflects deposit and borrowing costs increasing faster than yields on earning
assets due to the flattening of the yield curve.
Total noninterest income was $57.1 million in the second quarter compared
to $53.6 million a year ago, an increase of 6 percent. Deposit service fees
totaled $24.2 million and increased 11 percent from a year ago reflecting
growth in retail banking activities. Loan and loan servicing fees totaled $9.2
million and increased 26 percent aided by higher levels of line usage fees and
prepayment penalties. Wealth management fees totaled $6.9 million and
increased 15 percent based on strength in trust fees and investment services
revenues. These increases were partially offset by declines of $0.6 million in
insurance revenue and $0.5 million in gains on sale of loans.
The provision for credit losses totaled $3.0 million in the second quarter
and exceeded net loan charge-offs by $0.5 million. The provision was $2.0
million in the second quarter of 2005, which exceeded net loan charge-offs by
$2.3 million as a result of a net loan recovery of $0.3 million in that
quarter. The annualized net loan charge-off ratio was 0.08 percent of average
loans compared to (0.01) percent in the second quarter a year ago and 0.03
percent for the full year 2005.
Expenses
Total noninterest expenses were $117.3 million in the second quarter
compared to $113.5 million a year ago, an increase of 3 percent. Contributing
to this increase were ongoing investments in de novo branch expansion, HSA
Bank and the higher net cost of our new core systems. Adjusting for these
items and non-recurring core infrastructure conversion project charges in the
second quarter of 2005, noninterest expenses increased by 2 percent to $107.7
million compared to $105.4 million a year ago. This increase includes new
revenue-generating personnel in Webster's lines of business, the ongoing
build-out of the compliance function and other employee-related costs.
Balance Sheet Trends
Total assets were $18.0 billion at June 30, 2006 and increased 3 percent
from a year ago. Total loans were $12.7 billion and increased $0.9 billion, or
8 percent, from a year ago while securities totaled $3.4 billion and declined
by $0.4 billion, or 11 percent. Deposits were $12.2 billion and increased $0.6
billion, or 6 percent, with contributions from our de novo branching program
and ongoing growth in health savings account deposits at HSA Bank.
"Webster continues to deliver sustained organic growth through the
strength of our customer relationships," stated Webster President and Chief
Operating Officer William T. Bromage. "Our ability to address the totality of
customer financial needs in our expanding markets underpins Webster's future
opportunities for growth."
Demand and NOW deposits each grew by 3 percent compared to a year ago
while certificates of deposit balances grew by 16 percent as customers
continued to shift balances to this product category. The $0.4 billion
reduction in securities compared to a year ago funded $0.3 billion of loan
growth in excess of deposit growth and contributed to a $0.2 billion reduction
in wholesale borrowings over the past year. As a result, wholesale borrowings
declined to 22 percent of total assets at June 30 compared to 24 percent a
year ago.
Book value per common share of $31.27 at June 30, 2006 increased from
$29.94 a year ago. Tangible book value per share of $18.36 at June 30
increased from $17.18 last year. The ratio of tangible equity to tangible
assets increased to 5.48 percent at June 30 compared to 5.38 percent a year
ago. Return on average tangible equity was 17.4 percent in the second quarter
compared to 20.2 percent a year ago while the cash return on average tangible
equity was 18.9 percent and 22.3 percent in the respective periods.
Asset Quality
Nonperforming assets totaled $64.3 million, or 0.36 percent of total
assets, at June 30, 2006 compared to $61.9 million, or 0.35 percent, at March
31 and $44.2 million, or 0.25 percent, a year ago.
The allowance for credit losses, which consists of the allowance for loan
losses and the reserve for unfunded commitments, was $156.5 million, or 1.23
percent of total loans, at June 30 compared to $154.8 million, or 1.31
percent, a year ago. The ratio of the allowance to nonperforming loans was 253
percent at June 30 compared to 369 percent a year ago.
Webster Financial Corporation is the holding company for Webster Bank,
National Association and Webster Insurance. With $18.0 billion in assets,
Webster provides business and consumer banking, mortgage, insurance, financial
planning, trust and investment services through 160 banking offices, 308 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., Center Capital Corporation, an equipment
finance company headquartered in Farmington, Connecticut and provides health
savings account trustee and administrative services through HSA Bank, a
division of Webster Bank.
For more information about Webster, including past press releases and the
latest Annual Report, visit the Webster website at
http://www.websteronline.com.
Conference Call
A conference call covering Webster's 2006 second quarter earnings
announcement will be held today, Tuesday, July 25, at 11:00 a.m. Eastern Time
and may be heard through Webster's investor relations website at
http://www.wbst.com, or in listen-only mode by calling 1-877-407-3980 or
201-689-8475 internationally. The call will be archived on the website and
available for future retrieval.
Forward-looking Statements
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 2005. Except as required by law, Webster does not
undertake to update any such forward looking information.
Non-GAAP Financial Measures
In addition to results presented in accordance with GAAP, this press
release contains certain non-GAAP financial measures. We believe that
providing certain non-GAAP financial measures, such as cash basis net income,
provides investors with information useful in understanding our financial
performance, our performance trends and financial position. A reconciliation
of cash basis net income to net income is included in the accompanying
financial tables, elsewhere in this report.
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) 2006 2005 2006 2005
Net income and performance
ratios (annualized):
Net income $ 43,143 $ 46,258 $ 86,995 $ 93,753
Net income per diluted
common share 0.81 0.85 1.63 1.73
Return on average
shareholders' equity 10.34% 11.57% 10.44% 11.85%
Return on average tangible
equity 17.44 20.20 17.63 20.74
Return on average assets 0.96 1.07 0.98 1.09
Noninterest income as a
percentage of total
revenue 31.04 29.24 30.41 29.25
Efficiency ratio (a,d) 63.80 61.86 64.05 60.67
Cash income and performance
ratios (annualized) (b):
Net income $ 43,143 $ 46,258 $ 86,995 $ 93,753
Stock-based compensation,
net of tax 1,408 1,620 2,796 3,023
Intangible amortization,
net of tax 2,304 3,256 5,149 6,442
Cash income 46,855 51,134 94,940 103,218
Cash income per diluted
common share 0.88 0.94 1.78 1.90
Cash return on average
shareholders' equity 11.22% 12.78% 11.39% 13.04%
Cash return on average
tangible equity 18.94 22.33 19.24 22.83
Cash return on average
assets 1.05 1.18 1.06 1.20
Asset quality:
Allowance for credit
losses $156,471 $154,822 $156,471 $154,822
Nonperforming assets 64,319 44,241 64,319 44,241
Allowance for credit
losses / total loans 1.23% 1.31% 1.23% 1.31%
Net charge-offs
(recoveries) / average
loans (annualized) 0.08 (0.01) 0.07 0.01
Nonperforming loans /
total loans 0.49 0.35 0.49 0.35
Nonperforming assets /
total assets 0.36 0.25 0.36 0.25
Allowance for credit
losses / nonperforming
loans 253.44 369.49 253.44 369.49
Other ratios (annualized):
Tangible capital ratio 5.48% 5.38% 5.48% 5.38%
Shareholders' equity /
total assets 9.13 9.22 9.13 9.22
Interest-rate spread 3.06 3.29 3.13 3.28
Net interest margin 3.13 3.32 3.18 3.32
Share related:
Book value per common
share $ 31.27 $ 29.94 $ 31.27 $ 29.94
Tangible book value per
common share 18.36 17.18 18.36 17.18
Common stock closing price 47.44 46.69 47.44 46.69
Dividends declared per
common share 0.27 0.25 0.52 0.48
Common shares issued and
outstanding 52,610 53,807 52,610 53,807
Basic shares (average) 52,637 53,618 52,864 53,594
Diluted shares (average) 53,252 54,278 53,468 54,244
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) For purposes of this computation, unrealized gains (losses) are
excluded from the average balance for rate calculations.
(d) Excluding conversion and infrastructure costs, the efficiency ratio
would have been 59.95% and 59.39% for the three and six months ended
June 30, 2005, respectively.
(e) Effective December 31, 2005, Webster transferred the portion of the
allowance for loan losses related to commercial and consumer lending
commitments and letters of credit to the reserve for unfunded credit
commitments.
(f) The recording of the FHLB dividend of $1.8 million in the second
quarter of 2006 would have increased the yield by 19 basis points
(bp) and improved the wholesale spread from (24) bp to (5) bp.
(g) Cost of borrowings includes long-term debt such as Trust Preferred
Securities and subordinated debt.
Consolidated Statements of Condition (unaudited)
June 30, March 31, June 30,
(In thousands) 2006 2006 2005
Assets:
Cash and due from depository
institutions $ 327,622 $ 267,541 $ 322,376
Short-term investments 59,666 11,889 13,088
Securities:
Trading, at fair value 2,698 1,042 1,409
Available for sale, at fair value 2,317,645 2,472,699 2,649,930
Held-to-maturity securities 1,088,206 1,116,386 1,196,368
Total securities 3,408,549 3,590,127 3,847,707
Loans held for sale 275,240 201,210 245,174
Loans:
Residential mortgages 4,875,134 4,890,887 4,690,318
Commercial 3,160,200 3,038,930 2,781,938
Commercial real estate 1,819,635 1,851,035 1,666,235
Consumer 2,855,558 2,809,785 2,671,197
Total loans 12,710,527 12,590,637 11,809,688
Allowance for loan losses (147,401) (146,383) (154,822)
Loans, net 12,563,126 12,444,254 11,654,866
Accrued interest receivable 85,719 94,602 67,380
Premises and equipment, net 188,125 184,831 171,579
Goodwill and intangible assets 695,014 698,557 708,387
Cash surrender value of life
insurance 242,740 240,426 233,129
Prepaid expenses and other assets 176,341 173,749 208,511
Total Assets $18,022,142 $17,907,186 $17,472,197
Liabilities and Shareholders'
Equity:
Deposits:
Demand deposits $ 1,549,051 $ 1,459,855 $ 1,509,957
NOW accounts 1,687,297 1,683,677 1,640,692
Money market deposit accounts 1,888,179 1,761,016 1,892,664
Savings accounts 1,954,298 2,004,375 2,284,076
Certificates of deposit 4,447,504 4,392,731 3,830,999
Treasury deposits 690,136 776,623 420,846
Total deposits 12,216,465 12,078,277 11,579,234
Federal Home Loan Bank advances 1,804,140 2,383,118 2,126,437
Securities sold under agreements
to repurchase and other
short-term debt 1,528,224 1,007,439 1,345,910
Other long-term debt 622,267 631,568 674,117
Reserve for unfunded
commitments(e) 9,070 9,574 -
Accrued expenses and other
liabilities 187,445 146,871 126,011
Total liabilities 16,367,611 16,256,847 15,851,709
Preferred stock of subsidiary
corporation 9,577 9,577 9,577
Shareholders' equity 1,644,954 1,640,762 1,610,911
Total Liabilities and
Shareholders' Equity $18,022,142 $17,907,186 $17,472,197
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) 2006 2005 2006 2005
Interest income:
Loans $207,097 $166,967 $402,671 $325,754
Securities and short-term
investments 39,134 42,684 80,729 83,583
Loans held for sale 3,317 2,964 6,656 5,696
Total interest income 249,548 212,615 490,056 415,033
Interest expense:
Deposits 72,593 44,099 134,947 79,967
Borrowings 50,150 38,681 98,145 76,999
Total interest expense 122,743 82,780 233,092 156,966
Net interest income 126,805 129,835 256,964 258,067
Provision for credit losses 3,000 2,000 5,000 5,500
Net interest income after
provision for credit
losses 123,805 127,835 251,964 252,567
Noninterest income:
Deposit service fees 24,150 21,747 46,019 40,876
Insurance revenue 9,988 10,562 20,712 22,364
Loan and loan servicing fees 9,162 7,274 16,986 16,203
Wealth and investment
services 6,930 6,028 13,284 11,423
Gain on sale of loans and
loan servicing, net 2,538 3,012 5,811 5,548
Increase in cash surrender
value of life insurance 2,314 2,302 4,685 4,540
Other 1,284 2,013 3,059 4,256
56,366 52,938 110,556 105,210
Gain on sale of securities,
net 702 710 1,714 1,466
Total noninterest income 57,068 53,648 112,270 106,676
Noninterest expenses:
Compensation and benefits 64,585 57,854 129,588 115,756
Occupancy 11,824 10,810 24,006 21,669
Furniture and equipment 13,962 11,611 27,557 22,409
Intangible amortization 3,544 5,009 7,921 9,911
Marketing 4,292 3,664 7,916 6,947
Professional services 3,464 3,972 7,008 7,742
Conversion and
infrastructure costs - 3,506 - 4,640
Other 15,647 17,079 32,493 32,205
Total noninterest expenses 117,318 113,505 236,489 221,279
Income before income taxes 63,555 67,978 127,745 137,964
Income taxes 20,412 21,720 40,750 44,211
Net income $ 43,143 $ 46,258 $ 86,995 $ 93,753
Diluted shares (average) 53,252 54,278 53,468 54,244
Net income per common share:
Basic $ 0.82 $ 0.86 $ 1.65 $ 1.75
Diluted 0.81 0.85 1.63 1.73
See Selected Financial Highlights for footnotes.
Consolidated Statements of Income (unaudited)
Three Months Ended
(In thousands, except June 30, March 31, Dec. 31, Sept. 30, June 30,
per share data) 2006 2006 2005 2005 2005
Interest income:
Loans $207,097 $195,574 $187,607 $175,680 $166,967
Securities and short-
term investments 39,134 41,595 42,503 43,775 42,684
Loans held for sale 3,317 3,339 3,563 3,686 2,964
Total interest income 249,548 240,508 233,673 223,141 212,615
Interest expense:
Deposits 72,593 62,354 57,132 51,338 44,099
Borrowings 50,150 47,995 46,879 42,191 38,681
Total interest
expense 122,743 110,349 104,011 93,529 82,780
Net interest income 126,805 130,159 129,662 129,612 129,835
Provision for credit
losses 3,000 2,000 2,000 2,000 2,000
Net interest income
after provision for
credit losses 123,805 128,159 127,662 127,612 127,835
Noninterest income:
Deposit service fees 24,150 21,869 22,909 22,182 21,747
Insurance revenue 9,988 10,724 10,678 10,973 10,562
Loan and loan servicing
fees 9,162 7,824 9,290 7,739 7,274
Wealth and investment
services 6,930 6,354 6,174 5,554 6,028
Gain on sale of loans
and loan servicing, net 2,538 3,273 2,322 3,703 3,012
Increase in cash
surrender value of life
insurance 2,314 2,371 2,360 2,341 2,302
Other 1,284 1,775 3,470 2,347 2,013
56,366 54,190 57,203 54,839 52,938
Gain on sale of
securities, net 702 1,012 1,026 1,141 710
Total noninterest
income 57,068 55,202 58,229 55,980 53,648
Noninterest expenses:
Compensation and
benefits 64,585 65,003 64,905 60,808 57,854
Occupancy 11,824 12,182 11,141 10,482 10,810
Furniture and equipment 13,962 13,595 14,810 13,009 11,611
Intangible amortization 3,544 4,377 5,001 5,001 5,009
Marketing 4,292 3,624 3,981 3,339 3,664
Professional services 3,464 3,544 3,594 3,626 3,972
Conversion and
infrastructure costs - - 1,281 2,217 3,506
Other 15,647 16,846 14,646 16,450 17,079
Total noninterest
expenses 117,318 119,171 119,359 114,932 113,505
Income before income
taxes 63,555 64,190 66,532 68,660 67,978
Income taxes 20,412 20,338 21,032 22,058 21,720
Net income $ 43,143 $ 43,852 $ 45,500 $ 46,602 $ 46,258
Diluted shares
(average) 53,252 53,703 54,129 54,310 54,278
Net income per common
share:
Basic $ 0.82 $ 0.83 $ 0.85 $ 0.87 $ 0.86
Diluted 0.81 0.82 0.84 0.86 0.85
See Selected Financial Highlights for footnotes.
Retail and Wholesale Interest-Rate Spreads (unaudited)
Three Months Ended
June March December September June
2006 2006 2005 2005 2005
Interest-rate spread
Yield on interest-earning
assets 6.11% 5.97% 5.73% 5.55% 5.40%
Cost of interest-bearing
liabilities 3.05 2.78 2.55 2.33 2.11
Interest-rate spread 3.06% 3.19% 3.18% 3.22% 3.29%
Net interest margin 3.13 3.24 3.22 3.26 3.32
Retail interest-rate spread
Yield on loans and loans
held for sale 6.52% 6.32% 6.02% 5.83% 5.66%
Cost of deposits 2.43 2.16 1.94 1.76 1.57
Spread 4.09% 4.16% 4.08% 4.07% 4.09%
Wholesale interest-rate
spread
Yield on securities and
short-term investments(f) 4.61% 4.76% 4.75% 4.67% 4.62%
Cost of borrowings(g) 4.85 4.44 4.19 3.84 3.54
Spread(f) (0.24)% 0.32% 0.56% 0.83% 1.08%
Consolidated Average Statements of Condition (unaudited)
Three Months Ended June 30, 2006
Fully tax-
Average equivalent
(Dollars in thousands) balance Interest yield/rate
Assets:
Interest-earning assets:
Loans $12,625,061 $207,097 6.54%
Securities 3,496,863 40,991 4.61(c)
Loans held for sale 230,268 3,317 5.76
Short-term investments 38,412 407 4.19
Total interest-earning assets 16,390,604 251,812 6.11
Noninterest-earning assets 1,507,337
Total assets $17,897,941
Liabilities and Shareholders'
Equity:
Interest-bearing liabilities:
Demand deposits $ 1,457,462 $ - -%
Savings, NOW and money market
deposit accounts 5,371,432 22,489 1.68
Time deposits 5,147,276 50,104 3.90
Total deposits 11,976,170 72,593 2.43
Federal Home Loan Bank advances 2,241,811 25,329 4.47
Repurchase agreements and other
short-term debt 1,230,394 12,606 4.05
Other long-term debt 628,735 12,215 7.77
Total borrowings 4,100,940 50,150 4.85
Total interest-bearing liabilities 16,077,110 122,743 3.05
Noninterest-bearing liabilities 141,469
Total liabilities 16,218,579
Preferred stock of subsidiary
corporation 9,577
Shareholders' equity 1,669,785
Total liabilities and
shareholders' equity $17,897,941
129,069
Less: tax-equivalent adjustment (2,264)
Net interest income $126,805
Interest-rate spread 3.06%
Net interest margin 3.13%
Three Months Ended June 30, 2005
Fully tax-
Average equivalent
(Dollars in thousands) balance Interest yield/rate
Assets:
Interest-earning assets:
Loans $11,727,278 $166,968 5.68%
Securities 3,851,741 44,687 4.62(c)
Loans held for sale 242,351 2,964 4.89
Short-term investments 13,260 131 3.91
Total interest-earning assets 15,834,630 214,750 5.40
Noninterest-earning assets 1,493,233
Total assets $17,327,863
Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Demand deposits $ 1,451,236 $ - -%
Savings, NOW and money market
deposit accounts 5,749,931 16,181 1.13
Time deposits 4,078,793 27,918 2.75
Total deposits 11,279,960 44,099 1.57
Federal Home Loan Bank advances 2,210,809 18,160 3.25
Repurchase agreements and other
short-term debt 1,449,355 9,872 2.69
Other long-term debt 674,178 10,649 6.32
Total borrowings 4,334,342 38,681 3.54
Total interest-bearing
liabilities 15,614,302 82,780 2.11
Noninterest-bearing liabilities 104,104
Total liabilities 15,718,406
Preferred stock of subsidiary
corporation 9,577
Shareholders' equity 1,599,880
Total liabilities and
shareholders' equity $17,327,863
131,970
Less: tax-equivalent adjustment (2,135)
Net interest income $129,835
Interest-rate spread 3.29%
Net interest margin 3.32%
See Selected Financial Highlights for footnotes.
Consolidated Average Statements of Condition (unaudited)
Six Months Ended June 30, 2006
Fully tax-
Average equivalent
(Dollars in thousands) balance Interest yield/rate
Assets:
Interest-earning assets:
Loans $12,509,184 $402,671 6.44%
Securities 3,563,554 84,810 4.70(c)
Loans held for sale 229,486 6,656 5.80
Short-term investments 26,861 519 3.84
Total interest-earning assets 16,329,085 494,656 6.04
Noninterest-earning assets 1,504,001
Total assets $17,833,086
Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Demand deposits $ 1,454,585 $ - -%
Savings, NOW and money market
deposit accounts 5,340,529 42,297 1.60
Time deposits 5,027,758 92,650 3.72
Total deposits 11,822,872 134,947 2.30
Federal Home Loan Bank advances 2,319,410 49,825 4.27
Repurchase agreements and other
short-term debt 1,259,585 24,436 3.86
Other long-term debt 634,736 23,884 7.53
Total borrowings 4,213,731 98,145 4.64
Total interest-bearing
liabilities 16,036,603 233,092 2.91
Noninterest-bearing liabilities 120,349
Total liabilities 16,156,952
Preferred stock of subsidiary
corporation 9,577
Shareholders' equity 1,666,557
Total liabilities and
shareholders' equity $17,833,086
261,564
Less: tax-equivalent adjustment (4,600)
Net interest income $256,964
Interest-rate spread 3.13%
Net interest margin 3.18%
Six Months Ended June 30, 2005
Fully tax-
Average equivalent
(Dollars in thousands) balance Interest yield/rate
Assets:
Interest-earning assets:
Loans $11,706,386 $ 325,755 5.56%
Securities 3,801,582 87,376 4.58(c)
Loans held for sale 228,230 5,696 4.99
Short-term investments 20,020 273 2.71
Total interest-earning assets 15,756,218 419,100 5.31
Noninterest-earning assets 1,447,520
Total assets $17,203,738
Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Demand deposits $ 1,398,593 $ - -%
Savings, NOW and money market
deposit accounts 5,677,509 29,140 1.04
Time deposits 3,886,783 50,827 2.64
Total deposits 10,962,885 79,967 1.47
Federal Home Loan Bank advances 2,308,437 36,747 3.17
Repurchase agreements and other
short-term debt 1,553,899 19,415 2.49
Other long-term debt 677,630 20,837 6.15
Total borrowings 4,539,966 76,999 3.38
Total interest-bearing
liabilities 15,502,851 156,966 2.03
Noninterest-bearing liabilities 108,370
Total liabilities 15,611,221
Preferred stock of subsidiary
corporation 9,577
Shareholders' equity 1,582,940
Total liabilities and
shareholders' equity $17,203,738
262,134
Less: tax-equivalent adjustment (4,067)
Net interest income $258,067
Interest-rate spread 3.28%
Net interest margin 3.32%
See Selected Financial Highlights for footnotes.
At or for the Three Months Ended
June March Dec. Sept. June
(Unaudited) 30, 31, 31, 30, 30,
(Dollars in thousands) 2006 2006 2005 2005 2005
Asset Quality
Nonperforming loans:
Commercial:
Commercial $ 25,052 $ 20,721 $ 32,678 $ 27,544 $ 19,073
Equipment financing 2,693 2,864 3,065 3,209 3,466
Total commercial 27,745 23,585 35,743 30,753 22,539
Commercial real estate 23,711 24,012 22,678 19,650 11,654
Residential 7,218 8,891 6,979 6,436 6,690
Consumer 3,065 2,875 1,829 1,699 1,019
Total nonperforming
loans 61,739 59,363 67,229 58,538 41,902
Loans held for sale - - - 181 -
Other real estate owned
and repossessed assets:
Commercial 2,254 1,712 5,126 1,408 2,217
Residential 316 456 232 218 112
Consumer 10 361 427 10 10
Total other real estate
owned and repossessed
assets 2,580 2,529 5,785 1,636 2,339
Total nonperforming
assets $ 64,319 $ 61,892 $ 73,014 $ 60,355 $ 44,241
Allowance for Credit Losses
Beginning balance $155,957 $155,632 $155,052 $154,822 $152,519
Provision 3,000 2,000 2,000 2,000 2,000
Charge-offs:
Commercial 2,775 1,629 3,272 2,204 1,432
Residential 65 75 110 378 178
Consumer 239 362 153 137 201
Total charge-offs 3,079 2,066 3,535 2,719 1,811
Recoveries (593) (391) (2,115) (949) (2,114)
Net loan charge-offs
(recoveries) 2,486 1,675 1,420 1,770 (303)
Ending balance $156,471 $155,957 $155,632 $155,052 $154,822
Components: (e)
Allowance for loan
losses $147,401 $146,383 $146,486 $155,052 $154,822
Reserve for unfunded
credit commitments 9,070 9,574 9,146 - -
Allowance for credit
losses $156,471 $155,957 $155,632 $155,052 $154,822
Asset Quality Ratios:
Allowance for loan losses
/ total loans 1.16% 1.16% 1.19% 1.27% 1.31
Allowance for credit
losses / total loans 1.23 1.24 1.27 1.27 1.31
Net charge-offs (recoveries)/
average loans (annualized) 0.08 0.05 0.05 0.06 (0.01)
Nonperforming loans /
total loans 0.49 0.47 0.55 0.48 0.35
Nonperforming assets /
total assets 0.36 0.35 0.41 0.34 0.25
Allowance for credit losses /
nonperforming loans 253.44 262.72 231.50 264.87 369.49
See Selected Financial Highlights for footnotes.
SOURCE Webster Financial Corporation
CONTACT: Media Contact
Clark Finley 203-578-2287
cfinley@websterbank.com
or
Investor Contact
Terry Mangan 203-578-2318
tmangan@websterbank.com
/Web site: http://www.websteronline.com/
(WBS)