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First Quarter Highlights:
- Diluted earnings per share of $.62 (includes the aggregate effect of $.11 per diluted share of severance
- related charges from ongoing restructuring, the costs of closing the remaining operations of People's Mortgage Company (PMC) previously announced on April 5, 2007, the write down of a construction loan held for sale and seasonal compensation costs).
- Tangible capital increased to 6.74 percent, up from 6.46 percent at December 31, 2006 and 5.68 percent at September 30, 2006.
- Net interest margin improved to 3.41 percent, up from 3.23 percent in the fourth quarter of 2006 and 3.01 percent in the third quarter of 2006.
- Loan to deposit ratio improved to 98 percent from 104 percent at December 31, 2006 and 106 percent at September 30, 2006.
- Completion of the balance sheet repositioning actions announced in the fourth quarter with the securitization of $633 million in residential mortgage loans.
- Moody's announced upgrade of Webster based on financial strength and credit ratings; Fitch raised outlook to "Positive."
- Increased the quarterly cash dividend by 11% to $.30 per share from $.27 per share.
WATERBURY, Conn., April 19, 2007 /PRNewswire-FirstCall via COMTEX News Network/ -- Webster Financial
Corporation (NYSE: WBS), the holding company for Webster Bank, N.A., today
announced net income of $35.0 million or $.62 per diluted share for the first
quarter of 2007, compared to $37.8 million or $.67 per diluted share for the
fourth quarter of 2006 and to $43.9 million or $.82 per diluted share for the
first quarter of 2006. First quarter 2007 net income includes charges for
other items of $9.9 million ($6.4 million, net of tax) or $.11 per diluted
share outlined in the following table.
Earnings Reconciliation
For the Three Months Ended
March 31, 2007 December 31, 2006
(In thousands except Pre- Tax Pre- Tax
per share data) Tax Effected EPS Tax Effected EPS
Reported Net Income $51,222 $35,036 $0.62 $54,895 $37,798 $0.67
Balance Sheet
Repositioning Actions:
Loss on sale of $250
million
of mortgage loans - - - 5,713 3,713 0.07
Loss on sale of AFS
securities, net - - - 2,400 1,560 0.03
Total balance sheet
repositioning actions - - - 8,113 5,273 0.10
Other Items:
Acquisition costs
(NewMil) - - - 2,018 1,312 0.02
Net gain from pension
curtailment - - - (300) (195) -
Gain on sale of
properties - - - (1,400) (910) (0.02)
Write-down of
construction
loan held for sale 700 455 0.01 - - -
Compensation costs
seasonal (A) 4,700 3,055 0.05 - - -
Severance-related
charges 2,200 1,430 0.02 - - -
Closure of Peoples
Mortgage Company (PMC) 2,322 1,509 0.03 - - -
Total other items 9,922 6,449 0.11 318 207 0.00
Total balance sheet
repositioning
actions and other
items 9,922 6,449 0.11 8,431 5,480 0.10
Adjusted net income
excluding balance sheet
repositioning actions
and other items $61,144 $41,485 $0.73 $63,326 $43,278 $0.77
(A) Expect 25% of the seasonal increase to remain in the second quarter
As previously disclosed, Webster incurred seasonally higher expenses in
the first quarter of 2007 primarily related to payroll taxes and 401(k) match.
The impact of these seasonally higher expenses was $4.7 million ($3.1 million,
net of taxes) or $.05 per diluted share. In addition, as also previously
disclosed, one residential construction loan in Florida classified as held for
sale was written down in value by $700,000 ($455,000, net of taxes) or $.01
per diluted share. This adjustment is reflected in mortgage banking activities
as a reduction in noninterest income in the first quarter. Also, Webster
incurred severance related charges from ongoing restructuring in insurance and
other lines of business of $2.2 million ($1.4 million, net of taxes) or $.02
per diluted share and closing costs of $2.3 million ($1.5 million, net of
taxes) or $.03 per share related to the remaining operations of PMC.
Additionally, as the final component of balance sheet repositioning
actions announced in the fourth quarter, Webster completed the securitization
of $633 million of residential mortgage loans during the first quarter of
2007. These securities are classified as held-to-maturity.
"Webster has begun to execute changes resulting from our previously
announced strategic review with the objective of narrowing and sharpening our
focus on our vision to be New England's bank," stated Webster Chairman and
Chief Executive Officer James C. Smith. "To date outcomes from this review
include the closure of PMC, the termination of mezzanine lending operations,
the discontinuance of construction lending outside of our primary market, the
restructuring of our insurance operations and the outsourcing of the back
office operations of Webster Investment Services. We remain committed to
completing this process by mid-year."
Commercial loans, including commercial real estate loans, and consumer
loans, were $8.6 billion at March 31, 2007, up 11 percent from March 31, 2006.
Commercial and consumer loans represent 70 percent of total loans at March 31,
2007 compared to 61 percent a year ago. "Webster continues to show consistent
growth in these core lines of business," stated Webster President and Chief
Operating Officer William T. Bromage. "As the results show, our plan has been
to reduce our percentage of residential loans to total loans and to continue
to focus on growth in commercial and consumer loans."
Revenues
Total revenue, which consists of net interest income plus total
non-interest income, was $185.5 million in the first quarter, compared to
$180.5 million in the fourth quarter and $185.4 million a year ago.
Net interest income was $128.1 million in the first quarter compared to
$129.2 million in the fourth quarter and $130.2 million a year ago. Average
interest-earning assets were lower in the first quarter of 2007 as a result of
recent balance sheet repositioning actions in comparison to the fourth quarter
and first quarter of 2006; however, Webster's net interest margin (annualized
tax-equivalent net interest income as a percentage of average earning assets)
increased to 3.41 percent compared to 3.23 percent in the fourth quarter and
3.24 percent a year ago. Webster's balance sheet repositioning actions have
positively impacted the net interest margin as the proceeds from the sales of
securities have paid down high-cost borrowings. Slightly offsetting the
positive effect of the balance sheet restructuring is continued consumer
preference for higher yielding certificates of deposit as well as the impact
of the inverted yield curve. The spread between the yield on loans and the
cost of deposits increased to 3.87 percent in the first quarter compared to
3.83 percent in the fourth quarter and 4.17 percent a year ago.
Total non-interest income was $57.4 million in the first quarter compared
to $51.4 million in the fourth quarter and $55.2 million a year ago. Non-
interest income in the fourth quarter was affected by losses on sales of
securities of $2.4 million and losses on sale of loans of $5.7 million.
Deposit service fees totaled $25.4 million compared to $25.5 million in the
fourth quarter and $21.9 million a year ago. Insurance revenue was $10.1
million in the quarter compared to $8.3 million in the fourth quarter and
$10.7 million a year ago. Loan related fees were $7.9 million compared to $9.6
million in the fourth quarter and $7.8 million a year ago. The decrease in
loan related fees compared to the fourth quarter reflects higher commercial
real estate prepayment fees of $2.4 million in that period. Wealth management
fees totaled $6.9 million compared to $7.2 million in the fourth quarter and
$6.4 million a year ago. Income from mortgage banking activities was $2.2
million in the first quarter compared to $2.9 million in the fourth quarter
and $3.3 million a year ago. The decline from the fourth quarter reflects the
$700,000 write down in value of one previously-mentioned loan in Florida.
Other non-interest income was $1.8 million compared to $3.7 million in the
fourth quarter, and $1.8 million a year ago. Fourth quarter 2006 results
included a $1.4 million gain on the sale of properties.
Provision For Credit Losses
The provision for credit losses was $3.0 million in the first and fourth
quarter and $2.0 million a year ago. Net loan charge-offs totaled $5.3 million
compared to $9.1 million in the fourth quarter and $1.7 million a year ago.
The increase in net charge-offs when comparing the first quarter of 2007 to
the first quarter of 2006 reflects the $2.1 million of previously-announced
net charge-offs in connection with 13 residential construction loans in
Florida. Net charge-offs in the fourth quarter reflected two commercial loans
that had been identified and fully reserved earlier in 2006. The annualized
net loan charge-off ratio was 0.17 percent of average loans compared to 0.27
percent in the fourth quarter and 0.05 percent a year ago. The allowance for
credit losses to total loans was 1.24 percent at March 31, 2007 and 2006 and
1.20 percent at December 31, 2006.
Non-Interest Expenses
Total non-interest expenses were $131.3 million in the first quarter
compared to $122.6 million in the fourth quarter and $119.2 million a year
ago. First quarter expenses include the previously-discussed severance related
charges from ongoing restructuring in insurance and other lines of business of
$2.2 million, closing costs of $2.3 million related to the remaining
operations of PMC and $4.7 million of seasonally higher expenses compared to
the fourth quarter, primarily related to payroll tax and 401(k) match. The
2006 fourth quarter and 2007 first quarter include the expenses of operations
related to the acquisition of NewMil Bancorp. "We are managing our expenses
aggressively with the focus on improving operating leverage for the balance of
2007," stated Webster Chief Financial Officer Jerry Plush.
Balance Sheet Trends
Total assets were $16.9 billion at March 31, 2007 compared with $17.9
billion a year ago. Total assets have declined by $1 billion primarily from
the balance sheet repositioning actions. Total loans were $12.3 billion, a
decrease of $0.3 billion, or 2 percent, from a year ago, due primarily to the
securitization of $371 million in residential loans and the sale of $250
million in residential loans in the fourth quarter of 2006 and the
securitization of another $633 million in residential loans in the first
quarter of 2007. Securities totaled $2.5 billion and declined by $1.1 billion,
or 31 percent from a year ago. Deposits were $12.6 billion, an increase of
$0.5 billion, or 4 percent, from a year ago as retail deposits increased $898
million, with contributions from the branches acquired from the NewMil Bank
acquisition, de novo branching and growth in health savings account deposits
at HSA Bank, which more than offset a $418 million decline in brokered
deposits.
The $1.1 billion reduction in securities and $0.5 billion of total deposit
growth, each compared to a year ago, contributed to a $1.8 billion reduction
in wholesale borrowings over the past year. Wholesale borrowings declined to
13 percent of total assets at March 31 compared to 22 percent a year ago.
The loan to deposit ratio improved to 98 percent at March 31, 2007 from
104 percent at both December 31, 2006 and March 31, 2006. Improvement in this
ratio reflects completion of balance sheet repositioning actions and deposit
growth over the past year.
Book value per common share of $33.70 at March 31, 2007 increased from
$31.09 a year ago. Tangible book value per share of $19.46 at March 31, 2007
increased from $18.18 last year. The ratio of tangible equity to tangible
assets increased to 6.74 percent at March 31, 2007 compared to 5.48 percent a
year ago.
Capital
As previously announced, Webster prepaid its Capital Trust I and Capital
Trust II securities on April 2, 2007, at call prices of 104.68 percent and
105.0 percent, respectively, plus accrued and unpaid interest. As reported in
the 2006 10-K, Webster will record a net pretax charge to income in the second
quarter of 2007 of approximately $6.9 million ($9.0 million related to the
redemption premiums and unamortized issuance costs, partially offset by a $2.1
million gain on Trust I and II securities positions held by Webster).
Mr. Plush noted: "Webster's tangible capital ratio improved to 6.74% at
March 31, bringing us above our peer median; it has been our intention to
improve our capital position to support our commercial bank balance sheet and
the growth potential of our businesses. We have also been evaluating the
optimal capital structure for the company. We took a first step on April 2,
when we called the outstanding trust preferred securities that were carrying a
weighted average coupon of 9.57%; however, $105 million of these securities
qualified as Tier 1 capital for regulatory ratio purposes. We are continuing
to explore the potential issuance of an even greater amount of enhanced Trust
Preferred Securities at a significantly lower coupon, which would provide us
with improved regulatory and ratings agency ratios at an equivalent or lower
funding cost."
During the quarter, Moody's upgraded Webster Financial Corporation's
issuer rating to A3, Webster Bank's long-term deposit rating to A2 and short-
term deposit rating to P1. The report cites Webster's diversified consumer,
small- and middle-market commercial banking businesses, strong asset quality
on a low-risk portfolio and healthy liquidity for both the holding company and
the bank as the primary reasons for the upgrade. In addition, Fitch raised its
outlook to "Positive."
Asset Quality
Nonperforming assets totaled $64.8 million, or 0.53 percent of total loans
and other real estate owned, at March 31, 2007 compared to $61.8 million, or
0.48 percent, at December 31 and $60.9 million, or 0.48 percent, a year ago.
The allowance for credit losses, which consist of the allowance for loan
losses and the reserve for unfunded commitments, was $152.7 million, or 1.24
percent of total loans, at March 31, 2007 compared to $156.0 million, or 1.24
percent at March 31, 2006 and $155.0 million, or 1.20 percent at December 31,
2006. The ratio of the allowance to nonperforming loans was 259 percent at
March 31, 2007 compared to 267 percent at March 31, 2006.
Webster Financial Corporation is the holding company for Webster Bank,
National Association and Webster Insurance. With $16.9 billion in assets,
Webster provides business and consumer banking, mortgage, insurance, financial
planning, trust and investment services through 177 banking offices, 334 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 www.websteronline.com.
Conference Call
A conference call covering Webster's 2007 first quarter earnings
announcement will be held today, Thursday, April 19, at 11:00 a.m. Eastern
Time and may be heard through Webster's investor relations website at
www.wbst.com, or in listen-only mode by calling 1-877-407-8293 or 201-689-8349
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 2006. 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 provides investors with
information useful in understanding our financial performance, our performance
trends and financial position. A reconciliation of net income and other
performance ratios, as adjusted is included in the accompanying selected
financial highlights table, elsewhere in this report.
We believe that providing certain non-GAAP financial measures provides
investors with information useful in understanding our financial performance,
our performance trends and financial position. Specifically, we provide
measures based on what we believe are our operating earnings on a consistent
basis and exclude non-core operating items which affect the GAAP reporting of
results of operations. We utilize these measures for internal planning and
forecasting purposes. We, as well as securities analysts, investors and other
interested parties, also use these measures to compare peer company operating
performance. We believe that our presentation and discussion, together with
the accompanying reconciliations, provides a complete understanding of factors
and trends affecting our business and allows investors to view performance in
a manner similar to management. These non-GAAP measures should not be
considered a substitute for GAAP basis measures and results and we strongly
encourage investors to review our consolidated financial statements in their
entirety and not to rely on any single financial measure. Because non-GAAP
financial measures are not standardized, it may not be possible to compare
these financial measures with other companies' non-GAAP financial measures
having the same or similar names.
Webster Financial Corporation
Selected Financial Highlights (unaudited)
At or for the Three
Months Ended March 31,
(In thousands, except per share data) 2007 2006
Adjusted net income and performance
ratios, net of tax (annualized):
Net income $35,036 $43,852
Seasonal compensation costs 3,055 2,562
Closing costs-Peoples Mortgage Company 1,509 -
Severance costs 1,430 -
Write-down of construction loan held
for sale 455 -
Adjusted net income 41,485 46,414
Net income per diluted common share 0.73 0.86
Return on average shareholders' equity 8.73% 11.16%
Return on average tangible equity 15.15 18.86
Return on average assets 0.98 1.04
Noninterest income as a percentage of
total revenue 31.21 29.78
Efficiency ratio (a) 65.55 62.16
Net income and performance ratios
(annualized):
Net income $35,036 $43,852
Net income per diluted common share 0.62 0.82
Return on average shareholders' equity 7.38% 10.55%
Return on average tangible equity 12.79 17.83
Return on average assets 0.83 0.99
Noninterest income as a percentage of
total revenue 30.95 29.78
Efficiency ratio (a) 70.77 64.29
Asset quality:
Allowance for credit losses $152,660 $155,957
Nonperforming assets 64,830 60,890
Allowance for credit losses / total
loans 1.24% 1.24%
Net charge-offs / average loans
(annualized) 0.17 0.05
Nonperforming loans / total loans 0.48 0.46
Nonperforming assets / total loans
plus OREO 0.53 0.48
Allowance for credit losses /
nonperforming loans 259.23 267.23
Other ratios (annualized):
Tangible capital ratio 6.74% 5.48%
Shareholders' equity / total assets 11.29 9.16
Interest-rate spread 3.32 3.19
Net interest margin 3.41 3.24
Share related:
Book value per common share $33.70 $31.09
Tangible book value per common share 19.46 18.18
Common stock closing price 48.01 48.46
Dividends declared per common share 0.27 0.25
Common shares issued and outstanding 56,530 52,776
Basic shares (average) 56,113 53,094
Diluted shares (average) 56,762 53,703
Footnotes:
(a) Noninterest expense as a percentage of net interest income plus
noninterest income.
(b) For purposes of this computation, unrealized gains (losses) are
excluded from the average balance for rate calculations.
Consolidated Statements of Condition (unaudited)
March 31, December 31, March 31,
(In thousands) 2007 2006 2006
Assets:
Cash and due from depository
institutions $269,061 $311,888 $267,541
Short-term investments 6,161 175,648 11,889
Securities:
Trading, at fair value 14,076 4,842 1,042
Available for sale, at fair
value 395,668 503,918 2,472,699
Held-to-maturity 2,066,763 1,453,973 1,116,386
Total securities 2,476,507 1,962,733 3,590,127
Loans held for sale 456,033 354,798 201,210
Loans:
Residential mortgages 3,739,221 4,424,634 4,890,887
Commercial 3,444,612 3,386,274 3,038,930
Commercial real estate 1,936,650 1,904,597 1,851,035
Consumer 3,182,765 3,207,986 2,809,785
Total loans 12,303,248 12,923,491 12,590,637
Allowance for loan losses (145,367) (147,719) (146,383)
Loans, net 12,157,881 12,775,772 12,444,254
Accrued interest receivable 86,878 90,565 94,602
Premises and equipment, net 196,232 195,909 184,831
Goodwill and other intangible
assets 823,200 825,012 698,557
Cash surrender value of life
insurance 261,852 259,318 240,426
Prepaid expenses and other assets 145,395 145,828 173,749
Total Assets $16,879,200 $17,097,471 $17,907,186
Liabilities and Shareholders'
Equity:
Deposits:
Demand deposits $1,505,074 $1,588,783 $1,459,855
NOW accounts 1,761,178 1,671,778 1,683,677
Money market deposit accounts 1,887,602 1,908,496 1,761,016
Savings accounts 2,109,866 1,985,202 2,004,375
Certificates of deposit 4,834,440 4,831,477 4,291,378
Brokered deposits 460,230 472,660 877,976
Total deposits 12,558,390 12,458,396 12,078,277
Federal Home Loan Bank advances 655,709 1,074,933 2,383,118
Securities sold under agreements
to repurchase and
other short-term debt 943,802 893,206 1,007,439
Long-term debt 623,091 621,936 631,568
Reserve for unfunded credit
commitments 7,293 7,275 9,574
Accrued expenses and other
liabilities 176,324 155,285 146,871
Total liabilities 14,964,609 15,211,031 16,256,847
Preferred stock of subsidiary
corporation 9,577 9,577 9,577
Shareholders' equity 1,905,014 1,876,863 1,640,762
Total Liabilities and
Shareholders' Equity $16,879,200 $17,097,471 $17,907,186
See Selected Financial Highlights for footnotes.
Consolidated Statements of Income (unaudited)
Three Months Ended
March 31,
(In thousands, except per share data) 2007 2006
Interest income:
Loans $209,164 $195,574
Securities and short-term
investments 33,280 41,595
Loans held for sale 6,249 3,339
Total interest income 248,693 240,508
Interest expense:
Deposits 87,630 62,354
Borrowings 32,982 47,995
Total interest expense 120,612 110,349
Net interest income 128,081 130,159
Provision for credit losses 3,000 2,000
Net interest income after provision
for credit losses 125,081 128,159
Noninterest income:
Deposit service fees 25,354 21,869
Insurance revenue 10,121 10,724
Loan related fees 7,940 7,824
Wealth and investment services 6,878 6,354
Mortgage banking activities 2,229 3,273
Increase in cash surrender value of
life insurance 2,534 2,371
Other 1,824 1,775
56,880 54,190
Gain on sale of securities, net 541 1,012
Total noninterest income 57,421 55,202
Noninterest expenses:
Compensation and benefits 68,391 65,003
Occupancy 13,383 12,182
Furniture and equipment 14,969 13,595
Intangible amortization 3,473 4,377
Marketing 4,211 3,624
Professional services 4,802 3,544
Severance and closing costs 4,522 -
Other 17,529 16,846
Total noninterest expenses 131,280 119,171
Income before income taxes 51,222 64,190
Income taxes 16,186 20,338
Net income $35,036 $43,852
Diluted shares (average) 56,762 53,703
Net income per common share:
Basic $0.62 $0.83
Diluted 0.62 0.82
See Selected Financial Highlights for footnotes.
Consolidated Statements of Income (unaudited)
Three Months Ended
(In thousands, except March 31, Dec. 31, Sept. 30, June 30, March 31,
per share data) 2007 2006 2006 2006 2006
Interest income:
Loans $209,164 $225,634 $215,094 $207,097 $195,574
Securities and short-
term investments 33,280 32,514 40,883 39,134 41,595
Loans held for sale 6,249 6,191 4,366 3,317 3,339
Total interest income 248,693 264,339 260,343 249,548 240,508
Interest expense:
Deposits 87,630 90,195 85,058 72,593 62,354
Borrowings 32,982 44,994 52,849 50,150 47,995
Total interest expense 120,612 135,189 137,907 122,743 110,349
Net interest income 128,081 129,150 122,436 126,805 130,159
Provision for credit
losses 3,000 3,000 3,000 3,000 2,000
Net interest income
after provision for
credit losses 125,081 126,150 119,436 123,805 128,159
Noninterest income:
Deposit service fees 25,354 25,494 25,252 24,150 21,869
Insurance revenue 10,121 8,301 9,793 9,988 10,724
Loan related fees 7,940 9,643 7,760 9,162 7,824
Wealth and investment
services 6,878 7,161 6,738 6,930 6,354
Mortgage banking
activities 2,229 2,917 (185) 2,538 3,273
Increase in cash surrender
value of life insurance 2,534 2,550 2,368 2,314 2,371
Other 1,824 3,733 1,693 1,284 1,775
56,880 59,799 53,419 56,366 54,190
Loss on write-down of
AFS securities to fair
value - - (48,879) - -
Loss on sale of mortgage
loans - (5,713) - - -
(Loss) gain on sale of
securities, net 541 (2,732) 2,307 702 1,012
Total noninterest
income 57,421 51,354 6,847 57,068 55,202
Noninterest expenses:
Compensation and
benefits 68,391 64,142 62,050 64,585 65,003
Occupancy 13,383 13,403 11,977 11,824 12,182
Furniture and equipment 14,969 14,637 13,840 13,962 13,595
Intangible amortization 3,473 3,473 3,079 3,544 4,377
Marketing 4,211 3,350 4,211 4,292 3,624
Professional services 4,802 5,457 4,302 3,464 3,544
Severance and closing
costs 4,522 - - - -
Acquisition costs - 2,018 868 65 -
Other 17,529 16,129 15,523 15,582 16,846
Total noninterest
expenses 131,280 122,609 115,850 117,318 119,171
Income before income
taxes 51,222 54,895 10,433 63,555 64,190
Income taxes 16,186 17,097 1,436 20,412 20,338
Net income $35,036 $37,798 $8,997 $43,143 $43,852
Diluted shares (average) 56,762 56,452 52,871 53,252 53,703
Net income per common
share:
Basic $0.62 $0.68 $0.17 $0.82 $0.83
Diluted 0.62 0.67 0.17 0.81 0.82
See Selected Financial Highlights for footnotes.
Interest-Rate Spread (unaudited)
Three Months Ended
March Dec. Sept. June March
2007 2006 2006 2006 2006
Interest-rate spread
Yield on interest-earning assets 6.61% 6.52% 6.31% 6.11% 5.97%
Cost of interest-bearing
liabilities 3.29 3.38 3.38 3.05 2.78
Interest-rate spread 3.32% 3.14% 2.93% 3.06% 3.19%
Net interest margin 3.41% 3.23% 3.01% 3.13% 3.24%
Consolidated Average Statements of Condition (unaudited)
Three Months Ended March 31, 2007
Fully tax-
Average equivalent
(Dollars in thousands) balance Interest yield/rate
Assets:
Interest-earning assets:
Loans $12,445,025 $209,164 6.74%
Securities 2,303,191 34,203 5.97(b)
Loans held for sale 394,102 6,249 6.34
Short-term investments 117,584 1,585 5.39
Total interest-earning assets 15,259,902 251,201 6.61
Noninterest-earning assets 1,605,708
Total assets $16,865,610
Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Demand deposits $1,505,598 $ - - %
Savings, NOW and money market
deposit accounts 5,567,702 28,762 2.10
Time deposits 5,303,759 58,868 4.50
Total deposits 12,377,059 87,630 2.87
Federal Home Loan Bank advances 918,125 10,909 4.75
Repurchase agreements and other
short-term debt 883,172 9,878 4.47
Long-term debt 620,451 12,195 7.86
Total borrowings 2,421,748 32,982 5.45
Total interest-bearing
liabilities 14,798,807 120,612 3.29
Noninterest-bearing liabilities 157,247
Total liabilities 14,956,054
Preferred stock of subsidiary
corporation 9,577
Shareholders' equity 1,899,979
Total liabilities and
shareholders' equity $16,865,610
130,589
Less: tax-equivalent adjustment (2,508)
Net interest income $128,081
Interest-rate spread 3.32 %
Net interest margin 3.41 %
See Selected Financial Highlights for footnotes.
Consolidated Average Statements of Condition (unaudited)
Three Months Ended March 31, 2006
Fully tax-
Average equivalent
(Dollars in thousands) balance Interest yield/rate
Assets:
Interest-earning assets:
Loans $12,392,022 $195,574 6.33%
Securities 3,630,986 43,819 4.77(b)
Loans held for sale 228,695 3,339 5.84
Short-term investments 15,181 112 2.95
Total interest-earning assets 16,266,884 242,844 5.97
Noninterest-earning assets 1,500,627
Total assets $17,767,511
Liabilities and Shareholders'
Equity:
Interest-bearing liabilities:
Demand deposits $1,451,677 $ - - %
Savings, NOW and money market
deposit accounts 5,309,282 19,808 1.51
Time deposits 4,906,912 42,546 3.52
Total deposits 11,667,871 62,354 2.16
Federal Home Loan Bank advances 2,397,872 24,496 4.09
Repurchase agreements and other
short-term debt 1,289,102 11,830 3.67
Long-term debt 640,804 11,669 7.28
Total borrowings 4,327,778 47,995 4.44
Total interest-bearing
liabilities 15,995,649 110,349 2.78
Noninterest-bearing liabilities 98,991
Total liabilities 16,094,640
Preferred stock of subsidiary
corporation 9,577
Shareholders' equity 1,663,294
Total liabilities and
shareholders' equity $17,767,511
132,495
Less: tax-equivalent adjustment (2,336)
Net interest income $130,159
Interest-rate spread 3.19%
Net interest margin 3.24%
See Selected Financial Highlights for footnotes.
At or for the Three Months Ended
(Unaudited) March 31, Dec. 31, Sept. 30,
(Dollars in thousands) 2007 2006 2006
Asset Quality
Nonperforming loans:
Commercial:
Commercial $13,679 $21,105 $29,321
Equipment financing 2,405 2,616 2,450
Total commercial 16,084 23,721 31,771
Commercial real estate 18,524 17,618 16,811
Residential 13,473 11,307 7,032
Consumer 10,808 6,266 3,496
Total nonperforming loans 58,889 58,912 59,110
Other real estate owned and
repossessed assets:
Commercial 4,833 1,922 1,573
Residential 350 383 607
Consumer 758 608 126
Total other real estate owned and
repossessed assets 5,941 2,913 2,306
Total nonperforming assets $64,830 $61,825 $61,416
Accruing loans 90 or more days past
due $4,636 $1,490 $4,609
Allowance for Credit Losses
Beginning balance $154,994 $156,331 $156,471
Provision 3,000 3,000 3,000
Allowance for acquired loans - 4,724 -
Charge-offs:
Commercial 2,293 9,352 3,369
Residential 2,581 199 46
Consumer 1,993 454 265
Total charge-offs 6,867 10,005 3,680
Recoveries (1,533) (944) (540)
Net loan charge-offs 5,334 9,061 3,140
Ending balance $152,660 $154,994 $156,331
Components:
Allowance for loan losses $145,367 $147,719 $147,446
Reserve for unfunded credit
commitments 7,293 7,275 8,885
Allowance for credit losses $152,660 $154,994 $156,331
Asset Quality Ratios:
Allowance for loan losses / total
loans 1.18% 1.14% 1.13%
Allowance for credit losses / total
loans 1.24 1.20 1.20
Net charge-offs / average loans
(annualized) 0.17 0.27 0.10
Nonperforming loans / total loans 0.48 0.46 0.45
Nonperforming assets / total loans
plus OREO 0.53 0.48 0.47
Allowance for credit losses /
nonperforming loans 259.23 263.09 264.47
See Selected Financial Highlights for footnotes.
At or for the Three Months Ended
(Unaudited) June 30, March 31,
(Dollars in thousands) 2006 2006
Asset Quality
Nonperforming loans:
Commercial:
Commercial $22,930 $19,719
Equipment financing 2,693 2,864
Total commercial 25,623 22,583
Commercial real estate 23,291 24,012
Residential 7,218 8,891
Consumer 3,065 2,875
Total nonperforming loans 59,197 58,361
Other real estate owned and
repossessed assets:
Commercial 2,254 1,712
Residential 316 456
Consumer 10 361
Total other real estate owned and
repossessed assets 2,580 2,529
Total nonperforming assets $61,777 $60,890
Accruing loans 90 or more days past
due $2,542 $1,002
Allowance for Credit Losses
Beginning balance $155,957 $155,632
Provision 3,000 2,000
Allowance for acquired loans - -
Charge-offs:
Commercial 2,775 1,629
Residential 65 75
Consumer 239 362
Total charge-offs 3,079 2,066
Recoveries (593) (391)
Net loan charge-offs 2,486 1,675
Ending balance $156,471 $155,957
Components:
Allowance for loan losses $147,401 $146,383
Reserve for unfunded credit
commitments 9,070 9,574
Allowance for credit losses $156,471 $155,957
Asset Quality Ratios:
Allowance for loan losses / total
loans 1.16 % 1.16 %
Allowance for credit losses / total
loans 1.23 1.24
Net charge-offs / average loans
(annualized) 0.08 0.05
Nonperforming loans / total loans 0.47 0.46
Nonperforming assets / total loans
plus OREO 0.49 0.48
Allowance for credit losses /
nonperforming loans 264.32 267.23
See Selected Financial Highlights for footnotes.
CONTACT: Webster Bank
Media:
Clark Finley 203-578-2287
cfinley@websterbank.com
or
Investors:
Jim Sitro 203-578-2399
jsitro@websterbank.com
SOURCE Webster Financial Corporation
Webster Bank Media:
Clark Finley
203-578-2287
cfinley@websterbank.com
or Investors:
Jim Sitro
203-578-2399
jsitro@websterbank.com
http://www.websteronline.com