Opened new branches in September 2007 in New Rochelle, New York and
Longmeadow, Massachusetts; 27 branches now opened since 2002.
WATERBURY, Conn., Oct. 23 /PRNewswire-FirstCall/ -- Webster Financial
Corporation (NYSE: WBS), the holding company for Webster Bank, N.A., today
announced net income of $35.0 million or $.64 per diluted share for the third
quarter of 2007, compared to $35.5 million or $.63 per share for the second
quarter of 2007 and $9.0 million or $.17 per share for the third quarter of
2006. Results in the third quarter of 2007 reflect an increase in the
provision for credit losses of $11.0 million compared to the second quarter of
2007 ($7.6 million net of tax or $.14 per diluted share) in connection with
the Company's home equity portfolio. For the first nine months of 2007, net
income totaled $105.5 million, or $1.89 per diluted share, compared to $96.0
million, or $1.80 per diluted share a year ago.
(Logo: http://www.newscom.com/cgi-bin/prnh/20050421/NYTH039LOGO )
"In an otherwise solid quarter, we have increased our provision for credit
losses based on higher delinquency and non-accrual loans in our home equity
portfolio, specifically for nationally originated loans with high combined
loan to value," stated Webster Chairman and Chief Executive Officer James C.
Smith. "Delinquency for the month of September rose substantially, and we
believe taking this step is prudent given this emerging trend."
Commercial loans (consisting of commercial and industrial and commercial
real estate) and consumer loans posted solid growth year over year to $8.7
billion at September 30, 2007, up 7 percent from September 30, 2006.
Commercial and consumer loans represent 70 percent of total loans at September
30, 2007 compared to 63 percent a year ago. "We are intensely focused on our
direct, core franchise business and our progress is evident" stated Webster
President and Chief Operating Officer William T. Bromage.
Revenues
Total revenue, which consists of net interest income plus total
noninterest income, totaled $187.3 million in the third quarter. This compares
to total revenue of $192.2 million in the second quarter apart from a $2.1
million gain on Webster Capital Trust I and II securities held by Webster and
$178.2 million a year ago apart from a $48.9 million charge in connection with
an available for sale securities portfolio repositioning. Deducting securities
gains from each period results in adjusted total revenue of $186.8 million in
the third quarter, $191.7 million in the second quarter and $175.9 million a
year ago, or growth of 6.2 percent for the third quarter of 2007 compared to
the third quarter of 2006.
Net interest income totaled $127.1 million in the third quarter compared
to $130.4 million in the second quarter and $122.4 million a year ago. Average
interest-earning assets have been lower in 2007 compared to a year ago as a
result of Webster's balance sheet repositioning actions, with the third
quarter of 2007 being 7 percent lower than the third quarter of 2006. However,
Webster's net interest margin (annualized tax-equivalent net interest income
as a percentage of average earning assets) has improved compared to year-ago
levels. The net interest margin was 3.38 percent in the third quarter of 2007
compared to 3.01 percent in the third quarter of 2006, with the 37 basis point
increase in the net interest margin contributing to 4 percent growth in net
interest income compared to a year ago. The net interest margin of 3.38
percent in the third quarter declined by 9 basis points from the second
quarter, mainly due to the effect of increased share repurchase activity and
the impact of the issuance of $200 million in trust preferred securities in
June 2007. The spread between the yield on loans and the cost of deposits was
3.84 percent in the third quarter compared to 3.93 percent in the second
quarter and 3.89 percent a year ago.
Total noninterest income was $60.2 million in the third quarter. This
compares to $64.0 million in the second quarter, which included a $2.1 million
gain on Webster Capital Trust I and II securities held by Webster, and $6.8
million a year ago, which was reduced by the $48.9 million securities
portfolio repositioning charge. Deposit service fees totaled $30.0 million
compared to $28.8 million in the second quarter and $25.3 million a year ago,
the growth partly reflecting the growth in core deposits and the recent
implementation of a new consumer fee structure. Insurance revenue was $8.9
million compared to $9.1 million in the second quarter and $9.8 million a year
ago. Loan-related fees were $7.7 million compared to $7.9 million in the
second quarter and $7.8 million a year ago. Wealth and investment services
revenues totaled $7.1 million compared to $7.6 million in the second quarter
and $6.7 million a year ago. Income from mortgage banking activities was $1.8
million in the third quarter compared to income of $4.0 million in the second
quarter, inclusive of a $948,000 write-down on $96.3 million of loans
previously held for sale that were transferred into portfolio, and a loss of
$0.2 million a year ago. Other non-interest income was $1.6 million compared
to $1.4 million in the second quarter and $1.7 million a year ago.
Provision For Credit Losses
The provision for credit losses was $15.25 million compared to $4.25
million in the second quarter and $3.0 million a year ago. $11.0 million of
the provision for credit losses recorded in the third quarter was specifically
for the Company's $3.2 billion home equity loan and lines of credit portfolio.
The increase in provision compared with second quarter 2007 is based on the
Company's analysis of third quarter data developed post quarter end. This
takes into account the higher level of estimated losses inherent in this
portfolio at September 30, 2007 and reflects recent adverse trends in property
values and delinquencies, including higher September delinquencies on the home
equity loans secured by properties outside the Company's retail banking
footprint.
Net loan charge-offs totaled $4.0 million during the third quarter of 2007
compared to $4.2 million in the second quarter and $3.1 million a year ago.
Included in net charge-offs in the third and second quarters of 2007 were $0.5
million and $0.6 million, respectively, of consumer overdraft losses. Prior to
the second quarter, overdraft losses were shown as a reduction of deposit fee
income. The allowance for credit losses, which consists of the allowance for
loan losses and the reserve for unfunded credit commitments, was $164.0
million, or 1.32 percent of total loans at September 30, 2007 compared to
$152.8 million, or 1.23 percent at June 30, 2007 and $156.3 million, or 1.20
percent at September 30, 2006.
Noninterest Expenses
Total noninterest expenses were $121.7 million in the third quarter, or
$121.2 million apart from $0.5 million of severance and other costs. This
compares to $138.1 million in the second quarter, which included $8.9 million
of debt redemption premium costs related to prepayment of the capital trust
securities and $5.3 million of severance and other costs in connection with
Webster's recently completed strategic review, and $115.9 million a year ago,
which included $0.9 million of acquisition costs. Noninterest expenses
declined by $2.6 million from the second quarter of 2007 (excluding the effect
of the debt redemption premium and severance and other costs). Noninterest
expenses increased by 5.4 percent for the third quarter of 2007 compared to
the third quarter of 2006 (excluding the current quarter severance and other
costs and the acquisition costs of $0.9 million incurred in the year ago
period).
Webster Chief Financial Officer Jerry Plush noted: "The effects of the
repositioning steps we have taken over the past 15 months are now evidenced by
our achieving positive operating leverage with adjusted revenue growth
exceeding expense growth compared to a year ago. We're committed to further
reducing expenses in low contribution businesses identified in our recently
completed strategic review and to centralizing shared services functions,
which should benefit operating leverage in future periods."
Balance Sheet Trends
Total assets were $16.8 billion at September 30, 2007 compared to $18.1
billion a year ago, with the decrease primarily related to balance sheet
repositioning actions taken in the fourth quarter of 2006 and first quarter
2007. Total loans were $12.4 billion, a decrease of $0.6 billion, or 5
percent, from a year ago, as residential loans declined by $1.2 billion
primarily due to repositioning actions. Securities totaled $2.5 billion and
declined by $0.8 billion, or 24 percent from a year ago. Total deposits were
$12.6 billion, an increase of $0.3 billion, or 2 percent from a year ago,
which includes a $0.6 billion decline in brokered deposits. Excluding the
decline in brokered deposits, retail deposits increased $0.9 billion with
contributions from the branches acquired from the NewMil Bank acquisition,
organic growth from our branch network and growth in health savings account
deposits at HSA Bank.
The $0.6 billion reduction in loans, $0.8 billion reduction in securities
and $0.3 billion of total deposit growth, each compared to a year ago,
contributed to a $1.7 billion reduction in wholesale borrowings over the past
year. Wholesale borrowings declined to 14 percent of total assets at September
30, 2007 compared to 22 percent a year ago.
The loan to deposit ratio was 99 percent at September 30, 2007 compared to
97 percent at June 30 and 106 percent a year ago. Improvement from a year ago
reflects completion of balance sheet repositioning actions and the increase in
deposits over the past year.
Book value per common share of $33.73 at September 30, 2007 increased from
$32.02 a year ago. Tangible book value per share was $18.77 at September 30,
2007 compared to $19.11 a year ago. The ratio of tangible equity to tangible
assets increased to 6.17 percent at September 30, 2007 compared to 5.66
percent a year ago.
Capital
Webster repurchased 1,152,800 shares of its common stock during the third
quarter at a total cost of $48.9 million. As of September 30, 2007, Webster
had 0.7 million shares of remaining availability under the 2.8 million share
repurchase authorization that was announced on June 5, 2007 and 2.7 million
shares of availability under an additional authorization that was announced on
September 26, 2007, for combined availability of approximately 3.4 million
shares.
Mr. Plush noted: "Our improved capital position enabled us to repurchase
over 1.1 million shares in the quarter and 3.1 million shares year to date
while maintaining our principal capital ratios within the target ranges we
outlined in our most recent investor presentation in September. We intend to
continue to selectively repurchase our shares given the current level of our
stock price."
Asset Quality
Nonperforming assets totaled $104.2 million, or 0.84 percent of total
loans and other real estate owned at September 30, 2007, compared to $78.7
million, or 0.63 percent, at June 30 and $61.4 million, or 0.47 percent, a
year ago. Nonperforming assets in the residential portfolio totaled $34.3
million at September 30 compared to $27.4 million at June 30 and $7.6 million
a year ago, with the majority of the increase coming from residential
construction loans originated by Webster's National Wholesale Lending
operation. Webster previously announced it had discontinued residential
construction lending outside of its New England market area, and has allocated
reserves against these loans. Nonperforming assets in the consumer portfolio
totaled $19.5 million at September 30 compared to $12.3 million at June 30 and
$3.6 million a year ago, with the majority of the increase coming from home
equity loans and lines of credit originated out of footprint. Webster is
currently following a retail/in market origination strategy in its ongoing
home equity activity.
The allowance for credit losses, which consists of the allowance for loan
losses and the reserve for unfunded credit commitments, was $164.0 million, or
1.32 percent of total loans, at September 30, 2007 compared to $152.8 million,
or 1.23 percent at June 30, 2007 and $156.3 million, or 1.20 percent at
September 30, 2006. The ratio of the allowance for credit losses to
nonperforming loans was 172 percent at September 30, 2007 compared to 211
percent at June 30 and 264 percent a year ago.
Webster Financial Corporation is the holding company for Webster Bank,
National Association and Webster Insurance. With $16.8 billion in assets,
Webster provides business and consumer banking, mortgage, insurance, financial
planning, trust and investment services through 179 banking offices, 339 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 third quarter earnings
announcement will be held today, Tuesday, October 23, at 9:00 a.m. EDT 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. A reconciliation of net
income and other performance ratios, as adjusted is included in the
accompanying selected financial highlights table.
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.
CONTACT: Webster Bank
Media:
Clark Finley, 203-578-2287
cfinley@websterbank.com
or
Investors:
Terry Mangan, 203-578-2318
tmangan@websterbank.com
WEBSTER FINANCIAL CORPORATION
Selected Financial Highlights (unaudited)
At or for the Three At or for the Nine
Months Ended September 30, Months Ended September 30,
(In thousands, except per
share data) 2007 2006 (c) 2007 2006 (c)
Adjusted net income and
performance ratios, net
of tax (annualized):
Net income $34,968 $8,997 $105,471 $95,992
Net debt prepayment
expense - - 4,427 -
Software development cost
write-off - - 2,212 -
Severance costs 294 - 2,951 -
Closing costs-Peoples
Mortgage Company - - 1,509 -
Write-down of construction
loans held for sale - - 1,071 -
Recognition of loss on AFS
securities - 31,768 - 31,768
Adjusted net income 35,262 40,765 117,641 127,760
Net income per diluted
common share 0.65 0.77 2.11 2.40
Return on average
shareholders' equity 7.70 % 9.80 % 8.37 % 10.23 %
Return on average tangible
equity 13.68 16.55 14.65 17.27
Return on average assets 0.84 0.91 0.93 0.95
Noninterest income as a
percentage of total
revenue 32.16 31.28 31.97 30.69
Efficiency ratio (a) 64.72 65.03 65.62 64.37
Net income and performance
ratios (annualized):
Net income $34,968 $8,997 $105,471 $95,992
Net income per diluted
common share 0.64 0.17 1.89 1.80
Return on average
shareholders' equity 7.63 % 2.17 % 7.50 % 7.70 %
Return on average tangible
equity 13.57 3.66 13.13 13.01
Return on average assets 0.83 0.20 0.83 0.72
Noninterest income as a
percentage of total
revenue 32.16 5.30 32.03 23.89
Efficiency ratio (a) 64.96 89.61 68.95 70.68
Asset quality:
Allowance for credit
losses $164,011 $156,331 $164,011 $156,331
Nonperforming assets 104,174 61,416 104,174 61,416
Allowance for credit
losses / total loans 1.32 % 1.20 % 1.32 % 1.20 %
Net charge-offs / average
loans (annualized) 0.13 0.10 0.15 0.08
Nonperforming loans /
total loans 0.77 0.45 0.77 0.45
Nonperforming assets /
total loans plus OREO &
repos 0.84 0.47 0.84 0.47
Allowance for credit
losses / nonperforming
loans 172.06 264.47 172.06 264.47
Other ratios (annualized):
Tangible capital ratio 6.17 % 5.66 % 6.17 % 5.66 %
Shareholders' equity /
total assets 10.72 9.26 10.72 9.26
Interest-rate spread 3.29 2.93 3.32 3.06
Net interest margin 3.38 3.01 3.42 3.13
Share related:
Book value per common
share $33.73 $32.02 $33.73 32.02
Tangible book value per
common share 18.77 19.11 18.77 19.11
Common stock closing price 42.12 47.11 42.12 47.11
Dividends declared per
common share 0.30 0.27 0.87 0.79
Common shares issued and
outstanding 53,520 52,476 53,520 52,476
Basic shares (average) 53,735 52,241 55,166 52,654
Diluted shares (average) 54,259 52,871 55,753 53,276
Footnotes:
(a) Noninterest expense as a percentage of net interest income plus
noninterest income.
(b) For purposes of the yield computation, unrealized gains (losses) are
excluded from the average balance.
(c) Certain previously reported information has been revised for the
effect of a $4.2 million reduction in insurance commissions
receivable, including a $2.7 million after-tax reduction in
shareholders' equity. There was no effect on net income for the
periods presented.
Consolidated Statements of Condition (unaudited)
September 30, June 30, September 30,
(In thousands) 2007 2007 2006 (c)
Assets:
Cash and due from depository
institutions $264,929 $293,223 $243,434
Short-term investments 80,270 8,222 9,562
Securities:
Trading, at fair value 635 5,935 2,848
Available for sale, at fair
value 455,508 411,309 2,249,935
Held-to-maturity 2,051,277 2,046,891 1,064,188
Total securities 2,507,420 2,464,135 3,316,971
Loans held for sale 211,659 372,891 309,149
Loans:
Residential mortgages 3,677,682 3,736,313 4,845,198
Commercial 3,562,394 3,554,846 3,368,164
Commercial real estate 1,896,566 1,938,656 1,770,674
Consumer 3,283,914 3,210,457 3,037,674
Total loans 12,420,556 12,440,272 13,021,710
Allowance for loan losses (154,532) (144,974) (147,446)
Loans, net 12,266,024 12,295,298 12,874,264
Accrued interest receivable 86,654 85,078 93,844
Premises and equipment, net 197,852 194,412 189,562
Goodwill and other intangible
assets 816,471 818,422 692,388
Cash surrender value of life
insurance 266,729 264,100 245,108
Prepaid expenses and other assets 147,399 151,475 161,803
Total Assets $16,845,407 $16,947,256 $18,136,085
Liabilities and Shareholders'
Equity:
Deposits:
Demand deposits $1,479,503 $1,544,695 $1,453,317
NOW accounts 1,664,025 1,797,701 1,559,584
Money market deposit accounts 2,065,474 1,916,097 2,078,797
Savings accounts 2,211,125 2,194,215 1,838,494
Certificates of deposit 4,847,060 4,965,140 4,477,191
Brokered deposits 286,806 401,213 896,670
Total deposits 12,553,993 12,819,061 12,304,053
Federal Home Loan Bank advances 628,445 531,117 1,867,393
Securities sold under agreements
to repurchase and
other short-term debt 994,624 899,852 1,466,845
Long-term debt 666,236 656,455 636,028
Reserve for unfunded credit
commitments 9,479 7,776 8,885
Accrued expenses and other
liabilities 178,010 185,767 163,192
Total liabilities 15,030,787 15,100,028 16,446,396
Preferred stock of subsidiary
corporation 9,577 9,577 9,577
Shareholders' equity 1,805,043 1,837,651 1,680,112
Total Liabilities and
Shareholders' Equity $16,845,407 $16,947,256 $18,136,085
See Selected Financial Highlights for footnotes.
Consolidated Statements of Income (unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
(In thousands, except per
share data) 2007 2006 2007 2006
Interest income:
Loans $212,847 $215,094 $632,348 $617,765
Securities and short-term
investments 34,163 40,883 100,006 121,612
Loans held for sale 4,616 4,366 18,284 11,022
Total interest income 251,626 260,343 750,638 750,399
Interest expense:
Deposits 94,484 85,058 271,797 220,005
Borrowings 30,083 52,849 93,348 150,994
Total interest expense 124,567 137,907 365,145 370,999
Net interest income 127,059 122,436 385,493 379,400
Provision for credit losses 15,250 3,000 22,500 8,000
Net interest income after
provision for credit
losses 111,809 119,436 362,993 371,400
Noninterest income:
Deposit service fees 29,956 25,252 84,068 71,271
Insurance revenue 8,948 9,793 28,210 30,505
Loan related fees 7,661 7,760 23,502 24,746
Wealth and investment services 7,142 6,738 21,657 20,022
Mortgage banking activities 1,849 (185) 8,040 5,626
Increase in cash surrender
value of life insurance 2,629 2,368 7,749 7,053
Gain on sale of securities,
net 482 2,307 1,526 4,021
Other 1,568 1,693 4,759 4,752
60,235 55,726 179,511 167,996
Loss on write-down of AFS
securities to fair value - (48,879) - (48,879)
Gain on Webster Capital
Trust I and II securities - - 2,130 -
Total noninterest income 60,235 6,847 181,641 119,117
Noninterest expenses:
Compensation and benefits 66,958 62,050 202,237 191,638
Occupancy 12,516 11,977 39,099 35,983
Furniture and equipment 15,039 13,840 45,397 41,397
Intangible amortization 2,153 3,079 8,970 11,000
Marketing 4,134 4,211 12,554 12,127
Professional services 3,557 4,302 11,791 11,310
Other 16,867 15,523 51,794 47,951
121,224 114,982 371,842 351,406
Debt redemption premium - - 8,940 -
Severance and other costs 452 - 10,265 -
Acquisition costs - 868 - 933
Total noninterest expenses 121,676 115,850 391,047 352,339
Income before income taxes 50,368 10,433 153,587 138,178
Income taxes 15,400 1,436 48,116 42,186
Net income $34,968 $8,997 $105,471 $95,992
Diluted shares (average) 54,259 52,871 55,753 53,276
Net income per common share:
Basic $0.65 $0.17 $1.91 $1.82
Diluted 0.64 0.17 1.89 1.80
See Selected Financial Highlights for footnotes.
Consolidated Statements of Income (unaudited)
Three Months Ended
(In thousands, except Sept. 30, June 30, March 31, Dec. 31, Sept. 30,
per share data) 2007 2007 2007 2006 2006
Interest income:
Loans $212,847 $210,337 $209,164 $225,634 $215,094
Securities and short-
term investments 34,163 32,563 33,280 32,514 40,883
Loans held for sale 4,616 7,419 6,249 6,191 4,366
Total interest income 251,626 250,319 248,693 264,339 260,343
Interest expense:
Deposits 94,484 89,683 87,630 90,195 85,058
Borrowings 30,083 30,283 32,982 44,994 52,849
Total interest expense 124,567 119,966 120,612 135,189 137,907
Net interest income 127,059 130,353 128,081 129,150 122,436
Provision for credit
losses 15,250 4,250 3,000 3,000 3,000
Net interest income
after provision for
credit losses 111,809 126,103 125,081 126,150 119,436
Noninterest income:
Deposit service fees 29,956 28,758 25,354 25,494 25,252
Insurance revenue 8,948 9,141 10,121 8,301 9,793
Loan related fees 7,661 7,901 7,940 9,643 7,760
Wealth and investment
services 7,142 7,637 6,878 7,161 6,738
Mortgage banking
activities 1,849 3,962 2,229 2,917 (185)
Increase in cash
surrender value of life
insurance 2,629 2,586 2,534 2,550 2,368
Gain (loss) on sale of
securities, net 482 503 541 (2,732) 2,307
Other 1,568 1,367 1,824 3,733 1,693
60,235 61,855 57,421 57,067 55,726
Gain on Webster Capital
Trust I and II
securities - 2,130 - - -
Loss on write-down of
AFS securities to fair
value - - - - (48,879)
Loss on sale of mortgage
loans - - - (5,713) -
Total noninterest
income 60,235 63,985 57,421 51,354 6,847
Noninterest expenses:
Compensation and
benefits 66,958 66,888 68,391 64,142 62,050
Occupancy 12,516 13,200 13,383 13,403 11,977
Furniture and equipment 15,039 15,389 14,969 14,637 13,840
Intangible amortization 2,153 3,344 3,473 3,473 3,079
Marketing 4,134 4,209 4,211 3,350 4,211
Professional services 3,557 3,432 4,802 5,457 4,302
Other 16,867 17,398 17,529 16,129 15,523
121,224 123,860 126,758 120,591 114,982
Debt redemption premium - 8,940 - - -
Severance and other
costs 452 5,291 4,522 - -
Acquisition costs - - - 2,018 868
Total noninterest
expenses 121,676 138,091 131,280 122,609 115,850
Income before income
taxes 50,368 51,997 51,222 54,895 10,433
Income taxes 15,400 16,530 16,186 17,097 1,436
Net income $34,968 $35,467 $35,036 $37,798 $8,997
Diluted shares (average) 54,259 56,243 56,762 56,452 52,871
Net income per common
share:
Basic $0.65 $0.64 $0.62 $0.68 $0.17
Diluted 0.64 0.63 0.62 0.67 0.17
See Selected Financial Highlights for footnotes.
Interest-Rate Spread (unaudited)
Three Months Ended
Sept. June March Dec. Sept.
30, 30, 31, 31, 30,
2007 2007 2007 2006 2006
Interest-rate spread
Yield on interest-earning
assets 6.61 % 6.62 % 6.61 % 6.52 % 6.31 %
Cost of interest-bearing
liabilities 3.32 3.25 3.29 3.38 3.38
Interest-rate spread 3.29 % 3.37 % 3.32 % 3.14 % 2.93 %
Net interest margin 3.38 % 3.47 % 3.41 % 3.23 % 3.01 %
Consolidated Average Statements of Condition (unaudited)
Three Months Ended September 30, 2007
Fully tax-
Average equivalent
(Dollars in thousands) balance Interest yield/rate
Assets:
Interest-earning assets:
Loans $12,390,191 $212,847 6.80 %
Securities (b) 2,470,938 35,783 5.79
Loans held for sale 297,330 4,616 6.21
Short-term investments 91,362 1,185 5.08
Total interest-earning assets 15,249,821 254,431 6.61
Noninterest-earning assets 1,597,950
Total assets $16,847,771
Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Demand deposits $1,512,450 $- - %
Savings, NOW and money market
deposit accounts 5,909,836 34,832 2.34
Time deposits 5,224,511 59,652 4.53
Total deposits 12,646,797 94,484 2.96
Federal Home Loan Bank advances 589,427 6,906 4.58
Repurchase agreements and other
short-term debt 949,452 10,733 4.42
Long-term debt 661,075 12,444 7.53
Total borrowings 2,199,954 30,083 5.40
Total interest-bearing
liabilities 14,846,751 124,567 3.32
Noninterest-bearing liabilities 159,375
Total liabilities 15,006,126
Preferred stock of subsidiary
corporation 9,577
Shareholders' equity 1,832,068
Total liabilities and
shareholders' equity $16,847,771
129,864
Less: tax-equivalent adjustment (2,805)
Net interest income $127,059
Interest-rate spread 3.29 %
Net interest margin 3.38 %
Three Months Ended September 30, 2006
Fully tax-
Average equivalent
(Dollars in thousands) balance (c) Interest yield/rate
Assets:
Interest-earning assets:
Loans $12,813,385 $215,094 6.65 %
Securities (b) 3,347,060 43,000 5.06
Loans held for sale 277,181 4,366 6.30
Short-term investments 18,484 190 4.02
Total interest-earning assets 16,456,110 262,650 6.31
Noninterest-earning assets 1,496,171
Total assets $17,952,281
Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Demand deposits $1,451,171 $- - %
Savings, NOW and money market
deposit accounts 5,445,159 28,258 2.06
Time deposits 5,308,496 56,800 4.23
Total deposits 12,204,826 85,058 2.76
Federal Home Loan Bank advances 2,069,417 26,328 4.98
Repurchase agreements and other
short-term debt 1,215,371 13,764 4.43
Long-term debt 627,379 12,757 8.13
Total borrowings 3,912,167 52,849 5.31
Total interest-bearing
liabilities 16,116,993 137,907 3.38
Noninterest-bearing liabilities 165,298
Total liabilities 16,282,291
Preferred stock of subsidiary
corporation 9,577
Shareholders' equity 1,660,413
Total liabilities and
shareholders' equity $17,952,281
124,743
Less: tax-equivalent adjustment (2,307)
Net interest income $122,436
Interest-rate spread 2.93 %
Net interest margin 3.01 %
See Selected Financial Highlights for footnotes.
Consolidated Average Statements of Condition (unaudited)
Nine Months Ended September 30, 2007
Fully tax-
Average equivalent
(Dollars in thousands) balance Interest yield/rate
Assets:
Interest-earning assets:
Loans $12,380,468 $632,348 6.78 %
Securities (b) 2,402,321 105,023 5.84
Loans held for sale 390,651 18,284 6.24
Short-term investments 73,122 2,913 5.25
Total interest-earning assets 15,246,562 758,568 6.61
Noninterest-earning assets 1,598,840
Total assets $16,845,402
Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Demand deposits $1,511,333 $- - %
Savings, NOW and money market
deposit accounts 5,733,793 93,982 2.19
Time deposits 5,256,838 177,815 4.52
Total deposits 12,501,964 271,797 2.91
Federal Home Loan Bank advances 743,770 26,490 4.70
Repurchase agreements and other
short-term debt 970,515 33,208 4.51
Long-term debt 591,331 33,650 7.59
Total borrowings 2,305,616 93,348 5.36
Total interest-bearing
liabilities 14,807,580 365,145 3.29
Noninterest-bearing liabilities 154,169
Total liabilities 14,961,749
Preferred stock of subsidiary
corporation 9,577
Shareholders' equity 1,874,076
Total liabilities and
shareholders' equity $16,845,402
393,423
Less: tax-equivalent adjustment (7,930)
Net interest income $385,493
Interest-rate spread 3.32 %
Net interest margin 3.42 %
Nine Months Ended September 30, 2006
Fully tax-
Average equivalent
(Dollars in thousands) balance (c) Interest yield/rate
Assets:
Interest-earning assets:
Loans $12,611,701 $617,765 6.51 %
Securities (b) 3,490,595 127,810 4.81
Loans held for sale 245,559 11,022 5.98
Short-term investments 24,038 709 3.89
Total interest-earning assets 16,371,893 757,306 6.13
Noninterest-earning assets 1,498,577
Total assets $17,870,470
Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Demand deposits $1,453,435 $- - %
Savings, NOW and money market
deposit accounts 5,375,789 70,555 1.75
Time deposits 5,122,366 149,450 3.89
Total deposits 11,951,590 220,005 2.46
Federal Home Loan Bank advances 2,235,163 76,153 4.49
Repurchase agreements and other
short-term debt 1,244,686 38,200 4.05
Long-term debt 632,257 36,641 7.73
Total borrowings 4,112,106 150,994 4.86
Total interest-bearing
liabilities 16,063,696 370,999 3.07
Noninterest-bearing liabilities 134,520
Total liabilities 16,198,216
Preferred stock of subsidiary
corporation 9,577
Shareholders' equity 1,662,677
Total liabilities and
shareholders' equity $17,870,470
386,307
Less: tax-equivalent adjustment (6,907)
Net interest income $379,400
Interest-rate spread 3.06 %
Net interest margin 3.13 %
See Selected Financial Highlights for footnotes.
At or for the Three Months Ended
(Unaudited) Sept. 30, June 30, March 31, Dec. 31, Sept. 30,
(Dollars in thousands) 2007 2007 2007 2006 2006
Asset Quality
Nonperforming loans:
Commercial:
Commercial $25,845 $20,142 $13,679 $21,105 $29,321
Equipment financing 5,054 2,584 2,405 2,616 2,450
Total commercial 30,899 22,726 16,084 23,721 31,771
Commercial real estate 14,238 12,242 18,524 17,618 16,811
Residential 33,297 26,683 13,473 11,307 7,032
Consumer 16,887 10,875 10,808 6,266 3,496
Total nonperforming loans 95,321 72,526 58,889 58,912 59,110
Other real estate owned and
repossessed assets:
Commercial 5,233 3,950 4,833 1,922 1,573
Residential 985 711 350 383 607
Consumer 2,635 1,467 758 608 126
Total other real estate
owned and repossessed
assets 8,853 6,128 5,941 2,913 2,306
Total nonperforming assets $104,174 $78,654 $64,830 $61,825 $61,416
Accruing loans 90 or more
days past due $1,286 $2,088 $4,636 $1,490 $4,609
Allowance for Credit Losses
Beginning balance $152,750 $152,660 $154,994 $156,331 $156,471
Provision 15,250 4,250 3,000 3,000 3,000
Allowance for acquired
loans - - - 4,724 -
Charge-offs:
Commercial 1,992 2,034 2,293 9,352 3,369
Residential 433 286 2,581 199 46
Consumer 2,582 3,176 1,993 454 265
Total charge-offs 5,007 5,496 6,867 10,005 3,680
Recoveries (1,018) (1,336) (1,533) (944) (540)
Net loan charge-offs 3,989 4,160 5,334 9,061 3,140
Ending balance $164,011 $152,750 $152,660 $154,994 $156,331
Components:
Allowance for loan
losses $154,532 $144,974 $145,367 $147,719 $147,446
Reserve for unfunded
credit commitments 9,479 7,776 7,293 7,275 8,885
Allowance for credit
losses $164,011 $152,750 $152,660 $154,994 $156,331
Asset Quality Ratios:
Allowance for loan
losses / total loans 1.24 % 1.17 % 1.18 % 1.14 % 1.13%
Allowance for credit
losses / total loans 1.32 1.23 1.24 1.20 1.20
Net charge-offs / average
loans (annualized) 0.13 0.14 0.17 0.27 0.10
Nonperforming loans /
total loans 0.77 0.58 0.48 0.46 0.45
Nonperforming assets /
total loans plus
OREO & repos 0.84 0.63 0.53 0.48 0.47
Allowance for credit
losses / nonperforming
loans 172.06 210.61 259.23 263.09 264.47
See Selected Financial Highlights for footnotes.
SOURCE Webster Financial Corporation
CONTACT: Webster Bank
Media:
Clark Finley, 203-578-2287
cfinley@websterbank.com
or
Investors:
Terry Mangan, 203-578-2318
tmangan@websterbank.com/