WATERBURY, Conn., June 24 /PRNewswire-FirstCall/ -- Webster Financial
Corporation (NYSE: WBS) today announced the results of its comprehensive
revenue enhancement and cost reduction initiative, called the OneWebster
initiative. Webster expects to increase annual pre-tax earnings by $50
million within two years through actions that will save approximately $40
million in costs and achieve an additional $10 million in incremental revenue
growth on an annual run-rate basis compared with 2007 as a result of this
initiative.
The initiative begun in January 2008 is an ongoing, company-wide review of
business practices designed to enhance the customer experience and improve the
company's overall operating efficiency. Most of the plan will be executed
during the next six to nine months, and the plan will be fully implemented in
24 months. Webster foresees reducing its efficiency ratio to 60 percent in
the fourth quarter of 2008 with sustainable improvements in 2009 and beyond.
Webster people took a careful look at all of our processes and activities
through the eyes of our customers and were able to identify significant
opportunities to reduce expenses and enhance revenue growth opportunities,
said Webster Chairman and CEO James C. Smith. These steps will improve our
operating leverage consistent with our 'We Find a Way' approach to customer
experience, making Webster a better, more efficient bank.
Webster plans to achieve the $40 million in cost savings by streamlining
processes that will reduce headcount and by instituting other efficiency
initiatives. About 240 positions will be eliminated, with more than half to
be achieved through attrition and elimination of open positions. Webster will
incur severance and other related charges of approximately $3.1 million in
conjunction with these position eliminations, of which approximately $2.6
million will be recorded in the second quarter of 2008. In addition, Webster
expects to incur approximately $10 million in other implementation costs, of
which approximately $5 million will be recorded in the second quarter of 2008.
With these changes, Webster expects to meet its efficiency ratio target
while improving its ability to deliver top quality customer service, reduce
transaction times and make banking easier for Webster customers.
During the past few months, more than 200 Webster people analyzed more
than 3,000 specific, employee-identified recommendations to streamline
operations and improve responsiveness. The employee project teams scrutinized
every area of the company while maintaining Webster's commitments to its
customers. Examples include:
- Investing in customer service system enhancements;
- Adding staff in high-growth lines of business;
- Strategic procurement processes to leverage vendor relationships;
- Streamlining processes to speed customer service; and
- Utilizing best practices to achieve lower unit costs.
The large majority of Webster people will continue in their current or
comparable assignments or will be reassigned to new jobs. Smith stated that
while it is difficult to make decisions that will lead to job losses,
Webster's obligation to serve its customers and shareholders better requires
greater efficiency. Affected employees will have the full support of
Webster's severance plan with outplacement services to help their transition,
and Webster will consider them for future employment as the bank creates job
opportunities in the future. Smith said: One of the major successes of this
effort was our ability to realize efficiencies equal to ten percent of our
cost base while 97 percent of our employees remain minimally impacted.
Webster intends to provide additional information regarding OneWebster at
or before its July 22 second quarter earnings announcement.
Webster managed its OneWebster program with the assistance of Harvest
Earnings Group, LLC. Harvest Earnings specializes in earnings programs that
place an emphasis on internally led idea generation and evaluation.
Webster Financial Corporation is the holding company for Webster Bank,
National Association. With $17.2 billion in assets, Webster provides business
and consumer banking, mortgage, financial planning, trust and investment
services through 181 banking offices, 484 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. Member
FDIC and equal housing lender. For more information about Webster, including
past press releases and the latest annual report, visit the Webster website at
www.WebsterOnline.com.
Forward-looking Statements
Certain statements contained in this release may include forward-looking
statements within the meaning of the Private Securities Litigation Reform Act
of 1995. Such forward-looking statements are based upon specific assumptions
that may or may not prove correct. Forward-looking statements are also subject
to known and unknown risks, uncertainties and other factors relating to the
Company's and the Bank's operations and business environment, all of which are
difficult to predict, and many of which are beyond the control of the Company
and the Bank. The factors include, among others: economic and business
conditions in the areas and markets in which the Company and the Bank operate,
particularly those affecting loans secured by real estate; deterioration or
improvement in the ability of the Bank's borrowers to pay their debts to the
Bank; market fluctuations such as those affecting interest and foreign
exchange rates and the value of securities in which the Bank invests;
competition from other financial institutions, whether banks, investment
banks, insurance companies or others; the ability of the Bank to assimilate
acquisitions, enter new markets and lines of business, and open new branches,
successfully; changes in business strategies; changes in tax law and
governmental regulation of financial institutions; demographic changes; and
other risks and uncertainties, including those discussed in the documents the
Company files with the Securities and Exchange Commission (SEC). The
foregoing may cause the actual results and performance of the Company and the
Bank to be materially different from the results and performance indicated or
suggested by the forward-looking statements. Further description of the risks
and uncertainties are included in detail in the Company's current, quarterly
and annual reports, as filed with the SEC.
SOURCE: Webster Financial Corporation
CONTACT:
Webster Financial Corporation
Media:
Ed Steadham
+1-203-578-2287
esteadham@websterbank.com
or
Investors:
Terry Mangan
+1-203-578-2318
tmangan@websterbank.com
Web site: http://www.websteronline.com