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Announces Quarterly Cash Dividend of $.30 Per Share
Net income from continuing operations of $26.5 million or $.51 per diluted
share
- Sold Webster Insurance during the quarter; $2.1 million loss (net of
tax) or $.04 loss per share from discontinued operations, primarily
deal-related costs
- Recorded provision for credit losses for continuing portfolio of $15.8
million; credit reserves at 1.21 percent of $12.2 billion continuing
loan portfolio; overall credit reserves at 1.51 percent
- Net interest margin improved to 3.27 percent; core deposits improved to
60.7 percent of total deposits
- Added 140 Webster-branded ATM locations primarily in the Boston,
Springfield, Worcester and Providence markets as part of expansion
toward Boston
- HSA Bank deposits and linked brokerage account balances grew 18 percent
to $544 million
- Definitive agreement to sell Webster Risk Services; deal expected to
close in second quarter 2008
- Earnings optimization initiative underway ("OneWebster"); results to be
announced in late second quarter 2008
WATERBURY, Conn., April 22 /PRNewswire-FirstCall/ -- Webster Financial
Corporation (NYSE: WBS), the holding company for Webster Bank, N.A., today
announced net income of $24.4 million or $.47 per diluted share for the first
quarter of 2008, compared to a net loss of $8.7 million or $.16 per diluted
share for the fourth quarter of 2007 and $35.0 million in net income or $.62
in earnings per share for the first quarter of 2007. Results in the first
quarter of 2008 include the benefit of $2.3 million ($1.5 million net of tax)
or $.03 per share in connection with the Visa initial public offering and a
partial release of the Visa related litigation reserve established in the
fourth quarter of 2007 and also reflects other charges recorded in the quarter
aggregating $.09 per share.
First Quarter 2008 Earnings Per Share Reconciliation (on reported net
income):
Reported diluted EPS $0.47
Adjustments:
Discontinued operations - Webster Insurance 0.04
Visa transaction (0.03)
Increase in tax expense under FIN 48 0.03
Direct investment write-down 0.01
Securities write-down 0.01
Adjusted diluted EPS $0.53
Commenting on the quarter, Jim Smith, chairman and chief executive
officer, said, "While deteriorating credit conditions have, as expected,
affected provisioning and charge-offs in the first quarter, we are pleased
with the stability of the net interest margin, quality loan growth and expense
control. Given the weakening economy, we expect that credit conditions will
remain challenging in future quarters, possibly through year end or
potentially longer. We believe that Webster is positioned to manage
effectively through this down leg of the economic cycle given our solid
capital position, credit reserves and liquidity as well as improving core
operating results. We are focused on completing the OneWebster initiative we
started earlier this year, which should have a meaningful, positive impact on
future operating results."
Webster announced today that its Board of Directors declared a regular
quarterly cash dividend of $.30 per common share. The dividend is payable on
May 19, 2008 to shareholders of record on May 5, 2008. This is the 83rd
consecutive quarterly dividend since Webster first paid a dividend in 1987.
Webster will provide details on its performance on the first quarter
earnings conference call at 9:00 a.m. today EDT (refer to details for the
conference call at the end of this release). Additional details are also
available on our website at http://www.wbst.com.
The results of the quarter include a loss of $2.1 million or $.04 per
share from discontinued operations in connection with the sale of Webster
Insurance, which occurred on February 1, 2008. As part of the transaction,
Webster retained Webster Risk Services, a third-party workers' compensation
administrator of claims. Webster announced today that it had reached a
definitive agreement to sell Webster Risk Services and anticipates closing in
the second quarter of 2008.
Webster had several other charges specific to the quarter. The first was a
$709,000 write-down in value in a direct investment based on management's
assessment that the decline in market value of the underlying securities will
not be recovered in the near term. Webster also recorded a $544,000 charge
related to the other-than-temporary impairment of equity securities classified
as available for sale. Webster also recognized $1.7 million in tax expense
during the quarter for a prior tax position that, in accordance with the
provisions of FASB Interpretation No. 48, Accounting for Uncertainty in Income
Taxes ("FIN 48"), no longer met the more-likely-than-not recognition
threshold.
As previously announced, Webster launched an earnings optimization program
("OneWebster") in January 2008, assigning senior officers from each line of
business and shared services area to teams dedicated to enhance revenues and
reduce expenses. Harvest Earnings Group, LLC, whose principals have
significant expertise in this area, is assisting with this employee-led
program. The effort to improve operating efficiency will be implemented
through the end of the year and into 2009. The company anticipates that some
job eliminations and other related charges will occur as a result of this
initiative.
Revenues
Total revenue, which consists of net interest income plus total
noninterest income, totaled $172.7 million in the first quarter compared to
total revenue of $170.7 million in the fourth quarter and $175.4 million a
year ago.
Net interest income totaled $124.9 million in the first quarter compared
to $122.7 million in the fourth quarter and $128.1 million a year ago. The
$2.2 million increase from the fourth quarter mostly reflects reduced funding
costs while the $3.2 million reduction in net interest income from a year ago
reflects a lower net interest margin. The net interest margin was 3.27 percent
in the first quarter of 2008 compared to 3.26 percent in the fourth quarter of
2007 and 3.41 percent a year ago. The improvement from the fourth quarter is
the result of replacing higher cost certificates of deposit with lower cost
borrowings and core deposits, while the 14 basis point reduction from a year
ago relates to stock buyback activity undertaken in 2007 coupled with the
negative near-term impact of recent Fed Funds rate reductions and higher
levels of nonaccrual loans. The spread between the yield on interest-earning
assets and the cost of interest-bearing liabilities was 3.20 percent in the
first quarter compared to 3.18 percent in the fourth quarter and 3.32 percent
a year ago.
Total noninterest income was $47.8 million in the first quarter compared
to $48.0 million in the fourth quarter and $47.4 million a year ago. First
quarter 2008 results include the impact of several items specific to the
quarter including a $1.6 million gain from the Visa IPO; a $709,000 write-down
in value in a direct investment based on management's assessment that the
decline in market value of the underlying securities will not be recovered in
the near term and a $544,000 other-than-temporary impairment charge related to
equity securities classified as available for sale. Deposit service fees
totaled $28.4 million compared to $30.6 million in the fourth quarter and
$25.4 million a year ago. The 12 percent increase from a year ago partly
reflects the implementation of a new consumer fee structure during 2007 while
the decline from the fourth quarter is due to seasonal factors. Loan-related
fees were $6.9 million compared to $7.3 million in the fourth quarter and $7.9
million a year ago. The decline in the first quarter of 2008 compared with the
first quarter of 2007 is primarily due to reduced prepayment fee income, and
the decline in the first quarter of 2008 when compared to the fourth quarter
of 2007 is the result of reduced servicing-related income. Wealth and
investment services revenues totaled $7.0 million compared to $7.5 million in
the fourth quarter and $6.9 million a year ago. Income from mortgage banking
activities was $0.7 million in the first quarter compared to income of $1.3
million in the fourth quarter and $2.2 million a year ago. The decline from
each period reflects the recent decision to exit the national wholesale
mortgage business. Other noninterest income was $1.8 million compared to $2.1
million in the fourth quarter and $1.9 million a year ago.
Provision For Credit Losses
The provision for credit losses was $15.8 million compared to $45.25
million in the fourth quarter and $3.0 million a year ago. $40.0 million of
provision in the fourth quarter was to increase the allowance for credit
losses in conjunction with the company's decision to place into a liquidating
portfolio $424.0 million of loans from discontinued indirect residential
construction lending and indirect out of market home equity lending. At March
31, 2008, the liquidating portfolio totaled $395.0 million.
Net loan charge-offs from the continuing portfolios totaled $15.8 million
in the first quarter, and net charge-offs of $4.3 million and $3.5 million
were recorded respectively against the discontinued indirect national
construction loans and indirect, out-of-market home equity loans in the
liquidating portfolio.
The allowance for credit losses, which consists of the allowance for loan
losses and the reserve for unfunded credit commitments, was $189.8 million or
1.51 percent of total loans at March 31, 2008, compared to 1.58 percent at
December 31, 2007 and 1.24 percent at March 31, 2007. Of the total allowance
for credit losses as of March 31, 2008, $147.7 million was allocated toward
the continuing portfolio, or 1.21 percent of continuing loans. $42.1 million
was allocated to the liquidating portfolio, or 10.67 percent of liquidating
loans.
Noninterest Expenses
Total noninterest expenses were $116.1 million in the first quarter
compared to $120.3 million in the fourth quarter of 2007 and $121.2 million a
year ago. The first quarter includes $5.0 million of seasonally higher
compensation costs compared to the fourth quarter, primarily related to
payroll taxes and benefits. The first quarter of 2008 includes a credit for
the partial release of the Visa-related litigation reserve of $650,000
established in the fourth quarter of 2007. The fourth and the first quarter of
2007 included $6.9 million and $4.5 million, respectively, of severance and
other costs.
Income Taxes
The effective tax rate applicable to continuing operations for the first
quarter was 35.1%. Excluding the effects of the $1.7 million of tax expense
specific to the quarter as outlined above, the rate was 31.0%, as compared to
31.6% a year ago. The effective tax rate is subject to volatility from
quarter to quarter due to the interim-period recognition provisions of FIN 48.
Balance Sheet Trends
Total assets were $17.2 billion at March 31, 2008 compared to $16.9
billion a year ago. Total loans were $12.6 billion compared to $12.5 billion
in the fourth quarter and $12.3 billion a year ago. Commercial real estate and
Commercial & Industrial loans grew in the first quarter by $192 million, while
consumer and residential mortgage loans declined by $61 million and $6
million, respectively. Given the recent disruption in the capital markets, the
company has seen more opportunities to book high quality, low loan to value
loans. Securities totaled $2.9 billion compared to $2.4 billion a year ago,
offsetting a decline in loans held for sale of $448 million.
Total deposits were $12.1 billion, a decrease of $0.4 billion or 3 percent
from a year ago, as brokered certificates of deposits declined $249 million
and other certificates of deposit declined $270 million from a year ago.
Somewhat offsetting these declines was an increase in core deposits of $104
million. Borrowings totaled $3.2 billion or an increase of $1.0 billion,
primarily in repurchase agreements, from a year ago. Short-term borrowings
have represented an attractive alternative to certificates of deposits given
recent market conditions.
Book value per common share of $32.71 at March 31, 2008 compared to $33.65
a year ago. Tangible book value per share was $18.36 at March 31, 2008
compared to $20.23 a year ago. The ratio of tangible equity to tangible assets
was 5.77 percent at March 31, 2008 compared to 6.99 percent a year ago, due to
the effect of share buybacks undertaken in 2007 and an increase in unrealized
losses on securities classified as available for sale. Webster's projected
Tier 1 leverage ratio is 7.88 percent at March 31, 2008 compared to 8.34
percent a year ago, and projected total risk based capital ratio is 11.20
percent at March 31, 2008 compared with 12.18 percent a year ago. Given the
target levels the company has established for tangible, leverage and total
risk based capital, it does not intend to repurchase its stock at least until
target levels are achieved.
Asset Quality
Non-performing assets for the continuing portfolios totaled $113.3 million
or 0.93 percent of total loans and other real estate owned at March 31, 2008
compared to $91.2 million or 0.76 percent at December 31, 2007. The increase
in non-performing assets from continuing portfolios was primarily comprised of
$8.3 million in commercial real estate, $3.9 million in residential, $2.6
million in home equity and $4.6 million in other real estate owned. Non-
performing loans in the liquidating indirect national construction and
indirect out of footprint home equity portfolio totaled $29.8 million and $9.4
million at March 31, 2008, respectively compared to $22.8 million and $7.1
million at December 31, 2007 and $2.6 million and $2.7 million a year ago.
Past due loans for the continuing portfolios totaled $97.5 million at
March 31, 2008 compared to $77.0 million at December 31, 2007. The increase in
past due loans from these portfolios consisted primarily of $18.6 million in
commercial real estate, $8 million of which was related to delayed extensions
of credit related to tax credit issues and not payment issues, and these
issues are expected to be resolved in the second quarter of 2008. Past due
loans for the liquidating portfolio totaled $15.5 million at March 31, 2008,
down from $21.9 million at December 31, 2007, primarily from a decline in
indirect national construction loans.
The ratio of the allowance for credit losses to non-performing loans for
the continuing portfolios was 147 percent at March 31, 2008 compared to 178
percent at December 31, 2007. At March 31, 2008, the $42.1 million allowance
for the discontinued indirect portfolios was 108 percent of non-performing
loans from the discontinued portfolios compared to 167 percent at December 31,
2007.
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, insurance, 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, 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.
CONTACT: Webster Bank
Media:
Ed Steadham 203-578-2287
esteadham@websterbank.com
or
Investor:
Terry Mangan 203-578-2318
tmangan@websterbank.com
Conference Call
A conference call covering Webster's first quarter earnings announcement
will be held today, Tuesday, April 22, 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 1-877-407-8289 or 201-689-8341 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 2007. 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.
WEBSTER FINANCIAL CORPORATION
Selected Financial Highlights (unaudited)
At or for the Three
Months Ended March 31,
(In thousands, except per share data) 2008 2007 ( c )
Net income and performance ratios
(annualized):
Net income $24,365 $35,036
Net income per diluted common share 0.47 0.62
Return on average shareholders' equity 5.62% 7.39%
Return on average tangible equity 9.95 12.31
Return on average assets 0.57 0.83
Income from continuing operations and
performance ratios (annualized):
Income from continuing operations $26,489 $35,080
Net income from continuing operations
per diluted common share 0.51 0.62
Return on average shareholders' equity 6.11% 7.40%
Return on average tangible equity 10.82 12.33
Return on average assets 0.62 0.83
Noninterest income as a percentage of
total revenue 27.71 26.99
Efficiency ratio (a) 67.23 69.06
Asset quality:
Allowance for credit losses $189,808 $152,660
Nonperforming assets 153,984 64,830
Allowance for credit losses / total loans 1.51% 1.24%
Net charge-offs / average loans (annualized) 0.75 0.17
Nonperforming loans / total loans 1.11 0.48
Nonperforming assets / total loans plus OREO 1.22 0.53
Allowance for credit losses /
nonperforming loans 135.87 259.23
Other ratios (annualized):
Tangible capital ratio 5.77% 6.99%
Shareholders' equity / total assets 9.96 11.27
Interest-rate spread 3.20 3.32
Net interest margin 3.27 3.41
Share related:
Book value per common share $32.71 $33.65
Tangible book value per common share 18.36 20.23
Common stock closing price 27.87 48.01
Dividends declared per common share 0.30 0.27
Common shares issued and outstanding 52,490 56,530
Basic shares (average) 52,001 56,113
Diluted shares (average) 52,297 56,762
Footnotes:
(a) Noninterest expense as a percentage of net interest income plus
noninterest income.
(b) For purposes of the yield computation, unrealized gains (losses) on
securities available for sale are excluded from the average balance.
(c ) Certain previously reported information has been reclassified for the
effect of reporting Webster Insurance as discontinued operations.
(d) NCLC is defined as National Construction Lending Center.
Consolidated Statements of Condition (unaudited)
March 31, December 31, March 31,
(In thousands) 2008 2007 2007( c )
Assets:
Cash and due from depository
institutions $274,321 $306,654 $269,061
Short-term investments 4,042 5,112 6,161
Securities:
Trading, at fair value 1,049 2,340 14,076
Available for sale, at fair value 760,502 639,364 283,992
Held-to-maturity 2,091,918 2,107,227 2,066,763
Total securities 2,853,469 2,748,931 2,364,831
Federal Home Loan Bank and
Federal Reserve Bank stock 117,213 110,962 110,962
Loans held for sale 8,223 221,568 456,033
Loans:
Residential mortgages 3,635,314 3,641,602 3,739,221
Commercial 3,571,954 3,516,213 3,444,612
Commercial real estate 2,196,110 2,059,881 1,936,650
Consumer 3,197,591 3,258,247 3,182,765
Total loans 12,600,969 12,475,943 12,303,248
Allowance for loan losses (180,308) (188,086) (145,367)
Loans, net 12,420,661 12,287,857 12,157,881
Accrued interest receivable 77,593 80,432 86,878
Premises and equipment, net 192,928 193,063 191,918
Goodwill and other intangible
assets, net 766,467 768,015 775,998
Cash surrender value of life
insurance 271,947 269,366 261,852
Assets held for disposition 6,912 51,603 66,388
Prepaid expenses and other assets 249,786 158,397 130,636
Total Assets $17,243,562 $17,201,960 $16,878,599
Liabilities and Shareholders'
Equity:
Deposits:
Demand deposits $1,475,258 $1,538,083 $1,505,074
NOW accounts 1,825,963 1,718,757 1,761,178
Money market deposit accounts 1,704,655 1,828,656 1,887,602
Savings accounts 2,361,522 2,259,747 2,109,866
Certificates of deposit 4,564,887 4,772,624 4,834,440
Brokered deposits 211,007 236,291 460,230
Total deposits 12,143,292 12,354,158 12,558,390
Securities sold under agreements
to repurchase and other
short-term debt 1,642,320 1,238,012 943,802
Federal Home Loan Bank advances 869,079 1,052,228 655,709
Long-term debt 666,891 650,643 623,091
Reserve for unfunded credit
commitments 9,500 9,500 7,293
Liabilities held for disposition 806 9,261 7,617
Accrued expenses and other
liabilities 185,381 141,949 170,835
Total liabilities 15,517,269 15,455,751 14,966,737
Preferred stock of subsidiary
corporation 9,577 9,577 9,577
Shareholders' equity 1,716,716 1,736,632 1,902,285
Total Liabilities and
Shareholders' Equity $17,243,562 $17,201,960 $16,878,599
See Selected Financial Highlights for footnotes.
Consolidated Statements of Income (unaudited)
Three Months Ended
March 31,
(In thousands, except per share data) 2008 2007
Interest income:
Loans $191,272 $209,164
Securities and short-term investments 39,332 33,280
Loans held for sale 1,400 6,249
Total interest income 232,004 248,693
Interest expense:
Deposits 75,242 87,630
Borrowings 31,906 32,982
Total interest expense 107,148 120,612
Net interest income 124,856 128,081
Provision for credit losses 15,800 3,000
Net interest income after
provision for credit losses 109,056 125,081
Noninterest income:
Deposit service fees 28,433 25,354
Loan related fees 6,858 7,940
Wealth and investment services 6,956 6,878
Mortgage banking activities 740 2,229
Increase in cash surrender value of
life insurance 2,581 2,534
Gain on sale of securities, net 123 541
Other 1,784 1,878
47,475 47,354
Visa share redemption 1,625 -
Loss on write-down of investments
to fair value (1,253) -
Total noninterest income 47,847 47,354
Noninterest expenses:
Compensation and benefits 63,443 61,535
Occupancy 13,682 12,561
Furniture and equipment 15,160 14,558
Intangible amortization 1,548 3,322
Marketing 3,643 4,188
Professional services 4,153 4,511
Other 15,132 15,964
116,761 116,639
Severance and other costs (650) 4,522
Total noninterest expenses 116,111 121,161
Income from continuing operations
before income taxes 40,792 51,274
Income taxes 14,303 16,194
Income from continuing operations 26,489 35,080
Loss from discontinued operations,
net of tax (2,124) (44)
Net income $24,365 $35,036
Diluted shares (average) 52,297 56,762
Net income per common share:
Basic
Income from continuing operations $0.51 $0.63
Net income 0.47 0.62
Diluted
Income from continuing operations 0.51 0.62
Net income 0.47 0.62
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) 2008 2007 2007 2007 2007
Interest income:
Loans $191,272 $205,363 $212,847 $210,337 $209,164
Securities and short-
term investments 39,332 36,318 34,163 32,563 33,280
Loans held for sale 1,400 3,276 4,616 7,419 6,249
Total interest income 232,004 244,957 251,626 250,319 248,693
Interest expense:
Deposits 75,242 89,510 94,484 89,683 87,630
Borrowings 31,906 32,748 30,083 30,283 32,982
Total interest expense 107,148 122,258 124,567 119,966 120,612
Net interest income 124,856 122,699 127,059 130,353 128,081
Provision for credit
losses 15,800 45,250 15,250 4,250 3,000
Net interest income
after provision for
credit losses 109,056 77,449 111,809 126,103 125,081
Noninterest income:
Deposit service fees 28,433 30,577 29,956 28,758 25,354
Loan related fees 6,858 7,328 7,661 7,901 7,940
Wealth and investment
services 6,956 7,507 7,142 7,637 6,878
Mortgage banking
activities 740 1,276 1,849 3,962 2,229
Increase in cash
surrender value of life
insurance 2,581 2,637 2,629 2,586 2,534
Gain on sale of
securities, net 123 195 482 503 541
Other 1,784 2,094 1,688 2,025 1,878
47,475 51,614 51,407 53,372 47,354
VISA share redemption 1,625 - - - -
Loss on write-down of
investments to fair
value (1,253) (3,565) - - -
Gain on Webster Capital
Trust I and II
securities - - - 2,130 -
Total noninterest
income 47,847 48,049 51,407 55,502 47,354
Noninterest expenses:
Compensation and
benefits 63,443 59,910 61,171 61,954 61,535
Occupancy 13,682 12,321 11,932 12,564 12,561
Furniture and equipment 15,160 15,353 14,846 15,014 14,558
Intangible amortization 1,548 1,881 2,027 3,144 3,322
Marketing 3,643 1,727 4,123 4,175 4,188
Professional services 4,153 3,721 3,625 3,181 4,511
Other 15,132 18,513 15,377 16,224 15,964
116,761 113,426 113,101 116,256 116,639
Debt redemption premium - - - 8,940 -
Severance and other costs (650) 6,898 452 3,736 4,522
Total noninterest
expenses 116,111 120,324 113,553 128,932 121,161
Income from continuing
operations before
income taxes 40,792 5,174 49,663 52,673 51,274
Income taxes 14,303 5 15,088 16,801 16,194
Income from
continuing
operations 26,489 5,169 34,575 35,872 35,080
(Loss) income from
discontinued
operations, net of tax (2,124) (13,867) 393 (405) (44)
Net income (loss) $24,365 $(8,698) $34,968 $35,467 $35,036
Diluted shares (average) 52,297 52,795 54,259 56,243 56,762
Net income per common
share:
Basic
Income from
continuing
operations $0.51 $0.10 $0.64 $0.64 $0.63
Net income (loss) 0.47 (0.17) 0.65 0.64 0.62
Diluted
Income from
continuing
operations 0.51 0.10 0.64 0.64 0.62
Net income (loss) 0.47 (0.16) 0.64 0.63 0.62
See Selected Financial Highlights for footnotes.
Interest-Rate Spread (unaudited)
Three Months Ended
March December September June March
31, 31, 30, 30, 31,
2008 2007 2007 2007 2007
Interest-rate spread
Yield on interest-earning
assets 6.02% 6.42% 6.61% 6.62% 6.61%
Cost of interest-bearing
liabilities 2.82 3.24 3.32 3.25 3.29
Interest-rate spread 3.20% 3.18% 3.29% 3.37% 3.32%
Net interest margin 3.27% 3.26% 3.38% 3.47% 3.41%
Consolidated Average Statements of Condition (unaudited)
Three Months Ended March 31, 2008
Fully tax-
Average equivalent
(Dollars in thousands) balance Interest yield/rate
Assets:
Interest-earning assets:
Loans $12,540,115 $191,272 6.08%
Securities (b) 2,838,688 41,300 5.75
Loans held for sale 96,372 1,400 5.81
Federal Home Loan and Federal
Reserve Bank stock 116,197 1,673 5.79
Short-term investments 3,690 37 3.98
Total interest-earning assets 15,595,062 235,682 6.02
Noninterest-earning assets 1,538,898
Total assets $17,133,960
Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Demand deposits $1,437,553 $- -%
Savings, NOW and money market
deposit accounts 5,796,671 24,180 1.67
Time deposits 4,938,280 51,062 4.15
Total deposits 12,172,504 75,242 2.49
Securities sold under agreements to
repurchase and other short-term debt 1,359,763 11,219 3.26
Federal Home Loan Bank advances 1,039,936 9,879 3.76
Long-term debt 658,789 10,808 6.56
Total borrowings 3,058,488 31,906 4.14
Total interest-bearing liabilities 15,230,992 107,148 2.82
Noninterest-bearing liabilities 160,546
Total liabilities 15,391,538
Preferred stock of subsidiary
corporation 9,577
Shareholders' equity 1,732,845
Total liabilities and
shareholders' equity $17,133,960
Tax-equivalent net interest income 128,534
Less: tax-equivalent adjustment (3,678)
Net interest income $124,856
Interest-rate spread 3.20%
Net interest margin 3.27%
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 (b) 2,180,998 31,722 5.85
Loans held for sale 394,102 6,249 6.34
Federal Home Loan and Federal
Reserve Bank stock 122,193 2,481 8.23
Short-term investments 117,584 1,585 5.39
Total interest-earning assets 15,259,902 251,201 6.61
Noninterest-earning assets 1,602,979
Total assets $16,862,881
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
Securities sold under agreements to
repurchase and other short-term debt 883,172 9,878 4.47
Federal Home Loan Bank advances 918,125 10,909 4.75
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 1,897,250
Total liabilities and
shareholders' equity $16,862,881
Tax-equivalent net interest income 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.
Nonperforming Assets (unaudited)
March 31, Dec. 31, Sept. 30, June 30, March 31,
(Dollars in thousands) 2008 2007 2007 2007 2007
Nonperforming loans:
Continuing Portfolio:
Commercial:
Commercial $30,264 $26,804 $25,845 $20,142 $13,679
Equipment financing 5,719 6,473 5,054 2,584 2,405
Total commercial 35,983 33,277 30,899 22,726 16,084
Commercial real estate 21,211 12,896 14,238 12,242 18,524
Residential:
Residential
construction to
permanent 4,200 2,820 - - -
All other 22,042 19,532 14,811 13,288 10,838
Total residential 26,242 22,352 14,811 13,288 10,838
Consumer 17,084 14,455 12,688 8,164 8,114
Nonperforming loans -
continuing portfolio 100,520 82,980 72,636 56,420 53,560
Liquidating Portfolio:
NCLC (d) 29,804 22,797 18,486 13,395 2,635
Consumer 9,378 7,126 4,199 2,711 2,694
Nonperforming loans -
liquidating portfolio 39,182 29,923 22,685 16,106 5,329
Total nonperforming loans 139,702 112,903 95,321 72,526 58,889
Other real estate owned
and repossessed assets:
Commercial 6,590 2,211 5,233 3,950 4,833
Residential 1,820 1,062 985 711 350
Consumer 5,872 4,896 2,635 1,467 758
Total other real estate
owned and repossessed
assets 14,282 8,169 8,853 6,128 5,941
Total nonperforming assets $153,984 $121,072 $104,174 $78,654 $64,830
Accruing loans 90 or more
days past due $1,032 $1,891 $1,286 $2,088 $4,636
See Selected Financial Highlights for footnotes.
Past Due Loans (unaudited)
March 31, Dec. 31, Sept. 30, June 30, March 31,
(Dollars in thousands) 2008 2007 2007 2007 2007
Past Due 30-89 days:
Continuing Portfolio:
Commercial:
Commercial $10,229 $13,291 4,237 9,999 20,537
Equipment financing 10,269 5,644 3,057 3,355 3,582
Total commercial 20,498 18,935 7,294 13,354 24,119
Commercial real estate 30,654 12,054 21,017 13,452 6,429
Residential:
Residential
construction to
permanent 3,339 3,743 1,656 536 -
All other 22,295 19,967 22,501 14,556 10,354
Total residential 25,634 23,710 24,157 15,092 10,354
Consumer 20,721 22,347 17,836 17,005 6,801
Past Due 30-89 days -
continuing portfolio 97,507 77,046 70,304 58,903 47,703
Liquidating Portfolio:
NCLC (d) 4,983 13,143 10,209 9,037 1,835
Consumer 10,473 8,793 7,815 5,379 2,815
Past Due 30-89 days -
liquidating portfolio 15,456 21,936 18,024 14,416 4,650
Past Due 90 days or more:
Commercial 596 1,141 1,031 1,188 1,361
Commercial real estate 436 750 255 900 3,275
Total $113,995 $100,873 $89,614 $75,407 $56,989
See Selected Financial Highlights for footnotes.
Allowance for Credit Losses (unaudited)
For the Three Months Ended
March 31, Dec. 31, Sept. 30,
(Dollars in thousands) 2008 2007 2007
Beginning balance $197,586 $164,011 $152,750
Provision 15,800 45,250 15,250
Charge-offs continuing portfolio:
Commercial 11,439 2,485 1,992
Residential 1,480 71 364
Consumer 3,697 1,833 1,613
Charge-offs continuing portfolio: 16,616 4,389 3,969
Recoveries (827) (1,611) (1,018)
Net loan charge-offs 15,789 2,778 2,951
Charge-offs liquidating portfolio:
NCLC (d) 4,341 7,051 69
Consumer 3,448 1,846 969
Charge-offs liquidating portfolio: 7,789 8,897 1,038
Total net charge-offs 23,578 11,675 3,989
Ending balance $189,808 $197,586 $164,011
Components:
Allowance for loan losses $180,308 $188,086 $154,532
Reserve for unfunded credit
commitments 9,500 9,500 9,479
Allowance for credit losses $189,808 $197,586 $164,011
Asset Quality Ratios:
Allowance for loan losses /
total loans 1.43% 1.51% 1.24%
Allowance for credit losses /
total loans 1.51 1.58 1.32
Net charge-offs / average loans
(annualized) 0.75 0.38 0.13
Nonperforming loans / total loans 1.11 0.90 0.77
Nonperforming assets / total loans
plus OREO 1.22 0.97 0.84
Allowance for credit losses /
nonperforming loans 135.87 175.01 172.06
Continuing Portfolio
Allowance for loan losses /
total loans 1.13% 1.15% n/a
Allowance for credit losses /
total loans 1.21 1.23 n/a
Net charge-offs / average loans
(annualized) 0.52 0.09 n/a
Nonperforming loans / total loans 0.82 0.69 n/a
Nonperforming assets / total loans
plus OREO 0.93 0.76 n/a
Allowance for credit losses /
nonperforming loans 146.92 177.98 n/a
Liquidating Portfolio
NCLC
Allowance for loan losses /
total loans 18.77% 20.65% n/a
Net charge-offs / average loans
(annualized) 25.78 25.43 n/a
Nonperforming loans / total loans 43.49 27.37 n/a
Allowance for loan losses /
nonperforming loans 43.15 75.45 n/a
Consumer
Allowance for loan losses /
total loans 8.96% 9.60% n/a
Net charge-offs / average loans
(annualized) 4.20 2.17 n/a
Nonperforming loans / total loans 2.87 2.09 n/a
Allowance for loan losses /
nonperforming loans 312.09 458.88 n/a
Allowance for Credit Losses (unaudited)
For the Three Months Ended
June 30, March 31,
(Dollars in thousands) 2007 2007
Beginning balance $152,660 $154,994
Provision 4,250 3,000
Charge-offs continuing portfolio:
Commercial 2,034 2,293
Residential 286 442
Consumer 1,892 1,136
Charge-offs continuing portfolio: 4,212 3,871
Recoveries (1,336) (1,533)
Net loan charge-offs 2,876 2,338
Charge-offs liquidating portfolio:
NCLC (d) - 2,139
Consumer 1,284 857
Charge-offs liquidating
portfolio: 1,284 2,996
Total net charge-offs 4,160 5,334
Ending balance $152,750 $152,660
Components:
Allowance for loan losses $144,974 $145,367
Reserve for unfunded credit
commitments 7,776 7,293
Allowance for credit losses $152,750 $152,660
Asset Quality Ratios:
Allowance for loan losses / total loans 1.17% 1.18%
Allowance for credit losses / total loans 1.23 1.24
Net charge-offs / average loans
(annualized) 0.14 0.17
Nonperforming loans / total loans 0.58 0.48
Nonperforming assets / total loans
plus OREO 0.63 0.53
Allowance for credit losses /
nonperforming loans 210.61 259.23
Continuing Portfolio
Allowance for loan losses / total loans n/a n/a
Allowance for credit losses / total loans n/a n/a
Net charge-offs / average loans
(annualized) n/a n/a
Nonperforming loans / total loans n/a n/a
Nonperforming assets / total loans
plus OREO n/a n/a
Allowance for credit losses /
nonperforming loans n/a n/a
Liquidating Portfolio
NCLC
Allowance for loan losses / total loans n/a n/a
Net charge-offs / average loans
(annualized) n/a n/a
Nonperforming loans / total loans n/a n/a
Allowance for loan losses /
nonperforming loans n/a n/a
Consumer
Allowance for loan losses / total loans n/a n/a
Net charge-offs / average loans
(annualized) n/a n/a
Nonperforming loans / total loans n/a n/a
Allowance for loan losses /
nonperforming loans n/a n/a
See Selected Financial Highlights for footnotes.
SOURCE Webster Financial Corporation
CONTACT:
Media Contact
Ed Steadham 203-578-2287
esteadham@websterbank.com
Investor Contact
Terry Mangan 203-578-2318
tmangan@websterbank.com
Web site: http://www.websteronline.com
http://www.wbst.com
(WBS)