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WATERBURY, Conn., July 17 /PRNewswire-FirstCall/ -- Webster Financial
Corporation (NYSE: WBS), the holding company for Webster Bank, N.A., today
announced a consolidated net loss of $31.6 million and net income available to
common shareholders of $16.8 million for the quarter ended June 30, 2009. For
the first six months of 2009, the consolidated net loss was $42.7 million and
net loss available to common shareholders was $4.8 million.
Key points for the quarter include:
-- Deposits grew $480 million, resulting in an improved loan-to-deposit
ratio of 88 percent and core to total deposit ratio of 65 percent.
-- The successful exchange offer for convertible preferred stock and
trust preferred securities completed during the second quarter
contributed $173 million in additional Tier 1 common equity. Webster
continues to exceed all requirements for well capitalized regulatory
ratios by a wide margin.
-- Gains from the exchange offer offset charges related to write-downs
and sales of investment securities and a special FDIC assessment
which, taken together, contributed to net income available to common
shareholders of $16.8 million.
-- Webster recorded $85.0 million in provision for loan losses and net
loan charge-offs totaled $50.0 million. The allowance for credit
losses increased to 2.72 percent of total loans. Non performing assets
increased by 10 percent or $36 million during the quarter, of which
$24 million were restructured loans.
-- Noninterest expenses declined by 6 percent from a year ago, excluding
charges for foreclosed property expense, FDIC deposit insurance
assessments, goodwill impairment and severance and other costs.
Webster Chairman and Chief Executive Officer James C. Smith said, "The
major development in the second quarter was our highly successful exchange
offer which boosted our Tier 1 common equity by more than $170 million. In
addition to strengthening our capital position, the additional common equity
enhances our ability to compete vigorously for new business and to move
forward confidently toward our goal of being New England's bank.
"During the quarter," Smith added, "we continued to be vigilant on asset
quality. We again added to reserves in excess of charge-offs so that our
allowance for credit losses now stands at 2.72 percent of total loans. The
slow-down in the growth of delinquencies and nonperforming loans across most
loan categories is encouraging in this challenging economic environment."
Exchange offer for convertible preferred stock and trust preferred
securities
-- During the second quarter, Webster initiated and completed an exchange
offer for its Series A Convertible Preferred Stock for shares of
Webster common stock and cash and Webster Capital Trust IV Trust
Preferred Securities for shares of Webster common stock. Webster
accepted $168.5 million of the convertible preferred stock that was
tendered, which represented the 75 percent maximum level of
participation. All of the $63.9 million in trust preferred securities
tendered were accepted by Webster, which represented a participation
rate of 32 percent.
-- Webster issued 11.3 million common shares and paid $59 million in cash
under the exchange offer for an effective cost of common issuance of
$14.68 per share. The exchange offer generated $173 million of Tier 1
common equity and reduces interest and dividend expense by $19.2
million annually ($17.5 million after-tax).
Net interest income
-- Net interest margin improved to 3.04 percent in the second quarter
compared to 2.99 percent in the first quarter; the increase reflects a
15 basis point decline in the cost of funds offsetting a 10 basis
point decline in the yield on interest-earning assets.
-- Average interest-earning assets totaled $16.0 billion, down from $16.1
billion last quarter.
Provision for credit losses
-- $74.3 million of the provision for credit losses recorded in the
quarter was related to the Company's continuing portfolios and $10.7
million was related to the discontinued liquidating portfolio.
-- Net charge-offs were $49.9 million in the quarter compared to $30.1
million for the quarter ended March 31, 2009; $36.7 million was
related to the continuing portfolios and $13.2 million was related to
the discontinued liquidating portfolio.
Noninterest income
-- Deposit service fees increased by $2.0 million from last quarter,
reflecting a seasonal improvement over the first quarter.
-- Wealth and investment services revenues increased by $0.3 million from
the last quarter, primarily from an improved average level of assets
under management.
-- Loan related fees declined by $0.1 million from the last quarter,
reflective of decreased commercial and consumer loan originations.
-- Mortgage banking revenue increased by $2.8 million from the last
quarter from increased mortgage lending activity.
-- Net loss on sale of securities totaled $13.6 million, primarily from a
net loss of $11.9 million on the sale of $12.3 million book value of
pooled trust preferred securities and $1.7 million loss on sales of $7
million in common equities.
-- Gain of $24.3 million in connection with the early extinguishment of
$63.9 million of trust preferred securities under the exchange offer
-- Loss of $27.1 million on the write-down of certain pooled trust
preferred securities to fair value based on credit deterioration in
underlying issuers.
-- Gain of $1.9 million related to the sale of Visa shares.
Noninterest expenses
-- The increase in noninterest expenses from last quarter represents
increased compensation and benefits expense as well as higher ongoing
FDIC deposit insurance assessments.
-- Charges recorded in the second quarter include $1.2 million of
write-downs on certain corporate properties classified as assets held
for sale.
-- A special FDIC assessment of $8 million was recorded during the second
quarter.
Income taxes
-- Due to the pre-tax loss, the effective tax rate for the second quarter
was not meaningful. The Company recorded a $28.5 million tax benefit
in the quarter on the $60.4 million pre-tax loss applicable to
continuing operations in the period.
Investment securities
-- Total investment securities were $4.2 billion at June 30, 2009
compared to $3.5 billion at March 31, 2009. The carrying value of the
available for sale portfolio included $49 million in unrealized
losses, while the carrying value of the held to maturity portfolio did
not reflect $33 million in unrealized gains.
Loans
-- Total loans were $11.6 billion at June 30, 2009 compared to $12.1
billion at March 31, 2009. In the second quarter, residential mortgage
loans declined by $302.1 million primarily in connection with the
securitization of $203 million in conforming residential loans.
Consumer, commercial and commercial real estate loans declined by
$86.7 million, $81.4 million and $14.5 million, respectively.
-- Out-of-market asset based loans declined $56.0 million from March 31,
2009, or more than two-thirds of the decline in commercial loans noted
above.
-- The discontinued liquidating portfolio of indirect home equity and
national construction loans, included in the consumer and residential
loan portfolios, declined by $24.5 million from March 31, 2009 to
$249.1 million and $6.5 million, respectively.
Asset quality
-- Total nonperforming loans were $350.4 million or 3.02 percent of total
loans at June 30, 2009 compared to $316.2 million or 2.61 percent at
March 31, 2009. The increase in nonperforming loans was primarily
attributed to a combined increase of $24.0 million in performing non
accrual residential mortgages and consumer loans and an increase of
$19.6 million in non accrual equipment financing loans. Non accrual
loans in all other loan categories declined by a combined amount of
$9.4 million.
-- Past due loans for the continuing portfolios declined to $112.5
million at June 30, 2009 compared to $112.8 million at March 31, 2009.
Past due loans for the liquidating portfolio declined to $9.9 million
at June 30, 2009 compared to $12.2 million at March 31, 2009.
Deposits and borrowings
-- Total deposits were $13.2 billion at June 30, 2009 compared to $12.7
billion at March 31, 2009. NOW accounts, savings and demand deposits
increased $655.2 million, $202.9 million and $65.1 million,
respectively, while certificates of deposits and money market deposit
accounts decreased $216.9 million and $176.0 million respectively.
-- Core deposits, which exclude certificates of deposits and brokered
deposits, represented 65.2 percent of total deposits at June 30, 2009
compared to 61.7 percent at March 31, 2009 and 62.0 percent a year
ago.
-- Total borrowings were $2.3 billion, a decline of $0.2 billion from
$2.5 billion at March 31, 2009. Long-term debt declined from $662
million at March 31, 2009 to $591 million at June 30, 2009 in
connection with the exchange offer.
***
Webster Financial Corporation is the holding company for Webster Bank,
National Association. With $17.5 billion in assets, Webster provides business
and consumer banking, mortgage, financial planning, trust and investment
services through 181 banking offices, 492 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, Conn., 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.
***
Conference Call
A conference call covering Webster's second quarter earnings announcement
will be held today, Friday, July 17, 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 2008. 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 At or for the Six
Months Ended June 30, Months Ended June 30,
(In thousands, except per
share data) 2009 2008 2009 2008
------------------------- ---- ---- ---- ----
Net loss and performance
ratios (annualized):
------------------------
Net loss $(31,562) $(28,725) $(42,686) $(4,144)
Net income (loss) per
diluted common share 0.31 (0.56) (0.09) (0.09)
Return on average
shareholders' equity (6.81)% (6.51)% (4.60)% (0.47)%
Return on average tangible
equity (9.68) (11.34) (6.54) (0.83)
Return on average assets (0.72) (0.67) (0.49) (0.05)
Loss from continuing operations
and performance ratios
(annualized):
-------------------------------
Loss from continuing
operations $(31,875) $(28,286) $(42,999) $(1,581)
Net income (loss) from
continuing operations per
diluted common share 0.31 (0.55) (0.10) (0.04)
Return on average
shareholders' equity (6.88)% (6.41)% (4.63)% (0.18)%
Return on average tangible
equity (9.78) (11.17) (6.59) (0.32)
Return on average assets (0.73) (0.66) (0.49) (0.02)
Noninterest income as a
percentage of total
revenue 22.87 (4.79) 27.37 14.39
Efficiency ratio (a) 66.40 65.35 66.91 67.87
Asset quality:
--------------
Allowance for credit
Losses $316,037 $194,368 $316,037 $194,368
Nonperforming assets 384,203 224,100 384,203 224,100
Allowance for credit
losses / total loans 2.72% 1.52% 2.72% 1.52%
Net charge-offs / average
loans (annualized) 1.66 0.64 1.33 0.70
Nonperforming loans /
total loans 3.02 1.62 3.02 1.62
Nonperforming assets /
total loans plus OREO 3.30 1.75 3.30 1.75
Allowance for credit
losses / nonperforming
loans 90.19 93.87 90.19 93.87
Other ratios (annualized):
--------------------------
Tangible capital ratio 7.58% 6.79% 7.58% 6.79%
Tangible common equity
ratio 4.92 5.44 4.92 5.44
Total-risk based capital
(d) 13.80 13.51 13.80 13.51
Tier 1 common equity /
risk weighted assets (d) 6.40 7.18 6.40 7.18
Shareholders' equity /
total assets 10.55 10.82 10.55 10.82
Interest-rate spread 2.96 3.20 2.93 3.20
Net interest margin 3.04 3.26 3.01 3.27
Share related:
--------------
Book value per common share $21.73 $31.71 $21.73 $31.71
Tangible book value per
common share 13.15 17.57 13.15 17.57
Common stock closing price 8.05 18.60 8.05 18.60
Dividends declared per
common share 0.01 0.30 0.02 0.60
Common shares issued and
outstanding 64,098 52,551 64,098 52,551
Basic shares (average) 53,398 52,017 52,478 52,009
Diluted shares (average) 53,398 52,017 52,478 52,009
Footnotes:
----------
(a) Calculated using SNL's methodology - noninterest expense (excluding
foreclosed property expenses, intangible amortization, goodwill
impairments and other charges) as a percentage of net interest income
(FTE basis) plus noninterest income (excluding gain/loss on
securities and other charges).
(b) For purposes of the yield computation, unrealized gains (losses) on
securities available for sale are excluded from the average balance.
(c) NCLC is defined as National Construction Lending Center
(d) The ratios presented are projected for the 2009 reporting periods and
actual for the 2008 reporting periods.
WEBSTER FINANCIAL CORPORATION
Consolidated Balance Sheet (unaudited)
--------------------------------------
June 30, March 31, June 30,
(In thousands) 2009 2009 2008
-------------- ---- ---- ----
Assets:
Cash and due from
depository
institutions $254,638 $208,862 $323,480
Short-term investments 8,216 19,942 2,996
Investment securities:
Trading, at fair value - - 2,280
Available for sale, at
fair value 1,405,872 1,097,229 849,591
Held-to-maturity 2,767,965 2,429,887 2,065,771
--------- --------- ---------
Total securities 4,173,837 3,527,116 2,917,642
Loans held for sale 113,936 48,876 3,972
Loans:
Residential mortgages 2,881,955 3,184,082 3,594,100
Commercial 3,333,610 3,415,051 3,637,395
Commercial real estate 2,235,776 2,250,295 2,314,497
Consumer 3,159,361 3,246,031 3,220,462
--------- --------- ---------
Total loans 11,610,702 12,095,459 12,766,454
Allowance for loan losses (305,999) (270,929) (184,868)
-------- -------- --------
Loans, net 11,304,703 11,824,530 12,581,586
Federal Home Loan Bank
and Federal
Reserve Bank stock 137,874 134,874 132,210
Accrued interest
receivable 69,317 67,951 73,060
Premises and equipment,
net 179,625 182,629 190,273
Goodwill and other
intangible
assets, net 561,013 562,462 756,503
Cash surrender value of
life insurance 285,064 282,399 274,570
Deferred tax assets, net 153,745 199,531 94,823
Prepaid expenses and
other assets 210,608 197,562 127,521
------- ------- -------
Total Assets $17,452,576 $17,256,734 $17,478,636
=========== =========== ===========
Liabilities and Equity:
Deposits:
Demand deposits $1,595,390 $1,530,335 $1,583,686
NOW accounts 2,591,108 1,935,926 1,861,997
Money market deposit
accounts 1,618,910 1,794,943 1,591,857
Savings accounts 2,778,970 2,576,058 2,452,831
Certificates of deposit 4,422,033 4,638,977 4,416,165
Brokered deposits 168,171 218,520 170,031
Total deposits 13,174,582 12,694,759 12,076,567
Securities sold under agreements to
repurchase and
other short-term debt 1,015,099 1,146,852 1,275,024
Federal Home Loan Bank
advances 663,123 671,294 1,419,570
Long-term debt 590,520 661,968 653,995
Accrued expenses and other
liabilities 158,102 216,734 152,169
------- ------- -------
Total liabilities 15,601,426 15,391,607 15,577,325
Shareholders' equity 1,841,518 1,855,495 1,891,705
Noncontrolling interests 9,632 9,632 9,606
----- ----- -----
Total equity 1,851,150 1,865,127 1,901,311
Total Liabilities and
Equity $17,452,576 $17,256,734 $17,478,636
=========== =========== ===========
See Selected Financial Highlights for footnotes.
WEBSTER FINANCIAL CORPORATION
Consolidated Statements of Operations (unaudited)
-------------------------------------------------
Three Months Ended Six Months Ended
June 30, June 30,
-------- --------
(In thousands, except per
share data) 2009 2008 2009 2008
------------------------- ---- ---- ---- ----
Interest income:
Loans including fees $137,533 $175,786 $278,300 $367,058
Investment securities 48,799 38,115 99,626 77,447
Loans held for sale 833 92 997 1,492
--- -- --- -----
Total interest income 187,165 213,993 378,923 445,997
------- ------- ------- -------
Interest expense:
Deposits 49,982 60,055 102,890 135,297
Borrowings 17,895 28,252 38,548 60,158
------ ------ ------ ------
Total interest expense 67,877 88,307 141,438 195,455
------ ------ ------- -------
Net interest income 119,288 125,686 237,485 250,542
Provision for credit
losses 85,000 25,000 151,000 40,800
------ ------ ------- ------
Net interest income
after provision
for credit losses 34,288 100,686 86,485 209,742
------ ------- ------ -------
Non-interest income:
Deposit service fees 29,984 29,943 57,943 58,376
Loan related fees 6,350 7,891 12,832 14,749
Wealth and investment
services 6,081 7,634 11,831 14,590
Mortgage banking
activities 3,433 104 4,039 844
Increase in cash surrender
value of life insurance 2,665 2,623 5,257 5,204
Net (loss) gain on sale of
investment securities (13,593) 126 (9,135) 249
Other income 1,325 854 1,600 2,638
----- --- ----- -----
36,245 49,175 84,367 96,650
Gain on the exchange of
trust preferreds
for common stock 24,336 - 24,336 -
Gain on early
extinguishment of
subordinated notes - - 5,993 -
Loss on write-down of
investments to fair
value (27,110) (54,924) (27,110) (56,177)
Visa share transactions 1,907 - 1,907 1,625
----- - ----- -----
Total non-interest
income 35,378 (5,749) 89,493 42,098
------ ------ ------ ------
Non-interest expenses:
Compensation and benefits 59,189 62,866 115,658 126,309
Occupancy 13,594 13,128 27,889 26,810
Furniture and equipment 15,288 15,634 30,428 30,794
Marketing 3,196 4,940 6,302 8,583
Outside services 3,394 3,706 7,178 7,859
Intangible amortization 1,450 1,464 2,913 3,012
Foreclosed and repossessed
asset expenses 1,799 1,068 2,978 1,348
Foreclosed and repossessed
asset write-downs 2,829 484 6,279 717
FDIC deposit insurance
assessment 5,959 344 10,549 698
Other expenses 14,066 16,005 28,366 30,063
120,764 119,639 238,540 236,193
Severance and other costs 1,313 9,368 1,553 8,718
Impairment of goodwill - 8,500 - 8,500
FDIC special assessment 8,000 - 8,000 -
----- - ----- -
Total non-interest
expenses 130,077 137,507 248,093 253,411
------- ------- ------- -------
Loss from continuing
operations before
income taxes (60,411) (42,570) (72,115) (1,571)
Income tax (benefit)
expense (28,536) (14,285) (29,129) 18
------- ------- ------- --
Loss from continuing
operations (31,875) (28,285) (42,986) (1,589)
Income (loss) from
discontinued operations,
net of tax 313 (439) 313 (2,563)
--- ---- --- ------
Consolidated net
loss $(31,562) $(28,724) $(42,673) $(4,152)
Less: Net income (loss)
attributable to
noncontrolling interests - 1 13 (8)
--- --- -- -
Net loss attributable to
Webster Financial
Corporation (31,562) (28,725) (42,686) (4,144)
Preferred stock dividends,
accretion and
extinguishment gain 48,361 (215) 37,932 (431)
------ ---- ------ ----
Net income (loss)
available to
common shareholders $16,799 $(28,940) $(4,754) $(4,575)
======= ======== ======= =======
Diluted shares
(average) 53,398 52,017 52,478 52,009
Net income (loss) per common share:
Basic
Income (loss) from
continuing operations $0.31 $(0.55) $(0.10) $(0.04)
Net income (loss) 0.31 (0.56) (0.09) (0.09)
Diluted
Income (loss) from
continuing operations 0.31 (0.55) (0.10) (0.04)
Net income (loss) 0.31 (0.56) (0.09) (0.09)
See Selected Financial Highlights for footnotes.
WEBSTER FINANCIAL CORPORATION
Five Quarter Consolidated Statements of Operations (unaudited)
--------------------------------------------------------------
Three Months Ended
------------------
(In thousands,
except per share June 30, March 31, Dec. 31, Sept. 30, June 30,
data) 2009 2009 2008 2008 2008
----------------- ---- ---- ---- ---- ----
Interest income:
Loans
including fees $137,533 $140,767 $168,200 $175,363 $175,786
Investment
securities 48,799 50,827 40,398 39,210 38,115
Loans held
for sale 833 164 51 54 92
--- --- -- -- --
Total interest
income 187,165 191,758 208,649 214,627 213,993
------- ------- ------- ------- -------
Interest
expense:
Deposits 49,982 52,908 57,154 57,731 60,055
Borrowings 17,895 20,653 25,427 27,715 28,252
------ ------ ------ ------ ------
Total interest
expense 67,877 73,561 82,581 85,446 88,307
------ ------ ------ ------ ------
Net interest
income 119,288 118,197 126,068 129,181 125,686
Provision for
credit losses 85,000 66,000 100,000 45,500 25,000
------ ------ ------- ------ ------
Net interest
income after
provision
for credit
losses 34,288 52,197 26,068 83,681 100,686
------ ------ ------ ------ -------
Noninterest income:
Deposit
service fees 29,984 27,959 30,018 31,738 29,943
Loan related
fees 6,350 6,482 7,147 7,171 7,891
Wealth and
investment
services 6,081 5,750 6,480 7,070 7,634
Mortgage
banking
activities 3,433 606 336 50 104
Increase in
cash surrender
value of
life insurance 2,665 2,592 2,631 2,606 2,623
Net (loss)
gain on sale
of investment
securities (13,593) 4,458 (4,233) (50) 126
Other income 1,325 275 1,315 2,731 854
----- --- ----- ----- ---
36,245 48,122 43,694 51,316 49,175
Gain on the
exchange of
trust
preferreds
for common
stock 24,336 - - - -
Gain on early
extinguishment of
debt and swaps - 5,993 - - -
Loss on write-
down of
investments to
fair value (27,110) - (129,593) (33,507) (54,924)
Loss on sale of
FNMA/FHLMC
preferred stock - - - (2,060) -
Visa share
transactions 1,907 - - - -
----- --- --- --- ---
Total noninterest
income 35,378 54,115 (85,899) 15,749 (5,749)
------ ------ ------- ------ ------
Noninterest expenses:
Compensation and
benefits 59,189 56,469 52,078 61,314 62,866
Occupancy 13,594 14,295 13,406 12,827 13,128
Furniture and
equipment 15,288 15,140 15,469 14,892 15,634
Marketing 3,196 3,106 2,895 2,478 4,940
Outside
services 3,394 3,784 4,101 3,798 3,706
Intangible
amortization 1,450 1,463 1,463 1,464 1,464
Foreclosed
and repossessed
asset expenses 1,799 1,179 1,799 1,496 1,068
Foreclosed
and repossessed
asset write-
downs 2,829 3,450 1,615 1,968 484
FDIC deposit
insurance
assessment 5,959 4,590 3,468 532 344
Other expenses 14,066 14,302 13,379 13,998 16,005
120,764 117,778 109,673 114,767 119,639
Severance and
other costs 1,313 240 5,905 1,535 9,368
FDIC special
assessment 8,000 - - - -
Goodwill
impairment - - 188,866 1,013 8,500
--- --- ------- ----- -----
Total noninterest
expenses 130,077 118,018 304,444 117,315 137,507
------- ------- ------- ------- -------
Loss from
continuing
operations
before income
taxes (60,411) (11,706) (364,275) (17,885) (42,570)
Income tax
benefit (28,536) (593) (63,980) (1,878) (14,285)
------- ---- ------- ------ -------
Loss from
continuing
operations (31,875) (11,113) (300,295) (16,007) (28,285)
Income (loss)
from
discontinued
operations, net
of tax 313 - 8 (518) (439)
--- --- --- ---- ----
Consolidated net
loss $(31,562) $(11,113) $(300,287) $(16,525) $(28,724)
Less: Net income
(loss)
attributable to
noncontrolling
interests - 13 (1) 14 1
--- -- -- -- -
Net loss
attributable to
Webster
Financial
Corporation (31,562) $(11,126) $(300,286) $(16,539) $(28,725)
Preferred stock
dividends,
accretion and
extinguishment
gain 48,361 (10,430) (7,308) (5,209) (215)
------ ------- ------ ------ ----
Net income
(loss)
available to
common
shareholders $16,799 $(21,556) $(307,594) $(21,748) $(28,940)
------- -------- --------- -------- --------
Diluted shares
(average) 53,398 52,102 52,031 52,032 52,017
Net income
(loss) per
common share:
Basic
Income (loss)
from continuing
operations $0.31 $(0.41) $(5.91) $(0.41) $(0.55)
Net income
(loss) 0.31 (0.41) (5.91) (0.42) (0.56)
Diluted
Income (loss)
from continuing
operations 0.31 (0.41) (5.91) (0.41) (0.55)
Net income
(loss) 0.31 (0.41) (5.91) (0.42) (0.56)
See Selected Financial Highlights for footnotes.
WEBSTER FINANCIAL CORPORATION
Five Quarter Interest-Rate Spreads (unaudited)
------------------------------------------------
Three Months Ended
------------------
June March December September June
30, 31, 31, 30, 30,
2009 2009 2008 2008 2008
Interest-rate spread
--------------------
Yield on
interest-earning
assets 4.72% 4.82% 5.24% 5.45% 5.51%
Cost of interest-
bearing liabilities 1.76 1.91 2.13 2.21 2.31
---- ---- ---- ---- ----
Interest-rate
spread 2.96% 2.91% 3.11% 3.24% 3.20%
==== ==== ==== ==== ====
Net interest
margin 3.04% 2.99% 3.20% 3.32% 3.26%
==== ==== ==== ==== ====
Consolidated Average Balances, Yields and Rates Paid
(unaudited)
------------------------------------------------------
Three Months Ended June 30, 2009
--------------------------- ----
Fully tax-
(Dollars in Average equivalent
thousands) balance Interest yield/rate
----------- ------- --------- --------------
Assets:
Interest-earning assets:
Loans $12,003,362 $137,533 4.57%
Investment
securities (b) 3,804,936 51,689 5.32
Loans held for
sale 77,787 833 4.28
Federal Home
Loan and Federal
Reserve Bank
stock 137,841 670 1.95
Short-term
investments 12,124 43 1.39
------ -- ----
Total interest-
earning
assets 16,036,050 190,768 4.72
Noninterest-
earning assets 1,443,322
---------
Total assets $17,479,372
===========
Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Demand deposits $1,567,026 $- -%
Savings, NOW and money market
deposit accounts 6,745,909 15,229 0.91
Time deposits 4,778,929 34,753 2.92
--------- ------ ----
Total deposits 13,091,864 49,982 1.53
---------- ------ ----
Securities sold under
agreements to repurchase
and other short-term debt 1,031,671 4,554 1.75
Federal Home
Loan Bank advances 666,604 6,459 3.83
Long-term debt 653,712 6,882 4.21
------- ----- ----
Total borrowings 2,351,987 17,895 3.02
--------- ------ ----
Total interest-
bearing liabilities 15,443,851 67,877 1.76
Noninterest-
bearing liabilities 171,664
-------
Total liabilities 15,615,515
Preferred stock
of subsidiary
corporation 9,577
Shareholders'
equity 1,854,280
---------
Total liabilities and
shareholders'
equity $17,479,372
===========
Tax-equivalent net interest
income 122,891
Less: tax-equivalent
adjustment (3,603)
------
Net interest income $119,288
========
Interest-rate spread 2.96%
====
Net interest margin 3.04%
====
Three Months Ended June 30, 2008
--------------------------- ----
Fully tax-
(Dollars in Average equivalent
thousands) balance Interest yield/rate
----------- ------- --------- --------------
Assets:
Interest-earning assets:
Loans $12,686,784 $175,786 5.52%
Investment
securities (b) 2,882,509 40,435 5.48
Loans held for
sale 5,705 92 6.45
Federal Home
Loan and Federal
Reserve Bank
stock 126,073 1,366 4.36
Short-term
investments 6,374 40 2.50
----- -- ----
Total interest-
earning
assets 15,707,445 217,719 5.51
Noninterest-
earning assets 1,541,441
---------
Total assets $17,248,886
===========
Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Demand deposits $1,487,433 $- -%
Savings, NOW and money market
deposit accounts 5,891,261 19,305 1.31
Time deposits 4,626,051 40,751 3.53
--------- ------ ----
Total deposits 12,004,745 60,056 2.01
---------- ------ ----
Securities sold under
agreements to repurchase
and other short-term debt 1,298,709 8,561 2.61
Federal Home
Loan Bank advances 1,358,648 10,548 3.07
Long-term debt 660,642 9,142 5.54
------- ----- ----
Total borrowings 3,317,999 28,251 3.38
--------- ------ ----
Total interest-
bearing liabilities 15,322,744 88,307 2.31
Noninterest-bearing
liabilities 149,693
-------
Total liabilities 15,472,437
Preferred stock
of subsidiary
corporation 9,577
Shareholders' equity 1,766,872
---------
Total liabilities and
shareholders'
equity $17,248,886
===========
Tax-equivalent net interest
income 129,412
Less: tax-equivalent
adjustment (3,726)
------
Net interest income $125,686
========
Interest-rate spread 3.20%
====
Net interest margin 3.26%
====
See Selected Financial Highlights for footnotes.
WEBSTER FINANCIAL CORPORATION
Consolidated Average Balances, Yields and Rates Paid
(unaudited)
------------------------------------------------------
Six Months Ended June 30, 2009
------------------------- ----
Fully tax-
Average equivalent
(Dollars in thousands) balance Interest yield/rate
---------------------- ------- -------- --------------
Assets:
Interest-earning assets:
Loans $12,076,781 $278,300 4.61%
Investment securities (b) 3,808,227 105,575 5.40
Loans held for sale 49,259 997 4.05
Federal Home Loan and Federal
Reserve Bank stock 136,366 1,296 1.92
Short-term investments 16,114 74 0.92
------ -- ----
Total interest-
earning assets 16,086,747 386,242 4.77
------- ----
Noninterest-earning assets 1,454,622
---------
Total assets $17,541,369
===========
Liabilities and
Shareholders' Equity:
Interest-bearing liabilities:
Demand deposits $1,537,297 $- -%
Savings, NOW and money market
deposit accounts 6,346,814 30,940 0.98
Time deposits 4,808,525 71,950 3.02
--------- ------ ----
Total deposits 12,692,636 102,890 1.63
---------- ------- ----
Securities sold under
agreements to repurchase
and other short-term debt 1,361,792 10,355 1.51
Federal Home Loan
Bank advances 767,923 13,513 3.50
Long-term debt 667,465 14,680 4.40
------- ------ ----
Total borrowings 2,797,180 38,548 2.75
--------- ------ ----
Total interest-bearing
liabilities 15,489,816 141,438 1.84
Noninterest-bearing
liabilities 185,563
-------
Total liabilities 15,675,379
Preferred stock of
subsidiary corporation 9,577
Shareholders' equity 1,856,413
---------
Total liabilities and
shareholders' equity $17,541,369
===========
244,804
Less: tax-equivalent
adjustment (7,319)
------
Net interest income $237,485
========
Interest-rate spread 2.93%
====
Net interest margin 3.01%
====
Six Months Ended June 30, 2008
------------------------- ----
Fully tax-
Average equivalent
(Dollars in thousands) balance Interest yield/rate
---------------------- ------- -------- --------------
Assets:
Interest-earning assets:
Loans $12,613,449 $367,058 5.80%
Investment securities (b) 2,860,599 81,735 5.61
Loans held for sale 51,039 1,492 5.85
Federal Home Loan and Federal
Reserve Bank stock 121,135 3,039 5.05
Short-term investments 5,032 77 3.05
----- -- ----
Total interest-
earning assets 15,651,254 453,401 5.76
------- ----
Noninterest-earning assets 1,540,169
---------
Total assets $17,191,423
===========
Liabilities and
Shareholders' Equity:
Interest-bearing liabilities:
Demand deposits $1,462,493 $- -%
Savings, NOW and money market
deposit accounts 5,843,966 43,485 1.49
Time deposits 4,782,166 91,813 3.85
--------- ------ ----
Total deposits 12,088,625 135,298 2.25
---------- ------- ----
Securities sold under
agreements to repurchase
and other short-term debt 1,329,236 19,780 2.94
Federal Home Loan
Bank advances 1,199,292 20,427 3.37
Long-term debt 659,715 19,950 6.05
------- ------ ----
Total borrowings 3,188,243 60,157 3.75
--------- ------ ----
Total interest-bearing
liabilities 15,276,868 195,455 2.56
------- ----
Noninterest-bearing
liabilities 155,120
-------
Total liabilities 15,431,988
Preferred stock of
subsidiary corporation 9,577
Shareholders' equity 1,749,858
---------
Total liabilities and
shareholders' equity $17,191,423
===========
257,946
Less: tax-equivalent
adjustment (7,404)
------
Net interest income $250,542
========
Interest-rate spread 3.20%
====
Net interest margin 3.27%
====
See Selected Financial Highlights for footnotes.
WEBSTER FINANCIAL CORPORATION
Five Quarter Loan balances (unaudited)
--------------------------------------
June 30, March 31, Dec. 31,
(Dollars in thousands) 2009 2009 2008
---------------------- ---- ---- ----
Loan Balances (actuals):
Continuing Portfolio:
Residential mortgages $2,875,415 $3,170,908 $3,049,706
Commercial 1,711,995 1,738,640 1,797,135
Equipment financing 998,258 1,016,718 1,037,077
Asset based lending 623,357 659,694 752,595
Commercial real estate 2,091,811 2,094,751 2,070,641
Residential development 143,965 155,544 161,533
Consumer 2,910,275 2,979,117 3,016,524
--------- --------- ---------
Total continuing 11,355,076 11,815,372 11,885,211
Allowances for loan loss (264,159) (226,562) (191,426)
-------- -------- --------
Total continuing, net 11,090,917 11,588,810 11,693,785
---------- ---------- ----------
Liquidating Portfolio:
NCLC (c) 6,540 13,174 18,735
Consumer 249,086 266,913 283,645
------- ------- -------
Total liquidating
portfolio 255,626 280,087 302,380
Allowances for loan loss (41,840) (44,367) (43,903)
------- ------- -------
Total liquidating, net 213,786 235,720 258,477
------- ------- -------
Total Loan Balances (actuals) 11,610,702 12,095,459 12,187,591
Allowances for loan loss (305,999) (270,929) (235,329)
-------- -------- --------
Loans (net) $11,304,703 $11,824,530 $11,952,262
=========== =========== ===========
Loan Balances (average):
Continuing Portfolio:
Residential mortgages $3,112,695 $3,092,512 $3,449,202
Commercial 1,750,996 1,784,062 1,811,527
Equipment finance 1,011,999 1,026,322 1,015,340
Asset based lending 652,197 701,263 842,148
Commercial real estate 2,090,615 2,083,861 2,182,228
Residential development 150,674 158,924 161,533
Consumer 2,951,691 3,012,178 2,989,393
--------- --------- ---------
Total continuing 11,720,867 11,859,122 12,451,371
Allowances for loan loss (248,701) (204,619) (167,230)
-------- -------- --------
Total continuing, net 11,472,166 11,654,503 12,284,141
---------- ---------- ----------
Liquidating Portfolio:
NCLC (c) 24,494 15,675 24,199
Consumer 258,001 276,219 293,964
------- ------- -------
Total liquidating
portfolio 282,495 291,894 318,163
Allowances for loan loss (41,840) (44,367) (43,903)
------- ------- -------
Total liquidating, net 240,655 247,527 274,260
------- ------- -------
Total Loan Balances (average) 12,003,362 12,151,016 12,769,534
Allowances for loan loss (290,541) (248,986) (211,133)
-------- -------- --------
Loans (net) $11,712,821 $11,902,030 $12,558,401
=========== =========== ===========
Sept. 30, June 30,
(Dollars in thousands) 2008 2008
---------------------- ---- ----
Loan Balances (actuals):
Continuing Portfolio:
Residential mortgages $3,542,416 $3,547,997
Commercial 1,803,321 1,792,528
Equipment financing 1,006,238 1,002,533
Asset based lending 867,510 842,334
Commercial real estate 2,147,617 2,083,600
Residential development 217,564 230,897
Consumer 2,960,491 2,910,055
--------- ---------
Total continuing 12,545,157 12,409,944
Allowances for loan loss (161,331) (151,997)
-------- --------
Total continuing, net 12,383,826 12,257,947
---------- ----------
Liquidating Portfolio:
NCLC (c) 25,409 46,103
Consumer 295,823 310,407
------- -------
Total liquidating
portfolio 321,232 356,510
Allowances for loan loss (27,838) (32,871)
------- -------
Total liquidating, net 293,394 323,639
------- -------
Total Loan Balances (actuals) 12,866,389 12,766,454
Allowances for loan loss (189,169) (184,868)
-------- --------
Loans (net) $12,677,220 $12,581,586
=========== ===========
Loan Balances (average):
Continuing Portfolio:
Residential mortgages $3,542,938 $3,564,040
Commercial 1,796,598 1,778,444
Equipment finance 1,007,465 1,001,358
Asset based lending 844,518 836,934
Commercial real estate 2,120,589 2,016,430
Residential development 217,564 230,897
Consumer 2,924,446 2,890,852
--------- ---------
Total continuing 12,454,118 12,318,955
Allowances for loan loss (162,420) (147,845)
-------- --------
Total continuing, net 12,291,698 12,171,110
---------- ----------
Liquidating Portfolio:
NCLC (c) 43,777 49,656
Consumer 307,503 318,173
------- -------
Total liquidating
portfolio 351,280 367,829
Allowances for loan loss (27,838) (32,871)
------- -------
Total liquidating, net 323,442 334,958
------- -------
Total Loan Balances (average) 12,805,398 12,686,784
Allowances for loan loss (190,258) (180,716)
-------- --------
Loans (net) $12,615,140 $12,506,068
=========== ===========
See Selected Financial Highlights for footnotes.
WEBSTER FINANCIAL CORPORATION
Five Quarter Nonperforming Assets (unaudited)
---------------------------------------------
June 30, March 31, Dec. 31, Sept. 30, June 30,
(Dollars in thousands) 2009 2009 2008 2008 2008
---------------------- ---- ---- ---- ---- ----
Nonperforming loans:
Continuing
Portfolio:
Residential
mortgages $60,622 $55,962 $48,731 $39,445 $27,083
Performing non-
accrual residential
mortgages 32,975 10,849 3,771 - -
Commercial 68,979 65,073 32,915 33,842 36,808
Equipment financing 35,675 16,056 13,138 7,462 6,718
Asset based lending 24,456 29,353 17,072 17,239 18,980
Commercial real
estate 16,707 12,604 8,032 8,971 9,710
Residential
development 46,808 54,147 48,628 71,065 48,130
Consumer 33,838 37,518 29,627 23,668 20,745
Performing
non-accrual
consumer 4,512 2,652 312 - -
----- ----- --- --- ---
Nonperforming
loans - continuing
portfolio 324,572 284,214 202,226 201,692 168,174
------- ------- ------- ------- -------
Liquidating
Portfolio:
NCLC (c) 5,628 12,259 12,821 14,227 28,235
Performing non-
accrual NCLC - - 581 - -
Consumer 19,521 19,510 16,757 10,994 10,651
Performing non-
accrual
consumer 674 185 181 - -
--- --- --- --- ---
Nonperforming
loans -
liquidating
portfolio 25,823 31,954 30,340 25,221 38,886
------ ------ ------ ------ ------
Total
nonperforming
loans $350,395 $316,168 $232,566 $226,913 $207,060
-------- -------- -------- -------- --------
Other real estate
owned and repossessed assets:
Continuing
Portfolio:
Residential
mortgages $1,808 $1,399 $1,863 $3,071 $3,792
Commercial 9,340 10,361 9,782 1,026 1,113
Equipment
financing 10,322 13,352 13,086 12,261 5,663
Asset based
lending - - - - -
Commercial real
estate - - - - -
Residential
development - - - - -
Consumer 5,571 369 1,244 2,835 4,173
----- --- ----- ----- -----
Total continuing 27,041 25,481 25,975 19,193 14,741
------ ------ ------ ------ ------
Liquidating Portfolio:
NCLC (c) 5,836 5,563 3,519 2,943 279
Consumer 931 1,139 1,129 626 2,020
--- ----- ----- --- -----
Nonperforming
loans - liquidating
portfolio 6,767 6,702 4,648 3,569 2,299
----- ----- ----- ----- -----
Total other real
estate owned and
repossessed
assets $33,808 $32,183 $30,623 $22,762 $17,040
------- ------- ------- ------- -------
Total
nonperforming
assets $384,203 $348,351 $263,189 $249,675 $224,100
======== ======== ======== ======== ========
See Selected Financial Highlights for footnotes.
WEBSTER FINANCIAL CORPORATION
Five Quarter Past Due Loans (unaudited)
---------------------------------------
June 30, March 31, Dec. 31, Sept. 30, June 30,
(Dollars in thousands) 2009 2009 2008 2008 2008
---------------------- ---- ---- ---- ---- ----
Past due 30-89 days:
Accruing loans:
Continuing Portfolio:
Residential
mortgages $39,955 $45,798 $45,909 $40,209 $27,534
Commercial 8,460 8,033 15,817 7,196 8,337
Equipment
financing 13,464 16,404 9,860 8,102 9,414
Asset based
lending - 145 3,676 - -
Commercial real
estate 19,053 8,373 7,158 18,241 2,756
Residential
development 3,210 1,004 2,096 5,832 2,485
Consumer 28,354 33,092 33,848 23,279 18,137
------ ------ ------ ------ ------
Past Due 30-89 days
- continuing
portfolio 112,496 112,849 118,364 102,859 68,663
------- ------- ------- ------- ------
Liquidating Portfolio:
NCLC (c) 1 1 4,487 3,046 2,487
Consumer 9,880 12,244 15,621 15,370 8,063
----- ------ ------ ------ -----
Past Due 30-89 days
-
liquidating
portfolio 9,881 12,245 20,108 18,416 10,550
----- ------ ------ ------ ------
Accruing loans past due 90
days or more:
Residential
mortgages - - - - -
Commercial 445 573 459 534 1,380
Equipment
financing - - - - -
Asset based
lending - - - - -
Commercial real
estate 475 - 450 174 -
Residential
development - 150 201 - -
Consumer - - - - -
- - - - -
Accruing loans past
due 90
days or more: 920 723 1,110 708 1,380
--- --- ----- --- -----
Total past due loans $123,297 $125,817 $139,582 $121,983 $80,593
======== ======== ======== ======== =======
See Selected Financial Highlights for footnotes.
WEBSTER FINANCIAL CORPORATION
Five Quarter Changes in the Allowance for Credit Losses (unaudited)
-------------------------------------------------------------------
For the Three Months Ended
--------------------------
June 30, March 31, Dec. 31, Sept. 30, June 30,
(Dollars in thousands) 2009 2009 2008 2008 2008
--------------------- ---- ---- ---- ---- ----
Beginning balance $281,729 $245,829 $198,669 $194,368 $189,808
Provision 85,000 66,000 100,000 45,500 25,000
Charge-offs
continuing portfolio:
Residential
mortgages 4,793 2,964 3,778 1,623 1,036
Commercial 8,983 5,388 5,416 6,593 1,154
Equipment
financing 6,324 2,236 1,222 998 672
Asset based
lending 5,297 2,981 176 7,245 1,623
Commercial real
estate - - 53 - 1,504
Residential
development 2,350 48 30,158 161 3,711
Consumer 10,242 6,541 3,887 4,643 2,784
------ ----- ----- ----- -----
Charge-offs
continuing
portfolio 37,989 20,158 44,690 21,263 12,484
Charge-offs
liquidating
portfolio:
NCLC (c) 3,387 2,086 777 14,025 4,203
Consumer 10,825 9,911 8,779 6,767 5,450
------ ----- ----- ----- -----
Charge-offs
liquidating
portfolio 14,212 11,997 9,556 20,792 9,653
------ ------ ----- ------ -----
Total charge-offs 52,201 32,155 54,246 42,055 22,137
------ ------ ------ ------ ------
Recoveries continuing
portfolio:
Residential
mortgages 115 24 85 5 162
Commercial 230 378 225 89 269
Equipment
financing 203 287 177 303 238
Asset based
lending - 5 129 61 375
Commercial real
estate - - - - -
Residential
development 9 - - - -
Consumer 702 766 180 256 246
--- --- --- --- ---
Recoveries
continuing
portfolio 1,259 1,460 796 714 1,290
----- ----- --- --- -----
Recoveries liquidating
portfolio:
NCLC (c) 825 528 595 151 406
Consumer 187 67 15 (9) 1
--- -- -- -- -
Recoveries
liquidating
portfolio 1,012 595 610 142 407
----- --- --- --- ---
Total recoveries 2,271 2,055 1,406 856 1,697
----- ----- ----- --- -----
Total net charge-offs 49,930 30,100 52,840 41,199 20,440
------ ------ ------ ------ ------
Change in unfunded
commitments (762) - - - -
Ending balance $316,037 $281,729 $245,829 $198,669 $194,368
======== ======== ======== ======== ========
Components:
Allowance for loan
losses $305,999 $270,929 $235,329 $189,169 $184,868
Reserve for unfunded
credit commitments 10,038 10,800 10,500 9,500 9,500
------ ------ ------ ----- -----
Allowance for
credit losses $316,037 $281,729 $245,829 $198,669 $194,368
======== ======== ======== ======== ========
See Selected Financial Highlights for footnotes.
WEBSTER FINANCIAL CORPORATION
Asset Quality Ratios
--------------------
For the Three Months Ended
--------------------------
(Dollars in June 30, March 31, Dec. 31, Sept. 30, June 30,
thousands) 2009 2009 2008 2008 2008
----------- ---- ---- ---- ---- ----
Total Portfolio
---------------
Allowance for
loan losses /
total loans 2.64% 2.24% 1.93% 1.47% 1.45%
Allowance for
credit losses
/ total loans 2.72 2.33 2.02 1.54 1.52
Net charge-
offs /
average loans
(annualized) 1.66 0.99 1.66 1.29 0.64
Nonperforming
loans / total
loans 3.02 2.61 1.91 1.76 1.62
Nonperforming
assets /
total loans
plus OREO 3.30 2.87 2.15 1.94 1.75
Allowance for
credit losses /
nonperforming
loans 90.19 89.11 105.70 87.55 93.87
Continuing Portfolio
--------------------
Allowance for
loan losses /
total loans 2.33% 1.92% 1.61% 1.29% 1.22%
Allowance for
credit losses
/ total loans 2.41 2.01 1.70 1.36 1.3
Net charge-
offs /
average loans
(annualized) 1.25 0.63 1.41 0.66 0.36
Nonperforming
loans / total
loans 2.86 2.41 1.70 1.61 1.36
Nonperforming
assets /
total loans
plus OREO 3.09 2.62 1.92 1.76 1.47
Allowance for
credit losses /
nonperforming
loans 84.48 83.52 102.35 86.09 96.48
Liquidating Portfolio
---------------------
NCLC (C)
Allowance for
loan losses /
total loans 23.00% 30.86% 30.01% 22.85% 19.65%
Net charge-
offs /
average loans
(annualized) 41.84 39.76 2.99 126.76 30.59
Nonperforming
loans / total
loans 86.06 93.05 71.53 55.99 61.24
Allowance for
loan losses /
nonperforming
loans 26.72 33.16 41.96 40.80 32.09
Consumer
--------
Allowance for
loan losses /
total loans 16.19% 15.10% 13.50% 7.45% 7.53%
Net charge-
offs /
average loans
(annualized) 16.49 14.26 11.93 8.81 6.75
Nonperforming
loans / total
loans 8.11 7.38 5.97 3.72 3.37
Allowance for
loan losses /
nonperforming
loans 199.73 204.63 225.99 200.50 223.63
See Selected Financial Highlights for footnotes.
SOURCE Webster Financial Corporation
CONTACT: Media: Ed Steadham, +1-203-578-2287,
esteadham@websterbank.com;
or Investors: James Sitro, +1-203-578-2399,
jsitro@websterbank.com, both of
Webster/