WATERBURY, Conn., April 22, 2010 /PRNewswire via COMTEX/ --Webster Financial Corporation (NYSE: WBS), the holding company for Webster Bank, N.A., today announced consolidated net income of $1.4 million for the quarter ended March 31, 2010. The net loss to common shareholders was $6.1 million for the quarter ended March 31, 2010 and included $5.9 million of preferred dividends and $1.6 million from accelerated accretion of a discount related to Webster's repurchase of $100 million, or 25 percent, of the Series B preferred shares issued under the Capital Purchase Program.
Key points for the quarter:
Core pre-tax, pre-provision earnings were $57.3 million, comparable to the fourth quarter of 2009.
Reduced levels of provision for loan losses and net charge-offs of $43.0 million and $40.3 million, respectively, compared to $67.0 million and $51.8 million in the fourth quarter of 2009.
Nonperforming loans declined by 6.5 percent to $348.8 million compared to $373.0 million at December 31, 2009.
Improved net interest margin of 3.28 percent compared to 3.26 percent for the fourth quarter of 2009.
Improved core to total deposit ratio of 74 percent compared to 71 percent at December 31, 2009, reflecting core deposit growth of $613 million.
Loan-to-deposit ratio of 78 percent compared to 81 percent at December 31, 2009.
Webster Chairman and Chief Executive Officer James C. Smith said, "We are pleased to report that Webster returned to profitability from continuing operations in the quarter as our operating fundamentals improved, led by positive credit metrics, expansion in the net interest margin and strong core deposit growth. Business loan originations expanded nearly 60 percent in the quarter as we deliver on our pledge to finance the region's economic recovery."
Net interest income
- Net interest margin improved to 3.28 percent in the quarter with the increase reflecting an 11 basis point decline in the cost of funds offsetting an 8 basis point decline in the yield on interest-earning assets. The margin includes a 3 basis point negative impact from accelerated Freddie Mac loan buybacks from mortgage backed securities during the first quarter based on a recently announced policy change.
- Average interest-earning assets totaled $16.46 billion, up from $16.35 billion last quarter.
Provision for loan losses
- $34.8 million of the $43.0 million provision for loan losses recorded in the quarter was related to the Company's continuing portfolios, and $8.2 million was related to the liquidating portfolio.
- Net charge-offs were $40.3 million in the quarter compared to $51.8 million for the quarter ended December 31, 2009; $31.4 million was related to the continuing portfolios compared to $43.2 million and $8.9 million was related to the liquidating portfolio compared to $8.5 million.
"Improvement was seen in several key asset quality indicators in the quarter, including reduced charge-off levels, lower provision for loan losses as well as lower levels of non-performing loans and assets, the result of reduced inflow of new nonaccrual loans and higher levels of cures and exits from nonperforming status," noted Webster Senior Executive Vice President and Chief Financial Officer/Chief Risk Officer Jerry Plush. "While we remain cautious with regard to credit, these positive outcomes favorably impacted our results in the quarter."
Non-interest income
- Non-interest income includes a net gain on sale of investment securities of $4.3 million compared to a net gain of $53,000 in the fourth quarter. First quarter results also include a loss of $3.7 million on the write-down of investments to fair value. Fourth quarter results included a net gain of $3.6 million on the fair value accounting mark on warrants issued in connection with the Warburg Pincus investment.
Non-interest expenses
- Non-interest expenses, inclusive of other costs, increased $1.4 million from the fourth quarter and included $11.1 million related to previously announced fraud-related costs. Foreclosed and repossessed asset write-downs of $2.1 million and $2.7 million are also included in non-interest expenses in the respective periods.
Income taxes
- The Company recorded $0.4 million of income tax expense in the quarter on the $1.8 million of pre-tax income applicable to continuing operations in the period based on an estimated annual effective tax rate of 20.0%.
Investment securities
- Total investment securities were $5.3 billion at March 31, 2010 compared to $4.8 billion at December 31, 2009. The carrying value of the available for sale portfolio included $0.8 million in net unrealized losses compared to net unrealized losses of $2.8 million at December 31, 2009, while the carrying value of the held to maturity portfolio does not reflect $77.0 million in net unrealized gains compared to net unrealized gains of $61.3 million at December 31, 2009.
Loans
- Total loans were $10.9 billion at March 31, 2010 compared to $11.0 billion at December 31, 2009. Total originations for the quarter were $383 million compared to $472 million in the fourth quarter of 2009, as a $42 million increase in commercial non-mortgage originations was offset by a $115 million decline in residential mortgage lending. In the quarter, commercial, commercial real estate, residential mortgage and consumer loans declined by $39.9 million, $27.6 million, $9.3 million and $63.4 million, respectively. The decline in commercial loans reflects an increase of $34.0 million in core franchise lending offset by reductions of $51.2 million in equipment finance loans and $22.7 million in asset based loans. The decline in commercial real estate mostly reflects a reduction of $17.1 million in residential development outstandings while the decline in consumer reflects seasonal paydowns as well as continued pricing discipline on new production.
- The liquidating portfolio of indirect home equity and national construction loans, included in the consumer and residential loan portfolios, declined by $13.4 million from December 31, 2009 to $207.3 million and $3.3 million, respectively.
- National construction loans that have converted to permanent financing and are included in the residential loan portfolio declined by $4.2 million from December 31, 2009 to $32.6 million.
Asset quality
- Total nonperforming loans were $348.8 million or 3.20 percent of total loans at March 31, 2010 compared to $373.0 million or 3.38 percent at December 31, 2009. The decrease in nonperforming loans reflects a combined decrease of $41.6 million in nonaccrual loans in all loan categories except asset based lending and equipment financing, which increased $14.7 million and $2.8 million respectively. Paying nonperforming loans totaled $103 million at March 31, 2010 compared to $114 million at December 31, 2009.
- Past due loans for the continuing portfolios increased to $105.6 million at March 31, 2010 compared to $90.5 million at December 31, 2009. Past due loans for the liquidating portfolio decreased to $8.6 million at March 31, 2010 compared to $10.4 million at December 31, 2009. The increase in past due loans in the continuing portfolios at March 31, 2010 included two commercial credits, aggregating $14 million, which cured subsequent to the quarter end.
Deposits and borrowings
- Total deposits were $14.0 billion at March 31, 2010 compared to $13.6 billion at December 31, 2009. The core categories of non-interest bearing, NOW, money market and savings increased by a combined amount of $612.9 million while certificates of deposit and brokered deposits decreased by $217.1 million and $34.4 million, respectively.
- Total borrowings of $2.0 billion were essentially flat compared to December 31, 2009. Borrowings represented 11 percent of total assets at both March 31, 2010 and December 31, 2009.
Capital
- On March 3, 2010, Webster repurchased $100 million, or 25%, of the Series B Preferred Stock issued to the U.S. Treasury and recorded a $1.6 million reduction in retained earnings in the first quarter of 2010 from accelerated accretion of a discount related to the repurchased shares. Also in the first quarter, the Company downstreamed $100 million from the holding company to Webster Bank to improve bank-level leverage and total capital ratios to 8.00% and 13.33%, respectively, which exceed OCC individual minimum capital requirements of 7.5% and 12%, respectively, that go into effect on June 30, 2010.
Webster Financial Corporation is the holding company for Webster Bank, National Association. With $18.0 billion in assets, Webster provides business and consumer banking, mortgage, financial planning, trust and investment services through 181 banking offices, 500 ATMs, telephone banking and the Internet. Webster Bank owns the asset-based lending firm Webster Business Credit Corporation, Webster Capital Finance (formerly 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 Webster's website at www.websterbank.com.
Conference Call
A conference call covering Webster's first quarter earnings announcement will be held today, Thursday, 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
This release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Act"). Forward-looking statements can be identified by words such as "believes", "anticipates", "expects", "intends", "targeted", "continue", "remain", "will", "should", "may", "plans", "estimates" and similar references to future periods, however such words are not the exclusive means of identifying such statements. Examples of forward-looking statements include, but are not limited to: (i) projections of revenues, expenses, income or loss, earnings or loss per share, and other financial items; (ii) statements of plans, objectives and expectations of Webster or its management or Board of Directors; (iii) statements of future economic performance; and (iv) statements of assumptions underlying such statements. Forward-looking statements are based on Webster's current expectations and assumptions regarding its business, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Webster's actual results may differ materially from those contemplated by the forward-looking statements, which are neither statements of historical fact nor guarantees or assurances of future performance. Factors that could cause actual results to differ from those discussed in the forward-looking statements include, but are not limited to: (1) local, regional, national and international economic conditions; (2) government intervention in the U.S. financial system; (3) changes in the level of non-performing assets and charge-offs; (4) inflation, interest rate, securities market and monetary fluctuations, and management's estimates and projections of such fluctuations; (5) the timely development and acceptance of new products and services and perceived overall value of these products and services by users; (6) changes in management's estimate of the adequacy of the allowance for loan losses; (7) the risks associated with the continued diversification of assets and adverse changes to credit quality; (8) technological changes; (9) the Company's ability to increase market share and control expenses; (10) changes in laws, regulations and policies (including tax, banking, securities and insurance laws, regulations and policies); (11) changes in applicable accounting policies and practice; (12) legal and regulatory developments including the resolution of legal proceedings or regulatory or other governmental inquiries and the results of regulatory examinations or reviews; (13) the Company's success at managing the risks involved in the foregoing items; and (14) the other factors that are described in the Company's Annual Report on Form 10-K under the heading "Risk Factors." Any forward-looking statement made by the Company in this release speaks only as of the date on which it is made. Factors or events that could cause the Company's actual results to differ may emerge from time to time, and it is not possible for the Company to predict all of them. The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.
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.
Media Contact Investor Contact
Ed Steadham 203-578-2287 Terry Mangan 203-578-2318
esteadham@websterbank.com tmangan@websterbank.com
WEBSTER FINANCIAL CORPORATION
Selected Financial Highlights (unaudited)
-----------------------------------------
At or for the Three
Months Ended March 31,
(In thousands, except per share data) 2010 2009
------------------------------------- ---- ----
Net income (loss) and performance ratios
(annualized):
----------------------------------------
Net income (loss) attributable to
Webster Financial Corporation $1,421 $(11,126)
Net loss available to common
shareholders (6,069) (21,557)
Net loss per diluted common share (0.08) (0.41)
Return on average shareholders' equity 0.30% (2.39)%
Return on average tangible equity 0.41 (3.40)
Return on average assets 0.03 (0.25)
Income (loss) and performance ratios, (annualized), attributable
Webster Financial Corporation from continuing operations:
----------------------------------------------------------------
Income (loss) from continuing
operations $1,421 $(11,126)
Net loss available to common
shareholders (6,069) (21,557)
Net loss from continuing operations
per diluted common share (0.08) (0.41)
Return on average shareholders' equity 0.30% (2.39)%
Return on average tangible equity 0.41 (3.40)
Return on average assets 0.03 (0.25)
Noninterest income as a percentage of
total revenue 26.35 31.41
Efficiency ratio (a) 64.75 67.45
Asset quality:
--------------
Allowance for loan losses $343,871 $270,929
Non-performing assets 379,321 348,351
Allowance for loan losses /total
loans 3.16% 2.24%
Net charge-offs /average loans
(annualized) 1.47 0.99
Non-performing loans / total loans 3.20 2.61
Non-performing assets /total loans
plus OREO 3.47 2.87
Allowance for loan losses /non-
performing loans 98.57 85.69
Other ratios (annualized):
--------------------------
Tangible capital ratio 7.39% 7.75%
Tangible common equity ratio 5.53 4.05
Tier 1 risk-based capital ratio (d) 12.51 11.99
Total-risk based capital (d) 14.37 14.03
Tier 1 common equity /risk weighted
assets (d) 7.90 5.26
Shareholders' equity / total assets 10.24 10.75
Interest-rate spread 3.23 2.91
Net interest margin 3.28 2.99
Share and equity related:
-------------------------
Common equity $1,521,932 $1,238,734
Book value per common share 19.41 23.45
Tangible book value per common share 12.44 13.02
Common stock closing price 17.49 4.25
Dividends declared per common share 0.01 0.01
Common shares issued and outstanding 78,420 52,830
Basic shares (average) 77,922 52,102
Diluted shares (average) 77,922 52,102
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 2010 reporting
periods and actual for the 2009 reporting periods.
WEBSTER FINANCIAL CORPORATION
Consolidated Balance Sheets (unaudited)
----------------------------------------
March 31, December 31, March 31,
(In thousands) 2010 2009 2009
-------------- ---- ---- ----
Assets:
Cash and due
from banks $158,065 $171,184 $208,862
Short-term
investments 162,193 390,310 19,942
Investment securities:
Available for
sale, at fair
value 2,365,956 2,126,043 1,097,229
Held-to-
maturity 2,915,923 2,658,869 2,429,887
--------- --------- ---------
Total
securities 5,281,879 4,784,912 3,527,116
Loans held for
sale 29,790 12,528 48,876
Loans:
Commercial 2,890,353 2,930,239 3,415,051
Commercial
real estate 2,154,534 2,182,120 2,250,295
Residential
mortgages 2,894,291 2,903,637 3,184,082
Consumer 2,957,342 3,020,713 3,246,031
--------- --------- ---------
Total loans 10,896,520 11,036,709 12,095,459
Allowance for
loan losses (343,871) (341,184) (270,929)
-------- -------- --------
Loans, net 10,552,649 10,695,525 11,824,530
Prepaid FDIC
premiums 73,752 79,241 -
Federal Home
Loan Bank and
Federal
Reserve Bank
stock 140,874 140,874 134,874
Premises and
equipment,
net 171,178 178,422 182,629
Goodwill and
other
intangible
assets, net 555,355 556,752 562,462
Cash surrender
value of life
insurance
policies 290,786 289,486 282,399
Deferred tax
asset, net 121,010 121,733 199,531
Accrued
interest
receivable
and other
assets 487,184 318,230 265,513
------- ------- -------
Total Assets $18,024,715 $17,739,197 $17,256,734
=========== =========== ===========
Liabilities and Equity:
Deposits:
Non-interest
bearing
deposits $1,662,122 $1,664,958 $1,530,335
NOW accounts 2,909,737 2,912,510 1,935,926
Money market
deposit
accounts 2,384,297 1,991,423 1,794,943
Savings
accounts 3,372,260 3,146,603 2,576,058
Certificates
of deposit 3,613,735 3,830,865 4,638,977
Brokered
deposits 51,375 85,768 218,520
Total deposits 13,993,526 13,632,127 12,694,759
Securities sold under agreements
to repurchase and
other short-
term debt 849,876 856,846 1,146,852
Federal Home
Loan Bank
advances 574,378 544,651 671,294
Long-term
debt 588,540 588,419 661,968
Accrued
expenses and
other
liabilities 162,678 159,120 216,734
------- ------- -------
Total
liabilities 16,168,998 15,781,163 15,391,607
Webster
Financial
Corporation
shareholders'
equity 1,846,076 1,948,393 1,855,495
Non
controlling
interests 9,641 9,641 9,632
----- ----- -----
Total equity 1,855,717 1,958,034 1,865,127
--------- --------- ---------
Total
Liabilities
and Equity $18,024,715 $17,739,197 $17,256,734
=========== =========== ===========
See Selected Financial Highlights for footnotes.
WEBSTER FINANCIAL CORPORATION
Consolidated Statements of Operations (unaudited)
-------------------------------------------------
Three Months Ended
------------------
March 31,
---------
(In thousands, except per share data) 2010 2009
------------------------------------- ---- ----
Interest income:
Interest and fees on loans and leases $123,350 $140,767
Investment securities 54,156 50,827
Loans held for sale 314 164
Total interest income 177,820 191,758
------- -------
Interest expense:
Deposits 31,951 52,908
Borrowings 14,485 20,653
Total interest expense 46,436 73,561
------ ------
Net interest income 131,384 118,197
Provision for loan losses 43,000 66,000
Net interest income after provision
for loan losses 88,384 52,197
------ ------
Non-interest income:
Deposit service fees 27,784 27,959
Loan related fees 6,005 6,482
Wealth and investment services 5,835 5,750
Mortgage banking activities (138) 606
Increase in cash surrender value of
life insurance policies 2,578 2,592
Net gain on sale of investment
securities 4,318 4,457
Other income 4,314 276
-----
50,696 48,122
Gain on early extinguishment of
subordinated notes - 5,993
Loss on write-down of investment
securities to fair value (3,680) -
Total non-interest income 47,016 54,115
------ ------
Non-interest expenses:
Compensation and benefits 61,079 56,469
Occupancy 14,440 14,295
Technology and equipment expense 15,268 15,140
Marketing 4,791 3,106
Professional and outside services 2,602 3,784
Intangible assets amortization 1,397 1,464
Foreclosed and repossessed asset
expenses 1,692 1,179
Foreclosed and repossessed asset
write-downs 2,061 3,450
Deposit insurance 6,085 4,590
Other expenses 13,146 14,301
------
122,561 117,778
Other including fraud related costs 11,063 240
Total non-interest expenses 133,624 118,018
------- -------
Income (loss) from continuing
operations before income taxes 1,776 (11,706)
Income tax expense (benefit) 355 (593)
---
Income (loss) from continuing
operations 1,421 (11,113)
Income from discontinued operations,
net of tax - -
--- ---
Consolidated net income (loss) $1,421 $(11,113)
Less: Net income attributable to
noncontrolling interests - 13
--- ---
Net income (loss) attributable to
Webster Financial Corp. 1,421 (11,126)
Preferred stock dividends and
accretion (7,490) (10,431)
------
Net loss available to common
shareholders $(6,069) $(21,557)
======= ========
Diluted shares (average) 77,922 52,102
Net loss per common share:
Basic
Loss from continuing operations $(0.08) $(0.41)
Net loss available to common
shareholders (0.08) (0.41)
Diluted
Loss from continuing operations (0.08) (0.41)
Net loss available to common
shareholders (0.08) (0.41)
See Selected Financial Highlights for footnotes.
WEBSTER FINANCIAL CORPORATION
Five Quarter Consolidated Statements of Operations (unaudited)
Three Months Ended
------------------
March 31, Dec. 31, Sept. 30,
(In thousands, except per
share data) 2010 2009 2009
------------------------- ---- ---- ----
Interest income:
Interest and fees on
loans and leases $123,350 $127,069 $131,266
Investment securities 54,156 54,029 52,975
Loans held for sale 314 364 716
Total interest income 177,820 181,462 184,957
------- ------- -------
Interest expense:
Deposits 31,951 35,937 41,977
Borrowings 14,485 15,044 16,308
Total interest expense 46,436 50,981 58,285
------ ------ ------
Net interest income 131,384 130,481 126,672
Provision for loan losses 43,000 67,000 85,000
Net interest income after
provision for loan
losses 88,384 63,481 41,672
------ ------ ------
Non-interest income:
Deposit service fees 27,784 30,634 30,844
Loan related fees 6,005 6,501 5,557
Wealth and investment
services 5,835 6,009 6,160
Mortgage banking
activities (138) 1,456 1,406
Increase in cash
surrender value of life
insurance policies 2,578 2,680 2,692
Net gain (loss) on sale
of investment securities 4,318 54 (4,728)
Other income 4,314 2,648 3,517
50,696 49,982 45,448
Gain on the exchange of
trust preferreds for
common stock - - -
Gain on early
extinguishment of
subordinated notes - - -
Loss on write-down of
investment securities to
fair value (3,680) (77) (1,290)
Warrants -fair value
adjustment - 3,552 -
Visa share transactions - - -
Total non-interest
income 47,016 53,457 44,158
------ ------ ------
Non-interest expenses:
Compensation and benefits 61,079 61,644 59,772
Occupancy 14,440 14,061 13,572
Technology and equipment
expense 15,268 15,299 15,199
Marketing 4,791 4,365 3,802
Professional and outside
services 2,602 4,209 3,628
Intangible assets
amortization 1,397 1,408 1,421
Foreclosed and
repossessed asset
expenses 1,692 2,349 1,733
Foreclosed and
repossessed asset write-
downs 2,061 2,588 2,232
Deposit insurance 6,085 5,565 5,942
Other expenses 13,146 14,192 15,616
122,561 125,680 122,917
Other including fraud
related costs 11,063 6,533 4,169
FDIC special assessment - - -
Total non-interest
expenses 133,624 132,213 127,086
------- ------- -------
Income (loss) from
continuing operations
before income taxes 1,776 (15,275) (41,256)
Income tax expense
(benefit) 355 (1,593) (22,014)
--- ------ -------
Income (loss) from
continuing operations 1,421 (13,682) (19,242)
Income (loss) from
discontinued operations,
net of tax - (11) -
---
Consolidated net income
(loss) $1,421 $(13,693) $(19,242)
Less: Net income
attributable to
noncontrolling interests - 1 8
--- --- ---
Net income (loss)
attributable to Webster
Financial Corp. 1,421 (13,694) $(19,250)
Preferred stock
dividends, accretion and
extinguishment gain (7,490) (40,700) (6,850)
Net (loss) income
available to common
shareholders $(6,069) $(54,394) $(26,100)
------- -------- --------
Diluted shares (average) 77,922 72,747 66,281
Net (loss) income per
common share:
Basic
(Loss) income from
continuing operations $(0.08) $(0.76) $(0.39)
Net (loss) income
available to common
shareholders (0.08) (0.76) (0.39)
Diluted
Loss from continuing
operations (0.08) (0.84) (0.39)
Net loss available to
common shareholders (0.08) (0.84) (0.39)
Three Months Ended
------------------
June 30, March 31,
(In thousands, except per share data) 2009 2009
------------------------------------- ---- ----
Interest income:
Interest and fees on loans and leases $137,533 $140,767
Investment securities 48,799 50,827
Loans held for sale 833 164
Total interest income 187,165 191,758
------- -------
Interest expense:
Deposits 49,982 52,908
Borrowings 17,895 20,653
Total interest expense 67,877 73,561
------ ------
Net interest income 119,288 118,197
Provision for loan losses 85,000 66,000
Net interest income after provision for
loan losses 34,288 52,197
------ ------
Non-interest income:
Deposit service fees 29,984 27,959
Loan related fees 6,350 6,482
Wealth and investment services 6,081 5,750
Mortgage banking activities 3,433 606
Increase in cash surrender value of life
insurance policies 2,665 2,592
Net gain (loss) on sale of investment
securities (13,593) 4,457
Other income 1,325 276
36,245 48,122
Gain on the exchange of trust preferreds
for common stock 24,336 -
Gain on early extinguishment of
subordinated notes - 5,993
Loss on write-down of investment
securities to fair value (27,110) -
Warrants - fair value adjustment - -
Visa share transactions 1,907 -
Total non-interest income 35,378 54,115
------ ------
Non-interest expenses:
Compensation and benefits 59,189 56,469
Occupancy 13,594 14,295
Technology and equipment expense 15,288 15,140
Marketing 3,196 3,106
Professional and outside services 3,394 3,784
Intangible assets amortization 1,450 1,464
Foreclosed and repossessed asset expenses 1,799 1,179
Foreclosed and repossessed asset write-
downs 2,829 3,450
Deposit insurance 5,959 4,590
Other expenses 14,066 14,301
120,764 117,778
Other including fraud related costs 1,313 240
FDIC special assessment 8,000 -
Total non-interest expenses 130,077 118,018
------- -------
Income (loss) from continuing operations
before income taxes (60,411) (11,706)
Income tax expense (benefit) (28,536) (593)
------- ----
Income (loss) from continuing operations (31,875) (11,113)
Income (loss) from discontinued operations,
net of tax 313 -
Consolidated net income (loss) $(31,562) $(11,113)
Less: Net income attributable to
noncontrolling interests - 13
--- ---
Net income (loss) attributable to Webster
Financial Corp. $(31,562) $(11,126)
Preferred stock dividends, accretion and
extinguishment gain 48,361 (10,431)
Net (loss) income available to common
shareholders $16,799 $(21,557)
------- --------
Diluted shares (average) 53,398 52,102
Net (loss) income per common share:
Basic
(Loss) income from continuing operations $0.31 $(0.41)
Net (loss) income available to common
shareholders 0.31 (0.41)
Diluted
Loss from continuing operations (0.66) (0.41)
Net loss available to common shareholders (0.65) (0.41)
See Selected Financial Highlights for footnotes.
WEBSTER FINANCIAL CORPORATION
Five Quarter Interest-Rate Spreads and Margin (unaudited)
-------------------------------------------------------------------------
Three Months Ended
-------------------------------------------------------
March 31, December 31, September 30, June 30, March 31,
2010 2009 2009 2009 2009
---- ---- ---- ---- ----
Interest-
rate
spread
---------
Yield on interest-
earning assets 4.42% 4.50% 4.60% 4.72% 4.82%
Cost of interest-
bearing
liabilities 1.19 1.30 1.48 1.76 1.91
---- ---- ---- ---- ----
Interest-
rate spread 3.23% 3.20% 3.12% 2.96% 2.91%
==== ==== ==== ==== ====
Net interest
margin 3.28% 3.26% 3.18% 3.04% 2.99%
==== ==== ==== ==== ====
Consolidated Average Balances, Yields and Rates Paid (unaudited)
Three Months Ended March 31,
2010
---------------------------------
Fully tax-
Average equivalent
(Dollars in thousands) balance Interest yield/rate
Assets:
Interest-earning assets:
Loans $10,976,610 $123,350 4.51%
Investment securities (b) 5,066,951 56,835 4.49
Loans held for sale 27,446 314 4.58
Federal Home Loan and Federal
Reserve Bank stock 140,874 716 2.06
Short-term investments 250,458 162 0.26
Total interest-earning assets 16,462,339 181,377 4.42
------- ----
Noninterest-earning assets 1,398,593
Total assets $17,860,932
===========
Liabilities and Shareholders'
Equity:
Interest-bearing liabilities:
Demand deposits $1,641,654 $- - %
Savings, NOW and money market
deposits 8,365,705 13,878 0.67
Certificates of deposit 3,783,167 18,073 1.94
Total deposits 13,790,526 31,951 0.94
---------- ------ ----
Securities sold under agreements
to repurchase
and other short-term debt 828,213 4,003 1.93
Federal Home Loan Bank advances 576,674 4,418 3.06
Long-term debt 588,800 6,064 4.12
Total borrowings 1,993,687 14,485 2.91
--------- ------
Total interest-bearing
liabilities 15,784,213 46,436 1.19
------ ----
Noninterest-bearing liabilities 150,447
-------
Total liabilities 15,934,660
Noncontrolling interests 9,641
Webster Financial Corp.
shareholders' equity 1,916,631
Total liabilities and equity $17,860,932
===========
Tax-equivalent net interest
income 134,941
Less: tax-equivalent adjustment (3,557)
------
Net interest income $131,384
========
Interest-rate spread 3.23%
====
Net interest margin 3.28%
====
2009
---------------------------------
Fully tax-
Average equivalent
(Dollars in thousands) balance Interest yield/rate
Assets:
Interest-earning assets:
Loans $12,151,016 $140,767 4.65%
Investment securities (b) 3,811,555 53,885 5.48
Loans held for sale 20,415 164 3.22
Federal Home Loan and Federal
Reserve Bank stock 134,874 626 1.88
Short-term investments 20,148 32 0.63
------ --- ----
Total interest-earning assets 16,138,008 195,474 4.82
------- ----
Noninterest-earning assets 1,466,046
Total assets $17,604,054
===========
Liabilities and Shareholders'
Equity:
Interest-bearing liabilities:
Demand deposits $1,507,206 $- - %
Savings, NOW and money market
deposits 5,943,285 15,711 1.07
Certificates of deposit 4,838,449 37,197 3.12
--------- ------ ----
Total deposits 12,288,940 52,908 1.75
---------- ------ ----
Securities sold under
agreements to repurchase
and other short-term debt 1,695,580 5,800 1.37
Federal Home Loan Bank advances 870,368 7,054 3.24
Long-term debt 681,371 7,799 4.58
------- ----- ----
Total borrowings 3,247,319 20,653 2.54
--------- ------ ----
Total interest-bearing
liabilities 15,536,259 73,561 1.91
------ ----
Noninterest-bearing
liabilities 199,648
-------
Total liabilities 15,735,907
Noncontrolling interests 9,632
Webster Financial Corp.
shareholders' equity 1,858,515
Total liabilities and equity $17,604,054
===========
Tax-equivalent net interest
income 121,913
Less: tax-equivalent
adjustment (3,716)
------
Net interest income $118,197
========
Interest-rate spread 2.91%
====
Net interest margin 2.99%
====
See Selected Financial Highlights for footnotes.
WEBSTER FINANCIAL CORPORATION
Five Quarter Loan Balances (unaudited)
March 31, Dec. 31, Sept. 30,
(Dollars in thousands) 2010 2009 2009
---------------------- ---- ---- ----
Loan Balances
(actuals):
Continuing Portfolio:
Commercial $1,539,975 $1,505,956 $1,619,284
Equipment financing 846,562 897,802 951,500
Asset based lending 503,816 526,481 598,641
Commercial real estate 2,057,361 2,067,862 2,086,298
Residential
development 97,173 114,258 128,643
Residential mortgages 2,890,982 2,898,820 2,837,240
Consumer 2,750,084 2,801,588 2,863,622
--------- --------- ---------
Total continuing 10,685,953 10,812,767 11,085,228
Allowance for loan
losses (291,171) (287,784) (269,306)
Total continuing, net 10,394,782 10,524,983 10,815,922
---------- ---------- ----------
Liquidating Portfolio:
NCLC (c) 3,309 4,817 5,826
Consumer 207,258 219,125 231,305
------- ------- -------
Total liquidating
portfolio 210,567 223,942 237,131
Allowance for loan
losses (52,700) (53,400) (57,100)
Total liquidating, net 157,867 170,542 180,031
------- ------- -------
Total Loan Balances
(actuals) 10,896,520 11,036,709 11,322,359
Allowance for loan
losses (343,871) (341,184) (326,406)
-------- -------- --------
Loans, (net) $10,552,649 $10,695,525 $10,995,953
=========== =========== ===========
Loan Balances
(average):
Continuing Portfolio:
Commercial $1,520,157 $1,548,470 $1,675,289
Equipment finance 871,972 930,050 975,552
Asset based lending 523,938 577,330 622,472
Commercial real estate 2,062,769 2,075,754 2,089,643
Residential
development 107,343 125,320 139,040
Residential mortgages 2,892,797 2,860,204 2,831,440
Consumer 2,780,063 2,834,923 2,884,543
Total continuing 10,759,039 10,952,051 11,217,979
Allowance for loan
losses (291,281) (277,870) (260,472)
Total continuing, net 10,467,758 10,674,181 10,957,507
---------- ---------- ----------
Liquidating Portfolio:
NCLC (c) 4,558 5,661 6,414
Consumer 213,013 224,351 240,675
------- ------- -------
Total liquidating
portfolio 217,571 230,012 247,089
Allowance for loan
losses (52,700) (53,400) (57,100)
Total liquidating, net 164,871 176,612 189,989
------- ------- -------
Total Loan Balances
(average) 10,976,610 11,182,063 11,465,068
Allowance for loan
losses (343,981) (331,270) (317,572)
-------- -------- --------
Loans, (net) $10,632,629 $10,850,793 $11,147,496
=========== =========== ===========
June 30, March 31,
(Dollars in thousands) 2009 2009
---------------------- ---- ----
Loan Balances
(actuals):
Continuing Portfolio:
Commercial $1,711,995 $1,738,640
Equipment financing 998,258 1,016,718
Asset based lending 623,357 659,694
Commercial real estate 2,091,811 2,094,751
Residential
development 143,965 155,544
Residential mortgages 2,875,415 3,170,908
Consumer 2,910,275 2,979,117
--------- ---------
Total continuing 11,355,076 11,815,372
Allowance for loan
losses (264,159) (226,562)
Total continuing, net 11,090,917 11,588,810
---------- ----------
Liquidating Portfolio:
NCLC (c) 6,540 13,174
Consumer 249,086 266,913
------- -------
Total liquidating
portfolio 255,626 280,087
Allowance for loan
losses (41,840) (44,367)
Total liquidating, net 213,786 235,720
------- -------
Total Loan Balances
(actuals) 11,610,702 12,095,459
Allowance for loan
losses (305,999) (270,929)
-------- --------
Loans, (net) $11,304,703 $11,824,530
=========== ===========
Loan Balances
(average):
Continuing Portfolio:
Commercial $1,750,996 $1,784,062
Equipment finance 1,011,999 1,026,322
Asset based lending 652,197 701,263
Commercial real estate 2,090,615 2,083,861
Residential
development 150,674 158,924
Residential mortgages 3,127,099 3,092,512
Consumer 2,951,691 3,012,178
Total continuing 11,735,271 11,859,122
Allowance for loan
losses (248,701) (204,619)
Total continuing, net 11,486,570 11,654,503
---------- ----------
Liquidating Portfolio:
NCLC (c) 10,090 15,675
Consumer 258,001 276,219
------- -------
Total liquidating
portfolio 268,091 291,894
Allowance for loan
losses (41,840) (44,367)
Total liquidating, net 226,251 247,527
------- -------
Total Loan Balances
(average) 12,003,362 12,151,016
Allowance for loan
losses (290,541) (248,986)
-------- --------
Loans, (net) $11,712,821 $11,902,030
=========== ===========
See Selected Financial Highlights for footnotes.
WEBSTER FINANCIAL CORPORATION
Five Quarter Non-performing Assets (unaudited)
March 31, Dec. 31, Sept. 30,
(Dollars in thousands) 2010 2009 2009
---------------------- ---- ---- ----
Non-performing loans:
Continuing Portfolio:
Commercial $46,486 $56,632 $61,746
Equipment financing 32,985 30,152 31,784
Asset based lending 28,647 13,982 5,064
Commercial real estate 50,711 56,144 47,644
Residential development 34,651 47,264 44,821
Residential mortgages 70,908 70,311 66,180
Performing non-accrual residential
mortgages 34,699 39,256 43,581
Consumer 27,832 31,299 33,837
Performing non-accrual consumer 5,735 7,456 6,000
----- ----- -----
332,654 352,496 340,657
------- ------- -------
Liquidating Portfolio:
NCLC (c) 2,483 3,408 4,089
Performing non-accrual NCLC 825 825 825
Consumer 10,895 13,915 14,030
Performing non-accrual consumer 1,990 2,333 1,475
----- ----- -----
16,193 20,481 20,419
------ ------ ------
Total non-performing loans $348,847 $372,977 $361,076
-------- -------- --------
Other real estate owned and repossessed
assets:
Continuing Portfolio:
Commercial $13,464 $11,621 $13,225
Equipment financing 6,654 6,522 8,479
Asset based lending - - -
Commercial real estate - - -
Residential development - - -
Residential mortgages 4,461 4,131 2,872
Consumer 4,025 5,017 4,833
----- -----
28,604 27,291 29,409
------ ------ ------
Liquidating Portfolio:
NCLC (c) 1,744 1,401 3,108
Consumer 126 296 -
1,870 1,697 3,108
----- ----- -----
Total other real estate owned and
repossessed assets $30,474 $28,988 $32,517
------- ------- -------
Total non-performing assets $379,321 $401,965 $393,593
======== ======== ========
June 30, March 31,
(Dollars in thousands) 2009 2009
---------------------- ---- ----
Non-performing loans:
Continuing Portfolio:
Commercial $68,979 $65,073
Equipment financing 35,675 16,056
Asset based lending 24,456 29,353
Commercial real estate 16,707 12,604
Residential development 46,808 54,147
Residential mortgages 59,775 55,962
Performing non-accrual residential
mortgages 33,822 10,849
Consumer 33,816 37,518
Performing non-accrual consumer 4,534 2,652
----- -----
324,572 284,214
------- -------
Liquidating Portfolio:
NCLC (c) 5,628 12,259
Performing non-accrual NCLC - -
Consumer 19,521 19,510
Performing non-accrual consumer 674 185
--- ---
25,823 31,954
------ ------
Total non-performing loans $350,395 $316,168
-------- --------
Other real estate owned and repossessed
assets:
Continuing Portfolio:
Commercial $9,340 $10,361
Equipment financing 10,322 13,352
Asset based lending - -
Commercial real estate - -
Residential development - -
Residential mortgages 1,808 1,399
Consumer 5,571 369
----- ---
27,041 25,481
------ ------
Liquidating Portfolio:
NCLC (c) 5,836 5,563
Consumer 931 1,139
6,767 6,702
----- -----
Total other real estate owned and
repossessed assets $33,808 $32,183
------- -------
Total non-performing assets $384,203 $348,351
======== ========
See Selected Financial Highlights for footnotes.
WEBSTER FINANCIAL CORPORATION
Five Quarter Past Due Loans (unaudited)
March 31, Dec. 31, Sept. 30,
(Dollars in thousands) 2010 2009 2009
---------------------- ---- --- ----
Past due 30-89 days:
Accruing loans:
Continuing Portfolio:
Commercial $17,124 $7,871 $9,735
Equipment financing 11,030 10,642 10,407
Asset based lending - - -
Commercial real estate 16,950 8,183 23,872
Residential development 2,528 551 776
Residential mortgages 30,843 36,086 38,927
Consumer 27,099 27,214 31,178
105,574 90,547 114,895
------- ------ -------
Liquidating Portfolio:
NCLC (c) - 582 910
Consumer 8,596 9,804 11,680
8,596 10,386 12,590
----- ------ ------
Accruing loans past due 90 days
or more:
Commercial 350 50 2,685
Equipment financing - - -
Asset based lending - - -
Commercial real estate 365 236 206
Residential development - - -
Residential mortgages - - -
Consumer - - -
715 286 2,891
--- --- -----
Total past due loans $114,885 $101,219 $130,376
======== ======== ========
June 30, March 31,
(Dollars in thousands) 2009 2009
---------------------- ---- ---
Past due 30-89 days:
Accruing loans:
Continuing Portfolio:
Commercial $8,460 $8,033
Equipment financing 13,464 16,404
Asset based lending - 145
Commercial real estate 19,053 8,373
Residential development 3,210 1,004
Residential mortgages 39,955 45,798
Consumer 28,354 33,092
112,496 112,849
------- -------
Liquidating Portfolio:
NCLC (c) 1 1
Consumer 9,880 12,244
9,881 12,245
----- ------
Accruing loans past due 90 days
or more:
Commercial 445 573
Equipment financing - -
Asset based lending - -
Commercial real estate 475 -
Residential development - 150
Residential mortgages - -
Consumer - -
920 723
--- ---
Total past due loans $123,297 $125,817
======== ========
See Selected Financial Highlights for footnotes.
WEBSTER FINANCIAL CORPORATION
Five Quarter Changes in the Allowance for Credit Losses (unaudited)
For the Three Months Ended
--------------------------
March 31, Dec. 31, Sept. 30,
(Dollars in thousands) 2010 2009 2009
---------------------- ---- --- ---
Beginning balance $351,289 $336,511 $316,037
Provision 43,000 67,000 85,000
Allowance for sold loans - (469) -
Charge-offs continuing
portfolio:
Commercial 5,271 6,094 13,729
Equipment financing 5,108 13,302 7,939
Asset based lending 2,447 1,099 15,926
Commercial real estate 1,382 4,605 -
Residential development 5,131 6,600 3,019
Residential mortgages 4,455 2,858 2,721
Consumer 9,896 10,723 10,237
----- ------ ------
33,690 45,281 53,571
Charge-offs liquidating
portfolio:
NCLC (c) 70 1,068 135
Consumer 9,315 8,232 13,256
----- ----- ------
9,385 9,300 13,391
----- ----- ------
Total charge-offs 43,075 54,581 66,962
------ ------ ------
Recoveries continuing
portfolio:
Commercial 515 476 435
Equipment financing 952 898 821
Asset based lending 254 55 -
Commercial real estate - - -
Residential development - - -
Residential mortgages 80 82 277
Consumer 455 535 642
2,256 2,046 2,175
----- ----- -----
Recoveries liquidating
portfolio:
NCLC (c) 302 614 62
Consumer 204 168 132
506 782 194
--- --- ---
Total recoveries 2,762 2,828 2,369
----- ----- -----
Total net charge-offs 40,313 51,753 64,593
------ ------ ------
Change in unfunded
commitments (278) - 67
Ending balance $353,698 $351,289 $336,511
======== ======== ========
Components:
$343,871 $341,184 $326,406
9,827 10,105 10,105
------ ------
Allowance for credit losses $353,698 $351,289 $336,511
======== ======== ========
For the Three Months Ended
--------------------------
June 30, March 31,
(Dollars in thousands) 2009 2009
---------------------- --- ---
Beginning balance $281,729 $245,829
Provision 85,000 66,000
Allowance for sold loans - -
Charge-offs continuing
portfolio:
Commercial 8,983 5,388
Equipment financing 6,324 2,236
Asset based lending 5,297 2,981
Commercial real estate - -
Residential development 2,350 48
Residential mortgages 4,793 2,964
Consumer 10,242 6,541
------ -----
37,989 20,158
Charge-offs liquidating
portfolio:
NCLC (c) 3,387 2,086
Consumer 10,825 9,911
------ -----
14,212 11,997
------ ------
Total charge-offs 52,201 32,155
------ ------
Recoveries continuing
portfolio:
Commercial 230 378
Equipment financing 203 287
Asset based lending - 5
Commercial real estate - -
Residential development 9 -
Residential mortgages 115 24
Consumer 702 766
1,259 1,460
----- -----
Recoveries liquidating
portfolio:
NCLC (c) 825 528
Consumer 187 67
1,012 595
----- ---
Total recoveries 2,271 2,055
----- -----
Total net charge-offs 49,930 30,100
------
Change in unfunded
commitments (762) -
Ending balance $316,037 $281,729
======== ========
Components:
$305,999 $270,929
10,038 10,800
------ ------
Allowance for credit losses $316,037 $281,729
======== ========
See Selected Financial Highlights for footnotes.
WEBSTER FINANCIAL CORPORATION
Asset Quality Ratios
For the Three Months Ended
--------------------------
March 31, Dec. 31, Sept. 30,
(Dollars in thousands) 2010 2009 2009
---------------------- ---- ---- ----
Total Portfolio
---------------
Allowance for loan losses /total
loans 3.16% 3.09% 2.88%
Net charge-offs /average loans
(annualized) 1.47 1.85 2.25
Nonperforming loans / total loans 3.20 3.38 3.19
Nonperforming assets /total loans
plus OREO 3.47 3.63 3.47
Allowance for loan losses /
nonperforming loans 98.57 91.48 90.40
Continuing Portfolio
--------------------
Allowance for loan losses /total
loans 2.72% 2.66% 2.43%
Net charge-offs /average loans
(annualized) 1.17 1.58 1.83
Nonperforming loans / total loans 3.11 3.26 3.07
Nonperforming assets /total loans
plus OREO 3.37 3.50 3.33
Allowance for loan losses /
nonperforming loans 87.53 81.64 79.05
Liquidating Portfolio
---------------------
NCLC (C)
--------
Allowance for loan losses /total
loans 21.15% 18.68% 17.16%
Net charge-offs (recoveries) /
average loans (annualized) (20.36) 32.08 4.55
Nonperforming loans / total loans 99.97 87.88 84.35
Allowance for loan losses /
nonperforming loans 21.16 21.26 20.35
Consumer
--------
Allowance for loan losses /total
loans 25.09% 23.96% 24.25%
Net charge-offs /average loans
(annualized) 17.11 14.38 21.81
Nonperforming loans / total loans 6.22 7.41 6.70
Allowance for loan losses /
nonperforming loans 403.57 323.12 361.82
For the Three Months Ended
--------------------------
June 30, March 31,
(Dollars in thousands) 2009 2009
---------------------- ---- ----
Total Portfolio
---------------
Allowance for loan losses /total
loans 2.64% 2.24%
Net charge-offs /average loans
(annualized) 1.66 0.99
Nonperforming loans / total loans 3.02 2.61
Nonperforming assets /total loans
plus OREO 3.30 2.87
Allowance for loan losses /
nonperforming loans 87.33 85.69
Continuing Portfolio
--------------------
Allowance for loan losses /total
loans 2.33% 1.92%
Net charge-offs /average loans
(annualized) 1.25 0.63
Nonperforming loans / total loans 2.86 2.41
Nonperforming assets /total loans
plus OREO 3.09 2.62
Allowance for loan losses /
nonperforming loans 81.39 79.72
Liquidating Portfolio
---------------------
NCLC (C)
--------
Allowance for loan losses /total
loans 23.00% 30.86%
Net charge-offs (recoveries) /
average loans (annualized) 101.57 39.76
Nonperforming loans / total loans 86.06 93.05
Allowance for loan losses /
nonperforming loans 26.72 33.16
Consumer
--------
Allowance for loan losses /total
loans 16.19% 15.10%
Net charge-offs /average loans
(annualized) 16.49 14.26
Nonperforming loans / total loans 8.11 7.38
Allowance for loan losses /
nonperforming loans 199.73 204.63
See Selected Financial Highlights for footnotes.
SOURCE Webster Financial Corporation