Webster Financial Corporation ("Webster") (NYSE: WBS), the
holding company for Webster Bank, N.A. and its HSA Bank division,
today announced net income available to common stockholders of
$216.8 million, or $1.24 per diluted share, for the quarter ended
March 31, 2023, compared to net (loss) available to common
stockholders of $(20.2) million, or $(0.14) per diluted share, for
the quarter ended March 31, 2022.
First quarter 2023 results include $56.6 million pre-tax ($42.3
million after tax), or $0.251 per diluted share, of charges related
to the merger with Sterling Bancorp on January 31, 2022 ("the
merger") and balance sheet repositioning. Excluding these charges,
adjusted earnings per diluted share would have been $1.491 for the
quarter ended March 31, 2023.
"Webster generated solid results during a challenging time for
the banking industry," said John R. Ciulla, president and chief
executive officer. "Our diverse businesses, strong capital
position, unique deposit profile, and solid risk management
framework, allow our company to deliver for our clients in all
operating environments."
Highlights for the first quarter of 2023:
- Revenue of $666.0 million.
- Period end loans and leases balance of $50.9 billion, up $1.2
billion or 2.3 percent linked quarter; 81 percent commercial loans
and leases, 19 percent consumer loans, and a loan to deposit ratio
of 92 percent.
- Period end deposits balance of $55.3 billion, up $1.2 billion
or 2.3 percent linked quarter.
- Provision for credit losses totaled $46.7 million.
- Charges related to the merger and balance sheet repositioning
totaled $56.6 million.
- Return on average assets of 1.22 percent; adjusted 1.46
percent1.
- Return on average tangible common equity of 17.66 percent1;
adjusted 20.98 percent1.
- Net interest margin of 3.66 percent, down 8 basis points from
prior quarter.
- Common equity tier 1 ratio of 10.40 percent.
- Efficiency ratio of 41.64 percent1.
- Tangible common equity ratio of 7.15 percent1.
"Webster’s financial prospects remain strong," said Glenn
MacInnes, executive vice president and chief financial officer.
"Along with core deposit growth, we took actions that provided
ample liquidity and funding optionality going forward."
1 See Reconciliation to GAAP Financial
Measures beginning on page 18.
Line of Business performance compared
to the first quarter of 2022
Commercial Banking
Webster’s Commercial Banking segment serves businesses that have
more than $2 million of revenue through its business banking,
middle market, asset-based lending, equipment finance, commercial
real estate, sponsor finance, private banking, and treasury
services business units. At March 31, 2023, Commercial Banking had
$41.3 billion in loans and leases and $18.3 billion in
deposits.
Commercial Banking Operating Results:
Percent
Three months ended March 31,
Favorable/
(In thousands)
2023
2022
(Unfavorable)
Net interest income
$384,314
$287,069
33.9 %
Non-interest income
35,397
38,743
(8.6)
Operating revenue
419,711
325,812
28.8
Non-interest expense
108,509
89,240
(21.6)
Pre-tax, pre-provision net revenue
$311,202
$236,572
31.5
Percent
At March 31,
Increase/
(In millions)
2023
2022
(Decrease)
Loans and leases
$41,287
$34,928
18.2 %
Deposits
18,298
21,528
(15.0)
AUA / AUM (off balance sheet)
2,670
2,692
(0.8)
Pre-tax, pre-provision net revenue increased $74.6 million, to
$311.2 million, in the quarter as compared to prior year. The
increase in pre-tax, pre-provision net revenue was partially
attributable to the timing of the merger in the first quarter 2022.
Net interest income increased $97.2 million, to $384.3 million,
primarily driven by the merger, organic loan growth since the
merger, and the impact of the higher rate environment. Non-interest
income decreased $3.3 million, to $35.4 million, driven by
decreases of $3.5 million in prepayment penalties, $1.2 million in
cash management fees, and $0.6 million in fees from interest rate
hedging activities; partially offset by $1.9 million of higher
syndication fees. Non-interest expense increased $19.3 million, to
$108.5 million, primarily resulting from $19.0 million of higher
expenses due to the timing of the merger in the first quarter of
2022.
HSA Bank
Webster’s HSA Bank division offers a comprehensive
consumer-directed healthcare solution that includes health savings
accounts, health reimbursement arrangements, flexible spending
accounts and commuter benefits. Health savings accounts are
distributed nationwide directly to employers and individual
consumers, as well as through national and regional insurance
carriers, benefit consultants, and financial advisors. At March 31,
2023, HSA Bank had $12.1 billion in total footings comprising $8.3
billion in deposits and $3.8 billion in assets under administration
through linked investment accounts.
HSA Bank Operating Results:
Percent
Three months ended March 31,
Favorable/
(In thousands)
2023
2022
(Unfavorable)
Net interest income
$71,730
$44,577
60.9 %
Non-interest income
24,067
26,958
(10.7)
Operating revenue
95,797
71,535
33.9
Non-interest expense
43,700
36,409
(20.0)
Pre-tax, net revenue
$52,097
$35,126
48.3
Percent
At March 31,
Increase/
(Dollars in millions)
2023
2022
(Decrease)
Number of accounts (thousands)
3,172
3,067
3.4 %
Deposits
$8,273
$7,805
6.0
Linked investment accounts (off balance
sheet)
3,776
3,761
0.4
Total footings
$12,049
$11,566
4.2
Pre-tax net revenue increased $17.0 million, to $52.1 million,
in the quarter as compared to prior year. Net interest income
increased $27.2 million, to $71.7 million, primarily due to an
increase in net deposit spread and growth in deposits. Non-interest
income decreased $2.9 million, to $24.1 million, primarily due to
lower client account fees. Non-interest expense increased $7.3
million, to $43.7 million, primarily due to higher compensation and
service contract expense related to account growth and the
continued investment in our user experience build out.
Consumer Banking
Webster's Consumer Banking segment serves consumer and business
banking customers primarily throughout southern New England and the
New York Metro and Suburban markets. Consumer Banking is comprised
of the Consumer Lending and Small Business Banking business units,
as well as a distribution network consisting of 201 banking centers
and 351 ATMs, a customer care center, and a full range of web and
mobile-based banking services. Additionally, the Webster Investment
Services group provides investment services to consumers and small
business owners within Webster's targeted markets and retail
footprint. At March 31, 2023, Consumer Banking had $9.6 billion in
loans and $23.7 billion in deposits, as well as $7.8 billion in
assets under administration.
Consumer Banking Operating Results:
Percent
Three months ended March 31,
Favorable/
(In thousands)
2023
2022
(Unfavorable)
Net interest income
$210,583
$136,677
54.1 %
Non-interest income
25,959
27,901
(7.0)
Operating revenue
236,542
164,578
43.7
Non-interest expense
106,879
95,510
(11.9)
Pre-tax, pre-provision net revenue
$129,663
$69,068
87.7
At March 31,
Percent
(In millions)
2023
2022
Increase
Loans
$9,617
$8,595
11.9 %
Deposits
23,698
24,150
(1.9)
AUA (off balance sheet)
7,750
8,096
(4.3)
Pre-tax, pre-provision net revenue increased $60.6 million, to
$129.7 million, in the quarter as compared to prior year. The
increase in balances and income was partially attributable to the
merger in the first quarter of 2022. Net interest income increased
$73.9 million, to $210.6 million, primarily driven by the merger
and the impact of a higher rate environment on the value of
deposits. Non-interest income decreased $1.9 million, to $26.0
million, driven by $3.6 million in lower net investment services
income, which was attributable to the new outsourcing model adopted
in 2022, partially offset by higher deposit related fee income.
Non-interest expense increased $11.4 million, to $106.9 million,
primarily driven by $12.9 million of incremental expenses due to
the timing of the merger, partially offset by lower
compensation-related expenses.
Consolidated financial
performance:
Current period performance, when compared to the first quarter
of 2022, is impacted by the timing of the merger with Sterling
Bancorp occurring on January 31, 2022 as the first quarter of 2022
does not represent a full quarter of combined earnings.
Quarterly net interest income compared to the first quarter
of 2022:
- Net interest income was $595.3 million compared to $394.2
million.
- Net interest margin was 3.66 percent compared to 3.21 percent.
The yield on interest-earning assets increased by 175 basis points,
and the cost of interest-bearing liabilities increased by 139 basis
points.
- Average interest-earning assets totaled $66.1 billion and
increased by $15.8 billion, or 31.3 percent.
- Average loans and leases totaled $50.1 billion and increased by
$14.2 billion, or 39.5 percent.
- Average deposits totaled $54.8 billion and increased by $8.9
billion, or 19.4 percent.
Quarterly provision for credit losses:
- The provision for credit losses reflects a $46.7 million
expense in the quarter, contributing to a $19.2 million increase in
the allowance for credit losses on loans and leases. The provision
also reflects a decrease in the reserves on unfunded commitments of
$1.7 million. The provision for credit losses also reflected an
expense of $43.0 million in the prior quarter, and $188.8 million a
year ago.
- Net charge-offs were $24.5 million, compared to $20.2 million
in the prior quarter, and $8.9 million a year ago. The ratio of net
charge-offs to average loans and leases on an annualized basis was
0.20 percent, compared to 0.17 percent in the prior quarter, and
0.10 percent a year ago.
- The allowance for credit losses on loans and leases represented
1.21 percent of total loans and leases at March 31, 2023, compared
to 1.20 percent at December 31, 2022, and 1.31 percent at March 31,
2022. The allowance represented 332 percent of nonperforming loans
and leases at March 31, 2023, compared to 292 percent at December
31, 2022, and 229 percent at March 31, 2022.
Quarterly non-interest income compared to the first quarter
of 2022:
- Total non-interest income was $70.8 million compared to $104.0
million, a decrease of $33.2 million. The decrease primarily
reflects losses on the sale of securities, lower client hedging
income and valuation marks, the outsourcing of the consumer
investment services platform, lower client account fees, and lower
prepayment and other loan related fees.
Quarterly non-interest expense compared to the first quarter
of 2022:
- Total non-interest expense was $332.5 million compared to
$359.8 million, a decrease of $27.3 million. Total non-interest
expense includes a net $29.4 million of merger and strategic
initiatives charges, compared to a net $104.4 million a year ago.
Excluding those charges, total non-interest expense increased $47.7
million, which reflects a full quarter impact of the merger
compared to two thirds impact a year ago. After adjusting for
merger and strategic initiative charges and the full quarter impact
of the merger, expenses increased modestly year-over-year. The
modest increase reflects expense benefits from the merger and
outsourcing of the consumer investments services platform, which
were offset by an increase in intangible amortization and strategic
investments including operating expenses associated with the Bend
and interLINK acquisitions.
Quarterly income taxes compared to the first quarter of
2022:
- Income tax expense (benefit) was $65.8 million compared to
$(33.6) million, and the effective tax rate was 23.0 percent
compared to an effective tax benefit rate of (66.7) percent. The
tax benefit and effective tax benefit rate a year ago reflected the
pre-tax loss recognized in that period.
Investment securities:
- Total investment securities, net were $14.9 billion, compared
to $14.5 billion at December 31, 2022, and $15.1 billion at March
31, 2022. The carrying value of the available-for-sale portfolio
included $766.4 million of net unrealized losses, compared to
$864.5 million at December 31, 2022, and $328.4 million at March
31, 2022. The carrying value of the held-to-maturity portfolio does
not reflect $742.8 million of net unrealized losses, compared to
$803.4 million at December 31, 2022, and $270.8 million at March
31, 2022.
Loans and leases:
- Total loans and leases were $50.9 billion, compared to $49.8
billion at December 31, 2022, and $43.5 billion at March 31, 2022.
Compared to December 31, 2022, commercial loans and leases
increased by $0.3 billion, commercial real estate loans increased
by $0.9 billion, residential mortgages increased by $38.1 million,
while consumer loans decreased by $61.2 million.
- Compared to a year ago, commercial loans and leases increased
by $3.4 billion, commercial real estate loans increased by $2.9
billion, residential mortgages increased by $1.2 billion, while
consumer loans decreased by $131.3 million.
- Loan originations for the portfolio were $3.3 billion, compared
to $4.7 billion in the prior quarter, and $2.6 billion a year ago.
In addition, $2.5 million of residential loans were originated for
sale in the quarter, compared to $3.5 million in the prior quarter,
and $23.1 million a year ago.
Asset quality:
- Total nonperforming loans and leases were $185.0 million, or
0.36 percent of total loans and leases, compared to $203.8 million,
or 0.41 percent of total loans and leases, at December 31, 2022,
and $248.1 million, or 0.57 percent of total loans and leases, at
March 31, 2022.
- Past due loans and leases were $44.2 million, compared to $73.7
million at December 31, 2022, and $71.5 million at March 31,
2022.
Deposits and borrowings:
- Total deposits were $55.3 billion, compared to $54.1 billion at
December 31, 2022, and $54.4 billion at March 31, 2022. Core
deposits to total deposits1 were 91.8 percent, compared to 92.3
percent at December 31, 2022, and 94.8 percent at March 31, 2022.
The loan to deposit ratio was 92.1 percent at both March 31, 2023,
and December 31, 2022, and 80.1 percent at March 31, 2022.
- Total borrowings were $9.9 billion, compared to $7.7 billion at
December 31, 2022, and $1.6 billion at March 31, 2022.
Capital:
- The return on average common stockholders’ equity and the
return on average tangible common stockholders’ equity1 were 10.94
percent and 17.66 percent, respectively, compared to (1.25) percent
and (1.36) percent, respectively, in the first quarter of
2022.
- The tangible equity1 and tangible common equity1 ratios were
7.55 percent and 7.15 percent, respectively, compared to 8.72
percent and 8.26 percent, respectively, at March 31, 2022. The
common equity tier 1 ratio was 10.40 percent, compared to 11.46
percent at March 31, 2022.
- Book value and tangible book value per common share1 were
$45.85 and $29.47, respectively, compared to $44.32 and $28.94,
respectively, at March 31, 2022.
1 See Reconciliation to GAAP Financial
Measures beginning on page 18.
Webster Financial Corporation (NYSE:WBS) is the holding
company for Webster Bank, N.A. and its HSA Bank Division. Webster
is a leading commercial bank in the Northeast that provides a wide
range of digital and traditional financial solutions across three
differentiated lines of business: Commercial Banking, Consumer
Banking and its HSA Bank division, one of the country's largest
providers of employee benefits solutions. Headquartered in
Stamford, CT, Webster is a values-driven organization with $75
billion in assets. Its core footprint spans the northeastern U.S.
from New York to Massachusetts, with certain businesses operating
in extended geographies. Webster Bank is a member of the FDIC and
an equal housing lender. For more information about Webster,
including past press releases and the latest annual report, visit
the Webster website at www.websterbank.com.
Conference Call
A conference call covering Webster’s first quarter 2023
earnings announcement will be held today, Thursday, April 20, 2023
at 9:00 a.m. Eastern Time. To listen to the live call, please dial
888-330-2446, or 240-789-2732 for international callers. The
passcode is 8607257. The webcast, along with related slides, will
be available via Webster's Investor Relations website at
investors.websterbank.com. A replay of the conference call will be
available for one week via the website listed above, beginning at
approximately 12:00 noon (Eastern) on April 20, 2023. To access the
replay, dial 800-770-2030, or 647-362-9199 for international
callers. The replay conference ID number is 8607257.
Forward-Looking
Statements
This release contains “forward-looking statements” within the
meaning of the Private Securities Litigation Reform Act of 1995.
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)
Webster's ability to successfully integrate the operations of
Webster and Sterling Bancorp and realize the anticipated benefits
of the merger; (2) Webster's ability to successfully execute its
business plan and strategic initiatives, and manage any risks or
uncertainties; (3) Webster's ability to successfully achieve the
anticipated cost reductions and operating efficiencies from planned
strategic initiatives, including process automation, organization
simplification, and spending reductions, and avoid any higher than
anticipated costs or delays in the ongoing implementation; (4)
local, regional, national, and international economic conditions
and the impact they may have on Webster and its customers; (5)
volatility and disruption in national and international financial
markets, including as a result of geopolitical conflict such as the
war between Russia and Ukraine; (6) the potential adverse effects
of the ongoing novel coronavirus (COVID-19) pandemic, or other
unusual and infrequently occurring events, and any governmental or
societal responses thereto; (7) changes in laws and regulations,
including those concerning banking, taxes, dividends, securities,
insurance, and healthcare, with which Webster and its subsidiaries
must comply; (8) adverse conditions in the securities markets that
lead to impairment in the value of Webster's investment securities
and goodwill; (9) inflation, changes in interest rates, and
monetary fluctuations; (10) the replacement of and transition from
the London Interbank Offered Rate (LIBOR) to the Secured Overnight
Financing Rate (SOFR) as the primary interest rate benchmark; (11)
the timely development and acceptance of new products and services
and the perceived value of those products and services by
customers; (12) changes in deposit flows, consumer spending,
borrowings, and savings habits; (13) Webster's ability to implement
new technologies and maintain secure and reliable technology
systems; (14) the effects of any cyber threats, attacks or events
or fraudulent activity; (15) performance by Webster's
counterparties and vendors; (16) Webster's ability to increase
market share and control expenses; (17) changes in the competitive
environment among banks, financial holding companies, and other
financial services providers; (18) changes in the level of
non-performing assets and charge-offs; (19) changes in estimates of
future reserve requirements based upon the periodic review thereof
under relevant regulatory and accounting requirements; (20) the
effect of changes in accounting policies and practices applicable
to Webster, including the impact of recently adopted accounting
guidance; (21) legal and regulatory developments including the
resolution of legal proceedings or regulatory or other governmental
inquiries and the results of regulatory examinations or reviews;
(22) Webster's ability to appropriately address social,
environmental, and sustainability concerns that may arise from its
business activities; and (23) the other factors that are described
in the Company’s Annual Report on Form 10-K and Quarterly Reports
on Form 10-Q under the headings “Risk Factors” and “Management
Discussion and Analysis of Financial Condition and Results of
Operations.” 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, ROATCE, and other performance ratios,
in each case as adjusted, is included in the accompanying selected
financial highlights table.
Webster believes that providing certain non-GAAP financial
measures provides investors with information useful in
understanding its financial performance, performance trends, and
financial position. Webster utilizes these measures for internal
planning and forecasting purposes. Webster, as well as securities
analysts, investors, and other interested parties, also use these
measures to compare peer company operating performance. Webster
believes that its presentation and discussion, together with the
accompanying reconciliations, provides a complete understanding of
factors and trends affecting its 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 Webster strongly encourages investors to
review its 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 CORPORATIONSelected Financial Highlights
(unaudited) At or for the Three Months Ended
(In thousands, except per share data)
March 31,2023 December 31,2022 September 30,2022 June
30,2022 March 31,2022
Income and performance ratios:
Net income (loss)
$
221,004
$
244,751
$
233,968
$
182,311
$
(16,747)
Net income (loss) available to common stockholders
216,841
240,588
229,806
178,148
(20,178)
Earnings (loss) per diluted common share
1.24
1.38
1.31
1.00
(0.14)
Return on average assets
1.22
%
1.40
%
1.38
%
1.10
%
(0.12)
%
Return on average tangible common stockholders' equity (1)
17.66
19.93
18.62
14.50
(1.36)
Return on average common stockholders’ equity
10.94
12.54
11.78
9.09
(1.25)
Non-interest income as a percentage of total revenue
10.62
14.50
17.10
19.90
20.88
Asset quality: Allowance for credit losses on loans
and leases
$
613,914
$
594,741
$
574,325
$
571,499
$
569,371
Nonperforming assets
186,551
206,136
211,627
250,242
251,206
Allowance for credit losses on loans and leases / total loans and
leases
1.21
%
1.20
%
1.20
%
1.25
%
1.31
%
Net charge-offs / average loans and leases (annualized)
0.20
0.17
0.25
0.09
0.10
Nonperforming loans and leases / total loans and leases
0.36
0.41
0.44
0.54
0.57
Nonperforming assets / total loans and leases plus OREO
0.37
0.41
0.44
0.55
0.58
Allowance for credit losses on loans and leases / nonperforming
loans and leases
331.81
291.84
274.12
230.88
229.48
Other ratios: Tangible equity (1)
7.55
%
7.79
%
7.70
%
8.12
%
8.72
%
Tangible common equity (1)
7.15
7.38
7.27
7.68
8.26
Tier 1 risk-based capital (2)
10.91
11.23
11.35
11.65
12.05
Total risk-based capital (2)
12.94
13.25
13.38
13.91
14.41
Common equity tier 1 risk-based capital (2)
10.40
10.71
10.80
11.09
11.46
Stockholders’ equity / total assets
11.08
11.30
11.33
11.83
12.55
Net interest margin
3.66
3.74
3.54
3.28
3.21
Efficiency ratio (1)
41.64
40.27
41.17
45.25
48.73
Equity and share related: Common equity
$
8,010,315
$
7,772,207
$
7,542,431
$
7,713,809
$
7,893,156
Book value per common share
45.85
44.67
43.32
43.82
44.32
Tangible book value per common share (1)
29.47
29.07
27.69
28.31
28.94
Common stock closing price
39.42
47.34
45.20
42.15
56.12
Dividends declared per common share
0.40
0.40
0.40
0.40
0.40
Common shares issued and outstanding
174,712
174,008
174,116
176,041
178,102
Weighted-average common shares outstanding - Basic
172,766
172,522
173,868
175,845
147,394
Weighted-average common shares outstanding - Diluted
172,883
172,699
173,944
175,895
147,533
(1) See Reconciliation to GAAP Financial Measures beginning
on page 18. (2) Presented as preliminary for March 31, 2023, and
actual for the remaining periods.
WEBSTER FINANCIAL
CORPORATIONConsolidated Balance Sheets (unaudited) (In thousands) March 31,2023 December
31,2022 March 31,2022
Assets: Cash and due from banks
$
201,683
$
264,118
$
240,435
Interest-bearing deposits
2,232,388
575,825
552,778
Securities: Available for sale
7,798,977
7,892,697
8,744,897
Held to maturity, net
7,063,223
6,564,697
6,362,254
Total securities, net
14,862,200
14,457,394
15,107,151
Loans held for sale
210,724
1,991
17,970
Loans and Leases: Commercial
20,775,893
20,484,806
17,386,139
Commercial real estate
20,513,182
19,619,145
17,584,947
Residential mortgages
8,001,563
7,963,420
6,798,199
Consumer
1,635,885
1,697,055
1,767,200
Total loans and leases
50,926,523
49,764,426
43,536,485
Allowance for credit losses on loans and leases
(613,914)
(594,741)
(569,371)
Loans and leases, net
50,312,609
49,169,685
42,967,114
Federal Home Loan Bank and Federal Reserve Bank stock
584,724
445,900
206,123
Premises and equipment, net
431,432
430,184
490,004
Goodwill and other intangible assets, net
2,861,310
2,713,446
2,738,353
Cash surrender value of life insurance policies
1,233,994
1,229,169
1,222,898
Deferred tax asset, net
315,525
371,634
178,042
Accrued interest receivable and other assets
1,597,806
1,618,175
1,410,616
Total Assets $
74,844,395
$
71,277,521
$
65,131,484
Liabilities and Stockholders' Equity: Deposits:
Demand
$
12,007,387
$
12,974,975
$
13,570,702
Health savings accounts
8,272,507
7,944,892
7,804,858
Interest-bearing checking
8,560,750
9,237,529
9,579,839
Money market
14,203,858
11,062,652
11,964,649
Savings
7,723,198
8,673,343
8,615,138
Certificates of deposit
3,855,406
2,729,332
2,821,097
Brokered certificates of deposit
674,373
1,431,617
-
Total deposits
55,297,479
54,054,340
54,356,283
Securities sold under agreements to repurchase and other borrowings
306,154
1,151,830
518,733
Federal Home Loan Bank advances
8,560,461
5,460,552
10,903
Long-term debt
1,071,413
1,073,128
1,078,274
Accrued expenses and other liabilities
1,314,594
1,481,485
990,156
Total liabilities
66,550,101
63,221,335
56,954,349
Preferred stock
283,979
283,979
283,979
Common stockholders' equity
8,010,315
7,772,207
7,893,156
Total stockholders’ equity
8,294,294
8,056,186
8,177,135
Total Liabilities and Stockholders' Equity $
74,844,395
$
71,277,521
$
65,131,484
WEBSTER FINANCIAL CORPORATIONConsolidated
Statements of Income (unaudited)
Three Months Ended March
31,
(In thousands, except per share data)
2023
2022
Interest income: Interest and fees on loans and leases
$
716,356
$
346,276
Interest and dividends on securities
114,556
63,526
Loans held for sale
16
26
Total interest income
830,928
409,828
Interest expense: Deposits
150,204
7,399
Borrowings
85,441
8,181
Total interest expense
235,645
15,580
Net interest income
595,283
394,248
Provision for credit losses
46,749
188,845
Net interest income after provision for loan and lease
losses
548,534
205,403
Non-interest income: Deposit service fees
45,436
47,827
Loan and lease related fees
23,005
22,679
Wealth and investment services
6,587
10,597
Mortgage banking activities
59
428
Increase in cash surrender value of life insurance policies
6,728
6,732
(Loss) on sale of investment securities, net
(16,747)
-
Other income
5,698
15,772
Total non-interest income
70,766
104,035
Non-interest expense: Compensation and benefits
173,200
184,002
Occupancy
20,171
18,615
Technology and equipment
44,366
55,401
Marketing
3,476
3,509
Professional and outside services
32,434
54,091
Intangible assets amortization
9,497
6,387
Loan workout expenses
606
680
Deposit insurance
12,323
5,222
Other expenses
36,394
31,878
Total non-interest expense
332,467
359,785
Income (loss) before income taxes
286,833
(50,347)
Income tax expense (benefit)
65,829
(33,600)
Net income (loss)
221,004
(16,747)
Preferred stock dividends
(4,163)
(3,431)
Net income (loss) available to common stockholders $
216,841
$
(20,178)
Weighted-average common shares outstanding - Diluted
172,883
147,533
Earnings (loss) per common share: Basic
$
1.24
$
(0.14)
Diluted
1.24
(0.14)
WEBSTER FINANCIAL CORPORATIONFive Quarter Consolidated
Statements of Income (unaudited) Three Months Ended
(In thousands, except per share data)
March 31,2023 December 31,2022 September 30,2022 June
30,2022 March 31,2022
Interest income: Interest and fees on
loans and leases
$
716,356
$
642,784
$
525,960
$
431,538
$
346,276
Interest and dividends on securities
114,556
100,804
91,569
82,202
63,526
Loans held for sale
16
5
40
7
26
Total interest income
830,928
743,593
617,569
513,747
409,828
Interest expense: Deposits
150,204
81,202
37,492
12,459
7,399
Borrowings
85,441
60,016
29,074
14,628
8,181
Total interest expense
235,645
141,218
66,566
27,087
15,580
Net interest income
595,283
602,375
551,003
486,660
394,248
Provision for credit losses
46,749
43,000
36,531
12,243
188,845
Net interest income after provision for loan and lease
losses
548,534
559,375
514,472
474,417
205,403
Non-interest income: Deposit service fees
45,436
48,453
50,807
51,385
47,827
Loan and lease related fees
23,005
25,632
26,769
27,907
22,679
Wealth and investment services
6,587
7,017
11,419
11,244
10,597
Mortgage banking activities
59
89
86
102
428
Increase in cash surrender value of life insurance policies
6,728
6,543
7,718
8,244
6,732
(Loss) on sale of investment securities, net
(16,747)
(4,517)
(2,234)
-
-
Other income
5,698
18,962
19,071
22,051
15,772
Total non-interest income
70,766
102,179
113,636
120,933
104,035
Non-interest expense: Compensation and benefits
173,200
177,979
173,983
187,656
184,002
Occupancy
20,171
20,174
23,517
51,593
18,615
Technology and equipment
44,366
44,202
45,283
41,498
55,401
Marketing
3,476
5,570
3,918
3,441
3,509
Professional and outside services
32,434
26,489
21,618
15,332
54,091
Intangible assets amortization
9,497
8,240
8,511
8,802
6,387
Loan workout expenses
606
606
580
732
680
Deposit insurance
12,323
6,578
8,026
6,748
5,222
Other expenses
36,394
58,552
44,635
42,425
31,878
Total non-interest expense
332,467
348,390
330,071
358,227
359,785
Income (loss) before income taxes
286,833
313,164
298,037
237,123
(50,347)
Income tax expense (benefit)
65,829
68,413
64,069
54,812
(33,600)
Net income (loss)
221,004
244,751
233,968
182,311
(16,747)
Preferred stock dividends
(4,163)
(4,163)
(4,162)
(4,163)
(3,431)
Net income (loss) available to common stockholders $
216,841
$
240,588
$
229,806
$
178,148
$
(20,178)
Weighted-average common shares outstanding - Diluted
172,883
172,699
173,944
175,895
147,533
Earnings (loss) per common share: Basic
$
1.24
$
1.38
$
1.31
$
1.00
$
(0.14)
Diluted
1.24
1.38
1.31
1.00
(0.14)
WEBSTER FINANCIAL CORPORATIONConsolidated Average
Balances, Interest, Yields and Rates, and Net Interest Margin on a
Fully Tax-equivalent Basis (unaudited)
Three Months Ended March
31,
2023
2022
(Dollars in thousands)
Average balance
Interest
Yield/rate
Average balance
Interest
Yield/rate
Assets: Interest-earning assets: Loans and leases
$
50,095,192
$
725,543
5.80
%
$
35,912,829
$
349,417
3.90
%
Investment securities (1)
14,633,245
105,974
2.79
13,421,543
67,269
2.02
Federal Home Loan and Federal Reserve Bank stock
459,375
4,910
4.34
166,357
821
2.00
Interest-bearing deposits (2)
898,884
10,396
4.63
799,265
453
0.23
Loans held for sale
4,630
16
1.39
17,918
26
0.58
Total interest-earning assets
66,091,326
$
846,839
5.08
%
50,317,912
$
417,986
3.33
%
Non-interest-earning assets
6,225,199
4,490,665
Total Assets $
72,316,525
$
54,808,577
Liabilities and Stockholders' Equity:
Interest-bearing liabilities: Demand deposits
$
12,629,928
$
-
-
%
$
11,263,282
$
-
-
%
Health savings accounts
8,292,450
3,027
0.15
7,759,465
1,087
0.06
Interest-bearing checking, money market and savings
29,853,370
123,048
1.67
24,316,436
5,019
0.08
Certificates of deposit and brokered deposits
4,024,472
24,129
2.43
2,544,286
1,293
0.21
Total deposits
54,800,220
150,204
1.11
45,883,469
7,399
0.07
Securities sold under agreements to repurchase and other
borrowings
915,023
7,827
3.42
577,039
957
0.66
Federal Home Loan Bank advances
5,673,826
68,126
4.80
10,936
56
2.03
Long-term debt (1)
1,072,252
9,488
3.65
896,310
7,168
3.34
Total borrowings
7,661,101
85,441
4.48
1,484,285
8,181
2.26
Total interest-bearing liabilities
62,461,321
$
235,645
1.52
%
47,367,754
$
15,580
0.13
%
Non-interest-bearing liabilities
1,639,528
749,333
Total liabilities
64,100,849
48,117,087
Preferred stock
283,979
236,121
Common stockholders' equity
7,931,697
6,455,369
Total stockholders' equity
8,215,676
6,691,490
Total Liabilities and Stockholders' Equity $
72,316,525
$
54,808,577
Tax-equivalent net interest income
611,194
402,406
Less: tax-equivalent adjustments
(15,911)
(8,158)
Net interest income $
595,283
$
394,248
Net interest margin
3.66
%
3.21
%
(1) For the purposes of average yield/rate and margin
computations, unsettled trades on investment securities and
unrealized gain (loss) balances on securities available-for-sale
and senior fixed-rate notes hedges are excluded. (2)
Interest-bearing deposits is a component of cash and cash
equivalents on the Consolidated Balance Sheets.
WEBSTER
FINANCIAL CORPORATIONFive Quarter Loan and Lease Balances
(unaudited) (Dollars in thousands)
March 31,2023 December 31,2022 September 30,2022 June
30,2022 March 31,2022
Loan and Lease Balances (actual):
Commercial non-mortgage
$
19,015,366
$
18,663,164
$
17,807,234
$
16,628,317
$
15,578,594
Asset-based lending
1,760,527
1,821,642
1,803,719
1,892,278
1,807,545
Commercial real estate
20,513,182
19,619,145
18,862,619
18,141,670
17,584,947
Residential mortgages
8,001,563
7,963,420
7,617,955
7,223,728
6,798,199
Consumer
1,635,885
1,697,055
1,732,348
1,760,750
1,767,200
Total Loan and Lease Balances
50,926,523
49,764,426
47,823,875
45,646,743
43,536,485
Allowance for credit losses on loans and leases
(613,914)
(594,741)
(574,325)
(571,499)
(569,371)
Loans and Leases, net $
50,312,609
$
49,169,685
$
47,249,550
$
45,075,244
$
42,967,114
Loan and Lease Balances (average): Commercial
non-mortgage
$
18,670,917
$
18,024,771
$
16,780,780
$
15,850,507
$
12,568,454
Asset-based lending
1,790,992
1,780,874
1,811,073
1,851,956
1,540,301
Commercial real estate
19,970,326
19,234,292
18,503,077
17,756,151
13,732,925
Residential mortgages
7,995,327
7,819,415
7,384,704
6,905,509
6,322,495
Consumer
1,667,630
1,715,513
1,750,044
1,756,575
1,748,654
Total Loan and Lease Balances $
50,095,192
$
48,574,865
$
46,229,678
$
44,120,698
$
35,912,829
WEBSTER FINANCIAL CORPORATIONFive Quarter Nonperforming
Assets and Past Due Loans and Leases (unaudited) (Dollars in thousands) March 31,2023
December 31,2022 September 30,2022 June 30,2022 March 31,2022
Nonperforming loans and leases: Commercial non-mortgage
$
86,537
$
89,416
$
80,002
$
112,006
$
108,460
Asset-based lending
9,450
20,046
25,115
25,862
5,494
Commercial real estate
35,832
41,580
49,054
49,935
74,581
Residential mortgages
25,096
25,613
25,563
27,213
27,318
Consumer
28,105
27,136
29,782
32,514
32,258
Total nonperforming loans and leases $
185,020
$
203,791
$
209,516
$
247,530
$
248,111
Other real estate owned and repossessed assets:
Commercial non-mortgage
$
153
$
78
$
-
$
-
$
-
Residential mortgages
662
2,024
2,024
2,558
2,582
Consumer
716
243
87
154
513
Total other real estate owned and repossessed assets
$
1,531
$
2,345
$
2,111
$
2,712
$
3,095
Total nonperforming assets $
186,551
$
206,136
$
211,627
$
250,242
$
251,206
Past due 30-89 days: Commercial non-mortgage
$
9,645
$
20,248
$
17,440
$
6,006
$
8,025
Asset-based lending
-
5,921
-
-
24,103
Commercial real estate
17,115
26,147
6,050
25,587
20,533
Residential mortgages
10,710
11,385
12,577
10,781
9,307
Consumer
6,110
9,194
9,656
9,275
9,379
Total past due 30-89 days $
43,580
$
72,895
$
45,723
$
51,649
$
71,347
Past due 90 days or more and accruing
602
770
711
8
124
Total past due loans and leases $
44,182
$
73,665
$
46,434
$
51,657
$
71,471
WEBSTER FINANCIAL CORPORATIONFive Quarter Changes in the
Allowance for Credit Losses on Loans and Leases (unaudited)
For the Three Months Ended (Dollars in
thousands) March 31,2023 December 31,2022 September
30,2022 June 30,2022 March 31,2022
ACL on loans and leases,
beginning balance $
594,741
$
574,325
$
571,499
$
569,371
$
301,187
Adoption of ASU No. 2022-02
5,873
-
-
-
-
Initial allowance on PCD loans and leases (1)
-
-
-
-
88,045
Provision
37,821
40,649
31,352
11,728
189,068
Charge-offs: Commercial portfolio
26,410
21,499
31,356
18,757
11,248
Consumer portfolio
1,098
1,193
1,453
896
1,120
Total charge-offs
27,508
22,692
32,809
19,653
12,368
Recoveries: Commercial portfolio
1,574
895
1,413
7,765
1,364
Consumer portfolio
1,413
1,564
2,870
2,288
2,075
Total recoveries
2,987
2,459
4,283
10,053
3,439
Total net charge-offs
24,521
20,233
28,526
9,600
8,929
ACL on loans and leases, ending balance $
613,914
$
594,741
$
574,325
$
571,499
$
569,371
ACL on unfunded loan commitments, ending balance
26,051
27,707
25,329
20,149
19,640
Total ACL, ending balance $
639,965
$
622,448
$
599,654
$
591,648
$
589,011
(1) Represents the establishment of the initial reserve for PCD
loans and leases net of $48 million in charge-offs recognized upon
completion of the merger with Sterling in accordance with GAAP.
WEBSTER FINANCIAL CORPORATIONReconciliations to GAAP
Financial Measures1 The Company evaluates its business
based on certain ratios that utilize non-GAAP financial measures.
The Company believes the use of these non-GAAP financial measures
provides additional clarity in assessing the results and financial
position of the Company. Other companies may define or calculate
supplemental financial data differently. The efficiency
ratio, which measures the costs expended to generate a dollar of
revenue, is calculated excluding certain non-operational items.
Return on average tangible common stockholders' equity (ROATCE)
measures the Company’s net income available to common stockholders,
adjusted for the tax-effected amortization of intangible assets, as
a percentage of average stockholders’ equity less average preferred
stock and average goodwill and intangible assets. The tangible
equity ratio represents stockholders’ equity less goodwill and
intangible assets divided by total assets less goodwill and
intangible assets. The tangible common equity ratio represents
stockholders’ equity less preferred stock and goodwill and
intangible assets divided by total assets less goodwill and
intangible assets. Tangible book value per common share represents
stockholders’ equity less preferred stock and goodwill and
intangible assets divided by common shares outstanding at the end
of the period. Core deposits express total deposits less
certificates of deposit and brokered time deposits. Adjusted net
income (loss) available to common stockholders, adjusted diluted
earnings per share (EPS), adjusted ROATCE, and adjusted return on
average assets (ROAA) are calculated by excluding after tax
non-operational items including merger-related expenses and the
initial non-PCD provision related to the merger. See the tables
below for reconciliations of these non-GAAP financial measures with
financial measures defined by GAAP.
At or for the Three
Months Ended (In thousands, except per
share data) March 31,2023 December 31,2022 September
30,2022 June 30,2022 March 31,2022
Efficiency ratio:
Non-interest expense
$
332,467
$
348,390
$
330,071
$
358,227
$
359,785
Less: Foreclosed property activity
(262)
(80)
(393)
(358)
(75)
Intangible assets amortization
9,497
8,240
8,511
8,802
6,387
Operating lease depreciation
1,884
2,021
2,115
2,425
1,632
Strategic initiatives and other (1)
-
143
11,617
(152)
(4,140)
Merger related
29,373
45,790
25,536
66,640
108,495
Non-interest expense
$
291,975
$
292,276
$
282,685
$
280,870
$
247,486
Net interest income
$
595,283
$
602,375
$
551,003
$
486,660
$
394,248
Add: Tax-equivalent adjustment
15,911
13,991
13,247
11,732
8,158
Non-interest income
70,766
102,179
113,636
120,933
104,035
Other income (2)
4,311
4,814
11,186
3,805
3,082
Less: Operating lease depreciation
1,884
2,021
2,115
2,425
1,632
(Loss) on sale of investment securities, net
(16,747)
(4,517)
(2,234)
-
-
Other (3)
-
-
2,548
-
-
Income
$
701,134
$
725,855
$
686,643
$
620,705
$
507,891
Efficiency ratio
41.64
%
40.27
%
41.17
%
45.25
%
48.73
%
Return on average tangible common stockholders'
equity: Net income (loss)
$
221,004
$
244,751
$
233,968
$
182,311
$
(16,747)
Less: Preferred stock dividends
4,163
4,163
4,162
4,163
3,431
Add: Intangible assets amortization, tax-effected
7,503
6,510
6,724
6,954
5,046
Adjusted income (loss)
$
224,344
$
247,098
$
236,530
$
185,102
$
(15,132)
Adjusted income (loss), annualized basis
$
897,376
$
988,392
$
946,120
$
740,408
$
(60,528)
Average stockholders' equity
$
8,215,676
$
7,960,900
$
8,090,044
$
8,125,518
$
6,691,490
Less: Average preferred stock
283,979
283,979
283,979
283,979
236,121
Average goodwill and other intangible assets
2,849,673
2,716,981
2,725,200
2,733,827
2,007,266
Average tangible common stockholders' equity
$
5,082,024
$
4,959,940
$
5,080,865
$
5,107,712
$
4,448,103
Return on average tangible common stockholders' equity
17.66
%
19.93
%
18.62
%
14.50
%
(1.36)
%
(1) The three months ended September 30, 2022, primarily includes a
contribution to the Webster foundation of $10.5 million (included
within other non-interest expense). (2) Other income includes the
taxable equivalent of net income generated from low income housing
tax-credit investments. (3) The three months ended September 30,
2022, is comprised of a gain related to the early termination of
repurchase agreements.
WEBSTER FINANCIAL
CORPORATIONReconciliations to GAAP Financial Measures
(continued) At or for the Three Months Ended
(In thousands, except per share data)
March 31,2023 December 31,2022 September 30,2022 June
30,2022 March 31,2022
Tangible equity: Stockholders' equity
$
8,294,294
$
8,056,186
$
7,826,410
$
7,997,788
$
8,177,135
Less: Goodwill and other intangible assets
2,861,310
2,713,446
2,721,040
2,729,551
2,738,353
Tangible stockholders' equity
$
5,432,984
$
5,342,740
$
5,105,370
$
5,268,237
$
5,438,782
Total assets
$
74,844,395
$
71,277,521
$
69,052,566
$
67,595,021
$
65,131,484
Less: Goodwill and other intangible assets
2,861,310
2,713,446
2,721,040
2,729,551
2,738,353
Tangible assets
$
71,983,085
$
68,564,075
$
66,331,526
$
64,865,470
$
62,393,131
Tangible equity
7.55
%
7.79
%
7.70
%
8.12
%
8.72
%
Tangible common equity: Tangible stockholders' equity
$
5,432,984
$
5,342,740
$
5,105,370
$
5,268,237
$
5,438,782
Less: Preferred stock
283,979
283,979
283,979
283,979
283,979
Tangible common stockholders' equity
$
5,149,005
$
5,058,761
$
4,821,391
$
4,984,258
$
5,154,803
Tangible assets
$
71,983,085
$
68,564,075
$
66,331,526
$
64,865,470
$
62,393,131
Tangible common equity
7.15
%
7.38
%
7.27
%
7.68
%
8.26
%
Tangible book value per common share: Tangible common
stockholders' equity
$
5,149,005
$
5,058,761
$
4,821,391
$
4,984,258
$
5,154,803
Common shares outstanding
174,712
174,008
174,116
176,041
178,102
Tangible book value per common share $
29.47
$
29.07
$
27.69
$
28.31
$
28.94
Core deposits: Total deposits
$
55,297,479
$
54,054,340
$
54,008,887
$
53,077,157
$
54,356,283
Less: Certificates of deposit
3,855,406
2,729,332
2,311,484
2,554,102
2,821,097
Brokered certificates of deposit
674,373
1,431,617
258,110
-
-
Core deposits $
50,767,700
$
49,893,391
$
51,439,293
$
50,523,055
$
51,535,186
Three months
ended
March 31, 2023
Adjusted ROATCE: Net income $
221,004
Less: Preferred stock dividends
4,163
Add: Intangible assets amortization, tax-effected
7,503
Strategic initiatives and other, tax-effected
15,288
Merger related, tax-effected
26,956
Adjusted income $
266,588
Adjusted income, annualized basis $
1,066,352
Average stockholders' equity $
8,215,676
Less: Average preferred stock
283,979
Average goodwill and other intangible assets
2,849,673
Average tangible common stockholders' equity $
5,082,024
Adjusted return on average tangible common stockholders'
equity
20.98
%
Adjusted ROAA: Net income $
221,004
Add: Strategic initiatives and other, tax-effected
15,288
Merger related, tax-effected
26,956
Adjusted income $
263,248
Adjusted income, annualized basis $
1,052,992
Average assets $
72,316,525
Adjusted return on average assets
1.46
%
GAAP to adjusted reconciliation: Three months
ended March 31, 2023 (In millions, except
per share data) Pre-Tax Income Net Income
Availableto CommonStockholders Diluted EPS Reported
(GAAP) $
286.8
$
216.8
$
1.24
Merger related expenses
36.1
27.0
0.16
Strategic initiatives and other
20.5
15.3
0.09
Adjusted (non-GAAP) $
343.4
$
259.1
$
1.49
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230419005943/en/
Media Contact Alice Ferreira, 203-578-2610 acferreira@websterbank.com
Investor Contact Emlen Harmon, 212-309-7646 eharmon@websterbank.com
Webster Financial (NYSE:WBS)
Graphique Historique de l'Action
De Mai 2024 à Juin 2024
Webster Financial (NYSE:WBS)
Graphique Historique de l'Action
De Juin 2023 à Juin 2024