WBS Webster Financial Corporation

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 $222.3 million, or $1.28 per diluted share, for the quarter ended September 30, 2023, compared to $229.8 million, or $1.31 per diluted share, for the quarter ended September 30, 2022.

Third quarter 2023 results include $61.6 million pre-tax ($45.1 million after tax), or $0.271 per diluted share, of charges related to the merger with Sterling Bancorp on January 31, 2022 ("the merger"). Excluding these charges, adjusted earnings per diluted share would have been $1.551 for the quarter ended September 30, 2023.

"Our results this quarter illustrate the strength of Webster, both in terms of our earnings power and sound risk and operating profile," said John R. Ciulla, president and chief executive officer. "During the quarter we completed our core systems conversion which marks a significant milestone in the completion of our integration. We continue to be well positioned for the current operating environment."

Highlights for the third quarter of 2023:

• Revenue of $677.5 million.
• Period end loans and leases balance of $50.1 billion, down $1.5 billion or 3.0 percent from prior quarter; 80.4 percent commercial loans and leases, 19.6 percent consumer loans, and a loan to deposit ratio of 83.0 percent.
• Period end deposits balance of $60.3 billion, up $1.6 billion or 2.7 percent from prior quarter.
• Provision for credit losses totaled $36.5 million.
• Return on average assets of 1.23 percent; adjusted 1.48 percent1.
• Return on average tangible common equity of 17.51 percent1; adjusted 20.96 percent1.
• Net interest margin of 3.49 percent, up 14 basis points from prior quarter.
• Common equity tier 1 ratio of 11.15 percent.
• Efficiency ratio of 41.75 percent1.
• Tangible common equity ratio of 7.22 percent1.

"During the quarter, we further enhanced our liquidity position, while improving both net interest income and net interest margin," said Glenn MacInnes, executive vice president and chief financial officer.

1 See reconciliations to GAAP financial measures beginning on page 19.

Line of Business performance compared to the third 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 September 30, 2023, Commercial Banking had $40.3 billion in loans and leases and $19.4 billion in deposits, as well as a combined $2.7 billion in assets under administration and management.

Commercial Banking Operating Results:

 

 

 

 

 

Percent

 

Three months ended September 30,

 

Favorable/

(In thousands)

 

2023

2022

 

(Unfavorable)

Net interest income

 

$391,399

$333,554

 

 

17.3

%

 

Non-interest income

 

30,605

40,497

 

 

(24.4

)

 

Operating revenue

 

422,004

374,051

 

 

12.8

 

 

Non-interest expense

 

110,306

102,415

 

 

(7.7

)

 

Pre-tax, pre-provision net revenue

 

$311,698

$271,636

 

 

14.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Percent

 

 

At September 30,

 

Increase/

(In millions)

 

2023

2022

 

(Decrease)

Loans and leases

 

$40,261

$38,493

 

 

4.6

%

 

Deposits

 

19,411

20,828

 

 

(6.8

)

 

AUA / AUM (off balance sheet)

 

2,727

2,121

 

 

28.5

 

 

Pre-tax, pre-provision net revenue increased $40.1 million, to $311.7 million, in the quarter as compared to prior year. Net interest income increased $57.8 million, to $391.4 million, primarily driven by loan growth and the impact of the higher rate environment. Non-interest income decreased $9.9 million, to $30.6 million, driven by decreases in loan servicing related income, cash management fees, syndication fees, interest rate hedging activities, and prepayment penalties. Non-interest expense increased $7.9 million, to $110.3 million, primarily resulting from continued investments in technology and talent to support balance sheet growth.

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 September 30, 2023, HSA Bank had $12.3 billion in total footings comprising $8.2 billion in deposits and $4.1 billion in assets under administration through linked investment accounts.

HSA Bank Operating Results:

 

 

 

 

 

Percent

 

Three months ended September 30,

 

Favorable/

(In thousands)

 

2023

2022

 

(Unfavorable)

Net interest income

 

$77,669

$58,567

 

 

32.6

%

 

Non-interest income

 

20,799

25,842

 

 

(19.5

)

 

Operating revenue

 

98,468

84,409

 

 

16.7

 

 

Non-interest expense

 

39,870

36,725

 

 

(8.6

)

 

Pre-tax, net revenue

 

$58,598

$47,684

 

 

22.9

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Percent

 

 

At September 30,

 

Increase/

(Dollars in millions)

 

2023

2022

 

(Decrease)

Number of accounts (thousands)

 

3,186

3,133

 

 

1.7

%

 

 

 

 

 

 

 

 

 

Deposits

 

$8,230

$7,889

 

 

4.3

 

 

Linked investment accounts (off balance sheet)

 

4,095

3,233

 

 

26.7

 

 

Total footings

 

$12,325

$11,122

 

 

10.8

 

 

Pre-tax net revenue increased $10.9 million, to $58.6 million, in the quarter as compared to prior year. Net interest income increased $19.1 million, to $77.7 million, primarily due to an increase in net deposit spread and growth in deposits. Non-interest income decreased $5.0 million, to $20.8 million, primarily due to lower customer account service fees. Non-interest expense increased $3.1 million, to $39.9 million, primarily due to higher compensation and benefits expense, 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 199 banking centers and 350 ATMs, a customer care center, and a full range of web and mobile-based banking services. Additionally, Webster Investments provides investment services to consumers and small business owners within Webster's targeted markets and retail footprint. At September 30, 2023, Consumer Banking had $9.8 billion in loans and $23.6 billion in deposits, as well as $7.6 billion in assets under administration.

Consumer Banking Operating Results:

 

 

 

 

 

Percent

 

Three months ended September 30,

 

Favorable/

(In thousands)

 

2023

2022

 

(Unfavorable)

Net interest income

 

$195,315

$195,748

 

 

(0.2

)%

 

Non-interest income

 

26,886

33,842

 

 

(20.6

)

 

Operating revenue

 

222,201

229,590

 

 

(3.2

)

 

Non-interest expense

 

105,703

109,588

 

 

3.5

 

 

Pre-tax, pre-provision net revenue

 

$116,498

$120,002

 

 

(2.9

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At September 30,

 

Percent

(In millions)

 

2023

2022

 

Increase

Loans

 

$9,808

$9,302

 

 

5.4

%

 

Deposits

 

23,624

23,859

 

 

(1.0

)

 

AUA (off balance sheet)

 

7,615

7,369

 

 

3.3

 

 

Pre-tax, pre-provision net revenue decreased $3.5 million, to $116.5 million, in the quarter as compared to prior year. Net interest income decreased $0.4 million, to $195.3 million, primarily driven by a slight decrease in deposits, partially offset by continued loan growth. Non-interest income decreased $7.0 million, to $26.9 million, driven by lower net investment services income, which was attributable to an outsourcing model adopted in the fourth quarter of 2022, and lower deposit and loan servicing related fees, partially offset by other miscellaneous income. Non-interest expense decreased $3.9 million, to $105.7 million, primarily driven by the impact of outsourcing the consumer investment services platform, coupled with lower technology expenses.

Consolidated financial performance:

Quarterly net interest income compared to the third quarter of 2022:

• Net interest income was $587.1 million compared to $551.0 million.
• Net interest margin was 3.49 percent compared to 3.54 percent. The yield on interest-earning assets increased by 153 basis points, and the cost of interest-bearing liabilities increased by 169 basis points.
• Average interest-earning assets totaled $67.1 billion and increased by $5.0 billion, or 8.0 percent.
• Average loans and leases totaled $50.9 billion and increased by $4.7 billion, or 10.1 percent.
• Average deposits totaled $59.6 billion and increased by $5.6 billion, or 10.4 percent.

Quarterly provision for credit losses:

• The provision for credit losses was $36.5 million in the quarter, reflecting a $6.5 million increase in the allowance for credit losses on loans and leases from prior quarter. The provision also reflects an increase in the reserves on unfunded loan commitments of $0.7 million. The provision for credit losses was $31.5 million in the prior quarter, and $36.5 million a year ago.
• Net charge-offs were $29.3 million, compared to $20.3 million in the prior quarter, and $28.5 million a year ago. The ratio of net charge-offs to average loans and leases was 0.23 percent, compared to 0.16 percent in the prior quarter, and 0.25 percent a year ago.
• The allowance for credit losses on loans and leases represented 1.27 percent of total loans and leases, compared to 1.22 percent at June 30, 2023, and 1.20 percent at September 30, 2022. The allowance represented 295 percent of nonperforming loans and leases at September 30, 2023, compared to 287 percent at June 30, 2023, and 274 percent at September 30, 2022.

Quarterly non-interest income compared to the third quarter of 2022:

• Total non-interest income was $90.4 million compared to $113.6 million, a decrease of $23.2 million. The decrease primarily reflects lower prepayment and other loan related servicing fees, lower client deposit fees, the outsourcing of the consumer investment services platform, and lower client hedging activity. Total non-interest income for the third quarter of 2022 includes a net $0.3 million related to a gain on the early termination of repurchase agreements partially offset by a loss on the sale of investment securities.

Quarterly non-interest expense compared to the third quarter of 2022:

• Total non-interest expense was $362.6 million compared to $330.1 million, an increase of $32.5 million. Total non-interest expense includes a net $61.6 million of merger charges, compared to a net $26.7 million of merger and strategic initiatives and a $10.5 million donation to the Webster Bank Charitable Foundation a year ago. Excluding those charges, total non-interest expense increased $8.1 million. The increase reflects general inflationary impacts, including employee compensation and benefits expense, investments in technology, including the HSA and interLINK acquisitions, and higher deposit insurance expense, offset by expense benefits from the merger and outsourcing of the consumer investments services platform.

Quarterly income taxes compared to the third quarter of 2022:

• Income tax expense was $52.0 million compared to $64.1 million, and the effective tax rate was 18.7 percent compared to 21.5 percent. The lower effective tax rate in the current period reflects the impact of higher merger related charges compared to the 2022 period, as well as the recognition of a $3.3 million net discrete benefit during the quarter attributable to 2022 tax return true-up adjustments.

Investment securities:

• Total investment securities, net were $14.5 billion, compared to $14.7 billion at June 30, 2023, and $14.6 billion at September 30, 2022. The carrying value of the available-for-sale portfolio included $1.1 billion of net unrealized losses, compared to $883.0 million at June 30, 2023, and $941.8 million at September 30, 2022. The carrying value of the held-to-maturity portfolio does not reflect $1.2 billion of net unrealized losses, compared to $877.3 million at June 30, 2023, and $855.9 million at September 30, 2022.

Loans and leases:

• Total loans and leases were $50.1 billion, compared to $51.6 billion at June 30, 2023, and $47.8 billion at September 30, 2022. Compared to June 30, 2023, commercial loans and leases decreased by $1.5 billion, commercial real estate loans decreased by $77.8 million, residential mortgages increased by $88.3 million, and consumer loans decreased by $22.4 million.
• Compared to a year ago, commercial loans and leases increased by $80.5 million, commercial real estate loans increased by $1.7 billion, residential mortgages increased by $610.5 million, and consumer loans decreased by $147.4 million.
• Loan originations for the portfolio were $1.5 billion, compared to $2.5 billion in the prior quarter, and $5.1 billion a year ago. In addition, $1.5 million of residential loans were originated for sale in the quarter, compared to $5.7 million in the prior quarter, and $1.5 million a year ago.

Asset quality:

• Total nonperforming loans and leases were $215.1 million, or 0.43 percent of total loans and leases, compared to $218.9 million, or 0.42 percent of total loans and leases, at June 30, 2023, and $209.5 million, or 0.44 percent of total loans and leases, at September 30, 2022.
• Past due loans and leases were $70.9 million, compared to $51.4 million at June 30, 2023, and $46.4 million at September 30, 2022.

Deposits and borrowings:

• Total deposits were $60.3 billion, compared to $58.7 billion at June 30, 2023, and $54.0 billion at September 30, 2022. Core deposits to total deposits1 were 87.6 percent at both September 30, 2023, and June 30, 2023, compared to 95.2 percent at September 30, 2022. The loan to deposit ratio was 83.0 percent, compared to 87.9 percent at June 30, 2023, and 88.5 percent at September 30, 2022.
• Total borrowings were $3.0 billion, compared to $5.6 billion at June 30, 2023, and $5.9 billion at September 30, 2022.

Capital:

• The return on average common stockholders’ equity and the return on average tangible common stockholders’ equity1 were 11.00 percent and 17.51 percent, respectively, compared to 11.78 percent and 18.62 percent, respectively, in the third quarter of 2022.
• The tangible equity1 and tangible common equity1 ratios were 7.62 percent and 7.22 percent, respectively, compared to 7.70 percent and 7.27 percent, respectively, at September 30, 2022. The common equity tier 1 ratio was 11.15 percent, compared to 10.80 percent at September 30, 2022.
• Book value and tangible book value per common share1 were $46.00 and $29.48, respectively, compared to $43.32 and $27.69, respectively, at September 30, 2022.

1 See reconciliations to GAAP financial measures beginning on page 19.

***

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 $73 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 third quarter 2023 earnings announcement will be held today, Thursday, October 19, 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 October 19, 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, these words are not the exclusive means of identifying such statements. Examples of forward-looking statements include, but are not limited to: projections of revenues, expenses, income or loss, earnings or loss per share, and other financial items; statements of plans, objectives, and expectations of Webster or its management or Board of Directors; statements of future economic performance; and 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 Webster's actual results to differ from those discussed in any forward-looking statements include, but are not limited to: Webster's ability to successfully integrate the operations of Webster and Sterling Bancorp and realize the anticipated benefits of the merger, including validation of Webster's recently completed core conversion and any issues that may arise therefrom; Webster's ability to successfully execute its business plan and strategic initiatives, and manage any risks or uncertainties; any continuation of the recent turmoil in the banking industry, including the associated impact of any regulatory changes or other mitigation efforts taken by government agencies in response; volatility in Webster's stock price due to investor sentiment, including in light of the recent turmoil in the banking industry; local, regional, national, and international economic conditions, and the impact they may have on Webster or its customers; volatility and disruption in national and international financial markets, including as a result of geopolitical conflict; unforeseen events, such as pandemics or natural disasters, and any governmental or societal responses thereto; changes in laws and regulations, or existing laws and regulations that Webster becomes subject to, including those concerning banking, taxes, dividends, securities, insurance, and healthcare, with which Webster and its subsidiaries must comply; adverse conditions in the securities markets that could lead to impairment in the value of Webster's securities portfolio; inflation, monetary fluctuations, the possibility of a recession, and changes in interest rates, including the impact of such changes on economic conditions, customer behavior, funding costs, and Webster's loans and leases and securities portfolios; possible changes in governmental monetary and fiscal policies, including, but not limited to, the Federal Reserve policies in connection with continued inflationary pressures and the ability of the U.S. Congress to increase the U.S. statutory debt limit as needed; the impact of a potential U.S. federal government shutdown; 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; the timely development and acceptance of new products and services, and the perceived value of those products and services by customers; changes in deposit flows, consumer spending, borrowings, and savings habits; Webster's ability to implement new technologies and maintain secure and reliable technology systems; the effects of any cyber threats, attacks or events, or fraudulent activity, including those that involve Webster's third-party vendors and service providers; performance by Webster's counterparties and third-party vendors; Webster's ability to increase market share and control expenses; changes in the competitive environment among banks, financial holding companies, and other traditional and non-traditional financial service providers; Webster's ability to maintain adequate sources of funding and liquidity; changes in the level of non-performing assets and charge-offs; changes in estimates of future reserve requirements based upon periodic review under relevant regulatory and accounting requirements; the effect of changes in accounting policies and practices applicable to Webster, including the impacts of recently adopted accounting guidance; Webster's inability to remediate the material weaknesses in its internal control related to ineffective information technology general controls (ITGCs); legal and regulatory developments, including the resolution of legal proceedings or regulatory or other governmental inquiries, and the results of regulatory examinations or reviews; Webster's ability to appropriately address any environmental, social, governmental, and sustainability concerns that may arise from its business activities; and 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)

September 30, 2023

June 30, 2023

March 31, 2023

December 31, 2022

September 30, 2022

  Income and performance ratios: Net income $

226,475

$

234,968

$

221,004

$

244,751

$

233,968

Net income available to common stockholders

222,313

230,806

216,841

240,588

229,806

Earnings per diluted common share

1.28

1.32

1.24

1.38

1.31

Return on average assets (annualized)

1.23

%

1.23

%

1.22

%

1.40

%

1.38

%

Return on average tangible common stockholders' equity (annualized) (1)

17.51

18.12

17.66

19.93

18.62

Return on average common stockholders’ equity (annualized)

11.00

11.38

10.94

12.54

11.78

Non-interest income as a percentage of total revenue

13.34

13.28

10.62

14.50

17.10

  Asset quality: Allowance for credit losses on loans and leases $

635,438

$

628,911

$

613,914

$

594,741

$

574,325

Nonperforming assets

218,402

222,215

186,551

206,136

211,627

Allowance for credit losses on loans and leases / total loans and leases

1.27

%

1.22

%

1.21

%

1.20

%

1.20

%

Net charge-offs / average loans and leases (annualized)

0.23

0.16

0.20

0.17

0.25

Nonperforming loans and leases / total loans and leases

0.43

0.42

0.36

0.41

0.44

Nonperforming assets / total loans and leases plus OREO

0.44

0.43

0.37

0.41

0.44

Allowance for credit losses on loans and leases / nonperforming loans and leases

295.48

287.35

331.81

291.84

274.12

  Other ratios: Tangible equity (1)

7.62

%

7.62

%

7.55

%

7.79

%

7.70

%

Tangible common equity (1)

7.22

7.23

7.15

7.38

7.27

Tier 1 risk-based capital (2)

11.67

11.16

10.93

11.23

11.35

Total risk-based capital (2)

13.82

13.25

12.99

13.25

13.38

Common equity tier 1 risk-based capital (2)

11.15

10.65

10.42

10.71

10.80

Stockholders’ equity / total assets

11.21

11.18

11.08

11.30

11.33

Net interest margin

3.49

3.35

3.66

3.74

3.54

Efficiency ratio (1)

41.75

42.20

41.64

40.27

41.17

  Equity and share related: Common equity $

7,915,222

$

7,995,747

$

8,010,315

$

7,772,207

$

7,542,431

Book value per common share

46.00

46.15

45.85

44.67

43.32

Tangible book value per common share (1)

29.48

29.69

29.47

29.07

27.69

Common stock closing price

40.31

37.75

39.42

47.34

45.20

Dividends declared per common share

0.40

0.40

0.40

0.40

0.40

Common shares issued and outstanding

172,056

173,261

174,712

174,008

174,116

Weighted-average common shares outstanding - Basic

171,210

172,739

172,766

172,522

173,868

Weighted-average common shares outstanding - Diluted

171,350

172,803

172,883

172,699

173,944

  (1) See "Reconciliations to GAAP Financial Measures" section beginning on page 20. (2) Presented as preliminary for September 30, 2023, and actual for the remaining periods. WEBSTER FINANCIAL CORPORATIONConsolidated Balance Sheets (unaudited) (In thousands)

September 30, 2023

June 30,2023 September 30,2022 Assets: Cash and due from banks $

406,300

 

$

283,623

 

$

286,487

 

Interest-bearing deposits

1,766,431

 

1,077,136

 

326,638

 

Securities: Available-for-sale

7,653,391

 

7,759,341

 

8,085,044

 

Held-to-maturity, net

6,875,772

 

6,943,784

 

6,505,838

 

Total securities, net

14,529,163

 

14,703,125

 

14,590,882

 

Loans held for sale

46,267

 

10,963

 

898

 

Loans and Leases: Commercial

19,691,486

 

21,217,411

 

19,610,953

 

Commercial real estate

20,583,254

 

20,661,071

 

18,862,619

 

Residential mortgages

8,228,451

 

8,140,182

 

7,617,955

 

Consumer

1,584,955

 

1,607,384

 

1,732,348

 

Total loans and leases

50,088,146

 

51,626,048

 

47,823,875

 

Allowance for credit losses on loans and leases

(635,438

)

(628,911

)

(574,325

)

Loans and leases, net

49,452,708

 

50,997,137

 

47,249,550

 

Federal Home Loan Bank and Federal Reserve Bank stock

306,085

 

407,968

 

373,044

 

Premises and equipment, net

431,698

 

426,310

 

434,721

 

Goodwill and other intangible assets, net

2,843,217

 

2,852,117

 

2,721,040

 

Cash surrender value of life insurance policies

1,242,648

 

1,239,077

 

1,230,641

 

Deferred tax asset, net

478,926

 

377,588

 

369,737

 

Accrued interest receivable and other assets

1,627,408

 

1,663,199

 

1,468,928

 

Total Assets $

73,130,851

 

$

74,038,243

 

$

69,052,566

 

  Liabilities and Stockholders' Equity: Deposits: Demand $

11,410,063

 

$

11,157,390

 

$

13,849,812

 

Health savings accounts

8,229,889

 

8,206,844

 

7,889,310

 

Interest-bearing checking

8,826,265

 

8,775,975

 

9,203,220

 

Money market

17,755,198

 

16,189,678

 

11,156,579

 

Savings

6,622,833

 

7,131,587

 

9,340,372

 

Certificates of deposit

5,150,139

 

4,743,204

 

2,311,484

 

Brokered certificates of deposit

2,337,380

 

2,542,854

 

258,110

 

Total deposits

60,331,767

 

58,747,532

 

54,008,887

 

Securities sold under agreements to repurchase and other borrowings

157,491

 

243,580

 

1,265,414

 

Federal Home Loan Bank advances

1,810,218

 

4,310,371

 

3,510,717

 

Long-term debt (1)

1,050,539

 

1,052,258

 

1,074,844

 

Accrued expenses and other liabilities

1,581,635

 

1,404,776

 

1,366,294

 

Total liabilities

64,931,650

 

65,758,517

 

61,226,156

 

Preferred stock

283,979

 

283,979

 

283,979

 

Common stockholders' equity

7,915,222

 

7,995,747

 

7,542,431

 

Total stockholders’ equity

8,199,201

 

8,279,726

 

7,826,410

 

Total Liabilities and Stockholders' Equity $

73,130,851

 

$

74,038,243

 

$

69,052,566

 

  (1) The classification of debt as long-term is based on the initial terms of greater than one year as of the date of issuance. WEBSTER FINANCIAL CORPORATIONConsolidated Statements of Income (unaudited)

Three Months Ended September 30,

Nine Months Ended September 30,

(In thousands, except per share data)

2023

2022

2023

2022

Interest income: Interest and fees on loans and leases $

793,626

 

$

525,960

 

$

2,281,955

 

$

1,303,774

 

Interest and dividends on securities

137,146

 

91,569

 

412,704

 

237,297

 

Loans held for sale

17

 

40

 

454

 

73

 

Total interest income

930,789

 

617,569

 

2,695,113

 

1,541,144

 

Interest expense: Deposits

293,955

 

37,492

 

695,625

 

57,350

 

Borrowings

49,698

 

29,074

 

233,240

 

51,883

 

Total interest expense

343,653

 

66,566

 

928,865

 

109,233

 

Net interest income

587,136

 

551,003

 

1,766,248

 

1,431,911

 

Provision for credit losses

36,500

 

36,531

 

114,747

 

237,619

 

Net interest income after provision for loan and lease losses

550,636

 

514,472

 

1,651,501

 

1,194,292

 

Non-interest income: Deposit service fees

41,005

 

50,807

 

131,859

 

150,019

 

Loan and lease related fees

19,966

 

26,769

 

63,499

 

77,355

 

Wealth and investment services

7,254

 

11,419

 

21,232

 

33,260

 

Mortgage banking activities

42

 

86

 

230

 

616

 

Cash surrender value of life insurance policies

6,620

 

7,718

 

19,641

 

22,694

 

(Loss) on sale of investment securities, net

-

 

(2,234

)

(16,795

)

(2,234

)

Other income

15,495

 

19,071

 

30,856

 

56,894

 

Total non-interest income

90,382

 

113,636

 

250,522

 

338,604

 

Non-interest expense: Compensation and benefits

180,333

 

173,983

 

526,838

 

545,641

 

Occupancy

18,617

 

23,517

 

59,042

 

93,725

 

Technology and equipment

55,261

 

45,283

 

151,442

 

142,182

 

Marketing

4,810

 

3,918

 

13,446

 

10,868

 

Professional and outside services

26,874

 

21,618

 

88,693

 

91,041

 

Intangible assets amortization

8,899

 

8,511

 

27,589

 

23,700

 

Loan workout expenses

579

 

580

 

1,759

 

1,992

 

Deposit insurance

13,310

 

8,026

 

39,356

 

19,996

 

Other expenses

53,895

 

44,635

 

130,969

 

118,938

 

Total non-interest expense

362,578

 

330,071

 

1,039,134

 

1,048,083

 

Income before income taxes

278,440

 

298,037

 

862,889

 

484,813

 

Income tax expense

51,965

 

64,069

 

180,442

 

85,281

 

Net income

226,475

 

233,968

 

682,447

 

399,532

 

Preferred stock dividends

(4,162

)

(4,162

)

(12,487

)

(11,756

)

Net income available to common stockholders $

222,313

 

$

229,806

 

$

669,960

 

$

387,776

 

  Weighted-average common shares outstanding - Diluted

171,350

 

173,944

 

172,326

 

165,813

 

  Earnings per common share: Basic $

1.29

 

$

1.31

 

$

3.85

 

$

2.32

 

Diluted

1.28

 

1.31

 

3.85

 

2.32

 

WEBSTER FINANCIAL CORPORATIONFive Quarter Consolidated Statements of Income (unaudited)

Three Months Ended

(In thousands, except per share data)

September 30, 2023

June 30, 2023

March 31, 2023

December 31, 2022

September 30, 2022

Interest income: Interest and fees on loans and leases $

793,626

 

$

771,973

 

$

716,356

 

$

642,784

 

$

525,960

 

Interest and dividends on securities

137,146

 

161,002

 

114,556

 

100,804

 

91,569

 

Loans held for sale

17

 

421

 

16

 

5

 

40

 

Total interest income

930,789

 

933,396

 

830,928

 

743,593

 

617,569

 

Interest expense: Deposits

293,955

 

251,466

 

150,204

 

81,202

 

37,492

 

Borrowings

49,698

 

98,101

 

85,441

 

60,016

 

29,074

 

Total interest expense

343,653

 

349,567

 

235,645

 

141,218

 

66,566

 

Net interest income

587,136

 

583,829

 

595,283

 

602,375

 

551,003

 

Provision for credit losses

36,500

 

31,498

 

46,749

 

43,000

 

36,531

 

Net interest income after provision for loan and lease losses

550,636

 

552,331

 

548,534

 

559,375

 

514,472

 

Non-interest income: Deposit service fees

41,005

 

45,418

 

45,436

 

48,453

 

50,807

 

Loan and lease related fees

19,966

 

20,528

 

23,005

 

25,632

 

26,769

 

Wealth and investment services

7,254

 

7,391

 

6,587

 

7,017

 

11,419

 

Mortgage banking activities

42

 

129

 

59

 

89

 

86

 

Cash surrender value of life insurance policies

6,620

 

6,293

 

6,728

 

6,543

 

7,718

 

(Loss) on sale of investment securities, net

-

 

(48

)

(16,747

)

(4,517

)

(2,234

)

Other income

15,495

 

9,663

 

5,698

 

18,962

 

19,071

 

Total non-interest income

90,382

 

89,374

 

70,766

 

102,179

 

113,636

 

Non-interest expense: Compensation and benefits

180,333

 

173,305

 

173,200

 

177,979

 

173,983

 

Occupancy

18,617

 

20,254

 

20,171

 

20,174

 

23,517

 

Technology and equipment

55,261

 

51,815

 

44,366

 

44,202

 

45,283

 

Marketing

4,810

 

5,160

 

3,476

 

5,570

 

3,918

 

Professional and outside services

26,874

 

29,385

 

32,434

 

26,489

 

21,618

 

Intangible assets amortization

8,899

 

9,193

 

9,497

 

8,240

 

8,511

 

Loan workout expenses

579

 

574

 

606

 

606

 

580

 

Deposit insurance

13,310

 

13,723

 

12,323

 

6,578

 

8,026

 

Other expenses

53,895

 

40,680

 

36,394

 

58,552

 

44,635

 

Total non-interest expense

362,578

 

344,089

 

332,467

 

348,390

 

330,071

 

Income before income taxes

278,440

 

297,616

 

286,833

 

313,164

 

298,037

 

Income tax expense

51,965

 

62,648

 

65,829

 

68,413

 

64,069

 

Net income

226,475

 

234,968

 

221,004

 

244,751

 

233,968

 

Preferred stock dividends

(4,162

)

(4,162

)

(4,163

)

(4,163

)

(4,162

)

Net income available to common stockholders $

222,313

 

$

230,806

 

$

216,841

 

$

240,588

 

$

229,806

 

  Weighted-average common shares outstanding - Diluted

171,350

 

172,803

 

172,883

 

172,699

 

173,944

 

  Earnings per common share: Basic $

1.29

 

$

1.32

 

$

1.24

 

$

1.38

 

$

1.31

 

Diluted

1.28

 

1.32

 

1.24

 

1.38

 

1.31

 

WEBSTER FINANCIAL CORPORATIONConsolidated Average Balances, Interest, Yields and Rates, and Net Interest Margin on a Fully Tax-equivalent Basis (unaudited)

Three Months Ended September 30,

2023

2022

(Dollars in thousands)

Average balance

 

Interest

Yield/rate

Average balance

Interest

Yield/rate

Assets: Interest-earning assets: Loans and leases $

50,912,188

$

804,930

 

6.20

%

$

46,229,678

$

532,062

 

4.52

%

Investment securities (1)

14,686,798

119,997

 

3.09

15,039,510

93,561

 

2.40

Federal Home Loan and Federal Reserve Bank stock

355,495

7,619

 

8.50

326,860

1,875

 

2.28

Interest-bearing deposits

1,187,096

16,132

 

5.32

585,807

3278

 

2.19

Loans held for sale

6,756

17

 

1.03

580

40

 

n/m

Total interest-earning assets

67,148,333

$

948,695

 

5.49

%

62,182,435

$

630,816

 

3.96

%

Non-interest-earning assets

6,459,493

5,823,755

Total Assets $

73,607,826

$

68,006,190

  Liabilities and Stockholders' Equity: Interest-bearing liabilities: Demand deposits $

11,335,734

$

-

 

-

%

$

13,590,667

$

-

 

-

%

Health savings accounts

8,235,632

3,126

 

0.15

7,854,425

1,146

 

0.06

Interest-bearing checking, money market and savings

32,673,899

214,891

 

2.61

29,798,562

33,808

 

0.45

Certificates of deposit and brokered deposits

7,342,757

75,938

 

4.10

2,716,885

2,538

 

0.37

Total deposits

59,588,022

293,955

 

1.96

53,960,539

37,492

 

0.28

  Securities sold under agreements to repurchase and other borrowings

170,256

50

 

0.12

1,369,126

6,242

 

1.78

Federal Home Loan Bank advances

2,945,136

40,196

 

5.34

2,402,596

13,814

 

2.25

Long-term debt (1)

1,051,380

9,452

 

3.70

1,075,683

9,018

 

3.47

Total borrowings

4,166,772

49,698

 

4.72

4,847,405

29,074

 

2.38

Total interest-bearing liabilities

63,754,794

$

343,653

 

2.14

%

58,807,944

$

66,566

 

0.45

%

Non-interest-bearing liabilities

1,482,563

1,108,202

Total liabilities

65,237,357

59,916,146

  Preferred stock

283,979

283,979

Common stockholders' equity

8,086,490

7,806,065

Total stockholders' equity

8,370,469

8,090,044

Total Liabilities and Stockholders' Equity $

73,607,826

$

68,006,190

Tax-equivalent net interest income

605,042

 

564,250

 

Less: Tax-equivalent adjustments

(17,906

)

(13,247

)

Net interest income $

587,136

 

$

551,003

 

Net interest margin

3.49

%

3.54

%

  (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. WEBSTER FINANCIAL CORPORATIONConsolidated Average Balances, Interest, Yields and Rates, and Net Interest Margin on a Fully Tax-equivalent Basis (unaudited)

Nine Months Ended September 30,

2023

2022

(Dollars in thousands)

Average balance

Interest

Yield/rate

Average balance

Interest

Yield/rate

Assets: Interest-earning assets: Loans and leases $

50,733,691

$

2,313,030

 

6.02

%

$

42,125,526

$

1,317,941

 

4.14

%

Investment securities (1)

14,700,296

341,998

 

2.95

14,548,116

246,788

 

2.22

Federal Home Loan and Federal Reserve Bank stock

442,429

19,204

 

5.80

252,559

4,768

 

2.52

Interest-bearing deposits

1,872,657

71,536

 

5.04

623,866

4,711

 

1.00

Loans held for sale

35,982

454

 

1.68

12,160

73

 

0.80

Total interest-earning assets

67,785,055

$

2,746,222

 

5.30

%

57,562,227

$

1,574,281

 

3.60

%

Non-interest-earning assets

6,271,968

5,448,419

Total Assets $

74,057,023

$

63,010,646

  Liabilities and Stockholders' Equity: Interest-bearing liabilities: Demand deposits $

11,775,500

$

-

 

-

%

$

12,758,489

$

-

 

-

%

Health savings accounts

8,259,408

9,243

 

0.15

7,809,082

3,358

 

0.06

Interest-bearing checking, money market and savings

31,442,258

516,646

 

2.20

27,887,362

48,992

 

0.23

Certificates of deposit and brokered deposits

6,192,415

169,736

 

3.66

2,649,328

5,000

 

0.25

Total deposits

57,669,581

695,625

 

1.61

51,104,261

57,350

 

0.15

  Securities sold under agreements to repurchase and other borrowings

430,989

7,940

 

2.43

1,006,391

9,876

 

1.29

Federal Home Loan Bank advances

5,104,372

196,878

 

5.09

1,198,754

17,034

 

1.87

Long-term debt (1)

1,061,643

28,422

 

3.68

1,017,120

24,973

 

3.40

Total borrowings

6,597,004

233,240

 

4.69

3,222,265

51,883

 

2.16

Total interest-bearing liabilities

64,266,585

$

928,865

 

1.93

%

54,326,526

$

109,233

 

0.27

%

Non-interest-bearing liabilities

1,462,723

1,043,313

Total liabilities

65,729,308

55,369,839

  Preferred stock

283,979

268,202

Common stockholders' equity

8,043,736

7,372,605

Total stockholders' equity

8,327,715

7,640,807

Total Liabilities and Stockholders' Equity $

74,057,023

$

63,010,646

Tax-equivalent net interest income

1,817,357

 

1,465,048

 

Less: Tax-equivalent adjustments

(51,109

)

(33,137

)

Net interest income $

1,766,248

 

$

1,431,911

 

Net interest margin

3.49

%

3.35

%

  (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. WEBSTER FINANCIAL CORPORATIONFive Quarter Loans and Leases (unaudited) (Dollars in thousands)

September 30, 2023

June 30, 2023

March 31, 2023

December 31, 2022

September 30, 2022

Loans and Leases (actual): Commercial non-mortgage $

18,058,524

 

$

19,499,160

 

$

19,014,810

 

$

18,663,164

 

$

17,807,234

 

Asset-based lending

1,632,962

 

1,718,251

 

1,760,527

 

1,821,642

 

1,803,719

 

Commercial real estate

20,583,254

 

20,661,071

 

20,513,738

 

19,619,145

 

18,862,619

 

Residential mortgages

8,228,451

 

8,140,182

 

8,001,563

 

7,963,420

 

7,617,955

 

Consumer

1,584,955

 

1,607,384

 

1,635,885

 

1,697,055

 

1,732,348

 

Loans and Leases

50,088,146

 

51,626,048

 

50,926,523

 

49,764,426

 

47,823,875

 

Allowance for credit losses on loans and leases

(635,438

)

(628,911

)

(613,914

)

(594,741

)

(574,325

)

Loans and Leases, net $

49,452,708

 

$

50,997,137

 

$

50,312,609

 

$

49,169,685

 

$

47,249,550

 

  Loans and Leases (average): Commercial non-mortgage $

18,839,776

 

$

19,220,435

 

$

18,670,917

 

$

18,024,771

 

$

16,780,780

 

Asset-based lending

1,663,481

 

1,756,051

 

1,790,992

 

1,780,874

 

1,811,073

 

Commercial real estate

20,614,334

 

20,518,355

 

19,970,326

 

19,234,292

 

18,503,077

 

Residential mortgages

8,200,938

 

8,067,349

 

7,995,327

 

7,819,415

 

7,384,704

 

Consumer

1,593,659

 

1,622,525

 

1,667,630

 

1,715,513

 

1,750,044

 

Loans and Leases $

50,912,188

 

$

51,184,715

 

$

50,095,192

 

$

48,574,865

 

$

46,229,678

 

WEBSTER FINANCIAL CORPORATIONFive Quarter Nonperforming Assets and Past Due Loans and Leases (unaudited) (Dollars in thousands)

September 30, 2023

June 30, 2023

March 31, 2023

December 31, 2022

September 30, 2022

Nonperforming loans and leases: Commercial non-mortgage $

121,067

$

109,279

$

86,537

$

89,416

$

80,002

Asset-based lending

10,350

9,450

9,450

20,046

25,115

Commercial real estate

31,004

47,972

35,832

41,580

49,054

Residential mortgages

27,312

26,751

25,096

25,613

25,563

Consumer

25,320

25,417

28,105

27,136

29,782

Total nonperforming loans and leases $

215,053

$

218,869

$

185,020

$

203,791

$

209,516

  Other real estate owned and repossessed assets: Commercial non-mortgage $

2,687

$

2,152

$

153

$

78

$

-

Residential mortgages

662

662

662

2,024

2,024

Consumer

-

532

716

243

87

Total other real estate owned and repossessed assets $

3,349

$

3,346

$

1,531

$

2,345

$

2,111

Total nonperforming assets $

218,402

$

222,215

$

186,551

$

206,136

$

211,627

  Past due 30-89 days: Commercial non-mortgage $

38,875

$

32,074

$

9,645

$

20,248

$

17,440

Asset-based lending

-

-

-

5,921

-

Commercial real estate

3,631

1,970

17,115

26,147

6,050

Residential mortgages

16,208

10,583

10,710

11,385

12,577

Consumer

12,016

6,718

6,110

9,194

9,656

Total past due 30-89 days $

70,730

$

51,345

$

43,580

$

72,895

$

45,723

Past due 90 days or more and accruing

138

29

602

770

711

Total past due loans and leases $

70,868

$

51,374

$

44,182

$

73,665

$

46,434

WEBSTER FINANCIAL CORPORATIONFive Quarter Changes in the Allowance for Credit Losses on Loans and Leases (unaudited)

For the Three Months Ended

(Dollars in thousands)

September 30, 2023

June 30, 2023

March 31, 2023

December 31, 2022

September 30, 2022

ACL on loans and leases, beginning balance $

628,911

$

613,914

$

594,741

$

574,325

$

571,499

Adoption of ASU No. 2022-02

-

-

5,873

-

-

Provision

35,839

35,249

37,821

40,649

31,352

Charge-offs: Commercial portfolio

27,360

21,945

26,410

21,499

31,356

Consumer portfolio

3,642

1,085

1,098

1,193

1,453

Total charge-offs

31,002

23,030

27,508

22,692

32,809

Recoveries: Commercial portfolio

292

1,024

1,574

895

1,413

Consumer portfolio

1,398

1,754

1,413

1,564

2,870

Total recoveries

1,690

2,778

2,987

2,459

4,283

Total net charge-offs

29,312

20,252

24,521

20,233

28,526

ACL on loans and leases, ending balance $

635,438

$

628,911

$

613,914

$

594,741

$

574,325

ACL on unfunded loan commitments, ending balance

23,040

22,366

26,051

27,707

25,329

Total ACL, ending balance $

658,478

$

651,277

$

639,965

$

622,448

$

599,654

  WEBSTER FINANCIAL CORPORATIONReconciliations to GAAP Financial Measures   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 net intangible assets. The tangible equity ratio represents stockholders’ equity less goodwill and net intangible assets divided by total assets less goodwill and net intangible assets. The tangible common equity ratio represents stockholders’ equity less preferred stock and goodwill and net intangible assets divided by total assets less goodwill and net intangible assets. Tangible book value per common share represents stockholders’ equity less preferred stock and goodwill and net intangible assets divided by common shares outstanding at the end of the period. Core deposits express total deposits less certificates of deposit and brokered certificates of deposit. Adjusted net income 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 merger-related expenses.   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)

September 30, 2023

June 30,2023 March 31,2023 December 31,2022 September 30,2022 Efficiency ratio: Non-interest expense $

362,578

 

$

344,089

 

$

332,467

 

$

348,390

 

$

330,071

 

Less: Foreclosed property activity

(492

)

(432

)

(262

)

(80

)

(393

)

Intangible assets amortization

8,899

 

9,193

 

9,497

 

8,240

 

8,511

 

Operating lease depreciation

1,146

 

1,639

 

1,884

 

2,021

 

2,115

 

Strategic initiatives and other (1)

-

 

-

 

-

 

143

 

11,617

 

Merger related

61,625

 

40,840

 

29,373

 

45,790

 

25,536

 

Non-interest expense $

291,400

 

$

292,849

 

$

291,975

 

$

292,276

 

$

282,685

 

Net interest income $

587,136

 

$

583,829

 

$

595,283

 

$

602,375

 

$

551,003

 

Add: Tax-equivalent adjustment

17,906

 

17,292

 

15,911

 

13,991

 

13,247

 

Non-interest income

90,382

 

89,374

 

70,766

 

102,179

 

113,636

 

Other income (2)

3,614

 

5,035

 

4,311

 

4,814

 

11,186

 

Less: Operating lease depreciation

1,146

 

1,639

 

1,884

 

2,021

 

2,115

 

(Loss) on sale of investment securities, net

-

 

(48

)

(16,747

)

(4,517

)

(2,234

)

Other (3)

-

 

-

 

-

 

-

 

2,548

 

Income $

697,892

 

$

693,939

 

$

701,134

 

$

725,855

 

$

686,643

 

Efficiency ratio

41.75

 

%

42.20

 

%

41.64

 

%

40.27

 

%

41.17

 

%

  Return on average tangible common stockholders' equity: Net income $

226,475

 

$

234,968

 

$

221,004

 

$

244,751

 

$

233,968

 

Less: Preferred stock dividends

4,162

 

4,162

 

4,163

 

4,163

 

4,162

 

Add: Intangible assets amortization, tax-effected

7,030

 

7,262

 

7,503

 

6,510

 

6,724

 

Adjusted income $

229,343

 

$

238,068

 

$

224,344

 

$

247,098

 

$

236,530

 

Adjusted income, annualized basis $

917,372

 

$

952,272

 

$

897,376

 

$

988,392

 

$

946,120

 

Average stockholders' equity $

8,370,469

 

$

8,395,298

 

$

8,215,676

 

$

7,960,900

 

$

8,090,044

 

Less: Average preferred stock

283,979

 

283,979

 

283,979

 

283,979

 

283,979

 

Average goodwill and other intangible assets, net

2,847,560

 

2,856,581

 

2,849,673

 

2,716,981

 

2,725,200

 

Average tangible common stockholders' equity $

5,238,930

 

$

5,254,738

 

$

5,082,024

 

$

4,959,940

 

$

5,080,865

 

Return on average tangible common stockholders' equity

17.51

 

%

18.12

 

%

17.66

 

%

19.93

 

%

18.62

 

%

  (1) Strategic initiatives and other for the three months ended September 30, 2022, primarily includes a contribution to the Webster foundation of $10.5 million (presented within Other non-interest expense on the Consolidated Statements of Income). (2) Other income includes the taxable equivalent of net income generated from low income housing tax-credit investments. (3) Other for the three months ended September 30, 2022, includes 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)

September 30, 2023

June 30, 2023

March 31, 2023

December 31, 2022

September 30, 2022

Tangible equity: Stockholders' equity $

8,199,201

$

8,279,726

$

8,294,294

$

8,056,186

$

7,826,410

Less: Goodwill and other intangible assets, net

2,843,217

2,852,117

2,861,310

2,713,446

2,721,040

Tangible stockholders' equity $

5,355,984

$

5,427,609

$

5,432,984

$

5,342,740

$

5,105,370

Total assets $

73,130,851

$

74,038,243

$

74,844,395

$

71,277,521

$

69,052,566

Less: Goodwill and other intangible assets, net

2,843,217

2,852,117

2,861,310

2,713,446

2,721,040

Tangible assets $

70,287,634

$

71,186,126

$

71,983,085

$

68,564,075

$

66,331,526

Tangible equity

7.62

%

7.62

%

7.55

%

7.79

%

7.70

%

  Tangible common equity: Tangible stockholders' equity $

5,355,984

$

5,427,609

$

5,432,984

$

5,342,740

$

5,105,370

Less: Preferred stock

283,979

283,979

283,979

283,979

283,979

Tangible common stockholders' equity $

5,072,005

$

5,143,630

$

5,149,005

$

5,058,761

$

4,821,391

Tangible assets $

70,287,634

$

71,186,126

$

71,983,085

$

68,564,075

$

66,331,526

Tangible common equity

7.22

%

7.23

%

7.15

%

7.38

%

7.27

%

  Tangible book value per common share: Tangible common stockholders' equity $

5,072,005

$

5,143,630

$

5,149,005

$

5,058,761

$

4,821,391

Common shares outstanding

172,056

173,261

174,712

174,008

174,116

Tangible book value per common share $

29.48

$

29.69

$

29.47

$

29.07

$

27.69

  Core deposits: Total deposits $

60,331,767

$

58,747,532

$

55,297,479

$

54,054,340

$

54,008,887

Less: Certificates of deposit

5,150,139

4,743,204

3,855,406

2,729,332

2,311,484

Brokered certificates of deposit

2,337,380

2,542,854

674,373

1,431,617

258,110

Core deposits $

52,844,248

$

51,461,474

$

50,767,700

$

49,893,391

$

51,439,293

 

Three months ended September 30, 2023

Adjusted ROATCE: Net income $

226,475

Less: Preferred stock dividends

4,162

Add: Intangible assets amortization, tax-effected

7,030

Merger related, tax-effected

45,116

Adjusted income $

274,459

Adjusted income, annualized basis $

1,097,836

Average stockholders' equity $

8,370,469

Less: Average preferred stock

283,979

Average goodwill and other intangible assets, net

2,847,560

Average tangible common stockholders' equity $

5,238,930

Adjusted return on average tangible common stockholders' equity

20.96

%

  Adjusted ROAA: Net income $

226,475

Add: Merger related, tax-effected

45,116

Adjusted income $

271,591

Adjusted income, annualized basis $

1,086,364

Average assets $

73,607,826

Adjusted return on average assets

1.48

%

  GAAP to adjusted reconciliation: Three months ended September 30, 2023 (In millions, except per share data) Pre-Tax Income Net Income Available to Common Stockholders Diluted EPS Reported (GAAP) $

278.4

$

222.3

$

1.28

Merger related

61.6

45.1

0.27

Adjusted (non-GAAP) $

340.0

$

267.4

$

1.55

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20231019626804/en/

Media Contact Alice Ferreira, 203-578-2610 acferreira@websterbank.com

Investor Contact Emlen Harmon, 212-309-7646 eharmon@websterbank.com