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Webster Reports First Quarter 2024 EPS of $1.23; Adjusted EPS of $1.35
First quarter 2024 results include $13.2 million pre-tax ($20.8 million after tax), or $0.12(1) per diluted share, of net charges related to an increase in the FDIC special assessment estimate, Ametros acquisition expenses, securities repositioning, a net gain on sale of mortgage servicing rights ("MSRs"), and a discrete tax adjustment. Excluding these items, adjusted earnings per diluted share would have been $1.35(1) for the quarter ended March 31, 2024.
"We reported solid results in the first quarter, including an adjusted return on assets of 1.26 percent and an adjusted return on tangible common equity of 17.85 percent," said John R. Ciulla, chairman and chief executive officer. "We also enhanced our distinctive deposit franchise with the close of the Ametros acquisition, which expands our expertise in healthcare financial services."
Highlights for the first quarter of 2024:
Revenue of $667.1 million. Period end loan and lease balance of $51.1 billion, up $0.4 billion or 0.7 percent from prior quarter; consisting of 80.9 percent commercial loans and leases, 19.1 percent consumer loans, and a loan to deposit ratio of 84.1 percent. Period end deposit balance of $60.7 billion, down $36.5 million or 0.1 percent from prior quarter; core deposit growth of $1.5 billion from prior quarter. Provision for credit losses of $45.5 million. Return on average assets of 1.15 percent; adjusted 1.26 percent(1). Return on average tangible common equity of 16.30 percent(1); adjusted 17.85 percent(1). Net interest margin of 3.35 percent, down 7 basis points from prior quarter. Common equity tier 1 ratio of 10.51 percent. Efficiency ratio of 45.25 percent(1). Tangible common equity ratio of 7.15 percent(1).
"Webster generated strong deposit growth in key businesses this quarter, including HSA Bank and Ametros," said Glenn MacInnes, executive vice president and chief financial officer. "Our funding profile and overall balance sheet strength puts us in a unique position to deliver for our clients."
Line of Business performance compared to the first quarter of 2023
Effective January 1, 2024, Webster realigned certain of its business banking operations and related accounts from Commercial Banking to Consumer Banking to deliver operational efficiencies and better serve its customers. As a result, $1.5 billion of loans and $2.2 billion of deposits were moved from Commercial Banking to Consumer Banking. Prior period results have been recast accordingly.
Commercial Banking
Webster's Commercial Banking segment serves businesses that have more than $10 million of revenue through its regional banking, middle market, asset-based lending, equipment finance, commercial real estate, sponsor finance, private banking, and treasury services business units. At March 31, 2024, Commercial Banking had $39.9 billion in loans and leases and $16.1 billion in deposits, as well as a combined $3.0 billion in assets under administration and management.
Commercial Banking Operating Results:
Percent
Three months ended March 31, Favorable/
----------------------------------------------------------------------------------------------------
(In thousands) 2024 2023 (Unfavorable)
---------------------------------- -------------------- ------------------------------ -------------------- ------------------------------ ------------------------------
Net interest income $ 341,942 $ 360,293 (5.1 )%
Non-interest income 34,280 33,720 1.7
---------------------------------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- ---------- --------------------
Operating revenue 376,222 394,013 (4.5 )
Non-interest expense 106,225 98,833 (7.5 )
---------------------------------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- ---------- --------------------
Pre-tax, pre-provision net revenue $ 269,997 $ 295,180 (8.5 )
---------------------------------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- ---------- --------------------
Percent
At March 31, Increase/
--------------------------------------------------------------------------------
(In millions) 2024 2023 (Decrease)
---------------------------------- -------------------- ------------------------------ -------------------- ------------------------------ ------------------------------
Loans and leases $ 39,883 $ 40,127 (0.6 )%
Deposits 16,075 16,287 (1.3 )
Pre-tax, pre-provision net revenue decreased $25.2 million, to $270.0 million, in the quarter as compared to prior year. Net interest income decreased $18.4 million, to $341.9 million, primarily driven by lower deposit balances and higher rates paid on deposits. Non-interest income increased $0.6 million, to $34.3 million, primarily driven by increases in cash management fees and interest rate hedging activities, partially offset by lower net loan servicing income. Non-interest expense increased $7.4 million, to $106.2 million, primarily resulting from continued investments in talent, operational support, and technology to support balance sheet growth.
Healthcare Financial Services
Webster established a Healthcare Financial Services segment this quarter, which is comprised of HSA Bank and the newly acquired Ametros business. This segment offers consumer-directed healthcare solutions that include health savings accounts, health reimbursement arrangements, administration of medical insurance claim settlements, flexible spending accounts and commuter benefits. 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, 2024, Healthcare Financial Services had $14.7 billion in total footings comprising $9.5 billion in deposits and $5.2 billion in assets under administration through linked investment accounts.
Healthcare Financial Services Operating Results:
Percent
Three months ended March 31, Favorable/
----------------------------------------------------------------------------------------------------
(In thousands) 2024 2023 (Unfavorable)
---------------------------------------------- -------------------- ------------------------------ -------------------- ------------------------------ ------------------------------
Net interest income $ 86,138 $ 71,730 20.1 %
Non-interest income 31,061 24,067 29.1
---------------------------------------------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- ---------- --------------------
Operating revenue 117,199 95,797 22.3
Non-interest expense 52,127 43,700 (19.3 )
---------------------------------------------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- ---------- --------------------
Pre-tax, net revenue $ 65,072 $ 52,097 24.9
---------------------------------------------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- ---------- --------------------
At March 31, Percent
--------------------------------------------------------------------------------
(Dollars in millions) 2024 2023 Increase
---------------------------------------------- -------------------- ------------------------------ -------------------- ------------------------------ ------------------------------
Number of accounts (thousands) 3,344 3,172 5.4 %
Deposits $ 9,474 $ 8,273 14.5
Linked investment accounts (off balance sheet) 5,194 3,776 37.6
---------------------------------------------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- ---------- --------------------
Pre-tax net revenue increased $13.0 million, to $65.1 million, in the quarter as compared to prior year. The increase in pre-tax net revenue was partially attributable to the acquisition of Ametros in the quarter. Net interest income increased $14.4 million, to $86.1 million, primarily due to $5.7 million from Ametros and an increase in net deposit spread, and deposit growth at HSA Bank. Non-interest income increased $7.0 million, to $31.1 million, primarily due to $4.6 million from Ametros, as well as higher account fees and interchange fees at HSA Bank. Non-interest expense increased $8.4 million, to $52.1 million, primarily due to $7.3 million from Ametros, coupled with higher compensation and benefits expense, and service contract expense related to account growth at HSA Bank.
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 business banking business units, as well as a distribution network consisting of 196 banking centers and 347 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 March 31, 2024, Consumer Banking had $11.2 billion in loans and $26.9 billion in deposits, as well as $8.1 billion in assets under administration.
Consumer Banking Operating Results:
Percent
Three months ended March 31, Favorable/
----------------------------------------------------------------------------------------------------
(In thousands) 2024 2023 (Unfavorable)
---------------------------------- -------------------- ------------------------------ -------------------- ------------------------------ --------------------------------------------------
Net interest income $ 205,777 $ 234,604 (12.3 )%
Non-interest income 33,978 27,636 22.9
---------------------------------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- ---------- --------------------
Operating revenue 239,755 262,240 (8.6 )
Non-interest expense 120,121 116,555 (3.1 )
---------------------------------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- ---------- --------------------
Pre-tax, pre-provision net revenue $ 119,634 $ 145,685 (17.9 )
---------------------------------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- --------------------
At March 31, Percent
--------------------------------------------------------------------------------
(In millions) 2024 2023 Increase
---------------------------------- -------------------- ------------------------------ -------------------- ------------------------------ --------------------------------------------------
Loans $ 11,209 $ 10,777 4.0 %
Deposits 26,914 25,708 4.7
Pre-tax, pre-provision net revenue decreased $26.1 million, to $119.6 million, in the quarter as compared to prior year. Net interest income decreased $28.8 million, to $205.8 million, primarily driven by higher rates paid on deposits, partially offset by loan and deposit growth. Non-interest income increased $6.3 million, to $34.0 million, primarily driven by a net gain on sale of MSRs, partially offset by lower deposit service fees and loan related fees. Non-interest expense increased $3.6 million, to $120.1 million, primarily driven by higher compensation and operational support expenses, partially offset by decreases in technology costs and professional services expenses.
Consolidated financial performance:
Quarterly net interest income compared to the first quarter of 2023:
Net interest income was $567.7 million compared to $595.3 million. Net interest margin was 3.35 percent compared to 3.66 percent. The yield on interest-earning assets increased by 51 basis points, and the cost of interest-bearing liabilities increased by 87 basis points. Average interest-earning assets totaled $68.1 billion and increased by $2.0 billion, or 3.1 percent. Average loans and leases totaled $50.9 billion and increased by $0.8 billion, or 1.7 percent. Average deposits totaled $60.6 billion and increased by $5.8 billion, or 10.5 percent.
Quarterly provision for credit losses:
The provision for credit losses was $45.5 million in the quarter, contributing to a $5.7 million increase in the allowance for credit losses on loans and leases from prior quarter. The provision also contributed to a decrease in the reserve on unfunded loan commitments of $0.2 million. The provision for credit losses was $36.0 million in the prior quarter, and $46.7 million a year ago. Net charge-offs were $37.5 million, compared to $34.0 million in the prior quarter, and $24.5 million a year ago. The ratio of net charge-offs to average loans and leases was 0.29 percent, compared to 0.27 percent in the prior quarter, and 0.20 percent a year ago. The allowance for credit losses on loans and leases represented 1.26 percent of total loans and leases, compared to 1.25 percent at December 31, 2023, and 1.21 percent at March 31, 2023. The allowance represented 226 percent of nonperforming loans and leases at March 31, 2024, compared to 303 percent at December 31, 2023, and 332 percent at March 31, 2023.
Quarterly non-interest income compared to the first quarter of 2023:
Total non-interest income was $99.4 million compared to $70.8 million, an increase of $28.6 million. Total non-interest income includes a $9.8 million loss on the sale of investment securities and an $11.7 million net gain on the sale of MSRs, compared to a $16.7 million loss on the sale of investment securities a year ago. Excluding those items, total non-interest income increased $10.0 million. The increase is primarily attributable to the addition of Ametros and BOLI events.
Quarterly non-interest expense compared to the first quarter of 2023:
Total non-interest expense was $335.9 million compared to $332.5 million, an increase of $3.4 million. Total non-interest expense includes $11.9 million related to an increase to the FDIC special assessment estimate and $3.1 million of Ametros acquisition expenses, compared to $29.4 million of Sterling merger charges a year ago. Excluding those charges, total non-interest expense increased $17.8 million. The increase is primarily attributable to the addition of Ametros and higher performance-based incentive accruals.
Quarterly income taxes compared to the first quarter of 2023:
Income tax expense was $69.3 million compared to $65.8 million, and the effective tax rate was 24.3 percent compared to 23.0 percent. The higher effective tax rate in the current period reflects the recognition of a $10.9 million discrete expense for an out-of-period adjustment, impacting the effective tax rate in the current period by 3.8 percentage points.
Investment securities:
Total investment securities, net were $16.3 billion, compared to $16.0 billion at December 31, 2023, and $14.9 billion at March 31, 2023. The carrying value of the available-for-sale portfolio included $758.5 million of net unrealized losses, compared to $708.7 million at December 31, 2023, and $766.4 million at March 31, 2023. The carrying value of the held-to-maturity portfolio does not reflect $897.2 million of net unrealized losses, compared to $810.2 million at December 31, 2023, and $742.8 million at March 31, 2023.
Loans and leases:
Total loans and leases were $51.1 billion, compared to $50.7 billion at December 31, 2023, and $50.9 billion at March 31, 2023. Compared to December 31, 2023, commercial loans and leases decreased by $303.1 million, commercial real estate loans increased by $711.8 million, residential mortgages decreased by $1.8 million, and consumer loans decreased by $34.3 million. Compared to a year ago, commercial loans and leases decreased by $1.3 billion, commercial real estate loans increased by $1.4 billion, residential mortgages increased by $224.6 million, and consumer loans decreased by $101.9 million. Loan originations for the portfolio were $2.5 billion, compared to $3.2 billion in the prior quarter, and $3.3 billion a year ago. In addition, $2.9 million of residential loans were originated for sale in the quarter, compared to $3.4 million in the prior quarter, and $2.5 million a year ago.
Asset quality:
Total nonperforming loans and leases were $283.6 million, or 0.56 percent of total loans and leases, compared to $209.5 million, or 0.41 percent of total loans and leases, at December 31, 2023, and $185.0 million, or 0.36 percent of total loans and leases, at March 31, 2023. Past due loans and leases were $125.2 million, compared to $46.6 million at December 31, 2023, and $44.2 million at March 31, 2023. The increase from prior quarter is driven primarily by commercial real estate.
Deposits and borrowings:
Total deposits were $60.7 billion, compared to $60.8 billion at December 31, 2023, and $55.3 billion at March 31, 2023. Core deposits to total deposits(1) were 88.6 percent at March 31, 2024, compared to 86.1 percent at December 31, 2023, and 91.8 percent at March 31, 2023. The loan to deposit ratio was 84.1 percent, compared to 83.5 percent at December 31, 2023, and 92.1 percent at March 31, 2023. Total borrowings were $4.9 billion, compared to $3.9 billion at December 31, 2023, and $9.9 billion at March 31, 2023.
Capital:
The return on average common stockholders' equity and the return on average tangible common stockholders' equity(1) were 10.01 percent and 16.30 percent, respectively, compared to 10.94 percent and 17.66 percent, respectively, in the first quarter of 2023. The tangible equity(1) and tangible common equity(1) ratios were 7.54 percent and 7.15 percent, respectively, compared to 7.55 percent and 7.15 percent, respectively, at March 31, 2023. The common equity tier 1 ratio was 10.51 percent, compared to 10.42 percent at March 31, 2023. Book value and tangible book value per common share(1) were $49.07 and $30.22, respectively, compared to $45.85 and $29.47, respectively, at March 31, 2023.
(1) See "Non-GAAP to GAAP Reconciliations" section beginning on page 18.
Webster Financial Corporation (NYSE:WBS) is the holding company for Webster Bank, N.A. 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 Healthcare Financial Services, one of the country's largest providers of employee benefits and administration of medical insurance claim settlements solutions. Headquartered in Stamford, CT, Webster is a values-driven organization with $76 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 2024 earnings announcement will be held today, Tuesday, April 23, 2024 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 23, 2024. To access the replay, dial 800-770-2030, or 609-800-9909 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, expense savings, 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 execute its business plan and strategic initiatives, and manage any risks or uncertainties; continued regulatory changes or other mitigation efforts taken by government agencies in response to volatility in the banking industry, including due to the bank failures in 2023; volatility in Webster's stock price due to investor sentiment, including in light of the bank failures of 2023 and related 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; the impact of unrealized losses in our available-for-sale securities portfolio; 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 administration, 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, as well as the impact of the 2024 U.S. presidential election; the impact of a potential U.S. federal government shutdown; 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 information and technology systems; the effects of any cybersecurity 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 mix of loan geographies, sectors, or types and the level of nonperforming 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; 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 and environmental, social, governmental, and sustainability concerns that may arise from our business activities; Webster's ability to assess and monitor the effect of artificial intelligence on our business and operations; unforeseen events, such as pandemics or natural disasters, and any governmental or societal responses thereto; and the other factors that are described in Webster's Annual Report on Form 10-K for the year ended December 31, 2023, and Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. Any forward-looking statement made by Webster in this release speaks only as of the date on which it is made. Factors or events that could cause Webster's actual results to differ may emerge from time to time, and it is not possible for Webster to predict all of them. Webster 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, return on average tangible common stockholders' equity, 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 additional clarity of factors and trends affecting its business and allows investors to view performance in a manner similar to management.
The efficiency ratio, which represents the costs expended to generate a dollar of revenue, is calculated excluding certain non-operational items. The return on average tangible common stockholders' equity (ROATCE) represents 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 reflect total deposits less certificates of deposit and brokered certificates of deposit. Adjusted pre-tax net income, adjusted net income available to common stockholders, adjusted diluted earnings per share (EPS), adjusted ROATCE, and adjusted return on average assets (ROAA) are calculated excluding an FDIC special assessment estimate, Ametros acquisition expenses, loss on sale of investment securities, and net gain on sale of mortgage servicing rights, each of which have been tax-effected, and a discrete tax adjustment.
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.
Refer the tables on page 18 for Non-GAAP to GAAP reconciliations.
WEBSTER FINANCIAL CORPORATION
Selected Financial Highlights (unaudited)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
At or for the Three Months Ended At or for the Three Months Ended At or for the Three Months Ended
------------------------------------------------------------------------------------------------- -------------------------------- ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
(In thousands, except per share data) March 31, March 31, December 31, September 30, June 30, March 31,
2024 2024 2023 2023 2023 2023
------------------------------------------------------------------------------------------------- -------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- -------------------------------------------------
Income and performance ratios:
-------------------------------------------------------------------------------------------------
Net income $ $ 216,323 $ $ 185,393 $ $ 226,475 $ $ 234,968 $ $ 221,004
Net income available to common stockholders 212,160 181,230 222,313 230,806 216,841
Earnings per diluted common share 1.23 1.05 1.28 1.32 1.24
Return on average assets (annualized) 1.15 % 1.01 % 1.23 % 1.23 % 1.22 %
Return on average tangible common stockholders' equity (annualized) (1) 16.30 14.49 17.51 18.12 17.66
Return on average common stockholders' equity (annualized) 10.01 9.03 11.00 11.38 10.94
Non-interest income as a percentage of total revenue 14.89 10.05 13.34 13.28 10.62
Asset quality:
-------------------------------------------------------------------------------------------------
Allowance for credit losses on loans and leases $ $ 641,442 $ $ 635,737 $ $ 635,438 $ $ 628,911 $ $ 613,914
Nonperforming assets 289,254 218,600 218,402 222,215 186,551
Allowance for credit losses on loans and leases / total loans and leases 1.26 % 1.25 % 1.27 % 1.22 % 1.21 %
Net charge-offs / average loans and leases (annualized) 0.29 0.27 0.23 0.16 0.20
Nonperforming loans and leases / total loans and leases 0.56 0.41 0.43 0.42 0.36
Nonperforming assets / total loans and leases plus other real estate owned and repossessed assets 0.57 0.43 0.44 0.43 0.37
Allowance for credit losses on loans and leases / nonperforming loans and leases 226.17 303.39 295.48 287.35 331.81
Other ratios:
-------------------------------------------------------------------------------------------------
Tangible equity (1) 7.54 % 8.12 % 7.62 % 7.62 % 7.55 %
Tangible common equity (1) 7.15 7.73 7.22 7.23 7.15
Tier 1 risk-based capital (2) 11.01 11.62 11.64 11.16 10.93
Total risk-based capital (2) 13.13 13.72 13.79 13.25 12.99
Common equity tier 1 risk-based capital (2) 10.51 11.11 11.12 10.65 10.42
Stockholders' equity / total assets 11.49 11.60 11.21 11.18 11.08
Net interest margin 3.35 3.42 3.49 3.35 3.66
Efficiency ratio (1) 45.25 43.04 41.75 42.20 41.64
Equity and share related:
-------------------------------------------------------------------------------------------------
Common equity $ $ 8,463,519 $ $ 8,406,017 $ $ 7,915,222 $ $ 7,995,747 $ $ 8,010,315
Book value per common share 49.07 48.87 46.00 46.15 45.85
Tangible book value per common share (1) 30.22 32.39 29.48 29.69 29.47
Common stock closing price 50.77 50.76 40.31 37.75 39.42
Dividends declared per common share 0.40 0.40 0.40 0.40 0.40
Common shares issued and outstanding 172,464 172,022 172,056 173,261 174,712
Weighted-average common shares outstanding - Basic 170,445 170,415 171,210 172,739 172,766
Weighted-average common shares outstanding - Diluted 170,704 170,623 171,350 172,803 172,883
(1) See "Non-GAAP to GAAP Reconcilations" section beginning on page 18.
WEBSTER FINANCIAL CORPORATION
Consolidated Balance Sheets (unaudited)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
(In thousands) March 31, March 31, December 31, March 31,
2024 2024 2023 2023
------------------------------------------------------------------- -------------------- -------------------------------------------------- -------------------------------------------------- --------------------------------------------------
Assets:
Cash and due from banks $ $ 322,041 $ $ 429,323 $ $ 201,683
Interest-bearing deposits 1,223,187 1,286,472 2,232,388
Investment securities:
Available-for-sale 8,601,141 8,959,729 7,798,977
Held-to-maturity, net 7,679,891 7,074,588 7,063,223
-------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- --------------------
Total investment securities, net 16,281,032 16,034,317 14,862,200
Loans held for sale 239,763 6,541 210,724
Loans and leases:
Commercial 19,469,014 19,772,102 20,775,337
Commercial real estate 21,869,502 21,157,732 20,513,738
Residential mortgages 8,226,154 8,227,923 8,001,563
Consumer 1,533,972 1,568,295 1,635,885
-------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- --------------------
Total loans and leases 51,098,642 50,726,052 50,926,523
Allowance for credit losses on loans and leases (641,442 ) (635,737 ) (613,914 )
-------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- --------------------
Loans and leases, net 50,457,200 50,090,315 50,312,609
Federal Home Loan Bank and Federal Reserve Bank stock 381,451 326,882 584,724
Premises and equipment, net 423,128 429,561 431,432
Goodwill and other intangible assets, net 3,250,909 2,834,600 2,861,310
Cash surrender value of life insurance policies 1,237,828 1,247,938 1,233,994
Deferred tax assets, net 341,292 369,212 315,525
Accrued interest receivable and other assets 2,003,862 1,890,088 1,597,806
-------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- --------------------
Total assets $ $ 76,161,693 $ $ 74,945,249 $ $ 74,844,395
-------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- --------------------
Liabilities and Stockholders' Equity:
Deposits:
Demand $ $ 10,212,509 $ $ 10,732,516 $ $ 12,007,387
Health savings accounts 8,603,184 8,287,889 8,272,507
Interest-bearing checking 9,498,036 8,994,095 8,560,750
Money market 18,615,031 17,662,826 14,203,858
Savings 6,881,663 6,642,499 7,723,198
Certificates of deposit 5,928,773 5,574,048 3,855,406
Brokered certificates of deposit 1,008,547 2,890,411 674,373
-------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- --------------------
Total deposits 60,747,743 60,784,284 55,297,479
Securities sold under agreements to repurchase and other borrowings 361,886 458,387 306,154
Federal Home Loan Bank advances 3,659,930 2,360,018 8,560,461
Long-term debt 914,520 1,048,820 1,071,413
Accrued expenses and other liabilities 1,730,116 1,603,744 1,314,594
-------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- --------------------
Total liabilities 67,414,195 66,255,253 66,550,101
Preferred stock 283,979 283,979 283,979
Common stockholders' equity 8,463,519 8,406,017 8,010,315
-------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- --------------------
Total stockholders' equity 8,747,498 8,689,996 8,294,294
-------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- --------------------
WEBSTER FINANCIAL CORPORATION
Consolidated Statements of Income (unaudited)
--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Three Months Ended March 31, Three Months Ended March 31, Three Months Ended March 31,
---------------------------------------------------------------- ---------------------------- ------------------------------------------------------------------------------------------------------------------
(In thousands, except per share data) 2024 2024 2023
---------------------------------------------------------------- ---------------------------- ----------------------------------------------- -----------------------------------------------
Interest income:
Interest and fees on loans and leases $ $ 792,045 $ $ 716,356
Interest on investment securities 147,585 99,250
Loans held for sale 82 16
Other interest and dividends 12,138 15,306
---------------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
Total interest income 951,850 830,928
---------------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
Interest expense:
Deposits 335,971 150,204
Borrowings 48,140 85,441
---------------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
Total interest expense 384,111 235,645
---------------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
Net interest income 567,739 595,283
Provision for credit losses 45,500 46,749
---------------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
Net interest income after provision for loan and lease losses 522,239 548,534
---------------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
Non-interest income:
Deposit service fees 42,589 45,436
Loan and lease related fees 19,767 23,005
Wealth and investment services 7,924 6,587
Cash surrender value of life insurance policies 5,946 6,728
(Loss) on sale of investment securities (9,826 ) (16,747 )
Other income 32,953 5,757
---------------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
Total non-interest income 99,353 70,766
---------------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
Non-interest expense:
Compensation and benefits 188,540 173,200
Occupancy 19,439 20,171
Technology and equipment 45,836 44,366
Marketing 4,281 3,476
Professional and outside services 12,981 32,434
Intangible assets amortization 9,194 9,497
Deposit insurance 24,223 12,323
Other expenses 31,429 37,000
---------------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
Total non-interest expense 335,923 332,467
---------------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
Income before income taxes 285,669 286,833
Income tax expense 69,346 65,829
---------------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
Net income 216,323 221,004
Preferred stock dividends (4,163 ) (4,163 )
---------------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
Net income available to common stockholders $ $ 212,160 $ $ 216,841
---------------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
Weighted-average common shares outstanding - Diluted 170,704 172,883
Earnings per common share:
Basic $ $ 1.23 $ $ 1.24
WEBSTER FINANCIAL CORPORATION
Five Quarter Consolidated Statements of Income (unaudited)
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Three Months Ended Three Months Ended Three Months Ended
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(In thousands, except per share data) March 31, March 31, December 31, September 30, June 30, March 31,
2024 2024 2023 2023 2023 2023
---------------------------------------------------------------- -------------------- ----------------------------------------------- ----------------------------------------------- ----------------------------------------------- ----------------------------------------------- -----------------------------------------------
Interest income:
Interest and fees on loans and leases $ $ 792,045 $ $ 789,423 $ $ 793,626 $ $ 771,973 $ $ 716,356
Interest on investment securities 147,585 128,924 113,395 109,319 99,250
Loans held for sale 82 280 17 421 16
Other interest and dividends 12,138 14,520 23,751 51,683 15,306
-------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
Total interest income 951,850 933,147 930,789 933,396 830,928
-------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
Interest expense:
Deposits 335,971 325,793 293,955 251,466 150,204
Borrowings 48,140 36,333 49,698 98,101 85,441
-------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
Total interest expense 384,111 362,126 343,653 349,567 235,645
-------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------