18:44:41 EDT Tue 25 Jul 2017
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WEBSTER FINL CORP CONN
Symbol U : WBS
Recent Sedar Documents

Webster Reports 2017 First Quarter Earnings

2017-04-21 07:30 ET - News Release

WATERBURY, Conn., April 21, 2017 /PRNewswire/ -- Webster Financial Corporation (NYSE: WBS), the holding company for Webster Bank, N.A., today announced earnings applicable to common shareholders of $57.3 million, or $0.62 per diluted share, for the quarter ended March 31, 2017 compared to $44.9 million, or $0.49 per diluted share, for the quarter ended March 31, 2016.

"Record net income was driven by $1.1 billion in commercial loan growth year-over-year, fully funded by HSA and transactional account deposit growth," said James C. Smith, chairman and chief executive officer. "Our 30th consecutive quarter of year-over-year revenue growth benefited from rising interest rates. The solid results reflect sustained progress in executing sound growth strategies that maximize value for customers and shareholders."

Highlights for the first quarter of 2017 compared to the first quarter of 2016:

  • Revenue of $255.7 million, an increase of 7.3 percent, including a record level of net interest income of $192.7 million, and non-interest income of $63.0 million.
  • Loan growth of $1.2 billion, or 7.8 percent, with growth of $1.1 billion in commercial and commercial real estate loans.
  • Deposit growth of $1.5 billion, or 8.1 percent, with growth of $1.2 billion in health savings account and transactional deposits.
  • Net charge-off ratio of 0.13 percent.
  • Annualized return on average tangible common shareholders' equity (non-GAAP) of 12.47 percent.
  • Net interest margin of 3.22 percent, up 11 basis points.
  • Effective tax rate of 27 percent benefited from an accounting change.

"We are beginning to realize the transformational benefits of our balance sheet management strategies as evidenced by the 11 basis point increase in the net interest margin," said Glenn MacInnes, executive vice president and chief financial officer. "Credit quality remains stable and we continue to execute on our strategic roadmap, with a disciplined approach to investing in our business, driving sustainable long-term shareholder value."

Quarterly net interest income compared to the first quarter of 2016:

  • Net interest income was $192.7 million compared to $176.2 million.
  • Net interest margin was 3.22 percent compared to 3.11 percent. The yield on interest-earning assets increased by 11 basis points, while the cost of funds remained flat.
  • Average interest-earning assets totaled $24.4 billion and grew by $1.4 billion, or 6.2 percent.
  • Average loans totaled $17.0 billion and grew by $1.2 billion, or 7.9 percent.

Quarterly provision for loan losses:

  • The Company recorded a provision for loan losses of $10.5 million compared to $12.5 million in the prior quarter and $15.6 million a year ago.
  • Net charge-offs were $5.7 million compared to $6.1 million in the prior quarter and $16.4 million a year ago. The ratio of net charge-offs to average loans on an annualized basis was 0.13 percent compared to 0.15 percent in the prior quarter and 0.41 percent a year ago.
  • The allowance for loan losses represented 1.16 percent of total loans compared to 1.14 percent at December 31, 2016 and 1.10 percent at March 31, 2016. The allowance for loan losses represented 115 percent of nonperforming loans compared to 145 percent at December 31, 2016 and 124 percent at March 31, 2016.

Quarterly non-interest income compared to the first quarter of 2016:

  • Total non-interest income was $63.1 million compared to $62.4 million, an increase of $0.7 million. This reflects increases of $2.2 million in loan and lease fees and $2.1 million in deposit service fees offset by a decrease of $2.0 million in HSA other income related to an adjustment of an acquisition receivable and a decrease of $1.8 million in client swap activity.

Quarterly non-interest expense compared to the first quarter of 2016:

  • Total non-interest expense was $163.7 million compared to $152.4 million, an increase of $11.3 million. The increase reflects $7.6 million in compensation and benefits, $1.7 million in technology and equipment, $1.5 million in professional and outside services, and $1.1 million due to continued facility optimization, offset by a slight decline in other expenses.

Quarterly income taxes compared to the first quarter of 2016:

  • Income tax expense was $22.0 million compared to $23.4 million and the effective tax rate was 27.0 percent compared to 33.2 percent.
  • The lower effective tax rate in the quarter resulted from a change in the accounting rules for equity-based compensation that took effect on January 1, 2017, which reduced tax expense in the current quarter by $4.8 million.

Investment securities:

  • Total investment securities were $7.1 billion compared to $7.2 billion at December 31, 2016 and $7.1 billion at March 31, 2016. The carrying value of the available-for-sale portfolio included $28.2 million of net unrealized losses compared to $24.7 million of net unrealized losses at December 31, 2016 and $1.6 million of net unrealized gains at March 31, 2016. The carrying value of the held-to-maturity portfolio does not reflect $41.6 million of net unrealized losses compared to $35.5 million of net unrealized losses at December 31, 2016, and $82.2 million of net unrealized gains at March 31, 2016.

Loans:

  • Total loans were $17.1 billion compared to $17.0 billion at December 31, 2016 and $15.9 billion at March 31, 2016. Compared to December 31, 2016, commercial, commercial real estate, and residential mortgage loans increased by $62.7 million, $19.7 million, and $36.0 million, respectively, while consumer loans decreased by $50.4 million.
  • Compared to a year ago, commercial, commercial real estate, and residential mortgage loans increased by $663.9 million, $483.6 million, and $181.4 million, respectively, while consumer loans decreased by $92.8 million.
  • Loan originations for portfolio were $1.107 billion compared to $1.686 billion in the prior quarter and $0.9 billion a year ago. In addition, $73 million of residential loans were originated for sale in the quarter compared to $132 million in the prior quarter and $73 million a year ago.

Asset quality:

  • Total nonperforming loans were $173.8 million, or 1.02 percent of total loans, compared to $134.0 million, or 0.79 percent, at December 31, 2016 and $140.7 million, or 0.89 percent, at March 31, 2016. Total paying nonperforming loans were $73.5 million compared to $38.4 million at December 31, 2016 and $43.7 million at March 31, 2016.
  • Past due loans were $32.1 million compared to $42.0 million at December 31, 2016 and $55.7 million at March 31, 2016. Included in past due loans are loans past due 90 days or more and still accruing, which were flat with the prior quarter and decreased $2.6 million from the prior year.

Deposits and borrowings:

  • Total deposits were $20.2 billion compared to $19.3 billion at December 31, 2016 and $18.7 billion at March 31, 2016. Core deposits to total deposits were 90.0 percent compared to 89.5 percent at December 31, 2016 and 89.2 percent at March 31, 2016. Loans to deposits were 84.5 percent compared to 88.2 percent at December 31, 2016 and 84.7 percent at March 31, 2016.
  • Total borrowings were $3.0 billion compared to $4.0 billion at December 31, 2016 and $3.5 billion at March 31, 2016.

Capital:

  • The return on average tangible common shareholders' equity and the return on average common shareholders' equity were 12.47 percent and 9.43 percent, respectively, compared to 10.63 percent and 7.80 percent, respectively, in the first quarter of 2016.
  • The tangible equity and tangible common equity ratios were 7.82 percent and 7.34 percent, respectively, compared to 7.63 percent and 7.13 percent, respectively, at March 31, 2016. The common equity tier 1 risk-based capital ratio was 10.73 percent compared to 10.61 percent at March 31, 2016.
  • Book value and tangible book value per common share were $26.45 and $20.26, respectively, compared to $25.24 and $18.95, respectively, at March 31, 2016.

Webster Financial Corporation is the holding company for Webster Bank, National Association. With $26.0 billion in assets, Webster provides business and consumer banking, mortgage, financial planning, trust, and investment services through 175 banking centers and 349 ATMs. Webster also provides mobile and Internet banking. Webster Bank owns the asset-based lending firm Webster Business Credit Corporation; the equipment finance firm Webster Capital Finance Corporation; and HSA Bank, a division of Webster Bank, which provides health savings account trustee and administrative services. 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 2017 first quarter earnings announcement will be held today, Friday, April 21, 2017 at 9:00 a.m. (Eastern) and may be heard through Webster's Investor Relations website at www.wbst.com, or in listen-only mode by calling 877-407-8289 or 201-689-8341 internationally. The call will be archived on the website and available for future retrieval.

Forward-Looking Statements

This release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Act"). Forward-looking statements can be identified by words such as "believes," "anticipates," "expects," "intends," "targeted," "continue," "remain," "will," "should," "may," "plans," "estimates," and similar references to future periods; however, such words are not the exclusive means of identifying such statements. Examples of forward-looking statements include, but are not limited to: (i) projections of revenues, expenses, income or loss, earnings or loss per share, and other financial items; (ii) statements of plans, objectives, and expectations of Webster or its management or Board of Directors; (iii) statements of future economic performance; and (iv) statements of assumptions underlying such statements. Forward-looking statements are based on Webster's current expectations and assumptions regarding its business, the economy, and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict. Webster's actual results may differ materially from those contemplated by the forward-looking statements, which are neither statements of historical fact nor guarantees or assurances of future performance. Factors that could cause actual results to differ from those discussed in the forward-looking statements include, but are not limited to: (1) local, regional, national, and international economic conditions and the impact they may have on us and our customers and our assessment of that impact; (2) volatility and disruption in national and international financial markets; (3) government intervention in the U.S. financial system; (4) changes in the level of nonperforming assets and charge-offs; (5) changes in estimates of future reserve requirements based upon the periodic review thereof under relevant regulatory and accounting requirements; (6) adverse conditions in the securities markets that lead to impairment in the value of securities in our investment portfolio; (7) inflation, interest rate, securities market, and monetary fluctuations; (8) the timely development and acceptance of new products and services and perceived overall value of these products and services by customers; (9) changes in consumer spending, borrowings, and savings habits; (10) technological changes and cyber-security matters; (11) the ability to increase market share and control expenses; (12) changes in the competitive environment among banks, financial holding companies, and other financial services providers; (13) the effect of changes in laws and regulations (including laws and regulations concerning taxes, banking, securities, and insurance) with which we and our subsidiaries must comply, including the Dodd-Frank Wall Street Reform and Consumer Protection Act; (14) the effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Public Company Accounting Oversight Board, the Financial Accounting Standards Board, and other accounting standard setters; (15) the costs and effects of legal and regulatory developments including the resolution of legal proceedings or regulatory or other governmental inquiries and the results of regulatory examinations or reviews; (16) our success at managing the risks involved in the foregoing items and (17) 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 Operation." Any forward-looking statement made by the Company in this release speaks only as of the date on which it is made. Factors or events that could cause the Company's actual results to differ may emerge from time to time, and it is not possible for the Company to predict all of them. The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.

Non-GAAP Financial Measures

In addition to results presented in accordance with GAAP, this press release contains certain non-GAAP financial measures. A reconciliation of net income and other performance ratios, as adjusted, is included in the accompanying selected financial highlights table.

We believe that providing certain non-GAAP financial measures provides investors with information useful in understanding our financial performance, our performance trends and financial position. We utilize these measures for internal planning and forecasting purposes. We, as well as securities analysts, investors, and other interested parties, also use these measures to compare peer company operating performance. We believe that our presentation and discussion, together with the accompanying reconciliations, provides a complete understanding of factors and trends affecting our business and allows investors to view performance in a manner similar to management. These non-GAAP measures should not be considered a substitute for GAAP basis measures and results, and we strongly encourage investors to review our consolidated financial statements in their entirety and not to rely on any single financial measure. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names.

 

 

WEBSTER FINANCIAL CORPORATION
Selected Financial Highlights (unaudited)




At or for the Three Months Ended



(In thousands, except per share data)

March 31,
2017

December 31,
2016

September 30,
2016

June 30,
2016

March 31,
2016











Income and performance ratios:








Net income

$              59,471

$              57,660

$              51,817

$              50,603

$              47,047



Earnings applicable to common shareholders

57,342

55,501

49,634

48,398

44,921



Earnings per diluted common share

0.62

0.60

0.54

0.53

0.49



Return on average assets

0.91 %

0.89 %

0.82 %

0.81 %

0.76 %



Return on average tangible common shareholders' equity (non-GAAP)

12.47

12.31

11.24

11.25

10.63



Return on average common shareholders' equity

9.43

9.26

8.36

8.31

7.80



Non-interest income as a percentage of total revenue

24.65

27.60

26.93

26.89

26.15











Asset quality:








Allowance for loan and lease losses

$            199,107

$            194,320

$            187,925

$            180,428

$            174,201



Nonperforming assets

177,935

137,946

132,350

137,347

145,787



Allowance for loan and lease losses / total loans and leases

1.16 %

1.14 %

1.13 %

1.11 %

1.10 %



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

0.13

0.15

0.16

0.19

0.41



Nonperforming loans and leases / total loans and leases

1.02

0.79

0.77

0.82

0.89



Nonperforming assets / total loans and leases plus OREO

1.04

0.81

0.80

0.84

0.92



Allowance for loan and lease losses / nonperforming loans and leases

114.54

144.98

146.57

135.75

123.79











Other ratios:








Tangible equity (non-GAAP)

7.82 %

7.67 %

7.74 %

7.75 %

7.63 %



Tangible common equity (non-GAAP)

7.34

7.19

7.25

7.25

7.13



Tier 1 risk-based capital (a)

11.40

11.19

11.16

11.19

11.33



Total risk-based capital (a)

12.93

12.68

12.64

12.66

12.80



Common equity tier 1 risk-based capital (a)

10.73

10.52

10.48

10.50

10.61



Shareholders' equity / total assets

9.85

9.69

9.80

9.86

9.77



Net interest margin

3.22

3.11

3.10

3.08

3.11



Efficiency ratio (non-GAAP)

62.10

63.13

61.43

61.47

62.00











Equity and share related:








Common equity

$         2,437,648

$         2,404,302

$         2,388,919

$         2,354,256

$         2,312,076



Book value per common share

26.45

26.17

26.06

25.68

25.24



Tangible book value per common share (non-GAAP)

20.26

19.94

19.80

19.41

18.95



Common stock closing price

50.04

54.28

38.01

33.95

35.90



Dividends declared per common share

0.25

0.25

0.25

0.25

0.23











Common shares issued and outstanding

92,154

91,868

91,687

91,677

91,617



Weighted-average common shares outstanding - Basic

91,886

91,572

91,365

91,244

91,328



Weighted-average common shares outstanding - Diluted

92,342

92,099

91,857

91,745

91,809











(a) Presented as projected for March 31, 2017 and actual for the remaining periods.



WEBSTER FINANCIAL CORPORATION
Consolidated Balance Sheets (unaudited)





(In thousands)

March 31,
2017

December 31,
2016

March 31,
2016





Assets:








Cash and due from banks

$            184,044

$            190,663

$            198,174





Interest-bearing deposits

38,150

29,461

27,805





Securities:








Available for sale

2,897,060

2,991,091

3,080,469





Held to maturity

4,212,050

4,160,658

4,012,289





Total securities

7,109,110

7,151,749

7,092,758





Loans held for sale

28,698

67,577

30,425





Loans and Leases:








Commercial

5,639,244

5,576,560

4,975,332





Commercial real estate

4,530,507

4,510,846

4,046,911





Residential mortgages

4,290,685

4,254,682

4,109,243





Consumer

2,634,063

2,684,500

2,726,869





Total loans and leases

17,094,499

17,026,588

15,858,355





Allowance for loan and lease losses

(199,107)

(194,320)

(174,201)





Loans and leases, net

16,895,392

16,832,268

15,684,154





Federal Home Loan Bank and Federal Reserve Bank stock

163,557

194,646

188,347





Premises and equipment, net

134,551

137,413

134,212





Goodwill and other intangible assets, net

570,992

572,047

576,145





Cash surrender value of life insurance policies

521,427

517,852

506,746





Deferred tax asset, net

76,869

84,391

81,191





Accrued interest receivable and other assets

280,126

294,462

412,134





Total Assets

$       26,002,916

$       26,072,529

$       24,932,091













Liabilities and Shareholders' Equity:








Deposits:








Demand

$         3,913,058

$         4,021,061

$         3,625,605





Interest-bearing checking

2,607,060

2,528,274

2,421,692





Health savings accounts

4,793,734

4,362,503

4,084,190





Money market

2,452,726

2,047,121

2,319,588





Savings

4,456,980

4,320,090

4,244,383





Certificates of deposit

1,718,193

1,724,906

1,727,934





Brokered certificates of deposit

299,906

299,902

301,131





Total deposits

20,241,657

19,303,857

18,724,523





Securities sold under agreements to repurchase and other borrowings

807,573

949,526

910,149





Federal Home Loan Bank advances

1,922,832

2,842,908

2,363,131





Long-term debt

225,577

225,514

225,323





Accrued expenses and other liabilities

244,919

223,712

274,179





Total liabilities

23,442,558

23,545,517

22,497,305





Preferred stock

122,710

122,710

122,710





Common shareholders' equity

2,437,648

2,404,302

2,312,076





Total shareholders' equity

2,560,358

2,527,012

2,434,786





Total Liabilities and Shareholders' Equity

$       26,002,916

$       26,072,529

$       24,932,091





















WEBSTER FINANCIAL CORPORATION
Consolidated Statements of Income (unaudited)






Three Months Ended March 31,




(In thousands, except per share data)



2017

2016




Interest income:








Interest and fees on loans and leases



$            167,808

$            149,808




Interest and dividends on securities



51,556

52,254




Loans held for sale



316

273




Total interest income



219,680

202,335




Interest expense:








Deposits



13,435

12,299




Borrowings



13,581

13,884




Total interest expense



27,016

26,183




Net interest income



192,664

176,152




Provision for loan and lease losses



10,500

15,600




Net interest income after provision for loan and lease losses



182,164

160,552




Non-interest income:








Deposit service fees



37,006

34,925




Loan and lease related fees



7,208

5,044




Wealth and investment services



7,273

7,195




Mortgage banking activities



2,266

3,260




Increase in cash surrender value of life insurance policies



3,575

3,653




Gain on investment securities, net



320




Other income



5,714

8,126







63,042

62,523




Impairment loss on securities recognized in earnings



(149)




Total non-interest income



63,042

62,374




Non-interest expense:








Compensation and benefits



88,276

80,710




Occupancy



16,179

15,069




Technology and equipment



21,608

19,938




Marketing



5,441

4,924




Professional and outside services



4,276

2,811




Intangible assets amortization



1,055

1,554




Loan workout expenses



608

965




Deposit insurance



6,732

6,786




Other expenses



19,609

19,688




Total non-interest expense



163,784

152,445




Income before income taxes



81,422

70,481




Income tax expense



21,951

23,434




Net income



59,471

47,047




Preferred stock dividends and other



(2,129)

(2,126)




Earnings applicable to common shareholders



$              57,342

$              44,921












Weighted-average common shares outstanding - Diluted



92,342

91,809












Earnings per common share:








Basic



$                  0.62

$                  0.49




Diluted



0.62

0.49




















WEBSTER FINANCIAL CORPORATION
Five Quarter Consolidated Statements of Income (unaudited)




Three Months Ended



(In thousands, except per share data)

March 31,
2017

December 31,
2016

September 30,
2016

June 30,
2016

March 31,
2016



Interest income:








Interest and fees on loans and leases

$            167,808

$            161,978

$            157,071

$            152,171

$            149,808



Interest and dividends on securities

51,556

49,011

48,204

49,967

52,254



Loans held for sale

316

443

440

293

273



Total interest income

219,680

211,432

205,715

202,431

202,335



Interest expense:








Deposits

13,435

12,591

12,594

12,374

12,299



Borrowings

13,581

13,582

12,924

13,152

13,884



Total interest expense

27,016

26,173

25,518

25,526

26,183



Net interest income

192,664

185,259

180,197

176,905

176,152



Provision for loan and lease losses

10,500

12,500

14,250

14,000

15,600



Net interest income after provision for loan and lease losses

182,164

172,759

165,947

162,905

160,552



Non-interest income:








Deposit service fees

37,006

35,132

35,734

34,894

34,925



Loan and lease related fees

7,208

6,018

9,253

6,266

5,044



Wealth and investment services

7,273

6,970

7,593

7,204

7,195



Mortgage banking activities

2,266

3,300

4,322

3,753

3,260



Increase in cash surrender value of life insurance policies

3,575

3,699

3,743

3,664

3,653



Gain on investment securities, net

94

320



Other income

5,714

15,498

5,767

9,200

8,126




63,042

70,617

66,412

65,075

62,523



Impairment loss on securities recognized in earnings

(149)



Total non-interest income

63,042

70,617

66,412

65,075

62,374



Non-interest expense:








Compensation and benefits

88,276

88,038

83,148

80,231

80,710



Occupancy

16,179

16,195

15,004

14,842

15,069



Technology and equipment

21,608

20,815

19,753

19,376

19,938



Marketing

5,441

5,488

4,622

4,669

4,924



Professional and outside services

4,276

3,441

4,795

3,754

2,811



Intangible assets amortization

1,055

1,082

1,493

1,523

1,554



Loan workout expenses

608

378

1,133

530

965



Deposit insurance

6,732

6,410

6,177

6,633

6,786



Other expenses

19,609

20,024

19,972

21,220

19,688



Total non-interest expense

163,784

161,871

156,097

152,778

152,445



Income before income taxes

81,422

81,505

76,262

75,202

70,481



Income tax expense

21,951

23,845

24,445

24,599

23,434



Net income

59,471

57,660

51,817

50,603

47,047



Preferred stock dividends and other

(2,129)

(2,159)

(2,183)

(2,205)

(2,126)



Earnings applicable to common shareholders

$              57,342

$              55,501

$              49,634

$              48,398

$              44,921











Weighted-average common shares outstanding - Diluted

92,342

92,099

91,857

91,745

91,809











Earnings per common share:








Basic

$                  0.62

$                  0.61

$                  0.54

$                  0.53

$                  0.49



Diluted

0.62

0.60

0.54

0.53

0.49



















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


Three Months Ended March 31,


2017


2016

(Dollars in thousands)

Average balance

Interest

Yield/rate


Average balance

Interest

Yield/rate

Assets:








Interest-earning assets:








Loans and leases

$       17,041,156

$            168,729

3.97 %


$       15,798,897

$            150,536

3.79 %

Securities (a)

7,071,274

52,851

2.98


6,895,407

53,012

3.07

Federal Home Loan and Federal Reserve Bank stock

182,211

1,687

3.76


188,347

1,417

3.03

Interest-bearing deposits

68,157

130

0.77


57,337

72

0.49

Loans held for sale

36,239

316

3.49


26,623

273

4.10

Total interest-earning assets

24,399,037

$            223,713

3.67 %


22,966,611

$            205,310

3.56 %

Non-interest-earning assets (b)

1,642,732




1,822,608



Total Assets

$       26,041,769




$       24,789,219











Liabilities and Shareholders' Equity:








Interest-bearing liabilities:








Demand deposits

$         3,935,232

$                      —

—%


$         3,665,928

$                     —

—%

Savings, interest checking, and money market deposits

14,060,535

7,780

0.22


12,761,677

6,615

0.21

Certificates of deposit

2,022,522

5,655

1.13


2,057,650

5,684

1.11

Total deposits

20,018,289

13,435

0.27


18,485,255

12,299

0.27









Securities sold under agreements to repurchase and other borrowings

905,239

3,540

1.56


1,048,997

4,173

1.57

Federal Home Loan Bank advances

2,136,804

7,493

1.40


2,337,746

7,247

1.23

Long-term debt

225,541

2,548

4.52


226,191

2,464

4.36

Total borrowings

3,267,584

13,581

1.66


3,612,934

13,884

1.52

Total interest-bearing liabilities

23,285,873

$              27,016

0.47 %


22,098,189

$              26,183

0.47 %

Non-interest-bearing liabilities (b)

196,542




258,476



Total liabilities

23,482,415




22,356,665











Preferred stock

122,710




122,710



Common shareholders' equity

2,436,644




2,309,844



Total shareholders' equity (b)

2,559,354




2,432,554



Total Liabilities and Shareholders' Equity

$       26,041,769




$       24,789,219



Tax-equivalent net interest income


196,697




179,127


Less: tax-equivalent adjustments


(4,033)




(2,975)


Net interest income


$            192,664




$            176,152


Net interest margin



3.22 %




3.11 %









(a) For purposes of the yield computation, unrealized gains (losses) on securities available for sale are excluded from the average balance.

(b) Previously reported 2016 average balance has been modified to reflect immaterial correction to HSA Bank results.

















WEBSTER FINANCIAL CORPORATION
Five Quarter Loan and Lease Balances (unaudited)



(Dollars in thousands)

March 31,
2017

December 31,
2016

September 30,
2016

June 30,
2016

March 31,
2016



Loan and Lease Balances (actuals):








Commercial non-mortgage

$         4,171,246

$         4,135,625

$         3,976,931

$         3,798,436

$         3,607,176



Equipment financing

619,861

635,629

621,696

618,343

596,572



Asset-based lending

848,137

805,306

802,871

779,046

771,584



Commercial real estate

4,530,507

4,510,846

4,280,513

4,191,087

4,046,911



Residential mortgages

4,290,685

4,254,682

4,234,047

4,156,665

4,109,243



Consumer

2,634,063

2,684,500

2,707,343

2,728,452

2,726,869



Total Loan and Lease Balances (actuals)

17,094,499

17,026,588

16,623,401

16,272,029

15,858,355



Allowance for loan and lease losses

(199,107)

(194,320)

(187,925)

(180,428)

(174,201)



Loans and Leases, net

$       16,895,392

$       16,832,268

$       16,435,476

$       16,091,601

$       15,684,154











Loan and Lease Balances (average):








Commercial non-mortgage

$         4,148,625

$         4,053,728

$         3,921,609

$         3,726,394

$         3,605,483



Equipment financing

625,306

630,546

615,473

607,259

600,123



Asset-based lending

845,269

780,587

744,319

765,605

750,328



Commercial real estate

4,479,379

4,343,949

4,224,602

4,099,855

4,019,260



Residential mortgages

4,279,662

4,252,106

4,200,357

4,137,879

4,101,396



Consumer

2,662,915

2,694,492

2,717,282

2,742,356

2,722,307



Total Loan and Lease Balances (average)

17,041,156

16,755,408

16,423,642

16,079,348

15,798,897



Allowance for loan and lease losses

(198,308)

(192,565)

(185,886)

(180,835)

(179,911)



Loans and Leases, net

$       16,842,848

$       16,562,843

$       16,237,756

$       15,898,513

$       15,618,986











Note: The presentation of loan information above, and on the tables that follow, no longer presents liquidating portfolio information separately.



WEBSTER FINANCIAL CORPORATION
Five Quarter Nonperforming Assets (unaudited)



(Dollars in thousands)

March 31,
2017

December 31,
2016

September 30,
2016

June 30,
2016

March 31,
2016



Nonperforming loans and leases:








Commercial non-mortgage

$              74,483

$              38,550

$              27,398

$              28,700

$              32,517



Equipment financing

703

225

202

480

868



Asset-based lending



Commercial real estate

9,793

10,521

14,379

13,923

15,381



Residential mortgages

46,792

47,201

49,117

52,437

53,700



Consumer

42,054

37,538

37,122

37,372

38,256



Total nonperforming loans and leases

$            173,825

$            134,035

$            128,218

$            132,912

$            140,722











Other real estate owned and repossessed assets:








Commercial

$                      —

$                      —

$                   308

$                      —

$                      —



Repossessed equipment

82

70

220

342



Residential

2,296

2,625

2,987

3,395

3,329



Consumer

1,732

1,286

767

820

1,394



Total other real estate owned and repossessed assets

$                4,110

$                3,911

$                4,132

$                4,435

$                5,065



Total nonperforming assets

$            177,935

$            137,946

$            132,350

$            137,347

$            145,787











WEBSTER FINANCIAL CORPORATION
Five Quarter Past Due Loans and Leases (unaudited)



(Dollars in thousands)

March 31,
2017

December 31,
2016

September 30,
2016

June 30,
2016

March 31,
2016



Past due 30-89 days:








Commercial non-mortgage

$                1,685

$                1,949

$                2,522

$                2,050

$                7,265



Equipment financing

1,298

1,596

3,477

404

594



Asset-based lending



Commercial real estate

2,072

8,173

1,229

3,017

20,730



Residential mortgages

11,530

11,202

11,081

9,632

10,456



Consumer

14,762

18,293

15,449

13,845

13,233



Total past due 30-89 days

31,347

41,213

33,758

28,948

52,278



Past due 90 days or more and accruing

747

749

5,459

5,738

3,391



Total past due loans and leases

$              32,094

$              41,962

$              39,217

$              34,686

$              55,669



















WEBSTER FINANCIAL CORPORATION
Five Quarter Changes in the Allowance for Loan and Lease Losses (unaudited)




For the Three Months Ended



(Dollars in thousands)

March 31,
2017

December 31,
2016

September 30,
2016

June 30,
2016

March 31,
2016



Beginning balance

$            194,320

$            187,925

$            180,428

$            174,201

$            174,990



Provision

10,500

12,500

14,250

14,000

15,600



Charge-offs:








Commercial non-mortgage

123

1,067

2,561

3,525

11,208



Equipment financing

185

44

300

70

151



Asset-based lending



Commercial real estate

102

161

995

1,526



Residential mortgages

732

1,099

1,304

638

1,594



Consumer

6,474

6,433

5,259

4,556

4,421



Total charge-offs

7,616

8,804

9,424

9,784

18,900



Recoveries:








Commercial non-mortgage

322

439

370

315

455



Equipment financing

14

95

240

156

45



Asset-based lending

44

1

2



Commercial real estate

7

151

194

212

74



Residential mortgages

237

348

554

133

721



Consumer

1,323

1,622

1,313

1,194

1,214



Total recoveries

1,903

2,699

2,671

2,011

2,511



Total net charge-offs

5,713

6,105

6,753

7,773

16,389



Ending balance

$            199,107

$            194,320

$            187,925

$            180,428

$            174,201











WEBSTER FINANCIAL CORPORATION
Reconciliations to GAAP Financial Measures





The Company evaluates its business based on certain ratios that utilize tangible equity, a non-GAAP financial measure. Return on average tangible common shareholders' equity
measures the Company's net income available to common shareholders, adjusted for the tax-affected amortization of intangible assets, as a percentage of average shareholders' equity
less average preferred stock and average goodwill and intangible assets. The tangible equity ratio represents shareholders' equity less goodwill and intangible assets divided by total
assets less goodwill and intangible assets. The tangible common equity ratio represents shareholders' equity less preferred stock and goodwill and intangible assets divided by total
assets less goodwill and intangible assets. Tangible book value per common share represents shareholders' equity less preferred stock and goodwill and intangible assets divided by
common shares outstanding at the end of the period.



The efficiency ratio, which measures the costs expended to generate a dollar of revenue, is calculated excluding foreclosed property expense, amortization of intangibles, gain or loss on
securities, and other non-recurring items. Core deposits express total deposits less time deposits. Accordingly, these are also non-GAAP financial measures.



The Company believes the use of these non-GAAP financial measures provides additional clarity in assessing the results of the Company. Other companies may define or calculate
supplemental financial data differently. See the tables below for reconciliations of these non-GAAP financial measures with financial measures defined by GAAP.





At or for the Three Months Ended



(In thousands, except per share data)

March 31,
2017

December 31,
2016

September 30,
2016

June 30,
2016

March 31,
2016



Return on average tangible common shareholders' equity:
















Net income (GAAP)

$              59,471

$              57,660

$              51,817

$              50,603

$              47,047



Less: Preferred stock dividends (GAAP)

2,024

2,024

2,024

2,024

2,024



Add: Intangible assets amortization, tax-affected at 35% (GAAP)

686

703

970

990

1,010



Income adjusted for preferred stock dividends and intangible assets amortization
(non-GAAP)

$              58,133

$              56,339

$              50,763

$              49,569

$              46,033



Income adjusted for preferred stock dividends and intangible assets amortization,
annualized basis (non-GAAP)

$            232,532

$            225,356

$            203,052

$            198,276

$            184,132



Average shareholders' equity (non-GAAP)

$         2,559,354

$         2,526,099

$         2,503,960

$         2,460,763

$         2,432,554



Less: Average preferred stock (non-GAAP)

122,710

122,710

122,710

122,710

122,710



Average goodwill and other intangible assets (non-GAAP)

571,611

572,682

573,978

575,483

577,029



Average tangible common shareholders' equity (non-GAAP)

$         1,865,033

$         1,830,707

$         1,807,272

$         1,762,570

$         1,732,815



Return on average tangible common shareholders' equity (non-GAAP)

12.47 %

12.31 %

11.24 %

11.25 %

10.63 %











Efficiency ratio:








Non-interest expense (GAAP)

$            163,784

$            161,871

$            156,097

$            152,778

$            152,445



Less: Foreclosed property activity (GAAP)

74

(90)

45

(123)

(158)



Intangible assets amortization (GAAP)

1,055

1,082

1,493

1,523

1,554



Other expenses (non-GAAP)

1,123

1,243

793

260

1,217



Non-interest expense (non-GAAP)

$            161,532

$            159,636

$            153,766

$            151,118

$            149,832



Net interest income (GAAP)

$            192,664

$            185,259

$            180,197

$            176,905

$            176,152



Add: Tax-equivalent adjustment (non-GAAP)

4,033

3,902

3,478

3,282

2,975



Non-interest income (GAAP)

63,042

70,617

66,412

65,075

62,374



Less: Gain on investment securities, net (GAAP)

94

320



Other (non-GAAP)

(391)

(408)

(236)

(655)

(481)



One-time gain on the sale of an asset (GAAP)

(7,331)



Income (non-GAAP)

$            260,130

$            252,855

$            250,323

$            245,823

$            241,662



Efficiency ratio (non-GAAP)

62.10 %

63.13 %

61.43 %

61.47 %

62.00 %











Tangible equity:
















Shareholders' equity (GAAP)

$         2,560,358

$         2,527,012

$         2,511,629

$         2,476,966

$         2,434,786



Less: Goodwill and other intangible assets (GAAP)

570,992

572,047

573,129

574,622

576,145



Tangible shareholders' equity (non-GAAP)

$         1,989,366

$         1,954,965

$         1,938,500

$         1,902,344

$         1,858,641



Total assets (GAAP)

$       26,002,916

$       26,072,529

$       25,633,617

$       25,120,466

$       24,932,091



Less: Goodwill and other intangible assets (GAAP)

570,992

572,047

573,129

574,622

576,145



Tangible assets (non-GAAP)

$       25,431,924

$       25,500,482

$       25,060,488

$       24,545,844

$       24,355,946



Tangible equity (non-GAAP)

7.82 %

7.67 %

7.74 %

7.75 %

7.63 %











Tangible common equity:
















Tangible shareholders' equity (non-GAAP)

$         1,989,366

$         1,954,965

$         1,938,500

$         1,902,344

$         1,858,641



Less: Preferred stock (GAAP)

122,710

122,710

122,710

122,710

122,710



Tangible common shareholders' equity (non-GAAP)

$         1,866,656

$         1,832,255

$         1,815,790

$         1,779,634

$         1,735,931



Tangible assets (non-GAAP)

$       25,431,924

$       25,500,482

$       25,060,488

$       24,545,844

$       24,355,946



Tangible common equity (non-GAAP)

7.34 %

7.19 %

7.25 %

7.25 %

7.13 %











Tangible book value per common share:
















Tangible common shareholders' equity (non-GAAP)

$         1,866,656

$         1,832,255

$         1,815,790

$         1,779,634

$         1,735,931



Common shares outstanding

92,154

91,868

91,687

91,677

91,617



Tangible book value per common share (non-GAAP)

$                20.26

$                19.94

$                19.80

$                19.41

$                18.95











Core deposits:
















Total deposits

$       20,241,657

$       19,303,857

$       19,200,908

$       18,828,468

$       18,724,523



Less: Certificates of deposit

1,718,193

1,724,906

1,721,056

1,701,307

1,727,934



Brokered certificates of deposit

299,906

299,902

299,887

299,883

301,131



Core deposits (non-GAAP)

$       18,223,558

$       17,279,049

$       17,179,965

$       16,827,278

$       16,695,458



 

Media Contact

Investor Contact

Alice Ferreira, 203-578-2610

Terry Mangan, 203-578-2318

acferreira@websterbank.com

tmangan@websterbank.com

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/webster-reports-2017-first-quarter-earnings-300443336.html

SOURCE Webster Financial Corporation

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