(MENAFNEditorial) -- Webster Financial Corporation (NYSE: WBS), the holding company for Webster Bank, N.A., today announced earnings applicable to common shareholders of $55.5 million, or $0.60 per diluted share, for the quarter ended December 31, 2016 compared to $49.6 million, or $0.54 per diluted share, for the quarter ended December 31, 2015.
For the full year 2016, net income available to common shareholders was $198.4 million, or $2.16 per diluted share, compared to $195.4 million, or $2.14 per diluted share, for the full year 2015.
"I am pleased to report that Webster finished its best year ever with a strong fourth quarter. Record quarterly loan originations of $1.8 billion coupled with a modest increase in the net interest margin contributed to Webster's 29th consecutive quarter of year-over-year revenue growth and our 18th consecutive quarter of double-digit year-over-year commercial loan growth," said James C. Smith, chairman and chief executive officer. "Credit quality remains strong with net charge-offs on loans at their lowest level in nearly a decade. Our solid results showcase our sustained progress in executing sound growth strategies that maximize value for our customers and shareholders."
Highlights for the fourth quarter of 2016 compared to the fourth quarter of 2015:
Revenue of $255.9 million, an increase of 9.8 percent, including record levels of net interest income of $185.3 million and non-interest income of $70.6 million, which includes a one-time gain on the sale of an asset. Loan growth of $1.4 billion, or 8.6 percent, with growth of $1.2 billion in commercial and commercial real estate loans. Deposit growth of $1.4 billion, or 7.5 percent, with growth of $1.0 billion in transactional and health savings account deposits. Net charge-off ratio of 0.15 percent. Annualized return on average tangible common shareholders' equity (non-GAAP) of 12.31 percent. "Our focus remains the same," said Glenn MacInnes, executive vice president and chief financial officer. "We continue to have a disciplined approach in investing in our business to achieve consistent long-term growth and increase shareholder value."
Quarterly net interest income compared to the fourth quarter of 2015:
Net interest income was $185.3 million compared to $173.3 million. Net interest margin was 3.11 percent compared to 3.08 percent. The yield on interest-earning assets increased by 3 basis points, while the cost of funds remained flat. Average interest-earning assets totaled $24.1 billion and grew by $1.4 billion, or 6.3 percent. Average loans totaled $16.8 billion and grew by $1.3 billion, or 8.4 percent. Quarterly provision for loan losses:
The Company recorded a provision for loan losses of $12.5 million compared to $14.3 million in the prior quarter and $13.8 million a year ago. Net charge-offs were $6.1 million compared to $6.8 million in the prior quarter and $11.8 million a year ago. The ratio of net charge-offs to average loans on an annualized basis was 0.15 percent compared to 0.16 percent in the prior quarter and 0.31 percent a year ago. The allowance for loan losses represented 1.14 percent of total loans compared to 1.13 percent at September 30, 2016 and 1.12 percent at December 31, 2015. The allowance for loan losses represented 145 percent of nonperforming loans compared to 147 percent at September 30, 2016 and 125 percent at December 31, 2015. Quarterly non-interest income compared to the fourth quarter of 2015:
Total non-interest income was $70.6 million compared to $59.7 million, an increase of $10.9 million. The increase reflects income from a one-time gain on the sale of an asset of $7.3 million and increases of $1.5 million in deposit service fees and $1.2 million in loan fees. Quarterly non-interest expense compared to the fourth quarter of 2015:
Total non-interest expense was $161.9 million compared to $143.8 million, an increase of $18.1 million. The increase reflects added expenses of $4.8 million related to the Boston expansion, $3.2 million related to direct expense growth at HSA Bank, $2.3 million in occupancy expense, $1.6 million in marketing expense, and $1.4 million in technology and equipment. The remaining increase reflects compensation expense primarily related to variable deferred compensation driven by Webster's higher share price. Quarterly income taxes compared to the fourth quarter of 2015:
Income tax expense was $23.8 million compared to $23.6 million, and the effective tax rate was 29.3 percent compared to 31.3 percent. A portion of the one-time gain noted above is treated as capital for tax purposes which allowed the Company to recognize as a benefit in the quarter a reduction in the valuation allowance on its deferred tax assets applicable to capital losses. Excluding the tax effects associated with the one-time asset gain noted above, the effective tax rate would have been 32.2 percent in the quarter. Investment securities:
Total investment securities were $7.2 billion compared to $7.1 billion at September 30, 2016 and $6.9 billion at December 31, 2015. The carrying value of the available-for-sale portfolio included $24.7 million of net unrealized losses compared to $21.4 million of net unrealized gains at September 30, 2016 and $10.3 million of net unrealized losses at December 31, 2015, while the carrying value of the held-to-maturity portfolio does not reflect $35.5 million of net unrealized losses compared to $87.6 million of net unrealized gains at September 30, 2016 and $38.5 million of net unrealized gains at December 31, 2015. Loans:
Total loans were $17.0 billion compared to $16.6 billion at September 30, 2016 and $15.7 billion at December 31, 2015. Compared to September 30, 2016, commercial, commercial real estate, and residential mortgage loans increased by $175.1 million, $230.3 million, and $20.6 million, respectively, while consumer loans decreased by $22.8 million. Compared to a year ago, commercial, commercial real estate, and residential mortgage loans increased by $660.0 million, $519.2 million, and $193.7 million, respectively, while consumer loans decreased by $18.1 million. Loan originations for portfolio were $1.686 billion compared to $1.204 billion in the prior quarter and $1.534 billion a year ago. In addition, $132 million of residential loans were originated for sale in the quarter compared to $138 million in the prior quarter and $98 million a year ago. Asset quality:
Total nonperforming loans were $134.0 million, or 0.79 percent of total loans, compared to $128.2 million, or 0.77 percent, at September 30, 2016 and $139.9 million, or 0.89 percent, at December 31, 2015. Total paying nonperforming loans were $38.4 million compared to $34.5 million at September 30, 2016 and $48.7 million at December 31, 2015. Past due loans were $42.0 million compared to $39.2 million at September 30, 2016 and $39.2 million at December 31, 2015. Included in past due loans are loans past due 90 days or more and still accruing, which decreased $4.7 million from the prior quarter and $1.3 million from the prior year. Deposits and borrowings:
Total deposits were $19.3 billion compared to $19.2 billion at September 30, 2016 and $18.0 billion at December 31, 2015. Core deposits to total deposits were 89.5 percent compared to 89.5 percent at September 30, 2016 and 88.4 percent at December 31, 2015. Loans to deposits were 88.2 percent compared to 86.6 percent at September 30, 2016 and 87.3 percent at December 31, 2015. Total borrowings were $4.0 billion compared to $3.6 billion at September 30, 2016 and $4.0 billion at December 31, 2015. Capital:
The return on average tangible common shareholders' equity and the return on average common shareholders' equity were 12.31 percent and 9.26 percent, respectively, compared to 11.82 percent and 8.67 percent, respectively, in the fourth quarter of 2015. The tangible equity and tangible common equity ratios were 7.67 percent and 7.19 percent, respectively, compared to 7.63 percent and 7.12 percent, respectively, at December 31, 2015. The common equity tier 1 risk-based capital ratio was 10.51 percent compared to 10.70 percent at December 31, 2015. Book value and tangible book value per common share were $26.17 and $19.94, respectively, compared to $24.99 and $18.69, respectively, at December 31, 2015. Webster Financial Corporation is the holding company for Webster Bank, National Association. With $26.1 billion in assets, Webster provides business and consumer banking, mortgage, financial planning, trust, and investment services through 175 banking centers and 350 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 2016 fourth quarter earnings announcement will be held today, Thursday, January 19, 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-Kand 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)
December 31,
2016
September 30,
2016
June 30,
2016
March 31,
2016
December 31,
2015
Income and performance ratios:
Net income
$ 57,660
$ 51,817
$ 50,603
$ 47,047
$ 51,812
Earnings applicable to common shareholders
55,501
49,634
48,398
44,921
49,646
Earnings per diluted common share
0.60
0.54
0.53
0.49
0.54
Return on average assets
0.89 %
0.82 %
0.81 %
0.76 %
0.85 %
Return on average tangible common shareholders' equity (non-GAAP)
12.31
11.24
11.25
10.63
11.82
Return on average common shareholders' equity
9.26
8.36
8.31
7.80
8.67
Non-interest income as a percentage of total revenue
27.60
26.93
26.89
26.15
25.61
Asset quality:
Allowance for loan and lease losses
$ 194,320
$ 187,925
$ 180,428
$ 174,201
$ 174,990
Nonperforming assets
137,946
132,350
137,347
145,787
144,970
Allowance for loan and lease losses / total loans and leases
1.14 %
1.13 %
1.11 %
1.10 %
1.12 %
Net charge-offs / average loans and leases (annualized)
0.15
0.16
0.19
0.41
0.31
Nonperforming loans and leases / total loans and leases
0.79
0.77
0.82
0.89
0.89
Nonperforming assets / total loans and leases plus OREO
0.81
0.80
0.84
0.92
0.92
Allowance for loan and lease losses / nonperforming loans and leases
144.98
146.57
135.75
123.79
125.05
Other ratios:
Tangible equity (non-GAAP)
7.67 %
7.74 %
7.75 %
7.63 %
7.63 %
Tangible common equity (non-GAAP)
7.19
7.25
7.25
7.13
7.12
Tier 1 risk-based capital (a)
11.18
11.16
11.19
11.33
11.53
Total risk-based capital (a)
12.67
12.64
12.66
12.80
12.91
Common equity tier 1 risk-based capital (a)
10.51
10.48
10.50
10.61
10.70
Shareholders' equity / total assets
9.70
9.80
9.86
9.77
9.80
Net interest margin
3.11
3.10
3.08
3.11
3.08
Efficiency ratio (non-GAAP)
63.13
61.43
61.47
62.00
60.30
Equity and share related:
Common equity
$ 2,404,302
$ 2,388,919
$ 2,354,256
$ 2,312,076
$ 2,291,250
Book value per common share
26.17
26.06
25.68
25.24
24.99
Tangible book value per common share (non-GAAP)
19.94
19.80
19.41
18.95
18.69
Common stock closing price
54.28
38.01
33.95
35.90
37.19
Dividends declared per common share
0.25
0.25
0.25
0.23
0.23
Common shares issued and outstanding
91,868
91,687
91,677
91,617
91,677
Weighted-average common shares outstanding - Basic
91,572
91,365
91,244
91,328
91,419
Weighted-average common shares outstanding - Diluted
92,099
91,857
91,745
91,809
91,956
(a) Presented as projected for December 31, 2016 and actual for the remaining periods.
WEBSTER FINANCIAL CORPORATION
Consolidated Balance Sheets (unaudited)
(In thousands)
December 31,
2016
September 30,
2016
December 31,
2015 (a) (b)
Assets:
Cash and due from banks
$ 190,663
$ 199,989
$ 199,693
Interest-bearing deposits
29,461
21,938
155,907
Securities:
Available for sale
2,991,091
3,040,111
2,984,631
Held to maturity
4,160,658
4,022,332
3,923,052
Total securities
7,151,749
7,062,443
6,907,683
Loans held for sale
67,577
66,578
37,091
Loans and Leases:
Commercial
5,576,560
5,401,498
4,916,525
Commercial real estate
4,510,846
4,280,513
3,991,649
Residential mortgages
4,254,682
4,234,047
4,061,001
Consumer
2,684,500
2,707,343
2,702,560
Total loans and leases
17,026,588
16,623,401
15,671,735
Allowance for loan and lease losses
(194,320)
(187,925)
(174,990)
Loans and leases, net
16,832,268
16,435,476
15,496,745
Federal Home Loan Bank and Federal Reserve Bank stock
194,646
185,104
188,347
Premises and equipment, net
137,413
137,067
129,426
Goodwill and other intangible assets, net
572,047
573,129
577,699
Cash surrender value of life insurance policies
517,852
514,153
503,093
Deferred tax asset, net
84,391
73,228
101,578
Accrued interest receivable and other assets
286,597
364,512
343,856
Total Assets
$ 26,064,664
$ 25,633,617
$ 24,641,118
Liabilities and Shareholders' Equity:
Deposits:
Demand
$ 4,021,061
$ 3,993,750
$ 3,713,063
Interest-bearing checking
2,528,274
2,429,222
2,369,971
Health savings accounts
4,362,503
4,187,823
3,802,313
Money market
2,047,121
2,342,236
1,933,460
Savings
4,320,090
4,226,934
4,047,817
Certificates of deposit
1,724,906
1,721,056
1,762,847
Brokered certificates of deposit
299,902
299,887
323,307
Total deposits
19,303,857
19,200,908
17,952,778
Securities sold under agreements to repurchase and other borrowings
949,526
800,705
1,151,400
Federal Home Loan Bank advances
2,842,908
2,587,983
2,664,139
Long-term debt
225,514
225,450
225,260
Accrued expenses and other liabilities
215,847
306,942
233,581
Total liabilities
23,537,652
23,121,988
22,227,158
Preferred stock
122,710
122,710
122,710
Common shareholders' equity
2,404,302
2,388,919
2,291,250
Total shareholders' equity
2,527,012
2,511,629
2,413,960
Total Liabilities and Shareholders' Equity
$ 26,064,664
$ 25,633,617
$ 24,641,118
(a) A policy election was made effective in the first quarter 2016 to account for loans originated for sale under the fair value option of ASU 820. The loans held for sale balance does not reflect this policy at December 31, 2015.
(b) Certain previously reported informationhas been modified to reflect immaterial corrections to HSA Bank results.
WEBSTER FINANCIAL CORPORATION
Consolidated Statements of Income (unaudited)
Three Months Ended December 31,
Twelve Months Ended December 31,
(In thousands, except per share data)
2016
2015
2016
2015 (a)
Interest income:
Interest and fees on loans and leases
$ 161,978
$ 145,504
$ 621,028
$ 552,441
Interest and dividends on securities
49,011
52,365
199,436
206,009
Loans held for sale
443
291
1,449
1,590
Total interest income
211,432
198,160
821,913
760,040
Interest expense:
Deposits
12,591
11,476
49,858
46,031
Borrowings
13,582
13,344
53,542
49,384
Total interest expense
26,173
24,820
103,400
95,415
Net interest income
185,259
173,340
718,513
664,625
Provision for loan and lease losses
12,500
13,800
56,350
49,300
Net interest income after provision for loan and lease losses
172,759
159,540
662,163
615,325
Non-interest income:
Deposit service fees
35,132
33,675
140,685
135,057
Loan and lease related fees
7,065
5,881
30,113
25,594
Wealth and investment services
6,970
8,052
28,962
32,486
Mortgage banking activities
2,253
2,276
11,103
7,795
Increase in cash surrender value of life insurance policies
3,699
3,383
14,759
13,020
Gain on investment securities, net
—
80
414
609
Other income
15,498
6,360
38,591
23,326
70,617
59,707
264,627
237,887
Impairment loss on securities recognized in earnings
—
(28)
(149)
(110)
Total non-interest income
70,617
59,679
264,478
237,777
Non-interest expense:
Compensation and benefits
88,038
79,232
331,726
297,517
Occupancy
16,195
11,573
60,294
48,836
Technology and equipment
20,815
19,834
79,882
80,813
Marketing
5,488
3,533
19,703
16,053
Professional and outside services
3,441
2,932
14,801
11,156
Intangible assets amortization
1,082
1,588
5,652
6,340
Loan workout expenses
378
775
3,006
3,173
Deposit insurance
6,410
6,242
26,006
24,042
Other expenses
20,024
18,071
82,121
67,411
Total non-interest expense
161,871
143,780
623,191
555,341
Income before income taxes
81,505
75,439
303,450
297,761
Income tax expense
23,845
23,627
96,323
93,032
Net income
57,660
51,812
207,127
204,729
Preferred stock dividends and other
(2,159)
(2,166)
(8,704)
(9,368)
Earnings applicable to common shareholders
$ 55,501
$ 49,646
$ 198,423
$ 195,361
Weighted-average common shares outstanding - Diluted
92,099
91,956
91,856
91,533
Earnings per common share:
Basic
$ 0.61
$ 0.54
$ 2.17
$ 2.16
Diluted
0.60
0.54
2.16
2.14
(a) Certain previously reported information has been modified to reflect immaterial corrections to HSA Bank results.
WEBSTER FINANCIAL CORPORATION
Five Quarter Consolidated Statements of Income (unaudited)
Three Months Ended
(In thousands, except per share data)
December 31,
2016
September 30,
2016
June 30,
2016
March 31,
2016
December 31,
2015
Interest income:
Interest and fees on loans and leases
$ 161,978
$ 157,071
$ 152,171
$ 149,808
$ 145,504
Interest and dividends on securities
49,011
48,204
49,967
52,254
52,365
Loans held for sale
443
440
293
273
291
Total interest income
211,432
205,715
202,431
202,335
198,160
Interest expense:
Deposits
12,591
12,594
12,374
12,299
11,476
Borrowings
13,582
12,924
13,152
13,884
13,344
Total interest expense
26,173
25,518
25,526
26,183
24,820
Net interest income
185,259
180,197
176,905
176,152
173,340
Provision for loan and lease losses
12,500
14,250
14,000
15,600
13,800
Net interest income after provision for loan and lease losses
172,759
165,947
162,905
160,552
159,540
Non-interest income:
Deposit service fees
35,132
35,734
34,894
34,925
33,675
Loan and lease related fees
7,065
10,299
7,074
5,675
5,881
Wealth and investment services
6,970
7,593
7,204
7,195
8,052
Mortgage banking activities
2,253
3,276
2,945
2,629
2,276
Increase in cash surrender value of life insurance policies
3,699
3,743
3,664
3,653
3,383
Gain on investment securities, net
—
—
94
320
80
Other income
15,498
5,767
9,200
8,126
6,360
70,617
66,412
65,075
62,523
59,707
Impairment loss on securities recognized in earnings
—
—
—
(149)
(28)
Total non-interest income
70,617
66,412
65,075
62,374
59,679
Non-interest expense:
Compensation and benefits
88,038
83,148
80,231
80,309
79,232
Occupancy
16,195
15,004
14,842
14,253
11,573
Technology and equipment
20,815
19,753
19,376
19,938
19,834
Marketing
5,488
4,622
4,669
4,924
3,533
Professional and outside services
3,441
4,795
3,754
2,811
2,932
Intangible assets amortization
1,082
1,493
1,523
1,554
1,588
Loan workout expenses
378
1,133
530
965
775
Deposit insurance
6,410
6,177
6,633
6,786
6,242
Other expenses
20,024
19,972
21,220
20,905
18,071
Total non-interest expense
161,871
156,097
152,778
152,445
143,780
Income before income taxes
81,505
76,262
75,202
70,481
75,439
Income tax expense
23,845
24,445
24,599
23,434
23,627
Net income
57,660
51,817
50,603
47,047
51,812
Preferred stock dividends and other
(2,159)
(2,183)
(2,205)
(2,126)
(2,166)
Earnings applicable to common shareholders
$ 55,501
$ 49,634
$ 48,398
$ 44,921
$ 49,646
Weighted-average common shares outstanding - Diluted
92,099
91,857
91,745
91,809
91,956
Earnings per common share:
Basic
$ 0.61
$ 0.54
$ 0.53
$ 0.49
$ 0.54
Diluted
0.60
0.54
0.53
0.49
0.54
WEBSTER FINANCIAL CORPORATION
Consolidated Average Balances, Interest, Yields and Rates, and Net Interest Margin on a Fully Tax-equivalent Basis (unaudited)
Three Months Ended December 31,
2016
2015
(Dollars in thousands)
Average balance
Interest
Yield/rate
Average balance
Interest
Yield/rate
Assets:
Interest-earning assets:
Loans and leases
$ 16,755,408
$ 162,901
3.84 %
$ 15,452,576
$ 146,091
3.73 %
Securities (a)
7,058,135
50,187
2.85
6,930,635
52,591
3.04
Federal Home Loan and Federal Reserve Bank stock
189,338
1,724
3.62
186,367
1,862
3.96
Interest-bearing deposits
57,912
79
0.53
87,019
63
0.28
Loans held for sale
55,938
443
3.16
33,021
291
3.53
Total interest-earning assets
24,116,731
$ 215,334
3.54 %
22,689,618
$ 200,898
3.51 %
Non-interest-earning assets (b)
1,708,317
1,674,978
Total Assets
$ 25,825,048
$ 24,364,596
Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Demand deposits
$ 4,005,076
$ —
—%
$ 3,693,704
$ —
—%
Savings, interest checking, and money market deposits
13,257,671
6,850
0.21
12,072,461
5,686
0.19
Certificates of deposit
2,026,121
5,741
1.13
2,066,989
5,790
1.11
Total deposits
19,288,868
12,591
0.26
17,833,154
11,476
0.26
Securities sold under agreements to repurchase and other borrowings
960,960
3,529
1.44
1,132,700
4,150
1.43
Federal Home Loan Bank advances
2,631,478
7,516
1.12
2,566,447
6,759
1.03
Long-term debt
225,478
2,537
4.50
226,337
2,435
4.30
Total borrowings
3,817,916
13,582
1.40
3,925,484
13,344
1.34
Total interest-bearing liabilities
23,106,784
$ 26,173
0.45 %
21,758,638
$ 24,820
0.45 %
Non-interest-bearing liabilities (b)
192,165
185,366
Total liabilities
23,298,949
21,944,004
Preferred stock
122,710
122,710
Common shareholders' equity
2,403,389
2,297,882
Total shareholders' equity (b)
2,526,099
2,420,592
Total Liabilities and Shareholders' Equity
$ 25,825,048
$ 24,364,596
Tax-equivalent net interest income
189,161
176,078
Less: tax-equivalent adjustments
(3,902)
(2,738)
Net interest income
$ 185,259
$ 173,340
Net interest margin
3.11 %
3.08 %
(a) For purposes of the yield computation, unrealized gains (losses) on securities available for sale are excluded from the average balance.
(b) Previously reported 2015 average balance has been modified to reflect immaterial corrections, for cash collateral related to derivatives, and to HSA Bank results.
WEBSTER FINANCIAL CORPORATION
Consolidated Average Balances, Interest, Yields and Rates, and Net Interest Margin on a Fully Tax-equivalent Basis (unaudited)
Twelve Months Ended December 31,
2016
2015
(Dollars in thousands)
Average balance
Interest
Yield/rate
Average balance
Interest
Yield/rate
Assets:
Interest-earning assets:
Loans and leases
$ 16,266,101
$ 624,300
3.84 %
$ 14,746,168
$ 554,632
3.76 %
Securities (a)
6,910,649
203,467
2.95
6,846,297
207,675
3.04
Federal Home Loan and Federal Reserve Bank stock
188,854
6,039
3.20
188,631
6,479
3.43
Interest-bearing deposits
57,747
295
0.51
107,569
281
0.26
Loans held for sale
44,560
1,449
3.25
41,101
1,590
3.87
Total interest-earning assets
23,467,911
$ 835,550
3.56 %
21,929,766
$ 770,657
3.52 %
Non-interest-earning assets (b)
1,753,316
1,625,196
Total Assets
$ 25,221,227
$ 23,554,962
Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Demand deposits
$ 3,853,700
$ —
—%
$ 3,564,751
$ —
—%
Savings, interest checking, and money market deposits
13,072,577
27,331
0.21
11,846,049
21,472
0.18
Certificates of deposit
2,027,029
22,527
1.11
2,138,778
24,559
1.15
Total deposits
18,953,306
49,858
0.26
17,549,578
46,031
0.26
Securities sold under agreements to repurchase and other borrowings
947,858
14,528
1.53
1,144,963
16,861
1.47
Federal Home Loan Bank advances
2,413,309
29,033
1.20
2,084,496
22,858
1.10
Long-term debt
225,607
9,981
4.42
226,292
9,665
4.27
Total borrowings
3,586,774
53,542
1.49
3,455,751
49,384
1.43
Total interest-bearing liabilities
22,540,080
$ 103,400
0.46 %
21,005,329
$ 95,415
0.45 %
N on-interest-bearing liabilities (b)
199,730
162,347
Total liabilities
22,739,810
21,167,676
Preferred stock
122,710
134,682
Common shareholders' equity
2,358,707
2,252,604
Total shareholders' equity (b)
2,481,417
2,387,286
Total Liabilities and Shareholders' Equity
$ 25,221,227
$ 23,554,962
Tax-equivalent net interest income
732,150
675,242
Less: tax-equivalent adjustments
(13,637)
(10,617)
Net interest income
$ 718,513
$ 664,625
Net interest margin
3.12 %
3.08 %
(a) For purposes of the yield computation, unrealized gains (losses) on securities available for sale are excluded from the average balance.
(b) Previously reported 2015 average balance has been modified to reflect immaterial corrections, for cash collateral related to derivatives, and to HSA Bank results.
WEBSTER FINANCIAL CORPORATION
Five Quarter Loan and Lease Balances (unaudited)
(Dollars in thousands)
December 31,
2016
September 30,
2016
June 30,
2016
March 31,
2016
December 31,
2015
Loan and Lease Balances (actuals):
Continuing Portfolio:
Commercial non-mortgage
$ 4,135,625
$ 3,976,931
$ 3,798,436
$ 3,607,176
$ 3,562,784
Equipment financing
635,629
621,696
618,343
596,572
600,526
Asset-based lending
805,306
802,871
779,046
771,584
753,215
Commercial real estate
4,510,846
4,280,513
4,191,087
4,046,911
3,991,649
Residential mortgages
4,254,682
4,234,047
4,156,665
4,109,243
4,061,001
Consumer
2,619,525
2,637,773
2,655,504
2,649,644
2,622,998
Total continuing portfolio
16,961,613
16,553,831
16,199,081
15,781,130
15,592,173
Allowance for loan and lease losses
(189,238)
(182,472)
(174,693)
(167,769)
(167,626)
Total continuing portfolio, net
16,772,375
16,371,359
16,024,388
15,613,361
15,424,547
Liquidating Portfolio:
Consumer
64,975
69,570
72,948
77,225
79,562
Allowance for loan and lease losses
(5,082)
(5,453)
(5,735)
(6,432)
(7,364)
Total liquidating portfolio, net
59,893
64,117
67,213
70,793
72,198
Total Loan and Lease Balances (actuals)
17,026,588
16,623,401
16,272,029
15,858,355
15,671,735
Allowance for loan and lease losses
(194,320)
(187,925)
(180,428)
(174,201)
(174,990)
Loans and Leases, net
$ 16,832,268
$ 16,435,476
$ 16,091,601
$ 15,684,154
$ 15,496,745
Loan and Lease Balances (average):
Continuing Portfolio:
Commercial non-mortgage
$ 4,053,728
$ 3,921,609
$ 3,726,394
$ 3,605,483
$ 3,482,862
Equipment financing
630,546
615,473
607,259
600,123
570,686
Asset-based lending
780,587
744,319
765,605
750,328
721,662
Commercial real estate
4,343,949
4,224,602
4,099,855
4,019,260
3,955,012
Residential mortgages
4,252,106
4,200,357
4,137,879
4,101,396
4,039,341
Consumer
2,626,630
2,645,944
2,667,028
2,643,792
2,601,955
Total continuing portfolio
16,687,546
16,352,304
16,004,020
15,720,382
15,371,518
Allowance for loan and lease losses
(187,483)
(180,433)
(175,100)
(173,479)
(170,724)
Total continuing portfolio, net
16,500,063
16,171,871
15,828,920
15,546,903
15,200,794
Liquidating Portfolio:
Consumer
67,862
71,338
75,328
78,515
81,058
Allowance for loan and lease losses
(5,082)
(5,453)
(5,735)
(6,432)
(7,364)
Total liquidating portfolio, net
62,780
65,885
69,593
72,083
73,694
Total Loan and Lease Balances (average)
16,755,408
16,423,642
16,079,348
15,798,897
15,452,576
Allowance for loan and lease losses
(192,565)
(185,886)
(180,835)
(179,911)
(178,088)
Loans and Leases, net
$ 16,562,843
$ 16,237,756
$ 15,898,513
$ 15,618,986
$ 15,274,488
WEBSTER FINANCIAL CORPORATION
Five Quarter Nonperforming Assets (unaudited)
(Dollars in thousands)
December 31,
2016
September 30,
2016
June 30,
2016
March 31,
2016
December 31,
2015
Nonperforming loans and leases:
Continuing Portfolio:
Commercial non-mortgage
$ 38,550
$ 27,398
$ 28,700
$ 32,517
$ 27,086
Equipment financing
225
202
480
868
706
Asset-based lending
—
—
—
—
—
Commercial real estate
10,521
14,379
13,923
15,381
20,211
Residential mortgages
47,201
49,117
52,437
53,700
54,101
Consumer
34,655
34,294
34,016
34,581
33,972
Nonperforming loans and leases - continuing portfolio
131,152
125,390
129,556
137,047
136,076
Liquidating Portfolio:
Consumer
2,883
2,828
3,356
3,675
3,865
Total nonperforming loans and leases
$ 134,035
$ 128,218
$ 132,912
$ 140,722
$ 139,941
Other real estate owned and repossessed assets:
Continuing Portfolio:
Commercial
$ —
$ 308
$ —
$ —
$ —
Repossessed equipment
—
70
220
342
—
Residential
2,625
2,987
3,395
3,329
3,788
Consumer
1,286
767
820
1,394
1,241
Total other real estate owned and repossessed assets
$ 3,911
$ 4,132
$ 4,435
$ 5,065
$ 5,029
Total nonperforming assets
$ 137,946
$ 132,350
$ 137,347
$ 145,787
$ 144,970
WEBSTER FINANCIAL CORPORATION
Five Quarter Past Due Loans and Leases (unaudited)
(Dollars in thousands)
December 31,
2016
September 30,
2016
June 30,
2016
March 31,
2016
December 31,
2015
Past due 30-89 days:
Continuing Portfolio:
Commercial non-mortgage
$ 1,949
$ 2,522
$ 2,050
$ 7,265
$ 4,052
Equipment financing
1,596
3,477
404
594
602
Asset-based lending
—
—
—
—
—
Commercial real estate
8,173
1,229
3,017
20,730
2,250
Residential mortgages
11,202
11,081
9,632
10,456
15,032
Consumer
17,199
14,034
12,541
12,414
14,225
Past due 30-89 days - continuing portfolio
40,119
32,343
27,644
51,459
36,161
Liquidating Portfolio:
Consumer
1,094
1,415
1,304
819
1,036
Total past due 30-89 days
41,213
33,758
28,948
52,278
37,197
Past due 90 days or more and accruing
749
5,459
5,738
3,391
2,051
Total past due loans and leases
$ 41,962
$ 39,217
$ 34,686
$ 55,669
$ 39,248
WEBSTER FINANCIAL CORPORATION
Five Quarter Changes in the Allowance for Loan and Lease Losses (unaudited)
For the Three Months Ended
(Dollars in thousands)
December 31,
2016
September 30,
2016
June 30,
2016
March 31,
2016
December 31,
2015
Beginning balance
$ 187,925
$ 180,428
$ 174,201
$ 174,990
$ 172,992
Provision
12,500
14,250
14,000
15,600
13,800
Charge-offs continuing portfolio:
Commercial non-mortgage
1,067
2,561
3,525
11,208
6,522
Equipment financing
44
300
70
151
244
Asset-based lending
—
—
—
—
—
Commercial real estate
161
—
995
1,526
1,988
Residential mortgages
1,099
1,304
638
1,594
1,504
Consumer
6,103
5,172
4,193
4,101
4,379
Charge-offs continuing portfolio
8,474
9,337
9,421
18,580
14,637
Charge-offs liquidating portfolio:
NCLC
—
—
—
—
—
Consumer
330
87
363
320
320
Charge-offs liquidating portfolio
330
87
363
320
320
Total charge-offs
8,804
9,424
9,784
18,900
14,957
Recoveries continuing portfolio:
Commercial non-mortgage
439
370
315
455
441
Equipment financing
95
240
156
45
1,083
Asset-based lending
44
—
1
2
38
Commercial real estate
151
194
212
74
325
Residential mortgages
323
534
133
720
115
Consumer
1,063
963
845
905
948
Recoveries continuing portfolio
2,115
2,301
1,662
2,201
2,950
Recoveries liquidating portfolio:
NCLC
25
20
—
1
1
Consumer
559
350
349
309
204
Recoveries liquidating portfolio
584
370
349
310
205
Total recoveries
2,699
2,671
2,011
2,511
3,155
Total net charge-offs
6,105
6,753
7,773
16,389
11,802
Ending balance
$ 194,320
$ 187,925
$ 180,428
$ 174,201
$ 174,990
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)
December 31,
2016
September 30,
2016
June 30,
2016
March 31,
2016
December 31,
2015
Return on average tangible common shareholders' equity:
Net income (GAAP)
$ 57,660
$ 51,817
$ 50,603
$ 47,047
$ 51,812
Less: Preferred stock dividends (GAAP)
2,024
2,024
2,024
2,024
2,024
Add: Intangible assets amortization, tax-affected at 35% (GAAP)
703
970
990
1,010
1,032
Income adjusted for preferred stock dividends and intangible assets amortization (non-GAAP)
$ 56,339
$ 50,763
$ 49,569
$ 46,033
$ 50,820
Income adjusted for preferred stock dividends and intangible assets amortization, annualized basis (non-GAAP)
$ 225,356
$ 203,052
$ 198,276
$ 184,132
$ 203,280
Average shareholders' equity (non-GAAP)
$ 2,526,099
$ 2,503,960
$ 2,460,763
$ 2,432,554
$ 2,420,592
Less: Average preferred stock (non-GAAP)
122,710
122,710
122,710
122,710
122,710
Average goodwill and other intangible assets (non-GAAP)
572,682
573,978
575,483
577,029
578,598
Average tangible common shareholders' equity (non-GAAP)
$ 1,830,707
$ 1,807,272
$ 1,762,570
$ 1,732,815
$ 1,719,284
Return on average tangible common shareholders' equity (non-GAAP)
12.31 %
11.24 %
11.25 %
10.63 %
11.82 %
Efficiency ratio:
Non-interest expense (GAAP)
$ 161,871
$ 156,097
$ 152,778
$ 152,445
$ 143,780
Less: Foreclosed property activity (GAAP)
(90)
45
(123)
(158)
1
Intangible assets amortization (GAAP)
1,082
1,493
1,523
1,554
1,588
Other expenses (non-GAAP)
1,243
793
260
1,217
(108)
Non-interest expense (non-GAAP)
$ 159,636
$ 153,766
$ 151,118
$ 149,832
$ 142,299
Net interest income (GAAP)
$ 185,259
$ 180,197
$ 176,905
$ 176,152
$ 173,340
Add: Tax-equivalent adjustment (non-GAAP)
3,902
3,478
3,282
2,975
2,738
Non-interest income (GAAP)
70,617
66,412
65,075
62,374
59,679
Less: Gain on investment securities, net (GAAP)
—
—
94
320
80
Other (non-GAAP)
(408)
(236)
(655)
(481)
(303)
One-time gain on the sale of an asset (GAAP)
(7,331)
—
—
—
—
Income (non-GAAP)
$ 252,855
$ 250,323
$ 245,823
$ 241,662
$ 235,980
Efficiency ratio (non-GAAP)
63.13 %
61.43 %
61.47 %
62.00 %
60.30 %
Tangible equity:
Shareholders' equity (GAAP)
$ 2,527,012
$ 2,511,629
$ 2,476,966
$ 2,434,786
$ 2,413,960
Less: Goodwill and other intangible assets (GAAP)
572,047
573,129
574,622
576,145
577,699
Tangible shareholders' equity (non-GAAP)
$ 1,954,965
$ 1,938,500
$ 1,902,344
$ 1,858,641
$ 1,836,261
Total assets (GAAP)
$ 26,064,664
$ 25,633,617
$ 25,120,466
$ 24,932,091
$ 24,641,118
Less: Goodwill and other intangible assets (GAAP)
572,047
573,129
574,622
576,145
577,699
Tangible assets (non-GAAP)
$ 25,492,617
$ 25,060,488
$ 24,545,844
$ 24,355,946
$ 24,063,419
Tangible equity (non-GAAP)
7.67 %
7.74 %
7.75 %
7.63 %
7.63 %
Tangible common equity:
Tangible shareholders' equity (non-GAAP)
$ 1,954,965
$ 1,938,500
$ 1,902,344
$ 1,858,641
$ 1,836,261
Less: Preferred stock (GAAP)
122,710
122,710
122,710
122,710
122,710
Tangible common shareholders' equity (non-GAAP)
$ 1,832,255
$ 1,815,790
$ 1,779,634
$ 1,735,931
$ 1,713,551
Tangible assets (non-GAAP)
$ 25,492,617
$ 25,060,488
$ 24,545,844
$ 24,355,946
$ 24,063,419
Tangible common equity (non-GAAP)
7.19 %
7.25 %
7.25 %
7.13 %
7.12 %
Tangible book value per common share:
Tangible common shareholders' equity (non-GAAP)
$ 1,832,255
$ 1,815,790
$ 1,779,634
$ 1,735,931
$ 1,713,551
Common shares outstanding
91,868
91,687
91,677
91,617
91,677
Tangible book value per common share (non-GAAP)
$ 19.94
$ 19.80
$ 19.41
$ 18.95
$ 18.69
Core deposits:
Total deposits
$ 19,303,857
$ 19,200,908
$ 18,828,468
$ 18,724,523
$ 17,952,778
Less: Certificates of deposit
1,724,906
1,721,056
1,701,307
1,727,934
1,762,847
Brokered certificates of deposit
299,902
299,887
299,883
301,131
323,307
Core deposits (non-GAAP)
$ 17,279,049
$ 17,179,965
$ 16,827,278
$ 16,695,458
$ 15,866,624
Media Contact
Investor Contact
Sarah Barr, 203-578-2287
Terry Mangan, 203-578-2318
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/webster-reports-2016-fourth-quarter-earnings-300393328.html
SOURCE Webster Financial Corporation
Related Links
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