Attached files
| file | filename |
|---|---|
| 8-K - 8-K - WEBSTER FINANCIAL CORP | q4earningsrelease8-k.htm |
Exhibit 99.1
Media Contact | Investor Contact | |||
Bob Guenther, 203-578-2391 | Terry Mangan 203-578-2318 | |||
rguenther@websterbank.com | tmangan@websterbank.com | |||
WEBSTER REPORTS INCREASED 2012 FOURTH QUARTER EARNINGS
Net Income Grows by 8 Percent over Third Quarter and 21 Percent over Prior Year
WATERBURY, Conn., January 18, 2013 - Webster Financial Corporation (NYSE: WBS), the holding company for Webster Bank, N.A., today announced net income available to common shareholders of $47.9 million, or $0.52 per diluted share, for the quarter ended December 31, 2012 compared to $44.4 million, or $0.48 per diluted share, for the quarter ended September 30, 2012 and $39.6 million, or $0.43 per diluted share, for the quarter ended December 31, 2011.
Highlights for the quarter or at December 31 include:
Combined growth in commercial and commercial real estate loans of $339.4 million, or 5.9 percent, from September 30, and $860.6 million, or 16.4 percent, from a year ago.
Deposit growth of $117.4 million, or 0.8 percent, linked quarter and $874.8 million, or 6.4 percent, over prior year. Transaction account deposits, which had a cost of 0.13 percent in the quarter, now represent an all time high of 41.0 percent of total deposits.
Continued improvement in asset quality as evidenced by a 7.2 percent reduction in commercial classified loans from September 30 and a reduction of 34.8 percent from a year ago; nonperforming assets increased 18.3 percent from September 30 and 2.7 percent from a year ago and otherwise would have decreased compared to each date as a net of $39.5 million of residential and consumer loans were reclassified as nonaccrual in the quarter under regulatory guidance.
Continued achievement of positive operating leverage of 4.6 percent as core revenue grew by 3.5 percent and core expenses declined by 1.1 percent from the third quarter, which resulted in achievement of a 60 percent operating efficiency ratio in the fourth quarter.
Return on assets, return on common equity, and return on total equity improved to 0.98 percent, 9.74 percent, and 9.54 percent, respectively, compared to 0.92 percent, 9.19 percent, and 9.18 percent, respectively, in the third quarter.
“Our record fourth quarter results cap a year of strong performance for Webster,” Chairman and Chief Executive Officer James C. Smith said. “Core net income reached an all-time high in the fourth quarter. Loan originations rose 40 percent in the fourth quarter from a year ago and 46 percent for the full year to set a new record, and our loans to businesses now comprise more than half of our total loan portfolio. Webster's solid capital position and earnings momentum will enable us to return capital to our shareholders over time by gradually increasing the dividend payout ratio and repurchasing additional common shares. We are deeper, stronger, and able to meet our customers' financial needs better than ever before.”
Net interest income
• | Net interest income was $146.3 million for the quarter compared to $144.9 million in the third quarter. |
• | Net interest margin was 3.27 percent compared to 3.28 percent in the third quarter as the yield on interest-earning assets declined 4 basis points and the cost of funds declined 3 basis points. |
• | Average interest-earning assets grew by 1.1 percent from the third quarter and totaled $18.3 billion compared to $18.1 billion in the third quarter. |
• | Average loans grew by $184.4 million or 1.6 percent from the third quarter. |
Webster President and Chief Operating Officer Jerry Plush noted, “Some other significant business achievements in the quarter include the completion of the upgrade to our entire ATM network to envelope-free, image-capture technology, the rollout of our mobile app, the opening of a new retail office in Simsbury, and completion of a new retail and private banking office in Greenwich, Connecticut that opened this month. In 2013, we will continue to invest in additional improvements to our physical and electronic distribution network. This will make banking with Webster easier and convenient while meeting the changing preferences of our customers."
Provision for loan losses
• | The Company recorded a provision of $7.5 million in the quarter compared to $5.0 million in the third quarter and $2.5 million in the year ago period; the increased level of the provision over the past year reflects growth in the loan portfolio. |
• | Net charge-offs were $16.5 million in the quarter compared to $17.7 million for the third quarter and $26.4 million a year ago. |
• | The allowance for loan losses represented 91 percent of nonperforming loans compared to 114 percent in the prior quarter, with the reduction reflecting the reclassification of a net $39.5 million of residential and consumer loans as nonaccrual in the quarter under regulatory guidance. |
Noninterest income
• | Total noninterest income increased $4.5 million compared to the third quarter; there were no securities gains in the fourth quarter, while the third quarter included $0.8 million of securities gains. |
• | The $5.3 million increase in core noninterest income compared to the third quarter reflects increases of $2.0 million in mortgage banking activities, $1.5 million in loan fees, $0.8 million in bank-owned life insurance, and $0.7 million in wealth and investment services. |
Noninterest expense
• | Total noninterest expense decreased $1.0 million compared to the third quarter. Included in noninterest expense are net one time costs of $0.8 million in the fourth quarter and $0.6 million in the third quarter. |
• | Total noninterest expense excluding one time costs decreased $1.2 million from the third quarter with a combined decrease of $2.3 million in compensation and benefits, occupancy, marketing, and professional services expenses offset by a combined increase of $1.0 million in technology and equipment and loan workout expenses. Noninterest expense declined $3.3 million from a year ago, primarily reflecting a reduction of $2.4 million in compensation and benefits expense. The decrease in compensation and benefits expense compared to a year ago reflects a reduction of $2.6 million in cash award expense under a plan that fully vested in the fourth quarter of 2012. |
• | Foreclosed and repossessed asset expenses were $0.3 million in the quarter compared to $0.1 million in the third quarter, while gains on foreclosed and repossessed assets were $0.4 million in both quarters. |
Income taxes
• | The Company recorded $20.3 million of income tax expense in the quarter on the $68.8 million of pre-tax income applicable to continuing operations in the period. The effective tax rate for the quarter was 29.5 percent |
compared to 30.2 percent for the third quarter and reflects a net tax benefit of $0.7 million specific to the quarter compared to $0.3 million specific to the third quarter.
Investment securities
• | Total investment securities were $6.2 billion at December 31, 2012 and $6.3 billion at September 30, 2012. The carrying value of the available for sale portfolio included $68.2 million in net unrealized gains compared to net unrealized gains of $68.9 million at September 30, while the carrying value of the held to maturity portfolio does not reflect $157.2 million in net unrealized gains compared to net unrealized gains of $179.2 million at September 30. |
Loans
• | Total loans were $12.0 billion at December 31, 2012 compared to $11.7 billion at September 30, 2012 and are reflective of continued growth in commercial and commercial real estate loans. In the quarter, commercial and commercial real estate loans increased by $184.2 million and $155.2 million, respectively. Residential mortgage and consumer loans decreased by $1.2 million and $37.1 million, respectively. |
• | Loan originations for portfolio in the fourth quarter were $1.279 billion compared to $835.6 million in the third quarter and $971.7 million a year ago. In addition to loan originations for portfolio, $221.8 million of residential loans were originated and sold with servicing retained in the quarter compared to $207.7 million in the third quarter and $100.0 million a year ago. |
Asset quality
• | Total nonperforming loans increased to $194.8 million, or 1.62 percent of total loans, at December 31, 2012 compared to $162.6 million, or 1.39 percent, at September 30, 2012. The increase reflects the reclassification of a net $14.9 million of residential and a net $24.6 million of consumer loans as nonaccrual in the quarter under regulatory guidance. Total paying nonperforming loans at December 31 were $46.5 million compared to $16.8 million at September 30. At December 31, $28.8 million of the total paying nonperforming loans related to loans reclassified in the quarter. |
• | Apart from the reclassification, nonperforming loans decreased by $6.6 million, or 4.1 percent, from September 30 and $32.1 million, or 17.1 percent, from a year ago. |
• | Other real estate owned (OREO) totaled $3.4 million compared to $4.9 million at September 30. |
• | Past due loans increased to $74.3 million at December 31 compared to $67.4 million at September 30 as past due commercial real estate loans increased by $7.6 million. Past due loans represented 0.62 percent of total loans at December 31 and 0.57 percent at September 30. Past due loans for the continuing portfolios were $70.7 million at December 31 compared to $62.5 million at September 30. Past due loans for the liquidating portfolio were $3.6 million at December 31 compared to $4.9 million at September 30. |
Deposits and borrowings
• | Total deposits were $14.5 billion at December 31, 2012 compared to $14.4 billion at September 30, 2012. Increases of $94.6 million in demand, $196.6 million in interest-bearing checking, and $43.4 million in savings deposits were offset by declines of $135.6 million in money market deposits and $81.5 million in certificates of deposit. Core to total deposits and loans to deposits were 82.5 percent and 82.8 percent, respectively, compared to 81.8 percent and 81.4 percent at September 30. |
• | Total borrowings were $3.2 billion at December 31 compared to $3.1 billion at September 30. |
Capital
• | On November 27, 2012, $126.5 million of Webster Financial Corporation 6.40 % Series E Non-Cumulative Perpetual Preferred Stock was issued through an underwritten public offering. |
• | On December 6, 2012, a $100 million common stock authorization was announced with $50.0 million of the authorization utilized later in the quarter in connection with an underwritten secondary offering of 10 million shares of Webster's common stock by a selling shareholder. |
• | The tangible common equity and Tier 1 common equity to risk-weighted assets ratios were 7.17 percent and 10.78 percent, respectively, at December 31, 2012 compared to 7.39 percent and 11.10 percent, respectively, at September 30, 2012. |
• | Book value and tangible book value per common share were $22.75 and $16.47, respectively, at December 31 compared to $22.24 and $16.13, respectively, at September 30. |
• | Return on average common shareholders' equity and return on average total equity were 9.74 percent and 9.54 percent, respectively, at December 31 compared to 9.19 percent and 9.18 percent, respectively, at September 30. |
***
Webster Financial Corporation is the holding company for Webster Bank, National Association. With $20 billion in assets, Webster provides business and consumer banking, mortgage, financial planning, trust and investment services through 168 banking offices, 294 ATMs, telephone banking, mobile banking, and the Internet. Webster Bank owns the asset based lending firm Webster Business Credit Corporation; the equipment finance firm Webster Capital Finance Corporation; and provides health savings account trustee and administrative services through HSA Bank, a division of Webster Bank. Member FDIC and 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 2012 fourth quarter earnings announcement will be held today, Friday, January 18, 2013 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 1-877-407-8289 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 non-performing 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; (11) the ability to increase market share and control expenses; (12) changes in the competitive environment among banks, financial holding companies, and other financial service 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 those under the Dodd-Frank Wall Street Reform and Consumer Protection Act and the Basel III update to the Basel Accords that is under development; (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; and (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 heading “Risk Factors.” 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. Specifically, we provide measures based on what we believe are our operating earnings on a consistent basis and exclude non-core operating items which affect the GAAP reporting of results of operations. 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.
---30---
WEBSTER FINANCIAL CORPORATION Selected Financial Highlights (unaudited) | |||||||||||||||||||
At or for the Three Months Ended | |||||||||||||||||||
(In thousands, except per share data) | December 31, 2012 | September 30, 2012 | June 30, 2012 | March 31, 2012 | December 31, 2011 | ||||||||||||||
Income and performance ratios, (annualized): | |||||||||||||||||||
Net income attributable to Webster Financial Corp. | $ | 48,526 | $ | 44,993 | $ | 41,240 | $ | 38,938 | $ | 40,384 | |||||||||
Net income available to common shareholders | 47,911 | 44,378 | 40,625 | 38,323 | 39,591 | ||||||||||||||
Net income per diluted common share | 0.52 | 0.48 | 0.44 | 0.42 | 0.43 | ||||||||||||||
Return on average assets | 0.98 | % | 0.92 | % | 0.86 | % | 0.82 | % | 0.88 | % | |||||||||
Return on average common shareholders’ equity | 9.74 | 9.19 | 8.62 | 8.30 | 8.68 | ||||||||||||||
Return on average shareholders’ equity | 9.54 | 9.18 | 8.62 | 8.30 | 8.67 | ||||||||||||||
Noninterest income as a percentage of total revenue | 26.57 | 25.07 | 24.70 | 23.48 | 23.05 | ||||||||||||||
Efficiency ratio | 59.68 | 62.25 | 63.75 | 65.63 | 65.83 | ||||||||||||||
Asset quality: | |||||||||||||||||||
Allowance for loan losses | $ | 177,129 | $ | 186,089 | $ | 198,757 | $ | 210,288 | $ | 233,487 | |||||||||
Nonperforming assets | 198,180 | 167,524 | 173,621 | 184,218 | 193,047 | ||||||||||||||
Allowance for loan losses / total loans | 1.47 | % | 1.59 | % | 1.72 | % | 1.86 | % | 2.08 | % | |||||||||
Net charge-offs / average loans (annualized) | 0.56 | 0.61 | 0.58 | 0.96 | 0.95 | ||||||||||||||
Nonperforming loans / total loans | 1.62 | 1.39 | 1.47 | 1.58 | 1.68 | ||||||||||||||
Nonperforming assets / total loans plus OREO | 1.65 | 1.43 | 1.50 | 1.63 | 1.72 | ||||||||||||||
Allowance for loan losses / nonperforming loans | 90.93 | 114.44 | 117.44 | 117.96 | 124.14 | ||||||||||||||
Other ratios (annualized): | |||||||||||||||||||
Tangible equity ratio | 7.94 | % | 7.54 | % | 7.38 | % | 7.29 | % | 7.18 | % | |||||||||
Tangible common equity ratio | 7.17 | 7.39 | 7.22 | 7.14 | 7.03 | ||||||||||||||
Tier 1 risk-based capital ratio (a) | 12.48 | 11.90 | 12.82 | 12.86 | 13.05 | ||||||||||||||
Total risk-based capital (a) | 13.73 | 13.16 | 14.08 | 14.12 | 14.61 | ||||||||||||||
Tier 1 common equity / risk-weighted assets (a) | 10.78 | 11.10 | 10.97 | 10.96 | 11.08 | ||||||||||||||
Shareholders’ equity / total assets | 10.39 | 10.05 | 9.94 | 9.90 | 9.86 | ||||||||||||||
Net interest margin | 3.27 | 3.28 | 3.32 | 3.36 | 3.39 | ||||||||||||||
Share and equity related: | |||||||||||||||||||
Common equity | $ | 1,941,881 | $ | 1,954,739 | $ | 1,902,609 | $ | 1,866,003 | $ | 1,816,835 | |||||||||
Book value per common share | 22.75 | 22.24 | 21.65 | 21.24 | 20.74 | ||||||||||||||
Tangible book value per common share | 16.47 | 16.13 | 15.53 | 15.10 | 14.57 | ||||||||||||||
Common stock closing price | 20.55 | 23.70 | 21.66 | 22.67 | 20.39 | ||||||||||||||
Dividends declared per common share | 0.10 | 0.10 | 0.10 | 0.05 | 0.05 | ||||||||||||||
Common shares outstanding | 85,341 | 87,899 | 87,885 | 87,849 | 87,600 | ||||||||||||||
Basic shares (weighted average) | 86,949 | 87,394 | 87,291 | 87,216 | 87,097 | ||||||||||||||
Diluted shares (weighted average) | 91,315 | 91,884 | 91,543 | 91,782 | 90,929 | ||||||||||||||
(a) | The ratios presented are projected for December 31, 2012 and actual for the remaining periods presented. |
WEBSTER FINANCIAL CORPORATION Consolidated Balance Sheets (unaudited) | |||||||||||
(In thousands) | December 31, 2012 | September 30, 2012 | December 31, 2011 | ||||||||
Assets: | |||||||||||
Cash and due from banks | $ | 252,283 | $ | 164,556 | $ | 195,957 | |||||
Interest-bearing deposits | 98,205 | 79,763 | 96,062 | ||||||||
Investment securities: | |||||||||||
Available for sale, at fair value | 3,136,160 | 3,120,354 | 2,874,764 | ||||||||
Held to maturity | 3,107,529 | 3,142,160 | 2,973,727 | ||||||||
Total securities | 6,243,689 | 6,262,514 | 5,848,491 | ||||||||
Loans held for sale | 107,633 | 91,207 | 57,391 | ||||||||
Loans: | |||||||||||
Commercial | 3,323,044 | 3,138,807 | 2,860,597 | ||||||||
Commercial real estate | 2,783,061 | 2,627,893 | 2,384,889 | ||||||||
Residential mortgages | 3,291,724 | 3,292,948 | 3,219,889 | ||||||||
Consumer | 2,630,867 | 2,668,004 | 2,760,029 | ||||||||
Total loans | 12,028,696 | 11,727,652 | 11,225,404 | ||||||||
Allowance for loan losses | (177,129 | ) | (186,089 | ) | (233,487 | ) | |||||
Loans, net | 11,851,567 | 11,541,563 | 10,991,917 | ||||||||
Prepaid FDIC premiums | 16,323 | 21,673 | 37,946 | ||||||||
Federal Home Loan Bank and Federal Reserve Bank stock | 155,630 | 142,595 | 143,874 | ||||||||
Premises and equipment, net | 134,562 | 135,394 | 147,379 | ||||||||
Goodwill and other intangible assets, net | 540,157 | 541,399 | 545,577 | ||||||||
Cash surrender value of life insurance policies | 418,293 | 414,797 | 307,039 | ||||||||
Deferred tax asset, net | 68,681 | 74,098 | 105,665 | ||||||||
Accrued interest receivable and other assets | 259,742 | 260,103 | 237,042 | ||||||||
Total Assets | $ | 20,146,765 | $ | 19,729,662 | $ | 18,714,340 | |||||
Liabilities and Equity: | |||||||||||
Deposits: | |||||||||||
Demand | $ | 2,881,131 | $ | 2,786,525 | $ | 2,473,693 | |||||
Interest-bearing checking | 3,079,767 | 2,883,216 | 2,578,520 | ||||||||
Money market | 2,205,072 | 2,340,717 | 2,021,056 | ||||||||
Savings | 3,819,713 | 3,776,280 | 3,748,121 | ||||||||
Certificates of deposit | 2,418,853 | 2,507,647 | 2,715,583 | ||||||||
Brokered certificates of deposit | 126,299 | 119,052 | 119,052 | ||||||||
Total deposits | 14,530,835 | 14,413,437 | 13,656,025 | ||||||||
Securities sold under agreements to repurchase and other short-term borrowings | 1,076,160 | 1,310,015 | 1,164,706 | ||||||||
Federal Home Loan Bank advances | 1,827,612 | 1,452,660 | 1,252,609 | ||||||||
Long-term debt | 334,276 | 335,678 | 552,589 | ||||||||
Accrued expenses and other liabilities | 284,352 | 234,194 | 242,637 | ||||||||
Total liabilities | 18,053,235 | 17,745,984 | 16,868,566 | ||||||||
Webster Financial Corporation shareholders’ equity | 2,093,530 | 1,983,678 | 1,845,774 | ||||||||
Noncontrolling interests | — | — | — | ||||||||
Total equity | 2,093,530 | 1,983,678 | 1,845,774 | ||||||||
Total Liabilities and Equity | $ | 20,146,765 | $ | 19,729,662 | $ | 18,714,340 | |||||
WEBSTER FINANCIAL CORPORATION Consolidated Statements of Operations (unaudited) | |||||||||||||||
(In thousands, except per share data) | Three Months Ended December 31, | Twelve Months Ended, December 31, | |||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Interest income: | |||||||||||||||
Interest and fees on loans and leases | $ | 122,179 | $ | 121,223 | $ | 485,666 | $ | 486,883 | |||||||
Interest and dividends on securities | 49,752 | 51,260 | 205,411 | 211,605 | |||||||||||
Loans held for sale | 615 | 370 | 2,425 | 1,235 | |||||||||||
Total interest income | 172,546 | 172,853 | 693,502 | 699,723 | |||||||||||
Interest expense: | |||||||||||||||
Deposits | 13,885 | 17,268 | 59,586 | 80,808 | |||||||||||
Borrowings | 12,389 | 14,576 | 55,008 | 55,147 | |||||||||||
Total interest expense | 26,274 | 31,844 | 114,594 | 135,955 | |||||||||||
Net interest income | 146,272 | 141,009 | 578,908 | 563,768 | |||||||||||
Provision for loan losses | 7,500 | 2,500 | 21,500 | 22,500 | |||||||||||
Net interest income after provision for loan losses | 138,772 | 138,509 | 557,408 | 541,268 | |||||||||||
Noninterest income: | |||||||||||||||
Deposit service fees | 24,823 | 24,286 | 96,633 | 102,795 | |||||||||||
Loan related fees | 5,570 | 4,896 | 18,043 | 20,237 | |||||||||||
Wealth and investment services | 7,859 | 5,759 | 29,515 | 26,421 | |||||||||||
Mortgage banking activities | 8,515 | 1,094 | 23,037 | 4,905 | |||||||||||
Increase in cash surrender value of life insurance policies | 3,496 | 2,609 | 11,254 | 10,360 | |||||||||||
Net gain on investment securities | — | — | 3,347 | 2,024 | |||||||||||
Other income | 2,677 | 3,602 | 10,929 | 10,300 | |||||||||||
Total noninterest income | 52,940 | 42,246 | 192,758 | 177,042 | |||||||||||
Noninterest expense: | |||||||||||||||
Compensation and benefits | 65,769 | 68,146 | 264,101 | 262,647 | |||||||||||
Occupancy | 12,209 | 13,125 | 50,131 | 53,866 | |||||||||||
Technology and equipment expense | 15,489 | 15,054 | 62,210 | 60,721 | |||||||||||
Marketing | 3,104 | 4,540 | 16,827 | 18,456 | |||||||||||
Professional and outside services | 2,479 | 2,835 | 11,348 | 11,203 | |||||||||||
Intangible assets amortization | 1,242 | 1,397 | 5,420 | 5,588 | |||||||||||
Foreclosed and repossessed asset expenses | 267 | 730 | 1,028 | 3,050 | |||||||||||
Foreclosed and repossessed asset gains | (383 | ) | (63 | ) | (2,126 | ) | (306 | ) | |||||||
Loan workout expenses | 2,338 | 1,956 | 8,056 | 7,547 | |||||||||||
Deposit insurance | 5,642 | 4,756 | 22,749 | 20,927 | |||||||||||
Other expenses | 13,934 | 12,864 | 56,172 | 55,896 | |||||||||||
122,090 | 125,340 | 495,916 | 499,595 | ||||||||||||
Debt prepayment penalties | — | 5,203 | 4,040 | 5,203 | |||||||||||
Write-down for expedited asset disposition | — | 1,187 | — | 6,260 | |||||||||||
Contract termination and severance | 642 | 2,485 | 1,505 | 5,100 | |||||||||||
Branch and facility optimization | 18 | 1,689 | 168 | 5,004 | |||||||||||
Preferred stock redemption costs | — | 423 | — | 423 | |||||||||||
Stock registration costs | 175 | — | 175 | — | |||||||||||
Costs for warrant registration | — | — | — | 350 | |||||||||||
Provision (benefit) for litigation and settlements | — | (9,755 | ) | — | (9,523 | ) | |||||||||
Loan repurchase and unfunded commitment reserve benefit, net | — | — | — | (1,436 | ) | ||||||||||
Total noninterest expense | 122,925 | 126,572 | 501,804 | 510,976 | |||||||||||
Income from continuing operations before income taxes | 68,787 | 54,183 | 248,362 | 207,334 | |||||||||||
Income tax expense | 20,261 | 13,799 | 74,665 | 57,951 | |||||||||||
Income from continuing operations | 48,526 | 40,384 | 173,697 | 149,383 | |||||||||||
Income from discontinued operations, net of tax | — | — | — | 1,995 | |||||||||||
Consolidated net income | 48,526 | 40,384 | 173,697 | 151,378 | |||||||||||
Less: Net loss attributable to noncontrolling interests | — | — | — | (1 | ) | ||||||||||
Net income attributable to Webster Financial Corp. | 48,526 | 40,384 | 173,697 | 151,379 | |||||||||||
Preferred stock dividends | (615 | ) | (793 | ) | (2,460 | ) | (3,286 | ) | |||||||
Net income available to common shareholders | $ | 47,911 | $ | 39,591 | $ | 171,237 | $ | 148,093 | |||||||
Diluted shares (average) | 91,315 | 90,929 | 91,649 | 91,688 | |||||||||||
Net income per common share available to common shareholders: | |||||||||||||||
Basic | |||||||||||||||
Income from continuing operations | $ | 0.55 | $ | 0.45 | $ | 1.96 | $ | 1.67 | |||||||
Net income | 0.55 | 0.45 | 1.96 | 1.69 | |||||||||||
Diluted | |||||||||||||||
Income from continuing operations | 0.52 | 0.43 | 1.86 | 1.59 | |||||||||||
Net income | 0.52 | 0.43 | 1.86 | 1.61 | |||||||||||
WEBSTER FINANCIAL CORPORATION Five Quarter Consolidated Statements of Operations (unaudited) | |||||||||||||||||||
Three Months Ended | |||||||||||||||||||
(In thousands, except per share data) | Dec. 31, 2012 | Sept. 30, 2012 | June 30, 2012 | March 31, 2012 | Dec. 31, 2011 | ||||||||||||||
Interest income: | |||||||||||||||||||
Interest and fees on loans and leases | $ | 122,179 | $ | 121,367 | $ | 121,379 | $ | 120,741 | $ | 121,223 | |||||||||
Interest and dividends on securities | 49,752 | 50,194 | 52,597 | 52,868 | 51,260 | ||||||||||||||
Loans held for sale | 615 | 655 | 657 | 498 | 370 | ||||||||||||||
Total interest income | 172,546 | 172,216 | 174,633 | 174,107 | 172,853 | ||||||||||||||
Interest expense: | |||||||||||||||||||
Deposits | 13,885 | 14,543 | 15,102 | 16,056 | 17,268 | ||||||||||||||
Borrowings | 12,389 | 12,783 | 15,153 | 14,683 | 14,576 | ||||||||||||||
Total interest expense | 26,274 | 27,326 | 30,255 | 30,739 | 31,844 | ||||||||||||||
Net interest income | 146,272 | 144,890 | 144,378 | 143,368 | 141,009 | ||||||||||||||
Provision for loan losses | 7,500 | 5,000 | 5,000 | 4,000 | 2,500 | ||||||||||||||
Net interest income after provision for loan losses | 138,772 | 139,890 | 139,378 | 139,368 | 138,509 | ||||||||||||||
Noninterest income: | |||||||||||||||||||
Deposit service fees | 24,823 | 24,728 | 23,719 | 23,363 | 24,286 | ||||||||||||||
Loan related fees | 5,570 | 4,039 | 3,565 | 4,869 | 4,896 | ||||||||||||||
Wealth and investment services | 7,859 | 7,186 | 7,249 | 7,221 | 5,759 | ||||||||||||||
Mortgage banking activities | 8,515 | 6,515 | 3,624 | 4,383 | 1,094 | ||||||||||||||
Increase in cash surrender value of life insurance policies | 3,496 | 2,680 | 2,561 | 2,517 | 2,609 | ||||||||||||||
Net gain on investment securities | — | 810 | 2,537 | — | — | ||||||||||||||
Other income | 2,677 | 2,521 | 4,098 | 1,633 | 3,602 | ||||||||||||||
Total noninterest income | 52,940 | 48,479 | 47,353 | 43,986 | 42,246 | ||||||||||||||
Noninterest expense: | |||||||||||||||||||
Compensation and benefits | 65,769 | 66,126 | 63,587 | 68,619 | 68,146 | ||||||||||||||
Occupancy | 12,209 | 12,462 | 12,578 | 12,882 | 13,125 | ||||||||||||||
Technology and equipment expense | 15,489 | 15,118 | 16,021 | 15,582 | 15,054 | ||||||||||||||
Marketing | 3,104 | 4,529 | 5,094 | 4,100 | 4,540 | ||||||||||||||
Professional and outside services | 2,479 | 2,790 | 3,387 | 2,692 | 2,835 | ||||||||||||||
Intangible assets amortization | 1,242 | 1,384 | 1,397 | 1,397 | 1,397 | ||||||||||||||
Foreclosed and repossessed asset expenses | 267 | 118 | 176 | 467 | 730 | ||||||||||||||
Foreclosed and repossessed asset gains | (383 | ) | (409 | ) | (670 | ) | (664 | ) | (63 | ) | |||||||||
Loan workout expenses | 2,338 | 1,693 | 2,201 | 1,824 | 1,956 | ||||||||||||||
Deposit insurance | 5,642 | 5,675 | 5,723 | 5,709 | 4,756 | ||||||||||||||
Other expenses | 13,934 | 13,805 | 14,443 | 13,990 | 12,864 | ||||||||||||||
122,090 | 123,291 | 123,937 | 126,598 | 125,340 | |||||||||||||||
Debt prepayment penalties | — | 391 | 2,515 | 1,134 | 5,203 | ||||||||||||||
Write-down for expedited asset disposition | — | — | — | — | 1,187 | ||||||||||||||
Contract termination and severance | 642 | 136 | 727 | — | 2,485 | ||||||||||||||
Branch and facility optimization | 18 | 69 | — | 81 | 1,689 | ||||||||||||||
Preferred stock redemption costs | — | — | — | — | 423 | ||||||||||||||
Stock registration costs | 175 | — | — | — | — | ||||||||||||||
Provision (benefit) for litigation and settlements | — | — | — | — | (9,755 | ) | |||||||||||||
Total noninterest expense | 122,925 | 123,887 | 127,179 | 127,813 | 126,572 | ||||||||||||||
Income from continuing operations before income taxes | 68,787 | 64,482 | 59,552 | 55,541 | 54,183 | ||||||||||||||
Income tax expense | 20,261 | 19,489 | 18,312 | 16,603 | 13,799 | ||||||||||||||
Income from continuing operations | 48,526 | 44,993 | 41,240 | 38,938 | 40,384 | ||||||||||||||
Income from discontinued operations, net of tax | — | — | — | — | — | ||||||||||||||
Consolidated net income | 48,526 | 44,993 | 41,240 | 38,938 | 40,384 | ||||||||||||||
Less: Net loss attributable to noncontrolling interests | — | — | — | — | — | ||||||||||||||
Net income attributable to Webster Financial Corp. | 48,526 | 44,993 | 41,240 | 38,938 | 40,384 | ||||||||||||||
Preferred stock dividends | (615 | ) | (615 | ) | (615 | ) | (615 | ) | (793 | ) | |||||||||
Net income available to common shareholders | $ | 47,911 | $ | 44,378 | $ | 40,625 | $ | 38,323 | $ | 39,591 | |||||||||
Diluted shares (average) | 91,315 | 91,884 | 91,543 | 91,782 | 90,929 | ||||||||||||||
Net income per common share available to common shareholders: | |||||||||||||||||||
Basic | |||||||||||||||||||
Income from continuing operations | $ | 0.55 | $ | 0.51 | $ | 0.46 | $ | 0.44 | $ | 0.45 | |||||||||
Net income | 0.55 | 0.51 | 0.46 | 0.44 | 0.45 | ||||||||||||||
Diluted | |||||||||||||||||||
Income from continuing operations | 0.52 | 0.48 | 0.44 | 0.42 | 0.43 | ||||||||||||||
Net income | 0.52 | 0.48 | 0.44 | 0.42 | 0.43 | ||||||||||||||
WEBSTER FINANCIAL CORPORATION Consolidated Average Balances, Yields, and Rates Paid (unaudited) | |||||||||||||||||||||
Three Months Ended December 31, | 2012 | 2011 | |||||||||||||||||||
(Dollars in thousands) | Average balance | Interest | Fully tax- equivalent yield/rate | Average balance | Interest | Fully tax- equivalent yield/rate | |||||||||||||||
Assets: | |||||||||||||||||||||
Interest-earning assets: | |||||||||||||||||||||
Loans | $ | 11,792,691 | $ | 122,179 | 4.10 | % | $ | 11,122,372 | $ | 121,223 | 4.31 | % | |||||||||
Investment securities (a) | 6,170,119 | 52,326 | 3.43 | 5,638,172 | 54,414 | 3.88 | |||||||||||||||
Loans held for sale | 90,266 | 615 | 2.72 | 35,321 | 370 | 4.18 | |||||||||||||||
Federal Home Loan and Federal Reserve Bank stock | 143,557 | 872 | 2.42 | 143,874 | 831 | 2.29 | |||||||||||||||
Interest-bearing deposits | 72,539 | 34 | 0.18 | 86,156 | 26 | 0.12 | |||||||||||||||
Total interest-earning assets | 18,269,172 | 176,026 | 3.84 | 17,025,895 | 176,864 | 4.13 | |||||||||||||||
Noninterest-earning assets | 1,511,979 | 1,371,923 | |||||||||||||||||||
Total assets | $ | 19,781,151 | $ | 18,397,818 | |||||||||||||||||
Liabilities and Shareholders' Equity: | |||||||||||||||||||||
Interest-bearing liabilities: | |||||||||||||||||||||
Deposits: | |||||||||||||||||||||
Demand | $ | 2,832,130 | $ | — | — | % | $ | 2,364,594 | $ | — | — | % | |||||||||
Savings, interest checking, and money market | 9,054,442 | 4,845 | 0.21 | 8,420,850 | 6,302 | 0.30 | |||||||||||||||
Certificates of deposit | 2,594,963 | 9,040 | 1.39 | 2,899,642 | 10,966 | 1.50 | |||||||||||||||
Total deposits | 14,481,535 | 13,885 | 0.38 | 13,685,086 | 17,268 | 0.50 | |||||||||||||||
Securities sold under agreements to repurchase | |||||||||||||||||||||
and other short-term borrowings | 1,281,503 | 5,646 | 1.72 | 1,212,019 | 4,450 | 1.44 | |||||||||||||||
Federal Home Loan Bank advances | 1,418,606 | 4,011 | 1.11 | 854,539 | 4,151 | 1.90 | |||||||||||||||
Long-term debt | 334,954 | 2,732 | 3.26 | 553,684 | 5,975 | 4.32 | |||||||||||||||
Total borrowings | 3,035,063 | 12,389 | 1.61 | 2,620,242 | 14,576 | 2.20 | |||||||||||||||
Total interest-bearing liabilities | 17,516,598 | 26,274 | 0.59 | 16,305,328 | 31,844 | 0.77 | |||||||||||||||
Noninterest-bearing liabilities | 230,923 | 221,096 | |||||||||||||||||||
Total liabilities | 17,747,521 | 16,526,424 | |||||||||||||||||||
Noncontrolling interests | — | 7,703 | |||||||||||||||||||
Preferred Stock | 66,318 | 28,939 | |||||||||||||||||||
Common shareholders' equity | 1,967,312 | 1,834,752 | |||||||||||||||||||
Webster Financial Corp. shareholders' equity | 2,033,630 | 1,863,691 | |||||||||||||||||||
Total liabilities and equity | $ | 19,781,151 | $ | 18,397,818 | |||||||||||||||||
Tax-equivalent net interest income | 149,752 | 145,020 | |||||||||||||||||||
Less: tax-equivalent adjustment | (3,480 | ) | (4,011 | ) | |||||||||||||||||
Net interest income | $ | 146,272 | $ | 141,009 | |||||||||||||||||
Net interest margin | 3.27 | % | 3.39 | % | |||||||||||||||||
(a) | For purposes of the yield computation, unrealized gains (losses) on securities available for sale are excluded from the average balance. |
WEBSTER FINANCIAL CORPORATION Consolidated Average Balances, Yields, and Rates Paid (unaudited) | |||||||||||||||||||||
Twelve Months Ended December 31, | 2012 | 2011 | |||||||||||||||||||
(Dollars in thousands) | Average balance | Interest | Fully tax- equivalent yield/rate | Average balance | Interest | Fully tax- equivalent yield/rate | |||||||||||||||
Assets: | |||||||||||||||||||||
Interest-earning assets: | |||||||||||||||||||||
Loans | $ | 11,525,233 | $ | 485,666 | 4.21 | % | $ | 11,054,100 | $ | 486,883 | 4.40 | % | |||||||||
Investment securities (a) | 6,100,219 | 216,513 | 3.58 | 5,407,867 | 223,568 | 4.16 | |||||||||||||||
Loans held for sale | 73,156 | 2,425 | 3.31 | 28,144 | 1,235 | 4.39 | |||||||||||||||
Federal Home Loan and Federal Reserve Bank stock | 143,074 | 3,508 | 2.45 | 143,874 | 3,318 | 2.31 | |||||||||||||||
Interest-bearing deposits | 77,265 | 141 | 0.18 | 112,232 | 216 | 0.19 | |||||||||||||||
Total interest-earning assets | 17,918,947 | 708,253 | 3.96 | 16,746,217 | 715,220 | 4.28 | |||||||||||||||
Noninterest-earning assets | 1,427,824 | 1,335,374 | |||||||||||||||||||
Total assets | $ | 19,346,771 | $ | 18,081,591 | |||||||||||||||||
Liabilities and Shareholders' Equity: | |||||||||||||||||||||
Interest-bearing liabilities: | |||||||||||||||||||||
Deposits: | |||||||||||||||||||||
Demand | $ | 2,638,025 | $ | — | — | % | $ | 2,278,419 | $ | — | — | % | |||||||||
Savings, interest checking, and money market | 8,824,581 | 21,061 | 0.24 | 8,534,333 | 33,747 | 0.40 | |||||||||||||||
Certificates of deposit | 2,703,414 | 38,525 | 1.43 | 3,031,835 | 47,061 | 1.55 | |||||||||||||||
Total deposits | 14,166,020 | 59,586 | 0.42 | 13,844,587 | 80,808 | 0.58 | |||||||||||||||
Securities sold under agreements to repurchase and other short-term borrowings | 1,207,623 | 21,034 | 1.74 | 1,053,323 | 16,173 | 1.54 | |||||||||||||||
Federal Home Loan Bank advances | 1,389,999 | 16,943 | 1.22 | 569,987 | 14,352 | 2.52 | |||||||||||||||
Long-term debt | 418,896 | 17,031 | 4.07 | 565,331 | 24,622 | 4.36 | |||||||||||||||
Total borrowings | 3,016,518 | 55,008 | 1.82 | 2,188,641 | 55,147 | 2.52 | |||||||||||||||
Total interest-bearing liabilities | 17,182,538 | 114,594 | 0.67 | 16,033,228 | 135,955 | 0.85 | |||||||||||||||
Noninterest-bearing liabilities | 217,653 | 202,205 | |||||||||||||||||||
Total liabilities | 17,400,191 | 16,235,433 | |||||||||||||||||||
Noncontrolling interests | — | 9,119 | |||||||||||||||||||
Preferred Stock | 38,335 | 28,942 | |||||||||||||||||||
Common shareholders' equity | 1,908,245 | 1,808,097 | |||||||||||||||||||
Webster Financial Corp. shareholders' equity | 1,946,580 | 1,837,039 | |||||||||||||||||||
Total liabilities and equity | $ | 19,346,771 | $ | 18,081,591 | |||||||||||||||||
Tax-equivalent net interest income | 593,659 | 579,265 | |||||||||||||||||||
Less: tax-equivalent adjustment | (14,751 | ) | (15,497 | ) | |||||||||||||||||
Net interest income | $ | 578,908 | $ | 563,768 | |||||||||||||||||
Net interest margin | 3.32 | % | 3.47 | % | |||||||||||||||||
(a) | For purposes of the yield computation, unrealized gains (losses) on securities available for sale are excluded from the average balance. |
WEBSTER FINANCIAL CORPORATION Five Quarter Loan Balances (unaudited) | |||||||||||||||||||
(Dollars in thousands) | Dec. 31, 2012 | Sept. 30, 2012 | June 30, 2012 | March 31, 2012 | Dec. 31, 2011 | ||||||||||||||
Loan Balances (actuals): | |||||||||||||||||||
Continuing Portfolio: | |||||||||||||||||||
Commercial non-mortgage | $ | 2,399,500 | $ | 2,201,732 | $ | 2,069,127 | $ | 1,972,205 | $ | 1,932,542 | |||||||||
Equipment financing | 419,311 | 401,748 | 417,654 | 446,585 | 474,804 | ||||||||||||||
Asset based lending | 504,233 | 535,327 | 499,212 | 470,187 | 453,251 | ||||||||||||||
Commercial real estate | 2,755,320 | 2,597,835 | 2,518,392 | 2,389,206 | 2,345,241 | ||||||||||||||
Residential development | 27,741 | 30,058 | 33,035 | 36,591 | 39,648 | ||||||||||||||
Residential mortgages | 3,291,723 | 3,292,947 | 3,300,616 | 3,270,212 | 3,219,888 | ||||||||||||||
Consumer | 2,508,992 | 2,537,039 | 2,565,654 | 2,585,685 | 2,612,476 | ||||||||||||||
Total continuing | 11,906,820 | 11,596,686 | 11,403,690 | 11,170,671 | 11,077,850 | ||||||||||||||
Allowance for loan losses | (152,495 | ) | (156,214 | ) | (168,882 | ) | (180,413 | ) | (203,612 | ) | |||||||||
Total continuing, net | 11,754,325 | 11,440,472 | 11,234,808 | 10,990,258 | 10,874,238 | ||||||||||||||
Liquidating Portfolio: | |||||||||||||||||||
National Construction Lending Center (NCLC) | 1 | 1 | 1 | 1 | 1 | ||||||||||||||
Consumer | 121,875 | 130,965 | 136,306 | 141,478 | 147,553 | ||||||||||||||
Total liquidating portfolio | 121,876 | 130,966 | 136,307 | 141,479 | 147,554 | ||||||||||||||
Allowance for loan losses | (24,634 | ) | (29,875 | ) | (29,875 | ) | (29,875 | ) | (29,875 | ) | |||||||||
Total liquidating, net | 97,242 | 101,091 | 106,432 | 111,604 | 117,679 | ||||||||||||||
Total Loan Balances (actuals) | 12,028,696 | 11,727,652 | 11,539,997 | 11,312,150 | 11,225,404 | ||||||||||||||
Allowance for loan losses | (177,129 | ) | (186,089 | ) | (198,757 | ) | (210,288 | ) | (233,487 | ) | |||||||||
Loans, net | $ | 11,851,567 | $ | 11,541,563 | $ | 11,341,240 | $ | 11,101,862 | $ | 10,991,917 | |||||||||
Loan Balances (average): | |||||||||||||||||||
Continuing Portfolio: | |||||||||||||||||||
Commercial non-mortgage | $ | 2,238,557 | $ | 2,137,882 | $ | 2,008,778 | $ | 1,970,656 | $ | 1,868,885 | |||||||||
Equipment financing | 405,702 | 404,180 | 430,882 | 458,111 | 495,667 | ||||||||||||||
Asset based lending | 516,749 | 520,100 | 480,574 | 474,264 | 492,982 | ||||||||||||||
Commercial real estate | 2,653,749 | 2,528,394 | 2,453,430 | 2,336,576 | 2,254,970 | ||||||||||||||
Residential development | 29,322 | 31,484 | 35,422 | 38,401 | 49,182 | ||||||||||||||
Residential mortgages | 3,294,254 | 3,300,067 | 3,296,306 | 3,253,199 | 3,186,885 | ||||||||||||||
Consumer | 2,526,656 | 2,552,660 | 2,576,521 | 2,598,758 | 2,622,378 | ||||||||||||||
Total continuing | 11,664,989 | 11,474,767 | 11,281,913 | 11,129,965 | 10,970,949 | ||||||||||||||
Allowance for loan losses | (161,239 | ) | (167,469 | ) | (179,139 | ) | (201,592 | ) | (219,566 | ) | |||||||||
Total continuing, net | 11,503,750 | 11,307,298 | 11,102,774 | 10,928,373 | 10,751,383 | ||||||||||||||
Liquidating Portfolio: | |||||||||||||||||||
NCLC | 1 | 1 | 1 | 1 | 1 | ||||||||||||||
Consumer | 127,701 | 133,566 | 138,807 | 145,367 | 151,422 | ||||||||||||||
Total liquidating portfolio | 127,702 | 133,567 | 138,808 | 145,368 | 151,423 | ||||||||||||||
Allowance for loan losses | (24,634 | ) | (29,875 | ) | (29,875 | ) | (29,875 | ) | (29,875 | ) | |||||||||
Total liquidating, net | 103,068 | 103,692 | 108,933 | 115,493 | 121,548 | ||||||||||||||
Total Loan Balances (average) | 11,792,691 | 11,608,334 | 11,420,721 | 11,275,333 | 11,122,372 | ||||||||||||||
Allowance for loan losses | (185,873 | ) | (197,344 | ) | (209,014 | ) | (231,467 | ) | (249,441 | ) | |||||||||
Loans, net | $ | 11,606,818 | $ | 11,410,990 | $ | 11,211,707 | $ | 11,043,866 | $ | 10,872,931 | |||||||||
WEBSTER FINANCIAL CORPORATION Five Quarter Nonperforming Assets (unaudited) | |||||||||||||||||||
(Dollars in thousands) | Dec. 31, 2012 | Sept. 30, 2012 | June 30, 2012 | March 31, 2012 | Dec. 31, 2011 | ||||||||||||||
Nonperforming loans: | |||||||||||||||||||
Continuing Portfolio: | |||||||||||||||||||
Commercial non-mortgage | $ | 17,538 | $ | 30,315 | $ | 29,271 | $ | 31,547 | $ | 27,884 | |||||||||
Equipment financing | 3,325 | 3,052 | 5,862 | 4,868 | 7,154 | ||||||||||||||
Asset based lending | — | 92 | 262 | 1,475 | 1,880 | ||||||||||||||
Commercial real estate | 15,683 | 15,768 | 23,457 | 25,131 | 32,197 | ||||||||||||||
Residential development | 5,043 | 5,431 | 5,982 | 6,140 | 6,762 | ||||||||||||||
Residential mortgages (a) | 95,540 | 79,736 | 77,336 | 79,110 | 82,052 | ||||||||||||||
Consumer (a) | 49,536 | 23,602 | 22,616 | 26,098 | 25,059 | ||||||||||||||
Nonperforming loans - continuing portfolio | 186,665 | 157,996 | 164,786 | 174,369 | 182,988 | ||||||||||||||
Liquidating Portfolio: | |||||||||||||||||||
Consumer (a) | 8,133 | 4,616 | 4,460 | 3,896 | 5,091 | ||||||||||||||
Nonperforming loans - liquidating portfolio | 8,133 | 4,616 | 4,460 | 3,896 | 5,091 | ||||||||||||||
Total nonperforming loans | $ | 194,798 | $ | 162,612 | $ | 169,246 | $ | 178,265 | $ | 188,079 | |||||||||
Other real estate owned and repossessed assets: | |||||||||||||||||||
Continuing Portfolio: | |||||||||||||||||||
Commercial | $ | 541 | $ | 917 | $ | 917 | $ | 2,051 | $ | 1,961 | |||||||||
Repossessed equipment | 182 | 1,840 | 721 | 674 | 123 | ||||||||||||||
Residential | 2,369 | 1,705 | 2,271 | 2,648 | 1,947 | ||||||||||||||
Consumer | 290 | 450 | 466 | 580 | 805 | ||||||||||||||
Total continuing | 3,382 | 4,912 | 4,375 | 5,953 | 4,836 | ||||||||||||||
Liquidating Portfolio: | |||||||||||||||||||
NCLC | — | — | — | — | 132 | ||||||||||||||
Total liquidating | — | — | — | — | 132 | ||||||||||||||
Total other real estate owned and repossessed assets | $ | 3,382 | $ | 4,912 | $ | 4,375 | $ | 5,953 | $ | 4,968 | |||||||||
Total nonperforming assets | $ | 198,180 | $ | 167,524 | $ | 173,621 | $ | 184,218 | $ | 193,047 | |||||||||
(a) | The increases in the residential and consumer categories during 4Q12 are related to an OCC requirement to reflect Chapter 7 bankruptcies as nonaccruing loans. |
WEBSTER FINANCIAL CORPORATION Five Quarter Past Due Loans (unaudited) | |||||||||||||||||||
(Dollars in thousands) | Dec. 31, 2012 | Sept. 30, 2012 | June 30, 2012 | March 31, 2012 | Dec. 31, 2011 | ||||||||||||||
Past due 30-89 days: | |||||||||||||||||||
Accruing loans: | |||||||||||||||||||
Continuing Portfolio: | |||||||||||||||||||
Commercial non-mortgage | $ | 2,769 | $ | 4,424 | $ | 6,479 | $ | 6,938 | $ | 4,619 | |||||||||
Equipment financing | 1,926 | 3,524 | 1,665 | 4,099 | 4,800 | ||||||||||||||
Asset based lending | — | — | — | — | — | ||||||||||||||
Commercial real estate | 14,710 | 7,136 | 3,152 | 1,101 | 1,766 | ||||||||||||||
Residential development | — | 317 | — | — | — | ||||||||||||||
Residential mortgages | 25,183 | 22,230 | 26,966 | 22,915 | 24,361 | ||||||||||||||
Consumer | 24,860 | 24,664 | 22,163 | 19,592 | 20,847 | ||||||||||||||
Past Due 30-89 days - continuing portfolio | 69,448 | 62,295 | 60,425 | 54,645 | 56,393 | ||||||||||||||
Liquidating Portfolio: | |||||||||||||||||||
Consumer | 3,588 | 4,909 | 4,377 | 5,263 | 4,538 | ||||||||||||||
Past Due 30-89 days - liquidating portfolio | 3,588 | 4,909 | 4,377 | 5,263 | 4,538 | ||||||||||||||
Accruing loans past due 90 days or more | 1,236 | 205 | 1,074 | 43 | 724 | ||||||||||||||
Total past due loans | $ | 74,272 | $ | 67,409 | $ | 65,876 | $ | 59,951 | $ | 61,655 | |||||||||
WEBSTER FINANCIAL CORPORATION Five Quarter Changes in the Allowance for Loan Losses (unaudited) | |||||||||||||||||||
For the Three Months Ended | |||||||||||||||||||
(Dollars in thousands) | Dec. 31, 2012 | Sept. 30, 2012 | June 30, 2012 | March 31, 2012 | Dec. 31, 2011 | ||||||||||||||
Beginning balance | $ | 186,089 | $ | 198,757 | $ | 210,288 | $ | 233,487 | $ | 257,352 | |||||||||
Provision | 7,500 | 5,000 | 5,000 | 4,000 | 2,500 | ||||||||||||||
Charge-offs continuing portfolio: | |||||||||||||||||||
Commercial non-mortgage | 6,411 | 8,642 | 5,164 | 14,994 | 6,684 | ||||||||||||||
Equipment financing | 682 | 187 | 165 | 634 | 55 | ||||||||||||||
Asset based lending | 69 | — | 512 | — | 2,150 | ||||||||||||||
Commercial real estate | 170 | 2,655 | 1,066 | 5,848 | 7,768 | ||||||||||||||
Residential development | 156 | — | — | — | 453 | ||||||||||||||
Residential mortgages | 2,597 | 3,234 | 3,948 | 3,115 | 2,548 | ||||||||||||||
Consumer | 8,149 | 6,752 | 8,122 | 6,487 | 7,551 | ||||||||||||||
Charge-offs continuing portfolio | 18,234 | 21,470 | 18,977 | 31,078 | 27,209 | ||||||||||||||
Charge-offs liquidating portfolio: | |||||||||||||||||||
NCLC | — | 28 | 4 | — | 7 | ||||||||||||||
Consumer | 5,137 | 2,482 | 3,227 | 3,564 | 3,958 | ||||||||||||||
Charge-offs liquidating portfolio | 5,137 | 2,510 | 3,231 | 3,564 | 3,965 | ||||||||||||||
Total charge-offs | 23,371 | 23,980 | 22,208 | 34,642 | 31,174 | ||||||||||||||
Recoveries continuing portfolio: | |||||||||||||||||||
Commercial non-mortgage | 1,045 | 779 | 957 | 886 | 1,215 | ||||||||||||||
Equipment financing | 2,899 | 3,111 | 1,115 | 2,348 | 1,161 | ||||||||||||||
Asset based lending | 996 | 518 | 721 | 914 | 195 | ||||||||||||||
Commercial real estate | 43 | 121 | 34 | 1,069 | 96 | ||||||||||||||
Residential development | 721 | 181 | 12 | 31 | 5 | ||||||||||||||
Residential mortgages | 99 | 318 | 126 | 118 | 135 | ||||||||||||||
Consumer | 674 | 933 | 2,453 | 1,932 | 1,721 | ||||||||||||||
Recoveries continuing portfolio | 6,477 | 5,961 | 5,418 | 7,298 | 4,528 | ||||||||||||||
Recoveries liquidating portfolio: | |||||||||||||||||||
NCLC | 74 | 35 | 10 | 23 | 177 | ||||||||||||||
Consumer | 360 | 316 | 249 | 122 | 104 | ||||||||||||||
Recoveries liquidating portfolio | 434 | 351 | 259 | 145 | 281 | ||||||||||||||
Total recoveries | 6,911 | 6,312 | 5,677 | 7,443 | 4,809 | ||||||||||||||
Total net charge-offs | 16,460 | 17,668 | 16,531 | 27,199 | 26,365 | ||||||||||||||
Ending balance | $ | 177,129 | $ | 186,089 | $ | 198,757 | $ | 210,288 | $ | 233,487 | |||||||||
Note: $5.3 million of net charge-offs in 4Q12 relate to an OCC requirement to reduce Chapter 7 bankruptcies to collateral value.
WEBSTER FINANCIAL CORPORATION
Reconciliations to GAAP Financial Measures
The Company evaluates its business based on the following ratios that utilize tangible equity, a non-GAAP financial measure. Return on average tangible equity measures the Company’s earnings contribution as a percentage of average shareholders’ equity less goodwill and intangible assets (excluding mortgage servicing rights), net of related deferred tax liabilities on intangible assets. The tangible equity ratio represents total ending shareholders’ equity less goodwill and intangible assets (excluding mortgage servicing rights), net of related deferred tax liabilities divided by total assets less goodwill and intangible assets (excluding mortgage servicing rights), net of related deferred tax liabilities on intangible assets. The tangible common equity ratio represents ending common shareholders’ equity less goodwill and intangible assets (excluding mortgage servicing rights), net of related deferred tax liabilities divided by total assets less goodwill and intangible assets (excluding mortgage servicing rights), net of related deferred tax liabilities on intangible assets. Tangible book value per common share represents ending common shareholders’ equity less goodwill and intangible assets (excluding mortgage servicing rights), net of related deferred tax liabilities on intangible assets divided by ending common shares outstanding.
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. Accordingly, this is also a non-GAAP financial measure.
See the tables below for reconciliations of these non-GAAP financial measures with financial measures defined by GAAP for the three months ended December 31, 2012, September 30, 2012, June 30, 2012, March 31, 2012, December 31, 2011. 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.
For the Three Months Ended | |||||||||||||||||||
(Dollars in thousands) | Dec. 31, 2012 | Sept. 30, 2012 | June 30, 2012 | March 31, 2012 | Dec. 31, 2011 | ||||||||||||||
Reconciliation of period-end shareholders’ equity to period-end tangible shareholders’ equity | |||||||||||||||||||
Shareholders' equity | $ | 2,093,530 | $ | 1,983,678 | $ | 1,931,548 | $ | 1,894,942 | $ | 1,845,774 | |||||||||
Goodwill | (529,887 | ) | (529,887 | ) | (529,887 | ) | (529,887 | ) | (529,887 | ) | |||||||||
Intangible assets (excluding mortgage servicing rights) | (10,270 | ) | (11,512 | ) | (12,896 | ) | (14,293 | ) | (15,690 | ) | |||||||||
Related deferred tax liabilities | 3,678 | 4,123 | 4,618 | 5,119 | 5,492 | ||||||||||||||
Tangible shareholders’ equity | $ | 1,557,051 | $ | 1,446,402 | $ | 1,393,383 | $ | 1,355,881 | $ | 1,305,689 | |||||||||
Reconciliation of period-end common shareholders’ equity to period-end tangible common shareholders’ equity | |||||||||||||||||||
Shareholders' equity | $ | 2,093,530 | $ | 1,983,678 | $ | 1,931,548 | $ | 1,894,942 | $ | 1,845,774 | |||||||||
Preferred stock | (151,649 | ) | (28,939 | ) | (28,939 | ) | (28,939 | ) | (28,939 | ) | |||||||||
Common shareholders' equity | 1,941,881 | 1,954,739 | 1,902,609 | 1,866,003 | 1,816,835 | ||||||||||||||
Goodwill | (529,887 | ) | (529,887 | ) | (529,887 | ) | (529,887 | ) | (529,887 | ) | |||||||||
Intangible assets (excluding mortgage servicing rights) | (10,270 | ) | (11,512 | ) | (12,896 | ) | (14,293 | ) | (15,690 | ) | |||||||||
Related deferred tax liabilities | 3,678 | 4,123 | 4,618 | 5,119 | 5,492 | ||||||||||||||
Tangible common shareholders’ equity | $ | 1,405,402 | $ | 1,417,463 | $ | 1,364,444 | $ | 1,326,942 | $ | 1,276,750 | |||||||||
Reconciliation of period-end assets to period-end tangible assets | |||||||||||||||||||
Assets | $ | 20,146,765 | $ | 19,729,662 | $ | 19,429,749 | $ | 19,134,142 | $ | 18,714,340 | |||||||||
Goodwill | (529,887 | ) | (529,887 | ) | (529,887 | ) | (529,887 | ) | (529,887 | ) | |||||||||
Intangible assets (excluding mortgage servicing rights) | (10,270 | ) | (11,512 | ) | (12,896 | ) | (14,293 | ) | (15,690 | ) | |||||||||
Related deferred tax liabilities | 3,678 | 4,123 | 4,618 | 5,119 | 5,492 | ||||||||||||||
Tangible assets | $ | 19,610,286 | $ | 19,192,386 | $ | 18,891,584 | $ | 18,595,081 | $ | 18,174,255 | |||||||||
Book value per common share | |||||||||||||||||||
Common shareholders’ equity | $ | 1,941,881 | $ | 1,954,739 | $ | 1,902,609 | $ | 1,866,003 | $ | 1,816,835 | |||||||||
Ending common shares issued and outstanding (in thousands) | 85,341 | 87,899 | 87,885 | 87,849 | 87,600 | ||||||||||||||
Book value per share of common stock | $ | 22.75 | $ | 22.24 | $ | 21.65 | $ | 21.24 | $ | 20.74 | |||||||||
Tangible book value per common share | |||||||||||||||||||
Tangible common shareholders’ equity | $ | 1,405,402 | $ | 1,417,463 | $ | 1,364,444 | $ | 1,326,942 | $ | 1,276,750 | |||||||||
Ending common shares issued and outstanding (in thousands) | 85,341 | 87,899 | 87,885 | 87,849 | 87,600 | ||||||||||||||
Tangible book value per common share | $ | 16.47 | $ | 16.13 | $ | 15.53 | $ | 15.10 | $ | 14.57 | |||||||||
Reconciliation of noninterest expense to noninterest expense used in the efficiency ratio | |||||||||||||||||||
Noninterest expense | $ | 122,925 | $ | 123,887 | $ | 127,179 | $ | 127,813 | $ | 126,572 | |||||||||
Foreclosed property expense | (267 | ) | (118 | ) | (176 | ) | (467 | ) | (730 | ) | |||||||||
Amortization of intangibles | (1,242 | ) | (1,384 | ) | (1,397 | ) | (1,397 | ) | (1,397 | ) | |||||||||
Other expense | (452 | ) | (187 | ) | (2,572 | ) | (551 | ) | (1,169 | ) | |||||||||
Noninterest expense used in the efficiency ratio | $ | 120,964 | $ | 122,198 | $ | 123,034 | $ | 125,398 | $ | 123,276 | |||||||||
Reconciliation of income to income used in the efficiency ratio | |||||||||||||||||||
Net interest income before provision | $ | 146,272 | $ | 144,890 | $ | 144,378 | $ | 143,368 | $ | 141,009 | |||||||||
Fully taxable-equivalent adjustment | 3,480 | 3,740 | 3,813 | 3,718 | 4,011 | ||||||||||||||
Noninterest income | 52,940 | 48,479 | 47,353 | 43,986 | 42,246 | ||||||||||||||
Less: Net gain on investment securities | — | (810 | ) | (2,537 | ) | — | — | ||||||||||||
Income used in the efficiency ratio | $ | 202,692 | $ | 196,299 | $ | 193,007 | $ | 191,072 | $ | 187,266 | |||||||||