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8-K - 8-K - WEBSTER FINANCIAL CORPq4earningsrelease8-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