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Webster is a full service commercial bank that provides business and consumer banking, mortgage, financial planning, trust and investment services.

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Webster Reports Strong 2012 Second Quarter Earnings
Net Income Grows by 22 Percent over Prior Year

WATERBURY, Conn., July 13, 2012 /PRNewswire/ -- Webster Financial Corporation (NYSE: WBS), the holding company for Webster Bank, N.A., today announced net income available to common shareholders of $40.6 million, or $.44 per diluted share, for the quarter ended June 30, 2012 compared to $38.3 million, or $.42 per diluted share, for the quarter ended March 31, 2012 and $33.4 million, or $.36 per diluted share, for the quarter ended June 30, 2011. 

Highlights for the quarter or at June 30 include:

Combined growth in commercial and commercial real estate loans of $222.6 million or 4.2 percent from March 31, and $467.2 million or 9.2 percent from a year ago.

Growth of $176.0 million or 3.3 percent in transaction account deposits from March 31 and $673.5 million or 14.0 percent from a year ago, which represent 39.2 percent of total deposits compared to 38.0 percent at March 31 and 35.0 percent a year ago.

Net interest income increased $1.0 million compared to the first quarter and $3.5 million from a year ago; net interest margin was 3.32 percent compared to 3.36 percent in the first quarter and 3.48 percent a year ago.

Core noninterest income increased $0.8 million in the quarter and $0.3 million from a year ago reflecting expanded revenues from corporate finance products in franchise activities.

Noninterest expense before one time costs of $123.9 million compared to $126.6 million in the first quarter and $126.0 million a year ago; continued achievement of positive operating leverage as core revenue grew 1.0 percent and core expenses declined 1.9 percent from the first quarter.

Continued improvement in asset quality as evidenced by a 5.8 percent reduction in nonperforming assets and a 12.0 percent decline in commercial classified loans, both from March 31, and reductions of 30.6 percent and 36.2 percent from a year ago.

Provision for loan losses of $5.0 million compared to $4.0 million in the first quarter and $5.0 million a year ago, reflective of continued portfolio growth and asset quality improvement.

Webster Chairman and Chief Executive Officer James C. Smith said, "Webster turned in a solid second quarter by most any measure. Loan growth, asset quality, operating efficiency, and earnings all showed meaningful improvement as the southern New England economy continues to recover."

Net interest income

  • Net interest income was $144.4 million for the quarter compared to $143.4 million in the first quarter.
  • Net interest margin was 3.32 percent compared to 3.36 percent in the first quarter as the yield on interest-earning assets declined 6 basis points, primarily on securities, and the cost of funds declined 2 basis points.  
  • Average interest-earning assets grew by 1.8 percent from the first quarter and totaled $17.8 billion compared to $17.5 billion in the first quarter. 

Webster President and Chief Operating Officer Jerry Plush noted, "Loan originations were 69 percent higher than a year ago and totaled over $1 billion in the quarter. We ended the quarter with strong loan pipelines, which should bode well for the balance of the year. Our emphasis on growing transaction accounts continues to pay off as demand and interest-bearing checking deposits now represent almost 40 percent of total deposits. The growth in our loan portfolio, coupled with an increase in lower cost transaction deposits, enabled us to grow net interest income in a challenging interest rate environment."

Provision for loan losses

  • The Company recorded a provision of $5.0 million in the quarter compared to $4.0 million in the first quarter and $5.0 million a year ago.
  • Net charge-offs were $16.5 million in the quarter compared to $27.2 million for the first quarter and $21.7 million a year ago.
  • The allowance for loan losses represented 117 percent of nonperforming loans compared to 118 percent in the prior quarter.

Noninterest income

  • Total noninterest income increased $3.4 million compared to the first quarter. Included in noninterest income in the second quarter is $2.5 million of securities gains.
  • The $0.8 million increase in core noninterest income compared to the first quarter reflects an increase of $1.0 million in corporate finance products revenue included in other income. Direct investment income was $1.3 million higher as the first quarter included write-downs of $0.8 million. Deposit service fees increased $0.4 million compared to the first quarter while loan fees and mortgage banking decreased $1.3 million and $0.8 million, respectively. The lower loan fees were due in part to fewer prepayment penalties and a mortgage servicing right impairment of $0.3 million in the quarter.

Noninterest expense

  • Total noninterest expense decreased $0.6 million compared to the first quarter. Included in noninterest expense are net one time costs of $3.2 million in the second quarter and $1.2 million in the first quarter. Included in net one time costs in the second quarter is $2.5 million in debt prepayment expense in connection with the prepayment of $49.0 million in FHLB advances.
  • Total noninterest expense excluding one time costs decreased $2.7 million from the first quarter and $2.0 million from a year ago. The decrease compared to the first quarter is driven by a reduction of $5.0 million in compensation and benefits offset by an increase of $1.0 million in marketing and additional expense in technology. Gains on foreclosed and repossessed assets were $0.7 million in both the second and the first quarters.

Income taxes

  • The Company recorded $18.3 million of income tax expense in the quarter on the $59.6 million of pre-tax income applicable to continuing operations in the period. The effective tax rate for the quarter was 30.7 percent compared to 29.9 percent for the first quarter, which included $0.5 million of tax benefits specific to that period.

Investment securities

  • Total investment securities were $6.2 billion at both June 30, 2012 and March 31, 2012. The carrying value of the available for sale portfolio included $46.7 million in net unrealized gains compared to net unrealized gains of $43.4 million at March 31, while the carrying value of the held to maturity portfolio does not reflect $158.4 million in net unrealized gains compared to net unrealized gains of $154.9 million at March 31.

Loans

  • Total loans were $11.5 billion at June 30, 2012 compared to $11.3 billion at March 31, 2012 and are reflective of continued growth in commercial, commercial real estate and residential mortgages. In the quarter, commercial and commercial real estate loans increased by $97.0 million and $125.6 million, respectively. Residential mortgage loans increased by $30.4 million while consumer loans declined by $25.2 million.
  • Loan originations for portfolio in the second quarter were $973.0 million compared to $790.8 million in the first quarter and $643.3 million a year ago. Originations for the second quarter consisted of $393.0 million in commercial, $261.0 million in commercial real estate, $162.0 million in residential and $157.0 million in consumer.
  • In addition to loan originations for portfolio, $198.3 million of residential loans were originated and sold with servicing retained in the quarter compared to $131.4 million in the first quarter and $47.1 million a year ago.

Asset quality

  • Total nonperforming loans declined to $169.2 million, or 1.47 percent of total loans, at June 30, 2012 compared to $178.3 million, or 1.58 percent, at March 31, 2012. Included in nonperforming loans were paying loans totaling $17.0 million at June 30 compared to $18.1 million at March 31. Also included in nonperforming loans are $4.5 million in consumer liquidating loans compared to $3.9 million at March 31.
  • Past due loans increased to $65.9 million at June 30 compared to $60.0 million at March 31. Past due loans for the continuing portfolios were $61.5 million at June 30 compared to $54.7 million at March 31. Past due loans for the liquidating portfolio were $4.4 million at June 30 compared to $5.3 million at March 31.
  • Other real estate owned (OREO) totaled $4.4 million compared to $6.0 million at June 30.

Deposits and borrowings

  • Total deposits were $14.0 billion at June 30, 2012 compared to $13.9 billion at March 31, 2012. Increases of $119.9 million in demand, $56.1 million in interest-bearing checking and $15.3 million in savings deposits were offset by declines of $110.9 in money market and $51.0 million in certificates of deposit. Core to total deposits and loans to deposits were 81 percent and 83 percent, respectively, compared to 80 percent and 81 percent at March 31.
  • Total borrowings were $3.2 billion at June 30 compared to $3.1 billion at March 31. Borrowings represented 16 percent of total assets at both June 30 and March 31.

Capital

  • The tangible common equity and Tier 1 common equity to risk-weighted assets ratios were 7.22 percent and 10.95 percent, respectively, at June 30, 2012 compared to 7.14 percent and 10.96 percent, respectively, at March 31, 2012.
  • Book value and tangible book value per common share were $21.65 and $15.53, respectively, at June 30 compared to $21.24 and $15.10, respectively, at March 31.
  • Return on average shareholders' equity and return on average tangible equity were 8.49 percent and 11.81 percent, respectively, at June 30 and 8.17 percent and 11.46 percent, respectively, at March 31.

Webster Financial Corporation is the holding company for Webster Bank, National Association. With $19 billion in assets, Webster provides business and consumer banking, mortgage, financial planning, trust and investment services through 167 banking offices, 464 ATMs, 290 of which are owned by Webster and 174 of which are branded, 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 second quarter earnings announcement will be held today, Friday, July 13, 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.

 

WEBSTER FINANCIAL CORPORATION







Selected Financial Highlights (unaudited)














                                                                                   At or for the Three Months Ended


June 30,


March 31,


Dec. 31,


Sept. 30,


June 30,


(In thousands, except per share data)

2012


2012


2011


2011


2011













Income and performance ratios, (annualized):






















Net income available to common shareholders

$       40,625


$       38,323


$       39,591


$      41,400


$       33,353


Net income per diluted common share 

0.44


0.42


0.43


0.45


0.36


Return on average shareholders' equity

8.49

%

8.17

%

8.50

%

8.96

%

7.27

%

Return on average tangible equity

11.81


11.46


11.97


12.67


10.31


Return on average assets

0.85


0.81


0.86


0.92


0.74


Noninterest income as a percentage of total revenue

24.70


23.48


23.05


23.98


24.69


Efficiency ratio

63.75


65.63


65.83


62.22


65.02













Asset quality:






















Allowance for loan losses

$      198,757


$      210,288


$      233,487


$     257,352


$     281,243


Nonperforming assets

173,621


184,218


193,047


239,945


250,084


Allowance for loan losses / total loans

1.72

%

1.86

%

2.08

%

2.33

%

2.55

%

Net charge-offs / average loans (annualized)

0.58


0.96


0.95


1.05


0.79


Nonperforming loans / total loans

1.47


1.58


1.68


2.00


2.07


Nonperforming assets / total loans plus OREO

1.50


1.63


1.72


2.17


2.27


Allowance for loan losses / nonperforming loans

117.44


117.96


124.14


116.43


123.22













Other ratios (annualized):






















Tangible equity ratio

7.38

%

7.29

%

7.18

%

7.32

%

7.46

%

Tangible common equity ratio

7.22


7.14


7.03


7.16


7.29


Tier 1 risk-based capital ratio(b)

12.80


12.86


13.05


13.04


12.89


Total risk-based capital(b)

14.06


14.12


14.61


14.60


14.47


Tier 1 common equity / risk-weighted assets(b)

10.95


10.96


11.08


11.01


10.74


Shareholders' equity / total assets

9.94


9.90


9.86


10.08


10.27


Interest rate spread

3.29


3.33


3.36


3.45


3.44


Net interest margin

3.32


3.36


3.39


3.49


3.48













Share and equity related:






















Common equity

$   1,902,609


$   1,866,003


$   1,816,835


$  1,807,330


$  1,800,215


Book value per common share

21.65


21.24


20.74


20.65


20.57


Tangible book value per common share

15.53


15.10


14.57


14.47


14.38


Common stock closing price

21.66


22.67


20.39


15.30


21.02


Dividends declared per common share 

0.10


0.05


0.05


0.05


0.05













Common shares issued and outstanding

87,885


87,849


87,600


87,507


87,532


Basic shares (average)

87,291


87,216


87,097


87,046


86,986


Diluted shares (average)

91,543


91,782


90,929


91,205


92,184















Footnotes:

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

(b) The ratios presented are projected for June 30, 2012 and actual for the remaining periods presented.

(c) Certain previously reported information has been corrected to reflect the deferment of certain commercial loan fees.

 

WEBSTER FINANCIAL CORPORATION







Consolidated Balance Sheets (unaudited)










June 30,


March 31,


June 30,


(In thousands)

2012


2012


2011(c)












Assets:

















Cash and due from banks

$ 197,229


$ 173,027


$ 196,181



Interest-bearing deposits

73,598


77,921


57,863












Investment securities:









    Available for sale, at fair value

3,153,580


3,144,867


2,143,072




    Held to maturity

3,076,226


3,079,654


3,123,510




Total securities

6,229,806


6,224,521


5,266,582












Loans held for sale

89,228


59,615


21,650












Loans:








    Commercial

2,985,993


2,888,977


2,846,699



    Commercial real estate

2,551,427


2,425,797


2,223,477



    Residential mortgages

3,300,617


3,270,213


3,139,408



    Consumer

2,701,960


2,727,163


2,802,907




Total loans

11,539,997


11,312,150


11,012,491



Allowance for loan losses

(198,757)


(210,288)


(281,243)




Loans, net

11,341,240


11,101,862


10,731,248












Prepaid FDIC premiums

27,062


32,507


46,546



Federal Home Loan Bank and Federal Reserve Bank stock

142,595


142,595


143,874



Premises and equipment, net

137,420


141,088


152,009



Goodwill and other intangible assets, net

542,783


544,180


548,370



Cash surrender value of life insurance policies

312,117


309,556


303,258



Deferred tax asset, net

79,011


81,676


92,127



Accrued interest receivable and other assets

257,660


245,594


243,173












Total Assets

$ 19,429,749


$ 19,134,142


$ 17,802,881












Liabilities and Equity:

















Deposits:








          Demand

$ 2,611,297


$ 2,491,442


$ 2,323,266




Interest-bearing checking

2,863,076


2,806,950


2,477,625



          Money market

1,934,137


2,045,090


2,081,503



          Savings

3,850,549


3,835,180


3,773,417



          Certificates of deposit

2,595,816


2,646,783


2,939,648



          Brokered certificates of deposit

119,052


119,052


121,068




Total deposits

13,973,927


13,944,497


13,716,527












Securities sold under agreements to repurchase and









other short-term borrowings

1,203,378


1,268,589


1,079,866



Federal Home Loan Bank advances

1,529,102


1,352,466


403,131



Long-term debt

472,928


474,318


566,677



Accrued expenses and other liabilities

318,866


199,330


197,949




Total liabilities

17,498,201


17,239,200


15,964,150












Webster Financial Corporation shareholders' equity

1,931,548


1,894,942


1,829,154



Noncontrolling interests

-


-


9,577




Total equity

1,931,548


1,894,942


1,838,731





















Total Liabilities and Equity

$ 19,429,749


$ 19,134,142


$ 17,802,881












See Selected Financial Highlights for footnotes.







 

WEBSTER FINANCIAL CORPORATION

Consolidated Statements of Operations (unaudited)







Three Months Ended


Six Months Ended






June


June


(In thousands, except per share data)



2012


2011


2012


2011















Interest income:












Interest and fees on loans and leases



$ 121,379


$ 122,395


$ 242,120


$ 244,338



Interest and dividends on securities



52,597


53,527


105,465


107,371



Loans held for sale



657


177


1,155


599



    Total interest income



174,633


176,099


348,740


352,308















Interest expense:












Deposits



15,102


21,841


31,158


44,610



Borrowings



15,153


13,345


29,836


26,624



    Total interest expense



30,255


35,186


60,994


71,234















    Net interest income



144,378


140,913


287,746


281,074



Provision for loan losses



5,000


5,000


9,000


15,000



    Net interest income after provision for loan losses



139,378


135,913


278,746


266,074















Noninterest income:












Deposit service fees



23,719


26,095


47,082


51,435



Loan related fees



3,565


5,590


8,434


10,033



Wealth and investment services



7,249


7,454


14,470


14,176



Mortgage banking activities



3,624


1,234


8,007


2,487



Increase in cash surrender value of life insurance policies



2,561


2,576


5,078


5,109



Net gain on investment securities



2,537


1,647


2,537


2,024



Other income



4,098


1,593


5,731


4,841



    Total noninterest income



47,353


46,189


91,339


90,105















Noninterest expense:












Compensation and benefits



63,587


65,592


132,206


132,604



Occupancy



12,578


12,856


25,460


27,591



Technology and equipment expense



16,021


15,134


31,603


30,526



Marketing



5,094


4,252


9,194


9,772



Professional and outside services



3,387


2,813


6,079


5,243



Intangible assets amortization



1,397


1,397


2,794


2,794



Foreclosed and repossessed asset expenses



176


710


643


1,594



Foreclosed and repossessed asset (gains) write-downs



(670)


794


(1,334)


479



Loan workout expenses



2,201


1,779


4,025


3,579



Deposit insurance



5,723


5,918


11,432


11,699



Other expenses



14,443


14,716


28,433


28,640






123,937


125,961


250,535


254,521



Debt prepayment penalties



2,515


-


3,649


-



Write-down for expedited asset disposition



-


5,073


-


5,073



Contract termination and severance



727


1,060


727


1,060



Branch and facility optimization



-


859


81


1,132



Costs for warrant registration



-


350


-


350



Provision for litigation and settlements



-


194


-


486



Loan repurchase and unfunded commitment reserve benefit, net



-


(1,436)


-


(1,436)



    Total noninterest expense



127,179


132,061


254,992


261,186















Income from continuing operations before income taxes



59,552


50,041


115,093


94,993



Income tax expense



18,312


15,857


34,915


28,225



    Income from continuing operations



41,240


34,184


80,178


66,768



Income from discontinued operations, net of tax



-


-


-


1,995



    Consolidated net income



41,240


34,184


80,178


68,763



Less: Net loss attributable to noncontrolling interests



-


-


-


(1)



    Net income attributable to Webster Financial Corp.



41,240


34,184


80,178


68,764



Preferred stock dividends



(615)


(831)


(1,230)


(1,662)



    Net income available to common shareholders



$ 40,625


$ 33,353


$ 78,948


$ 67,102















Diluted shares (average)



91,543


92,184


91,669


92,368















Net income per common share available to common shareholders:












Basic












    Income from continuing operations



$ 0.46


$ 0.38


$ 0.90


$ 0.75



    Net income



0.46


0.38


0.90


0.77



Diluted












    Income from continuing operations



0.44


0.36


0.86


0.70



    Net income



0.44


0.36


0.86


0.72



See Selected Financial Highlights for footnotes.























 

WEBSTER FINANCIAL CORPORATION

Five Quarter Consolidated Statements of Operations (unaudited)


Three Months Ended












June 30,


March 31,


Dec. 31,


Sept. 30,


June 30,

(In thousands, except per share data)

2012


2012


2011


2011


2011











Interest income:










Interest and fees on loans and leases

$121,379


$120,741


$121,223


$121,322


$122,395

Interest and dividends on securities

52,597


52,868


51,260


52,974


53,527

Loans held for sale

657


498


370


266


177

    Total interest income

174,633


174,107


172,853


174,562


176,099











Interest expense:










Deposits

15,102


16,056


17,268


18,930


21,841

Borrowings

15,153


14,683


14,576


13,947


13,345

   Total interest expense

30,255


30,739


31,844


32,877


35,186











   Net interest income

144,378


143,368


141,009


141,685


140,913

Provision for loan losses

5,000


4,000


2,500


5,000


5,000

   Net interest income after provision for loan losses

139,378


139,368


138,509


136,685


135,913











Noninterest income:










Deposit service fees

23,719


23,363


24,286


27,074


26,095

Loan related fees

3,565


4,869


4,896


5,308


5,590

Wealth and investment services

7,249


7,221


5,759


6,486


7,454

Mortgage banking activities

3,624


4,383


1,094


1,324


1,234

Increase in cash surrender value of life insurance policies

2,561


2,517


2,609


2,642


2,576

Net gain on investment securities

2,537


-


-


-


1,647

Other income

4,098


1,633


3,602


1,857


1,593

   Total noninterest income

47,353


43,986


42,246


44,691


46,189











Noninterest expense:










Compensation and benefits

63,587


68,619


68,146


61,897


65,592

Occupancy

12,578


12,882


13,125


13,150


12,856

Technology and equipment expense

16,021


15,582


15,054


15,141


15,134

Marketing

5,094


4,100


4,540


4,144


4,252

Professional and outside services

3,387


2,692


2,835


3,125


2,813

Intangible assets amortization

1,397


1,397


1,397


1,397


1,397

Foreclosed and repossessed asset expenses

176


467


730


726


710

Foreclosed and repossessed asset (gains) write-downs 

(670)


(664)


(63)


(722)


794

Loan workout expenses

2,201


1,824


1,956


2,012


1,779

Deposit insurance 

5,723


5,709


4,756


4,472


5,918

Other expenses

14,443


13,990


12,864


14,392


14,716


123,937


126,598


125,340


119,734


125,961

Debt prepayment penalties

2,515


1,134


5,203


-


-

Write-down for expedited asset disposition

-


-


1,187


-


5,073

Contract termination and severance

727


-


2,485


1,555


1,060

Branch and facility optimization

-


81


1,689


2,183


859

Preferred stock redemption costs

-


-


423


-


-

Costs for warrant registration

-


-


-


-


350

Provision (benefit) for litigation and settlements

-


-


(9,755)


(254)


194

Loan repurchase and unfunded commitment reserve benefit, net

-


-


-


-


(1,436)

  Total noninterest expense

127,179


127,813


126,572


123,218


132,061











Income from continuing operations before income taxes 

59,552


55,541


54,183


58,158


50,041

Income tax expense

18,312


16,603


13,799


15,927


15,857

   Income from continuing operations 

41,240


38,938


40,384


42,231


34,184

Income from discontinued operations, net of tax

-


-


-


-


-

   Consolidated net income

41,240


38,938


40,384


42,231


34,184

Less: Net loss attributable to noncontrolling interests

-


-


-


-


-

  Net income attributable to Webster Financial Corp.

41,240


38,938


40,384


42,231


34,184

Preferred stock dividends

(615)


(615)


(793)


(831)


(831)

   Net income available to common shareholders

$40,625


$38,323


$39,591


$41,400


$33,353











   Diluted shares (average)

91,543


91,782


90,929


91,205


92,184











Net income per common share available to common shareholders:










Basic










   Income from continuing operations

$0.46


$0.44


$0.45


$0.48


$0.38

   Net income 

0.46


0.44


0.45


0.48


0.38

Diluted










   Income from continuing operations

0.44


0.42


0.43


0.45


0.36

   Net income

0.44


0.42


0.43


0.45


0.36

See Selected Financial Highlights for footnotes.











 

 

WEBSTER FINANCIAL CORPORATION




Five Quarter Interest Rate Spreads and Margin  (unaudited)








Three Months Ended








June 30,


March 31,


December 31,


September 30,


June 30,









2012 


2012


2011


2011


2011























Interest rate spread

















Yield on interest-earning assets



4.00

%

4.06

%

4.13

%

4.27

%

4.33

%





Cost of interest-bearing liabilities



0.71


0.73


0.77


0.82


0.89






    Interest rate spread



3.29

%

3.33

%

3.36

%

3.45

%

3.44

%






















    Net interest margin



3.32

%

3.36

%

3.39

%

3.49

%

3.48

%






















Consolidated Average Balances, Yields, and Rates Paid   (unaudited)
























Three Months Ended June 30,





2012






2011 (c)












 Fully tax- 






 Fully tax- 







Average




 equivalent 


Average




 equivalent 



(Dollars in thousands)



balance


Interest 


 yield/rate 


balance


Interest 


 yield/rate 




















Assets:

















Interest-earning assets:

















Loans



$  11,420,721


$       121,379


4.23

%

$ 10,991,890


$       122,395


4.44

%



Investment securities(a)



6,122,745


55,497


3.65


5,244,359


56,395


4.34




Loans held for sale



68,362


657


3.85


14,814


177


4.78




Federal Home Loan and Federal Reserve Bank stock

142,595


881


2.48


143,874


832


2.32




Interest-bearing deposits



67,480


32


0.19


212,172


123


0.23




   Total interest-earning assets



17,821,903


178,446


4.00


16,607,109


179,922


4.33




Noninterest-earning assets



1,383,932






1,313,712








   Total assets



$  19,205,835






$ 17,920,821
























Liabilities and Shareholders' Equity:

















Interest-bearing liabilities:

















   Deposits:

















     Demand



2,554,873


$                -


-

%

$   2,225,819


$                -


-

%



     Savings, interest checking, and money market


8,676,206


5,285


0.24


8,675,135


9,554


0.44




     Certificates of deposit



2,732,024


9,817


1.45


3,122,527


12,287


1.58




        Total deposits



13,963,103


15,102


0.43


14,023,481


21,841


0.62




Securities sold under agreements to repurchase
















  and other short-term borrowings



1,210,234


5,360


1.75


891,344


3,777


1.68




Federal Home Loan Bank advances



1,447,347


4,426


1.21


403,223


3,295


3.23




Long-term debt



473,602


5,367


4.53


568,868


6,273


4.41




   Total borrowings



3,131,183


15,153


1.92


1,863,435


13,345


2.85




   Total interest-bearing liabilities



17,094,286


30,255


0.71


15,886,916


35,186


0.89




Noninterest-bearing liabilities



197,224






188,395








   Total liabilities



17,291,510






16,075,311

























Noncontrolling interests



-






9,577

























Webster Financial Corp. shareholders' equity


1,914,325






1,835,933








   Total liabilities and equity



$  19,205,835






$ 17,920,821








Tax-equivalent net interest income





148,191






144,736






Less: tax-equivalent adjustment





(3,813)






(3,823)























Net interest income





$       144,378






$       140,913























Interest rate spread







3.29

%




3.44

%



Net interest margin







3.32

%




3.48

%





































See Selected Financial Highlights for footnotes.
































 

 

WEBSTER FINANCIAL CORPORATION













Consolidated Average Balances, Yields, and Rates Paid   (unaudited)

























Six Months Ended June 30,


2012




2011 (c)













 Fully tax- 






 Fully tax- 







Average




 equivalent 


Average




 equivalent 



(Dollars in thousands)



balance


Interest


 yield/rate 


balance


Interest


 yield/rate 




















Assets:

















Interest-earning assets:

















Loans



$         11,348,027


$     242,120


4.25

%

$       11,025,481


$     244,338


4.43

%



Investment securities(a)



6,042,040


111,177


3.71


5,322,767


113,239


4.29




Loans held for sale



60,034


1,155


3.85


25,792


599


4.64




Federal Home Loan and Federal Reserve Bank stock

143,073


1,757


2.47


143,874


1,663


2.33




Interest-bearing deposits



72,457


62


0.17


137,156


157


0.23




   Total interest-earning assets



17,665,631


356,271


4.03


16,655,070


359,996


4.33




Noninterest-earning assets



1,389,005






1,324,594








   Total assets



$         19,054,636






$       17,979,664
























Liabilities and Shareholders' Equity:

















Interest-bearing liabilities:

















   Deposits:

















     Demand



$           2,495,035


$               -


-

%

$         2,193,967


$               -


-

%



     Savings, interest checking, and money market


8,652,127


11,079


0.26


8,659,127


20,137


0.47




     Certificates of deposit



2,771,113


20,079


1.46


3,116,638


24,473


1.58




        Total deposits



13,918,275


31,158


0.45


13,969,732


44,610


0.64




Securities sold under agreements to repurchase
















  and other short-term borrowings



1,188,392


9,794


1.63


942,745


7,339


1.55




Federal Home Loan Bank advances



1,353,782


8,990


1.31


478,474


6,650


2.76




Long-term debt



490,359


11,052


4.51


575,188


12,635


4.39




   Total borrowings



3,032,533


29,836


1.95


1,996,407


26,624


2.66




   Total interest-bearing liabilities



16,950,808


60,994


0.72


15,966,139


71,234


0.90




Noninterest-bearing liabilities



208,279






192,356








   Total liabilities



17,159,087






16,158,495

























Noncontrolling interests



-






9,606

























Webster Financial Corporation shareholders' equity


1,895,549






1,811,563








   Total liabilities and equity



$         19,054,636






$       17,979,664








Tax-equivalent net interest income





295,277






288,762






Less: tax-equivalent adjustment





(7,531)






(7,688)























Net interest income





$     287,746






$     281,074























Interest rate spread







3.31

%




3.43

%



Net interest margin







3.34

%




3.47

%





































See Selected Financial Highlights for footnotes.
































WEBSTER FINANCIAL CORPORATION























Five Quarter Loan Balances (unaudited)
















June 30,


March 31,


Dec. 31,


Sept. 30,


June 30,


(Dollars in thousands)


2012


2012


2011


2011


2011
















Loan Balances (actuals):












   Continuing Portfolio:














   Commercial non-mortgage


$  2,069,127


$  1,972,205