WATERBURY, Conn., Jan. 22 /PRNewswire-FirstCall/ -- Webster Financial Corporation (NYSE: WBS), the holding company for Webster Bank, N.A., today announced a consolidated net loss of $13.7 million for the quarter ended December 31, 2009. The net loss available to common shareholders of $54.4 million for the quarter ended December 31, 2009 included $34 million of imputed dividends related to the Warburg Pincus investment and convertible preferred exchanges completed during the quarter, which did not have any effect on capital levels at year end.
Key points for the quarter:
Increased core pre-tax, pre-provision earnings of $57.4 million compared to $56.1 million for the third quarter.
Increased tangible common equity by $71 million with completion of the Warburg Pincus investment; also bolstered common equity by exchanging common stock for $27 million par amount of outstanding Webster convertible preferred stock.
Reduced levels of provision for loan losses and net charge-offs of $67.0 million and $51.8 million, respectively, compared to $85.0 million and $64.6 million in the third quarter.
Improved net interest margin of 3.26 percent compared to 3.18 percent for the third quarter of 2009.
Improved core to total deposit ratio of 71 percent compared to 69 percent at September 30, 2009, reflecting core deposit growth of $394 million.
Improved loan-to-deposit ratio of 81 percent compared to 83 percent at September 30, 2009.
Webster Chairman and Chief Executive Officer James C. Smith said, "The fourth quarter was marked by many significant improvements in Webster's operating fundamentals, especially as seen in stabilizing and improved credit metrics, including lower delinquencies, a reduced provision for losses, lower net charge-offs, and higher loan loss coverage." Other positive trends include improved earnings before loan loss provision, expanded net interest margin, and continuing strong core deposit growth. While our results do not yet reflect a return to profitability, our solid performance and improving trends are encouraging. Our recently announced lending and hiring initiatives reflect our positive outlook for continuing improvement throughout 2010."
Net interest income
-- Net interest margin improved to 3.26 percent in the fourth quarter with the increase reflecting an 18 basis point decline in the cost of funds offsetting a 10 basis point decline in the yield on interest-earning assets.
-- Average interest-earning assets totaled $16.35 billion, up from $16.25 billion last quarter.
Provision for credit losses
-- $62.2 million of the $67.0 million provision for credit losses recorded in the fourth quarter was related to the Company's continuing portfolios, and $4.8 million of the provision for credit losses was related to the discontinued liquidating portfolio.
-- Net charge-offs were $51.8 million in the fourth quarter compared to $64.6 million for the quarter ended September 30, 2009; $43.2 million was related to the continuing portfolios compared to $51.4 million in the third quarter and $8.5 million was related to the discontinued liquidating portfolio compared to $13.2 million in the third quarter.
Noninterest income
-- Noninterest income includes a net gain on sale of investment securities of $53,000 compared to a net loss of $4.7 million in the third quarter. Fourth quarter results also include a net gain of $3.6 million on the fair value accounting mark on warrants issued in connection with the Warburg Pincus investment.
Noninterest expenses
-- Noninterest expenses, inclusive of severance and other one-time costs, increased $5.1 million from the third quarter. The fourth quarter included $6.5 million in severance and other one-time costs while the third quarter included $4.2 million in such charges. Included in the $6.5 million in severance and other costs were $3.7 million in facilities related charges, reflecting actions towards full consolidation of back office facilities, and $1.1 million in fraud related expense. Foreclosed and repossessed asset write-downs of $2.7 million and $2.2 million are also included in noninterest expenses in the respective periods.
Income taxes
-- Due to the pre-tax loss, the effective tax rate for the fourth quarter was not meaningful. The Company recorded a $1.6 million tax benefit in the quarter on the $15.3 million pre-tax loss applicable to continuing operations in the period.
Investment securities
-- Total investment securities were $4.8 billion at December 31, 2009 compared to $4.6 billion at September 30, 2009. The carrying value of the available for sale portfolio included $3 million in net unrealized losses compared to net unrealized losses of $4 million at September 30, 2009, while the carrying value of the held to maturity portfolio does not reflect $61 million in net unrealized gains compared to net unrealized gains of $103 million at September 30, 2009.
Loans
-- Total loans were $11.0 billion at December 31, 2009 compared to $11.3 billion at September 30, 2009. In the fourth quarter, residential mortgage loans increased by $60.6 million while consumer, commercial and commercial real estate loans declined by $74.2 million, $239.2 million and $32.8 million, respectively. The decline in commercial loans reflects reductions of $72.2 million in asset based loans and $53.7 million in equipment finance loans, as well as the sale of the insurance premium finance subsidiary in the quarter which had $93.5 million in loans at September 30, 2009.
-- The discontinued liquidating portfolio of indirect home equity and national construction loans, included in the consumer and residential loan portfolios, declined by $13.2 million from September 30, 2009 to $219.1 million and $4.8 million, respectively.
Asset quality
-- Total nonperforming loans were $373.0 million or 3.38 percent of total loans at December 31, 2009 compared to $361.1 million or 3.19 percent at September 30, 2009. The increase in nonperforming loans reflects a combined increase of $19.9 million in non-accrual commercial real estate, residential development and asset based lending loans and a combined decrease of $8.0 million in all other loan categories.
-- Past due loans for the continuing portfolios decreased to $90.5 million at December 31, 2009 compared to $114.9 million at September 30, 2009. Past due loans for the liquidating portfolio decreased to $10.4 million at December 31, 2009 compared to $12.6 million at September 30, 2009.
Deposits and borrowings
-- Total deposits were $13.6 billion at December 31, 2009 compared to the same amount at September 30, 2009. The core categories of demand, NOW, money market and savings increased by a combined amount of $393.8 million while certificates of deposit and brokered deposits decreased by $317.9 million and $44.5 million, respectively.
-- Total borrowings were $2.0 billion, a decline of $134.9 million from $2.1 billion at September 30, 2009 primarily from maturities of FHLB advances of $118.6 million in the quarter. Borrowings represented 11.2 percent of total assets at December 31, 2009 compared to 11.9 percent at September 30, 2009.
Webster Financial Corporation is the holding company for Webster Bank, National Association. With $17.7 billion in assets, Webster provides business and consumer banking, mortgage, financial planning, trust and investment services through 181 banking offices, 501 ATMs, telephone banking and the Internet. Webster Bank owns the asset-based lending firm Webster Business Credit Corporation, Center Capital Corporation, an equipment finance company headquartered in Farmington, Conn., 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.websteronline.com.
Conference Call
A conference call covering Webster's fourth quarter earnings announcement will be held today, Friday, January 22, at 9:00 a.m. EST 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; (2) government intervention in the U.S. financial system; (3) changes in the level of non-performing assets and charge-offs; (4) inflation, interest rate, securities market and monetary fluctuations, and management's estimates and projections of such fluctuations; (5) the timely development and acceptance of new products and services and perceived overall value of these products and services by users; (6) changes in management's estimate of the adequacy of the allowance for loan losses; (7) the risks associated with the continued diversification of assets and adverse changes to credit quality; (8) technological changes; (9) the Company's ability to increase market share and control expenses; (10) changes in laws, regulations and policies (including tax, banking, securities and insurance laws, regulations and policies); (11) changes in applicable accounting policies and practice; (12) legal and regulatory developments including the resolution of legal proceedings or regulatory or other governmental inquiries and the results of regulatory examinations or reviews; (13) the Company's success at managing the risks involved in the foregoing items; and (14) the other factors that are described in the Company's Annual Report on Form 10-K 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 December 31, (In thousands, except per share data) 2009 2008 ------------------------------------- ---- ---- Net loss and performance ratios (annualized): ------------------------------- Net loss $(13,696) $(300,286) Net loss per diluted common share (0.84) (5.91) Return on average shareholders' equity (2.81)% (61.69)% Return on average tangible equity (3.91) (99.44) Return on average assets (0.31) (6.87) Loss from continuing operations and performance ratios (annualized): ----------------------------------- Loss from continuing operations attributable to Webster Financial Corporation $(13,685) $(300,294) Net loss from continuing operations per diluted common share (0.84) (5.91) Return on average shareholders' equity (2.81)% (61.70)% Return on average tangible equity (3.91) (99.45) Return on average assets (0.31) (6.87) Noninterest income as a percentage of total revenue 29.06 (213.84) Efficiency ratio (a) 64.88 58.96 Asset quality: -------------- Allowance for loan losses $341,184 $235,329 Nonperforming assets 401,965 263,189 Allowance for loan losses / total loans 3.09 % 1.93 % Net charge-offs /average loans (annualized) 1.85 1.66 Nonperforming loans / total loans 3.38 1.91 Nonperforming assets /total loans plus OREO 3.63 2.15 Allowance for loan losses / nonperforming loans 91.48 101.19 Other ratios (annualized): -------------------------- Tangible capital ratio 8.10 % 7.70 % Tangible common equity ratio 5.64 4.08 Total-risk based capital (d) 15.34 15.20 Tier 1 common equity /risk weighted assets (d) 7.83 5.66 Shareholders' equity / total assets 10.98 10.66 Interest-rate spread 3.20 3.11 Net interest margin 3.26 3.20 Share related: -------------- Book value per common share $19.60 $23.78 Tangible book value per common share 12.57 13.35 Common stock closing price 11.87 13.78 Dividends declared per common share 0.01 0.30 Common shares issued and outstanding 77,893 52,884 Basic shares (average) 71,445 52,031 Diluted shares (average) 72,747 52,031
At or for the Twelve Months Ended December 31, (In thousands, except per share data) 2009 2008 ------------------------------------- ---- ---- Net loss and performance ratios (annualized): ------------------------------- Net loss $(75,632) $(320,970) Net loss per diluted common share (2.14) (6.42) Return on average shareholders' equity (4.02)% (17.55)% Return on average tangible equity (5.68) (29.68) Return on average assets (0.43) (1.85) Loss from continuing operations and performance ratios (annualized): ----------------------------------- Loss from continuing operations attributable to Webster Financial Corporation $(75,934) $(317,897) Net loss from continuing operations per diluted common share (2.15) (6.36) Return on average shareholders' equity (4.04)% (17.39)% Return on average tangible equity (5.71) (29.40) Return on average assets (0.43) (1.84) Noninterest income as a percentage of total revenue 27.45 (5.87) Efficiency ratio (a) 65.92 62.38 Asset quality: -------------- Allowance for loan losses $341,184 $235,329 Nonperforming assets 401,965 263,189 Allowance for loan losses / total loans 3.09 % 1.93 % Net charge-offs /average loans (annualized) 1.68 1.09 Nonperforming loans / total loans 3.38 1.91 Nonperforming assets /total loans plus OREO 3.63 2.15 Allowance for loan losses / nonperforming loans 91.48 101.19 Other ratios (annualized): -------------------------- Tangible capital ratio 8.10 % 7.70 % Tangible common equity ratio 5.64 4.08 Total-risk based capital (d) 15.34 15.20 Tier 1 common equity /risk weighted assets (d) 7.83 5.66 Shareholders' equity / total assets 10.98 10.66 Interest-rate spread 3.07 3.21 Net interest margin 3.13 3.28 Share related: -------------- Book value per common share $19.60 $23.78 Tangible book value per common share 12.57 13.35 Common stock closing price 11.87 13.78 Dividends declared per common share 0.04 1.20 Common shares issued and outstanding 77,893 52,884 Basic shares (average) 60,943 52,020 Diluted shares (average) 63,917 52,020
Footnotes: ---------- (a) Calculated using SNL's methodology -noninterest expense (excluding foreclosed property expenses, intangible amortization, goodwill impairments and other charges) as a percentage of net interest income (FTE basis) plus noninterest income (excluding gain/ loss on securities and other charges). (b) For purposes of the yield computation, unrealized gains (losses) on securities available for sale are excluded from the average balance. (c) NCLC is defined as National Construction Lending Center. (d) The ratios presented are projected for the 2009 reporting periods and actual for the 2008 reporting periods.
WEBSTER FINANCIAL CORPORATION Consolidated Balance Sheet (unaudited) ----------------------------------------
December September December 31, 30, 31, (In thousands) 2009 2009 2008 -------------- ---- ---- ---- Assets: Cash and due from depository institutions $171,184 $173,437 $259,208 Short-term investments 390,310 360,618 22,154 Investment securities: Trading, at fair value - - 77 Available for sale, at fair value 2,126,043 1,912,283 1,188,705 Held-to-maturity 2,658,869 2,702,881 2,522,511 --------- --------- --------- Total securities 4,784,912 4,615,164 3,711,293 Loans held for sale 12,528 37,005 24,524 Loans: Residential mortgages 2,903,637 2,843,066 3,068,441 Consumer 3,020,714 3,094,927 3,300,169 Commercial 2,930,239 3,169,425 3,586,807 Commercial real estate 2,182,120 2,214,941 2,232,174 --------- --------- --------- Total loans 11,036,710 11,322,359 12,187,591 Allowance for loan losses (341,184) (326,406) (235,329) -------- -------- -------- Loans, net 10,695,526 10,995,953 11,952,262 Accrued interest receivable 65,041 70,007 74,307 Prepaid FDIC premiums 79,241 - - Federal Home Loan Bank and Federal Reserve Bank stock 140,874 140,874 134,874 Premises and equipment, net 178,422 179,353 185,928 Goodwill and other intangible assets, net 556,752 559,592 563,926 Cash surrender value of life insurance 289,486 286,806 279,807 Deferred tax assets, net 121,733 139,458 189,337 Prepaid expenses and other assets 253,188 250,019 185,917 ------- ------- ------- Total Assets $17,739,197 $17,808,286 $17,583,537 =========== =========== =========== Liabilities and Equity: Deposits: Demand deposits $1,664,958 $1,571,980 $1,493,295 NOW accounts 2,912,510 2,544,260 1,802,250 Money market deposit accounts 1,991,423 2,209,145 1,356,361 Savings accounts 3,146,603 2,996,318 2,361,169 Certificates of deposit 3,830,865 4,148,759 4,677,615 Brokered deposits 85,768 130,268 194,200 Total deposits 13,632,127 13,600,730 11,884,890 Securities sold under agreements to repurchase and other short-term debt 856,846 872,030 1,570,971 Federal Home Loan Bank advances 544,651 663,210 1,335,996 Long-term debt 588,419 589,600 687,797 Accrued expenses and other liabilities 159,120 185,342 220,145 ------- ------- ------- Total liabilities 15,781,163 15,910,912 15,699,799 Shareholders' equity 1,948,393 1,887,734 1,874,119 Noncontrolling interests 9,641 9,640 9,619 ----- ----- ----- Total equity 1,958,034 1,897,374 1,883,738 --------- --------- --------- Total Liabilities and Equity $17,739,197 $17,808,286 $17,583,537 =========== =========== ===========
See Selected Financial Highlights for footnotes.
WEBSTER FINANCIAL CORPORATION Consolidated Statements of Operations (unaudited) -------------------------------------------------
Three Months Ended December 31, ------------ (In thousands, except per share data) 2009 2008 ------------------------------------- ---- ---- Interest income: Loans including fees $127,069 $168,200 Investment securities 54,029 40,398 Loans held for sale 364 51 --- --- Total interest income 181,462 208,649 ------- ------- Interest expense: Deposits 35,937 57,154 Borrowings 15,044 25,427 ------ ------ Total interest expense 50,981 82,581 ------ ------ Net interest income 130,481 126,068 Provision for credit losses 67,000 100,000 ------ ------- Net interest income after provision for credit losses 63,481 26,068 ------ ------ Non-interest income: Deposit service fees 30,634 30,018 Loan related fees 6,501 7,147 Wealth and investment services 6,009 6,480 Mortgage banking activities 1,456 336 Increase in cash surrender value of life insurance 2,680 2,631 Net gain (loss) on sale of investment securities 53 (4,233) Other income 2,649 1,315 ----- ----- 49,982 43,694 Gain on the exchange of trust preferreds for common stock - - Gain on early extinguishment of subordinated notes - - Loss on write-down of investments to fair value (77) (129,593) Visa share transactions - - Warrants - fair value adjustment 3,552 - ----- --- Total non-interest income 53,457 (85,899) ------ ------- Non-interest expenses: Compensation and benefits 61,644 52,078 Occupancy 14,061 13,406 Furniture and equipment 15,299 15,469 Marketing 4,365 2,895 Outside services 4,209 4,101 Intangible amortization 1,409 1,463 Foreclosed and repossessed asset expenses 2,192 1,799 Foreclosed and repossessed asset write- downs 2,745 1,615 FDIC deposit insurance assessment 5,565 3,468 Other expenses 14,193 13,379 ------ 125,682 109,673 Severance and other costs 6,533 5,905 Impairment of goodwill - 188,866 FDIC special assessment - - --- --- Total non-interest expenses 132,215 304,444 ------- ------- Loss from continuing operations before income taxes (15,277) (364,275) Income tax benefit (1,593) (63,980) ------ ------- Loss from continuing operations (13,684) (300,295) (Loss) income from discontinued operations, net of tax (11) 8 --- --- Consolidated net loss $(13,695) $(300,287) Less: Net income (loss) attributable to noncontrolling interests 1 (1) --- --- Net loss attributable to Webster Financial Corporation (13,696) (300,286) Preferred stock dividends, accretion and extinguishment gain (40,704) (7,308) ------- ------ Net loss available to common shareholders $(54,400) $(307,594) ======== ========= Diluted shares (average) 72,747 52,031 Net loss per common share: Basic Loss from continuing operations $(0.76) $(5.91) Net loss (0.76) (5.91) Diluted Loss from continuing operations (0.84) (5.91) Net loss (0.84) (5.91)
Twelve Months Ended December 31, ------------ (In thousands, except per share data) 2009 2008 ------------------------------------- ---- ---- Interest income: Loans including fees $536,635 $710,621 Investment securities 206,630 157,055 Loans held for sale 2,077 1,597 ----- ----- Total interest income 745,342 869,273 ------- ------- Interest expense: Deposits 180,804 250,182 Borrowings 69,900 113,300 ------ ------- Total interest expense 250,704 363,482 ------- ------- Net interest income 494,638 505,791 Provision for credit losses 303,000 186,300 ------- ------- Net interest income after provision for credit losses 191,638 319,491 ------- ------- Non-interest income: Deposit service fees 119,421 120,132 Loan related fees 24,890 29,067 Wealth and investment services 24,000 28,140 Mortgage banking activities 6,901 1,230 Increase in cash surrender value of life insurance 10,629 10,441 Net gain (loss) on sale of investment securities (13,810) (6,094) Other income 7,766 6,684 ----- ----- 179,797 189,600 Gain on the exchange of trust preferreds for common stock 24,336 - Gain on early extinguishment of subordinated notes 5,993 - Loss on write-down of investments to fair value (28,477) (219,277) Visa share transactions 1,907 1,625 Warrants - fair value adjustment 3,552 - ----- --- Total non-interest income 187,108 (28,052) ------- ------- Non-interest expenses: Compensation and benefits 237,074 239,701 Occupancy 55,522 53,043 Furniture and equipment 60,926 61,155 Marketing 14,469 13,956 Outside services 15,015 15,758 Intangible amortization 5,743 5,939 Foreclosed and repossessed asset expenses 7,060 4,643 Foreclosed and repossessed asset write- downs 11,099 4,300 FDIC deposit insurance assessment 22,056 4,698 Other expenses 58,175 57,442 487,139 460,635 Severance and other costs 12,255 16,158 Impairment of goodwill - 198,379 FDIC special assessment 8,000 - ----- --- Total non-interest expenses 507,394 675,172 ------- ------- Loss from continuing operations before income taxes (128,648) (383,733) Income tax benefit (52,736) (65,840) ------- ------- Loss from continuing operations (75,912) (317,893) (Loss) income from discontinued operations, net of tax 302 (3,073) --- ------ Consolidated net loss $(75,610) $(320,966) Less: Net income (loss) attributable to noncontrolling interests 22 4 --- --- Net loss attributable to Webster Financial Corporation (75,632) (320,970) Preferred stock dividends, accretion and extinguishment gain (9,620) (12,947) ------ ------- Net loss available to common shareholders $(85,252) $(333,917) ======== ========= Diluted shares (average) 63,917 52,020 Net loss per common share: Basic Loss from continuing operations $(1.41) $(6.36) Net loss (1.40) (6.42) Diluted Loss from continuing operations (2.15) (6.36) Net loss (2.14) (6.42)
See Selected Financial Highlights for footnotes.
WEBSTER FINANCIAL CORPORATION Five Quarter Consolidated Statements of Operations (unaudited) --------------------------------------------------------------
Three Months Ended ------------------ Sept. Dec. 31, 30, June 30, (In thousands, except per share data) 2009 2009 2009 ------------------------- ---- ---- ---- Interest income: Loans including fees $127,069 $131,266 $137,533 Investment securities 54,029 52,975 48,799 Loans held for sale 364 716 833 --- --- --- Total interest income 181,462 184,957 187,165 ------- ------- ------- Interest expense: Deposits 35,937 41,977 49,982 Borrowings 15,044 16,308 17,895 ------ ------ ------ Total interest expense 50,981 58,285 67,877 ------ ------ ------ Net interest income 130,481 126,672 119,288 Provision for credit losses 67,000 85,000 85,000 ------ ------ ------ Net interest income after provision for credit losses 63,481 41,672 34,288 ------ ------ ------ Noninterest income: Deposit service fees 30,634 30,844 29,984 Loan related fees 6,501 5,557 6,350 Wealth and investment services 6,009 6,160 6,081 Mortgage banking activities 1,456 1,406 3,433 Increase in cash surrender value of life insurance 2,680 2,692 2,665 Net gain (loss) on sale of investment securities 53 (4,728) (13,593) Other income 2,649 3,517 1,325 ----- ----- ----- 49,982 45,448 36,245 Gain on the exchange of trust preferreds for common stock - - 24,336 Gain on early extinguishment of debt and swaps - - - Loss on write-down of investments to fair value (77) (1,290) (27,110) Warrants -fair value adjustment 3,552 - - Visa share transactions - - 1,907 --- --- ----- Total noninterest income 53,457 44,158 35,378 ------ ------ ------ Noninterest expenses: Compensation and benefits 61,644 59,772 59,189 Occupancy 14,061 13,572 13,594 Furniture and equipment 15,299 15,199 15,288 Marketing 4,365 3,802 3,196 Outside services 4,209 3,628 3,394 Intangible amortization 1,409 1,421 1,450 Foreclosed and repossessed asset expenses 2,192 1,733 1,799 Foreclosed and repossessed asset write-downs 2,745 2,232 2,829 FDIC deposit insurance assessment 5,565 5,942 5,959 Other expenses 14,193 15,616 14,066 125,682 122,917 120,764 Severance and other costs 6,533 4,169 1,313 FDIC special assessment - - 8,000 Goodwill impairment - - - --- --- --- Total noninterest expenses 132,215 127,086 130,077 ------- ------- ------- Loss from continuing operations before income taxes (15,277) (41,256) (60,411) Income tax benefit (1,593) (22,014) (28,536) ------ ------- ------- Loss from continuing operations (13,684) (19,242) (31,875) (Loss) income from discontinued operations, net of tax (11) - 313 --- --- --- Consolidated net loss $(13,695) $(19,242) $(31,562) Less: Net income (loss) attributable to noncontrolling interests 1 8 - --- --- --- Net loss attributable to Webster Financial Corporation (13,696) $(19,250) $(31,562) Preferred stock dividends, accretion and extinguishment gain (40,704) (6,850) 48,361 ------- ------ ------ Net (loss) income available to common shareholders $(54,400) $(26,100) $16,799 -------- -------- ------- Diluted shares (average) 72,386 66,281 53,398 Net income (loss) per common share: Basic (Loss) income from continuing operations $(0.76) $(0.39) $0.31 Net (loss) income (0.76) (0.39) 0.31 Diluted Loss from continuing operations (0.84) (0.39) (0.66) Net loss (0.84) (0.39) (0.66)
Three Months Ended ------------------ March 31, Dec. 31, (In thousands, except per share data) 2009 2008 ------------------------------------- ---- ---- Interest income: Loans including fees $140,767 $168,200 Investment securities 50,827 40,398 Loans held for sale 164 51 --- --- Total interest income 191,758 208,649 ------- ------- Interest expense: Deposits 52,908 57,154 Borrowings 20,653 25,427 ------ ------ Total interest expense 73,561 82,581 ------ ------ Net interest income 118,197 126,068 Provision for credit losses 66,000 100,000 ------ ------- Net interest income after provision for credit losses 52,197 26,068 ------ ------ Noninterest income: Deposit service fees 27,959 30,018 Loan related fees 6,482 7,147 Wealth and investment services 5,750 6,480 Mortgage banking activities 606 336 Increase in cash surrender value of life insurance 2,592 2,631 Net gain (loss) on sale of investment securities 4,458 (4,233) Other income 275 1,315 --- ----- 48,122 43,694 Gain on the exchange of trust preferreds for common stock - - Gain on early extinguishment of debt and swaps 5,993 - Loss on write-down of investments to fair value - (129,593) Warrants - fair value adjustment - - Visa share transactions - - --- --- Total noninterest income 54,115 (85,899) ------ ------- Noninterest expenses: Compensation and benefits 56,469 52,078 Occupancy 14,295 13,406 Furniture and equipment 15,140 15,469 Marketing 3,106 2,895 Outside services 3,784 4,101 Intangible amortization 1,463 1,463 Foreclosed and repossessed asset expenses 1,179 1,799 Foreclosed and repossessed asset write- downs 3,450 1,615 FDIC deposit insurance assessment 4,590 3,468 Other expenses 14,302 13,379 117,778 109,673 Severance and other costs 240 5,905 FDIC special assessment - - Goodwill impairment - 188,866 --- ------- Total noninterest expenses 118,018 304,444 ------- ------- Loss from continuing operations before income taxes (11,706) (364,275) Income tax benefit (593) (63,980) ---- ------- Loss from continuing operations (11,113) (300,295) (Loss) income from discontinued operations, net of tax - 8 --- --- Consolidated net loss $(11,113) $(300,287) Less: Net income (loss) attributable to noncontrolling interests 13 (1) --- --- Net loss attributable to Webster Financial Corporation $(11,126) $(300,286) Preferred stock dividends, accretion and extinguishment gain (10,430) (7,308) ------- ------ Net (loss) income available to common shareholders $(21,556) $(307,594) -------- --------- Diluted shares (average) 52,102 52,031 Net income (loss) per common share: Basic (Loss) income from continuing operations $(0.41) $(5.91) Net (loss) income (0.41) (5.91) Diluted Loss from continuing operations (0.41) (5.91) Net loss (0.41) (5.91)
See Selected Financial Highlights for footnotes.
WEBSTER FINANCIAL CORPORATION Five Quarter Interest-Rate Spreads (unaudited) ------------------------------------------------
Three Months Ended ------------------ December September June March December 31, 30, 30, 31, 31, 2009 2009 2009 2009 2008 ---- ---- ---- ---- ---- Interest-rate spread -------------------- Yield on interest- earning assets 4.50% 4.60% 4.72% 4.82% 5.24% Cost of interest-bearing liabilities 1.30 1.48 1.76 1.91 2.13 ---- ---- ---- ---- ---- Interest-rate spread 3.20% 3.12% 2.96% 2.91% 3.11% ==== ==== ==== ==== ==== Net interest margin 3.26% 3.18% 3.04% 2.99% 3.20% ==== ==== ==== ==== ====
Consolidated Average Balances, Yields and Rates Paid (unaudited)
Three Months Ended December 31, 2009 --------------------------- ---- Fully tax- Average equivalent yield/ (Dollars in thousands) balance Interest rate ---------------------- ------- -------- ------ Assets: Interest-earning assets: Loans $11,182,063 $127,069 4.50% Investment securities (b) 4,673,090 56,607 4.86 Loans held for sale 41,250 364 3.53 Federal Home Loan and Federal Reserve Bank stock 140,874 716 2.02 Short-term investments 317,183 211 0.26 ------- --- ---- Total interest-earning assets 16,354,460 184,967 4.50 ------- ---- Noninterest-earning assets 1,331,093 --------- Total assets $17,685,553 =========== Liabilities and Shareholders' Equity: Interest-bearing liabilities: Demand deposits $1,639,058 $- - % Savings, NOW and money market deposit accounts 7,749,872 14,429 0.74 Time deposits 4,110,743 21,508 2.08 --------- ------ ---- Total deposits 13,499,673 35,937 1.06 ---------- ------ ---- Securities sold under agreements to repurchase and other short-term debt 884,867 4,449 1.97 Federal Home Loan Bank advances 594,919 5,259 3.46 Long-term debt 589,548 5,336 3.62 ------- ----- ---- Total borrowings 2,069,334 15,044 2.87 --------- ------ ---- Total interest-bearing liabilities 15,569,007 50,981 1.30 ------ ---- Noninterest-bearing liabilities 158,592 ------- Total liabilities 15,727,599 Noncontrolling interests 9,638 Shareholders' equity 1,948,316 --------- Total liabilities and shareholders' equity $17,685,553 =========== Tax-equivalent net interest income 133,986 Less: tax-equivalent adjustment (3,505) ------ Net interest income $130,481 ======== Interest-rate spread 3.20% ==== Net interest margin 3.26% ====
Three Months Ended December 31, 2008 --------------------------- ---- Fully tax- Average equivalent yield/ (Dollars in thousands) balance Interest rate ---------------------- ------- -------- ------ Assets: Interest-earning assets: Loans $12,769,534 $168,200 5.22% Investment securities (b) 3,000,195 42,918 5.42 Loans held for sale 4,093 51 4.99 Federal Home Loan and Federal Reserve Bank stock 134,874 1,196 3.53 Short-term investments 11,399 40 1.38 ------ --- ---- Total interest-earning assets 15,920,095 212,405 5.24 ------- ---- Noninterest-earning assets 1,570,208 --------- Total assets $17,490,303 =========== Liabilities and Shareholders' Equity: Interest-bearing liabilities: Demand deposits $1,510,066 $- - % Savings, NOW and money market deposit accounts 5,550,224 17,849 1.28 Time deposits 4,823,332 39,305 3.24 --------- ------ ---- Total deposits 11,883,622 57,154 1.91 ---------- ------ ---- Securities sold under agreements to repurchase and other short-term debt 1,446,049 6,345 1.72 Federal Home Loan Bank advances 1,384,706 8,630 2.44 Long-term debt 665,382 10,452 6.28 ------- ------ ---- Total borrowings 3,496,137 25,427 2.87 --------- ------ ---- Total interest-bearing liabilities 15,379,759 82,581 2.13 ------ ---- Noninterest-bearing liabilities 154,048 ------- Total liabilities 15,533,807 Noncontrolling interests 9,577 Shareholders' equity 1,946,919 --------- Total liabilities and shareholders' equity $17,490,303 =========== Tax-equivalent net interest income 129,824 Less: tax-equivalent adjustment (3,756) ------ Net interest income $126,068 ======== Interest-rate spread 3.11% ==== Net interest margin 3.20% ====
See Selected Financial Highlights for footnotes.
WEBSTER FINANCIAL CORPORATION Consolidated Average Balances, Yields and Rates Paid (unaudited) ------------------------------------------------------------------
Twelve Months Ended December 31, 2009 ---------------------------- ---- Fully tax- Average equivalent yield/ (Dollars in thousands) balance Interest rate ---------------------- ------- -------- ------ Assets: Interest-earning assets: Loans $11,697,078 $536,635 4.59% Investment securities (b) 4,150,969 217,961 5.18 Loans held for sale 52,131 2,077 3.98 Federal Home Loan and Federal Reserve Bank stock 137,931 2,685 1.95 Short-term investments 156,553 471 0.30 ------- --- ---- Total interest-earning assets 16,194,662 759,829 4.68 ------- ---- Noninterest-earning assets 1,395,821 --------- Total assets $17,590,483 =========== Liabilities and Shareholders' Equity: Interest-bearing liabilities: Demand deposits $1,578,356 $- - % Savings, NOW and money market deposit accounts 6,977,196 60,971 0.87 Time deposits 4,525,770 119,833 2.65 --------- ------- ---- Total deposits 13,081,322 180,804 1.38 ---------- ------- ---- Securities sold under agreements to repurchase and other short-term debt 1,124,118 19,275 1.71 Federal Home Loan Bank advances 697,711 25,286 3.62 Long-term debt 628,145 25,339 4.03 ------- ------ ---- Total borrowings 2,449,974 69,900 2.85 --------- ------ ---- Total interest-bearing liabilities 15,531,296 250,704 1.61 ------- ---- Noninterest-bearing liabilities 168,970 ------- Total liabilities 15,700,266 Noncontrolling interests 9,631 Shareholders' equity 1,880,586 --------- Total liabilities and shareholders' equity $17,590,483 =========== 509,125 Less: tax-equivalent adjustment (14,487) ------- Net interest income $494,638 ======== Interest-rate spread 3.07% ==== Net interest margin 3.13% ====
Twelve Months Ended December 31,