Attached files
| file | filename |
|---|---|
| 8-K - 8-K - WEBSTER FINANCIAL CORP | a8-kq32017earningsrelease.htm |
Exhibit 99.1
Media Contact | Investor Contact | |||
Alice Ferreira, 203-578-2610 | Terry Mangan, 203-578-2318 | |||
acferreira@websterbank.com | tmangan@websterbank.com | |||
WEBSTER REPORTS
RECORD THIRD QUARTER 2017 EARNINGS
WATERBURY, Conn., October 19, 2017 - Webster Financial Corporation (NYSE: WBS), the holding company for Webster Bank, N.A. and its HSA Bank division, today announced earnings applicable to common shareholders of $62.4 million, or $0.67 per diluted share, for the quarter ended September 30, 2017 compared to $49.6 million, or $0.54 per diluted share, for the quarter ended September 30, 2016.
“We are pleased to report another quarter of record earnings, which exceeded Webster’s cost of capital once again,” said James C. Smith, chairman and chief executive officer. “We have achieved 32 consecutive quarters of year-over-year revenue growth as Webster bankers continue to excel in service to our customers and communities. With our recently announced CEO succession, we have cemented Webster’s future leadership from a position of financial, strategic, and organizational strength.”
Highlights for the third quarter of 2017:
• | Annualized return on average common shareholders’ equity of 9.95 percent; annualized return on average tangible common shareholders’ equity (non-GAAP) of 12.99 percent. |
• | Record earnings applicable to common shareholders of $62.4 million. |
• | Record revenue of $266.7 million, an increase of 8.2 percent from a year ago, including net interest income of $200.9 million, a record level, and non-interest income of $65.8 million. |
• | Year-over-year pre-tax, pre-provision net revenue growth of 15.9 percent, led by HSA Bank’s growth of 28.5 percent. |
• | Net interest margin of 3.30 percent, up 20 basis points from a year ago. |
• | Loan growth of $823 million, or 5.0 percent from a year ago, with growth of $698 million in commercial and commercial real estate loans. |
• | HSA Bank’s deposits grew $703 million and total deposits grew $1.7 billion, or 8.6 percent from a year ago. |
“Our balance sheet structure and earning asset mix have facilitated five consecutive quarters of improvement in net interest margin, which now is at a five-year high,” said Glenn MacInnes, executive vice president and chief financial officer. “Webster’s strong capital levels and favorable loan-to-deposit ratio position us well for future growth.”
Line of Business performance compared to the third quarter of 2016:
Commercial Banking
Webster’s Commercial Banking segment serves middle market, commercial real estate, asset-based lending, equipment finance, private banking, and treasury and payment solutions clients. As of September 30, 2017, Commercial Banking had $9.3 billion in loans and leases and $4.3 billion in deposit balances.
Commercial Banking Operating Results:
Three months ended September 30, | ||||||
(In thousands) | 2017 | 2016 | ||||
Net interest income | $ | 81,925 | $ | 74,265 | ||
Non-interest income | 13,207 | 15,916 | ||||
Operating revenue | 95,132 | 90,181 | ||||
Non-interest expense | 38,339 | 35,793 | ||||
Pre-tax, pre-provision net revenue | $ | 56,793 | $ | 54,388 | ||
At September 30, | ||||||
(In millions) | 2017 | 2016 | ||||
Loans and leases | $ | 9,291 | $ | 8,689 | ||
Deposits | 4,251 | 3,889 | ||||
Pre-tax, pre-provision net revenue increased $2.4 million to $56.8 million in the quarter as compared to prior year. Net interest income increased $7.7 million to $81.9 million, primarily due to loan growth and higher loan portfolio yield. Non-interest income decreased $2.7 million to $13.2 million primarily due to greater syndication fees in the year ago period. Non-interest expense increased $2.5 million to $38.3 million, primarily due to investments in people and product enhancements.
HSA Bank
Webster’s HSA Bank division offers health savings accounts, health reimbursement accounts, flexible spending accounts and other solutions to employers for the benefit of their employees, and to individuals. Health savings accounts are distributed nationwide directly and through national and regional insurance carriers. As of September 30, 2017, HSA Bank had $6.1 billion in total footings comprising $4.9 billion in deposit balances and $1.2 billion in assets under administration through linked investment accounts.
HSA Bank Operating Results:
Three months ended September 30, | ||||||
(In thousands) | 2017 | 2016 | ||||
Net interest income | $ | 26,713 | $ | 20,560 | ||
Non-interest income | 19,371 | 16,900 | ||||
Operating revenue | 46,084 | 37,460 | ||||
Non-interest expense | 27,222 | 23,021 | ||||
Pre-tax, net revenue | $ | 18,862 | $ | 14,439 | ||
At September 30, | ||||||
(In millions) | 2017 | 2016 | ||||
Number of accounts | 2.416 | 2.059 | ||||
Deposits | $ | 4,891 | $ | 4,188 | ||
Linked investment accounts * | 1,159 | 833 | ||||
Total footings | $ | 6,050 | $ | 5,021 | ||
* Linked investment accounts are held off balance sheet | ||||||
Pre-tax net revenue increased $4.4 million to $18.9 million in the quarter as compared to prior year; the prior period amount included a $0.3 million reduction from an acquisition receivable adjustment. Net interest income increased $6.2 million to $26.7 million due primarily to growth in deposits and improved deposit spread. Non-interest income increased $2.5 million to $19.4 million due primarily to growth in accounts over the past year. The year ago period included the reduction of $0.3 million for the acquisition receivable adjustment. Non-interest expense increased $4.2 million to $27.2 million primarily due to costs associated with supporting the growth in total accounts and investments such as 24/7 call center capability, continuous improvement initiatives and expanded distribution.
Community Banking
Community Banking serves consumer and business banking customers primarily throughout southern New England and into Westchester County, New York. Community Banking is comprised of the Personal Banking and Business Banking operating segments, as well as a distribution network consisting of 167 banking centers and 338 ATMs, a customer care center, and a full range of web and mobile-based banking services.
As of September 30, 2017, Community Banking had $8.2 billion in loans and $11.3 billion in deposit balances.
Community Banking Operating Results:
Three months ended September 30, | ||||||
(In thousands) | 2017 | 2016 | ||||
Net interest income | $ | 96,859 | $ | 91,995 | ||
Non-interest income | 27,079 | 29,130 | ||||
Operating revenue | 123,938 | 121,125 | ||||
Non-interest expense | 92,478 | 92,508 | ||||
Pre-tax, pre-provision net revenue | $ | 31,460 | $ | 28,617 | ||
At September 30, | ||||||
(In millions) | 2017 | 2016 | ||||
Loans | $ | 8,155 | $ | 7,935 | ||
Deposits | 11,331 | 10,747 | ||||
Pre-tax, pre-provision net revenue increased $2.8 million to $31.5 million in the quarter as compared to prior year. Net interest income increased $4.9 million to $96.9 million primarily due to growth in loans and higher loan portfolio yield. Non-interest income decreased $2.1 million to $27.1 million resulting from lower revenue in mortgage banking, loan servicing, and client interest rate hedging. Non-interest expense was flat at $92.5 million driven by continued focus on expense management.
Consolidated financial performance:
Quarterly net interest income compared to the third quarter of 2016:
• | Net interest income was $200.9 million compared to $180.2 million. |
• | Net interest margin was 3.30 percent compared to 3.10 percent. The yield on interest-earning assets increased by 25 basis points, and the cost of funds increased by 6 basis points. |
• | Average interest-earning assets totaled $24.6 billion and grew by $1.1 billion, or 4.6 percent. |
• | Average loans totaled $17.4 billion and grew by $1.0 billion, or 5.7 percent. |
Quarterly provision for loan losses:
• | The Company recorded a provision for loan losses of $10.2 million compared to $7.3 million in the prior quarter and $14.3 million a year ago. |
• | Net charge-offs were $7.9 million compared to $6.8 million in the prior quarter and a year ago. The ratio of net charge-offs to average loans on an annualized basis was 0.18 percent compared to 0.16 percent in the prior quarter and a year ago. |
• | The allowance for loan losses represented 1.16 percent of total loans at both September 30, 2017 and June 30, 2017, and 1.13 percent at September 30, 2016. The allowance for loan losses represented 123 percent of nonperforming loans compared to 120 percent at June 30, 2017 and 147 percent at September 30, 2016. |
Quarterly non-interest income compared to the third quarter of 2016:
• | Total non-interest income was $65.8 million compared to $66.4 million, a decrease of $0.6 million. This reflects a decrease of $2.9 million in loan and lease related fees and a $1.9 million decrease in mortgage banking activities, offset by increases of $2.6 million in deposit service fees and $1.5 million in other income. |
Quarterly non-interest expense compared to the third quarter of 2016:
• | Total non-interest expense was $161.8 million compared to $156.1 million, an increase of $5.7 million. This reflects increases of $6.0 million in compensation and benefits and $2.8 million in technology and equipment, offset by decreases of $0.9 million in other expenses and $0.8 million in professional and outside services. |
Quarterly income taxes compared to the third quarter of 2016:
• | Income tax expense was $30.3 million compared to $24.4 million and the effective tax rate was 32.0 percent compared to 32.1 percent. |
Investment securities:
• | Total investment securities were $7.1 billion compared to $7.0 billion at June 30, 2017 and $7.1 billion at September 30, 2016. The carrying value of the available-for-sale portfolio included $21.7 million of net unrealized losses compared to $23.1 million of net unrealized losses at June 30, 2017 and $21.4 million of net unrealized gains at September 30, 2016. The carrying value of the held-to-maturity portfolio does not reflect $15.6 million of net unrealized losses compared |
to $21.8 million of net unrealized losses at June 30, 2017, and $87.6 million of net unrealized gains at September 30, 2016.
Loans:
• | Total loans were $17.4 billion compared to $17.3 billion at June 30, 2017 and $16.6 billion at September 30, 2016. Compared to June 30, 2017, commercial loans increased by $185.2 million and residential loans increased by $111.1 million, while commercial real estate loans decreased by $91.3 million and consumer loans decreased by $32.3 million. |
• | Compared to a year ago, commercial loans increased by $513.6 million, residential loans increased by $265.4 million, and commercial real estate loans increased by $184.4 million, while consumer loans decreased by $140.4 million. |
• | Loan originations for portfolio were $1.085 billion compared to $1.374 billion in the prior quarter and $1.204 billion a year ago. In addition, $80 million of residential loans were originated for sale in the quarter compared to $74 million in the prior quarter and $138 million a year ago. |
Asset quality:
• | Total nonperforming loans were $163.6 million, or 0.94 percent of total loans, compared to $166.4 million, or 0.96 percent, at June 30, 2017 and $128.2 million, or 0.77 percent, at September 30, 2016. Total paying nonperforming loans were $72.0 million compared to $75.6 million at June 30, 2017 and $34.5 million at September 30, 2016. |
• | Past due loans were $33.5 million compared to $29.2 million at June 30, 2017 and $39.2 million at September 30, 2016. Included in past due loans are loans past due 90 days or more and still accruing, which decreased $0.3 million from June 30, 2017 and decreased $4.5 million from the prior year. |
Deposits and borrowings:
• | Total deposits were $20.9 billion compared to $20.5 billion at June 30, 2017 and $19.2 billion at September 30, 2016. Core deposits to total deposits were 89.3 percent compared to 89.8 percent at June 30, 2017 and 89.5 percent at September 30, 2016. The loan to deposit ratio was 83.7 percent compared to 84.4 percent at June 30, 2017 and 86.6 percent at September 30, 2016. |
• | Total borrowings were $2.6 billion compared to $2.9 billion at June 30, 2017 and $3.6 billion at September 30, 2016. |
Capital:
• | The return on average common shareholders’ equity and the return on average tangible common shareholders’ equity were 9.95 percent and 12.99 percent, respectively, compared to 8.36 percent and 11.24 percent, respectively, in the third quarter of 2016. |
• | The tangible equity and tangible common equity ratios were 8.03 percent and 7.55 percent, respectively, compared to 7.74 percent and 7.25 percent, respectively, at September 30, 2016. The common equity tier 1 risk-based capital ratio was 10.96 percent compared to 10.48 percent at September 30, 2016. |
• | Book value and tangible book value per common share were $27.34 and $21.16 respectively, compared to $26.06 and $19.80, respectively, at September 30, 2016. |
***
Webster Financial Corporation is the holding company for Webster Bank, National Association and its HSA Bank division. With $26.4 billion in assets, Webster provides business and consumer banking, mortgage, financial planning, trust, and investment services through 167 banking centers and 338 ATMs. Webster also provides mobile and Internet banking. Webster Bank owns the asset-based lending firm Webster Business Credit Corporation; the equipment finance firm Webster Capital Finance Corporation; and HSA Bank, a division of Webster Bank, which provides health savings account trustee and administrative services. Webster Bank is a member of the FDIC and an equal housing lender. For more information about Webster, including past press releases and the latest annual report, visit the Webster website at www.websterbank.com.
Conference Call
A conference call covering Webster’s 2017 third quarter earnings announcement will be held today, Thursday, October 19, 2017 at 9:00 a.m. (Eastern) and may be heard through Webster’s Investor Relations website at www.wbst.com, or in listen-only mode by calling 877-407-8289 or 201-689-8341 internationally. The call will be archived on the website and available for future retrieval.
Forward-Looking Statements
This release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Act”). Forward-looking statements can be identified by words such as “believes,” “anticipates,” “expects,” “intends,” “targeted,” “continue,” “remain,” “will,” “should,” “may,” “plans,” “estimates,” and similar references to future periods; however, such words are not the exclusive means of identifying such statements. Examples of forward-looking statements include, but are not limited to: (i) projections of revenues, expenses, income or loss, earnings or loss per share, and other financial items; (ii) statements of plans, objectives, and expectations of Webster or its management or Board of Directors; (iii) statements of future economic performance; and (iv) statements of assumptions underlying such statements. Forward-looking statements are based on Webster’s current expectations and assumptions regarding its business, the economy, and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict. Webster’s actual results may differ materially from those contemplated by the forward-looking statements, which are neither statements of historical fact nor guarantees or assurances of future performance. Factors that could cause actual results to differ from those discussed in the forward-looking statements include, but are not limited to: (1) local, regional, national, and international economic conditions and the impact they may have on us and our customers and our assessment of that impact; (2) volatility and disruption in national and international financial markets; (3) government intervention in the U.S. financial system; (4) changes in the level of nonperforming assets and charge-offs; (5) changes in estimates of future reserve requirements based upon the periodic review thereof under relevant regulatory and accounting requirements; (6) adverse conditions in the securities markets that lead to impairment in the value of securities in our investment portfolio; (7) inflation, interest rate, securities market, and monetary fluctuations; (8) the timely development and acceptance of new products and services and perceived overall value of these products and services by customers; (9) changes in consumer spending, borrowings, and savings habits; (10) technological changes and cyber-security matters; (11) the ability to increase market share and control expenses; (12) changes in the competitive environment among banks, financial holding companies, and other financial services providers; (13) the effect of changes in laws and regulations (including laws and regulations concerning taxes, banking, securities, and insurance) with which we and our subsidiaries must comply, including the Dodd-Frank Wall Street Reform and Consumer Protection Act; (14) the effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Public Company Accounting Oversight Board, the Financial Accounting Standards Board, and other accounting standard setters; (15) the costs and effects of legal and regulatory developments including the resolution of legal proceedings or regulatory or other governmental inquiries and the results of regulatory examinations or reviews; (16) our success at managing the risks involved in the foregoing items and (17) the other factors that are described in the Company’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q under the headings “Risk Factors” and ‘Management Discussion and Analysis of Financial Condition and Results of Operation.” Any forward-looking statement made by the Company in this release speaks only as of the date on which it is made. Factors or events that could cause the Company’s actual results to differ may emerge from time to time, and it is not possible for the Company to predict all of them. The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.
Non-GAAP Financial Measures
In addition to results presented in accordance with GAAP, this press release contains certain non-GAAP financial measures. A reconciliation of net income and other performance ratios, as adjusted, is included in the accompanying selected financial highlights table.
We believe that providing certain non-GAAP financial measures provides investors with information useful in understanding our financial performance, our performance trends and financial position. We utilize these measures for internal planning and forecasting purposes. We, as well as securities analysts, investors, and other interested parties, also use these measures to compare peer company operating performance. We believe that our presentation and discussion, together with the accompanying reconciliations, provides a complete understanding of factors and trends affecting our business and allows investors to view performance in a manner similar to management. These non-GAAP measures should not be considered a substitute for GAAP basis measures and results, and we strongly encourage investors to review our consolidated financial statements in their entirety and not to rely on any single financial measure. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies’ non-GAAP financial measures having the same or similar names.
---30---
WEBSTER FINANCIAL CORPORATION Selected Financial Highlights (unaudited) | |||||||||||||||||||
At or for the Three Months Ended | |||||||||||||||||||
(In thousands, except per share data) | September 30, 2017 | June 30, 2017 | March 31, 2017 | December 31, 2016 | September 30, 2016 | ||||||||||||||
Income and performance ratios: | |||||||||||||||||||
Net income | $ | 64,496 | $ | 61,579 | $ | 59,471 | $ | 57,660 | $ | 51,817 | |||||||||
Earnings applicable to common shareholders | 62,426 | 59,485 | 57,342 | 55,501 | 49,634 | ||||||||||||||
Earnings per diluted common share | 0.67 | 0.64 | 0.62 | 0.60 | 0.54 | ||||||||||||||
Return on average assets | 0.98 | % | 0.94 | % | 0.91 | % | 0.89 | % | 0.82 | % | |||||||||
Return on average tangible common shareholders' equity (non-GAAP) | 12.99 | 12.65 | 12.47 | 12.31 | 11.24 | ||||||||||||||
Return on average common shareholders’ equity | 9.95 | 9.63 | 9.43 | 9.26 | 8.36 | ||||||||||||||
Non-interest income as a percentage of total revenue | 24.68 | 24.61 | 24.65 | 27.60 | 26.93 | ||||||||||||||
Asset quality: | |||||||||||||||||||
Allowance for loan and lease losses | $ | 201,803 | $ | 199,578 | $ | 199,107 | $ | 194,320 | $ | 187,925 | |||||||||
Nonperforming assets | 168,962 | 170,390 | 177,935 | 137,946 | 132,350 | ||||||||||||||
Allowance for loan and lease losses / total loans and leases | 1.16 | % | 1.16 | % | 1.16 | % | 1.14 | % | 1.13 | % | |||||||||
Net charge-offs / average loans and leases (annualized) | 0.18 | 0.16 | 0.13 | 0.15 | 0.16 | ||||||||||||||
Nonperforming loans and leases / total loans and leases | 0.94 | 0.96 | 1.02 | 0.79 | 0.77 | ||||||||||||||
Nonperforming assets / total loans and leases plus OREO | 0.97 | 0.99 | 1.04 | 0.81 | 0.80 | ||||||||||||||
Allowance for loan and lease losses / nonperforming loans and leases | 123.32 | 119.96 | 114.54 | 144.98 | 146.57 | ||||||||||||||
Other ratios: | |||||||||||||||||||
Tangible equity (non-GAAP) | 8.03 | % | 7.95 | % | 7.82 | % | 7.67 | % | 7.74 | % | |||||||||
Tangible common equity (non-GAAP) | 7.55 | 7.47 | 7.34 | 7.19 | 7.25 | ||||||||||||||
Tier 1 risk-based capital (a) | 11.62 | 11.51 | 11.42 | 11.19 | 11.16 | ||||||||||||||
Total risk-based capital (a) | 13.14 | 13.02 | 12.95 | 12.68 | 12.64 | ||||||||||||||
Common equity tier 1 risk-based capital (a) | 10.96 | 10.84 | 10.75 | 10.52 | 10.48 | ||||||||||||||
Shareholders’ equity / total assets | 10.01 | 9.95 | 9.85 | 9.69 | 9.80 | ||||||||||||||
Net interest margin | 3.30 | 3.27 | 3.22 | 3.11 | 3.10 | ||||||||||||||
Efficiency ratio (non-GAAP) | 59.18 | 60.65 | 62.10 | 63.13 | 61.43 | ||||||||||||||
Equity and share related: | |||||||||||||||||||
Common equity | $ | 2,516,077 | $ | 2,482,416 | $ | 2,437,648 | $ | 2,404,302 | $ | 2,388,919 | |||||||||
Book value per common share | 27.34 | 26.93 | 26.45 | 26.17 | 26.06 | ||||||||||||||
Tangible book value per common share (non-GAAP) | 21.16 | 20.74 | 20.26 | 19.94 | 19.80 | ||||||||||||||
Common stock closing price | 52.55 | 52.22 | 50.04 | 54.28 | 38.01 | ||||||||||||||
Dividends declared per common share | 0.26 | 0.26 | 0.25 | 0.25 | 0.25 | ||||||||||||||
Common shares issued and outstanding | 92,034 | 92,195 | 92,154 | 91,868 | 91,687 | ||||||||||||||
Weighted-average common shares outstanding - Basic | 92,125 | 92,092 | 91,886 | 91,572 | 91,365 | ||||||||||||||
Weighted-average common shares outstanding - Diluted | 92,503 | 92,495 | 92,342 | 92,099 | 91,857 | ||||||||||||||
(a) Presented as projected for September 30, 2017 and actual for the remaining periods. | |||||||||||||||||||
WEBSTER FINANCIAL CORPORATION Consolidated Balance Sheets (unaudited) | |||||||||||
(In thousands) | September 30, 2017 | June 30, 2017 | September 30, 2016 | ||||||||
Assets: | |||||||||||
Cash and due from banks | $ | 215,244 | $ | 231,808 | $ | 199,989 | |||||
Interest-bearing deposits | 26,992 | 33,662 | 21,938 | ||||||||
Securities: | |||||||||||
Available for sale | 2,591,162 | 2,807,966 | 3,040,111 | ||||||||
Held to maturity | 4,497,311 | 4,219,198 | 4,022,332 | ||||||||
Total securities | 7,088,473 | 7,027,164 | 7,062,443 | ||||||||
Loans held for sale | 32,855 | 39,407 | 66,578 | ||||||||
Loans and Leases: | |||||||||||
Commercial | 5,915,080 | 5,729,844 | 5,401,498 | ||||||||
Commercial real estate | 4,464,917 | 4,556,208 | 4,280,513 | ||||||||
Residential mortgages | 4,499,441 | 4,388,308 | 4,234,047 | ||||||||
Consumer | 2,566,983 | 2,599,318 | 2,707,343 | ||||||||
Total loans and leases | 17,446,421 | 17,273,678 | 16,623,401 | ||||||||
Allowance for loan and lease losses | (201,803 | ) | (199,578 | ) | (187,925 | ) | |||||
Loans and leases, net | 17,244,618 | 17,074,100 | 16,435,476 | ||||||||
Federal Home Loan Bank and Federal Reserve Bank stock | 136,340 | 155,505 | 185,104 | ||||||||
Premises and equipment, net | 130,358 | 131,833 | 137,067 | ||||||||
Goodwill and other intangible assets, net | 568,962 | 569,964 | 573,129 | ||||||||
Cash surrender value of life insurance policies | 528,136 | 524,674 | 514,153 | ||||||||
Deferred tax asset, net | 82,895 | 80,942 | 73,228 | ||||||||
Accrued interest receivable and other assets | 295,309 | 305,871 | 364,512 | ||||||||
Total Assets | $ | 26,350,182 | $ | 26,174,930 | $ | 25,633,617 | |||||
Liabilities and Shareholders' Equity: | |||||||||||
Deposits: | |||||||||||
Demand | $ | 4,138,206 | $ | 4,074,819 | $ | 3,993,750 | |||||
Interest-bearing checking | 2,581,266 | 2,669,207 | 2,429,222 | ||||||||
Health savings accounts | 4,891,024 | 4,828,145 | 4,187,823 | ||||||||
Money market | 2,598,187 | 2,316,460 | 2,342,236 | ||||||||
Savings | 4,428,061 | 4,473,925 | 4,226,934 | ||||||||
Certificates of deposit | 1,918,817 | 1,795,871 | 1,721,056 | ||||||||
Brokered certificates of deposit | 299,674 | 299,670 | 299,887 | ||||||||
Total deposits | 20,855,235 | 20,458,097 | 19,200,908 | ||||||||
Securities sold under agreements to repurchase and other borrowings | 902,902 | 872,692 | 800,705 | ||||||||
Federal Home Loan Bank advances | 1,507,681 | 1,767,757 | 2,587,983 | ||||||||
Long-term debt | 225,704 | 225,640 | 225,450 | ||||||||
Accrued expenses and other liabilities | 219,873 | 245,618 | 306,942 | ||||||||
Total liabilities | 23,711,395 | 23,569,804 | 23,121,988 | ||||||||
Preferred stock | 122,710 | 122,710 | 122,710 | ||||||||
Common shareholders' equity | 2,516,077 | 2,482,416 | 2,388,919 | ||||||||
Total shareholders’ equity | 2,638,787 | 2,605,126 | 2,511,629 | ||||||||
Total Liabilities and Shareholders' Equity | $ | 26,350,182 | $ | 26,174,930 | $ | 25,633,617 | |||||
WEBSTER FINANCIAL CORPORATION Consolidated Statements of Income (unaudited) | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
(In thousands, except per share data) | 2017 | 2016 | 2017 | 2016 | |||||||||||
Interest income: | |||||||||||||||
Interest and fees on loans and leases | $ | 181,130 | $ | 157,071 | $ | 523,394 | $ | 459,050 | |||||||
Interest and dividends on securities | 49,584 | 48,204 | 153,270 | 150,425 | |||||||||||
Loans held for sale | 307 | 440 | 826 | 1,006 | |||||||||||
Total interest income | 231,021 | 205,715 | 677,490 | 610,481 | |||||||||||
Interest expense: | |||||||||||||||
Deposits | 16,760 | 12,594 | 44,874 | 37,267 | |||||||||||
Borrowings | 13,357 | 12,924 | 41,261 | 39,960 | |||||||||||
Total interest expense | 30,117 | 25,518 | 86,135 | 77,227 | |||||||||||
Net interest income | 200,904 | 180,197 | 591,355 | 533,254 | |||||||||||
Provision for loan and lease losses | 10,150 | 14,250 | 27,900 | 43,850 | |||||||||||
Net interest income after provision for loan and lease losses | 190,754 | 165,947 | 563,455 | 489,404 | |||||||||||
Non-interest income: | |||||||||||||||
Deposit service fees | 38,321 | 35,734 | 113,519 | 105,553 | |||||||||||
Loan and lease related fees | 6,346 | 9,253 | 19,898 | 20,563 | |||||||||||
Wealth and investment services | 7,750 | 7,593 | 22,900 | 21,992 | |||||||||||
Mortgage banking activities | 2,421 | 4,322 | 8,038 | 11,335 | |||||||||||
Increase in cash surrender value of life insurance policies | 3,720 | 3,743 | 10,943 | 11,060 | |||||||||||
Gain on investment securities, net | — | — | — | 414 | |||||||||||
Other income | 7,288 | 5,767 | 18,267 | 23,093 | |||||||||||
65,846 | 66,412 | 193,565 | 194,010 | ||||||||||||
Impairment loss on securities recognized in earnings | — | — | (126 | ) | (149 | ) | |||||||||
Total non-interest income | 65,846 | 66,412 | 193,439 | 193,861 | |||||||||||
Non-interest expense: | |||||||||||||||
Compensation and benefits | 89,192 | 83,148 | 264,822 | 244,089 | |||||||||||
Occupancy | 14,744 | 15,004 | 46,957 | 44,915 | |||||||||||
Technology and equipment | 22,580 | 19,753 | 66,646 | 59,067 | |||||||||||
Marketing | 4,045 | 4,622 | 14,101 | 14,215 | |||||||||||
Professional and outside services | 4,030 | 4,795 | 11,813 | 11,360 | |||||||||||
Intangible assets amortization | 1,002 | 1,493 | 3,085 | 4,570 | |||||||||||
Loan workout expenses | 840 | 1,133 | 2,203 | 2,628 | |||||||||||
Deposit insurance | 6,344 | 6,177 | 19,701 | 19,596 | |||||||||||
Other expenses | 19,046 | 19,972 | 60,698 | 60,880 | |||||||||||
Total non-interest expense | 161,823 | 156,097 | 490,026 | 461,320 | |||||||||||
Income before income taxes | 94,777 | 76,262 | 266,868 | 221,945 | |||||||||||
Income tax expense | 30,281 | 24,445 | 81,322 | 72,478 | |||||||||||
Net income | 64,496 | 51,817 | 185,546 | 149,467 | |||||||||||
Preferred stock dividends and other | (2,070 | ) | (2,183 | ) | (6,284 | ) | (6,540 | ) | |||||||
Earnings applicable to common shareholders | $ | 62,426 | $ | 49,634 | $ | 179,262 | $ | 142,927 | |||||||
Weighted-average common shares outstanding - Diluted | 92,503 | 91,857 | 92,412 | 91,776 | |||||||||||
Earnings per common share: | |||||||||||||||
Basic | $ | 0.68 | $ | 0.54 | $ | 1.95 | $ | 1.57 | |||||||
Diluted | 0.67 | 0.54 | 1.94 | 1.56 | |||||||||||
WEBSTER FINANCIAL CORPORATION Five Quarter Consolidated Statements of Income (unaudited) | |||||||||||||||||||
Three Months Ended | |||||||||||||||||||
(In thousands, except per share data) | September 30, 2017 | June 30, 2017 | March 31, 2017 | December 31, 2016 | September 30, 2016 | ||||||||||||||
Interest income: | |||||||||||||||||||
Interest and fees on loans and leases | $ | 181,130 | $ | 174,456 | $ | 167,808 | $ | 161,978 | $ | 157,071 | |||||||||
Interest and dividends on securities | 49,584 | 52,130 | 51,556 | 49,011 | 48,204 | ||||||||||||||
Loans held for sale | 307 | 203 | 316 | 443 | 440 | ||||||||||||||
Total interest income | 231,021 | 226,789 | 219,680 | 211,432 | 205,715 | ||||||||||||||
Interest expense: | |||||||||||||||||||
Deposits | 16,760 | 14,679 | 13,435 | 12,591 | 12,594 | ||||||||||||||
Borrowings | 13,357 | 14,323 | 13,581 | 13,582 | 12,924 | ||||||||||||||
Total interest expense | 30,117 | 29,002 | 27,016 | 26,173 | 25,518 | ||||||||||||||
Net interest income | 200,904 | 197,787 | 192,664 | 185,259 | 180,197 | ||||||||||||||
Provision for loan and lease losses | 10,150 | 7,250 | 10,500 | 12,500 | 14,250 | ||||||||||||||
Net interest income after provision for loan and lease losses | 190,754 | 190,537 | 182,164 | 172,759 | 165,947 | ||||||||||||||
Non-interest income: | |||||||||||||||||||
Deposit service fees | 38,321 | 38,192 | 37,006 | 35,132 | 35,734 | ||||||||||||||
Loan and lease related fees | 6,346 | 6,344 | 7,208 | 6,018 | 9,253 | ||||||||||||||
Wealth and investment services | 7,750 | 7,877 | 7,273 | 6,970 | 7,593 | ||||||||||||||
Mortgage banking activities | 2,421 | 3,351 | 2,266 | 3,300 | 4,322 | ||||||||||||||
Increase in cash surrender value of life insurance policies | 3,720 | 3,648 | 3,575 | 3,699 | 3,743 | ||||||||||||||
Gain on investment securities, net | — | — | — | — | — | ||||||||||||||
Other income | 7,288 | 5,265 | 5,714 | 15,498 | 5,767 | ||||||||||||||
65,846 | 64,677 | 63,042 | 70,617 | 66,412 | |||||||||||||||
Impairment loss on securities recognized in earnings | — | (126 | ) | — | — | — | |||||||||||||
Total non-interest income | 65,846 | 64,551 | 63,042 | 70,617 | 66,412 | ||||||||||||||
Non-interest expense: | |||||||||||||||||||
Compensation and benefits | 89,192 | 87,354 | 88,276 | 88,038 | 83,148 | ||||||||||||||
Occupancy | 14,744 | 16,034 | 16,179 | 16,195 | 15,004 | ||||||||||||||
Technology and equipment | 22,580 | 22,458 | 21,608 | 20,815 | 19,753 | ||||||||||||||
Marketing | 4,045 | 4,615 | 5,441 | 5,488 | 4,622 | ||||||||||||||
Professional and outside services | 4,030 | 3,507 | 4,276 | 3,441 | 4,795 | ||||||||||||||
Intangible assets amortization | 1,002 | 1,028 | 1,055 | 1,082 | 1,493 | ||||||||||||||
Loan workout expenses | 840 | 755 | 608 | 378 | 1,133 | ||||||||||||||
Deposit insurance | 6,344 | 6,625 | 6,732 | 6,410 | 6,177 | ||||||||||||||
Other expenses | 19,046 | 22,043 | 19,609 | 20,024 | 19,972 | ||||||||||||||
Total non-interest expense | 161,823 | 164,419 | 163,784 | 161,871 | 156,097 | ||||||||||||||
Income before income taxes | 94,777 | 90,669 | 81,422 | 81,505 | 76,262 | ||||||||||||||
Income tax expense | 30,281 | 29,090 | 21,951 | 23,845 | 24,445 | ||||||||||||||
Net income | 64,496 | 61,579 | 59,471 | 57,660 | 51,817 | ||||||||||||||
Preferred stock dividends and other | (2,070 | ) | (2,094 | ) | (2,129 | ) | (2,159 | ) | (2,183 | ) | |||||||||
Earnings applicable to common shareholders | $ | 62,426 | $ | 59,485 | $ | 57,342 | $ | 55,501 | $ | 49,634 | |||||||||
Weighted-average common shares outstanding - Diluted | 92,503 | 92,495 | 92,342 | 92,099 | 91,857 | ||||||||||||||
Earnings per common share: | |||||||||||||||||||
Basic | $ | 0.68 | $ | 0.65 | $ | 0.62 | $ | 0.61 | $ | 0.54 | |||||||||
Diluted | 0.67 | 0.64 | 0.62 | 0.60 | 0.54 | ||||||||||||||
WEBSTER FINANCIAL CORPORATION Consolidated Average Balances, Interest, Yields and Rates, and Net Interest Margin on a Fully Tax-equivalent Basis (unaudited) | |||||||||||||||||||||
Three Months Ended September 30, | |||||||||||||||||||||
2017 | 2016 | ||||||||||||||||||||
(Dollars in thousands) | Average balance | Interest | Yield/rate | Average balance | Interest | Yield/rate | |||||||||||||||
Assets: | |||||||||||||||||||||
Interest-earning assets: | |||||||||||||||||||||
Loans and leases | $ | 17,364,519 | $ | 182,269 | 4.14 | % | $ | 16,423,642 | $ | 157,926 | 3.80 | % | |||||||||
Securities (a) | 6,994,661 | 51,130 | 2.92 | 6,784,652 | 49,282 | 2.91 | |||||||||||||||
Federal Home Loan and Federal Reserve Bank stock | 135,943 | 1,482 | 4.33 | 185,104 | 1,478 | 3.18 | |||||||||||||||
Interest-bearing deposits | 58,193 | 173 | 1.17 | 53,852 | 67 | 0.49 | |||||||||||||||
Loans held for sale | 34,939 | 307 | 3.51 | 58,299 | 440 | 3.02 | |||||||||||||||
Total interest-earning assets | 24,588,255 | $ | 235,361 | 3.78 | % | 23,505,549 | $ | 209,193 | 3.53 | % | |||||||||||
Non-interest-earning assets | 1,721,591 | 1,752,981 | |||||||||||||||||||
Total Assets | $ | 26,309,846 | $ | 25,258,530 | |||||||||||||||||
Liabilities and Shareholders' Equity: | |||||||||||||||||||||
Interest-bearing liabilities: | |||||||||||||||||||||
Demand deposits | $ | 4,201,723 | $ | — | — | % | $ | 4,011,712 | $ | — | — | % | |||||||||
Savings, interest checking, and money market deposits | 14,577,673 | 10,229 | 0.28 | 13,257,559 | 7,005 | 0.21 | |||||||||||||||
Certificates of deposit | 2,155,743 | 6,531 | 1.20 | 2,009,433 | 5,589 | 1.11 | |||||||||||||||
Total deposits | 20,935,139 | 16,760 | 0.32 | 19,278,704 | 12,594 | 0.26 | |||||||||||||||
Securities sold under agreements to repurchase and other borrowings | 904,854 | 3,847 | 1.66 | 909,560 | 3,447 | 1.48 | |||||||||||||||
Federal Home Loan Bank advances | 1,362,165 | 6,894 | 1.98 | 2,158,911 | 6,979 | 1.26 | |||||||||||||||
Long-term debt | 225,673 | 2,616 | 4.64 | 225,414 | 2,498 | 4.43 | |||||||||||||||
Total borrowings | 2,492,692 | 13,357 | 2.11 | 3,293,885 | 12,924 | 1.54 | |||||||||||||||
Total interest-bearing liabilities | 23,427,831 | $ | 30,117 | 0.51 | % | 22,572,589 | $ | 25,518 | 0.45 | % | |||||||||||
Non-interest-bearing liabilities | 246,703 | 181,981 | |||||||||||||||||||
Total liabilities | 23,674,534 | 22,754,570 | |||||||||||||||||||
Preferred stock | 122,710 | 122,710 | |||||||||||||||||||
Common shareholders' equity | 2,512,602 | 2,381,250 | |||||||||||||||||||
Total shareholders' equity | 2,635,312 | 2,503,960 | |||||||||||||||||||
Total Liabilities and Shareholders' Equity | $ | 26,309,846 | $ | 25,258,530 | |||||||||||||||||
Tax-equivalent net interest income | 205,244 | 183,675 | |||||||||||||||||||
Less: tax-equivalent adjustments | (4,340 | ) | (3,478 | ) | |||||||||||||||||
Net interest income | $ | 200,904 | $ | 180,197 | |||||||||||||||||
Net interest margin | 3.30 | % | 3.10 | % | |||||||||||||||||
(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, Interest, Yields and Rates, and Net Interest Margin on a Fully Tax-equivalent Basis (unaudited) | |||||||||||||||||||||
Nine Months Ended September 30, | |||||||||||||||||||||
2017 | 2016 | ||||||||||||||||||||
(Dollars in thousands) | Average balance | Interest | Yield/rate | Average balance | Interest | Yield/rate | |||||||||||||||
Assets: | |||||||||||||||||||||
Interest-earning assets: | |||||||||||||||||||||
Loans and leases | $ | 17,225,217 | $ | 526,419 | 4.05 | % | $ | 16,101,807 | $ | 461,399 | 3.79 | % | |||||||||
Securities (a) | 7,031,738 | 157,550 | 2.98 | 6,861,128 | 153,280 | 2.98 | |||||||||||||||
Federal Home Loan and Federal Reserve Bank stock | 160,911 | 4,732 | 3.93 | 188,692 | 4,315 | 3.05 | |||||||||||||||
Interest-bearing deposits | 63,684 | 472 | 0.98 | 57,692 | 216 | 0.49 | |||||||||||||||
Loans held for sale | 31,373 | 826 | 3.51 | 40,739 | 1,006 | 3.29 | |||||||||||||||
Total interest-earning assets | 24,512,923 | $ | 689,999 | 3.73 | % | 23,250,058 | $ | 620,216 | 3.54 | % | |||||||||||
Non-interest-earning assets | 1,666,080 | 1,768,426 | |||||||||||||||||||
Total Assets | $ | 26,179,003 | $ | 25,018,484 | |||||||||||||||||
Liabilities and Shareholders' Equity: | |||||||||||||||||||||
Interest-bearing liabilities: | |||||||||||||||||||||
Demand deposits | $ | 4,039,738 | $ | — | — | % | $ | 3,802,873 | $ | — | — | % | |||||||||
Savings, interest checking, and money market deposits | 14,315,225 | 26,732 | 0.25 | 13,010,427 | 20,481 | 0.21 | |||||||||||||||
Certificates of deposit | 2,079,021 | 18,142 | 1.17 | 2,027,336 | 16,786 | 1.11 | |||||||||||||||
Total deposits | 20,433,984 | 44,874 | 0.29 | 18,840,636 | 37,267 | 0.26 | |||||||||||||||
Securities sold under agreements to repurchase and other borrowings | 884,975 | 10,970 | 1.63 | 943,458 | 10,999 | 1.53 | |||||||||||||||
Federal Home Loan Bank advances | 1,829,175 | 22,543 | 1.63 | 2,340,055 | 21,517 | 1.21 | |||||||||||||||
Long-term debt | 225,607 | 7,748 | 4.58 | 225,651 | 7,444 | 4.40 | |||||||||||||||
Total borrowings | 2,939,757 | 41,261 | 1.85 | 3,509,164 | 39,960 | 1.50 | |||||||||||||||
Total interest-bearing liabilities | 23,373,741 | $ | 86,135 | 0.49 | % | 22,349,800 | $ | 77,227 | 0.46 | % | |||||||||||
Non-interest-bearing liabilities | 207,688 | 202,270 | |||||||||||||||||||
Total liabilities | 23,581,429 | 22,552,070 | |||||||||||||||||||
Preferred stock | 122,710 | 122,710 | |||||||||||||||||||
Common shareholders' equity | 2,474,864 | 2,343,704 | |||||||||||||||||||
Total shareholders' equity | 2,597,574 | 2,466,414 | |||||||||||||||||||
Total Liabilities and Shareholders' Equity | $ | 26,179,003 | $ | 25,018,484 | |||||||||||||||||
Tax-equivalent net interest income | 603,864 | 542,989 | |||||||||||||||||||
Less: tax-equivalent adjustments | (12,509 | ) | (9,735 | ) | |||||||||||||||||
Net interest income | $ | 591,355 | $ | 533,254 | |||||||||||||||||
Net interest margin | 3.27 | % | 3.10 | % | |||||||||||||||||
(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 and Lease Balances (unaudited) | |||||||||||||||||||
(Dollars in thousands) | September 30, 2017 | June 30, 2017 | March 31, 2017 | December 31, 2016 | September 30, 2016 | ||||||||||||||
Loan and Lease Balances (actual): | |||||||||||||||||||
Commercial non-mortgage | $ | 4,464,704 | $ | 4,282,968 | $ | 4,171,246 | $ | 4,135,625 | $ | 3,976,931 | |||||||||
Equipment financing | 566,777 | 585,673 | 619,861 | 635,629 | 621,696 | ||||||||||||||
Asset-based lending | 883,599 | 861,203 | 848,137 | 805,306 | 802,871 | ||||||||||||||
Commercial real estate | 4,464,917 | 4,556,208 | 4,530,507 | 4,510,846 | 4,280,513 | ||||||||||||||
Residential mortgages | 4,499,441 | 4,388,308 | 4,290,685 | 4,254,682 | 4,234,047 | ||||||||||||||
Consumer | 2,566,983 | 2,599,318 | 2,634,063 | 2,684,500 | 2,707,343 | ||||||||||||||
Total Loan and Lease Balances | 17,446,421 | 17,273,678 | 17,094,499 | 17,026,588 | 16,623,401 | ||||||||||||||
Allowance for loan and lease losses | (201,803 | ) | (199,578 | ) | (199,107 | ) | (194,320 | ) | (187,925 | ) | |||||||||
Loans and Leases, net | $ | 17,244,618 | $ | 17,074,100 | $ | 16,895,392 | $ | 16,832,268 | $ | 16,435,476 | |||||||||
Loan and Lease Balances (average): | |||||||||||||||||||
Commercial non-mortgage | $ | 4,416,834 | $ | 4,288,612 | $ | 4,148,625 | $ | 4,053,728 | $ | 3,921,609 | |||||||||
Equipment financing | 573,312 | 602,834 | 625,306 | 630,546 | 615,473 | ||||||||||||||
Asset-based lending | 859,289 | 864,247 | 845,269 | 780,587 | 744,319 | ||||||||||||||
Commercial real estate | 4,475,207 | 4,550,595 | 4,479,379 | 4,343,949 | 4,224,602 | ||||||||||||||
Residential mortgages | 4,455,932 | 4,340,656 | 4,279,662 | 4,252,106 | 4,200,357 | ||||||||||||||
Consumer | 2,583,945 | 2,619,480 | 2,662,915 | 2,694,492 | 2,717,282 | ||||||||||||||
Total Loan and Lease Balances | 17,364,519 | 17,266,424 | 17,041,156 | 16,755,408 | 16,423,642 | ||||||||||||||
Allowance for loan and lease losses | (202,628 | ) | (201,852 | ) | (198,308 | ) | (192,565 | ) | (185,886 | ) | |||||||||
Loans and Leases, net | $ | 17,161,891 | $ | 17,064,572 | $ | 16,842,848 | $ | 16,562,843 | $ | 16,237,756 | |||||||||
WEBSTER FINANCIAL CORPORATION Five Quarter Nonperforming Assets (unaudited) | |||||||||||||||||||
(Dollars in thousands) | September 30, 2017 | June 30, 2017 | March 31, 2017 | December 31, 2016 | September 30, 2016 | ||||||||||||||
Nonperforming loans and leases: | |||||||||||||||||||
Commercial non-mortgage | $ | 58,942 | $ | 68,430 | $ | 74,483 | $ | 38,550 | $ | 27,398 | |||||||||
Equipment financing | 570 | 547 | 703 | 225 | 202 | ||||||||||||||
Asset-based lending | 8,558 | — | — | — | — | ||||||||||||||
Commercial real estate | 11,066 | 11,168 | 9,793 | 10,521 | 14,379 | ||||||||||||||
Residential mortgages | 45,597 | 46,018 | 46,792 | 47,201 | 49,117 | ||||||||||||||
Consumer | 38,915 | 40,206 | 42,054 | 37,538 | 37,122 | ||||||||||||||
Total nonperforming loans and leases | $ | 163,648 | $ | 166,369 | $ | 173,825 | $ | 134,035 | $ | 128,218 | |||||||||
Other real estate owned and repossessed assets: | |||||||||||||||||||
Commercial | $ | — | $ | — | $ | — | $ | — | $ | 308 | |||||||||
Repossessed equipment | 328 | 33 | 82 | — | 70 | ||||||||||||||
Residential | 2,843 | 2,513 | 2,296 | 2,625 | 2,987 | ||||||||||||||
Consumer | 2,143 | 1,475 | 1,732 | 1,286 | 767 | ||||||||||||||
Total other real estate owned and repossessed assets | $ | 5,314 | $ | 4,021 | $ | 4,110 | $ | 3,911 | $ | 4,132 | |||||||||
Total nonperforming assets | $ | 168,962 | $ | 170,390 | $ | 177,935 | $ | 137,946 | $ | 132,350 | |||||||||
WEBSTER FINANCIAL CORPORATION Five Quarter Past Due Loans and Leases (unaudited) | |||||||||||||||||||
(Dollars in thousands) | September 30, 2017 | June 30, 2017 | March 31, 2017 | December 31, 2016 | September 30, 2016 | ||||||||||||||
Past due 30-89 days: | |||||||||||||||||||
Commercial non-mortgage | $ | 2,302 | $ | 1,910 | $ | 1,685 | $ | 1,949 | $ | 2,522 | |||||||||
Equipment financing | 867 | 883 | 1,298 | 1,596 | 3,477 | ||||||||||||||
Asset-based lending | — | — | — | — | — | ||||||||||||||
Commercial real estate | 1,783 | 1,013 | 2,072 | 8,173 | 1,229 | ||||||||||||||
Residential mortgages | 11,700 | 9,831 | 11,530 | 11,202 | 11,081 | ||||||||||||||
Consumer | 15,942 | 14,360 | 14,762 | 18,293 | 15,449 | ||||||||||||||
Total past due 30-89 days | 32,594 | 27,997 | 31,347 | 41,213 | 33,758 | ||||||||||||||
Past due 90 days or more and accruing | 934 | 1,185 | 747 | 749 | 5,459 | ||||||||||||||
Total past due loans and leases | $ | 33,528 | $ | 29,182 | $ | 32,094 | $ | 41,962 | $ | 39,217 | |||||||||
WEBSTER FINANCIAL CORPORATION Five Quarter Changes in the Allowance for Loan and Lease Losses (unaudited) | |||||||||||||||||||
For the Three Months Ended | |||||||||||||||||||
(Dollars in thousands) | September 30, 2017 | June 30, 2017 | March 31, 2017 | December 31, 2016 | September 30, 2016 | ||||||||||||||
Beginning balance | $ | 199,578 | $ | 199,107 | $ | 194,320 | $ | 187,925 | $ | 180,428 | |||||||||
Provision | 10,150 | 7,250 | 10,500 | 12,500 | 14,250 | ||||||||||||||
Charge-offs: | |||||||||||||||||||
Commercial non-mortgage | 3,002 | 2,196 | 123 | 1,067 | 2,561 | ||||||||||||||
Equipment financing | 121 | 119 | 185 | 44 | 300 | ||||||||||||||
Asset-based lending | — | — | — | — | — | ||||||||||||||
Commercial real estate | 749 | 100 | 102 | 161 | — | ||||||||||||||
Residential mortgages | 585 | 623 | 732 | 1,099 | 1,304 | ||||||||||||||
Consumer | 6,197 | 5,602 | 6,474 | 6,433 | 5,259 | ||||||||||||||
Total charge-offs | 10,654 | 8,640 | 7,616 | 8,804 | 9,424 | ||||||||||||||
Recoveries: | |||||||||||||||||||
Commercial non-mortgage | 466 | 317 | 322 | 439 | 370 | ||||||||||||||
Equipment financing | 79 | 13 | 14 | 95 | 240 | ||||||||||||||
Asset-based lending | — | — | — | 44 | — | ||||||||||||||
Commercial real estate | 10 | 4 | 7 | 151 | 194 | ||||||||||||||
Residential mortgages | 280 | 407 | 237 | 348 | 554 | ||||||||||||||
Consumer | 1,894 | 1,120 | 1,323 | 1,622 | 1,313 | ||||||||||||||
Total recoveries | 2,729 | 1,861 | 1,903 | 2,699 | 2,671 | ||||||||||||||
Total net charge-offs | 7,925 | 6,779 | 5,713 | 6,105 | 6,753 | ||||||||||||||
Ending balance | $ | 201,803 | $ | 199,578 | $ | 199,107 | $ | 194,320 | $ | 187,925 | |||||||||
WEBSTER FINANCIAL CORPORATION
Reconciliations to GAAP Financial Measures ____ ___
The Company evaluates its business based on certain ratios that utilize tangible equity, a non-GAAP financial measure. Return on average tangible common shareholders' equity measures the Company’s net income available to common shareholders, adjusted for the tax-affected amortization of intangible assets, as a percentage of average shareholders’ equity less average preferred stock and average goodwill and intangible assets. The tangible equity ratio represents shareholders’ equity less goodwill and intangible assets divided by total assets less goodwill and intangible assets. The tangible common equity ratio represents shareholders’ equity less preferred stock and goodwill and intangible assets divided by total assets less goodwill and intangible assets. Tangible book value per common share represents shareholders’ equity less preferred stock and goodwill and intangible assets divided by common shares outstanding at the end of the period.
The efficiency ratio, which measures the costs expended to generate a dollar of revenue, is calculated excluding foreclosed property expense, amortization of intangibles, gain or loss on securities, and other non-recurring items. Core deposits express total deposits less time deposits. Accordingly, these are also non-GAAP financial measures.
The Company believes the use of these non-GAAP financial measures provides additional clarity in assessing the results of the Company. Other companies may define or calculate supplemental financial data differently. See the tables below for reconciliations of these non-GAAP financial measures with financial measures defined by GAAP.
At or for the Three Months Ended | |||||||||||||||||||
(In thousands, except per share data) | September 30, 2017 | June 30, 2017 | March 31, 2017 | December 31, 2016 | September 30, 2016 | ||||||||||||||
Return on average tangible common shareholders' equity: | |||||||||||||||||||
Net income (GAAP) | $ | 64,496 | $ | 61,579 | $ | 59,471 | $ | 57,660 | $ | 51,817 | |||||||||
Less: Preferred stock dividends (GAAP) | 2,024 | 2,024 | 2,024 | 2,024 | 2,024 | ||||||||||||||
Add: Intangible assets amortization, tax-affected at 35% (GAAP) | 651 | 668 | 686 | 703 | 970 | ||||||||||||||
Income adjusted for preferred stock dividends and intangible assets amortization (non-GAAP) | $ | 63,123 | $ | 60,223 | $ | 58,133 | $ | 56,339 | $ | 50,763 | |||||||||
Income adjusted for preferred stock dividends and intangible assets amortization, annualized basis (non-GAAP) | $ | 252,492 | $ | 240,892 | $ | 232,532 | $ | 225,356 | $ | 203,052 | |||||||||
Average shareholders' equity (non-GAAP) | $ | 2,635,312 | $ | 2,597,222 | $ | 2,559,354 | $ | 2,526,099 | $ | 2,503,960 | |||||||||
Less: Average preferred stock (non-GAAP) | 122,710 | 122,710 | 122,710 | 122,710 | 122,710 | ||||||||||||||
Average goodwill and other intangible assets (non-GAAP) | 569,538 | 570,560 | 571,611 | 572,682 | 573,978 | ||||||||||||||
Average tangible common shareholders' equity (non-GAAP) | $ | 1,943,064 | $ | 1,903,952 | $ | 1,865,033 | $ | 1,830,707 | $ | 1,807,272 | |||||||||
Return on average tangible common shareholders' equity (non-GAAP) | 12.99 | % | 12.65 | % | 12.47 | % | 12.31 | % | 11.24 | % | |||||||||
Efficiency ratio: | |||||||||||||||||||
Non-interest expense (GAAP) | $ | 161,823 | $ | 164,419 | $ | 163,784 | $ | 161,871 | $ | 156,097 | |||||||||
Less: Foreclosed property activity (GAAP) | (72 | ) | (143 | ) | 74 | (90 | ) | 45 | |||||||||||
Intangible assets amortization (GAAP) | 1,002 | 1,028 | 1,055 | 1,082 | 1,493 | ||||||||||||||
Other expenses (non-GAAP) | 213 | 1,587 | 1,123 | 1,243 | 793 | ||||||||||||||
Non-interest expense (non-GAAP) | $ | 160,680 | $ | 161,947 | $ | 161,532 | $ | 159,636 | $ | 153,766 | |||||||||
Net interest income (GAAP) | $ | 200,904 | $ | 197,787 | $ | 192,664 | $ | 185,259 | $ | 180,197 | |||||||||
Add: Tax-equivalent adjustment (non-GAAP) | 4,340 | 4,136 | 4,033 | 3,902 | 3,478 | ||||||||||||||
Non-interest income (GAAP) | 65,846 | 64,551 | 63,042 | 70,617 | 66,412 | ||||||||||||||
Less: Gain on investment securities, net (GAAP) | — | — | — | — | — | ||||||||||||||
Other (non-GAAP) | (431 | ) | (555 | ) | (391 | ) | (408 | ) | (236 | ) | |||||||||
One-time gain on the sale of an asset (GAAP) | — | — | — | (7,331 | ) | — | |||||||||||||
Income (non-GAAP) | $ | 271,521 | $ | 267,029 | $ | 260,130 | $ | 252,855 | $ | 250,323 | |||||||||
Efficiency ratio (non-GAAP) | 59.18 | % | 60.65 | % | 62.10 | % | 63.13 | % | 61.43 | % | |||||||||
WEBSTER FINANCIAL CORPORATION
Reconciliations to GAAP Financial Measures (continued) ___ ___
At or for the Three Months Ended | |||||||||||||||||||
(In thousands, except per share data) | September 30, 2017 | June 30, 2017 | March 31, 2017 | December 31, 2016 | September 30, 2016 | ||||||||||||||
Tangible equity: | |||||||||||||||||||
Shareholders' equity (GAAP) | $ | 2,638,787 | $ | 2,605,126 | $ | 2,560,358 | $ | 2,527,012 | $ | 2,511,629 | |||||||||
Less: Goodwill and other intangible assets (GAAP) | 568,962 | 569,964 | 570,992 | 572,047 | 573,129 | ||||||||||||||
Tangible shareholders' equity (non-GAAP) | $ | 2,069,825 | $ | 2,035,162 | $ | 1,989,366 | $ | 1,954,965 | $ | 1,938,500 | |||||||||
Total assets (GAAP) | $ | 26,350,182 | $ | 26,174,930 | $ | 26,002,916 | $ | 26,072,529 | $ | 25,633,617 | |||||||||
Less: Goodwill and other intangible assets (GAAP) | 568,962 | 569,964 | 570,992 | 572,047 | 573,129 | ||||||||||||||
Tangible assets (non-GAAP) | $ | 25,781,220 | $ | 25,604,966 | $ | 25,431,924 | $ | 25,500,482 | $ | 25,060,488 | |||||||||
Tangible equity (non-GAAP) | 8.03 | % | 7.95 | % | 7.82 | % | 7.67 | % | 7.74 | % | |||||||||
Tangible common equity: | |||||||||||||||||||
Tangible shareholders' equity (non-GAAP) | $ | 2,069,825 | $ | 2,035,162 | $ | 1,989,366 | $ | 1,954,965 | $ | 1,938,500 | |||||||||
Less: Preferred stock (GAAP) | 122,710 | 122,710 | 122,710 | 122,710 | 122,710 | ||||||||||||||
Tangible common shareholders' equity (non-GAAP) | $ | 1,947,115 | $ | 1,912,452 | $ | 1,866,656 | $ | 1,832,255 | $ | 1,815,790 | |||||||||
Tangible assets (non-GAAP) | $ | 25,781,220 | $ | 25,604,966 | $ | 25,431,924 | $ | 25,500,482 | $ | 25,060,488 | |||||||||
Tangible common equity (non-GAAP) | 7.55 | % | 7.47 | % | 7.34 | % | 7.19 | % | 7.25 | % | |||||||||
Tangible book value per common share: | |||||||||||||||||||
Tangible common shareholders' equity (non-GAAP) | $ | 1,947,115 | $ | 1,912,452 | $ | 1,866,656 | $ | 1,832,255 | $ | 1,815,790 | |||||||||
Common shares outstanding | 92,034 | 92,195 | 92,154 | 91,868 | 91,687 | ||||||||||||||
Tangible book value per common share (non-GAAP) | $ | 21.16 | $ | 20.74 | $ | 20.26 | $ | 19.94 | $ | 19.80 | |||||||||
Core deposits: | |||||||||||||||||||
Total deposits | $ | 20,855,235 | $ | 20,458,097 | $ | 20,241,657 | $ | 19,303,857 | $ | 19,200,908 | |||||||||
Less: Certificates of deposit | 1,918,817 | 1,795,871 | 1,718,193 | 1,724,906 | 1,721,056 | ||||||||||||||
Brokered certificates of deposit | 299,674 | 299,670 | 299,906 | 299,902 | 299,887 | ||||||||||||||
Core deposits (non-GAAP) | $ | 18,636,744 | $ | 18,362,556 | $ | 18,223,558 | $ | 17,279,049 | $ | 17,179,965 | |||||||||