UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(RULE 14A-101)
SCHEDULE 14A INFORMATION
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Webster Financial Corporation
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| Media Contact | Investor Contact | |||||
| Ed Steadham 203-578-2287 | Terry Mangan 203-578-2318 | |||||
| esteadham@websterbank.com | tmangan@websterbank.com |
WEBSTER REPORTS THIRD QUARTER RESULTS
WATERBURY, Conn., October 22, 2009 – Webster Financial Corporation (NYSE: WBS), the holding company for Webster Bank, N.A., today announced a consolidated net loss of $19.2 million and net loss available to common shareholders of $26.1 million for the quarter ended September 30, 2009. For the first nine months of 2009, the consolidated net loss was $61.9 million and net loss available to common shareholders was $30.9 million.
Key points for the quarter:
Strong deposit growth of $426 million in the quarter; up $1.7 billion year to date.
Improved loan-to-deposit ratio of 83 percent compared to 88 percent at June 30, 2009.
Improved core to total deposit ratio of 69 percent compared to 65 percent at June 30, 2009.
Improved net interest margin of 3.18 percent compared to 3.04 percent for the second quarter of 2009.
Increased the allowance for credit losses to 2.97 percent of total loans; recorded $85.0 million in provision for credit losses and net charge-offs of $64.6 million.
Higher core pre-tax, pre-provision earnings of $56 million compared to $51 million for the second quarter.
The Warburg Pincus investment announced on July 27, 2009 added $40 million of common equity during the quarter. The remaining $75 million investment in common equity, non-voting perpetual participating preferred stock, and warrants was completed on October 15, 2009 after receipt of regulatory approval.
Webster Chairman and Chief Executive Officer James C. Smith said, “Webster reported progress on several fronts in the quarter. Capital levels continue to improve and are well in excess of all regulatory requirements; earnings before credit provisions increased by 10 percent; and deposits and deposit market share are on the rise. We saw significant improvement in the net interest margin, loan delinquencies were flat for the third consecutive quarter and overall performance was solid considering the challenging environment”
Warburg Pincus investment
| • | During the third quarter, Webster announced that the global private equity firm, Warburg Pincus, would make a $115 million investment in Webster’s common stock. An initial amount of $40 million in the form of 4.0 million common shares was invested on July 27, 2009. The remaining $75 million was invested on October 15, 2009 with $30 million in the form of 3.0 million common shares and $45 million in junior non-voting preferred stock, which converts into an additional 4.5 million common shares, subject to the receipt of shareholder approval, 6.8 million seven-year A-Warrants, Series 2, which initially have a strike price of $10.00 per share, with the strike price increasing to $11.50 per share on October 15, 2011 and to $13.00 per share on October 15, 2013; and 4.3 million seven-year B-Warrants, Series 2 with a strike price of $2.50 per share which will only become exercisable and transferable if shareholder approval is not received by February 28, 2010. The B-Warrants, Series 2 will expire immediately upon receipt of shareholder approval. This investment, coupled with the successful exchange offer for convertible preferred stock and trust preferred securities completed during the second quarter, has allowed Webster to increase common equity by $285 million with minimal dilution to tangible book value. |
| • | Including the initial $40 million realized under the Warburg Pincus investment during the third quarter, Webster’s ratio of Tier 1 common to risk-weighted assets was 6.39 percent at September 30, 2009 and including the recently funded $75 million on a proforma basis, would have been 6.93 percent at September 30, 2009. |
Smith said, “The recent approval by the Fed and funding of the balance of the Warburg Pincus investment has significantly boosted our capital position subsequent to the quarter end. We are pleased to have this transaction completed and to have Warburg as an investor in Webster”.
Net interest income
| • | Net interest margin improved to 3.18 percent in the third quarter compared to 3.04 percent in the second quarter; the increase reflects a 28 basis point decline in the cost of funds offsetting a 12 basis point decline in the yield on interest-earning assets. |
| • | Average interest-earning assets totaled $16.2 billion, up from $16.0 billion last quarter. |
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Provision for credit losses
| • | $56.5 million of the provision for credit losses recorded in the quarter was related to the Company’s continuing portfolios and $28.5 million was related to the discontinued liquidating portfolio. |
| • | Net charge-offs were $64.6 million in the quarter compared to $49.9 million for the quarter ended June 30, 2009; $51.4 million was related to the continuing portfolios and $13.2 million was related to the discontinued liquidating portfolio. |
Noninterest income
| • | Deposit service fees increased by $0.9 million from last quarter, reflecting seasonality in account usage. |
| • | Wealth and investment services revenues increased by $0.1 million from the last quarter, primarily from an increase in the value of assets under management. |
| • | Loan related fees declined by $0.8 million from the last quarter, reflective of lower application volumes and amendment fees in the quarter. |
| • | Mortgage banking revenue declined by $2.0 million from the last quarter from decreased mortgage lending activity in the period. |
| • | Net loss on sale of investment securities totaled $4.7 million as $4.9 million of pooled trust preferred securities were sold for tax purposes. |
| • | Other income increased by $2.2 million primarily from higher credit card referral fees, direct investment income and receipt of insurance proceeds. |
| • | Loss of $1.3 million on the write-down of investments on certain pooled trust preferred securities to fair value based on credit deterioration in certain underlying issuers. |
Noninterest expenses
| • | Noninterest expenses, inclusive of severance and other one time costs and the special FDIC assessment, declined $3.0 million from the second quarter. The second quarter included $8.0 million in FDIC special assessment and $1.3 million in |
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| severance and other charges, while the third quarter included $4.1 million in such charges. Included in the third quarter charges is the establishment of a $3.1 million reserve for fraud which had no customer impact and excludes any consideration of recovery. |
Income taxes
| • | Due to the pre-tax loss, the effective tax rate for the third quarter was not meaningful. The Company recorded a $22.0 million tax benefit in the quarter on the $41.3 million pre-tax loss applicable to continuing operations in the period. |
Investment securities
| • | Total investment securities were $4.6 billion at September 30, 2009 compared to $4.2 billion at June 30, 2009. The carrying value of the available for sale portfolio included $4 million in net unrealized losses compared to $53 million at June 30, 2009, while the carrying value of the held to maturity portfolio does not reflect $103 million in net unrealized gains at September 30 compared to $33 million at June 30, 2009. |
Loans
| • | Total loans were $11.3 billion at September 30, 2009 compared to $11.6 billion at June 30, 2009. In the third quarter, residential mortgage, consumer, commercial and commercial real estate loans declined by $38.9 million, $64.4 million, $164.2 million and $20.8 million, respectively. |
| • | The discontinued liquidating portfolio of indirect home equity and national construction loans, included in the consumer and residential loan portfolios, declined by $18.5 million from June 30, 2009 to $231.3 million and $5.8 million, respectively. |
Asset quality
| • | Total nonperforming loans were $361.1 million or 3.19 percent of total loans at September 30, 2009 compared to $350.4 million or 3.02 percent at June 30, 2009. The increase in nonperforming loans reflects a combined increase of $12.9 million in performing non-accrual residential mortgages and consumer loans, an increase of $30.9 million in non-accrual commercial real estate loans and a combined decrease of $33.1 million in all other categories. |
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| • | Past due loans for the continuing portfolios increased to $114.9 million at September 30, 2009 compared to $112.5 million at June 30, 2009. Past due loans for the liquidating portfolio increased to $12.6 million at September 30, 2009 compared to $9.9 million at June 30, 2009. |
Deposits and borrowings
| • | Total deposits were $13.6 billion at September 30, 2009 compared to $13.2 billion at June 30, 2009. The core categories of demand, NOW, money market and savings increased by a combined amount of $737.3 million while certificates of deposit and brokered deposits decreased by $273.3 million and $37.9 million, respectively. |
| • | Core deposits, which exclude certificates of deposits and brokered deposits, represented 68.5 percent of total deposits at September 30, 2009 compared to 65.2 percent at June 30, 2009 and 60.5 percent a year ago. |
| • | Total borrowings were $2.1 billion, a decline of $0.2 billion from $2.3 billion at June 30, 2009. Borrowings represented 11.9 percent of total assets at September 30, 2009 compared to 13.0 percent at June 30, 2009. |
***
Webster Financial Corporation is the holding company for Webster Bank, National Association. With $17.8 billion in assets, Webster provides business and consumer banking, mortgage, financial planning, trust and investment services through 181 banking offices, 492 ATMs, telephone banking and the Internet. Webster Bank owns the asset-based lending firm Webster Business Credit Corporation, the insurance premium finance company Budget Installment Corp., 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 third quarter earnings announcement will be held today, Thursday, October 22, at 9:00 a.m. EDT 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.
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Forward-looking statements
This press release may contain forward looking statements within the meaning of the Securities Exchange Act of 1934, as amended. Actual results could differ materially from management expectations, projections and estimates. Factors that could cause future results to vary from current management expectations include, but are not limited to, general economic conditions, legislative and regulatory changes, monetary and fiscal policies of the federal government, any failure to receive the approval of Webster’s shareholders in connection with Warburg Pincus’ investment, changes in tax policies, rates and regulations of federal, state and local tax authorities, changes in interest rates, deposit flows, the cost of funds, demand for loan products, demand for financial services, competition, changes in the quality or composition of our loan and investment portfolios, changes in accounting principles, policies or guidelines, and other economic, competitive, governmental and technological factors affecting our operations, markets, products, services and prices. Some of these and other factors are discussed in the annual and quarterly reports of Webster Financial Corporation previously filed with the Securities and Exchange Commission. Such developments, or any combination thereof, could have an adverse impact on the company’s financial position and results of operations. Except as required by law, Webster does not undertake to update any such forward looking statements.
Additional Information
In connection with the Investment Agreement, Webster has filed with the Securities and Exchange Commission (the “SEC”) a preliminary proxy statement. Webster will mail the definitive proxy statement, when available, to its shareholders. Investors and security holders are urged to read the proxy statement regarding the investment when it becomes available because it will contain important information. You may obtain a free copy of the proxy statement (when available) and other related documents filed by Webster with the SEC at the SEC’s website at http://www.sec.gov. The definitive proxy statement (when available) and the other documents may also be obtained for free by accessing Webster’s website at http://www.websterbank.com under the heading “Investor Relations” and then under the heading “Financial Reports” and then under the heading “SEC Filings.”
Participants in the Solicitation
Webster and its directors, executive officers and certain other members of management and employees may be soliciting proxies from shareholders in favor of certain matters relating to Warburg Pincus’ investment. Information regarding the persons who may, under the rules of the SEC, be considered participants in the solicitation of the shareholders in connection with such matters is filed with the SEC. Information about the directors and executive officers of Webster is set forth in Webster’s definitive proxy statement filed with the SEC on March 20, 2009. Additional information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, is contained in the preliminary proxy statement filed with the SEC on September 21, 2009. You may obtain a free copy of the definitive proxy statement (when available) and other related documents filed by Webster with the SEC at the SEC’s website at http://www.sec.gov. The definitive proxy statement (when available) and the other documents may also be obtained for free by accessing Webster’s website at http://www.websterbank.com under the heading “Investor Relations” and then under the heading “Financial Reports” and then under the heading “SEC Filings.”
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Non-GAAP Financial Measures
In addition to results presented in accordance with GAAP, this press release contains certain non-GAAP financial measures. A reconciliation of net income and other performance ratios, as adjusted, is included in the accompanying selected financial highlights table.
We believe that providing certain non-GAAP financial measures provides investors with information useful in understanding our financial performance, our performance trends and financial position. Specifically, we provide measures based on what we believe are our operating earnings on a consistent basis and exclude non-core operating items which affect the GAAP reporting of results of operations. We utilize these measures for internal planning and forecasting purposes. We, as well as securities analysts, investors and other interested parties, also use these measures to compare peer company operating performance. We believe that our presentation and discussion, together with the accompanying reconciliations, provides a complete understanding of factors and trends affecting our business and allows investors to view performance in a manner similar to management. These non-GAAP measures should not be considered a substitute for GAAP basis measures and results and we strongly encourage investors to review our consolidated financial statements in their entirety and not to rely on any single financial measure. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies’ non-GAAP financial measures having the same or similar names.
—30—
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WEBSTER FINANCIAL CORPORATION
Selected Financial Highlights (unaudited)
| At or for the Three Months Ended September 30, |
At or for the Nine Months Ended September 30, |
|||||||||||||||
| (In thousands, except per share data) | 2009 | 2008 | 2009 | 2008 | ||||||||||||
| Net loss and performance ratios (annualized): |
||||||||||||||||
| Net loss |
$ | (19,250 | ) | $ | (16,539 | ) | $ | (61,936 | ) | $ | (20,683 | ) | ||||
| Net loss per diluted common share |
(0.39 | ) | (0.42 | ) | (0.54 | ) | (0.51 | ) | ||||||||
| Return on average shareholders’ equity |
(4.14 | )% | (3.54 | )% | (4.45 | )% | (1.54 | )% | ||||||||
| Return on average tangible equity |
(5.88 | ) | (5.89 | ) | (6.32 | ) | (2.65 | ) | ||||||||
| Return on average assets |
(0.44 | ) | (0.38 | ) | (0.47 | ) | (0.16 | ) | ||||||||
| Loss from continuing operations and performance ratios (annualized): |
||||||||||||||||
| Loss from continuing operations |
$ | (19,250 | ) | $ | (16,021 | ) | $ | (62,249 | ) | $ | (17,602 | ) | ||||
| Net loss from continuing operations per diluted common share |
(0.39 | ) | (0.41 | ) | (0.55 | ) | (0.45 | ) | ||||||||
| Return on average shareholders’ equity |
(4.14 | )% | (3.43 | )% | (4.47 | )% | (1.31 | )% | ||||||||
| Return on average tangible equity |
(5.88 | ) | (5.70 | ) | (6.35 | ) | (2.26 | ) | ||||||||
| Return on average assets |
(0.44 | ) | (0.37 | ) | (0.47 | ) | (0.14 | ) | ||||||||
| Noninterest income as a percentage of total revenue |
25.85 | 10.87 | 26.85 | 13.22 | ||||||||||||
| Efficiency ratio (a) |
65.11 | 59.60 | 66.29 | 63.52 | ||||||||||||
| Asset quality: |
||||||||||||||||
| Allowance for credit losses |
$ | 336,511 | $ | 198,669 | $ | 336,511 | $ | 198,669 | ||||||||
| Nonperforming assets |
393,593 | 249,675 | 393,593 | 249,675 | ||||||||||||
| Allowance for credit losses / total loans |
2.97 | % | 1.54 | % | 2.97 | % | 1.54 | % | ||||||||
| Net charge-offs / average loans (annualized) |
2.25 | 1.29 | 1.62 | 0.89 | ||||||||||||
| Nonperforming loans / total loans |
3.19 | 1.76 | 3.19 | 1.76 | ||||||||||||
| Nonperforming assets / total loans plus OREO |
3.47 | 1.94 | 3.47 | 1.94 | ||||||||||||
| Allowance for credit losses / nonperforming loans |
93.20 | 87.55 | 93.20 | 87.55 | ||||||||||||
| Other ratios (annualized): |
||||||||||||||||
| Tangible capital ratio |
7.70 | % | 6.34 | % | 7.70 | % | 6.34 | % | ||||||||
| Tangible common equity ratio |
5.10 | 5.00 | 5.10 | 5.00 | ||||||||||||
| Total-risk based capital (d) |
14.05 | 13.10 | 14.05 | 13.10 | ||||||||||||
| Tier 1 common equity / risk weighted assets (d) |
6.40 | 6.91 | 6.40 | 6.91 | ||||||||||||
| Shareholders’ equity / total assets |
10.60 | 10.37 | 10.60 | 10.37 | ||||||||||||
| Interest-rate spread |
3.12 | 3.24 | 2.99 | 3.21 | ||||||||||||
| Net interest margin |
3.18 | 3.32 | 3.07 | 3.28 | ||||||||||||
| Share related: |
||||||||||||||||
| Book value per common share |
$ | 21.11 | $ | 30.19 | $ | 21.11 | $ | 30.19 | ||||||||
| Tangible book value per common share |
13.05 | 16.13 | 13.05 | 16.13 | ||||||||||||
| Common stock closing price |
12.47 | 25.25 | 12.47 | 25.25 | ||||||||||||
| Dividends declared per common share |
0.01 | 0.30 | 0.03 | 0.90 | ||||||||||||
| Common shares issued and outstanding |
68,140 | 52,711 | 68,140 | 52,711 | ||||||||||||
| Basic shares (average) |
66,281 | 52,032 | 57,125 | 52,017 | ||||||||||||
| Diluted shares (average) |
66,281 | 52,032 | 57,125 | 52,017 | ||||||||||||
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)
| (In thousands) | September 30, 2009 |
June 30, 2009 |
September 30, 2008 |
|||||||||
| Assets: |
||||||||||||
| Cash and due from depository institutions |
$ | 173,437 | $ | 254,638 | $ | 221,195 | ||||||
| Short-term investments |
360,618 | 8,216 | 6,449 | |||||||||
| Investment securities: |
||||||||||||
| Trading, at fair value |
— | — | 1,197 | |||||||||
| Available for sale, at fair value |
1,912,283 | 1,405,872 | 824,118 | |||||||||
| Held-to-maturity |
2,702,881 | 2,767,965 | 2,031,665 | |||||||||
| Total securities |
4,615,164 | 4,173,837 | 2,856,980 | |||||||||
| Loans held for sale |
37,005 | 113,936 | 3,247 | |||||||||
| Loans: |
||||||||||||
| Residential mortgages |
2,843,066 | 2,881,955 | 3,567,825 | |||||||||
| Consumer |
3,094,927 | 3,159,361 | 3,256,314 | |||||||||
| Commercial |
3,169,425 | 3,333,610 | 3,677,069 | |||||||||
| Commercial real estate |
2,214,941 | 2,235,776 | 2,365,181 | |||||||||
| Total loans |
11,322,359 | 11,610,702 | 12,866,389 | |||||||||
| Allowance for loan losses |
(326,406 | ) | (305,999 | ) | (189,169 | ) | ||||||
| Loans, net |
10,995,953 | 11,304,703 | 12,677,220 | |||||||||
| Assets held for disposition |
9,920 | 6,247 | 900 | |||||||||
| Federal Home Loan Bank and Federal Reserve Bank stock |
140,874 | 137,874 | 134,874 | |||||||||
| Accrued interest receivable |
70,007 | 69,317 | 75,830 | |||||||||
| Premises and equipment, net |
179,353 | 179,625 | 188,443 | |||||||||
| Goodwill and other intangible assets, net |
559,592 | 561,013 | 754,026 | |||||||||
| Cash surrender value of life insurance |
286,806 | 285,064 | 277,176 | |||||||||
| Deferred tax assets, net |
139,458 | 153,745 | 127,628 | |||||||||
| Prepaid expenses and other assets |
240,099 | 204,361 | 192,069 | |||||||||
| Total Assets |
$ | 17,808,286 | $ | 17,452,576 | $ | 17,516,037 | ||||||
| Liabilities and Equity: |
||||||||||||
| Deposits: |
||||||||||||
| Demand deposits |
$ | 1,571,980 | $ | 1,595,390 | $ | 1,509,319 | ||||||
| NOW accounts |
2,544,260 | 2,591,108 | 1,740,650 | |||||||||
| Money market deposit accounts |
2,209,145 | 1,618,910 | 1,591,599 | |||||||||
| Savings accounts |
2,996,318 | 2,778,970 | 2,318,014 | |||||||||
| Certificates of deposit |
4,148,759 | 4,422,033 | 4,492,767 | |||||||||
| Brokered deposits |
130,268 | 168,171 | 180,026 | |||||||||
| Total deposits |
13,600,730 | 13,174,582 | 11,832,375 | |||||||||
| Securities sold under agreements to repurchase and other short-term debt |
872,030 | 1,015,099 | 1,688,728 | |||||||||
| Federal Home Loan Bank advances |
663,210 | 663,123 | 1,355,931 | |||||||||
| Long-term debt |
589,600 | 590,520 | 657,004 | |||||||||
| Liabilities held for disposition |
15,075 | — | — | |||||||||
| Accrued expenses and other liabilities |
170,267 | 158,102 | 155,810 | |||||||||
| Total liabilities |
15,910,912 | 15,601,426 | 15,689,848 | |||||||||
| Shareholders’ equity |
1,887,734 | 1,841,518 | 1,816,569 | |||||||||
| Noncontrolling interests |
9,640 | 9,632 | 9,620 | |||||||||
| Total equity |
1,897,374 | 1,851,150 | 1,826,189 | |||||||||
| Total Liabilities and Equity |
$ | 17,808,286 | $ | 17,452,576 | $ | 17,516,037 | ||||||
See Selected Financial Highlights for footnotes.
WEBSTER FINANCIAL CORPORATION
Consolidated Statements of Operations (unaudited)
| Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
| (In thousands, except per share data) | 2009 | 2008 | 2009 | 2008 | ||||||||||||
| Interest income: |
||||||||||||||||
| Loans including fees |
$ | 131,266 | $ | 175,363 | $ | 409,566 | $ | 542,421 | ||||||||
| Investment securities |
52,975 | 39,210 | 152,601 | 116,657 | ||||||||||||
| Loans held for sale |
716 | 54 | 1,713 | 1,546 | ||||||||||||
| Total interest income |
184,957 | 214,627 | 563,880 | 660,624 | ||||||||||||
| Interest expense: |
||||||||||||||||
| Deposits |
41,977 | 57,731 | 144,867 | 193,028 | ||||||||||||
| Borrowings |
16,308 | 27,715 | 54,856 | 87,873 | ||||||||||||
| Total interest expense |
58,285 | 85,446 | 199,723 | 280,901 | ||||||||||||
| Net interest income |
126,672 | 129,181 | 364,157 | 379,723 | ||||||||||||
| Provision for credit losses |
85,000 | 45,500 | 236,000 | 86,300 | ||||||||||||
| Net interest income after provision for credit losses |
41,672 | 83,681 | 128,157 | 293,423 | ||||||||||||
| Non-interest income: |
||||||||||||||||
| Deposit service fees |
30,844 | 31,738 | 88,787 | 90,114 | ||||||||||||
| Loan related fees |
5,557 | 7,171 | 18,389 | 21,920 | ||||||||||||
| Wealth and investment services |
6,160 | 7,070 | 17,991 | 21,660 | ||||||||||||
| Mortgage banking activities |
1,406 | 50 | 5,445 | 894 | ||||||||||||
| Increase in cash surrender value of life insurance |
2,692 | 2,606 | 7,949 | 7,810 | ||||||||||||
| Net (loss) gain on sale of investment securities |
(4,728 | ) | (50 | ) | (13,863 | ) | 199 | |||||||||
| Other income |
3,517 | 2,731 | 5,117 | 5,369 | ||||||||||||
| 45,448 | 51,316 | 129,815 | 147,966 | |||||||||||||
| 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 |
(1,290 | ) | (33,507 | ) | (28,400 | ) | (89,684 | ) | ||||||||
| Visa share transactions |
— | — | 1,907 | 1,625 | ||||||||||||
| Loss on sale of FNMA/FHLMC preferred stock |
— | (2,060 | ) | — | (2,060 | ) | ||||||||||
| Total non-interest income |
44,158 | 15,749 | 133,651 | 57,847 | ||||||||||||
| Non-interest expenses: |
||||||||||||||||
| Compensation and benefits |
59,772 | 61,314 | 175,430 | 187,623 | ||||||||||||
| Occupancy |
13,572 | 12,827 | 41,461 | 39,637 | ||||||||||||
| Furniture and equipment |
15,199 | 14,892 | 45,627 | 45,686 | ||||||||||||
| Marketing |
3,802 | 2,478 | 10,104 | 11,061 | ||||||||||||
| Outside services |
3,628 | 3,798 | 10,806 | 11,657 | ||||||||||||
| Intangible amortization |
1,421 | 1,464 | 4,334 | 4,476 | ||||||||||||
| Foreclosed and repossessed asset expenses |
1,733 | 1,496 | 4,868 | 2,844 | ||||||||||||
| Foreclosed and repossessed asset write-downs |
2,232 | 1,968 | 8,354 | 2,685 | ||||||||||||
| FDIC deposit insurance assessment |
5,942 | 532 | 16,491 | 1,230 | ||||||||||||
| Other expenses |
15,616 | 13,998 | 43,982 | 44,061 | ||||||||||||
| 122,917 | 114,767 | 361,457 | 350,960 | |||||||||||||
| Severance and other costs |
4,169 | 1,535 | 5,722 | 10,253 | ||||||||||||
| Impairment of goodwill |
— | 1,013 | — | 9,513 | ||||||||||||
| FDIC special assessment |
— | — | 8,000 | — | ||||||||||||
| Total non-interest expenses |
127,086 | 117,315 | 375,179 | 370,726 | ||||||||||||
| Loss from continuing operations before income taxes |
(41,256 | ) | (17,885 | ) | (113,371 | ) | (19,456 | ) | ||||||||
| Income tax benefit |
(22,014 | ) | (1,878 | ) | (51,143 | ) | (1,860 | ) | ||||||||
| Loss from continuing operations |
(19,242 | ) | (16,007 | ) | (62,228 | ) | (17,596 | ) | ||||||||
| (Loss) income from discontinued operations, net of tax |
— | (518 | ) | 313 | (3,081 | ) | ||||||||||
| Consolidated net loss |
$ | (19,242 | ) | $ | (16,525 | ) | $ | (61,915 | ) | $ | (20,677 | ) | ||||
| Less: Net income attributable to noncontrolling interests |
8 | 14 | 21 | 6 | ||||||||||||
| Net loss attributable to Webster Financial Corporation |
(19,250 | ) | (16,539 | ) | (61,936 | ) | (20,683 | ) | ||||||||
| Preferred stock dividends, accretion and extinguishment gain |
(6,850 | ) | (5,209 | ) | 31,082 | (5,640 | ) | |||||||||
| Net loss available to common shareholders |
$ | (26,100 | ) | $ | (21,748 | ) | $ | (30,854 | ) | $ | (26,323 | ) | ||||
| Diluted shares (average) |
66,281 | 52,032 | 57,125 | 52,017 | ||||||||||||
| Net loss per common share: |
||||||||||||||||
| Basic |
||||||||||||||||
| Loss from continuing operations |
$ | (0.39 | ) | $ | (0.41 | ) | $ | (0.55 | ) | $ | (0.45 | ) | ||||
| Net loss |
(0.39 | ) | (0.42 | ) | (0.54 | ) | (0.51 | ) | ||||||||
| Diluted |
||||||||||||||||
| Loss from continuing operations |
(0.39 | ) | (0.41 | ) | (0.55 | ) | (0.45 | ) | ||||||||
| Net loss |
(0.39 | ) | (0.42 | ) | (0.54 | ) | (0.51 | ) | ||||||||
See Selected Financial Highlights for footnotes.
WEBSTER FINANCIAL CORPORATION
Five Quarter Consolidated Statements of Operations (unaudited)
| Three Months Ended | ||||||||||||||||||||
| (In thousands, except per share data) | Sept. 30, 2009 |
June 30, 2009 |
March 31, 2009 |
Dec. 31, 2008 |
Sept. 30, 2008 |
|||||||||||||||
| Interest income: |
||||||||||||||||||||
| Loans including fees |
$ | 131,266 | $ | 137,533 | $ | 140,767 | $ | 168,200 | $ | 175,363 | ||||||||||
| Investment securities |
52,975 | 48,799 | 50,827 | 40,398 | 39,210 | |||||||||||||||
| Loans held for sale |
716 | 833 | 164 | 51 | 54 | |||||||||||||||
| Total interest income |
184,957 | 187,165 | 191,758 | 208,649 | 214,627 | |||||||||||||||
| Interest expense: |
||||||||||||||||||||
| Deposits |
41,977 | 49,982 | 52,908 | 57,154 | 57,731 | |||||||||||||||
| Borrowings |
16,308 | 17,895 | 20,653 | 25,427 | 27,715 | |||||||||||||||
| Total interest expense |
58,285 | 67,877 | 73,561 | 82,581 | 85,446 | |||||||||||||||
| Net interest income |
126,672 | 119,288 | 118,197 | 126,068 | 129,181 | |||||||||||||||
| Provision for credit losses |
85,000 | 85,000 | 66,000 | 100,000 | 45,500 | |||||||||||||||
| Net interest income after provision for credit losses |
41,672 | 34,288 | 52,197 | 26,068 | 83,681 | |||||||||||||||
| Noninterest income: |
||||||||||||||||||||
| Deposit service fees |
30,844 | 29,984 | 27,959 | 30,018 | 31,738 | |||||||||||||||
| Loan related fees |
5,557 | 6,350 | 6,482 | 7,147 | 7,171 | |||||||||||||||
| Wealth and investment services |
6,160 | 6,081 | 5,750 | 6,480 | 7,070 | |||||||||||||||
| Mortgage banking activities |
1,406 | 3,433 | 606 | 336 | 50 | |||||||||||||||
| Increase in cash surrender value of life insurance |
2,692 | 2,665 | 2,592 | 2,631 | 2,606 | |||||||||||||||
| Net (loss) gain on sale of investment securities |
(4,728 | ) | (13,593 | ) | 4,458 | (4,233 | ) | (50 | ) | |||||||||||
| Other income |
3,517 | 1,325 | 275 | 1,315 | 2,731 | |||||||||||||||
| 45,448 | 36,245 | 48,122 | 43,694 | 51,316 | ||||||||||||||||
| Gain on the exchange of trust preferreds for common stock |
— | 24,336 | — | — | — | |||||||||||||||
| Gain on early extinguishment of debt and swaps |
— | — | 5,993 | — | — | |||||||||||||||
| Loss on write-down of investments to fair value |
(1,290 | ) | (27,110 | ) | — | (129,593 | ) | (33,507 | ) | |||||||||||
| Loss on sale of FNMA/FHLMC preferred stock |
— | — | — | — | (2,060 | ) | ||||||||||||||
| Visa share transactions |
— | 1,907 | — | — | — | |||||||||||||||
| Total noninterest income |
44,158 | 35,378 | 54,115 | (85,899 | ) | 15,749 | ||||||||||||||
| Noninterest expenses: |
||||||||||||||||||||
| Compensation and benefits |
59,772 | 59,189 | 56,469 | 52,078 | 61,314 | |||||||||||||||
| Occupancy |
13,572 | 13,594 | 14,295 | 13,406 | 12,827 | |||||||||||||||
| Furniture and equipment |
15,199 | 15,288 | 15,140 | 15,469 | 14,892 | |||||||||||||||
| Marketing |
3,802 | 3,196 | 3,106 | 2,895 | 2,478 | |||||||||||||||
| Outside services |
3,628 | 3,394 | 3,784 | 4,101 | 3,798 | |||||||||||||||
| Intangible amortization |
1,421 | 1,450 | 1,463 | 1,463 | 1,464 | |||||||||||||||
| Foreclosed and repossessed asset expenses |
1,733 | 1,799 | 1,179 | 1,799 | 1,496 | |||||||||||||||
| Foreclosed and repossessed asset write-downs |
2,232 | 2,829 | 3,450 | 1,615 | 1,968 | |||||||||||||||
| FDIC deposit insurance assessment |
5,942 | 5,959 | 4,590 | 3,468 | 532 | |||||||||||||||
| Other expenses |
15,616 | 14,066 | 14,302 | 13,379 | 13,998 | |||||||||||||||
| 122,917 | 120,764 | 117,778 | 109,673 | 114,767 | ||||||||||||||||
| Severance and other costs |
4,169 | 1,313 | 240 | 5,905 | 1,535 | |||||||||||||||
| FDIC special assessment |
— | 8,000 | — | — | — | |||||||||||||||
| Goodwill impairment |
— | — | — | 188,866 | 1,013 | |||||||||||||||
| Total noninterest expenses |
127,086 | 130,077 | 118,018 | 304,444 | 117,315 | |||||||||||||||
| Loss from continuing operations before income taxes |
(41,256 | ) | (60,411 | ) | (11,706 | ) | (364,275 | ) | (17,885 | ) | ||||||||||
| Income tax benefit |
(22,014 | ) | (28,536 | ) | (593 | ) | (63,980 | ) | (1,878 | ) | ||||||||||
| Loss from continuing operations |
(19,242 | ) | (31,875 | ) | (11,113 | ) | (300,295 | ) | (16,007 | ) | ||||||||||
| Income (loss) from discontinued operations, net of tax |
— | 313 | — | 8 | (518 | ) | ||||||||||||||
| Consolidated net loss |
$ | (19,242 | ) | $ | (31,562 | ) | $ | (11,113 | ) | $ | (300,287 | ) | $ | (16,525 | ) | |||||
| Less: Net income (loss) attributable to noncontrolling interests |
8 | — | 13 | (1 | ) | 14 | ||||||||||||||
| Net loss attributable to Webster Financial Corporation |
(19,250 | ) | $ | (31,562 | ) | $ | (11,126 | ) | $ | (300,286 | ) | $ | (16,539 | ) | ||||||
| Preferred stock dividends, accretion and extinguishment gain |
(6,850 | ) | 48,361 | (10,430 | ) | (7,308 | ) | (5,209 | ) | |||||||||||
| Net (loss) income available to common shareholders |
$ | (26,100 | ) | $ | 16,799 | $ | (21,556 | ) | $ | (307,594 | ) | $ | (21,748 | ) | ||||||
| Diluted shares (average) |
66,281 | 53,398 | 52,102 | 52,031 | 52,032 | |||||||||||||||
| Net income (loss) per common share: |
||||||||||||||||||||
| Basic |
||||||||||||||||||||
| (Loss) income from continuing operations |
$ | (0.39 | ) | $ | 0.31 | $ | (0.41 | ) | $ | (5.91 | ) | $ | (0.41 | ) | ||||||
| Net (loss) income |
(0.39 | ) | 0.31 | (0.41 | ) | (5.91 | ) | (0.42 | ) | |||||||||||
| Diluted |
||||||||||||||||||||
| (Loss) income from continuing operations |
(0.39 | ) | 0.31 | (0.41 | ) | (5.91 | ) | (0.41 | ) | |||||||||||
| Net (loss) income |
(0.39 | ) | 0.31 | (0.41 | ) | (5.91 | ) | (0.42 | ) | |||||||||||
See Selected Financial Highlights for footnotes.
WEBSTER FINANCIAL CORPORATION
Five Quarter Interest-Rate Spreads (unaudited)
| Three Months Ended | |||||||||||||||
| September 30, 2009 |
June 30, 2009 |
March 31, 2009 |
December 31, 2008 |
September 30, 2008 |
|||||||||||
| Interest-rate spread |
|||||||||||||||
| Yield on interest-earning assets |
4.60 | % | 4.72 | % | 4.82 | % | 5.24 | % | 5.45 | % | |||||
| Cost of interest-bearing liabilities |
1.48 | 1.76 | 1.91 | 2.13 | 2.21 | ||||||||||
| Interest-rate spread |
3.12 | % | 2.96 | % | 2.91 | % | 3.11 | % | 3.24 | % | |||||
| Net interest margin |
3.18 | % | 3.04 | % | 2.99 | % | 3.20 | % | 3.32 | % | |||||
Consolidated Average Balances, Yields and Rates Paid (unaudited)
| Three Months Ended September 30, | 2009 |
2008 |
||||||||||||||||||||
| (Dollars in thousands) | Average balance |
Interest | Fully tax- equivalent yield/rate |
Average balance |
Interest | Fully tax- equivalent yield/rate |
||||||||||||||||
| Assets: |
||||||||||||||||||||||
| Interest-earning assets: |
||||||||||||||||||||||
| Loans |
$ | 11,465,068 | $ | 131,266 | 4.54 | % | $ | 12,805,398 | $ | 175,363 | 5.43 | % | ||||||||||
| Investment securities (b) |
4,303,155 | 55,777 | 5.14 | 2,860,309 | 41,661 | 5.62 | ||||||||||||||||
| Loans held for sale |
68,663 | 716 | 4.17 | 3,810 | 54 | 5.62 | ||||||||||||||||
| Federal Home Loan and Federal Reserve Bank stock |
138,070 | 674 | 1.94 | 132,413 | 1,265 | 3.80 | ||||||||||||||||
| Short-term investments |
272,222 | 187 | 0.27 | 4,193 | 28 | 2.64 | ||||||||||||||||
| Total interest-earning assets |
16,247,178 | 188,620 | 4.60 | 15,806,123 | 218,371 | 5.45 | ||||||||||||||||
| Noninterest-earning assets |
1,344,626 | 1,537,759 | ||||||||||||||||||||
| Total assets |
$ | 17,591,804 | $ | 17,343,882 | ||||||||||||||||||
| Liabilities and Shareholders' Equity: |
||||||||||||||||||||||
| Interest-bearing liabilities: |
||||||||||||||||||||||
| Demand deposits |
$ | 1,598,433 | $ | — | — | % | $ | 1,515,047 | $ | — | — | % | ||||||||||
| Savings, NOW and money market deposit accounts |
7,444,729 | 15,602 | 0.83 | 5,869,948 | 19,660 | 1.33 | ||||||||||||||||
| Time deposits |
4,384,509 | 26,375 | 2.39 | 4,670,268 | 38,070 | 3.23 | ||||||||||||||||
| Total deposits |
13,427,671 | 41,977 | 1.24 | 12,055,263 | 57,730 | 1.90 | ||||||||||||||||
| Securities sold under agreements to repurchase and other short-term debt |
895,771 | 4,472 | 1.95 | 1,332,097 | 8,517 | 2.50 | ||||||||||||||||
| Federal Home Loan Bank advances |
662,367 | 6,514 | 3.85 | 1,291,583 | 10,181 | 3.08 | ||||||||||||||||
| Long-term debt |
589,384 | 5,322 | 3.61 | 655,760 | 9,018 | 5.50 | ||||||||||||||||
| Total borrowings |
2,147,522 | 16,308 | 2.99 | 3,279,440 | 27,716 | 3.33 | ||||||||||||||||
| Total interest-bearing liabilities |
15,575,193 | 58,285 | 1.48 | 15,334,703 | 85,446 | 2.21 | ||||||||||||||||
| Noninterest-bearing liabilities |
146,798 | 132,762 | ||||||||||||||||||||
| Total liabilities |
15,722,050 | 15,467,502 | ||||||||||||||||||||
| Noncontrolling interests |
9,636 | 9,614 | ||||||||||||||||||||
| Shareholders’ equity |
1,860,177 | 1,866,803 | ||||||||||||||||||||
| Total liabilities and shareholders’ equity |
$ | 17,591,804 | $ | 17,343,882 | ||||||||||||||||||
| Tax-equivalent net interest income |
130,335 | 132,925 | ||||||||||||||||||||
| Less: tax-equivalent adjustment |
(3,663 | ) | (3,744 | ) | ||||||||||||||||||
| Net interest income |
$ | 126,672 | $ | 129,181 | ||||||||||||||||||
| Interest-rate spread |
3.12 | % | 3.24 | % | ||||||||||||||||||
| Net interest margin |
3.18 | % | 3.32 | % | ||||||||||||||||||
See Selected Financial Highlights for footnotes.
WEBSTER FINANCIAL CORPORATION
Consolidated Average Balances, Yields and Rates Paid (unaudited)
| Nine Months Ended September 30, | 2009 | 2008 | ||||||||||||||||||||
| (Dollars in thousands) | Average balance |
Interest | Fully tax- equivalent yield/rate |
Average balance |
Interest | Fully tax- equivalent yield/rate |
||||||||||||||||
| Assets: |
||||||||||||||||||||||
| Interest-earning assets: |
||||||||||||||||||||||
| Loans |
$ | 11,870,636 | $ | 409,566 | 4.58 | % | $ | 12,677,899 | $ | 542,421 | 5.67 | % | ||||||||||
| Investment securities (b) |
3,975,016 | 161,352 | 5.31 | 2,860,501 | 123,394 | 5.62 | ||||||||||||||||
| Loans held for sale |
55,798 | 1,713 | 4.09 | 35,181 | 1,546 | 5.86 | ||||||||||||||||
| Federal Home Loan and Federal Reserve Bank stock |
136,940 | 1,970 | 1.92 | 124,922 | 4,305 | 4.60 | ||||||||||||||||
| Short-term investments |
102,421 | 261 | 0.34 | 4,750 | 106 | 2.93 | ||||||||||||||||
| Total interest-earning assets |
16,140,811 | 574,862 | 4.71 | 15,703,253 | 671,772 | 5.65 | ||||||||||||||||
| Noninterest-earning assets |
1,417,635 | 1,538,806 | ||||||||||||||||||||
| Total assets |
$ | 17,558,446 | $ | 17,242,059 | ||||||||||||||||||
| Liabilities and Shareholders’ Equity: |
||||||||||||||||||||||
| Interest-bearing liabilities: |
||||||||||||||||||||||
| Demand deposits |
$ | 1,557,900 | $ | — | — | % | $ | 1,480,139 | $ | — | — | % | ||||||||||
| Savings, NOW and money market deposit accounts |
6,716,808 | 46,542 | 0.93 | 5,852,690 | 63,145 | 1.44 | ||||||||||||||||
| Time deposits |
4,665,633 | 98,325 | 2.82 | 4,744,594 | 129,883 | 3.65 | ||||||||||||||||
| Total deposits |
12,940,341 | 144,867 | 1.50 | 12,077,423 | 193,028 | 2.13 | ||||||||||||||||
| Securities sold under agreements to repurchase and other short-term debt |
1,204,744 | 14,826 | 1.62 | 1,330,197 | 28,298 | 2.80 | ||||||||||||||||
| Federal Home Loan Bank advances |
732,351 | 20,028 | 3.61 | 1,230,280 | 30,607 | 3.27 | ||||||||||||||||
| Long-term debt |
641,152 | 20,002 | 4.16 | 658,387 | 28,968 | 5.87 | ||||||||||||||||
| Total borrowings |
2,578,247 | 54,856 | 2.82 | 3,218,864 | 87,873 | 3.60 | ||||||||||||||||
| Total interest-bearing liabilities |
15,518,588 | 199,723 | 1.72 | 15,296,287 | 280,901 | 2.44 | ||||||||||||||||
| Noninterest-bearing liabilities |
172,467 | 147,586 | ||||||||||||||||||||
| Total liabilities |
15,691,107 | 15,443,907 | ||||||||||||||||||||
| Noncontrolling interests |
9,629 | 9,611 | ||||||||||||||||||||
| Shareholders’ equity |
1,857,762 | 1,788,575 | ||||||||||||||||||||
| Total liabilities and shareholders’ equity |
$ | 17,558,446 | $ | 17,242,059 | ||||||||||||||||||
| 375,139 | 390,871 | |||||||||||||||||||||
| Less: tax-equivalent adjustment |
(10,982 | ) | (11,148 | ) | ||||||||||||||||||
| Net interest income |
$ | 364,157 | $ | 379,723 | ||||||||||||||||||
| Interest-rate spread |
2.99 | % | 3.21 | % | ||||||||||||||||||
| Net interest margin |
3.07 | % | 3.28 | % | ||||||||||||||||||
See Selected Financial Highlights for footnotes.
WEBSTER FINANCIAL CORPORATION
Five Quarter Loan balances (unaudited)
| (Dollars in thousands) | Sep. 30, 2009 |
June 30, 2009 |
March 31, 2009 |
Dec. 31, 2008 |
Sept. 30, 2008 |
|||||||||||||||
| Loan Balances (actuals): |
||||||||||||||||||||
| Continuing Portfolio: |
||||||||||||||||||||
| Residential mortgages |
$ | 2,837,240 | $ | 2,875,415 | $ | 3,170,908 | $ | 3,049,706 | $ | 3,542,416 | ||||||||||
| Consumer |
2,863,622 | 2,910,275 | 2,979,117 | 3,016,524 | 2,960,491 | |||||||||||||||
| Commercial |
1,619,284 | 1,711,995 | 1,738,640 | 1,797,135 | 1,803,321 | |||||||||||||||
| Equipment financing |
951,500 | 998,258 | 1,016,718 | 1,037,077 | 1,006,238 | |||||||||||||||
| Asset based lending |
598,641 | 623,357 | 659,694 | 752,595 | 867,510 | |||||||||||||||
| Commercial real estate |
2,086,298 | 2,091,811 | 2,094,751 | 2,070,641 | 2,147,617 | |||||||||||||||
| Residential development |
128,643 | 143,965 | 155,544 | 161,533 | 217,564 | |||||||||||||||
| Total continuing |
11,085,228 | 11,355,076 | 11,815,372 | 11,885,211 | 12,545,157 | |||||||||||||||
| Allowances for loan loss |
(269,306 | ) | (264,159 | ) | (226,562 | ) | (191,426 | ) | (161,331 | ) | ||||||||||
| Total continuing, net |
10,815,922 | 11,090,917 | 11,588,810 | 11,693,785 | 12,383,826 | |||||||||||||||
| Liquidating Portfolio: |
||||||||||||||||||||
| NCLC (c) |
5,826 | 6,540 | 13,174 | 18,735 | 25,409 | |||||||||||||||
| Consumer |
231,305 | 249,086 | 266,913 | 283,645 | 295,823 | |||||||||||||||
| Total liquidating portfolio |
237,131 | 255,626 | 280,087 | 302,380 | 321,232 | |||||||||||||||
| Allowances for loan loss |
(57,100 | ) | (41,840 | ) | (44,367 | ) | (43,903 | ) | (27,838 | ) | ||||||||||
| Total liquidating, net |
180,031 | 213,786 | 235,720 | 258,477 | 293,394 | |||||||||||||||
| Total Loan Balances (actuals) |
11,322,359 | 11,610,702 | 12,095,459 | 12,187,591 | 12,866,389 | |||||||||||||||
| Allowances for loan loss |
(326,406 | ) | (305,999 | ) | (270,929 | ) | (235,329 | ) | (189,169 | ) | ||||||||||
| Loans (net) |
$ | 10,995,953 | $ | 11,304,703 | $ | 11,824,530 | $ | 11,952,262 | $ | 12,677,220 | ||||||||||
| Loan Balances (average): |
||||||||||||||||||||
| Continuing Portfolio: |
||||||||||||||||||||
| Residential mortgages |
$ | 2,831,440 | $ | 3,127,099 | $ | 3,092,512 | $ | 3,449,202 | $ | 3,542,938 | ||||||||||
| Consumer |
2,884,543 | 2,951,691 | 3,012,178 | 2,989,393 | 2,924,446 | |||||||||||||||
| Commercial |
1,675,289 | 1,750,996 | 1,784,062 | 1,811,527 | 1,796,598 | |||||||||||||||
| Equipment finance |
975,552 | 1,011,999 | 1,026,322 | 1,015,340 | 1,007,465 | |||||||||||||||
| Asset based lending |
622,472 | 652,197 | 701,263 | 842,148 | 844,518 | |||||||||||||||
| Commercial real estate |
2,089,643 | 2,090,615 | 2,083,861 | 2,182,228 | 2,120,589 | |||||||||||||||
| Residential development |
139,040 | 150,674 | 158,924 | 161,533 | 217,564 | |||||||||||||||
| Total continuing |
11,217,980 | 11,735,271 | 11,859,122 | 12,451,371 | 12,454,118 | |||||||||||||||
| Allowances for loan loss |
(260,472 | ) | (248,701 | ) | (204,619 | ) | (167,230 | ) | (162,420 | ) | ||||||||||
| Total continuing, net |
10,957,508 | 11,486,570 | 11,654,503 | 12,284,141 | 12,291,698 | |||||||||||||||
| Liquidating Portfolio: |
||||||||||||||||||||
| NCLC (c) |
6,414 | 10,090 | 15,675 | 24,199 | 43,777 | |||||||||||||||
| Consumer |
240,675 | 258,001 | 276,219 | 293,964 | 307,503 | |||||||||||||||
| Total liquidating portfolio |
247,089 | 268,091 | 291,894 | 318,163 | 351,280 | |||||||||||||||
| Allowances for loan loss |
(57,100 | ) | (41,840 | ) | (44,367 | ) | (43,903 | ) | (27,838 | ) | ||||||||||
| Total liquidating, net |
189,989 | 226,251 | 247,527 | 274,260 | 323,442 | |||||||||||||||
| Total Loan Balances (average) |
11,465,068 | 12,003,362 | 12,151,016 | 12,769,534 | 12,805,398 | |||||||||||||||
| Allowances for loan loss |
(317,572 | ) | (290,541 | ) | (248,986 | ) | (211,133 | ) | (190,258 | ) | ||||||||||
| Loans (net) |
$ | 11,147,496 | $ | 11,712,821 | $ | 11,902,030 | $ | 12,558,401 | $ | 12,615,140 | ||||||||||
See Selected Financial Highlights for footnotes.
WEBSTER FINANCIAL CORPORATION
Five Quarter Nonperforming Assets (unaudited)
| (Dollars in thousands) | Sept. 30, 2009 |
June 30, 2009 |
March 31, 2009 |
Dec. 31, 2008 |
Sept. 30, 2008 | ||||||||||
| Nonperforming loans: |
|||||||||||||||
| Continuing Portfolio: |
|||||||||||||||
| Residential mortgages |
$ | 66,180 | $ | 59,775 | $ | 55,962 | $ | 48,731 | $ | 39,445 | |||||
| Performing non-accrual residential mortgages |
43,581 | 33,822 | 10,849 | 3,771 | — | ||||||||||
| Commercial |
61,746 | 68,979 | 65,073 | 32,915 | 33,842 | ||||||||||
| Equipment financing |
31,784 | 35,675 | 16,056 | 13,138 | 7,462 | ||||||||||
| Asset based lending |
5,064 | 24,456 | 29,353 | 17,072 | 17,239 | ||||||||||
| Commercial real estate |
47,644 | 16,707 | 12,604 | 8,032 | 8,971 | ||||||||||
| Residential development |
44,821 | 46,808 | 54,147 | 48,628 | 71,065 | ||||||||||
| Consumer |
33,837 | 33,816 | 37,518 | 29,627 | 23,668 | ||||||||||
| Performing non-accrual consumer |
6,000 | 4,534 | 2,652 | 312 | — | ||||||||||
| Nonperforming loans - continuing portfolio |
340,657 | 324,572 | 284,214 | 202,226 | 201,692 | ||||||||||
| Liquidating Portfolio: |
|||||||||||||||
| NCLC (c) |
4,089 | 5,628 | 12,259 | 12,821 | 14,227 | ||||||||||
| Performing non-accrual NCLC |
825 | — | — | 581 | — | ||||||||||
| Consumer |
14,030 | 19,521 | 19,510 | 16,757 | 10,994 | ||||||||||
| Performing non-accrual consumer |
1,475 | 674 | 185 | 181 | — | ||||||||||
| Nonperforming loans - liquidating portfolio |
20,419 | 25,823 | 31,954 | 30,340 | 25,221 | ||||||||||
| Total nonperforming loans |
$ | 361,076 | $ | 350,395 | $ | 316,168 | $ | 232,566 | $ | 226,913 | |||||
| Other real estate owned and repossessed assets: |
|||||||||||||||
| Continuing Portfolio: |
|||||||||||||||
| Residential mortgages |
$ | 2,872 | $ | 1,808 | $ | 1,399 | $ | 1,863 | $ | 3,071 | |||||
| Commercial |
13,225 | 9,340 | 10,361 | 9,782 | 1,026 | ||||||||||
| Equipment financing |
8,479 | 10,322 | 13,352 | 13,086 | 12,261 | ||||||||||
| Asset based lending |
— | — | — | — | — | ||||||||||
| Commercial real estate |
— | — | — | — | — | ||||||||||
| Residential development |
— | — | — | — | — | ||||||||||
| Consumer |
4,833 | 5,571 | 369 | 1,244 | 2,835 | ||||||||||
| Total continuing |
29,409 | 27,041 | 25,481 | 25,975 | 19,193 | ||||||||||
| Liquidating Portfolio: |
|||||||||||||||
| NCLC (c) |
3,108 | 5,836 | 5,563 | 3,519 | 2,943 | ||||||||||
| Consumer |
— | 931 | 1,139 | 1,129 | 626 | ||||||||||
| Nonperforming loans - liquidating portfolio |
3,108 | 6,767 | 6,702 | 4,648 | 3,569 | ||||||||||
| Total other real estate owned and repossessed assets |
$ | 32,517 | $ | 33,808 | $ | 32,183 | $ | 30,623 | $ | 22,762 | |||||
| Total nonperforming assets |
$ | 393,593 | $ | 384,203 | $ | 348,351 | $ | 263,189 | $ | 249,675 | |||||
See Selected Financial Highlights for footnotes.
WEBSTER FINANCIAL CORPORATION
Five Quarter Past Due Loans (unaudited)
| (Dollars in thousands) | Sept. 30, 2009 |
June 30, 2009 |
March 31, 2009 |
Dec. 31, 2008 |
Sept. 30, 2008 | ||||||||||
| Past due 30-89 days: |
|||||||||||||||
| Accruing loans: |
|||||||||||||||
| Continuing Portfolio: |
|||||||||||||||
| Residential mortgages |
$ | 38,927 | $ | 39,955 | $ | 45,798 | $ | 45,909 | $ | 40,209 | |||||
| Commercial |
9,735 | 8,460 | 8,033 | 15,817 | 7,196 | ||||||||||
| Equipment financing |
10,407 | 13,464 | 16,404 | 9,860 | 8,102 | ||||||||||
| Asset based lending |
— | — | 145 | 3,676 | — | ||||||||||
| Commercial real estate |
23,872 | 19,053 | 8,373 | 7,158 | 18,241 | ||||||||||
| Residential development |
776 | 3,210 | 1,004 | 2,096 | 5,832 | ||||||||||
| Consumer |
31,178 | 28,354 | 33,092 | 33,848 | 23,279 | ||||||||||
| Past Due 30-89 days - continuing portfolio |
114,895 | 112,496 | 112,849 | 118,364 | 102,859 | ||||||||||
| Liquidating Portfolio: |
|||||||||||||||
| NCLC (c) |
910 | 1 | 1 | 4,487 | 3,046 | ||||||||||
| Consumer |
11,680 | 9,880 | 12,244 | 15,621 | 15,370 | ||||||||||
| Past Due 30-89 days - liquidating portfolio |
12,590 | 9,881 | 12,245 | 20,108 | 18,416 | ||||||||||
| Accruing loans past due 90 days or more: |
|||||||||||||||
| Residential mortgages |
— | — | — | — | — | ||||||||||
| Commercial |
2,685 | 445 | 573 | 459 | 534 | ||||||||||
| Equipment financing |
— | — | — | — | — | ||||||||||
| Asset based lending |
— | — | — | — | — | ||||||||||
| Commercial real estate |
206 | 475 | — | 450 | 174 | ||||||||||
| Residential development |
— | — | 150 | 201 | — | ||||||||||
| Consumer |
— | — | — | — | — | ||||||||||
| Accruing loans past due 90 days or more: |
2,891 | 920 | 723 | 1,110 | 708 | ||||||||||
| Total past due loans |
$ | 130,376 | $ | 123,297 | $ | 125,817 | $ | 139,582 | $ | 121,983 | |||||
See Selected Financial Highlights for footnotes.
WEBSTER FINANCIAL CORPORATION
Five Quarter Changes in the Allowance for Credit Losses (unaudited)
| For the Three Months Ended | |||||||||||||||||
| (Dollars in thousands) | Sept. 30, 2009 |
June 30, 2009 |
March 31, 2009 |
Dec. 31, 2008 |
Sept. 30, 2008 |
||||||||||||
| Beginning balance |
$ | 316,037 | $ | 281,729 | $ | 245,829 | $ | 198,669 | $ | 194,368 | |||||||
| Provision |
85,000 | 85,000 | 66,000 | 100,000 | 45,500 | ||||||||||||
| Charge-offs continuing portfolio: |
|||||||||||||||||
| Residential mortgages |
2,721 | 4,793 | 2,964 | 3,778 | 1,623 | ||||||||||||
| Commercial |
13,729 | 8,983 | 5,388 | 5,416 | 6,593 | ||||||||||||
| Equipment financing |
7,939 | 6,324 | 2,236 | 1,222 | 998 | ||||||||||||
| Asset based lending |
15,926 | 5,297 | 2,981 | 176 | 7,245 | ||||||||||||
| Commercial real estate |
— | — | — | 53 | — | ||||||||||||
| Residential development |
3,019 | 2,350 | 48 | 30,158 | 161 | ||||||||||||
| Consumer |
10,237 | 10,242 | 6,541 | 3,887 | 4,643 | ||||||||||||
| Charge-offs continuing portfolio |
53,571 | 37,989 | 20,158 | 44,690 | 21,263 | ||||||||||||
| Charge-offs liquidating portfolio: |
|||||||||||||||||
| NCLC (c) |
135 | 3,387 | 2,086 | 777 | 14,025 | ||||||||||||
| Consumer |
13,256 | 10,825 | 9,911 | 8,779 | 6,767 | ||||||||||||
| Charge-offs liquidating portfolio |
13,391 | 14,212 | 11,997 | 9,556 | 20,792 | ||||||||||||
| Total charge-offs |
66,962 | 52,201 | 32,155 | 54,246 | 42,055 | ||||||||||||
| Recoveries continuing portfolio: |
|||||||||||||||||
| Residential mortgages |
277 | 115 | 24 | 85 | 5 | ||||||||||||
| Commercial |
435 | 230 | 378 | 225 | 89 | ||||||||||||
| Equipment financing |
821 | 203 | 287 | 177 | 303 | ||||||||||||
| Asset based lending |
— | — | 5 | 129 | 61 | ||||||||||||
| Commercial real estate |
— | — | — | — | — | ||||||||||||
| Residential development |
— | 9 | — | — | — | ||||||||||||
| Consumer |
642 | 702 | 766 | 180 | 256 | ||||||||||||
| Recoveries continuing portfolio |
2,175 | 1,259 | 1,460 | 796 | 714 | ||||||||||||
| Recoveries liquidating portfolio: |
|||||||||||||||||
| NCLC (c) |
62 | 825 | 528 | 595 | 151 | ||||||||||||
| Consumer |
132 | 187 | 67 | 15 | (9 | ) | |||||||||||
| Recoveries liquidating portfolio |
194 | 1,012 | 595 | 610 | 142 | ||||||||||||
| Total recoveries |
2,369 | 2,271 | 2,055 | 1,406 | 856 | ||||||||||||
| Total net charge-offs |
64,593 | 49,930 | 30,100 | 52,840 | 41,199 | ||||||||||||
| Change in unfunded commitments |
67 | (762 | ) | — | — | — | |||||||||||
| Ending balance |
$ | 336,511 | $ | 316,037 | $ | 281,729 | $ | 245,829 | $ | 198,669 | |||||||
| Components: |
|||||||||||||||||
| Allowance for loan losses |
$ | 326,406 | $ | 305,999 | $ | 270,929 | $ | 235,329 | $ | 189,169 | |||||||
| Reserve for unfunded credit commitments |
10,105 | 10,038 | 10,800 | 10,500 | 9,500 | ||||||||||||
| Allowance for credit losses |
$ | 336,511 | $ | 316,037 | $ | 281,729 | $ | 245,829 | $ | 198,669 | |||||||
See Selected Financial Highlights for footnotes.
WEBSTER FINANCIAL CORPORATION
Asset Quality Ratios
| For the Three Months Ended | |||||||||||||||
| (Dollars in thousands) | Sept. 30, 2009 |
June 30, 2009 |
March 31, 2009 |
Dec. 31, 2008 |
Sept. 30, 2008 |
||||||||||
| Total Portfolio |
|||||||||||||||
| Allowance for loan losses / total loans |
2.88 | % | 2.64 | % | 2.24 | % | 1.93 | % | 1.47 | % | |||||
| Allowance for credit losses / total loans |
2.97 | 2.72 | 2.33 | 2.02 | 1.54 | ||||||||||
| Net charge-offs / average loans (annualized) |
2.25 | 1.66 | 0.99 | 1.66 | 1.29 | ||||||||||
| Nonperforming loans / total loans |
3.19 | 3.02 | 2.61 | 1.91 | 1.76 | ||||||||||
| Nonperforming assets / total loans plus OREO |
3.47 | 3.30 | 2.87 | 2.15 | 1.94 | ||||||||||
| Allowance for credit losses / nonperforming loans |
93.20 | 90.19 | 89.11 | 105.70 | 87.55 | ||||||||||
| Continuing Portfolio |
|||||||||||||||
| Allowance for loan losses / total loans |
2.43 | % | 2.33 | % | 1.92 | % | 1.61 | % | 1.29 | % | |||||
| Allowance for credit losses / total loans |
2.52 | 2.41 | 2.01 | 1.70 | 1.36 | ||||||||||
| Net charge-offs / average loans (annualized) |
1.83 | 1.25 | 0.63 | 1.41 | 0.66 | ||||||||||
| Nonperforming loans / total loans |
3.07 | 2.86 | 2.41 | 1.70 | 1.61 | ||||||||||
| Nonperforming assets / total loans plus OREO |
3.33 | 3.09 | 2.62 | 1.92 | 1.76 | ||||||||||
| Allowance for credit losses / nonperforming loans |
82.02 | 84.48 | 83.52 | 102.35 | 86.09 | ||||||||||
| Liquidating Portfolio |
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| NCLC (C) |
|||||||||||||||
| Allowance for loan losses / total loans |
17.16 | % | 23.00 | % | 30.86 | % | 30.01 | % | 22.85 | % | |||||
| Net charge-offs / average loans (annualized) |
4.55 | 101.57 | 39.76 | 2.99 | 126.76 | ||||||||||
| Nonperforming loans / total loans |
84.35 | 86.06 | 93.05 | 71.53 | 55.99 | ||||||||||
| Allowance for loan losses / nonperforming loans |
20.35 | 26.72 | 33.16 | 41.96 | 40.8 | ||||||||||
| Consumer |
|||||||||||||||
| Allowance for loan losses / total loans |
24.25 | % | 16.19 | % | 15.10 | % | 13.50 | % | 7.45 | % | |||||
| Net charge-offs / average loans (annualized) |
21.81 | 16.49 | 14.26 | 11.93 | 8.81 | ||||||||||
| Nonperforming loans / total loans |
6.70 | 8.11 | 7.38 | 5.97 | 3.72 | ||||||||||
| Allowance for loan losses / nonperforming loans |
361.82 | 199.73 | 204.63 | 225.99 | 200.5 | ||||||||||
See Selected Financial Highlights for footnotes.