Exhibit 99.1
| | | | | | |
| Media Contact | | | | | | Investor Contact |
| Arthur House 203-578-2391 | | | | | | Terry Mangan 203-578-2318 |
| ahouse@websterbank.com | | | | | | tmangan@websterbank.com |
WEBSTER REPORTS 2007 FOURTH QUARTER RESULTS AND
2008 OUTLOOK AND FOCUS
Fourth Quarter 2007:
| | • | | Reported diluted loss per share of $.16 including the effect of a previously announced $40.0 million ($26.0 million net of tax, or $.49 per share) special provision for credit losses for the discontinued indirect residential construction and home equity portfolios and other charges specific to the quarter aggregating $.39 per share). |
| | • | | Announced ATM branding arrangement for 131 locations in Massachusetts, 20 in Rhode Island and 7 in Connecticut as part of expansion toward Boston. |
| | • | | Opened 2 new branches in East Longmeadow, Massachusetts and Woodbridge, Connecticut; 29 branches now opened since 2002. |
WATERBURY, Conn., January 24, 2008 – Webster Financial Corporation (NYSE: WBS), the holding company for Webster Bank, N.A., today announced a net loss for the fourth quarter of 2007 of $8.7 million or $.16 per diluted share, compared to $35.0 million in net income or $.64 in earnings per share for the third quarter of 2007 and $37.8 million in net income or $.67 in earnings per share for the fourth quarter of 2006. Results in the fourth quarter of 2007 reflect previously announced charges of $.86 per share, including a special provision of $40.0 million ($26.0 million net of tax or $.49 per share) for credit losses for the discontinued residential construction and home equity portfolios, and other charges taken in the quarter aggregating $.37 per share. For the twelve months ended December 31, 2007, net income from continuing operations totaled $110.7 million or $2.01 per diluted share compared to $133.7 million or $2.47 per share for the twelve months ended December 31, 2006.
“Webster closes 2007 having addressed head-on the challenges facing the financial services industry and taken aggressive, constructive action,” said Webster Chairman and CEO James C. Smith. “Our future is in-market and contiguous franchise growth and lending relationships that are direct to consumer and commercial customers. We look forward with confidence in our strategy and in our ability to be New England’s bank.”
Webster will provide details on its 2008 outlook and ongoing business focus during its fourth quarter earnings conference call later today (refer to details for the conference call at the end of this release). Additional details are also available on our website athttp://www.wbst.com.
Webster had previously announced that it discontinued indirect residential construction lending and indirect out of market home equity lending. In the aggregate, these two indirect loan portfolios totaled $424.0 million and have been placed into a liquidating portfolio which will be managed by a designated credit team. With the addition of the $40.0 million special provision as of December 31, 2007, the allowance for loan losses for these portfolios totals $49.9 million at year end 2007.
Smith further stated: “Our objective in setting up the liquidating portfolio was to identify, segregate and reserve against estimated losses inherent in these portfolios using default rates and loss rates that reflect our view that such rates will significantly worsen from current levels.”
Regarding the other previously announced charges taken in the fourth quarter, $14.0 million or $.27 per share related to the company’s anticipated sale of its insurance operations. The company expects that the sale will be structured such that the consideration will comprise an upfront payment and additional potential consideration over a multi-year earn-out period. Given this structure, Webster has accordingly written down the carrying value of its investment and as of year end 2007 is reporting Webster Insurance separately from its continuing operations.
The company also recorded other previously announced charges totaling $8.5 million or $.10 per share. Included in the other charges was a $3.6 million pre-tax write down in value in a direct investment based on management’s assessment that the decline in market value of the underlying securities will not be recovered in the near term and on uncertainty of intent to continue to hold this investment in the future. Other charges in the fourth quarter of 2007 include $1.4 million in pre-tax, nonrecurring charges related to a retail office lease termination and a technology service contract settlement. Webster also discontinued all national wholesale mortgage banking activities and, as a result, is closing its wholesale lending offices in Seattle, Washington; Phoenix, Arizona; Cheshire, Connecticut; and Chicago, Illinois. As a result, the company recorded severance and other costs, primarily for lease terminations and outplacement, of $3.5 million (pre tax) in the fourth quarter of 2007. Webster’s remaining mortgage and home equity operations in Cheshire, CT will now focus solely on direct to consumer retail originations.
In addition, fourth quarter 2007 results include an additional pre-tax charge of $2.0 million or $.03 per share consisting of $0.5 million of other severance costs and $1.5 million for the recording of a liability relating to Visa Inc. legal dispute settlements
reflecting Webster’s share as a Visa U.S.A. member. If Visa Inc. is successful in completing its planned public offering, Webster expects that shares received from an anticipated Class B common stock redemption related to its ownership interest in Visa Inc. will more than offset the Visa U.S.A.-related liability.
Also as previously announced, Webster has launched an earnings optimization program, assigning senior officers from each line of business and shared services area to teams dedicated to enhance revenues and reduce expenses. Harvest Earnings Group, LLC, a highly regarded firm with expertise in this area, will assist with this employee-led program. The effort to ensure that positive operating leverage and improved operating efficiency are achieved will be undertaken over the next four months and implemented through the end of the year and into 2009. The company anticipates that some job eliminations will be necessary as an outcome of this initiative.
During the fourth quarter, Webster announced an ATM branding agreement with plans for 158 in-store Webster branded ATMs in select Walgreens stores in Massachusetts (131 locations, primarily in the eastern part of the state), Rhode Island (20 locations) and Connecticut (7 locations). The project is scheduled to begin and reach completion in the first quarter of 2008. This branding agreement complements Webster’s branch expansion program and establishes another distribution platform for future growth in Rhode Island and the Boston market. Also during the fourth quarter, Webster opened two new branches, one in East Longmeadow, Massachusetts and one in Woodbridge, Connecticut. In 2007, Webster added fourde novo branches for a total of 29 branches opened since 2002.
Revenues
Total revenue, which consists of net interest income plus total noninterest income, totaled $170.7 million in the fourth quarter. This compares to total revenue of $178.5 million in the third quarter and $172.2 million a year ago.
Net interest income totaled $122.7 million in the fourth quarter compared to $127.1 million in the third quarter and $129.2 million a year ago with the reductions compared to the fourth quarter of 2007 reflecting lower levels of average interest-earning assets in 2007 from Webster’s balance sheet repositioning actions. The net interest margin was 3.26 percent in the fourth quarter of 2007 compared to 3.38 percent in the third quarter of 2007 and 3.23 percent a year ago. The 12 basis point reduction from the third quarter relates to stock buyback activity in the fourth quarter coupled with the negative near term impact of recent Fed Funds rate reductions and higher levels of nonaccrual loans. The spread between the yield on interest-earning assets and the cost of interest-bearing liabilities was 3.18 percent in the fourth quarter compared to 3.29 percent in the third quarter and 3.14 percent a year ago.
Total noninterest income was $48.0 million in the fourth quarter, inclusive of the aforementioned $3.6 million loss on the write-down of a direct investment to fair value. This compares to $51.4 million in the third quarter and $43.1 million a year ago, which was reduced by a $5.7 million loss on the sale of mortgage loans. Deposit service fees totaled $30.6 million compared to $30.0 million in the third quarter and $25.5 million a year ago, with growth partly reflecting the implementation of a new consumer fee structure during 2007. Loan-related fees were $7.3 million compared to $7.7 million in the third quarter and $9.6 million a year ago, which included higher commercial real estate prepayment fees. Wealth and investment services revenues totaled $7.5 million compared to $7.1 million in the third quarter and $7.2 million a year ago. Income from mortgage banking activities was $1.3 million in the fourth quarter compared to income of $1.8 million in the third quarter and $2.9 million a year ago. Other non-interest income was $2.1 million compared to $1.7 million in the third quarter and $3.8 million a year ago, which included a $1.4 million gain on the sale of properties.
Provision For Credit Losses
The provision for credit losses was $45.25 million compared to $15.25 million in the third quarter and $3.0 million a year ago. As previously disclosed, $40.0 million of the provision for credit losses recorded in the fourth quarter was to increase the allowance for credit losses for $424.0 million of loans in the discontinued indirect residential construction lending and indirect out of footprint home equity portfolios.
Net loan charge-offs totaled $11.7 million during the fourth quarter of 2007, of which $7.1 million and $1.8 million were in the discontinued indirect national construction and indirect, out of footprint home equity portfolios, respectively.
The allowance for credit losses, which consists of the allowance for loan losses and the reserve for unfunded credit commitments, was $197.6 million or 1.58 percent of total loans at December 31, 2007, compared to 1.32 percent of total loans at September 30, 2007 and 1.20 percent at December 31, 2006. Of the total allowance for credit losses as of December 31, 2007, $49.9 million was allocated toward the discontinued indirect residential construction lending and indirect out of footprint home equity portfolios.
Noninterest Expenses
Total noninterest expenses were $120.3 million in the fourth quarter, or $113.4 million excluding $6.9 million of severance and other costs. This amount compares to $113.6 million in the third quarter, which included $0.5 million of severance and other costs in connection with Webster’s recently completed strategic review, and $112.7 million a year ago, which included $2.0 million of acquisition costs. Adjusting for the aforementioned costs particular to each quarter, noninterest expenses increased slightly from the third quarter and increased by 2 percent from a year ago.
Balance Sheet Trends
Total assets were $17.2 billion at December 31, 2007 compared to $17.1 billion a year ago. Total loans were $12.5 billion, a decrease of $0.4 billion or 3 percent from a year ago that reflects a $0.8 billion reduction in residential loans primarily from loans that were securitized and transferred into the securities portfolio during the first quarter of 2007. Securities totaled $2.7 billion and increased by $0.9 billion primarily due to the aforementioned securitization of residential loans. Commercial loans (consisting of commercial and industrial and commercial real estate) and consumer loans increased at a combined rate of 4 percent compared to a year ago and totaled $8.8 billion at December 31, 2007. Commercial and consumer loans represent 71 percent of total loans at December 31, 2007 compared to 66 percent a year ago. Securities represented 16 percent of total assets at December 31, 2007 compared to 11 percent a year ago.
Total deposits were $12.4 billion, a decrease of $0.1 billion or 1 percent from a year ago, as a result of a $0.2 billion decline in brokered deposits. Borrowings totaled $2.9 billion, an increase of $350 million primarily in repurchase agreements, from a year ago. Total borrowings were 17 percent of total assets at December 31, 2007 compared to 15 percent a year ago.
The loan to deposit ratio was 101 percent at December 31, 2007 compared to 104 percent a year ago. Improvement from a year ago reflects completion of balance sheet repositioning actions.
Book value per common share of $33.09 at December 31, 2007 compared to $33.25 a year ago. Tangible book value per share was $18.73 at December 31, 2007 compared to $19.76 a year ago. The ratio of tangible equity to tangible assets was 5.89 percent at December 31, 2007 compared to 6.72 percent a year ago. Webster’s projected leverage ratio was 7.99 at December 31, 2007 compared to 7.43% a year ago, and projected total risk based ratio was 11.5% at December 31, 2007 compared with 11.45% a year ago. Webster repurchased 1.3 million shares of its common stock during the fourth quarter and 4.39 million shares throughout 2007. As of December 31, 2007, Webster had 2.1 million shares remaining under a 2.7 million share authorization that was announced on September 26, 2007. Given the target levels the company has established for tangible, leverage and total risk based capital, it does not intend to continue to repurchase its stock in the near term.
Asset Quality
Non-performing assets totaled $121.1 million or 0.97 percent of total loans and other real estate owned at December 31, 2007 compared to $104.2 million or 0.84 percent at September 30, 2007 and $61.8 million or 0.48 percent a year ago. Non-performing loans in the liquidating indirect national construction and indirect out of footprint home equity portfolio totaled $22.8 million and $7.1 million at December 31, 2007, respectively compared to $18.5 million and $4.2 million at September 30, 2007 respectively and $1.1 million and $2.5 million a year ago. Non-performing assets from the ongoing portfolios totaled $91.2 million or 0.73 percent of total loans at December 31, 2007. The increase in non-performing assets from September 30, 2007 was primarily composed of $4.7 million in residential, $1.8 million in home equity, and $4.3 million and $2.9 million from the discontinued liquidating indirect national construction and indirect, out of footprint home equity portfolios.
The ratio of the allowance for credit losses to non-performing loans was 175 percent at December 31, 2007 compared to 172 percent at September 30, 2007 and 263 percent a year ago. At December 31, 2007, the $49.9 million allowance for the discontinued indirect portfolios was 153 percent of non-performing loans from the discontinued portfolios, while the $147.7 million allowance for the continuing portfolios was 184 percent of non-performing loans from the continuing portfolios.
***
Webster Financial Corporation is the holding company for Webster Bank, National Association and Webster Insurance. With $17.2 billion in assets, Webster provides business and consumer banking, mortgage, insurance, financial planning, trust and investment services through 181 banking offices, 343 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, and provides health savings account trustee and administrative services through HSA Bank, a division of Webster Bank.
For more information about Webster, including past press releases and the latest Annual Report, visit the Webster website atwww.websteronline.com.
***
Conference Call
A conference call covering Webster’s fourth quarter earnings announcement will be held today, Thursday, January 24, at 9:00 a.m. EST and may be heard through Webster’s investor relations website atwww.wbst.com, or in listen-only mode by calling 1-877-407-8289 or 201-689-8341 internationally. The call will be archived on the website and available for future retrieval.
Forward-looking Statements
Statements in this press release regarding Webster Financial Corporation’s business that are not historical facts are “forward-looking statements” that involve risks and uncertainties. For a discussion of such risks and uncertainties that could cause actual results to differ from those contained in the forward-looking statement, see “Forward Looking Statements” in Webster’s Annual Report for 2006. Except as required by law, Webster does not undertake to update any such forward looking information.
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.
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WEBSTER FINANCIAL CORPORATION
Selected Financial Highlights (unaudited)
| | | | | | | | | | | | | | | | |
| | | At or for the Three
Months Ended December 31, | | | At or for the Twelve
Months Ended December 31, | |
(In thousands, except per share data) | | 2007 | | | 2006 (c) | | | 2007 | | | 2006 (c) | |
Adjusted net income and performance ratios, net of tax (annualized): | | | | | | | | | | | | | | | | |
Income from continuing operations | | $ | 5,169 | | | $ | 38,808 | | | $ | 110,696 | | | $ | 133,680 | |
Net debt prepayment expense | | | — | | | | — | | | | 4,427 | | | | — | |
Recognition of loss on direct investments | | | 2,317 | | | | — | | | | 2,317 | | | | — | |
Closing costs-National Wholesale Operations | | | 2,250 | | | | — | | | | 2,250 | | | | — | |
Software development cost write-off | | | — | | | | — | | | | 2,212 | | | | — | |
Severance and other costs | | | 2,233 | | | | — | | | | 5,184 | | | | — | |
Closing costs-Peoples Mortgage Company | | | — | | | | — | | | | 1,509 | | | | — | |
Write-down of construction loans held for sale | | | — | | | | — | | | | 1,071 | | | | — | |
Recognition of loss on AFS securities | | | — | | | | 1,560 | | | | — | | | | 33,328 | |
Loss on sale of mortgage loans | | | — | | | | 3,713 | | | | — | | | | 3,713 | |
NewMil acquisition costs | | | — | | | | 1,312 | | | | — | | | | 1,918 | |
Net gain from pension plan curltailment | | | — | | | | (195 | ) | | | — | | | | (195 | ) |
Gain on sale of properties | | | — | | | | (910 | ) | | | — | | | | (910 | ) |
| | | | | | | | | | | | | | | | |
Adjusted net income from continuing operations | | | 11,969 | | | | 44,288 | | | | 129,666 | | | | 171,534 | |
| | | | |
Net income from continuing operations per diluted common share | | | 0.23 | | | | 0.78 | | | | 2.36 | | | | 3.17 | |
Return on average shareholders’ equity | | | 2.68 | % | | | 9.46 | % | | | 7.00 | % | | | 9.99 | % |
Return on average tangible equity | | | 4.63 | | | | 15.80 | | | | 11.84 | | | | 16.26 | |
Return on average assets | | | 0.29 | | | | 0.99 | | | | 0.77 | | | | 0.96 | |
Noninterest income as a percentage of total revenue | | | 29.61 | | | | 28.39 | | | | 28.79 | | | | 27.05 | |
Efficiency ratio (a) | | | 65.07 | | | | 62.31 | | | | 64.20 | | | | 62.41 | |
| | | | |
Net income and performance ratios (annualized): | | | | | | | | | | | | | | | | |
Income from continuing operations | | $ | 5,169 | | | $ | 38,808 | | | $ | 110,696 | | | $ | 133,680 | |
Net income from continuing operations per diluted common share | | | 0.10 | | | | 0.69 | | | | 2.01 | | | | 2.47 | |
Return on average shareholders’ equity | | | 1.16 | % | | | 8.29 | % | | | 5.97 | % | | | 7.78 | % |
Return on average tangible equity | | | 2.00 | | | | 13.84 | | | | 10.10 | | | | 12.67 | |
Return on average assets | | | 0.13 | | | | 0.87 | | | | 0.66 | | | | 0.75 | |
Noninterest income as a percentage of total revenue | | | 28.14 | | | | 25.01 | | | | 28.48 | | | | 20.56 | |
Efficiency ratio (a) | | | 70.47 | | | | 65.42 | | | | 68.12 | | | | 68.16 | |
| | | | |
Asset quality: | | | | | | | | | | | | | | | | |
Allowance for credit losses | | $ | 197,586 | | | $ | 154,994 | | | $ | 197,586 | | | $ | 154,994 | |
Nonperforming assets | | | 121,071 | | | | 61,825 | | | | 121,071 | | | | 61,825 | |
Allowance for credit losses / total loans | | | 1.58 | % | | | 1.20 | % | | | 1.58 | % | | | 1.20 | % |
Net charge-offs / average loans (annualized) | | | 0.38 | | | | 0.27 | | | | 0.20 | | | | 0.13 | |
Nonperforming loans / total loans | | | 0.90 | | | | 0.46 | | | | 0.90 | | | | 0.46 | |
Nonperforming assets / total loans plus OREO | | | 0.97 | | | | 0.48 | | | | 0.97 | | | | 0.48 | |
Allowance for credit losses / nonperforming loans | | | 175.01 | | | | 263.09 | | | | 175.01 | | | | 263.09 | |
| | | | |
Other ratios (annualized): | | | | | | | | | | | | | | | | |
Tangible capital ratio | | | 5.89 | % | | | 6.72 | % | | | 5.89 | % | | | 6.72 | % |
Shareholders’ equity / total assets | | | 10.10 | | | | 10.96 | | | | 10.10 | | | | 10.96 | |
Interest-rate spread | | | 3.18 | | | | 3.14 | | | | 3.32 | | | | 3.09 | |
Net interest margin | | | 3.26 | | | | 3.23 | | | | 3.40 | | | | 3.16 | |
| | | | |
Share related: | | | | | | | | | | | | | | | | |
Book value per common share | | $ | 33.09 | | | $ | 33.24 | | | $ | 33.09 | | | $ | 33.24 | |
Tangible book value per common share | | | 18.73 | | | | 19.76 | | | | 18.73 | | | | 19.76 | |
Common stock closing price | | | 31.97 | | | | 48.72 | | | | 31.97 | | | | 48.72 | |
Dividends declared per common share | | | 0.30 | | | | 0.27 | | | | 1.17 | | | | 1.06 | |
| | | | |
Common shares issued and outstanding | | | 52,475 | | | | 56,389 | | | | 52,475 | | | | 56,389 | |
Basic shares (average) | | | 52,400 | | | | 55,753 | | | | 54,469 | | | | 53,435 | |
Diluted shares (average) | | | 52,795 | | | | 56,452 | | | | 54,996 | | | | 54,065 | |
Footnotes:
| (a) | Noninterest expense as a percentage of net interest income plus noninterest income. |
| (b) | For purposes of the yield computation, unrealized gains (losses) are excluded from the average balance. |
| (c) | Certain previously reported information has been reclassified for the effect of reporting Webster Insurance as discontinued operations. |
Consolidated Statements of Condition (unaudited)
| | | | | | | | | | | | |
(In thousands) | | December 31,
2007 | | | September 30,
2007 (c) | | | December 31,
2006 (c) | |
Assets: | | | | | | | | | | | | |
| | | |
Cash and due from depository institutions | | $ | 306,654 | | | $ | 264,929 | | | $ | 311,888 | |
Short-term investments | | | 5,112 | | | | 80,270 | | | | 175,648 | |
Federal Home Loan and Federal Reserve Bank stock | | | 110,962 | | | | 110,962 | | | | 137,755 | |
Trading, at fair value | | | 2,340 | | | | 635 | | | | 4,842 | |
Available for sale, at fair value | | | 640,117 | | | | 344,546 | | | | 366,163 | |
Held-to-maturity | | | 2,107,227 | | | | 2,051,277 | | | | 1,453,973 | |
Loans held for sale | | | 221,568 | | | | 211,659 | | | | 354,798 | |
| | | |
Loans: | | | | | | | | | | | | |
Residential mortgages | | | 3,641,602 | | | | 3,677,682 | | | | 4,424,634 | |
Commercial | | | 3,516,213 | | | | 3,562,394 | | | | 3,386,274 | |
Commercial real estate | | | 2,059,881 | | | | 1,896,566 | | | | 1,904,597 | |
Consumer | | | 3,258,247 | | | | 3,283,914 | | | | 3,207,986 | |
| | | | | | | | | | | | |
Total loans | | | 12,475,943 | | | | 12,420,556 | | | | 12,923,491 | |
Allowance for loan losses | | | (188,086 | ) | | | (154,532 | ) | | | (147,719 | ) |
| | | | | | | | | | | | |
Loans, net | | | 12,287,857 | | | | 12,266,024 | | | | 12,775,772 | |
| | | |
Accrued interest receivable | | | 80,432 | | | | 86,654 | | | | 90,565 | |
Premises and equipment, net | | | 193,063 | | | | 192,880 | | | | 191,492 | |
Goodwill and other intangible assets | | | 768,015 | | | | 769,893 | | | | 777,659 | |
Cash surrender value of life insurance | | | 269,366 | | | | 266,729 | | | | 259,318 | |
Assets held for disposition | | | 51,603 | | | | 64,971 | | | | 69,580 | |
Prepaid expenses and other assets | | | 157,644 | | | | 140,418 | | | | 127,937 | |
| | | | | | | | | | | | |
Total Assets | | $ | 17,201,960 | | | $ | 16,851,847 | | | $ | 17,097,390 | |
| | | | | | | | | | | | |
Liabilities and Shareholders’ Equity: | | | | | | | | | | | | |
| | | |
Deposits: | | | | | | | | | | | | |
Demand deposits | | $ | 1,538,083 | | | $ | 1,479,503 | | | $ | 1,588,783 | |
NOW accounts | | | 1,718,757 | | | | 1,664,025 | | | | 1,671,778 | |
Money market deposit accounts | | | 1,828,656 | | | | 2,065,474 | | | | 1,908,496 | |
Savings accounts | | | 2,259,747 | | | | 2,211,125 | | | | 1,985,202 | |
Certificates of deposit | | | 4,772,624 | | | | 4,847,060 | | | | 4,911,860 | |
Brokered deposits | | | 236,291 | | | | 286,806 | | | | 392,277 | |
| | | | | | | | | | | | |
Total deposits | | | 12,354,158 | | | | 12,553,993 | | | | 12,458,396 | |
| | | |
Federal Home Loan Bank advances | | | 1,052,228 | | | | 628,445 | | | | 1,074,933 | |
Securities sold under agreements to repurchase and other short-term debt | | | 1,238,012 | | | | 994,624 | | | | 893,206 | |
Long-term debt | | | 650,643 | | | | 666,236 | | | | 621,936 | |
Reserve for unfunded credit commitments | | | 9,500 | | | | 9,479 | | | | 7,275 | |
Liabilities held for disposition | | | 9,261 | | | | 9,310 | | | | 10,807 | |
Accrued expenses and other liabilities | | | 141,949 | | | | 175,140 | | | | 147,126 | |
| | | | | | | | | | | | |
Total liabilities | | | 15,455,751 | | | | 15,037,227 | | | | 15,213,679 | |
| | | |
Preferred stock of subsidiary corporation | | | 9,577 | | | | 9,577 | | | | 9,577 | |
| | | |
Shareholders’ equity | | | 1,736,632 | | | | 1,805,043 | | | | 1,874,134 | |
| | | | | | | | | | | | |
Total Liabilities and Shareholders’ Equity | | $ | 17,201,960 | | | $ | 16,851,847 | | | $ | 17,097,390 | |
| | | | | | | | | | | | |
See Selected Financial Highlights for footnotes.
Consolidated Statements of Income (unaudited)
| | | | | | | | | | | | | | | | |
| | | Three Months Ended
December 31, | | | Twelve Months Ended
December 31, | |
(In thousands, except per share data) | | 2007 | | | 2006 (c) | | | 2007 | | | 2006 (c) | |
Interest income: | | | | | | | | | | | | | | | | |
Loans | | $ | 205,363 | | | $ | 225,634 | | | $ | 837,711 | | | $ | 843,398 | |
Securities and short-term investments | | | 36,318 | | | | 32,514 | | | | 136,324 | | | | 154,127 | |
Loans held for sale | | | 3,276 | | | | 6,191 | | | | 21,560 | | | | 17,213 | |
| | | | | | | | | | | | | | | | |
Total interest income | | | 244,957 | | | | 264,339 | | | | 995,595 | | | | 1,014,738 | |
| | | | | | | | | | | | | | | | |
| | | | |
Interest expense: | | | | | | | | | | | | | | | | |
Deposits | | | 89,510 | | | | 90,195 | | | | 361,307 | | | | 310,199 | |
Borrowings | | | 32,748 | | | | 44,994 | | | | 126,096 | | | | 195,989 | |
| | | | | | | | | | | | | | | | |
Total interest expense | | | 122,258 | | | | 135,189 | | | | 487,403 | | | | 506,188 | |
| | | | | | | | | | | | | | | | |
Net interest income | | | 122,699 | | | | 129,150 | | | | 508,192 | | | | 508,550 | |
Provision for credit losses | | | 45,250 | | | | 3,000 | | | | 67,750 | | | | 11,000 | |
| | | | | | | | | | | | | | | | |
Net interest income after provision for credit losses | | | 77,449 | | | | 126,150 | | | | 440,442 | | | | 497,550 | |
| | | | | | | | | | | | | | | | |
Noninterest income: | | | | | | | | | | | | | | | | |
Deposit service fees | | | 30,577 | | | | 25,494 | | | | 114,645 | | | | 96,765 | |
Loan related fees | | | 7,328 | | | | 9,643 | | | | 30,830 | | | | 34,389 | |
Wealth and investment services | | | 7,507 | | | | 7,161 | | | | 29,164 | | | | 27,183 | |
Mortgage banking activities | | | 1,276 | | | | 2,917 | | | | 9,316 | | | | 8,542 | |
Increase in cash surrender value of life insurance | | | 2,637 | | | | 2,550 | | | | 10,386 | | | | 9,603 | |
Gain (loss) on sale of securities, net | | | 195 | | | | (2,732 | ) | | | 1,721 | | | | 1,289 | |
Other | | | 2,094 | | | | 3,761 | | | | 7,685 | | | | 8,426 | |
| | | | | | | | | | | | | | | | |
| | | 51,614 | | | | 48,794 | | | | 203,747 | | | | 186,197 | |
Loss on write-down of investments to fair value | | | (3,565 | ) | | | — | | | | (3,565 | ) | | | — | |
Loss on write-down of AFS securities to fair value | | | — | | | | — | | | | — | | | | (48,879 | ) |
Loss on sale of mortgage loans | | | — | | | | (5,713 | ) | | | — | | | | (5,713 | ) |
Gain on Webster Capital Trust I and II securities | | | — | | | | — | | | | 2,130 | | | | — | |
| | | | | | | | | | | | | | | | |
Total noninterest income | | | 48,049 | | | | 43,081 | | | | 202,312 | | | | 131,605 | |
| | | | | | | | | | | | | | | | |
Noninterest expenses: | | | | | | | | | | | | | | | | |
Compensation and benefits | | | 59,910 | | | | 57,552 | | | | 243,515 | | | | 229,556 | |
Occupancy | | | 12,321 | | | | 12,396 | | | | 48,878 | | | | 46,083 | |
Furniture and equipment | | | 15,353 | | | | 14,352 | | | | 59,771 | | | | 54,828 | |
Intangible amortization | | | 1,881 | | | | 3,322 | | | | 10,374 | | | | 13,865 | |
Marketing | | | 1,727 | | | | 3,338 | | | | 14,213 | | | | 15,417 | |
Professional services | | | 3,721 | | | | 5,253 | | | | 15,038 | | | | 15,927 | |
Other | | | 18,513 | | | | 14,451 | | | | 66,078 | | | | 57,708 | |
| | | | | | | | | | | | | | | | |
| | | 113,426 | | | | 110,664 | | | | 457,867 | | | | 433,384 | |
Debt redemption premium | | | — | | | | — | | | | 8,940 | | | | — | |
Severance and other costs | | | 6,898 | | | | — | | | | 17,163 | | | | — | |
Acquisition costs | | | — | | | | 2,018 | | | | — | | | | 2,951 | |
| | | | | | | | | | | | | | | | |
Total noninterest expenses | | | 120,324 | | | | 112,682 | | | | 483,970 | | | | 436,335 | |
| | | | | | | | | | | | | | | | |
Income from continuing operations before income taxes | | | 5,174 | | | | 56,549 | | | | 158,784 | | | | 192,820 | |
Income taxes | | | 5 | | | | 17,741 | | | | 48,088 | | | | 59,140 | |
| | | | | | | | | | | | | | | | |
Income from continuing operations | | | 5,169 | | | | 38,808 | | | | 110,696 | | | | 133,680 | |
(Loss) income from discontinued operations, net of tax | | | (13,867 | ) | | | (1,010 | ) | | | (13,923 | ) | | | 110 | |
| | | | | | | | | | | | | | | | |
Net (loss) income | | $ | (8,698 | ) | | $ | 37,798 | | | $ | 96,773 | | | $ | 133,790 | |
| | | | | | | | | | | | | | | | |
Diluted shares (average) | | | 52,795 | | | | 56,452 | | | | 54,996 | | | | 54,065 | |
Net income per common share: | | | | | | | | | | | | | | | | |
Basic | | | | | | | | | | | | | | | | |
Income from continuing operations | | $ | 0.10 | | | $ | 0.70 | | | $ | 2.03 | | | $ | 2.50 | |
Net (loss) income | | | (0.17 | ) | | | 0.68 | | | | 1.78 | | | | 2.50 | |
Diluted | | | | | | | | | | | | | | | | |
Income from continuing operations | | | 0.10 | | | | 0.69 | | | | 2.01 | | | | 2.47 | |
Net (loss) income | | | (0.16 | ) | | | 0.67 | | | | 1.76 | | | | 2.47 | |
See Selected Financial Highlights for footnotes.
Consolidated Statements of Income (unaudited)
| | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended | |
(In thousands, except per share data) | | Dec. 31,
2007 | | | Sept. 30,
2007 (c) | | June 30,
2007 (c) | | | March 31,
2007 (c) | | | Dec. 31,
2006 (c) | |
Interest income: | | | | | | | | | | | | | | | | | | | |
Loans | | $ | 205,363 | | | $ | 212,847 | | $ | 210,337 | | | $ | 209,164 | | | $ | 225,634 | |
Securities and short-term investments | | | 36,318 | | | | 34,163 | | | 32,563 | | | | 33,280 | | | | 32,514 | |
Loans held for sale | | | 3,276 | | | | 4,616 | | | 7,419 | | | | 6,249 | | | | 6,191 | |
| | | | | | | | | | | | | | | | | | | |
Total interest income | | | 244,957 | | | | 251,626 | | | 250,319 | | | | 248,693 | | | | 264,339 | |
| | | | | | | | | | | | | | | | | | | |
Interest expense: | | | | | | | | | | | | | | | | | | | |
Deposits | | | 89,510 | | | | 94,484 | | | 89,683 | | | | 87,630 | | | | 90,195 | |
Borrowings | | | 32,748 | | | | 30,083 | | | 30,283 | | | | 32,982 | | | | 44,994 | |
| | | | | | | | | | | | | | | | | | | |
Total interest expense | | | 122,258 | | | | 124,567 | | | 119,966 | | | | 120,612 | | | | 135,189 | |
| | | | | | | | | | | | | | | | | | | |
Net interest income | | | 122,699 | | | | 127,059 | | | 130,353 | | | | 128,081 | | | | 129,150 | |
Provision for credit losses | | | 45,250 | | | | 15,250 | | | 4,250 | | | | 3,000 | | | | 3,000 | |
| | | | | | | | | | | | | | | | | | | |
Net interest income after provision for credit losses | | | 77,449 | | | | 111,809 | | | 126,103 | | | | 125,081 | | | | 126,150 | |
| | | | | | | | | | | | | | | | | | | |
Noninterest income: | | | | | | | | | | | | | | | | | | | |
Deposit service fees | | | 30,577 | | | | 29,956 | | | 28,758 | | | | 25,354 | | | | 25,494 | |
Loan related fees | | | 7,328 | | | | 7,661 | | | 7,901 | | | | 7,940 | | | | 9,643 | |
Wealth and investment services | | | 7,507 | | | | 7,142 | | | 7,637 | | | | 6,878 | | | | 7,161 | |
Mortgage banking activities | | | 1,276 | | | | 1,849 | | | 3,962 | | | | 2,229 | | | | 2,917 | |
Increase in cash surrender value of life insurance | | | 2,637 | | | | 2,629 | | | 2,586 | | | | 2,534 | | | | 2,550 | |
Gain (loss) on sale of securities, net | | | 195 | | | | 482 | | | 503 | | | | 541 | | | | (2,732 | ) |
Other | | | 2,094 | | | | 1,688 | | | 2,025 | | | | 1,878 | | | | 3,761 | |
| | | | | | | | | | | | | | | | | | | |
| | | 51,614 | | | | 51,407 | | | 53,372 | | | | 47,354 | | | | 48,794 | |
Loss on write-down of investments to fair value | | | (3,565 | ) | | | — | | | — | | | | — | | | | — | |
Gain on Webster Capital Trust I and II securities | | | — | | | | — | | | 2,130 | | | | — | | | | — | |
Loss on sale of mortgage loans | | | — | | | | — | | | — | | | | — | | | | (5,713 | ) |
| | | | | | | | | | | | | | | | | | | |
Total noninterest income | | | 48,049 | | | | 51,407 | | | 55,502 | | | | 47,354 | | | | 43,081 | |
| | | | | | | | | | | | | | | | | | | |
Noninterest expenses: | | | | | | | | | | | | | | | | | | | |
Compensation and benefits | | | 59,910 | | | | 61,171 | | | 60,899 | | | | 61,535 | | | | 57,552 | |
Occupancy | | | 12,321 | | | | 11,932 | | | 12,064 | | | | 12,561 | | | | 12,396 | |
Furniture and equipment | | | 15,353 | | | | 14,846 | | | 15,014 | | | | 14,558 | | | | 14,352 | |
Intangible amortization | | | 1,881 | | | | 2,027 | | | 3,144 | | | | 3,322 | | | | 3,322 | |
Marketing | | | 1,727 | | | | 4,123 | | | 4,175 | | | | 4,188 | | | | 3,338 | |
Professional services | | | 3,721 | | | | 3,625 | | | 3,181 | | | | 4,511 | | | | 5,253 | |
Other | | | 18,513 | | | | 15,377 | | | 16,224 | | | | 15,964 | | | | 14,451 | |
| | | | | | | | | | | | | | | | | | | |
| | | 113,426 | | | | 113,101 | | | 114,701 | | | | 116,639 | | | | 110,664 | |
Debt redemption premium | | | — | | | | — | | | 8,940 | | | | — | | | | — | |
Severance and other costs | | | 6,898 | | | | 452 | | | 5,291 | | | | 4,522 | | | | — | |
Acquisition costs | | | — | | | | — | | | — | | | | — | | | | 2,018 | |
| | | | | | | | | | | | | | | | | | | |
Total noninterest expenses | | | 120,324 | | | | 113,553 | | | 128,932 | | | | 121,161 | | | | 112,682 | |
| | | | | | | | | | | | | | | | | | | |
Income from continuing operations before income taxes | | | 5,174 | | | | 49,663 | | | 52,673 | | | | 51,274 | | | | 56,549 | |
Income taxes | | | 5 | | | | 15,088 | | | 16,801 | | | | 16,194 | | | | 17,741 | |
| | | | | | | | | | | | | | | | | | | |
Income from continuing operations | | | 5,169 | | | | 34,575 | | | 35,872 | | | | 35,080 | | | | 38,808 | |
(Loss) income from discontinued operations, net of tax | | | (13,867 | ) | | | 393 | | | (405 | ) | | | (44 | ) | | | (1,010 | ) |
| | | | | | | | | | | | | | | | | | | |
Net (loss) income | | $ | (8,698 | ) | | $ | 34,968 | | $ | 35,467 | | | $ | 35,036 | | | $ | 37,798 | |
| | | | | | | | | | | | | | | | | | | |
Diluted shares (average) | | | 52,795 | | | | 54,259 | | | 56,243 | | | | 56,762 | | | | 56,452 | |
| | | | | |
Net income per common share: | | | | | | | | | | | | | | | | | | | |
Basic | | | | | | | | | | | | | | | | | | | |
Income from continuing operations | | $ | 0.10 | | | $ | 0.64 | | $ | 0.64 | | | $ | 0.63 | | | $ | 0.70 | |
Net (loss) income | | | (0.17 | ) | | | 0.65 | | | 0.64 | | | | 0.62 | | | | 0.68 | |
Diluted | | | | | | | | | | | | | | | | | | | |
Income from continuing operations | | | 0.10 | | | | 0.64 | | | 0.64 | | | | 0.62 | | | | 0.69 | |
Net (loss) income | | | (0.16 | ) | | | 0.64 | | | 0.63 | | | | 0.62 | | | | 0.67 | |
See Selected Financial Highlights for footnotes.
Interest-Rate Spread (unaudited)
| | | | | | | | | | | | | | | |
| | | Three Months Ended | |
| | | December 31,
2007 | | | September 30,
2007 | | | June 30,
2007 | | | March 31,
2007 | | | December 31,
2006 | |
Interest-rate spread | | | | | | | | | | | | | | | |
Yield on interest-earning assets | | 6.42 | % | | 6.61 | % | | 6.62 | % | | 6.61 | % | | 6.52 | % |
Cost of interest-bearing liabilities | | 3.24 | | | 3.32 | | | 3.25 | | | 3.29 | | | 3.38 | |
| | | | | | | | | | | | | | | |
Interest-rate spread | | 3.18 | % | | 3.29 | % | | 3.37 | % | | 3.32 | % | | 3.14 | % |
| | | | | | | | | | | | | | | |
Net interest margin | | 3.26 | % | | 3.38 | % | | 3.47 | % | | 3.41 | % | | 3.23 | % |
| | | | | | | | | | | | | | | |
Consolidated Average Statements of Condition (unaudited)
| | | | | | | | | | | | | | | | | | | | |
| Three Months Ended December 31, | | 2007 | | | 2006 | |
(Dollars in thousands) | | Average
balance | | Interest | | | Fully tax-
equivalent
yield/rate | | | Average
balance | | Interest | | | Fully tax-
equivalent
yield/rate | |
Assets: | | | | | | | | | | | | | | | | | | | | |
Interest-earning assets: | | | | | | | | | | | | | | | | | | | | |
Loans | | $ | 12,422,076 | | $ | 205,363 | | | 6.54 | % | | $ | 13,362,185 | | $ | 225,634 | | | 6.69 | % |
Securities (b) | | | 2,561,459 | | | 37,569 | | | 5.85 | | | | 2,289,026 | | | 32,085 | | | 5.63 | |
Loans held for sale | | | 208,199 | | | 3,276 | | | 6.29 | | | | 417,479 | | | 6,191 | | | 5.93 | |
Federal Home Loan and Federal Reserve Bank stock | | | 110,962 | | | 1,760 | | | 6.29 | | | | 146,960 | | | 2,610 | | | 7.05 | |
Short-term investments | | | 18,464 | | | 132 | | | 2.79 | | | | 29,896 | | | 368 | | | 4.82 | |
| | | | | | | | | | | | | | | | | | | | |
Total interest-earning assets | | | 15,321,160 | | | 248,100 | | | 6.42 | | | | 16,245,546 | | | 266,888 | | | 6.52 | |
| | | | | | | | | | | | | | | | | | | | |
Noninterest-earning assets | | | 1,564,878 | | | | | | | | | | 1,617,888 | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Total assets | | $ | 16,886,038 | | | | | | | | | $ | 17,863,434 | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Liabilities and Shareholders’ Equity: | | | | | | | | | | | | | | | | | | | | |
Interest-bearing liabilities: | | | | | | | | | | | | | | | | | | | | |
Demand deposits | | $ | 1,492,936 | | $ | — | | | — | % | | $ | 1,522,571 | | $ | — | | | — | % |
Savings, NOW and money market deposit accounts | | | 5,795,625 | | | 31,608 | | | 2.16 | | | | 5,582,187 | | | 29,609 | | | 2.10 | |
Time deposits | | | 5,104,534 | | | 57,902 | | | 4.50 | | | | 5,405,010 | | | 60,586 | | | 4.44 | |
| | | | | | | | | | | | | | | | | | | | |
Total deposits | | | 12,393,095 | | | 89,510 | | | 2.86 | | | | 12,509,768 | | | 90,195 | | | 2.86 | |
| | | | | | | | | | | | | | | | | | | | |
Federal Home Loan Bank advances | | | 797,713 | | | 8,812 | | | 4.32 | | | | 1,444,155 | | | 18,169 | | | 4.92 | |
Repurchase agreements and other short-term debt | | | 1,072,976 | | | 11,560 | | | 4.22 | | | | 1,239,065 | | | 14,100 | | | 4.45 | |
Long-term debt | | | 662,904 | | | 12,376 | | | 7.47 | | | | 637,853 | | | 12,725 | | | 7.98 | |
| | | | | | | | | | | | | | | | | | | | |
Total borrowings | | | 2,533,593 | | | 32,748 | | | 5.10 | | | | 3,321,073 | | | 44,994 | | | 5.33 | |
| | | | | | | | | | | | | | | | | | | | |
Total interest-bearing liabilities | | | 14,926,688 | | | 122,258 | | | 3.24 | | | | 15,830,841 | | | 135,189 | | | 3.38 | |
| | | | | | | | | | | | | | | | | | | | |
Noninterest-bearing liabilities | | | 161,761 | | | | | | | | | | 149,623 | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Total liabilities | | | 15,088,449 | | | | | | | | | | 15,980,464 | | | | | | | |
| | | | | | |
Preferred stock of subsidiary corporation | | | 9,577 | | | | | | | | | | 9,577 | | | | | | | |
| | | | | | |
Shareholders’ equity | | | 1,788,012 | | | | | | | | | | 1,873,393 | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Total liabilities and shareholders’ equity | | $ | 16,886,038 | | | | | | | | | $ | 17,863,434 | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | 125,842 | | | | | | | | | | 131,699 | | | | |
Less: tax-equivalent adjustment | | | | | | (3,143 | ) | | | | | | | | | (2,549 | ) | | | |
| | | | | | | | | | | | | | | | | | | | |
Net interest income | | | | | $ | 122,699 | | | | | | | | | $ | 129,150 | | | | |
| | | | | | | | | | | | | | | | | | | | |
Interest-rate spread | | | | | | | | | 3.18 | % | | | | | | | | | 3.14 | % |
| | | | | | | | | | | | | | | | | | | | |
Net interest margin | | | | | | | | | 3.26 | % | | | | | | | | | 3.23 | % |
| | | | | | | | | | | | | | | | | | | | |
See Selected Financial Highlights for footnotes.
Consolidated Average Statements of Condition (unaudited)
| | | | | | | | | | | | | | | | | | | | |
| Twelve Months Ended December 31, | | 2007 | | | 2006 | |
(Dollars in thousands) | | Average
balance | | Interest | | | Fully tax-
equivalent
yield/rate | | | Average balance | | Interest | | | Fully tax-
equivalent
yield/rate | |
Assets: | | | | | | | | | | | | | | | | | | | | |
Interest-earning assets: | | | | | | | | | | | | | | | | | | | | |
Loans | | $ | 12,390,955 | | $ | 837,711 | | | 6.76 | % | | $ | 12,800,864 | | $ | 843,398 | | | 6.59 | % |
Securities (b) | | | 2,356,669 | | | 136,398 | | | 5.79 | | | | 3,061,432 | | | 152,832 | | | 4.93 | |
Loans held for sale | | | 344,663 | | | 21,560 | | | 6.26 | | | | 288,892 | | | 17,213 | | | 5.96 | |
Federal Home Loan and Federal Reserve Bank stock | | | 113,731 | | | 7,954 | | | 6.99 | | | | 163,344 | | | 9,672 | | | 5.92 | |
Short-term investments | | | 59,345 | | | 3,045 | | | 5.13 | | | | 25,514 | | | 1,079 | | | 4.23 | |
| | | | | | | | | | | | | | | | | | | | |
Total interest-earning assets | | | 15,265,363 | | | 1,006,668 | | | 6.60 | | | | 16,340,046 | | | 1,024,194 | | | 6.25 | |
| | | | | | | | | | | | | | | | | | | | |
Noninterest-earning assets | | | 1,590,282 | | | | | | | | | | 1,531,421 | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Total assets | | $ | 16,855,645 | | | | | | | | | $ | 17,871,467 | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Liabilities and Shareholders’ Equity: | | | | | | | | | | | | | | | | | | | | |
Interest-bearing liabilities: | | | | | | | | | | | | | | | | | | | | |
Demand deposits | | $ | 1,506,696 | | $ | — | | | — | % | | $ | 1,470,861 | | $ | — | | | — | % |
Savings, NOW and money market deposit accounts | | | 5,749,378 | | | 125,590 | | | 2.18 | | | | 5,427,812 | | | 100,165 | | | 1.85 | |
Time deposits | | | 5,218,449 | | | 235,717 | | | 4.52 | | | | 5,193,608 | | | 210,034 | | | 4.04 | |
| | | | | | | | | | | | | | | | | | | | |
Total deposits | | | 12,474,523 | | | 361,307 | | | 2.90 | | | | 12,092,281 | | | 310,199 | | | 2.57 | |
| | | | | | | | | | | | | | | | | | | | |
Federal Home Loan Bank advances | | | 757,367 | | | 35,302 | | | 4.66 | | | | 2,035,786 | | | 94,322 | | | 4.63 | |
Repurchase agreements and other short-term debt | | | 996,341 | | | 44,769 | | | 4.49 | | | | 1,243,269 | | | 52,301 | | | 4.21 | |
Long-term debt | | | 609,371 | | | 46,025 | | | 7.55 | | | | 633,667 | | | 49,366 | | | 7.79 | |
| | | | | | | | | | | | | | | | | | | | |
Total borrowings | | | 2,363,079 | | | 126,096 | | | 5.34 | | | | 3,912,722 | | | 195,989 | | | 5.01 | |
| | | | | | | | | | | | | | | | | | | | |
Total interest-bearing liabilities | | | 14,837,602 | | | 487,403 | | | 3.28 | | | | 16,005,003 | | | 506,188 | | | 3.16 | |
| | | | | | | | | | | | | | | | | | | | |
Noninterest-bearing liabilities | | | 156,083 | | | | | | | | | | 139,057 | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Total liabilities | | | 14,993,685 | | | | | | | | | | 16,144,060 | | | | | | | |
| | | | | | |
Preferred stock of subsidiary corporation | | | 9,577 | | | | | | | | | | 9,577 | | | | | | | |
| | | | | | |
Shareholders’ equity | | | 1,852,383 | | | | | | | | | | 1,717,830 | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Total liabilities and shareholders’ equity | | $ | 16,855,645 | | | | | | | | | $ | 17,871,467 | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | 519,265 | | | | | | | | | | 518,006 | | | | |
Less: tax-equivalent adjustment | | | | | | (11,073 | ) | | | | | | | | | (9,456 | ) | | | |
| | | | | | | | | | | | | | | | | | | | |
Net interest income | | | | | $ | 508,192 | | | | | | | | | $ | 508,550 | | | | |
| | | | | | | | | | | | | | | | | | | | |
Interest-rate spread | | | | | | | | | 3.32 | % | | | | | | | | | 3.09 | % |
| | | | | | | | | | | | | | | | | | | | |
Net interest margin | | | | | | | | | 3.40 | % | | | | | | | | | 3.16 | % |
| | | | | | | | | | | | | | | | | | | | |
See Selected Financial Highlights for footnotes.
Nonperforming Assets(unaudited)
| | | | | | | | | | | | | | | |
(Dollars in thousands) | | Dec. 31,
2007 | | Sept. 30,
2007 | | June 30,
2007 | | March 31,
2007 | | Dec. 31,
2006 |
Nonperforming loans: | | | | | | | | | | | | | | | |
Continuing Portfolio: | | | | | | | | | | | | | | | |
Commercial: | | | | | | | | | | | | | | | |
Commercial | | $ | 26,804 | | $ | 25,845 | | $ | 20,142 | | $ | 13,679 | | $ | 21,105 |
Equipment financing | | | 6,473 | | | 5,054 | | | 2,584 | | | 2,405 | | | 2,616 |
| | | | | | | | | | | | | | | |
Total commercial | | | 33,277 | | | 30,899 | | | 22,726 | | | 16,084 | | | 23,721 |
Commercial real estate | | | 12,896 | | | 14,238 | | | 12,242 | | | 18,524 | | | 17,618 |
Residential: | | | | | | | | | | | | | | | |
Residential construction to permanent | | | 2,820 | | | — | | | — | | | — | | | — |
All other | | | 19,532 | | | 14,811 | | | 13,288 | | | 10,838 | | | 10,231 |
| | | | | | | | | | | | | | | |
Total residential | | | 22,352 | | | 14,811 | | | 13,288 | | | 10,838 | | | 10,231 |
Consumer | | | 14,455 | | | 12,688 | | | 8,164 | | | 8,114 | | | 3,779 |
| | | | | | | | | | | | | | | |
Nonperforming loans - continuing portfolio | | | 82,980 | | | 72,636 | | | 56,420 | | | 53,560 | | | 55,349 |
| | | | | | | | | | | | | | | |
Liquidating Portfolio: | | | | | | | | | | | | | | | |
NCLC | | | 22,797 | | | 18,486 | | | 13,395 | | | 2,635 | | | 1,076 |
Consumer | | | 7,126 | | | 4,199 | | | 2,711 | | | 2,694 | | | 2,487 |
| | | | | | | | | | | | | | | |
Nonperforming loans - liquidating portfolio | | | 29,923 | | | 22,685 | | | 16,106 | | | 5,329 | | | 3,563 |
| | | | | | | | | | | | | | | |
Total nonperforming loans | | | 112,903 | | | 95,321 | | | 72,526 | | | 58,889 | | | 58,912 |
| | | | | | | | | | | | | | | |
Other real estate owned and repossessed assets: | | | | | | | | | | | | | | | |
Commercial | | | 2,211 | | | 5,233 | | | 3,950 | | | 4,833 | | | 1,922 |
Residential | | | 1,061 | | | 985 | | | 711 | | | 350 | | | 383 |
Consumer | | | 4,896 | | | 2,635 | | | 1,467 | | | 758 | | | 608 |
| | | | | | | | | | | | | | | |
Total other real estate owned and repossessed assets | | | 8,168 | | | 8,853 | | | 6,128 | | | 5,941 | | | 2,913 |
| | | | | | | | | | | | | | | |
Total nonperforming assets | | $ | 121,071 | | $ | 104,174 | | $ | 78,654 | | $ | 64,830 | | $ | 61,825 |
| | | | | | | | | | | | | | | |
Accruing loans 90 or more days past due | | $ | 1,891 | | $ | 1,286 | | $ | 2,088 | | $ | 4,636 | | $ | 1,490 |
| | | | | | | | | | | | | | | |
See Selected Financial Highlights for footnotes.
Past Due Loans(unaudited)
| | | | | | | | | | | | | | | |
(Dollars in thousands) | | Dec. 31,
2007 | | Sept. 30,
2007 | | June 30,
2007 | | March 31,
2007 | | Dec. 31,
2006 |
Past Due 30-89 days: | | | | | | | | | | | | | | | |
Continuing Portfolio: | | | | | | | | | | | | | | | |
Commercial: | | | | | | | | | | | | | | | |
Commercial | | $ | 13,291 | | $ | 4,237 | | $ | 9,999 | | $ | 20,537 | | $ | 5,672 |
Equipment financing | | | 5,644 | | | 3,057 | | | 3,355 | | | 3,582 | | | 1,443 |
| | | | | | | | | | | | | | | |
Total commercial | | | 18,935 | | | 7,294 | | | 13,354 | | | 24,119 | | | 7,115 |
Commercial real estate | | | 12,054 | | | 21,017 | | | 13,452 | | | 6,429 | | | 26,476 |
Residential: | | | | | | | | | | | | | | | |
Residential construction to permanent | | | 3,743 | | | 1,656 | | | 536 | | | — | | | — |
All other | | | 19,967 | | | 22,501 | | | 14,556 | | | 10,354 | | | 14,269 |
| | | | | | | | | | | | | | | |
Total residential | | | 23,710 | | | 24,157 | | | 15,092 | | | 10,354 | | | 14,269 |
Consumer | | | 22,347 | | | 17,836 | | | 17,005 | | | 6,801 | | | 11,730 |
| | | | | | | | | | | | | | | |
Past Due 30-89 days - continuing portfolio | | | 77,046 | | | 70,304 | | | 58,903 | | | 47,703 | | | 59,590 |
| | | | | | | | | | | | | | | |
Liquidating Portfolio: | | | | | | | | | | | | | | | |
NCLC | | | 13,143 | | | 10,209 | | | 9,037 | | | 1,835 | | | 685 |
Consumer | | | 8,793 | | | 7,815 | | | 5,379 | | | 2,815 | | | 2,288 |
| | | | | | | | | | | | | | | |
Past Due 30-89 days - liquidating portfolio | | | 21,936 | | | 18,024 | | | 14,416 | | | 4,650 | | | 2,973 |
| | | | | | | | | | | | | | | |
Past Due 90 days or more: | | | | | | | | | | | | | | | |
Commercial | | | 1,141 | | | 1,031 | | | 1,188 | | | 1,361 | | | 1,490 |
Commercial real estate | | | 750 | | | 255 | | | 900 | | | 3,275 | | | — |
| | | | | | | | | | | | | | | |
Total | | $ | 100,873 | | $ | 89,614 | | $ | 75,407 | | $ | 56,989 | | $ | 64,053 |
| | | | | | | | | | | | | | | |
See Selected Financial Highlights for footnotes.
Allowance for Credit Losses(unaudited)
| | | | | | | | | | | | | | | | | | | | |
| | | For the Three Months Ended | |
(Dollars in thousands) | | Dec. 31,
2007 | | | Sept. 30,
2007 | | | June 30,
2007 | | | March 31,
2007 | | | Dec. 31,
2006 | |
Beginning balance | | $ | 164,011 | | | $ | 152,750 | | | $ | 152,660 | | | $ | 154,994 | | | $ | 156,331 | |
Provision | | | 45,250 | | | | 15,250 | | | | 4,250 | | | | 3,000 | | | | 3,000 | |
Allowance for acquired loans | | | — | | | | — | | | | — | | | | — | | | | 4,724 | |
| | | | | |
Charge-offs continuing portfolio: | | | | | | | | | | | | | | | | | | | | |
Commercial | | | 2,485 | | | | 1,992 | | | | 2,034 | | | | 2,293 | | | | 9,352 | |
Residential | | | 71 | | | | 364 | | | | 286 | | | | 442 | | | | 199 | |
Consumer | | | 1,833 | | | | 1,613 | | | | 1,892 | | | | 1,136 | | | | 382 | |
| | | | | | | | | | | | | | | | | | | | |
Charge-offs continuing portfolio: | | | 4,389 | | | | 3,969 | | | | 4,212 | | | | 3,871 | | | | 9,933 | |
| | | | | | | | | | | | | | | | | | | | |
Charge-offs liquidating portfolio: | | | | | | | | | | | | | | | | | | | | |
NCLC | | | 7,051 | | | | 69 | | | | — | | | | 2,139 | | | | — | |
Consumer | | | 1,846 | | | | 969 | | | | 1,284 | | | | 857 | | | | 72 | |
| | | | | | | | | | | | | | | | | | | | |
Charge-offs liquidating portfolio: | | | 8,897 | | | | 1,038 | | | | 1,284 | | | | 2,996 | | | | 72 | |
| | | | | | | | | | | | | | | | | | | | |
Total charge-offs | | | 13,286 | | | | 5,007 | | | | 5,496 | | | | 6,867 | | | | 10,005 | |
| | | | | | | | | | | | | | | | | | | | |
Recoveries | | | (1,611 | ) | | | (1,018 | ) | | | (1,336 | ) | | | (1,533 | ) | | | (944 | ) |
| | | | | | | | | | | | | | | | | | | | |
Net loan charge-offs | | | 11,675 | | | | 3,989 | | | | 4,160 | | | | 5,334 | | | | 9,061 | |
| | | | | | | | | | | | | | | | | | | | |
Ending balance | | $ | 197,586 | | | $ | 164,011 | | | $ | 152,750 | | | $ | 152,660 | | | $ | 154,994 | |
| | | | | | | | | | | | | | | | | | | | |
Components: | | | | | | | | | | | | | | | | | | | | |
Allowance for loan losses | | $ | 188,086 | | | $ | 154,532 | | | $ | 144,974 | | | $ | 145,367 | | | $ | 147,719 | |
Reserve for unfunded credit commitments | | | 9,500 | | | | 9,479 | | | | 7,776 | | | | 7,293 | | | | 7,275 | |
| | | | | | | | | | | | | | | | | | | | |
Allowance for credit losses | | $ | 197,586 | | | $ | 164,011 | | | $ | 152,750 | | | $ | 152,660 | | | $ | 154,994 | |
| | | | | | | | | | | | | | | | | | | | |
Asset Quality Ratios: | | | | | | | | | | | | | | | | | | | | |
| | | | | |
Allowance for loan losses / total loans | | | 1.51 | % | | | 1.24 | % | | | 1.17 | % | | | 1.18 | % | | | 1.14 | % |
Allowance for credit losses / total loans | | | 1.58 | | | | 1.32 | | | | 1.23 | | | | 1.24 | | | | 1.20 | |
Net charge-offs / average loans (annualized) | | | 0.38 | | | | 0.13 | | | | 0.14 | | | | 0.17 | | | | 0.27 | |
Nonperforming loans / total loans | | | 0.90 | | | | 0.77 | | | | 0.58 | | | | 0.48 | | | | 0.46 | |
Nonperforming assets / total loans plus OREO | | | 0.97 | | | | 0.84 | | | | 0.63 | | | | 0.53 | | | | 0.48 | |
Allowance for credit losses / nonperforming loans | | | 175.01 | | | | 172.06 | | | | 210.61 | | | | 259.23 | | | | 263.09 | |
| | | | | |
Continuing Portfolio | | | | | | | | | | | | | | | | | | | | |
Allowance for loan losses / total loans | | | 1.15 | % | | | n/a | | | | n/a | | | | n/a | | | | n/a | |
Allowance for credit losses / total loans | | | 1.23 | | | | n/a | | | | n/a | | | | n/a | | | | n/a | |
Net charge-offs / average loans (annualized) | | | 0.09 | | | | n/a | | | | n/a | | | | n/a | | | | n/a | |
Nonperforming loans / total loans | | | 0.69 | | | | n/a | | | | n/a | | | | n/a | | | | n/a | |
Nonperforming assets / total loans plus OREO | | | 0.76 | | | | n/a | | | | n/a | | | | n/a | | | | n/a | |
Allowance for credit losses / nonperforming loans | | | 177.98 | | | | n/a | | | | n/a | | | | n/a | | | | n/a | |
| | | | | |
Liquidating Portfolio | | | | | | | | | | | | | | | | | | | | |
NCLC | | | | | | | | | | | | | | | | | | | | |
Allowance for loan losses / total loans | | | 20.65 | % | | | n/a | | | | n/a | | | | n/a | | | | n/a | |
Net charge-offs / average loans (annualized) | | | 25.43 | | | | n/a | | | | n/a | | | | n/a | | | | n/a | |
Nonperforming loans / total loans | | | 27.37 | | | | n/a | | | | n/a | | | | n/a | | | | n/a | |
Allowance for loan losses / nonperforming loans | | | 75.45 | | | | n/a | | | | n/a | | | | n/a | | | | n/a | |
| | | | | |
Consumer | | | | | | | | | | | | | | | | | | | | |
Allowance for loan losses / total loans | | | 9.60 | % | | | n/a | | | | n/a | | | | n/a | | | | n/a | |
Net charge-offs / average loans (annualized) | | | 2.17 | | | | n/a | | | | n/a | | | | n/a | | | | n/a | |
Nonperforming loans / total loans | | | 2.09 | | | | n/a | | | | n/a | | | | n/a | | | | n/a | |
Allowance for loan losses / nonperforming loans | | | 458.88 | | | | n/a | | | | n/a | | | | n/a | | | | n/a | |
See Selected Financial Highlights for footnotes.
