Exhibit 99.1
| | | | |
| Media Contact | | | | Investor Contact |
| Ed Steadham 203-578-2287 | | | | Terry Mangan 203-578-2318 |
| esteadham@websterbank.com | | | | tmangan@websterbank.com |
WEBSTER REPORTS SECOND QUARTER 2008 RESULTS;
ANNOUNCES QUARTERLY CASH DIVIDEND OF $.30 PER SHARE
Net loss of $28.9 million or ($.56) per diluted share includes the impact of:
| | • | | OneWebster costs and other charges totaling $12.5 million or $0.16 per share. |
| | • | | Increased provision for credit losses for the continuing portfolios to $25.0 million against net charge-offs in the continuing portfolios of $11.2 million; credit reserves increased from 1.21 percent to 1.30 percent of the $12.4 billion continuing loan portfolio; overall credit reserves at 1.52 percent. |
| | • | | An impairment charge of $8.5 million based on an evaluation of all goodwill associated with its reporting units (charge has no impact to tangible capital). |
| | • | | Charges for other-than-temporary impairment on certain investment securities totaling $53.7 million and a $1.2 million write-down in direct investments. |
WATERBURY, Conn., July 22, 2008 – Webster Financial Corporation (NYSE: WBS), the holding company for Webster Bank, N.A., today announced a net loss of $28.9 million or ($.56) per diluted share for the second quarter of 2008, compared to net income of $24.4 million or $.47 per diluted share for the first quarter of 2008 and $35.5 million in net income or $.63 in earnings per share for the second quarter of 2007. As detailed below, results in the second quarter of 2008 reflect certain cash and non-cash charges in the quarter aggregating to $.98 per share. For the first six months of 2008, net loss totaled $4.6 million, or $.09 per diluted share, compared to net income of $70.5 million, or $1.25 per diluted share in the year-ago period.
Detail of Charges to Second Quarter 2008 Earnings (Loss) Per Share:
| | |
Reported diluted loss per share | | $(0.56) |
Adjustments: | | |
Write-down of certain investments to fair value | | 0.66 |
Impairment of goodwill | | 0.16 |
Severance and other costs | | 0.11 |
Other charges | | 0.05 |
| | |
Adjusted diluted EPS | | 0.42 |
| | |
Other items in the quarter include:
| | • | | Capital ratios were strengthened through the issuance of $225 million of convertible preferred stock; tangible equity now at 6.8 percent; projected total risk-based capital ratio at 13.2 percent. |
| | • | | Solid growth in demand, NOW, and savings deposits resulting in core deposits improving to 62.0 percent of total deposits. |
| | • | | Results of OneWebster earnings optimization program produce estimated annual cost saves of $40 million, pre-tax, plus $10 million in pre-tax incremental annual revenue growth when the program is fully implemented over the next 24 months. |
| | • | | Completed the sale of Webster Risk Services. |
Webster Chairman and Chief Executive Officer James C. Smith said: “These non-cash charges reflect the current depressed values for financial assets and offset the solid core operating results that otherwise would be the focus of this quarter. Additionally, Webster has taken steps to increase the allowance for credit losses in light of continuing economic uncertainty in the second half of 2008.”
Smith added, “We have very strong capital levels that are critical in these uncertain times. Webster’s capital position is a huge asset as we pursue our vision to be New England’s bank.”
Webster also announced today that its Board of Directors has declared a regular quarterly cash dividend of $.30 per common share. The dividend is payable on August 18, 2008 to shareholders of record on August 4, 2008. This is the 84thconsecutive quarterly dividend since Webster first paid a dividend in 1987. Smith said, “The solid core operating performance in the quarter
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supported the Board’s decision to declare the regular quarterly cash dividend. We plan to balance the desire to maintain the current dividend against Webster’s capital needs in the quarters ahead.”
Webster will provide details on its second quarter performance in a conference call at 9:00 a.m. today (refer to details for the conference call at the end of this release). In addition, Webster has posted supplemental information regarding its investment securities portfolio and the results of the OneWebster program. Additional details are also available on our website atwww.wbst.com.
There were several charges specific to the quarter, including $53.7 million in write-downs for other-than-temporary impairment of certain investment securities classified as available for sale and a $1.2 million write-down in a direct investment. Webster had previously announced an expected $14.5 million in securities write-downs; the increase to $53.7 million is primarily from subsequent analysis based on current information and management’s determination subsequent to the preannouncement that we should act as of the end of the second quarter to impair certain BBB rated pooled capital trust securities where interest payments to Webster have been deferred as provided under the original structure. In addition, the company also evaluated the balance of its remaining BBB rated pooled securities and determined that based on the best estimate of cash flows, there was the likelihood of an implied adverse change and elected to impair these securities as well and write them down to fair value. Webster also recorded $12.5 million in other pre-tax charges, consisting of $7.7 million in charges related to the OneWebster earnings optimization initiative, and $4.8 million in other charges, including $1.6 million in severance and other expenses related to early retirement and other executive changes.
Webster recently completed an evaluation of all goodwill associated with its reporting units. Having completed this analysis, the company has determined that $8.5 million in goodwill attributable to its insurance premium finance subsidiary was impaired, and this charge is reflected in second quarter results. Such a charge is non-cash in nature and does not affect Webster’s liquidity, tangible equity or regulatory capital ratios. Webster will evaluate the goodwill associated with its reporting units again in the third quarter as part of its established annual review process.
Revenues
Total revenue, which consists of net interest income plus total noninterest income, totaled $119.9 million in the second quarter of 2008 compared to $172.7 million in the first quarter of 2008 and $185.9 million a year ago. Total revenue declined in the second quarter of 2008 as a result of the $53.7 million in write-downs for other-than-temporary impairment of certain investment securities classified as available for sale and the $1.2 million write-down in direct investments.
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Net interest income totaled $125.7 million in the second quarter compared to $124.9 million in the first quarter and $130.4 million in the year-ago period. The $0.8 million increase from the first quarter reflects an increase in earning assets while the $4.7 million reduction from a year ago reflects a lower net interest margin partially offset by a higher level of earning assets. The net interest margin was 3.26 percent in the second quarter compared to 3.27 percent in the first quarter and 3.47 percent a year ago. The spread between the yield on interest-earning assets and the cost of interest-bearing liabilities in the second quarter of 2008 was flat with the first quarter of 2008 at 3.20 percent compared to 3.37 percent in the second quarter of 2007.
Noninterest income was $49.2 million in the second quarter of 2008 compared to $47.5 million in the first quarter and $53.4 million in the year-ago period. Total noninterest income inclusive of charges in the second quarter of 2008 was ($5.7) million compared to $55.5 million which included a gain of $2.1 million. Deposit service fees totaled $29.9 million in the second quarter of 2008, an increase of $1.5 million and $1.1 million, respectively compared to $28.4 million in the first quarter and $28.8 million a year ago. Loan-related fees were $7.9 million for the second quarter compared to $6.9 million in the first quarter and $7.9 million in the year-ago period. Wealth and investment services revenues totaled $7.6 million in the second quarter compared to $7.0 million in the first quarter and $7.6 million a year ago. Income from mortgage banking activities was $0.1 million in the second quarter compared to income of $0.7 million in the first quarter and $4.0 million a year ago. The decline from each of the prior periods reflects the decision to exit the national wholesale mortgage business in the fourth quarter of 2007. Other noninterest income was $0.9 million compared to $1.8 million in the first quarter and $2.0 million a year ago.
Provision For Credit Losses
The provision for credit losses was $25.0 million compared to $15.8 million in the first quarter and $4.3 million a year ago. The decision to increase the provision for credit losses in the second quarter reflects increased levels of nonperforming loans and management’s decision to build reserve levels given continued economic uncertainty.
Net loan charge-offs from the continuing portfolios totaled $11.2 million in the second quarter compared with $15.8 million in the first quarter. Additional net charge-offs of $3.7 million and $5.5 million were recorded in the second quarter against the discontinued indirect national construction loans and indirect, out-of-market home equity loans in the liquidating portfolio respectively, compared with net charge-offs of $4.3 million and $3.5 million in the first quarter.
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The total allowance for credit losses, which consists of the allowance for loan losses and the reserve for unfunded credit commitments, was $194.4 million or 1.52 percent of total loans at June 30, 2008, compared to 1.51 percent at March 31, 2008 and 1.23 percent at June 30, 2007. Of the total allowance for credit losses as of June 30, 2008, $161.5 million was allocated toward the continuing portfolios, or 1.30 percent of continuing loans, up from $147.7 million or 1.21 percent of loans as of March 31, 2008 and $32.9 million was allocated to the liquidating portfolio, or 8.65 percent of liquidating loans, a decline from $42.1 million, or 10.67 percent, as of March 31, 2008.
Noninterest Expenses
Total noninterest expenses were $137.7 million in the second quarter compared to $116.1 million in the first quarter of 2008 and $128.9 million a year ago. The second quarter of 2008 included the $8.5 million goodwill impairment charge and $12.5 million of other costs consisting of $7.7 million of previously disclosed amounts related to the OneWebster earnings optimization initiative, $1.6 million in severance and other expenses related to early retirement and other executive changes, and $3.2 million of other charges. The first quarter of 2008 included $5.0 million of seasonally higher compensation costs primarily related to payroll taxes and benefits and a credit for the partial release of the Visa-related litigation reserve of $650,000 established in the fourth quarter of 2007.
Balance Sheet Trends
Total assets were $17.5 billion at June 30, 2008 compared to $17.2 billion at March 31, 2008 and $17.0 billion a year ago. Total loans were $12.8 billion compared to $12.6 billion in the first quarter and $12.4 billion a year ago. Commercial real estate increased by $118 million in the second quarter as continued disruption in the capital markets has provided more opportunities to book high quality, low loan to value loans. Commercial & Industrial loans grew by $65 million in the second quarter, while residential mortgage loans declined by $41 million and consumer loans grew by $23 million. Securities totaled $3.0 billion compared to $2.5 billion a year ago, offsetting a decline in loans held for sale of $369 million.
Total deposits were $12.1 billion, a decrease of $0.7 billion or 6 percent from a year ago, as brokered certificates of deposits declined $231 million and other certificates of deposit declined $549 million from a year ago. The company now has only $170 million in brokered deposits of which $106 million mature in the last six months of 2008 and are not expected to be replaced. Core deposits increased $38 million from a year ago, and as a percent of total deposits increased to 62.0 percent at June 30, 2008 from 60.7 percent in the first quarter and 58.1 percent a year ago. Borrowings totaled $3.3 billion or an increase of $1.3 billion, primarily in repurchase agreements and FHLB borrowings, from a year ago. While short-term borrowings have represented an attractive alternative to certificates of deposits given recent market conditions, the company does not currently intend to further increase the use of borrowings.
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Book value per common share of $31.71 at June 30, 2008 compared to $33.63 a year ago. Tangible book value per share was $17.57 at June 30, 2008 compared to $19.79 a year ago. The ratio of tangible equity to tangible assets was 6.8 percent at June 30, 2008 compared to 6.6 percent a year ago. Webster’s projected Tier 1 leverage ratio is 9.0 percent at June 30, 2008 compared to 8.6 percent a year ago, and projected total risk based capital ratio is 13.3 percent at June 30, 2008 compared with 12.3 percent a year ago.
Asset Quality
Nonperforming assets for the continuing portfolios totaled $182.1 million or 1.47 percent of total loans and other real estate owned at June 30, 2008 compared to $113.3 million or 0.93 percent at March 31, 2008. The $68.8 million increase in nonperforming assets from continuing portfolios was primarily comprised of $36.6 million in commercial real estate (primarily 4 residential development projects) and $26.5 million in commercial loans, $3.7 million in consumer loans and $2.0 million in other real estate owned. Nonperforming loans in the liquidating indirect national construction and indirect out of footprint home equity portfolio totaled $29.0 million and $10.7 million at June 30, 2008, respectively compared to $29.8 million and $9.4 million at March 31, 2008 and $13.4 million and $2.7 million a year ago.
Past due loans for the continuing portfolios totaled $67.7 million at June 30, 2008, a decline of $29.8 million compared to $97.5 million at March 31, 2008, primarily due to a decline in commercial real estate loans. Past due loans for the liquidating portfolio totaled $11.5 million at June 30, 2008, down from $15.5 million at March 31, 2008, due to a decline in indirect national construction loans.
The ratio of the allowance for credit losses to nonperforming loans for the continuing portfolios was 96 percent at June 30, 2008 compared to 147 percent at March 31, 2008. At June 30, 2008, the $32.8 million allowance for the liquidating portfolio was 83 percent of non-performing loans from this portfolio compared to 108 percent at March 31, 2008.
***
Webster Financial Corporation is the holding company for Webster Bank, National Association. With $17.5 billion in assets, Webster provides business and consumer banking, mortgage, financial planning, trust and investment services through 181 banking offices, 484 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, Connecticut 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 atwww.WebsterOnline.com.
***
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Conference Call
A conference call covering Webster’s second quarter earnings announcement will be held today, Tuesday, July 22, at 9:00 a.m. EDT 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 2007. 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 June 30, | | | At or for the Six
Months Ended June 30, | |
(In thousands, except per share data) | | 2008 | | | 2007 (c) | | | 2008 | | | 2007 (c) | |
Net income (loss) and performance ratios (annualized): | | | | | | | | | | | | | | | | |
| | | | |
Net income (loss) | | $ | (28,940 | ) | | $ | 35,467 | | | $ | (4,575 | ) | | $ | 70,503 | |
Net income (loss) per diluted common share | | | (0.56 | ) | | | 0.63 | | | | (0.09 | ) | | | 1.25 | |
Return on average shareholders’ equity | | | N/M | | | | 7.49 | % | | | N/M | % | | | 7.44 | % |
Return on average tangible equity | | | N/M | | | | 12.50 | | | | N/M | | | | 12.40 | |
Return on average assets | | | N/M | | | | 0.84 | | | | N/M | | | | 0.84 | |
| | | | |
Income (loss) from continuing operations and performance ratios (annualized): | | | | | | | | | | | | | | | | |
| | | | |
Income (loss) from continuing operations | | $ | (28,501 | ) | | $ | 35,872 | | | $ | (2,012 | ) | | $ | 70,952 | |
Net income (loss) from continuing operations per diluted common share | | | (0.55 | ) | | | 0.64 | | | | (0.04 | ) | | | 1.26 | |
Return on average shareholders’ equity | | | N/M | | | | 7.58 | % | | | N/M | % | | | 7.49 | % |
Return on average tangible equity | | | N/M | | | | 12.64 | | | | N/M | | | | 12.48 | |
Return on average assets | | | N/M | | | | 0.85 | | | | N/M | | | | 0.84 | |
Noninterest income as a percentage of total revenue | | | N/M | % | | | 29.86 | | | | N/M | | | | 28.47 | |
Efficiency ratio (a) | | | N/M | | | | 69.37 | | | | N/M | | | | 69.22 | |
| | | | |
Asset quality: | | | | | | | | | | | | | | | | |
| | | | |
Allowance for credit losses | | $ | 194,368 | | | $ | 152,750 | | | $ | 194,368 | | | $ | 152,750 | |
Nonperforming assets | | | 224,100 | | | | 78,654 | | | | 224,100 | | | | 78,654 | |
Allowance for credit losses / total loans | | | 1.52 | % | | | 1.23 | % | | | 1.52 | % | | | 1.23 | % |
Net charge-offs / average loans (annualized) | | | 0.64 | | | | 0.14 | | | | 0.70 | | | | 0.15 | |
Nonperforming loans / total loans | | | 1.62 | | | | 0.58 | | | | 1.62 | | | | 0.58 | |
Nonperforming assets / total loans plus OREO | | | 1.75 | | | | 0.63 | | | | 1.75 | | | | 0.63 | |
Allowance for credit losses / nonperforming loans | | | 93.87 | | | | 210.61 | | | | 93.87 | | | | 210.61 | |
| | | | |
Other ratios (annualized): | | | | | | | | | | | | | | | | |
| | | | |
Tangible capital ratio | | | 6.79 | % | | | 6.59 | % | | | 6.79 | % | | | 6.59 | % |
Total-risk based capital (e) | | | 13.17 | | | | 12.28 | | | | 13.17 | | | | 12.28 | |
Shareholders’ equity / total assets | | | 10.82 | | | | 10.84 | | | | 10.82 | | | | 10.84 | |
Interest-rate spread | | | 3.20 | | | | 3.37 | | | | 3.20 | | | | 3.34 | |
Net interest margin | | | 3.26 | | | | 3.47 | | | | 3.27 | | | | 3.44 | |
| | | | |
Share related: | | | | | | | | | | | | | | | | |
| | | | |
Book value per common share | | $ | 31.71 | | | $ | 33.63 | | | $ | 31.71 | | | $ | 33.63 | |
Tangible book value per common share | | | 17.57 | | | | 19.79 | | | | 17.57 | | | | 19.79 | |
Common stock closing price | | | 18.60 | | | | 42.67 | | | | 18.60 | | | | 42.67 | |
Dividends declared per common share | | | 0.30 | | | | 0.30 | | | | 0.60 | | | | 0.57 | |
| | | | |
Common shares issued and outstanding | | | 52,551 | | | | 54,643 | | | | 52,551 | | | | 54,643 | |
Basic shares (average) | | | 52,017 | | | | 55,677 | | | | 52,009 | | | | 55,894 | |
Diluted shares (average) | | | 52,017 | | | | 56,243 | | | | 52,009 | | | | 56,497 | |
Footnotes:
| (a) | Noninterest expense as a percentage of net interest income plus noninterest income. |
| (b) | For purposes of the yield computation, unrealized gains (losses) on securities available for sale are excluded from the average balance. |
| (c) | Certain previously reported information has been reclassified for the effect of reporting Webster Insurance as discontinued operations. |
| (d) | NCLC is defined as National Construction Lending Center |
| (e) | The ratios presented are projected for the 2008 reporting periods and actual for the 2007 reporting periods. |
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WEBSTER FINANCIAL CORPORATION
Consolidated Statements of Condition (unaudited)
| | | | | | | | | | | | |
(In thousands) | | June 30,
2008 | | | March 31,
2008 | | | June 30,
2007 (c) | |
Assets: | | | | | | | | | | | | |
| | | |
Cash and due from depository institutions | | $ | 323,480 | | | $ | 274,321 | | | $ | 293,223 | |
Short-term investments | | | 2,996 | | | | 4,042 | | | | 8,222 | |
| | | |
Investment securities: | | | | | | | | | | | | |
Trading, at fair value | | | 2,280 | | | | 1,049 | | | | 5,935 | |
Available for sale, at fair value | | | 849,591 | | | | 760,502 | | | | 299,599 | |
Held-to-maturity | | | 2,065,771 | | | | 2,091,918 | | | | 2,046,891 | |
Other securities | | | 132,210 | | | | 117,213 | | | | 110,962 | |
| | | | | | | | | | | | |
Total securities | | | 3,049,852 | | | | 2,970,682 | | | | 2,463,387 | |
| | | |
Loans held for sale | | | 3,972 | | | | 8,223 | | | | 372,891 | |
| | | |
Loans: | | | | | | | | | | | | |
Residential mortgages | | | 3,594,100 | | | | 3,635,314 | | | | 3,736,313 | |
Commercial | | | 3,637,395 | | | | 3,571,954 | | | | 3,554,846 | |
Commercial real estate | | | 2,314,497 | | | | 2,196,110 | | | | 1,938,656 | |
Consumer | | | 3,220,462 | | | | 3,197,591 | | | | 3,210,457 | |
| | | | | | | | | | | | |
Total loans | | | 12,766,454 | | | | 12,600,969 | | | | 12,440,272 | |
Allowance for loan losses | | | (184,868 | ) | | | (180,308 | ) | | | (144,974 | ) |
| | | | | | | | | | | | |
Loans, net | | | 12,581,586 | | | | 12,420,661 | | | | 12,295,298 | |
| | | |
Accrued interest receivable | | | 73,060 | | | | 77,593 | | | | 85,078 | |
Premises and equipment, net | | | 190,273 | | | | 192,928 | | | | 190,895 | |
Goodwill and other intangible assets, net | | | 756,503 | | | | 766,467 | | | | 771,454 | |
Cash surrender value of life insurance | | | 274,570 | | | | 271,947 | | | | 264,100 | |
Assets held for disposition | | | 900 | | | | 6,912 | | | | 61,918 | |
Prepaid expenses and other assets | | | 221,444 | | | | 249,786 | | | | 144,124 | |
| | | | | | | | | | | | |
Total Assets | | $ | 17,478,636 | | | $ | 17,243,562 | | | $ | 16,950,590 | |
| | | | | | | | | | | | |
Liabilities and Shareholders’ Equity: | | | | | | | | | | | | |
| | | |
Deposits: | | | | | | | | | | | | |
Demand deposits | | $ | 1,583,686 | | | $ | 1,475,258 | | | $ | 1,544,695 | |
NOW accounts | | | 1,861,997 | | | | 1,825,963 | | | | 1,797,701 | |
Money market deposit accounts | | | 1,591,857 | | | | 1,704,655 | | | | 1,916,097 | |
Savings accounts | | | 2,452,831 | | | | 2,361,522 | | | | 2,194,215 | |
Certificates of deposit | | | 4,416,165 | | | | 4,564,887 | | | | 4,965,140 | |
Brokered deposits | | | 170,031 | | | | 211,007 | | | | 401,213 | |
| | | | | | | | | | | | |
Total deposits | | | 12,076,567 | | | | 12,143,292 | | | | 12,819,061 | |
| | | |
Securities sold under agreements to repurchase and other short-term debt | | | 1,275,024 | | | | 1,642,320 | | | | 899,852 | |
Federal Home Loan Bank advances | | | 1,419,570 | | | | 869,079 | | | | 531,117 | |
Long-term debt | | | 653,995 | | | | 666,891 | | | | 656,455 | |
Reserve for unfunded credit commitments | | | 9,500 | | | | 9,500 | | | | 7,776 | |
Liabilities held for disposition | | | — | | | | 806 | | | | 6,257 | |
Accrued expenses and other liabilities | | | 142,698 | | | | 185,381 | | | | 182,844 | |
| | | | | | | | | | | | |
Total liabilities | | | 15,577,354 | | | | 15,517,269 | | | | 15,103,362 | |
| | | |
Preferred stock of subsidiary corporation | | | 9,577 | | | | 9,577 | | | | 9,577 | |
| | | |
Shareholders’ equity | | | 1,891,705 | | | | 1,716,716 | | | | 1,837,651 | |
| | | | | | | | | | | | |
Total Liabilities and Shareholders’ Equity | | $ | 17,478,636 | | | $ | 17,243,562 | | | $ | 16,950,590 | |
| | | | | | | | | | | | |
See Selected Financial Highlights for footnotes.
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WEBSTER FINANCIAL CORPORATION
Consolidated Statements of Operations (unaudited)
| | | | | | | | | | | | | | | | |
| | | Three Months Ended
June 30, | | | Six Months Ended
June 30, | |
(In thousands, except per share data) | | 2008 | | | 2007 | | | 2008 | | | 2007 | |
Interest income: | | | | | | | | | | | | | | | | |
Loans | | $ | 175,786 | | | $ | 210,337 | | | $ | 367,058 | | | $ | 419,501 | |
Investment securities and short-term investments | | | 38,115 | | | | 32,563 | | | | 77,447 | | | | 65,843 | |
Loans held for sale | | | 92 | | | | 7,419 | | | | 1,492 | | | | 13,668 | |
| | | | | | | | | | | | | | | | |
Total interest income | | | 213,993 | | | | 250,319 | | | | 445,997 | | | | 499,012 | |
| | | | | | | | | | | | | | | | |
Interest expense: | | | | | | | | | | | | | | | | |
Deposits | | | 60,056 | | | | 89,683 | | | | 135,298 | | | | 177,313 | |
Borrowings | | | 28,251 | | | | 30,283 | | | | 60,157 | | | | 63,265 | |
| | | | | | | | | | | | | | | | |
Total interest expense | | | 88,307 | | | | 119,966 | | | | 195,455 | | | | 240,578 | |
| | | | | | | | | | | | | | | | |
Net interest income | | | 125,686 | | | | 130,353 | | | | 250,542 | | | | 258,434 | |
Provision for credit losses | | | 25,000 | | | | 4,250 | | | | 40,800 | | | | 7,250 | |
| | | | | | | | | | | | | | | | |
Net interest income after provision for credit losses | | | 100,686 | | | | 126,103 | | | | 209,742 | | | | 251,184 | |
| | | | | | | | | | | | | | | | |
Noninterest income: | | | | | | | | | | | | | | | | |
Deposit service fees | | | 29,943 | | | | 28,758 | | | | 58,376 | | | | 54,112 | |
Loan related fees | | | 7,891 | | | | 7,901 | | | | 14,749 | | | | 15,841 | |
Wealth and investment services | | | 7,634 | | | | 7,637 | | | | 14,590 | | | | 14,515 | |
Mortgage banking activities | | | 104 | | | | 3,962 | | | | 844 | | | | 6,191 | |
Increase in cash surrender value of life insurance | | | 2,623 | | | | 2,586 | | | | 5,204 | | | | 5,120 | |
Gain on sale of securities, net | | | 126 | | | | 503 | | | | 249 | | | | 1,044 | |
Other | | | 854 | | | | 2,025 | | | | 2,638 | | | | 3,903 | |
| | | | | | | | | | | | | | | | |
| | | 49,175 | | | | 53,372 | | | | 96,650 | | | | 100,726 | |
| | | | |
Visa share redemption | | | — | | | | — | | | | 1,625 | | | | — | |
Loss on write-down of investments to fair value | | | (54,924 | ) | | | — | | | | (56,177 | ) | | | — | |
Gain on Webster Capital Trust I and II securities | | | — | | | | 2,130 | | | | — | | | | 2,130 | |
| | | | | | | | | | | | | | | | |
Total noninterest income | | | (5,749 | ) | | | 55,502 | | | | 42,098 | | | | 102,856 | |
| | | | | | | | | | | | | | | | |
Noninterest expenses: | | | | | | | | | | | | | | | | |
Compensation and benefits | | | 62,866 | | | | 60,899 | | | | 126,309 | | | | 122,434 | |
Occupancy | | | 13,128 | | | | 12,064 | | | | 26,810 | | | | 24,625 | |
Furniture and equipment | | | 15,634 | | | | 15,014 | | | | 30,794 | | | | 29,572 | |
Intangible amortization | | | 1,464 | | | | 3,144 | | | | 3,012 | | | | 6,466 | |
Marketing | | | 4,940 | | | | 4,175 | | | | 8,583 | | | | 8,363 | |
Professional services | | | 3,706 | | | | 3,181 | | | | 7,859 | | | | 7,692 | |
Other | | | 18,117 | | | | 16,224 | | | | 33,249 | | | | 32,188 | |
| | | | | | | | | | | | | | | | |
| | | 119,855 | | | | 114,701 | | | | 236,616 | | | | 231,340 | |
Debt redemption premium | | | — | | | | 8,940 | | | | — | | | | 8,940 | |
Severance and other costs | | | 9,368 | | | | 5,291 | | | | 8,718 | | | | 9,813 | |
Impairment of goodwill | | | 8,500 | | | | — | | | | 8,500 | | | | — | |
| | | | | | | | | | | | | | | | |
Total noninterest expenses | | | 137,723 | | | | 128,932 | | | | 253,834 | | | | 250,093 | |
| | | | | | | | | | | | | | | | |
Income (loss) from continuing operations before income taxes | | | (42,786 | ) | | | 52,673 | | | | (1,994 | ) | | | 103,947 | |
Income taxes (benefit) | | | (14,285 | ) | | | 16,801 | | | | 18 | | | | 32,995 | |
| | | | | | | | | | | | | | | | |
Income (loss) from continuing operations | | | (28,501 | ) | | | 35,872 | | | | (2,012 | ) | | | 70,952 | |
Loss from discontinued operations, net of tax | | | (439 | ) | | | (405 | ) | | | (2,563 | ) | | | (449 | ) |
| | | | | | | | | | | | | | | | |
Net income (loss) | | $ | (28,940 | ) | | $ | 35,467 | | | $ | (4,575 | ) | | $ | 70,503 | |
| | | | | | | | | | | | | | | | |
Diluted shares (average) | | | 52,017 | | | | 56,243 | | | | 52,009 | | | | 56,497 | |
| | | | |
Net income (loss) per common share: | | | | | | | | | | | | | | | | |
Basic | | | | | | | | | | | | | | | | |
Income (loss) from continuing operations | | $ | (0.55 | ) | | $ | 0.64 | | | $ | (0.04 | ) | | $ | 1.27 | |
Net income (loss) | | | (0.56 | ) | | | 0.64 | | | | (0.09 | ) | | | 1.26 | |
Diluted | | | | | | | | | | | | | | | | |
Income (loss) from continuing operations | | | (0.55 | ) | | | 0.64 | | | | (0.04 | ) | | | 1.26 | |
Net income (loss) | | | (0.56 | ) | | | 0.63 | | | | (0.09 | ) | | | 1.25 | |
See Selected Financial Highlights for footnotes.
10
WEBSTER FINANCIAL CORPORATION
Consolidated Statements of Operations (unaudited)
| | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended | |
(In thousands, except per share data) | | June 30,
2008 | | | March 31,
2008 | | | Dec. 31,
2007 | | | Sept. 30,
2007 | | June 30,
2007 | |
Interest income: | | | | | | | | | | | | | | | | | | | |
Loans | | $ | 175,786 | | | $ | 191,272 | | | $ | 205,363 | | | $ | 212,847 | | $ | 210,337 | |
Investment securities and short-term investments | | | 38,115 | | | | 39,332 | | | | 36,318 | | | | 34,163 | | | 32,563 | |
Loans held for sale | | | 92 | | | | 1,400 | | | | 3,276 | | | | 4,616 | | | 7,419 | |
| | | | | | | | | | | | | | | | | | | |
Total interest income | | | 213,993 | | | | 232,004 | | | | 244,957 | | | | 251,626 | | | 250,319 | |
| | | | | | | | | | | | | | | | | | | |
Interest expense: | | | | | | | | | | | | | | | | | | | |
Deposits | | | 60,056 | | | | 75,242 | | | | 89,510 | | | | 94,484 | | | 89,683 | |
Borrowings | | | 28,251 | | | | 31,906 | | | | 32,748 | | | | 30,083 | | | 30,283 | |
| | | | | | | | | | | | | | | | | | | |
Total interest expense | | | 88,307 | | | | 107,148 | | | | 122,258 | | | | 124,567 | | | 119,966 | |
| | | | | | | | | | | | | | | | | | | |
Net interest income | | | 125,686 | | | | 124,856 | | | | 122,699 | | | | 127,059 | | | 130,353 | |
Provision for credit losses | | | 25,000 | | | | 15,800 | | | | 45,250 | | | | 15,250 | | | 4,250 | |
| | | | | | | | | | | | | | | | | | | |
Net interest income after provision for credit losses | | | 100,686 | | | | 109,056 | | | | 77,449 | | | | 111,809 | | | 126,103 | |
| | | | | | | | | | | | | | | | | | | |
Noninterest income: | | | | | | | | | | | | | | | | | | | |
Deposit service fees | | | 29,943 | | | | 28,433 | | | | 30,577 | | | | 29,956 | | | 28,758 | |
Loan related fees | | | 7,891 | | | | 6,858 | | | | 7,328 | | | | 7,661 | | | 7,901 | |
Wealth and investment services | | | 7,634 | | | | 6,956 | | | | 7,507 | | | | 7,142 | | | 7,637 | |
Mortgage banking activities | | | 104 | | | | 740 | | | | 1,276 | | | | 1,849 | | | 3,962 | |
Increase in cash surrender value of life insurance | | | 2,623 | | | | 2,581 | | | | 2,637 | | | | 2,629 | | | 2,586 | |
Gain on sale of securities, net | | | 126 | | | | 123 | | | | 195 | | | | 482 | | | 503 | |
Other | | | 854 | | | | 1,784 | | | | 2,094 | | | | 1,688 | | | 2,025 | |
| | | | | | | | | | | | | | | | | | | |
| | | 49,175 | | | | 47,475 | | | | 51,614 | | | | 51,407 | | | 53,372 | |
VISA share redemption | | | — | | | | 1,625 | | | | — | | | | — | | | — | |
Loss on write-down of investments to fair value | | | (54,924 | ) | | | (1,253 | ) | | | (3,565 | ) | | | — | | | — | |
Gain on Webster Capital Trust I and II securities | | | — | | | | — | | | | — | | | | — | | | 2,130 | |
| | | | | | | | | | | | | | | | | | | |
Total noninterest income | | | (5,749 | ) | | | 47,847 | | | | 48,049 | | | | 51,407 | | | 55,502 | |
| | | | | | | | | | | | | | | | | | | |
Noninterest expenses: | | | | | | | | | | | | | | | | | | | |
Compensation and benefits | | | 62,866 | | | | 63,443 | | | | 59,910 | | | | 61,171 | | | 60,899 | |
Occupancy | | | 13,128 | | | | 13,682 | | | | 12,321 | | | | 11,932 | | | 12,064 | |
Furniture and equipment | | | 15,634 | | | | 15,160 | | | | 15,353 | | | | 14,846 | | | 15,014 | |
Intangible amortization | | | 1,464 | | | | 1,548 | | | | 1,881 | | | | 2,027 | | | 3,144 | |
Marketing | | | 4,940 | | | | 3,643 | | | | 1,727 | | | | 4,123 | | | 4,175 | |
Professional services | | | 3,706 | | | | 4,153 | | | | 3,721 | | | | 3,625 | | | 3,181 | |
Other | | | 18,117 | | | | 15,132 | | | | 18,513 | | | | 15,377 | | | 16,224 | |
| | | | | | | | | | | | | | | | | | | |
| | | 119,855 | | | | 116,761 | | | | 113,426 | | | | 113,101 | | | 114,701 | |
Debt redemption premium | | | — | | | | — | | | | — | | | | — | | | 8,940 | |
Severance and other costs | | | 9,368 | | | | (650 | ) | | | 6,898 | | | | 452 | | | 5,291 | |
Impairment of goodwill | | | 8,500 | | | | — | | | | — | | | | — | | | — | |
| | | | | | | | | | | | | | | | | | | |
Total noninterest expenses | | | 137,723 | | | | 116,111 | | | | 120,324 | | | | 113,553 | | | 128,932 | |
| | | | | | | | | | | | | | | | | | | |
Income (loss) from continuing operations before income taxes | | | (42,786 | ) | | | 40,792 | | | | 5,174 | | | | 49,663 | | | 52,673 | |
Income taxes (benefit) | | | (14,285 | ) | | | 14,303 | | | | 5 | | | | 15,088 | | | 16,801 | |
| | | | | | | | | | | | | | | | | | | |
Income (loss) from continuing operations | | | (28,501 | ) | | | 26,489 | | | | 5,169 | | | | 34,575 | | | 35,872 | |
(Loss) income from discontinued operations, net of tax | | | (439 | ) | | | (2,124 | ) | | | (13,867 | ) | | | 393 | | | (405 | ) |
| | | | | | | | | | | | | | | | | | | |
Net income (loss) | | $ | (28,940 | ) | | $ | 24,365 | | | $ | (8,698 | ) | | $ | 34,968 | | $ | 35,467 | |
| | | | | | | | | | | | | | | | | | | |
Diluted shares (average) | | | 52,017 | | | | 52,297 | | | | 52,795 | | | | 54,259 | | | 56,243 | |
| | | | | |
Net income (loss) per common share: | | | | | | | | | | | | | | | | | | | |
Basic | | | | | | | | | | | | | | | | | | | |
Income (loss) from continuing operations | | $ | (0.55 | ) | | $ | 0.51 | | | $ | 0.10 | | | $ | 0.64 | | $ | 0.64 | |
Net income (loss) | | | (0.56 | ) | | | 0.47 | | | | (0.17 | ) | | | 0.65 | | | 0.64 | |
Diluted | | | | | | | | | | | | | | | | | | | |
Income (loss) from continuing operations | | | (0.55 | ) | | | 0.51 | | | | 0.10 | | | | 0.64 | | | 0.64 | |
Net income (loss) | | | (0.56 | ) | | | 0.47 | | | | (0.16 | ) | | | 0.64 | | | 0.63 | |
See Selected Financial Highlights for footnotes.
11
WEBSTER FINANCIAL CORPORATION
Interest-Rate Spread (unaudited)
| | | | | | | | | | | | | | | |
| | | Three Months Ended | |
| | | June 30,
2008 | | | March 31,
2008 | | | December 31,
2007 | | | September 30,
2007 | | | June 30,
2007 | |
Interest-rate spread | | | | | | | | | | | | | | | |
Yield on interest-earning assets | | 5.51 | % | | 6.02 | % | | 6.42 | % | | 6.61 | % | | 6.62 | % |
Cost of interest-bearing liabilities | | 2.31 | | | 2.82 | | | 3.24 | | | 3.32 | | | 3.25 | |
| | | | | | | | | | | | | | | |
Interest-rate spread | | 3.20 | % | | 3.20 | % | | 3.18 | % | | 3.29 | % | | 3.37 | % |
| | | | | | | | | | | | | | | |
Net interest margin | | 3.26 | % | | 3.27 | % | | 3.26 | % | | 3.38 | % | | 3.47 | % |
| | | | | | | | | | | | | | | |
Consolidated Average Statements of Condition (unaudited)
| | | | | | | | | | | | | | | | | | | | |
Three Months Ended June 30, | | 2008 | | | 2007 | |
(Dollars in thousands) | | Average
balance | | Interest | | | Fully tax-
equivalent
yield/rate | | | Average
balance | | Interest | | | Fully tax-
equivalent
yield/rate | |
Assets: | | | | | | | | | | | | | | | | | | | | |
Interest-earning assets: | | | | | | | | | | | | | | | | | | | | |
Loans | | $ | 12,686,784 | | $ | 175,786 | | | 5.52 | % | | $ | 12,306,789 | | $ | 210,337 | | | 6.81 | % |
Investment securities (b) | | | 3,008,582 | | | 41,801 | | | 5.43 | | | | 2,430,989 | | | 35,035 | | | 5.78 | |
Loans held for sale | | | 5,705 | | | 92 | | | 6.45 | | | | 481,583 | | | 7,419 | | | 6.16 | |
Short-term investments | | | 6,374 | | | 40 | | | 2.50 | | | | 10,708 | | | 145 | | | 5.36 | |
| | | | | | | | | | | | | | | | | | | | |
Total interest-earning assets | | | 15,707,445 | | | 217,719 | | | 5.51 | | | | 15,230,069 | | | 252,936 | | | 6.62 | |
| | | | | | | | | | | | | | | | | | | | |
Noninterest-earning assets | | | 1,541,441 | | | | | | | | | | 1,597,103 | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Total assets | | $ | 17,248,886 | | | | | | | | | $ | 16,827,172 | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Liabilities and Shareholders’ Equity: | | | | | | | | | | | | | | | | | | | | |
Interest-bearing liabilities: | | | | | | | | | | | | | | | | | | | | |
Demand deposits | | $ | 1,487,433 | | $ | — | | | — | % | | $ | 1,515,877 | | $ | — | | | — | % |
Savings, NOW and money market deposit accounts | | | 5,891,261 | | | 19,305 | | | 1.31 | | | | 5,720,081 | | | 30,388 | | | 2.13 | |
Time deposits | | | 4,626,051 | | | 40,751 | | | 3.53 | | | | 5,243,115 | | | 59,295 | | | 4.53 | |
| | | | | | | | | | | | | | | | | | | | |
Total deposits | | | 12,004,745 | | | 60,056 | | | 2.01 | | | | 12,479,073 | | | 89,683 | | | 2.88 | |
| | | | | | | | | | | | | | | | | | | | |
Securities sold under agreements to repurchase and other short-term debt | | | 1,298,709 | | | 8,561 | | | 2.61 | | | | 1,078,192 | | | 12,596 | | | 4.62 | |
Federal Home Loan Bank advances | | | 1,358,648 | | | 10,548 | | | 3.07 | | | | 727,371 | | | 8,675 | | | 4.72 | |
Long-term debt | | | 660,642 | | | 9,142 | | | 5.54 | | | | 492,020 | | | 9,012 | | | 7.33 | |
| | | | | | | | | | | | | | | | | | | | |
Total borrowings | | | 3,317,999 | | | 28,251 | | | 3.38 | | | | 2,297,583 | | | 30,283 | | | 5.23 | |
| | | | | | | | | | | | | | | | | | | | |
Total interest-bearing liabilities | | | 15,322,744 | | | 88,307 | | | 2.31 | | | | 14,776,656 | | | 119,966 | | | 3.25 | |
| | | | | | | | | | | | | | | | | | | | |
Noninterest-bearing liabilities | | | 149,693 | | | | | | | | | | 147,312 | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Total liabilities | | | 15,472,437 | | | | | | | | | | 14,923,968 | | | | | | | |
| | | | | | |
Preferred stock of subsidiary corporation | | | 9,577 | | | | | | | | | | 9,577 | | | | | | | |
| | | | | | |
Shareholders’ equity | | | 1,766,872 | | | | | | | | | | 1,893,627 | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Total liabilities and shareholders’ equity | | $ | 17,248,886 | | | | | | | | | $ | 16,827,172 | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Tax-equivalent net interest income | | | | | | 129,412 | | | | | | | | | | 132,970 | | | | |
Less: tax-equivalent adjustment | | | | | | (3,726 | ) | | | | | | | | | (2,617 | ) | | | |
| | | | | | | | | | | | | | | | | | | | |
Net interest income | | | | | $ | 125,686 | | | | | | | | | $ | 130,353 | | | | |
| | | | | | | | | | | | | | | | | | | | |
Interest-rate spread | | | | | | | | | 3.20 | % | | | | | | | | | 3.37 | % |
| | | | | | | | | | | | | | | | | | | | |
Net interest margin | | | | | | | | | 3.26 | % | | | | | | | | | 3.47 | % |
| | | | | | | | | | | | | | | | | | | | |
See Selected Financial Highlights for footnotes.
12
WEBSTER FINANCIAL CORPORATION
Consolidated Average Statements of Condition (unaudited)
| | | | | | | | | | | | | | | | | | | | |
Six Months Ended June 30, | | 2008 | | | 2007 | |
(Dollars in thousands) | | Average
balance | | Interest | | | Fully tax-
equivalent
yield/rate | | | Average
balance | | Interest | | | Fully tax-
equivalent
yield/rate | |
Assets: | | | | | | | | | | | | | | | | | | | | |
Interest-earning assets: | | | | | | | | | | | | | | | | | | | | |
Loans | | $ | 12,613,449 | | $ | 367,058 | | | 5.80 | % | | $ | 12,375,526 | | $ | 419,501 | | | 6.78 | % |
Investment securities (b) | | | 2,981,734 | | | 84,774 | | | 5.59 | | | | 2,367,443 | | | 69,238 | | | 5.87 | |
Loans held for sale | | | 51,039 | | | 1,492 | | | 5.85 | | | | 438,084 | | | 13,668 | | | 6.24 | |
Short-term investments | | | 5,032 | | | 77 | | | 3.05 | | | | 63,851 | | | 1,729 | | | 5.39 | |
| | | | | | | | | | | | | | | | | | | | |
Total interest-earning assets | | | 15,651,254 | | | 453,401 | | | 5.76 | | | | 15,244,904 | | | 504,136 | | | 6.61 | |
| | | | | | | | | | | | | | | | | | | | |
Noninterest-earning assets | | | 1,540,169 | | | | | | | | | | 1,599,293 | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Total assets | | $ | 17,191,423 | | | | | | | | | $ | 16,844,197 | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Liabilities and Shareholders’ Equity: | | | | | | | | | | | | | | | | | | | | |
Interest-bearing liabilities: | | | | | | | | | | | | | | | | | | | | |
Demand deposits | | $ | 1,462,493 | | $ | — | | | — | % | | $ | 1,510,766 | | $ | — | | | — | % |
Savings, NOW and money market deposit accounts | | | 5,843,966 | | | 43,485 | | | 1.49 | | | | 5,644,312 | | | 59,150 | | | 2.11 | |
Time deposits | | | 4,782,166 | | | 91,813 | | | 3.85 | | | | 5,273,269 | | | 118,163 | | | 4.52 | |
| | | | | | | | | | | | | | | | | | | | |
Total deposits | | | 12,088,625 | | | 135,298 | | | 2.25 | | | | 12,428,347 | | | 177,313 | | | 2.88 | |
| | | | | | | | | | | | | | | | | | | | |
Securities sold under agreements to repurchase and other short-term debt | | | 1,329,236 | | | 19,780 | | | 2.94 | | | | 981,222 | | | 22,475 | | | 4.56 | |
Federal Home Loan Bank advances | | | 1,199,292 | | | 20,427 | | | 3.37 | | | | 822,221 | | | 19,584 | | | 4.74 | |
Long-term debt | | | 659,715 | | | 19,950 | | | 6.05 | | | | 555,881 | | | 21,206 | | | 7.63 | |
| | | | | | | | | | | | | | | | | | | | |
Total borrowings | | | 3,188,243 | | | 60,157 | | | 3.75 | | | | 2,359,324 | | | 63,265 | | | 5.34 | |
| | | | | | | | | | | | | | | | | | | | |
Total interest-bearing liabilities | | | 15,276,868 | | | 195,455 | | | 2.56 | | | | 14,787,671 | | | 240,578 | | | 3.27 | |
| | | | | | | | | | | | | | | | | | | | |
Noninterest-bearing liabilities | | | 155,120 | | | | | | | | | | 151,521 | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Total liabilities | | | 15,431,988 | | | | | | | | | | 14,939,192 | | | | | | | |
| | | | | | |
Preferred stock of subsidiary corporation | | | 9,577 | | | | | | | | | | 9,577 | | | | | | | |
| | | | | | |
Shareholders’ equity | | | 1,749,858 | | | | | | | | | | 1,895,428 | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Total liabilities and shareholders’ equity | | $ | 17,191,423 | | | | | | | | | $ | 16,844,197 | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | 257,946 | | | | | | | | | | 263,558 | | | | |
Less: tax-equivalent adjustment | | | | | | (7,404 | ) | | | | | | | | | (5,124 | ) | | | |
| | | | | | | | | | | | | | | | | | | | |
Net interest income | | | | | $ | 250,542 | | | | | | | | | $ | 258,434 | | | | |
| | | | | | | | | | | | | | | | | | | | |
Interest-rate spread | | | | | | | | | 3.20 | % | | | | | | | | | 3.34 | % |
| | | | | | | | | | | | | | | | | | | | |
Net interest margin | | | | | | | | | 3.27 | % | | | | | | | | | 3.44 | % |
| | | | | | | | | | | | | | | | | | | | |
See Selected Financial Highlights for footnotes.
13
WEBSTER FINANCIAL CORPORATION
Nonperforming Assets(unaudited)
| | | | | | | | | | | | | | | |
(Dollars in thousands) | | June 30,
2008 | | March 31,
2008 | | Dec. 31,
2007 | | Sept. 30,
2007 | | June 30,
2007 |
Nonperforming loans: | | | | | | | | | | | | | | | |
Continuing Portfolio: | | | | | | | | | | | | | | | |
Commercial: | | | | | | | | | | | | | | | |
Commercial | | $ | 55,788 | | $ | 30,264 | | $ | 26,804 | | $ | 25,845 | | $ | 20,142 |
Equipment financing | | | 6,718 | | | 5,719 | | | 6,473 | | | 5,054 | | | 2,584 |
| | | | | | | | | | | | | | | |
Total commercial | | | 62,506 | | | 35,983 | | | 33,277 | | | 30,899 | | | 22,726 |
| | | | | |
Commercial real estate | | | 57,840 | | | 21,211 | | | 12,896 | | | 14,238 | | | 12,242 |
Residential: | | | | | | | | | | | | | | | |
Residential construction to permanent | | | 6,660 | | | 4,200 | | | 2,820 | | | — | | | — |
All other | | | 19,633 | | | 22,042 | | | 19,532 | | | 14,811 | | | 13,288 |
| | | | | | | | | | | | | | | |
Total residential | | | 26,293 | | | 26,242 | | | 22,352 | | | 14,811 | | | 13,288 |
Consumer | | | 20,745 | | | 17,084 | | | 14,455 | | | 12,688 | | | 8,164 |
| | | | | | | | | | | | | | | |
Nonperforming loans - continuing portfolio | | | 167,384 | | | 100,520 | | | 82,980 | | | 72,636 | | | 56,420 |
| | | | | | | | | | | | | | | |
Liquidating Portfolio: | | | | | | | | | | | | | | | |
NCLC(d) | | | 29,025 | | | 29,804 | | | 22,797 | | | 18,486 | | | 13,395 |
Consumer | | | 10,651 | | | 9,378 | | | 7,126 | | | 4,199 | | | 2,711 |
| | | | | | | | | | | | | | | |
Nonperforming loans - liquidating portfolio | | | 39,676 | | | 39,182 | | | 29,923 | | | 22,685 | | | 16,106 |
| | | | | | | | | | | | | | | |
Total nonperforming loans | | | 207,060 | | | 139,702 | | | 112,903 | | | 95,321 | | | 72,526 |
| | | | | | | | | | | | | | | |
Other real estate owned and repossessed assets: | | | | | | | | | | | | | | | |
Commercial | | | 6,776 | | | 6,590 | | | 2,211 | | | 5,233 | | | 3,950 |
Residential | | | 4,071 | | | 1,820 | | | 1,062 | | | 985 | | | 711 |
Consumer | | | 6,193 | | | 5,872 | | | 4,896 | | | 2,635 | | | 1,467 |
| | | | | | | | | | | | | | | |
Total other real estate owned and repossessed assets | | | 17,040 | | | 14,282 | | | 8,169 | | | 8,853 | | | 6,128 |
| | | | | | | | | | | | | | | |
Total nonperforming assets | | $ | 224,100 | | $ | 153,984 | | $ | 121,072 | | $ | 104,174 | | $ | 78,654 |
| | | | | | | | | | | | | | | |
Accruing loans 90 or more days past due | | $ | 1,380 | | $ | 1,032 | | $ | 1,891 | | $ | 1,286 | | $ | 2,088 |
| | | | | | | | | | | | | | | |
See Selected Financial Highlights for footnotes.
14
WEBSTER FINANCIAL CORPORATION
Past Due Loans(unaudited)
| | | | | | | | | | | | | | | |
(Dollars in thousands) | | June 30,
2008 | | March 31,
2008 | | Dec. 31,
2007 | | Sept. 30,
2007 | | June 30,
2007 |
Past Due 30-89 days: | | | | | | | | | | | | | | | |
Continuing Portfolio: | | | | | | | | | | | | | | | |
Commercial: | | | | | | | | | | | | | | | |
Commercial | | $ | 8,337 | | $ | 10,229 | | $ | 13,291 | | $ | 4,237 | | $ | 9,999 |
Equipment financing | | | 9,414 | | | 10,269 | | | 5,644 | | | 3,057 | | | 3,355 |
| | | | | | | | | | | | | | | |
Total commercial | | | 17,751 | | | 20,498 | | | 18,935 | | | 7,294 | | | 13,354 |
Commercial real estate | | | 5,241 | | | 30,654 | | | 12,054 | | | 21,017 | | | 13,452 |
Residential: | | | | | | | | | | | | | | | |
Residential construction to permanent | | | 1,914 | | | 3,339 | | | 3,743 | | | 1,656 | | | 536 |
All other | | | 24,621 | | | 22,295 | | | 19,967 | | | 22,501 | | | 14,556 |
| | | | | | | | | | | | | | | |
Total residential | | | 26,535 | | | 25,634 | | | 23,710 | | | 24,157 | | | 15,092 |
Consumer | | | 18,137 | | | 20,721 | | | 22,347 | | | 17,836 | | | 17,005 |
| | | | | | | | | | | | | | | |
Past Due 30-89 days - continuing portfolio | | | 67,664 | | | 97,507 | | | 77,046 | | | 70,304 | | | 58,903 |
| | | | | | | | | | | | | | | |
Liquidating Portfolio: | | | | | | | | | | | | | | | |
NCLC(d) | | | 3,486 | | | 4,983 | | | 13,143 | | | 10,209 | | | 9,037 |
Consumer | | | 8,063 | | | 10,473 | | | 8,793 | | | 7,815 | | | 5,379 |
| | | | | | | | | | | | | | | |
Past Due 30-89 days - liquidating portfolio | | | 11,549 | | | 15,456 | | | 21,936 | | | 18,024 | | | 14,416 |
| | | | | | | | | | | | | | | |
Past Due 90 days or more: | | | | | | | | | | | | | | | |
Commercial | | | 1,380 | | | 596 | | | 1,141 | | | 1,031 | | | 1,188 |
Commercial real estate | | | — | | | 436 | | | 750 | | | 255 | | | 900 |
| | | | | | | | | | | | | | | |
Total | | $ | 80,593 | | $ | 113,995 | | $ | 100,873 | | $ | 89,614 | | $ | 75,407 |
| | | | | | | | | | | | | | | |
See Selected Financial Highlights for footnotes.
15
WEBSTER FINANCIAL CORPORATION
Allowance for Credit Losses (unaudited)
| | | | | | | | | | | | | | | | | | | | |
| | | For the Three Months Ended | |
(Dollars in thousands) | | June 30,
2008 | | | March 31,
2008 | | | Dec. 31,
2007 | | | Sept. 30,
2007 | | | June 30,
2007 | |
Beginning balance | | $ | 189,808 | | | $ | 197,586 | | | $ | 164,011 | | | $ | 152,750 | | | $ | 152,660 | |
Provision | | | 25,000 | | | | 15,800 | | | | 45,250 | | | | 15,250 | | | | 4,250 | |
| | | | | |
Charge-offs continuing portfolio: | | | | | | | | | | | | | | | | | | | | |
Commercial | | | 8,664 | | | | 11,439 | | | | 2,485 | | | | 1,992 | | | | 2,034 | |
Residential | | | 1,036 | | | | 1,480 | | | | 71 | | | | 364 | | | | 286 | |
Consumer | | | 2,784 | | | | 3,697 | | | | 1,833 | | | | 1,613 | | | | 1,892 | |
| | | | | | | | | | | | | | | | | | | | |
Charge-offs continuing portfolio: | | | 12,484 | | | | 16,616 | | | | 4,389 | | | | 3,969 | | | | 4,212 | |
Recoveries | | | (1,290 | ) | | | (827 | ) | | | (1,611 | ) | | | (1,018 | ) | | | (1,336 | ) |
| | | | | | | | | | | | | | | | | | | | |
Net loan charge-offs | | | 11,194 | | | | 15,789 | | | | 2,778 | | | | 2,951 | | | | 2,876 | |
| | | | | | | | | | | | | | | | | | | | |
Charge-offs liquidating portfolio: | | | | | | | | | | | | | | | | | | | | |
NCLC(d) | | | 4,203 | | | | 4,341 | | | | 7,051 | | | | 69 | | | | — | |
Consumer | | | 5,450 | | | | 3,448 | | | | 1,846 | | | | 969 | | | | 1,284 | |
| | | | | | | | | | | | | | | | | | | | |
Charge-offs liquidating portfolio: | | | 9,653 | | | | 7,789 | | | | 8,897 | | | | 1,038 | | | | 1,284 | |
Recoveries | | | (407 | ) | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | |
Net loan charge-offs | | | 9,246 | | | | 7,789 | | | | 8,897 | | | | 1,038 | | | | 1,284 | |
| | | | | | | | | | | | | | | | | | | | |
Total net charge-offs | | | 20,440 | | | | 23,578 | | | | 11,675 | | | | 3,989 | | | | 4,160 | |
| | | | | | | | | | | | | | | | | | | | |
Ending balance | | $ | 194,368 | | | $ | 189,808 | | | $ | 197,586 | | | $ | 164,011 | | | $ | 152,750 | |
| | | | | | | | | | | | | | | | | | | | |
Components: | | | | | | | | | | | | | | | | | | | | |
Allowance for loan losses | | $ | 184,868 | | | $ | 180,308 | | | $ | 188,086 | | | $ | 154,532 | | | $ | 144,974 | |
Reserve for unfunded credit commitments | | | 9,500 | | | | 9,500 | | | | 9,500 | | | | 9,479 | | | | 7,776 | |
| | | | | | | | | | | | | | | | | | | | |
Allowance for credit losses | | $ | 194,368 | | | $ | 189,808 | | | $ | 197,586 | | | $ | 164,011 | | | $ | 152,750 | |
| | | | | | | | | | | | | | | | | | | | |
Asset Quality Ratios: | | | | | | | | | | | | | | | | | | | | |
| | | | | |
Allowance for loan losses / total loans | | | 1.45 | % | | | 1.43 | % | | | 1.51 | % | | | 1.24 | % | | | 1.17 | % |
Allowance for credit losses / total loans | | | 1.52 | | | | 1.51 | | | | 1.58 | | | | 1.32 | | | | 1.23 | |
Net charge-offs / average loans (annualized) | | | 0.64 | | | | 0.75 | | | | 0.38 | | | | 0.13 | | | | 0.14 | |
Nonperforming loans / total loans | | | 1.62 | | | | 1.11 | | | | 0.90 | | | | 0.77 | | | | 0.58 | |
Nonperforming assets / total loans plus OREO | | | 1.75 | | | | 1.22 | | | | 0.97 | | | | 0.84 | | | | 0.63 | |
Allowance for credit losses / nonperforming loans | | | 93.87 | | | | 135.87 | | | | 175.01 | | | | 172.06 | | | | 210.61 | |
| | | | | |
Continuing Portfolio | | | | | | | | | | | | | | | | | | | | |
Allowance for loan losses / total loans | | | 1.23 | % | | | 1.13 | % | | | 1.15 | % | | | n/a | | | | n/a | |
Allowance for credit losses / total loans | | | 1.30 | | | | 1.21 | | | | 1.23 | | | | n/a | | | | n/a | |
Net charge-offs / average loans (annualized) | | | 0.36 | | | | 0.52 | | | | 0.09 | | | | n/a | | | | n/a | |
Nonperforming loans / total loans | | | 1.35 | | | | 0.82 | | | | 0.69 | | | | n/a | | | | n/a | |
Nonperforming assets / total loans plus OREO | | | 1.47 | | | | 0.93 | | | | 0.76 | | | | n/a | | | | n/a | |
Allowance for credit losses / nonperforming loans | | | 96.48 | | | | 146.92 | | | | 177.98 | | | | n/a | | | | n/a | |
| | | | | |
Liquidating Portfolio | | | | | | | | | | | | | | | | | | | | |
| | | | | |
NCLC | | | | | | | | | | | | | | | | | | | | |
Allowance for loan losses / total loans | | | 14.26 | % | | | 18.77 | % | | | 20.65 | % | | | n/a | | | | n/a | |
Net charge-offs / average loans (annualized) | | | 23.00 | | | | 25.78 | | | | 25.43 | | | | n/a | | | | n/a | |
Nonperforming loans / total loans | | | 45.68 | | | | 43.49 | | | | 27.37 | | | | n/a | | | | n/a | |
Allowance for loan losses / nonperforming loans | | | 31.22 | | | | 43.15 | | | | 75.45 | | | | n/a | | | | n/a | |
| | | | | |
Consumer | | | | | | | | | | | | | | | | | | | | |
Allowance for loan losses / total loans | | | 7.53 | % | | | 8.96 | % | | | 9.60 | % | | | n/a | | | | n/a | |
Net charge-offs / average loans (annualized) | | | 6.75 | | | | 4.20 | | | | 2.17 | | | | n/a | | | | n/a | |
Nonperforming loans / total loans | | | 3.37 | | | | 2.87 | | | | 2.09 | | | | n/a | | | | n/a | |
Allowance for loan losses / nonperforming loans | | | 223.63 | | | | 312.09 | | | | 458.88 | | | | n/a | | | | n/a | |
See Selected Financial Highlights for footnotes.
16
