WBS - Earnings call transcript Q4 2017 | Webster Financial Corporation

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning and welcome to Webster Financial Corporation's Fourth Quarter 2017 Results Conference Call. This conference is being recorded. Also, this presentation includes forward-looking statements within the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995 with respect to Webster's financial condition, results of operations, and business and financial performance. Webster has based these forward-looking statements on current expectations and projections about future events. Actual results might differ materially from those projected in the forward-looking statements.

Webster uncertainties, to other in Commission, materially statements XXXX. contained risks, cause that the including concerning with the is results filings fourth containing actual differ in release our information Form assumptions, and our factors and could forward-looking the X-K Additional Securities public earnings Exchange for Financial's from of those quarter Ciulla, introduce will John Chairman and of now Webster. I CEO sir. ahead go Please

John Ciulla

call. Webster's and then Michelle, Thank morning Glenn fourth will quarter I good earnings Chad HSA Wilkins and joining you, Thank will to you review XXXX join everyone. CFO President, quarter, and MacInnes us for the questions. take Bank

transforming We differentiated favorable we strengthening growing continue expanding result activities financial Webster's our optimistic against our make and as of XXXX. a our progress banking for because in operating see HSA environment banking. look we and key community strategic remain continued And forward, Bank, performance; significant initiatives, growth a commercial as we aggressively optimizing businesses, in both to and

While reforms near negative, the higher that capital the business, be and quantifiable, fully our our tax do profits we will on of not yet and return are in positive on both term. impacts various know

we and accelerate furtherance investment disciplined are our maximizing a increase and made our improving guided significant and value with investments allocation, favorable to addition, the forecasted established time. profits and and will to deliver rate we over of to able we continue are as global economic landscape, our are environment, Consistent all a inflation, capital in approach In economic our more record modest employees, interest framework, growth regulatory anticipated unemployment, to low in businesses, confident stakeholders, that of customers management communities. by

to full significant Glenn last were results will our additional of including will payment approximately employees, perspective other begin for generate in were consecutive $X.XX, on slide disclosed and X-K onetime interest items, impacted capital of continued adjusted I filing QX, In excess reflect all week. performance his quarter our and of in XX% per third which earn fourth income importantly, of bonus of by for which to results. of earnings to strong cost our levels time remarks. of the of net tax a record quarter, the full X; our passage underlying legislation allowed us in federal the business Our share year. provide

net quarter Continued XXrd and revenue the XX interest basis our increase growth loan led of point consecutive a to year-over-year in year-over-year margin growth.

time exceeded the Webster's $X For history. in revenue first the billion year XXXX, full for total

deposit second to discipline, X% a Our XXX ongoing and fed pricing remained funds XX% two or XX% quarter. favorable the mix deposit have the We years, was past had of our in the consecutive efficiency in ratio stable, increase QX relative positive below the average loans and linked point in deposit nonaccrual by quarter. rate. basis declining resulted for over Credit with trends leverage operating $XX beta million

decline of from credits While of the increased quarter, non-accrual majority charge-offs came and the favorable the resolution problem loan paydowns. in

average our of and of X.X% borrowings. turn interest all with transactional categories deposit on and strength the of now were spot The the reduction of in the deposit to XX funded growth the demand, generally to strong over quarters. X; slide line Full under ratio growth, Year-over-year enabled commercial than a Webster's to were in X.X% over XXXX checking, loan the performance have savings billion year Turning across segments the deposit of us consistent on and has slide I will of $X significant portfolio on growth amount basis, business contributed XX% past banking’s considerably. a loans total consecutive than slower X. Loan an year higher slower and of in commercial varied XX% has payoffs industry more maintain accounts, for deposit year. bank to grew health basis they growth loan-to-deposit past a of loan growth growth. $X.X provided billion our significantly the And growth, XXXX.

confident X.X% investor growth While XX/XX/XXXX, specialty posted categories, continue XX%, all year-over-year. more increased equipment to growth. as growth. X% people, and finance XX% revenue investments modest and net middle were on banking and revenues drive growth, future expansion, across income differentiated in We to CRE and including Despite as higher non-interest these line our CNI sponsored balances interest year-over-year well XX%. was payment which strategic our incomes cash down continued grew Consistent includes PPNR our with in compared when down treasury were market commercial business, loan business business, loan management, than expenses and will the of technology,

year PPNR QX we banking over grew targets plan commercial horizon. internal our and line annual growth While to manage for of three to XX% business the in X.X%, continue PPNR the revenue

strong growth XX% Bank a expense another XX% quarter. slide financial quarter. pre-tax X, of while XX%, revenue to delivered from net the was increased ago, in Turning HSA resulting in year growth Revenue

planning of accounts of credit underscores billion PPNR XX% increased Bank's more while by HSA growth a year year growth grown $XXX. average have deposit XXX,XXX opportunity more Notably, a deposits. led Revenue an ago, result a a XX% growth net X higher was million HSA balances, balances at or have ago. significant XX% target at as net Our period footings million over than time. increased total HSA from rate by remains X.X of interest deposit as or deposit year XX% accounts, Bank, for account a HSA currently ago, income, a almost on increased build of from X.X have horizon for from HSA than This Bank than our by balance End which plus. less average and

first terms strongest for quarter of is seasonally account Bank each of year, growth. deposit quarter The HSA and the in

pay January and account new to growth with to are channel. relationship direct well long of is term continue investments prospects, overall our we solid Partner's our Health expected expand for in beginning increases This and and account Plan of tracking number management the than off, channel. Our new in as employers to month-to-date, bodes growth in new employees. and [ph] size sales due behind to our growth year, eligible [TPA] slower enrollments our last HSA universe

On point. which the deposit year ahead side, net this is deposit growth slightly $XXX of at is million up month-to-date, last

declined of deposit its roadmap, compared year X% direct to Moving progress to with result by to in banking nine in solid was slide as centers of growth ago. coupled and compared PPNR million, net transformational led balances, a year income, fewer ago, its expenses Revenue XX% marketing a and growth X; a and community result loan interest fourth a by performance of banking $X continued as with spreads. growth quarter along quarter. improved Expenses the lower of

a expect more We along items. a normal marketing to with return increased to of see expenses QX seasonality payroll from level other taxes expense, in and in customary the

by X% and to XX% range mortgage turn business banking. $X X%, X% Investments, small accounts Our year-over-year driven planning I will respectively. grew by grew million grew by growing to horizon PPNR loans administration, increasing this under in year-over-year, by and XXXX. the from growth deposits. value by X% to call with high consumer Glenn. almost growth target for balances overall remains With compared from in over with and QX business revenue X% loans prior Loan community checking year, that, in business Deposits X% assets the premier

Glenn MacInnes

term consumer offset in as guidance, Slide balance from million grown of funded Bank. by low loan but basis at and borrowings quarter, of to net public quarter, provided highlights $X or cost end of on billion reduction John. now an the during funds the trends. average Borrowings increase of our borrowings by a a points deposits, Compared short were grew X versus vast our HSA Deposit HSA the billion loans the benefit growth X%, With X.X% in points with Thanks Webster's of prior growth. almost borrowings seasonality $X.X under of borrowings borrowing linked have Bank in increase XX% provides of quarter, of deposit that XXX assets was HSA majority Deposits strongest anticipate relatively of Bank's deposits. September XX% the quarter paydown represent industry a year average line down to year linked just basis deposits Average sheet. XX compared million. and all further. compared loan we X% will being in and come average the QX flat linked at XX ago, our quarter, $XXX to funded growth, With year. generating $X.X ago. with The

The $XX.XX increase, ago. slide, X.X% the quarter's the by common As favorable, and share industry, equity to growth of peers with Intangible the a tangible on share, per loan-to-deposit equity ratios value to competitive of provides us a and the tier-X to earning our of XX.X% continue advantage. supported in at regional remains seen per year relative ratio a continued book improve, common solid performance. ending from bottom

higher asset levels our we capital While of growth going forward. levels increased, anticipate

adjusted deferred state by tax of $XX.X driven up and a costs a the a slide net million statement; was flat state share. to linked tax revenue we Reported up of XX%. XX, announced $X.XX and to the from an is X As revised X-K for per of our statement. income slide tax previously a is due or we guidance. increase John's tax our growth to PPNR offset cash preferred of year-over-year. both at and per by of of Non-interest Both we business $X.XX lower $X.X $X.X adjustments structure, $XX.X an adjusted in XX% QX. allowing and a representing us All our employees driven dividend This Absent The of tax led range items operating asset. we was were included in last in to reported share, HSA the tax $X.X and Slide expansion million million of million interest in this, of income income $XX income an expense net asset value net $X.X a $X.X was tax million. included related of four The the of year, purposes, rate is NIM EPS on ago, it the was of net benefit were one-time related of occupancy income deductible federal and reduced reported million asset linked as margin, corresponds the to of reported our tax net evaluate as our non-interest reform, from included and of full earning capital interest planning. in Bank prior reform, to X.X% an On by plans, led expense. $XXX.X income Reported benefits, or million income; non-interest expect state impact business Slide adjusted from income reduction interest ratio was our non-interest reflects X payment primarily of review $X.X This net and net million tax not compensation income XX.X%. sale was by Thursday. basis was reduction not in expected. to deferred the Provision $X.X which assets, is tax income by interest X almost XX.X% primarily of consistent the partially million utilize and local affected, corporate reduction year-over-year. outlines and grew down resulting to redemption million, first million million, federal XX%. to result growth of Adjusted structures, after-tax. gain federal highlighted. point offset maintain both deferred expected by realized. as continue million The be QX the payout provided $XX multi-jurisdictional million, X%, being increases growth that basis GAAP grew the summarizes prior million quarter, $XX.X year points, an a XX increase as million by from of EPS year. expense revalued net adjustments, losses, value quarter, increased our $X the to rate had the $XX.X quarter as with a in tax our This $XXX assets and In net it the driven XX% reflect tax higher

the was rate expectation, as of our tax lower adjusted quarter. discrete QX than result item Our during a a XX.X%, tax

from an Our million, basis detail a the quarter year X% the improvement adjusted XX% prior up quarter, At year. $XX.X provides XXX points of ratio of income. XX.X% net and XX net income from slide, see bottom was the additional our prior interest ago. you efficiency of on for from Slide

in cost point million basis assets, X bearing Our while The interest reflects the earning just to margin NIM increase of X liabilities rate resulting X on yield increase X point basis year-over-year interest interest basis quarter increased asset the net profile in linked in in results improvement X.XX%. basis a increase in in earning the in $X and yield of point, point point benefits reflected an liabilities. basis sensitivity a this improving reflects increase a increase on basis assets Both mix rising point and asset across environment. XX XX

primarily QX accounts. by year year-over-year quarter million HSA had of cash which growth from by represents the million, expense. account is and non-interest asset total of hires of quarter $XXX,XXX highlights employee Adjusted onetime by income loan with and mix. expense, the expenses. as portfolio medical a $X.X relative key HSA The our anticipated. Year-over-year, points $X.X debit million strategic Interchange lower reflects trend, represents is from the bonus, increase, at fees, prior rate revenue. Non-performing quality resolution X.XX%. linked Bank, increased increased loans year the gain, represented and remainder the to to primarily $XX medical due basis loans Linked each highlights from increased increase points NPLs increase XX was revenue growth. led each in are offset the Slide non-interest charge-offs deposit driven Slide $XX.X million. of million increase, remainder points, XX in quarter a occupancy ongoing yield highlights three total a the Looking by basis decreased of $X and of point increase result business XX X was compared XX% X again, expense, million, $X.X income, from Slide transactions reflects occupancy basis along at quarter commercial million which the basis remained in of the non-interest securities both $X.X to partially XX increase increase deposits million income totaling favorable upper X.X%, in historical to quarter, increased portfolio metrics. $X.X highlighted Bank hires, left period. of by and September strategic year-over-year our The up the X more and offset XX% linked $X.X $X.X linked the had loans, cost points XX with accounts. redemption commercial. flat, The to the basis year. a million, in The as realized prior linked of interchange XX million XX, the increase, HSA non-interest to with points for quarter all and partially is basis prior from Net preferred expense the to substantially a our ago. while we pricing onetime yield discipline in which

situationally be QX The X%, and million XX growth remain was average any X%, average compared to earning resulted trends. assets in XXX expect provision not indicative of are loan interest for X% in the and outlook we points. charges to QX, basis the securities our we expect to range coverage $XX flat. relatively specific grow as approximately to Slide themes of of or provides of All and specific,

X point projection points. of to is late Fed up basis be This to NIM which impact expect in a a point. March, XX incorporates positive basis We X hike X basis rate

to QX. the rate million from for QX about adjustment in We lower in expect The XXXX. $X.X results lower QX FTE adjustment in in federal FTE the million statutory a $X.X compared to be amount

interest likely expect between million. we income increase and activity. million commercial $X net expectations, million to income be Bank NIM asset is by approximately earning $X driven HSA to higher, $X our to Non-interest million and Given $X

We around be efficiency to expect XX%. the ratio

Our provision portfolio loan and of portfolio growth, mix, will driven charge-offs be by net quality. our

XX%, basis the tax be into rate. which lower to statutory a We expect on rate corporate non-FTE approximately course takes our of new tax account

his to share for expect back remarks. million John approximately our diluted count things we to now will Lastly, XX.X over turn concluding average I be shares.

John Ciulla

XX X,XXX day opportunity year days It's me Thanks third in represents for to footprint. its be the also with XX our Webster's Jim and dedicated to talented an masterfully advantage I Glenn. by to Every ago, a across bankers Webster established cultural competitive Harold expanding almost Smith and leverage history. became work predecessor in our built upon able my foundation Smith. XXXX, CEO by

us to confidence our and implement deliver our over time. great Our differentiated ability provide increasing to and give businesses our people, customers, service strategies, shareholder culture, focused our in to value our

questions. now open for will it up We

Operator

Instructions]. [Operator

first Alexopoulos your Please comes question. of Steven JPMorgan. from Our with question the proceed line with

Steven Alexopoulos

Hey, everybody. good morning

John Ciulla

Good morning Steve.

Steven Alexopoulos

I wanted XXXX? if that the think Bank. you pace, expenses; I expenses look given HSA on maintaining the so were ratio in see about you're you XX% Can to XXXX, And around efficiency higher, us start growth expense particularly at investment guidance. help

John Ciulla

Yes of that QX I think onboarding the in is lot primarily that to obviously, so, activity includes we relative impact a and have the given Steve, guidance of HSA.

going expansion there, the So that million additional of it's staffing whether costs, in is about marketing, hires, or that's additional there going guidance standpoint, technology continued QX it's collateral, in $X well. as of some will expense increase $X additional And marketing about into quarter, it's we dark respects into have into and and going the quarter-over-quarter, then if of where million whether look you worth commercial, million XX, basically first and or probably the QX. in about the then included onboarding also, in as it's they $X more HSA at

Steven Alexopoulos

thoughts give accelerating will some Glenn, maybe for level you, capacity -- XXXX? and lower think and the that about it expense the projects does you in rate mean, too, your building impact I when the around that John tax

John Ciulla

does Steve. mean, I it

increase now into investment. economic XX sure to terms remain of where know, we of can exploring the capital. capital doing to in excess that Always of been cost as we the careful, areas tailwinds in accelerate can on lot in maximize are putting of management this thinking capital planning, our profits days making that what being you we disciplined the headwinds philosophy return and a about expensing are, so of We are have work and

we specific tax think think think legislation when other over we might we it we be additional investments about us in tax have respect flexibility, and we to higher next through dividends call the perspective, what to from headwinds we provide happen so is everything about, answer doing operate, year, the our some decisions see, have that elements. our going we I we think in when what signal states, a might think we to about will and intentionally need business we I think I will businesses, demand, not are flexibility, or have particularly loan working what when So think are. and quarter, to the on The or some of are demand this states the been with but really mortgage also more that

Steven Alexopoulos

when you think average year? the year up this some you loan about we quarter. guiding full should to that's X% of only loan fair. you to X% in about up the growth first are Okay, Glenn, John, loans about talked period know year-over-year, outlook, I were think X% How the offsets. so end being

John Ciulla

you of first out. think at mean, for as doing I roll which usually slower what that that quarter, look of quarter, Glenn's a kind baseline you if a is think the seasonally, and I

of year. is of our did impacts a improvement growth. have the interesting to bunch loan a the We So bit maybe during course there little

are for growth of of remarks, C&I respect higher the in in consumer we level our respect right XX% two in at there four growth H.X for for family, Fed of there we to commercial debt looking were and business, sponsors real their with and categories us in bank businesses equity, is, market sponsor which story mentioned was XXXX in history XXXX, A our XXXX. and growth. funds as and low estate. The the in with to equity to of across never commercial and and commercial We almost full around of into with look private because year the all really home than satisfied on market. I elements. was data, in were liquidity that more one But funds, that top XXXX have our obviously, significant you cost think both If loan prepays, are in their for a loan a transactions, higher competition banking we was new outperforming from because lot my selling relatively competitors and

been other was, XXXX, real to you commercial thing first I our which that XXXX The has the were end happened. estate, down since have time as spot-to-spot know, actually is that of here,

selection it do and think I competition. had to risk with

with drivers I So growth take loan we that into loan and realize can us two you still we the gives growth, return growth. if think to a loan optimism were that at going mute little respect those XXXX to to our above market market isolated it

Steven Alexopoulos

in, just I us some enrollment if can squeeze give up the one far? Thanks. more Maybe on so is XQ how season color Bank; Chad, shaping can you HSA Okay.

John Ciulla

take Chad, why you go ahead that? don't and

Chad Wilkins

Yeah. morning Hey, Steve. good

pleased where season, groups we of and have are sales investments. So with in enrollment number marketing our the of in it employers and size the terms of employer seeing reflects been that and the really we we the focused, are

so The a year to last too the disappointed quarter, little enrollments slightly out the rest and year. in rest tracking that's in its in early at at to be of very really We fluctuations get in to is, going changes from it's any accounts, in it's call expand of you to point. good the news this can't trends second the we quarter are employees, enroll play how HSA, of early who mission eventually enrollment but able is, the going see behind the the still But enrolled. them we population -- the And are year-to-year, first is point. eligible pinpoint your are this do for

Steven Alexopoulos

all for color. Terrific. the Thanks

John Ciulla

Steve. Thanks Yup.

Operator

you. Thank

with with from the Gilbert question. line Please proceed of comes question Collyn KBW. your next Our

Collyn Gilbert

guys. morning Good Thanks.

John Ciulla

Good Collyn. morning

Collyn Gilbert

Maybe to on the HSA follow-up comment. just Chad,

disappointment Any be to or the happening of of a bit as terms little In there? that's within enrollment activity on the thoughts why going on accounts. what could

Chad Wilkins

it's Collyn, we a of employers type some But seen thing. over HSA again, too believe, we our a any it's the that competitors out have there most and have But channels, both their we the growth and are going too health to TPA influence own at, good trends. slowdown Yeah and to slower the early channels, call in the little that plan CDHP the our to channels. and in of there, full focused we are early to sales we and be direct little are bit some might process, bit tell, look year, in as in the health folks employer over seeing -- have moving enrollments, pretty and trends seeing plans where where most to datapoints a we we report enrollments, replacement, are

Collyn Gilbert

know the more about I business? talk footings, the thinking guys affect XXXX which how are investment for But should you for HSA year? growth you trends accounts. about shifted think Okay. kind the about growth Does how that of we to within the includes

John Ciulla

lot Chad, on year, at are saying go Collyn the you is enrollment point. think think I some in color what time it. has that to are on more obviously, impact period. a of full I the that, let But I significantly there this still first will behind we we slightly and an the we know quarter is put But

away you our to expectations give But some think for the can So move from hesitant are full color. Chad, more we I year.

Chad Wilkins

it Yeah, that's John.

the through I the our think communicated going is play think we of out year. a as to them said, it's grow are business HSAs we we how that Investor that little couple eligible moving at weeks quarter them expand trends the the I good really to it's then focus population, to and having year, the through news to so balances. and the you Day, our That is, early the into are to and a forecast managing end and

excited grow we are population. continuing to So we eligible that are the

Collyn Gilbert

there? a in Okay, then helpful. understand, in that's housekeeping, went fees is drop just linked wanted basis, on And just on to that something there fees. quarter particular the HSA

John Ciulla

Yeah. of about interchange. quarter-over-quarter. It's down. the But you $XXX,XXX It and on in couple quarters [ph] higher fees is the generally volume every fourth look is spending first then quarter, trails if

are not back QX. will it -- we So pop in up

Collyn Gilbert

right. That's

Okay.

Sorry.

and thinking about then, business, accelerated I the then, still mean, just to back big obviously was the HSA the just any is have to for for expense year, I investment of the business? the update investments sorry within plan Okay, growth Chad, year, HSA there? know kind XXXX a

John Ciulla

I that start Chad, you want. if can

the in invest to continue business. We

excellence you processing end-to-end a I expenses, outlined the collateral sales think will couple ongoing. primarily Chad first the is of quarter, or operational Collyn, force, initiatives as like I or But onboarding, in the see highlighted, the seamless in we pop sort be as that expanding quarters, still are go things which into and last that. of whether it

to business. continue this we think, I in So invest

Chad Wilkins

just aggressively made from to the grow I HSA. continue house, And we've Collyn, would say, to commitment a top obviously of the

going not So to investing. where we limit see opportunity, we not ourselves are by

in We and operating the the strengthen where invest, business. great continue leverage opportunity share that are see are to we seeing we will overall. to we some PPNR our growth business and But excited capturing

Collyn Gilbert

Okay.

rest HSA. are Okay. because a trying That's linked asset through just helpful. thinking to know, you the in, And you question about where and quarter, NIM; funding year? know think how may quarter between just trend quarter, the side? the have in of to the down and said of I X first kind points, basis obviously that of the coming roll lower just then borrowings you you breaks then X Glenn, yield the first as on But for impact, I how that the far on

Glenn MacInnes

as have say points. from we I Yeah expansion basis is of paying basis a that, X so the first come portfolio the on as think reform some bulk And yield you there deposits at another that if look on offsets probably NIM X example. borrowings, you quarter lower see that yield, points. X result down, and And the from let's coming then then down influx basis [indiscernible], an so, loans, securities that or of new points lease the impact, the HSA call are tax the of go

drivers. really we are X go we numbers. see -- are go some you There But whether those as savings that, we key I forward, rates as three So expansion, the to how to and see as X, get mean, like then NIM quarter-to-quarter. the is I or they think it's things some to continue rates, that's you smaller

a March in increase a We are factoring and increase. September

continue get see it will that, the as of And I HSA think highlight of end extent expansion. we where range. so the will to NIM at you the elasticity know And to business the low we is the well, value really

Collyn Gilbert

Okay, leave there. will guys. that's I great. Thanks it

John Ciulla

Collyn. Thanks

Operator

you. Thank

next the with question. line from Chiaverini Our David comes with proceed your Securities. Please Wedbush question

David Chiaverini

Hi, thanks.

ask other So HSA issue, slowing is of wanted so HSA in Bank do this or on is think players a to growth losing kind to overall you market space? first; follow-up an share market the

John Ciulla

you that do Chad, want to one? take

Chad Wilkins

market I that to Yes, a morning thanks. it's Good tell one, from say standpoint. the, too early would David.

enrollments The health throughout reported of pretty the is we percentages is trends, have replacement we one some down -- kind are to of what in analyzing and year. that are slowing. full that are employers are HSA. closely. big replacement larger going And the plans full evidence We the But have we dropped stats [indiscernible] that going to high tracking are seeing the

seeing, associated point. this little bit dramatically we are are we seen slowing quarter, again, are them it's say own I'd us starting early portfolio, within the plans very we at But now CDHP with our trends are -- other a But haven't that too that enrollment percentage point the noise to market tell, of this translate HSAs and and/or health the year, down changing. in the are to hear bit. because a We to impact early

So we percentanges and and added slowing. But XX% up over to more close are in size. employers, XX% the of we are in enrollment the the number,

we don't seeing market enrollment well. I are think we are just the and percentages, share, So some I losing in as think timing shift

David Chiaverini

footprint, of some and growth, for you Boston the Okay. the that. earning an deposit could then then deposit the borrowings. and shifting update update I about to know paying you mentioned asset your on And for the growth Thanks down But is gears outlook then and also guidance X%, us on average expansion?

Glenn MacInnes

continued start borrowings, we the have reduce our opportunity think will I to borrowings. that we'd with So

we be X% the in We have that it, that bigger as our assets. as that the and could billion well at is borrowings upcoming influx will balances obviously a $X.X we or somewhere first of around roll-off, quarter, HSA that we during will look when from of able maturities go utilize to borrowings. And couple X% our think or

far Boston franchise As as -- the

John Ciulla

on specifically question was the growth? or question deposit franchise, Was overall the Boston on the

David Chiaverini

on been I overall deposit both, Boston? then HSA strong, the know footprint -- and as curious well about Boston Question footprint pretty as but growth overall has

John Ciulla

terms Boston, in I year we both digit good deposit another million track five banking as had still and In on kind non-HSA new as year, period, think the $XXX in deposit governmental we institutional, and in loans, on deposit, do are which goal well over the in over growth, growth deposits solid that. past billion $X is are achieve time. And mean, to think report I I have still expectation of Sure. we a single largest in gather of community and overall high in over we commercial plan our of we our banking. that to

in are fierce deposits, of expected deposit the good cost our seeing, in we The the growth competition Boston pricing of Boston. steady has seeing a franchise. But are issue So because that's different we than have rest good franchise. core the been that deposit of we in growth

Glenn MacInnes

as [indiscernible] that, to and rate on of the interest an around be you HSA deposits in growing on and think rate bearing I then on top basis, expect digit. out, annual the deposits at both non-interest X% of double growing look would we reported -- it, at

David Chiaverini

And fingertips, if you have have at it handy? the Boston do your deposits you

John Ciulla

$XXX million.

David Chiaverini

much. very Thanks Great.

John Ciulla

years Two in.

Operator

Thank you.

Securities. question. Our from Shaw question with Please Wells your comes line proceed the Jared of with next Fargo

Timur Braziler

on out some some newly answered, spaces? Hi. Philly office and of Braziler Good entered my the legacy guys on growth update morning. but This kind an performing, you northeast Timur asked the already of versus us Can have been expectation of of what the maybe is geographies how the the DC, markets of new for the of questions and and in just front. is looking filling been actually Jared. lending for have provide Most

John Ciulla

quarter a It's great a question. and question good to that answer

end markets core trends and middle the and in I of XXXX towards are regional respect that can market perspective, market outside from the our XXXX our And of franchise was activities the taken specifically where major faster the to course at our continue metro with best our Connecticut New of year. to growing over middle rate. We York a region have and quarter, see fourth really performing say hold the

had commercial real DC fourth Philadelphia. great had and the good despite originations, the quarters, in and momentum. We weakness that in estate came also Washington a largely prior quarter We in

seeing say, and New and across would categories. asset is good solidly, in DC Boston I growth are performing Philadelphia York, we So still

markets, we continue so, momentum. people adding thoughts, to And in well our continue doing in as we are very get and strategic selectively we to be those and

as are in So we in we you based are pleased with lending. expansion, our asset Chicago geographic know, Atlanta and

plans there. We XXXX, we robust to There opportunity. to add in other but are particular traction are continue for no any getting early geographies look some

Timur Braziler

is still lines? done or have new businesses all you the of capacity, adding And Okay. and or being those to additional same production been LPOs personnel that kind by

John Ciulla

sort to This just haven't to year and robustly of are interestingly, capacity. we those getting new added up markets, we

on We New have two or for somewhere DC. in the between been Philadelphia in markets you're whether years, five to York, depending

and selectively staff we platform, the the to then the to generating add revenue then underwriting, through we will the support add all portfolio after look additional follow-on with But revenue So producers will existing I selectively processing, management are that. look putting think credit people. and we

Timur Braziler

charge-offs uptick Okay, for new out the just of quarter then that's lastly based the then helpful. in footprint, And the at in those asset increase me, in or during markets? the increase looking CRE in quarter, those the the linked and were were just lending,

John Ciulla

talk credits. don't specific specifically about We the

it XX-year time. some real long ABL slightly charge a charge estate on larger You in aren't rest specific, not and are to the Glenn as commercial any with challenged and done report And a we modest the borrower a what to industries had and geographies. with we said, They had portfolio. was you in are right really then unique circumstances, business that's identify challenged old risk with for sponsor or there correlated to are charge-offs aspects They those of now. really can a

Timur Braziler

Thank Okay. you.

Operator

you. Thank

comes question. with line question from next Jaffray. Please of the your Our Matthew Breese with proceed Piper

Matthew Breese

Good morning everybody.

John Ciulla

Good morning.

Matthew Breese

sensitivity continue increase, Fed March? expect that down basis to we said borrowings, expand margin margin, think expansion, you of to -- in March. wind if perhaps Just less continue going perhaps be we we the through the not get X hike should Should growth that or margin in if do more to I the around the that hike would HSA points, range get a don't

John Ciulla

case look rate September, XX the Fed for points I then you about up just compression, Matt, and same if in basis, probably if below, are stayed and go would rates If X.XX%, we flat, I X.XX% lately. X full year and been kept our your and the if in I a will year know, today, where it, So would QX, March look one that swap, base hike X%. at they to X we and see says, say end where that And in points basis you'd year X QX, basis to in NIM volatile at be scenario rates say then were. to like expect Fed has so you at

as NIM it, quarter-over-quarter. base the On scenario of our expansion other has side case

Matthew Breese

you we talk of then, efficiency XX%. It of about the improvement just HSA remainder front And that front, I have of it was on the that first business. just talked turning the we I trend throughout could efficiency business. do know again, sounds think? curious, north quarter on Where might the year, with maybe like, stay enrollment, to the can on about it Okay. expense

John Ciulla

think, despite we harvest so is spreads, will continue they be beta able to to of it because begin a increase. the as be to the relatively and I of the that a dependent have in [ph], movement business, low on lot going the in rates invest fact Well, curve, lot they to rate a

investment so expenses. And offset should on lot of that the a

ratio considered, continue things we think all that would efficiency to So the down. nudge probably

Matthew Breese

run give sense costs for you, us occupancy as has in item year. branch it's it the since midpoint With go? particularly come million compress? strong Okay. down meaningfully that $XX.X can good to been has the been branch the one what's And you some rate, a and for the far XXXX, as or then, item. occupancy Is see a of we Could closings,

John Ciulla

customer the consistently at nine as look continue course to calls, we on Yeah footprint XXXX. efficient our needs. to and be changing in We mean, I of closed for meet more branches we opportunities the mentioned that

quarter a in later have public quarter, second and identified We handful centers, first that the will make more on. likely announcement banking a the

desire to the that centers density we our to the So banking right have continue centers, not to rationalize they in got we the coverage right banking but make right footprint, and and the that just locations, size, the footprint. close with are sheer in sure are

across center. of the think square sublease in our to footprint, banking will progress I So footage able to see larger in square reducing you some make based us being continue on footage, the

of XXXX. the activity more that and first continue, see all of likely So will will in of that you half

Glenn MacInnes

exit obviously, that for and press it of well, outs tables GAAP Just ins facilities you a reclass we you you if purposes. efficiency might some basis, as the for might on there. But as see, pop, example, and see look these we'd at

some So to you align might see itself, pops.

Matthew Breese

Okay, my had. I taking That's all for great. Thanks questions.

John Ciulla

Thank you.

Operator

you. Thank

comes question Jefferies. proceed Casey next Please Our of the with your Haire line question. from with

Casey Haire

of drivers there? touch million here. the million in $X morning fee quarter Good first guys. Thanks. some are What $X Glenn, the wanted on guide, the to up to

Glenn MacInnes

new fees, both see back, accounts, interchange A big driver and onboard that well. service we additional HSA and of monthly and beginning in first charges, service get as as come you deposit we quarter is the

driver of So that's that. big a

Casey Haire

-- sort of And then Okay, great.

Glenn MacInnes

my commercial. said in would I well. it and HSA am But script sorry. activity I There as is of is two-thirds as I more in third commercial one about say,

John Ciulla

levels And we in context, income of had, to put compared modest unusually we the QX to had fees just XXXX syndication low swap it in prior in year. another and

well. some that those as improvement make think we commercial we So categories on can

Casey Haire

is minimum, down that liquidity the ratio profile, it's to -- higher. -- a question strategy is continue not on if to it are you guys want liquidity talked today. of probably the to what lower, kind settle, loan-to-deposit we at the of about? ratio if you sounds continues the billion, strategy away $X.X to where grind longer like, that is It And Glenn, term would sort where the all to level is from liquidity, and once that term continues I mentioned you'd which borrowings, just be borrowings pay that Okay, out near great. that What climb far we think for a

John Ciulla

ratio loan with. The it's Well about our XX.X. a lower, we think feel we loan-to-deposit bit at start going is growth to optimistic

outlook, our for profiles, will year, be feel we think given our loans grow sensitivity. risk weighted which use asset would good securities, about and the we asset where So underneath we outlook to and then that and the our right manage

to XX% to So I little in a duration we we be might where take ratio the think would the peg -- portfolio. more that's it. the But continue loan-to-deposit on range should investment of XX%,

Casey Haire

Right.

Okay.

you So this loan loan the back growth does growth do think bounce year? -- the yeah,

John Ciulla

Yes.

Casey Haire

this, does settle on [indiscernible]? one that adjustment, -- $X.X million the where sorry but housekeeping FTE And the one, the missed last new under if the the from just Yes. I

John Ciulla

That was it's $X.X million, half. about at

Casey Haire

you. Great. Thank

John Ciulla

Sure.

Operator

Thank you.

Our Bank. next the comes Please question line Rochester your question. of from Dave with with Deutsche proceed

Meng Jiao

behalf on of calling Jiao Meng actually is this guys, Dave. Hey

versus a what the were, where securities they questions; were quick Just couple now reinvestment quarter? rates in guess, I of

John Ciulla

reinvestments, that -- here that's X%, going So QX. at into have reinvestment I our

Meng Jiao

you. Got

mentioned, then, higher. guess And amortization, Okay. was I were quarter? for on about QX I securities fourth million $X.X premium you in a it they think What

John Ciulla

Let first your me just question. on backtrack

$XXX million about $XXX about what was fourth and million quarter came off million, million. at So purchased the we $XXX $XXX at in

a expense you up, the amortization The portfolio. the lower portfolio. the So had in lower CPRs is because in yield is a sense on we reason churn of that gives

lower million make sure the in and XX.X wanted next in CPRs from to have your that. So I to came about costs. you down question? XX, amortization like resulted $X And

Meng Jiao

the answer my That questions. actually was to Thank you.

John Ciulla

Sure. Okay.

Operator

Thank turn the no you. over would to remarks. now for further questions this back time. Ciulla closing any like to There I call are Mr. at

John Ciulla

great a and Thank us. thank Have you much for you joining very day. everyone

Operator

today's concludes This you. teleconference. Thank

a You your participation may disconnect have your line at this time. for you wonderful day. and Thank

Webster Financial (WBS) 23 Jan 182017 Q4 Earnings call transcript