WBS - Earnings call transcript Q3 2018 | Webster Financial Corporation

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Operator

Good morning, and welcome to the Webster Financial Corporation’s Third Quarter 2018 Earnings Call. I will now introduce Webster’s Director of Investor Relations, Terry Mangan. Please go ahead sir.

Terry Mangan

Thank you, Michelle. Welcome to Webster. recorded. being is conference This operations, Also, this provisions of the Harbor results statements with financial includes the Private forward-looking of conditions, of financial Act to within business Securities and respect performance. Safe Webster’s presentation and Litigation XXXX Reform based on current these future projections expectations statements forward-looking has and about Webster events. materially projected might in Actual statements. forward-looking differ results the from those

Financial’s these containing Additional I’ll President and public Ciulla, our contained results to actual Webster. that could information cause is Securities the concerning of risks, with release of John Form CEO statements differ filings uncertainties, the in from and assumptions, in including XXXX. forward-looking and quarter introduce third Webster our other factors Commission, for the materially now Exchange earnings X-K

John Ciulla

third quarter, MacInnes performance Chad team’s I’m CFO, two. Bank, earnings Thanks, banking Slide Terry. on Banking for quarter aggressively and net grow record Bank quarter. join Good of income. transform XXXX priorities us and resulted and expand I’ll quarterly financial will Q&A. this really on HSA commercial level morning, Glenn review Community of for business the the will then Webster’s President, HSA begin strategic a to in Webster’s performance call. Wilkins, everyone. I to continued proud execution Welcome

EPS framework our for tax our benefit insurance where accrual management QX an a differentiated growth our highest third in was revenue management potential of revenue $XXX quarter the the quarterly of share of of and benefit more year generate a the quarter of our fees growth. resulted new pre specific to QX, of year and $X.XX. capital We’ve commercial revenue strategic quarters was to for and premiums year-over-year prior those Earnings posted consecutive net for year-over-year continues Loan approach that Adjusted Leveraging provision has final growth $X.XX discrete allocation performance. to XX%. higher expenses than Adjusting XX% of and operating disciplined Performance a of of represent In quarter the per have last periods, business to X% level Our quarter FDIC in another sixth record. X% net profit a combination quarter the related for led over XXth the strong excess financial better resulting million than and and ago. better with total quarter. ensure a loan in XX% growth by a framework to to capital three ago a businesses leverage. resources flow stakeholders. was economic consecutive year-over-year more driven model of less increased along of from than increased revenue in than our margin to now HSA than positive interest overtime consecutive

below remained been has ratio role for transformed it’s crucial Webster’s efficiency XX% and in balance sheet below played success. Our XX% our quarters. five consecutive a

The rates. XXX Our when interest which loan higher on over third began prior basis has than to XXXX that the commercial basis XXX improved quarter of our portfolio Fed raising yield short points yield is points period. in a the portfolio is just term

million. NIM by On dynamic has of quality only years. last QX This over driving several deposits. the improvement remains low totaling cost $X Webster’s increased XX of HSA the our net stability the in and under basis period, have sheet, asset over transactional other just deposits with this side points cost stable influenced been charge-offs balance our and

loans declining total X%. loan to Turning a and slide versus X% was year three, growth growth above XX% compared ago [ph] loan to commercial consumer

been in is strategic affected Consistent with consumer banking. consistent September, the market, Conference Barclays focus As on I borrowings. home have this mortgage growth reductions broader the the year and continued commercial reduction grew in outstanding performance thirds two ago and our of balances. of and expanding balances loan year-over-year from equity our Deposits funding with by lower indicated volumes X.X% all a origination

also the than compared on to loans as As in I time. approximately our Commercial yield primarily grew a the billion deposits income you strong loan record than well. year. quarter to during the slide quarter significantly another the the as and by in will commercial linked banking the quarterly driven fees pay-offs loan level and of million due faster to the quarter and increased loans Low in $XX Non-interest of both portfolio lines market, Loans slide cost the on accrete first and reported and $XX on Starting exceeded grew Commercial almost view indication real-estate swap net banking QX growth. X% pre-originations. specialty. of can for XX% strong middle businesses. more on see non-interest revenue contributed year-over-year the four, prior originations sponsor quarter generated income achieved portfolio

by in of the bankers have a growth year execution $XX and banking Our from performance. in PPNR XX.X% and consistent representing our businesses QX in continued ago. growth commercial focused of strong generated investment Commercial resulted million

quality loan Asset and at lows. portfolio metrics in remains cycle banking the stable commercial

this slide HSA the HSA rising rate Webster Bank five, to performance and to value particularly Bank’s Turning underscore QX environment. by-directional continues of in

footings cost HSA investment from billion billion accounts Webster’s were Total our $XX growth additional year-over-year operating evidencing which Bank or linked duration XX% million this business. in ago. ago. Our earning resulting and XX%. interest generated revenue seasoning a Year-over-year grew account a was growth from growth net and deposit X% XX% account in pretax that XX% higher net grew X.X year was footings X.X derived net the Combination ago Bank’s balances $X.X billion increase and XX% HSA in increase fund of $X.X positive in loan per balances. a credit resulted average quarterly from leverage of year-over-year of year deposits investment rate. a million an income higher assets The differentiating in accounts XX% continued in account and are total comprised in of $XX XX% helped revenue million in expense higher. low year than

teams investments have our pipeline our has HSA direct-to- years. from in head signs Bank’s the in of growth positive see focused past into important employer been in Progress where channel season. our sales stages to we greatest continue of enrolment couple as we over the all X January We activities the

small slide six, lower to are an balances Bank. all The have total being X% demonstrating that, Business the by study, moment lender more X% to by and X% total in to retail first team for up business adds declined high region in was Community growth for U.S. Moving deposits the year-over-year. volumes. SPA loan New This to one as in in call or loan take the Total recently in in long ago. deposit provide balances quality Webster’s of Total top including in our revenue grew in XXXX commitment X% interest was customer SPA our Community million dollar year Banking the customer from of England. call administration decline income. offset year-over-year loan I’d and X% mortgage Bank been consumer from a to like in the the spreads also as segment recognized were net experience. I’ll declined Power revenue business modestly Deposits continues net grew growth of than deposits. Webster proud England in With and while reduction Community the QX million volume drove resulting result $XX Banking satisfaction banking by center $XXX origination Investment for was to we originations organization. balances increase year-over-year Glenn. to banking over center loan history Connecticut. satisfaction service Banking representing XX% growth the number business for Community a this X% JD of in non-interest congratulate Total care in X% growth year-over-year income improved customer grew of revenue to New ranked for a X% turn lender year-over-year, by the PPNR continued

Glenn MacInnes

which for balance loans $XXX June Year-over-year sheet. X% or Average highlights million Thanks, John. X% linked grew seven C&I C&I quarter Webster's X.X% year-over-year. growth from or Slide $XX.Xbillion to XXth. by increased provides $XXX of increased and led $X.X accounting billion Loan originations was million of in average $X.X were the Loan fundings. fundings totaled billion, QX. $X.X with which the million down and quarter Loan for commercial were billion payoffs $XXX million, million XX%. $XXX the and totaled of $XXX from originations

with residential increased X.X% by $XXX year-over-year $XXX pay and of in highlighted, a lower reduction million Deposit million year consumer Average portfolio. loan both was volume $XXX with of the $XXX growth continued This CD seasonal QX. home fundings deposits million deposits and or downs over million, quarter linked funds exceeded loans portfolio resulting equity X.X% Bank in origination increased the As from coupled average led borrowings. the of John linked prior declining increase reflects or $XXX and of quarter versus the million representing increase. growth for a public HSA in

at a and XX% X.X% X.X% compared improved ago. as June to year XXth borrowings Our a ratio

remains favorable XX%. Our at loan-to-deposit ratio

growth the provides Net incremental of below year. second grew for linked and this year-over-year XX% The deposit level remained equity, available a Non-interest in net $X.X FDIC $XX point includes rate income by our to provision to strategies Revenue is of competitive a On grew $XX.X pre-provisioned for million PPNR result a additional When shareholders. The while due $X.X to In basis basis point million excludes rate us or an quarter. deposit related QX providing well and record of increase. growth. volume. revenue total on The overall in consecutive stable income. a million quarterly Slide and periods XX a improvement linked growth to efficiency in net of The revenue XX% funding increased additional measured quarter. income X.X% million benefit, to continues nine yield insurance quarterly loan to remained ability planning ratio QX XX.X% loan of Our interest cost. and result resulted in continues this prior million X.X% a The reflect by QX in increase strong XX% a advantage. due a of XX% and prior rate, detail XX one-time XX%. against average equity tax which deposit by $X.X for eight is interest of increase credit quarter margin. basis, the ratios rate and earnings long connection statement million The beta million with result benefit $XX.X our year-over-year loss through the fully in increased summarizes combined supported increase basis tier reform. an XX%. drivers increase XX to funds in net non-interest includes of income of our higher in deposit interest fund earnings interest tax quality. which common commercial and point year-over-year common increase expense. expense basis XXXX. The quarter growth point multiple from effective tangible discrete of net in Slide quarter Fed in X $X.X of and FDIC compensation quarter decreased a and XX.X% reflects record beta net increase expense, a is activity loan million XX to our expense channels a for and Reported detail Slide HSA million additional position XX in is on expense fees, Loan the million includes $X.X and was $XXX provides in incremental $XX income tax benefits record. led technology linked million. a to $XXX increase and higher income, had non-interest common

days from $X.X or continues amount September to indexed a are benefit loans indexed Our resetting XX, one of less. to are XX of LIBOR the and significant to $X.X performance At month billion of at billion Pride XX% Combined our on reset floating of total once maturity. final least loans XX% or our portfolio, Combined, before [ph]. another a priced are represents XX% periodic loan basis. of this loans our loans

improvement point cost X.XX%. seven $X basis assets the of from results income liabilities NIM the four Slide This QX. quarter, on the interest-earning points, increased increased increased while which basis For four in in interest-bearing non-interest to XX highlights million points. basis yield

driven increased As Mortgage anticipated, fees commercial $X.X was income level led at by non-interest of commercial this HSA we year-over-year quarter. account higher million. expense facilities optimization increased higher primarily growth million; costs, was On $XX fees and was expense had insurance This Year-over-year a Bank. Adjusted the $X and incremental involves a this $X.X million $X.X linked due year non-interest QX and and XX basis of to a million incremental this On Slide increase QX, origination deposit annual quarter asset Slide costs. quality from million decreased driven for highlights a from medical quarter FDIC by strategic million key $X.X revenue expenses trend. medical banking linked XX highlights million. expense metrics. $X.X in $X.X the volume. lower declined prior cost, basis, expense, million an and by from our hires. increase $X of merit million was

a view growth. QX. continue a for The charge-off lease asset The support was now provider ratio exceeded as XX points and loan basis near-term positive points net of loans. QX is million again have loan provision We is quality. and to net XXX XX for of total to allowance basis $XXX compared The allowance in Slide represents year-to-date. of outlook XX points basis charge-off loss

X% again loan average X% led We loans. by once in range of expect be growth to commercial to a

We assets expect average interest-earning X%. around grow to

in X Prime. month points, points increase basis X average up by driven be one to NIM expect and expected to LIBOR We basis

assets expectations, be million net $X income is strong we earnings expect result as Non-interest between income a $X NIM $X between and $Xmillion commercial Given likely to activity. interest our million of increase million. and and to down QX

expect in a two efficiency over We to quarters. be ratio the range our continue to last

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

tax back approximately be non-FTE turn be We over share while With actually XX%, things I’ll to John. on diluted basis to rate to average we level. expect expect that, our similar a count QX’s our to

John Ciulla

they country. Bankers our Webster to very placed we rank And I’ll we’ll up pursue to the the regional it among much in you quarter. vision performing as that, banks by open Thank another and Glenn. us our in With like complementing solid highest shareholders questions. conclude for our confidence HSA thank I’d the for on have

Operator

comes of Steven Thank with the a question you. We’ll from session. question-and-answer question. now be Instructions] your first conducting Alexopoulos Please line proceed [Operator JPMorgan. Our with

Steven Alexopoulos

everybody. morning good Hey

John Ciulla

Steve. Hey

Glenn MacInnes

Hi, Steve.

Steven Alexopoulos

with The thought here are deposit loan pressure ratio to guys behind to point time such the for aggressive the as XX%, you I start and on And on only wanted deposits. at real CDs? only deposit growth cost deposits. what’s

John Ciulla

other Yes, be wouldn’t about aggressive spoke Steve, mean that the chasing as deposits, behind last to to consumer, for quarters, behind we we and products it this so that we lot we be clients in clients we’ve a we that characterize I and profitable don’t us. have of overly however mortgages benefit know CDs have many and of I aggressive HSA are and don’t because our disappointed as the said in OCD our want few growth are

it’s our at that for us look to rates by line So our competitive deposit important maintain being region, we’re business to sure by deposit. and enough make

to CDs customer So, be are we’re ridiculous but of to not going increasing obviously think going race but with we preferences with the I terms pursue. us and will set, changing, competitive, be in are competitive are our

Glenn MacInnes

of seen somewhat quarter savings this, but second And so Steve, XX migration was keeping pronounced basis it’s or from we’ve now third points rate, quarter customers. basis the migration month and it’s with I to of our a XX to points, month Glenn be to last and for customers a so XX quarter a add moving that CD product than the CDs, would like more current we’ve also seen XX the a savings slower

Steven Alexopoulos

XX Yes, okay. for underlies change another the you cost through walk could up NIM us the Glenn, in guidance And that XQ [ph]? in expected deposit

Glenn MacInnes

going think quarter points into we basis be So cost. points, X are deposit we to up X basis the see six we I we see up – fourth on

Steven Alexopoulos

Okay, X X. or

Glenn MacInnes

third but say XXXX, what’s cycle XX.X%. to look and at some on at you betas quarter it through you’ve and you our from if I third us deposit think work of of as XXXX look can I encouraging this the quarter know we done this, the

do of that for you of third the continue the XXXX and the we side, on asset our XXXX to asset quarter keep beta quarter XX% If about loan third is same mix. to beta

Steven Alexopoulos

Right.

which X% norm? planning about and we is digit next loans, new Okay, horizon is year growth X% to shifting range, the it the back as range could with or in to is think you into gears move mid-single the reasonable X% then trending loan

Glenn MacInnes

I mix, Well Steve. it’s right mean think I

bogey that’s over outperform of we’re think commercial credit for after and to that So said loan mortgage market, you is the but sweet opportunity, loans looking we to spot personal our XX% due at we down do sort on more we’re we’re correspondent like but really on loan mortgage, again what and is of growth market little looking the we times, some ability the the do and we I’ve we’re the right over looking we looking think on on not the digitization have revisiting products think, channel. down it down, turn are consumer you quality side, we also to bit really I but market so at in some pricing, down give a know comes refinance, at our consumer our we’re the launching on now, and side, at know process,

going be back balances we growing that think I in X%. So consumer what to really dependent the can get do of up terms it’s to loan X% or on to

Steven Alexopoulos

helpful. that’s is mean question. what but it’s know it enrollment going, for the tell plans season indicator Okay, Chad And I enrollment underway have you how so HSA know and a last the to the could any annual far one, I ask to I for account early, is just growth? and Thanks. now health

Chad Wilkins

Steve. thanks Yes,

to. employers comes remember sales one about I’d we thing comes production about existing come is say have first our less is which of production XX% our The that account and new half another we -- half production new, accounts direct partnered when from activity less and XX% from also talk have to for that one visibility from from we

we where headed we’re for seeing channels we signs a and the are have one. strong and and positive focus that one segments the in influence believe So most

of we production and the year quarter as production better this expecting new quarter year. We account had in are first to the first this than we compared have of better

up proposal with that signs large some out activity been -- are especially employers. I threw significantly has And there

Our wins year is last and we’ve and groups this year, point of in pipeline of than the more terms number last significantly at size have more opportunities, and size than size year. the several number had this this times more had year both last, and larger both wins we we transfer

potentially having So know our have and aligned that better from so large yields really retention standpoint, the higher I and been we there. mentioned account anticipate signs relationship with our positive existing management you improve

All and selection, infact factors seeing are encouraged we’re are of plans but that what point, enrollments there this said, lot and at of that by we Steve.

Steven Alexopoulos

Terrific. Thanks color for all guys. the

Chad Wilkins

Steve. Thanks,

Operator

you. Thank

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

Collyn Gilbert

Thanks, gentlemen. morning good

within that look the you your some for had maybe on is or missed But commercial indicated book the just out Glenn, then saw this transcript broadly but you the next into as Glenn, look Just commercial it, at what pay-offs in you can curious John the fourth seeing the trends quarter question I are as a more I to that know know within quarter. you outlook the and pay-offs of just book. I year. we just

Glenn MacInnes

at this I’ve which saw quarter them loan last than $XX growth, pay-offs this actually that It’s probably quarter, they and last about we but digit really been predicting resulted million into Collyn. we linked we put quarter. double did Sure, growth quarter a we had framework, did quarter million less to fewer in $XX than bad obviously originations we had commercial have but in just funny been good year-over-year really lumpy.

and quarter an seen pay-offs pretty pay-off a down. of active peaked kind – they quarter usually we’ve trended is in usually a XQ, origination So, – they on perspective. both pretty Fourth

change are or see you a in So sort the million we where our we’re down all million transactions to it it end commercial really get quarter. towards $XX things of going estate particularly I trending of think real some pay and $XX could of could trajectory don’t shift a the depends in the

increase in we you a there marketplace lack visibility of would see except in or indicate that of to can’t downs in would say I a give the sudden anything So refinancing whole activities. lot don’t be shift pay a that

to quarters similar say would this prior would be one. and it I So

Collyn Gilbert

fourth to that’s HSA are pretty your you broadly you back from you of the kind that’s helpful. obviously what or is seen some Okay, the deposit are own migration on know but you more behaviors that pressure slowing you market seeing seeing kind know are of data within savings but thoughts driven, your perhaps just what that that then a had to again, your deposit in more expecting controlled longer you And indicated comment Glenn, quarter, I just just for – the to pricing you you’ve know deposit realized CD from given…. of base, maybe term as generally CDs

Glenn MacInnes

us a York been – most Yes, high market. is Boston, areas New aggressive Boston market I the the for some think Metro has extent our as to very

extent a So in promotional is market. to our of lot the do Boston pricing we it the

that’s the where seeing we are of pressure higher on So most cost.

are I you fact to then the very -- also which the that with very retail And the could through the from loan deposit banks, on bank eventually conscious think an conscious that of we storm. where the that think perfect advantage – QE has deposits LCR and on of we value of unwinding typical Northeast in the high that we ratio. standpoint are we competitive be the we larger couple say a we’re – a the have fact

to So, that. monitor continue we

also forecast relatively When of at very it XXXX. we We think seen of that accelerate will a haven't XXXX deposit look out and conscious constant our or we yet. little but couple go later we we're it in stay a quarters, our could data bit

Collyn Gilbert

Yes.

okay. Okay,

Okay. expenses, indicated just And guys question you then That's of again broad year-over-year kind have XX%. on helpful. expenses up a

you me efficiency the I would -- either some XX. know, here -- of or continue they trajectory I'd the You've where to kind then investment the initiatives expenses growth know – And of sales how what year? be you're the migrating ask a mix Let see that it articulated expense same cuts? What sort for do the of building on the are how of to question Chad into in docket invest expense in to necessary in business up big next below guess keep you they HSA, get going force, recognizing do broadly? been that

Glenn MacInnes

Let with a efficiency bank over so our know it's a is of or I strategic everything core have and a of start on of the it's I done HSA let digital they highest from Collyn, bank, ratio. type that there I'll they Chad. efficiency HSA and turn that. investments facility side you retail, me you out to expending there. footage. whether to that start generally Yes, that is with me work banking, would our initiatives think lot it Because the mobile ongoing. But Stanford those network Also use the and a our containing sort expenses marketing, look follow a related hub replacements, look that sorting still are segmentation, to order priorities upgrades lowest say of continuous site far our in infrastructure of its customer hub, all square at last commercial sort that are then HSA can side here, its be things ongoing customer that as There like And continues for data if at on we and projects that's are improvement security. as corporate lot the --

to I'll returns. it of to lot turn continue those capital I to over or allocating a we're higher because But as have know well. they So initiatives generate going on Chad HSA that

Chad Wilkins

we so in with us. that initiatives investments behind operational us help spiky excellence the our and made big our to helping resources on are in the we've past that say improvement And I'd consultants also bringing with have brought execution. Glenn. continuous Thanks, Yes.

invest like lower-cost, so years portfolio tools support we us, an funds, this we decision platform their to guided can consumers which fee to also launched operating will drive for for automotive offer to and in higher-quality funds things – of to portfolios, it. asset-based year rolling the also higher couple things by with our like rebalance investment just October and associated workflow So will which way here that us out allows quality that be the to leverage continue over next in

XXX(k) year fast the channel So, have excited really a get also allows really in work beginning business investment offering of growing is at the a market, RIA with to we that of that expect as but to that lot platform from which and advisers new to us us for launching well. plan

So earn offering. to also an and offer income it that allows HSA manage the an RIA on investments and

in So more channel. that we're looking effectively to partner

-- So, investments our in invest a to our continue and we consumer positive we're Also lot good HSAs teams experience sales customer see grow in [Indiscernible] capabilities. the ROI across making of a market. team growth to we'll as

Collyn Gilbert

I Okay. guys. there. helpful. Thanks will leave That's it

John Ciulla

Collyn. Thanks

Operator

Thank you.

O'Neill. of Our with comes question. Fitzgibbon line Please the Mark next from question proceed with Sandler your

Mark Fitzgibbon

Hey, guys. Good morning.

John Ciulla

Good morning, Mark.

Mark Fitzgibbon

nurture First What had of HSA question of your the magnitude when would deposit the might I deposits, And HSA change Chad sort require anticipate? we that on change from point happens? you do higher they basis think is rate for to see XX that When Chad, customers' amazing. rates? you where might start

Chad Wilkins

Yes.

of only at reducing when customer all the associated look fees -- and about we're the the And monitor We any have industry we better on any seen haven't real a we we there our think that experience. offering. has improve because some I we movement holistically. the pretty pricing rise looked the like it things at And nuisance across been to about pressure our of with more better still fees think thinking that the and aligning -- rates closely. that

deposits. seen and rates the on fees more we've rather we pressure HSAs monthly than the other that charge fees on with associated So

do than from next continue customers we have market. necessary. monitor feedback from continue and that the where So, expect we year, see forecast expect perspective. we out we actually we'll forecast we've to what what in our and get to We'll to terms where of rates, increase We make performed adjustments better

don't significant changes expect short So time. real that in any

John Ciulla

thing balances. Mark, you And had see is behaviorally investment to one increases that in I'd

enough what option your into your return about to have you is, of account. do HSA you have concerned the be in if So, account going an investment

think the deposit. to rate the of that on has pressure off taking of also some We effect actual

Mark Fitzgibbon

Okay.

funds to on next your for NIM the that cost assumed So does flat and then, quarter Glenn guidance HAS? a

Glenn MacInnes

On XX the flat basis HSA stay points. at we

Mark Fitzgibbon

then, can update that? optimization branch in great. the are Okay, you where us on And plan you

Glenn MacInnes

Sure. sale think saw our most the XX. we've by And, including reduced recent so I that year-over-year you branch probably size

a obviously And branch year-over-year within I'd network, basis XX,XXX we were just able so out footage say that continues. on to bout square take about, and effort our

And at opportunity movement. always sort to small feet kind which continue we XXXX was think to of Square of to so we optimize that square an see of see example look number that you'll sublease where Harvard footage, I have as an and you'll square so we're point doing,

John Ciulla

forward same. going continues center footprint. preferences we're our constantly but We anything even centers in be channel, banking though the banking don't to critical are front reviewing We customer delivery think strategy have changing. are the us, Mark, the of right

we square smaller, think in channel but channel. I we as that make tell the year we is likely thing will add and So overtime as have at efficient also to vibrant One as over we year, are you sure over customer not have a we'll but situations. play feet fewer may consolidate, we that make moving more can we all to be certain quickly disrupt may in year-over-year experience

Glenn MacInnes

branches, the XX. strip at the look Mark, XXX out trends Last if and centers, from market, say the back our into you XXX Boston XXXX we're down XXX, you go expansion down to thing add you I'll back so banking

So I that network. the think aggressive rationalizing we've been fairly

Mark Fitzgibbon

the views curious if answered Okay. this And I'm in but change. past lastly, you guys and then your you've

acquisition quarters? or of and fee-based next few into relative getting businesses Can strong M&A see have currency. you banks say the other You a back

John Ciulla

the stays answer Mark, same. the

we're growth differentiated each be we unlikely here acquisition quarter whole look highly plate, would a showing we're As the that we it we the strategic but transaction. at enter progress our would businesses, everything making organic with on obviously always in that the bank said

Mark Fitzgibbon

you. Thank

Operator

you. Thank

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

David Chiaverini

Couple thanks. for Hi, you. questions of

given the digit good that First, the on is borrowings the mentioned you've said level guess, down, building in which I loan asset, XX% ratio, think targeting liquidity sheet I ratio still mid-single that's borrowings that you're for balance to assets to lowest a the is previously to type to coming deposit And you see. the case? first, about years,

Glenn MacInnes

see David, you seasonal. what which of see of is Part case. the the you still that influx think I is public yes, funds Mid-single,

were that ebb Fed FHLB so by we flow. about reduction further see a by million take you'll some reducing but there $XXX swing of so in that it's able reducing in repose to and and borrowings, reducing funds And advantage borrowings,

David Chiaverini

of approaching in you're level, going Is since building forward HSA. to that growth assumption? kind targeted strong the portfolio start seeing the correct a assuming going you're I'm deposit securities And we're more that meaningfully considering

Chad Wilkins

to the we the assets. securities remain of that XX% range portfolio of So in think XX% our will

assets to but the And extent you we marginally. expect so grow that would only grow

David Chiaverini

securities the look yield earning with down I months it's year sticking then when XXXX, rates period to the first despite your actually portfolio And the moving nine up. over of last Okay. same versus

have moved duration hasn't change that yield to do up? all? why you And So get or the is, question up the at this any of kind plans

Glenn MacInnes

So, we wouldn't and that change such thought portfolio. the duration would point until that we curve inverting the extend was

within speeds that. I are the which far thing yield, impacting as is amortization look at think the as to the have prepayment you

the quarter And so see you'd speeds and as I into you fourth million. think about expect it's down come to $X prepayment go

the increase that portfolio. So on yield would the

David Chiaverini

last And to was it. to the versus year I into season several pipeline enrollment Okay, Chad's that? by gears intrigued HSA, comment this the the main are shifting drivers heading larger then that year. is What got times

Chad Wilkins

we're so so on methodology, of productivity the investments resources, trying those positive and to capacity and lot I triple things teams. know, we're growth seeing of a you few only years we've mean results As over so relationship our like well, also and invested but over our we've right three last team of now. years, the in We've all invested lot fracing a management our [ph] sales sales and not as size in increase tools the that

David Chiaverini

I one run Okay. quarters; is from the about X at And rate anything but and past lease look the more there? housekeeping, of when me fees then last over the above XX million million, unusual that's loan in few related the of

John Ciulla

The commercial trend.

Glenn MacInnes

X.X as transaction than million. so which four syndication more impact quarter Yes, quarter the in was run transactions about had we episodic in is in had we that the almost fees I think line. one highlight that rate, We a million fee $X which commercial third

David Chiaverini

very Got it. Thanks much.

Glenn MacInnes

You're welcome.

Operator

you. Thank

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

Matthew Breese

everybody. morning, Good

John Ciulla

Matt. Hey,

Matthew Breese

sheets success dynamics prepayment versus comments the the competitive loan having back markets? I you side to and could that your wanted address comment on to you maybe growth this. the I and term lower know capturing But more made, origination you with go of are you of

Glenn MacInnes

timing. Yes. read its you just the paper. really I say, say would we're And more success in I'm capturing would I don't having think term I sure sheets.

with I target less, or losing we're We're level those units lending, have to our has areas, I would think certain geographies I've said some competition of risk the you our that and in I we as increase when growth winning one then we underperform spread, or netting sort quarterly of that can or commercial industry I've on and We're of a see pull of appetite. growth, prepayment equipment won been and expanding like certain and over geographies contribute verticals, loan asset again lot that we we've business we any asset-based on classes rate portfolio more based growth in commercial an quarter, have anyone sticking middle over with geographies and there's assets; and so based market said levers to really can annualized finance estate so outperform of of competition. with across deals many speed. the of quarter I over and real in deals bunch that a to think about in lowering strong more and certain of anyone feel so respect in XX% kind time deals.

the up let's can't have quarters obviously you ratchet to really much tell things continues changed the slightly. over say except that So last that competition I four

Matthew Breese

Understood.

your new just to first, just JPMorgan, And be figures, Okay. secondly, like might maybe they some back deposit recently then Boston towards competitors more updated get M&T that loan pushing going comments; maybe larger market. that heard to but we've that

a going a seems we here deposits already competitive this as on it of you markets so? see shift could strategic wealth the Given HSA have front to get more even

John Ciulla

Yes.

a I that's think question. good

for us profitability deposits terms building of retention chasing our game the core of sake You've of plan moving instead already loans of customers seen kind loans. and and and in really really deposits of towards modify

most are competitive more It of part the market. franchise is only our competitive It get you arrives. right. will when So, Chase

about years of five-year million our we $XXX in into plan are marginally a deposits, ahead almost five-year three We loan and are plan.

to So we're looking behind us important on been our with very think and and full The disciplined deposit for is to to strategically as we we a acquisition, get more optimistic. whole I still respect market really relationships. be continue pricing but

work for For bankers that reached contingent got we of in We momentum momentum really corporate centers are seeing our a banking we pipeline and We're we example, banking banking and had just and a in But full coverage necessary seven do couldn't middle-market bankers and build business center cross-selling customers our there. market. we're before wealth. business we network. which those provide Those Boston FTEs. to have

and We offices. have may have we consumer mortgages you momentum in in And as that well. finance know two

have in specialty most We an Back Franklin located. our the bankers business sponsor we in bankers where have government bankers office and and of Bay and are also are middle-market Street, our but

loans of billions we've So originated from that market. dollars got of

and market. we're overall it a footprint to be banking expectations. try to we right value as We more long From will be the continues perspective the we add and have continue continue which can there but patient competitive holistically believe center We manage competitive. to have think to that, as only and efficient get that momentum consumer and we

Matthew Breese

Great.

Clad, Understood. one the sensitivity do you, rate maybe for table and to point that? the next over you the outlook the maneuvers XX to XX Webster rates, the months what off considering some start at could environment, accomplish asset we for see just to some take might Okay.

Chad Wilkins

we portfolio is the boarding so assets would of I turning swap that that, see a it we on that would consider way. or estate whether be more fixed mortgages would to the X.X out. where to depending We And think float assets fixed we I consider years And and the if it's would real from want or boarding the a Sure. we also do absolutely commercial extending maneuvers the extend loan curve do type we think investment end that. consider residential could

of to available levers off several of are us the page. to take sort asset there So the some sensitivity

Matthew Breese

Okay.

one just that business? are syndication What's just I scale of want just on loans tied in to an up to that the last fees What's had So portfolio? that. scope quarter. and this get update What the on it? I

John Ciulla

last really capability. distribution balance really years. XXXX markets about for and I six capital We a its sheet -- the earnest Yes. over build syndications have commercial or mean the in so arrangements strong in where talked and knowledge, we this most use relationship, only and we publicly out real underwritings expertise specialty management or or those the see areas industry either sponsor in in you of estate deep sponsor We in group. our so

for not nature You generate syndicating fees a of of participate us higher-quality fees handful to quarter. allow firms. can every tool episodic at probably tell from but we're level the us, a We also to not that higher use only the those of deals

the and with industry of years bigger management good the our relationship use understand one with appropriately for team a been we that last the very had iterations transactions, example, an six again so did lead you successfully this they give I'll level. tool syndication and that. we've arranged couple a it So back to us had we I tell obviously so, that manage asked executed largest we hold did quarter. that was successfully we company We got over the our we this you can quarter a underwritten to leave through the but actually and in well in XX such

and around we of wrote we the million under of million $XX $XXX fee. we're can end it day holding transaction the generate and at So

that hope scale. of gives sort you a So, sense some

Matthew Breese

Understood.

you. I Thank That's all Okay. had.

John Ciulla

Thank you.

Operator

you. Thank

your question Our the of Eric proceed Please with Boenning line from comes with next question. Scattergood. & Zwick

Eric Zwick

guy. Good morning,

John Ciulla

morning. Good

Eric Zwick

remains which quality Overall, too strong, surprising. credit guess it's I not

the and industries its actually Can commercial huge million the concern, were to increased tables, non-accruals quarter, really you or not about whether that estate, year-over-year. you're non-real commonalities? provide the businesses the flat XX drove through pretty some looking Just particular involved in any color that borrowers noticing in those XQ a increase

John Ciulla

same perspective industry the come weakness to commercial they perspective, in that in group. the tell the – are is they credits credits; is of I from out even they underwriting really an don't you two a and anything industry will didn't or those geography Yes. represent it specific perspective, What

to So, terms there, a up but lows of still we as bit, speak value a cycle specific on credits said it underlined in ticked MPAs. relative at an little value, on don't absolute total our you

Eric Zwick

classify to period till that the or Okay. and many despite you and then of that paycheck communicated the that gears maybe bigger one number Chad; do savers expectations for And Americans of that that picture long kind retirement kind participants savings of over paycheck to expansion, continue have as you read of grow having a the economic adequate previously time, we're switching question should are indicate, of investment expansion majority I reports not in. is

on at savers employ with an basis the strategies versus that to and increase savers to can just are target are So, as spenders oppose ability they backdrop how that of you total rate in the to same that you share participants? growing what actual absolute HSA them confident as

Chad Wilkins

of question to the for is need and save and focus is and them to long-term individuals heart that what in working direction. tools of with ability resources healthcare, them to them make its help Great more giving move the – our aware that really

then help and make our and materials consumers, partners we hired plan, We investor front resources a so in plan with like build health help to big difference we're as the the out employers contributions, the continue in in of reach marketing – you have our can calculator, decision. employer build you and make back so haven't build in those health over of out invested their contributions right work resources so tools, saver the plan they we more those the tools. lot grow get of to and pick to portfolio. spender, employees and and deliver and seen and health things percentages right We a to that year the But people out great partners

think able reflected So of moving growth. we're when we – we And I and to -- that's communications we're are year the and compared account to we growth there deploy footings the tools in solid lot our are believe dail. over opportunity as seeing there's those a a

Eric Zwick

color. my questions taking Thanks the appreciate I today. for

Chad Wilkins

Thank you.

Operator

you. Thank

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

Jared Shaw

Hi. morning. Good

John Ciulla

morning. Good

Jared Shaw

big consumer we how and see the on of the consumer expect years Just the sheet side growing consumer over few being or the look as the on – into could push a the side? at make looking the to we of lending side, looking really balance you on out bigger to discussion next a part

John Ciulla

consumer trying streamline us to see you'll the but the and meet sheet strategic see think digital that I are -- customer's you balance the on shift and side, more don't products trajectory truth will the back I our with our not growth priorities by way. more needs the creating is other

back, pretty two equity, which commercial a and the We're in and flipped consumer. banking don't to So, consumer it hopefully balance was and we've We've change ship slow that. mortgage here full two-thirds start business one-third often talk about when the we to loan but home almost consumer see growth. were relative one-third you'll see sheet thirds you'll from commercial. I I higher think arrived much

Jared Shaw

you. Thank Great.

Operator

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

John Ciulla

all in great day. for Webster Thank a you your interest and have

Operator

Thank you. today's teleconference. This concludes

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

Webster Financial (WBS) 18 Oct 182018 Q3 Earnings call transcript