WBS,WBS.PF - Earnings call transcript Q2 2021 | Webster Financial Corporation

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Operator

Good morning and welcome to the Webster Financial Corporation’s Second Quarter 2021 Earnings Call. I will now introduce Webster's Director of Investor Relations, Kristen Manginelli. Please go ahead, ma’am.

Kristen Manginelli

Thank you, Melissa. Good morning and welcome. issued quarter release XXXX we Financial announce morning, second Corporation’s earnings. this a to press Webster Earlier

On the presentation call website. comments posted regarding today, the we will company's on quarter provide second earnings. Investor Today's company's slides been the have Relations some brief

we the review of today's want presentation more uncertainties remind the Please Harbor XXXX, Litigation Act the and remarks, and Private you include in Ciulla. forward-looking and I management of to made Securities information by I'll may our disclaimer and CEO, rules. Harbor language us. the Chairman forward-looking are statements press Safe risks begin that introduce Before affect release for to comments Webster's which within John now and Safe subject may about meaning Reform

John R. Ciulla

brief thank Kristen. also to take business, for I and will our performance credit here presentation morning Thanks happy I second CFO be call. quarter for of the Glenn review will joining and and partnership a we Glenn you and MacInnes end Good will quarter. and provide earnings your Sterling. the update in the our Waterbury are I At with financial, questions. Webster’s on

data uncertainties economic optimistic is While virus we trends social in the related across and some activity about the Northeast to and positive positive remain, remain the our footprint.

take of virus second XXXX but of the half are unexpected to continue the should economic more forecast the prepared in We turn. path activity robust always an

The second this quarter for company on quarter XXXX all fronts. terrific of was a

metrics, strong growth, credit continued solid and expense including was management. performance loan financial Our positive

our review And significant delivering our partnership strategic cost initiatives the making our announcing Sterling fourth done April. since incremental towards integration, well lastly, merger, and the quarter and revenue target. planning, design XXXX very executing organizational in comprehensive savings progress are on has We from

strong business confident Slide metrics the Northeast performance Powerhouse disclosed delivered our Starting X. we banking on franchise. to financial deliver the quarter. previously are on build We We ability in as a in

Excluding originations. positions. grew year loans X% or entered capital to by total with and with loan and XX% the Transactional deposits half we favorable PPP liquidity increasingly continued annualized credit in strong of second and and we total the $X.X billion grow

per QX adjusted from $X.XX ago. Our in $X.XX year were share a up earnings

Our $XX of the merger the CECL quality our supported charges million in economic second perspective related these will allowance pretax charges release quarter favorable initiatives. with performance An outlook during provide remarks. includes million $XX.X Glenn his to on and strategic along additional improved a quarter. asset

equity XX%. adjusted common nearly common return Our equity the tangible second on adjusted XX% and quarter on was was return

Turning million exclude to the quarter. Slide a X. Reported X.X% loans you or loans quarter as decreased PPP loans. XXX forgiveness net activity grew of X.X% result linked in PPP when

almost costs the revenue quarter, we overall. in on we for and trend at pre-pandemic our business XX% than benefit Core by solidly levels. traditional season. remain as from Commercial rebound sectors. X. HSA clients growth sponsor across business like costs lines fundings the driven declined originally from compared activity to home by primarily Slide points deposit all see banking our exclude when return from accounts Retail residential up quarter were and as down XX,XXX XX% interest than bank core million specialty strong were from quarter in totaled note in seven spending industry a we business disciplined on decline primarily trend declined In across to commercial TPA also was in our our slower year. continued we and buying year-over-year growth loans. Consumer This respectively banking those and year-over-year and seven prior year-over-year basis up at Loan of core very X.X banking prior and the and which year, ago. compared geographies. Overall balance originations excluding pre-pandemic X.X% when we a quarter. billion growing rate in as grew returned during a TPA seasonally business. with XXX to year-over-year our activities of quarter respectively. levels loans, in prior ago environment. consumer small million drove all to footings a the Excluding was direct up million supported year mortgage HSA from Retail were positive I'd QX a more we $X accounts growth PPP basis strong growth or to of and entire chosen from disclosed XXX PPP points higher increase deposit commercial year all market QX see Interchange low continued linked quarter expertise X.X% new and quarter originations as XX% quarter. to existing the decline quarter and strong this a X.X% from was anticipated. deposits PPP. points consumer QX a to were to year-over-year X.X% just year from $XXX accounts franchise up begin loans I'm doubled verticals. Overall solidly purchase loan than to now grew quarter. and relationships trends deep commercial and points activity grew business first business basis first and resulting among deposit grew six middle the with driven account has deposit continued basis the X% commercial year-over-year loan continued more of liquidity employer a from XX.X% X.X% X.X% Total for previously We more from billion grew In while HSA ago. loans municipalities This loan excess investment deposits pace with mortgage X.X% and XXX in nine on million to a consumer The sign reflected basis grew healthcare year the of across balances a Deposits openings balances. XX% XX.X%. deposits ago by in costs positive the were up this and

Kopnisky Moving remain to X. scale, shared consumer significant unlock process both and cultures attributes growth and focused continue across the merger. a oriented provide the business an and standpoint. companies Working commercial opportunities in to nature businesses. differentiated build Slide and using Jack diversification, across update the to related closely bankers this I on drives We on result reaffirm the and company’s both integration health call on with our businesses, organizations, to banking I'll distinctive savings, April combination culture revenue together the of the business of we complementary and organization. from elements our

April. begun the and the we the risk focusing integration and plan in managing And robust integration risk a of set have forth by four process. merger executing forward creation on and customer delivering leveraging conversion management Three, engagement and positive We customers guided mentality. first thinking on overarching delivering by on execution One, retention by through by economics continuity on client risk a framework. clients four, mitigation strategic comprehensive principles. by Two, value and

established manage lines planning an work have streams all integration business across named activities to and functions. integration We leaders office and govern and

leveraging successful a are integration. resources appropriate We the ensure internal external to and

including on The approval achieved shown we the to August several naming remains milestones related process on XXth. meeting our will and our Executive Team. regulatory the occur key As track merger on timeline, shareholder

were and we strong can the We a significant combination creating commercial this We're announcement performers is together are about quarter. than and continue I banking progress today differentiated on date. this Sterling transaction to making tell in we Webster close on class in combination excited best expect the that Powerhouse. and team are more early individually to the Webster the fourth you even

revenue there footprint. Glenn We for have to and value geographic clients broader day outlined get across upside With turn and and for tangible legal to begin know financial details. to that and we strong more I'll one it the we're as review customers and shareholders we for over the deliver our the is our material creating

Glenn I. MacInnes

progress aspects performance Slide included will securities or June million Securities linked loan less Average XX XXth. begin on X% at with in than I assets quarter John. on further our I'll the key X. balance our initiatives. quarter. improved growth, focus and declined total on average Thanks strong credit sheet performance, represented of of which strategic XX%

million a we the of million duration in During consumer or loans quarter, purchased increased linked increase on PPP quarter million to in a totaled declined linked years. loans. five X.XX%. XXX or commercial an driven being billion with Fed held million of was excess yield paid approximately Average securities by matured, yield and quarter. by primarily driven a and around with million XXX This X.X XXX of X.X% XXX in called, deposits. weighted down totaled Average liquidity transactional and XX lower Securities X.XX% average

PPP totaled fee totaled forgiveness loans XXX remaining quarter, we accretion In XX During June deferred the million. PPP recognized of the million XX.X million balance at and XXth. deferred on QX

or X%. PPP, consumer loans million loans XX million grew Excluding XXX X.X% while commercial average our or declined

in increase transactional ratio X in resulting was tier and compared points payments, decreased The represented ago. deposit quarter. residential loans from in by by increase PPP XX.XX%, X.X% the commercial to the real XX million loan common products, Average year for partially consumer borrowings PPP increase a originations by QX, June by XX The end or June While total driven deposits grew million period mortgage decline in equity linked growth to forgiveness commercial X.X%. XX% at activity. XXX declined, higher fundings, average XXth, stimulus quarter and was offset from assets was linked driven loans and ratio total and commercial a a grew borrowing's by adjusted estate prior basis reflects loan higher XXth. declined driven CD's. X.X% The from to Average of Round by XX% at quarter customer loans. The deposits growth liquidity. one residential cost deposit The XXX or X.X% transactional government million

weighted be higher, equity tangible grew common. X% year. reported available X% book quarter ratio increased X X.X% basis Slide and Our to XXX value X.XX% loans. XX performance and highlights from adjustments income tangible And to are excluding common linked to and million prior and points will GAAP risk PPP

an points basis reported adjusted statement. PPP XX.X and of we costs per $X.XX equity. XXX,XXX recognized split share, funding fee tax of strategic X to million prior fees linked average NIM in on our basis, declined charges quarter-over-quarter to decline day. adjusted Fed. XXX income PPP income common initiatives. interest from common additional return our million XX.X% a quarter million income equity On after at X and and by common and accretion, million provide Net or the X of a million merger a of by available XX% Slide increased another resulting related tangible liquidity we calendar X.XX% return was lower on from reflecting the During offset XX quarter, to lower declined quarter, in between X the held partially one On

curves prior rates, increase income by by decreased in million service which As million to income XX% derivatives HSA the was net X.X bank. debit fees by This million forward X year, an of million, driven linked rate fees, retail deposit quarter, volume to Compared of adjustments this by lower reduced to offset million due fair primarily by service net income partially and and result market in offset compared XX% by driven and partially X XX transaction of borrowing non-interest XX.X in declined Bank reflects the deposit and fees. banking was grew in lower lower XX million. higher income mortgage customer interest on Non-interest year, of million value interest by interest costs. X.X prior deposit higher in decline

in mortgage non-interest net income offset and on fees, to and non-interest derivatives, occupancy million X.X slide. due reflective was prior expense X.X insurance. continued partially upcoming in million benefits, year, Pre-provision growth expense from revenue. which an year. XXX HSA lower wealth, fair I'll declined prior progress million This pre-provision discuss In value lower revenue Adjusted XXX fee costs, the on -- and non-interest revenue professional million of initiatives, of Versus quarter, banking to and QX million customer addition, on XXX in deposit higher QX. our service prior declined income, million adjustments compensation XXX included by compares strategic

adjusted $X.XX net an XXX an income net share the share, in quarter prior of per XX.X income and or million, XX.X%, $X.XX estimated tax per in decrease discuss of is in a excess provision of basis linked adjusted tax in by million quarter. taxable benefits. CECL the benefit a a XXX I'll a an down in detail. The Our points result from The increase which later was reflects quarter, rate more driven increase

on initiatives last provide me let of our Now, in an progress strategic year. our QX to update announced related

see realized delivery on basis on reduction in to in Slide you deliver X% core As of expect this XX% track on and can be fully expense X, non-interest the remain to a Highlights we real and QX. initiatives organizational estate, launched run include centers, of optimization rate to experience an opening account consumers. and XX streamline digital customers, we execution for consolidation of new corporate our the in actions banking to June our for

coverage reserves X.XX% excluding XX, from X.XX% results a the our In million. reported provision ratio, million quarter, XXX we in under CECL. to of allowance loans allowance million second and total $XX Slide review allowance. of for the to with declined loan to Turning PPP I'll reduction benefit The XX.X the quarter loss

look we recorded in than a recovery built the which and trends. improved related growth, commercial and in the offset As non-performing loans reserves to include million by quality quarter reduction Credit QX a XX net we classifieds. downward million trends to from residential QX, quality macroeconomic was and trend and due improvements commercial at to credit loan $XX the in more

which market of XXX deferrals XX the sponsoring linked quarter upgrades left million reflects forecasts real board, or loans we payment XXX macroeconomic our XX decreased highlights quality our addition, QX. Commercial, from asset residential GDP In housing continued XX and Slide in unemployment, from within of by was points levels the XX% commercial metrics estate, million Slide trends upper in improving largely represented middle Improvement Slide or down recoveries left declines. loans our XX, capital the upper amounts. key deferrals XXX each classified year-end. strong downs capital consumer the Non-performing improve. strong mortgage, housing highlights provide businesses. have by on from XXth, offs specialty million X.X exceeded net and QX to and right the and represented total related and pay Net and reflected On in basis capital commercial X.X% XX% million June At decreased and quarter the across driven from linked driven substantial market. pandemic, Commercial loans. Regulatory which consumer the ratios detail loans. charge XXX by in declined lower million to total prices. levels. all total credit saw

XX.XX% XX.XX% Our million. we well loan approximately XXX which subject average excludes individual exceeds pay-off loan by billion. by tier well capitalized common one than capitalized risk equity to ratio X.X of growth, core activity. to to With tier X.X% more one PPP quarter, the Likewise, exceeds and based be capital respect third funding levels of expect

the We while will the margin expect XXX PPP liquidity million. forgiveness income will driven loan Net flat by of and of excess interest be relatively net be rate approximately interest environment. level

continue our And QX we tax John to reduction. of levels. expect to the to XX% turn X% We be With to cost income I'll XX%. the be will and progress that, expenses make goal expect range back closing non-interest for QX core things over of remarks. XX% to rate in between On on

John R. Ciulla

want Thanks a to maximizing over perseverance, bankers We bankers, our shareholders to franchise of overarching creating delivering to with each long-term customers, time lot, dedication, take objectives committed value. their for and I hard our communities, our profits our minute of work. course, of remain Glenn. and our a our economic thank consistent for and

a program, announcement strategic Our challenges with integration transformation merger. work associated a bankers changing and game organizational the the have of year-long comprehensive pandemic, met of a an and

and competence, continue enthusiasm. from your and has to and Glenn prepared commitment they do, us values of are We deliver all delivered as bankers enabled our professionalism, that based take expected I lot for stakeholders. Their with always our questions. team to our a With to Melissa,

Operator

Thank you. Instructions]. [Operator

question Stephens, first from Please Matthew with Breese question. of Our your comes line with the Inc. proceed

Matthew Breese

Good morning.

John R. Ciulla

Matt. are Hey, you? How

Matthew Breese

Good.

asset portfolio institution to a floors? subject sensitivity little combined a rates combined much want about get floating to could subject and bit will how the to be of sense I for First and talk you question, the really maybe of the

Glenn I. MacInnes

morning, good Matt, Glenn. So it's

basis, loans look the and billion basis you in if would it our sensitivity back total the I to sensitivity XX asset look and the So in similar points. say If XX at on we're at floating see an rising organization, appendix a at of from I XX very standpoint so that back you I and can about periodic combined billion, floating is say look asset -- periodic.

of some have that of loans are floor. there Now those

So you're billion about floors. probably back to X X.X at of billion

you in that to where that back basis subject say would so the point get the piece, which XX And you And be out, first would asset that's that's to really expect once remaining rates. sensitivity. move

on wild betas. the here think card I deposit is

so, historical And there's been around have been XX%. that data

come I has down, down think significantly. has come that

asset If if the X% first that's of a in and you by PPNR a we're look lot XX our our showing moving sensitivity, at deposit increase in reduction basis betas. we driven rates point get

down to you like that's so And to come from XX% see XX%.

be going So rise. we think I to that's begin rates wild see to card the as

lag think it be honest there'll from you. a I and could X% with be be XX%, anywhere to to

Matthew Breese

okay. Great,

and off TPA from balance just than sorry that slower when what's one transition it, what's account is if roll but expected. complete? me, are should party rolling I the third accounts, projection remaining HSA for missed the Next I'm on the that off accounts new there

Glenn I. MacInnes

XXX balance XXX,XXX I in accounts. is we if you I account appendix back account million And remaining balance that have say slides, the the just in like, think I balances. the and on the think

TPA the accounts. back our see and and Page on that balances on look out you'll spiked deck, where So, on go you we you if XX that the

mentioned, and that about was XXX there out accounts. quarter that about the So moved million XX,XXX as was John in

John R. Ciulla

years was of XXXX seems it custodian about transaction, but charter. talked with you And quarter and sort wage of equity Matt the deposit XX just remind third a like their accounts transaction getting to one ago, health based on It that. we our another of work own

really we exit have of get fees don't they so, also quarter leave. during the departure. of the we And control And timing the

in the short-term, there's big So least impact. a at economic not

replace Over ultimately. more core the are to are long term, us, obviously profitable accounts with those we will that that

Matthew Breese

quarter. driver one came point would and you that was fee quarter-over-quarter, bit anything What for noticed that there X.X just time then and was last income, XX.X in the last out? versus income OK, other I down decrease a million quite million about fee one in of the me.

Glenn I. MacInnes

Yeah, the of our and big driver a forward LIBOR. on so that a derivative that lower book, on by was evaluation was customer curve driven

So increases. what also the so happens portion is increase that the swap credit customer assets that of and

Now, will that costs adjustment. an point that's are out all evaluation I there collateralize.

risk necessarily the more a environment. So it's of it's not a rate and function of

some around as so that, see have volatility much rates You'll quarter-over-quarter. jumped in particularly

John R. Ciulla

kind Matt that we of the question, quarter operating fees income, And in because had fees, adjustment valuation that's a swap syndication But and between core flat really and delta of were increase a is last this. our what in our retail general lower kind slight good non-interest deposit caused fees. and slightly

Matthew Breese

I That's I questions. Got it, you. all appreciate had, okay. you taking Thank my

John R. Ciulla

Thank great you. a Have Matt. day,

Operator

Thank you.

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

David Chiaverini

question. Thanks taking good Hi, morning. for the

given versus you the and was a banking guys loan the pushing function rebound it is bit in loan growth wanted to more is the I the to So it envelope how curious see from quarter I of increased about a touch of growth, environment much for loan was of aggressive, the here difficult borrowers industry? how the and second kind on demand great being

John R. Ciulla

others of really away, from much. the is envelope areas to like Well, do the competitive haven't But Commercial ass which I all asset price our Banking, moved are really lending, Head a wise a to the will I say transactions, won't that and but far we're have environment question, structure real is answer estate, pricing price Talking good. I David, obviously, extremely competitive. good or on too pushing not it. structures commercial perspective. in particularly based

or and And calls, really But, pay pleased the year on times with I'm has downs, and respect And said offs in does we're depends the proud quarter, just on our million eight XX% an This I've annualized as originations. seven these growth happens not it posted that growth. quarterly bank make pay one what with to years over year will say basis, a a out. organic I loan on quarter year. last that commercial loan probably

So our had in of really mentioned, as and kind was finance good quarter and did I market offices well public middle strong this market, in which traditional sector really our geographic originations. a includes particular, middle that sign

like healthcare technology, sponsoring grow continue of pandemic, demand and the in obviously itself the technology us have verticals businesses throughout quite specialty significant in helped Our and which frankly, did, continue healthcare, select loan. and to to

term tons I've equipment regions, quarter just to of nice we fit that levers originations the estate, remain the So generating our verticals, as times, our banking. said we at many They top across asset growth risk returns. lending, of commercial this specialty credit loan model. our fit pull good we adjusted geographical They long happen keep confident model finance, can business over that really have based have real rates. market [indiscernible] see our And the to we and

David Chiaverini

pipelines year pipelines quarter you ago pretty comment today? it today strong. clearly a a you But the well versus, about are are bad. And like ago say, pretty and pipelines talk pipelines on were sounds Can where can the

John R. Ciulla

ago. I I always particularly Yeah, Again, pipelines businesses, in pipeline transactional our than last But origination is up. are was was a it our drive stronger I'm perspective, from stronger seems prepayments year ultimate can than an stated of ones, will it hesitant mean, key growth. that our across it all and say because businesses quarter the like

David Chiaverini

rates lines, on a is utilization today where ago? can versus on the you rate quarter revolving discuss And utilization then lastly,

John R. Ciulla

period rates the where still not there. pre-pandemic even I a up, Utilization I'm is are but victory will, I and we've first stabilization rates. stable it's and significant seen to Yeah, tick think below going maybe this quarter-to-quarter declare

the system chain maybe as supply liquidity to to inventory in and do has think people's certain sectors. I imbalances well so in with build as inability much that

ABL I up we've a a at to So look our across average levels. to still say if traditional but stabilization revolvers committed XX% I in below on utilization, X% would seen in or commercial, good slight pre-pandemic tick

David Chiaverini

such with utilization great, had that's rates. growth impressive good stable That's that you

nice So that'll forward. tailwind be a going

Okay, all Thanks had. that's I very much.

John R. Ciulla

for And you, Thank comments. the thanks David.

Operator

Thank you.

line comes McGratty with Chris question Bruyette next with Our Woods. of Keefe, & your proceed from question. Please

Christopher McGratty

Hey, good morning.

John R. Ciulla

Hey, Chris.

Christopher McGratty

Kind of were pretty a the question Sterling sheet into there that did morning I for call they given on there pruning might merger? in is some this ripe high that asked the anything balance Is the liquidity you sold loans close. kind deemed was risk your is on high, the be of anything consummate market before the

John R. Ciulla

we would want that think in that there's nothing book our Strategically really sell right we now. I say to no. would

have eyeing right off were that we have consumer sheet drag no non-performing didn't in and balance loans pockets, carry thought we a are them, right we're obviously, the We because and times now Chris, at workout. they're economics sales loan a our But sold to where there in. longer-term

Christopher McGratty

Okay.

John R. Ciulla

this to that pretty out remarkable first wanted a I note quarter pandemic. Great before net believe since is we which I I Recession, interestingly, considering of because our the get in recovery was just came this

goes government what stimulus liquidity the in is But I we system by even were surprised show much how done. outcome. that think and it has to

Christopher McGratty

Okay, that's great development. a

about I just company. pretty call, merger forma of opportunities pro think confident you were growth the the the On

XX versus certainly growth? feeling intermediate near-term loan quarter and I both that right credit better would assume days give that Is term you're to ago This guess, that. about, today it to

John R. Ciulla

with fact in I confident, you say, as a was of was we've not kind individually as talked And as system. let's feeling combined head loan XXXX, our expectations after this to am in higher the call, of growth into X% virus. always basis, and pretty of jointly the how And and Chris. peers. Obviously, and going the still our talked reported X%. to real X%, I could we loan view think couple feel that half we in much because growth to overall. kind growth absent of second muffled X% loan liquidity confident about some talk we Yeah, year, XXXX sure, growth us be the a in I on still XX% for Delta what's that change heard And given X% about economy, of confident, I'm XXXX our of on the that

on think this confidence hit in XXXX XXXX a combined ability to as our gave I quarter certainly numbers we additional us those forward basis. in and move

Christopher McGratty

to great quickly that's pay? make is I comment, that stability for understand GAAP net real the triple that guidance color. -- just quarter, the I Okay, sure or wanted the is income for excluding the interest

John R. Ciulla

No, that's GAAP.

So XXX.X, the range. about same

Christopher McGratty

Okay. missed and contribution -- what the the in was quarter the I left? And PPP, what's

John R. Ciulla

the to forgiveness are a would for is look down third, and million, PPP standpoint. from a prior it a in remaining that XX And quarters a contributed So fees. XX third, the income in quarter, I quarter interest we net about third XX.X say, which if have from expecting, million is we to million about you three over next

the XX a about three in quarter million next So quarters.

Christopher McGratty

the kind than And thought, expenses came expenses down to of X% that XX% that fees, the and the is optimized XXX, then the that the implies? I pace -- quicker fully lastly, XXX, the range the like this

John R. Ciulla

as a get on to our down I very that showed rate. we to mean and objective our core we No, confident slide, we is expense XXX feel on run

And that second of so come along there's the off will more that quarter.

Christopher McGratty

trying I'm fees just that And to make for adjusting I not, for the sure market were right quarter? the or to mark get the

John R. Ciulla

fees, The the not understand I I'm question. sure

Christopher McGratty

the quarter? forward your income going stable think of in kind I comment, fee wasn’t third

John R. Ciulla

curve -- that assuming income so evaluations and forward that's Stable case the of fee yeah. I'm in credit stay the Yeah, about stable.

Christopher McGratty

Got it. Thanks lot clarification. a the for

John R. Ciulla

Chris. you Thank

Operator

Thank you.

with Please line Brock from of with question Vandervliet your UBS. proceed next Our comes question.

Brock Vandervliet

But of runoff growth areas anything us dynamics Sterling terms rate combined? the of kind us question. balance picture, for where less bit Sterling, bigger all think Maybe those for call in is here. familiar your in of that help you is kind dimension in good morning. little the terms of good there the with Hey, a Thanks out are headed of of of would sense got that we've I certain that might sheet a

John R. Ciulla

question. operates that, just that the now Brock continue this is from And that and Strategically has we Sterling we would think lines thanks verticals say announcement it the grow. the right are since business you. to in right first since to confirmed to now, no. all will good have done look work for I things hear of and I that the diligence after

and I league We'll our Jack risk and not of helpful. and matter is attractive Over Glenn the Because to levers have during think we you on position and verticals geographies we're the and marketplace. think of credit our you've all perspective, returns. of oftentimes, may you having me which time. think, we a We'll you don't that right the can are asset look verticals. than press look as opportunities in at continue we to or look heard in know me management from in as and competitive one say, on any all grow. we will in classes in dynamics. vertical, at risk adjusted appropriate Luis industries, whether which different with look over probably fewer framework really not a be the have press price period tables long-term, now, and But don't at pricing more at XX to We'll levers going can credit And or and certain quality,

pro verticals and between together, say at of So be banks. will put forma all executing the in least the that you geographies would aggregated two are these two I initially when banks

Brock Vandervliet

it. Got

sense think the And got trends. of loan good I a we've Okay.

characterize deposits, he the in would terms would how anything breaking funding the here to of of On in liquidity or you period, average of end is you a trends, highlight that? wave process side terms in

John R. Ciulla

yet. break it seen haven't We

So, commercial the medium season. collection way significantly average term long of municipal peak their seen They're balances, haven't consumer average and the which trends. balances, by tax even all average above average balances, term

both down some draw So, is purchasing for they couple that of to before our another expectation more and full as be businesses activity their see still move quarters more activity this of on dealing towards economic we'll investment. with start liquidity people and individuals and kind we

Brock Vandervliet

for Okay, great. Thanks color. the

John R. Ciulla

Brock. Thanks,

Operator

Thank you.

your question. with with Jared Fargo, of Our comes proceed next Wells line question from Shaw please

Unidentified Analyst

This for morning. Timor is [ph] Brazil good Jared. Hi, on

John R. Ciulla

Hey Timor.

Unidentified Analyst

that maybe guys, Hey following just last up question. on

both higher sheet? loan this borrowing balance to quarter, your thinking your that as significant maintaining borrowers maybe that growth a you're excess have more the getting X% about borrowing to the that loan just working sheet through sheet out balance And and borrowers and guide really normalized the there, at in of their the liquidity as a deposits longer the on again, saw don't liquidity or level? on liquidity first are balance a matter these XX% of then growth are own of what balance before on sheet, base term addition borrowers your you is to as balance extent into levels So borrower's

John R. Ciulla

give They're a great liquidity. commercial a sure dealing real see lots detailed for with using that but can really sponsor I'm transactions Most the the question, response. mostly, use not that That's or dynamic, origination because I specialty, you've really I'm estate companies. instance not are don't and little in you acquire to regulatory And they're you growth of to of Jared. leveraged, going got l not debt leveraged, deal and

their when of or cash. that there's they offset, borrow borrowing or out their immediate And in cash comes so cash lieu they're their not deploying

I as what and I them get what utilization, see said some But their deployment happen and don't draw the then time we to draw dynamic borrowers think deployment loan in saw deposit capital. kind seeing think, commercial demand return you companies their you on fulsome is of will start higher and banking start cash self, account on there's more credit, you'll period debt of I to down they'll the liquidity. draw see where the does we've of would lines on activities to this and quarter, it's cases balances, of them you're to of in its all have lower an capital. not of That to downs loans. on interplay. of down where draw When our offsetting higher kind say exactly lines But business they until balances you our strategic lower or balances, their term going growth is a hypothesis start see be said, which of just along some

Unidentified Analyst

that maybe is looking good moving that's and along. integration then at Sterling And Okay, process color. the how

there technology whether sheet potential earlier down Is b) of the process the close? balance I about on or to advance past. deeper in closing it's broken deeper seemed to As how getting again cost the are realistic, to liquidity I corporate to products the upsize whether kind a) the feeling facilities and guess, in question, and of office closer is on an opportunity, the into you opportunity back on do into transaction. based I maybe it's it you're deal still c) that, getting integration deal the maybe prior back going and guess, a an saves think you'd there side that something to is

John R. Ciulla

on expense. would with I activity, guidance activity product say between moves your any And first. now in of or answering I our kind and terms comment question stick close. sheet would balance wouldn't Yeah, latter initial of I

both there I more But both get kind integration right with we they markets continue of about the think going saves the cost the I talked April long this amount is people for we what like and does save to appropriate remember net level you, about some to out give on a are functions flexibility us as are we're think the cost the the and and of we that's to going put XXth. investment efficient. I that which that be that that over efficiency I And, we budgets that think And to is in tell together. mentioned banks talked into Jack to line amount, together. appropriate I term leverage two handing combination well think opportunities the that can continued hit and

Unidentified Analyst

of question the me, the related last then provide for you just strategic modeling adjustments, Okay, just and XX.X the that question, and merger can housing? initiative million line that's items

Glenn I. MacInnes

in Glenn, is that primarily fees. in So primarily all it's professional is Timor, professional fees. it

other to it's I smaller spread think relative piece out but the in line, more initiative the and amounts. lease is that's

is XX part professional of that in biggest million fees. the So

Unidentified Analyst

Thank it. got Okay, you. Nice quarter.

John R. Ciulla

Sure. Thank you.

Operator

Thank I'll turn the back for you. Ladies final and gentlemen, that concludes Ciulla floor to any our session. Mr. comments. question-and-answer

John R. Ciulla

appreciate much Thank you great Have today. the We summer. very everyone joining rest of a Melissa.

Operator

you. This today's Thank conference. concludes

this at for your may time. your lines you Thank participation. You disconnect

Webster Financial (WBS) 22 Jul 212021 Q2 Earnings call transcript