8-K
WEBSTER FINANCIAL CORP (WBS)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________
FORM 8-K
_________________________
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): January 17, 2025
_________________________
WEBSTER FINANCIAL CORPORATION
_________________________________________
(Exact name of registrant as specified in its charter)
| Delaware | 001-31486 | 06-1187536 |
|---|---|---|
| (State or other jurisdiction<br>of incorporation) | (Commission<br>File Number) | (IRS Employer<br>Identification No.) |
200 Elm Street, Stamford, Connecticut 6902
(Address and zip code of principal executive offices)
203-578-2202
(Registrant’s telephone number, including area code)
______________________________________________________________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||
|---|---|---|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||
| --- | --- | ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
| --- | --- | ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |
| --- | --- |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbols | Name of each exchange on which registered |
|---|---|---|
| Common Stock, par value $0.01 per share | WBS | New York Stock Exchange |
| Depositary Shares, each representing 1/1000th interest in a share of 5.25% Series F Non-Cumulative Perpetual Preferred Stock | WBS-PrF | New York Stock Exchange |
| Depositary Shares, each representing 1/40th interest in a share of 6.50% Series G Non-Cumulative Perpetual Preferred Stock | WBS-PrG | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 2.02 | Results of Operations and Financial Condition |
|---|
On January 17, 2025, Webster Financial Corporation (the Company) issued a press release reporting its results of operations for the quarter ended December 31, 2024. That press release is attached hereto as Exhibit 99.1.
Information contained herein, including Exhibit 99.1, shall not be deemed filed for the purposes of the Securities Exchange Act of 1934, nor shall such information or Exhibit be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such a filing.
| Item 7.01 | Regulation FD Disclosure |
|---|
On January 17, 2025, the Company will hold a conference call to discuss its financial results for the quarter ended December 31, 2024, including the press release and other matters relating to the Company. Presentation slides and a link to the live webcast will be available via the Company's Investor Relations website at investors.websterbank.com.
| Item 9.01 | Financial Statements and Exhibits |
|---|
(d)Exhibits.
| Exhibit<br>Number | Description |
|---|---|
| 99.1 | Press release dated January 17, 2025 |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| WEBSTER FINANCIAL CORPORATION | |
|---|---|
| (Registrant) | |
| Date: January 17, 2025 | /s/ Albert J. Wang |
| Albert J. Wang | |
| Executive Vice President and Chief Accounting Officer |
Document
Exhibit 99.1
WEBSTER REPORTS
FOURTH QUARTER 2024 EPS OF $1.01; ADJUSTED EPS OF $1.43
STAMFORD, Conn., January 17, 2025 - Webster Financial Corporation (“Webster”) (NYSE: WBS), the holding company for Webster Bank, N.A., today announced net income available to common stockholders of $173.6 million, or $1.01 per diluted share, for the quarter ended December 31, 2024, compared to $181.2 million, or $1.05 per diluted share, for the quarter ended December 31, 2023.
Fourth quarter 2024 results include securities repositioning losses of $56.9 million, pre-tax, and a deferred tax asset valuation adjustment of $29.4 million. Excluding these items, adjusted earnings per diluted share would have been $1.431 for the quarter ended December 31, 2024, compared to $1.46 for the quarter ended December 31, 2023.
“Our financial performance for the quarter and full year 2024 illustrate the power and resiliency of Webster’s business model” said John R. Ciulla, chairman and chief executive officer. “At the same time, we are thoughtfully investing to facilitate future growth.”
Highlights for the fourth quarter of 2024:
•Revenue of $661.0 million.
•Period end loans and leases balance of $52.5 billion, up $0.6 billion or 1.1 percent from prior quarter.
•Period end deposits balance of $64.8 billion, up $0.2 billion or 0.4 percent from prior quarter.
•Provision for credit losses of $63.5 million.
•Return on average assets of 0.91 percent; adjusted 1.27 percent1.
•Return on average tangible common equity of 12.73 percent1; adjusted 17.73 percent1.
•Net interest margin of 3.39 percent, up 3 basis points from prior quarter.
•Common equity tier 1 ratio of 11.50%2.
•Efficiency ratio of 44.80 percent1.
•Tangible common equity ratio of 7.45 percent1.
“The actions we took in 2024 to enhance Webster’s capital and liquidity, unique funding attributes and investments in people and technology fortify the base for our company’s growth” said Neal Holland, executive vice president and chief financial officer.
1 See “Non-GAAP to GAAP Reconciliations” section beginning on page 19.
2 Presented as preliminary for December 31, 2024.
Consolidated financial performance:
Quarterly net interest income compared to the fourth quarter of 2023:
•Net interest income was $608.5 million compared to $571.0 million.
•Net interest margin was 3.39 percent compared to 3.42 percent. The yield on interest-earning assets decreased by 1 basis point, and the cost of interest-bearing liabilities remained flat.
•Average interest-earning assets totaled $71.9 billion and increased by $4.4 billion, or 6.4 percent.
•Average loans and leases totaled $52.3 billion and increased by $1.9 billion, or 3.8 percent.
•Average deposits totaled $64.8 billion and increased by $4.8 billion, or 8.1 percent.
Quarterly provision for credit losses:
•The provision for credit losses was $63.5 million in the quarter, contributing to a $1.8 million increase in the allowance for credit losses on loans and leases from the prior quarter. The provision for credit losses was $54.0 million in the prior quarter, and $36.0 million a year ago.
•Net charge-offs were $60.9 million, compared to $35.4 million in the prior quarter, and $34.0 million a year ago. The ratio of net charge-offs to average loans and leases was 0.47 percent, compared to 0.27 percent in both the prior quarter and a year ago.
•The allowance for credit losses on loans and leases represented 1.31 percent of total loans and leases, compared to 1.32 percent at September 30, 2024, and 1.25 percent at December 31, 2023. The allowance represented 149 percent of nonperforming loans and leases, compared to 162 percent at September 30, 2024, and 303 percent at December 31, 2023.
Quarterly non-interest income compared to the fourth quarter of 2023:
•Total non-interest income was $52.5 million compared to $63.8 million, a decrease of $11.3 million. Total non-interest income includes $56.9 million and $16.8 million of losses on sales of investment securities for the fourth quarter of 2024 and 2023, respectively. Excluding these items, total non-interest income increased $28.8 million. The increase is primarily attributable to direct investment gains, a credit valuation adjustment, and the addition of Ametros.
Quarterly non-interest expense compared to the fourth quarter of 2023:
•Total non-interest expense was $340.4 million compared to $377.2 million, a decrease of $36.8 million. In the fourth quarter of 2023, total non-interest expense included $47.2 million related to the FDIC special assessment and a net $30.7 million of merger related expenses. Excluding those charges, total non-interest expense increased $41.0 million. The increase is primarily attributable to the addition of Ametros and the related intangible amortization, higher performance-based incentives, investments in human capital and technology, and a contribution to the Webster Charitable Foundation.
Quarterly income taxes compared to the fourth quarter of 2023:
•Income tax expense was $79.3 million compared to $36.2 million, and the effective tax rate was 30.9 percent compared to 16.3 percent. The higher tax expense and tax rate in the current period reflects a $29.4 million deferred tax asset valuation adjustment related to state and local net operating loss carryforwards, which impacted the rate by 11.4 percentage points. The lower effective tax rate in the period a year ago reflected the recognition of a discrete tax benefit attributable to tax return true-up adjustments, along with a lower level of pre-tax income in that period.
Investment securities:
•Total investment securities, net were $17.5 billion, compared to $17.2 billion at September 30, 2024, and $16.0 billion at December 31, 2023. The carrying value of the available-for-sale portfolio included $712.9 million of net unrealized losses, compared to $486.1 million at September 30, 2024, and $708.7 million at December 31, 2023. The carrying value of the held-to-maturity portfolio does not reflect $991.2 million of net unrealized losses, compared to $677.0 million at September 30, 2024, and $810.2 million at December 31, 2023.
Loans and leases:
•Total loans and leases were $52.5 billion, compared to $51.9 billion at September 30, 2024, and $50.7 billion at December 31, 2023. Compared to September 30, 2024, commercial loans and leases increased by $556.0 million, commercial real estate loans decreased by $300.3 million, residential mortgages increased by $277.1 million, and consumer loans increased by $25.5 million. Compared to a year ago, commercial loans and leases increased by $904.9 million, commercial real estate loans increased by $233.3 million, residential mortgages increased by $625.7 million, and consumer loans increased by $15.2 million.
•Loan originations for the portfolio were $3.4 billion, compared to $2.8 billion in the prior quarter, and $3.2 billion a year ago.
Asset quality:
•Total nonperforming loans and leases were $461.3 million, or 0.88 percent of total loans and leases, compared to $425.6 million, or 0.82 percent of total loans and leases, at September 30, 2024, and $209.5 million, or 0.41 percent of total loans and leases, at December 31, 2023.
•Past due loans and leases were $88.6 million, compared to $108.9 million at September 30, 2024, and $46.6 million at December 31, 2023. The decrease from prior quarter is driven primarily by commercial non-mortgage and residential mortgages, partially offset by commercial real estate.
Deposits and borrowings:
•Total deposits were $64.8 billion, compared to $64.5 billion at September 30, 2024, and $60.8 billion at December 31, 2023. During the quarter, seasonal declines in municipal deposits of $1.1 million were offset by short-duration time deposits. Core deposits to total deposits1 were 87.3 percent, compared to 88.5 percent at September 30, 2024, and 86.1 percent at December 31, 2023. The loan to deposit ratio was 81.1 percent, compared to 80.5 percent at September 30, 2024, and 83.5 percent at December 31, 2023.
•Total borrowings were $3.4 billion, compared to $4.1 billion at September 30, 2024, and $3.9 billion at December 31, 2023.
Capital:
•The return on average common stockholders’ equity and the return on average tangible common stockholders’ equity1 were 7.80 percent and 12.73 percent, respectively, compared to 8.67 percent and 14.29 percent, respectively, in the third quarter of 2024, and 9.03 percent and 14.49 percent, respectively, in the fourth quarter of 2023.
•The adjusted return on average tangible common stockholders’ equity1 was 17.73 percent, compared to 17.28 percent in the third quarter of 2024, and 19.83 percent in the fourth quarter of 2023.
•The tangible equity1 and tangible common equity1 ratios were 7.82 percent and 7.45 percent, respectively, compared to 7.85 percent and 7.48 percent, respectively, at September 30, 2024, and 8.12 percent and 7.73 percent, respectively, at December 31, 2023. The common equity tier 12 ratio was 11.50 percent, compared to 11.25 percent at September 30, 2024, and 11.11 percent at December 31, 2023.
•Book value and tangible book value per common share1 were $51.63 and $32.95, respectively, compared to $52.00 and $33.26, respectively, at September 30, 2024, and $48.87 and $32.39, respectively, at December 31, 2023.
1 See “Non-GAAP to GAAP Reconciliations” section beginning on page 19.
2 Presented as preliminary for December 31, 2024, and actual for the remaining periods.
Reportable segments:
Commercial Banking
Webster’s Commercial Banking segment serves businesses that have more than $10 million of revenue through its asset based lending, commercial services, commercial real estate, middle market, private banking, sponsor and specialty, verticals, regional banking, and treasury management business units. At December 31, 2024, Commercial Banking had $40.6 billion in loans and leases and $16.3 billion in deposits, as well as a combined $3.0 billion in assets under administration and management.
Commercial Banking Operating Results:
| Three months ended December 31, | |||||
| (In thousands) | 2024 | 2023 | |||
| Net interest income | $330,392 | 351,942 | (6.1) | % | |
| Non-interest income | 41,026 | 32,711 | 25.4 | ||
| Operating revenue | 371,418 | 384,653 | (3.4) | ||
| Non-interest expense | 106,762 | 97,299 | (9.7) | ||
| Pre-tax, pre-provision net revenue | $264,656 | 287,354 | (7.9) | ||
| At December 31, | |||||
| (In millions) | 2024 | 2023 | |||
| Loans and leases | $40,616 | 39,481 | 2.9 | % | |
| Deposits | 16,252 | 16,054 | 1.2 | ||
| AUA / AUM (off balance sheet) | 2,966 | 2,911 | 1.9 |
All values are in US Dollars.
Pre-tax, pre-provision net revenue decreased $22.7 million, to $264.7 million, in the quarter as compared to prior year. Net interest income decreased $21.5 million, to $330.4 million, primarily driven by lower loan yields coupled with lower deposit interest spread. Non-interest income increased $8.3 million, to $41.0 million, primarily driven by direct investment gains, higher deposit and cash management fees, and increased fees from trust and investment services, partially offset by lower fees from client hedging activities and lower loan servicing fees. Non-interest expense increased $9.5 million, to $106.8 million, primarily driven by continued investments in technology and increased compensation-related expenses.
Healthcare Financial Services
Webster’s Healthcare Financial Services segment is comprised of HSA Bank and Ametros, which was acquired in the first quarter of 2024. This segment offers consumer-directed healthcare solutions that include health savings accounts, health reimbursement arrangements, administration of medical insurance claim settlements, flexible spending accounts, and commuter benefits. Accounts are distributed nationwide directly to employers and individual consumers, as well as through national and regional insurance carriers, benefit consultants, and financial advisors. At December 31, 2024, Healthcare Financial Services had $15.3 billion in total footings comprising $10.0 billion in deposits and $5.3 billion in assets under administration through linked investment accounts.
Healthcare Financial Services Operating Results:
| Three months ended December 31, | |||||
| (In thousands) | 2024 | 2023 | |||
| Net interest income | $95,185 | 78,036 | 22.0 | % | |
| Non-interest income | 25,140 | 20,224 | 24.3 | ||
| Operating revenue | 120,325 | 98,260 | 22.5 | ||
| Non-interest expense | 56,672 | 41,947 | (35.1) | ||
| Pre-tax, net revenue | $63,653 | 56,313 | 13.0 | ||
| At December 31, | |||||
| (Dollars in millions) | 2024 | 2023 | |||
| Number of accounts (thousands) | 3,326 | 3,184 | 4.5 | % | |
| Deposits | $9,967 | 8,288 | 20.3 | ||
| Linked investment accounts (off balance sheet) | 5,322 | 4,642 | 14.6 | ||
| Total footings | $15,289 | 12,930 | 18.2 |
All values are in US Dollars.
Pre-tax net revenue increased $7.3 million, to $63.7 million, in the quarter as compared to prior year. Net interest income increased $17.1 million, to $95.2 million, primarily due to $12.0 million from Ametros coupled with deposit growth at HSA Bank. Non-interest income increased $4.9 million, to $25.1 million, primarily due to $6.1 million from Ametros, offset by a decrease of $1.2 million from HSA Bank. The decrease in HSA Bank was the net result of lower customer account fees partially offset by higher interchange revenue. Non-interest expense increased $14.7 million, to $56.7 million, primarily due to $11.4 million from Ametros. HSA Bank expenses were $3.3 million higher due to higher service contract expense related to account growth and support costs.
Consumer Banking
Webster’s Consumer Banking segment serves consumer and business banking customers primarily throughout southern New England and the New York metro and suburban markets. Consumer Banking is comprised of the residential and consumer lending, private client, and business banking business units, as well as a distribution network consisting of 196 banking centers and 347 ATMs, a customer care center, and a full range of digital and mobile-based banking services. Additionally, Webster Investment Services provides investment services to consumers and small business owners within Webster’s targeted markets and retail footprint. At December 31, 2024, Consumer Banking had $11.9 billion in loans and $27.3 billion in deposits, as well as $8.0 billion in assets under administration.
Consumer Banking Operating Results:
| Three months ended December 31, | |||||
|---|---|---|---|---|---|
| (In thousands) | 2024 | 2023 | |||
| Net interest income | $202,165 | 213,913 | (5.5) | % | |
| Non-interest income | 26,969 | 27,426 | (1.7) | ||
| Operating revenue | 229,134 | 241,339 | (5.1) | ||
| Non-interest expense | 119,123 | 116,413 | (2.3) | ||
| Pre-tax, pre-provision net revenue | $110,011 | 124,926 | (11.9) | ||
| At December 31, | |||||
| (In millions) | 2024 | 2023 | |||
| Loans | $11,886 | 11,235 | 5.8 | % | |
| Deposits | 27,333 | 26,252 | 4.1 | ||
| AUA (off balance sheet) | 7,997 | 7,876 | 1.5 |
All values are in US Dollars.
Pre-tax, pre-provision net revenue decreased $14.9 million, to $110.0 million, in the quarter as compared to prior year. Net interest income decreased $11.7 million, to $202.2 million, primarily driven by higher rates paid on deposits, partially offset by higher loan yields, as well as loan and deposit balance growth. Non-interest income decreased $0.5 million, to $27.0 million, primarily driven by lower loan servicing fees and a decrease in gains on sales of loans, partially offset by increased deposit related fees and higher miscellaneous fee income. Non-interest expense increased $2.7 million, to $119.1 million, primarily driven by continued investments in technology, partially offset by lower overall operating expenses.
***
Webster Financial Corporation (NYSE:WBS) is the holding company for Webster Bank, N.A. Webster is a leading commercial bank in the Northeast that provides a wide range of digital and traditional financial solutions across three differentiated lines of business: Commercial Banking, Consumer Banking, and Healthcare Financial Services, one of the country’s largest providers of employee benefit solutions and administrator of medical insurance claim settlements. Headquartered in Stamford, CT, Webster is a values-driven organization with $79 billion in assets. Its core footprint spans the northeastern U.S. from New York to Massachusetts, with certain businesses operating in extended geographies. Webster Bank is a member of the FDIC and an equal housing lender. For more information about Webster, including past press releases and the latest annual report, visit the Webster website at www.websterbank.com.
Conference Call
A conference call covering Webster’s fourth quarter 2024 earnings announcement will be held today, Friday, January 17, 2025, at 9:00 a.m. Eastern Time. To listen to the live call, please dial 888-330-2446, or 240-789-2732 for international callers. The passcode is 8607257. The webcast, along with related slides, will be available via Webster’s Investor Relations website at investors.websterbank.com. A replay of the conference call will be available for one week via the website listed above, beginning at approximately 12:00 noon (Eastern Time) on January 17, 2025. To access the replay, dial 800-770-2030, or 609-800-9909 for international callers. The replay conference ID number is 8607257.
Media Contact
Alice Ferreira, 203-578-2610
acferreira@websterbank.com
Investor Contact
Emlen Harmon, 212-309-7646
eharmon@websterbank.com
Forward-Looking Statements
This release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as “believes,” “anticipates,” “expects,” “intends,” “targeted,” “continue,” “remain,” “will,” “should,” “may,” “plans,” “estimates,” and similar references to future periods. However, these words are not the exclusive means of identifying such statements. Examples of forward-looking statements include but are not limited to: projections of revenues, expenses, expense savings, income or loss, earnings or loss per share, and other financial items; statements of plans, objectives, and expectations of Webster or its management or Board of Directors; statements of future economic performance; and statements of assumptions underlying such statements. Forward-looking statements are based on Webster’s current expectations and assumptions regarding its business, the economy, and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict. Webster’s actual results may differ materially from those contemplated by the forward-looking statements, which are neither statements of historical fact nor guarantees or assurances of future performance. Factors that could cause Webster’s actual results to differ from those discussed in any forward-looking statements include, but are not limited to: Webster’s ability to successfully execute its business plan and strategic initiatives, and manage any risks or uncertainties; continued regulatory changes or other mitigation efforts taken by government agencies in response to volatility in the banking industry; volatility in Webster’s stock price due to investor sentiment and perception of the banking industry; local, regional, national, and international economic conditions, and the impact they may have on Webster or its customers; volatility and disruption in national and international financial markets, including as a result of geopolitical conflict; the impact of unrealized losses in Webster’s available-for-sale securities portfolio; changes in laws and regulations, or existing laws and regulations that Webster becomes subject to, including those concerning banking, taxes, dividends, securities, insurance, cybersecurity, and healthcare administration, with which Webster and its subsidiaries must comply; adverse conditions in the securities markets that could lead to impairment in the value of Webster’s securities portfolio; inflation, monetary fluctuations, and changes in interest rates, including the impact of such changes on economic conditions, customer behavior, funding costs, and Webster’s loans and leases and securities portfolios; possible changes in governmental monetary and fiscal policies, including, but not limited to, the Federal Reserve policies in connection with continued inflationary pressures; the effects of any U.S. federal government shutdown; the impact of any new regulatory, policy, or enforcement developments resulting from the change in U.S. presidential administration; the timely development and acceptance of new products and services, and the perceived value of those products and services by customers; changes in deposit flows, consumer spending, borrowings, and savings habits; Webster’s ability to implement new technologies and maintain secure and reliable information and technology systems; the effects of any cybersecurity threats, attacks or disruptions, fraudulent activity, or other data breaches or security events, including those involving Webster’s third-party vendors and service providers; performance by Webster’s counterparties and third-party vendors; Webster’s ability to increase market share and control expenses; changes in the competitive environment among banks, financial holding companies, and other traditional and non-traditional financial service providers; Webster’s ability to maintain adequate sources of funding and liquidity; Webster’s ability to attract, develop, motivate, and retain skilled employees; changes in loan demand or real estate values; changes in the mix of loan geographies, sectors, or types and the level of nonperforming assets, charge-offs, and delinquencies; changes in our estimates of current expected credit losses based upon periodic review under relevant regulatory and accounting requirements; the effect of changes in accounting policies and practices applicable to Webster, including the impacts of recently adopted accounting guidance; legal and regulatory developments, including any due to judicial decisions, the resolution of legal proceedings or regulatory or other governmental inquiries, and the results of regulatory examinations or reviews; Webster’s ability to navigate differing environmental, social, governmental, and sustainability concerns among its stakeholders and other activists; Webster’s ability to assess and monitor the effect of artificial intelligence on its business and operations; the occurrence of natural disasters, severe weather events, and public health crises, and any governmental or societal responses thereto; and the other factors that are described in Webster’s Annual Report on Form 10-K for the year ended December 31, 2023, and subsequent filings with the U.S. Securities and Exchange Commission. Any forward-looking statement made by Webster in this release speaks only as of the date on which it is made. Factors or events that could cause Webster’s actual results to differ may emerge from time to time, and it is not possible for Webster to predict all of them. Webster undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.
Non-GAAP Financial Measures
In addition to results presented in accordance with GAAP, this press release contains certain non-GAAP financial measures. A reconciliation of net income, return on average tangible common stockholders’ equity, and other performance ratios, in each case as adjusted, is included in the accompanying selected financial highlights table.
Webster believes that providing certain non-GAAP financial measures provides investors with information useful in understanding its financial performance, performance trends, and financial position. Webster utilizes these measures for internal planning and forecasting purposes. Webster, as well as securities analysts, investors, and other interested parties, also use these measures to compare peer company operating performance. Webster believes that its presentation and discussion, together with the accompanying reconciliations, provides additional clarity of factors and trends affecting its business and allows investors to view performance in a manner similar to management.
The efficiency ratio, which represents the costs expended to generate a dollar of revenue, is calculated excluding certain non-operational items. The return on average tangible common stockholders’ equity (“ROATCE”) represents net income available to common stockholders, adjusted for the tax-effected amortization of intangible assets, as a percentage of average stockholders’ equity less average preferred stock and average goodwill and net intangible assets. The tangible equity ratio represents stockholders’ equity less goodwill and net intangible assets divided by total assets less goodwill and net intangible assets. The tangible common equity ratio represents stockholders’ equity less preferred stock and goodwill and net intangible assets divided by total assets less goodwill and net intangible assets. Tangible book value per common share represents stockholders’ equity less preferred stock and goodwill and net intangible assets divided by common shares outstanding at the end of the period. Core deposits reflect total deposits less certificates of deposit and brokered certificates of deposit. Adjusted pre-tax net income, adjusted net income available to common stockholders, adjusted diluted earnings per share (“EPS”), adjusted ROATCE, and adjusted return on average assets (“ROAA”) are calculated excluding losses on sales of investment securities, which have been tax-effected, and a deferred tax valuation adjustment.
These non-GAAP measures should not be considered a substitute for GAAP basis measures and results, and Webster strongly encourages investors to review its consolidated financial statements in their entirety and not to rely on any single financial measure. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies’ non-GAAP financial measures having the same or similar names.
Refer the tables beginning on page 19 for Non-GAAP to GAAP reconciliations.
| WEBSTER FINANCIAL CORPORATION<br><br>Selected Financial Highlights (unaudited) | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| At or for the Three Months Ended | |||||||||||||||
| (In thousands, except per share data) | December 31,<br>2024 | September 30,<br>2024 | June 30,<br>2024 | March 31,<br>2024 | December 31,<br>2023 | ||||||||||
| Income and performance ratios: | |||||||||||||||
| Net income | $ | 177,766 | $ | 192,985 | $ | 181,633 | $ | 216,323 | $ | 185,393 | |||||
| Net income available to common stockholders | 173,603 | 188,823 | 177,471 | 212,160 | 181,230 | ||||||||||
| Earnings per diluted common share | 1.01 | 1.10 | 1.03 | 1.23 | 1.05 | ||||||||||
| Return on average assets (annualized) | 0.91 | % | 1.01 | % | 0.96 | % | 1.15 | % | 1.01 | % | |||||
| Return on average tangible common stockholders' equity (annualized) (1) | 12.73 | 14.29 | 14.17 | 16.30 | 14.49 | ||||||||||
| Return on average common stockholders’ equity (annualized) | 7.80 | 8.67 | 8.40 | 10.01 | 9.03 | ||||||||||
| Non-interest income as a percentage of total revenue | 7.94 | 8.92 | 6.88 | 14.89 | 10.05 | ||||||||||
| Asset quality: | |||||||||||||||
| Allowance for credit losses on loans and leases | $ | 689,566 | $ | 687,798 | $ | 669,355 | $ | 641,442 | $ | 635,737 | |||||
| Nonperforming assets | 461,751 | 427,274 | 374,884 | 289,254 | 218,600 | ||||||||||
| Allowance for credit losses on loans and leases / total loans and leases | 1.31 | % | 1.32 | % | 1.30 | % | 1.26 | % | 1.25 | % | |||||
| Net charge-offs / average loans and leases (annualized) | 0.47 | 0.27 | 0.26 | 0.29 | 0.27 | ||||||||||
| Nonperforming loans and leases / total loans and leases | 0.88 | 0.82 | 0.72 | 0.56 | 0.41 | ||||||||||
| Nonperforming assets / total loans and leases plus other real estate owned and repossessed assets | 0.88 | 0.82 | 0.73 | 0.57 | 0.43 | ||||||||||
| Allowance for credit losses on loans and leases / nonperforming loans and leases | 149.47 | 161.60 | 181.48 | 226.17 | 303.39 | ||||||||||
| Other ratios: | |||||||||||||||
| Tangible equity (1) | 7.82 | % | 7.85 | % | 7.56 | % | 7.54 | % | 8.12 | % | |||||
| Tangible common equity (1) | 7.45 | 7.48 | 7.18 | 7.15 | 7.73 | ||||||||||
| Tier 1 risk-based capital (2) | 12.01 | 11.77 | 11.09 | 11.08 | 11.62 | ||||||||||
| Total risk-based capital (2) | 14.20 | 14.06 | 13.28 | 13.21 | 13.72 | ||||||||||
| Common equity tier 1 risk-based capital (2) | 11.50 | 11.25 | 10.59 | 10.57 | 11.11 | ||||||||||
| Stockholders’ equity / total assets | 11.56 | 11.58 | 11.46 | 11.49 | 11.60 | ||||||||||
| Net interest margin | 3.39 | 3.36 | 3.32 | 3.35 | 3.42 | ||||||||||
| Efficiency ratio (1) | 44.80 | 45.49 | 46.22 | 45.25 | 43.04 | ||||||||||
| Equity and share related: | |||||||||||||||
| Common stockholders’ equity | $ | 8,849,235 | $ | 8,914,071 | $ | 8,525,289 | $ | 8,463,519 | $ | 8,406,017 | |||||
| Book value per common share | 51.63 | 52.00 | 49.74 | 49.07 | 48.87 | ||||||||||
| Tangible book value per common share (1) | 32.95 | 33.26 | 30.82 | 30.22 | 32.39 | ||||||||||
| Common stock closing price | 55.22 | 46.61 | 43.59 | 50.77 | 50.76 | ||||||||||
| Dividends declared per common share | 0.40 | 0.40 | 0.40 | 0.40 | 0.40 | ||||||||||
| Common shares issued and outstanding | 171,391 | 171,428 | 171,402 | 172,464 | 172,022 | ||||||||||
| Weighted-average common shares outstanding - Basic | 169,589 | 169,569 | 169,675 | 170,445 | 170,415 | ||||||||||
| Weighted-average common shares outstanding - Diluted | 170,005 | 169,894 | 169,937 | 170,704 | 170,623 |
(1)See “Non-GAAP to GAAP Reconciliations” section beginning on page 19.
(2)Presented as preliminary for December 31, 2024, and actual for the remaining periods.
| WEBSTER FINANCIAL CORPORATION<br><br>Consolidated Balance Sheets (unaudited) | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (In thousands) | December 31,<br>2024 | September 30,<br>2024 | December 31,<br>2023 | |||||||||
| Assets: | ||||||||||||
| Cash and due from banks | $ | 388,060 | $ | 721,261 | $ | 429,323 | ||||||
| Interest-bearing deposits | 1,686,374 | 2,476,290 | 1,286,472 | |||||||||
| Investment securities: | ||||||||||||
| Available-for-sale | 9,006,600 | 8,594,978 | 8,959,729 | |||||||||
| Held-to-maturity, net | 8,444,191 | 8,565,936 | 7,074,588 | |||||||||
| Total investment securities, net | 17,450,791 | 17,160,914 | 16,034,317 | |||||||||
| Loans held for sale | 27,634 | 117,615 | 6,541 | |||||||||
| Loans and leases: | ||||||||||||
| Commercial | 20,676,965 | 20,120,992 | 19,772,102 | |||||||||
| Commercial real estate | 21,391,036 | 21,691,377 | 21,157,732 | |||||||||
| Residential mortgages | 8,853,669 | 8,576,612 | 8,227,923 | |||||||||
| Consumer | 1,583,498 | 1,558,034 | 1,568,295 | |||||||||
| Total loans and leases | 52,505,168 | 51,947,015 | 50,726,052 | |||||||||
| Allowance for credit losses on loans and leases | (689,566) | (687,798) | (635,737) | |||||||||
| Total loans and leases, net | 51,815,602 | 51,259,217 | 50,090,315 | |||||||||
| Federal Home Loan Bank and Federal Reserve Bank stock | 321,343 | 360,795 | 326,882 | |||||||||
| Premises and equipment, net | 406,963 | 411,070 | 429,561 | |||||||||
| Goodwill and other intangible assets, net | 3,202,369 | 3,212,050 | 2,834,600 | |||||||||
| Cash surrender value of life insurance policies | 1,251,622 | 1,247,624 | 1,247,938 | |||||||||
| Deferred tax assets, net | 316,856 | 273,174 | 369,212 | |||||||||
| Accrued interest receivable and other assets | 2,157,459 | 2,213,890 | 1,890,088 | |||||||||
| Total assets | $ | 79,025,073 | $ | 79,453,900 | $ | 74,945,249 | ||||||
| Liabilities and Stockholders’ Equity: | ||||||||||||
| Deposits: | ||||||||||||
| Demand | $ | 10,316,501 | $ | 10,744,524 | $ | 10,732,516 | ||||||
| Health savings accounts | 8,951,031 | 8,951,383 | 8,287,889 | |||||||||
| Interest-bearing checking | 9,834,790 | 10,016,651 | 8,994,095 | |||||||||
| Money market | 20,433,250 | 20,460,382 | 17,662,826 | |||||||||
| Savings | 6,982,554 | 6,921,459 | 6,642,499 | |||||||||
| Certificates of deposit | 6,041,329 | 6,020,031 | 5,574,048 | |||||||||
| Brokered certificates of deposit | 2,193,625 | 1,400,000 | 2,890,411 | |||||||||
| Total deposits | 64,753,080 | 64,514,430 | 60,784,284 | |||||||||
| Securities sold under agreements to repurchase and other borrowings | 344,168 | 100,232 | 458,387 | |||||||||
| Federal Home Loan Bank advances | 2,110,108 | 3,110,205 | 2,360,018 | |||||||||
| Long-term debt | 909,185 | 910,963 | 1,048,820 | |||||||||
| Accrued expenses and other liabilities | 1,775,318 | 1,620,020 | 1,603,744 | |||||||||
| Total liabilities | 69,891,859 | 70,255,850 | 66,255,253 | |||||||||
| Preferred stock | 283,979 | 283,979 | 283,979 | |||||||||
| Common stockholders’ equity | 8,849,235 | 8,914,071 | 8,406,017 | |||||||||
| Total stockholders’ equity | 9,133,214 | 9,198,050 | 8,689,996 | |||||||||
| Total liabilities and stockholders’ equity | $ | 79,025,073 | $ | 79,453,900 | $ | 74,945,249 | ||||||
| WEBSTER FINANCIAL CORPORATION<br><br>Consolidated Statements of Income (unaudited) | ||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||
| Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||
| (In thousands, except per share data) | 2024 | 2023 | 2024 | 2023 | ||||||||
| Interest income: | ||||||||||||
| Interest and fees on loans and leases | $ | 783,140 | $ | 789,423 | $ | 3,182,466 | $ | 3,071,378 | ||||
| Interest on investment securities | 189,801 | 128,924 | 674,935 | 450,888 | ||||||||
| Loans held for sale | 2,836 | 280 | 13,911 | 734 | ||||||||
| Other interest and dividends | 19,310 | 14,520 | 55,974 | 105,260 | ||||||||
| Total interest income | 995,087 | 933,147 | 3,927,286 | 3,628,260 | ||||||||
| Interest expense: | ||||||||||||
| Deposits | 358,895 | 325,793 | 1,427,204 | 1,021,418 | ||||||||
| Borrowings | 27,724 | 36,333 | 161,695 | 269,573 | ||||||||
| Total interest expense | 386,619 | 362,126 | 1,588,899 | 1,290,991 | ||||||||
| Net interest income | 608,468 | 571,021 | 2,338,387 | 2,337,269 | ||||||||
| Provision for credit losses | 63,500 | 36,000 | 222,000 | 150,747 | ||||||||
| Net interest income after provision for loan and lease losses | 544,968 | 535,021 | 2,116,387 | 2,186,522 | ||||||||
| Non-interest income: | ||||||||||||
| Deposit service fees | 38,665 | 37,459 | 161,144 | 169,318 | ||||||||
| Loan and lease related fees | 18,770 | 21,362 | 76,384 | 84,861 | ||||||||
| Wealth and investment services | 8,387 | 7,767 | 33,234 | 28,999 | ||||||||
| Cash surrender value of life insurance policies | 7,387 | 6,587 | 27,712 | 26,228 | ||||||||
| (Loss) on sale of investment securities, net | (56,886) | (16,825) | (136,224) | (33,620) | ||||||||
| Other income | 36,184 | 7,465 | 89,649 | 38,551 | ||||||||
| Total non-interest income | 52,507 | 63,815 | 251,899 | 314,337 | ||||||||
| Non-interest expense: | ||||||||||||
| Compensation and benefits | 192,668 | 184,914 | 762,794 | 711,752 | ||||||||
| Occupancy | 18,740 | 18,478 | 72,161 | 77,520 | ||||||||
| Technology and equipment | 47,182 | 46,486 | 195,017 | 197,928 | ||||||||
| Marketing | 6,139 | 5,176 | 18,751 | 18,622 | ||||||||
| Professional and outside services | 15,205 | 18,804 | 58,253 | 107,497 | ||||||||
| Intangible assets amortization | 9,681 | 8,618 | 36,082 | 36,207 | ||||||||
| Deposit insurance | 16,069 | 58,725 | 68,912 | 98,081 | ||||||||
| Other expenses | 34,693 | 36,020 | 139,309 | 168,748 | ||||||||
| Total non-interest expense | 340,377 | 377,221 | 1,351,279 | 1,416,355 | ||||||||
| Income before income taxes | 257,098 | 221,615 | 1,017,007 | 1,084,504 | ||||||||
| Income tax expense | 79,332 | 36,222 | 248,300 | 216,664 | ||||||||
| Net income | 177,766 | 185,393 | 768,707 | 867,840 | ||||||||
| Preferred stock dividends | (4,163) | (4,163) | (16,650) | (16,650) | ||||||||
| Net income available to common stockholders | $ | 173,603 | $ | 181,230 | $ | 752,057 | $ | 851,190 | ||||
| Weighted-average common shares outstanding - Diluted | 170,005 | 170,623 | 170,192 | 171,883 | ||||||||
| Earnings per common share: | ||||||||||||
| Basic | $ | 1.01 | $ | 1.05 | $ | 4.38 | $ | 4.91 | ||||
| Diluted | 1.01 | 1.05 | 4.37 | 4.91 | ||||||||
| WEBSTER FINANCIAL CORPORATION<br><br>Five Quarter Consolidated Statements of Income (unaudited) | ||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||
| Three Months Ended | ||||||||||||
| (In thousands, except per share data) | December 31,<br>2024 | September 30,<br>2024 | June 30,<br>2024 | March 31,<br>2024 | December 31,<br>2023 | |||||||
| Interest income: | ||||||||||||
| Interest and fees on loans and leases | $ | 783,140 | $ | 809,184 | $ | 798,097 | $ | 792,045 | $ | 789,423 | ||
| Interest on investment securities | 189,801 | 176,722 | 160,827 | 147,585 | 128,924 | |||||||
| Loans held for sale | 2,836 | 5,400 | 5,593 | 82 | 280 | |||||||
| Other interest and dividends | 19,310 | 12,757 | 11,769 | 12,138 | 14,520 | |||||||
| Total interest income | 995,087 | 1,004,063 | 976,286 | 951,850 | 933,147 | |||||||
| Interest expense: | ||||||||||||
| Deposits | 358,895 | 371,075 | 361,263 | 335,971 | 325,793 | |||||||
| Borrowings | 27,724 | 43,105 | 42,726 | 48,140 | 36,333 | |||||||
| Total interest expense | 386,619 | 414,180 | 403,989 | 384,111 | 362,126 | |||||||
| Net interest income | 608,468 | 589,883 | 572,297 | 567,739 | 571,021 | |||||||
| Provision for credit losses | 63,500 | 54,000 | 59,000 | 45,500 | 36,000 | |||||||
| Net interest income after provision for loan and lease losses | 544,968 | 535,883 | 513,297 | 522,239 | 535,021 | |||||||
| Non-interest income: | ||||||||||||
| Deposit service fees | 38,665 | 38,863 | 41,027 | 42,589 | 37,459 | |||||||
| Loan and lease related fees | 18,770 | 18,513 | 19,334 | 19,767 | 21,362 | |||||||
| Wealth and investment services | 8,387 | 8,367 | 8,556 | 7,924 | 7,767 | |||||||
| Cash surrender value of life insurance policies | 7,387 | 8,020 | 6,359 | 5,946 | 6,587 | |||||||
| (Loss) on sale of investment securities, net | (56,886) | (19,597) | (49,915) | (9,826) | (16,825) | |||||||
| Other income | 36,184 | 3,575 | 16,937 | 32,953 | 7,465 | |||||||
| Total non-interest income | 52,507 | 57,741 | 42,298 | 99,353 | 63,815 | |||||||
| Non-interest expense: | ||||||||||||
| Compensation and benefits | 192,668 | 194,736 | 186,850 | 188,540 | 184,914 | |||||||
| Occupancy | 18,740 | 18,879 | 15,103 | 19,439 | 18,478 | |||||||
| Technology and equipment | 47,182 | 56,696 | 45,303 | 45,836 | 46,486 | |||||||
| Marketing | 6,139 | 4,224 | 4,107 | 4,281 | 5,176 | |||||||
| Professional and outside services | 15,205 | 16,001 | 14,066 | 12,981 | 18,804 | |||||||
| Intangible assets amortization | 9,681 | 8,491 | 8,716 | 9,194 | 8,618 | |||||||
| Deposit insurance | 16,069 | 13,555 | 15,065 | 24,223 | 58,725 | |||||||
| Other expenses | 34,693 | 36,376 | 36,811 | 31,429 | 36,020 | |||||||
| Total non-interest expense | 340,377 | 348,958 | 326,021 | 335,923 | 377,221 | |||||||
| Income before income taxes | 257,098 | 244,666 | 229,574 | 285,669 | 221,615 | |||||||
| Income tax expense | 79,332 | 51,681 | 47,941 | 69,346 | 36,222 | |||||||
| Net income | 177,766 | 192,985 | 181,633 | 216,323 | 185,393 | |||||||
| Preferred stock dividends | (4,163) | (4,162) | (4,162) | (4,163) | (4,163) | |||||||
| Net income available to common stockholders | $ | 173,603 | $ | 188,823 | $ | 177,471 | $ | 212,160 | $ | 181,230 | ||
| Weighted-average common shares outstanding - Diluted | 170,005 | 169,894 | 169,937 | 170,704 | 170,623 | |||||||
| Earnings per common share: | ||||||||||||
| Basic | $ | 1.01 | $ | 1.10 | $ | 1.03 | $ | 1.23 | $ | 1.05 | ||
| Diluted | 1.01 | 1.10 | 1.03 | 1.23 | 1.05 | |||||||
| WEBSTER FINANCIAL CORPORATION<br><br>Consolidated Average Balances, Interest, Yields/Rates, and Net Interest Margin on a Fully Tax-equivalent Basis (unaudited) | ||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Three Months Ended December 31, | ||||||||||||
| 2024 | 2023 | |||||||||||
| (Dollars in thousands) | Average<br>balance | Interest | Yield/rate | Average<br>balance | Interest | Yield/rate | ||||||
| Assets: | ||||||||||||
| Interest-earning assets: | ||||||||||||
| Loans and leases | $ | 52,255,431 | $ | 794,271 | 5.97 | % | $ | 50,352,340 | $ | 800,679 | 6.24 | % |
| Investment securities (1) | 17,982,632 | 192,334 | 4.28 | 16,194,457 | 135,498 | 3.35 | ||||||
| Federal Home Loan and Federal Reserve Bank stock | 301,218 | 4,732 | 6.25 | 308,505 | 5,581 | 7.18 | ||||||
| Interest-bearing deposits | 1,201,613 | 14,578 | 4.75 | 649,104 | 8,939 | 5.39 | ||||||
| Loans held for sale | 122,449 | 2,836 | 9.27 | 7,130 | 280 | n/m | ||||||
| Total interest-earning assets | 71,863,343 | $ | 1,008,751 | 5.53 | % | 67,511,536 | $ | 950,977 | 5.54 | % | ||
| Non-interest-earning assets (1) | 6,493,521 | 5,620,527 | ||||||||||
| Total assets | $ | 78,356,864 | $ | 73,132,063 | ||||||||
| Liabilities and Stockholders' Equity: | ||||||||||||
| Interest-bearing liabilities: | ||||||||||||
| Demand deposits | $ | 10,568,678 | $ | — | — | % | $ | 11,067,121 | $ | — | — | % |
| Health savings accounts | 8,919,071 | 3,485 | 0.16 | 8,219,431 | 3,123 | 0.15 | ||||||
| Interest-bearing checking, money market and savings | 37,464,574 | 271,010 | 2.88 | 33,156,966 | 239,875 | 2.87 | ||||||
| Certificates of deposit and brokered deposits | 7,863,067 | 84,400 | 4.27 | 7,538,131 | 82,795 | 4.36 | ||||||
| Total deposits | 64,815,390 | 358,895 | 2.20 | 59,981,649 | 325,793 | 2.15 | ||||||
| Securities sold under agreements to repurchase and other borrowings | 191,265 | 853 | 1.74 | 221,437 | 1,162 | 2.05 | ||||||
| Federal Home Loan Bank advances | 1,535,140 | 19,063 | 4.86 | 1,815,493 | 25,659 | 5.53 | ||||||
| Long-term debt (1) | 886,648 | 7,808 | 3.52 | 1,020,901 | 9,512 | 3.73 | ||||||
| Total borrowings | 2,613,053 | 27,724 | 4.18 | 3,057,831 | 36,333 | 4.68 | ||||||
| Total interest-bearing liabilities | 67,428,443 | $ | 386,619 | 2.28 | % | 63,039,480 | $ | 362,126 | 2.28 | % | ||
| Non-interest-bearing liabilities (1) | 1,742,339 | 1,779,785 | ||||||||||
| Total liabilities | 69,170,782 | 64,819,265 | ||||||||||
| Preferred stock | 283,979 | 283,979 | ||||||||||
| Common stockholders’ equity | 8,902,103 | 8,028,819 | ||||||||||
| Total stockholders’ equity | 9,186,082 | 8,312,798 | ||||||||||
| Total liabilities and stockholders’ equity | $ | 78,356,864 | $ | 73,132,063 | ||||||||
| Tax-equivalent net interest income | 622,132 | 588,851 | ||||||||||
| Less: Tax-equivalent adjustments | (13,664) | (17,830) | ||||||||||
| Net interest income | $ | 608,468 | $ | 571,021 | ||||||||
| Net interest margin | 3.39 | % | 3.42 | % |
(1)In order to provide the users of the Company’s financial statements with a more transparent view of the actual consolidated average balances that are used in the calculation of net interest margin, the Company has recast, in the above table, certain consolidated average balances for the three months ended December 31, 2023, to reflect a change in presentation being applied retrospectively. Specifically, adjustments were made to exclude unsettled trades of $142.4 million and available-for-sale unrealized losses of $1.1 billion from investment securities, and to exclude a $28.8 million basis adjustment related to a de-designated fair value hedge from long-term debt. Rather, effective as of December 31, 2024, these amounts are being presented in non-interest-earning assets and non-interest-bearing liabilities, respectively. There was no change to the related yields/rates, net interest income, or net interest margin that had been previously disclosed.
| WEBSTER FINANCIAL CORPORATION<br><br>Consolidated Average Balances, Interest, Yields/Rates, and Net Interest Margin on a Fully Tax-equivalent Basis (unaudited) | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Twelve Months Ended December 31, | ||||||||||||
| 2024 | 2023 | |||||||||||
| (Dollars in thousands) | Average<br>Balance | Interest | Yield/Rate | Average<br>balance | Interest | Yield/Rate | ||||||
| Assets: | ||||||||||||
| Interest-earning assets: | ||||||||||||
| Loans and leases | $ | 51,597,443 | $ | 3,224,653 | 6.25 | % | $ | 50,637,569 | $ | 3,113,709 | 6.15 | % |
| Investment securities (1) | 17,356,753 | 690,265 | 3.98 | 15,626,684 | 477,496 | 3.06 | ||||||
| Federal Home Loan and Federal Reserve Bank stock | 330,418 | 18,633 | 5.64 | 408,673 | 24,785 | 6.06 | ||||||
| Interest-bearing deposits | 723,688 | 37,341 | 5.16 | 1,564,255 | 80,475 | 5.14 | ||||||
| Loans held for sale | 143,812 | 13,911 | 9.67 | 28,710 | 734 | 2.56 | ||||||
| Total interest-earning assets | 70,152,114 | $ | 3,984,803 | 5.68 | % | 68,265,891 | $ | 3,697,199 | 5.42 | % | ||
| Non-interest-earning assets (1) | 6,461,020 | 5,557,991 | ||||||||||
| Total assets | $ | 76,613,134 | $ | 73,823,882 | ||||||||
| Liabilities and Stockholders' Equity: | ||||||||||||
| Interest-bearing liabilities: | ||||||||||||
| Demand deposits | $ | 10,387,807 | $ | — | — | % | $ | 11,596,949 | $ | — | — | % |
| Health savings accounts | 8,650,485 | 13,139 | 0.15 | 8,249,332 | 12,366 | 0.15 | ||||||
| Interest-bearing checking, money market and savings | 35,789,961 | 1,070,949 | 2.99 | 31,874,457 | 756,521 | 2.37 | ||||||
| Certificates of deposit and brokered deposits | 7,597,612 | 343,116 | 4.52 | 6,531,610 | 252,531 | 3.87 | ||||||
| Total deposits | 62,425,865 | 1,427,204 | 2.29 | 58,252,348 | 1,021,418 | 1.75 | ||||||
| Securities sold under agreements to repurchase and other borrowings | 196,328 | 4,113 | 2.09 | 378,171 | 9,102 | 2.41 | ||||||
| Federal Home Loan Bank advances | 2,296,048 | 125,329 | 5.46 | 4,275,394 | 222,537 | 5.21 | ||||||
| Long-term debt (1) | 903,603 | 32,253 | 3.57 | 1,027,869 | 37,934 | 3.69 | ||||||
| Total borrowings | 3,395,979 | 161,695 | 4.76 | 5,681,434 | 269,573 | 4.74 | ||||||
| Total interest-bearing liabilities | 65,821,844 | $ | 1,588,899 | 2.41 | % | 63,933,782 | $ | 1,290,991 | 2.02 | % | ||
| Non-interest-bearing liabilities (1) | 1,871,615 | 1,566,145 | ||||||||||
| Total liabilities | 67,693,459 | 65,499,927 | ||||||||||
| Preferred stock | 283,979 | 283,979 | ||||||||||
| Common stockholders’ equity | 8,635,696 | 8,039,976 | ||||||||||
| Total stockholders’ equity | 8,919,675 | 8,323,955 | ||||||||||
| Total liabilities and stockholders’ equity | $ | 76,613,134 | $ | 73,823,882 | ||||||||
| Tax-equivalent net interest income | 2,395,904 | 2,406,208 | ||||||||||
| Less: Tax-equivalent adjustments | (57,517) | (68,939) | ||||||||||
| Net interest income | $ | 2,338,387 | $ | 2,337,269 | ||||||||
| Net interest margin | 3.42 | % | 3.52 | % |
(1)In order to provide the users of the Company’s financial statements with a more transparent view of the actual consolidated average balances that are used in the calculation of net interest margin, the Company has recast, in the above table, certain consolidated average balances for the twelve months ended December 31, 2023, to reflect a change in presentation being applied retrospectively. Specifically, adjustments were made to exclude unsettled trades of $108.9 million and available-for-sale unrealized losses of $895.8 million from investment securities, and to exclude a $30.8 million basis adjustment related to a de-designated fair value hedge from long-term debt. Rather, effective as of December 31, 2024, these amounts are being presented in non-interest-earning assets and non-interest-bearing liabilities, respectively. There was no change to the related yields/rates, net interest income, or net interest margin that had been previously disclosed.
| WEBSTER FINANCIAL CORPORATION Five Quarter Loans and Leases (unaudited) | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (Dollars in thousands) | December 31,<br>2024 | September 30,<br>2024 | June 30,<br>2024 | March 31,<br>2024 | December 31,<br>2023 | |||||||||||||||||
| Loans and leases (actual): | ||||||||||||||||||||||
| Commercial non-mortgage | $ | 19,272,958 | $ | 18,657,089 | $ | 18,021,758 | $ | 17,976,128 | $ | 18,214,261 | ||||||||||||
| Asset-based lending | 1,404,007 | 1,463,903 | 1,470,675 | 1,492,886 | 1,557,841 | |||||||||||||||||
| Commercial real estate | 21,391,036 | 21,691,377 | 22,277,813 | 21,869,502 | 21,157,732 | |||||||||||||||||
| Residential mortgages | 8,853,669 | 8,576,612 | 8,284,297 | 8,226,154 | 8,227,923 | |||||||||||||||||
| Consumer | 1,583,498 | 1,558,034 | 1,518,922 | 1,533,972 | 1,568,295 | |||||||||||||||||
| Total loans and leases | 52,505,168 | 51,947,015 | 51,573,465 | 51,098,642 | 50,726,052 | |||||||||||||||||
| Allowance for credit losses on loans and leases | (689,566) | (687,798) | (669,355) | (641,442) | (635,737) | |||||||||||||||||
| Total loans and leases, net | $ | 51,815,602 | $ | 51,259,217 | $ | 50,904,110 | $ | 50,457,200 | $ | 50,090,315 | ||||||||||||
| Loans and leases (average): | ||||||||||||||||||||||
| Commercial non-mortgage | $ | 18,919,934 | $ | 18,166,258 | $ | 17,995,654 | $ | 18,235,402 | $ | 18,181,417 | ||||||||||||
| Asset-based lending | 1,449,743 | 1,452,794 | 1,473,175 | 1,523,616 | 1,588,350 | |||||||||||||||||
| Commercial real estate | 21,572,682 | 22,215,293 | 22,186,566 | 21,403,765 | 20,764,834 | |||||||||||||||||
| Residential mortgages | 8,740,658 | 8,390,613 | 8,252,397 | 8,225,151 | 8,240,390 | |||||||||||||||||
| Consumer | 1,572,414 | 1,527,235 | 1,527,007 | 1,550,484 | 1,577,349 | |||||||||||||||||
| Total loans and leases | $ | 52,255,431 | $ | 51,752,193 | $ | 51,434,799 | $ | 50,938,418 | $ | 50,352,340 | ||||||||||||
| WEBSTER FINANCIAL CORPORATION<br><br>Five Quarter Nonperforming Assets and Past Due Loans and Leases (unaudited) | ||||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||||||||||
| (Dollars in thousands) | December 31,<br>2024 | September 30,<br>2024 | June 30,<br>2024 | March 31,<br>2024 | December 31,<br>2023 | |||||||||||||||||
| Nonperforming loans and leases: | ||||||||||||||||||||||
| Commercial non-mortgage | $ | 268,354 | $ | 215,834 | $ | 210,906 | $ | 203,626 | $ | 134,617 | ||||||||||||
| Asset-based lending | 20,815 | 29,791 | 29,791 | 34,915 | 35,090 | |||||||||||||||||
| Commercial real estate | 138,642 | 150,711 | 96,337 | 14,323 | 11,314 | |||||||||||||||||
| Residential mortgages | 12,500 | 9,098 | 11,345 | 8,407 | 5,591 | |||||||||||||||||
| Consumer | 21,015 | 20,183 | 20,457 | 22,341 | 22,932 | |||||||||||||||||
| Total nonperforming loans and leases | $ | 461,326 | $ | 425,617 | $ | 368,836 | $ | 283,612 | $ | 209,544 | ||||||||||||
| Other real estate owned and repossessed assets: | ||||||||||||||||||||||
| Commercial non-mortgage | $ | 425 | $ | 504 | $ | 5,013 | $ | 5,540 | $ | 8,954 | ||||||||||||
| Residential mortgages | — | 221 | — | — | — | |||||||||||||||||
| Consumer | — | 932 | 1,035 | 102 | 102 | |||||||||||||||||
| Total other real estate owned and repossessed assets | $ | 425 | $ | 1,657 | $ | 6,048 | $ | 5,642 | $ | 9,056 | ||||||||||||
| Total nonperforming assets | $ | 461,751 | $ | 427,274 | $ | 374,884 | $ | 289,254 | $ | 218,600 | Past due 30-89 days: | |||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||||||||||
| Commercial non-mortgage | $ | 16,619 | $ | 45,123 | $ | 134,794 | $ | 15,365 | $ | 7,071 | ||||||||||||
| Commercial real estate | 48,725 | 36,110 | 10,284 | 72,999 | 9,002 | |||||||||||||||||
| Residential mortgages | 14,113 | 18,153 | 13,008 | 17,580 | 21,047 | |||||||||||||||||
| Consumer | 9,122 | 9,471 | 8,185 | 6,824 | 9,417 | |||||||||||||||||
| Total past due 30-89 days | $ | 88,579 | $ | 108,857 | $ | 166,271 | $ | 112,768 | $ | 46,537 | ||||||||||||
| Past due 90 days or more and accruing | — | 71 | 9 | 12,460 | 52 | |||||||||||||||||
| Total past due loans and leases | $ | 88,579 | $ | 108,928 | $ | 166,280 | $ | 125,228 | $ | 46,589 | ||||||||||||
| Five Quarter Changes in the Allowance for Credit Losses on Loans and Leases (unaudited) | ||||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||||||||||
| Three Months Ended | ||||||||||||||||||||||
| (Dollars in thousands) | December 31,<br>2024 | September 30,<br>2024 | June 30,<br>2024 | March 31,<br>2024 | December 31,<br>2023 | |||||||||||||||||
| ACL on loans and leases, beginning balance | $ | 687,798 | $ | 669,355 | $ | 641,442 | $ | 635,737 | $ | 635,438 | ||||||||||||
| Provision | 62,639 | 53,869 | 61,041 | 43,194 | 34,300 | |||||||||||||||||
| Charge-offs: | ||||||||||||||||||||||
| Commercial portfolio | 63,281 | 36,362 | 33,356 | 38,461 | 28,794 | |||||||||||||||||
| Consumer portfolio | 1,265 | 997 | 1,418 | 1,330 | 6,878 | |||||||||||||||||
| Total charge-offs | 64,546 | 37,359 | 34,774 | 39,791 | 35,672 | |||||||||||||||||
| Recoveries: | ||||||||||||||||||||||
| Commercial portfolio | 2,779 | 377 | 360 | 553 | 396 | |||||||||||||||||
| Consumer portfolio | 896 | 1,556 | 1,286 | 1,749 | 1,275 | |||||||||||||||||
| Total recoveries | 3,675 | 1,933 | 1,646 | 2,302 | 1,671 | |||||||||||||||||
| Total net charge-offs | 60,871 | 35,426 | 33,128 | 37,489 | 34,001 | |||||||||||||||||
| ACL on loans and leases, ending balance | $ | 689,566 | $ | 687,798 | $ | 669,355 | $ | 641,442 | $ | 635,737 | ||||||||||||
| ACL on unfunded loan commitments, ending balance | 22,593 | 22,598 | 22,456 | 24,495 | 24,734 | |||||||||||||||||
| ACL, ending balance | $ | 712,159 | $ | 710,396 | $ | 691,811 | $ | 665,937 | $ | 660,471 |
WEBSTER FINANCIAL CORPORATION
Non-GAAP to GAAP Reconciliations
| Three Months Ended | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| (In thousands, except per share data) | December 31,<br>2024 | September 30,<br>2024 | June 30,<br>2024 | March 31,<br>2024 | December 31,<br>2023 | |||||
| Efficiency ratio: | ||||||||||
| Non-interest expense | $ | 340,377 | $ | 348,958 | $ | 326,021 | $ | 335,923 | $ | 377,221 |
| Less: Foreclosed property activity | (32) | (687) | (364) | (330) | (96) | |||||
| Intangible assets amortization | 9,681 | 8,491 | 8,716 | 9,194 | 8,618 | |||||
| Operating lease depreciation | 121 | 197 | 560 | 663 | 900 | |||||
| FDIC special assessment | — | (1,544) | — | 11,862 | 47,164 | |||||
| Merger related expenses (1) | — | — | — | 3,139 | 30,679 | |||||
| Strategic restructuring costs and other | — | 22,169 | — | — | — | |||||
| Adjusted non-interest expense | $ | 330,607 | $ | 320,332 | $ | 317,109 | $ | 311,395 | $ | 289,956 |
| Net interest income | $ | 608,468 | $ | 589,883 | $ | 572,297 | $ | 567,739 | $ | 571,021 |
| Add: Tax-equivalent adjustment | 13,664 | 13,659 | 14,315 | 15,879 | 17,830 | |||||
| Non-interest income | 52,507 | 57,741 | 42,298 | 99,353 | 63,815 | |||||
| Other income (2) | 6,564 | 7,448 | 7,802 | 7,626 | 5,099 | |||||
| Less: Operating lease depreciation | 121 | 197 | 560 | 663 | 900 | |||||
| (Loss) on sale of investment securities, net | (56,886) | (19,597) | (49,915) | (9,826) | (16,825) | |||||
| Exit of non-core operations | — | (15,977) | — | — | — | |||||
| Net gain on sale of mortgage servicing rights | — | — | — | 11,655 | — | |||||
| Adjusted income | $ | 737,968 | $ | 704,108 | $ | 686,067 | $ | 688,105 | $ | 673,690 |
| Efficiency ratio | 44.80% | 45.49% | 46.22% | 45.25% | 43.04% | |||||
| ROATCE: | ||||||||||
| Net income | $ | 177,766 | $ | 192,985 | $ | 181,633 | $ | 216,323 | $ | 185,393 |
| Less: Preferred stock dividends | 4,163 | 4,162 | 4,162 | 4,163 | 4,163 | |||||
| Add: Intangible assets amortization, tax-effected | 7,648 | 6,708 | 6,886 | 7,263 | 6,808 | |||||
| Adjusted net income | $ | 181,251 | $ | 195,531 | $ | 184,357 | $ | 219,423 | $ | 188,038 |
| Adjusted net income, annualized basis | $ | 725,004 | $ | 782,124 | $ | 737,428 | $ | 877,692 | $ | 752,152 |
| Average stockholders’ equity | $ | 9,186,082 | $ | 8,995,134 | $ | 8,733,737 | $ | 8,759,992 | $ | 8,312,798 |
| Less: Average preferred stock | 283,979 | 283,979 | 283,979 | 283,979 | 283,979 | |||||
| Average goodwill and other intangible assets, net | 3,207,554 | 3,238,115 | 3,246,940 | 3,090,751 | 2,838,770 | |||||
| Average tangible common stockholders’ equity | $ | 5,694,549 | $ | 5,473,040 | $ | 5,202,818 | $ | 5,385,262 | $ | 5,190,049 |
| Return on average tangible common stockholders’ equity | 12.73% | 14.29% | 14.17% | 16.30% | 14.49% |
(1)Merger related expenses reflect Ametros acquisition expenses for the three months ended March 31, 2024, and primarily Sterling merger expenses for the three months ended December 31, 2023.
(2)Other income reflects a tax-equivalent adjustment on income generated from low income housing tax-credit investments.
| (In thousands, except per share data) | December 31,<br>2024 | September 30,<br>2024 | June 30,<br>2024 | March 31,<br>2024 | December 31,<br>2023 | |||||
|---|---|---|---|---|---|---|---|---|---|---|
| Tangible equity: | ||||||||||
| Stockholders’ equity | $ | 9,133,214 | $ | 9,198,050 | $ | 8,809,268 | $ | 8,747,498 | $ | 8,689,996 |
| Less: Goodwill and other intangible assets, net | 3,202,369 | 3,212,050 | 3,242,193 | 3,250,909 | 2,834,600 | |||||
| Tangible stockholders’ equity | $ | 5,930,845 | $ | 5,986,000 | $ | 5,567,075 | $ | 5,496,589 | $ | 5,855,396 |
| Total assets | $ | 79,025,073 | $ | 79,453,900 | $ | 76,838,106 | $ | 76,161,693 | $ | 74,945,249 |
| Less: Goodwill and other intangible assets, net | 3,202,369 | 3,212,050 | 3,242,193 | 3,250,909 | 2,834,600 | |||||
| Tangible assets | $ | 75,822,704 | $ | 76,241,850 | $ | 73,595,913 | $ | 72,910,784 | $ | 72,110,649 |
| Tangible equity | 7.82% | 7.85% | 7.56% | 7.54% | 8.12% | |||||
| Tangible common equity: | ||||||||||
| Tangible stockholders’ equity | $ | 5,930,845 | $ | 5,986,000 | $ | 5,567,075 | $ | 5,496,589 | $ | 5,855,396 |
| Less: Preferred stock | 283,979 | 283,979 | 283,979 | 283,979 | 283,979 | |||||
| Tangible common stockholders’ equity | $ | 5,646,866 | $ | 5,702,021 | $ | 5,283,096 | $ | 5,212,610 | $ | 5,571,417 |
| Tangible assets | $ | 75,822,704 | $ | 76,241,850 | $ | 73,595,913 | $ | 72,910,784 | $ | 72,110,649 |
| Tangible common equity | 7.45% | 7.48% | 7.18% | 7.15% | 7.73% | |||||
| Tangible book value per common share: | ||||||||||
| Tangible common stockholders’ equity | $ | 5,646,866 | $ | 5,702,021 | $ | 5,283,096 | $ | 5,212,610 | $ | 5,571,417 |
| Common shares outstanding | 171,391 | 171,428 | 171,402 | 172,464 | 172,022 | |||||
| Tangible book value per common share | $ | 32.95 | $ | 33.26 | $ | 30.82 | $ | 30.22 | $ | 32.39 |
| Core deposits: | ||||||||||
| Total deposits | $ | 64,753,080 | $ | 64,514,430 | $ | 62,276,692 | $ | 60,747,743 | $ | 60,784,284 |
| Less: Certificates of deposit | 6,041,329 | 6,020,031 | 5,861,431 | 5,928,773 | 5,574,048 | |||||
| Brokered certificates of deposit | 2,193,625 | 1,400,000 | 1,910,071 | 1,008,547 | 2,890,411 | |||||
| Core deposits | $ | 56,518,126 | $ | 57,094,399 | $ | 54,505,190 | $ | 53,810,423 | $ | 52,319,825 |
| Three Months Ended<br>December 31, 2024 | Twelve Months Ended<br>December 31, 2024 | |||||||||
| --- | --- | --- | --- | --- | --- | --- | ||||
| Adjusted ROATCE: | ||||||||||
| Net income | $ | 177,766 | $ | 768,707 | ||||||
| Less: Preferred stock dividends | 4,163 | 16,650 | ||||||||
| Add: Intangible assets amortization, tax-effected | 7,648 | 28,505 | ||||||||
| Loss on sale of investment securities, net, tax-effected | 41,763 | 102,126 | ||||||||
| Deferred tax asset valuation adjustment | 29,350 | 29,350 | ||||||||
| Exit of non-core operations, tax-effected | — | 11,644 | ||||||||
| Strategic restructuring costs and other, tax-effected | — | 16,158 | ||||||||
| FDIC special assessment, tax-effected | — | 7,792 | ||||||||
| Ametros acquisition expenses, tax-effected | — | 2,360 | ||||||||
| Net (gain) on mortgage servicing rights, tax-effected | — | (8,761) | ||||||||
| Discrete tax adjustment | — | 10,929 | ||||||||
| Adjusted net income | $ | 252,364 | $ | 952,160 | ||||||
| Adjusted net income, annualized basis | $ | 1,009,456 | $ | 952,160 | ||||||
| Average stockholders’ equity | $ | 9,186,082 | $ | 8,919,675 | ||||||
| Less: Average preferred stock | 283,979 | 283,979 | ||||||||
| Average goodwill and other intangible assets, net | 3,207,554 | 3,195,988 | ||||||||
| Average tangible common stockholders’ equity | $ | 5,694,549 | $ | 5,439,708 | ||||||
| Adjusted return on average tangible common stockholders’ equity | 17.73 | % | 17.50 | % | ||||||
| Adjusted ROAA: | ||||||||||
| Net income | $ | 177,766 | $ | 768,707 | ||||||
| Add: Loss on sale of investment securities, net, tax-effected | 41,763 | 102,126 | ||||||||
| Deferred tax asset valuation adjustment | 29,350 | 29,350 | ||||||||
| Exit of non-core operations, tax-effected | — | 11,644 | ||||||||
| Strategic restructuring costs and other, tax-effected | — | 16,158 | ||||||||
| FDIC special assessment, tax-effected | — | 7,792 | ||||||||
| Ametros acquisition expenses, tax-effected | — | 2,360 | ||||||||
| Net (gain) on mortgage servicing rights, tax-effected | — | (8,761) | ||||||||
| Discrete tax adjustment | — | 10,929 | ||||||||
| Adjusted net income | $ | 248,879 | $ | 940,305 | ||||||
| Adjusted net income, annualized basis | $ | 995,516 | $ | 940,305 | ||||||
| Average assets | $ | 78,356,864 | $ | 76,613,134 | ||||||
| Adjusted return on average assets | 1.27 | % | 1.23 | % | ||||||
| GAAP to adjusted reconciliation: | Three Months Ended December 31, 2024 | |||||||||
| --- | --- | --- | --- | --- | --- | --- | ||||
| (In millions, except per share data) | Pre-Tax Income | Net Income Available to Common Stockholders | Diluted EPS | |||||||
| Reported (GAAP) | $ | 257.1 | $ | 173.6 | $ | 1.01 | ||||
| Loss on sale of investment securities | 56.9 | 41.8 | 0.25 | |||||||
| Deferred tax asset valuation adjustment | N/A | 29.4 | 0.17 | |||||||
| Adjusted (non-GAAP) | $ | 314.0 | $ | 244.7 | $ | 1.43 | ||||
| Twelve Months Ended December 31, 2024 | ||||||||||
| Pre-Tax Income | Net Income Available to Common Stockholders | Diluted EPS | ||||||||
| Reported (GAAP) | $ | 1,017.0 | $ | 752.1 | $ | 4.37 | ||||
| Loss on sale of investment securities, net | 136.2 | 102.1 | 0.60 | |||||||
| Exit of non-core operations | 16.0 | 11.6 | 0.07 | |||||||
| Strategic restructuring costs and other | 22.2 | 16.2 | 0.10 | |||||||
| FDIC special assessment | 10.3 | 7.8 | 0.04 | |||||||
| Ametros acquisition expenses | 3.1 | 2.4 | 0.01 | |||||||
| Net (gain) on sale of mortgage servicing rights | (11.7) | (8.8) | (0.05) | |||||||
| Discrete tax adjustment | N/A | 10.9 | 0.07 | |||||||
| Deferred tax asset valuation adjustment | N/A | 29.4 | 0.17 | |||||||
| Adjusted (non-GAAP) | $ | 1,193.1 | $ | 923.7 | $ | 5.38 |
Note: Totals may not sum due to rounding
22