WEBSTER FINANCIAL CORPORATION 
By Company Strengthened Capital, Bolstered Loan Loss Reserves, Reduced Expenses
Key points for the quarter included:
Loss of
Provision for credit losses of
Planned elimination of approximately 200 additional positions across the Company, resulting in an additional severance charge of
Pre-tax operating loss of
Strong tangible capital position, including all of the above charges, of 7.70 percent at year end compared to 5.89 percent a year ago. Significantly exceed all requirements for well capitalized regulatory ratios
Dividend reduced to
Goodwill Impairment
As indicated in the Form 8-K filed
Pre-tax Operating Income
Twelve Twelve
(in thousands, except per Months Months
share data) Three Months Ended Ended Ended
Dec. 31, Sept. 30, Dec. 31, Dec. 31,
2008 2008 2008 2007
Net (Loss) Income Before
Tax $(364,489) $(18,114) $(384,597) $158,784
Adjustments:
OTTI Charge 129,593 33,507 219,277 3,565
Securities Losses (Gains) 4,233 2,110 6,094 (1,721)
Severance 5,905 1,535 16,158 15,608
Impairment of Goodwill 188,866 1,013 198,379 -
Gain on Webster Capital
Trust Securities - - - (2,130)
Visa Share Redemption - - (1,625) -
Total Adjustments 328,597 38,165 438,283 15,322
Pre-tax Operating Loss
Income $(35,892) $20,051 $53,686 $174,106
Pre Tax Loss Earnings Per
Share $(0.83) $0.29 $0.80 $3.17
For the full year 2008, net loss totaled
Webster Chairman and Chief Executive Officer
Webster will provide details on its fourth quarter performance in a conference call at
Previously announced charges taken in the fourth quarter included
Of the
On
Webster also announced today that its Board of Directors, at its
Asset Quality
-- Total nonperforming assets were $263.2 million or 2.15 percent of total
loans and other real estate owned at December 31, 2008 compared to
$250.5 million or 1.94 percent at September 30, 2008. The $12.7 million
increase in nonperforming assets was primarily attributed to a $7.9
million increase in other real estate owned and a $6.2 million increase
in non performing loans in the liquidating portfolio offset by a decline
of $1.4 million of nonperforming loans in the continuing portfolio
-- Past due loans for the continuing portfolios totaled $117.4 million at
December 31, 2008, an increase of $15.3 million compared to $102.1
million at September 30, 2008. The increase was primarily related to
increases of $12.3 million in commercial, $1.8 million in equipment
financing, $5.5 million in residential loans and $10.6 million in
consumer loans offset by decreases in commercial real estate of $11.1
million and residential development of $3.6 million. Past due loans for
the liquidating portfolio totaled $21.0 million at December 31, 2008
compared to $19.1 million at September 30, 2008.
Net interest income
-- Net interest margin was 3.20 percent in the fourth quarter compared to
3.32 percent in the third quarter; the decline reflects the impact of
three Federal Reserve rate reductions totaling 175 bps in the fourth
quarter as well as interest reversals on nonaccrual loans and pooled
trust preferred securities.
-- Average earning assets totaled $15.9 billion, up from $15.8 billion last
quarter.
Provision For Credit Losses
-- $75.0 million of the provision for credit losses was related to the
Company's continuing portfolios, including $30.0 million for
residential development loans in the commercial real estate portfolio,
and $25.0 million was related to the liquidating home equity portfolio.
-- The increase over the third quarter reflects charge-offs based on recent
appraisals on nonaccruing residential development loans, higher
forecasted charge-offs for the liquidating home equity portfolio in
light of deteriorating economic conditions, and increased reserve levels
for other lines of business given economic deterioration.
Non-interest income
-- Deposit service fees declined by $1.7 million from last quarter;
primarily from a decline in NSF fees.
-- Wealth and investment services revenues declined by $590,000; primarily
from a decline in the value of assets under management due to adverse
market conditions.
-- Loss on sale of securities totaled $4.2 million; primarily to maximize
tax strategies.
Non-interest expenses
-- Excluding goodwill impairment and OneWebster charges, the decline from
last quarter represents reduced operating expenses from One Webster
initiatives as well as a significant reduction in incentive
compensation.
Income Taxes
-- Due to the pre-tax loss, the effective tax rate for the fourth quarter
was not meaningful. The $64.0 million tax benefit in the quarter on the
$364.5 million pre-tax loss applicable to continuing operations in the
period was impacted primarily by substantially no tax benefit being
available on the goodwill impairment charge ($66 million otherwise) and
to a lesser extent, no tax benefit being available on a portion of the
securities losses.
-- For tax purposes, $19.6 million of the securities losses are capital in
nature and the tax benefits on those have been limited ($6.8 million
otherwise). Offsetting that, in part, was the recognition of a $3.8
million tax benefit due to the October 2008 passage of the U.S.
Emergency Economic Stabilization Act, which included a provision
permitting banks to treat losses relating to FNMA and FHLMC preferred
stock as ordinary instead of capital. The $3.8 million of benefit
pertains to losses incurred by the Company prior to the fourth quarter
when the tax benefits were limited.
Investment securities
-- Total investments were $3.8 billion at December 31, 2008 compared to
$3.0 billion at September 30, 2008. The increase was primarily driven by
a $468 million residential loan securitization undertaken in the fourth
quarter. The securitization was undertaken to generate additional
collateral for borrowings and municipal deposits.
Loans
-- Total loans were $12.2 billion at December 31, 2008 compared to $12.9
billion at September 30, 2008. In the fourth quarter, commercial and
commercial real estate loans decreased by $90.2 million and $133.0
million, respectively while consumer increased by $43.8 million.
Residential mortgage loans declined by $499.4 million largely as a
result of the aforementioned residential loan securitization undertaken
during the fourth quarter.
Deposits and borrowings
-- Total deposits were $11.9 billion at December 31, 2008 compared to $11.8
billion at September 30, 2008. In the fourth quarter, consumer
preferences shifted to certificates of deposits, savings accounts and
NOW accounts as balances increased $184.8 million, $43.1 million and
$61.6 million, respectively. Offsetting these increases were decreases
in demand deposits and money market accounts of $16.0 million and $235.2
million, respectively.
-- Core deposits as a percent of total deposits was 59.0 percent at
December 31, 2008 compared to 60.5 percent at the end of the third
quarter and 59.5 percent a year ago.
-- Total borrowings were $3.6 billion, a decline of $107 million from $3.7
billion at September 30, 2008.
Webster Financial Corporation is the holding company for
Conference Call
A conference call covering Webster's fourth quarter earnings announcement will be held today,
Forward-looking Statements
Statements in this press release regarding Webster Financial Corporation's business that are not historical facts are "forward-looking statements" that involve risks and uncertainties. For a discussion of such risks and uncertainties that could cause actual results to differ from those contained in the forward-looking statement, see "Forward Looking Statements" in Webster's Annual Report for 2007. Except as required by law, Webster does not undertake to update any such forward looking information.
Non-GAAP Financial Measures
In addition to results presented in accordance with GAAP, this press release contains certain non-GAAP financial measures. A reconciliation of net income and other performance ratios, as adjusted, is included in the accompanying selected financial highlights table.
We believe that providing certain non-GAAP financial measures provides investors with information useful in understanding our financial performance, our performance trends and financial position. Specifically, we provide measures based on what we believe are our operating earnings on a consistent basis and exclude non-core operating items which affect the GAAP reporting of results of operations. We utilize these measures for internal planning and forecasting purposes. We, as well as securities analysts, investors and other interested parties, also use these measures to compare peer company operating performance. We believe that our presentation and discussion, together with the accompanying reconciliations, provides a complete understanding of factors and trends affecting our business and allows investors to view performance in a manner similar to management. These non-GAAP measures should not be considered a substitute for GAAP basis measures and results and we strongly encourage investors to review our consolidated financial statements in their entirety and not to rely on any single financial measure. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names.
Media Contact Investor Contact
Ed Steadham 203-578-2287 Terry Mangan 203-578-2318
esteadham@websterbank.com tmangan@websterbank.com
WEBSTER FINANCIAL CORPORATION
Selected Financial Highlights (unaudited)
-----------------------------------------
At or for the Three At or for the Twelve
Months Ended December 31, Months Ended December 31,
(In
thousands,
except per
share data) 2008 2007 2008 2007
------------ ---- ---- ---- ----
Net income (loss) and performance ratios (annualized):
------------------------------------------------------
Net income
(loss) $(300,501) $(8,698) $(321,830) $96,773
Net income
(loss) per
diluted
common share (5.91) (0.16) (6.42) 1.76
Return on
average
shareholders'
equity (61.74)% (1.95)% (17.60)% 5.22%
Return on
average
tangible
equity (99.52) (3.37) (29.76) 8.83
Return on
average
assets (6.87) (0.21) (1.86) 0.57
Income (loss) from continuing operations and performance ratios
(annualized):
---------------------------------------------------------------
Income (loss)
from
continuing
operations $(300,509) $5,169 $(318,757) $110,696
Net income
(loss) from
continuing
operations
per diluted
common share (5.91) 0.10 (6.36) 2.01
Return on
average
shareholders'
equity (61.74)% 1.16% (17.43)% 5.97%
Return on
average
tangible
equity (99.52) 2.00 (29.48) 10.10
Return on
average
assets (6.87) 0.12 (1.84) 0.66
Noninterest
income as a
percentage of
total revenue (213.84) 28.14 (5.87) 28.48
Efficiency
ratio (a) 59.08 62.88 62.51 61.98
Asset quality:
--------------
Allowance for
credit losses $245,829 $197,586 $245,829 $197,586
Nonperforming
assets 263,189 121,072 263,189 121,072
Allowance for
credit losses
/ total loans 2.02% 1.58% 2.02% 1.58%
Net charge-
offs /
average loans
(annualized) 1.66 0.38 1.09 0.20
Nonperforming
loans / total
loans 1.91 0.90 1.91 0.90
Nonperforming
assets /
total loans
plus OREO 2.15 0.97 2.15 0.97
Allowance for
credit losses
/
nonperforming
loans 105.70 175.01 105.70 175.01
Other ratios (annualized):
--------------------------
Tangible
capital ratio 7.70% 5.89% 7.70% 5.89%
Tangible
common equity
ratio 4.08 5.89 4.08 5.89
Total-risk
based capital
(d) 15.20 11.39 15.20 11.39
Shareholders'
equity /
total assets 10.66 10.10 10.66 10.10
Interest-rate
spread 3.11 3.18 3.21 3.32
Net interest
margin 3.20 3.26 3.28 3.40
Share related:
--------------
Book value
per common
share $23.78 $33.09 $23.78 $33.09
Tangible book
value per
common share 13.35 18.73 13.35 18.73
Common stock
closing price 13.78 31.97 13.78 31.97
Dividends
declared per
common share 0.30 0.30 1.20 1.17
Common shares
issued and
outstanding 52,884 52,475 52,884 52,475
Basic shares
(average) 52,031 52,400 52,020 54,469
Diluted
shares
(average) 52,031 52,795 52,020 54,996
Footnotes:
(a) Calculated using SNL's methodology - noninterest expense (excluding
foreclosed property expenses, intangible amortization, goodwill
impairments and other charges) as a percentage of net interest income
(FTE basis) plus noninterest income (excluding gain/loss on securities
and other charges).
(b) For purposes of the yield computation, unrealized gains (losses) on
securities available for sale are excluded from the average balance.
(c) NCLC is defined as National Construction Lending Center
(d) The ratios presented are projected for the 2008 reporting periods and
actual for the 2007 reporting periods.
WEBSTER FINANCIAL CORPORATION
Consolidated Balance Sheet (unaudited)
-----------------------------------------
December September December
31, 30, 31,
(In thousands) 2008 2008 2007
-------------- ---- ---- ----
Assets:
Cash and due from depository
institutions $259,208 $221,195 $306,654
Short-term investments 22,154 6,449 5,112
Investment securities:
Trading, at fair value 77 1,197 2,340
Available for sale, at fair
value 1,188,705 824,118 639,364
Held-to-maturity 2,522,511 2,031,665 2,107,227
Other securities 134,874 134,874 110,962
------- ------- -------
Total securities 3,846,167 2,991,854 2,859,893
Loans held for sale 24,524 3,247 221,568
Loans:
Residential mortgages 3,068,441 3,567,825 3,641,602
Commercial 3,586,807 3,677,069 3,516,213
Commercial real estate 2,232,174 2,365,181 2,059,881
Consumer 3,300,169 3,256,314 3,258,247
--------- --------- ---------
Total loans 12,187,591 12,866,389 12,475,943
Allowance for loan losses (235,329) (189,169) (188,086)
--------- --------- ---------
Loans, net 11,952,262 12,677,220 12,287,857
Accrued interest receivable 74,307 75,830 80,432
Premises and equipment, net 185,928 188,443 193,063
Goodwill and other intangible
assets, net 563,926 754,026 768,015
Cash surrender value of life
insurance 279,807 277,176 269,366
Assets held for disposition 5,571 900 51,603
Unsettled trades 105 68,996 2,308
Deferred tax assets, net 189,337 127,628 58,126
Prepaid expenses and other
assets 180,241 123,073 97,963
------- ------- ------
Total Assets $17,583,537 $17,516,037 $17,201,960
=========== =========== ===========
Liabilities and Shareholders'
Equity:
Deposits:
Demand deposits $1,493,295 $1,509,319 $1,538,083
NOW accounts 1,802,250 1,740,650 1,718,757
Money market deposit accounts 1,356,361 1,591,599 1,828,656
Savings accounts 2,361,169 2,318,014 2,259,747
Certificates of deposit 4,677,615 4,492,767 4,772,624
Brokered deposits 194,200 180,026 236,291
------- ------- -------
Total deposits 11,884,890 11,832,375 12,354,158
Securities sold under
agreements to repurchase and
other short-term debt 1,570,971 1,688,728 1,238,012
Federal Home Loan Bank
advances 1,335,996 1,355,931 1,052,228
Long-term debt 687,797 657,004 650,643
Liabilities held for
disposition - - 9,261
Accrued expenses and other
liabilities 220,187 155,853 151,449
------- ------- -------
Total liabilities 15,699,841 15,689,891 15,455,751
Preferred stock of subsidiary
corporation 9,577 9,577 9,577
Shareholders' equity 1,874,119 1,816,569 1,736,632
--------- --------- ---------
Total Liabilities and
Shareholders' Equity $17,583,537 $17,516,037 $17,201,960
=========== =========== ===========
See Selected Financial Highlights for footnotes.
WEBSTER FINANCIAL CORPORATION
Consolidated Statements of Operations (unaudited)
-------------------------------------------------
Three Months Ended Twelve Months Ended
December 31, December 31,
------------ ------------
(In thousands, except per share
data) 2008 2007 2008 2007
------------------------------- ---- ---- ---- ----
Interest income:
Loans $168,200 $205,363 $710,621 $837,711
Investment securities and
short-term investments 40,398 36,318 157,055 136,324
Loans held for sale 51 3,276 1,597 21,560
-- ----- ----- ------
Total interest income 208,649 244,957 869,273 995,595
------- ------- ------- -------
Interest expense:
Deposits 57,154 89,510 250,182 361,307
Borrowings 25,427 32,748 113,300 126,096
------ ------ ------- -------
Total interest expense 82,581 122,258 363,482 487,403
------ ------- ------- -------
Net interest income 126,068 122,699 505,791 508,192
Provision for credit losses 100,000 45,250 186,300 67,750
------- ------ ------- ------
Net interest income after
provision for credit
losses 26,068 77,449 319,491 440,442
------ ------ ------- -------
Noninterest income:
Deposit service fees 30,018 30,577 120,132 114,645
Loan related fees 7,147 7,328 29,067 30,830
Wealth and investment services 6,480 7,507 28,140 29,164
Mortgage banking activities 336 1,276 1,230 9,316
Increase in cash surrender
value of life insurance 2,631 2,637 10,441 10,386
Gain (loss) on sale of
securities, net (4,233) 195 (4,034) 1,721
Other 1,315 2,094 6,684 7,685
----- ----- ----- -----
43,694 51,614 191,660 203,747
Loss on write-down of
investments to fair value (129,593) (3,565) (219,277) (3,565)
Loss on sale of FNMA/FHLMC
preferred stock - - (2,060) -
Visa share redemption - - 1,625 -
Gain on Webster Capital Trust
I and II securities - - - 2,130
- - - -----
Total noninterest income (85,899) 48,049 (28,052) 202,312
------- ------ ------- -------
Noninterest expenses:
Compensation and benefits 52,078 60,965 239,701 244,570
Occupancy 13,406 12,821 53,043 49,378
Furniture and equipment 15,469 15,353 61,155 59,771
Intangible amortization 1,463 1,881 5,939 10,374
Marketing 2,895 1,727 13,956 14,213
Professional services 4,101 3,721 15,758 15,038
Foreclosed property expense 3,414 1,634 8,943 2,010
FDIC deposit insurance
assessment 3,468 357 4,698 1,520
Other 13,593 16,522 58,306 62,548
109,887 114,981 461,499 459,422
Debt redemption premium - - - 8,940
Severance and other costs 5,905 5,343 16,158 15,608
Impairment of goodwill 188,866 - 198,379 -
------- - ------- -
Total noninterest expenses 304,658 120,324 676,036 483,970
------- ------- ------- -------
Income (loss) from continuing
operations before income
taxes (364,489) 5,174 (384,597) 158,784
Income taxes (benefit) (63,980) 5 (65,840) 48,088
------- - ------- ------
Income (loss) from continuing
operations (300,509) 5,169 (318,757) 110,696
Income (loss) from
discontinued operations, net
of tax 8 (13,867) (3,073) (13,923)
- ------- ------ -------
Net income (loss) $(300,501) $(8,698) $(321,830) $96,773
--------- ------- --------- -------
Preferred stock dividends 7,093 - 12,087 -
----- - ------ -
Net income (loss) available
to common shareholders $(307,594) $(8,698) $(333,917) $96,773
========= ======= ========= =======
Diluted shares (average) 52,031 52,795 52,020 54,996
Net income (loss) per common share:
Basic
Income (loss) from continuing
operations $(5.91) $0.10 $(6.36) $2.03
Net income (loss) (5.91) (0.17) (6.42) 1.78
Diluted
Income (loss) from continuing
operations (5.91) 0.10 (6.36) 2.01
Net income (loss) (5.91) (0.16) (6.42) 1.76
See Selected Financial Highlights for footnotes.
WEBSTER FINANCIAL CORPORATION
Five Quarter Consolidated Statements of Operations (unaudited)
--------------------------------------------------------------
Three Months Ended
------------------
Dec. 31, Sept. 30, June 30, March 31, Dec. 31,
(In thousands,
except per share
data) 2008 2008 2008 2008 2007
----------------- ---- ---- ---- ---- ----
Interest income:
Loans $168,200 $175,363 $175,786 $191,272 $205,363
Investment
securities and short-
term investments 40,398 39,210 38,115 39,332 36,318
Loans held for sale 51 54 92 1,400 3,276
-- -- -- ----- -----
Total interest
income 208,649 214,627 213,993 232,004 244,957
------- ------- ------- ------- -------
Interest expense:
Deposits 57,154 57,730 60,056 75,242 89,510
Borrowings 25,427 27,716 28,251 31,906 32,748
------ ------ ------ ------ ------
Total interest
expense 82,581 85,446 88,307 107,148 122,258
------ ------ ------ ------- -------
Net interest income 126,068 129,181 125,686 124,856 122,699
Provision for credit
losses 100,000 45,500 25,000 15,800 45,250
------- ------ ------ ------ ------
Net interest
income after
provision for
credit losses 26,068 83,681 100,686 109,056 77,449
------ ------ ------- ------- ------
Noninterest income:
Deposit service fees 30,018 31,738 29,943 28,433 30,577
Loan related fees 7,147 7,171 7,891 6,858 7,328
Wealth and
investment services 6,480 7,070 7,634 6,956 7,507
Mortgage banking
activities 336 50 104 740 1,276
Increase in cash
surrender value of
life insurance 2,631 2,606 2,623 2,581 2,637
Gain (loss) on sale
of securities, net (4,233) (50) 126 123 195
Other 1,315 2,731 854 1,784 2,094
----- ----- --- ----- -----
43,694 51,316 49,175 47,475 51,614
Loss on write-down
of investments to
fair value (129,593) (33,507) (54,924) (1,253) (3,565)
Loss on sale of FNMA/
FHLMC preferred
stock - (2,060) - - -
VISA share redemption - - - 1,625 -
- - - ----- -
Total noninterest
income (85,899) 15,749 (5,749) 47,847 48,049
------- ------ ------ ------ ------
Noninterest expenses:
Compensation and
benefits 52,078 61,314 62,866 63,443 59,910
Occupancy 13,406 12,827 13,128 13,682 12,321
Furniture and
equipment 15,469 14,892 15,634 15,160 15,353
Intangible
amortization 1,463 1,464 1,464 1,548 1,881
Marketing 2,895 2,478 4,940 3,643 1,727
Professional services 4,101 3,798 3,706 4,153 3,721
Foreclosed property
expense 3,414 3,464 1,552 513 1,634
FDIC deposit
insurance assessment 3,468 532 344 354 357
Other 13,593 14,227 16,221 14,265 16,522
109,887 114,996 119,855 116,761 113,426
Severance and other
costs 5,905 1,535 9,368 (650) 6,898
Impairment of
goodwill 188,866 1,013 8,500 - -
------- ----- ----- - -
Total noninterest
expenses 304,658 117,544 137,723 116,111 120,324
------- ------- ------- ------- -------
Income (loss) from
continuing
operations before
income taxes (364,489) (18,114) (42,786) 40,792 5,174
Income taxes
(benefit) (63,980) (1,878) (14,285) 14,303 5
------- ------ ------- ------ -
Income (loss) from
continuing
operations (300,509) (16,236) (28,501) 26,489 5,169
Income (loss) from
discontinued
operations, net of
tax 8 (518) (439) (2,124) (13,867)
- ---- ---- ------ -------
Net income (loss) $(300,501) $(16,754) $(28,940) $24,365 $(8,698)
========= ======== ======== ======= =======
Preferred stock
dividends 7,093 4,994 - - -
----- ----- - - -
Net income (loss)
available to common
shareholders $(307,594) $(21,748) $(28,940) $24,365 $(8,698)
--------- -------- -------- ------- -------
Diluted shares
(average) 52,031 52,032 52,017 52,297 52,795
Net income (loss) per common share:
Basic
Income (loss) from
continuing
operations $(5.91) $(0.41) $(0.55) $0.51 $0.10
Net income (loss) (5.91) (0.42) (0.56) 0.47 (0.17)
Diluted
Income (loss) from
continuing
operations (5.91) (0.41) (0.55) 0.51 0.10
Net income (loss) (5.91) (0.42) (0.56) 0.47 (0.16)
See Selected Financial Highlights for footnotes.
WEBSTER FINANCIAL CORPORATION
Five Quarter Interest-Rate Spreads (unaudited)
Three Months Ended
------------------
December September June 30, March 31, December
31, 30, 31,
2008 2008 2008 2008 2007
---- ---- ---- ---- ----
Interest-rate
spread
-------------
Yield on
interest-earning
assets 5.24 % 5.45 % 5.51 % 6.02 % 6.42 %
Cost of
interest-bearing
liabilities 2.13 2.21 2.31 2.82 3.24
---- ---- ---- ---- ----
Interest-rate
spread 3.11 % 3.24 % 3.20 % 3.20 % 3.18 %
==== ==== ==== ==== ====
Net interest
margin 3.20 % 3.32 % 3.26 % 3.27 % 3.26 %
==== ==== ==== ==== ====
Consolidated Average Balances,
Yields and Rates Paid (unaudited)
------------------------------------------------------
Three Months Ended December 31, 2008
------------------------------- ----
Fully tax-
Average equivalent
(Dollars in thousands) balance Interest yield/rate
---------------------- ------- --------- ----------
Assets:
Interest-earning assets:
Loans $12,769,534 $168,200 5.22%
Investment securities (b) 3,135,069 44,114 5.34
Loans held for sale 4,093 51 4.99
Short-term investments 11,399 40 1.38
------ -- ----
Total interest-earning assets 15,920,095 212,405 5.24
------- ----
Noninterest-earning assets 1,570,208
---------
Total assets $17,490,303
===========
Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Demand deposits $1,510,066 $- -%
Savings, NOW and money market
deposit accounts 5,550,224 17,849 1.28
Time deposits 4,823,332 39,305 3.24
--------- ------ ----
Total deposits 11,883,622 57,154 1.91
---------- ------ ----
Securities sold under agreements to repurchase
and other short-term debt 1,446,049 6,345 1.72
Federal Home Loan Bank advances 1,384,706 8,630 2.44
Long-term debt 665,382 10,452 6.28
------- ------ ----
Total borrowings 3,496,137 25,427 2.87
--------- ------ ----
Total interest-bearing
liabilities 15,379,759 82,581 2.13
------ ----
Noninterest-bearing liabilities 154,048
-------
Total liabilities 15,533,807
Preferred stock of subsidiary
corporation 9,577
Shareholders' equity 1,946,919
---------
Total liabilities and
shareholders' equity $17,490,303
===========
Tax-equivalent net interest income 129,824
Less: tax-equivalent adjustment (3,756)
------
Net interest income $126,068
========
Interest-rate spread 3.11%
====
Net interest margin 3.20%
====
Three Months Ended December 31, 2007
------------------------------- ----
Fully tax-
Average equivalent
(Dollars in thousands) balance Interest yield/rate
---------------------- ------- --------- ----------
Assets:
Interest-earning assets:
Loans $12,422,076 $205,363 6.54%
Investment securities (b) 2,672,421 39,329 5.85
Loans held for sale 208,199 3,276 6.29
Short-term investments 18,464 132 2.79
------ --- ----
Total interest-earning assets 15,321,160 248,100 6.42
------- ----
Noninterest-earning assets 1,564,878
---------
Total assets $16,886,038
===========
Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Demand deposits $1,492,936 $- -%
Savings, NOW and money market
deposit accounts 5,795,625 31,608 2.16
Time deposits 5,104,534 57,902 4.50
--------- ------ ----
Total deposits 12,393,095 89,510 2.86
---------- ------ ----
Securities sold under agreements to repurchase
and other short-term debt 1,072,976 11,560 4.22
Federal Home Loan Bank advances 797,713 8,812 4.32
Long-term debt 662,904 12,376 7.47
------- ------ ----
Total borrowings 2,533,593 32,748 5.10
--------- ------ ----
Total interest-bearing
liabilities 14,926,688 122,258 3.24
------- ----
Noninterest-bearing liabilities 161,761
-------
Total liabilities 15,088,449
Preferred stock of subsidiary
corporation 9,577
Shareholders' equity 1,788,012
---------
Total liabilities and
shareholders' equity $16,886,038
===========
Tax-equivalent net interest income 125,842
Less: tax-equivalent adjustment (3,143)
------
Net interest income $122,699
========
Interest-rate spread 3.18%
====
Net interest margin 3.26%
====
See Selected Financial Highlights for footnotes.
WEBSTER FINANCIAL CORPORATION
Consolidated Average Balances,
Yields and Rates Paid (unaudited)
------------------------------------------------------
Twelve Months Ended December 31, 2008
-------------------------------- ----
Fully tax-
Average equivalent
(Dollars in thousands) balance Interest yield/rate
---------------------- ------- -------- ----------
Assets:
Interest-earning assets:
Loans $12,700,933 $710,621 5.60%
Investment securities (b) 3,023,039 171,813 5.51
Loans held for sale 27,366 1,597 5.83
Short-term investments 6,422 146 2.27
----- --- ----
Total interest-earning
assets 15,757,760 884,177 5.58
------- ----
Noninterest-earning assets 1,546,699
---------
Total assets $17,304,459
===========
Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Demand deposits $1,487,661 $- -%
Savings, NOW and money market
deposit accounts 5,776,660 80,994 1.40
Time deposits 4,764,386 169,188 3.55
--------- ------- ----
Total deposits 12,028,707 250,182 2.08
---------- ------- ----
Securities sold under agreements to repurchase
and other short-term debt 1,359,318 34,643 2.55
Federal Home Loan Bank
advances 1,269,098 39,236 3.09
Long-term debt 660,146 39,421 5.97
------- ------ ----
Total borrowings 3,288,562 113,300 3.45
--------- ------- ----
Total interest-bearing
liabilities 15,317,269 363,482 2.37
------- ----
Noninterest-bearing
liabilities 149,236
-------
Total liabilities 15,466,505
Preferred stock of subsidiary
corporation 9,577
Shareholders' equity 1,828,377
---------
Total liabilities and
shareholders' equity $17,304,459
===========
520,695
Less: tax-equivalent adjustment (14,904)
-------
Net interest income $505,791
========
Interest-rate spread 3.21%
====
Net interest margin 3.28%
====
Twelve Months Ended December 31, 2007
-------------------------------- ----
Fully tax-
Average equivalent
(Dollars in thousands) balance Interest yield/rate
---------------------- ------- -------- ----------
Assets:
Interest-earning assets:
Loans $12,390,955 $837,711 6.76%
Investment securities (b) 2,470,400 144,352 5.79
Loans held for sale 344,663 21,560 6.26
Short-term investments 59,345 3,045 5.13
------ ----- ----
Total interest-earning
assets 15,265,363 1,006,668 6.60
--------- ----
Noninterest-earning assets 1,590,282
---------
Total assets $16,855,645
===========
Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Demand deposits $1,506,696 $- -
Savings, NOW and money market
deposit accounts 5,749,378 125,590 2.18
Time deposits 5,218,449 235,717 4.52
--------- ------- ----
Total deposits 12,474,523 361,307 2.90
---------- ------- ----
Securities sold under agreements to repurchase
and other short-term debt 996,341 44,769 4.49
Federal Home Loan Bank
advances 757,367 35,302 4.66
Long-term debt 609,371 46,025 7.55
------- ------ ----
Total borrowings 2,363,079 126,096 5.34
--------- ------- ----
Total interest-bearing
liabilities 14,837,602 487,403 3.28
------- ----
Noninterest-bearing
liabilities 156,083
-------
Total liabilities 14,993,685
Preferred stock of subsidiary
corporation 9,577
Shareholders' equity 1,852,383
---------
Total liabilities and
shareholders' equity $16,855,645
===========
519,265
Less: tax-equivalent adjustment (11,073)
-------
Net interest income $508,192
========
Interest-rate spread 3.32%
====
Net interest margin 3.40%
====
See Selected Financial Highlights for footnotes.
WEBSTER FINANCIAL CORPORATION
Five Quarter Nonperforming Assets (unaudited)
---------------------------------------------
Dec. 31, Sept. 30, June 30, March 31, Dec. 31,
(Dollars in thousands) 2008 2008 2008 2008 2007
---------------------- ---- ---- ---- ---- ----
Nonperforming loans:
Continuing Portfolio:
Commercial:
Commercial $49,987 $51,081 $55,788 $30,264 $26,804
Equipment financing 13,138 7,462 6,718 5,719 6,473
------ ----- ----- ----- -----
Total commercial 63,125 58,543 62,506 35,983 33,277
Commercial real estate 8,032 8,971 9,710 7,809 8,523
Residential development 48,628 71,065 48,130 13,402 4,373
Residential:
Residential
construction to
permanent 10,896 8,189 6,660 4,200 2,820
All other 37,385 27,992 19,633 22,042 19,532
------ ------ ------ ------ ------
Total residential 48,281 36,181 26,293 26,242 22,352
Consumer 29,939 23,668 20,745 17,084 14,455
------ ------ ------ ------ ------
Nonperforming loans -
continuing portfolio 198,005 198,428 167,384 100,520 82,980
------- ------- ------- ------- ------
Liquidating Portfolio:
NCLC (c) 17,623 17,491 29,025 29,804 22,797
Consumer 16,938 10,994 10,651 9,378 7,126
------ ------ ------ ----- -----
Nonperforming loans -
liquidating portfolio 34,561 28,485 39,676 39,182 29,923
Total nonperforming loans 232,566 226,913 207,060 139,702 112,903
------- ------- ------- ------- -------
Other real estate owned
and repossessed assets:
Commercial 22,868 13,287 6,776 6,590 2,211
Residential 5,382 6,014 4,071 1,820 1,062
Consumer 2,373 3,461 6,193 5,872 4,896
----- ----- ----- ----- -----
Total other real estate
owned and repossessed
assets 30,623 22,762 17,040 14,282 8,169
------ ------ ------ ------ -----
Total nonperforming
assets $263,189 $249,675 $224,100 $153,984 $121,072
======== ======== ======== ======== ========
Accruing loans 90 or
more days past due $1,110 $708 $1,380 $1,032 $1,891
====== ==== ====== ====== ======
See Selected Financial Highlights for footnotes.
WEBSTER FINANCIAL CORPORATION
Five Quarter Past Due Loans (unaudited)
---------------------------------------
Dec. 31, Sept. 30, June 30, March 31, Dec. 31,
(Dollars in thousands) 2008 2008 2008 2008 2007
---------------------- ---- ---- ---- ---- ----
Past Due 30-89 days:
Continuing Portfolio:
Commercial:
Commercial $19,493 $7,196 $8,337 $10,229 $13,291
Equipment financing 9,860 8,102 9,414 10,269 5,644
----- ----- ----- ------ -----
Total commercial 29,353 15,298 17,751 20,498 18,935
Commercial real estate 7,158 18,241 2,756 24,655 8,178
Residential development 2,096 5,832 2,485 5,999 3,876
Residential:
Residential
construction to
permanent 3,934 4,156 1,914 3,339 3,743
All other 41,048 35,341 24,621 22,295 19,967
------ ------ ------ ------ ------
Total residential 44,982 39,497 26,535 25,634 23,710
Consumer 33,848 23,279 18,137 20,721 22,347
------ ------ ------ ------ ------
Past Due 30-89 days -
continuing portfolio 117,437 102,147 67,664 97,507 77,046
------- ------- ------ ------ ------
Liquidating Portfolio:
NCLC (c) 5,414 3,758 3,486 4,983 13,143
Consumer 15,621 15,370 8,063 10,473 8,793
------ ------ ----- ------ -----
Past Due 30-89 days -
liquidating portfolio 21,035 19,128 11,549 15,456 21,936
------ ------ ------ ------ ------
Past Due 90 days or more:
Commercial 459 534 1,380 596 1,141
Commercial real estate 450 174 - - 550
Residential
development 201 - - 436 200
--- - - --- ---
Past Due 90 days or more 1,110 708 1,380 1,032 1,891
----- --- ----- ----- -----
Total $139,582 $121,983 $80,593 $113,995 $100,873
======== ======== ======= ======== ========
See Selected Financial Highlights for footnotes.
WEBSTER FINANCIAL CORPORATION
Five Quarter Changes in the Allowance for Credit Losses (unaudited)
-------------------------------------------------------------------
For the Three Months Ended
--------------------------
Dec. 31, Sept. 30, June 30,
(Dollars in thousands) 2008 2008 2008
---------------------- ---- ---- ----
Beginning balance $198,669 $194,368 $189,808
Provision 100,000 45,500 25,000
Charge-offs continuing portfolio:
Commercial 5,641 13,837 3,903
Equipment financing 1,222 998 672
Commercial real estate 253 - 378
Residential development 29,909 161 3,711
Residential 3,037 1,624 1,036
Consumer 3,887 4,643 2,784
----- ----- -----
Charge-offs continuing
portfolio: 43,949 21,263 12,484
Recoveries (796) (714) (1,290)
---- ---- ------
Net loan charge-offs 43,153 20,549 11,194
------ ------ ------
Charge-offs liquidating portfolio:
NCLC (c) 1,518 14,025 4,203
Consumer 8,779 6,767 5,450
----- ----- -----
Charge-offs liquidating
portfolio: 10,297 20,792 9,653
Recoveries (610) (142) (407)
---- ---
