WBS Webster Financial Corporation

Webster Financial Corporation ("Webster") (NYSE: WBS), the holding company for Webster Bank, N.A. and its HSA Bank division, today announced net income available to common stockholders of $181.2 million, or $1.05 per diluted share, for the quarter ended December 31, 2023, compared to $240.6 million, or $1.38 per diluted share, for the quarter ended December 31, 2022.

Fourth quarter 2023 results include $94.7 million pre-tax ($69.3 million after tax), or $0.411 per diluted share, of charges related to a FDIC special assessment, the merger with Sterling Bancorp on January 31, 2022 ("the merger"), and securities repositioning. Excluding these charges, adjusted earnings per diluted share would have been $1.461 for the quarter ended December 31, 2023.

"In addition to our strong financial performance for the quarter and full-year 2023, we realized several meaningful strategic accomplishments," said John R. Ciulla, president and chief executive officer. "Our strong financial position and proactive actions position us well for continued success in 2024."

Highlights for the fourth quarter of 2023:

• Revenue of $634.8 million.
• Period end loan and lease balance of $50.7 billion, up $0.6 billion or 1.3 percent from prior quarter; 80.7 percent commercial loans and leases, 19.3 percent consumer loans, and a loan to deposit ratio of 83.5 percent.
• Period end deposit balance of $60.8 billion, up $0.5 billion or 0.7 percent from prior quarter.
• Provision for credit losses totaled $36.0 million.
• Return on average assets of 1.01 percent; adjusted 1.39 percent1.
• Return on average tangible common equity of 14.49 percent1; adjusted 19.83 percent1.
• Net interest margin of 3.42 percent, down 7 basis points from prior quarter.
• Common equity tier 1 ratio of 11.12 percent.
• Efficiency ratio of 43.04 percent1.
• Tangible common equity ratio of 7.73 percent1.

"We continue to invest in our businesses, including the recently announced acquisition of Ametros Financial, which will provide further diversification of funding sources," said Glenn MacInnes, executive vice president and chief financial officer. "At the same time, we are consistently improving our existing operations to maximize financial performance.”

1

See "Reconciliations to GAAP Financial Measures" section beginning on page 19.

Line of Business performance compared to the fourth quarter of 2022

Commercial Banking

Webster’s Commercial Banking segment serves businesses that have more than $2 million of revenue through its business banking, middle market, asset-based lending, equipment finance, commercial real estate, sponsor finance, private banking, and treasury services business units. At December 31, 2023, Commercial Banking had $40.9 billion in loans and leases and $18.2 billion in deposits, as well as a combined $2.9 billion in assets under administration and management.

Commercial Banking Operating Results:

 

 

 

 

 

Percent

 

 

Three months ended December 31,

 

Favorable/

(In thousands)

 

2023

2022

 

(Unfavorable)

Net interest income

 

$

377,725

$

392,340

 

 

(3.7

)%

 

Non-interest income

 

 

34,403

 

42,767

 

 

(19.6

)

 

Operating revenue

 

 

412,128

 

435,107

 

 

(5.3

)

 

Non-interest expense

 

 

109,893

 

103,725

 

 

(5.9

)

 

Pre-tax, pre-provision net revenue

 

$

302,235

$

331,382

 

 

(8.8

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Percent

 

 

At December 31,

 

Increase/

(In millions)

 

2023

2022

 

(Decrease)

Loans and leases

 

$

40,934

$

40,115

 

 

2.0

%

 

Deposits

 

 

18,246

 

19,563

 

 

(6.7

)

 

AUA / AUM (off balance sheet)

 

 

2,911

 

2,259

 

 

28.9

 

 

Pre-tax, pre-provision net revenue decreased $29.1 million, to $302.2 million, in the quarter as compared to prior year. Net interest income decreased $14.6 million, to $377.7 million, primarily driven by lower deposit balances coupled with higher rates paid on deposits, partially offset by loan growth. Non-interest income decreased $8.4 million, to $34.4 million, driven by decreases in loan servicing income, syndication fees, direct investments income, and cash management fees. Non-interest expense increased $6.2 million, to $109.9 million, primarily resulting from continued investments in technology and talent to support balance sheet growth.

HSA Bank

Webster’s HSA Bank division offers a comprehensive consumer-directed healthcare solution that includes health savings accounts, health reimbursement arrangements, flexible spending accounts and commuter benefits. Health savings 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, 2023, HSA Bank had $12.9 billion in total footings comprising $8.3 billion in deposits and $4.6 billion in assets under administration through linked investment accounts.

HSA Bank Operating Results:

 

 

 

 

 

Percent

 

 

Three months ended December 31,

 

Favorable/

(In thousands)

 

2023

2022

 

(Unfavorable)

Net interest income

 

$

78,036

$

65,447

 

 

19.2

%

 

Non-interest income

 

 

20,224

 

25,234

 

 

(19.9

)

 

Operating revenue

 

 

98,260

 

90,681

 

 

8.4

 

 

Non-interest expense

 

 

41,947

 

40,655

 

 

(3.2

)

 

Pre-tax, net revenue

 

$

56,313

$

50,026

 

 

12.6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Percent

 

 

At December 31,

 

Increase/

(Dollars in millions)

 

2023

2022

 

(Decrease)

Number of accounts (thousands)

 

 

3,184

 

3,042

 

 

4.7

%

 

 

 

 

 

 

 

 

 

Deposits

 

$

8,288

$

7,945

 

 

4.3

 

 

Linked investment accounts (off balance sheet)

 

 

4,642

 

3,394

 

 

36.8

 

 

Total footings

 

$

12,930

$

11,339

 

 

14.0

 

 

Pre-tax net revenue increased $6.3 million, to $56.3 million, in the quarter as compared to prior year. Net interest income increased $12.6 million, to $78.0 million, primarily due to an increase in net deposit spread and growth in deposits. Non-interest income decreased $5.0 million, to $20.2 million, primarily due to lower customer fees. Non-interest expense increased $1.3 million, to $41.9 million, primarily due to higher compensation and benefits expense and service contract expense related to account growth, and the continued investment in our user experience build out.

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 Consumer Lending and Small Business Banking business units, as well as a distribution network consisting of 198 banking centers and 349 ATMs, a customer care center, and a full range of web and mobile-based banking services. Additionally, Webster Investments provides investment services to consumers and small business owners within Webster's targeted markets and retail footprint. At December 31, 2023, Consumer Banking had $9.8 billion in loans and $24.1 billion in deposits, as well as $7.9 billion in assets under administration.

Consumer Banking Operating Results:

 

 

 

 

 

Percent

 

 

Three months ended December 31,

 

Favorable/

(In thousands)

 

2023

2022

 

(Unfavorable)

Net interest income

 

$

188,130

$

209,077

 

 

(10.0

)%

 

Non-interest income

 

 

25,734

 

27,150

 

 

(5.2

)

 

Operating revenue

 

 

213,864

 

236,227

 

 

(9.5

)

 

Non-interest expense

 

 

103,819

 

113,669

 

 

8.7

 

 

Pre-tax, pre-provision net revenue

 

$

110,045

$

122,558

 

 

(10.2

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At December 31,

 

Percent

(In millions)

 

2023

2022

 

Increase

Loans

 

$

9,781

$

9,624

 

 

1.6

%

 

Deposits

 

 

24,060

 

23,610

 

 

1.9

 

 

AUA (off balance sheet)

 

 

7,876

 

7,872

 

 

0.1

 

 

Pre-tax, pre-provision net revenue decreased $12.5 million, to $110.0 million, in the quarter as compared to prior year. Net interest income decreased $20.9 million, to $188.1 million, primarily driven by higher rates paid on deposits, partially offset by loan and deposit growth. Non-interest income decreased $1.4 million, to $25.7 million, driven by lower deposit fee income, partially offset by gains on loan sales and higher investment services and other miscellaneous income. Non-interest expense decreased $9.9 million, to $103.8 million, primarily driven by lower technology and shared services expenses, coupled with the impact of outsourcing the consumer investment services platform.

Consolidated financial performance:

Quarterly net interest income compared to the fourth quarter of 2022:

• Net interest income was $571.0 million compared to $602.4 million.
• Net interest margin was 3.42 percent compared to 3.74 percent. The yield on interest-earning assets increased by 94 basis points, and the cost of interest-bearing liabilities increased by 136 basis points.
• Average interest-earning assets totaled $66.6 billion and increased by $2.6 billion, or 4.1 percent.
• Average loans and leases totaled $50.4 billion and increased by $1.8 billion, or 3.7 percent.
• Average deposits totaled $60.0 billion and increased by $5.9 billion, or 11.0 percent.

Quarterly provision for credit losses:

• The provision for credit losses was $36.0 million in the quarter, contributing to a $0.3 million increase in the allowance for credit losses on loans and leases from prior quarter. The provision also contributed to an increase in the reserves on unfunded loan commitments of $1.7 million. The provision for credit losses was $36.5 million in the prior quarter, and $43.0 million a year ago.
• Net charge-offs were $34.0 million, compared to $29.3 million in the prior quarter, and $20.2 million a year ago. The ratio of net charge-offs to average loans and leases was 0.27 percent, compared to 0.23 percent in the prior quarter, and 0.17 percent a year ago.
• The allowance for credit losses on loans and leases represented 1.25 percent of total loans and leases, compared to 1.27 percent at September 30, 2023, and 1.20 percent at December 31, 2022. The allowance represented 303 percent of nonperforming loans and leases at December 31, 2023, compared to 295 percent at September 30, 2023, and 292 percent at December 31, 2022.

Quarterly non-interest income compared to the fourth quarter of 2022:

• Total non-interest income was $63.8 million compared to $102.2 million, a decrease of $38.4 million. Total non-interest income includes a $16.8 million and $4.5 million loss on the sale of investment securities for the fourth quarter of 2023 and 2022, respectively. Excluding those losses, total non-interest income decreased $26.1 million. The decrease primarily reflects lower deposit fees, lower loan syndication, prepayment, and other transaction fees, and a decline in other non-interest income due to a non-cash swing in our modeled credit valuation adjustment on customer derivatives, direct investment income, and bank-owned life insurance income.

Quarterly non-interest expense compared to the fourth quarter of 2022:

• Total non-interest expense was $377.2 million compared to $348.4 million, an increase of $28.8 million. Total non-interest expense includes $47.2 million related to a FDIC special assessment and a net $30.7 million of merger related expense, compared to a net $45.9 million of merger and strategic initiatives charges a year ago. Excluding those charges, total non-interest expense decreased $3.1 million. The decrease reflects lower consulting, project, and loan related expenses, partially offset by increases in compensation and benefits and deposit insurance expense.

Quarterly income taxes compared to the fourth quarter of 2022:

• Income tax expense was $36.2 million compared to $68.4 million, and the effective tax rate was 16.3 percent compared to 21.8 percent. The lower effective tax rate in the current period reflects the recognition of a $5.5 million net discrete benefit attributable to 2022 state and local tax return true-up adjustments, along with the impact of decreased pre-tax income compared to the 2022 period.

Investment securities:

• Total investment securities, net were $16.0 billion, compared to $14.5 billion at both September 30, 2023, and December 31, 2022. The carrying value of the available-for-sale portfolio included $708.7 million of net unrealized losses, compared to $1.1 billion at September 30, 2023, and $864.5 million at December 31, 2022. The carrying value of the held-to-maturity portfolio does not reflect $810.2 million of net unrealized losses, compared to $1.2 billion at September 30, 2023, and $803.4 million at December 31, 2022.

Loans and leases:

• Total loans and leases were $50.7 billion, compared to $50.1 billion at September 30, 2023, and $49.8 billion at December 31, 2022. Compared to September 30, 2023, commercial loans and leases increased by $80.6 million, commercial real estate loans increased by $574.5 million, residential mortgages decreased by $0.5 million, and consumer loans decreased by $16.7 million.
• Compared to a year ago, commercial loans and leases decreased by $712.7 million, commercial real estate loans increased by $1.5 billion, residential mortgages increased by $264.5 million, and consumer loans decreased by $128.8 million.
• Loan originations for the portfolio were $3.2 billion, compared to $1.5 billion in the prior quarter, and $4.7 billion a year ago. In addition, $3.4 million of residential loans were originated for sale in the quarter, compared to $1.5 million in the prior quarter, and $3.5 million a year ago.

Asset quality:

• Total nonperforming loans and leases were $209.5 million, or 0.41 percent of total loans and leases, compared to $215.1 million, or 0.43 percent of total loans and leases, at September 30, 2023, and $203.8 million, or 0.41 percent of total loans and leases, at December 31, 2022.
• Past due loans and leases were $46.6 million, compared to $70.7 million at September 30, 2023, and $73.7 million at December 31, 2022.

Deposits and borrowings:

• Total deposits were $60.8 billion, compared to $60.3 billion at September 30, 2023, and $54.1 billion at December 31, 2022. Core deposits to total deposits1 were 86.1 percent at December 31, 2023, compared to 87.6 percent at September 30, 2023, and 92.3 percent at December 31, 2022. The loan to deposit ratio was 83.5 percent, compared to 83.0 percent at September 30, 2023, and 92.1 percent at December 31, 2022.
• Total borrowings were $3.9 billion, compared to $3.0 billion at September 30, 2023, and $7.7 billion at December 31, 2022.

Capital:

• The return on average common stockholders’ equity and the return on average tangible common stockholders’ equity1 were 9.03 percent and 14.49 percent, respectively, compared to 12.54 percent and 19.93 percent, respectively, in the fourth quarter of 2022.
• The tangible equity1 and tangible common equity1 ratios were 8.12 percent and 7.73 percent, respectively, compared to 7.79 percent and 7.38 percent, respectively, at December 31, 2022. The common equity tier 1 ratio was 11.12 percent, compared to 10.71 percent at December 31, 2022.
• Book value and tangible book value per common share1 were $48.87 and $32.39, respectively, compared to $44.67 and $29.07, respectively, at December 31, 2022.

1

See "Reconciliations to GAAP Financial Measures" section beginning on page 19.

Webster Financial Corporation (NYSE:WBS) is the holding company for Webster Bank, N.A. and its HSA Bank Division. 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 its HSA Bank division, one of the country's largest providers of employee benefits solutions. Headquartered in Stamford, CT, Webster is a values-driven organization with $75 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 2023 earnings announcement will be held today, Tuesday, January 23, 2024 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) on January 23, 2024. To access the replay, dial 800-770-2030, or 647-362-9199 for international callers. The replay conference ID number is 8607257.

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, 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 integrate the operations of Webster and Sterling Bancorp and realize the anticipated benefits of the merger, including validation of Webster's recently completed core conversion and any issues that may arise therefrom; Webster's ability to successfully execute its business plan and strategic initiatives, and manage any risks or uncertainties; any continuation of the recent turmoil in the banking industry, including the associated impact of any regulatory changes or other mitigation efforts taken by government agencies in response; volatility in Webster's stock price due to investor sentiment, including in light of the recent turmoil in 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; unforeseen events, such as pandemics or natural disasters, and any governmental or societal responses thereto; changes in laws and regulations, or existing laws and regulations that Webster becomes subject to, including those concerning banking, taxes, dividends, securities, insurance, and healthcare, 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, the possibility of a recession, 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 and the ability of the U.S. Congress to increase the U.S. statutory debt limit as needed; the impact of a potential U.S. federal government shutdown; 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 technology systems; the effects of any cyber threats, attacks or events, or fraudulent activity, including those that involve 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; changes in the level of nonperforming assets and charge-offs; changes in estimates of future reserve requirements 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; Webster's inability to remediate the material weaknesses in its internal control related to ineffective information technology general controls; legal and regulatory developments, including the resolution of legal proceedings or regulatory or other governmental inquiries, and the results of regulatory examinations or reviews; Webster's ability to appropriately address any environmental, social, governmental, and sustainability concerns that may arise from its business activities; and the other factors that are described in Webster's Annual Report on Form 10-K for the year ended December 31, 2022, and Quarterly Reports on Form 10-Q for the quarterly periods ended in 2023. 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.

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.

WEBSTER FINANCIAL CORPORATIONSelected Financial Highlights (unaudited) At or for the Three Months Ended (In thousands, except per share data) December 31,2023 September 30,2023 June 30,2023 March 31,2023 December 31,2022   Income and performance ratios: Net income $

185,393

$

226,475

$

234,968

$

221,004

$

244,751

 

Net income available to common stockholders

181,230

222,313

230,806

216,841

240,588

 

Earnings per diluted common share

1.05

1.28

1.32

1.24

1.38

 

Return on average assets (annualized)

1.01

%

1.23

%

1.23

%

1.22

%

1.40

%

Return on average tangible common stockholders' equity (annualized) (1)

14.49

17.51

18.12

17.66

19.93

 

Return on average common stockholders’ equity (annualized)

9.03

11.00

11.38

10.94

12.54

 

Non-interest income as a percentage of total revenue

10.05

13.34

13.28

10.62

14.50

 

  Asset quality: Allowance for credit losses on loans and leases $

635,737

$

635,438

$

628,911

$

613,914

$

594,741

 

Nonperforming assets

218,600

218,402

222,215

186,551

206,136

 

Allowance for credit losses on loans and leases / total loans and leases

1.25

%

1.27

%

1.22

%

1.21

%

1.20

%

Net charge-offs / average loans and leases (annualized)

0.27

0.23

0.16

0.20

0.17

 

Nonperforming loans and leases / total loans and leases

0.41

0.43

0.42

0.36

0.41

 

Nonperforming assets / total loans and leases plus other real estate owned and repossessed assets

0.43

0.44

0.43

0.37

0.41

 

Allowance for credit losses on loans and leases / nonperforming loans and leases

303.39

295.48

287.35

331.81

291.84

 

  Other ratios: Tangible equity (1)

8.12

%

7.62

%

7.62

%

7.55

%

7.79

%

Tangible common equity (1)

7.73

7.22

7.23

7.15

7.38

 

Tier 1 risk-based capital (2)

11.63

11.64

11.16

10.93

11.23

 

Total risk-based capital (2)

13.72

13.79

13.25

12.99

13.25

 

Common equity tier 1 risk-based capital (2)

11.12

11.12

10.65

10.42

10.71

 

Stockholders’ equity / total assets

11.60

11.21

11.18

11.08

11.30

 

Net interest margin

3.42

3.49

3.35

3.66

3.74

 

Efficiency ratio (1)

43.04

41.75

42.20

41.64

40.27

 

  Equity and share related: Common equity $

8,406,017

$

7,915,222

$

7,995,747

$

8,010,315

$

7,772,207

 

Book value per common share

48.87

46.00

46.15

45.85

44.67

 

Tangible book value per common share (1)

32.39

29.48

29.69

29.47

29.07

 

Common stock closing price

50.76

40.31

37.75

39.42

47.34

 

Dividends declared per common share

0.40

0.40

0.40

0.40

0.40

 

Common shares issued and outstanding

172,022

172,056

173,261

174,712

174,008

 

Weighted-average common shares outstanding - Basic

170,415

171,210

172,739

172,766

172,522

 

Weighted-average common shares outstanding - Diluted

170,623

171,350

172,803

172,883

172,699

 

(1) See "Reconciliations to GAAP Financial Measures" section beginning on page 19. (2) Presented as preliminary for December 31, 2023, and actual for the remaining periods. WEBSTER FINANCIAL CORPORATIONConsolidated Balance Sheets (unaudited) (In thousands) December 31,2023 September 30,2023 December 31,2022 Assets: Cash and due from banks $

429,323

 

$

406,300

 

$

264,118

 

Interest-bearing deposits

1,286,472

 

1,766,431

 

575,825

 

Investment securities: Available-for-sale

8,959,729

 

7,653,391

 

7,892,697

 

Held-to-maturity, net

7,074,588

 

6,875,772

 

6,564,697

 

Total investment securities, net

16,034,317

 

14,529,163

 

14,457,394

 

Loans held for sale

6,541

 

46,267

 

1,991

 

Loans and leases: Commercial

19,772,102

 

19,691,486

 

20,484,806

 

Commercial real estate

21,157,732

 

20,583,254

 

19,619,145

 

Residential mortgages

8,227,923

 

8,228,451

 

7,963,420

 

Consumer

1,568,295

 

1,584,955

 

1,697,055

 

Total loans and leases

50,726,052

 

50,088,146

 

49,764,426

 

Allowance for credit losses on loans and leases

(635,737

)

(635,438

)

(594,741

)

Loans and leases, net

50,090,315

 

49,452,708

 

49,169,685

 

Federal Home Loan Bank and Federal Reserve Bank stock

326,882

 

306,085

 

445,900

 

Premises and equipment, net

429,561

 

431,698

 

430,184

 

Goodwill and other intangible assets, net

2,834,600

 

2,843,217

 

2,713,446

 

Cash surrender value of life insurance policies

1,247,938

 

1,242,648

 

1,229,169

 

Deferred tax assets, net

369,212

 

478,926

 

371,634

 

Accrued interest receivable and other assets

1,890,088

 

1,627,408

 

1,618,175

 

Total assets $

74,945,249

 

$

73,130,851

 

$

71,277,521

 

  Liabilities and Stockholders' Equity: Deposits: Demand $

10,732,516

 

$

11,410,063

 

$

12,974,975

 

Health savings accounts

8,287,889

 

8,229,889

 

7,944,892

 

Interest-bearing checking

8,994,095

 

8,826,265

 

9,237,529

 

Money market

17,662,826

 

17,755,198

 

11,062,652

 

Savings

6,642,499

 

6,622,833

 

8,673,343

 

Certificates of deposit

5,574,048

 

5,150,139

 

2,729,332

 

Brokered certificates of deposit

2,890,411

 

2,337,380

 

1,431,617

 

Total deposits

60,784,284

 

60,331,767

 

54,054,340

 

Securities sold under agreements to repurchase and other borrowings

458,387

 

157,491

 

1,151,830

 

Federal Home Loan Bank advances

2,360,018

 

1,810,218

 

5,460,552

 

Long-term debt (1)

1,048,820

 

1,050,539

 

1,073,128

 

Accrued expenses and other liabilities

1,603,744

 

1,581,635

 

1,481,485

 

Total liabilities

66,255,253

 

64,931,650

 

63,221,335

 

Preferred stock

283,979

 

283,979

 

283,979

 

Common stockholders' equity

8,406,017

 

7,915,222

 

7,772,207

 

Total stockholders’ equity

8,689,996

 

8,199,201

 

8,056,186

 

Total liabilities and stockholders' equity $

74,945,249

 

$

73,130,851

 

$

71,277,521

 

(1) The classification of debt as long-term is based on the initial terms of greater than one year as of the date of issuance. WEBSTER FINANCIAL CORPORATIONConsolidated Statements of Income (unaudited)

Three Months Ended December 31,

 

 

Twelve Months Ended December 31,

(In thousands, except per share data)

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Interest income: Interest and fees on loans and leases $

789,423

 

$

642,784

 

$

3,071,378

 

$

1,946,558

 

Interest and dividends on investment securities

143,444

 

100,804

 

556,148

 

338,101

 

Loans held for sale

280

 

5

 

734

 

78

 

Total interest income

933,147

 

743,593

 

3,628,260

 

2,284,737

 

Interest expense: Deposits

325,793

 

81,202

 

1,021,418

 

138,552

 

Borrowings

36,333

 

60,016

 

269,573

 

111,899

 

Total interest expense

362,126

 

141,218

 

1,290,991

 

250,451

 

Net interest income

571,021

 

602,375

 

2,337,269

 

2,034,286

 

Provision for credit losses

36,000

 

43,000

 

150,747

 

280,619

 

Net interest income after provision for loan and lease losses

535,021

 

559,375

 

2,186,522

 

1,753,667

 

Non-interest income: Deposit service fees

37,459

 

48,453

 

169,318

 

198,472

 

Loan and lease related fees

21,362

 

25,632

 

84,861

 

102,987

 

Wealth and investment services

7,767

 

7,017

 

28,999

 

40,277

 

Mortgage banking activities

1,010

 

89

 

1,240

 

705

 

Cash surrender value of life insurance policies

6,587

 

6,543

 

26,228

 

29,237

 

(Loss) on sale of investment securities

(16,825

)

(4,517

)

(33,620

)

(6,751

)

Other income

6,455

 

18,962

 

37,311

 

75,856

 

Total non-interest income

63,815

 

102,179

 

314,337

 

440,783

 

Non-interest expense: Compensation and benefits

184,914

 

177,979

 

711,752

 

723,620

 

Occupancy

18,478

 

20,174

 

77,520

 

113,899

 

Technology and equipment

46,486

 

44,202

 

197,928

 

186,384

 

Marketing

5,176

 

5,570

 

18,622

 

16,438

 

Professional and outside services

18,804

 

26,489

 

107,497

 

117,530

 

Intangible assets amortization

8,618

 

8,240

 

36,207

 

31,940

 

Deposit insurance

58,725

 

6,578

 

98,081

 

26,574

 

Other expenses

36,020

 

59,158

 

168,748

 

180,088

 

Total non-interest expense

377,221

 

348,390

 

1,416,355

 

1,396,473

 

Income before income taxes

221,615

 

313,164

 

1,084,504

 

797,977

 

Income tax expense

36,222

 

68,413

 

216,664

 

153,694

 

Net income

185,393

 

244,751

 

867,840

 

644,283

 

Preferred stock dividends

(4,163

)

(4,163

)

(16,650

)

(15,919

)

Net income available to common stockholders $

181,230

 

$

240,588

 

$

851,190

 

$

628,364

 

  Weighted-average common shares outstanding - Diluted

170,623

 

172,699

 

171,883

 

167,547

 

  Earnings per common share: Basic $

1.05

 

$

1.38

 

$

4.91

 

$

3.72

 

Diluted

1.05

 

1.38

 

4.91

 

3.72

 

WEBSTER FINANCIAL CORPORATIONFive Quarter Consolidated Statements of Income (unaudited) Three Months Ended (In thousands, except per share data) December 31,2023 September 30,2023 June 30,2023 March 31,2023 December 31,2022 Interest income: Interest and fees on loans and leases $

789,423

 

$

793,626

 

$

771,973

 

$

716,356

 

$

642,784

 

Interest and dividends on investment securities

143,444

 

137,146

 

161,002

 

114,556

 

100,804

 

Loans held for sale

280

 

17

 

421

 

16

 

5

 

Total interest income

933,147

 

930,789

 

933,396

 

830,928

 

743,593

 

Interest expense: Deposits

325,793

 

293,955

 

251,466

 

150,204

 

81,202

 

Borrowings

36,333

 

49,698

 

98,101

 

85,441

 

60,016

 

Total interest expense

362,126

 

343,653

 

349,567

 

235,645

 

141,218

 

Net interest income

571,021

 

587,136

 

583,829

 

595,283

 

602,375

 

Provision for credit losses

36,000

 

36,500

 

31,498

 

46,749

 

43,000

 

Net interest income after provision for loan and lease losses

535,021

 

550,636

 

552,331

 

548,534

 

559,375

 

Non-interest income: Deposit service fees

37,459

 

41,005

 

45,418

 

45,436

 

48,453

 

Loan and lease related fees

21,362

 

19,966

 

20,528

 

23,005

 

25,632

 

Wealth and investment services

7,767

 

7,254

 

7,391

 

6,587

 

7,017

 

Mortgage banking activities

1,010

 

42

 

129

 

59

 

89

 

Cash surrender value of life insurance policies

6,587

 

6,620

 

6,293

 

6,728

 

6,543

 

(Loss) on sale of investment securities

(16,825

)

-

 

(48

)

(16,747

)

(4,517

)

Other income

6,455

 

15,495

 

9,663

 

5,698

 

18,962

 

Total non-interest income

63,815

 

90,382

 

89,374

 

70,766

 

102,179

 

Non-interest expense: Compensation and benefits

184,914

 

180,333

 

173,305

 

173,200

 

177,979

 

Occupancy

18,478

 

18,617

 

20,254

 

20,171

 

20,174

 

Technology and equipment

46,486

 

55,261

 

51,815

 

44,366

 

44,202

 

Marketing

5,176

 

4,810

 

5,160

 

3,476

 

5,570

 

Professional and outside services

18,804

 

26,874

 

29,385

 

32,434

 

26,489

 

Intangible assets amortization

8,618

 

8,899

 

9,193

 

9,497

 

8,240

 

Deposit insurance

58,725

 

13,310

 

13,723

 

12,323

 

6,578

 

Other expenses

36,020

 

54,474

 

41,254

 

37,000

 

59,158

 

Total non-interest expense

377,221

 

362,578

 

344,089

 

332,467

 

348,390

 

Income before income taxes

221,615

 

278,440

 

297,616

 

286,833

 

313,164

 

Income tax expense

36,222

 

51,965

 

62,648

 

65,829

 

68,413

 

Net income

185,393

 

226,475

 

234,968

 

221,004

 

244,751

 

Preferred stock dividends

(4,163

)

(4,162

)

(4,162

)

(4,163

)

(4,163

)

Net income available to common stockholders $

181,230

 

$

222,313

 

$

230,806

 

$

216,841

 

$

240,588

 

  Weighted-average common shares outstanding - Diluted

170,623

 

171,350

 

172,803

 

172,883

 

172,699

 

  Earnings per common share: Basic $

1.05

 

$

1.29

 

$

1.32

 

$

1.24

 

$

1.38

 

Diluted

1.05

 

1.28

 

1.32

 

1.24

 

1.38

 

WEBSTER FINANCIAL CORPORATIONConsolidated Average Balances, Interest, Yields and Rates, and Net Interest Margin on a Fully Tax-equivalent Basis (unaudited) Three Months Ended December 31,

2023

 

2022

 

(Dollars in thousands) Average balance Interest Yield/rate Average balance Interest Yield/rate Assets: Interest-earning assets: Loans and leases $

50,352,340

$

800,679

 

6.24

%

$

48,574,865

$

649,820

 

5.25

%

Investment securities (1)

15,253,540

135,498

 

3.35

14,471,173

98,812

 

2.57

Federal Home Loan and Federal Reserve Bank stock

308,505

5,581

 

7.18

399,497

4,007

 

3.98

Interest-bearing deposits

649,104

8,939

 

5.39

516,930

4,940

 

3.74

Loans held for sale

7,130

280

 

n/m

2,964

5

 

0.73

Total interest-earning assets

66,570,619

$

950,977

 

5.54

%

63,965,429

$

757,584

 

4.60

%

Non-interest-earning assets

6,561,444

5,994,351

Total assets $

73,132,063

$

69,959,780

  Liabilities and Stockholders' Equity: Interest-bearing liabilities: Demand deposits $

11,067,121

$

-

 

-

%

$

13,371,074

$

-

 

-

%

Health savings accounts

8,219,431

3,123

 

0.15

7,878,486

2,957

 

0.15

Interest-bearing checking, money market and savings

33,156,966

239,875

 

2.87

29,390,078

66,279

 

0.89

Certificates of deposit and brokered deposits

7,538,131

82,795

 

4.36

3,399,857

11,966

 

1.40

Total deposits

59,981,649

325,793

 

2.15

54,039,495

81,202

 

0.60

  Securities sold under agreements to repurchase and other borrowings

221,437

1,162

 

2.05

1,237,132

9,183

 

2.90

Federal Home Loan Bank advances

1,815,493

25,659

 

5.53

4,241,042

41,523

 

3.83

Long-term debt (1)

1,049,655

9,512

 

3.73

1,073,960

9,310

 

3.58

Total borrowings

3,086,585

36,333

 

4.68

6,552,134

60,016

 

3.62

Total interest-bearing liabilities

63,068,234

$

362,126

 

2.28

%

60,591,629

$

141,218

 

0.92

%

Non-interest-bearing liabilities

1,751,031

1,407,251

Total liabilities

64,819,265

61,998,880

  Preferred stock

283,979

283,979

Common stockholders' equity

8,028,819

7,676,921

Total stockholders' equity

8,312,798

7,960,900

Total liabilities and stockholders' equity $

73,132,063

$

69,959,780

Tax-equivalent net interest income

588,851

 

616,366

 

Less: Tax-equivalent adjustments

(17,830

)

(13,991

)

Net interest income $

571,021

 

$

602,375

 

Net interest margin

3.42

%

3.74

%

  (1) For the purposes of average yield/rate and margin computations, unsettled trades on investment securities, unrealized gains (losses) on available-for-sale investment securities, and basis adjustments on long-term debt from de-designated fair value hedges are excluded. WEBSTER FINANCIAL CORPORATIONConsolidated Average Balances, Interest, Yields and Rates, and Net Interest Margin on a Fully Tax-equivalent Basis (unaudited) Twelve Months Ended December 31,

2023

 

2022

 

(Dollars in thousands) Average balance Interest Yield/rate Average balance Interest Yield/rate Assets: Interest-earning assets: Loans and leases $

50,637,569

$

3,113,709

 

6.15

%

$

43,751,112

$

1,967,761

 

4.50

%

Investment securities (1)

14,839,744

477,496

 

3.06

14,528,722

345,600

 

2.31

Federal Home Loan and Federal Reserve Bank stock

408,673

24,785

 

6.06

289,595

8,775

 

3.03

Interest-bearing deposits

1,564,255

80,475

 

5.14

596,912

9,651

 

1.62

Loans held for sale

28,710

734

 

2.56

9,842

78

 

0.80

Total interest-earning assets

67,478,951

$

3,697,199

 

5.42

%

59,176,183

$

2,331,865

 

3.91

%

Non-interest-earning assets

6,344,931

5,586,025

Total assets $

73,823,882

$

64,762,208

  Liabilities and Stockholders' Equity: Interest-bearing liabilities: Demand deposits $

11,596,949

$

-

 

-

%

$

12,912,894

$

-

 

-

%

Health savings accounts

8,249,332

12,366

 

0.15

7,826,576

6,315

 

0.08

Interest-bearing checking, money market and savings

31,874,457

756,521

 

2.37

28,266,128

115,271

 

0.41

Certificates of deposit and brokered deposits

6,531,610

252,531

 

3.87

2,838,502

16,966

 

0.60

Total deposits

58,252,348

1,021,418

 

1.75

51,844,100

138,552

 

0.27

  Securities sold under agreements to repurchase and other borrowings

378,171

9,102

 

2.41

1,064,551

19,059

 

1.79

Federal Home Loan Bank advances

4,275,394

222,537

 

5.21

1,965,577

58,557

 

2.98

Long-term debt (1)

1,058,621

37,934

 

3.69

1,031,446

34,283

 

3.44

Total borrowings

5,712,186

269,573

 

4.74

4,061,574

111,899

 

2.78

Total interest-bearing liabilities

63,964,534

$

1,290,991

 

2.02

%

55,905,674

$

250,451

 

0.45

%

Non-interest-bearing liabilities

1,535,393

1,135,046

Total liabilities

65,499,927

57,040,720

  Preferred stock

283,979

272,179

Common stockholders' equity

8,039,976

7,449,309

Total stockholders' equity

8,323,955

7,721,488

Total liabilities and stockholders' equity $

73,823,882

$

64,762,208

Tax-equivalent net interest income

2,406,208

 

2,081,414

 

Less: Tax-equivalent adjustments

(68,939

)

(47,128

)

Net interest income $

2,337,269

 

$

2,034,286

 

Net interest margin

3.52

%

3.49

%

(1) For the purposes of average yield/rate and margin computations, unsettled trades on investment securities, unrealized gains (losses) on available-for-sale investment securities, and basis adjustments on long-term debt from de-designated fair value hedges are excluded. WEBSTER FINANCIAL CORPORATIONFive Quarter Loans and Leases (unaudited) (Dollars in thousands) December 31,2023 September 30,2023 June 30,2023 March 31,2023 December 31,2022 Loans and leases (actual): Commercial non-mortgage $

18,214,261

 

$

18,058,524

 

$

19,499,160

 

$

19,014,810

 

$

18,663,164

 

Asset-based lending

1,557,841

 

1,632,962

 

1,718,251

 

1,760,527

 

1,821,642

 

Commercial real estate

21,157,732

 

20,583,254

 

20,661,071

 

20,513,738

 

19,619,145

 

Residential mortgages

8,227,923

 

8,228,451

 

8,140,182

 

8,001,563

 

7,963,420

 

Consumer

1,568,295

 

1,584,955

 

1,607,384

 

1,635,885

 

1,697,055

 

Loans and leases

50,726,052

 

50,088,146

 

51,626,048

 

50,926,523

 

49,764,426

 

Allowance for credit losses on loans and leases

(635,737

)

(635,438

)

(628,911

)

(613,914

)

(594,741

)

Loans and leases, net $

50,090,315

 

$

49,452,708

 

$

50,997,137

 

$

50,312,609

 

$

49,169,685

 

  Loans and leases (average): Commercial non-mortgage $

18,181,417

 

$

18,839,776

 

$

19,220,435

 

$

18,670,917

 

$

18,024,771

 

Asset-based lending

1,588,350

 

1,663,481

 

1,756,051

 

1,790,992

 

1,780,874

 

Commercial real estate

20,764,834

 

20,614,334

 

20,518,355

 

19,970,326

 

19,234,292

 

Residential mortgages

8,240,390

 

8,200,938

 

8,067,349

 

7,995,327

 

7,819,415

 

Consumer

1,577,349

 

1,593,659

 

1,622,525

 

1,667,630

 

1,715,513

 

Loans and leases $

50,352,340

 

$

50,912,188

 

$

51,184,715

 

$

50,095,192

 

$

48,574,865

 

WEBSTER FINANCIAL CORPORATIONFive Quarter Nonperforming Assets and Past Due Loans and Leases (unaudited) (Dollars in thousands) December 31,2023 September 30,2023 June 30,2023 March 31,2023 December 31,2022 Nonperforming loans and leases: Commercial non-mortgage $

134,617

$

121,067

$

109,279

$

86,537

$

89,416

Asset-based lending

35,090

10,350

9,450

9,450

20,046

Commercial real estate

11,314

31,004

47,972

35,832

41,580

Residential mortgages

5,591

27,312

26,751

25,096

25,613

Consumer

22,932

25,320

25,417

28,105

27,136

Total nonperforming loans and leases $

209,544

$

215,053

$

218,869

$

185,020

$

203,791

  Other real estate owned and repossessed assets: Commercial non-mortgage $

8,954

$

2,687

$

2,152

$

153

$

78

Residential mortgages

-

662

662

662

2,024

Consumer

102

-

532

716

243

Total other real estate owned and repossessed assets $

9,056

$

3,349

$

3,346

$

1,531

$

2,345

Total nonperforming assets $

218,600

$

218,402

$

222,215

$

186,551

$

206,136

Past due 30-89 days: Commercial non-mortgage $

7,071

$

38,875

$

32,074

$

9,645

$

20,248

Asset-based lending

-

-

-

-

5,921

Commercial real estate

9,002

3,491

1,970

17,115

26,147

Residential mortgages

21,047

16,208

10,583

10,710

11,385

Consumer

9,417

12,016

6,718

6,110

9,194

Total past due 30-89 days $

46,537

$

70,590

$

51,345

$

43,580

$

72,895

Past due 90 days or more and accruing

52

138

29

602

770

Total past due loans and leases $

46,589

$

70,728

$

51,374

$

44,182

$

73,665

WEBSTER FINANCIAL CORPORATIONFive Quarter Changes in the Allowance for Credit Losses on Loans and Leases (unaudited) For the Three Months Ended (Dollars in thousands) December 31,2023 September 30,2023 June 30,2023 March 31,2023 December 31,2022 ACL on loans and leases, beginning balance $

635,438

$

628,911

$

613,914

$

594,741

$

574,325

Adoption of ASU No. 2022-02

-

-

-

5,873

-

Provision

34,300

35,839

35,249

37,821

40,649

Charge-offs: Commercial portfolio

28,794

27,360

21,945

26,410

21,499

Consumer portfolio

6,878

3,642

1,085

1,098

1,193

Total charge-offs

35,672

31,002

23,030

27,508

22,692

Recoveries: Commercial portfolio

396

292

1,024

1,574

895

Consumer portfolio

1,275

1,398

1,754

1,413

1,564

Total recoveries

1,671

1,690

2,778

2,987

2,459

Total net charge-offs

34,001

29,312

20,252

24,521

20,233

ACL on loans and leases, ending balance $

635,737

$

635,438

$

628,911

$

613,914

$

594,741

ACL on unfunded loan commitments, ending balance

24,734

23,040

22,366

26,051

27,707

Total ACL, ending balance $

660,471

$

658,478

$

651,277

$

639,965

$

622,448

WEBSTER FINANCIAL CORPORATIONReconciliations to GAAP Financial Measures

The Company evaluates its business based on certain ratios that utilize non-GAAP financial measures. The Company believes the use of these non-GAAP financial measures provides additional clarity in assessing the results and financial position of the Company. Other companies may define or calculate supplemental financial data differently. The efficiency ratio, which measures the costs expended to generate a dollar of revenue, is calculated excluding certain non-operational items. Return on average tangible common stockholders' equity (ROATCE) measures the Company’s 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 express 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 by excluding a FDIC special assessment, merger related expense, and loss on sale of investment securities, each of which have been tax-effected. See the tables below for reconciliations of these non-GAAP financial measures with financial measures defined by GAAP.

  At or for the Three Months Ended (In thousands, except per share data) December 31,2023 September 30,2023 June 30,2023 March 31,2023 December 31,2022 Efficiency ratio: Non-interest expense $

377,221

 

$

362,578

 

$

344,089

 

$

332,467

 

$

348,390

 

Less: Foreclosed property activity

(96

)

(492

)

(432

)

(262

)

(80

)

Intangible assets amortization

8,618

 

8,899

 

9,193

 

9,497

 

8,240

 

Operating lease depreciation

900

 

1,146

 

1,639

 

1,884

 

2,021

 

FDIC special assessment

47,164

 

-

 

-

 

-

 

-

 

Merger related expense

30,679

 

61,625

 

40,840

 

29,373

 

45,790

 

Strategic initiatives

-

 

-

 

-

 

-

 

143

 

Non-interest expense $

289,956

 

$

291,400

 

$

292,849

 

$

291,975

 

$

292,276

 

Net interest income $

571,021

 

$

587,136

 

$

583,829

 

$

595,283

 

$

602,375

 

Add: Tax-equivalent adjustment

17,830

 

17,906

 

17,292

 

15,911

 

13,991

 

Non-interest income

63,815

 

90,382

 

89,374

 

70,766

 

102,179

 

Other income (1)

5,099

 

3,614

 

5,035

 

4,311

 

4,814

 

Less: Operating lease depreciation

900

 

1,146

 

1,639

 

1,884

 

2,021

 

(Loss) on sale of investment securities

(16,825

)

-

 

(48

)

(16,747

)

(4,517

)

Income $

673,690

 

$

697,892

 

$

693,939

 

$

701,134

 

$

725,855

 

Efficiency ratio

43.04

%

41.75

%

42.20

%

41.64

%

40.27

%

  ROATCE: Net income $

185,393

 

$

226,475

 

$

234,968

 

$

221,004

 

$

244,751

 

Less: Preferred stock dividends

4,163

 

4,162

 

4,162

 

4,163

 

4,163

 

Add: Intangible assets amortization, tax-effected

6,808

 

7,030

 

7,262

 

7,503

 

6,510

 

Adjusted income $

188,038

 

$

229,343

 

$

238,068

 

$

224,344

 

$

247,098

 

Adjusted income, annualized basis $

752,152

 

$

917,372

 

$

952,272

 

$

897,376

 

$

988,392

 

Average stockholders' equity $

8,312,798

 

$

8,370,469

 

$

8,395,298

 

$

8,215,676

 

$

7,960,900

 

Less: Average preferred stock

283,979

 

283,979

 

283,979

 

283,979

 

283,979

 

Average goodwill and other intangible assets, net

2,838,770

 

2,847,560

 

2,856,581

 

2,849,673

 

2,716,981

 

Average tangible common stockholders' equity $

5,190,049

 

$

5,238,930

 

$

5,254,738

 

$

5,082,024

 

$

4,959,940

 

Return on average tangible common stockholders' equity

14.49

%

17.51

%

18.12

%

17.66

%

19.93

%

(1) Other income includes the taxable equivalent of net income generated from low income housing tax-credit investments.   At or for the Three Months Ended (In thousands, except per share data) December 31,2023 September 30,2023 June 30,2023 March 31,2023 December 31,2022 Tangible equity: Stockholders' equity $

8,689,996

$

8,199,201

$

8,279,726

$

8,294,294

$

8,056,186

Less: Goodwill and other intangible assets, net

2,834,600

2,843,217

2,852,117

2,861,310

2,713,446

Tangible stockholders' equity $

5,855,396

$

5,355,984

$

5,427,609

$

5,432,984

$

5,342,740

Total assets $

74,945,249

$

73,130,851

$

74,038,243

$

74,844,395

$

71,277,521

Less: Goodwill and other intangible assets, net

2,834,600

2,843,217

2,852,117

2,861,310

2,713,446

Tangible assets $

72,110,649

$

70,287,634

$

71,186,126

$

71,983,085

$

68,564,075

Tangible equity

8.12

%

7.62

%

7.62

%

7.55

%

7.79

%

  Tangible common equity: Tangible stockholders' equity $

5,855,396

$

5,355,984

$

5,427,609

$

5,432,984

$

5,342,740

Less: Preferred stock

283,979

283,979

283,979

283,979

283,979

Tangible common stockholders' equity $

5,571,417

$

5,072,005

$

5,143,630

$

5,149,005

$

5,058,761

Tangible assets $

72,110,649

$

70,287,634

$

71,186,126

$

71,983,085

$

68,564,075

Tangible common equity

7.73

%

7.22

%

7.23

%

7.15

%

7.38

%

  Tangible book value per common share: Tangible common stockholders' equity $

5,571,417

$

5,072,005

$

5,143,630

$

5,149,005

$

5,058,761

Common shares outstanding

172,022

172,056

173,261

174,712

174,008

Tangible book value per common share $

32.39

$

29.48

$

29.69

$

29.47

$

29.07

  Core deposits: Total deposits $

60,784,284

$

60,331,767

$

58,747,532

$

55,297,479

$

54,054,340

Less: Certificates of deposit

5,574,048

5,150,139

4,743,204

3,855,406

2,729,332

Brokered certificates of deposit

2,890,411

2,337,380

2,542,854

674,373

1,431,617

Core deposits $

52,319,825

$

52,844,248

$

51,461,474

$

50,767,700

$

49,893,391

Three months ended December 31, 2023 Adjusted ROATCE: Net income $

185,393

Less: Preferred stock dividends

4,163

Add: Intangible assets amortization, tax-effected

6,808

FDIC special assessment, tax-effected

34,509

Merger related expense, tax-effected

22,447

Loss on sale of investment securities, tax-effected

12,310

Adjusted income $

257,304

Adjusted income, annualized basis $

1,029,216

Average stockholders' equity $

8,312,798

Less: Average preferred stock

283,979

Average goodwill and other intangible assets, net

2,838,770

Average tangible common stockholders' equity $

5,190,049

Adjusted return on average tangible common stockholders' equity

19.83

%

  Adjusted ROAA: Net income $

185,393

Add: FDIC special assessment, tax-effected

34,509

Merger related expense, tax-effected

22,447

Loss on sale of investment securities, tax-effected

12,310

Adjusted income $

254,659

Adjusted income, annualized basis $

1,018,636

Average assets $

73,132,063

Adjusted return on average assets

1.39

%

GAAP to adjusted reconciliation: Three months ended December 31, 2023 (In millions, except per share data) Pre-Tax Income Net Income Available toCommon Stockholders Diluted EPS Reported (GAAP) $

221.6

$

181.2

$

1.05

FDIC special assessment

47.2

34.5

0.21

Merger related expense

30.7

22.5

0.13

Loss on sale of investment securities

16.8

12.3

0.07

Adjusted (non-GAAP) $

316.3

$

250.5

$

1.46

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240122059705/en/

Media Contact Alice Ferreira, 203-578-2610 acferreira@websterbank.com

Investor Contact Emlen Harmon, 212-309-7646 eharmon@websterbank.com