EX-99.1 2 exhibit991earningsreleaseq.htm EXHIBIT 99.1 Exhibit


Exhibit 99.1
wbsupdatedheadera06.jpg

Media Contact
 
 
  
Investor Contact
Alice Ferreira, 203-578-2610
 
 
  
Terry Mangan, 203-578-2318
acferreira@websterbank.com
 
 
  
tmangan@websterbank.com

WEBSTER REPORTS
THIRD QUARTER 2018 EARNINGS

WATERBURY, Conn., October 18, 2018 - Webster Financial Corporation (NYSE: WBS), the holding company for Webster Bank, N.A. and its HSA Bank division, today announced earnings applicable to common shareholders of $97.5 million, or $1.06 per diluted share, for the quarter ended September 30, 2018 compared to $62.4 million, or $0.67 per diluted share, for the quarter ended September 30, 2017. Adjusting for $2.9 million related to the final accrual for deposit insurance assessments for periods prior to 2018 and $8.5 million of discrete tax benefits specific to the quarter, earnings per diluted share would have been $0.98.

“Webster’s third quarter results reflect the positive outcomes of our organizational commitment to key strategic priorities and strong execution by our bankers,” said John R. Ciulla, president and chief executive officer. “Record earnings were driven by the 36th consecutive quarter of year-over-year revenue growth led by double-digit commercial loan growth and a 31 basis point increase in the net interest margin.”

Highlights for the third quarter of 2018:
Revenue of $302.7 million, an increase of 13.5 percent from a year ago, including net interest income of $230.4 million, an increase of 14.7 percent from a year ago.
Loan growth of $875 million, or 5.0 percent from a year ago, with growth of $1.1 billion, or 10.5 percent, in commercial and commercial real estate loans.
Deposit growth of $1.1 billion, or 5.5 percent from a year ago, with growth of $709 million, or 14.5 percent, in health savings account deposits.
Net interest margin of 3.61 percent, up 31 basis points from a year ago.
Non-interest expense of $178.8 million includes $2.9 million related to an accrual for deposit insurance assessments prior to 2018. Excluding this amount, non-interest expense increased 8.7 percent from a year ago.
Pre-tax, pre-provision net revenue growth of $18.9 million, or 18.1 percent from a year ago, led by HSA Bank’s growth of 49.2 percent.
Efficiency ratio of 57.4 percent (non-GAAP) compared to 59.2 percent a year ago.
Annualized return on average common shareholders’ equity of 14.74 percent compared to 9.95 percent a year ago; annualized return on average tangible common shareholders’ equity (non-GAAP) of 18.88 percent compared to 12.99 percent a year ago.
    
“Third quarter results benefit from our long-term balance sheet positioning, emphasizing the bi-directional value of increasing loan yields funded by long duration, low-cost transactional and HSA deposits,” said Glenn MacInnes, executive vice president and chief financial officer. “Our loan portfolio yield is 57 basis points higher than a year ago while our cost of deposits increased only 12 basis points, with the outcome being record quarterly net interest income.”






Line of Business performance compared to the third quarter of 2017:

Commercial Banking
Webster’s Commercial Banking segment serves middle market, commercial real estate, asset-based lending, equipment finance, private banking, and treasury and payment solutions clients. As of September 30, 2018, Commercial Banking had $10.3 billion in loans and leases and $4.3 billion in deposit balances.

Commercial Banking Operating Results:
 
Three months ended September 30,
(In thousands)
2018

2017

Net interest income
$
91,243

$
81,925

Non-interest income
18,305

13,207

Operating revenue
109,548

95,132

Non-interest expense
44,506

38,339

Pre-tax, pre-provision net revenue
$
65,042

$
56,793

 
 
 
 
At September 30,
 
(In millions)
2018

2017

Loans and leases
$
10,289

$
9,291

Deposits
4,251

4,251



Pre-tax, pre-provision net revenue increased $8.2 million to $65.0 million in the quarter as compared to prior year. Net interest income increased $9.3 million to $91.2 million, primarily due to loan growth and higher loan and deposit margins. Non-interest income increased $5.1 million to $18.3 million, primarily due to greater syndication fees and client interest rate hedging activity in the quarter as compared to prior year. Non-interest expense increased $6.2 million to $44.5 million, primarily due to investments in people and technology.

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. As of September 30, 2018, HSA Bank had $7.2 billion in total footings comprising $5.6 billion in deposit balances and $1.6 billion in assets under administration through linked investment accounts.







HSA Bank Operating Results:
 
Three months ended September 30,
(In thousands)
2018

2017

Net interest income
$
36,731

$
26,713

Non-interest income
22,159

19,371

Operating revenue
58,890

46,084

Non-interest expense
30,753

27,222

Pre-tax, net revenue
$
28,137

$
18,862

 
 
 
 
At September 30,
 
(In millions)
2018

2017

Number of accounts
2,702

2,416

Deposits
$
5,600

$
4,891

Linked investment accounts *
1,599

1,159

Total footings
$
7,199

$
6,050

* Linked investment accounts are held off balance sheet
 
 


Pre-tax net revenue increased $9.3 million to $28.1 million in the quarter as compared to prior year. Net interest income increased $10.0 million to $36.7 million, due to a 14 percent growth in deposits and a 20 percent improvement in deposit spreads. Non-interest income increased $2.8 million to $22.2 million, primarily due to growth in accounts over the past year. Non-interest expense increased $3.5 million to $30.8 million, primarily due to account growth and continued investment in the business including expanded distribution.

Community Banking
Community Banking serves consumer and business banking customers primarily throughout southern New England and into Westchester County, New York. Community Banking is comprised of the Personal Banking and Business Banking operating segments, as well as a distribution network consisting of 157 banking centers and 319 ATMs, a customer care center, and a full range of web and mobile-based banking services.

As of September 30, 2018, Community Banking had $8.0 billion in loans and $11.8 billion in deposit balances.






Community Banking Operating Results:
 
Three months ended September 30,
(In thousands)
2018

2017

Net interest income
$
101,952

$
96,859

Non-interest income
26,847

27,079

Operating revenue
128,799

123,938

Non-interest expense
95,768

92,478

Pre-tax, pre-provision net revenue
$
33,031

$
31,460

 
 
 
 
At September 30,
 
(In millions)
2018

2017

Loans
$
8,031

$
8,155

Deposits
11,799

11,331




Pre-tax, pre-provision net revenue increased $1.6 million to $33.0 million in the quarter as compared to prior year. Net interest income increased $5.1 million to $102.0 million, primarily due to growth in deposit balances, coupled with improved interest rate spreads on deposits. Non-interest income decreased $0.2 million primarily driven by lower mortgage production and related returns on mortgage banking activities, offset by growth in fees from investment services and fees from interest rate hedging activities. Non-interest expense increased $3.3 million to $95.8 million as a result of higher compensation-related expenses and investments in technology.
Consolidated financial performance:
Quarterly net interest income compared to the third quarter of 2017:

Net interest income was $230.4 million compared to $200.9 million.
Net interest margin was 3.61 percent compared to 3.30 percent. The yield on interest-earning assets increased by 42 basis points, and the cost of funds increased by 12 basis points.
Average interest-earning assets totaled $25.4 billion and grew by $796 million, or 3.2 percent.
Average loans totaled $18.1 billion and grew by $696 million, or 4.0 percent.
Deposits totaled $22.0 billion and and grew by $1.1 billion, or 5.5 percent.








Quarterly provision for loan losses:

The Company recorded a provision for loan losses of $10.5 million, compared to $10.5 million in the prior quarter and $10.2 million a year ago.
Net charge-offs were $6.0 million, compared to $8.5 million in the prior quarter and $7.9 million a year ago. The decrease from prior quarter is primarily due to decreased commercial non-mortgage charge-offs. The ratio of net charge-offs to average loans on an annualized basis was 0.13 percent, compared to 0.19 percent in the prior quarter and 0.18 percent a year ago.
The allowance for loan losses represented 1.16 percent of total loans at September 30, 2018, compared to 1.15 percent at June 30, 2018 and 1.16 percent at September 30, 2017. The allowance for loan losses represented 139 percent of nonperforming loans compared to 148 percent at June 30, 2018 and 123 percent at September 30, 2017.
Quarterly non-interest income compared to the third quarter of 2017:
Total non-interest income was $72.3 million, compared to $65.8 million, an increase of $6.4 million. This reflects an increase in HSA fee income of $2.8 million driven by account growth, $4.4 million in loan-related fees due to loan syndication fees offset by a decrease of $1.1 million in mortgage banking activities driven by lower originations.
Quarterly non-interest expense compared to the third quarter of 2017:
Total non-interest expense was $178.8 million, compared to $161.8 million, an increase of $17.0 million. This reflects an increase in compensation of $8.3 million due to strategic hires, annual merit increases, and higher medical costs, $3.6 million in other due to increased pension expense, consulting fees, and lower deferral of loan related expenses, $3.4 million in deposit insurance primarily related to an accrual for prior period deposit insurance assessments, as well as $2.0 million in technology and equipment due to higher depreciation and service contracts to support infrastructure.
Quarterly income taxes compared to the third quarter of 2017:
Income tax expense was $13.7 million, compared to $30.3 million and the effective tax rate was 12.1 percent, compared to 32.0 percent.
The lower effective tax rate in the quarter primarily reflects the reduction of the U.S. corporate tax rate effective in 2018 as a result of the Tax Cuts and Jobs Act enacted in 2017, as well as discrete tax benefits attributable to tax planning.







Investment securities:
Total investment securities were $7.2 billion, compared to $7.1 billion at June 30, 2018 and $7.1 billion at September 30, 2017. The carrying value of the available-for-sale portfolio included $105.1 million of net unrealized losses, compared to $86.5 million at June 30, 2018 and $21.7 million at September 30, 2017. The carrying value of the held-to-maturity portfolio does not reflect $168.1 million of net unrealized losses, compared to $130.2 million at June 30, 2018, and $15.6 million at September 30, 2017.
Loans:
Total loans were $18.3 billion, compared to $18.0 billion at June 30, 2018 and $17.4 billion at September 30, 2017. Compared to June 30, 2018, commercial loans increased by $188.9 million and commercial real estate loans increased by $191.1 million, while consumer loans decreased by $44.5 million and residential loans decreased by $40.5 million.
Compared to a year ago, commercial loans increased by $778.4 million and commercial real estate loans increased by $306.4 million, while consumer loans decreased by $125.8 million and residential mortgages decreased by 84.4 million.
Loan originations for portfolio were $1.375 billion, compared to $1.509 billion in the prior quarter and $1.085 billion a year ago. In addition, $55 million of residential loans were originated for sale in the quarter, compared to $44 million in the prior quarter and $80 million a year ago.
Asset quality:
Total nonperforming loans were $152.7 million, or 0.83 percent of total loans, compared to $140.1 million, or 0.78 percent, at June 30, 2018 and $163.6 million, or 0.94 percent, at September 30, 2017. Total paying nonperforming loans were $28.9 million, compared to $34.1 million at June 30, 2018 and $72.0 million at September 30, 2017.
Past due loans were $39.2 million, compared to $33.5 million at June 30, 2018 and $33.5 million at September 30, 2017.
Deposits and borrrowings:
Total deposits were $22.0 billion, compared to $21.3 billion at June 30, 2018 and $20.9 billion at September 30, 2017. Core deposits to total deposits were 85.9 percent, compared to 86.7 percent at June 30, 2018 and 89.4 percent at September 30, 2017. The loan to deposit ratio was 83.3 percent, compared to 84.5 percent at June 30, 2018 and 83.7 percent at September 30, 2017.
Total borrowings were $2.2 billion, compared to $2.7 billion at June 30, 2018 and $2.6 billion at September 30, 2017.





Capital:

The return on average common shareholders’ equity and the return on average tangible common shareholders’ equity were 14.74 percent and 18.88 percent, respectively, compared to 9.95 percent and 12.99 percent, respectively, in the third quarter of 2017.
The tangible equity and tangible common equity ratios were 8.41 percent and 7.86 percent, respectively, compared to 8.03 percent and 7.55 percent, respectively, at September 30, 2017. The common equity tier 1 risk-based capital ratio was 11.23 percent, compared to 10.99 percent at September 30, 2017.
Book value and tangible book value per common share were $28.96 and $22.83, respectively, compared to $27.34 and $21.16, respectively, at September 30, 2017.

***


Webster Financial Corporation is the holding company for Webster Bank, National Association and its HSA Bank division. With $27.3 billion in assets, Webster provides business and consumer banking, mortgage, financial planning, trust, and investment services through 157 banking centers and 319 ATMs. Webster also provides mobile and Internet banking. Webster Bank owns the asset-based lending firm Webster Business Credit Corporation; the equipment finance firm Webster Capital Finance Corporation; and HSA Bank, a division of Webster Bank, which provides health savings account trustee and administrative services. 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 2018 third quarter earnings announcement will be held today, Thursday, October 18, 2018 at 9:00 a.m. (Eastern) and may be heard through Webster’s Investor Relations website at www.wbst.com, or in listen-only mode by calling 877-407-8289 or 201-689-8341 internationally. The call will be archived on the website and available for future retrieval.






Forward-Looking Statements

This release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Act”). 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, such words are not the exclusive means of identifying such statements. Examples of forward-looking statements include, but are not limited to: (i) projections of revenues, expenses, income or loss, earnings or loss per share, and other financial items; (ii) statements of plans, objectives, and expectations of Webster or its management or Board of Directors; (iii) statements of future economic performance; and (iv) 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 actual results to differ from those discussed in the forward-looking statements include, but are not limited to: (1) local, regional, national, and international economic conditions and the impact they may have on us and our customers and our assessment of that impact; (2) volatility and disruption in national and international financial markets; (3) government intervention in the U.S. financial system; (4) changes in the level of nonperforming assets and charge-offs; (5) changes in estimates of future reserve requirements based upon the periodic review thereof under relevant regulatory and accounting requirements; (6) adverse conditions in the securities markets that lead to impairment in the value of securities in our investment portfolio; (7) inflation, interest rate, securities market, and monetary fluctuations; (8) the timely development and acceptance of new products and services and perceived overall value of these products and services by customers; (9) changes in consumer spending, borrowings, and savings habits; (10) technological changes and cyber-security matters; (11) the ability to increase market share and control expenses; (12) changes in the competitive environment among banks, financial holding companies, and other financial services providers; (13) the effect of changes in laws and regulations (including laws and regulations concerning taxes, banking, securities, and insurance) with which we and our subsidiaries must comply, including the Dodd-Frank Wall Street Reform and Consumer Protection Act, the final rules establishing a new comprehensive capital framework for U.S. banking organizations, and the Tax Cuts and Jobs Act of 2017 (Tax Act); (14) the effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Public Company Accounting Oversight Board, the Financial Accounting Standards Board, and other accounting standard setters; (15) the costs and effects of legal and regulatory developments including the resolution of legal proceedings or regulatory or other governmental inquiries and the results of regulatory examinations or reviews; (16) our success at managing the risks involved in the foregoing items and (17) the other factors that are described in the Companys Annual Report on Form 10-K and Quarterly Reports on Form 10-Q under the headings Risk Factors and Management Discussion and Analysis of Financial Condition and Results of Operation. Any forward-looking statement made by the Company in this release speaks only as of the date on which it is made. Factors or events that could cause the Company’s actual results to differ may emerge from time to time, and it is not possible for the Company to predict all of them. The Company 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 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. 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.


---30---







WEBSTER FINANCIAL CORPORATION
Selected Financial Highlights (unaudited)
 
 
 
 
 
 
 
 
 
 
At or for the Three Months Ended
(In thousands, except per share data)
September 30,
2018
 
June 30,
2018
 
March 31,
2018
 
December 31,
2017
 
September 30,
2017
 
 
 
 
 
 
 
 
 
 
Income and performance ratios:
 
 
 
 
 
 
 
 
 
Net income
$
99,673

 
$
81,682

 
$
80,225

 
$
69,893

 
$
64,496

Earnings applicable to common shareholders
97,460

 
79,489

 
78,083

 
67,710

 
62,426

Earnings per diluted common share
1.06

 
0.86

 
0.85

 
0.73

 
0.67

Return on average assets
1.47
%
 
1.22
%
 
1.20
%
 
1.05
%
 
0.98
%
Return on average tangible common shareholders' equity (non-GAAP)
18.88

 
15.76

 
15.73

 
13.85

 
12.99

Return on average common shareholders’ equity
14.74

 
12.22

 
12.15

 
10.66

 
9.95

Non-interest income as a percentage of total revenue
23.88

 
23.31

 
24.30

 
24.37

 
24.68

 
 
 
 
 
 
 
 
 
 
Asset quality:
 
 
 
 
 
 
 
 
 
Allowance for loan and lease losses
$
211,832

 
$
207,322

 
$
205,349

 
$
199,994

 
$
201,803

Nonperforming assets
157,967

 
146,047

 
140,090

 
132,646

 
168,962

Allowance for loan and lease losses / total loans and leases
1.16
%
 
1.15
%
 
1.15
%
 
1.14
%
 
1.16
%
Net charge-offs / average loans and leases (annualized)
0.13

 
0.19

 
0.13

 
0.34

 
0.18

Nonperforming loans and leases / total loans and leases
0.83

 
0.78

 
0.75

 
0.72

 
0.94

Nonperforming assets / total loans and leases plus OREO
0.86

 
0.81

 
0.79

 
0.76

 
0.97

Allowance for loan and lease losses / nonperforming loans and leases
138.76

 
148.00

 
152.95

 
158.00

 
123.32

 
 
 
 
 
 
 
 
 
 
Other ratios:
 
 
 
 
 
 
 
 
 
Tangible equity (non-GAAP)
8.41
%
 
8.29
%
 
8.21
%
 
8.23
%
 
8.03
%
Tangible common equity (non-GAAP)
7.86

 
7.75

 
7.65

 
7.67

 
7.55

Tier 1 risk-based capital (a)
11.96

 
11.74

 
11.75

 
11.91

 
11.65

Total risk-based capital (a)
13.44

 
13.21

 
13.24

 
13.40

 
13.17

Common equity tier 1 risk-based capital (a)
11.23

 
10.99

 
10.99

 
11.14

 
10.99

Shareholders’ equity / total assets
10.30

 
10.21

 
10.15

 
10.20

 
10.01

Net interest margin
3.61

 
3.57

 
3.44

 
3.33

 
3.30

Efficiency ratio (non-GAAP)
57.41

 
57.78

 
59.76

 
59.48

 
59.18

 
 
 
 
 
 
 
 
 
 
Equity and share related:
 
 
 
 
 
 
 
 
 
Common equity
$
2,671,161

 
$
2,616,686

 
$
2,571,105

 
$
2,556,902

 
$
2,516,077

Book value per common share
28.96

 
28.40

 
27.94

 
27.76

 
27.34

Tangible book value per common share (non-GAAP)
22.83

 
22.25

 
21.78

 
21.59

 
21.16

Common stock closing price
58.96

 
63.70

 
55.40

 
56.16

 
52.55

Dividends declared per common share
0.33

 
0.33

 
0.26

 
0.26

 
0.26

Common shares issued and outstanding
92,230

 
92,151

 
92,016

 
92,101

 
92,034

Weighted-average common shares outstanding - Basic
91,959

 
91,893

 
91,921

 
92,058

 
92,125

Weighted-average common shares outstanding - Diluted
92,208

 
92,173

 
92,254

 
92,400

 
92,503

 
(a) Presented as projected for September 30, 2018 and actual for the remaining periods.






WEBSTER FINANCIAL CORPORATION
Consolidated Balance Sheets (unaudited)
 
 
 
 
 
(In thousands)
September 30,
2018
 
June 30,
2018
 
September 30,
2017
Assets:
 
 
 
 
 
Cash and due from banks
$
222,234

 
$
228,628

 
$
215,244

Interest-bearing deposits
99,746

 
70,654

 
26,992

Securities:
 
 
 
 
 
Available for sale
2,823,953

 
2,780,581

 
2,591,162

Held to maturity
4,332,458

 
4,356,219

 
4,497,311

Total securities
7,156,411

 
7,136,800

 
7,088,473

Loans held for sale
17,137

 
18,645

 
32,855

Loans and Leases:
 
 
 
 
 
Commercial
6,693,450

 
6,504,521

 
5,915,080

Commercial real estate
4,771,325

 
4,580,200

 
4,464,917

Residential mortgages
4,415,063

 
4,455,580

 
4,499,441

Consumer
2,441,181

 
2,485,695

 
2,566,983

Total loans and leases
18,321,019

 
18,025,996

 
17,446,421

Allowance for loan and lease losses
(211,832
)
 
(207,322
)
 
(201,803
)
Loans and leases, net
18,109,187

 
17,818,674

 
17,244,618

Federal Home Loan Bank and Federal Reserve Bank stock
133,740

 
141,293

 
136,340

Premises and equipment, net
128,507

 
127,973

 
130,358

Goodwill and other intangible assets, net
565,099

 
566,061

 
568,962

Cash surrender value of life insurance policies
539,923

 
537,431

 
528,136

Deferred tax asset, net
92,910

 
106,910

 
82,895

Accrued interest receivable and other assets
281,423

 
283,668

 
295,309

Total Assets
$
27,346,317

 
$
27,036,737

 
$
26,350,182

 
 
 
 
 
 
Liabilities and Shareholders' Equity:
 
 
 
 
 
Deposits:
 
 
 
 
 
Demand
$
4,231,505

 
$
4,151,259

 
$
4,138,206

Health savings accounts
5,599,596

 
5,517,929

 
4,891,024

Interest-bearing checking
2,587,679

 
2,637,346

 
2,581,266

Money market
2,376,649

 
2,016,453

 
2,598,187

Savings
4,106,942

 
4,180,666

 
4,428,061

Certificates of deposit
2,746,884

 
2,478,589

 
1,918,817

Brokered certificates of deposit
348,368

 
361,114

 
299,674

Total deposits
21,997,623

 
21,343,356

 
20,855,235

Securities sold under agreements to repurchase and other borrowings
564,488

 
862,568

 
902,902

Federal Home Loan Bank advances
1,441,884

 
1,576,956

 
1,507,681

Long-term debt
225,957

 
225,894

 
225,704

Accrued expenses and other liabilities
300,167

 
266,240

 
219,873

Total liabilities
24,530,119

 
24,275,014

 
23,711,395

Preferred stock
145,037

 
145,037

 
122,710

Common shareholders' equity
2,671,161

 
2,616,686

 
2,516,077

Total shareholders’ equity
2,816,198

 
2,761,723

 
2,638,787

Total Liabilities and Shareholders' Equity
$
27,346,317

 
$
27,036,737

 
$
26,350,182

 






WEBSTER FINANCIAL CORPORATION
Consolidated Statements of Income (unaudited)
 
 
 
 
 
 
 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
(In thousands, except per share data)
2018
 
2017
 
2018
 
2017
Interest income:
 
 
 
 
 
 
 
Interest and fees on loans and leases
$
215,448

 
$
181,130

 
$
616,488

 
$
523,394

Interest and dividends on securities
52,707

 
49,584

 
157,789

 
153,270

Loans held for sale
208

 
307

 
498

 
826

Total interest income
268,363

 
231,021

 
774,775

 
677,490

Interest expense:
 
 
 
 
 
 
 
Deposits
24,397

 
16,760

 
62,778

 
44,874

Borrowings
13,594

 
13,357

 
42,447

 
41,261

Total interest expense
37,991

 
30,117

 
105,225

 
86,135

Net interest income
230,372

 
200,904

 
669,550

 
591,355

Provision for loan and lease losses
10,500

 
10,150

 
32,000

 
27,900

Net interest income after provision for loan and lease losses
219,872

 
190,754

 
637,550

 
563,455

Non-interest income:
 
 
 
 
 
 
 
Deposit service fees
40,601

 
38,321

 
121,911

 
113,519

Loan and lease related fees
10,782

 
6,346

 
24,111

 
19,898

Wealth and investment services
8,412

 
7,750

 
24,738

 
22,900

Mortgage banking activities
1,305

 
2,421

 
3,684

 
8,038

Increase in cash surrender value of life insurance policies
3,706

 
3,720

 
10,921

 
10,943

Other income
7,478

 
7,288

 
24,040

 
18,267

 
72,284

 
65,846

 
209,405

 
193,565

Impairment loss on securities recognized in earnings

 

 

 
(126
)
Total non-interest income
72,284

 
65,846

 
209,405

 
193,439

Non-interest expense:
 
 
 
 
 
 
 
Compensation and benefits
96,640

 
88,395

 
284,457

 
262,288

Occupancy
14,502

 
14,744

 
45,489

 
46,957

Technology and equipment
24,553

 
22,580

 
73,019

 
66,646

Marketing
4,052

 
4,045

 
12,493

 
14,101

Professional and outside services
4,930

 
4,030

 
14,099

 
11,813

Intangible assets amortization
961

 
1,002

 
2,885

 
3,085

Loan workout expenses
681

 
840

 
2,101

 
2,203

Deposit insurance
9,694

 
6,344

 
30,098

 
19,701

Other expenses
22,770

 
19,843

 
66,216

 
63,232

Total non-interest expense
178,783

 
161,823

 
530,857

 
490,026

Income before income taxes
113,373

 
94,777

 
316,098

 
266,868

Income tax expense
13,700

 
30,281

 
54,518

 
81,322

Net income
99,673

 
64,496

 
261,580

 
185,546

Preferred stock dividends and other
(2,213
)
 
(2,070
)
 
(6,540
)
 
(6,284
)
Earnings applicable to common shareholders
$
97,460

 
$
62,426

 
$
255,040

 
$
179,262

 
 
 
 
 
 
 
 
Weighted-average common shares outstanding - Diluted
92,208

 
92,503

 
92,221

 
92,412

 
 
 
 
 
 
 
 
Earnings per common share:
 
 
 
 
 
 
 
Basic
$
1.06

 
$
0.68

 
$
2.77

 
$
1.95

Diluted
1.06

 
0.67

 
2.77

 
1.94

 
 
 
 
 
 
 
 






WEBSTER FINANCIAL CORPORATION
Five Quarter Consolidated Statements of Income (unaudited)
 
 
 
 
 
 
 
 
 
Three Months Ended
(In thousands, except per share data)
September 30,
2018
 
June 30,
2018
 
March 31,
2018
 
December 31,
2017
 
September 30,
2017
Interest income:
 
 
 
 
 
 
 
 
 
Interest and fees on loans and leases
$
215,448

 
$
207,820

 
$
193,220

 
$
185,172

 
$
181,130

Interest and dividends on securities
52,707

 
52,523

 
52,559

 
50,735

 
49,584

Loans held for sale
208

 
148

 
142

 
208

 
307

Total interest income
268,363

 
260,491

 
245,921

 
236,115

 
231,021

Interest expense:
 
 
 
 
 
 
 
 
 
Deposits
24,397

 
20,225

 
18,156

 
17,379

 
16,760

Borrowings
13,594

 
15,256

 
13,597

 
13,804

 
13,357

Total interest expense
37,991

 
35,481

 
31,753

 
31,183

 
30,117

Net interest income
230,372

 
225,010

 
214,168

 
204,932

 
200,904

Provision for loan and lease losses
10,500

 
10,500

 
11,000

 
13,000

 
10,150

Net interest income after provision for loan and lease losses
219,872

 
214,510

 
203,168

 
191,932

 
190,754

Non-interest income:
 
 
 
 
 
 
 
 
 
Deposit service fees
40,601

 
40,859

 
40,451

 
37,618

 
38,321

Loan and lease related fees
10,782

 
6,333

 
6,996

 
6,550

 
6,346

Wealth and investment services
8,412

 
8,456

 
7,870

 
8,155

 
7,750

Mortgage banking activities
1,305

 
1,235

 
1,144

 
1,899

 
2,421

Increase in cash surrender value of life insurance policies
3,706

 
3,643

 
3,572

 
3,684

 
3,720

Other income
7,478

 
7,848

 
8,714

 
8,133

 
7,288

 
72,284

 
68,374

 
68,747

 
66,039

 
65,846

Impairment loss on securities recognized in earnings

 

 

 

 

Total non-interest income
72,284

 
68,374

 
68,747

 
66,039

 
65,846

Non-interest expense:
 
 
 
 
 
 
 
 
 
Compensation and benefits
96,640

 
93,052

 
94,765

 
94,217

 
88,395

Occupancy
14,502

 
15,842

 
15,145

 
13,533

 
14,744

Technology and equipment
24,553

 
24,604

 
23,862

 
22,818

 
22,580

Marketing
4,052

 
4,889

 
3,552

 
3,320

 
4,045

Professional and outside services
4,930

 
4,381

 
4,788

 
5,045

 
4,030

Intangible assets amortization
961

 
962

 
962

 
977

 
1,002

Loan workout expenses
681

 
844

 
576

 
891

 
840

Deposit insurance
9,694

 
13,687

 
6,717

 
5,948

 
6,344

Other expenses
22,770

 
22,198

 
21,248

 
24,300

 
19,843

Total non-interest expense
178,783

 
180,459

 
171,615

 
171,049

 
161,823

Income before income taxes
113,373

 
102,425

 
100,300

 
86,922

 
94,777

Income tax expense
13,700

 
20,743

 
20,075

 
17,029

 
30,281

Net income
99,673

 
81,682

 
80,225

 
69,893

 
64,496

Preferred stock dividends and other
(2,213
)
 
(2,193
)
 
(2,142
)
 
(2,183
)
 
(2,070
)
Earnings applicable to common shareholders
$
97,460

 
$
79,489

 
$
78,083

 
$
67,710

 
$
62,426

 
 
 
 
 
 
 
 
 
 
Weighted-average common shares outstanding - Diluted
92,208

 
92,173

 
92,254

 
92,400

 
92,503

 
 
 
 
 
 
 
 
 
 
Earnings per common share:
 
 
 
 
 
 
 
 
 
Basic
$
1.06

 
$
0.87

 
$
0.85

 
$
0.74

 
$
0.68

Diluted
1.06

 
0.86

 
0.85

 
0.73

 
0.67

 
 
 
 
 
 
 
 
 
 






WEBSTER FINANCIAL CORPORATION
Consolidated Average Balances, Interest, Yields and Rates, and Net Interest Margin on a Fully Tax-equivalent Basis (unaudited)
 
Three Months Ended September 30,
 
 
 
2018
 
 
 
 
 
2017
 
 
(Dollars in thousands)
Average
balance
 
Interest
 
Yield/rate
 
Average
balance
 
Interest
 
Yield/rate
Assets:
 
 
 
 
 
 
 
 
 
 
 
Interest-earning assets:
 
 
 
 
 
 
 
 
 
 
 
Loans and leases
$
18,060,842

 
$
216,065

 
4.71
%
 
$
17,364,519

 
$
182,269

 
4.14
%
Securities (a)
7,104,625

 
52,342

 
2.91

 
6,994,661

 
51,130

 
2.92

Federal Home Loan and Federal Reserve Bank stock
126,558

 
1,586

 
4.97

 
135,943

 
1,482

 
4.33

Interest-bearing deposits
72,157

 
334

 
1.81

 
58,193

 
173

 
1.17

Loans held for sale
20,291

 
208

 
4.10

 
34,939

 
307

 
3.51

Total interest-earning assets
25,384,473

 
$
270,535

 
4.20
%
 
24,588,255

 
$
235,361

 
3.78
%
Non-interest-earning assets
1,663,012

 
 
 
 
 
1,721,591

 
 
 
 
Total Assets
$
27,047,485

 
 
 
 
 
$
26,309,846

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities and Shareholders' Equity:
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing liabilities:
 
 
 
 
 
 
 
 
 
 
 
Demand deposits
$
4,257,448

 
$

 
%
 
$
4,201,723

 
$

 
%
Health savings accounts
5,576,417

 
2,793

 
0.20

 
4,870,620

 
2,449

 
0.20

Interest-bearing checking, money market and savings
9,135,736

 
9,827

 
0.43

 
9,707,053

 
7,780

 
0.32

Certificates of deposit
2,935,663

 
11,777

 
1.59

 
2,155,743

 
6,531

 
1.20

Total deposits
21,905,264

 
24,397

 
0.44

 
20,935,139

 
16,760

 
0.32

 
 
 
 
 
 
 
 
 
 
 
 
Securities sold under agreements to repurchase and other borrowings
729,154

 
3,084

 
1.66

 
904,854

 
3,847

 
1.66

Federal Home Loan Bank advances
1,155,768

 
7,685

 
2.60

 
1,362,165

 
6,894

 
1.98

Long-term debt
225,926

 
2,825

 
5.00

 
225,673

 
2,616

 
4.64

Total borrowings
2,110,848

 
13,594

 
2.53

 
2,492,692

 
13,357

 
2.11

Total interest-bearing liabilities
24,016,112

 
$
37,991

 
0.63
%
 
23,427,831

 
$
30,117

 
0.51
%
Non-interest-bearing liabilities
234,564

 
 
 
 
 
246,703

 
 
 
 
Total liabilities
24,250,676

 
 
 
 
 
23,674,534

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Preferred stock
145,037

 
 
 
 
 
122,710

 
 
 
 
Common shareholders' equity
2,651,772

 
 
 
 
 
2,512,602

 
 
 
 
Total shareholders' equity
2,796,809

 
 
 
 
 
2,635,312

 
 
 
 
Total Liabilities and Shareholders' Equity
$
27,047,485

 
 
 
 
 
$
26,309,846

 
 
 
 
Tax-equivalent net interest income
 
 
232,544

 
 
 
 
 
205,244

 
 
Less: tax-equivalent adjustments
 
 
(2,172
)
 
 
 
 
 
(4,340
)
 
 
Net interest income
 
 
$
230,372

 
 
 
 
 
$
200,904

 
 
Net interest margin
 
 
 
 
3.61
%
 
 
 
 
 
3.30
%
 
(a) For purposes of the yield computation, unrealized gains (losses) on securities available for sale are excluded from the average balance.
 






WEBSTER FINANCIAL CORPORATION
Consolidated Average Balances, Interest, Yields and Rates, and Net Interest Margin on a Fully Tax-equivalent Basis (unaudited)
 
Nine Months Ended September 30,
 
 
 
2018
 
 
 
 
 
2017
 
 
(Dollars in thousands)
Average
balance
 
Interest
 
Yield/rate
 
Average
balance
 
Interest
 
Yield/rate
Assets:
 
 
 
 
 
 
 
 
 
 
 
Interest-earning assets:
 
 
 
 
 
 
 
 
 
 
 
Loans and leases
$
17,901,888

 
$
618,419

 
4.58
%
 
$
17,225,217

 
$
526,419

 
4.05
%
Securities (a)
7,135,037

 
157,108

 
2.91

 
7,031,738

 
157,550

 
2.98

Federal Home Loan and Federal Reserve Bank stock
130,947

 
4,587

 
4.68

 
160,911

 
4,732

 
3.93

Interest-bearing deposits
63,807

 
782

 
1.62

 
63,684

 
472

 
0.98

Loans held for sale
17,292

 
498

 
3.84

 
31,373

 
826

 
3.51

Total interest-earning assets
25,248,971

 
$
781,394

 
4.09
%
 
24,512,923

 
$
689,999

 
3.73
%
Non-interest-earning assets
1,645,331

 
 
 
 
 
1,666,080

 
 
 
 
Total Assets
$
26,894,302

 
 
 
 
 
$
26,179,003

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities and Shareholders' Equity:
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing liabilities:
 
 
 
 
 
 
 
 
 
 
 
Demand deposits
$
4,177,004

 
$

 
%
 
$
4,039,738

 
$

 
%
Health savings accounts
5,508,325

 
8,152

 
0.20

 
4,810,038

 
7,133

 
0.20

Interest-bearing checking, money market and savings
9,172,498

 
25,399

 
0.37

 
9,505,187

 
19,599

 
0.28

Certificates of deposit
2,710,917

 
29,227

 
1.44

 
2,079,021

 
18,142

 
1.17

Total deposits
21,568,744

 
62,778

 
0.39

 
20,433,984

 
44,874

 
0.29

 
 
 
 
 
 
 
 
 
 
 
 
Securities sold under agreements to repurchase and other borrowings
824,203

 
10,722

 
1.72

 
884,975

 
10,970

 
1.63

Federal Home Loan Bank advances
1,288,410

 
23,437

 
2.40

 
1,829,175

 
22,543

 
1.63

Long-term debt
225,863

 
8,288

 
4.89

 
225,607

 
7,748

 
4.58

Total borrowings
2,338,476

 
42,447

 
2.40

 
2,939,757

 
41,261

 
1.85

Total interest-bearing liabilities
23,907,220

 
$
105,225

 
0.59
%
 
23,373,741

 
$
86,135

 
0.49
%
Non-interest-bearing liabilities
228,892

 
 
 
 
 
207,688

 
 
 
 
Total liabilities
24,136,112

 
 
 
 
 
23,581,429

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Preferred stock
145,078

 
 
 
 
 
122,710

 
 
 
 
Common shareholders' equity
2,613,112

 
 
 
 
 
2,474,864

 
 
 
 
Total shareholders' equity
2,758,190

 
 
 
 
 
2,597,574

 
 
 
 
Total Liabilities and Shareholders' Equity
$
26,894,302

 
 
 
 
 
$
26,179,003

 
 
 
 
Tax-equivalent net interest income
 
 
676,169

 
 
 
 
 
603,864

 
 
Less: tax-equivalent adjustments
 
 
(6,619
)
 
 
 
 
 
(12,509
)
 
 
Net interest income
 
 
$
669,550

 
 
 
 
 
$
591,355

 
 
Net interest margin
 
 
 
 
3.54
%
 
 
 
 
 
3.27
%
 
(a) For purposes of the yield computation, unrealized gains (losses) on securities available for sale are excluded from the average balance.
 






WEBSTER FINANCIAL CORPORATION Five Quarter Loan and Lease Balances (unaudited)
 
 
 
 
 
 
 
 
(Dollars in thousands)
September 30,
2018
 
June 30,
2018
 
March 31,
2018
 
December 31,
2017
 
September 30,
2017
Loan and Lease Balances (actual):
 
 
 
 
 
 
 
 
 
Commercial non-mortgage
$
5,724,405

 
$
5,544,685

 
$
5,404,231

 
$
5,084,148

 
$
5,031,481

Asset-based lending
969,045

 
959,836

 
874,271

 
834,779

 
883,599

Commercial real estate
4,771,325

 
4,580,200

 
4,544,831

 
4,523,828

 
4,464,917

Residential mortgages
4,415,063

 
4,455,580

 
4,459,862

 
4,490,878

 
4,499,441

Consumer
2,441,181

 
2,485,695

 
2,522,380

 
2,590,225

 
2,566,983

Total Loan and Lease Balances
18,321,019

 
18,025,996

 
17,805,575

 
17,523,858

 
17,446,421

Allowance for loan and lease losses
(211,832
)
 
(207,322
)
 
(205,349
)
 
(199,994
)
 
(201,803
)
Loans and Leases, net
$
18,109,187

 
$
17,818,674

 
$
17,600,226

 
$
17,323,864

 
$
17,244,618

 
 
 
 
 
 
 
 
 
 
Loan and Lease Balances (average):
 
 
 
 
 
 
 
 
 
Commercial non-mortgage
$
5,597,831

 
$
5,470,677

 
$
5,306,412

 
$
5,080,267

 
$
4,990,146

Asset-based lending
944,120

 
897,564

 
864,895

 
876,070

 
859,289

Commercial real estate
4,620,741

 
4,549,969

 
4,538,429

 
4,446,162

 
4,475,207

Residential mortgages
4,434,056

 
4,460,904

 
4,476,057

 
4,498,707

 
4,455,932

Consumer
2,464,094

 
2,507,571

 
2,568,980

 
2,600,970

 
2,583,945

Total Loan and Lease Balances
18,060,842

 
17,886,685

 
17,754,773

 
17,502,176

 
17,364,519

Allowance for loan and lease losses
(208,102
)
 
(207,718
)
 
(201,575
)
 
(202,632
)
 
(202,628
)
Loans and Leases, net
$
17,852,740

 
$
17,678,967

 
$
17,553,198

 
$
17,299,544

 
$
17,161,891






WEBSTER FINANCIAL CORPORATION
Five Quarter Nonperforming Assets (unaudited)
 
 
 
 
 
 
 
 
 
(Dollars in thousands)
September 30,
2018
 
June 30,
2018
 
March 31,
2018
 
December 31,
2017
 
September 30,
2017
Nonperforming loans and leases:
 
 
 
 
 
 
 
 
 
Commercial non-mortgage
$
58,366

 
$
40,240

 
$
46,843

 
$
39,795

 
$
59,512

Asset-based lending
1,066

 
1,197

 
1,571

 
589

 
8,558

Commercial real estate
7,255

 
9,606

 
3,884

 
4,484

 
11,066

Residential mortgages
49,348

 
50,654

 
44,496

 
44,407

 
45,597

Consumer
36,621

 
38,390

 
37,465

 
37,307

 
38,915

Total nonperforming loans and leases
$
152,656

 
$
140,087

 
$
134,259

 
$
126,582

 
$
163,648

 
 
 
 
 
 
 
 
 
 
Other real estate owned and repossessed assets:
 
 
 
 
 
 
 
 
 
Commercial non-mortgage
$
83

 
$
148

 
$
218

 
$
305

 
$
328

Residential mortgages
3,944

 
3,271

 
2,785

 
3,110

 
2,843

Consumer
1,284

 
2,541

 
2,828

 
2,649

 
2,143

Total other real estate owned and repossessed assets
$
5,311

 
$
5,960

 
$
5,831

 
$
6,064

 
$
5,314

Total nonperforming assets
$
157,967

 
$
146,047

 
$
140,090

 
$
132,646

 
$
168,962







WEBSTER FINANCIAL CORPORATION
Five Quarter Past Due Loans and Leases (unaudited)
 
 
 
 
 
 
 
 
(Dollars in thousands)
September 30,
2018
 
June 30,
2018
 
March 31,
2018
 
December 31,
2017
 
September 30,
2017
Past due 30-89 days:
 
 
 
 
 
 
 
 
 
Commercial non-mortgage
$
6,186

 
$
7,508

 
$
4,749

 
$
8,167

 
$
3,169

Asset-based lending

 

 

 

 

Commercial real estate
2,746

 
719

 
1,103

 
551

 
1,783

Residential mortgages
14,499

 
10,861

 
17,337

 
13,771

 
11,700

Consumer
15,631

 
14,354

 
17,602

 
22,394

 
15,942

Total past due 30-89 days
39,062

 
33,442

 
40,791

 
44,883

 
32,594

Past due 90 days or more and accruing
139

 
62

 
845

 
887

 
934

Total past due loans and leases
$
39,201

 
$
33,504

 
$
41,636

 
$
45,770

 
$
33,528

 





WEBSTER FINANCIAL CORPORATION
Five Quarter Changes in the Allowance for Loan and Lease Losses (unaudited)
 
 
 
 
 
 
For the Three Months Ended
(Dollars in thousands)
September 30,
2018
 
June 30,
2018
 
March 31,
2018
 
December 31,
2017
 
September 30,
2017
Beginning balance
$
207,322

 
$
205,349

 
$
199,994

 
$
201,803

 
$
199,578

Provision
10,500

 
10,500

 
11,000

 
13,000

 
10,150

Charge-offs:
 
 
 
 
 
 
 
 
 
Commercial non-mortgage
876

 
5,697

 
1,542

 
387

 
3,123

Asset-based lending

 

 

 
2,572

 

Commercial real estate
1,922

 
40

 
77

 
8,324

 
749

Residential mortgages
874

 
754

 
917

 
560

 
585

Consumer
4,863

 
4,907

 
5,074

 
6,174

 
6,197

Total charge-offs
8,535

 
11,398

 
7,610

 
18,017

 
10,654

Recoveries:
 
 
 
 
 
 
 
 
 
Commercial non-mortgage
442

 
923

 
135

 
1,231

 
545

Asset-based lending

 

 

 
33

 

Commercial real estate
143

 
9

 
2

 
144

 
10

Residential mortgages
133

 
325

 
385

 
100

 
280

Consumer
1,827

 
1,614

 
1,443

 
1,700

 
1,894

Total recoveries
2,545

 
2,871

 
1,965

 
3,208

 
2,729

Total net charge-offs
5,990

 
8,527

 
5,645

 
14,809

 
7,925

Ending balance
$
211,832

 
$
207,322

 
$
205,349

 
$
199,994

 
$
201,803







WEBSTER FINANCIAL CORPORATION
Reconciliations to GAAP Financial Measures ____ ___
The Company evaluates its business based on certain ratios that utilize tangible equity, a non-GAAP financial measure. Return on average tangible common shareholders' equity measures the Company’s net income available to common shareholders, adjusted for the tax-effected amortization of intangible assets, as a percentage of average shareholders’ equity less average preferred stock and average goodwill and intangible assets. The tangible equity ratio represents shareholders’ equity less goodwill and intangible assets divided by total assets less goodwill and intangible assets. The tangible common equity ratio represents shareholders’ equity less preferred stock and goodwill and intangible assets divided by total assets less goodwill and intangible assets. Tangible book value per common share represents shareholders’ equity less preferred stock and goodwill and intangible assets divided by common shares outstanding at the end of the period.
The efficiency ratio, which measures the costs expended to generate a dollar of revenue, is calculated excluding foreclosed property expense, amortization of intangibles, gain or loss on securities, and other non-recurring items. Core deposits express total deposits less time deposits. Accordingly, these are also non-GAAP financial measures.
The Company believes the use of these non-GAAP financial measures provides additional clarity in assessing the results of the Company. Other companies may define or calculate supplemental financial data differently. 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)
September 30,
2018
 
June 30,
2018
 
March 31,
2018
 
December 31,
2017
 
September 30,
2017
Return on average tangible common shareholders' equity:
 
 
 
 
 
 
 
 
 
Net income (GAAP)
$
99,673

 
$
81,682

 
$
80,225

 
$
69,893

 
$
64,496

Less: Preferred stock dividends (GAAP)
1,968

 
1,969

 
1,947

 
2,112

 
2,024

Add: Intangible assets amortization, tax-effected (GAAP)
759

 
760

 
760

 
635

 
651

Income adjusted for preferred stock dividends and intangible assets amortization (non-GAAP)
$
98,464

 
$
80,473

 
$
79,038

 
$
68,416

 
$
63,123

Income adjusted for preferred stock dividends and intangible assets amortization, annualized basis (non-GAAP)
$
393,856

 
$
321,892

 
$
316,152

 
$
273,664

 
$
252,492

Average shareholders' equity (non-GAAP)
$
2,796,809

 
$
2,754,355

 
$
2,722,591

 
$
2,675,733

 
$
2,635,312

Less: Average preferred stock (non-GAAP)
145,037

 
145,037

 
145,161

 
131,707

 
122,710

         Average goodwill and other intangible assets (non-GAAP)
565,559

 
566,522

 
567,547

 
568,546

 
569,538

Average tangible common shareholders' equity (non-GAAP)
$
2,086,213

 
$
2,042,796

 
$
2,009,883

 
$
1,975,480

 
$
1,943,064

Return on average tangible common shareholders' equity (non-GAAP)
18.88
%
 
15.76
%
 
15.73
%
 
13.85
%
 
12.99
%
 
 
 
 
 
 
 
 
 
 
Efficiency ratio:
 
 
 
 
 
 
 
 
 
Non-interest expense (GAAP)
$
178,783

 
$
180,459

 
$
171,615

 
$
171,049

 
$
161,823

Less: Foreclosed property activity (GAAP)
(309
)
 
(106
)
 
85

 
(97
)
 
(72
)
         Intangible assets amortization (GAAP)
961

 
962

 
962

 
977

 
1,002

         Other expenses (non-GAAP)
2,959

 
8,599

 

 
6,106

 
213

Non-interest expense (non-GAAP)
$
175,172

 
$
171,004

 
$
170,568

 
$
164,063

 
$
160,680

Net interest income (GAAP)
$
230,372

 
$
225,010

 
$
214,168

 
$
204,932

 
$
200,904

Add: Tax-equivalent adjustment (non-GAAP)
2,172

 
2,217

 
2,230

 
4,444

 
4,340

         Non-interest income (GAAP)
72,284

 
68,374

 
68,747

 
66,039

 
65,846

         Other (non-GAAP)
308

 
359

 
295

 
421

 
431

Income (non-GAAP)
$
305,136

 
$
295,960

 
$
285,440

 
$
275,836

 
$
271,521

Efficiency ratio (non-GAAP)
57.41
%
 
57.78
%
 
59.76
%
 
59.48
%
 
59.18
%





WEBSTER FINANCIAL CORPORATION
Reconciliations to GAAP Financial Measures (continued) ___ ___

 
At or for the Three Months Ended
(In thousands, except per share data)
September 30,
2018
 
June 30,
2018
 
March 31,
2018
 
December 31,
2017
 
September 30,
2017
Tangible equity:
 
 
 
 
 
 
 
 
 
Shareholders' equity (GAAP)
$
2,816,198

 
$
2,761,723

 
$
2,716,142

 
$
2,701,958

 
$
2,638,787

Less: Goodwill and other intangible assets (GAAP)
565,099

 
566,061

 
567,023

 
567,984

 
568,962

Tangible shareholders' equity (non-GAAP)
$
2,251,099

 
$
2,195,662

 
$
2,149,119

 
$
2,133,974

 
$
2,069,825

Total assets (GAAP)
$
27,346,317

 
$
27,036,737

 
$
26,752,147

 
$
26,487,645

 
$
26,350,182

Less: Goodwill and other intangible assets (GAAP)
565,099

 
566,061

 
567,023

 
567,984

 
568,962

Tangible assets (non-GAAP)
$
26,781,218

 
$
26,470,676

 
$
26,185,124

 
$
25,919,661

 
$
25,781,220

Tangible equity (non-GAAP)
8.41
%
 
8.29
%
 
8.21
%
 
8.23
%
 
8.03
%
 
 
 
 
 
 
 
 
 
 
Tangible common equity:
 
 
 
 
 
 
 
 
 
Tangible shareholders' equity (non-GAAP)
$
2,251,099

 
$
2,195,662

 
$
2,149,119

 
$
2,133,974

 
$
2,069,825

Less: Preferred stock (GAAP)
145,037

 
145,037

 
145,037

 
145,056

 
122,710

Tangible common shareholders' equity (non-GAAP)
$
2,106,062

 
$
2,050,625

 
$
2,004,082

 
$
1,988,918

 
$
1,947,115

Tangible assets (non-GAAP)
$
26,781,218

 
$
26,470,676

 
$
26,185,124

 
$
25,919,661

 
$
25,781,220

Tangible common equity (non-GAAP)
7.86
%
 
7.75
%
 
7.65
%
 
7.67
%
 
7.55
%
 
 
 
 
 
 
 
 
 
 
Tangible book value per common share:
 
 
 
 
 
 
 
 
 
Tangible common shareholders' equity (non-GAAP)
$
2,106,062

 
$
2,050,625

 
$
2,004,082

 
$
1,988,918

 
$
1,947,115

Common shares outstanding
92,230

 
92,151

 
92,016

 
92,101

 
92,034

Tangible book value per common share (non-GAAP)
$
22.83

 
$
22.25

 
$
21.78

 
$
21.59

 
$
21.16

 
 
 
 
 
 
 
 
 
 
Core deposits:
 
 
 
 
 
 
 
 
 
Total deposits
$
21,997,623

 
$
21,343,356

 
$
21,385,042

 
$
20,993,729

 
$
20,855,235

Less: Certificates of deposit
2,746,884

 
2,478,589

 
2,275,897

 
2,187,756

 
1,918,817

Brokered certificates of deposit
348,368

 
361,114

 
277,356

 
280,652

 
299,674

Core deposits (non-GAAP)
$
18,902,371

 
$
18,503,653

 
$
18,831,789

 
$
18,525,321

 
$
18,636,744