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WATERBURY, Conn. – Webster Financial Corp. on Friday said its second-quarter profit nearly doubled compared with the year-earlier period as the bank cut back on the money it set aside for anticipated bad loans.
For the quarter ended June 30, the company – New England’s largest independent bank and the parent of Webster Bank N.A. – posted $34.21 million in earnings, 94 percent higher than the $17.64 million profit in the same period in 2010.
The company’s earnings per diluted share totaled 36 cents, beating by one cent the profit forecast by a consensus of analysts who cover the bank, according to Yahoo!Finance .
The improved earnings came despite a decline in revenue. Webster recorded $222.23 million in interest and non-interest revenue, down 8.7 percent from the $243.55 million in the same period a year ago.
Webster – Rhode Island’s eighth-biggest bank by deposits – benefited significantly from reducing its second-quarter loan-loss provision to $5 million, down from $32 million in the 2010 second quarter. A small loan-loss set aside signals that the bank believes the quality of its $11 billion loan portfolio continues to improve.
The bank said nonperforming loans declined to $223.12 million as of June 30, down from $254.07 million on March 31 and $317.31 million a year ago. And charge-offs – loans the bank has deemed uncollectible – dropped to $26.4 million, down from $37.94 million in the first quarter and $35.98 million in the second quarter of 2010.
Webster said the nonperforming assets were 2.27 percent of total loans and other real estate owned, down from 3.21 percent in the second quarter of 2010.
“Significant reductions in past due loans, classified assets and nonperforming loans resulted in a reduced need for [provisioning] for loans compared to prior periods,” said Jerry Plush, vice chairman and chief operating officer.
The bank’s net interest margin stood at 3.46 percent as of June 30, up two basis points from three months earlier, and up 19 basis points from a year ago.
Total deposits declined to $13.72 billion from $14.12 billion on March 31. A year earlier, deposits stood at $13.47 billion.