Webster Financial reports profit increase for year, largely due to loan demand

WEBSTER FINANCIALCorp. Thursday announced its year-end earnings report, reflecting a year-over-year net income increase of 11 percent, which its CEO attributes in large part to an increased volume of lending.
WEBSTER FINANCIALCorp. Thursday announced its year-end earnings report, reflecting a year-over-year net income increase of 11 percent, which its CEO attributes in large part to an increased volume of lending.

(Updated 3:17 p.m.)WATERBURY, Conn. – Webster Financial Corp. Thursday announced its year-end earnings report, reflecting a year-over-year net income increase of 11 percent, which its CEO attributes in large part to an increased volume of lending.
Webster Financial Corp., holding company of Webster Bank, reported $199.75 million net income in the year ending Dec. 31, according to its financial earnings report.
The amount rose from $179.55 million in 2013.
Yearly earnings broke out to $2.08 per diluted share, representing an increase from $1.86 in 2013. The bank reported $22.5 billion in total assets for 2014, reflecting an 8 percent increase from 2013.
CEO James. C. Smith noted in a statement a strong loan demand, which he says boosted revenue and profit throughout the entire year.
“Record lending to businesses once again led the way, as Webster bankers excelled in service to our customers and communities,” Smith said. “Further strength in credit quality reflects our customers’ solid financial condition amid a gradually improving economy.”

Smith says a large part of the increase in loan demand is due to the economy, which he says is gradually improving along with business confidence.
“Our view is that trend is likely to continue because we think the economy is going to continue to get better,” Smith said.
The bank is also seeing an uptick in business and commercial lending throughout the market, including in Rhode Island.
“Rhode Island is a vital part of our franchise,” Smith said. “We’ve added bankers in that market and taken more space up in Rhode Island and we see Providence as a significant growth area for us.”
Although there are no solid plans to open new branches in Rhode Island, Smith says Webster is always looking for ways to optimize efforts in each state, whether that be through consolidating, opening or moving branches. Noting the increased amount of people using their mobile devices for banking, Smith said the bank is bolstering efforts to develop and improve its online brand to make it more user friendly. The bank recently launched an Apple Touch ID fingerprint sensor for its mobile app, which allows customers to login and check their balances, or view transaction history.
Smith, however, says that while the mobile world continues to grow, at least 85 percent of new accounts are still opened at banking centers, which he says are vital to the brand of the bank.
Despite the positive quarter and bullish year, Smith is now focusing on this year.
“We believe we can be the best regional bank in the country,” Smith said.

The bank’s total interest income rose from $687.64 million in 2013 to $718.94 million in 2014, representing a 4.5 percent increase. Total non-interest income increased 5.8 percent from $191.05 million in 2013 to $202.1 million in 2014, according to the report.
Total loans on Dec. 31 were $13.9 billion compared with $12.7 billion at the same time in 2013.
Year-over-year, Webster reported commercial, commercial real estate, residential mortgage and consumer loans increased by $543.7 million, $496.1 million and $147.8 million and $12.7 million, respectively.
The reported fourth quarter net income of $51 million, represented a 1 percent increase from the previous quarter ending Sept. 30. The year-over-year fourth quarter comparison, however, represents a 16.6 percent increase.
Net income per diluted share in the fourth quarter was 53 cents, compared with 45 cents during the fourth quarter 2013.
Webster recorded a provision for loan losses of $9.5 million in the fourth quarter of 2014, which remained unchanged from the third quarter, but fell $500,000 from the same quarter in 2013.

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