WEBSTER FINANCIAL CORP. more than doubled its net income in 2011, thanks to low interest rates and improving loan quality.
By Michael Souza PBN Staff Writer
WATERBURY, Conn. – Displaying continuing signs of a recovering economy, Webster Financial Corp., parent of Webster Bank, reported net income on Thursday of $151.4 million for 2011, a 109 percent increase on its 2010 profit.
With a decline of 3.6 percent in total interest and non-interest revenue, to $876.8 million, for the year, the bank was able to book a larger profit by taking advantage of the low interest rate environment to pay less on deposits, as well as the improving quality of its loan portfolio, for which it took $22.5 million in provision for loan losses, a steep drop from the $115 million it took in 2010.
Webster reported earnings per diluted share of $1.61, a sharp increase from the 57 cents per diluted share that the bank posted in 2010.
Low interest rates helped the bank, as interest expense totaled $136 million for 2011, a significant drop from $171.4 million in 2010 and $250.7 million in 2009.
Continued improvement in asset quality was reflected by a 36 percent reduction in nonperforming assets and a 34 percent decline in commercial classified loans over the course of the year.
Total nonperforming loans continued to decline throughout the year. The nonperforming amount at the end of the year was $188.1 million, compared with $221.0 million as of Sept. 30, and $273,573 as reported for Dec. 31, 2010.
The bank ended the year strong as well, with a 26.4 percent increase in net income to $40.4 million, and a 48.3 percent increase in earnings per diluted share to 43 cents.
“Fourth-quarter results cap a year of meaningful, across-the-board progress for Webster, with particularly strong improvement in credit metrics,” said Chairman and CEO James C. Smith. “Still, we have much to do to sustain our progress and improve financial performance in 2012, with special emphasis on improving the ration of expenses to revenue.”