Webster profit drops 2.8% as total revenue grows 8.6%

WEBSTER FINANCIAL CORP. reported a second-quarter earnings decline of 2.8 percent Wednesday, even as total revenue for the Waterbury, Conn.-based parent of Webster Bank increased 8.6 percent.
WEBSTER FINANCIAL CORP. reported a second-quarter earnings decline of 2.8 percent Wednesday, even as total revenue for the Waterbury, Conn.-based parent of Webster Bank increased 8.6 percent.

WATERBURY, Conn. – Webster Financial Corp. profit fell 2.8 percent to $50.6 million, or 53 cents per diluted share, while revenue grew 8.6 percent to $267.5 million for the quarter ended June 30.
The parent company of Webster Bank, based in Waterbury, Conn., announced its second-quarter earnings on Tuesday, showing revenue growth fueled by a record-level of net interest income – totaling $176.9 million – but a slip in profit, as both interest expenses and noninterest expense grew, 8.8 percent to $25.5 million and 11.1 percent to $152.8 million, respectively.
At the same time, total loans and leases grew 10.1 percent to $16.3 billion, which James C. Smith, chairman and CEO, says helped offset low interest rates.
“Double-digit loan growth once again propelled strong revenue growth as Webster bankers continued to excel in service to businesses and consumers,” he said. “Loan originations in excess of $1 billion coupled with exceptionally strong credit metrics, helped overcome margin pressure from today’s historically low interest rate environment to produce another solid quarter.”
The company’s net interest margin grew to 3.08 percent compared with 3.05 percent during the same period last year.
The company said the second quarter of this year included a $400,000 net tax benefit, down from a benefit of $3.7 million a year ago, “primarily related to a change in the estimated reliability of the company’s state deferred tax assets.”

Loan growth was fueled by increases in loan types across the board, including commercial, commercial real estate, residential mortgages and consumer loans. But loan origination growth slowed, to $1.3 billion compared with $1.4 billion during the same period last year. The large drop came in residential loan originations, falling to $109 million compared with $147 million in the second quarter of 2015.
Allowance for loan and lease losses grew 7.5 percent to $180.4 million. Nonperforming assets fell 20.5 percent to $137.3 million.
Total assets grew 6.5 percent to $25.1 billion, while total deposits grew 8.9 percent to $18.8 billion.
“Ongoing strategic investments in our businesses, along with continued expense discipline, are designed to maximize shareholder value over time,” said Glenn MacInnes, executive vice president and chief financial officer.

No posts to display