In This Article:
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Deposit Growth: Increased by 3.6% in the quarter, with significant growth in DDA, commercial deposits, and HSA.
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Loan Growth: Increased by 0.7% in the quarter, excluding a $300 million securitization, growth was 1.3%.
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Net Interest Income: Increased quarter over quarter, aligning with full-year expectations.
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Efficiency Ratio: Maintained at 45%, indicating well-managed expenses.
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Return on Average Assets: 1.22% on an adjusted basis for the quarter.
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Return on Tangible Common Equity: 17.3% on an adjusted basis for the quarter.
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Adjusted EPS: $1.34 for the quarter.
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Net Income to Common Shareholders: $230 million on an adjusted basis.
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Total Assets: $79 billion at period end, an increase of $2.6 billion from the second quarter.
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Common Equity Tier 1 Ratio: 11.23%, an increase of 64 basis points from the previous quarter.
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Tangible Common Equity Ratio: 7.48%.
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Loan to Deposit Ratio: 80.5%.
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Net Interest Margin: Increased by 4 basis points to 336 basis points.
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Allowance for Credit Losses: Increased by $19 million, with coverage to loans at 132 basis points.
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Net Charge-Offs: $36 million for the quarter.
Release Date: October 17, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Webster Financial Corp (NYSE:WBS) reported a 3.6% growth in deposits for the quarter, including growth in DDA, overall commercial deposits, and HSA.
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Net interest income grew quarter over quarter, aligning with full-year expectations, benefiting from asset growth and balance sheet repositioning.
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The company maintained strong capital levels, with a CET 1 ratio exceeding the operating target of 11%, providing capital flexibility.
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Webster Financial Corp (NYSE:WBS) achieved an industry-leading efficiency ratio of 45%, indicating well-managed expenses.
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The company successfully reduced its commercial real estate (CRE) concentration, with pre-outstandings as a percentage of tier one capital and reserves declining from 285% to approximately 265%.
Negative Points
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Webster Financial Corp (NYSE:WBS) experienced continued negative risk rating migration, particularly in the office segment of the CRE portfolio.
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Non-accrual loans increased by $50 million this quarter, primarily driven by the office portfolio migration.
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The company faced pressure on core fee growth, with adjusted noninterest income only up by $1 million.
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There was a $20 million securities repositioning charge, a $16 million impact from the exit of noncorporate factoring operations, and $22 million in strategic restructuring costs.
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Webster Financial Corp (NYSE:WBS) anticipates a decline in deposits by around 1% in the fourth quarter due to seasonality in the public funds business.