WBS » Topics » Summary

This excerpt taken from the WBS 10-Q filed May 9, 2008.

Summary

Webster’s net income was $24.4 million, or $.47 per diluted share, for the three months ended March 31, 2008, compared to $35.0 million, or $0.62 per diluted share, for the three months ended March 31, 2007, a decrease of 30.5%. Income from continuing operations was $26.5 million, or $.51 per diluted share, for the three months ended March 31, 2008, compared to $35.1 million, or $0.63 per diluted share for the three months ended March 31, 2007. For the three months ended March 31, 2008, loss from discontinued operations, net of taxes, totaled of $2.1 million, or $.04 per diluted share, compared to a loss, net of taxes of $44 thousand for the three months ended March 31, 2007. The year-over-year decrease in continuing operations is attributable to an increase in the provision for credit losses of $12.8 million and a decrease in net interest income of $3.2 million, which was partially offset by a decrease of $5.0 million in non-interest expenses. The year-over-year comparison of net interest income is impacted by the interest rate environment, and the effect that declining short-term interest rates and a flattening of the yield curve had on the net interest margin. The effect of these market conditions has been partially offset by the growth in the loan portfolio, particularly in higher yielding commercial and consumer loans. The year-over-year increase in discontinued operations is primarily attributable to expenses related to the sale of Webster Insurance.

Selected financial highlights are presented in the table below.

 

(In thousands, except per share data)

   At or for the three
months ended March 31,
 
   2008     2007 (b)  

Earnings and Per Share Data

    

Net interest income

   $ 124,856     $ 128,081  

Total noninterest income

     47,847       47,354  

Total noninterest expense

     116,111       121,161  

Income from continuing operations, net of tax

     26,489       35,080  

Loss from discontinued operations, net of tax

     (2,124 )     (44 )

Net income

     24,365       35,036  

Net income per share from continuing operations—diluted

   $ 0.47     $ 0.62  

Net income per share— diluted

     0.47       0.62  

Dividends declared per common share

     0.30       0.27  

Book value per common share

     32.71       33.65  

Tangible book value per common share

     18.36       20.23  

Diluted shares (average)

     52,297       56,762  

Selected Ratios

    

Return on average assets (c)

     0.62 %     0.83 %

Return on average shareholders' equity (c)

     6.11       7.40  

Net interest margin

     3.27       3.41  

Efficiency ratio (a)

     67.23       69.06  

Tangible capital ratio

     5.77       6.99  

 

(a) Total non-interest expense as a percentage of net interest income plus total non-interest income.
(b) Certain previously reported information has been reclassified for the effect of reporting Webster Insurance and Webster Risk Services as discontinued operations.
(c) Calculated based on income from continuing operations for all periods presented.

 

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Table of Contents
This excerpt taken from the WBS 10-Q filed May 4, 2007.

Summary

Webster’s net income was $35.0 million for the three months ended March 31, 2007, compared to $43.9 million for the three months ended March 31, 2006, a decrease of 20.3%. Net income per diluted share was $0.62 for the three months ended March 31, 2007 compared to $0.82 for the comparable period in 2006. The year-over-year decrease is attributable to closing costs of $2.3 million ($1.5 million, net of taxes) related to the remaining operations of PMC, severance related charges from ongoing restructuring in insurance and other lines of business of $2.2 million ($1.4 million, net of taxes) and a $0.7 million ($0.5 million, net of taxes) write down in value of one residential construction loan in Florida classified as held for sale. The year-over-year comparisons are also impacted by the interest rate environment, and the effect that rising short-term interest rates and a flattening of the yield curve had on our net interest margin. The effect of these market conditions has been partially offset by the growth in the loan portfolio, particularly in higher yielding commercial and consumer loans.

The Company has made considerable progress regarding management’s strategic review which began in the fourth quarter of 2006 and is expected to be completed by the end of the second quarter of 2007. This previously announced strategic review is looking at all segments and lines of business to focus on core competencies, identify operational efficiencies and position Webster to realize its vision of becoming New England’s bank. This process encompasses evaluating the contribution, growth potential, fit and alignment of each segment and line of business with the Company’s goals and mission. The Company also anticipates structural and other changes will be made to improve operational efficiency and effectiveness in the coming months.

In addition to the actions regarding PMC and residential construction lending discussed above, during the first quarter of 2007, Webster decided to terminate the mezzanine lending operations of Webster Bank’s subsidiary, Webster Growth Capital. Webster also outsourced the back-office operations of Webster Investment Services, its mutual fund and annuities distribution services.

Selected financial highlights are presented in the table below.

 

    

At or for the

three months ended March 31,

 

(In thousands, except per share data)

   2007     2006  

Earnings and Per Share Data

    

Net interest income

   $ 128,081     $ 130,159  

Total noninterest income

     57,421       55,202  

Total noninterest expense

     131,280       119,171  

Net income

     35,036       43,852  

Net income per diluted common share

   $ 0.62     $ 0.82  

Dividends declared per common share

     0.27       0.25  

Book value per common share

     33.70       31.09  

Tangible book value per common share

     19.46       18.18  

Diluted shares (average)

     56,762       53,703  

Selected Ratios

    

Return on average assets

     0.83 %     0.99 %

Return on average shareholders' equity

     7.38       10.55  

Net interest margin

     3.41       3.24  

Efficiency ratio (a)

     70.77       64.29  

Tangible capital ratio

     6.74       5.48  

(a)

Noninterest expense as a percentage of net interest income plus noninterest income

 

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EXCERPTS ON THIS PAGE:

10-Q
May 9, 2008
10-Q
May 4, 2007
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