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Revenue at Webster Financial in Waterbury, Conn., hit a record $240.6 million in the first quarter, but expenses related to its expansion in Boston and an uptick in net chargeoffs kept profits flat.
April 19 -
Webster Financial has agreed to take over the leases of 14 Citigroup branches in the Boston area, which would more than triple its retail presence there.
December 11 -
A hedge fund is pressuring Webster Financial in Waterbury, Conn., to consider spinning off its health savings account division.
March 2
Webster Financial's investments in its Boston expansion program and HSA Bank subsidiary contributed to an 11% increase in noninterest expense. However, the spending spike was more than offset by 10% loan growth and record noninterest income at the Waterbury, Conn., company.
When all was said and done, the $25.1 billion-asset Webster produced net income of $48.4 million. The company earned $49.8 million in the same period last year, but that total included a $3.7 million tax benefit. Adjusting for one-time events, Webster's 2016 second-quarter profit rose 5% year over year.
"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," Chairman and Chief Executive James C. Smith said in a press release Wednesday.
Webster reported nonperforming loans of $132.9 million, down from $167.9 million on June 30, 2015. Of its current nonperformers, a total of $33.8 million are categorized as paying-nonperforming loans.
Webster's strong loan growth pushed net interest income to a record level of $176.9 million -- 8% more than the second quarter of 2015. Noninterest income rose 9.8%, totaling $65.1 million on June 30.
Period-ending loans totaled $16.3 billion; deposits were $18.8 billion, up 9% year over year.
