Webster Financial Corp. (WBS) in Waterbury, Conn., reported solid first-quarter results thanks to a surge in commercial lending.
The $21 billion-asset company said Thursday that it earned $47.8 million in the quarter, up 21% from the same period a year ago. Earnings per share of 53 cents came in a penny higher than the estimates of analysts polled by Bloomberg.
Webster's net interest income rose to $155.3 milliona 7% increase from the same period a year ago and the highest pre-tax level since the third quarter of 2004. Growth in commercial loans propelled the increase, according to Webster Chairman and Chief Executive James Smith. The company's loan portfolio totaled $13 billion, an 8% increase from the same period the previous year, while loan originations rose 28%, to $880 million. Webster's net interest margin ticked up 3 basis points, to 3.23%.
"Our continued loan growth reflects the gradually improving economy and our success in building deep, lasting customer relationships," Smith said in a press release.
Noninterest income rose 3%, to $49.8 million. The increase was largely driven by the sale of investment securities related to compliance with the Volcker Rule, Webster said in the release. The securities sales and higher revenue from client transactions helped offset a $6.3 million decline in mortgage banking revenue.
Webster's noninterest expense fell roughly 1%, to $124.6 million. Webster increased its loan-loss provision by 17%, to $9 million. But improved asset quality allowed it to chop net chargeoffs in half, to $8 million.