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.
The $24.9 billion-asset company reported net income of $46.5 million, down slightly from the $46.9 it million earned a year earlier.
Webster announced plans in December to expand significantly in Boston. Its 18 new branches have already attracted more than $100 million of new deposits, but costs associated with the new locations added $5.7 million to noninterest expenses.
Webster officials told analysts Tuesday that its deposits in Boston could reach nearly $300 million by yearend.
Meanwhile, the company’s ratio of nonperforming loans and leases to total loans and leases actually declined to 0.89% from 1.07%, but net chargeoffs more than doubled to $16.4 million. Webster attributed the spike in chargeoffs to problems in its commercial loan portfolio. As a result it recorded a provision for loan losses of $15.6 million, up 63% from a year earlier.
Loans rose 11% to $15.9 million at March 31. Deposits grew 7% to $18.7 billion. Webster attributed most of the increase in deposits to the addition of 335,000 health savings accounts; its HSA deposits rose 16% to $4.1 billion.