Spain's Santander said on Tuesday it will buy U.S. regional lender Webster Financial in a $12.2 billion deal. ...

STAMFORD, Conn.--(BUSINESS WIRE)--Webster Financial Corporation (NYSE: WBS), the holding company for Webster Bank, N.A., today announced the signing of a definitive agreement under which Banco Santander, S.A. ("Santander†) (NYSE: SAN, Madrid: SAN) will acquire Webster in a cash-and-stock transaction. Under the terms of the agreement, Webster stockholders will receive $48.75 in cash and 2.0548 Santander American Depository Shares for each Webster common share. Based on Santander's closing stock. ...

Financial Performance - Webster Financial Corp reported quarterly earnings of $1.59 per share, exceeding the analyst consensus estimate of $1.54 per share [1] - The company reported quarterly sales of $632.853 million, which fell short of the analyst consensus estimate of $643.044 million [1] Management Commentary - John R. Ciulla, chairman and CEO, stated that Webster continued to excel fundamentally in the fourth quarter and highlighted record EPS and tangible book value per share in the year of its 90th anniversary [2] Stock Performance - Following the earnings announcement, Webster Financial shares fell 0.3% to trade at $63.83 [2] Analyst Ratings and Price Targets - Keefe, Bruyette & Woods analyst Christopher Mcgratty maintained an Outperform rating and raised the price target from $75 to $77 [3] - Citigroup analyst Ben Gerlinger maintained a Buy rating but lowered the price target from $77 to $75 [3] - Truist Securities analyst David Smith maintained a Buy rating and raised the price target from $72 to $73 [3] - TD Cowen analyst Janet Lee maintained a Buy rating and raised the price target from $77 to $79 [3]

Key Takeaways WBS posted Q4 adjusted EPS of $1.59, beating estimates, while the stock lost 3.2% after results.Webster Financial benefited from higher NII and non-interest income, plus rising loan and deposit balances.WBS faced headwinds from higher expenses, a lower net interest margin, and a weaker efficiency ratio.Webster Financial Corporation (WBS) reported fourth-quarter 2025 adjusted earnings per share (EPS) of $1.59, which beat the Zacks Consensus Estimate of $1.52. Also, the reported figure compared ...

Core Insights - Webster Financial Corporation (WBS) reported earnings per share (EPS) of $1.59, exceeding the estimated $1.52 and improving from the previous year's EPS of $1.43, indicating effective financial management [2][6] - The company reported revenue of approximately $731 million, slightly above the estimated $729.5 million, reflecting successful market expansion strategies [3][6] - WBS's net income for the fourth quarter of 2025 reached $248.7 million, underscoring the company's robust financial health [3] Financial Metrics - WBS has a price-to-earnings (P/E) ratio of about 10.50 and a price-to-sales ratio of 2.71, demonstrating solid valuation [4] - The enterprise value to sales ratio is 2.81, and the enterprise value to operating cash flow ratio is 6.92, indicating efficient use of resources [4] - The company maintains a low debt-to-equity ratio of 0.078, showcasing a conservative financial strategy [5][6] Growth Potential - The earnings yield of approximately 9.53% positions the company well for future growth and stability [5]

Core Viewpoint - Webster Financial Corporation (WBS) has shown strong performance over the past year, with a 12% gain and recovery from a Q2 selloff, reaching a new 52-week high [1] Company Performance - The diversified business model of Webster Financial Corporation has contributed to its solid performance [1]

Core Viewpoint - Webster Financial Corporation (WBS) has shown strong performance over the past year, with a 12% gain and recovery from a Q2 selloff, reaching a new 52-week high [1] Company Performance - The diversified business model of Webster Financial Corporation has contributed to its solid performance [1]

Core Viewpoint - Webster Financial reported a year of consistent execution and balance sheet growth in 2025, with expectations for loan and deposit expansion in 2026 while continuing investments in healthcare and payments-related businesses [1] Group 1: 2025 Performance Highlights - CEO John Ciulla stated that Webster achieved a 17% return on tangible common equity (ROTCE) and a 1.2% return on assets (ROA) for the full year [2] - Earnings per share increased by 10% year over year, with loan growth of 8% and deposit growth of 6% [2] - Tangible book value per share grew by 13%, and the company repurchased 10.9 million shares during 2025 [3] Group 2: Loan Portfolio and Asset Quality - Ciulla mentioned aggressive remediation of two isolated pockets of the loan portfolio, with a 5% decline in commercial classified loans compared to the prior year-end [4] - The company reported solid broader asset quality trends, entering 2026 with robust capital and a strong funding and liquidity profile [4] - President and COO Luis Massiani noted a 7% decline in classified commercial loans and an 8% decline in nonperforming loans during the quarter [6] Group 3: Funding and Growth Initiatives - Deposit growth in 2025 was driven by contributions from various sectors, including commercial, consumer, healthcare, and financial services [7] - The company observed increased direct-to-consumer account openings, particularly among Affordable Care Act plan participants, and enhanced mobile and web enrollment to serve this demographic [7] - Massiani highlighted that limited payoff activity contributed to better-than-expected loan growth across a broad range of asset classes [5]

Financial Data and Key Metrics Changes - Webster Financial Corporation generated a 17% ROTCE and a 1.2% ROA for the full year 2025, with EPS up 10% year-over-year [7] - Loans grew by 8% and deposits by 6% over the year, while tangible book value per share increased by 13% [7] - The company repurchased 10.9 million shares, enhancing capital distributions to shareholders [8] Business Line Data and Key Metrics Changes - In the fourth quarter, loans increased by $1.5 billion or 2.8%, with a full-year growth of 7.8%, primarily driven by commercial loan categories [14] - Classified commercial loans decreased by 7% and nonperforming loans were down 8%, indicating progress in credit remediation [10][18] - HSA Bank is expected to drive $1 billion-$2.5 billion in incremental deposit growth over the next five years, with $50 million-$100 million growth anticipated in 2026 [12] Market Data and Key Metrics Changes - The overall asset quality trends remain solid, with non-performing assets down 8% and commercial classified loans down 7% [18] - The company operates from a strong capital position, with capital ratios above well-capitalized levels [19] Company Strategy and Development Direction - Webster aims to enhance financial performance while investing in non-traditional banking verticals, including HSA Bank and Ametros [8][21] - The company is focused on maintaining profitability and returns while exploring organic growth and potential tuck-in acquisitions [91] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about entering 2026 with robust capital levels and a strong funding and liquidity profile [9] - The outlook for 2026 anticipates loan growth of 5%-7% and deposit growth of 4%-6%, with expected revenue of $3 billion [19][21] Other Important Information - The company is closely monitoring healthcare policy developments that could enhance HSA Bank's growth potential [12] - The acquisition of SecureSave is expected to enhance the company's offerings in emergency savings accounts, although it is characterized as a small business [138] Q&A Session Summary Question: Update on loan growth influenced by the partnership with Marathon - Management indicated that while the partnership is operational, it has not yet had a material impact on loan growth trajectory, expecting $2 million in positive income from the joint venture [30][31] Question: Insights on expense trends related to marketing and client outreach - The majority of investments are focused on marketing to identify and educate potential HSA holders, with technology investments already in place [32][34] Question: Impact of potential changes in regulatory thresholds on company plans - Management noted that while changes could reduce expenses, it would not significantly alter the strategic growth trajectory of the bank [40][41] Question: NIM trajectory expectations for early 2026 - The company expects to maintain a NIM of around 335 basis points throughout 2026, with some seasonal variability [43] Question: Thoughts on loan growth and reserve reductions - Management indicated that credit spreads have tightened, and they expect to grow in lower-risk sectors, potentially leading to further reductions in reserves as a percentage of loans [52][54] Question: Update on HSA account openings during the enrollment season - The company reported a positive trend in account openings, slightly ahead of the previous year, with expectations for continued growth [87][88] Question: Future buyback activity and capital management - Management anticipates continued share repurchases in 2026, with a focus on maintaining a CET1 ratio above 11% [91][92]

Financial Data and Key Metrics Changes - Webster Financial Corporation reported a 17% ROTCE and a 1.2% ROA for the full year 2025, with EPS increasing by 10% compared to the previous year [8] - Loans grew by 8% and deposits by 6% year-over-year, while tangible book value per share increased by 13% [8] - The company repurchased 10.9 million shares, enhancing capital distributions to shareholders [8] Business Line Data and Key Metrics Changes - In the fourth quarter, loans increased by $1.5 billion or 2.8%, with a full-year growth of 7.8%, primarily driven by commercial loan categories [14] - Classified commercial loans decreased by 7% and nonperforming loans were down 8%, indicating progress in credit remediation [10][18] - HSA Bank is expected to drive $1 billion-$2.5 billion in incremental deposit growth over the next five years, with $50 million-$100 million growth anticipated in 2026 [12] Market Data and Key Metrics Changes - The overall asset quality remains solid, with non-performing assets down 8% and commercial classified loans down 7% [18] - The company operates from a strong capital position, with capital ratios above well-capitalized levels [18] Company Strategy and Development Direction - The company aims to enhance its strategic advantages by investing in non-traditional banking verticals, including HSA Bank and Ametros [8] - Webster Financial is focused on maintaining profitability while growing its loan portfolio, with a loan growth forecast of 5%-7% for 2026 [19][62] - The company is adapting to a supportive macroeconomic environment and regulatory changes, which are expected to benefit its growth trajectory [23][24] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about entering 2026 with robust capital levels and a strong funding and liquidity profile [9] - The outlook for 2026 anticipates continued growth in loans and deposits, with expected revenue of $3 billion [19] - Management highlighted the importance of maintaining a balance between growth and risk management in the current competitive landscape [21][62] Other Important Information - The company has made significant investments in technology and marketing to enhance client experience and drive account openings in HSA [11][33] - The acquisition of SecureSave is expected to complement the company's offerings in emergency savings accounts, although it is characterized as a relatively small deal [131][134] Q&A Session Summary Question: Update on loan growth and partnership with Marathon - Management indicated that while the partnership is operational, it has not yet materially impacted loan growth, expecting a positive income of $2 million from the joint venture [29][30] Question: Expense trends related to investments - Most investments are focused on marketing and client outreach to identify potential HSA account holders, with technology investments already in place [31][33] Question: Impact of potential changes in Category IV threshold - Management noted that while it could reduce expenses, it does not significantly alter the strategic growth outlook for the bank [38][40] Question: NIM trajectory for early 2026 - The company expects to maintain a NIM of around 3.35% throughout 2026, with some seasonal variability [42] Question: Loan growth guidance and deposit mix - Management provided a conservative loan growth forecast of 5%-7% for 2026, emphasizing a focus on profitability and capital allocation [62] Question: HSA account openings during open enrollment - The company reported a positive trend in HSA account openings, slightly ahead of the previous year, with expectations for continued growth [85] Question: Capital management and buyback activity - Management indicated a potential for continued share repurchases in 2026, with a focus on maintaining a CET1 ratio above 11% [88][89]