Core Insights - Value investing remains a preferred strategy for identifying strong stocks across various market conditions [2] - Zacks has developed a Style Scores system to highlight stocks with specific traits, particularly beneficial for value investors [3] - Bank OZK (OZK) and Webster Financial (WBS) are highlighted as strong value stocks with favorable metrics [4][7] Bank OZK (OZK) - OZK holds a Zacks Rank of 2 (Buy) and a Value grade of A, with a current P/E ratio of 7.82, significantly lower than the industry average of 10.03 [4] - The P/B ratio for OZK is 1.06, which is competitive against the industry average of 1.09, with a 52-week range of 0.78 to 1.12 [5] - OZK's P/CF ratio stands at 7.02, well below the industry average of 16.17, indicating potential undervaluation [6] Webster Financial (WBS) - WBS also has a Zacks Rank of 2 (Buy) and a Value Score of A, with a Forward P/E ratio of 9.55, compared to the industry average of 10.03 [7] - The PEG ratio for WBS is 0.51, indicating strong growth potential relative to its valuation, while the industry average PEG is 0.36 [7] - WBS's P/B ratio is 1.13, slightly above the industry average of 1.09, with a 52-week range of 0.79 to 1.21 [8] Overall Valuation Insights - Both OZK and WBS exhibit strong value characteristics, suggesting they may be undervalued in the current market [9]

Core Insights - Zacks Premium provides tools for investors to enhance their stock market engagement and confidence [1] - The service includes daily updates on Zacks Rank, Zacks Industry Rank, and various stock research reports [1][2] Zacks Style Scores - Zacks Style Scores rate stocks based on value, growth, and momentum, serving as complementary indicators to the Zacks Rank [3] - Stocks are rated from A to F, with A indicating the highest potential for market outperformance [4] Value Score - The Value Score identifies attractive stocks using financial ratios like P/E and Price/Sales, focusing on undervalued opportunities [4] Growth Score - The Growth Score assesses a company's financial health and future outlook, emphasizing long-term sustainable growth [5] Momentum Score - The Momentum Score helps investors capitalize on price trends, utilizing recent price changes and earnings estimate shifts [6] VGM Score - The VGM Score combines all three Style Scores, providing a comprehensive assessment of stocks based on value, growth, and momentum [7] Zacks Rank - The Zacks Rank uses earnings estimate revisions to simplify portfolio building, with 1 (Strong Buy) stocks averaging a +23.64% annual return since 1988 [8] - There are over 800 stocks rated 1 or 2, making it essential to use Style Scores for selection [9] Stock to Watch: Webster Financial (WBS) - Webster Financial Corporation is rated 3 (Hold) with a VGM Score of B, providing various banking and financial services [12] - The stock has a Momentum Style Score of B, with a 7% increase in shares over the past four weeks [13] - Analysts have raised earnings estimates for fiscal 2025, with the Zacks Consensus Estimate increasing by $0.17 to $5.86 per share [13]

Group 1 - The event is a mid-cap bank fireside chat featuring Webster Financial and its CEO John Ciulla [1][2] - The format encourages audience interaction, allowing questions to be submitted via BlackBerry and through raised hands [2]

Summary of Webster Financial's Fireside Chat Company Overview - **Company**: Webster Financial - **Industry**: Regional Banking - **Market Position**: $82 billion regional bank with a geographic footprint from Boston to Philadelphia, operating approximately 200 branches [4][5] Key Points and Arguments Financial Performance - Webster operates with an **80% loan-to-deposit ratio**, indicating strong deposit flexibility [5] - The bank has experienced **high returns** and is growing its balance sheet on both sides, with positive financial performance continuing into the third quarter [5][6] - The bank is benefiting from an expansion in the addressable market in HSA Bank, which is expected to accelerate deposit growth [5][6] Credit Quality - A **credit inflection point** was noted in the second quarter, with improvements in risk rating migration and resolution of problem credits continuing into the third quarter [6][62] - The bank has a strong capital and liquidity position, with an efficiency ratio in the mid-40s [6] Market Dynamics - The bank's clients are showing resilience, with an increase in loan demand and M&A activity observed in the second and third quarters [21][22] - There is cautious optimism among clients regarding economic conditions, with a focus on managing expenses [21] Regulatory Environment - Anticipation of changes in the **category four bank threshold**, which could lead to a re-rating of banks in the $80 to $100 billion range if the threshold increases [13][64] - The bank is preparing for potential regulatory changes that could impact expense trajectories and capital deployment strategies [64][66] Deposit Growth Strategy - Webster is focusing on growing its healthcare vertical, which includes **$10 billion in deposits** with an average cost of **$0.15** [33] - The bank is investing in treasury and payment capabilities to drive commercial deposits and enhance digital acquisition capabilities [34] Joint Venture with Marathon Asset Management - The joint venture is expected to enhance Webster's origination capabilities without adding risk to the bank's balance sheet [25][52] - The partnership aims to support private equity sponsors and increase the bank's competitive edge in larger transactions [25][56] Future Outlook - Expected organic loan growth for Webster is projected to be in the **5% to 7% range** for the coming years, with a stable economic outlook [45] - The bank is actively looking for opportunities to deploy capital, including potential tuck-in acquisitions in the healthcare space [67][68] Other Important Insights - The bank's **net interest margin (NIM)** is robust, with expectations to maintain it in the **$330s range** despite potential rate cuts [36][37] - Webster is not currently focused on transformational M&A but remains open to strategic opportunities that align with its growth objectives [69] Conclusion - Webster Financial is well-positioned to navigate the current banking landscape, leveraging its unique business model, strong credit quality, and strategic partnerships to drive growth and enhance shareholder value [70]

Core Viewpoint - The article emphasizes the importance of value investing and highlights Webster Financial (WBS) as a strong value stock based on its financial metrics and Zacks Rank [1][2][6]. Group 1: Value Investing - Value investing is a popular strategy that utilizes fundamental analysis and traditional valuation metrics to identify undervalued stocks [2]. - Zacks has developed a Style Scores system to categorize stocks, with a specific focus on the "Value" category for value investors [3]. Group 2: Webster Financial (WBS) - Webster Financial (WBS) currently holds a Zacks Rank 2 (Buy) and an A grade for Value, indicating strong potential [4]. - WBS has a Forward P/E ratio of 9.3, which is lower than the industry average of 9.77, suggesting it may be undervalued [4]. - Over the past year, WBS's Forward P/E has fluctuated between 7.00 and 11.14, with a median of 8.95 [4]. - The stock has a P/CF ratio of 10.84, which is attractive compared to the industry's average P/CF of 15.10, indicating a favorable cash flow outlook [5]. - WBS's P/CF has ranged from 8.07 to 12.64 over the past 52 weeks, with a median of 10.76 [5]. - Overall, the financial metrics suggest that Webster Financial is likely undervalued and stands out as one of the strongest value stocks in the market [6].

[PART I – FINANCIAL INFORMATION](index=7&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=7&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Webster Financial Corporation reported total consolidated assets of approximately $82 billion as of June 30, 2025, with net income increasing to $258.8 million in Q2 2025, driven by higher net interest income and a positive swing in non-interest income. - Webster Financial Corporation is a bank holding company with approximately **$82 billion in total consolidated assets** as of June 30, 2025, operating through Commercial Banking, Healthcare Financial Services, and Consumer Banking[17](index=17&type=chunk) - Management believes the company's diverse business, strong capital, and risk management framework position it to operate effectively despite economic uncertainty from potential changes in U.S. trade policies and tariffs[19](index=19&type=chunk) [Results of Operations](index=8&type=section&id=Results%20of%20Operations) In Q2 2025, net income rose to $258.8 million, a 42.5% increase YoY, with diluted EPS at $1.52, driven by an 8.5% quarterly increase in net interest income and a 123.8% surge in non-interest income. Selected Financial Highlights (Q2 & YTD 2025 vs 2024) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | **Net Income (in thousands)** | $258,848 | $181,633 | $485,765 | $397,956 | | **Diluted EPS** | $1.52 | $1.03 | $2.81 | $2.26 | | **Return on Average Assets (annualized)** | 1.29% | 0.96% | 1.22% | 1.05% | | **Return on Avg. Tangible Common Equity (non-GAAP, annualized)** | 17.96% | 14.17% | 16.95% | 15.25% | | **Net Interest Margin** | 3.44% | 3.39% | 3.46% | 3.40% | | **Efficiency Ratio (non-GAAP)** | 45.40% | 46.22% | 45.59% | 45.74% | [Segment Reporting](index=18&type=section&id=Segment%20Reporting) For Q2 2025, Commercial Banking's pre-tax, pre-provision net revenue (PPNR) decreased 10.0% YoY to $240.8 million, while Healthcare Financial Services' PPNR grew 4.4% to $70.9 million, and Consumer Banking's PPNR increased 2.7% to $114.2 million. Segment Pre-Tax, Pre-Provision Net Revenue (PPNR) (in thousands) | Segment | Q2 2025 | Q2 2024 | Change | YTD 2025 | YTD 2024 | Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Commercial Banking** | $240,774 | $267,510 | (10.0%) | $482,273 | $537,507 | (10.3%) | | **Healthcare Financial Services** | $70,859 | $67,862 | 4.4% | $140,890 | $132,934 | 6.0% | | **Consumer Banking** | $114,219 | $111,166 | 2.7% | $219,831 | $230,800 | (4.8%) | - Commercial Banking loans and leases grew by **$581.5 million (1.4%)** since year-end 2024, driven by commercial non-mortgage lending[71](index=71&type=chunk) - Healthcare Financial Services deposits increased by **$214.4 million (2.2%)** since year-end 2024, due to growth in HSA Bank and Ametros account holders[76](index=76&type=chunk) - Consumer Banking loans increased by **$585.6 million (4.9%)** since year-end 2024, primarily from growth in residential mortgages and other consumer loans[82](index=82&type=chunk) [Financial Condition](index=21&type=section&id=Financial%20Condition) As of June 30, 2025, total assets increased by $2.9 billion (3.7%) to $81.9 billion from year-end 2024, driven by a $1.2 billion rise in loans and leases and a $0.9 billion increase in cash equivalents. Balance Sheet Changes (June 30, 2025 vs. Dec 31, 2024) | Item | Change (in billions) | Key Drivers | | :--- | :--- | :--- | | **Total Assets** | +$2.9 | +$1.2B in Loans & Leases, +$0.9B in Cash & Equivalents | | **Total Liabilities** | +$2.7 | +$1.5B in Deposits, +$1.2B in FHLB Advances | | **Total Stockholders' Equity** | +$0.2 | +$485.8M Net Income, offset by -$261.9M Stock Repurchases & Dividends | [Liquidity and Capital Resources](index=30&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains a strong liquidity and capital position, with the Holding Company's primary liquidity source being dividends from the Bank, and all regulatory capital ratios significantly exceeding 'well-capitalized' thresholds. - The Board of Directors increased the common stock repurchase program authority by **$700.0 million** on April 30, 2025, with the company repurchasing **5.1 million shares for $259.6 million** in the first six months of 2025[130](index=130&type=chunk) Regulatory Capital Ratios as of June 30, 2025 | Ratio | Webster Financial Corp. | Webster Bank | Well Capitalized Minimum | | :--- | :--- | :--- | :--- | | **CET1 Risk-Based Capital** | 11.35% | 12.55% | 6.5% | | **Tier 1 Risk-Based Capital** | 11.86% | 12.55% | 8.0% | | **Total Risk-Based Capital** | 14.05% | 13.80% | 10.0% | | **Tier 1 Leverage Capital** | 8.57% | 9.08% | 5.0% | - Total uninsured deposits, after excluding affiliate and collateralized deposits, were **$14.0 billion**, representing **21.1% of total deposits**[142](index=142&type=chunk) - The company reports immediately available liquidity of **$26.2 billion**, covering these adjusted uninsured deposits by **187.0%**[143](index=143&type=chunk) [Financial Statements](index=39&type=section&id=Item%201.%20Financial%20Statements) The unaudited condensed consolidated financial statements for the period ended June 30, 2025, show total assets of $81.9 billion, up from $79.0 billion at year-end 2024, with net income for the six months at $485.8 million. [Condensed Consolidated Financial Statements](index=39&type=section&id=Condensed%20Consolidated%20Financial%20Statements) The condensed consolidated financial statements present the company's financial position as of June 30, 2025, with total assets of $81.9 billion, total liabilities of $72.6 billion, and total stockholders' equity of $9.3 billion. Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | $81,914,270 | $79,025,073 | | Loans and leases, net | $52,949,913 | $51,815,602 | | Total Deposits | $66,314,425 | $64,753,080 | | **Total Liabilities** | $72,576,653 | $69,891,859 | | **Total Stockholders' Equity** | $9,337,617 | $9,133,214 | Condensed Consolidated Income Statement Highlights (Six Months Ended June 30) | Account (in thousands) | 2025 | 2024 | | :--- | :--- | :--- | | Net Interest Income | $1,233,374 | $1,140,036 | | Provision for credit losses | $124,000 | $104,500 | | Total Non-interest Income | $187,263 | $141,651 | | Total Non-interest Expense | $689,358 | $661,944 | | **Net Income** | **$485,765** | **$397,956** | [Notes to Condensed Consolidated Financial Statements](index=46&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes provide detailed disclosures, including the January 2024 acquisition of Ametros for $378.4 million, the February 2024 sale of mortgage servicing rights for an $11.7 million net gain, and the July 2024 formation of a private credit joint venture. - On January 24, 2024, the Bank acquired Ametros for a total purchase price of **$378.4 million**, resulting in **$228.2 million of goodwill** and **$188.9 million in other intangible assets**[204](index=204&type=chunk)[205](index=205&type=chunk)[207](index=207&type=chunk) - In February 2024, the company sold the majority of its mortgage servicing portfolio for net cash proceeds of **$18.4 million**, recognizing an **$11.7 million net gain** on the sale[211](index=211&type=chunk) - In July 2024, the company formed a private credit joint venture with Marathon Asset Management, seeding it with **$242.2 million of commercial non-mortgage loans** reclassified to 'Loans held for sale' in June 2025[212](index=212&type=chunk)[213](index=213&type=chunk) - The Allowance for Credit Losses (ACL) on loans and leases increased to **$722.0 million** at June 30, 2025, from **$689.6 million** at year-end 2024, primarily due to macroeconomic uncertainty and organic loan growth[233](index=233&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=95&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section refers to the detailed market risk disclosures provided in Note 13 of the Financial Statements and the 'Asset/Liability Management and Market Risk' section of the MD&A. - The company's disclosures about market risk are incorporated by reference from Note 13 (Derivative Financial Instruments) and the 'Asset/Liability Management and Market Risk' section within the MD&A[381](index=381&type=chunk) [Controls and Procedures](index=95&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of June 30, 2025. - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of June 30, 2025[382](index=382&type=chunk) - A new cloud-based general ledger system was implemented during the quarter, leading to modifications and additions to internal controls over financial reporting[383](index=383&type=chunk) [PART II – OTHER INFORMATION](index=96&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) [Legal Proceedings](index=96&type=section&id=Item%201.%20Legal%20Proceedings) The company is subject to various legal proceedings in the ordinary course of business, with management believing that the outcomes will not have a material impact on the company's financial position. - Information regarding legal proceedings is incorporated by reference from Note 17: Commitments and Contingencies[387](index=387&type=chunk) [Risk Factors](index=96&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2024. - No material changes to risk factors were reported since the last Annual Report on Form 10-K[388](index=388&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=96&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During the second quarter of 2025, the company repurchased a total of 1,528,615 shares of its common stock at an average price of $51.70 per share, with the Board increasing repurchase authority by $700.0 million. Issuer Purchases of Equity Securities (Q2 2025) | Period (2025) | Total Shares Purchased | Avg. Price Paid Per Share | Shares Purchased Under Program | Remaining Authority (in millions) | | :--- | :--- | :--- | :--- | :--- | | April | 368,600 | $51.08 | 366,318 | $728.2 | | May | 598,919 | $52.05 | 598,257 | $697.1 | | June | 561,096 | $51.72 | 555,939 | $668.4 | | **Total** | **1,528,615** | **$51.70** | **1,520,514** | **$668.4** | - On April 30, 2025, the Board of Directors increased the authority for the common stock repurchase program by **$700.0 million**[391](index=391&type=chunk) [Other Information](index=97&type=section&id=Item%205.%20Other%20Information) John Ciulla, the Chairman and Chief Executive Officer, entered into a Rule 10b5-1 trading agreement on April 30, 2025, covering the potential sale of up to 32,000 shares of Webster common stock. - Chairman and CEO John Ciulla entered into a Rule 10b5-1 trading plan on April 30, 2025, for the sale of up to **32,000 shares of common stock**[394](index=394&type=chunk) [Exhibits](index=98&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including corporate governance documents, indentures, new employment-related agreements, and certifications required by the Sarbanes-Oxley Act.

Core Insights - Zacks Premium offers various tools for investors to enhance their stock market strategies and confidence [1] - The Zacks Style Scores are designed to help investors identify stocks with the highest potential to outperform the market in the short term [2] Zacks Style Scores Overview - The Style Scores consist of four categories: Value Score, Growth Score, Momentum Score, and VGM Score, each focusing on different investment strategies [3][4][5][6] - Value Score emphasizes finding undervalued stocks based on financial ratios [3] - Growth Score assesses a company's future growth potential through earnings and sales projections [4] - Momentum Score identifies trends in stock prices and earnings estimates to optimize entry points [5] - VGM Score combines all three styles to highlight stocks with the best overall characteristics [6] Zacks Rank and Style Scores Interaction - The Zacks Rank is a proprietary model that uses earnings estimate revisions to guide investment decisions, with 1 (Strong Buy) stocks historically yielding an average annual return of +23.75% since 1988 [7] - The combination of Zacks Rank and Style Scores helps investors select stocks with the highest probability of success [9] - Stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B are recommended for maximizing returns [9][10] Company Spotlight: Webster Financial Corporation - Webster Financial Corporation, based in Stanford, CT, operates through Webster Bank and HSA Bank, offering a range of financial services [11] - The company holds a Zacks Rank of 2 (Buy) and a VGM Score of B, indicating strong investment potential [11] - Webster Financial's Value Style Score is B, supported by a forward P/E ratio of 9.67, making it attractive to value investors [12] - Recent upward revisions in earnings estimates by nine analysts have increased the Zacks Consensus Estimate for fiscal 2025 by $0.15 to $5.86 per share, with an average earnings surprise of +1.6% [12]

Core Viewpoint - Webster Financial (WBS) has received an upgrade to a Zacks Rank 2 (Buy), indicating a positive outlook based on rising earnings estimates, which significantly influence stock prices [1][3]. Earnings Estimates and Stock Price Impact - The Zacks rating system emphasizes the importance of earnings estimate revisions, which are strongly correlated with near-term stock price movements [4][6]. - An increase in earnings estimates typically leads to higher fair value calculations by institutional investors, resulting in stock price movements [4]. Company Performance and Outlook - The upgrade for Webster Financial suggests an improvement in the company's underlying business, which is expected to be reflected in higher stock prices [5]. - The Zacks Consensus Estimate for Webster Financial indicates an expected earnings per share of $5.86 for the fiscal year ending December 2025, with a 2.8% increase in estimates over the past three months [8]. Zacks Rating System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with only the top 20% receiving a "Strong Buy" or "Buy" rating, indicating superior earnings estimate revisions [9][10]. - The upgrade of Webster Financial to a Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, suggesting potential for market-beating returns in the near term [10].

Core Insights - Zacks Premium offers various tools to help investors make informed decisions and enhance their confidence in the stock market [1] - The Zacks Style Scores provide a unique rating system for stocks based on value, growth, and momentum characteristics, aiding investors in selecting securities with high potential for market outperformance [2][3] Zacks Style Scores - Stocks are rated from A to F based on their value, growth, and momentum characteristics, with A indicating the highest potential for outperformance [3] - The Value Score identifies attractive stocks using ratios like P/E, PEG, and Price/Sales, focusing on undervalued stocks [3] - The Growth Score evaluates stocks based on projected and historical earnings, sales, and cash flow to find those with sustainable growth [4] - The Momentum Score helps investors capitalize on price trends, using factors like one-week price change and monthly earnings estimate changes [5] - The VGM Score combines all three Style Scores, providing a comprehensive indicator for investors seeking value, growth, and momentum [6] Zacks Rank - The Zacks Rank is a proprietary model that uses earnings estimate revisions to simplify portfolio building [7] - Stocks rated 1 (Strong Buy) have historically produced an average annual return of +23.62% since 1988, significantly outperforming the S&P 500 [8] - There are over 800 stocks rated 1 or 2, making it essential for investors to utilize Style Scores to narrow down choices [9] Investment Strategy - For optimal returns, investors should focus on stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B [10] - Stocks with a 3 (Hold) rank should also have A or B Scores to maximize upside potential [10] - The direction of earnings estimate revisions is crucial; stocks with lower ranks and declining forecasts pose higher risks [11] Company Spotlight: Webster Financial (WBS) - Webster Financial Corporation, based in Stanford, CT, operates through three segments, providing various banking and financial services [12] - Currently rated 3 (Hold) with a VGM Score of B, WBS has a Momentum Style Score of A and has seen a 17% increase in shares over the past four weeks [12][13] - Recent earnings estimates for fiscal 2025 have been revised upward, with the Zacks Consensus Estimate increasing by $0.07 to $5.78 per share, alongside an average earnings surprise of +1.6% [13]

Core Insights - Webster Financial Corporation is leveraging legislative changes to expand the addressable market for its subsidiary, HSA Bank, which is expected to drive significant deposit growth [1][2]. HSA Bank Growth Potential - The recent reconciliation bill expands HSA eligibility for approximately 7 million participants in "bronze" ACA health plans, potentially leading to an additional $1 billion to $2.5 billion in HSA deposits over the next five years [2][3]. - Initial incremental growth for HSA deposits is projected to be between $50 million and $100 million in the next year, with the possibility of doubling the deposit opportunity if further legislation is enacted [3]. Private Credit Joint Venture - A joint venture with Marathon Asset Management will allow Webster Financial to engage in larger, more complex transactions, enhancing fee-based income and diversifying its private credit platform [4][5]. - The joint venture is expected to launch in the third quarter, with significant fee income anticipated to ramp up in 2026 and beyond [4]. Capital Management and Shareholder Returns - The company has improved its CET1 ratios and tangible book value per share, leading to a $700 million increase in share repurchase authorization, with 1.5 million shares repurchased at an average price of $51.69 [6][7]. - The management team is focused on a disciplined approach to capital deployment, balancing organic growth, M&A opportunities, and shareholder returns [8]. Future Outlook - The effective tax rate is projected to be between 20%-21%, with net interest margin expected to be between 3.35% and 3.40% in the second half of the year [9]. - The company plans to maintain its focus on organic growth and selective acquisitions while adapting to market conditions [9].