Core Viewpoint - Webster Financial (WBS) reported strong second-quarter 2025 earnings, with EPS of $1.52, surpassing the Zacks Consensus Estimate of $1.41 and up from $1.26 a year ago [1][8] Financial Performance - Net income applicable to common shareholders was $251.7 million, reflecting a 43.4% increase from the prior-year quarter [2] - Total revenues increased 16.5% year over year to $715.8 million, exceeding the Zacks Consensus Estimate by 0.6% [3] - Net interest income (NII) rose 8.5% year over year to $621.2 million, with a net interest margin of 3.44%, up five basis points [3] - Non-interest income significantly increased to $94.7 million from $42.3 million a year ago, excluding prior losses on investment securities [4] Expenses and Efficiency - Non-interest expenses were $345.7 million, up 6% from the previous year, driven by risk management investments and increased compensation [5] - The efficiency ratio improved to 45.40% from 46.22% in the prior-year quarter, indicating enhanced profitability [5] Loans and Deposits - Total loans and leases increased 1.2% sequentially to $53.7 billion, while total deposits rose 1% to $66.3 billion as of June 30, 2025 [6][8] Credit Quality - Total non-performing assets were $537.1 million, up 43.3% from the year-ago quarter, with an allowance for loan losses at 1.35% of total loans [7] - The provision for credit losses decreased by 21.2% year over year to $46.5 million [7] Capital Ratios - The Tier 1 risk-based capital ratio improved to 11.84% from 11.00% a year ago, and the total risk-based capital ratio rose to 14.03% from 13.28% [9] Profitability Ratios - Return on average assets was 1.29%, up from 0.96% in the prior-year quarter, and return on average common stockholders' equity increased to 11.31% from 8.40% [10] Strategic Outlook - Rising NII and non-interest income are expected to enhance Webster Financial's top line, supported by strategic buyouts and growth in deposits and loans, although elevated expenses pose a near-term concern [11]

Group 1 - The Royal Bank of Canada (RBC) has raised the target price for Webster Financial Corporation from $62 to $70 [1]

Core Insights - Webster Financial (WBS) reported a revenue of $715.84 million for the quarter ended June 2025, reflecting a year-over-year increase of 16.5% and a surprise of +0.58% over the Zacks Consensus Estimate of $711.74 million [1] - The earnings per share (EPS) for the quarter was $1.52, up from $1.26 in the same quarter last year, resulting in an EPS surprise of +7.8% compared to the consensus estimate of $1.41 [1] Financial Performance Metrics - Net Interest Margin stood at 3.4%, matching the average estimate from six analysts [4] - The Efficiency Ratio was reported at 45.4%, better than the average estimate of 47.6% from six analysts [4] - Net charge-offs as a percentage of average loans and leases (annualized) were 0.3%, lower than the average estimate of 0.4% from five analysts [4] - Average balance of Total interest-earning assets was $74 billion, exceeding the average estimate of $72.96 billion from five analysts [4] - Total nonperforming loans and leases amounted to $534.52 million, significantly lower than the estimated $587.42 million from two analysts [4] - Total Non-Interest Income reached $94.66 million, slightly above the average estimate of $93.59 million from six analysts [4] - Net Interest Income was reported at $621.18 million, surpassing the average estimate of $616.23 million from five analysts [4] - Wealth and investment services income was $7.78 million, slightly below the average estimate of $7.86 million from five analysts [4] - Loan and lease related fees totaled $17.66 million, below the average estimate of $17.97 million from five analysts [4] - Deposit service fees were reported at $40.93 million, exceeding the average estimate of $39.51 million from five analysts [4] - Increase in cash surrender value of life insurance policies was $9.17 million, above the average estimate of $8.02 million from four analysts [4] - Non-interest income from other sources was $19.12 million, below the average estimate of $20.35 million from four analysts [4] Stock Performance - Webster Financial's shares have returned +13.3% over the past month, outperforming the Zacks S&P 500 composite's +4.2% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

Financial Data and Key Metrics Changes - The company reported a return on tangible common equity of 18% and a return on assets (ROA) of nearly 1.3% with overall revenue growth of 1.6% quarter-over-quarter [6][18] - The common equity Tier one ratio increased, and the loan to deposit ratio remained flat at 81% [7][18] - The tangible book value per common share grew to $35.13, up over 3% from the previous quarter [18][26] Business Line Data and Key Metrics Changes - Total loans increased by $616 million or 1.2% linked quarter, with a notable one-time transfer of $242 million of loans to held for sale [19] - Total deposits grew by $739 million, with deposit costs up three basis points due to seasonal mix shifts [20] - Non-interest income was $95 million, reflecting a modest increase driven by growth in deposit service fees [23] Market Data and Key Metrics Changes - The company noted no new pockets of credit deterioration across industries, maintaining a strong operating position [9] - The Healthcare Financial Services segment is expected to see significant growth due to favorable provisions in recent legislation, potentially adding $1 billion to $2.5 billion in deposits over five years [13][14] Company Strategy and Development Direction - The company is focused on organic growth, tuck-in acquisitions, and enhancing its healthcare services vertical [30][50] - The asset management partnership with Marathon is expected to enhance loan growth and drive fee revenue starting in 2026 [11][15] - The company aims to maintain a disciplined approach to capital management, prioritizing growth and shareholder returns [38] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate a less certain macroeconomic environment and highlighted the potential for loan growth to accelerate [6][28] - The company anticipates that regulatory changes will strengthen the competitive position of U.S. banks [29] - Management remains vigilant regarding credit quality, with expectations for continued improvement in credit metrics [80] Other Important Information - The company announced the addition of Jason Schugel as Chief Risk Officer and Fred Crawford as a new Board member [30] - The company is preparing to cross $100 billion in assets, with significant investments in technology and operations [24] Q&A Session Summary Question: Capital and Buyback Strategy - Management indicated a willingness to reduce the CET1 ratio over time while maintaining a target of 11% for the near term, with potential buybacks in the second half of the year [35][37][39] Question: NIM Outlook and Debt Issuance - Management confirmed that cash balances are at desired levels, with a minor impact on NIM expected from cash build and upcoming debt issuance [42][43] Question: Deposit Costs and Growth - Management expects deposit costs to decrease with potential rate cuts, but competition may limit significant reductions [45][46] Question: HSA Market Expansion - Management noted that no major changes in expenses are anticipated for HSA, but marketing investments will be necessary to educate new consumers [56][59] Question: Credit Quality Metrics - Management expressed cautious optimism about credit quality improvements, emphasizing stability in risk ratings and no new problem areas [80][81] Question: Commercial and Industrial Originations - Management reported strong originations across all categories, with expectations for continued growth in the second half of the year [66][68] Question: Rent-Regulated Buildings Impact - Management indicated limited exposure to rent-regulated buildings, with a well-seasoned portfolio and good credit stats [72][75] Question: Non-Interest Bearing Deposits - Management noted a recent uptick in non-interest bearing deposits, with expectations for mild growth in the second half of the year [88][90] Question: HSA Provisions and Market Size - Management highlighted that the majority of the deposit growth opportunity stems from new eligibility for HSA accounts under recent legislation [91][93]

Financial Data and Key Metrics Changes - The company reported a return on tangible common equity of 18% and a return on assets (ROA) of nearly 1.3% with overall revenue growth of 1.6% compared to the prior quarter [5][6] - The common equity Tier one ratio increased, and the loan to deposit ratio remained flat at 81% [6][15] - The tangible book value per common share grew to $35.13, up over 3% from the previous quarter [15][23] Business Line Data and Key Metrics Changes - Total loans increased by $616 million or 1.2% linked quarter, with a notable one-time transfer of $242 million of loans to held for sale [16][17] - Total deposits grew by $739 million, with deposit costs up three basis points due to seasonal mix shifts [17][20] - Non-interest income was $95 million, reflecting a modest increase driven by growth in deposit service fees [20] Market Data and Key Metrics Changes - The company has not observed new pockets of credit deterioration across any industry or sector, maintaining a strong operating position [7][22] - The healthcare financial services segment is expected to benefit from favorable provisions in the reconciliation bill, potentially increasing HSA deposits significantly over the next five years [11][12] Company Strategy and Development Direction - The company is focused on organic growth, tuck-in acquisitions, and enhancing its healthcare services vertical [25][46] - The asset management partnership with Marathon is anticipated to enhance loan growth and drive fee revenue starting in 2026 [9][13] - The company aims to leverage its differentiated deposit profile and strong capital position to capitalize on growth opportunities [7][28] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about loan growth accelerating as clients adapt to the current economic environment [25][26] - The company is well-positioned to thrive in various operating environments, including an accelerating investment cycle [27][28] - Management remains vigilant regarding potential impacts from proposed tariffs but does not foresee significant exposure to affected industries [7][26] Other Important Information - The company authorized an additional $700 million in share repurchases and bought back 1.5 million shares during the quarter [6][15] - The company welcomed a new Chief Risk Officer and a new Board member, enhancing its executive management team [28][29] Q&A Session Summary Question: What is the company's willingness to reduce CET1 and thoughts on near-term buyback pace? - Management indicated a medium-term goal of 11% for CET1 and a potential reduction over time, with disciplined capital management strategies in place [34][35] Question: What is the outlook for NIM and cash balances? - Management confirmed that cash balances are at desired levels, with a slight impact on NIM expected from cash build and new debt issuance [40] Question: How does the company view deposit costs in light of expected rate cuts? - Management expects to lower deposit costs if rate cuts occur but noted significant competition in the deposit market [42][43] Question: What is the company's stance on M&A if the category four threshold is lifted? - Management stated that while they are not actively pursuing whole bank M&A, they remain open to opportunities if the regulatory environment changes [46][47] Question: How will the expansion of the HSA market impact expenses? - Management indicated no major changes in expense trajectory for HSA, with some marketing investments anticipated for consumer education [53][55] Question: What is the outlook for credit quality metrics? - Management expressed cautious optimism about continued improvement in credit quality metrics, with no new pockets of problems identified [76][78] Question: How will the joint venture with Marathon impact loan growth? - Management expects the joint venture to enhance competitive positioning and facilitate participation in larger transactions, positively impacting loan growth [95][101]

Core Viewpoint - Webster Financial (WBS) reported quarterly earnings of $1.52 per share, exceeding the Zacks Consensus Estimate of $1.41 per share, and showing an increase from $1.26 per share a year ago, resulting in an earnings surprise of +7.80% [1] Financial Performance - The company posted revenues of $715.84 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 0.58%, compared to $614.59 million in the same quarter last year [2] - Over the last four quarters, Webster Financial has exceeded consensus EPS estimates two times and topped consensus revenue estimates once [2] Stock Performance - Webster Financial shares have increased approximately 5.8% since the beginning of the year, while the S&P 500 has gained 6.5% [3] - The current Zacks Rank for Webster Financial is 3 (Hold), indicating expected performance in line with the market in the near future [6] Earnings Outlook - The consensus EPS estimate for the upcoming quarter is $1.46 on revenues of $721.92 million, and for the current fiscal year, it is $5.69 on revenues of $2.87 billion [7] - The trend of estimate revisions for Webster Financial was mixed ahead of the earnings release, which may change following the recent report [6] Industry Context - The Banks - Northeast industry, to which Webster Financial belongs, is currently ranked in the top 36% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8]

Financial Performance - Reported PPNR was $370.1 million[4] - Net income applicable to common shareholders was $251.7 million[4] - Diluted EPS reached $1.52[4] - ROAA stood at 1.29%[4, 5] - ROATCE was 17.96%[4, 5] Balance Sheet Highlights - Loans increased by $0.6 billion, a 1.2% LQ increase[5] - Excluding loans moved to held for sale, loan growth would have been $0.9 billion, or 1.6%[5, 14] - Total deposits grew by $0.7 billion, representing a 1.1% LQ increase[5] - TBVPS grew 3.4% to $35.13 LQ[5] - Total loans as a % of earning assets is 73%[83] Key Ratios - The loan-to-deposit ratio was 80.9%[5, 7] - The efficiency ratio improved to 45.4%, down 0.4% LQ[5] - CET1 was 11.33%[5, 7] - TCE was 7.46%[5, 7] Loan Portfolio - Total loans reached $53.672 billion[7] - Commercial loans totaled $42.652 billion[7] - Consumer loans amounted to $11.020 billion[7] - C&I loans increased by $420 million LQ, or 3.0%, reaching $14.232 billion[11] - CRE decreased by $44 million LQ, or -0.2%, reaching $21.111 billion[11] Deposit Portfolio - Total deposits reached $66.314 billion[7] - Transactional deposits totaled $19.164 billion[7] - Healthcare Financial Services deposits were $10.180 billion[7] - interSYNC deposits were $8.719 billion[16] - Ametros accounts were $1.115 billion[16] Net Interest Income and Margin - Net interest income totaled $621.2 million, up $9.0 million or 1.5% LQ[21, 26] - Net interest margin was 3.44%, down 4 bps LQ[5, 21] Commercial Real Estate Portfolio - The commercial real estate portfolio totaled $18.8 billion[57, 61] - Classified loans were 3.9%[57]

Second Quarter 2025 Earnings Highlights [Q2 2025 Performance Summary](index=2&type=section&id=Q2%202025%20Performance%20Summary) Webster Financial Corporation reported strong Q2 2025 financial results, with net income and diluted EPS significantly increasing year-over-year, alongside solid growth in loans, deposits, and revenue Q2 2025 vs Q2 2024 Performance | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net Income (Common Stockholders) | $251.7 million | $175.5 million | | Diluted EPS | $1.52 | $1.03 | Key Financial Metrics for Q2 2025 | Metric | Value | | :--- | :--- | | Revenue | $715.8 million | | Period End Loans and Leases | $53.7 billion (+1.2% QoQ) | | Period End Deposits | $66.3 billion (+1.1% QoQ) | | Provision for Credit Losses | $46.5 million | | Return on Average Assets (ROA) | 1.29% | | Return on Average Tangible Common Equity (ROTCE) | 17.96% | | Net Interest Margin (NIM) | 3.44% (-4 bps QoQ) | | Common Equity Tier 1 (CET1) Ratio | 11.33% | | Efficiency Ratio | 45.40% | - Management expressed confidence in the company's future success, citing **impressive financial and strategic results** and new opportunities for business growth. The CFO highlighted **improved asset quality**, **capital returns to shareholders**, and continued investments for future growth[4](index=4&type=chunk) Consolidated Financial Performance [Net Interest Income](index=3&type=section&id=Net%20Interest%20Income) Net interest income increased to $621.2 million in Q2 2025, with net interest margin expanding to 3.44% driven by lower deposit costs Net Interest Income and Margin (YoY Comparison) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net Interest Income | $621.2 million | $572.3 million | | Net Interest Margin | 3.44% | 3.39% | | Avg. Interest-Earning Assets | $74.0 billion | $69.6 billion | | Avg. Loans and Leases | $53.3 billion | $51.4 billion | | Avg. Deposits | $66.0 billion | $61.7 billion | [Provision for Credit Losses](index=3&type=section&id=Provision%20for%20Credit%20Losses) Provision for credit losses decreased to $46.5 million in Q2 2025, with net charge-offs at 0.27% and allowance for credit losses at 1.35% Credit Loss Metrics | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Provision for Credit Losses | $46.5 million | $77.5 million | $59.0 million | | Net Charge-offs | $36.4 million | $55.0 million | $33.1 million | | NCOs / Avg. Loans Ratio | 0.27% | 0.42% | 0.26% | | Allowance / Total Loans | 1.35% | 1.34% | 1.30% | [Non-Interest Income](index=3&type=section&id=Non-Interest%20Income) Total non-interest income significantly increased to $94.7 million in Q2 2025, mainly due to the absence of a prior-year investment securities loss - Total non-interest income rose by **$52.4 million** year-over-year to **$94.7 million**. A key factor was the absence of a **$49.9 million loss** on investment securities sales that occurred in Q2 2024[8](index=8&type=chunk) - Excluding the prior-year securities loss, non-interest income increased by **$2.5 million**, mainly from higher bank-owned life insurance income, direct investment gains, and Healthcare Financial Services income, partially offset by lower loan and lease-related fees[8](index=8&type=chunk) [Non-Interest Expense](index=4&type=section&id=Non-Interest%20Expense) Non-interest expense increased to $345.7 million in Q2 2025, driven by strategic investments in human capital and risk management - Total non-interest expense increased by **$19.7 million** year-over-year to **$345.7 million**[10](index=10&type=chunk) - The primary drivers for the expense increase were investments in **human capital** and **risk management infrastructure**[10](index=10&type=chunk) [Income Taxes](index=4&type=section&id=Income%20Taxes) Income tax expense was $64.8 million in Q2 2025, with the effective tax rate decreasing to 20.0% due to a discrete tax benefit Income Tax Comparison (YoY) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Income Tax Expense | $64.8 million | $47.9 million | | Effective Tax Rate | 20.0% | 20.9% | | Discrete Tax Benefit | $3.9 million | $0.3 million | Balance Sheet and Capital Analysis [Investment Securities](index=4&type=section&id=Investment%20Securities) Total net investment securities reached $17.8 billion as of June 30, 2025, with net unrealized losses decreasing in the available-for-sale portfolio Investment Securities Portfolio (June 30, 2025) | Portfolio | Carrying Value | Net Unrealized Losses | | :--- | :--- | :--- | | Total Investment Securities | $17.8 billion | N/A | | Available-for-Sale | $9.6 billion | $568.3 million | | Held-to-Maturity | $8.2 billion | $901.6 million (not reflected in carrying value) | [Loans and Leases](index=4&type=section&id=Loans%20and%20Leases) Total loans and leases grew to $53.7 billion in Q2 2025, driven by commercial and residential mortgage growth, with strong quarterly originations Loan Portfolio Growth | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :--- | :--- | :--- | :--- | | Total Loans and Leases | $53.7 billion | $53.1 billion | $51.6 billion | | Loan Originations | $3.8 billion | $2.7 billion | $3.0 billion | - Compared to the prior year, commercial loans and leases increased by **$1.8 billion** and residential mortgages by **$1.0 billion**, while commercial real estate loans decreased by **$919.0 million**[15](index=15&type=chunk) [Asset Quality](index=5&type=section&id=Asset%20Quality) Asset quality improved in Q2 2025, with non-performing loans decreasing to $534.5 million (1.00% of total loans) and past due loans declining Asset Quality Ratios | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :--- | :--- | :--- | :--- | | Non-Performing Loans | $534.5 million | $564.4 million | $368.8 million | | NPLs / Total Loans | 1.00% | 1.06% | 0.72% | | Past Due Loans | $54.8 million | $87.2 million | $166.3 million | [Deposits and Borrowings](index=5&type=section&id=Deposits%20and%20Borrowings) Total deposits increased to $66.3 billion at quarter-end, maintaining a stable loan-to-deposit ratio of 80.9% with core deposits at 88.1% Deposits and Borrowings Summary | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :--- | :--- | :--- | :--- | | Total Deposits | $66.3 billion | $65.6 billion | $62.3 billion | | Core Deposits / Total Deposits | 88.1% | 88.5% | 87.5% | | Loan to Deposit Ratio | 80.9% | 80.9% | 82.8% | | Total Borrowings | $4.6 billion | $3.9 billion | $4.0 billion | [Capital](index=5&type=section&id=Capital) Capital ratios remained strong and improved, with the CET1 ratio increasing to 11.33% and tangible common equity ratio improving to 7.46% Key Capital Ratios and Returns | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | CET1 Ratio | 11.33% | 11.25% | 10.59% | | Tangible Common Equity Ratio | 7.46% | 7.43% | 7.18% | | Return on Avg. Tangible Common Equity | 17.96% | 15.93% | 14.17% | | Tangible Book Value per Share | $35.13 | $33.97 | $30.82 | Reportable Segments [Commercial Banking](index=6&type=section&id=Commercial%20Banking) Commercial Banking reported a 10.0% decrease in pre-tax, pre-provision net revenue to $240.8 million, driven by lower net interest and non-interest income Commercial Banking Operating Results (Q2 2025 vs Q2 2024) | Metric (in thousands) | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Net interest income | $318,518 | $337,588 | (5.6)% | | Non-interest income | $30,628 | $34,510 | (11.2)% | | Pre-tax, pre-provision net revenue | $240,774 | $267,510 | (10.0)% | - The segment had **$41.2 billion** in loans and leases and **$16.2 billion** in deposits as of June 30, 2025[20](index=20&type=chunk) - The decrease in net interest income was primarily due to lower spreads on loans and leases, while the decrease in non-interest income was driven by lower factoring, prepayment, and syndication fees[21](index=21&type=chunk) [Healthcare Financial Services](index=7&type=section&id=Healthcare%20Financial%20Services) Healthcare Financial Services delivered a 4.4% increase in pre-tax net revenue to $70.9 million, driven by higher net interest and non-interest income Healthcare Financial Services Operating Results (Q2 2025 vs Q2 2024) | Metric (in thousands) | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Net interest income | $97,625 | $91,664 | 6.5% | | Non-interest income | $28,687 | $27,465 | 4.4% | | Pre-tax net revenue | $70,859 | $67,862 | 4.4% | Healthcare Financial Services Key Metrics (YoY) | Metric | June 30, 2025 | June 30, 2024 | % Change | | :--- | :--- | :--- | :--- | | Deposits | $10,180 million | $9,392 million | 8.4% | | Total Footings | $15,931 million | $14,914 million | 6.8% | - The segment includes HSA Bank, a leading administrator of health savings accounts, and Ametros, a professional administrator of medical insurance claim settlements[22](index=22&type=chunk) [Consumer Banking](index=8&type=section&id=Consumer%20Banking) Consumer Banking reported a 2.7% increase in pre-tax, pre-provision net revenue to $114.2 million, driven by higher net interest income and strong loan growth Consumer Banking Operating Results (Q2 2025 vs Q2 2024) | Metric (in thousands) | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Net interest income | $212,672 | $202,679 | 4.9% | | Non-interest income | $24,591 | $24,392 | 0.8% | | Pre-tax, pre-provision net revenue | $114,219 | $111,166 | 2.7% | Consumer Banking Balance Sheet (YoY) | Metric | June 30, 2025 | June 30, 2024 | % Change | | :--- | :--- | :--- | :--- | | Loans | $12,472 million | $11,239 million | 11.0% | | Deposits | $27,790 million | $27,108 million | 2.5% | - Non-interest expense increased by **$7.1 million**, primarily due to investments in technology, employee-related expenses, and professional services[25](index=25&type=chunk) Financial Tables and Reconciliations [Forward-Looking Statements and Non-GAAP Measures](index=10&type=section&id=Forward-Looking%20Statements%20and%20Non-GAAP%20Measures) This section outlines forward-looking statement disclaimers and defines non-GAAP financial measures used to assess performance and provide investors with business insights - The report includes forward-looking statements subject to risks and uncertainties, including economic conditions, regulatory changes, and market volatility, which could materially affect actual results[29](index=29&type=chunk) - The company uses non-GAAP measures like the efficiency ratio, ROTCE, and tangible book value per share to provide investors with information useful for understanding its financial position and performance[30](index=30&type=chunk)[31](index=31&type=chunk) - Investors are encouraged to review the consolidated financial statements in their entirety and not rely on any single financial measure, as non-GAAP measures are not standardized and may not be comparable to those of other companies[33](index=33&type=chunk) [Selected Financial Highlights](index=12&type=section&id=Selected%20Financial%20Highlights) Selected financial highlights show positive trends in profitability and capital strength, with diluted EPS and key performance ratios peaking in Q2 2025 Five-Quarter Performance Trend | Metric | Q2 2025 | Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | Diluted EPS | $1.52 | $1.30 | $1.01 | $1.10 | $1.03 | | ROA (annualized) | 1.29% | 1.15% | 0.91% | 1.01% | 0.96% | | ROTCE (annualized) | 17.96% | 15.93% | 12.73% | 14.29% | 14.17% | | CET1 Ratio | 11.33% | 11.25% | 11.54% | 11.25% | 10.59% | [Consolidated Balance Sheets](index=13&type=section&id=Consolidated%20Balance%20Sheets) The consolidated balance sheet as of June 30, 2025, shows total assets of $81.9 billion, driven by increases in loans, leases, and deposits Balance Sheet Summary (YoY Comparison) | Balance Sheet Item (in billions) | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Total Assets | $81.9 | $76.8 | | Total Loans and Leases, net | $52.9 | $50.9 | | Total Investment Securities, net | $17.8 | $16.4 | | Total Deposits | $66.3 | $62.3 | | Total Liabilities | $72.6 | $68.0 | | Total Stockholders' Equity | $9.3 | $8.8 | [Consolidated Statements of Income](index=14&type=section&id=Consolidated%20Statements%20of%20Income) Consolidated statements of income show Q2 2025 net income of $258.8 million, a substantial increase driven by higher net interest income and non-interest income Income Statement Summary (YoY Comparison) | Income Statement Item (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net Interest Income | $621,182 | $572,297 | | Provision for Credit Losses | $46,500 | $59,000 | | Total Non-interest Income | $94,657 | $42,298 | | Total Non-interest Expense | $345,714 | $326,021 | | Net Income | $258,848 | $181,633 | | Diluted EPS | $1.52 | $1.03 | [Analysis of Net Interest Margin](index=16&type=section&id=Analysis%20of%20Net%20Interest%20Margin) Analysis of net interest margin shows a NIM of 3.44% for Q2 2025, improving due to a larger decrease in deposit costs offsetting asset yield declines Net Interest Margin Components (YoY Comparison) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net Interest Margin (Tax-equivalent) | 3.44% | 3.39% | | Average Yield on Interest-Earning Assets | 5.44% | 5.65% | | Average Rate on Total Deposits | 2.07% | 2.35% | | Average Rate on Total Deposits and Interest-Bearing Liabilities | 2.18% | 2.49% | [Loan Portfolio and Credit Quality](index=18&type=section&id=Loan%20Portfolio%20and%20Credit%20Quality) This section details the loan portfolio and credit quality metrics, showing total loans at $53.7 billion and non-performing loans decreasing to $534.5 million Loan Portfolio Composition (June 30, 2025) | Loan Category | Balance (in thousands) | | :--- | :--- | | Commercial non-mortgage | $19,943,097 | | Commercial real estate | $21,358,775 | | Residential mortgages | $9,332,413 | | Consumer | $1,687,668 | | **Total loans and leases** | **$53,671,959** | Non-Performing Assets (June 30, 2025) | Metric | Value (in thousands) | | :--- | :--- | | Total non-performing loans and leases | $534,522 | | Total other real estate owned | $2,528 | | **Total non-performing assets** | **$537,050** | - The allowance for credit losses on loans and leases increased from **$713.3 million** in Q1 2025 to **$722.0 million** in Q2 2025, after accounting for a **$45.1 million** provision and **$36.4 million** in net charge-offs[46](index=46&type=chunk) [Non-GAAP to GAAP Reconciliations](index=20&type=section&id=Non-GAAP%20to%20GAAP%20Reconciliations) This section provides detailed reconciliations of non-GAAP financial measures to GAAP, including efficiency ratio, ROTCE, and tangible equity ratios Tangible Common Equity Reconciliation (June 30, 2025) | Item (in thousands) | Value | | :--- | :--- | | Stockholders' equity (GAAP) | $9,337,617 | | Less: Goodwill and other intangible assets | $3,184,039 | | Less: Preferred stock | $283,979 | | **Tangible common stockholders' equity (Non-GAAP)** | **$5,869,599** | Return on Average Tangible Common Equity (Q2 2025) | Item (in thousands) | Value | | :--- | :--- | | Net income (GAAP) | $258,848 | | Adjustments (Preferred dividends, tax-effected amortization) | $2,465 | | **Adjusted net income (Non-GAAP)** | **$261,313** | | Average tangible common stockholders' equity | $5,821,098 | | **Return on Average Tangible Common Equity** | **17.96%** |

Core Viewpoint - Analysts expect Webster Financial (WBS) to report quarterly earnings of $1.41 per share, reflecting an 11.9% year-over-year increase, with revenues projected at $711.74 million, up 15.8% from the previous year [1] Earnings Projections - The consensus EPS estimate has been revised down by 0.2% in the past 30 days, indicating a reassessment by covering analysts [1][2] Key Financial Metrics - Analysts predict a 'Net Interest Margin' of 3.4%, up from 3.2% in the same quarter last year [4] - The 'Efficiency Ratio' is estimated at 47.6%, compared to 46.2% a year ago [4] - 'Average balance - Total interest-earning assets' is expected to be $72.96 billion, an increase from $68.86 billion in the same quarter last year [5] - 'Total nonperforming loans and leases' are projected to be $587.42 million, up from $368.84 million a year ago [5] Income Estimates - 'Total Non-Interest Income' is expected to reach $93.59 million, significantly higher than $42.30 million reported in the same quarter last year [6] - 'Net Interest Income' is projected at $616.23 million, compared to $572.30 million in the same quarter last year [6] - 'Wealth and investment services' are expected to be $7.86 million, down from $8.56 million a year ago [7] - 'Loan and lease related fees' are estimated at $17.97 million, lower than $19.33 million reported last year [7] - 'Deposit service fees' are forecasted to be $39.51 million, down from $41.03 million a year ago [8] - 'Increase in cash surrender value of life insurance policies' is estimated at $8.02 million, up from $6.36 million last year [8] - 'Non-interest income - Other income' is projected to reach $20.35 million, compared to $16.94 million a year ago [8] Overall Performance - Over the past month, shares of Webster Financial have increased by 13.4%, outperforming the Zacks S&P 500 composite's 4% change [9] - Currently, WBS holds a Zacks Rank 3 (Hold), suggesting its performance may align with the overall market in the near future [9]

Core Viewpoint - The market anticipates Webster Financial (WBS) will report a year-over-year increase in earnings driven by higher revenues for the quarter ended June 2025, with actual results being crucial for stock price movement [1][2]. Earnings Expectations - The upcoming earnings report is expected to be released on July 17, with a consensus EPS estimate of $1.43, reflecting a year-over-year increase of +13.5%. Revenues are projected at $712.23 million, up 15.9% from the previous year [3]. Estimate Revisions - The consensus EPS estimate has remained unchanged over the last 30 days, indicating that analysts have not significantly altered their initial projections during this period [4]. Earnings Surprise Prediction - The Zacks Earnings ESP model compares the Most Accurate Estimate to the Zacks Consensus Estimate, suggesting that recent analyst revisions may provide more accurate insights into earnings expectations [8][9]. Current Earnings ESP and Zacks Rank - For Webster Financial, the Most Accurate Estimate is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -0.50%. The stock currently holds a Zacks Rank of 3, complicating predictions for an earnings beat [12]. Historical Performance - In the last reported quarter, Webster Financial was expected to post earnings of $1.38 per share but delivered only $1.30, resulting in a surprise of -5.80%. Over the past four quarters, the company has only beaten consensus EPS estimates once [13][14]. Conclusion - While the company may not appear to be a strong candidate for an earnings beat, investors should consider other factors when making decisions regarding the stock ahead of the earnings release [17].