Webster Financial (US:WBS)2025-11-10 21:22Financial Performance - For the three months ended September 30, 2025, net income was $261,217,000, an increase of 35.3% compared to $192,985,000 in 2024 [21]. - Earnings per diluted common share increased to $1.54 for the three months ended September 30, 2025, up from $1.10 in 2024, representing a 40% increase [21]. - Return on average assets (annualized) improved to 1.27% in 2025 from 1.01% in 2024 [21]. - Adjusted net income for the nine months ended September 30, 2025, reached $754,388,000, compared to $599,311,000 in 2024, reflecting a 25.9% increase [26]. - Net interest income for the three months ended September 30, 2025, was $631,667,000, up from $589,883,000 in 2024, marking a 7.1% increase [29]. - Net interest income for the nine months ended September 30, 2025, increased by $0.2 billion, or 7.8%, to $1.9 billion compared to $1.7 billion for the same period in 2024 [38]. - Total non-interest income rose by $43.2 million, or 74.8%, from $57.7 million in Q3 2024 to $100.9 million in Q3 2025, mainly due to changes in net gains on sale of investment securities and an increase in other income [45]. - Total non-interest income for the nine months ended September 30, 2025, increased by $88.8 million, or 44.5%, from $199.4 million in the same period of 2024 [49]. Asset and Equity Growth - As of September 30, 2025, Webster Financial Corporation had over $83 billion in total consolidated assets [17]. - Common stockholders' equity increased to $9,178,698,000 in 2025 from $8,914,071,000 in 2024 [21]. - Average stockholders' equity rose to $9,440,148,000 in Q3 2025 from $8,995,134,000 in Q3 2024, reflecting a growth of 4.9% [26]. - Total assets increased to $80.6 billion as of September 30, 2025, from $76.0 billion as of September 30, 2024 [30]. - Total stockholders' equity increased by $0.4 billion, or 3.6%, from $9.1 billion at December 31, 2024, to $9.5 billion at September 30, 2025 [89]. Credit Losses and Provisions - The allowance for credit losses (ACL) on loans and leases was $727,897,000 as of September 30, 2025, compared to $687,798,000 in 2024 [21]. - Total provision for credit losses decreased by $10.0 million, or 18.5%, from $54.0 million for the three months ended September 30, 2024, to $44.0 million for the three months ended September 30, 2025 [40]. - The Company experienced a net charge-off of $38.4 million for the three months ended September 30, 2025, an increase of $3.0 million or 8.3% compared to $35.4 million for the same period in 2024 [126]. - For the nine months ended September 30, 2025, net charge-offs rose to $129.7 million, an increase of $23.7 million or 22.3% from $106.0 million in the prior year [127]. - The qualitative portion of the collective ACL accounted for approximately 21% of the total ACL on loans and leases as of September 30, 2025, down from 39% on December 31, 2024 [119]. Loans and Leases - Total loans and leases amounted to $55.1 billion at September 30, 2025, up from $52.5 billion at December 31, 2024 [100]. - Average loans and leases increased by $2.6 billion, or 5.1%, primarily due to increases in commercial non-mortgage, residential mortgages, and other consumer loans [37]. - Commercial non-mortgage loans increased to $19.4 billion, representing 35.2% of total loans and leases as of September 30, 2025 [100]. - Total loans and leases in Commercial Banking increased by $1.7 billion, or 4.3%, to $42.4 billion as of September 30, 2025, compared to $40.6 billion as of December 31, 2024 [75]. Deposits and Borrowings - Total deposits increased by $3.4 billion to $68.2 billion as of September 30, 2025, primarily due to a $1.9 billion increase in money market deposits [143]. - The Bank's loan to total deposit ratio was 80.8% at September 30, 2025, compared to 81.1% at December 31, 2024 [135]. - Total borrowings increased to $3.9 billion at September 30, 2025, representing 4.7% of total assets [148]. - FHLB advances rose to $2.6 billion at September 30, 2025, up from $2.1 billion at December 31, 2024 [150]. Interest Rate Risk and Sensitivity - The estimated impact of a 100 basis point increase in interest rates on net interest income is a 0.1% increase as of September 30, 2025 [171]. - The estimated net interest income sensitivity to a 100 basis point increase in the short end of the yield curve is a decrease of 1.3% [172]. - The Company's duration gap was zero as of September 30, 2025, indicating a matched balance sheet with no change in estimated economic value for interest rate changes [174]. - Management believes the interest rate risk position is reasonable given the current interest rate outlook and is prepared to take additional action if necessary [175]. Dividends and Share Repurchases - The Company paid $200.0 million in dividends to the Holding Company during the three months ended September 30, 2025, and $500.0 million during the nine months ended September 30, 2025 [131]. - The quarterly cash dividend to common stockholders remained at $0.40 per common share for the three months ended September 30, 2025 [132]. - The Holding Company repurchased 2,231,026 shares at a weighted-average price of $58.17, totaling $129.8 million during the three months ended September 30, 2025 [133].