Webster Financial Corp.(WBS), the holding company for Webster Bank, N.A., reported Friday a higher second-quarter profit, reflecting strong growth in loan portfolio. On a per share basis, earnings matched Street analysts' expectations.
James Smith, chairman and chief executive officer of the company said, "Webster turned in a solid second quarter by most any measure. Loan growth, asset quality, operating efficiency, and earnings all showed meaningful improvement as the southern New England economy continues to recover."
In the second quarter, the company's net income available to common shareholders increased to $40.63 million or $0.44 per share from $33.35 million or $0.36 per share a year ago. On average, 15 analysts polled by Thomson Reuters expected the company to report earnings of $0.44 per share. Analysts' estimates typically exclude special items.
Net interest income grew to $144.38 million from $140.91 million in the prior-year quarter. Total non-interest income was $47.35 million, higher than $46.19 million in the same quarter a year earlier. Analysts expected revenues of $145.17 million.
The company noted that a growth in its loan portfolio, coupled with an increase in lower cost transaction deposits, helped to grow net interest income in a challenging interest rate environment.
Net interest margin was 3.32 percent, compared 3.48 percent a year ago. Provision for loan losses was $5 million, unchanged from last year, reflecting continued portfolio growth and asset quality improvement, the company said.
As at June 30, Tier 1 risk-based capital ratio was 12.80 percent, in comparison with 12.86 percent at the end of March 2012.
President and Chief Operating Officer Jerry Plush said, "Loan originations were 69 percent higher than a year ago and totaled over $1 billion in the quarter. We ended the quarter with strong loan pipelines, which should bode well for the balance of the year."
WBS is currently trading at $21.95, up $0.51 or 2.38 percent, on a volume of 206 thousand shares on the NYSE.
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