Thursday, Webster Financial Corp. (WBS) reported a wider than expected net loss for the third quarter from a year ago, due to lower interest income with higher provision for credit losses, partially offset by an increase in non-interest income.
The holding company of Webster Bank reported a wider net loss of $19.2 million from $16.53 million in the year-ago period. On a per share basis, Webster posted a net loss of $0.39, compared to a net loss of $0.42 in the prior year quarter.
On average, 11 analysts polled by Thomson Reuters expected a net loss of $0.25 per share for the quarter. Analysts' estimates typically exclude one-time items.
Net interest margin declined to $3.18 from $3.32 in the prior-year quarter. Net interest income was $126.67 million, down from $129.18 million last year. Provision for credit losses doubled to $85.00 million from $45.50 million in the year-ago period.
Net interest income after provision for credit losses dropped to $41.67 million from $83.68 million in the year-ago period. Total non-interest income increased to $44.15 million from $15.74 million in the year-ago period.
Allowance for credit losses increased to $336.51 million from $198.66 million. Looking at asset quality, the company's non-performing assets increased to $393.59 million from $249.67 million in the year-ago period, while annualized net charge-offs on average loans went up to 2.25% from 1.29% in the year-ago period.
Total loans decreased to $11.32 million from $11.61 million in the year-ago period, while total deposits increased to $13.60 million from $13.17 million in the year-ago period.
For the nine-month period, Webster's net loss increased to $61.93 million or $0.54 per share from a net loss of $20.68 million or $0.51 per share in the year-ago period.
Webster Chairman and CEO James Smith said, "Capital levels continue to improve and are well in excess of all regulatory requirements; earnings before credit provisions increased by 10 percent; and deposits and deposit market share are on the rise. We saw significant improvement in the net interest margin, loan delinquencies were flat for the third consecutive quarter and overall performance was solid considering the challenging environment."
Webster (WBS) stock is currently trading at $12.53, down $0.20, on the NYSE.
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