Friday, Webster Financial Corp. (WBS), the holding company for Webster Bank, reported a profit for the second quarter, helped mainly by a gain from an exchange offer for convertible preferred stock and trust preferred securities during the quarter. On a consolidated basis, Webster reported a wider net loss hurt principally by increased loan loss provisions. WBS shares rose more than 7% in early morning trade on the New York Stock Exchange.
The Waterbury, Connecticut-based company's second quarter net income available to common shareholders was $16.80 million or $0.31 per share, compared to a loss of $28.94 million or $0.56 per share in the same quarter last year.
Consolidated net loss for the quarter was $31.56 million, wider than a net loss of $28.72 million in the year-ago quarter.
On average, 11 analysts polled by Thomson Reuters expected the company to report a loss of $0.46 per share. Analysts' estimates typically exclude one-time charges and gains.
Webster noted that the successful exchange offer for convertible preferred stock and trust preferred securities completed during the second quarter contributed $173 million and offset charges related to write-downs and sales of investment securities and a special Federal Deposit Insurance Corp. assessment.
Net interest income for the quarter decreased to $119.28 million from $125.69 million in the same quarter of last year. Net interest margin for the quarter was 3.04% compared to 3.26% in the corresponding period last year.
Provision for loan losses for the quarter increased substantially to $85.00 million from $25.00 million in the corresponding quarter last year.
Total non-interest income for the quarter was $35.39 million compared with non-interest loss of $5.75 million last year. Non-interest income included a gain of $24.3 million in connection with the early extinguishment of $63.9 million of trust preferred securities under the exchange offer.
Total non-interest expenses declined by 6% to $130.10 million from $137.51 million in the same quarter last year.
As at June 30, 2009, total loans were $11.61 billion, compared to $12.80 billion as at June 30, 2008. As at June 30, 2009, total deposits were $13.17 billion, compared to total deposits of $12.10 billion as at June 30, 2008.
James Smith, Chairman and Chief Executive Officer, Webster said, "The major development in the second quarter was our highly successful exchange offer which boosted our Tier 1 common equity by more than $170 million. In addition to strengthening our capital position, the additional common equity enhances our ability to compete vigorously for new business and to move forward confidently toward our goal of being New England's bank."
For the six-month period, net loss available to common shareholders was $4.75 million, wider than a loss of $4.58 million last year. On a per share basis, loss was flat at $0.09 with last year.
Consolidated net loss for the six-month period was $42.67 million, wider than a net loss of $4.15 million in the same period last year. Net interest income for the six months was $237.49 million, down from $250.54 million last year.
WBS is currently trading at $9.42, up $0.79 or 9.15%, on a volume of 1.30 million shares on the NYSE.
For comments and feedback: editorial@rttnews.com