2010 year of recovery for regional banks Webster, Independent Bank Corp.

The year 2010 was one of solid recovery for regional banks Webster Financial Corp. and Independent Bank Corp.
Financial giant Bank of America Corp., meanwhile, continued to struggle, saying it lost $2.24 billion in 2010 tied to writedowns and litigation involving faulty mortgages.
Waterbury, Conn.-based Webster Financial – parent of Webster Bank – posted a profit of $32.57 million in the fourth quarter, a dramatic turnaround from its $13.69 million loss in the same period a year ago. For all of 2010, Webster said it earned $74.32 million, swinging from the $75.63 million loss it posted for 2009.
The bank benefited from a significant decline in provisions for bad loans, which is an indicator of improving credit quality. For the fourth quarter, Webster set aside $15 million, down from $67 million in the fourth quarter of 2009. For 2010, the bank set aside $115 million, about one-third of the $303 million provision in 2009.
Low interest rates also helped Webster, which saw its interest expense for the fourth quarter dropped to $37.68 million from $50.98 million a year earlier. For 2010, interest expense was $171.38 million, a sharp decline from $250.7 million in 2009.
Independent Bank, the parent of Rockland Trust Co., said it turned an $11.84 million fourth-quarter profit, up 30 percent from the $9.1 million a year earlier.
For the year ended Dec. 31, Independent’s net income was $40.24 million, 75 percent greater than the $22.99 million the bank recorded in 2009.
The improved fourth-quarter profit appeared to be largely due to noninterest income, which the bank saw climb more than 42 percent year over year to $14.26 million, partly because of smaller impairment charges on Independent’s debt securities.
Also, income from service charges on deposit accounts rose $989,000 – or 21.8 percent – to $5.53 million compared with the 2009 fourth quarter. The bank said the increase was the result of higher debit card usage and more overdraft privilege fees.
The bank’s loan-loss provision – funds set aside in anticipation of bad loans – totaled $3.58 million for the quarter, a decrease from the $4.42 million a year earlier, but up slightly from the $3.5 million in the third quarter.
Sovereign Bank’s parent, the Spanish bank Banco Santander S.A., did not report its fourth-quarter and year-end results before press time last week. Neither did Royal Bank of Scotland plc, owner of Providence-based Citizens Financial Group Inc., nor Newport Bancorp Inc., the holding company for NewportFed. •