The area’s economic recovery may come slowly, but regional bank Webster Financial Corp. is one of several financial institutions with a local presence that is seeing a turnaround now.
Waterbury, Conn.-based Webster; Rockland, Mass.-based Independent Bank Corp.; and Newport Bancorp Inc., the holding company for NewportFed, each reported significant increases in profits in the first quarter.
Meanwhile, financial giant Bank of America posted first-quarter income that didn’t quite match the performance from a year earlier.
Bank of America, the largest U.S. bank by assets, said it turned a $2.05 billion profit in the first quarter, down from $3.18 billion in the year-earlier period. Still, CEO Brian T. Moynihan said the bank is on the road back.
Webster Financial – parent of the $17.96 billion Webster Bank – recorded a $33.47 million profit in the first quarter compared with a $6.07 million loss in the same period last year. The improved bottom line comes despite lower interest and noninterest revenue – down more than 2 percent year over year to $219.8 million in the first three months of 2011.
The bank benefited from reducing its first-quarter set-aside for anticipated bad loans to $10 million, down from $43 million in the 2010 first quarter. Webster also exited the federal government’s Troubled Asset Relief Program, or TARP, at the end of 2010, allowing the bank to avoid the $7.49 million in dividends and other TARP charges it paid in the 2010 first quarter.
Independent Bank, the parent of Rockland Trust Co., posted an $11.19 million first-quarter profit, up 21.3 percent from a year earlier. That gain was helped by a first-quarter loan-loss provision that was cut by more than half to $2.2 million, compared with $4.65 million in the 2010 first quarter.
The smaller provision indicates the bank believes its credit portfolio is improving now that many businesses are emerging from recession.
The $449.53 million Newport Bancorp said it finished the first quarter with a $301,000 profit, nearly three times the $101,000 net income reported in the 2010 first quarter. The earnings were better in the first three months of 2011, in part because of a $217,000 loss a year earlier on the sale of securities that did not occur in the 2011 first quarter.
Sovereign Bank’s parent, the Spanish bank Banco Santander S.A., did not report first-quarter results before deadline last week. Royal Bank of Scotland plc, owner of Providence-based Citizens Financial Group Inc., will post its first-quarter numbers on May 6. •
