STAMFORD, Conn. – Webster Financial Corp. on Thursday declared earnings of $216.8 million for the first quarter of 2023.
The profit marked a strong recovery from the first quarter of 2022 when the Webster Bank parent recorded a loss of $20.2 million following the $10.3 billion merger with Sterling Bancorp of New York. The combination created one of the largest commercial banks in the Northeast.
Reported earnings per diluted share rose from a negative 14 cents to to $1.24 for the first quarter of 2023.
“Webster generated solid results during a challenging time for the banking industry,” said John R. Ciulla, president and chief executive officer of Webster Financial Corp. “Our diverse businesses, strong capital position, unique deposit profile, and solid risk management framework, allow our company to deliver for our clients in all operating environments.”
First quarter 2023 results included a pre-tax provision, reflecting merger-related charges of $56.6 million, the company reported.
Net interest income rebounded to a total of $595.3 million, increasing more than 45% from $409.8 million in the first quarter of 2022.
The company recorded a $46.7 million provision expense, which was attributable to loan growth, macroeconomic trends and a merger charge of $6.7 million.
The net interest margin, the difference between interest income generated and the amount paid out to lenders, was up 45 basis points to 3.66% year over year.
Average interest-earning assets totaled $66.1 billion and increased by $15.8 billion, or 31.3% compared to the first quarter of 2022.
Non-interest income fell to $70.8 million from $104 million in first quarter of 2022. The total reflected an adjustment for a $16.7 million loss on the sale of investment securities and the impact of outsourcing the consumer investment services platform, the company said.
Non-interest expenses were down slightly down for the quarter, $332 million, which included $29.4 million in costs related to the merger with Sterling and “strategic intiative charges,” the company stated.
“Webster’s financial prospects remain strong,” said Glenn MacInnes, executive vice president and chief financial officer. “Along with core deposit growth, we took actions that provided ample liquidity and funding optionality going forward.”
Total assets climbed to $74.8 billion, rising 15% from $65.1 billion a year ago. The company recorded about $50.9 billion in loans and leases, up $1.2 billion or 2.3% year over year. Webster reported a loan to deposit ratio of 92%.
Compared to a year ago, commercial loans and leases increased by $3.4 billion, commercial real estate loans increased by $2.9 billion, residential mortgages increased by $1.2 billion, while consumer loans decreased by $131.3 million.
Quarterly deposits of $55.3 billion marked a 1.6% increase over a year ago, with interest-bearing deposits up $1.7 billion providing increased liquidity.
Other highlights included revenue of $666 million and a provision for credit losses totaling $46.7 million.
Webster held the 10th largest-share of in-market deposits in Rhode Island as of June 30, according to the FDIC.
Sam Wood is a PBN staff writer. Contact him at Wood@PBN.com
