STAMFORD, Conn. – Webster Financial Corp. on Thursday reported a $235 million second-quarter net income, an increase of $52.7 million – or 28.9% – from the same quarter a year ago.
Earnings per diluted share increased 32 cents to $1.32.
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Second-quarter results include $40.8 million pre-tax, or 18 cents per diluted share, of charges related to the merger with Sterling Bancorp on Jan. 31, 2022, the company said in its report.
“We are proud to deliver consistent earnings during a challenging period for the banking industry,” said John R. Ciulla, president and chief executive officer. “Our unique and resilient funding profile, robust capital position, and talented colleagues enabled our performance in the quarter and position us well for the future.”
Most of the increase in profit for the three months that ended June 30 was attributable to higher interest income. Webster said net interest income was $583.8 million for the second quarter, up $97.2 million from a year ago, or 20%. Offsetting that increase was a $17.4 million decline in net noninterest income year over year.
Noninterest income fell 35.2% to $89.4 million, due to lower client hedging activity, lower prepayment and other loan-related servicing fees, lower client deposit fees, and the outsourcing of the consumer investment services platform.
At the same time, noninterest expenses fell $14.1 million year over year to $344.1 million, driven primarily by increases in deposit insurance, investments in technology, including the HSA and interLINK acquisitions, and employee benefits related to medical claims, offset by expense benefits from the merger and outsourcing of the consumer investments services platform.
Quarterly deposits stood at $58.7 billion, a 10.5% year-over-year increase.
The net interest margin, the difference between interest income generated and the amount paid out to depositors, was up 186 basis points year-over-year to 3.35%.
The company also increased its loan loss provisions, setting aside $31.5 million in anticipation of defaulting loasn and leases. By comparison, Webster set aside $12.2 million in the second quarter of 2022.
