STAMFORD, Conn. – Webster Financial Corp., the parent company of Webster Bank N.A., reported a third-quarter profit of $261.2 million on Friday, an increase of 35% from $193 million
posted the same period last year.
The profit jump was fueled by higher loan and deposit balances and wider loan rate spreads, boosting net interest income despite tighter deposit margins, according to the earnings report.
Webster Financial, the holding company for Webster Bank, which has seven locations in Rhode Island, reported earnings of $1.54 per diluted share compared to $1.10 a year ago. The results topped Wall Street expectations. The average estimate of nine analysts surveyed by Zacks Investment Research was for earnings of $1.52 per share.
It also posted revenue of $732.6 billion in the period compared to $647.6 million the year prior. Its revenue net of interest expense was $732.6 million, also beating Wall Street forecasts. Six analysts surveyed by Zacks expected $724.9 million.
"Webster continues to exhibit strong financial results," said Chairman and CEO John R. Ciulla. "It is appropriate that on Webster’s 90th anniversary, the consistency and excellence Webster has delivered since its founding persists."
Total deposits climbed to $68.2 billion this quarter, compared to $64.5 billion a year ago. Meanwhile, total assets stood at $83.2 billion, up from $79.4 billion in 2024.
Webster's net interest income rose to $631.6 million this quarter, up 7.1% from $589.9 million a year earlier, as higher rates and loan growth continued to boost core lending revenue.
The net interest margin – a key measure of a bank’s core profitability that reflects the spread between interest earned on assets and interest paid on liabilities – was 3.40%, down slightly from 3.41% a year ago.
Noninterest income was $100.9 million for the quarter, an increase of $43.2 million or 75% from the $57.7 million reported this same time last year, which was dragged down by a $19.6 million loss on investment securities and a $16 million charge tied to the exit of non-core operations, including a related write-off.
After accounting for those items, noninterest income rose $7.6 million, driven by stronger client hedging activity, a higher credit valuation adjustment, and a $4 million legal settlement, according to Webster Financial.
Noninterest expense totaled $356.7 million, up $7.7 million from a year ago. That figure includes $20.6 million in restructuring costs and a benefit tied to the FDIC special assessment.
Without those one-time items, core noninterest expense climbed $28.3 million, fueled by investments in talent, performance incentives, business development, and risk management systems.
Material from The Associated Press was used in this report.
Matthew McNulty is a PBN staff writer. He can be reached at McNulty@PBN.com or on X at @MattMcNultyNYC.
