WATERBURY, Conn. – Webster Financial Corp., the parent of Webster Bank N.A., on Friday posted a fourth-quarter profit of $32.57 million, a dramatic turnaround from the $13.69 million it lost in the same period a year earlier.
After $7.6 million of preferred dividend payments, net income available to common shareholders was $24.96 million, or 30 cents per diluted share. That gain beat the 20 cents per share net income forecast by a consensus of analysts who cover the bank, according to Yahoo! Finance.
For all of 2010, Webster said it earned $74.32 million, swinging from the $75.63 million loss it posted for 2009.
The improvement both for the quarter and for the year came despite lower revenue figures.
Webster, New England’s largest independent bank, recorded $221.08 million in interest and non-interest revenue for the quarter that ended Dec. 31, down 5.9 percent from the $234.92 million in the year-earlier period.
For all of 2010, the bank had $913.04 million in revenue, down 2.1 percent from $932.45 million the year before.
The drop in revenue was offset by a decline in the 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.
Also helping matters: Banks are paying less for deposits as interest rates remain low.
The interest expense for the fourth quarter was $37.68 million, down from $50.98 million a year earlier. For 2010, interest expense was $171.38 million, a sharp decline from $250.7 million in 2009.
“We are pleased to report that credit metrics, profitability and other key performance metrics showed meaningful improvement in the fourth quarter,” said James C. Smith, Webster’s chairman and CEO.
Webster also exited the U.S. Treasury’s Troubled Asset Relief Program in the fourth quarter, paying back the remainder of the $400 million cash infusion it had received in late 2008. The bank issued more than 8 million common shares to finance the repayment.
The bank said nonperforming loans – typically loans that are more than 90 days overdue – continued to decline in the fourth quarter to $273.57 million as of Dec. 31, down from $372.98 million at the end of 2009.
And charge-offs – loans the bank has deemed uncollectible – dropped to $37.17 million from $54.58 million in the fourth quarter, but it represented an increase from $34.4 million in the third quarter.
The bank’s net interest margin widened in the fourth quarter to 3.40 percent, up four basis points from three months earlier and up 14 basis points from a year ago.
Total deposits increased to $13.61 billion on Sept. 30, a gain from the third-quarter total of $13.57 billion, but a decline from the Dec. 31, 2009, total of $13.63 billion.
