STAMFORD, Conn. – Webster Financial Corp. on Thursday posted a third-quarter profit of $226.5 million, a 3.2% decline from the same period a year ago.
The parent of Webster Bank N.A., which has seven locations in Rhode Island, said it had earnings of $1.28 per diluted share. Earnings, adjusted for costs related to mergers and acquisitions, was $1.55 per share, which beat Wall Street expectations. The average estimate of eight analysts surveyed by Zacks Investment Research was for earnings of $1.50 per share.
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“Our results this quarter illustrate the strength of Webster, both in terms of our earnings power and sound risk and operating profile,” said John R. Ciulla, Webster CEO and president. ” We continue to be well-positioned for the current operating environment.”
Webster recorded $1.02 billion in interest and noninterest revenue for the quarter that ended Sept. 30, up 39.7% from the $731.2 million in the year-earlier period thanks in large part to higher interest rates.
But that increase in revenue did not fully offset the rise in interest and noninterest expenses, which jumped 78.1% from $396.6 million in the third quarter of 2022 to $706.2 million in the same period this year. That jump included interest expenses of $343.6 million in the quarter that ended on Sept. 30, five times higher than the year-ago period.
Likewise, Webster saw its net interest margin narrow to 3.49% in the third quarter from 3.54% a year ago. Still, that was an improvement over the 3.35% margin reported in the second quarter of this year.
Total deposits increased to $60.3 billion on Sept. 30, a gain from the second-quarter total of $58.7 billion and $54 billion a year ago.
In terms of asset quality, total nonperforming loans and leases – typically those that are more than 90 days past due – were $215.1 million as of Sept. 30, or 0.43% of total loans and leases, compared to $218.9 million, or 0.42% of total loans and leases, on June 30, and $209.5 million, or 0.44% of total loans and leases, a year ago.
However, there was a jump in late payments by borrowers and lessees. Past due loans and leases were $70.9 million as of Sept. 30, compared with $51.4 million on June 30, and $46.4 million at the end of September 2022.
(With reports from The Associated Press.)
William Hamilton is PBN managing editor. He can be reached at hamilton@pbn.com.
