Financial Highlights for Webster Financial Corporation

Webster Financial Corporation, a leading bank holding company, has reported its financial results for the first quarter of 2025. The company saw solid performance across its three main business lines - Commercial Banking, Healthcare Financial Services, and Consumer Banking.

Strong Earnings and Profitability Webster reported net income of $226.9 million for the first quarter of 2025, up from $216.3 million in the same period last year. Earnings per diluted common share were $1.30, compared to $1.23 a year ago. The company’s return on average assets was 1.15%, unchanged from the prior year quarter. Return on average tangible common stockholders’ equity, a key profitability metric, was 15.93%, down slightly from 16.30% in the first quarter of 2024.

Steady Revenue Growth Webster’s net interest income, the difference between interest earned on loans and investments and interest paid on deposits and borrowings, increased 7.8% to $612.2 million. This was driven by growth in the company’s loan and deposit portfolios as well as higher net interest margins. Non-interest income, which includes fees and other revenue sources, decreased 6.8% to $92.6 million, primarily due to lower deposit service fees and investment gains.

Prudent Credit Risk Management The company’s asset quality metrics remained stable, though there was an increase in non-performing loans and leases as a percentage of the total portfolio, from 0.56% to 1.06%. The allowance for credit losses on loans and leases increased 3.4% to $713.3 million, reflecting uncertainty in the economic environment and some risk rating migration in the loan portfolio. Net charge-offs increased to 0.42% of average loans on an annualized basis, up from 0.29% a year earlier.

Solid Capital and Liquidity Positions Webster maintained strong capital ratios, with a Common Equity Tier 1 capital ratio of 11.25% and a Total Risk-Based Capital ratio of 13.96% as of March 31, 2025. These levels exceed regulatory “well-capitalized” minimums, providing the company with a solid buffer to withstand potential economic stress. The bank’s liquidity position also remained robust, with a loan-to-deposit ratio of 80.9% and ample borrowing capacity from the Federal Home Loan Bank and Federal Reserve.

Segment Performance

• Commercial Banking: This segment’s pre-tax, pre-provision net revenue (PPNR) decreased 10.6% year-over-year, primarily due to lower net interest income and non-interest income, as well as higher non-interest expense. Loans and deposits in this segment grew modestly.
• Healthcare Financial Services: PPNR for this segment increased 7.6%, driven by higher net interest income, partially offset by lower non-interest income and higher non-interest expense. Deposits grew 2.8% during the quarter.
• Consumer Banking: PPNR in this segment declined 11.7%, reflecting decreases in net interest income and non-interest income, as well as an increase in non-interest expense. Loans grew 3.2%, while deposits increased 1.7%.

Outlook and Risks The economic environment remains uncertain, with potential risks from trade policy changes, inflation, and the possibility of a recession. However, Webster’s diversified business model, strong capital position, and prudent risk management provide a solid foundation to navigate these challenges. The company continues to monitor the evolving economic landscape and is prepared to adjust its strategies as needed to support its customers and shareholders.

In summary, Webster Financial Corporation delivered a solid performance in the first quarter of 2025, demonstrating the strength of its business model and disciplined approach to risk management. The company’s focus on serving the financial needs of businesses, healthcare providers, and consumers in its core markets has positioned it well for continued success.