Webster Financial posts narrower 1st-quarter loss than expected, shares rise

Webster 1st-qtr loss narrows, tops expectations

WATERBURY, Conn. — Webster Financial Corp. on Thursday said its first-quarter loss narrowed substantially and said its credit-related problems are easing.

After paying preferred dividends, the bank said the net loss available to common shareholders was $6.1 million, or 8 cents per share, compared with a loss of $21.6 million, or 41 cents per share, a year ago.

Analysts polled by Thomson Reuters, on average, expected a loss of 12 cents per share.

“Improvement was seen in several key asset quality indicators in the quarter,” said Chief Financial Officer/Chief Risk Officer Jerry Plush in a statement. He pointed to the amount of loans that were written off, the amount of money set aside to cover bad loans and the lower levels of loans falling behind payments as positive measures.

“While we remain cautious with regard to credit, these positive outcomes favorably impacted our results in the quarter,” he said.

The better-than-expected results boosted Webster stock. It shares gained 81 cents, or 4 percent, to close Thursday at $21.48, after earlier touching a 52-week high of $22.68. Volume was nearly twice as heavy as normal.

Net interest income, or earnings from deposits and loans, rose 11 percent to $131.4 million, from $118.2 million in the 2009 first quarter.

Total deposits were $13.79 billion at the end of the quarter, up from $12.69 billion the prior year.

Non-interest income, or earnings from fees and charges, fell 13 percent to $47 million, from $54.1 million last year. The decline mainly reflected a loss on the write-down of the value of investment securities.

Total loans dropped 10 percent to $10.9 billion, from $12.1 billion the prior year.

The bank decreased its provision for loan losses, or money set aside to cover souring loans, by 35 percent to $43 million, from $66 million a year ago.

Net charge-offs, or loans written off as uncollectable, rose 34 percent to $40.3 million, from $30.1 million in the 2009 first quarter. However, charge-offs fell 22 percent from the 2009 fourth quarter.

Nonperforming assets, or loans and leases that are considered past due and in danger of being written off, rose 9 percent to $379.3 million, from $348.4 million last year. This measure was also from the prior quarter, by 6 percent.