This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

10 Best Bank Stocks of 2010

7. Webster Financial

Company Profile

Shares of Webster Financial (WBS) of Waterbury, Conn. closed at 17.74 Wednesday, for a year-to-date return of 50%.

Shares of the Waterbury, Conn.-based lender have remained fairly stable since taking an initial leg up from roughly $12.50 at the start of the year to a high above $20 in the spring. Since September, the stock has stayed mostly in a range of $15 to $18.

Income Statement

The company reported third-quarter net income to common shareholders of $17.8 million, or 22 cents a share, compared to a net loss of $26.1 million, or 39 cents a share, during the third quarter of 2009. Following the pattern for so many banks, earnings improved year-over-year mainly because of a declined in the provision for loan losses to $25 million during the third quarter from $85 million a year earlier.

Third-quarter 2010 earnings suffered from a $2.8 million legal settlement of a class action lawsuit related to overdraft fees.

Following the third-quarter earnings announcement, David Darst of Guggenheim Securities reiterated his buy rating for Webster Financial, citing "generally positive" credit trends and the company's $644 million in loans originated during the third quarter, increasing from $577 million the previous quarter and $383 million a year earlier. Darst's price target for Webster is $20.50.

Balance Sheet

Webster Financial had total assets of $17.8 billion as of September 30, with an NPA ratio of 1.97%, improving from 2.27% a year earlier. The third-quarter net charge-off ratio was 1.06% and loan loss reserves covered 3.12% of total loans as of September 30.

The company owes $400 million in TARP money and according to SNL Financial, CEO Gerald Plush said at an investor conference on November 11 that the company "previously estimated a capital raise of $100 million to $150 million, and continue to think that's accurate."

Stock Ratios

The shares trade for 1.4 times tangible book value according to SNL Financial. The forward price-to-earnings ratio is 18.3, based on the consensus earnings estimate of 97 cents a share for 2011. The forward P/E drops to 13, based on the 2012 consensus earnings estimate of $1.36 a share.

Analyst Ratings

Out of 12 analysts covering Webster Financial, three rate the shares a buy, eight recommend holding the shares and one analyst recommends investors sell the share.

5 of 11

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,042.93 -28.29 -0.17%
S&P 500 1,975.20 -2.60 -0.13%
NASDAQ 4,498.9960 -6.8560 -0.15%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs