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

Stocks in this article: CBACJPMHBANZIONCSECATY

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!

COMPARE ALL SERVICES
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 16,614.81 +215.14 1.31%
S&P 500 1,941.28 +37.27 1.96%
NASDAQ 4,419.4780 +103.4040 2.40%

Brokerage Partners

Rates from Bankrate.com

  • 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