The results came in ahead of the 20-cent consensus estimate among analysts polled by Thomson Reuters.
In comparison, Webster's earnings to common shareholders were $17.8 million, or 22 cents a share, during the third quarter and the company posted a net loss to common shareholders of $54.4 million, or 84 cents a share, during the fourth quarter of 2009.
For the full year 2010, net income available to common shareholders was $49.4 million, or $60 a share, compared to a loss of $85.3 million, or $2.14 a share, in 2009.CEO James Smith said his firm was pleased "that credit metrics, profitability and other key performance metrics showed meaningful improvement," adding that "growth in loans in the quarter, most particularly middle market and commercial real estate originations, is a positive sign of quality financing opportunities in our core lines of business, and reflects a gradually improving regional economy." Following the industry pattern, the main factor in the earnings improvement was a decline in credit costs. Webster's fourth-quarter provision for loan loss reserves was $15 million, declining from $25 million the previous quarter and $67 million during the fourth quarter of 2009. Net charge-offs - loan losses less recoveries - totaled $33.7 million during the fourth quarter, meaning that the company "released" $18.7 million in loan loss reserves, which directly boosted the bottom line. This followed the pattern of the largest U.S. banks over the past several quarters. JPMorgan Chase (JPM - Get Report), released $1.9 billion in loan loss reserves during the fourth quarter. Webster's net interest margin - essentially the difference between a bank's annualized yield on loans and investments and its average cost of funds -was 3.40%, improving from 3.36% in the third quarter and 3.26% in the fourth quarter of 2009. The company's fourth-quarter return on average assets was 0.73% and its return on average tangible equity was 10.11%, which are both decent figures for a community bank in the current environment.