This Day On The Street
Continue to site right-arrow
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

Webster Financial Blows Past Estimates

Stocks in this article: WBS JPM

WATERBURY, Conn. ( TheStreet) -- Webster Financial (MTB) on Friday reported fourth-quarter net income available to common shareholders of $25 million, or 30 cents a share.

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.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

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
Stocks Under $10

Jim Cramer's protégé, 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
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, 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
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

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

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
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 17,416.85 +225.48 1.31%
S&P 500 2,021.25 +19.09 0.95%
NASDAQ 4,683.4070 +45.4130 0.98%

Partners Compare Online Brokers

Free Reports

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