A Webster Bank branch in downtown Boston in 2019. Banker & Tradesman file photo.

Webster Financial Corp., the holding company for Webster Bank and its HSA Bank division, saw first quarter earnings decline by 63 percent compared to last year according to the bank’s quarterly report. Webster had earnings of $36 million, or $0.39 per diluted share, in the first quarter, compared to $97.5 million, or $1.06 per diluted share, for the first quarter of 2019.

The bank’s provision for credit losses was $76 million under the new current expected credit loss accounting standard. The provision for credit losses was $8.6 million in the same period last year.

Webster Bank had loans totaling about $2.58 billion in commercial sectors most affected by the coronavirus, according to information presented during its April 21 first quarter earnings call. Industries included retail, transportation and aerospace, construction, travel and leisure, restaurants, hotels and motels, and oil and gas. The risk rating for 94 percent of these loans was pass, while 6 percent were criticized.

Webster Bank made loan modifications during the first quarter to 19 percent of its commercial loan value in these sectors. Hotels and motels saw modifications to 47 percent of its loan value, the most for any of Webster’s exposure. Travel and leisure was next with 39 percent. The total amount of commercial loans receiving modifications in these sectors during the first quarter was $517 million. Modifications included payment deferrals, covenant relief and credit line adjustments.

Jason Soto, Webster’s executive vice president and chief credit officer, said during the earnings call that the pace of modifications, which were up to $692 million, had slowed in April for these sectors.

Webster’s president and CEO John Ciulla said across all Webster’s commercial loan portfolio through April 16, modifications had been made for more than 300 borrowers and close to $1.6 billion of commercial loans, approximately 13 percent of the funded commercial loan portfolio.

The bank also modified over 2,000 home equity and residential loans, representing $476 million, approximately 6.5 percent of total home equity and mortgage balances. Additionally, modifications were made for 750 borrowers with $300 million in small business loans, about 17 percent of Webster’s small business loan portfolio.

“During these uncertain, challenging and unprecedented times, Webster bankers have once again stepped up to take care of our customers, our communities and, importantly, each other.  I am so proud of every one of our 3,400 bankers,” John R. Ciulla, Webster’s president and chief executive officer, said in a statement announcing earnings. “We continue to take swift actions to keep our employees safe while effectively providing our customers with the banking services and financial assistance they need to navigate through the economic storm brought on by this pandemic.”

$2.4B in Webster Bank Loans Receive Modifications

by Diane McLaughlin time to read: 2 min