Strong commercial lending and a surge of new health savings accounts helped drive growth at the parent company of Webster Bank.

The company reported earnings of $96.7 million, or $1.05 per diluted share, for the fourth quarter of 2018, compared to $67.7 million, or $0.73 per diluted share, for the fourth quarter in 2017.

Net interest income for the quarter was more than $92 million, an increase of close to $9 million from the same period last year. The margin grew 33 basis points on a year-over-year basis, ending the year at 3.66 percent.

“Webster’s results in the fourth quarter and in all of 2018 demonstrate the positive outcomes in executing our long-term strategy,” John R. Ciulla, president and CEO of Webster Bank and its parent company, said in a statement. “Fourth quarter revenues grew more than 14 percent from a year ago while revenue growth was 13 percent for all of 2018, and we earned well in excess of our cost of capital.”

Commercial real estate and other commercial loans led the way in the fourth quarter, with growth of $1.2 billion, or 11.6 percent, in commercial and commercial real estate loans on a year-over-year basis. Ciulla said commercial real estate loans represented 40 percent of originations in the fourth quarter.

While commercial lending was up, the bank’s nonperforming assets in commercial real estate nearly doubled, reaching about $8.2 million, while nonperforming assets in commercial non-mortgages rose from about $40 million at the end of 2017 to more than $62 million at the end of 2018.

Residential real estate and consumer loans both saw year-over-year declines.

Total assets at the bank reached $27.6 billion, up about $1.12 billion from 2017. Total deposits grew about $865 million year-over-year.

Ciulla said Boston is still the most competitive deposit market from a pricing perspective, especially with the emergence of JPMorgan Chase and Pittsburgh-based PNC Bank. However, Ciulla said he also sees the big banks competing in higher income areas like Fairfield, Connecticut and Westchester, New York.

Webster had a strong quarter in its HSA division, bringing in more than 700,000 new accounts. Total HSA deposits are up nearly 14 percent on a year-over-year basis and now make up about $7.2 billion of the bank’s total deposits.

The bank also sold six banking centers in the fourth quarter, as it continues to reevaluate its footprint.

The allowance for loan losses represented 1.15 percent of total loans in the fourth quarter, compared to 1.14 percent in the fourth quarter of 2017. Total nonperforming loans increased on an annual basis, reaching $154.8 million, or .84 percent of total loans, in the fourth quarter, compared to $126.6 million, or 0.72 percent, at the same time in 2017.

Commercial Lending, HSA Drive Strong Q4 at Webster Bank

by Bram Berkowitz time to read: 2 min