Waterbury, Conn.-based Webster Financial Corp., the holding company for Webster Bank N.A, which has branches across New England, reported a consolidated net loss of $31.6 million for the quarter ended June 30, as an $85 million provision for loan losses and a 10 percent increase in non-performing assets offset a $480 million growth in deposits.
For the first six months of 2009, the consolidated net loss is $42.7 million, compared to a loss of $4.1 million for the first six months of 2008 – a difference of $38.6 million.
Total loans declined $500 million in the second quarter compared to the previous quarter, from $12.1 billion as of March 31 to $11.6 billion at June 30. In the second quarter, residential mortgage loans declined by $302.1 million primarily in connection with the securitization of $203 million in conforming residential loans, the bank said. Consumer, commercial and commercial real estate loans declined by $86.7 million, $81.4 million and $14.5 million, respectively.
During the second quarter, Webster initiated and completed an exchange offer for its Series A Convertible Preferred Stock for shares of Webster common stock and cash, and exchanged its Webster Capital Trust IV Trust Preferred Securities for shares of Webster common stock.
Webster said it issued 11.3 million common shares in the exchange and paid $59 million in cash under the exchange offer for an effective cost of common issuance of $14.68 per share. The exchange offer generated $173 million of Tier 1 common equity and is expected interest and dividend expense by $19.2 million annually ($17.5 million after-tax). Webster said it continues to exceed all requirements for well capitalized regulatory ratios by a wide margin.
"The major development in the second quarter was our highly successful exchange offer which boosted our Tier 1 common equity by more than $170 million," said Webster Chairman and Chief Executive Officer James C. Smith. "In addition to strengthening our capital position, the additional common equity enhances our ability to compete vigorously for new business and to move forward confidently toward our goal of being New England’s bank."
