| Webster Financial Corp. wound down 2015 with double-digit increases in loan growth and a bump in earnings, and company leadership looked toward the year ahead – and the Boston expansion in particular – with optimism.
For the fourth quarter, Webster’s net income available to common shareholders totaled $50.6 million, or 55 cents per share, compared with $48.4 million, or 53 cents per share, in the year-ago period. For the full year 2015, it totaled $197.6 million, or $2.15 per share, compared with $189.2 million, or $2.08 per share, in 2014.
Increases in loan growth and noninterest income helped boost the Waterbury, Connecticut-based company’s bottom line, while company leadership also boasted that Webster had maintained its efficiency ratio at or below 60 percent for 11 consecutive quarters, totaling 59.87 in the three-month period ended Dec. 31.
As Webster plots its expansion into Boston with its acquisition of the 17 branches Citibank has left behind, Chairman and CEO James C. Smith said the bank has no immediate plans to build out more branches – but he did not rule out the possibility.
“We are very happy with the Boston footprint. It is possible we might add a branch or two as we get used to the location, but we think these 17 locations, plus our flagship … gives us a great footprint in that market,” Smith said, responding to an investor’s question.
The holding company for Webster Bank has said previously that it expects the Boston acquisition to be dilutive to earnings this year, to break even next year and to be accretive to earnings thereafter.
Webster also benefitted from its HSA Bank business in the fourth quarter and its January 2015 acquisition of JPMorgan’s HSA business. Year-over-year, deposits increased $2.3 billion, or 14.7 percent, in the period ended Dec. 31, driven largely by the HSA business. The HSA Bank also brought in $8.3 million more in deposit service fees in the fourth quarter, compared with the year-ago period.
Total non-interest income increased $6.6 million, or 12 percent, to $60.3 million in the fourth quarter. Besides HSA deposit service fees, Webster also saw a $1.3 million increase in mortgage banking activities. Those increases were offset by decreases of $2.5 million in loan-related fees and $500,000 in wealth and investment services.
Total loans increased nearly 13 percent year-over-year to $15.7 billion in the fourth quarter. Compared with the year-ago period, commercial, residential mortgage, commercial real estate and consumer loans increased by $629.5 million, $551.8 million, $437.2 million, and $153.2 million, respectively.
Total nonperforming loans declined to $139.9 million, or 0.89 percent of total loans, compared with $159 million, or 1.04 percent, at Sept. 30 and $129.9 million, or 0.93 percent, a year ago. Total paying nonperforming loans were $48.7 million compared to $45 million at Sept. 30 and $30.5 million a year ago.
