Webster Financial Corporation · NYSE:WBS
Webster Financial — Merger or Acquisition (April 2021)
27 slides from Webster Financial's merger presentation, Apr 19, 2021
Slide 1: Webster + Sterling: Creating Scale, Unlocking Growth and Value
April 19 , 2021 Webster + Sterling Creating Scale, Unlocking Growth and Value
Slide 2: Caution Regarding Forward-Looking Statements
CAUTION REGARDING FORWARD - LOOKING STATEMENTS This communication may contain certain forward - looking statements, including, but not limited to, certain plans, expectations, g oals, projections, and statements about the benefits of the proposed transaction, the plans, objectives, expectations and
Slide 3: Non-GAAP Financial Measures
Non - GAAP Financial Measures In addition to results presented in accordance with GAAP, this presentation contains certain non - GAAP financial measures . A reconciliation of tangible book value and other ratios, as adjusted, is included on page 27. We believe that providing certain non - GAAP finan
Slide 4: Presenters
4 PRESENTERS John R. Ciulla Chairman, President & CEO Glenn I. MacInnes CFO Jack L. Kopnisky President & CEO Luis Massiani COO
Slide 5: Creating Scale, Unlocking Growth and Value
5 Creating Scale, Unlocking Growth and Value Scale • Uniting strong banks with complementary strategies to create a powerhouse Northeast player with national reach Growth • Unlocking compelling revenue growth opportunities in commercial lending, health savings, fee - based businesses, and consumer a
Slide 6: Powerhouse Northeast Bank
6 Powerhouse Northeast Bank ROATCE 3 run - rate after realizing cost synergies 17 % LOANS $ 42B DEPOSITS $ 52B FLOATING RATE loans / total loans 2 63 % REGIONAL RANK by total assets COMMERCIAL loans / total loans 1 80 % ASSETS $ 63B Note: Financial data as of March 31, 2021; Pro forma balance sheet
Slide 7: Combined Platform Growth and Value Unlocked
7 Combined Platform Growth and Value Unlocked Relationship - and Expertise - Based Commercial Banking • Preferred banking partner to sophisticated companies and sponsors in targeted segments • Bankers, organized as teams, have deep relationships and expertise • Grow relationships with existing clien
Slide 8: Significant Loan Growth Potential
17% 4% 10% 24% 8% 16% 8% 27% 17% 19% 52% 36% 33% 8% 20% Webster Sterling Together Consumer & Other Commercial real estate Diversified C&I Traditional C&I Sponsor & Specialty Significant Loan Growth Potential • Northeast corridor footprint is the largest in the nation by population • The combined com
Slide 9: Best-in-Class Deposit Franchises
9 Best - in - Class Deposit Franchises • Consumer – 200+ financial centers serving consumers and small businesses in the highly populated Northeast I - 95 corridor and Long Island • Commercial – Sophisticated treasury services offerings for commercial clients • HSA Bank – Longstanding top 3 player n
Slide 10: Shared Values, Benefits for All Stakeholders
10 Shared Values, Benefits for All Stakeholders COMPLEMENTARY VALUES BASED CULTURES and robust risk management EXPAND PRODUCTS AND SERVICES to better serve customers $ 6.5 M+ in a n n ua l corporate giving 100,000+ VOLUNTEER HOURS in communities where we live and work COMMITMENT to advancing our pro
Slide 11: Transaction Structure and Financial Impact
Transaction Structure and Financial Impact
Slide 12: Merger of Equals Structure & Exchange Ratio
12 Merger of Equals Structure & Exchange Ratio • Sterling Bancorp to merge into Webster Financial Corporation; Sterling National Bank to merge into Webster Bank, N.A. • 100% stock consideration • 0.463 of a Webster share for each Sterling share Leadership • Jack L. Kopnisky , President & CEO of Ster
Slide 13: Key Financial Assumptions
13 Key Financial Assumptions Standalone EPS • 2022 consensus EPS 1 : Webster $4.24, Sterling $2.20 Annual Cost Savings • $120M pre - tax, representing 11% of combined 2022 expenses 2 (o ver and above Webster's announced 2021 efficiency plan) • Net of planned investments in people, products and techn
Slide 14: Exceptional Financial Benefits
14 Exceptional Financial Benefits GAAP EPS ACCRETION to Sterling 1 > 10% GAAP EPS ACCRETION to Webster 1 > 20% TBVPS DILUTION 2 < 2% TBVPS EARNBACK 3 < 1 year EXCESS CAPITAL generated annually 4 ~$ 440M Note: Financial data as of March 31, 2021; Market data as of April 16, 2021 1 Run - rate GAAP EPS
Slide 15: Enhanced Opportunity to Aggressively Grow HSA Bank
15 Enhanced Opportunity to Aggressively Grow HSA Bank Source: Company filings; SNL Financial 1 Includes all U.S. banks with total consolidated assets between $20 – 100B as of December 31, 2020, excluding banks involved in ma jor M&A transactions since 2015 2 Average of disclosed net interest margins
Slide 16: Efficiency Improvements Enable Investments
16 Efficiency Improvements Enable Investments Conservative, Achievable Cost Savings Significantly Enhanced Investment Capacity • $120M in identified pre - tax cost savings • 11% of combined 2022 expenses 1 ( over and above Webster's announced 2021 efficiency plan) • Net of planned investments in peo
Slide 17: Peer-Leading Excess Capital Generation
17 Peer - Leading Excess Capital Generation 10.5 % 11.3 % Closing Target Annual $M Synergized earnings 1 ~$930 ( – ) Capital for organic growth 2 ~(190) ( – ) Dividends 3 ~(300) Excess capital generation ~$440 Per share, before repurchases ~$2.50 Note: Financial data as of March 31, 2021; Market dat
Slide 18: Thorough, Reciprocal Due Diligence
18 Thorough, Reciprocal Due Diligence LOCAL DENSITY from New York to Boston BY THE NUMBERS EXTENSIVE SCOPE Consumer Banking Commercial Banking Digital Banking Credit CECL & Capital Stress Testing CRA Enterprise Risk Management BSA & Compliance Audit Finance, Tax & Accounting Legal Human Resources Lo
Slide 19: Webster + Sterling vs. $50-100B Asset Banks
19 Webster + Sterling $50 – 100B asset banks 1 Webster Sterling 2022 ROAA 1.08% 1.25% 1.40% 0.97 % 2022 ROATCE 13% 14% 17% 13 % CET1 11.9% 11.9% 11.3 % 9.9 % Price / run - rate 2022 EPS 13.5x 10.8x 10.9x 2 12.7 x Significant Upside Source: FactSet, SNL Financial Note : Financial data as of most rece
Slide 20: Driving Growth and Value
20 Driving growth and value Creating scale Delivering exceptional performance Maintaining our values and culture Webster + Sterling
Slide 21: Appendix
Appendix
Slide 22: Delivers on All Key Elements Necessary for a Successful Merger
22 Webster + Sterling Strong capital position and adequate loan loss reserves x Established ERM systems and platform x Positive regulatory relationships x Strong earnings performance, internal capital generation and capital management strategy x Diversified and low cost core funding and liquidity pr
Slide 23: Shared Values
23 Shared Values We take personal responsibility for meeting our customers’ needs . We respect the dignity of every individual . We earn trust through ethical behavior . We give of ourselves in the communities we serve . We work together to achieve outstanding results . THE WEBSTER WAY Accountabilit
Slide 24: Pro Forma Balance Sheet
24 As of March 31, 2021 Illustrative at closing¹ ($B) Webster Sterling Webster + Sterling Assets Total cash and securities $10.3 $5.2 $13.9 Net loans 21.0 20.9 43.4 Total intangibles 0.6 1.8 2.7 Other assets 1.5 2.1 3.9 Total assets $33.3 $29.9 $63.9 Liabilities and Equity Deposits $28.5 $23.8 $51.9
Slide 25: Earnings Per Share Accretion
Earnings Per Share Accretion 25 Note : Financial data as of March 31, 2021; Market data as of April 16, 2021 1 $ 120 million in pre - tax cost savings identified on a fully synergized basis, net of targeted investments 2 Core deposit intangible of 0.50% of Sterling’s $21 billion core deposits, amort
Slide 26: Purchase Accounting Summary
Purchase Accounting Summary 26 Millions of $M basic shares $ per share Webster tangible book value as of March 31, 2021¹ $2,568 90.4 $28.41 (+) Three quarters of consensus earnings prior to close 255 (–) Three quarters of consensus per share common dividends (108) (–) One-time adjustments related to
Slide 27: Reconciliations to GAAP Financial Measures
27 Webster Financial Corporation (In thousands, except per share data) Tangible equity: Shareholders' equity (GAAP) $3,272,928 Less: Goodwill and other intangible assets (GAAP) 559,617 Tangible shareholders' equity (non-GAAP) $2,713,311 Tangible common equity: Tangible shareholders' equity (non-GAAP
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