Webster Financial Corporation · NYSE:WBS
Webster Financial — Q1 2025 Earnings Presentation
33 slides from Webster Financial's earnings presentation, Apr 24, 2025
Slide 1: Earnings Conference Call First Quarter 2025
Earnings Conference Call First Quarter 2025 April 24, 2025 WEBSTER FINANCIAL CORPORATION
Slide 2: First Quarter 2025 Highlights
First Quarter 2025 Highlights REPORTED • Highlighted results: ◦ Total deposits grew $0.8 billion, or 1.3% LQ $361.2M ◦ Loans up $0.6 billion, or 1.0% LQ PPNR ◦ Efficiency ratio of 45.8% ◦ ROAA 1.15% ◦ ROATCE 15.93% $220.4M NET INCOME APPLICABLE TO COMMON 1 • NIM of 3.48% , up 4 bps organically, refl
Slide 3: Diversified and Stable Deposit Profile
Diversified and Stable Deposit Profile Consumer Bank / Commercial Bank Corporate • 195+ financial • Sophisticated • Longstanding top • Leading • Tech-enabled cash • Specialized centers treasury services player nationally, professional sweep program treasury activities complemented by an offering for
Slide 4: Balance Sheet — End of Period
Balance Sheet — End of Period ($ in millions) 1Q25 4Q24 Increase / (Decrease) 1Q24 Key Observations Cash and interest-bearing deposits $ 2,512 $ 438 $ 967 • Securities portfolio: Securities 17,659 208 1,378 ◦ AFS $9.4 billion, 4.67% yield, duration of 4.4 years Commercial loans 42,264 196 925 ◦ HTM
Slide 5: Loans
Loans ($ in millions, balances end of period) Loan Growth of 1.0% LQ LQ growth of $0.6 billion or 1.0% LQ Change YOY Change LQ Change YOY Change • Total loans up $0.6 billion from the prior quarter, with growth Portfolio 1Q25 driven by residential and sponsor & specialty categories ($) ($) (%) (%) C
Slide 6: Deposits
Deposits ($ in millions, balances end of period) Deposit Growth of 1.3% LQ LQ growth of $0.8 billion or 1.3% LQ Change YOY Change LQ Change YOY Change • Deposit growth of $0.8 billion, with strong core deposit 1Q25 ($) ($) (%) (%) growth partially offset by a reduction in non-core categories Demand
Slide 7: Income Statement
Income Statement Relative to 4Q24 Adjusted Reported Adjusted ($ in millions, except EPS) 1Q25 4Q24 Favorable / (Unfavorable)1 Key Observations Net interest income $ 612.2 $ 608.5 $ 3.7 Reported GAAP: Non-interest income 92.6 109.4 (16.8) • Net income of $226.9 million, up from $177.8 million in 4Q24
Slide 8: Net Interest Income
Net Interest Income ($ in millions) $608.5 $612.2 Linked Quarter NII $567.7 • Net interest income totaled $612.2 million, up from prior quarter by $3.7 million or 0.6%, driven by balance sheet growth and modest NIM 5.59% 5.53% 5.42% expansion, and partially offset by lower day count Linked Quarter N
Slide 9: Interest Rate Positioning
Interest Rate Positioning Balance sheet well positioned for up and down rate scenarios Rising vs. Flat Rate NII Scenarios Falling vs. Flat Rate NII Scenarios 1.4% 0.6% 0.8% 0.4% (0.1)% —% (0.5)% (0.9)% 4Q24 1Q25 4Q24 1Q25 Ramp Up 100 bps Ramp Up 200 bps Shock Down 100 bps Ramp Down 100 bps * Assumes
Slide 10: Non-Interest Income
Non-Interest Income ($ in millions) $109.4 (adj) $99.4 $109.4 $92.6 Non-interest income decreased $16.8 million vs. adjusted LQ $99.4 $97.5 $92.6 (adj) • The decline in income primarily reflects direct investment gain in 4Q24 and a swing in the credit valuation adjustment • The modeled credit valuat
Slide 11: Non-Interest Expense
Non-Interest Expense ($ in millions) $335.9 $340.4 $343.6 $11.9 Expense increased $3.3 million LQ $3.1 • The increase in expenses was driven by an increase in seasonal benefits costs, technology investments, partially offset by elevated Q4 expense levels driven by charitable contributions and above
Slide 12: Allowance for Credit Losses on Loans & Leases
Allowance for Credit Losses on Loans & Leases ($ in millions) Provision: $63 Provision: $78 * $74 $713 $688 $58 $690 $5 $4 $(61) $(55) * 1Q25 provision expense includes ~$20 million of reserve build for higher weighting on Coverage % 1.32% 1.31% recession scenario 1.34% 9/30/2024 4Q Net Charge- Loan
Slide 13: Key Asset Quality Metrics
Key Asset Quality Metrics ($ in millions) Nonperforming Loans, OREO, NPL Ratio Net Charge-Offs (Recoveries) $60.5 $565 $54.6 $461 $564 $37.9 $461 $289 1.06% 0.88% $0.4 $0.3 $284 0.56% $(0.4) 0.29% 0.47% 0.42% 1Q24 4Q24 1Q25 1Q24 4Q24 1Q25 Nonperforming Loans Nonperforming Assets NPL Ratio Commercial
Slide 14: Strong Capital Levels
Strong Capital Levels Webster Financial Capital Levels Webster Financial Capital Ratios 13.98% At Mar 31, At Dec 31, At Mar 31, 11.77% 2025* 2024** 2024** 11.26% Common Equity Tier 1 risk-based capital 11.26% 11.54% 10.57% 8.54% Tangible common equity 7.43% 7.45% 7.15% 10.00% Tangible equity 7.80% 7
Slide 15: 2025 Full Year Outlook
2025 Full Year Outlook No changes to full year Outlook except yield curve assumptions Loan Growth • Full year loan growth of 4% to 5% Deposit Growth • Deposit growth of 4% to 5% • Full year NII of $2.45 billion to $2.50 billion (non-FTE), excluding ~$55 million of FTE adjustments NII • Assumes 3 Fed
Slide 16: Supplemental Information
Supplemental Information pg. 17 to 19 Commercial Real Estate Portfolio pg. 20 to 23 Lines of Business Summary pg. 24 Net Interest Margin - Linked Quarter pg. 25 Earning Asset & Funding Mix pg. 26 to 27 Investment Portfolio pg. 28 Loan Originations & Mix pg. 29 Deposit Mix & Rate pg. 30 to 31 Non-GAA
Slide 17: Commercial Real Estate Portfolio
Commercial Real Estate Portfolio ($ in millions) Commercial Real Estate Portfolio ex. Owner Occupied Portfolio Characteristics Loan-to- Amortizing Classified Non- 12-Month • Portfolio balance of $18.7 billion Property Type Balances Value 1 DSCR 2 % Accrual % Maturities • Weighted Average LTV / Amort
Slide 18: Commercial Real Estate Portfolio
Commercial Real Estate Portfolio ($ in millions) Balances by Geography & Property Type Portfolio Profile and Metrics Other NY Property Type NYC County CT Southeast NJ MA Other • Portfolio is concentrated in NYC/NY, particularly ADC / Construction 26 % 19 % 10 % 12 % 6% 8% 18 % Multifamily Multifamil
Slide 19: Commercial Real Estate Portfolio
Commercial Real Estate Portfolio Investor CRE portfolio remains well diversified Investor CRE Portfolio of $18.7 billion Rent Regulated Multifamily Detail • $1.5 billion in exposure represents properties where > 50% of NOI is RR • $99 million in additional exposure where RR NOI between 25-50% ADC /
Slide 20: Commercial Banking
Commercial Banking ($ in millions) Total Loans Key Business Metrics Increase / (Decrease) $39,883 $40,616 $40,791 1Q25 4Q24 1Q24 $363 $338 $329 Loan originations $ 2,117 $ (660) $ (106) Loan fundings $ 1,662 $ (368) $ (12) Coupon on fundings 6.54% (0.07)% (0.75)% $20,079 $20,062 $20,490 Deposits $ 1
Slide 21: Healthcare Financial Services
Healthcare Financial Services ($ in millions) Total Footings Key Business Metrics Increase / (Decrease) 1Q25 4Q24 1Q24 $15,289 $15,353 $14,668 HSA accounts ('000) 3,452 155 133 HSA new accounts ('000) 303 205 22 $5,322 $5,108 $5,194 Ametros accounts ('000) 30 1 5 Ametros new accounts ('000) 1 — — $1
Slide 22: Healthcare Financial Services — PTNR Detail
Healthcare Financial Services — PTNR Detail ($ in millions) Favorable / HSA Bank PTNR Favorable / (Unfavorable) Ametros PTNR (Unfavorable) 1Q25 4Q24 1Q24 1Q25 4Q24 1Q24 Net interest income $ 84.0 $ 0.8 $ 3.5 Net interest income $ 12.4 $ 0.4 $ 6.7 Interchange revenue 14.6 3.0 0.6 Medical services fee
Slide 23: Consumer Banking
Consumer Banking ($ in millions) Total Loans $11,886 $12,267 $11,209 $1,796 $1,811 Key Business Metrics Increase / (Decrease) $1,822 1Q25 4Q24 1Q24 Loan originations - Consumer Lending $ 505 $ 13 $ 305 $9,387 $10,090 $10,456 Loan originations - Small Business $ 66 $ (33) $ (14) Coupon on fundings 6.
Slide 24: Net Interest Margin — Linked Quarter
Net Interest Margin — Linked Quarter 1Q25 4Q24 Increase / (Decrease) Average Yield/ Average ($ in millions) Balance Interest Rate Balance Interest BPs 1 Securities $ 18,114 $ 196.8 4.35 % $ 131 $ 4.5 7 Money market & other 2,143 23.9 4.47 641 4.6 (58) Loans held for sale 29 — 0.21 (94) (2.8) (906) C
Slide 25: Earning Asset & Funding Mix
Earning Asset & Funding Mix ($ in millions, end of period balances) Earning Asset Mix Type Balance Total % Floating % Periodic % Fixed % • Floating and periodic rate loans represent 42% of CRE Loans $ 21,383 29 % 53 % 6% 41 % earning assets: C&I Loans 20,881 29 54 14 32 Resi & Other Consumer 9,802 1
Slide 26: Investment Portfolio
Investment Portfolio ($ in millions, end of period balances) Investment Securities Duration / Yield $17,451 $17,659 $16,281 $9,007 $9,361 4.5 4.8 4.7 $8,601 4.1 3.6 3.0 $7,680 $8,444 $8,298 1Q24 4Q24 1Q25 1Q24 4Q24 1Q25 HTM Securities AFS Securities Portfolio Duration (years) Purchase Duration (year
Slide 27: Investment Securities
Investment Securities ($ in millions, end of period balances; portfolio duration in years) Available-for-Sale March 31, 2025 December 31, 2024 Increase / (Decrease) Balances Portfolio Duration Balances Portfolio Duration Balances Portfolio Duration Government Agency Debentures $ 192 $ 186 $ 6 Munici
Slide 28: Loan Originations & Mix
Loan Originations & Mix ($ in millions) Originations by Loan Portfolio 1Q25 4Q24 1Q24 End of period balances Full quarter originations Balance Originations Balance Originations Balance Originations Commercial non-mortgage $ 19,496 $ 1,488 $ 19,273 $ 2,288 $ 17,976 $ 1,003 Asset-based lending 1,385 1
Slide 29: Deposit Mix & Rate
Deposit Mix & Rate ($ in millions) End of period balances 1Q25 4Q24 1Q24 Full quarter cost Balance Rate Balance Rate Balance Rate Demand $ 10,134 —% $ 10,313 —% $ 10,213 —% Interest-bearing checking 8,688 1.71 8,829 1.88 8,627 1.80 Health savings accounts 9,181 0.16 8,951 0.16 8,603 0.15 interLINK 8
Slide 30: Non-GAAP Reconciliations
Non-GAAP Reconciliations ($ in thousands, except per share amounts) Efficiency Ratio 1Q25 4Q24 1Q24 Non-interest expense $ 343,644 $ 340,377 $ 335,923 Less: Foreclosed property activity 517 (32) (330) Intangible assets amortization 9,237 9,681 9,194 Operating lease depreciation 16 121 663 FDIC speci
Slide 31: Non-GAAP Reconciliations
Non-GAAP Reconciliations ($ in thousands) Tangible Common Equity Ratio 1Q25 4Q24 1Q24 Stockholders' equity $ 9,204,154 $ 9,133,214 $ 8,747,498 Less: Goodwill and other intangible assets 3,193,132 3,202,369 3,250,909 Tangible stockholders' equity 6,011,022 5,930,845 5,496,589 Less: Preferred stock 28
Slide 32: Forward-Looking Statements
WBS 1Q25 Financial Review Forward-Looking Statements This presentation contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as “believes,” “outlook,” “expects,” “target,” “continue
Slide 33: Webster Financial Corporation
S) Webster Financial Corporation