NYSE$WBS

Webster Financial Corporation · Q1 2020 earnings

Q1 2020 earnings · · Investor relations

Briefing

Reported earnings of $0.39 per diluted share, impacted by CECL adoption and COVID-19.

Webster Financial Corporation announced earnings applicable to common shareholders of $36.0 million, or $0.39 per diluted share, for the quarter ended March 31, 2020. The results reflect a provision for credit losses of $76.0 million due to the adoption of CECL and the impact of COVID-19.

  • Results include the adoption of CECL and the impact of COVID-19 resulting in a provision of $76.0 million; allowance coverage of 1.60 percent.
  • Revenue of $304.2 million.
  • Loan growth of $2.1 billion, or 11.0 percent from a year ago, led by commercial and commercial real estate, which increased 15.6 percent.
  • Deposit growth of $1.8 billion, or 7.7 percent from a year ago, with growth of $527 million, or 8.5 percent, in HSA deposits.

Headline financials

Total Revenue

$231M

Previous: $310M-25.6%
EPS (adj)

$0.39

Previous: $1.06-63.2%
Net Interest Margin

3.2%

No prior period
Efficiency Ratio

58.0%

No prior period
Capital Expenditures

$3.55M

Previous: -$5.96M+159.5%
Free Cash Flow

-$65.1M

Previous: $93.8M-169.5%
Net Income

$38.2M

Previous: $99.7M-61.7%
Operating Income

$49.3M

Previous: $254M-80.6%
Gross Profit

$304M

Previous: $310M-2.1%
Cash & Equivalents

$268M

Previous: $221M+21.4%
Total Assets

$31.7B

Previous: $28.2B+12.1%
Stock-Based Comp

$2.61M

Previous: $2.98M-12.3%

Revenue & EPS history

Webster · Revenue · Quarterly

$231M

Q1 2020-25.6%vs Q1 2019
Beat estimate in 8 of 16 quarters(50%)
ActualEstimate

Revenue by segment

Webster · $309M total across 3 segments · Q1 2020

  • Consumer Banking
    $127M
  • Commercial Banking
    $113M
  • Healthcare Financial
    $69.1M

Forward guidance

Webster has responded quickly with programs to support our Employees, Customers and the Communities where we live and work.

Tailwinds

  • 75% of our bankers are currently working remotely
  • Special pay considerations and additional PTO for essential front line employees
  • No furloughs; bankers are at 100% pay
  • Zero-interest loans up to $5,000 are available to assist employees and their families facing unforeseen challenges due to COVID-19
  • Instituted a 90-day foreclosure moratorium on residential loans

Headwinds

  • Increased deposit limits; waiving penalties for early CD withdrawals
  • Waiving or reducing certain fees
  • Not reporting payment deferrals to credit bureaus
  • Participating in the SBA Paycheck Protection Program with the initial round resulting in approximately $650 million in SBA approved loans
  • Payment modifications (needs based / COVID related impact)

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q1 2020

Historical avgQ1 2020

+0.5%

Avg return

Earnings day

+0.8%

Avg return

5 days after

+2.8%

Avg return

30 days after

51%

35 / 69 earnings

Positive

+14.5%

Q3 2020

Best reaction

-11.9%

Q1 2021

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026-0.6%+0.5%+1.1%
Q4 2025-3.2%-2.6%+10.4%
Q3 2025+0.4%+3.3%+4.3%
Q2 2025-1.6%-0.1%+5.3%
Q1 2025+1.6%+1.1%+8.7%
Q4 2024+4.0%+2.4%+2.0%
Q3 2024+8.8%+6.8%+23.5%
Q2 2024-5.0%+0.8%-7.6%
Q1 2024-3.5%-4.5%-7.1%
Q4 2023+0.5%+0.1%-7.9%
Q3 2023-2.9%-5.6%+9.8%
Q2 2023+1.3%+3.4%-5.6%
Q1 2023-2.6%-9.0%-9.5%
Q4 2022+7.5%+11.3%+12.7%
Q3 2022+4.8%+8.9%+8.4%
Q2 2022-2.8%-2.5%+5.9%
Q1 2022+2.7%+3.9%+0.2%
Q4 2021-1.5%-1.6%-2.8%
Q3 2021-0.8%-1.4%-2.7%
Q2 2021-0.9%-1.4%+0.8%
Q1 2021-11.9%-7.1%-0.3%
Q4 2020-2.2%-2.8%+0.1%
Q3 2020+14.5%+5.4%+29.1%
Q2 2020+1.7%-1.0%+2.9%
Q1 2020-1.9%+1.1%+6.6%
Q4 2019-5.2%-8.1%-10.5%
Q3 2019-6.1%-4.8%+0.5%
Q2 2019+4.7%+5.6%-2.9%
Q1 2019-2.8%+0.3%-7.5%
Q4 2018+5.5%+4.1%+4.6%
Q3 2018+4.3%+1.1%+1.9%
Q2 2018+1.5%+2.8%+2.3%
Q1 2018+8.7%+10.1%+18.1%
Q4 2017+0.1%-1.6%-5.2%
Q3 2017+4.7%+4.5%+0.8%
Q2 2017-3.6%-3.4%-12.8%
Q1 2017+3.4%+6.8%-1.5%
Q4 2016+0.2%+1.5%+7.0%
Q3 2016+4.3%+4.8%+23.2%
Q2 2016-1.7%-1.1%+4.1%
Q1 2016-1.4%
Q4 2015-2.6%
Q3 2015-1.5%
Q2 2015-3.3%
Q1 2015-3.6%
Q4 2014+5.7%
Q3 2014+2.7%
Q2 2014-3.7%
Q1 2014+2.7%
Q4 2013+4.6%
Q3 2013+5.3%
Q2 2013+3.6%
Q1 2013-4.0%
Q4 2009+1.3%
Q4 2012+3.7%
Q3 2012-6.0%
Q2 2012+6.3%
Q1 2012+0.4%
Q4 2011-3.8%
Q4 2010-3.8%
Q4 2008-3.8%
Q1 2010-3.8%
Q3 2011+5.5%
Q2 2011-0.9%
Q1 2011+1.2%
Q3 2010+5.3%
Q3 2009+5.3%
Q2 2009-0.5%
Q2 2010-0.5%

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