Earnings
Conference Call
Fourth Quarter 2022
January 26, 2023
WEBSTER FINANCIAL CORPORATION
Fourth Quarter 2022 Highlights
REPORTEDADJUSTED
- Reported results include merger/initiative related charges of $50.4 million pre-tax
- Adjusted results highlight strong performance
- Loan growth in diverse segments
- Asset repricing continues to outpace deposits
- LQ growth in NII of 9.3%
- LQ growth in PPNR of 9.5%
- Efficiency ratio of 40%
- NIM expanded 20 bps to 3.74%
- Announced acquisition of interLINK will further diversify our funding sources
- ~$9 billion of managed funds increases liquidity options
- Strong capital position; provides optionality
- CET1 of 10.7%
- TCE of 7.4%
Note: Adjusted results are non-GAAP. See non-GAAP reconciliation on pages 6 and 33 through 35.
$356.2M
PPNR
$240.6M
NET INCOME AVAILABLE TO COMMON
$1.38
DILUTED EPS
1.40%
ROAA
12.54%
ROACE
19.93%
ROATCE
$406.6M
PPNR
$277.6M
NET INCOME AVAILABLE TO COMMON
$1.60
DILUTED EPS
1.61%
ROAA
14.47%
ROACE
22.92%
ROATCE
WEBSTER FINANCIAL CORPORATION | 2 |
Full Year 2022 Highlights
($ in millions, unless noted)
Adjusted EPS +15.9%
$5.62
$4.85
$4.42
$3.72
2021 | 2022 |
Reported EPS | Adjusted EPS |
Net Interest Margin:
2.84%3.49%
Adjusted ROATCE:
16.83%19.84%
Key Results
- Reported GAAP EPS of $3.72, down 15.8% from prior year primarily related to merger related charges
- Adjusted EPS of $5.62, up 15.9%
- Significant increase in profitability reflects the strength of the merger and balance sheet positioning
- Adjusted return on average tangible common equity of 19.8%
- Full year efficiency ratio of 43.4%
- Post-mergerloan growth of 15%
WEBSTER FINANCIAL CORPORATION | 3 |
Overview of interLINK
interLINK Business Overview within Webster
- interLINK is a tech-enabled deposit management platform administering ~$9 billion of deposits from over 520 thousand retail brokerage accounts
- Leverages in-house technology to orchestrate the precise movement of cash from brokerage accounts to insured deposit institutions ("IDIs") in compliance with FDIC and other banking regulations
520k
Brokerage Accounts
Deposits
Broker Dealers
Deposits &
Withdrawal
Instructions
Manages
Allocation
Instructions
Fund
Liquidity
Needs
Relationship Management
50+ IDIs | ||
IDI deposits from each | ||
Excess | ||
Deposits | brokerage account | |
< $250K |
Strategically Aligned; Complementary Capabilities
Managed Deposits ($bn)
Adds tech-enabled deposit gathering platform complementary to our already differentiated channels
Stable source of core deposits: 100% historical Broker Dealer retention and majority of clients in long-term contracts
Adds flexibility to size liquidity based on near term needs; highly scalable technology with low operating expenses
Potential for significant growth, serving an addressable market of >$500bn of deposits1
Limited integration risk and no credit risk
WEBSTER FINANCIAL CORPORATION | 4 |
Source: Company information.
- Estimated based on publicly known administered deposits of market participants.
Tech-Enabled Core Deposit Gathering Platform Complementary to Our Already Differentiated Channels
Consumer Bank /
• | 200+ financial centers |
serving consumers and | |
small businesses in the | |
highly populated | |
Business | Northeast I-95 corridor |
Description | and Long-Island |
• | Complemented by online |
platform (BrioDirect) |
Commercial Bank | Corporate | ||||||
• Sophisticated treasury | • | Longstanding top 3 | • Specialized treasury | • Tech-enabled cash | |||
services offering for | players nationally, with | activities | sweep program | ||||
commercial clients | strong growth | administrator for Broker- | |||||
• Full credit and deposit | characteristics | Dealers | |||||
relationships with | • | Offers a comprehensive | |||||
targeted deposit | consumer-directed | ||||||
gathering in select | healthcare solution | ||||||
verticals including law | |||||||
firms, NFP, property | |||||||
mgmt, and municipal |
Volume of | $23.6bn | $19.6bn | $7.9bn | $2.9bn | ~$9bn managed | |||
Deposits | 44% of Total | 36% of Total | 15% of Total | 5% of Total | up to 75% available | |||
to Webster over time | ||||||||
• | Branch deposits are | • Lower cost, operating | • High growth, sticky, low | • | Low operating cost | • | Access to core | |
sticky and low cost, | deposits | cost | • | Sticky deposits | deposits | |||
complemented by low | • | Significant flexibility; | ||||||
Key Benefits | all-in cost digital channel | deposit onboarding | ||||||
based on near term | ||||||||
liquidity needs | ||||||||
• | Highly scalable with | |||||||
low operating costs | ||||||||
WEBSTER FINANCIAL CORPORATION | 5 | |||||||
Source: Company information. |
This is an excerpt of the original content. To continue reading it, access the original document here.
Attachments
- Original Link
- Original Document
- Permalink
Disclaimer
Webster Financial Corporation published this content on 26 January 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 26 January 2023 12:42:07 UTC.