While merger charges resulted in a quarterly loss for parent Webster Bank, bank executives say they have already seen the tie-up with Sterling National Bank reflected in financial performance.
Stamford, Conn.-based Webster Financial Corp., the holding company of Webster Bank and its HSA Bank division, posted a net loss of $20.2 million in the first quarter, down $0.14 per diluted share, compared to net income of $106.1 million, or $1.17 per diluted share, in the first quarter of 2021.
Webster completed the acquisition of Sterling on January 31, and first quarter results included expenses totaling $279.5 million before tax, or $204.3 million after tax, which were primarily merger-related expenses as well an initial deteriorated provision for non-purchase credit, the bank said in its first-quarter income statement.
Without those expenses, earnings per diluted share for the first quarter would have been $1.24, the bank said.
“This was a historic quarter for Webster as we completed our merger of equals with Sterling Bancorp,” John R. Ciulla, Webster’s president and chief executive, said in the statement. “We are excited about our future as a combined entity as we add scale, talent and capabilities that will enhance our customers’ experience. I’m also proud that we were able to produce strong underlying business trends while combining these complementary organizations. »
Webster in the first quarter also completed the acquisition of Bend Financial Inc., which the bank said would “advance our offering of a modern, differentiated approach to HSA management and engagement.”
Reflecting the acquisition of Sterling, Webster had total assets at the end of the first quarter of $65.1 billion, nearly doubling the $33.26 billion in assets from the first quarter of 2021.
The deposit balance at the end of the first quarter was $54.4 billion. Webster in the first quarter of 2021 had $28.5 billion in deposits.
The bank’s loan and lease balance was $43.5 billion at the end of the first quarter, compared to $21.3 billion in the first quarter of 2021. The bank had 80% of its balance in commercial loans and 20% in consumer loans.
Compared to December 31, when loans totaled $22.3 billion, Webster’s commercial loans increased by $8.8 billion, commercial real estate loans increased by $11 billion, residential mortgages increased by $1.4 billion and consumer loans increased by $88.3 million, the bank said.
“The power of our combined entity is already evident in our financial performance,” Glenn MacInnes, Webster’s executive vice president and chief financial officer, said in the release. “On an adjusted basis, we generated a return on assets of 1.37% and a return on tangible equity of 17%. We also posted significant growth in key product categories and expect to continue this momentum in the periods ahead. »