EX-99.1 2 y23347exv99w1.htm EX-99.1: PRESS RELEASE EX-99.1
 

[Webster Bank Letterhead]

Press Release

Exhibit 99.1

     
Media Contact
Clark Finley 203-578-2287		   Investor Contact
Terry Mangan 203-578-2318

WEBSTER REPORTS QUARTERLY EARNINGS PER SHARE OF $.81

               SECOND QUARTER TRENDS COMPARED TO PRIOR YEAR:

               •     Commercial loans grow by 12 percent

               •     Deposits grow by 6 percent

               •     Noninterest income increases by 6 percent

               •     Wholesale borrowings decline to 22 percent of assets

WATERBURY, Conn., July 25, 2006 – Webster Financial Corporation (NYSE: WBS), the holding company for Webster Bank, N.A., today announced net income of $43.1 million in the second quarter compared to $46.3 million a year ago. Net income per diluted share was $.81 compared to $.85 a year ago. For the first six months of 2006, net income was $87.0 million compared to $93.8 million a year ago. Net income per share was $1.63 and $1.73 in the respective periods.

Among the factors impacting the quarter were a change in the timing of dividends from the Federal Home Loan Bank of Boston (FHLB Boston) and the continuing effects of a flattened yield curve. Webster did not record any dividend income on its FHLB Boston investment during the quarter, but the FHLB Boston has indicated that it expects to declare the equivalent of two dividend payments in the third quarter. Earnings for the second quarter of 2006 would have been $.02 per share higher had the dividend been recorded. The flattened yield curve reduced wholesale spread revenues from investment securities activities in the quarter, as the cost of borrowings exceeded the yield on securities and reduced earnings per share by $.01 compared to a favorable wholesale spread contribution of $.13 per share a year ago.

Cash net income, which adds stock-based compensation and intangible amortization expenses back to net income, was $46.9 million, or $.88 per share, compared to $51.1 million, or $.94 per share, in the year-ago quarter. For the first six months, cash net income was $94.9 million, or $1.78 per share, compared to $103.2 million, or $1.90 per share, a year ago.

 

[Webster Bank Letterhead]

Press Release

“Solid growth in our core franchise activities underscores Webster’s strategic progress,” stated Webster Chairman and Chief Executive Officer James C. Smith. “Double-digit combined growth in commercial and consumer loans, coupled with solid growth in deposits and fees and reductions in securities and borrowings, further strengthens our balance sheet and improves earnings quality. We’re building on our position as the largest independent bank headquartered in New England.”

Commercial loans, including commercial real estate loans, were $5.0 billion at June 30, 2006, up 12 percent from a year ago. Commercial and industrial loans were $3.2 billion, up 14 percent, and commercial real estate loans were $1.8 billion, up 9 percent. Consumer loans, primarily home equity loans and lines, increased 7 percent to $2.9 billion compared to $2.7 billion a year ago. Commercial and consumer loans grew at a combined rate of 10 percent from a year ago while residential loans, which totaled $4.9 billion, grew by 4 percent.

The company also noted that Webster Bank has reached an informal agreement with the Office of the Comptroller of the Currency to address general bank compliance, including bank secrecy act and related money laundering risks, flood acts compliance and the internal audit program. These increased compliance efforts, already well under way and receiving significant management attention, are not expected to have a material impact on Webster’s operations or earnings.

Revenues

Total revenues, consisting of net interest income plus total noninterest income, were $183.9 million in the second quarter compared to $183.5 million a year ago. Net interest income totaled $126.8 million in the second quarter compared to $129.8 million in the year-ago period, a decrease of 2 percent. FHLB Boston’s decision to defer the timing of dividends represented $1.8 million of the decline. Strong growth in higher yielding commercial and consumer loans was offset by reduced wholesale spread revenue from the securities portfolio.

Webster’s net interest margin (annualized tax-equivalent net interest income as a percentage of average earning assets) was 3.13 percent compared to 3.32 percent in the second quarter of 2005. The net interest margin would have been 4 basis points higher in this quarter had FHLB Boston dividend income been recorded as in prior periods. The decline from a year ago primarily reflects deposit and borrowing costs increasing faster than yields on earning assets due to the flattening of the yield curve.

 

[Webster Bank Letterhead]

Press Release

Total noninterest income was $57.1 million in the second quarter compared to $53.6 million a year ago, an increase of 6 percent. Deposit service fees totaled $24.2 million and increased 11 percent from a year ago reflecting growth in retail banking activities. Loan and loan servicing fees totaled $9.2 million and increased 26 percent aided by higher levels of line usage fees and prepayment penalties. Wealth management fees totaled $6.9 million and increased 15 percent based on strength in trust fees and investment services revenues. These increases were partially offset by declines of $0.6 million in insurance revenue and $0.5 million in gains on sale of loans.

The provision for credit losses totaled $3.0 million in the second quarter and exceeded net loan charge-offs by $0.5 million. The provision was $2.0 million in the second quarter of 2005, which exceeded net loan charge-offs by $2.3 million as a result of a net loan recovery of $0.3 million in that quarter. The annualized net loan charge-off ratio was 0.08 percent of average loans compared to (0.01) percent in the second quarter a year ago and 0.03 percent for the full year 2005.

Expenses

Total noninterest expenses were $117.3 million in the second quarter compared to $113.5 million a year ago, an increase of 3 percent. Contributing to this increase were ongoing investments in de novo branch expansion, HSA Bank and the higher net cost of our new core systems. Adjusting for these items and non-recurring core infrastructure conversion project charges in the second quarter of 2005, noninterest expenses increased by 2 percent to $107.7 million compared to $105.4 million a year ago. This increase includes new revenue-generating personnel in Webster’s lines of business, the ongoing build-out of the compliance function and other employee-related costs.

Balance Sheet Trends

Total assets were $18.0 billion at June 30, 2006 and increased 3 percent from a year ago. Total loans were $12.7 billion and increased $0.9 billion, or 8 percent, from a year ago while securities totaled $3.4 billion and declined by $0.4 billion, or 11 percent. Deposits were $12.2 billion and increased $0.6 billion, or 6 percent, with contributions from our de novo branching program and ongoing growth in health savings account deposits at HSA Bank.

“Webster continues to deliver sustained organic growth through the strength of our customer relationships,” stated Webster President and Chief Operating Officer William T. Bromage.

 

[Webster Bank Letterhead]

Press Release

“Our ability to address the totality of customer financial needs in our expanding markets underpins Webster’s future opportunities for growth.”

Demand and NOW deposits each grew by 3 percent compared to a year ago while certificates of deposit balances grew by 16 percent as customers continued to shift balances to this product category. The $0.4 billion reduction in securities compared to a year ago funded $0.3 billion of loan growth in excess of deposit growth and contributed to a $0.2 billion reduction in wholesale borrowings over the past year. As a result, wholesale borrowings declined to 22 percent of total assets at June 30 compared to 24 percent a year ago.

Book value per common share of $31.27 at June 30, 2006 increased from $29.94 a year ago. Tangible book value per share of $18.36 at June 30 increased from $17.18 last year. The ratio of tangible equity to tangible assets increased to 5.48 percent at June 30 compared to 5.38 percent a year ago. Return on average tangible equity was 17.4 percent in the second quarter compared to 20.2 percent a year ago while the cash return on average tangible equity was 18.9 percent and 22.3 percent in the respective periods.

Asset Quality

Nonperforming assets totaled $64.3 million, or 0.36 percent of total assets, at June 30, 2006 compared to $61.9 million, or 0.35 percent, at March 31 and $44.2 million, or 0.25 percent, a year ago.

The allowance for credit losses, which consists of the allowance for loan losses and the reserve for unfunded commitments, was $156.5 million, or 1.23 percent of total loans, at June 30 compared to $154.8 million, or 1.31 percent, a year ago. The ratio of the allowance to nonperforming loans was 253 percent at June 30 compared to 369 percent a year ago.

***

 

[Webster Bank Letterhead]

Press Release

Webster Financial Corporation is the holding company for Webster Bank, National Association and Webster Insurance. With $18.0 billion in assets, Webster provides business and consumer banking, mortgage, insurance, financial planning, trust and investment services through 160 banking offices, 308 ATMs, telephone banking and the Internet. Webster Bank owns the asset-based lending firm Webster Business Credit Corporation, the insurance premium finance company Budget Installment Corp., Center Capital Corporation, an equipment finance company headquartered in Farmington, Connecticut and provides health savings account trustee and administrative services through HSA Bank, a division of Webster Bank.

For more information about Webster, including past press releases and the latest Annual Report, visit the Webster website at www.websteronline.com.

***

Conference Call

A conference call covering Webster’s 2006 second quarter earnings announcement will be held today, Tuesday, July 25, at 11:00 a.m. Eastern Time and may be heard through Webster’s investor relations website at www.wbst.com, or in listen-only mode by calling 1-877-407-3980 or 201-689-8475 internationally. The call will be archived on the website and available for future retrieval.

Forward-looking Statements

Statements in this press release regarding Webster Financial Corporation’s business that are not historical facts are “forward-looking statements” that involve risks and uncertainties. For a discussion of such risks and uncertainties that could cause actual results to differ from those contained in the forward-looking statement, see “Forward Looking Statements” in Webster’s Annual Report for 2005. Except as required by law, Webster does not undertake to update any such forward looking information.

Non-GAAP Financial Measures

In addition to results presented in accordance with GAAP, this press release contains certain non-GAAP financial measures. We believe that providing certain non-GAAP financial measures, such as cash basis net income, provides investors with information useful in understanding our financial performance, our performance trends and financial position. A reconciliation of cash basis net income to net income is included in the accompanying financial tables, elsewhere in this report.

—30—

 

WEBSTER FINANCIAL CORPORATION
Selected Financial Highlights (unaudited)
                                 
    At or for the Three     At or for the Six  
    Months Ended June 30,     Months Ended June 30,  
(In thousands, except per share data)   2006     2005     2006     2005  
 
Net income and performance ratios (annualized):
                                
 
                                
Net income
   $ 43,143     $ 46,258     $ 86,995     $ 93,753  
Net income per diluted common share
     0.81       0.85       1.63       1.73  
Return on average shareholders’ equity
     10.34 %     11.57 %     10.44 %     11.85 %
Return on average tangible equity
     17.44       20.20       17.63       20.74  
Return on average assets
     0.96       1.07       0.98       1.09  
Noninterest income as a percentage of total revenue
     31.04       29.24       30.41       29.25  
Efficiency ratio (a,d)
     63.80       61.86       64.05       60.67  
 
                                
Cash income and performance ratios (annualized) (b):
                                
 
                                
Net income
   $ 43,143     $ 46,258     $ 86,995     $ 93,753  
Stock-based compensation, net of tax
     1,408       1,620       2,796       3,023  
Intangible amortization, net of tax
     2,304       3,256       5,149       6,442  
 
                        
Cash income
     46,855       51,134       94,940       103,218  
 
                                
Cash income per diluted common share
     0.88       0.94       1.78       1.90  
Cash return on average shareholders’ equity
     11.22 %     12.78 %     11.39 %     13.04 %
Cash return on average tangible equity
     18.94       22.33       19.24       22.83  
Cash return on average assets
     1.05       1.18       1.06       1.20  
 
                                
Asset quality:
                                
 
                                
Allowance for credit losses
   $ 156,471     $ 154,822     $ 156,471     $ 154,822  
Nonperforming assets
     64,319       44,241       64,319       44,241  
Allowance for credit losses / total loans
     1.23 %     1.31 %     1.23 %     1.31 %
Net charge-offs (recoveries) / average loans (annualized)
     0.08       (0.01 )     0.07       0.01  
Nonperforming loans / total loans
     0.49       0.35       0.49       0.35  
Nonperforming assets / total assets
     0.36       0.25       0.36       0.25  
Allowance for credit losses / nonperforming loans
     253.44       369.49       253.44       369.49  
 
                                
Other ratios (annualized):
                                
 
                                
Tangible capital ratio
     5.48 %     5.38 %     5.48 %     5.38 %
Shareholders’ equity / total assets
     9.13       9.22       9.13       9.22  
Interest-rate spread
     3.06       3.29       3.13       3.28  
Net interest margin
     3.13       3.32       3.18       3.32  
 
                                
Share related:
                                
 
                                
Book value per common share
   $ 31.27     $ 29.94     $ 31.27     $ 29.94  
Tangible book value per common share
     18.36       17.18       18.36       17.18  
Common stock closing price
     47.44       46.69       47.44       46.69  
Dividends declared per common share
     0.27       0.25       0.52       0.48  
 
                                
Common shares issued and outstanding
     52,610       53,807       52,610       53,807  
Basic shares (average)
     52,637       53,618       52,864       53,594  
Diluted shares (average)
     53,252       54,278       53,468       54,244  
 
Footnotes:
     
(a)  
Noninterest expense as a percentage of net interest income plus noninterest income.
 
(b)  
Cash income represents net income excluding the after tax effects of non-cash charges related to the amortization of intangible assets and stock-based compensation, which includes stock options and restricted stock.
 
(c)  
For purposes of this computation, unrealized gains (losses) are excluded from the average balance for rate calculations.
 
(d)  
Excluding conversion and infrastructure costs, the efficiency ratio would have been 59.95% and 59.39% for the three and six months ended June 30, 2005, respectively.
 
(e)  
Effective December 31, 2005, Webster transferred the portion of the allowance for loan losses related to commercial and consumer lending commitments and letters of credit to the reserve for unfunded credit commitments.
 
(f)  
The recording of the FHLB dividend of $1.8 million in the second quarter of 2006 would have increased the yield by 19 basis points (bp) and improved the wholesale spread from (24) bp to (5) bp.
 
(g)  
Cost of borrowings includes long-term debt such as Trust Preferred Securities and subordinated debt.

 

 

Consolidated Statements of Condition (unaudited)
                         
    June 30,     March 31,     June 30,  
(In thousands)   2006     2006     2005  
 
Assets:
                        
 
                        
Cash and due from depository institutions
   $ 327,622     $ 267,541     $ 322,376  
Short-term investments
     59,666       11,889       13,088  
 
                        
Securities:
                        
Trading, at fair value
     2,698       1,042       1,409  
Available for sale, at fair value
     2,317,645       2,472,699       2,649,930  
Held-to-maturity securities
     1,088,206       1,116,386       1,196,368  
 
                  
Total securities
     3,408,549       3,590,127       3,847,707  
 
                        
Loans held for sale
     275,240       201,210       245,174  
 
                        
Loans:
                        
Residential mortgages
     4,875,134       4,890,887       4,690,318  
Commercial
     3,160,200       3,038,930       2,781,938  
Commercial real estate
     1,819,635       1,851,035       1,666,235  
Consumer
     2,855,558       2,809,785       2,671,197  
 
                  
Total loans
     12,710,527       12,590,637       11,809,688  
Allowance for loan losses
     (147,401 )     (146,383 )     (154,822 )
 
                  
Loans, net
     12,563,126       12,444,254       11,654,866  
 
                        
Accrued interest receivable
     85,719       94,602       67,380  
Premises and equipment, net
     188,125       184,831       171,579  
Goodwill and intangible assets
     695,014       698,557       708,387  
Cash surrender value of life insurance
     242,740       240,426       233,129  
Prepaid expenses and other assets
     176,341       173,749       208,511  
 
                  
 
                        
Total Assets
   $ 18,022,142     $ 17,907,186     $ 17,472,197  
 
                  
 
                        
Liabilities and Shareholders’ Equity:
                        
 
                        
Deposits:
                        
Demand deposits
   $ 1,549,051     $ 1,459,855     $ 1,509,957  
NOW accounts
     1,687,297       1,683,677       1,640,692  
Money market deposit accounts
     1,888,179       1,761,016       1,892,664  
Savings accounts
     1,954,298       2,004,375       2,284,076  
Certificates of deposit
     4,447,504       4,392,731       3,830,999  
Treasury deposits
     690,136       776,623       420,846  
 
                  
Total deposits
     12,216,465       12,078,277       11,579,234  
 
                        
Federal Home Loan Bank advances
     1,804,140       2,383,118       2,126,437  
Securities sold under agreements to repurchase and other short-term debt
     1,528,224       1,007,439       1,345,910  
Other long-term debt
     622,267       631,568       674,117  
Reserve for unfunded commitments (e)
     9,070       9,574       —  
Accrued expenses and other liabilities
     187,445       146,871       126,011  
 
                  
Total liabilities
     16,367,611       16,256,847       15,851,709  
 
                        
Preferred stock of subsidiary corporation
     9,577       9,577       9,577  
 
                        
Shareholders’ equity
     1,644,954       1,640,762       1,610,911  
 
                  
 
                        
Total Liabilities and Shareholders’ Equity
   $ 18,022,142     $ 17,907,186     $ 17,472,197  
 
                  
See Selected Financial Highlights for footnotes.

 

 

Consolidated Statements of Income (unaudited)
                                 
    Three Months Ended     Six Months Ended  
    June 30,     June 30,  
(In thousands, except per share data)   2006     2005     2006     2005  
 
Interest income:
                                
Loans
   $ 207,097     $ 166,967     $ 402,671     $ 325,754  
Securities and short-term investments
     39,134       42,684       80,729       83,583  
Loans held for sale
     3,317       2,964       6,656       5,696  
 
                        
Total interest income
     249,548       212,615       490,056       415,033  
 
                        
 
                                
Interest expense:
                                
Deposits
     72,593       44,099       134,947       79,967  
Borrowings
     50,150       38,681       98,145       76,999  
 
                        
Total interest expense
     122,743       82,780       233,092       156,966  
 
                        
 
                                
Net interest income
     126,805       129,835       256,964       258,067  
Provision for credit losses
     3,000       2,000       5,000       5,500  
 
                        
Net interest income after provision for credit losses
     123,805       127,835       251,964       252,567  
 
                        
 
                                
Noninterest income:
                                
Deposit service fees
     24,150       21,747       46,019       40,876  
Insurance revenue
     9,988       10,562       20,712       22,364  
Loan and loan servicing fees
     9,162       7,274       16,986       16,203  
Wealth and investment services
     6,930       6,028       13,284       11,423  
Gain on sale of loans and loan servicing, net
     2,538       3,012       5,811       5,548  
Increase in cash surrender value of life insurance
     2,314       2,302       4,685       4,540  
Other
     1,284       2,013       3,059       4,256  
 
                        
 
     56,366       52,938       110,556       105,210  
Gain on sale of securities, net
     702       710       1,714       1,466  
 
                        
Total noninterest income
     57,068       53,648       112,270       106,676  
 
                        
 
                                
Noninterest expenses:
                                
Compensation and benefits
     64,585       57,854       129,588       115,756  
Occupancy
     11,824       10,810       24,006       21,669  
Furniture and equipment
     13,962       11,611       27,557       22,409  
Intangible amortization
     3,544       5,009       7,921       9,911  
Marketing
     4,292       3,664       7,916       6,947  
Professional services
     3,464       3,972       7,008       7,742  
Conversion and infrastructure costs
     —       3,506       —       4,640  
Other
     15,647       17,079       32,493       32,205  
 
                        
Total noninterest expenses
     117,318       113,505       236,489       221,279  
 
                        
 
                                
Income before income taxes
     63,555       67,978       127,745       137,964  
Income taxes
     20,412       21,720       40,750       44,211  
 
                        
Net income
   $ 43,143     $ 46,258     $ 86,995     $ 93,753  
 
                        
 
                                
Diluted shares (average)
     53,252       54,278       53,468       54,244  
 
                                
Net income per common share:
                                
Basic
   $ 0.82     $ 0.86     $ 1.65     $ 1.75  
Diluted
     0.81       0.85       1.63       1.73  
See Selected Financial Highlights for footnotes.

 

 

Consolidated Statements of Income (unaudited)
                                         
    Three Months Ended  
    June 30,     March 31,     Dec. 31,     Sept. 30,     June 30,  
(In thousands, except per share data)   2006     2006     2005     2005     2005  
 
Interest income:
                                        
Loans
   $ 207,097     $ 195,574     $ 187,607     $ 175,680     $ 166,967  
Securities and short-term investments
     39,134       41,595       42,503       43,775       42,684  
Loans held for sale
     3,317       3,339       3,563       3,686       2,964  
 
                              
Total interest income
     249,548       240,508       233,673       223,141       212,615  
 
                              
 
                                        
Interest expense:
                                        
Deposits
     72,593       62,354       57,132       51,338       44,099  
Borrowings
     50,150       47,995       46,879       42,191       38,681  
 
                              
Total interest expense
     122,743       110,349       104,011       93,529       82,780  
 
                              
 
                                        
Net interest income
     126,805       130,159       129,662       129,612       129,835  
Provision for credit losses
     3,000       2,000       2,000       2,000       2,000  
 
                              
Net interest income after provision for credit losses
     123,805       128,159       127,662       127,612       127,835  
 
                              
 
                                        
Noninterest income:
                                        
Deposit service fees
     24,150       21,869       22,909       22,182       21,747  
Insurance revenue
     9,988       10,724       10,678       10,973       10,562  
Loan and loan servicing fees
     9,162       7,824       9,290       7,739       7,274  
Wealth and investment services
     6,930       6,354       6,174       5,554       6,028  
Gain on sale of loans and loan servicing, net
     2,538       3,273       2,322       3,703       3,012  
Increase in cash surrender value of life insurance
     2,314       2,371       2,360       2,341       2,302  
Other
     1,284       1,775       3,470       2,347       2,013  
 
                              
 
     56,366       54,190       57,203       54,839       52,938  
Gain on sale of securities, net
     702       1,012       1,026       1,141       710  
 
                              
Total noninterest income
     57,068       55,202       58,229       55,980       53,648  
 
                              
 
                                        
Noninterest expenses:
                                        
Compensation and benefits
     64,585       65,003       64,905       60,808       57,854  
Occupancy
     11,824       12,182       11,141       10,482       10,810  
Furniture and equipment
     13,962       13,595       14,810       13,009       11,611  
Intangible amortization
     3,544       4,377       5,001       5,001       5,009  
Marketing
     4,292       3,624       3,981       3,339       3,664  
Professional services
     3,464       3,544       3,594       3,626       3,972  
Conversion and infrastructure costs
     —       —       1,281       2,217       3,506  
Other
     15,647       16,846       14,646       16,450       17,079  
 
                              
Total noninterest expenses
     117,318       119,171       119,359       114,932       113,505  
 
                              
 
                                        
Income before income taxes
     63,555       64,190       66,532       68,660       67,978  
Income taxes
     20,412       20,338       21,032       22,058       21,720  
 
                              
Net income
   $ 43,143     $ 43,852     $ 45,500     $ 46,602     $ 46,258  
 
                              
 
                                        
Diluted shares (average)
     53,252       53,703       54,129       54,310       54,278  
 
                                        
Net income per common share:
                                        
Basic
   $ 0.82     $ 0.83     $ 0.85     $ 0.87     $ 0.86  
Diluted
     0.81       0.82       0.84       0.86       0.85  
See Selected Financial Highlights for footnotes.

 

 

Retail and Wholesale Interest-Rate Spreads (unaudited)
                                         
    Three Months Ended  
    June     March     December     September     June  
    2006     2006     2005     2005     2005  
 
Interest-rate spread
                                        
Yield on interest-earning assets
     6.11 %     5.97 %     5.73 %     5.55 %     5.40 %
Cost of interest-bearing liabilities
     3.05       2.78       2.55       2.33       2.11  
 
                              
Interest-rate spread
     3.06 %     3.19 %     3.18 %     3.22 %     3.29 %
Net interest margin
     3.13       3.24       3.22       3.26       3.32  
 
                                        
Retail interest-rate spread
                                        
Yield on loans and loans held for sale
     6.52 %     6.32 %     6.02 %     5.83 %     5.66 %
Cost of deposits
     2.43       2.16       1.94       1.76       1.57  
 
                              
Spread
     4.09 %     4.16 %     4.08 %     4.07 %     4.09 %
 
                              
 
                                        
Wholesale interest-rate spread
                                        
Yield on securities and short-term investments(f)
     4.61 %     4.76 %     4.75 %     4.67 %     4.62 %
Cost of borrowings(g)
     4.85       4.44       4.19       3.84       3.54  
 
                              
Spread(f)
     (0.24 )%     0.32 %     0.56 %     0.83 %     1.08 %
 
                              
Consolidated Average Statements of Condition (unaudited)
                                                 
Three Months Ended June 30,   2006     2005  
                    Fully tax-                     Fully tax-  
    Average             equivalent     Average             equivalent  
(Dollars in thousands)   balance     Interest     yield/rate     balance     Interest     yield/rate  
 
Assets:
                                                
Interest-earning assets:
                                                
Loans
   $ 12,625,061     $ 207,097       6.54 %   $ 11,727,278     $ 166,968       5.68 %
Securities
     3,496,863       40,991       4.61 (c)     3,851,741       44,687       4.62 (c)
Loans held for sale
     230,268       3,317       5.76       242,351       2,964       4.89  
Short-term investments
     38,412       407       4.19       13,260       131       3.91  
 
                                    
Total interest-earning assets
     16,390,604       251,812       6.11       15,834,630       214,750       5.40  
 
                                        
Noninterest-earning assets
     1,507,337                       1,493,233                  
 
                                            
Total assets
   $ 17,897,941                     $ 17,327,863                  
 
                                            
 
                                                
Liabilities and Shareholders’ Equity:
                                                
Interest-bearing liabilities:
                                                
Demand deposits
   $ 1,457,462     $ —       — %   $ 1,451,236     $ —       — %
Savings, NOW and money market deposit accounts
     5,371,432       22,489       1.68       5,749,931       16,181       1.13  
Time deposits
     5,147,276       50,104       3.90       4,078,793       27,918       2.75  
 
                                    
Total deposits
     11,976,170       72,593       2.43       11,279,960       44,099       1.57  
 
                                    
Federal Home Loan Bank advances
     2,241,811       25,329       4.47       2,210,809       18,160       3.25  
Repurchase agreements and other short-term debt
     1,230,394       12,606       4.05       1,449,355       9,872       2.69  
Other long-term debt
     628,735       12,215       7.77       674,178       10,649       6.32  
 
                                    
Total borrowings
     4,100,940       50,150       4.85       4,334,342       38,681       3.54  
 
                                    
Total interest-bearing liabilities
     16,077,110       122,743       3.05       15,614,302       82,780       2.11  
 
                                        
Noninterest-bearing liabilities
     141,469                       104,104                  
 
                                            
Total liabilities
     16,218,579                       15,718,406                  
 
                                                
Preferred stock of subsidiary corporation
     9,577                       9,577                  
 
                                                
Shareholders’ equity
     1,669,785                       1,599,880                  
 
                                            
Total liabilities and shareholders’ equity
   $ 17,897,941                     $ 17,327,863                  
 
                                            
 
             129,069                       131,970          
Less: tax-equivalent adjustment
             (2,264 )                     (2,135 )        
 
                                            
 
                                                
Net interest income
           $ 126,805                     $ 129,835          
 
                                            
 
                                                
Interest-rate spread
                     3.06 %                     3.29 %
 
                                            
Net interest margin
                     3.13 %                     3.32 %
 
                                            
See Selected Financial Highlights for footnotes.

 

 

Consolidated Average Statements of Condition (unaudited)
                                                 
Six Months Ended June 30,   2006     2005  
                    Fully tax-                     Fully tax-  
    Average             equivalent     Average             equivalent  
(Dollars in thousands)   balance     Interest     yield/rate     balance     Interest     yield/rate  
 
Assets:
                                                
Interest-earning assets:
                                                
Loans
   $ 12,509,184     $ 402,671       6.44 %   $ 11,706,386     $ 325,755       5.56 %
Securities
     3,563,554       84,810       4.70 (c)     3,801,582       87,376       4.58 (c)
Loans held for sale
     229,486       6,656       5.80       228,230       5,696       4.99  
Short-term investments
     26,861       519       3.84       20,020       273       2.71  
                             
Total interest-earning assets
     16,329,085       494,656       6.04       15,756,218       419,100       5.31  
 
                                        
Noninterest-earning assets
     1,504,001                       1,447,520                  
 
                                            
Total assets
   $ 17,833,086                     $ 17,203,738                  
 
                                            
 
                                                
Liabilities and Shareholders’ Equity:
                                                
Interest-bearing liabilities:
                                                
Demand deposits
   $ 1,454,585     $ —       — %   $ 1,398,593     $ —       — %
Savings, NOW and money market deposit accounts
     5,340,529       42,297       1.60       5,677,509       29,140       1.04  
Time deposits
     5,027,758       92,650       3.72       3,886,783       50,827       2.64  
 
                                    
Total deposits
     11,822,872       134,947       2.30       10,962,885       79,967       1.47  
 
                                    
Federal Home Loan Bank advances
     2,319,410       49,825       4.27       2,308,437       36,747       3.17  
Repurchase agreements and other short-term debt
     1,259,585       24,436       3.86       1,553,899       19,415       2.49  
Other long-term debt
     634,736       23,884       7.53       677,630       20,837       6.15  
 
                                    
Total borrowings
     4,213,731       98,145       4.64       4,539,966       76,999       3.38  
 
                                    
Total interest-bearing liabilities
     16,036,603       233,092       2.91       15,502,851       156,966       2.03  
 
                                        
Noninterest-bearing liabilities
     120,349                       108,370                  
 
                                            
Total liabilities
     16,156,952                       15,611,221                  
 
                                                
Preferred stock of subsidiary corporation
     9,577                       9,577                  
 
                                                
Shareholders’ equity
     1,666,557                       1,582,940                  
 
                                            
Total liabilities and shareholders’ equity
   $ 17,833,086                     $ 17,203,738                  
 
                                            
 
             261,564                       262,134          
Less: tax-equivalent adjustment
             (4,600 )                     (4,067 )        
 
                                            
 
                                                
Net interest income
           $ 256,964                     $ 258,067          
 
                                            
 
                                                
Interest-rate spread
                     3.13 %                     3.28 %
 
                                            
Net interest margin
                     3.18 %                     3.32 %
 
                                            
See Selected Financial Highlights for footnotes.

 

 

                                         
    At or for the Three Months Ended  
(Unaudited)   June 30,     March 31,     Dec. 31,     Sept. 30,     June 30,  
(Dollars in thousands)   2006     2006     2005     2005     2005  
 
Asset Quality
                                        
 
                                        
Nonperforming loans:
                                        
Commercial:
                                        
Commercial
   $ 25,052     $ 20,721     $ 32,678     $ 27,544     $ 19,073  
Equipment financing
     2,693       2,864       3,065       3,209       3,466  
     
Total commercial
     27,745       23,585       35,743       30,753       22,539  
 
                                        
Commercial real estate
     23,711       24,012       22,678       19,650       11,654  
Residential
     7,218       8,891       6,979       6,436       6,690  
Consumer
     3,065       2,875       1,829       1,699       1,019  
     
 
                                        
Total nonperforming loans
     61,739       59,363       67,229       58,538       41,902  
     
 
                                        
Loans held for sale
     —       —       —       181       —  
 
                                        
Other real estate owned and repossessed assets:
                                        
Commercial
     2,254       1,712       5,126       1,408       2,217  
Residential
     316       456       232       218       112  
Consumer
     10       361       427       10       10  
     
 
                                        
Total other real estate owned and repossessed assets
     2,580       2,529       5,785       1,636       2,339  
     
 
                                        
Total nonperforming assets
   $ 64,319     $ 61,892     $ 73,014     $ 60,355     $ 44,241  
     
 
                                        
Allowance for Credit Losses
                                        
 
                                        
Beginning balance
   $ 155,957     $ 155,632     $ 155,052     $ 154,822     $ 152,519  
Provision
     3,000       2,000       2,000       2,000       2,000  
 
                                        
Charge-offs:
                                        
Commercial
     2,775       1,629       3,272       2,204       1,432  
Residential
     65       75       110       378       178  
Consumer
     239       362       153       137       201  
     
Total charge-offs
     3,079       2,066       3,535       2,719       1,811  
Recoveries
     (593 )     (391 )     (2,115 )     (949 )     (2,114 )
     
Net loan charge-offs (recoveries)
     2,486       1,675       1,420       1,770       (303 )
     
 
                                        
Ending balance
   $ 156,471     $ 155,957     $ 155,632     $ 155,052     $ 154,822  
     
 
                                        
Components: (e)
                                        
Allowance for loan losses
   $ 147,401     $ 146,383     $ 146,486     $ 155,052     $ 154,822  
Reserve for unfunded credit commitments
     9,070       9,574       9,146       —       —  
 
                              
Allowance for credit losses
   $ 156,471     $ 155,957     $ 155,632     $ 155,052     $ 154,822  
 
                              
 
                                        
Asset Quality Ratios:
                                        
     
Allowance for loan losses / total loans
     1.16 %     1.16 %     1.19 %     1.27 %     1.31 %
Allowance for credit losses / total loans
     1.23       1.24       1.27       1.27       1.31  
Net charge-offs (recoveries)/ average loans (annualized)
     0.08       0.05       0.05       0.06       (0.01 )
Nonperforming loans / total loans
     0.49       0.47       0.55       0.48       0.35  
Nonperforming assets / total assets
     0.36       0.35       0.41       0.34       0.25  
Allowance for credit losses / nonperforming loans
     253.44       262.72       231.50       264.87       369.49  
See Selected Financial Highlights for footnotes.