Amid a recent spate of M&A activity among Massachusetts banks, Webster Bank’s leaders don’t expect to be joining in.
John Ciulla, president and CEO of Webster Bank and its holding company, said on a recent earnings call in response to investors’ questions that he does not think Webster will get involved in any acquisitions in the Boston area.
“From an M&A perspective, we continue to take a really disciplined approach, and our view is we’ve got two hurdles for M&A. One is financial, but the other one is strategic as well,” he said, adding that “we never say never. So, if you think about us doing a whole bank acquisition to get more banking center footprint, it’s unlikely for us to do a tuck-in acquisition in those markets because we have a stated strategy of growing HSA, expanding and becoming more commercial and optimizing our community bank, which we have, and I think Boston is a great example of that.”
Overall though, Ciulla was happy with the bank’s performance in Boston and bullish on the market.
Webster first moved into Boston in 2009, but five years ago made a big push for expansion by purchasing 14 branches from Citigroup, which failed to gain traction in the city. Following that move, Webster set a five-year goal of bringing in $1 billion in deposits and $500 million in loans.
Now on year four of that plan, Ciulla said the bank is ahead of its goals in terms of loans, but slightly behind on the deposit front. Still, he said he thinks the bank will hit those goals come next year.
“Our view on Boston has always been kind of a macro-holistic view on the Boston market and that it’s one of the economic drivers, if not the economic driver in the Northeast outside of New York,” Ciulla said.
Overall, Webster Bank’s holding company reported second quarter earnings $96.2 million, or $1.05 per diluted share, compared to $79.5 million, or $0.86 per diluted share, for the second quarter of 2018.
Net interest income in the quarter was just over $92 million, up a little less than $4 million from the second quarter of last year. The margin grew six basis points over the year reaching 3.63 percent.
Total assets at the $28.9 billion asset company grew more than $1.9 billion year-over-year, while total loans were up more than $1.2 billion year-over-year, reaching $19.2 billion. The gains were led by commercial and commercial real estate loan growth, while consumer loan volume declined year-over-year by nearly $185 million.
Total non-interest income was more than $75 million in the quarter, up more than $7 million from the second quarter of last year. The HSA Bank also enjoyed a healthy second quarter, crossing the $8 billion mark with just under 3 million accounts.
The provision for loan losses was $11.9 million in the quarter, up $1.4 million from a year ago. Total nonperforming loans in the second quarter were $148.1 million, or 0.77 percent of total loans, compared to $140.1 million, or 0.78 percent, in the second quarter of 2018.
