Webster Bank’s plunge into the Boston market is continuing to prove fruitful for the $26.5 billion asset institution.
John Ciulla, president and CEO of Webster Bank and its parent company, said on a recent earnings call that the bank is still on pace to achieve its goal of $1 billion in new deposits in the Boston market in five years. The bank currently has $425 million in Boston deposits two years into that plan, powered by strong performance in the community banking and institutional government sectors, he said.
Webster Bank first entered the Boston market in 2009, but the strategy really ramped up toward the end of 2015, when the company purchased 14 branches from Citibank in and around Boston. The bank then added another four branches after that.
The only downside to the Boston market, according to Ciulla, is that the cost of deposits is more expensive than some of the other markets Webster is in.
On the whole, Webster Bank’s parent company had a strong year, reporting net income of $67.7 million, or $0.73 per diluted share, for the quarter ended Dec. 31, 2017, compared to $55.5 million, or $0.60 per diluted share, for the quarter ended Dec. 31, 2016.
Net income for the year was over $255 million, up from about $207 million at the end of 2016. Net interest income was up almost $20 million from 2016, totaling nearly $205 million in 2017. Total revenue was over $1 billion in 2017 for the first time in history, according to Ciulla. The net interest margin increased from 3.11 percent at the end of 2016 t0 3.33 percent at the end of 2017.
Total loans at the $26.5 billion asset company reached past $17.5 billion, up nearly $500 million year-over-year, mainly due to strong growth in commercial loans.
The bank also closed nine branches in 2017, a trend that could continue in 2017. Ciulla said the bank is always looking for more opportunities to be more efficient and make sure all the branches are in the right location, of the appropriate size and density. He said there are a handful more branches that may be altered or close in the first half of 2018.
Webster executives expressed slight reservations about one of its core business divisions, the health savings account bank, because enrollment is tracking behind in the first quarter of 2018, but stressed that it was still early.
The company has a loan-to-deposit ratio of 83.5 percent, which is favorable compared to its regional peers. It also decreased non-performing loans by $37 million primarily due to resolutions with three commercial accounts.
