STAMFORD, Conn., Oct. 20, 2022 /PRNewswire/ -- Webster Financial Corporation (NYSE:WBS), the holding company for Webster Bank, N.A. and its HSA Bank division, today announced net income available to common shareholders of $229.8 million, or $1.31 per diluted share, for the quarter ended September 30, 2022, compared to $93.7 million, or $1.03 per diluted share, for the quarter ended September 30, 2021.

Third quarter 2022 results include $36.8 million pre-tax, ($27.2 million after tax), or $0.15 per diluted share, of expenses related to the merger, strategic initiatives, and other charges. Excluding these expenses, earnings per diluted share would have been $1.46 for the quarter ended September 30, 2022. Reported results prior to the first quarter of 2022 reflect legacy Webster Financial results only.

"Third quarter results reflect the strong progress our colleagues have made in creating a high performing and differentiated company," said John R. Ciulla, president and chief executive officer. "While executing on integration activities, we have maintained a laser-focus on our clients, resulting in financial performance that exceeds the targets we set forth at the announcement of the MOE more than a year ago."

Highlights for the third quarter of 2022:

Revenue of $664.6 million.

Period end loan and lease balance of $47.8 billion; 80 percent commercial loans and leases, 20 percent consumer loans, and a loan to deposit ratio of 89 percent.

Period end deposit balance of $54.0 billion.

Provision for credit losses totaled $36.5 million.

Charges related to the merger, strategic initiatives, and other totaled $36.8 million.

Return on average assets of 1.38 percent; adjusted 1.54 percent (non-GAAP).

Return on average tangible common equity of 18.62 percent; adjusted 20.76 percent (non-GAAP).

Net interest margin of 3.54 percent, up 26 basis points from prior quarter.

Common equity tier 1 ratio of 10.82 percent.

Efficiency ratio (non-GAAP) of 41.17 percent.

Tangible common equity ratio of 7.27 percent.

Repurchased approximately $100 million in shares under Webster's share repurchase program.

"Not only were our financial results strong this quarter, the underlying drivers of increases in profitability should provide tailwinds into the future," said Glenn MacInnes, executive vice president and chief financial officer. "Our net interest income should continue to benefit from higher interest rates, and we continue to execute on the efficiencies created in our recent merger."

Increases in the balance sheet and income statement, when compared to a year ago, are largely attributable to the merger with Sterling Bancorp on January 31, 2022.

Line of Business performance compared to the third quarter of 2021

Commercial Banking

Webster's Commercial Banking segment serves businesses that have more than $2 million of revenue through our business banking, middle market, asset-based lending, equipment finance, commercial real estate, sponsor finance, and treasury services business units. Additionally, our Wealth group provides wealth management solutions to business owners, operators, and consumers within our targeted markets and retail footprint. As of September 30, 2022, Commercial Banking had $38.5 billion in loans and leases and $20.8 billion in deposit balances.

Commercial Banking Operating Results:

				Percent
	Three months ended September 30,			Favorable/
(In thousands)		2022	2021	(Unfavorable)
Net interest income		$333,554	$152,012		119.4 %
Non-interest income		40,497	22,782		77.8
Operating revenue		374,051	174,794		114.0
Non-interest expense		102,415	50,244		(103.8)
Pre-tax, pre-provision net revenue		$271,636	$124,550		118.1

				Percent
		At September 30,		Increase/
(In millions)		2022	2021	(Decrease)
Loans and leases		$38,493	$14,655		162.7 %
Deposits		20,828	10,103		106.2
AUA / AUM (off balance sheet)		2,121	2,847		(25.5)

Pre-tax, pre-provision net revenue increased $147.1 million to $271.6 million in the quarter as compared to prior year. The increase in balances and income was largely attributable to the merger. Net interest income increased $181.5 million to $333.6 million, primarily driven by the merger, organic growth in loans and deposits since the merger, and the impact of the rising rate environment. Non-interest income increased $17.7 million to $40.5 million, with $18.8 million driven by the merger, partially offset by lower direct investment income. Non-interest expense increased $52.2 million to $102.4 million, with $47.2 million due to the merger, and $5.0 million primarily to support loan and deposit growth.

HSA Bank

Webster's HSA Bank division offers a comprehensive consumer-directed healthcare solution that includes health savings accounts, health reimbursement arrangements, flexible spending accounts and commuter benefits. Health savings accounts are distributed nationwide directly to employers and individual consumers, as well as through national and regional insurance carriers, benefit consultants and financial advisors. As of September 30, 2022, HSA Bank had $11.1 billion in total footings comprising $7.9 billion in deposit balances and $3.2 billion in assets under administration through linked investment accounts.

HSA Bank Operating Results:

				Percent
	Three months ended September 30,			Favorable/
(In thousands)		2022	2021	(Unfavorable)
Net interest income		$58,567	$42,074		39.2 %
Non-interest income		25,842	24,756		4.4
Operating revenue		84,409	66,830		26.3
Non-interest expense		36,725	32,374		(13.4)
Pre-tax, net revenue		$47,684	$34,456		38.4

				Percent
		At September 30,		Increase/
(Dollars in millions)		2022	2021	(Decrease)
Number of accounts (thousands)		3,133	3,003		4.3 %

Deposits		$7,889	$7,329		7.6
Linked investment accounts (off balance sheet)		3,233	3,427		(5.7)
Total footings		$11,122	$10,756		3.4

Pre-tax net revenue increased $13.2 million to $47.7 million in the quarter as compared to prior year. Net interest income increased $16.5 million to $58.6 million, primarily due to an increase in net deposit spread and growth in deposits. Non-interest income increased $1.1 million to $25.8 million, due primarily to increased interchange revenue. Non-interest expense increased $4.4 million to $36.7 million, primarily due to incremental expenses from Bend's acquired business and higher compensation, temporary help, and travel expenses.

Consumer Banking

Consumer Banking serves consumer and business banking customers primarily throughout southern New England and the New York Metro and Suburban markets. Consumer Banking is comprised of the Consumer Lending and Small Business Banking (businesses that have less than $2 million of revenue) business units, as well as a distribution network consisting of 201 banking centers and 354 ATMs, a customer care center, and a full range of web and mobile-based banking services. Additionally, our Webster Investment Services group provides investment services to consumers and small business owners within our targeted markets and retail footprint. As of September 30, 2022, Consumer Banking had $9.3 billion in loans and $23.9 billion in deposit balances, as well as $7.4 billion in assets under administration.

Consumer Banking Operating Results:

				Percent
	Three months ended September 30,			Favorable/
(In thousands)		2022	2021	(Unfavorable)
Net interest income		$195,748	$98,572		98.6 %
Non-interest income		33,838	24,292		39.3
Operating revenue		229,586	122,864		86.9
Non-interest expense		109,588	73,212		(49.7)
Pre-tax, pre-provision net revenue		$119,998	$49,652		141.7

				Percent
		At September 30,		Increase/
(In millions)		2022	2021	(Decrease)
Loans		$9,302	$6,925		34.3 %
Deposits		23,859	12,591		89.5
AUA (off balance sheet)		7,369	4,194		75.7

Pre-tax, pre-provision net revenue increased $70.3 million to $120.0 million in the quarter as compared to prior year. The increase in balances and income was largely attributable to the merger. Net interest income increased $97.2 million to $195.7 million, with $71.7 million driven by the merger, and $25.5 million driven by deposit and loan growth, coupled with the impact of the rising rate environment. Non-interest income increased $9.5 million to $33.8 million, with $6.1 million driven by the merger, and $4.7 million from higher deposit, loan, and investment services income, partially offset by $1.5 million in lower mortgage banking fee income. Non-interest expense increased $36.4 million to $109.6 million, primarily driven by $38.4 million of incremental expenses due to the merger, partially offset by lower shared services charges.

Consolidated financial performance:

Quarterly net interest income compared to the third quarter of 2021:

Net interest income was $551.0 million compared to $229.7 million.

Net interest margin was 3.54 percent compared to 2.80 percent. The yield on interest-earning assets increased by 104 basis points, and the cost of interest-bearing liabilities increased by 32 basis points.

Average interest-earning assets totaled $62.2 billion and increased by $29.3 billion, or 89.2 percent.

Average loans and leases totaled $46.2 billion and increased by $24.7 billion, or 114.6 percent.

Average deposits totaled $54.0 billion and increased by $24.1 billion, or 80.8 percent.

Quarterly provision for credit losses:

The provision for credit losses reflects a $36.5 million expense in the quarter, contributing to a $2.8 million increase in the allowance for credit losses on loans and leases and a $5.2 million increase in reserves on unfunded commitments. The provision for credit losses reflected an expense of $12.2 million in the prior quarter, compared to $7.8 million a year ago.

Net charge-offs were $28.5 million, compared to $9.6 million in the prior quarter and $0.9 million a year ago. The ratio of net charge-offs to average loans and leases on an annualized basis was 0.25 percent, compared to 0.09 percent in the prior quarter and 0.02 percent a year ago.

The allowance for credit losses on loans and leases represented 1.20 percent of total loans and leases at September 30, 2022, compared to 1.25 percent at June 30, 2022 and 1.46 percent at September 30, 2021. The allowance represented 274 percent of nonperforming loans and leases at September 30, 2022 compared to 231 percent at June 30, 2022 and 309 percent at September 30, 2021.

Quarterly non-interest income compared to the third quarter of 2021:

Total non-interest income was $113.6 million compared to $83.8 million, an increase of $29.8 million. The increase primarily reflects the impact of the merger with Sterling, offset by lower direct investment income and mortgage banking revenue. Total non-interest income includes a net $0.3 million related to a gain on the early termination of repurchase agreements partially offset by a loss on the sale of investment securities.

Quarterly non-interest expense compared to the third quarter of 2021:

Total non-interest expense was $330.1 million compared to $180.2 million, an increase of $149.9 million. Total non-interest expense includes a net $26.7 million of merger and strategic initiatives and a $10.5 million donation to the Webster Bank Charitable Foundation, compared to $5.8 million of merger and strategic initiative related charges a year ago. Excluding those charges, total non-interest expense increased $118.5 million which primarily reflects the impact of the merger with Sterling.

Quarterly income taxes compared to the third quarter of 2021:

Income tax expense was $64.1 million compared to $29.8 million, and the effective tax rate was 21.5 percent compared to 23.7 percent. The lower effective tax rate in the current period primarily reflects higher levels of tax-exempt income and tax credits than a year ago, partially offset by the effects of increased income overall in 2022 compared to 2021.

Investment securities:

Total investment securities, net were $14.6 billion, compared to $15.2 billion at June 30, 2022 and $9.4 billion at September 30, 2021. The carrying value of the available-for-sale portfolio included $941.8 million of net unrealized losses, compared to net unrealized losses of $609.8 million at June 30, 2022 and net unrealized gains of $44.7 million at September 30, 2021. The carrying value of the held-to-maturity portfolio does not reflect $855.9 million of net unrealized losses, compared to net unrealized losses of $539.4 million at June 30, 2022 and net unrealized gains of $152.9 million at September 30, 2021.

Loans and Leases:

Total loans and leases were $47.8 billion, compared to $45.6 billion at June 30, 2022 and $21.6 billion at September 30, 2021. Compared to June 30, 2022, commercial loans and leases increased by $1.1 billion, commercial real estate loans increased by $0.7 billion, residential mortgages increased by $0.4 billion, while consumer loans decreased by $28.4 million.

Compared to a year ago, commercial loans and leases increased by $11.5 billion, commercial real estate loans increased by $12.3 billion, residential mortgages increased by $2.5 billion, and consumer loans increased by $1.3 million.

Loan originations for the portfolio were $5.1 billion, compared to $5.0 billion in the prior quarter and $2.0 billion a year ago. In addition, $1.5 million of residential loans were originated for sale in the quarter, compared to $5.0 million in the prior quarter and $56.7 million a year ago.

Asset quality:

Total nonperforming loans and leases were $209.5 million, or 0.44 percent of total loans and leases, compared to $247.5 million, or 0.54 percent of total loans and leases, at June 30, 2022 and $101.8 million, or 0.47 percent of total loans and leases, at September 30, 2021. As of September 30, 2022, $82.0 million of nonperforming loans and leases were contractually current.

Past due loans and leases were $46.4 million, compared to $51.7 million at June 30, 2022 and $17.1 million at September 30, 2021.

Deposits and borrowings:

Total deposits were $54.0 billion, compared to $53.1 billion at June 30, 2022 and $30.0 billion at September 30, 2021. Core deposits to total deposits were 95.2 percent, compared to 95.2 percent at June 30, 2022 and 93.7 percent at September 30, 2021. The loan to deposit ratio was 88.5 percent, compared to 86.0 percent at June 30, 2022 and 71.9 percent at September 30, 2021.

Total borrowings were $5.9 billion, compared to $5.3 billion at June 30, 2022 and $1.3 billion at September 30, 2021.

Capital:

The return on average common shareholders' equity and the return on average tangible common shareholders' equity were 11.78 percent and 18.62 percent, respectively, compared to 11.61 percent and 14.16 percent, respectively, in the third quarter of 2021.

The tangible equity and tangible common equity ratios were 7.70 percent and 7.27 percent, respectively, compared to 8.12 percent and 7.71 percent, respectively, at September 30, 2021. The common equity tier 1 risk-based capital ratio was 10.82 percent, compared to 11.77 percent at September 30, 2021.

Book value and tangible book value per common share were $43.32 and $27.69, respectively, compared to $35.78 and $29.63, respectively, at September 30, 2021.

Repurchased approximately $100 million in shares under Webster's share repurchase program.

Webster Financial Corporation (NYSE:WBS) is the holding company for Webster Bank, N.A. and its HSA Bank Division. Webster is a leading commercial bank in the Northeast that provides a wide range of digital and traditional financial solutions across three differentiated lines of business: Commercial Banking, Consumer Banking and its HSA Bank division, one of the country's largest providers of employee benefits solutions. Headquartered in Stamford, CT, Webster is a values-driven organization with $69 billion in assets. Its core footprint spans the northeastern U.S. from New York to Massachusetts, with certain businesses operating in extended geographies. Webster Bank is a member of the FDIC and an equal housing lender. For more information about Webster, including past press releases and the latest annual report, visit the Webster website at www.websterbank.com.

Conference Call

A conference call covering Webster's third quarter 2022 earnings announcement will be held today, Thursday, October 20, 2022 at 9:00 a.m. Eastern Time. To listen to the live call, please dial 888-330-2446, or 240-789-2732 for international callers. The passcode is 8607257. The webcast, along with related slides, will be available via Webster's Investor Relations website at investors.websterbank.com. A replay of the conference call will be available for one week via the website listed above, beginning at approximately 12:00 noon (Eastern) on October 20, 2022. To access the replay, dial 800-770-2030, or 647-362-9199 for international callers. The replay conference ID number is 8607257.

Media Contact

Alice Ferreira, 203-578-2610

acferreira@websterbank.com

Investor Contact

Emlen Harmon, 212-309-7646

eharmon@websterbank.com

Forward-Looking Statements

This release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Act"). Forward-looking statements can be identified by words such as "believes," "anticipates," "expects," "intends," "targeted," "continue," "remain," "will," "should," "may," "plans," "estimates," and similar references to future periods; however, such words are not the exclusive means of identifying such statements. Examples of forward-looking statements include, but are not limited to: (i) projections of revenues, expenses, income or loss, earnings or loss per share, and other financial items; (ii) statements of plans, objectives, and expectations of Webster or its management or Board of Directors; (iii) statements of future economic performance; and (iv) statements of assumptions underlying such statements. Forward-looking statements are based on Webster's current expectations and assumptions regarding its business, the economy, and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict. Webster's actual results may differ materially from those contemplated by the forward-looking statements, which are neither statements of historical fact nor guarantees or assurances of future performance. Factors that could cause actual results to differ from those discussed in the forward-looking statements include, but are not limited to: (1) our ability to successfully integrate the operations of Webster and Sterling Bancorp and realize the anticipated benefits of the merger; (2) our ability to successfully execute our business plan and strategic initiatives, and manage any risks or uncertainties; (3) our ability to successfully achieve the anticipated cost reductions and operating efficiencies from planned strategic initiatives, including process automation, organization simplification, and spending reductions, and avoid any higher than anticipated costs or delays in the ongoing implementation; (4) local, regional, national, and international economic conditions and the impact they may have on us and our customers; (5) volatility and disruption in national and international financial markets, including as a result of geopolitical conflict such as the war between Russia and Ukraine; (6) the potential adverse effects of the ongoing novel coronavirus (COVID-19) pandemic, or other unusual and infrequently occurring events, and any governmental or societal responses thereto; (7) changes in laws and regulations, including those concerning banking, taxes, dividends, securities, insurance, and healthcare, with which we and our subsidiaries must comply; (8) adverse conditions in the securities markets that lead to impairment in the value of our investment securities and goodwill; (9) inflation, changes in interest rates, and monetary fluctuations; (10) the replacement of and transition from the London Interbank Offered Rate (LIBOR) to the Secured Overnight Financing Rate (SOFR) as the primary interest rate benchmark; (11) the timely development and acceptance of new products and services and the perceived value of those products and services by customers; (12) changes in deposit flows, consumer spending, borrowings, and savings habits; (13) our ability to implement new technologies and maintain secure and reliable technology systems; (14) the effects of any cyber threats, attacks or events or fraudulent activity; (15) performance by our counterparties and vendors; (16) our ability to increase market share and control expenses; (17) changes in the competitive environment among banks, financial holding companies, and other financial services providers; (18) changes in the level of non-performing assets and charge-offs; (19) changes in estimates of future reserve requirements based upon the periodic review thereof under relevant regulatory and accounting requirements; (20) the effect of changes in accounting policies and practices applicable to us, including the impact of recently adopted accounting guidance; (21) legal and regulatory developments including the resolution of legal proceedings or regulatory or other governmental inquiries and the results of regulatory examinations or reviews; (22) our ability to appropriately address social, environmental, and sustainability concerns that may arise from our business activities; and (23) the other factors that are described in the Company's Annual Report on Form 10-K and Quarterly Reports on Form 10-Q under the headings "Risk Factors" and "Management Discussion and Analysis of Financial Condition and Results of Operations." Any forward-looking statement made by the Company in this release speaks only as of the date on which it is made. Factors or events that could cause the Company's actual results to differ may emerge from time to time, and it is not possible for the Company to predict all of them. The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.

Non-GAAP Financial Measures

In addition to results presented in accordance with GAAP, this press release contains certain non-GAAP financial measures. A reconciliation of net income, ROATCE, and other performance ratios, in each case as adjusted, is included in the accompanying selected financial highlights table.

We believe that providing certain non-GAAP financial measures provides investors with information useful in understanding our financial performance, our performance trends and financial position. We utilize these measures for internal planning and forecasting purposes. We, as well as securities analysts, investors, and other interested parties, also use these measures to compare peer company operating performance. We believe that our presentation and discussion, together with the accompanying reconciliations, provides a complete understanding of factors and trends affecting our business and allows investors to view performance in a manner similar to management. These non-GAAP measures should not be considered a substitute for GAAP basis measures and results, and we strongly encourage investors to review our consolidated financial statements in their entirety and not to rely on any single financial measure. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names.

WEBSTER FINANCIAL CORPORATION Selected Financial Highlights (unaudited)
		At or for the Three Months Ended
(In thousands, except per share data)	September 30, 2022			June 30, 2022			March 31, 2022			December 31, 2021			September 30, 2021

Income and performance ratios:
Net income (loss)	$	233,968		$	182,311		$	(16,747)		$	111,038		$	95,713
Net income (loss) available to common shareholders		229,806			178,148			(20,178)			109,069			93,745
Earnings (loss) per diluted common share		1.31			1.00			(0.14)			1.20			1.03
Return on average assets		1.38	%		1.10	%		(0.12)	%		1.26	%		1.10
Return on average tangible common shareholders' equity^(non-GAAP)		18.62			14.50			(1.36)			16.23			14.16
Return on average common shareholders' equity		11.78			9.09			(1.25)			13.35			11.61
Non-interest income as a percentage of total revenue		17.10			19.90			20.88			28.44			26.73

Asset quality:
Allowance for credit losses on loans and leases	$	574,325		$	571,499		$	569,371		$	301,187		$	314,922
Nonperforming assets		211,627			250,242			251,206			112,590			104,209
Allowance for credit losses on loans and leases / total loans and leases		1.20	%		1.25	%		1.31	%		1.35	%		1.46
Net charge-offs (recoveries) / average loans and leases (annualized)		0.25			0.09			0.10			(0.02)			0.02
Nonperforming loans and leases / total loans and leases		0.44			0.54			0.57			0.49			0.47
Nonperforming assets / total loans and leases plus OREO		0.44			0.55			0.58			0.51			0.48
Allowance for credit losses on loans and leases / nonperforming loans and leases		274.12			230.88			229.48			274.36			309.44

Other ratios:
Tangible equity^(non-GAAP)		7.70	%		8.12	%		8.72	%		8.39	%		8.12
Tangible common equity ^(non-GAAP)		7.27			7.68			8.26			7.97			7.71
Tier 1 risk-based capital ^(a)		11.37			11.65			12.05			12.32			12.39
Total risk-based capital ^(a)		13.41			13.91			14.41			13.64			13.79
Common equity tier 1 risk-based capital ^(a)		10.82			11.09			11.46			11.72			11.77
Shareholders' equity / total assets		11.33			11.83			12.55			9.85			9.57
Net interest margin		3.54			3.28			3.21			2.73			2.80
Efficiency ratio ^(non-GAAP)		41.17			45.25			48.73			54.85			54.84

Equity and share related:
Common equity	$	7,542,431		$	7,713,809		$	7,893,156		$	3,293,288		$	3,241,152
Book value per common share		43.32			43.82			44.32			36.36			35.78
Tangible book value per common share^(non-GAAP)		27.69			28.31			28.94			30.22			29.63
Common stock closing price		45.20			42.15			56.12			55.84			54.46
Dividends declared per common share		0.40			0.40			0.40			0.40			0.40
Common shares issued and outstanding		174,116			176,041			178,102			90,584			90,588
Weighted-average common shares outstanding - Basic		173,868			175,845			147,394			90,052			90,038
Weighted-average common shares outstanding - Diluted		173,944			175,895			147,533			90,284			90,232

(a) Presented as preliminary for September 30, 2022 and actual for the remaining periods.

WEBSTER FINANCIAL CORPORATION Consolidated Balance Sheets (unaudited)
(In thousands)	September 30, 2022		June 30, 2022		September 30, 2021
Assets:
Cash and due from banks	$	286,487	$	294,482	$	161,369
Interest-bearing deposits		326,638		607,323		2,442,790
Securities:
Available for sale		8,085,044		8,638,358		3,410,443
Held to maturity, net		6,505,838		6,547,998		5,986,308
Total securities, net		14,590,882		15,186,356		9,396,751
Loans held for sale		898		388		24,969
Loans and Leases:
Commercial		19,642,624		18,520,595		8,159,127
Commercial real estate		18,830,948		18,141,670		6,522,679
Residential mortgages		7,617,955		7,223,728		5,167,527
Consumer		1,732,348		1,760,750		1,731,002
Total loans and leases		47,823,875		45,646,743		21,580,335
Allowance for credit losses on loans and leases		(574,325)		(571,499)		(314,922)
Loans and leases, net		47,249,550		45,075,244		21,265,413
Federal Home Loan Bank and Federal Reserve Bank stock		373,044		329,424		75,936
Premises and equipment, net		434,721		449,578		209,573
Goodwill and other intangible assets, net		2,721,040		2,729,551		557,360
Cash surrender value of life insurance policies		1,230,641		1,228,484		572,368
Deferred tax asset, net		369,737		269,790		96,489
Accrued interest receivable and other assets		1,468,928		1,424,401		571,240
Total Assets	$	69,052,566	$	67,595,021	$	35,374,258

Liabilities and Shareholders' Equity:
Deposits:
Demand	$	13,849,812	$	13,576,152	$	7,154,835
Health savings accounts		7,889,310		7,777,786		7,329,405
Interest-bearing checking		9,203,220		9,547,749		4,181,825
Money market		11,156,579		10,884,656		3,958,700
Savings		9,340,372		8,736,712		5,517,189
Certificates of deposit		2,311,484		2,554,102		1,884,373
Brokered certificates of deposit		258,110		-		-
Total deposits		54,008,887		53,077,157		30,026,327
Securities sold under agreements to repurchase and other borrowings		1,265,414		1,743,782		655,871
Federal Home Loan Bank advances		3,510,717		2,510,810		113,334
Long-term debt		1,074,844		1,076,559		564,114
Accrued expenses and other liabilities		1,366,294		1,188,925		628,423
Total liabilities		61,226,156		59,597,233		31,988,069
Preferred stock		283,979		283,979		145,037
Common shareholders' equity		7,542,431		7,713,809		3,241,152
Total shareholders' equity		7,826,410		7,997,788		3,386,189
Total Liabilities and Shareholders' Equity	$	69,052,566	$	67,595,021	$	35,374,258

WEBSTER FINANCIAL CORPORATION Consolidated Statements of Income (unaudited)
	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands, except per share data)	2022		2021		2022		2021
Interest income:
Interest and fees on loans and leases	$	525,960	$	196,273	$	1,303,774	$	572,728
Interest and dividends on securities		91,569		43,362		237,297		133,895
Loans held for sale		40		57		73		201
Total interest income		617,569		239,692		1,541,144		706,824
Interest expense:
Deposits		37,492		4,571		57,350		16,104
Borrowings		29,074		5,430		51,883		16,413
Total interest expense		66,566		10,001		109,233		32,517
Net interest income		551,003		229,691		1,431,911		674,307
Provision for credit losses		36,531		7,750		237,619		(39,500)
Net interest income after provision for loan and lease losses		514,472		221,941		1,194,292		713,807
Non-interest income:
Deposit service fees		50,807		40,258		150,019		122,166
Loan and lease related fees		26,769		10,881		77,355		27,056
Wealth and investment services		11,419		9,985		33,260		29,475
Mortgage banking activities		86		1,525		616		5,486
Increase in cash surrender value of life insurance policies		7,718		3,666		22,694		10,802
(Loss) on sale of investment securities, net		(2,234)		-		(2,234)		-
Other income		19,071		17,460		56,894		38,249
Total non-interest income		113,636		83,775		338,604		233,234
Non-interest expense:
Compensation and benefits		173,983		105,352		545,641		310,706
Occupancy		23,517		12,430		93,725		42,090
Technology and equipment		45,283		28,441		142,182		84,081
Marketing		3,918		3,721		10,868		9,452
Professional and outside services		21,618		7,074		91,041		37,875
Intangible assets amortization		8,511		1,124		23,700		3,395
Loan workout expenses		580		203		1,992		924
Deposit insurance		8,026		3,855		19,996		11,560
Other expenses		44,635		18,037		118,938		55,164
Total non-interest expense		330,071		180,237		1,048,083		555,247
Income before income taxes		298,037		125,479		484,813		391,794
Income tax expense		64,069		29,766		85,281		93,968
Net income		233,968		95,713		399,532		297,826
Preferred stock dividends		(4,162)		(1,968)		(11,756)		(5,906)
Net income available to common shareholders	$	229,806	$	93,745	$	387,776	$	291,920

Weighted-average common shares outstanding - Diluted		173,944		90,232		165,813		90,186

Earnings per common share:
Basic	$	1.31	$	1.03	$	2.32	$	3.23
Diluted		1.31		1.03		2.32		3.22

WEBSTER FINANCIAL CORPORATION Five Quarter Consolidated Statements of Income (unaudited)
		Three Months Ended
(In thousands, except per share data)	September 30, 2022		June 30, 2022		March 31, 2022		December 31, 2021		September 30, 2021
Interest income:
Interest and fees on loans and leases	$	525,960	$	431,538	$	346,276	$	189,985	$	196,273
Interest and dividends on securities		91,569		82,202		63,526		45,990		43,362
Loans held for sale		40		7		26		45		57
Total interest income		617,569		513,747		409,828		236,020		239,692
Interest expense:
Deposits		37,492		12,459		7,399		4,027		4,571
Borrowings		29,074		14,628		8,181		5,211		5,430
Total interest expense		66,566		27,087		15,580		9,238		10,001
Net interest income		551,003		486,660		394,248		226,782		229,691
Provision for credit losses		36,531		12,243		188,845		(15,000)		7,750
Net interest income after provision for loan and lease losses		514,472		474,417		205,403		241,782		221,941
Non-interest income:
Deposit service fees		50,807		51,385		47,827		40,544		40,258
Loan and lease related fees		26,769		27,907		22,679		9,602		10,881
Wealth and investment services		11,419		11,244		10,597		10,111		9,985
Mortgage banking activities		86		102		428		733		1,525
Increase in cash surrender value of life insurance policies		7,718		8,244		6,732		3,627		3,666
(Loss) on sale of investment securities, net		(2,234)		-		-		-		-
Other income		19,071		22,051		15,772		25,521		17,460
Total non-interest income		113,636		120,933		104,035		90,138		83,775
Non-interest expense:
Compensation and benefits		173,983		187,656		184,002		109,283		105,352
Occupancy		23,517		51,593		18,615		13,256		12,430
Technology and equipment		45,283		41,498		55,401		28,750		28,441
Marketing		3,918		3,441		3,509		2,599		3,721
Professional and outside services		21,618		15,332		54,091		9,360		7,074
Intangible assets amortization		8,511		8,802		6,387		1,118		1,124
Loan workout expenses		580		732		680		244		203
Deposit insurance		8,026		6,748		5,222		4,234		3,855
Other expenses		44,635		42,425		31,878		21,009		18,037
Total non-interest expense		330,071		358,227		359,785		189,853		180,237
Income (loss) before income taxes		298,037		237,123		(50,347)		142,067		125,479
Income tax expense (benefit)		64,069		54,812		(33,600)		31,029		29,766
Net income (loss)		233,968		182,311		(16,747)		111,038		95,713
Preferred stock dividends		(4,162)		(4,163)		(3,431)		(1,969)		(1,968)
Net income (loss) available to common shareholders	$	229,806	$	178,148	$	(20,178)	$	109,069	$	93,745

Weighted-average common shares outstanding - Diluted		173,944		175,895		147,533		90,284		90,232

Earnings (loss) per common share:
Basic	$	1.31	$	1.00	$	(0.14)	$	1.20	$	1.03
Diluted		1.31		1.00		(0.14)		1.20		1.03

WEBSTER FINANCIAL CORPORATION Consolidated Average Balances, Interest, Yields and Rates, and Net Interest Margin on a Fully Tax-equivalent Basis (unaudited)
		Three Months Ended September 30,
		2022						2021
(Dollars in thousands)		Average balance		Interest	Yield/rate			Average balance		Interest	Yield/rate
Assets:
Interest-earning assets:
Loans and leases	$	46,229,678	$	532,062	4.52	%	$	21,538,513	$	197,015	3.60	%
Investment securities ^(a)		15,039,510		93,561	2.40			8,911,291		43,868	2.01
Federal Home Loan and Federal Reserve Bank stock		326,860		1,875	2.28			76,212		290	1.51
Interest-bearing deposits ^(b)		585,807		3,278	2.19			2,334,986		896	0.15
Loans held for sale		580		40	n/m			11,328		57	2.03
Total interest-earning assets		62,182,435	$	630,816	3.96	%		32,872,330	$	242,126	2.92	%
Non-interest-earning assets		5,823,755						2,021,962
Total Assets	$	68,006,190					$	34,894,292

Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Demand deposits	$	13,590,667	$	-	-	%	$	7,182,116	$	-	-	%
Health savings accounts		7,854,425		1,146	0.06			7,346,239		1,463	0.08
Interest-bearing checking, money market and savings		29,798,562		33,808	0.45			13,363,703		1,794	0.05
Certificates of deposit and brokered deposits		2,716,885		2,538	0.37			1,957,286		1,314	0.27
Total deposits		53,960,539		37,492	0.28			29,849,344		4,571	0.06

Securities sold under agreements to repurchase and other borrowings		1,369,126		6,242	1.78			544,311		721	0.52
Federal Home Loan Bank advances		2,402,596		13,814	2.25			120,714		492	1.59
Long-term debt ^(a)		1,075,683		9,018	3.47			564,692		4,217	3.22
Total borrowings		4,847,405		29,074	2.38			1,229,717		5,430	1.82
Total interest-bearing liabilities		58,807,944	$	66,566	0.45	%		31,079,061	$	10,001	0.13	%
Non-interest-bearing liabilities		1,108,202						439,830
Total liabilities		59,916,146						31,518,891

Preferred stock		283,979						145,037
Common shareholders' equity		7,806,065						3,230,364
Total shareholders' equity		8,090,044						3,375,401
Total Liabilities and Shareholders' Equity	$	68,006,190					$	34,894,292
Tax-equivalent net interest income				564,250						232,125
Less: tax-equivalent adjustments				(13,247)						(2,434)
Net interest income			$	551,003					$	229,691
Net interest margin					3.54	%					2.80	%

(a) For the purposes of our average yield/rate and margin computations, unsettled trades on investment securities and unrealized gain (loss) balances on securities available-for-sale and senior fixed-rate notes hedges are excluded.

(b) Interest-bearing deposits is a component of cash and cash equivalents.

WEBSTER FINANCIAL CORPORATION Consolidated Average Balances, Interest, Yields and Rates, and Net Interest Margin on a Fully Tax-equivalent Basis (unaudited)
		Nine Months Ended September 30,
		2022						2021
(Dollars in thousands)		Average balance		Interest	Yield/rate			Average balance		Interest	Yield/rate
Assets:
Interest-earning assets:
Loans and leases	$	42,125,526	$	1,317,941	4.14	%	$	21,477,967	$	574,984	3.54	%
Investment securities ^(a)		14,548,116		246,788	2.22			8,878,820		136,727	2.09
Federal Home Loan and Federal Reserve Bank stock		252,559		4,768	2.52			77,040		909	1.58
Interest-bearing deposits^(b)		623,866		4,711	1.00			1,434,552		1419	0.13
Loans held for sale		12,160		73	0.80			11,515		201	2.33
Total interest-earning assets		57,562,227	$	1,574,281	3.60	%		31,879,894	$	714,240	2.98	%
Non-interest-earning assets		5,448,419						1,968,707
Total Assets	$	63,010,646					$	33,848,601

Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Demand deposits	$	12,758,489	$	-	-	%	$	6,800,456	$	-	-	%
Health savings accounts		7,809,082		3,358	0.06			7,414,332		4,720	0.09
Interest-bearing checking, money market and savings		27,887,362		48,992	0.23			12,579,762		5,117	0.05
Certificates of deposit and brokered deposits		2,649,328		5,000	0.25			2,146,218		6,267	0.39
Total deposits		51,104,261		57,350	0.15			28,940,768		16,104	0.07

Securities sold under agreements to repurchase and other borrowings		1,006,391		9,876	1.29			522,638		2,216	0.56
Federal Home Loan Bank advances		1,198,754		17,034	1.87			131,606		1,539	1.54
Long-term debt ^(a)		1,017,120		24,973	3.40			565,866		12,658	3.22
Total borrowings		3,222,265		51,883	2.16			1,220,110		16,413	1.85
Total interest-bearing liabilities		54,326,526	$	109,233	0.27	%		30,160,878	$	32,517	0.14	%
Non-interest-bearing liabilities		1,043,313						373,609

WEBSTER REPORTS THIRD QUARTER 2022 EPS OF $1.31; ADJUSTED EPS OF $1.46