Webster Financial Corporation Reports $768.7 Million Net Income for 2024, Down 11.4%

Webster Financial Corporation (Webster) reported a net income of $768.7 million for the year ended December 31, 2024, a decrease of $99.1 million (11.4%) compared to the $867.8 million reported in 2023. Diluted earnings per common share were $4.37 in 2024, down from $4.91 in 2023. Return on average assets decreased to 1.00% from 1.18% in the prior year, while return on average tangible common stockholders' equity (a non-GAAP measure) fell to 14.35% from 16.95%. Non-interest income as a percentage of total revenue decreased to 9.72% from 11.85% in 2023.

The decrease in net income was primarily driven by a $78.1 million increase in the provision for credit losses (excluding a merger-related charge in 2023), reflecting the impact of macroeconomic conditions on credit performance. Non-interest income also decreased by $62.4 million (19.9%), mainly due to net losses on the sale of investment securities and lower deposit service and loan-related fees. Offsetting these decreases was an increase in other income, primarily due to the acquisition of Ametros Financial Corporation. Total assets increased by $4.1 billion (5.4%) to $79.0 billion, largely due to increases in investment securities and loans and leases.

On January 24, 2024, Webster acquired Ametros, a medical fund custodian and administrator, adding a new source of deposits and non-interest income. On July 19, 2024, the company formed a private credit joint venture, MW Advisors, LLC, with Marathon Asset Management. The company also realigned certain Business Banking operations into Consumer Banking, effective January 1, 2024, resulting in the reassignment of loans and deposits and the reallocation of goodwill. As of December 31, 2024, Webster had 4,297 full-time and 110 part-time employees.

Webster's operations are organized into three reportable segments: Commercial Banking, Healthcare Financial Services (including HSA Bank and Ametros), and Consumer Banking. Commercial Banking experienced a decrease in pre-tax, pre-provision net revenue, primarily due to higher deposit costs and lower loan interest rate spreads. Healthcare Financial Services saw an increase in pre-tax, pre-provision net revenue due to the Ametros acquisition. Consumer Banking experienced a decrease in pre-tax, pre-provision net revenue due to lower net interest income and non-interest income. The company's liquidity and capital ratios exceeded minimum regulatory requirements at year-end.

Webster noted several risk factors, including information security risks, reputation risk, operational risks related to third-party vendors, credit risk, compliance risk, financial risks related to economic conditions and interest rates, and strategic risks related to competition and technological change. The company also discussed its enterprise risk management framework and its approach to managing various risk categories, including information risk, reputation risk, operational risk, credit risk, compliance risk, financial risk, and strategic risk. The company's outlook and forward-looking statements are included in the filing's "Forward-Looking Statements" section.