Document

Exhibit 99.1

WEBSTER REPORTS

SECOND QUARTER 2022 EPS OF $1.00; ADJUSTED EPS OF $1.29

STAMFORD, Conn., July 21, 2022 - 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 $178.1 million, or $1.00 per diluted share, for the quarter ended June 30, 2022, compared to $92.1 million, or $1.01 per diluted share, for the quarter ended June 30, 2021.

Second quarter 2022 results include $66.5 million pre-tax, ($50.5 million after tax), or $0.29 per diluted share, of merger-related expenses. Excluding these expenses, earnings per diluted share would have been $1.29 for the quarter ended June 30, 2022. Reported results prior to the first quarter of 2022 reflect legacy Webster Financial results only.

“Our second quarter performance is a great reflection of the strength of Webster,” said John R. Ciulla, President and Chief Executive Officer. “We achieved strong and diverse loan growth, the quality of our core deposit franchise was evident in this rising rate environment, and we maintained our strong capital position, providing flexibility as we operate through a changing macro environment.”

Highlights for the second quarter of 2022:

•Revenue of $607.6 million.

•Period end loan and lease balance of $45.6 billion; 80 percent commercial loans and leases, 20 percent consumer loans, and a loan to deposit ratio of 86 percent.

•Period end deposit balance of $53.1 billion.

•Provision for credit losses totaled $12.2 million.

•Charges related to the merger and strategic initiatives totaled $66.5 million.

•Return on average assets of 1.10 percent; adjusted 1.41 percent (non-GAAP).

•Return on average tangible common equity of 14.50 percent; adjusted 18.45 percent (non-GAAP).

•Net interest margin of 3.28 percent includes net accretion of 0.19 percent.

•Common equity tier 1 ratio of 11.04 percent.

•Efficiency ratio (non-GAAP) of 45.25 percent.

•Tangible common equity ratio of 7.68 percent.

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

“Our financial performance illustrates both merger synergies and the organic growth we anticipate our company will produce,” said Glenn MacInnes, Executive Vice President and Chief Financial Officer. “On an adjusted basis, we generated a return on assets of 1.41 percent and return on tangible common equity of 18.5 percent. Earnings improvement was broad, with interest income, fees and expenses all trending positively.”

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 second 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 June 30, 2022, Commercial Banking had $36.6 billion in loans and leases and $20.5 billion in deposit balances.

Commercial Banking Operating Results:


				Percent
	Three months ended June 30,			Favorable/
(In thousands)		2022	2021	(Unfavorable)
Net interest income		$333,421	$140,589		137.2	%
Non-interest income		49,430	18,378		169.0
Operating revenue		382,851	158,967		140.8
Non-interest expense		102,720	46,275		(122.0)
Pre-tax, pre-provision net revenue		$280,131	$112,692		148.6

				Percent
		At June 30,		Increase/
(In millions)		2022	2021	(Decrease)
Loans and leases		$36,634	$14,654		150.0	%
Deposits		20,501	8,729		134.9
AUA / AUM (off balance sheet)		2,266	2,863		(20.8)

Pre-tax, pre-provision net revenue increased $167.4 million to $280.1 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 $192.8 million to $333.4 million, with $177.1 million driven by the merger, and $15.7 million due to loan and deposit growth in the legacy Webster portfolios. Non-interest income increased $31.1 million to $49.4 million, with $27.6 million driven by the merger, and $3.5 million primarily driven by increased client hedging activity and growth in loan related fees. Non-interest expense increased $56.4 million to $102.7 million, with $50.6 million due to the merger, and $5.8 million primarily to support loan and deposit growth in the legacy Webster portfolios.

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 June 30, 2022, HSA Bank had $11.1 billion in total footings comprising $7.8 billion in deposit balances and $3.3 billion in assets under administration through linked investment accounts.

HSA Bank Operating Results:


				Percent
	Three months ended June 30,			Favorable/
(In thousands)		2022	2021	(Unfavorable)
Net interest income		$49,558	$42,193		17.5	%
Non-interest income		26,552	26,554		—
Operating revenue		76,110	68,747		10.7
Non-interest expense		37,540	32,423		(15.8)
Pre-tax, net revenue		$38,570	$36,324		6.2

				Percent
		At June 30,		Increase/
(Dollars in millions)		2022	2021	(Decrease)
Number of accounts (thousands)		3,077	2,995		2.7	%

Deposits		$7,778	$7,323		6.2
Linked investment accounts (off balance sheet)		3,277	3,384		(3.1)
Total footings		$11,055	$10,707		3.3

Pre-tax net revenue increased $2.2 million to $38.6 million in the quarter as compared to prior year. Net interest income increased $7.4 million to $49.6 million, primarily due to an increase in net deposit spread and growth in deposits. Non-interest income was flat at $26.6 million. Non-interest expense increased $5.1 million to $37.5 million, primarily due to incremental expenses from Bend's acquired business and higher temporary help, consulting, 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 202 banking centers and 359 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 June 30, 2022, Consumer Banking had $9.0 billion in loans and $23.8 billion in deposit balances, as well as $7.5 billion in assets under administration.

Consumer Banking Operating Results:


				Percent
	Three months ended June 30,			Favorable/
(In thousands)		2022	2021	(Unfavorable)
Net interest income		$179,067	$93,075		92.4	%
Non-interest income		30,784	24,098		27.7
Operating revenue		209,851	117,173		79.1
Non-interest expense		107,312	74,149		(44.7)
Pre-tax, pre-provision net revenue		$102,539	$43,024		138.3

				Percent
		At June 30,		Increase/
(In millions)		2022	2021	(Decrease)
Loans		$8,965	$6,821		31.4	%
Deposits		23,841	12,795		86.3
AUA (off balance sheet)		7,536	4,198		79.5

Pre-tax, pre-provision net revenue increased $59.5 million to $102.5 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 $86.0 million to $179.1 million, with $72.1 million driven by the merger, and $13.9 million driven by deposit and loan growth coupled with lower interest paid on deposits. Non-interest income increased $6.7 million to $30.8 million, with $6.4 million driven by the merger and $2.0 million from higher deposit and loan service fees, partially offset by $1.7 million in lower mortgage banking and investment services income. Non-interest expense increased $33.2 million to $107.3 million, primarily driven by the incremental expenses from the merger.

Consolidated financial performance:

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

•Net interest income was $486.7 million compared to $220.9 million.

•Net interest margin was 3.28 percent compared to 2.82 percent. The yield on interest-earning assets increased by 51 basis points, and the cost of interest-bearing liabilities increased by 5 basis points.

•Average interest-earning assets totaled $60.1 billion and increased by $28.5 billion, or 90.0 percent.

•Average loans and leases totaled $44.1 billion and grew by $22.7 billion, or 106.0 percent.

•Average deposits totaled $53.4 billion and grew by $24.7 billion, or 86.0 percent.

Quarterly provision for credit losses:

•The provision for credit losses reflects a $12.2 million expense in the quarter, contributing to a $2.1 million increase in the allowance for credit losses on loans and leases. The provision for credit losses reflected an expense of $188.8 million in the prior quarter, which included $175.1 million associated with day one accounting provision required for loans and leases acquired during the quarter from the Sterling merger, compared to a benefit of $21.5 million a year ago.

•Net charge-offs (recoveries) were $9.6 million, compared to $8.9 million in the prior quarter and $(1.2) million a year ago. The ratio of net charge-offs (recoveries) to average loans and leases on an annualized basis was 0.09 percent, compared to 0.10 percent in the prior quarter and (0.02) percent a year ago.

•The allowance for credit losses on loans and leases represented 1.25 percent of total loans and leases at June 30, 2022, compared to 1.31 percent at March 31, 2022 and 1.43 percent at June 30, 2021. The allowance represented 231 percent of nonperforming loans and leases at June 30, 2022 compared to 229 percent at March 31, 2022 and 255 percent at June 30, 2021.

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

•Total non-interest income was $120.9 million compared to $72.7 million, an increase of $48.2 million. The increase primarily reflects the impact of the merger with Sterling, along with higher deposit and loan related fees as a result of higher transactional activity.

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

•Total non-interest expense was $358.2 million compared to $187.0 million, an increase of $171.2 million. Total non-interest expense includes a net $66.5 million of merger and strategic initiative charges compared to $18.2 million a year ago. Excluding those charges, total non-interest expense increased $122.9 million which primarily reflects the impact of the merger with Sterling.

Quarterly income taxes compared to the second quarter of 2021:

•Income tax expense was $54.8 million compared to $34.0 million, and the effective tax rate was 23.1 percent compared to 26.6 percent. The higher effective tax rate in the period a year ago reflects the effects of merger related expenses recognized during the period that were estimated to be largely nondeductible for tax purposes.

Investment securities:

•Total investment securities, net were $15.2 billion, compared to $15.1 billion at March 31, 2022 and $8.9 billion at June 30, 2021. The carrying value of the available-for-sale portfolio included $609.8 million of net unrealized losses, compared to net unrealized losses of $328.4 million at March 31, 2022 and net unrealized gains of $49.3 million at June 30, 2021. The carrying value of the held-to-maturity portfolio does not reflect $539.4 million of net unrealized losses, compared to net unrealized losses of $270.8 million at March 31, 2022 and net unrealized gains of $170.5 million at June 30, 2021.

Loans and Leases:

•Total loans and leases were $45.6 billion, compared to $43.5 billion at March 31, 2022 and $21.5 billion at June 30, 2021. Compared to March 31, 2022, commercial loans and leases increased by $1.1 billion, commercial real estate loans and leases increased by $0.6 billion, residential mortgages increased by $0.4 billion, and consumer loans decreased by $6.5 million.

•Compared to a year ago, commercial loans and leases increased by $10.1 billion, commercial real estate loans and leases increased by $11.7 billion, and residential mortgages increased by $2.4 billion, while consumer loans decreased by $29.6 million.

•Loan originations for the portfolio were $5.0 billion, compared to $2.6 billion in the prior quarter and $2.3 billion a year ago. In addition, $5.0 million of residential loans were originated for sale in the quarter, compared to $23.1 million in the prior quarter and $54.6 million a year ago.

Asset quality:

•Total nonperforming loans and leases were $247.5 million, or 0.54 percent of total loans and leases, compared to $248.1 million, or 0.57 percent of total loans and leases, at March 31, 2022 and $120.7 million, or 0.56 percent of total loans and leases, at June 30, 2021. As of June 30, 2022, $90.3 million of nonperforming loans and leases were contractually current.

•Past due loans and leases were $51.7 million, compared to $71.5 million at March 31, 2022 and $18.4 million at June 30, 2021.

Deposits and borrowings:

•Total deposits were $53.1 billion, compared to $54.4 billion at March 31, 2022 and $28.8 billion at June 30, 2021. Core deposits to total deposits were 95.2 percent, compared to 94.8 percent at March 31, 2022 and 93.0 percent at June 30, 2021. The loan to deposit ratio was 86.0 percent, compared to 80.1 percent at March 31, 2022 and 74.4 percent at June 30, 2021.

•Total borrowings were $5.3 billion, compared to $1.6 billion at March 31, 2022 and $1.2 billion at June 30, 2021.

Capital:

•The return on average common shareholders’ equity and the return on average tangible common shareholders’ equity were 9.09 percent and 14.50 percent, respectively, compared to 11.63 percent and 14.26 percent, respectively, in the second quarter of 2021.

•The tangible equity and tangible common equity ratios were 8.12 percent and 7.68 percent, respectively, compared to 8.35 percent and 7.91 percent, respectively, at June 30, 2021. The common equity tier 1 risk-based capital ratio was 11.04 percent, compared to 11.66 percent at June 30, 2021.

•Book value and tangible book value per common share were $43.82 and $28.31, respectively, compared to $35.15 and $28.99, respectively, at June 30, 2021.

•Repurchased $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 $68 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 second quarter 2022 earnings announcement will be held today, Thursday, July 21, 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 July 21, 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)	June 30, 2022			March 31, 2022			December 31, 2021			September 30, 2021			June 30, 2021

Income and performance ratios:
Net income (loss)	$	182,311		$	(16,747)		$	111,038		$	95,713		$	94,035
Net income (loss) available to common shareholders	178,148			(20,178)			109,069			93,745			92,066
Earnings (loss) per diluted common share	1.00			(0.14)			1.20			1.03			1.01
Return on average assets	1.10		%	(0.12)		%	1.26		%	1.10		%	1.12		%
Return on average tangible common shareholders' equity (non-GAAP)	14.50			(1.36)			16.23			14.16			14.26
Return on average common shareholders’ equity	9.09			(1.25)			13.35			11.61			11.63
Non-interest income as a percentage of total revenue	19.90			20.88			28.44			26.73			24.77

Asset quality:
Allowance for credit losses on loans and leases	$	571,499		$	569,371		$	301,187		$	314,922		$	307,945
Nonperforming assets	250,242			251,206			112,590			104,209			123,497
Allowance for credit losses on loans and leases / total loans and leases	1.25		%	1.31		%	1.35		%	1.46		%	1.43		%
Net charge-offs (recoveries) / average loans and leases (annualized)	0.09			0.10			(0.02)			0.02			(0.02)
Nonperforming loans and leases / total loans and leases	0.54			0.57			0.49			0.47			0.56
Nonperforming assets / total loans and leases plus OREO	0.55			0.58			0.51			0.48			0.57
Allowance for credit losses on loans and leases / nonperforming loans and leases	230.88			229.48			274.36			309.44			255.05

Other ratios:
Tangible equity (non-GAAP)	8.12		%	8.72		%	8.39		%	8.12		%	8.35		%
Tangible common equity (non-GAAP)	7.68			8.26			7.97			7.71			7.91
Tier 1 risk-based capital (a)	11.61			12.05			12.32			12.39			12.30
Total risk-based capital (a)	13.86			14.41			13.64			13.79			13.70
Common equity tier 1 risk-based capital (a)	11.04			11.46			11.72			11.77			11.66
Shareholders’ equity / total assets	11.83			12.55			9.85			9.57			9.86
Net interest margin	3.28			3.21			2.73			2.80			2.82
Efficiency ratio (non-GAAP)	45.25			48.73			54.85			54.84			56.64

Equity and share related:
Common equity	$	7,713,809		$	7,893,156		$	3,293,288		$	3,241,152		$	3,184,668
Book value per common share	43.82			44.32			36.36			35.78			35.15
Tangible book value per common share (non-GAAP)	28.31			28.94			30.22			29.63			28.99
Common stock closing price	42.15			56.12			55.84			54.46			53.34
Dividends declared per common share	0.40			0.40			0.40			0.40			0.40
Common shares issued and outstanding	176,041			178,102			90,584			90,588			90,594
Weighted-average common shares outstanding - Basic	175,845			147,394			90,052			90,038			90,027
Weighted-average common shares outstanding - Diluted	175,895			147,533			90,284			90,232			90,221
(a) Presented as preliminary for June 30, 2022 and actual for the remaining periods.


WEBSTER FINANCIAL CORPORATION Consolidated Balance Sheets (unaudited)
(In thousands)	June 30, 2022		March 31, 2022		June 30, 2021
Assets:
Cash and due from banks	$	294,482	$	240,435	$	193,430
Interest-bearing deposits	607,323		552,778		1,386,463
Securities:
Available for sale	8,638,358		8,744,897		3,262,893
Held to maturity, net	6,547,998		6,362,254		5,623,243
Total securities, net	15,186,356		15,107,151		8,886,136
Loans held for sale	388		17,970		4,335
Loans and Leases:
Commercial	18,520,595		17,386,139		8,417,719
Commercial real estate	18,141,670		17,584,947		6,410,672
Residential mortgages	7,223,728		6,798,199		4,856,302
Consumer	1,760,750		1,767,200		1,790,308
Total loans and leases	45,646,743		43,536,485		21,475,001
Allowance for credit losses on loans and leases	(571,499)		(569,371)		(307,945)
Loans and leases, net	45,075,244		42,967,114		21,167,056
Federal Home Loan Bank and Federal Reserve Bank stock	329,424		206,123		76,874
Premises and equipment, net	449,578		490,004		215,716
Goodwill and other intangible assets, net	2,729,551		2,738,353		558,485
Cash surrender value of life insurance policies	1,228,484		1,222,898		570,380
Deferred tax asset, net	269,790		178,042		78,268
Accrued interest receivable and other assets	1,424,401		1,410,616		616,609
Total Assets	$	67,595,021	$	65,131,484	$	33,753,752

Liabilities and Shareholders' Equity:
Deposits:
Demand	$	13,576,152	$	13,570,702	$	6,751,373
Health savings accounts	7,777,786		7,804,858		7,323,421
Interest-bearing checking	9,547,749		9,579,839		3,843,725
Money market	10,884,656		11,964,649		3,442,319
Savings	8,736,712		8,615,138		5,471,584
Certificates of deposit	2,554,102		2,821,097		2,014,544

Total deposits	53,077,157		54,356,283		28,846,966
Securities sold under agreements to repurchase and other borrowings	1,743,782		518,733		507,124
Federal Home Loan Bank advances	2,510,810		10,903		138,444
Long-term debt	1,076,559		1,078,274		565,297
Accrued expenses and other liabilities	1,188,925		990,156		366,216
Total liabilities	59,597,233		56,954,349		30,424,047
Preferred stock	283,979		283,979		145,037
Common shareholders' equity	7,713,809		7,893,156		3,184,668
Total shareholders’ equity	7,997,788		8,177,135		3,329,705
Total Liabilities and Shareholders' Equity	$	67,595,021	$	65,131,484	$	33,753,752


WEBSTER FINANCIAL CORPORATION Consolidated Statements of Income (unaudited)
	Three months ended June 30,				Six months ended June 30,
(In thousands, except per share data)	2022		2021		2022		2021
Interest income:
Interest and fees on loans and leases	$	431,538	$	185,919	$	777,814	$	376,455
Interest and dividends on securities	82,202		45,586		145,728		90,533
Loans held for sale	7		53		33		144
Total interest income	513,747		231,558		923,575		467,132
Interest expense:
Deposits	12,459		5,094		19,858		11,533
Borrowings	14,628		5,612		22,809		10,983
Total interest expense	27,087		10,706		42,667		22,516
Net interest income	486,660		220,852		880,908		444,616
Provision for credit losses	12,243		(21,500)		201,088		(47,250)
Net interest income after provision for loan and lease losses	474,417		242,352		679,820		491,866
Non-interest income:
Deposit service fees	51,385		41,439		99,212		81,908
Loan and lease related fees	27,907		7,862		50,586		16,175
Wealth and investment services	11,244		10,087		21,841		19,490
Mortgage banking activities	102		1,319		530		3,961
Increase in cash surrender value of life insurance policies	8,244		3,603		14,976		7,136

Other income	22,051		8,392		37,823		20,789


Total non-interest income	120,933		72,702		224,968		149,459
Non-interest expense:
Compensation and benefits	187,656		97,754		371,658		205,354
Occupancy	51,593		14,010		70,208		29,660
Technology and equipment	41,498		27,124		96,899		55,640
Marketing	3,441		3,227		6,950		5,731
Professional and outside services	15,332		21,025		69,423		30,801
Intangible assets amortization	8,802		1,132		15,189		2,271
Loan workout expenses	732		327		1,412		721
Deposit insurance	6,748		3,749		11,970		7,705
Other expenses	42,425		18,680		74,303		37,127
Total non-interest expense	358,227		187,028		718,012		375,010
Income before income taxes	237,123		128,026		186,776		266,315
Income tax expense	54,812		33,991		21,212		64,202
Net income	182,311		94,035		165,564		202,113
Preferred stock dividends	(4,163)		(1,969)		(7,594)		(3,938)
Net income available to common shareholders	$	178,148	$	92,066	$	157,970	$	198,175

Weighted-average common shares outstanding - Diluted	175,895		90,221		161,785		90,164

Earnings per common share:
Basic	$	1.00	$	1.02	$	0.97	$	2.19
Diluted	1.00		1.01		0.97		2.19


WEBSTER FINANCIAL CORPORATION Five Quarter Consolidated Statements of Income (unaudited)
	Three Months Ended
(In thousands, except per share data)	June 30, 2022		March 31, 2022		December 31, 2021		September 30, 2021		June 30, 2021
Interest income:
Interest and fees on loans and leases	$	431,538	$	346,276	$	189,985	$	196,273	$	185,919
Interest and dividends on securities	82,202		63,526		45,990		43,362		45,586
Loans held for sale	7		26		45		57		53
Total interest income	513,747		409,828		236,020		239,692		231,558
Interest expense:
Deposits	12,459		7,399		4,027		4,571		5,094
Borrowings	14,628		8,181		5,211		5,430		5,612
Total interest expense	27,087		15,580		9,238		10,001		10,706
Net interest income	486,660		394,248		226,782		229,691		220,852
Provision for credit losses	12,243		188,845		(15,000)		7,750		(21,500)
Net interest income after provision for loan and lease losses	474,417		205,403		241,782		221,941		242,352
Non-interest income:
Deposit service fees	51,385		47,827		40,544		40,258		41,439
Loan and lease related fees	27,907		22,679		9,602		10,881		7,862
Wealth and investment services	11,244		10,597		10,111		9,985		10,087
Mortgage banking activities	102		428		733		1,525		1,319
Increase in cash surrender value of life insurance policies	8,244		6,732		3,627		3,666		3,603

Other income	22,051		15,772		25,521		17,460		8,392


Total non-interest income	120,933		104,035		90,138		83,775		72,702
Non-interest expense:
Compensation and benefits	187,656		184,002		109,283		105,352		97,754
Occupancy	51,593		18,615		13,256		12,430		14,010
Technology and equipment	41,498		55,401		28,750		28,441		27,124
Marketing	3,441		3,509		2,599		3,721		3,227
Professional and outside services	15,332		54,091		9,360		7,074		21,025
Intangible assets amortization	8,802		6,387		1,118		1,124		1,132
Loan workout expenses	732		680		244		203		327
Deposit insurance	6,748		5,222		4,234		3,855		3,749
Other expenses	42,425		31,878		21,009		18,037		18,680
Total non-interest expense	358,227		359,785		189,853		180,237		187,028
Income (loss) before income taxes	237,123		(50,347)		142,067		125,479		128,026
Income tax expense (benefit)	54,812		(33,600)		31,029		29,766		33,991
Net income (loss)	182,311		(16,747)		111,038		95,713		94,035
Preferred stock dividends	(4,163)		(3,431)		(1,969)		(1,968)		(1,969)
Net income (loss) available to common shareholders	$	178,148	$	(20,178)	$	109,069	$	93,745	$	92,066

Weighted-average common shares outstanding - Diluted	175,895		147,533		90,284		90,232		90,221

Earnings (loss) per common share:
Basic	$	1.00	$	(0.14)	$	1.20	$	1.03	$	1.02
Diluted	1.00		(0.14)		1.20		1.03		1.01


WEBSTER FINANCIAL CORPORATION Consolidated Average Balances, Interest, Yields and Rates, and Net Interest Margin on a Fully Tax-equivalent Basis (unaudited)
	Three Months Ended June 30,
			2022						2021
(Dollars in thousands)	Average balance		Interest		Yield/rate		Average balance		Interest		Yield/rate
Assets:
Interest-earning assets:
Loans and leases	$	44,120,698	$	436,462	3.92	%	$	21,413,439	$	186,681	3.46	%
Investment securities (a)	15,165,514		85,958		2.22		8,834,859		46,582		2.13
Federal Home Loan and Federal Reserve Bank stock	262,695		2,072		3.16		77,292		382		1.98
Interest-bearing deposits (b)	488,870		980		0.79		1,270,121		347		0.11
Loans held for sale	18,172		7		0.15		8,898		53		2.37
Total interest-earning assets	60,055,949		$	525,479	3.46	%	31,604,609		$	234,045	2.95	%
Non-interest-earning assets	6,016,193						1,901,412
Total Assets	$	66,072,142					$	33,506,021

Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Demand deposits	$	13,395,942	$	—	—	%	$	6,774,206	$	—	—	%
Health savings accounts	7,812,313		1,125		0.06		7,446,735		1,650		0.09
Interest-bearing checking, money market and savings	29,486,846		10,165		0.14		12,365,074		1,603		0.05
Certificates of deposit	2,684,914		1,169		0.17		2,114,889		1,841		0.35
Total deposits	53,380,015		12,459		0.09		28,700,904		5,094		0.07

Securities sold under agreements to repurchase and other borrowings	1,064,304		2,677		1.00		500,638		860		0.68
Federal Home Loan Bank advances	1,156,449		3,164		1.08		138,483		534		1.52
Long-term debt (a)	1,077,395		8,787		3.38		565,874		4,218		3.22
Total borrowings	3,298,148		14,628		1.79		1,204,995		5,612		1.93
Total interest-bearing liabilities	56,678,163		$	27,087	0.19	%	29,905,899		$	10,706	0.14	%
Non-interest-bearing liabilities	1,268,461						288,716
Total liabilities	57,946,624						30,194,615

Preferred stock	283,979						145,037
Common shareholders' equity	7,841,539						3,166,369
Total shareholders' equity	8,125,518						3,311,406
Total Liabilities and Shareholders' Equity	$	66,072,142					$	33,506,021
Tax-equivalent net interest income			498,392						223,339
Less: tax-equivalent adjustments			(11,732)						(2,487)
Net interest income			$	486,660					$	220,852
Net interest margin					3.28	%					2.82	%

(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)
	Six Months Ended June 30,
			2022						2021
(Dollars in thousands)	Average balance		Interest		Yield/rate		Average balance		Interest		Yield/rate
Assets:
Interest-earning assets:
Loans and leases	$	40,039,437	$	785,879	3.91	%	$	21,447,192	$	377,969	3.51	%
Investment securities (a)	14,298,347		153,227		2.12		8,862,314		92,859		2.13
Federal Home Loan and Federal Reserve Bank stock	214,792		2,893		2.72		77,461		619		1.61
Interest-bearing deposits (b)	643,210		1,433		0.44		976,873		523		0.11
Loans held for sale	18,046		33		0.36		11,610		144		2.48
Total interest-earning assets	55,213,832		$	943,465	3.40	%	31,375,450		$	472,114	3.01	%
Non-interest-earning assets	5,257,642						1,941,640
Total Assets	$	60,471,474					$	33,317,090

Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Demand deposits	$	12,335,504	$	—	—	%	$	6,606,464	$	—	—	%
Health savings accounts	7,786,035		2,212		0.06		7,448,943		3,257		0.09
Interest-bearing checking, money market and savings	26,915,923		15,184		0.11		12,181,295		3,323		0.06
Certificates of deposit	2,614,989		2,462		0.19		2,242,250		4,953		0.45
Total deposits	49,652,451		19,858		0.08		28,478,952		11,533		0.08

Securities sold under agreements to repurchase and other borrowings	822,017		3,634		0.88		511,622		1,495		0.58
Federal Home Loan Bank advances	586,857		3,220		1.09		137,143		1,047		1.52
Long-term debt (a)	987,353		15,955		3.36		566,462		8,441		3.22
Total borrowings	2,396,227		22,809		1.93		1,215,227		10,983		1.87
Total interest-bearing liabilities	52,048,678		$	42,667	0.16	%	29,694,179		$	22,516	0.15	%
Non-interest-bearing liabilities	1,010,331						339,949
Total liabilities	53,059,009						30,034,128

Preferred stock	260,183						145,037
Common shareholders' equity	7,152,282						3,137,925
Total shareholders' equity	7,412,465						3,282,962
Total Liabilities and Shareholders' Equity	$	60,471,474					$	33,317,090
Tax-equivalent net interest income			900,798						449,598
Less: tax-equivalent adjustments			(19,890)						(4,982)
Net interest income			$	880,908					$	444,616
Net interest margin					3.24	%					2.87	%

(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 Five Quarter Loan and Lease Balances (unaudited)
(Dollars in thousands)	June 30, 2022		March 31, 2022		December 31, 2021		September 30, 2021		June 30, 2021
Loan and Lease Balances (actual):
Commercial non-mortgage	$	16,628,317	$	15,578,594	$	7,509,538	$	7,172,345	$	7,473,758
Asset-based lending	1,892,278		1,807,545		1,067,248		986,782		943,961
Commercial real estate	18,141,670		17,584,947		6,603,180		6,522,679		6,410,672
Residential mortgages	7,223,728		6,798,199		5,412,905		5,167,527		4,856,302
Consumer	1,760,750		1,767,200		1,678,858		1,731,002		1,790,308
Total Loan and Lease Balances	45,646,743		43,536,485		22,271,729		21,580,335		21,475,001
Allowance for credit losses on loans and leases	(571,499)		(569,371)		(301,187)		(314,922)		(307,945)
Loans and Leases, net	$	45,075,244	$	42,967,114	$	21,970,542	$	21,265,413	$	21,167,056

Loan and Lease Balances (average):
Commercial non-mortgage	$	15,850,507	$	12,568,454	$	7,304,985	$	7,280,258	$	7,545,398
Asset-based lending	1,851,956		1,540,301		1,010,874		956,535		937,580
Commercial real estate	17,756,151		13,732,925		6,575,865		6,510,100		6,365,830
Residential mortgages	6,905,509		6,322,495		5,309,127		5,036,329		4,738,859
Consumer	1,756,575		1,748,654		1,701,250		1,755,291		1,825,772
Total Loan and Lease Balances	$	44,120,698	$	35,912,829	$	21,902,101	$	21,538,513	$	21,413,439


WEBSTER FINANCIAL CORPORATION Five Quarter Nonperforming Assets and Past Due Loans and Leases (unaudited)
(Dollars in thousands)	June 30, 2022		March 31, 2022		December 31, 2021		September 30, 2021		June 30, 2021
Nonperforming loans and leases:
Commercial non-mortgage	$	112,006	$	108,460	$	63,553	$	40,774	$	57,831

Asset-based lending	25,862		5,494		2,114		2,139		2,403
Commercial real estate	49,935		74,581		5,058		15,972		12,687
Residential mortgages	27,213		27,318		15,591		19,327		21,467
Consumer	32,514		32,258		23,462		23,558		26,353
Total nonperforming loans and leases	$	247,530	$	248,111	$	109,778	$	101,770	$	120,741

Other real estate owned and repossessed assets:


Residential mortgages	$	2,558	$	2,582	$	2,276	$	1,759	$	1,934
Consumer	154		513		536		680		822
Total other real estate owned and repossessed assets	$	2,712	$	3,095	$	2,812	$	2,439	$	2,756
Total nonperforming assets	$	250,242	$	251,206	$	112,590	$	104,209	$	123,497




Past due 30-89 days:
Commercial non-mortgage	$	6,006	$	8,025	$	9,340	$	5,537	$	3,154
Asset-based lending	—		24,103		—		—		—
Commercial real estate	25,587		20,533		921		821		1,679
Residential mortgages	10,781		9,307		3,561		3,447		4,690
Consumer	9,275		9,379		5,576		7,158		8,829
Total past due 30-89 days	$	51,649	$	71,347	$	19,398	$	16,963	$	18,352
Past due 90 days or more and accruing	8		124		2,507		107		25
Total past due loans and leases	$	51,657	$	71,471	$	21,905	$	17,070	$	18,377


Five Quarter Changes in the Allowance for Credit Losses on Loans and Leases (unaudited)
	For the Three Months Ended
(Dollars in thousands)	June 30, 2022		March 31, 2022		December 31, 2021		September 30, 2021		June 30, 2021
ACL on loans and leases, beginning balance	$	569,371	$	301,187	$	314,922	$	307,945	$	328,351

Initial allowance on PCD loans and leases (1)	—		88,045		—		—		—
Provision	11,728		189,068		(14,980)		7,898		(21,574)
Charge-offs:



Commercial portfolio	18,757		11,248		799		1,723		594


Consumer portfolio	896		1,120		1,382		2,053		2,808
Total charge-offs	19,653		12,368		2,181		3,776		3,402
Recoveries:



Commercial portfolio	7,765		1,364		1,107		142		836


Consumer portfolio	2,288		2,075		2,319		2,713		3,734
Total recoveries	10,053		3,439		3,426		2,855		4,570
Total net charge-offs (recoveries)	9,600		8,929		(1,245)		921		(1,168)
ACL on loans and leases, ending balance	$	571,499	$	569,371	$	301,187	$	314,922	$	307,945

ACL on unfunded loan commitments, beginning balance	$	19,640	$	13,104	$	12,170	$	11,974	$	12,800
Acquisition of Sterling	—		6,749		—		—		—
Provision	509		(213)		934		196		(826)
ACL on unfunded loan commitments, ending balance	$	20,149	$	19,640	$	13,104	$	12,170	$	11,974
Total ending balance	$	591,648	$	589,011	$	314,291	$	327,092	$	319,919

(1)Represents the establishment of the initial reserve for PCD loans and leases net of $48 million in charge-offs recognized upon completion of the merger in accordance with GAAP.

WEBSTER FINANCIAL CORPORATION

Reconciliations to GAAP Financial Measures

The Company evaluates its business based on certain ratios that utilize non-GAAP financial measures. The Company believes the use of these non-GAAP financial measures provides additional clarity in assessing the results and financial position of the Company. Other companies may define or calculate supplemental financial data differently.

The efficiency ratio, which measures the costs expended to generate a dollar of revenue, is calculated excluding certain non-operational items. Return on average tangible common shareholders' equity (ROATCE) measures the Company’s net income available to common shareholders, adjusted for the tax-effected amortization of intangible assets, as a percentage of average shareholders’ equity less average preferred stock and average goodwill and intangible assets. The tangible equity ratio represents shareholders’ equity less goodwill and intangible assets divided by total assets less goodwill and intangible assets. The tangible common equity ratio represents shareholders’ equity less preferred stock and goodwill and intangible assets divided by total assets less goodwill and intangible assets. Tangible book value per common share represents shareholders’ equity less preferred stock and goodwill and intangible assets divided by common shares outstanding at the end of the period. Core deposits express total deposits less certificates of deposit and brokered time deposits. Adjusted net income (loss) available to common shareholders, adjusted diluted earnings per share (EPS), adjusted ROATCE, and adjusted return on average assets (ROAA) are calculated by excluding after tax non-operational items including merger-related expenses and the initial non-PCD provision related to the merger. See the tables below for reconciliations of these non-GAAP financial measures with financial measures defined by GAAP.


	At or for the Three Months Ended
(In thousands, except per share data)	June 30, 2022		March 31, 2022		December 31, 2021		September 30, 2021		June 30, 2021
Efficiency ratio:
Non-interest expense	$	358,227	$	359,785	$	189,853	$	180,237	$	187,028
Less: Foreclosed property activity	(358)		(75)		(347)		(142)		(137)
Intangible assets amortization	8,802		6,387		1,118		1,124		1,132
Operating lease depreciation	2,425		1,632		—		—		—
Strategic initiatives	(152)		(4,140)		600		(4,011)		1,138
Merger related	66,640		108,495		10,560		9,847		17,047
Debt prepayment costs	—		—		2,526		—		—
Non-interest expense	$	280,870	$	247,486	$	175,396	$	173,419	$	167,848
Net interest income	$	486,660	$	394,248	$	226,782	$	229,691	$	220,852
Add: Tax-equivalent adjustment	11,732		8,158		2,397		2,434		2,487
Non-interest income	120,933		104,035		90,138		83,775		72,702
Other	3,805		3,082		431		327		309


Less: Operating lease depreciation	2,425		1,632		—		—		—

Income	$	620,705	$	507,891	$	319,748	$	316,227	$	296,350
Efficiency ratio	45.25%		48.73%		54.85%		54.84%		56.64%

Return on average tangible common shareholders' equity:
Net income (loss)	$	182,311	$	(16,747)	$	111,038	$	95,713	$	94,035
Less: Preferred stock dividends	4,163		3,431		1,969		1,968		1,969
Add: Intangible assets amortization, tax-effected	6,954		5,046		883		888		894
Income (loss) adjusted for preferred stock dividends and intangible assets amortization	$	185,102	$	(15,132)	$	109,952	$	94,633	$	92,960
Income (loss) adjusted for preferred stock dividends and intangible assets amortization, annualized basis	$	740,408	$	(60,528)	$	439,808	$	378,532	$	371,840
Average shareholders' equity	$	8,125,518	$	6,691,490	$	3,411,911	$	3,375,401	$	3,311,406
Less: Average preferred stock	283,979		236,121		145,037		145,037		145,037
Average goodwill and other intangible assets	2,733,827		2,007,266		556,784		557,902		559,032
Average tangible common shareholders' equity	$	5,107,712	$	4,448,103	$	2,710,090	$	2,672,462	$	2,607,337
Return on average tangible common shareholders' equity	14.50%		(1.36)%		16.23%		14.16%		14.26%

WEBSTER FINANCIAL CORPORATION

Reconciliations to GAAP Financial Measures (continued)


	At or for the Three Months Ended
(In thousands, except per share data)	June 30, 2022		March 31, 2022		December 31, 2021		September 30, 2021		June 30, 2021
Tangible equity:
Shareholders' equity	$	7,997,788	$	8,177,135	$	3,438,325	$	3,386,189	$	3,329,705
Less: Goodwill and other intangible assets	2,729,551		2,738,353		556,242		557,360		558,485
Tangible shareholders' equity	$	5,268,237	$	5,438,782	$	2,882,083	$	2,828,829	$	2,771,220
Total assets	$	67,595,021	$	65,131,484	$	34,915,599	$	35,374,258	$	33,753,752
Less: Goodwill and other intangible assets	2,729,551		2,738,353		556,242		557,360		558,485
Tangible assets	$	64,865,470	$	62,393,131	$	34,359,357	$	34,816,898	$	33,195,267
Tangible equity	8.12%		8.72%		8.39%		8.12%		8.35%

Tangible common equity:
Tangible shareholders' equity	$	5,268,237	$	5,438,782	$	2,882,083	$	2,828,829	$	2,771,220
Less: Preferred stock	283,979		283,979		145,037		145,037		145,037
Tangible common shareholders' equity	$	4,984,258	$	5,154,803	$	2,737,046	$	2,683,792	$	2,626,183
Tangible assets	$	64,865,470	$	62,393,131	$	34,359,357	$	34,816,898	$	33,195,267
Tangible common equity	7.68%		8.26%		7.97%		7.71%		7.91%

Tangible book value per common share:
Tangible common shareholders' equity	$	4,984,258	$	5,154,803	$	2,737,046	$	2,683,792	$	2,626,183
Common shares outstanding	176,041		178,102		90,584		90,588		90,594
Tangible book value per common share	$	28.31	$	28.94	$	30.22	$	29.63	$	28.99

Core deposits:
Total deposits	$	53,077,157	$	54,356,283	$	29,847,029	$	30,026,327	$	28,846,966
Less: Certificates of deposit	2,554,102		2,821,097		1,797,770		1,884,373		2,014,544

Core deposits	$	50,523,055	$	51,535,186	$	28,049,259	$	28,141,954	$	26,832,422



	Three months ended June 30, 2022
Adjusted ROATCE:
Net income	$	182,311
Less: Preferred stock dividends	4,163
Add: Intangible assets amortization, tax-effected	6,954
Strategic initiatives, tax-effected	(116)
Merger related, tax-effected	50,583

Income adjusted for preferred stock dividends, intangible assets amortization, and other	$	235,569
Income adjusted for preferred stock dividends, intangible assets amortization, and other, annualized basis	$	942,276
Average shareholders' equity	$	8,125,518
Less: Average preferred stock	283,979
Average goodwill and other intangible assets	2,733,827
Average tangible common shareholders' equity	$	5,107,712
Adjusted return on average tangible common shareholders' equity	18.45		%

Adjusted ROAA:
Net income	$	182,311
Add: Strategic initiatives, tax-effected	(116)
Merger related, tax-effected	50,583

Income adjusted for strategic initiatives and merger related	$	232,778
Income adjusted for strategic initiatives and merger related, annualized basis	$	931,112
Average assets	$	66,072,142
Adjusted return on average assets	1.41		%


(In millions, except per share data)
GAAP to adjusted reconciliation:
	Three months ended June 30, 2022
	Pre-Tax Income		Net Income Available to Common Shareholders		Diluted EPS
Reported (GAAP)	$	237.1	$	178.1	$	1.00
Strategic initiatives	(0.1)		(0.1)		—

Merger related expenses	66.6		50.6		0.29


Adjusted (non-GAAP)	$	303.6	$	228.6	$	1.29