Document

Exhibit 99.1

WEBSTER REPORTS

THIRD QUARTER 2021 EARNINGS OF $1.03 PER DILUTED SHARE

WATERBURY, Conn., October 21, 2021 - Webster Financial Corporation (NYSE: WBS), the holding company for Webster Bank, N.A. and its HSA Bank division, today announced earnings applicable to common shareholders of $93.2 million, or $1.03 per diluted share, for the quarter ended September 30, 2021, compared to $66.9 million, or $0.75 per diluted share, for the quarter ended September 30, 2020. Earnings per diluted share would have been $1.08 for the quarter ended September 30, 2021, adjusting for a net $5.8 million ($4.3 million after tax) of merger related costs and strategic optimization initiatives.

“Webster delivered strong financial performance as evidenced by linked quarter loan growth of 2.7%, excluding PPP, and deposit growth of 4.1%,” said John R. Ciulla, chairman and chief executive officer. “While we continue to deliver for clients, communities, colleagues and shareholders, integration plans for our merger with Sterling are well established and we are prepared to execute the transaction upon receipt of all regulatory approvals.”

Highlights for the third quarter of 2021:

•Revenue of $313.5 million, an increase of 6.5 percent compared to a year ago.

•Loan growth of 2.7 percent linked quarter, excluding Paycheck Protection Program (PPP) loans, led by commercial and residential which increased 3.3 percent.

•Current Expected Credit Loss (CECL) provision of $7.8 million with a reserve increase of $7.0 million compared to the prior quarter primarily driven by loan growth, resulting in an allowance coverage of 1.46 percent, or 1.49 percent excluding $0.4 billion of PPP loans.

•Deposit growth of $1.2 billion or 4.1 percent linked quarter, with growth of $741.6 million in demand and interest-bearing checking deposits and $516.4 million in money market deposits.

•Charges related to merger and strategic optimization initiatives totaled $5.8 million.

•Net interest margin of 2.80 percent.

•Efficiency ratio (non-GAAP) of 54.8 percent.

“Credit quality and economic conditions continued to improve, supporting favorable trends for non-performing loans and net charge-offs in the quarter,” said Glenn MacInnes, executive vice president and chief financial officer. “The strength of our balance sheet continues to position us well for the future.”

Line of Business performance compared to the third quarter of 2020

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, 2021, Commercial Banking had $14.7 billion in loans and leases and $10.2 billion in deposit balances.

Commercial Banking Operating Results:


				Percent
	Three months ended September 30,			Favorable/
(In thousands)		2021	2020	(Unfavorable)
Net interest income		$152,556	$132,026		15.5	%
Non-interest income		30,076	20,710		45.2
Operating revenue		182,632	152,736		19.6
Non-interest expense		64,917	66,482		2.4
Pre-tax, pre-provision net revenue		$117,715	$86,254		36.5

				Percent
		At September 30,		Increase/
(In millions)		2021	2020	(Decrease)
Loans and leases		$14,655	$14,544		0.8	%
Deposits		10,219	8,326		22.7
AUA / AUM (off balance sheet)		7,041	6,000		17.4

Pre-tax, pre-provision net revenue increased $31.5 million to $117.7 million in the quarter as compared to prior year. Net interest income increased $20.5 million to $152.6 million, primarily driven by PPP loan fee acceleration associated with PPP loan forgiveness, loan rates, and deposit growth. Non-interest income increased $9.4 million to $30.1 million, driven by higher syndication fees, fair value adjustments on direct investments, and trust and investment service fees. Non-interest expense decreased $1.6 million to $64.9 million, primarily driven by lower support costs.

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, 2021, HSA Bank had $10.7 billion in total footings comprising $7.3 billion in deposit balances and $3.4 billion in assets under administration through linked investment accounts.

HSA Bank Operating Results:


				Percent
	Three months ended September 30,			Favorable/
(In thousands)		2021	2020	(Unfavorable)
Net interest income		$42,074	$39,861		5.6	%
Non-interest income		24,756	27,235		(9.1)
Operating revenue		66,830	67,096		(0.4)
Non-interest expense		32,800	34,789		5.7
Pre-tax, net revenue		$34,030	$32,307		5.3

				Percent
		At September 30,		Increase/
(Dollars in millions)		2021	2020	(Decrease)
Number of accounts (thousands)		3,003	2,968		1.2	%

Deposits		$7,329	$6,976		5.1
Linked investment accounts (off balance sheet)		3,427	2,454		39.6
Total footings		$10,756	$9,430		14.1

Pre-tax net revenue increased $1.7 million to $34.0 million in the quarter as compared to prior year. Net interest income increased $2.2 million to $42.1 million, due to growth in deposits. Non-interest income decreased $2.5 million to $24.8 million, primarily due to decreases in third-party administrator closure fees. Non-interest expense decreased $2.0 million to $32.8 million, primarily due to reduced compensation and benefits expenses.

Retail Banking

Retail Banking serves consumer and business banking customers primarily throughout southern New England and into Westchester County, New York. Retail 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 130 banking centers and 254 ATMs, a customer care center, and a full range of web and mobile-based banking services. As of September 30, 2021, Retail Banking had $6.9 billion in loans and $12.5 billion in deposit balances.

Retail Banking Operating Results:


				Percent
	Three months ended September 30,			Favorable/
(In thousands)		2021	2020	(Unfavorable)
Net interest income		$98,028	$83,609		17.2	%
Non-interest income		16,998	21,359		(20.4)
Operating revenue		115,026	104,968		9.6
Non-interest expense		73,480	80,119		8.3
Pre-tax, pre-provision net revenue		$41,546	$24,849		67.2

				Percent
		At September 30,		Increase/
(In millions)		2021	2020	(Decrease)
Loans		$6,925	$7,308		(5.2)	%
Deposits		12,475	11,623		7.3

Pre-tax, pre-provision net revenue increased $16.7 million to $41.5 million in the quarter as compared to prior year. Net interest income increased $14.4 million to $98.0 million, driven by PPP loan fee acceleration associated with PPP loan forgiveness, deposit balance growth, and lower interest paid on deposits, partially offset by lower consumer loan balances. Non-interest income decreased $4.4 million to $17.0 million, resulting from lower mortgage banking fee income, partially offset by higher deposit service fees. Non-interest expense decreased $6.6 million to $73.5 million, driven by lower employee-related, occupancy, technology and equipment, and marketing expenses.

Consolidated financial performance:

Quarterly net interest income compared to the third quarter of 2020:

•Net interest income was $229.7 million compared to $219.3 million.

•Net interest margin was 2.80 percent compared to 2.88 percent. The yield on interest-earning assets declined by 21 basis points, and the cost of interest-bearing liabilities declined by 14 basis points.

•Average interest-earning assets totaled $32.9 billion and grew by $2.0 billion, or 6.5 percent.

•Average loans totaled $21.5 billion and declined by $0.3 billion, or 1.5 percent.

•Average deposits totaled $29.8 billion and grew by $2.9 billion, or 10.8 percent.

Quarterly provision for credit losses:

•The provision for credit losses reflects a $7.8 million provision in the quarter, contributing to a $7.0 million increase in the allowance for credit losses on loans and leases. The increase in the allowance is based primarily on loan growth. The provision for credit losses reflected a $21.5 million benefit in the prior quarter compared to an expense of $22.8 million a year ago.

•Net charge-offs (recoveries) were $0.9 million, compared to $(1.2) million in the prior quarter and $11.5 million a year ago. The ratio of net charge-offs (recoveries) to average loans on an annualized basis was 0.02 percent, compared to (0.02) percent in the prior quarter and 0.21 percent a year ago.

•The allowance for credit losses on loans and leases represented 1.46 percent of total loans at September 30, 2021, compared to 1.43 percent at June 30, 2021 and 1.69 percent at September 30, 2020. Excluding $0.4 billion of risk free PPP loans, the coverage ratio was 1.49 percent at September 30, 2021, compared to 1.49 percent at June 30, 2021 excluding $0.8 billion of risk free PPP loans, and 1.80 percent at September 30, 2020 excluding $1.4 billion of risk free PPP loans. The allowance represented 309 percent of nonperforming loans at September 30, 2021 compared to 255 percent at June 30, 2021 and 227 percent at September 30, 2020.

Quarterly non-interest income compared to the third quarter of 2020:

•Total non-interest income was $83.8 million compared to $75.1 million, an increase of $8.7 million. This primarily reflects an increase of $9.0 million in other due to fair value adjustments on direct investments; $4.3 million in loan related fees driven by higher syndication and prepayment fees; $1.8 million in deposit service fees driven by higher overdraft and cash management fees; and $1.7 million primarily due to increased investment activity. These increases were partially offset by a $5.6 million decrease in mortgage banking activities which is in line with our strategic choice to originate loans for portfolio along with lower spreads on loans originated for sale and a $2.5 million decrease in HSA fee income due to prior year closure fees from third-party administrator custodial accounts and lower account service related charges.

Quarterly non-interest expense compared to the third quarter of 2020:

•Total non-interest expense was $180.2 million compared to $184.0 million, a decrease of $3.8 million. Total non-interest expense includes a net $5.8 million of merger and strategic initiative related charges compared to $4.8 million of strategic initiatives a year ago. Excluding those charges, total non-interest expense decreased $4.8 million reflecting a $2.5 million decrease in compensation and benefits, a $1.8 million decrease in occupancy, and a $0.9 million decrease in the reserve for unfunded lines.

Quarterly income taxes compared to the third quarter of 2020:

•Income tax expense was $29.8 million compared to $18.3 million, and the effective tax rate was 23.7 percent compared to 20.9 percent. The higher effective tax rate in the quarter primarily reflects the effects of increased pre-tax income in 2021 compared to 2020.

Investment securities:

•Total investment securities were $9.4 billion, compared to $8.9 billion at June 30, 2021 and $9.0 billion at September 30, 2020. The carrying value of the available-for-sale portfolio included $44.7 million of net unrealized gains, compared to $49.3 million at June 30, 2021 and $103.1 million at September 30, 2020. The carrying value of the held-to-maturity portfolio does not reflect $152.9 million of net unrealized gains, compared to $170.5 million at June 30, 2021 and $283.0 million at September 30, 2020.

Loans:

•Total loans were $21.6 billion, compared to $21.5 billion at June 30, 2021 and $21.9 billion at September 30, 2020. Compared to June 30, 2021, commercial real estate loans increased by $112.0 million while commercial loans (excluding PPP loans) increased by $189.0 million, residential mortgages increased by $311.2 million, consumer loans decreased by $59.3 million, and PPP loans decreased by $447.5 million.

•Compared to a year ago, commercial real estate loans increased by $215.1 million and commercial loans (excluding PPP loans) increased by $502.5 million, while consumer loans decreased by $315.1 million and residential mortgages increased by $281.7 million. PPP loans totaled $0.4 billion at September 30, 2021.

•Loan originations for the portfolio were $1.987 billion, compared to $2.333 billion ($2.269 billion excluding PPP loan originations) in the prior quarter and $1.560 billion ($1.525 billion excluding PPP loan originations) a year ago. In addition, $57 million of residential loans were originated for sale in the quarter, compared to $55 million in the prior quarter and $149 million a year ago.

Asset quality:

•Total nonperforming loans were $101.8 million, or 0.47 percent of total loans, compared to $120.7 million, or 0.56 percent of total loans, at June 30, 2021 and $162.6 million, or 0.74 percent of total loans, at September 30, 2020. As of September 30, 2021, $40.3 million of nonperforming loans were contractually current.

•Past due loans were $17.1 million, compared to $18.4 million at June 30, 2021 and $21.8 million at September 30, 2020.

Deposits and borrowings:

•Total deposits were $30.0 billion, compared to $28.8 billion at June 30, 2021 and $26.9 billion at September 30, 2020. Core deposits to total deposits were 93.7 percent, compared to 93.0 percent at June 30, 2021 and 90.5 percent at September 30, 2020. The loan to deposit ratio was 71.9 percent, compared to 74.4 percent at June 30, 2021 and 81.2 percent at September 30, 2020.

•Total borrowings were $1.3 billion, compared to $1.2 billion at June 30, 2021 and $2.3 billion at September 30, 2020.

Capital:

•The return on average common shareholders’ equity and the return on average tangible common shareholders’ equity were 11.61 percent and 14.16 percent, respectively, compared to 8.80 percent and 10.91 percent, respectively, in the third quarter of 2020.

•The tangible equity and tangible common equity ratios were 8.12 percent and 7.71 percent, respectively, compared to 8.19 percent and 7.75 percent, respectively, at September 30, 2020. The common equity tier 1 risk-based capital ratio was 11.77 percent, compared to 11.23 percent at September 30, 2020.

•Book value and tangible book value per common share were $35.78 and $29.63, respectively, compared to $34.09 and $27.86, respectively, at September 30, 2020.

***

Webster Financial Corporation is the holding company for Webster Bank, National Association and its HSA Bank division. With $35.4 billion in assets, Webster provides business and consumer banking, mortgage, financial planning, trust, and investment services through 130 banking centers and 254 ATMs. Webster also provides mobile and Internet banking. Webster Bank owns the asset-based lending firm Webster Business Credit Corporation; the equipment finance firm Webster Capital Finance Corporation; and HSA Bank, a division of Webster Bank, which provides health savings account trustee and administrative services. 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 2021 earnings announcement will be held today, Thursday, October 21, 2021 at 9:00 a.m. Eastern Time. To listen to the live call, please dial 877-407-8289, or 201-689-8341 for international callers. The webcast, along with related slides, will be available on the Webster website (www.wbst.com). A replay of the conference call will be available for one week via the website listed above, beginning at approximately 11:00 a.m. (Eastern) on October 21, 2021. To access the replay, dial 877-660-6853, or 201-612-7415 for international callers. The replay conference ID number is 13723032.

Media Contact

Alice Ferreira, 203-578-2610

acferreira@websterbank.com

Investor Contact

Kristen Manginelli, 203-578-2307

kmanginelli@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 complete the merger with 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 our completed branch consolidations and other 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; (6) the potential adverse effects of the ongoing novel coronavirus (COVID-19) pandemic and any governmental or societal responses thereto, or other unusual and infrequently occurring events; (7) changes in the level of nonperforming assets and charge-offs; (8) changes in estimates of future reserve requirements based upon the periodic review thereof under relevant regulatory and accounting requirements; (9) adverse conditions in the securities markets that lead to impairment in the value of our investment securities; (10) inflation, changes in interest rates (including the replacement of LIBOR as an interest rate benchmark), and monetary fluctuations; (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 laws and regulations (including those concerning banking, taxes, dividends, securities, insurance, and healthcare) with which we and our subsidiaries must comply; (19) the effect of changes in accounting policies and practices applicable to us, including impacts of recently adopted accounting guidance; (20) legal and regulatory developments including the resolution of legal proceedings or regulatory or other governmental inquiries and the results of regulatory examinations or reviews; (21) our ability to appropriately address social, environmental, and sustainability concerns that may arise from our business activities; and (22) 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 Operation.” 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 and other performance ratios, 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, 2021			June 30, 2021			March 31, 2021			December 31, 2020			September 30, 2020

Income and performance ratios:
Net income	$	95,713		$	94,035		$	108,078		$	60,044		$	69,281
Earnings applicable to common shareholders	93,171			91,555			105,530			57,715			66,890
Earnings per diluted common share	1.03			1.01			1.17			0.64			0.75
Return on average assets	1.10		%	1.12		%	1.31		%	0.73		%	0.84		%
Return on average tangible common shareholders' equity (non-GAAP)	14.16			14.26			16.79			9.31			10.91
Return on average common shareholders’ equity	11.61			11.63			13.65			7.51			8.80
Non-interest income as a percentage of total revenue	26.73			24.77			25.54			26.14			25.50

Asset quality:
Allowance for credit losses on loans and leases	$	314,922		$	307,945		$	328,351		$	359,431		$	369,811
Nonperforming assets	104,209			123,497			152,808			170,314			167,314
Allowance for credit losses on loans and leases / total loans and leases	1.46		%	1.43		%	1.54		%	1.66		%	1.69		%
Net charge-offs (recoveries) / average loans and leases (annualized)	0.02			(0.02)			0.10			0.17			0.21
Nonperforming loans and leases / total loans and leases	0.47			0.56			0.71			0.78			0.74
Nonperforming assets / total loans and leases plus OREO	0.48			0.57			0.72			0.79			0.77
Allowance for credit losses on loans and leases / nonperforming loans and leases	309.44			255.05			218.29			213.94			227.39

Other ratios:
Tangible equity (non-GAAP)	8.12		%	8.35		%	8.30		%	8.35		%	8.19		%
Tangible common equity (non-GAAP)	7.71			7.91			7.85			7.90			7.75
Tier 1 risk-based capital (a)	12.39			12.30			12.55			11.99			11.88
Total risk-based capital (a)	13.79			13.70			14.08			13.59			13.47
Common equity tier 1 risk-based capital (a)	11.77			11.66			11.89			11.35			11.23
Shareholders’ equity / total assets	9.57			9.86			9.84			9.92			9.76
Net interest margin	2.80			2.82			2.92			2.83			2.88
Efficiency ratio (non-GAAP)	54.84			56.64			58.46			60.27			59.99

Equity and share related:
Common equity	$	3,241,152		$	3,184,668		$	3,127,891		$	3,089,588		$	3,074,653
Book value per common share	35.78			35.15			34.60			34.25			34.09
Tangible book value per common share (non-GAAP)	29.63			28.99			28.41			28.04			27.86
Common stock closing price	54.46			53.34			55.11			42.15			26.41
Dividends declared per common share	0.40			0.40			0.40			0.40			0.40
Common shares issued and outstanding	90,588			90,594			90,410			90,199			90,204
Weighted-average common shares outstanding - Basic	90,038			90,027			89,809			89,645			89,630
Weighted-average common shares outstanding - Diluted	90,232			90,221			90,108			89,915			89,738

(a) Presented as preliminary for September 30, 2021 and actual for the remaining periods. In accordance with regulatory capital rules, the Company elected an option to delay the estimated impact of CECL on its regulatory capital for two years followed by a three year transition period ending December 31, 2024. As a result, capital ratios and amounts as of September 30, 2021 exclude the impact of the increased allowance for credit losses on loans, held-to-maturity debt securities and unfunded loan commitments attributed to the adoption of CECL.


WEBSTER FINANCIAL CORPORATION Consolidated Balance Sheets (unaudited)
(In thousands)	September 30, 2021		June 30, 2021		September 30, 2020
Assets:
Cash and due from banks	$	161,369	$	193,430	$	181,524
Interest-bearing deposits	2,442,790		1,386,463		60,276
Securities:
Available for sale	3,410,443		3,262,893		3,304,217
Held to maturity, net	5,986,308		5,623,243		5,723,128
Total securities, net	9,396,751		8,886,136		9,027,345
Loans held for sale	24,969		4,335		29,018
Loans and Leases:
Commercial	8,159,127		8,417,719		8,612,549
Commercial real estate	6,522,679		6,410,672		6,307,567
Residential mortgages	5,167,527		4,856,302		4,885,821
Consumer	1,731,002		1,790,308		2,046,086
Total loans and leases	21,580,335		21,475,001		21,852,023
Allowance for credit losses on loans and leases	(314,922)		(307,945)		(369,811)
Loans and leases, net	21,265,413		21,167,056		21,482,212
Federal Home Loan Bank and Federal Reserve Bank stock	75,936		76,874		89,611
Premises and equipment, net	209,573		215,716		250,535
Goodwill and other intangible assets, net	557,360		558,485		561,902
Cash surrender value of life insurance policies	572,368		570,380		561,021
Deferred tax asset, net	96,489		78,268		76,695
Accrued interest receivable and other assets	571,240		616,609		674,304
Total Assets	$	35,374,258	$	33,753,752	$	32,994,443

Liabilities and Shareholders' Equity:
Deposits:
Demand	$	7,154,835	$	6,751,373	$	6,136,814
Health savings accounts	7,329,405		7,323,421		6,976,280
Interest-bearing checking	4,181,825		3,843,725		3,390,921
Money market	3,958,700		3,442,319		3,069,098
Savings	5,517,189		5,471,584		4,777,000
Certificates of deposit	1,884,373		2,014,544		2,570,440

Total deposits	30,026,327		28,846,966		26,920,553
Securities sold under agreements to repurchase and other borrowings	655,871		507,124		1,301,822
Federal Home Loan Bank advances	113,334		138,444		433,243
Long-term debt	564,114		565,297		568,846
Accrued expenses and other liabilities	628,423		366,216		550,289
Total liabilities	31,988,069		30,424,047		29,774,753
Preferred stock	145,037		145,037		145,037
Common shareholders' equity	3,241,152		3,184,668		3,074,653
Total shareholders’ equity	3,386,189		3,329,705		3,219,690
Total Liabilities and Shareholders' Equity	$	35,374,258	$	33,753,752	$	32,994,443


WEBSTER FINANCIAL CORPORATION Consolidated Statements of Income (unaudited)
	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands, except per share data)	2021		2020		2021		2020
Interest income:
Interest and fees on loans and leases	$	196,273	$	188,001	$	572,728	$	600,709
Interest and dividends on securities	43,362		51,009		133,895		164,687
Loans held for sale	57		229		201		588
Total interest income	239,692		239,239		706,824		765,984
Interest expense:
Deposits	4,571		12,598		16,104		59,246
Borrowings	5,430		7,385		16,413		32,274
Total interest expense	10,001		19,983		32,517		91,520
Net interest income	229,691		219,256		674,307		674,464
Provision for credit losses	7,750		22,750		(39,500)		138,750
Net interest income after provision for loan and lease losses	221,941		196,506		713,807		535,714
Non-interest income:
Deposit service fees	40,258		39,278		122,166		117,687
Loan and lease related fees	10,881		6,568		27,056		20,032
Wealth and investment services	9,985		8,255		29,475		24,096
Mortgage banking activities	1,525		7,087		5,486		14,185
Increase in cash surrender value of life insurance policies	3,666		3,695		10,802		10,899
Gain on investment securities, net	—		—		—		8
Other income	17,460		10,177		38,249		21,607


Total non-interest income	83,775		75,060		233,234		208,514
Non-interest expense:
Compensation and benefits	105,352		104,019		310,706		305,637
Occupancy	12,430		14,275		42,090		43,005
Technology and equipment	28,441		27,846		84,081		83,151
Marketing	3,721		3,852		9,452		10,640
Professional and outside services	7,074		9,223		37,875		21,044
Intangible assets amortization	1,124		1,089		3,395		3,013
Loan workout expenses	203		612		924		1,497
Deposit insurance	3,855		4,204		11,560		13,944
Other expenses	18,037		18,876		55,164		57,485
Total non-interest expense	180,237		183,996		555,247		539,416
Income before income taxes	125,479		87,570		391,794		204,812
Income tax expense	29,766		18,289		93,968		44,235
Net income	95,713		69,281		297,826		160,577
Preferred stock dividends and other	(2,542)		(2,391)		(7,567)		(6,819)
Earnings applicable to common shareholders	$	93,171	$	66,890	$	290,259	$	153,758

Weighted-average common shares outstanding - Diluted	90,232		89,738		90,186		90,235

Earnings per common share:
Basic	$	1.03	$	0.75	$	3.23	$	1.71
Diluted	1.03		0.75		3.22		1.70


WEBSTER FINANCIAL CORPORATION Five Quarter Consolidated Statements of Income (unaudited)
	Three Months Ended
(In thousands, except per share data)	September 30, 2021		June 30, 2021		March 31, 2021		December 31, 2020		September 30, 2020
Interest income:
Interest and fees on loans and leases	$	196,273	$	185,919	$	190,536	$	189,010	$	188,001
Interest and dividends on securities	43,362		45,586		44,947		46,874		51,009
Loans held for sale	57		53		91		181		229
Total interest income	239,692		231,558		235,574		236,065		239,239
Interest expense:
Deposits	4,571		5,094		6,439		8,651		12,598
Borrowings	5,430		5,612		5,371		10,485		7,385
Total interest expense	10,001		10,706		11,810		19,136		19,983
Net interest income	229,691		220,852		223,764		216,929		219,256
Provision for credit losses	7,750		(21,500)		(25,750)		(1,000)		22,750
Net interest income after provision for loan and lease losses	221,941		242,352		249,514		217,929		196,506
Non-interest income:
Deposit service fees	40,258		41,439		40,469		38,345		39,278
Loan and lease related fees	10,881		7,862		8,313		9,095		6,568
Wealth and investment services	9,985		10,087		9,403		8,820		8,255
Mortgage banking activities	1,525		1,319		2,642		4,110		7,087
Increase in cash surrender value of life insurance policies	3,666		3,603		3,533		3,662		3,695

Other income	17,460		8,392		12,397		12,731		10,177


Total non-interest income	83,775		72,702		76,757		76,763		75,060
Non-interest expense:
Compensation and benefits	105,352		97,754		107,600		122,754		104,019
Occupancy	12,430		14,010		15,650		28,024		14,275
Technology and equipment	28,441		27,124		28,516		29,122		27,846
Marketing	3,721		3,227		2,504		3,485		3,852
Professional and outside services	7,074		21,025		9,776		11,380		9,223
Intangible assets amortization	1,124		1,132		1,139		1,147		1,089
Loan workout expenses	203		327		394		261		612
Deposit insurance	3,855		3,749		3,956		4,372		4,204
Other expenses	18,037		18,680		18,447		18,985		18,876
Total non-interest expense	180,237		187,028		187,982		219,530		183,996
Income before income taxes	125,479		128,026		138,289		75,162		87,570
Income tax expense	29,766		33,991		30,211		15,118		18,289
Net income	95,713		94,035		108,078		60,044		69,281
Preferred stock dividends and other	(2,542)		(2,480)		(2,548)		(2,329)		(2,391)
Earnings applicable to common shareholders	$	93,171	$	91,555	$	105,530	$	57,715	$	66,890

Weighted-average common shares outstanding - Diluted	90,232		90,221		90,108		89,915		89,738

Earnings per common share:
Basic	$	1.03	$	1.02	$	1.18	$	0.64	$	0.75
Diluted	1.03		1.01		1.17		0.64		0.75


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,
			2021						2020
(Dollars in thousands)	Average balance		Interest		Yield/rate		Average balance		Interest		Yield/rate
Assets:
Interest-earning assets:
Loans and leases	$	21,538,513	$	197,015	3.60	%	$	21,870,740	$	188,865	3.40	%
Investment securities (a)	8,911,291		43,868		2.01		8,762,692		52,154		2.47
Federal Home Loan and Federal Reserve Bank stock	76,212		290		1.51		91,232		600		2.62
Interest-bearing deposits (b)	2,334,986		896		0.15		102,059		26		0.10
Loans held for sale	11,328		57		2.03		31,211		229		2.94
Total interest-earning assets	32,872,330		$	242,126	2.92	%	30,857,934		$	241,874	3.13	%
Non-interest-earning assets	2,021,962						2,057,503
Total Assets	$	34,894,292					$	32,915,437

Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Demand deposits	$	7,182,116	$	—	—	%	$	6,228,436	$	—	—	%
Health savings accounts	7,346,239		1,463		0.08		6,953,641		2,073		0.12
Interest-bearing checking, money market and savings	13,363,703		1,794		0.05		11,167,653		3,983		0.14
Certificates of deposit	1,957,286		1,314		0.27		2,589,888		6,542		1.00
Total deposits	29,849,344		4,571		0.06		26,939,618		12,598		0.19

Securities sold under agreements to repurchase and other borrowings	544,311		721		0.52		1,225,616		608		0.19
Federal Home Loan Bank advances	120,714		492		1.59		449,085		2,528		2.20
Long-term debt (a)	564,692		4,217		3.22		569,425		4,249		3.25
Total borrowings	1,229,717		5,430		1.82		2,244,126		7,385		1.33
Total interest-bearing liabilities	31,079,061		$	10,001	0.13	%	29,183,744		$	19,983	0.27	%
Non-interest-bearing liabilities	439,830						526,363
Total liabilities	31,518,891						29,710,107

Preferred stock	145,037						145,037
Common shareholders' equity	3,230,364						3,060,293
Total shareholders' equity	3,375,401						3,205,330
Total Liabilities and Shareholders' Equity	$	34,894,292					$	32,915,437
Tax-equivalent net interest income			232,125						221,891
Less: tax-equivalent adjustments			(2,434)						(2,635)
Net interest income			$	229,691					$	219,256
Net interest margin					2.80	%					2.88	%

(a) For purposes of yield/rate computation, 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,
			2021						2020
(Dollars in thousands)	Average balance		Interest		Yield/rate		Average balance		Interest		Yield/rate
Assets:
Interest-earning assets:
Loans and leases	$	21,477,967	$	574,984	3.54	%	$	21,270,350	$	603,100	3.75	%
Investment securities (a)	8,878,820		136,727		2.09		8,554,646		167,027		2.67
Federal Home Loan and Federal Reserve Bank stock	77,040		909		1.58		108,788		2,716		3.33
Interest-bearing deposits (b)	1,434,552		1,419		0.13		89,989		222		0.32
Loans held for sale	11,515		201		2.33		25,944		588		3.02
Total interest-earning assets	31,879,894		$	714,240	2.98	%	30,049,717		$	773,653	3.43	%
Non-interest-earning assets	1,968,707						2,017,159
Total Assets	$	33,848,601					$	32,066,876

Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Demand deposits	$	6,800,456	$	—	—	%	$	5,525,573	$	—	—	%
Health savings accounts	7,414,332		4,720		0.09		6,854,101		7,973		0.16
Interest-bearing checking, money market and savings	12,579,762		5,117		0.05		10,427,634		22,848		0.29
Certificates of deposit	2,146,218		6,267		0.39		2,841,385		28,425		1.34
Total deposits	28,940,768		16,104		0.07		25,648,693		59,246		0.31

Securities sold under agreements to repurchase and other borrowings	522,638		2,216		0.56		1,366,292		5,318		0.51
Federal Home Loan Bank advances	131,606		1,539		1.54		870,063		13,145		1.98
Long-term debt (a)	565,866		12,658		3.22		563,805		13,811		3.52
Total borrowings	1,220,110		16,413		1.85		2,800,160		32,274		1.55
Total interest-bearing liabilities	30,160,878		$	32,517	0.14	%	28,448,853		$	91,520	0.43	%
Non-interest-bearing liabilities	373,609						433,207
Total liabilities	30,534,487						28,882,060

Preferred stock	145,037						145,037
Common shareholders' equity	3,169,077						3,039,779
Total shareholders' equity	3,314,114						3,184,816
Total Liabilities and Shareholders' Equity	$	33,848,601					$	32,066,876
Tax-equivalent net interest income			681,723						682,133
Less: tax-equivalent adjustments			(7,416)						(7,669)
Net interest income			$	674,307					$	674,464
Net interest margin					2.85	%					3.03	%

(a) For purposes of yield/rate computation, 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)	September 30, 2021		June 30, 2021		March 31, 2021		December 31, 2020		September 30, 2020
Loan and Lease Balances (actual):
Commercial non-mortgage	$	7,172,345	$	7,473,758	$	7,530,066	$	7,687,300	$	7,722,838

Asset-based lending	986,782		943,961		907,421		890,598		889,711
Commercial real estate	6,522,679		6,410,672		6,338,056		6,322,637		6,307,567
Residential mortgages	5,167,527		4,856,302		4,668,945		4,782,016		4,885,821
Consumer	1,731,002		1,790,308		1,856,895		1,958,664		2,046,086
Total Loan and Lease Balances	21,580,335		21,475,001		21,301,383		21,641,215		21,852,023
Allowance for credit losses on loans and leases	(314,922)		(307,945)		(328,351)		(359,431)		(369,811)
Loans and Leases, net	$	21,265,413	$	21,167,056	$	20,973,032	$	21,281,784	$	21,482,212

Loan and Lease Balances (average):
Commercial non-mortgage	$	7,280,258	$	7,545,398	$	7,650,367	$	7,662,828	$	7,683,879

Asset-based lending	956,535		937,580		896,093		874,221		922,653
Commercial real estate	6,510,100		6,365,830		6,303,765		6,363,776		6,260,114
Residential mortgages	5,036,329		4,738,859		4,720,703		4,821,199		4,914,368
Consumer	1,755,291		1,825,772		1,910,392		2,007,226		2,089,726
Total Loan and Lease Balances	21,538,513		21,413,439		21,481,320		21,729,250		21,870,740
Allowance for credit losses on loans and leases	(308,279)		(332,522)		(364,358)		(375,080)		(363,552)
Loans and Leases, net	$	21,230,234	$	21,080,917	$	21,116,962	$	21,354,170	$	21,507,188


WEBSTER FINANCIAL CORPORATION Five Quarter Nonperforming Assets and Past Due Loans and Leases (unaudited)
(Dollars in thousands)	September 30, 2021		June 30, 2021		March 31, 2021		December 31, 2020		September 30, 2020
Nonperforming loans and leases:
Commercial non-mortgage	$	40,774	$	57,831	$	60,103	$	71,499	$	75,080

Asset-based lending	2,139		2,403		2,430		2,622		3,789
Commercial real estate	15,972		12,687		13,743		21,222		8,784
Residential mortgages	19,327		21,467		42,708		41,033		41,498
Consumer	23,558		26,353		31,437		31,629		33,485
Total nonperforming loans and leases	$	101,770	$	120,741	$	150,421	$	168,005	$	162,636

Other real estate owned and repossessed assets:
Commercial non-mortgage	$	—	$	—	$	102	$	175	$	175

Residential mortgages	1,759		1,934		1,695		1,544		3,899
Consumer	680		822		590		590		604
Total other real estate owned and repossessed assets	$	2,439	$	2,756	$	2,387	$	2,309	$	4,678
Total nonperforming assets	$	104,209	$	123,497	$	152,808	$	170,314	$	167,314




Past due 30-89 days:
Commercial non-mortgage	$	5,537	$	3,154	$	7,395	$	8,918	$	3,821

Asset-based lending	—		—		—		1,175		—
Commercial real estate	821		1,679		699		3,003		329
Residential mortgages	3,447		4,690		5,241		10,623		9,291
Consumer	7,158		8,829		7,036		8,720		8,349
Total past due 30-89 days	16,963		18,352		20,371		32,439		21,790
Past due 90 days or more and accruing	107		25		50		445		—
Total past due loans and leases	$	17,070	$	18,377	$	20,421	$	32,884	$	21,790


Five Quarter Changes in the Allowance for Credit Losses on Loans and Leases (unaudited)
	For the Three Months Ended
(Dollars in thousands)	September 30, 2021		June 30, 2021		March 31, 2021		December 31, 2020		September 30, 2020
Beginning balance	$	307,945	$	328,351	$	359,431	$	369,811	$	358,522

Provision	7,898		(21,574)		(25,759)		(992)		22,753
Charge-offs:
Commercial non-mortgage	1,706		431		1,164		7,876		12,085
Asset-based lending	—		—		—		—		10
Commercial real estate	17		163		5,157		688		1,399
Residential mortgages	88		1,105		380		105		546
Consumer	1,965		1,703		2,594		2,673		1,717
Total charge-offs	3,776		3,402		9,295		11,342		15,757
Recoveries:
Commercial non-mortgage	137		824		209		232		1,978
Asset-based lending	—		2		1,424		33		—
Commercial real estate	5		10		3		3		47
Residential mortgages	672		782		1,158		190		521
Consumer	2,041		2,952		1,180		1,496		1,747
Total recoveries	2,855		4,570		3,974		1,954		4,293
Total net charge-offs (recoveries)	921		(1,168)		5,321		9,388		11,464
Ending balance	$	314,922	$	307,945	$	328,351	$	359,431	$	369,811

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 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 time deposits, including brokered time deposits. Adjusted diluted earnings per share (EPS) is calculated by excluding after tax non-operational items from reported earnings applicable to common shareholders. 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)	September 30, 2021		June 30, 2021		March 31, 2021		December 31, 2020		September 30, 2020
Efficiency ratio:
Non-interest expense (GAAP)	$	180,237	$	187,028	$	187,982	$	219,530	$	183,996
Less: Foreclosed property activity (GAAP)	(142)		(137)		91		(836)		(201)
Intangible assets amortization (GAAP)	1,124		1,132		1,139		1,147		1,089
Strategic initiatives (non-GAAP)	(4,011)		1,138		9,441		38,265		4,786
Merger related (non-GAAP)	9,847		17,047		—		—		—
Non-interest expense (non-GAAP)	$	173,419	$	167,848	$	177,311	$	180,954	$	178,322
Net interest income (GAAP)	$	229,691	$	220,852	$	223,764	$	216,929	$	219,256
Add: Tax-equivalent adjustment (non-GAAP)	2,434		2,487		2,495		2,577		2,635
Non-interest income (GAAP)	83,775		72,702		76,757		76,763		75,060
Other (non-GAAP)	327		309		277		291		297
Loss on hedge terminations (GAAP)	—		—		—		3,680		—


Income (non-GAAP)	$	316,227	$	296,350	$	303,293	$	300,240	$	297,248
Efficiency ratio (non-GAAP)	54.84%		56.64%		58.46%		60.27%		59.99%

Return on average tangible common shareholders' equity:
Net income (GAAP)	$	95,713	$	94,035	$	108,078	$	60,044	$	69,281
Less: Preferred stock dividends (GAAP)	1,968		1,969		1,969		1,969		1,968
Add: Intangible assets amortization, tax-effected (GAAP)	888		894		900		906		860
Income adjusted for preferred stock dividends and intangible assets amortization (non-GAAP)	$	94,633	$	92,960	$	107,009	$	58,981	$	68,173
Income adjusted for preferred stock dividends and intangible assets amortization, annualized basis (non-GAAP)	$	378,532	$	371,840	$	428,036	$	235,924	$	272,692
Average shareholders' equity (non-GAAP)	$	3,375,401	$	3,311,406	$	3,254,203	$	3,239,221	$	3,205,330
Less: Average preferred stock (non-GAAP)	145,037		145,037		145,037		145,037		145,037
Average goodwill and other intangible assets (non-GAAP)	557,902		559,032		560,173		561,303		560,959
Average tangible common shareholders' equity (non-GAAP)	$	2,672,462	$	2,607,337	$	2,548,993	$	2,532,881	$	2,499,334
Return on average tangible common shareholders' equity (non-GAAP)	14.16%		14.26%		16.79%		9.31%		10.91%

WEBSTER FINANCIAL CORPORATION

Reconciliations to GAAP Financial Measures (continued)


	At or for the Three Months Ended
(In thousands, except per share data)	September 30, 2021		June 30, 2021		March 31, 2021		December 31, 2020		September 30, 2020
Tangible equity:
Shareholders' equity (GAAP)	$	3,386,189	$	3,329,705	$	3,272,928	$	3,234,625	$	3,219,690
Less: Goodwill and other intangible assets (GAAP)	557,360		558,485		559,617		560,756		561,902
Tangible shareholders' equity (non-GAAP)	$	2,828,829	$	2,771,220	$	2,713,311	$	2,673,869	$	2,657,788
Total assets (GAAP)	$	35,374,258	$	33,753,752	$	33,259,037	$	32,590,690	$	32,994,443
Less: Goodwill and other intangible assets (GAAP)	557,360		558,485		559,617		560,756		561,902
Tangible assets (non-GAAP)	$	34,816,898	$	33,195,267	$	32,699,420	$	32,029,934	$	32,432,541
Tangible equity (non-GAAP)	8.12%		8.35%		8.30%		8.35%		8.19%

Tangible common equity:
Tangible shareholders' equity (non-GAAP)	$	2,828,829	$	2,771,220	$	2,713,311	$	2,673,869	$	2,657,788
Less: Preferred stock (GAAP)	145,037		145,037		145,037		145,037		145,037
Tangible common shareholders' equity (non-GAAP)	$	2,683,792	$	2,626,183	$	2,568,274	$	2,528,832	$	2,512,751
Tangible assets (non-GAAP)	$	34,816,898	$	33,195,267	$	32,699,420	$	32,029,934	$	32,432,541
Tangible common equity (non-GAAP)	7.71%		7.91%		7.85%		7.90%		7.75%

Tangible book value per common share:
Tangible common shareholders' equity (non-GAAP)	$	2,683,792	$	2,626,183	$	2,568,274	$	2,528,832	$	2,512,751
Common shares outstanding	90,588		90,594		90,410		90,199		90,204
Tangible book value per common share (non-GAAP)	$	29.63	$	28.99	$	28.41	$	28.04	$	27.86

Core deposits:
Total deposits	$	30,026,327	$	28,846,966	$	28,481,834	$	27,335,436	$	26,920,553
Less: Certificates of deposit	1,884,373		2,014,544		2,234,133		2,487,818		2,570,440

Core deposits (non-GAAP)	$	28,141,954	$	26,832,422	$	26,247,701	$	24,847,618	$	24,350,113


(In millions, except per share data)
GAAP earnings adjusted for strategic optimization initiatives and merger related costs:
	Three months ended September 30, 2021
	Pre-Tax Income		Earnings Applicable to Common Shareholders		Diluted EPS
Reported (GAAP)	$	125.5	$	93.2	$	1.03
Strategic initiatives	(4.0)		(3.0)		(0.03)

Merger related	9.8		7.3		0.08


Adjusted (non-GAAP)	$	131.3	$	97.5	$	1.08