Webster Financial Expands HSA Opportunities Amid Regulatory Changes in 2026 Outlook

Webster Financial reported Q3 2025 earnings with a return on tangible common equity of 18%, ROA of 1.3%, and growth in both loans and deposits of over 2%. CEO John Ciulla highlighted revenue growth of 2.3% over the prior quarter. Management views the expanded Health Savings Account opportunity as a key driver for the company's outlook in 2026.

Webster Financial Corporation (WBS) reported robust earnings for the third quarter and nine months ended September 30, 2025. The company's net interest income for the quarter was USD 631.67 million, an increase of USD 41.79 million compared to the same period last year. Net income for the quarter was USD 261.22 million, a significant increase of USD 68.23 million year-over-year, according to a MarketScreener release.

For the nine months, net interest income reached USD 1,865.04 million, up USD 135.12 million from the same period in 2024. Net income for the nine months was USD 746.98 million, an increase of USD 156.04 million year-over-year, the MarketScreener release said.

CEO John Ciulla highlighted the company's strong performance, noting a return on tangible common equity of 18%, a return on assets (ROA) of nearly 1.3%, and growth in both loans and deposits of over 2%. Revenue grew 2.3% over the prior quarter. Ciulla emphasized that the company's strategic position, including diverse balance sheet growth and substantial liquidity, contributed to its performance, as reported in a Seeking Alpha report.

The company also reported significant share repurchases of 2.2 million shares, representing 1.4% of outstanding shares at the end of the second quarter. Tangible book value per share increased to USD 36.42 from USD 35.13. The company's private credit joint venture with Marathon Asset Management is now fully operational, with early returns described as positive, according to Seeking Alpha.

Looking ahead, CFO William Holland forecasted that net interest income would be effectively flat to the third quarter. Balance sheet growth would be offset by lower quarterly net interest margin (NIM). Holland also noted that the company would be above the range on loan growth at the top end of its NII guidance and a bit higher than the midpoint on fees and expenses on a full-year basis, per Seeking Alpha.

Management cited regulatory changes and clarifications regarding Health Savings Account (HSA) eligibility for Bronze and Catastrophic Affordable Care Act (ACA) plans as a key driver for the company's outlook in 2026. The company is investing in mobile and web enrollment systems to capitalize on this opportunity, according to Seeking Alpha.

Webster Financial's third quarter highlighted robust loan and deposit growth, expanding addressable markets for HSA Bank due to regulatory changes, and advancing its private credit strategy through the Marathon JV. Management reaffirmed confidence in credit quality, capital strength, and its ability to navigate market volatility, all while maintaining a disciplined approach to growth and risk, as noted by Seeking Alpha.