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- **Record Performance**: Q3 revenue grew 2.3% QoQ, driven by $1.4 billion in loan growth and 2.2% deposit expansion.
- **Strategic Wins**: Marathon JV pipeline active, HSA Bank's addressable market expands by 7 million customers.
- **Capital Strength**: 18% ROTCE, $261 million net income, and 11.4% CET1 ratio support share buybacks.
- **Risk Management**: Criticized loans down 7%, charge-offs at 28bps, and NDFI portfolio with no historical losses.
- **Growth Catalysts**: interSYNC deposit growth, fee income diversification, and regulatory tailwinds.
- **Q4 Outlook**: Flat NII, 1% loan growth ex-seasonality, and cautious capital allocation.


**【CEO Summary Section】**
- Webster Financial reported strong third-quarter results with a return on tangible common equity of 18% and revenue growth of 2.3% quarter-over-quarter.
- Loan growth of $1.4 billion (2.6%) was driven by diverse categories, including commercial real estate, while deposits grew 2.2% due to strong performance in health care and commercial segments.
- Capital generation remained robust, with 2.2 million shares repurchased and tangible book value increasing 3.4% quarter-over-quarter.
- Asset quality improved, with criticized loans down 7% and charge-offs at 28 basis points, near the lower end of the company's normalized range.
- Management emphasized strategic advantages such as diverse deposit generation, regulatory tailwinds, and a focus on fee income growth.

**【COO Operational Update】**
- Commercial lending pipeline activity was strong, with growth across all major lending categories, including a 20% increase in loan-related fees.
- Deposit growth was driven by Ametros (record new account growth) and interSYNC (10% annualized growth), offsetting seasonal public funds inflows.
- The private credit joint venture with Marathon Asset Management is performing well, with a pipeline of potential lending opportunities and alignment on risk appetite.
- HSA Bank's addressable market expanded by 7 million customers due to new legislation, with potential incremental deposit growth of $1 billion to $2.5 billion over five years.

**【CFO Financial Commentary】**
- GAAP net income was $261 million, up from $259 million in the prior quarter, with EPS of $1.54 reflecting strong profitability.
- Net interest income increased $10 million due to balance sheet growth, though net interest margin (NIM) declined 4 basis points to 3.4% due to spread compression.
- Noninterest income grew $6 million quarter-over-quarter, driven by swap fee income and a one-time legal settlement.
- Operating expenses increased $11 million due to higher incentive accruals, but remained well-controlled.
- The company maintained excess capital, with tangible book value per share rising to $36.42.
- Q4 outlook includes flat net interest income, seasonal deposit outflows, and higher debt costs due to subordinated note redemptions.

**【Q&A Highlights】**
- **Marathon JV Success**: Early pipeline activity and alignment with Marathon on risk management suggest long-term growth opportunities in lending and fee income.
- **Deposit Strategy**: Preference for low-cost, high-fee deposits (e.g., interSYNC) over brokered deposits, with brokered balances expected to remain below 4%.
- **NDFI Exposure**: $6 billion in non-depository financial institution loans, 90% in low-risk fund banking and lender finance, with no historical losses.
- **M&A Outlook**: Unlikely to pursue whole-bank acquisitions, focusing instead on smaller health care-related deals.
- **Loan Growth**: Q4 pipeline remains solid, but growth may moderate due to seasonal prepayments and higher payoff activity.
- **Credit Quality**: Stable nonperforming loans (NPLs) at 0.45%, with charge-offs concentrated in health care and office CRE.
- **NIM Compression**: Offset by loan growth and fee income, but NIM expected to remain under pressure in 2026.


Webster Financial Corporation (WBS) Q3 2025 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

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Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

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Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

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Net Income

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Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

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Other Comprehensive Income

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Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

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Diluted EPS from Discontinued Operations

WBS

WBS fundamentals

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