Webster Financial Corporation ("Webster") (NYSE:WBS), the holding company for Webster Bank, N.A. and its HSA Bank division, today announced net income available to common stockholders of $181.2 million, or $1.05 per diluted share, for the quarter ended December 31, 2023, compared to $240.6 million, or $1.38 per diluted share, for the quarter ended December 31, 2022.

Fourth quarter 2023 results include $94.7 million pre-tax ($69.3 million after tax), or $0.41¹ per diluted share, of charges related to a FDIC special assessment, the merger with Sterling Bancorp on January 31, 2022 ("the merger"), and securities repositioning. Excluding these charges, adjusted earnings per diluted share would have been $1.46¹ for the quarter ended December 31, 2023.

"In addition to our strong financial performance for the quarter and full-year 2023, we realized several meaningful strategic accomplishments," said John R. Ciulla, president and chief executive officer. "Our strong financial position and proactive actions position us well for continued success in 2024."

Highlights for the fourth quarter of 2023:

Revenue of $634.8 million.
Period end loan and lease balance of $50.7 billion, up $0.6 billion or 1.3 percent from prior quarter; 80.7 percent commercial loans and leases, 19.3 percent consumer loans, and a loan to deposit ratio of 83.5 percent.
Period end deposit balance of $60.8 billion, up $0.5 billion or 0.7 percent from prior quarter.
Provision for credit losses totaled $36.0 million.
Return on average assets of 1.01 percent; adjusted 1.39 percent¹.
Return on average tangible common equity of 14.49 percent¹; adjusted 19.83 percent¹.
Net interest margin of 3.42 percent, down 7 basis points from prior quarter.
Common equity tier 1 ratio of 11.12 percent.
Efficiency ratio of 43.04 percent¹.
Tangible common equity ratio of 7.73 percent¹.

"We continue to invest in our businesses, including the recently announced acquisition of Ametros Financial, which will provide further diversification of funding sources," said Glenn MacInnes, executive vice president and chief financial officer. "At the same time, we are consistently improving our existing operations to maximize financial performance."

¹	See "Reconciliations to GAAP Financial Measures" section beginning on page 19.

Line of Business performance compared to the fourth quarter of 2022

Commercial Banking

Webster's Commercial Banking segment serves businesses that have more than $2 million of revenue through its business banking, middle market, asset-based lending, equipment finance, commercial real estate, sponsor finance, private banking, and treasury services business units. At December 31, 2023, Commercial Banking had $40.9 billion in loans and leases and $18.2 billion in deposits, as well as a combined $2.9 billion in assets under administration and management.

Commercial Banking Operating Results:

					Percent
	Three months ended December 31,				Favorable/
(In thousands)	2023		2022		(Unfavorable)
Net interest income	$	377,725	$	392,340		(3.7	)%
Non-interest income		34,403		42,767		(19.6	)
Operating revenue		412,128		435,107		(5.3	)
Non-interest expense		109,893		103,725		(5.9	)
Pre-tax, pre-provision net revenue	$	302,235	$	331,382		(8.8	)

					Percent
	At December 31,				Increase/
(In millions)	2023		2022		(Decrease)
Loans and leases	$	40,934	$	40,115		2.0	%
Deposits		18,246		19,563		(6.7	)
AUA / AUM (off balance sheet)		2,911		2,259		28.9

Pre-tax, pre-provision net revenue decreased $29.1 million, to $302.2 million, in the quarter as compared to prior year. Net interest income decreased $14.6 million, to $377.7 million, primarily driven by lower deposit balances coupled with higher rates paid on deposits, partially offset by loan growth. Non-interest income decreased $8.4 million, to $34.4 million, driven by decreases in loan servicing income, syndication fees, direct investments income, and cash management fees. Non-interest expense increased $6.2 million, to $109.9 million, primarily resulting from continued investments in technology and talent to support balance sheet growth.

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. At December 31, 2023, HSA Bank had $12.9 billion in total footings comprising $8.3 billion in deposits and $4.6 billion in assets under administration through linked investment accounts.

HSA Bank Operating Results:

					Percent
	Three months ended December 31,				Favorable/
(In thousands)	2023		2022		(Unfavorable)
Net interest income	$	78,036	$	65,447		19.2	%
Non-interest income		20,224		25,234		(19.9	)
Operating revenue		98,260		90,681		8.4
Non-interest expense		41,947		40,655		(3.2	)
Pre-tax, net revenue	$	56,313	$	50,026		12.6

					Percent
	At December 31,				Increase/
(Dollars in millions)	2023		2022		(Decrease)
Number of accounts (thousands)		3,184		3,042		4.7	%

Deposits	$	8,288	$	7,945		4.3
Linked investment accounts (off balance sheet)		4,642		3,394		36.8
Total footings	$	12,930	$	11,339		14.0

Pre-tax net revenue increased $6.3 million, to $56.3 million, in the quarter as compared to prior year. Net interest income increased $12.6 million, to $78.0 million, primarily due to an increase in net deposit spread and growth in deposits. Non-interest income decreased $5.0 million, to $20.2 million, primarily due to lower customer fees. Non-interest expense increased $1.3 million, to $41.9 million, primarily due to higher compensation and benefits expense and service contract expense related to account growth, and the continued investment in our user experience build out.

Consumer Banking

Webster's Consumer Banking segment 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 business units, as well as a distribution network consisting of 198 banking centers and 349 ATMs, a customer care center, and a full range of web and mobile-based banking services. Additionally, Webster Investments provides investment services to consumers and small business owners within Webster's targeted markets and retail footprint. At December 31, 2023, Consumer Banking had $9.8 billion in loans and $24.1 billion in deposits, as well as $7.9 billion in assets under administration.

Consumer Banking Operating Results:

					Percent
	Three months ended December 31,				Favorable/
(In thousands)	2023		2022		(Unfavorable)
Net interest income	$	188,130	$	209,077		(10.0	)%
Non-interest income		25,734		27,150		(5.2	)
Operating revenue		213,864		236,227		(9.5	)
Non-interest expense		103,819		113,669		8.7
Pre-tax, pre-provision net revenue	$	110,045	$	122,558		(10.2	)


	At December 31,				Percent
(In millions)	2023		2022		Increase
Loans	$	9,781	$	9,624		1.6	%
Deposits		24,060		23,610		1.9
AUA (off balance sheet)		7,876		7,872		0.1

Pre-tax, pre-provision net revenue decreased $12.5 million, to $110.0 million, in the quarter as compared to prior year. Net interest income decreased $20.9 million, to $188.1 million, primarily driven by higher rates paid on deposits, partially offset by loan and deposit growth. Non-interest income decreased $1.4 million, to $25.7 million, driven by lower deposit fee income, partially offset by gains on loan sales and higher investment services and other miscellaneous income. Non-interest expense decreased $9.9 million, to $103.8 million, primarily driven by lower technology and shared services expenses, coupled with the impact of outsourcing the consumer investment services platform.

Consolidated financial performance:

Quarterly net interest income compared to the fourth quarter of 2022:

Net interest income was $571.0 million compared to $602.4 million.
Net interest margin was 3.42 percent compared to 3.74 percent. The yield on interest-earning assets increased by 94 basis points, and the cost of interest-bearing liabilities increased by 136 basis points.
Average interest-earning assets totaled $66.6 billion and increased by $2.6 billion, or 4.1 percent.
Average loans and leases totaled $50.4 billion and increased by $1.8 billion, or 3.7 percent.
Average deposits totaled $60.0 billion and increased by $5.9 billion, or 11.0 percent.

Quarterly provision for credit losses:

The provision for credit losses was $36.0 million in the quarter, contributing to a $0.3 million increase in the allowance for credit losses on loans and leases from prior quarter. The provision also contributed to an increase in the reserves on unfunded loan commitments of $1.7 million. The provision for credit losses was $36.5 million in the prior quarter, and $43.0 million a year ago.
Net charge-offs were $34.0 million, compared to $29.3 million in the prior quarter, and $20.2 million a year ago. The ratio of net charge-offs to average loans and leases was 0.27 percent, compared to 0.23 percent in the prior quarter, and 0.17 percent a year ago.
The allowance for credit losses on loans and leases represented 1.25 percent of total loans and leases, compared to 1.27 percent at September 30, 2023, and 1.20 percent at December 31, 2022. The allowance represented 303 percent of nonperforming loans and leases at December 31, 2023, compared to 295 percent at September 30, 2023, and 292 percent at December 31, 2022.

Quarterly non-interest income compared to the fourth quarter of 2022:

Total non-interest income was $63.8 million compared to $102.2 million, a decrease of $38.4 million. Total non-interest income includes a $16.8 million and $4.5 million loss on the sale of investment securities for the fourth quarter of 2023 and 2022, respectively. Excluding those losses, total non-interest income decreased $26.1 million. The decrease primarily reflects lower deposit fees, lower loan syndication, prepayment, and other transaction fees, and a decline in other non-interest income due to a non-cash swing in our modeled credit valuation adjustment on customer derivatives, direct investment income, and bank-owned life insurance income.

Quarterly non-interest expense compared to the fourth quarter of 2022:

Total non-interest expense was $377.2 million compared to $348.4 million, an increase of $28.8 million. Total non-interest expense includes $47.2 million related to a FDIC special assessment and a net $30.7 million of merger related expense, compared to a net $45.9 million of merger and strategic initiatives charges a year ago. Excluding those charges, total non-interest expense decreased $3.1 million. The decrease reflects lower consulting, project, and loan related expenses, partially offset by increases in compensation and benefits and deposit insurance expense.

Quarterly income taxes compared to the fourth quarter of 2022:

Income tax expense was $36.2 million compared to $68.4 million, and the effective tax rate was 16.3 percent compared to 21.8 percent. The lower effective tax rate in the current period reflects the recognition of a $5.5 million net discrete benefit attributable to 2022 state and local tax return true-up adjustments, along with the impact of decreased pre-tax income compared to the 2022 period.

Investment securities:

Total investment securities, net were $16.0 billion, compared to $14.5 billion at both September 30, 2023, and December 31, 2022. The carrying value of the available-for-sale portfolio included $708.7 million of net unrealized losses, compared to $1.1 billion at September 30, 2023, and $864.5 million at December 31, 2022. The carrying value of the held-to-maturity portfolio does not reflect $810.2 million of net unrealized losses, compared to $1.2 billion at September 30, 2023, and $803.4 million at December 31, 2022.

Loans and leases:

Total loans and leases were $50.7 billion, compared to $50.1 billion at September 30, 2023, and $49.8 billion at December 31, 2022. Compared to September 30, 2023, commercial loans and leases increased by $80.6 million, commercial real estate loans increased by $574.5 million, residential mortgages decreased by $0.5 million, and consumer loans decreased by $16.7 million.
Compared to a year ago, commercial loans and leases decreased by $712.7 million, commercial real estate loans increased by $1.5 billion, residential mortgages increased by $264.5 million, and consumer loans decreased by $128.8 million.
Loan originations for the portfolio were $3.2 billion, compared to $1.5 billion in the prior quarter, and $4.7 billion a year ago. In addition, $3.4 million of residential loans were originated for sale in the quarter, compared to $1.5 million in the prior quarter, and $3.5 million a year ago.

Asset quality:

Total nonperforming loans and leases were $209.5 million, or 0.41 percent of total loans and leases, compared to $215.1 million, or 0.43 percent of total loans and leases, at September 30, 2023, and $203.8 million, or 0.41 percent of total loans and leases, at December 31, 2022.
Past due loans and leases were $46.6 million, compared to $70.7 million at September 30, 2023, and $73.7 million at December 31, 2022.

Deposits and borrowings:

Total deposits were $60.8 billion, compared to $60.3 billion at September 30, 2023, and $54.1 billion at December 31, 2022. Core deposits to total deposits¹ were 86.1 percent at December 31, 2023, compared to 87.6 percent at September 30, 2023, and 92.3 percent at December 31, 2022. The loan to deposit ratio was 83.5 percent, compared to 83.0 percent at September 30, 2023, and 92.1 percent at December 31, 2022.
Total borrowings were $3.9 billion, compared to $3.0 billion at September 30, 2023, and $7.7 billion at December 31, 2022.

Capital:

The return on average common stockholders' equity and the return on average tangible common stockholders' equity¹ were 9.03 percent and 14.49 percent, respectively, compared to 12.54 percent and 19.93 percent, respectively, in the fourth quarter of 2022.
The tangible equity¹ and tangible common equity¹ ratios were 8.12 percent and 7.73 percent, respectively, compared to 7.79 percent and 7.38 percent, respectively, at December 31, 2022. The common equity tier 1 ratio was 11.12 percent, compared to 10.71 percent at December 31, 2022.
Book value and tangible book value per common share¹ were $48.87 and $32.39, respectively, compared to $44.67 and $29.07, respectively, at December 31, 2022.

¹	See "Reconciliations to GAAP Financial Measures" section beginning on page 19.

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 $75 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 fourth quarter 2023 earnings announcement will be held today, Tuesday, January 23, 2024 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 January 23, 2024. To access the replay, dial 800-770-2030, or 647-362-9199 for international callers. The replay conference ID number is 8607257.

Forward-Looking Statements

This release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. 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, these words are not the exclusive means of identifying such statements. Examples of forward-looking statements include, but are not limited to: projections of revenues, expenses, income or loss, earnings or loss per share, and other financial items; statements of plans, objectives, and expectations of Webster or its management or Board of Directors; statements of future economic performance; and 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 Webster's actual results to differ from those discussed in any forward-looking statements include, but are not limited to: Webster's ability to successfully integrate the operations of Webster and Sterling Bancorp and realize the anticipated benefits of the merger, including validation of Webster's recently completed core conversion and any issues that may arise therefrom; Webster's ability to successfully execute its business plan and strategic initiatives, and manage any risks or uncertainties; any continuation of the recent turmoil in the banking industry, including the associated impact of any regulatory changes or other mitigation efforts taken by government agencies in response; volatility in Webster's stock price due to investor sentiment, including in light of the recent turmoil in the banking industry; local, regional, national, and international economic conditions, and the impact they may have on Webster or its customers; volatility and disruption in national and international financial markets, including as a result of geopolitical conflict; unforeseen events, such as pandemics or natural disasters, and any governmental or societal responses thereto; changes in laws and regulations, or existing laws and regulations that Webster becomes subject to, including those concerning banking, taxes, dividends, securities, insurance, and healthcare, with which Webster and its subsidiaries must comply; adverse conditions in the securities markets that could lead to impairment in the value of Webster's securities portfolio; inflation, monetary fluctuations, the possibility of a recession, and changes in interest rates, including the impact of such changes on economic conditions, customer behavior, funding costs, and Webster's loans and leases and securities portfolios; possible changes in governmental monetary and fiscal policies, including, but not limited to, the Federal Reserve policies in connection with continued inflationary pressures and the ability of the U.S. Congress to increase the U.S. statutory debt limit as needed; the impact of a potential U.S. federal government shutdown; the timely development and acceptance of new products and services, and the perceived value of those products and services by customers; changes in deposit flows, consumer spending, borrowings, and savings habits; Webster's ability to implement new technologies and maintain secure and reliable technology systems; the effects of any cyber threats, attacks or events, or fraudulent activity, including those that involve Webster's third-party vendors and service providers; performance by Webster's counterparties and third-party vendors; Webster's ability to increase market share and control expenses; changes in the competitive environment among banks, financial holding companies, and other traditional and non-traditional financial service providers; Webster's ability to maintain adequate sources of funding and liquidity; changes in the level of nonperforming assets and charge-offs; changes in estimates of future reserve requirements based upon periodic review under relevant regulatory and accounting requirements; the effect of changes in accounting policies and practices applicable to Webster, including the impacts of recently adopted accounting guidance; Webster's inability to remediate the material weaknesses in its internal control related to ineffective information technology general controls; legal and regulatory developments, including the resolution of legal proceedings or regulatory or other governmental inquiries, and the results of regulatory examinations or reviews; Webster's ability to appropriately address any environmental, social, governmental, and sustainability concerns that may arise from its business activities; and the other factors that are described in Webster's Annual Report on Form 10-K for the year ended December 31, 2022, and Quarterly Reports on Form 10-Q for the quarterly periods ended in 2023. Any forward-looking statement made by Webster in this release speaks only as of the date on which it is made. Factors or events that could cause Webster's actual results to differ may emerge from time to time, and it is not possible for Webster to predict all of them. Webster 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, return on average tangible common stockholders' equity, and other performance ratios, in each case as adjusted, is included in the accompanying selected financial highlights table.

Webster believes that providing certain non-GAAP financial measures provides investors with information useful in understanding its financial performance, performance trends, and financial position. Webster utilizes these measures for internal planning and forecasting purposes. Webster, as well as securities analysts, investors, and other interested parties, also use these measures to compare peer company operating performance. Webster believes that its presentation and discussion, together with the accompanying reconciliations, provides additional clarity of factors and trends affecting its 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 Webster strongly encourages investors to review its 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)		December 31, 2023			September 30, 2023			June 30, 2023			March 31, 2023			December 31, 2022

Income and performance ratios:
Net income	$	185,393		$	226,475		$	234,968		$	221,004		$	244,751
Net income available to common stockholders		181,230			222,313			230,806			216,841			240,588
Earnings per diluted common share		1.05			1.28			1.32			1.24			1.38
Return on average assets (annualized)		1.01	%		1.23	%		1.23	%		1.22	%		1.40	%
Return on average tangible common stockholders' equity (annualized)⁽¹⁾		14.49			17.51			18.12			17.66			19.93
Return on average common stockholders' equity (annualized)		9.03			11.00			11.38			10.94			12.54
Non-interest income as a percentage of total revenue		10.05			13.34			13.28			10.62			14.50

Asset quality:
Allowance for credit losses on loans and leases	$	635,737		$	635,438		$	628,911		$	613,914		$	594,741
Nonperforming assets		218,600			218,402			222,215			186,551			206,136
Allowance for credit losses on loans and leases / total loans and leases		1.25	%		1.27	%		1.22	%		1.21	%		1.20	%
Net charge-offs / average loans and leases (annualized)		0.27			0.23			0.16			0.20			0.17
Nonperforming loans and leases / total loans and leases		0.41			0.43			0.42			0.36			0.41
Nonperforming assets / total loans and leases plus other real estate owned and repossessed assets		0.43			0.44			0.43			0.37			0.41
Allowance for credit losses on loans and leases / nonperforming loans and leases		303.39			295.48			287.35			331.81			291.84

Other ratios:
Tangible equity⁽¹⁾		8.12	%		7.62	%		7.62	%		7.55	%		7.79	%
Tangible common equity ⁽¹⁾		7.73			7.22			7.23			7.15			7.38
Tier 1 risk-based capital ⁽²⁾		11.63			11.64			11.16			10.93			11.23
Total risk-based capital ⁽²⁾		13.72			13.79			13.25			12.99			13.25
Common equity tier 1 risk-based capital ⁽²⁾		11.12			11.12			10.65			10.42			10.71
Stockholders' equity / total assets		11.60			11.21			11.18			11.08			11.30
Net interest margin		3.42			3.49			3.35			3.66			3.74
Efficiency ratio ⁽¹⁾		43.04			41.75			42.20			41.64			40.27

Equity and share related:
Common equity	$	8,406,017		$	7,915,222		$	7,995,747		$	8,010,315		$	7,772,207
Book value per common share		48.87			46.00			46.15			45.85			44.67
Tangible book value per common share⁽¹⁾		32.39			29.48			29.69			29.47			29.07
Common stock closing price		50.76			40.31			37.75			39.42			47.34
Dividends declared per common share		0.40			0.40			0.40			0.40			0.40
Common shares issued and outstanding		172,022			172,056			173,261			174,712			174,008
Weighted-average common shares outstanding - Basic		170,415			171,210			172,739			172,766			172,522
Weighted-average common shares outstanding - Diluted		170,623			171,350			172,803			172,883			172,699

⁽¹⁾ See "Reconciliations to GAAP Financial Measures" section beginning on page 19.

⁽²⁾ Presented as preliminary for December 31, 2023, and actual for the remaining periods.

WEBSTER FINANCIAL CORPORATION Consolidated Balance Sheets (unaudited)
(In thousands)		December 31, 2023			September 30, 2023			December 31, 2022
Assets:
Cash and due from banks	$	429,323		$	406,300		$	264,118
Interest-bearing deposits		1,286,472			1,766,431			575,825
Investment securities:
Available-for-sale		8,959,729			7,653,391			7,892,697
Held-to-maturity, net		7,074,588			6,875,772			6,564,697
Total investment securities, net		16,034,317			14,529,163			14,457,394
Loans held for sale		6,541			46,267			1,991
Loans and leases:
Commercial		19,772,102			19,691,486			20,484,806
Commercial real estate		21,157,732			20,583,254			19,619,145
Residential mortgages		8,227,923			8,228,451			7,963,420
Consumer		1,568,295			1,584,955			1,697,055
Total loans and leases		50,726,052			50,088,146			49,764,426
Allowance for credit losses on loans and leases		(635,737	)		(635,438	)		(594,741	)
Loans and leases, net		50,090,315			49,452,708			49,169,685
Federal Home Loan Bank and Federal Reserve Bank stock		326,882			306,085			445,900
Premises and equipment, net		429,561			431,698			430,184
Goodwill and other intangible assets, net		2,834,600			2,843,217			2,713,446
Cash surrender value of life insurance policies		1,247,938			1,242,648			1,229,169
Deferred tax assets, net		369,212			478,926			371,634
Accrued interest receivable and other assets		1,890,088			1,627,408			1,618,175
Total assets	$	74,945,249		$	73,130,851		$	71,277,521

Liabilities and Stockholders' Equity:
Deposits:
Demand	$	10,732,516		$	11,410,063		$	12,974,975
Health savings accounts		8,287,889			8,229,889			7,944,892
Interest-bearing checking		8,994,095			8,826,265			9,237,529
Money market		17,662,826			17,755,198			11,062,652
Savings		6,642,499			6,622,833			8,673,343
Certificates of deposit		5,574,048			5,150,139			2,729,332
Brokered certificates of deposit		2,890,411			2,337,380			1,431,617
Total deposits		60,784,284			60,331,767			54,054,340
Securities sold under agreements to repurchase and other borrowings		458,387			157,491			1,151,830
Federal Home Loan Bank advances		2,360,018			1,810,218			5,460,552
Long-term debt ⁽¹⁾		1,048,820			1,050,539			1,073,128
Accrued expenses and other liabilities		1,603,744			1,581,635			1,481,485
Total liabilities		66,255,253			64,931,650			63,221,335
Preferred stock		283,979			283,979			283,979
Common stockholders' equity		8,406,017			7,915,222			7,772,207
Total stockholders' equity		8,689,996			8,199,201			8,056,186
Total liabilities and stockholders' equity	$	74,945,249		$	73,130,851		$	71,277,521

⁽¹⁾ The classification of debt as long-term is based on the initial terms of greater than one year as of the date of issuance.

WEBSTER FINANCIAL CORPORATION Consolidated Statements of Income (unaudited)
		Three Months Ended December 31,						Twelve Months Ended December 31,
(In thousands, except per share data)		2023			2022			2023			2022
Interest income:
Interest and fees on loans and leases	$	789,423		$	642,784		$	3,071,378		$	1,946,558
Interest and dividends on investment securities		143,444			100,804			556,148			338,101
Loans held for sale		280			5			734			78
Total interest income		933,147			743,593			3,628,260			2,284,737
Interest expense:
Deposits		325,793			81,202			1,021,418			138,552
Borrowings		36,333			60,016			269,573			111,899
Total interest expense		362,126			141,218			1,290,991			250,451
Net interest income		571,021			602,375			2,337,269			2,034,286
Provision for credit losses		36,000			43,000			150,747			280,619
Net interest income after provision for loan and lease losses		535,021			559,375			2,186,522			1,753,667
Non-interest income:
Deposit service fees		37,459			48,453			169,318			198,472
Loan and lease related fees		21,362			25,632			84,861			102,987
Wealth and investment services		7,767			7,017			28,999			40,277
Mortgage banking activities		1,010			89			1,240			705
Cash surrender value of life insurance policies		6,587			6,543			26,228			29,237
(Loss) on sale of investment securities		(16,825	)		(4,517	)		(33,620	)		(6,751	)
Other income		6,455			18,962			37,311			75,856
Total non-interest income		63,815			102,179			314,337			440,783
Non-interest expense:
Compensation and benefits		184,914			177,979			711,752			723,620
Occupancy		18,478			20,174			77,520			113,899
Technology and equipment		46,486			44,202			197,928			186,384
Marketing		5,176			5,570			18,622			16,438
Professional and outside services		18,804			26,489			107,497			117,530
Intangible assets amortization		8,618			8,240			36,207			31,940
Deposit insurance		58,725			6,578			98,081			26,574
Other expenses		36,020			59,158			168,748			180,088
Total non-interest expense		377,221			348,390			1,416,355			1,396,473
Income before income taxes		221,615			313,164			1,084,504			797,977
Income tax expense		36,222			68,413			216,664			153,694
Net income		185,393			244,751			867,840			644,283
Preferred stock dividends		(4,163	)		(4,163	)		(16,650	)		(15,919	)
Net income available to common stockholders	$	181,230		$	240,588		$	851,190		$	628,364

Weighted-average common shares outstanding - Diluted		170,623			172,699			171,883			167,547

Earnings per common share:
Basic	$	1.05		$	1.38		$	4.91		$	3.72
Diluted		1.05			1.38			4.91			3.72

WEBSTER FINANCIAL CORPORATION Five Quarter Consolidated Statements of Income (unaudited)
		Three Months Ended
(In thousands, except per share data)		December 31, 2023			September 30, 2023			June 30, 2023			March 31, 2023			December 31, 2022
Interest income:
Interest and fees on loans and leases	$	789,423		$	793,626		$	771,973		$	716,356		$	642,784
Interest and dividends on investment securities		143,444			137,146			161,002			114,556			100,804
Loans held for sale		280			17			421			16			5
Total interest income		933,147			930,789			933,396			830,928			743,593
Interest expense:
Deposits		325,793			293,955			251,466			150,204			81,202
Borrowings		36,333			49,698			98,101			85,441			60,016
Total interest expense		362,126			343,653			349,567			235,645			141,218
Net interest income		571,021			587,136			583,829			595,283			602,375
Provision for credit losses		36,000			36,500			31,498			46,749			43,000
Net interest income after provision for loan and lease losses		535,021			550,636			552,331			548,534			559,375
Non-interest income:
Deposit service fees		37,459			41,005			45,418			45,436			48,453
Loan and lease related fees		21,362			19,966			20,528			23,005			25,632
Wealth and investment services		7,767			7,254			7,391			6,587			7,017
Mortgage banking activities		1,010			42			129			59			89
Cash surrender value of life insurance policies		6,587			6,620			6,293			6,728			6,543
(Loss) on sale of investment securities		(16,825	)		-			(48	)		(16,747	)		(4,517	)
Other income		6,455			15,495			9,663			5,698			18,962
Total non-interest income		63,815			90,382			89,374			70,766			102,179
Non-interest expense:
Compensation and benefits		184,914			180,333			173,305			173,200			177,979
Occupancy		18,478			18,617			20,254			20,171			20,174
Technology and equipment		46,486			55,261			51,815			44,366			44,202
Marketing		5,176			4,810			5,160			3,476			5,570
Professional and outside services		18,804			26,874			29,385			32,434			26,489
Intangible assets amortization		8,618			8,899			9,193			9,497			8,240
Deposit insurance		58,725			13,310			13,723			12,323			6,578
Other expenses		36,020			54,474			41,254			37,000			59,158
Total non-interest expense		377,221			362,578			344,089			332,467			348,390
Income before income taxes		221,615			278,440			297,616			286,833			313,164
Income tax expense		36,222			51,965			62,648			65,829			68,413
Net income		185,393			226,475			234,968			221,004			244,751
Preferred stock dividends		(4,163	)		(4,162	)		(4,162	)		(4,163	)		(4,163	)
Net income available to common stockholders	$	181,230		$	222,313		$	230,806		$	216,841		$	240,588

Weighted-average common shares outstanding - Diluted		170,623			171,350			172,803			172,883			172,699

Earnings per common share:
Basic	$	1.05		$	1.29		$	1.32		$	1.24		$	1.38
Diluted		1.05			1.28			1.32			1.24			1.38

WEBSTER FINANCIAL CORPORATION Consolidated Average Balances, Interest, Yields and Rates, and Net Interest Margin on a Fully Tax-equivalent Basis (unaudited)
		Three Months Ended December 31,
		2023							2022
(Dollars in thousands)		Average balance		Interest		Yield/rate			Average balance		Interest		Yield/rate
Assets:
Interest-earning assets:
Loans and leases	$	50,352,340	$	800,679		6.24	%	$	48,574,865	$	649,820		5.25	%
Investment securities ⁽¹⁾		15,253,540		135,498		3.35			14,471,173		98,812		2.57
Federal Home Loan and Federal Reserve Bank stock		308,505		5,581		7.18			399,497		4,007		3.98
Interest-bearing deposits		649,104		8,939		5.39			516,930		4,940		3.74
Loans held for sale		7,130		280		n/m			2,964		5		0.73
Total interest-earning assets		66,570,619	$	950,977		5.54	%		63,965,429	$	757,584		4.60	%
Non-interest-earning assets		6,561,444							5,994,351
Total assets	$	73,132,063						$	69,959,780

Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Demand deposits	$	11,067,121	$	-		-	%	$	13,371,074	$	-		-	%
Health savings accounts		8,219,431		3,123		0.15			7,878,486		2,957		0.15
Interest-bearing checking, money market and savings		33,156,966		239,875		2.87			29,390,078		66,279		0.89
Certificates of deposit and brokered deposits		7,538,131		82,795		4.36			3,399,857		11,966		1.40
Total deposits		59,981,649		325,793		2.15			54,039,495		81,202		0.60

Securities sold under agreements to repurchase and other borrowings		221,437		1,162		2.05			1,237,132		9,183		2.90
Federal Home Loan Bank advances		1,815,493		25,659		5.53			4,241,042		41,523		3.83
Long-term debt ⁽¹⁾		1,049,655		9,512		3.73			1,073,960		9,310		3.58
Total borrowings		3,086,585		36,333		4.68			6,552,134		60,016		3.62
Total interest-bearing liabilities		63,068,234	$	362,126		2.28	%		60,591,629	$	141,218		0.92	%
Non-interest-bearing liabilities		1,751,031							1,407,251
Total liabilities		64,819,265							61,998,880

Preferred stock		283,979							283,979
Common stockholders' equity		8,028,819							7,676,921
Total stockholders' equity		8,312,798							7,960,900
Total liabilities and stockholders' equity	$	73,132,063						$	69,959,780
Tax-equivalent net interest income				588,851							616,366
Less: Tax-equivalent adjustments				(17,830	)						(13,991	)
Net interest income			$	571,021						$	602,375
Net interest margin						3.42	%						3.74	%

⁽¹⁾ For the purposes of average yield/rate and margin computations, unsettled trades on investment securities, unrealized gains (losses) on available-for-sale investment securities, and basis adjustments on long-term debt from de-designated fair value hedges are excluded.

WEBSTER FINANCIAL CORPORATION Consolidated Average Balances, Interest, Yields and Rates, and Net Interest Margin on a Fully Tax-equivalent Basis (unaudited)
		Twelve Months Ended December 31,
		2023							2022
(Dollars in thousands)		Average balance		Interest		Yield/rate			Average balance		Interest		Yield/rate
Assets:
Interest-earning assets:
Loans and leases	$	50,637,569	$	3,113,709		6.15	%	$	43,751,112	$	1,967,761		4.50	%
Investment securities ⁽¹⁾		14,839,744		477,496		3.06			14,528,722		345,600		2.31
Federal Home Loan and Federal Reserve Bank stock		408,673		24,785		6.06			289,595		8,775		3.03
Interest-bearing deposits		1,564,255		80,475		5.14			596,912		9,651		1.62
Loans held for sale		28,710		734		2.56			9,842		78		0.80
Total interest-earning assets		67,478,951	$	3,697,199		5.42	%		59,176,183	$	2,331,865		3.91	%
Non-interest-earning assets		6,344,931							5,586,025
Total assets	$	73,823,882						$	64,762,208

Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Demand deposits	$	11,596,949	$	-		-	%	$	12,912,894	$	-		-	%
Health savings accounts		8,249,332		12,366		0.15			7,826,576		6,315		0.08
Interest-bearing checking, money market and savings		31,874,457		756,521		2.37			28,266,128		115,271		0.41
Certificates of deposit and brokered deposits		6,531,610		252,531		3.87			2,838,502		16,966		0.60
Total deposits		58,252,348		1,021,418		1.75			51,844,100		138,552		0.27

Securities sold under agreements to repurchase and other borrowings		378,171		9,102		2.41			1,064,551		19,059		1.79
Federal Home Loan Bank advances		4,275,394		222,537		5.21			1,965,577		58,557		2.98
Long-term debt ⁽¹⁾		1,058,621		37,934		3.69			1,031,446		34,283		3.44
Total borrowings		5,712,186		269,573		4.74			4,061,574		111,899		2.78
Total interest-bearing liabilities		63,964,534	$	1,290,991		2.02	%		55,905,674	$	250,451		0.45	%
Non-interest-bearing liabilities		1,535,393							1,135,046
Total liabilities		65,499,927							57,040,720

Preferred stock		283,979							272,179
Common stockholders' equity		8,039,976							7,449,309
Total stockholders' equity		8,323,955							7,721,488
Total liabilities and stockholders' equity	$	73,823,882						$	64,762,208
Tax-equivalent net interest income				2,406,208							2,081,414
Less: Tax-equivalent adjustments				(68,939	)						(47,128	)
Net interest income			$	2,337,269						$	2,034,286
Net interest margin						3.52	%						3.49	%

WEBSTER FINANCIAL CORPORATION Five Quarter Loans and Leases (unaudited)
(Dollars in thousands)		December 31, 2023			September 30, 2023			June 30, 2023			March 31, 2023			December 31, 2022
Loans and leases (actual):
Commercial non-mortgage	$	18,214,261		$	18,058,524		$	19,499,160		$	19,014,810		$	18,663,164
Asset-based lending		1,557,841			1,632,962			1,718,251			1,760,527			1,821,642
Commercial real estate		21,157,732			20,583,254			20,661,071			20,513,738			19,619,145
Residential mortgages		8,227,923			8,228,451			8,140,182			8,001,563			7,963,420
Consumer		1,568,295			1,584,955			1,607,384			1,635,885			1,697,055
Loans and leases		50,726,052			50,088,146			51,626,048			50,926,523			49,764,426
Allowance for credit losses on loans and leases		(635,737	)		(635,438	)		(628,911	)		(613,914	)		(594,741	)
Loans and leases, net	$	50,090,315		$	49,452,708		$	50,997,137		$	50,312,609		$	49,169,685

Loans and leases (average):
Commercial non-mortgage	$	18,181,417		$	18,839,776		$	19,220,435		$	18,670,917		$	18,024,771
Asset-based lending		1,588,350			1,663,481			1,756,051			1,790,992			1,780,874
Commercial real estate		20,764,834			20,614,334			20,518,355			19,970,326			19,234,292
Residential mortgages		8,240,390			8,200,938			8,067,349			7,995,327			7,819,415
Consumer		1,577,349			1,593,659			1,622,525			1,667,630			1,715,513
Loans and leases	$	50,352,340		$	50,912,188		$	51,184,715		$	50,095,192		$	48,574,865

WEBSTER FINANCIAL CORPORATION Five Quarter Nonperforming Assets and Past Due Loans and Leases (unaudited)
(Dollars in thousands)		December 31, 2023		September 30, 2023		June 30, 2023		March 31, 2023		December 31, 2022
Nonperforming loans and leases:
Commercial non-mortgage	$	134,617	$	121,067	$	109,279	$	86,537	$	89,416
Asset-based lending		35,090		10,350		9,450		9,450		20,046
Commercial real estate		11,314		31,004		47,972		35,832		41,580
Residential mortgages		5,591		27,312		26,751		25,096		25,613
Consumer		22,932		25,320		25,417		28,105		27,136
Total nonperforming loans and leases	$	209,544	$	215,053	$	218,869	$	185,020	$	203,791

Other real estate owned and repossessed assets:
Commercial non-mortgage	$	8,954	$	2,687	$	2,152	$	153	$	78
Residential mortgages		-		662		662		662		2,024
Consumer		102		-		532		716		243
Total other real estate owned and repossessed assets	$	9,056	$	3,349	$	3,346	$	1,531	$	2,345
Total nonperforming assets	$	218,600	$	218,402	$	222,215	$	186,551	$	206,136

Past due 30-89 days:
Commercial non-mortgage	$	7,071	$	38,875	$	32,074	$	9,645	$	20,248
Asset-based lending		-		-		-		-		5,921
Commercial real estate		9,002		3,491		1,970		17,115		26,147
Residential mortgages		21,047		16,208		10,583		10,710		11,385
Consumer		9,417		12,016		6,718		6,110		9,194
Total past due 30-89 days	$	46,537	$	70,590	$	51,345	$	43,580	$	72,895
Past due 90 days or more and accruing		52		138		29		602		770
Total past due loans and leases	$	46,589	$	70,728	$	51,374	$	44,182	$	73,665

WEBSTER FINANCIAL CORPORATION Five Quarter Changes in the Allowance for Credit Losses on Loans and Leases (unaudited)
		For the Three Months Ended
(Dollars in thousands)		December 31, 2023		September 30, 2023		June 30, 2023		March 31, 2023		December 31, 2022
ACL on loans and leases, beginning balance	$	635,438	$	628,911	$	613,914	$	594,741	$	574,325
Adoption of ASU No. 2022-02		-		-		-		5,873		-
Provision		34,300		35,839		35,249		37,821		40,649
Charge-offs:
Commercial portfolio		28,794		27,360		21,945		26,410		21,499
Consumer portfolio		6,878		3,642		1,085		1,098		1,193
Total charge-offs		35,672		31,002		23,030		27,508		22,692
Recoveries:
Commercial portfolio		396		292		1,024		1,574		895
Consumer portfolio		1,275		1,398		1,754		1,413		1,564
Total recoveries		1,671		1,690		2,778		2,987		2,459
Total net charge-offs		34,001		29,312		20,252		24,521		20,233
ACL on loans and leases, ending balance	$	635,737	$	635,438	$	628,911	$	613,914	$	594,741
ACL on unfunded loan commitments, ending balance		24,734		23,040		22,366		26,051		27,707
Total ACL, ending balance	$	660,471	$	658,478	$	651,277	$	639,965	$	622,448

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 stockholders' equity (ROATCE) measures the Company's net income available to common stockholders, adjusted for the tax-effected amortization of intangible assets, as a percentage of average stockholders' equity less average preferred stock and average goodwill and net intangible assets. The tangible equity ratio represents stockholders' equity less goodwill and net intangible assets divided by total assets less goodwill and net intangible assets. The tangible common equity ratio represents stockholders' equity less preferred stock and goodwill and net intangible assets divided by total assets less goodwill and net intangible assets. Tangible book value per common share represents stockholders' equity less preferred stock and goodwill and net intangible assets divided by common shares outstanding at the end of the period. Core deposits express total deposits less certificates of deposit and brokered certificates of deposit. Adjusted pre-tax net income, adjusted net income available to common stockholders, adjusted diluted earnings per share (EPS), adjusted ROATCE, and adjusted return on average assets (ROAA) are calculated by excluding a FDIC special assessment, merger related expense, and loss on sale of investment securities, each of which have been tax-effected.

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)		December 31, 2023			September 30, 2023			June 30, 2023			March 31, 2023			December 31, 2022
Efficiency ratio:
Non-interest expense	$	377,221		$	362,578		$	344,089		$	332,467		$	348,390
Less: Foreclosed property activity		(96	)		(492	)		(432	)		(262	)		(80	)
Intangible assets amortization		8,618			8,899			9,193			9,497			8,240
Operating lease depreciation		900			1,146			1,639			1,884			2,021
FDIC special assessment		47,164			-			-			-			-
Merger related expense		30,679			61,625			40,840			29,373			45,790
Strategic initiatives		-			-			-			-			143
Non-interest expense	$	289,956		$	291,400		$	292,849		$	291,975		$	292,276
Net interest income	$	571,021		$	587,136		$	583,829		$	595,283		$	602,375
Add: Tax-equivalent adjustment		17,830			17,906			17,292			15,911			13,991
Non-interest income		63,815			90,382			89,374			70,766			102,179
Other income ⁽¹⁾		5,099			3,614			5,035			4,311			4,814
Less: Operating lease depreciation		900			1,146			1,639			1,884			2,021
(Loss) on sale of investment securities		(16,825	)		-			(48	)		(16,747	)		(4,517	)
Income	$	673,690		$	697,892		$	693,939		$	701,134		$	725,855
Efficiency ratio		43.04	%		41.75	%		42.20	%		41.64	%		40.27	%

ROATCE:
Net income	$	185,393		$	226,475		$	234,968		$	221,004		$	244,751
Less: Preferred stock dividends		4,163			4,162			4,162			4,163			4,163
Add: Intangible assets amortization, tax-effected		6,808			7,030			7,262			7,503			6,510
Adjusted income	$	188,038		$	229,343		$	238,068		$	224,344		$	247,098
Adjusted income, annualized basis	$	752,152		$	917,372		$	952,272		$	897,376		$	988,392
Average stockholders' equity	$	8,312,798		$	8,370,469		$	8,395,298		$	8,215,676		$	7,960,900
Less: Average preferred stock		283,979			283,979			283,979			283,979			283,979
Average goodwill and other intangible assets, net		2,838,770			2,847,560			2,856,581			2,849,673			2,716,981
Average tangible common stockholders' equity	$	5,190,049		$	5,238,930		$	5,254,738		$	5,082,024		$	4,959,940
Return on average tangible common stockholders' equity		14.49	%		17.51	%		18.12	%		17.66	%		19.93	%

⁽¹⁾Other income includes the taxable equivalent of net income generated from low income housing tax-credit investments.

Webster Reports Fourth Quarter 2023 EPS of $1.05; Adjusted EPS of $1.46