| Webster Financial Corp., the holding company of the Waterbury, Connecticut-based Webster Bank, saw a net income of $59.5 million at the end of the second quarter, up roughly $11 million compared to the second quarter of last year.
The positive trend is largely attributed to continuing growth of HSA Bank, a division of Webster Financial Corp. that administers health savings accounts, and growth in the company’s commercial loan business.
Earnings per share for the $26.2 billion asset bank was $.64 per diluted share, up from $.53 at this time last year.
Net interest income was $197.8 million compared to $176.9 million at the end of the second quarter in 2016.
Total non-interest income was $64.6 million compared to $65.1 million a year ago, a decrease the bank attributes to a decrease of income primarily from a reduction in revenues from client hedging activity.
“Webster again reported solid business and financial performance, with record levels of net interest income and pre-provision net revenue resulting in record net income and earnings per share growth of over 20 percent from a year ago,” James C. Smith, chairman and CEO, said in a statement. “Our investments in strategic growth initiatives are producing positive results for shareholders as Webster bankers excel in service to our customers and communities.”
Perhaps the bank’s highest-priority strategy right now is the continuing growth of its HSA business.
HSA deposits at the end of the second quarter were $4.8 billion – making up 24 percent of all deposits – up from $4.2 billion one year ago.
Webster executives continue to put emphasis on this primary growth strategy.
John Ciulla, president of Webster Financial Corp. and Webster Bank, said in an earnings call that total HSA accounts grew 18 percent, or $100,000, in the second quarter, by adding some solid employer accounts to the business.
HSA Bank year-over-year growth in the second quarter was 19.7 percent in total footings and account growth of 17.7 percent.
Smith called HSAs a “real game changer” because while there is a lot of debate about health care in the country, everyone seems to agree on the importance of HSAs, he said.
The contribution limits to HSAs could double, he said, and Webster is in a strong position to reap the full benefits of the HSA business.
Webster executives also expressed confidence in their community banking business, which saw strong commercial lending growth.
Loan growth in the second quarter was $1 billion, 6.2 percent higher than in the second quarter, with growth of $899 million in commercial and commercial real estate loans.
Total loans were $17.3 billion compared to $16.3 billion at June 30, 2016, compared to March 31, 2017.
Compared to a year ago, commercial loans increased by $534.0 million, commercial real estate loans increased by $365.1 million, and residential mortgage loans increased by $231.6 million, while consumer loans decreased by $129.1 million.
Webster executives said their goal is still to reach 10 percent annual loan growth.
The quarterly provision for loan losses and net charge-offs were both down from this time a year ago.
