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July 28, 2021

Webster Financial’s 2Q earnings up as merger process continues

Photo | A Webster Bank branch.

Fueled by renewed loan growth and origination activity, Waterbury-based Webster Financial Corp., the parent company of Webster Bank, saw its second quarter earnings nearly double.

The holding company, which controls Webster and its HSA Bank division, reported net income of $91.6 million, or $1.01 per diluted share, up from $50.7 million, or 57 cents per diluted share, in the second quarter of 2020.

During a conference call with analysts, Webster Financial President and CEO John R. Ciulla attributed the improvement to a brightening economic outlook, favorable asset quality, positive credit metrics and an emphasis on expense management. The company is also making headway on plans to absorb Sterling Bancorp, Ciulla said; a merger of equals between the two firms was announced in April.

Excluding Paycheck Protection Program loans, Webster recorded loan growth of 3.2%, led by commercial and commercial real estate lending, which increased by 3.8%. The company originated $2.4 billion in loans overall, up 26.4% compared to the first quarter of 2021.

Deposits grew by $2.5 billion, or 9.5%, from one year ago.

Webster’s merger with New York-based Sterling is expected to create a banking franchise with approximately $63 billion in assets. The combined company will keep Webster’s name, and its corporate headquarters will be set up in Stamford.

Webster officials said the linkup is on pace to close during the fourth quarter of this year.

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