Webster Bank gets a big profit because less set aside for bad loans
WATERBURY – On Friday, Webster Financial Corp. told that it more than doubles its profit in the second quarter because it doesn’t have to set aside much money to cover up bad loans. The Waterbury-based financial institution had informed that net income which was available to common shareholders of $33.4 million, or 36 cents per diluted share. While net income, which was available to common shareholders of $12.7 million, or 15 cents per diluted share, for the second quarter of 2010.
James C. Smith as Webster’s chairman and CEO said that if the growth in core business lending coupled with a higher net interest margin,” as well as “positive asset quality trends”, it would improve a good results. Webster only set aside $5 million as a provision against loan losses during the quarter, $10 million in the first quarter and $32 million in the second quarter of 2010. Because of the sixth quarter, Webster only set aside a smaller amount to cover loan losses than the previous quarter.
The signs, which could improve asset quality in the bank’s loan portfolio, were:
1.Loans more than 90 days past due, dropped by 13 percent in the second quarter to $228.2 million from $261.9 million in the first quarter of the year;
2.Loans between 30 and 89 days past due, declined to $66 million, a 22 percent decline from $84.1 million in the first quarter, and
3.Loans the bank didn’t expect to be repaid dropped 36 percent to $21.7 million in the second quarter from $33.7 million in the first quarter.
The report of Webster’s earnings was well accepted on Wall Street. The company’s shares, which were traded on the New York Stock Exchange under the symbol WBS, rise 45 cents, or 2.2 percent, per share, and to close at $21 on Friday.