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1. Company Snapshot

1.a. Company Description

Webster Financial Corporation operates as the bank holding company for Webster Bank, National Association that provides a range of banking, investment, and financial services to individuals, families, and businesses in the United States.It operates through three segments: Commercial Banking, HSA Bank, and Retail Banking.The Commercial Banking segment provides lending, deposit, and cash management services; commercial and industrial lending and leasing, commercial real estate lending, equipment financing, and asset-based lending, as well as treasury and payment services; wealth management solutions to business owners, operators, and consumers; and trust, asset management, financial planning, insurance, retirement, and investment products.


The HSA Bank segment offers health savings accounts, health reimbursement arrangements, flexible spending accounts, and commuter services that are distributed directly to employers and individual consumers, as well as through national and regional insurance carriers, consultants, and financial advisors.The Retail Banking segment provides deposit and fee-based services, residential mortgages, home equity lines, secured and unsecured loans, and credit cards to consumers.The company also offers online and mobile banking services.


As of December 31, 2021, it operated 130 banking centers and 251 ATMs. The company was founded in 1935 and is headquartered in Stamford, Connecticut.

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1.b. Last Insights on WBS

Webster Financial Corporation's recent performance faced challenges due to increased competition in the financial services sector. Despite beating earnings estimates with $1.54 per share, up from $1.34 a year ago, concerns surrounding commercial real estate (CRE) and non-performing assets linger. However, Webster Financial's growing Health Savings Account (HSA) platform provides a unique growth opportunity. Institutional investors, such as Bailard Inc. and Aviva PLC, have recently increased their stakes in the company.

1.c. Company Highlights

2. Webster Financial Corporation's Q3 2025 Earnings: A Strong Performance

Webster Financial Corporation reported a robust third-quarter 2025 performance, with overall revenue growing 2.3% over the prior quarter, driven by loan growth of over 2% and deposit growth of over 2%. The company's return on tangible common equity stood at 18%, and its return on assets (ROA) was nearly 1.3%. The earnings per share (EPS) came in at $1.54, beating analyst estimates of $1.52. The net interest margin (NIM) was 3.4%, down four basis points from the prior quarter.

Publication Date: Oct -20

📋 Highlights
  • Strong Capital Generation:: Repurchased 2.2 million shares (1.4% of outstanding) and increased tangible book value by 3.7% QoQ.
  • Improved Credit Quality:: Criticized loans dropped 7%, non-accrual loans flat, and charge-offs at 28 bps (near normalized low).
  • Loan & Deposit Growth:: 2% QoQ loan growth, 2% deposit growth, with $83B total assets and 3.4% NIM (down 4 bps QoQ).
  • Strategic Growth Opportunities:: HSA Bank projects $1B–$2.5B incremental deposits over 5 years from new legislation, plus Marathon JV pipeline.
  • Capital Position & Guidance:: CET1 ratio at 11.4% above target, Q4 NII guidance $330–335M, and tangible book value of $36.42/share.

Capital Generation and Share Repurchase

The company's capital generation is a strategic advantage, with 2.2 million shares repurchased, or 1.4% of outstanding shares, and tangible book value growing 3.7% over the prior quarter. The company's CET1 ratio is 11.4%, above its near-term target, and it will prioritize loan growth, strategic acquisitions, and returning capital to shareholders.

Asset Quality and Credit Performance

The provision for credit losses was $44 million, down modestly from the last quarter. Criticized loans decreased over 7%, and non-accrual loans were essentially flat. Charge-offs remained near the bottom of the normalized range at 28 basis points. The company's credit profile is strong, with a focus on resolving office and multifamily exposures.

Business Line Performance

The company's business lines showed positive activity, with commercial lending growth at the higher end of the outlook range and a pickup in loan-related fees. The private credit joint venture with Marathon Asset Management is fully operational, with a significant pipeline of potential lending opportunities. HSA Bank's addressable market is expected to increase due to new legislation, with a potential $1 billion to $2.5 billion in incremental deposit growth over the next five years.

Valuation and Outlook

Given the company's strong performance, its valuation metrics appear reasonable. The Price-to-Tangible Book Value (P/TBV) ratio is close to 0.94, indicating that the stock is trading near its book value. The Dividend Yield is 2.94%, providing a relatively attractive return for income investors. Analysts estimate next year's revenue growth at 4.3%, which suggests a positive outlook for the company. With its robust capital generation, strong credit profile, and diversified business lines, Webster Financial Corporation is well-positioned for continued success.

3. NewsRoom

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HSA Bank Acquires SecureSave

Dec -04

Source: businesswire.com

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Fisher Asset Management LLC Purchases 9,730 Shares of Webster Financial Corporation $WBS

Dec -03

Source: defenseworld.net

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Bailard Inc. Grows Position in Webster Financial Corporation $WBS

Nov -15

Source: defenseworld.net

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Aviva PLC Invests $529,000 in Webster Financial Corporation $WBS

Nov -14

Source: defenseworld.net

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Is Webster Financial a Buy After Investment Firm Compass Wealth Made the Stock Its Top Holding?

Nov -02

Source: fool.com

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Webster Financial Corporation $WBS Shares Bought by Ethic Inc.

Oct -30

Source: defenseworld.net

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Webster Lowers Prime Lending Rate to 7.00 Percent

Oct -29

Source: businesswire.com

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7,394 Shares in Webster Financial Corporation $WBS Purchased by Sequoia Financial Advisors LLC

Oct -22

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (7.64%)

6. Segments

Commercial Banking

Expected Growth: 7.5%

Webster Financial Corporation's 7.5% growth in Commercial Banking is driven by strong loan growth, fueled by a robust economy and increased demand for commercial and industrial loans. Additionally, the bank's strategic expansion into new markets, improved operating efficiency, and enhanced digital capabilities have contributed to the segment's growth.

Consumer Banking

Expected Growth: 7.8%

Webster Financial Corporation's 7.8% growth in Consumer Banking is driven by increasing demand for digital banking services, strategic branch expansion, and competitive loan and deposit offerings. Additionally, the corporation's focus on customer experience, cross-selling initiatives, and effective cost management have contributed to the segment's growth.

Health Savings Account Bank

Expected Growth: 8.2%

Webster Financial Corporation's Health Savings Account (HSA) growth of 8.2% is driven by increasing adoption of consumer-directed health plans, rising healthcare costs, and growing awareness of HSAs as a tax-advantaged savings vehicle. Additionally, Webster's strong online platform, competitive interest rates, and user-friendly interface contribute to its market share gain.

Corporate and Reconciling

Expected Growth: 7.2%

Webster Financial Corporation's 7.2% growth is driven by strong corporate loan growth, fueled by a robust commercial and industrial loan pipeline, as well as continued expansion in the commercial real estate sector. Additionally, reconciling items such as lower provision for loan losses and increased fee income from treasury services and mortgage banking also contributed to the growth.

7. Detailed Products

Commercial Banking

Webster Financial Corporation provides commercial banking services to businesses, including cash management, lending, and treasury management solutions.

Consumer Banking

Webster Financial Corporation offers consumer banking services, including checking and savings accounts, credit cards, and personal loans.

Home Lending

Webster Financial Corporation provides home lending services, including mortgages, refinancing, and home equity loans.

Private Banking

Webster Financial Corporation offers private banking services, including wealth management, investment, and trust services.

Insurance Services

Webster Financial Corporation provides insurance services, including life insurance, disability insurance, and long-term care insurance.

Wealth Management

Webster Financial Corporation offers wealth management services, including investment management, financial planning, and retirement planning.

8. Webster Financial Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

Webster Financial Corporation operates in a highly competitive industry, and customers have various alternatives to choose from. However, the company's strong brand reputation and customer loyalty mitigate the threat of substitutes.

Bargaining Power Of Customers

Webster Financial Corporation's customers have limited bargaining power due to the company's diversified customer base and lack of concentration. This reduces the threat of customers negotiating better prices or terms.

Bargaining Power Of Suppliers

Webster Financial Corporation relies on a few large suppliers for its operations, giving them some bargaining power. However, the company's strong relationships with suppliers and its ability to negotiate contracts mitigate this threat.

Threat Of New Entrants

The financial services industry has high barriers to entry, including regulatory hurdles and capital requirements. This makes it difficult for new entrants to compete with established players like Webster Financial Corporation.

Intensity Of Rivalry

The financial services industry is highly competitive, with many established players competing for market share. Webster Financial Corporation faces intense rivalry from other banks and financial institutions, which can lead to pricing pressures and reduced market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 31.01%
Debt Cost 7.90%
Equity Weight 68.99%
Equity Cost 10.63%
WACC 9.78%
Leverage 44.95%

11. Quality Control: Webster Financial Corporation passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Webster

A-Score: 6.8/10

Value: 7.0

Growth: 6.4

Quality: 7.1

Yield: 6.0

Momentum: 8.0

Volatility: 6.0

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Hancock Whitney

A-Score: 6.7/10

Value: 6.6

Growth: 5.9

Quality: 7.8

Yield: 6.0

Momentum: 7.0

Volatility: 6.7

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Zions Bank

A-Score: 6.3/10

Value: 6.7

Growth: 7.0

Quality: 5.8

Yield: 6.0

Momentum: 7.0

Volatility: 5.3

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Ameris

A-Score: 5.7/10

Value: 5.2

Growth: 7.8

Quality: 5.0

Yield: 2.0

Momentum: 7.0

Volatility: 7.3

1-Year Total Return ->

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Atlantic Union Bankshares

A-Score: 5.7/10

Value: 6.5

Growth: 5.2

Quality: 5.6

Yield: 7.0

Momentum: 3.5

Volatility: 6.3

1-Year Total Return ->

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UMB

A-Score: 5.7/10

Value: 5.7

Growth: 5.8

Quality: 5.2

Yield: 4.0

Momentum: 6.5

Volatility: 6.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

61.94$

Current Price

61.94$

Potential

-0.00%

Expected Cash-Flows