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The merger-of-equals between Waterbury-based Webster Bank and New York-based Sterling National Bank remains on track, and the banks expect to complete the transaction early in the fourth quarter.
Webster Bank CEO and Chairman John R. Ciulla said during an earnings call last week that the banks were on track to receive regulatory approval for the deal. The banks hold their shareholder votes on the merger on Aug. 17.
“We’re making significant progress on this combination, and I can tell you that the Webster team is even more excited about this combination today than we were on the announcement date,” Ciulla said. “Webster and Sterling are individually strong performers and together we are creating a differentiated best-in-class commercial banking powerhouse.”
Webster Financial Corp., the parent company for Webster Bank and its HSA Bank division, had second quarter earnings of $91.6 million, or $1.01 per diluted share, compared to $50.7 million, or $0.57 per diluted share, in the second quarter of 2020.
Webster had $187 million in second quarter noninterest expenses compared to $176.6 million in the same quarter last year. The bank in its earnings statement attributed the increase primarily to $18.2 million in charges related to merger and strategic optimization initiatives, which include the branch consolidation announced several months before the merger agreement. The strategic initiatives did contribute to a $2 million decrease in compensation and benefits.
The bank had second quarter noninterest income of $72.7 million compared to $60.1 million in the same quarter last year. The bank said it saw an increase of $3.4 million in HSA fee income, driven primarily by higher interchange and account service fees, and $3 million in wealth and investment services, primarily because of increased investment activity. Webster also saw a $2.9 million increase in deposit service fees, including higher overdraft, interchange and cash management fees. The increases were partially offset by a $2.9 million decrease in mortgage banking activities because of lower volume and spreads on loans originated for sale.
The bank had $33.75 billion in total assets in the second quarter, up from $33.26 billion in the first quarter and $32.7 billion in the second quarter of 2020.
Webster saw deposit growth of $2.5 billion, or 9.5 percent from a year ago, including a $557.6 million increase in demand deposits and $536.6 million increase in HSA deposits. The bank had $28.8 billion in total deposits compared to $28.5 billion in the first quarter and $26.4 billion in the second quarter of 2020.
Webster’s total loans were $21.5 billion in the second quarter compared to $21.3 billion in the first quarter and $21.8 billion in the second quarter last year.
