Webster Financial (WBS) Q1 2025 earnings summary

Executive summary

• Net income for Q1 2025 was $226.9 million, up 4.9% year-over-year, with diluted EPS of $1.30 and ROA of 1.15%; return on tangible common equity was 15.93%.

• Deposit growth was 1.3% sequentially, with total deposits reaching $65.6 billion and a loan-to-deposit ratio of 81%.

• Loan growth was 1% sequentially, with broad-based contributions across business lines, especially in middle-market and commercial banking.

• Efficiency ratio was 45.8%, reflecting solid profitability and ongoing investment in growth.

• Share repurchases totaled 3.6 million shares in Q1, with continued buybacks and an expanded repurchase authority.

Financial highlights

• Net interest income rose to $612.2 million, up 7.8% year-over-year, with net interest margin at 3.48%.

• Non-interest income was $92.6 million, down from the prior quarter and year, mainly due to lower deposit service fees and absence of prior-year gains.

• Non-interest expense increased to $343.6 million, driven by higher compensation, technology, and Ametros acquisition costs.

• Tangible book value per share rose to $33.97, up 3.1% sequentially and 12.4% year-over-year.

• CET1 ratio was 11.26%, and tangible common equity ratio was 7.43%, both above regulatory requirements.

Outlook and guidance

• Full-year 2025 guidance unchanged, with loan and deposit growth expected at 4–5% and NII of $2.45–$2.50 billion.

• NIM guidance for the year is around 3.40%, slightly above the previous range.

• Charge-offs are anticipated in the 25–35 basis point range for the year.

• Management expects provisioning to align with charge-offs if the base case of a stable, non-recessionary environment holds.

• Assumes three Fed funds rate cuts starting June; CET1 near-term target 11%.