Webster Financial (WBS) Barclays 23rd Annual Global Financial Services Conference summary

Business model and strategic positioning

• Operates as an $82 billion regional bank with a strong presence from Boston to Philadelphia and national verticals accounting for 25% of business.

• Differentiated by a low-cost, long-duration deposit base, especially in healthcare verticals like HSA Bank and Ametros.

• Maintains an 80% loan-to-deposit ratio, providing significant deposit flexibility and balance sheet growth.

• Recent joint venture with Marathon Asset Management aims to boost sponsor and specialty loan growth without increasing balance sheet risk.

• Focused on expanding healthcare deposit verticals both organically and inorganically.

Financial performance and outlook

• Reports strong financial performance year-to-date, with high returns and efficient operations (efficiency ratio in the mid-40s).

• Balance sheet growth is robust, with momentum expected to continue into the third quarter.

• Neutral to interest rate cuts due to balance sheet adjustments and hedging; expects NIM to remain in the 3.30%-3.35% range.

• Deposit beta expected to remain stable, with competition keeping deposit pricing elevated.

• Capital levels are strong, with a long-term operating target of 10.5% and ongoing share repurchases.

Credit quality and risk management

• Credit inflection point occurred in Q2, with improving risk ratings and resolution of problem credits continuing into Q3.

• Non-accruals and classified assets mainly from office and healthcare services portfolios, both now stabilized or reduced.

• Risk rating profile is improving, with proactive monitoring and no significant correlated risks identified.

• Expects stable to moderately improving credit performance over the next several quarters, absent a recession.