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Webster Financial Corp (WBS)
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Webster Financial (WBS) AI Stock Analysis

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WBS

Webster Financial

(NYSE:WBS)

Rating:79Outperform
Price Target:
$65.00
â–²(4.82% Upside)
Webster Financial's strong financial performance, coupled with positive technical indicators and strategic corporate actions, contribute to an overall favorable outlook. Key strengths include robust profitability, effective cash flow management, and a solid market position. While minor challenges in operational efficiency and competitive pressures exist, the company's strategic initiatives and growth potential provide a positive investment case.
Positive Factors
Credit Trends
Credit trends were a highlight with nonperforming and commercial classified loans both decreasing, alongside a decline in net charge offs.
Earnings Performance
4Q24 earnings exceeded expectations, with operating EPS beating consensus due to higher net interest income and fees.
Loan Growth
Loan growth showed positive momentum with end of period balances increasing and originations accelerating across major segments.
Negative Factors
Asset Quality
Asset quality metrics deteriorated, as evidenced by an increase in nonperforming and commercial classified loans.

Webster Financial (WBS) vs. SPDR S&P 500 ETF (SPY)

Webster Financial Business Overview & Revenue Model

Company DescriptionWebster Financial Corporation (WBS) is a regional bank holding company headquartered in Waterbury, Connecticut. The company operates through its subsidiary, Webster Bank, providing a comprehensive range of financial services including personal and commercial banking, mortgage lending, and wealth management. Webster serves customers across various sectors, including retail, small businesses, and corporate clients, with a focus on delivering tailored financial solutions to meet their diverse needs.
How the Company Makes MoneyWebster Financial generates revenue primarily through interest income from loans and investments, as well as non-interest income from fees for various financial services. The bank makes money by lending at higher interest rates than the rates it pays on deposits, capturing the spread. Key revenue streams include commercial and residential loans, consumer banking services, wealth management fees, and service charges on deposit accounts. Additionally, Webster may enter into strategic partnerships and alliances that enhance its product offerings, expand its customer base, and contribute to its overall earnings.

Webster Financial Earnings Call Summary

Earnings Call Date:Jul 17, 2025
(Q2-2025)
|
% Change Since: |
Next Earnings Date:Oct 16, 2025
Earnings Call Sentiment Positive
Webster Financial Corporation demonstrated strong financial performance with solid growth metrics and strategic initiatives, such as share repurchases and partnerships, indicating a positive trajectory. However, challenges like declining net interest margin and competitive pressures on deposit costs present areas of concern.
Q2-2025 Updates
Positive Updates
Strong Financial Performance
The company reported a return on tangible common equity of 18%, ROAA of nearly 1.3%, and revenue growth of 1.6% over the prior quarter. The loan-to-deposit ratio remained roughly flat, maintaining a favorable liquidity position.
Share Repurchase Program
The Board authorized an additional $700 million in share repurchases, and 1.5 million shares were bought back in the quarter.
Decrease in Criticized Commercial Loans and Non-Accruals
The inflection point in asset quality projected for mid-2025 is materializing with reductions in criticized commercial loans and non-accruals.
Healthcare Financial Services Segment Growth
Provisions within the recently passed reconciliation bill are expected to accelerate growth in HSA deposits, with an estimated potential deposit opportunity ranging from $1 billion to $2.5 billion over the next 5 years.
Asset Management Partnership with Marathon
The partnership with Marathon Asset Management has reached operational realization, contributing loans to the joint venture and expected to drive fee revenue in 2026 and beyond.
Negative Updates
Net Interest Margin Decline
The net interest margin (NIM) was down 4 basis points from the prior quarter to 3.44%, with drivers of lower NIM including seasonal deposit mix shift, higher cash balances, and slight organic spread compression.
Deposit Cost Increase
Deposit costs were up 3 basis points over the prior quarter due to seasonal mix shift effects in HSA and public deposit accounts.
Competitive Deposit Market
There is significant competition on the deposit side, limiting opportunities to reduce deposit costs despite anticipated rate cuts.
Company Guidance
During the second quarter of 2025, Webster Financial Corporation reported robust financial metrics, including a return on tangible common equity of 18% and a return on average assets (ROAA) of nearly 1.3%. The company experienced a 1% linked-quarter increase in both loans and deposits, alongside a 1.6% rise in overall revenue compared to the previous quarter. Their common equity Tier 1 ratio improved, and the loan-to-deposit ratio remained stable. Significantly, asset quality improved as criticized commercial loans and non-accruals decreased, with a net charge-off ratio of 27 basis points. The company also announced a $700 million share repurchase authorization, having already bought back 1.5 million shares during the quarter. Webster Financial's diversified deposit and loan origination channels, particularly in the Healthcare Financial Services segment, continue to offer growth opportunities and flexibility. The outlook remains positive with anticipated benefits from an asset management partnership with Marathon Asset Management, expected to enhance sponsor loan growth and fee revenue by 2026.

Webster Financial Financial Statement Overview

Summary
Webster Financial demonstrates a solid financial position with strong profitability and effective cash flow management. Despite a slight decline in EBIT Margin, the company's balanced leverage and prudent cash management highlight its stability and potential for continued growth.
Income Statement
78
Positive
Webster Financial shows a stable performance with a Gross Profit Margin of 56.6% for TTM (Trailing-Twelve-Months), indicating efficient cost management. The Net Profit Margin is healthy at 18.6%, reflecting strong profitability. Revenue has grown by 5.68% compared to the previous year, showcasing positive growth. However, the EBIT Margin has slightly declined to 24.2%, which may indicate rising operational costs.
Balance Sheet
72
Positive
The company's Debt-to-Equity Ratio stands at 0.42, which is relatively low, suggesting prudent leverage management. Return on Equity is solid at 8.47%, indicating effective use of equity to generate income. The Equity Ratio of 11.46% showcases a balanced approach to asset financing, though there is room for strengthening the equity base to enhance financial stability.
Cash Flow
81
Very Positive
Webster Financial demonstrates robust cash flow management, with Operating Cash Flow to Net Income Ratio at 1.61, indicating strong cash generation relative to profits. The Free Cash Flow to Net Income Ratio is commendable at 1.56, reflecting effective capital expenditure management. While Free Cash Flow growth is slightly negative at -11.10%, the overall cash flow position remains healthy.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue4.19B4.17B3.94B2.72B1.26B1.29B
Gross Profit2.37B2.36B2.50B2.19B1.28B1.04B
EBITDA1.09B1.09B1.16B879.78M575.37M323.15M
Net Income779.30M768.71M867.84M644.28M408.86M220.62M
Balance Sheet
Total Assets80.28B79.03B74.95B71.28B34.92B32.59B
Cash, Cash Equivalents and Short-Term Investments2.52B2.08B10.68B8.73B4.70B3.59B
Total Debt3.90B3.36B3.87B7.69B1.39B1.88B
Total Liabilities71.08B69.89B66.26B63.22B31.48B29.36B
Stockholders Equity9.20B9.13B8.69B8.06B3.44B3.23B
Cash Flow
Free Cash Flow1.22B1.37B938.35M1.31B672.00M359.27M
Operating Cash Flow1.26B1.40B978.65M1.34B688.59M380.55M
Investing Cash Flow-3.26B-3.87B-2.60B-7.19B-2.41B-2.29B
Financing Cash Flow2.97B2.82B2.49B6.23B1.91B1.91B

Webster Financial Technical Analysis

Technical Analysis Sentiment
Positive
Last Price62.01
Price Trends
50DMA
58.62
Positive
100DMA
54.29
Positive
200DMA
54.43
Positive
Market Momentum
MACD
1.39
Negative
RSI
61.60
Neutral
STOCH
70.58
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WBS, the sentiment is Positive. The current price of 62.01 is above the 20-day moving average (MA) of 59.80, above the 50-day MA of 58.62, and above the 200-day MA of 54.43, indicating a bullish trend. The MACD of 1.39 indicates Negative momentum. The RSI at 61.60 is Neutral, neither overbought nor oversold. The STOCH value of 70.58 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for WBS.

Webster Financial Risk Analysis

Webster Financial disclosed 47 risk factors in its most recent earnings report. Webster Financial reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Webster Financial Peers Comparison

Overall Rating
UnderperformOutperform
Sector (68)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
80
Outperform
$9.36B12.9411.60%1.39%4.74%10.10%
79
Outperform
$10.46B12.789.34%2.58%4.73%7.12%
78
Outperform
$9.39B13.9410.05%1.28%30.40%12.40%
77
Outperform
$10.48B15.408.19%2.16%21.10%7.74%
77
Outperform
$9.07B13.5811.07%4.12%-8.62%15.37%
72
Outperform
$10.08B11.7712.58%1.68%7.14%14.94%
68
Neutral
$18.06B11.9710.24%3.74%9.75%1.30%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
WBS
Webster Financial
62.01
19.80
46.91%
CMA
Comerica
68.86
16.58
31.71%
UMBF
UMB Financial
124.47
26.10
26.53%
WTFC
Wintrust Financial
139.53
37.77
37.12%
WAL
Western Alliance
90.65
13.32
17.22%
SSB
SouthState Corporation
103.01
11.77
12.90%

Webster Financial Corporate Events

Executive/Board Changes
Webster Financial Announces Executive Resignation
Neutral
Jul 21, 2025

On July 18, 2025, Albert J. Wang announced his resignation as Executive Vice President and Chief Accounting Officer of Webster Financial Corporation and Webster Bank, effective September 2, 2025, to pursue another professional opportunity. Gregory S. Madar will assume the role of Interim Chief Accounting Officer starting September 3, 2025, while the company searches for a permanent replacement.

The most recent analyst rating on (WBS) stock is a Buy with a $66.00 price target. To see the full list of analyst forecasts on Webster Financial stock, see the WBS Stock Forecast page.

Business Operations and StrategyFinancial Disclosures
Webster Financial Reports Strong Q2 2025 Results
Positive
Jul 17, 2025

Webster Financial Corporation reported strong financial results for the second quarter of 2025, with net income applicable to common stockholders of $251.7 million, or $1.52 per diluted share, compared to $175.5 million, or $1.03 per diluted share, in the same quarter of 2024. The company experienced growth in revenue, loans, and deposits, with improved asset quality metrics and a lower provision for credit losses. The financial performance highlights Webster’s solid growth and strategic positioning, indicating a positive outlook for future business opportunities and shareholder returns.

The most recent analyst rating on (WBS) stock is a Buy with a $66.00 price target. To see the full list of analyst forecasts on Webster Financial stock, see the WBS Stock Forecast page.

Executive/Board ChangesBusiness Operations and Strategy
Webster Financial Appoints New Board Member and CRO
Positive
Jul 1, 2025

On June 25, 2025, Webster Financial Corporation announced the appointment of Frederick J. Crawford to its Board of Directors, effective July 1, 2025, expanding the board from 12 to 13 members. Crawford, recognized as an independent director and financial expert, will serve on the Audit and Risk Committees. Additionally, Jason E. Schugel was appointed as Chief Risk Officer and Executive Vice President, effective July 14, 2025, succeeding Daniel Bley, who will retire but remain temporarily in an advisory role. Schugel brings extensive experience in risk management from his previous role at Ally Bank. These appointments are expected to enhance Webster’s strategic capabilities and governance as it continues to grow and navigate the regulatory landscape.

The most recent analyst rating on (WBS) stock is a Buy with a $66.00 price target. To see the full list of analyst forecasts on Webster Financial stock, see the WBS Stock Forecast page.

Executive/Board ChangesShareholder Meetings
Webster Financial Concludes Successful Annual Stockholders Meeting
Neutral
May 23, 2025

On May 21, 2025, Webster Financial Corporation held its 2025 Annual Meeting of Stockholders, where 89.7% of shares were represented. During the meeting, stockholders elected twelve directors for one-year terms, approved executive compensation on a non-binding basis, and ratified KPMG LLP as the independent auditor for the fiscal year ending December 31, 2025.

The most recent analyst rating on (WBS) stock is a Buy with a $75.00 price target. To see the full list of analyst forecasts on Webster Financial stock, see the WBS Stock Forecast page.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jul 18, 2025