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Waterbury-based Webster Financial, parent of Webster Bank, said its third-quarter profits fell nearly 25%, with lower interest and securities yields leading the drop.
Webster on Thursday reported $66.9 million in net income, or 75 cents per diluted share, for the quarter that ended Sept. 30, down nearly 27% from $91.4 million, or $1 per share, a year ago.
The results beat recent analyst estimates compiled by Zacks Investment Research, who had estimated profits of 69 cents per share.
Lower interest, fees and dividends on loans, leases and securities during the recent quarter drove down Webster’s income by nearly $55 million, or 18.7%, from a year ago.
That was partially offset by lower expenses as well as higher fee income generated by mortgage refinancing activity.
While COVID-19 continued to be a factor for Webster, requiring an increase in the bank’s set-aside for credit losses, the pandemic’s impacts on the bank’s loan portfolio are subsiding.
Payment deferrals granted by Webster to commercial and consumer borrowers were down 65% compared to the second quarter, with deferrals falling from $1.38 billion to $482 million.
Deferrals now amount to 2% of the bank’s total portfolio, down from 7% three months ago.
“Webster’s capital and liquidity strength has enabled us to continue to support our customers and assist in the broader financial recovery,” Glenn MacInnes, executive vice president and chief financial officer, said in a statement.
Webster said has funded $1.5 billion worth of Paycheck Protection Program stimulus loans this year for more than 11,000 businesses and has assisted 2,600 consumers with deferrals on their mortgage payments. The bank has frozen residential foreclosure sales until March 1 of next year, except for vacant properties.
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