The two banks involved in the largest mergers in Connecticut over the last year have reported higher profits following their deals.
Stamford-based Webster Financial Corp., parent of Webster Bank, said Thursday its third quarter profits soared to $233.9 million, or $1.31 per diluted share, compared to $95.7 million, or $1.03 per share, in the year-ago period.
Those earnings topped Wall Street expectations, according to the Associated Press.
Webster Financial in February completed its merger with New York-based Sterling Bancorp, creating a regional lending giant with $65 billion in assets, $44 billion in loans, and $53 billion in deposits as of Dec. 31.
At the end of the third quarter, Webster reported $69 billion in assets, $47.8 billion in loans (with 80% made up of commercial loans), and $54 billion in deposits.
During the quarter, the bank also announced it took a $36.8 million pre-tax charge for expenses related to its “merger, strategic initiatives, and other charges.” It’s not clear if that included layoffs following the Sterling deal.
Buffalo-based M&T Bank Corp., which recently completed its acquisition of Bridgeport-based People’s United Bank, said Wednesday that it recorded $647 million in third-quarter profits, compared to $495 million in the year-ago period.
Despite the higher profits, the numbers missed Zacks consensus estimate of $4.21 per share in net operating earnings. Instead the bank reported $3.83 in net operating earnings per share.
Investors weren’t impressed. The company’s stock price since Tuesday morning has shed nearly 15% of its value, closing at $163.06 on Wednesday,
M&T said during the quarter it recorded a $53 million merger-related expense. That number was down significantly from the $465 million in merger-related expense in the second quarter. As part of its People’s United Bank acquisition, M&T said it would lay off several hundred people in Connecticut. As of earlier this month, the bank said it had laid off 325 employees in Connecticut.
In a conference call with analysts on Wednesday, M&T Bank CFO Darren King also addressed concerns and complaints about the company’s customer conversion process, which led to technical snafus, including some former People’s United customers temporarily losing access to their accounts.
“We completed the system conversion over Labor Day and have spent September stabilizing things,” King told analysts. “And stabilizing when I say that, is really working through with all of the clients to make sure that they have access that they understand how the tools work and they’re able to perform the basic functions that they look for on a Tape Day basis. And whenever you go through a massive change like this, there’s always some things where there’s some confusion. But overall, we feel really good about how things have gone. We convert nearly a million customers. And while there have been some hiccups, the complaints have been less than 1%. Even with that, we’re not happy until everyone has the access that they’re looking for. And we’ve been working with those clients on a one-on-one basis to solve their individual issues.”
