The Waterbury parent of Webster Bank announced today it will trim expenses and boost capital by cutting 200 additional jobs and slashing its dividend after suffering a $300.5 million fourth-quarter loss.
Webster Financial Corp. said it lost $5.91 a share in the three months ended Dec. 31, compared with a loss of $8.7 million, or 16 cents a share, a year earlier.
The bank holding company’s’ shares plunged on the news. At 11 a.m., Webster shares traded at $4.28, down $1.05, or 19.7 percent. The company has shed 70 percent of its market value since Jan. 6.
Webster said its earnings results are preliminary, pending the outcome of a goodwill impairment analysis now under way.
Webster said the bulk of the loss was due to a $188.9 million non-cash goodwill impairment charge, and a $129.6 million non-cash charge stemming from the fallen value of certain investment securities
The bank holding company also suffered a pretax operating loss of $35.9 million.
Webster said its board of directors voted to slash the bank’s quarterly dividend to a penny from 30 cents, to preserve capital.
On top of the planned 240 job cuts ovet a two-year period that Webster previously had announced, the bank said today another 200 jobs will be shed companywide to shave expenses and will result in a severance charge of $4.2 million.
Starting in early February, 100 mostly Connecticut employees — including managers — will receive layoff notices, bank spokesman Ed Steadham said. Unfilled openings and attrition will make up the balance of job losses, Steadham said.
It was not immediately clear whether the cuts include the 240 jobs the bank announced last summer that it planned to reduce over the next two years.
In November, Webster said it was cleared to receive $400 million as part of the U.S. Treasury’s broad banking rescue effort to cushion its capital reserves against deteriorating loans and other assets.
