Shares of Webster Bank’s Waterbury parent traded this morning at a 52-week low after unveiling an estimated $100 million charge to fourth-quarter earnings to cover rising loan losses and a writedown of the value of its investment portfolio.
At 11 a.m., shares of Webster Financial Corp. traded at $8.66, down $1.14, or 11.6 percent.Â
Webster said the fourth-quarter provision for loan losses is wider than the $45.5 million provision taken in the third quarter. After expected net charge-offs of $53 million, Webster said its total allowance for loan losses will rise to 105 percent of non-accruing loans and will exceed 2 percent of total loans outstanding.
Webster also said it will record a non-cash charge of $118 million against its trust preferred investments due to declining values for those securities in the current economic and market climate. In addition, the bank holding company expects to record a $12 million, non-cash charge against its equity securities.
The bank plans to release fourth-quarter results on Jan. 23.
In December, Webster received $400 million in bailout funds from the U.S. Treasury.
“Our exceptionally strong capital levels serve us well during these challenging times as we address the potential losses associated with the deteriorating economic conditions,” said Webster Chairman and CEO James C. Smith. “We remain well positioned to meet our customers’ borrowing needs and to contribute to the region’s economic recovery.”
