Webster Financial Corp. saw its first-quarter earnings fall by nearly two-thirds as the Waterbury-based super-regional lender was forced to set aside more money for expected loan losses due to the ongoing COVID-19 pandemic.
Webster Bank reported a first-quarter profit of $36 million, or 39 cents per diluted share, down from $97.5 million, or $1.06 per share, in the first quarter of 2019.
The company set aside $76 million for expected credit losses during the quarter, up from $8.6 million a year ago. That increase was mainly due to impacts from COVID-19, as well as the adoption of a new accounting standard for loan losses that’s kicking in for many public companies this year.
Webster’s loan portfolio grew 11% over the year, from $18.8 billion to $20.9 billion, led by its commercial and commercial real estate units.
Webster was one of more than 60 Connecticut banks and credit unions that pledged in late March to adhere to a 90-day foreclosure moratorium on residential mortgages. Many banks have also waived or reduced fees and are also modifying loans for customers affected by the fallout of COVID-19.
Webster said Tuesday that it has not furloughed any employees or trimmed anyone’s pay. It’s also offered $5,000 low-interest loans to its employees who are facing COVID-19-related challenges.
“During these uncertain, challenging and unprecedented times, Webster bankers have once again stepped up to take care of our customers, our communities and, importantly, each other,” CEO John R. Ciulla said in a statement. “We continue to take swift actions to keep our employees safe while effectively providing our customers with the banking services and financial assistance they need to navigate through the economic storm brought on by this pandemic.”
Webster and other lenders aligned with the U.S. Small Business Administration scrambled over the past several weeks to process customer applications for economic stimulus under the Paycheck Protection Program, or PPP.
Webster disclosed Tuesday that it had processed approximately $650 million worth of PPP loans, which is about 16% of the $4.1 billion approved for more than 18,000 companies in the state as of last week, when the $350 billion program’s funding ran dry.
Politico reported Monday that Congress was nearing a deal on a $300 billion infusion of funding for the program, an amount predicted to run out within a few days.
