Webster Reports Second Quarter 2026 EPS of $1.56; Adjusted EPS of $1.60

Webster Financial Corporation ("Webster") (NYSE:WBS), the holding company for Webster Bank, N.A., today announced net income applicable to common stockholders of $249.4 million, or $1.56 per diluted share, for the quarter ended June 30, 2026, compared to $251.7 million, or $1.52 per diluted share, for the quarter ended June 30, 2025.

Second quarter 2026 results include Transaction expenses. Excluding this item, adjusted earnings per diluted share would have been $1.60¹ for the quarter ended June 30, 2026.

On February 3, 2026, Webster entered into a transaction agreement with Banco Santander, S.A. ("Banco Santander"), under which Banco Santander will acquire Webster in a cash and stock transaction (the "Transaction").

The Transaction was approved by Webster’s stockholders on May 26, 2026, the Office of the Comptroller of the Currency on June 12, 2026 and the European Central Bank on July 21, 2026. The Transaction remains subject to customary closing conditions, including the approval of the Board of Governors of the Federal Reserve System. The Transaction is expected to close in the second half of 2026.

Under the terms of the transaction agreement, Webster’s common stockholders will receive $48.75 in cash and 2.0548 Banco Santander ordinary shares, which will be delivered in the form of American Depository Receipts, for each Webster share. In light of the proposed Transaction with Banco Santander, Webster will no longer provide a forward-looking financial outlook.

"Webster continued to generate impressive financial results this quarter," said John R. Ciulla, Chairman and Chief Executive Officer. "Our execution is commendable, in that our colleagues continue to deliver for our clients while they also prepare to integrate our proposed Transaction with Banco Santander."

Highlights for the second quarter of 2026:

• Revenue² of $740.0 million
• Loans and leases balance of $57.9 billion, up $0.6 billion, or 1.1 percent from prior quarter
• Deposits balance of $70.3 billion, up $1.2 billion, or 1.8 percent, from prior quarter
• Provision for credit losses of $31.5 million
• Return on average assets of 1.19 percent
• Return on average tangible common stockholders’ equity of 16.67 percent¹
• Net interest margin of 3.26 percent
• Common equity tier 1 ratio of 11.69 percent³
• Efficiency ratio of 47.74 percent¹
• Tangible common equity ratio of 7.60 percent¹

"Our returns and growth affirm the quality of Webster’s banking franchise," said Neal Holland, Senior Executive Vice President and Chief Financial Officer. "Our operating position has only grown stronger, as capital levels increased, loans grew in categories with appealing risk characteristics, and non-performing assets declined significantly."

Consolidated financial performance compared to the second quarter of 2025:

Net interest income:

• Net interest income was $632.7 million, compared to $621.2 million.
• Net interest margin was 3.26 percent, compared to 3.44 percent.
• Average interest-earning assets totaled $79.8 billion, an increase of $5.8 billion, or 7.9 percent. The average yield on interest-earning assets decreased by 32 basis points.
• Average deposits and interest-bearing liabilities totaled $75.3 billion, an increase of $5.7 billion, or 8.1 percent. The average cost of deposits and interest-bearing liabilities decreased by 16 basis points.

Provision for credit losses:

• The provision for credit losses was $31.5 million, compared to $46.5 million.
• Net charge-offs were $42.7 million, compared to $36.4 million. The ratio of net charge-offs to average loans and leases was 0.30 percent, compared to 0.27 percent.
• The allowance for credit losses on loans and leases represented 1.25 percent of total loans and leases, compared to 1.35 percent.
• The allowance for credit losses on loans and leases represented 169 percent of non-performing loans and leases, compared to 135 percent.

Non-interest income:

• Total non-interest income was $107.2 million, compared to $94.7 million. The $12.5 million increase was primarily driven by other miscellaneous income and higher loan and lease related fees.

Non-interest expense:

• Total non-interest expense was $385.0 million, compared to $345.7 million. The $39.3 million increase was primarily driven by higher compensation and benefit costs and $8.7 million of Transaction expenses incurred during the quarter ended June 30, 2026.

Income taxes:

• Income tax expense was $66.7 million, compared to $64.8 million, and the effective tax rate was 20.6 percent, compared to 20.0 percent. Both the higher income tax expense and the effective tax rate for the quarter ended June 30, 2026, primarily reflected the recognition of $1.2 million of net discrete tax benefits in the current period, compared to $3.9 million a year ago.

Investment securities:

• Investment securities totaled $18.3 billion, an increase of $0.5 billion, or 2.7 percent. The carrying value at June 30, 2026, included $0.6 billion of net unrealized losses on the available-for-sale securities portfolio and excluded $0.9 billion of net unrealized losses on the held-to-maturity securities portfolio.

Loans and leases:

• Loans and leases totaled $57.9 billion, an increase of $4.2 billion, or 7.8 percent. Commercial loans and leases increased by $2.4 billion, commercial real estate loans increased by $1.4 billion, residential mortgages increased by $0.3 billion, and consumer loans increased by $0.1 billion.
• Loan originations for the portfolio were $3.5 billion, compared to $3.8 billion.

Asset quality:

• Non-performing loans and leases were $429.0 million, a decrease of $105.5 million, or 19.7 percent. The decrease was primarily driven by commercial non-mortgage and commercial real estate. The ratio of non-performing loans and leases to total loans and leases was 0.74 percent, compared to 1.00 percent.
• Past due loans and leases were $117.3 million, an increase of $62.6 million, or 114.3 percent. The increase was primarily driven by commercial real estate.

Deposits and borrowings:

• Deposits totaled $70.3 billion, an increase of $4.0 billion, or 6.0 percent. The increase was primarily driven by interest-bearing checking and money market. The ratio of core deposits to total deposits¹ remained flat at 88.1 percent. The loan to deposit ratio was 82.3 percent, compared to 80.9 percent.
• Borrowings totaled $4.5 billion, a decrease of $0.1 billion, or 3.2 percent.

Capital:

• The return on average common stockholders’ equity and the return on average tangible common stockholders’ equity¹ were 10.73 percent and 16.67 percent, respectively, compared to 11.31 percent and 17.96 percent, respectively.
• The tangible equity¹ and tangible common equity¹ ratios were 7.94 percent and 7.60 percent, respectively, compared to 7.82 percent and 7.46 percent, respectively.
• The common equity tier 1 ratio² was 11.69 percent, compared to 11.35 percent.
• Book value per common share and tangible book value per common share¹ were $58.49 and $38.81, respectively, compared to $54.19 and $35.13, respectively.

Webster Financial Corporation ("Webster") (NYSE:WBS) is the holding company for Webster Bank, N.A. ("Webster Bank"). Headquartered in Stamford, CT, Webster is a values-driven organization with approximately $86 billion in total consolidated assets. Webster Bank is a commercial bank that provides a wide range of financial products and services to businesses, individuals, and families across three differentiated lines of business: Commercial Banking, Healthcare Financial Services, and Consumer Banking. While its core footprint spans the Northeast from the New York metropolitan area to Rhode Island and Massachusetts, certain businesses operate in extended geographies. Webster Bank is a member of the FDIC and an equal housing lender. For more information about Webster, including past press releases and the latest annual report, visit the Webster website at www.websterbank.com.

Forward-Looking Statements

This press release contains statements that constitute "forward-looking statements" within the meaning of, and subject to the protections of, the Private Securities Litigation Reform Act of 1995. Factors that could cause Webster’s actual results to differ from those described in the forward-looking statements are described in Webster’s Annual Report on Form 10-K for the year ended December 31, 2025, as amended, and in Webster’s subsequent filings with the U.S. Securities and Exchange Commission. Any forward-looking statement made by Webster in this release speaks only as of the date on which it is made. Factors or events that could cause Webster’s actual results to differ may emerge from time to time, and it is not possible for Webster to predict all of them. Webster undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.

Non-GAAP Financial Measures

In addition to results presented in accordance with GAAP, this press release contains certain non-GAAP financial measures, including the efficiency ratio, the return on average tangible common stockholders’ equity, the tangible equity ratio, the tangible common equity ratio, tangible book value per common share, core deposits, adjusted return on average assets, adjusted return on average tangible common stockholders’ equity, adjusted pre-tax net income, adjusted net income applicable to common stockholders, and adjusted diluted earnings per share ("EPS"). A reconciliation of each non-GAAP financial measure to the most comparable GAAP financial measure is included in the accompanying selected financial highlights table.

Webster believes that certain non-GAAP financial measures provide investors with information useful in understanding its financial position, results of operations, the strength of its capital position, and overall business performance. These non-GAAP financial measures are used by Webster for performance measurement purposes, as well as for internal planning and forecasting, and by securities analysts, investors, and other interested parties to assess peer company operating performance. Webster believes that this presentation, together with the accompanying reconciliations, provides investors with a more complete understanding of the factors and trends affecting its business and allows investors to view its performance in a manner similar to management.

The efficiency ratio represents the costs expended to generate a dollar of revenue and is calculated excluding certain non-operational items and certain non-recurring transactions or events. The return on average tangible common stockholders’ equity is calculated using net income less preferred stock dividends, adjusted for the tax-effected amortization of intangible assets, as a percentage of average stockholders’ equity less average preferred stock and average goodwill and other intangible assets. The tangible equity ratio represents stockholders’ equity less goodwill and other intangible assets ("tangible stockholders’ equity") divided by total assets less goodwill and other intangible assets ("tangible assets"). The tangible common equity ratio represents stockholders’ equity less preferred stock and goodwill and other intangible assets ("tangible common stockholders’ equity") divided by tangible assets. Tangible book value per common share represents tangible common stockholders’ equity divided by the number of common shares outstanding at the end of the reporting period. Core deposits reflect total deposits less certificates of deposit and brokered certificates of deposit. The adjusted return on average assets, adjusted return on average tangible common stockholders’ equity, adjusted pre-tax net income, adjusted net income applicable to common stockholders, and adjusted diluted EPS are calculated excluding certain non-recurring transactions or events, which have been tax-effected, as applicable.

These non-GAAP financial measures should not be considered a substitute for GAAP-basis financial measures. Because non-GAAP financial measures are not standardized, it may not be possible to compare these with other companies that present financial measures having the same or similar names. Webster strongly encourages investors to review its consolidated financial statements in their entirety and to not rely on any single financial measure. Refer the tables beginning on page 12 for Non-GAAP to GAAP reconciliations.

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