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STAMFORD, Conn. - Webster Financial Corporation (NYSE:WBS), the parent company of Webster Bank, has announced an increase in its stock repurchase authority by $700 million. Currently trading at $47.81, InvestingPro analysis suggests the stock is slightly undervalued, with a price-to-book ratio of 0.9 and an attractive dividend yield of 3.38%. The additional authorization is part of the company’s ongoing share repurchase program, which allows for the repurchase of shares through various means, including open market or private transactions and block trades.
The decision to repurchase shares will be made by the company’s management, considering several factors such as stock availability, market conditions, stock trading price, alternative capital uses, regulatory considerations, and the company’s financial performance. According to InvestingPro data, Webster Financial demonstrates high shareholder yield and has maintained dividend payments for 39 consecutive years, highlighting its commitment to shareholder returns. The repurchases are to be conducted in compliance with Rule 10b-18 of the Securities and Exchange Commission (SEC) and other applicable legal requirements.
Webster Financial has indicated that the repurchase of shares could occur throughout 2025 and potentially in future years, depending on management’s discretion and regulatory constraints. The program does not have a set expiration date, but the Board of Directors may suspend, terminate, or modify it at any time based on various factors including market conditions and investment opportunities.
The share repurchase program is not a commitment by Webster Financial to acquire a specific number of shares and will be subject to the company’s capital and liquidity requirements.
Webster Financial Corporation, with over $80 billion in total assets and a market capitalization of $8.1 billion, operates Webster Bank, which provides financial services to businesses, individuals, and families. Webster Bank’s services are available in the Northeastern United States, with a core presence from the New York metropolitan area to Rhode Island and Massachusetts, and some businesses have a broader geographic reach. For deeper insights into Webster Financial’s performance and prospects, investors can access comprehensive analysis and additional ProTips through InvestingPro’s detailed research reports. This announcement is based on a press release statement from Webster Financial Corporation.
In other recent news, Webster Financial Corporation reported its first-quarter 2025 earnings, which showed a slight shortfall in both earnings per share (EPS) and revenue compared to analyst expectations. The company posted an EPS of $1.30, missing the forecast of $1.38, and reported revenue of $704.8 million, which was below the anticipated $707.12 million. Despite the earnings miss, Webster Financial demonstrated solid asset growth, with total assets reaching $80 billion and deposits increasing by over $800 million. The company also noted a 1% loan growth, equivalent to $551 million, and maintained a return on assets of 1.15% and a return on tangible common equity just below 16%.
In terms of future expectations, Webster Financial anticipates full-year loan growth of 4-5% and net interest income of $2.5 billion. The company is also preparing to launch a new Health Savings Account (HSA) product suite and a joint venture with Marathon later this year. Analyst firm Barclays inquired about the company’s credit quality and non-performing assets during the earnings call, with Webster Financial addressing these concerns by emphasizing its capital allocation and share repurchase strategy.
Despite the earnings miss, Webster Financial remains confident in its strategic initiatives and economic outlook, as expressed by CEO John Ciulla. The company has increased its recession case probability to 30% in its CECL process, reflecting a cautious stance amid ongoing economic uncertainties.
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