Webster Financial reported fourth-quarter net interest income rising modestly on stronger loan yields and lower payoff activity, while fee income climbed by $2.7 million sequentially driven by higher client activity and direct investment gains. Operating revenue included a net $8 million reduction to pre-tax income from one-time adjustments. Non-interest expenses increased, largely reflecting incentive accruals and investments in HSA Bank and technology initiatives. Despite 2.8% loan growth and 0.9% deposit growth in the quarter, margin pressure from higher funding costs and elevated expenses contributed to a 3.2% decline in the share price on the day of the release.

For the full year, Webster delivered a return on tangible common equity of 17.0% and a return on assets of 1.2%, while earnings per share rose 10% year-over-year. The bank achieved 8% loan growth and 6% deposit growth, with tangible book value per share increasing 13%. Capital returns included the repurchase of 10.9 million shares, underscoring management’s commitment to returning excess capital to shareholders alongside steady balance sheet expansion.

Total assets increased by $880 million, or 1.0%, in Q4 and grew just over $5.0 billion, or 6.4%, for the full year. Loans expanded by $1.5 billion, and deposit balances held steady despite a seasonal $1.2 billion decline in public funds, which the bank offset with increased corporate deposits. Asset quality improved, with nonperforming assets down 8%, classified commercial loans down 7%, and net charge-offs at 35 basis points. The allowance for credit losses declined by $9 million sequentially, reflecting charge-offs of previously reserved loans and underlying improvement in credit metrics.

Webster forecasts 5% to 7% loan growth and 4% to 6% deposit growth in 2026, targeting approximately $3.0 billion in GAAP revenue. Net interest income is projected at $2.57 billion to $2.63 billion assuming two 25-basis-point rate cuts, while fee income is expected in the range of $390 million to $410 million. Operating expenses are guided to $1.46 billion to $1.48 billion, with first-quarter costs modestly higher due to seasonal payroll taxes and merit increases. Management anticipates maintaining a net interest margin around 3.35% through year-end and sustaining capital ratios above well-capitalized levels.