Webster's profit for past year rises 21%

Waterbury-based Webster Bank nearly tripled its fourth-quarter earnings thanks in part to reduced expenses, a $9 million increase in fee-based revenues and restructuring costs that hurt the bank's performance in the final quarter of 2004.

Webster Financial Corp., the bank's parent, reported net income of $45.5 million, or 84 cents per diluted share, for the quarter compared with $16.3 million, or 30 cents per diluted share, for the fourth quarter of 2004.

Earnings in the final quarter of 2004 were hurt by a one-time, pre-tax loss of $49.9 million connected to the sale of $750 million in securities. The sale was part of a balance sheet restructuring program.

The company also reported a 21 percent increase in profits for the fiscal year. Webster closed the year with net income of $185.9 million, or $3.43 per diluted share, compared with $153.8 million, or $3 per diluted share, for the previous year.

Webster Financial, which employs about 3,500 people, is a $17.8 billion financial institution founded in 1935 by Harold Webster Smith as First Federal Savings & Loan.

Aside from Webster Bank, which has 157 branches and 304 ATMs, the company has an insurance division; an investment services division; a brokerage division; a division that markets health savings accounts; an equipment-financing company and other subsidiaries.

Webster reported net interest income of $129.7 million for the fourth quarter, a 2 percent increase from the $127.6 million it reported for the fourth quarter of 2004. Net interest income is the difference between the interest a bank earns on its loans and investments and the interest it pays on the money it borrows or to its depositors.

Fee-based income for the fourth quarter jumped 19 percent to $58.2 million, thanks to a $2.2 million increase in deposit service fees and a $1.6 million jump in loan and loan servicing fees. For the year, fee-based income increased by a half percent to $217.2 million.

Noninterest expenses, which include items like salaries, rent, equipment costs and taxes, fell by $34.7 million in the fourth quarter to $119.3 million.

Fourth-quarter expenses were inflated in 2004 by $45.8 million in costs associated with the restructuring effort. For the year, noninterest expenses increase 2 percent to $455.6 million.

What are people saying about mortgages today:

Rates on 30-year mortgages edged down last week to a seven-month low. Mortgage-giant Freddie Mac reported Thursday that 30-year, fixed-rate mortgages fell to 6.3 percent, down slightly from 6.31 percent two weeks ago. It put rates at the lowest level since they were at 6.24 percent the first week of March.

Bank of Hawaii, Central Pacific Bank, Territorial Savings Bank and Wells Fargo Home Mortgages all cut their 30-year mortgage rates to 5.75 percent this week.

Most people think of a mortgage as a means to an end. After all, you buy a house, not a home loan. But a mortgage is much more than the path to homeownership. It is a financial instrument that must be managed, just like any other financial investment.