Webster Financial Profile
Webster Financial Corporation (Webster) operates as a bank holding company and financial holding company.
Webster Bank (Webster Bank, National Association), and its HSA Bank Division, is a leading commercial bank in the Northeast that provides a wide range of digital and traditional financial solutions across three differentiated lines of business: Commercial Banking, HSA Bank, and Consumer Banking. While its core footprint spans the northeastern U.S. from New York to Massachusetts, certain businesses operate in extended geographies. HSA Bank is one of the largest providers of employee benefits solutions in the U.S.
On January 11, 2023, the bank acquired interLINK, a technology-enabled deposit management platform that administers over $9 billion of deposits from FDIC-insured cash sweep programs between banks and broker/dealers and clearing firms. The acquisition provided the company with access to a unique source of core deposit funding and scalable liquidity and added another technology-enabled channel to its already differentiated, omnichannel deposit gathering capabilities.
On January 24, 2024, the bank acquired Ametros, a custodian and administrator of medical funds from insurance claims settlements that helps individuals manage their ongoing medical care through its CareGuard service and proprietary technology platform. The acquisition will provide a fast-growing source of long-duration deposits, new sources of non-interest income, and enhance its employee benefit and healthcare financial services expertise.
Subsidiaries and Reportable Segments
The company’s principal consolidated subsidiary is the bank. As of December 31, 2023, the bank's significant wholly-owned subsidiaries included: Webster Servicing LLC, Webster Public Finance Corporation, Sterling National Funding Corporation, Webster Mortgage Investment Corporation, Sterling Business Credit LLC, Webster Wealth Advisors, Inc., Webster Licensing, LLC, Bend Financial, Inc., Interlink Insured Sweep LLC, Webster Investment Services, Inc., Webster Preferred Capital Corporation, and Webster Community Development Corporation.
As of December 31, 2023, the company's operations are organized into three reportable segments that represent its primary businesses: Commercial Banking, HSA Bank, and Consumer Banking.
Commercial Banking segment
Commercial Banking serves businesses with more than $2 million of revenue through its Commercial Real Estate and Equipment Finance, Middle Market, Business Banking, Asset-Based Lending and Commercial Services, Public Sector Finance, Mortgage Warehouse, Sponsor and Specialty Finance, Verticals and Support, Private Banking, and Treasury Management business units.
Commercial Real Estate offers financing alternatives for the purpose of acquiring, developing, constructing, improving, or refinancing commercial real estate, in which loans are typically secured by institutional-quality real estate, including apartments, anchored retail, industrial, office, and student and affordable housing properties, and where the income generated from the secured property is the primary repayment source.
Equipment Finance offers small to mid-ticket equipment leasing solutions for critical equipment, new or used, across the manufacturing, construction and transportation, and environmental sectors.
Middle Market offers a broad range of financial services to a diversified group of companies delivering competitive products and solutions that meet their specific middle market needs.
Business Banking offers credit, deposit, and cash flow management products to businesses and professional service firms.
Asset-Based Lending, which is a top U.S. asset-based lender, offers asset-based loans and revolving credit facilities by financing core working capital with advance rates against inventory, accounts receivable, equipment, or other property owned by the borrower.
Commercial Services offers accounts receivable factoring and trade financing, and payroll funding and business process outsourcing to temporary staffing agencies nationwide, including full back-office, technology, and tax accounting services.
Public Sector Finance offers financing solutions exclusively to state, municipal, and local government entities.
Mortgage Warehouse offers warehouse financing facilities consisting of temporary lines of credit, and which are secured by 1-4 family residential mortgages, to independent mortgage origination companies.
Sponsor and Specialty Finance offers senior debt capital to companies across the U.S. that are backed by private equity sponsors and/or privately owned in one of the company’s specialty industries: technology and infrastructure, healthcare, environmental services, business and information services, lender finance, and fund banking.
Verticals and Support offers credit, deposit, and cash flow management to businesses and professional service firms in the legal, not-for-profit, and property management sectors, as well as to local and state governments.
Private Banking offers an array of wealth management solutions to business owners and operators, including trust, asset management, financial planning, insurance, retirement, and investment products.
Treasury Management offers derivative, treasury, accounts payable, accounts receivable, and trade products and services, through a dedicated team of treasury professionals and local commercial bankers, to help its business and institutional customers enhance liquidity, improve operations, and reduce risk.
HSA Bank segment
HSA Bank, serviced through Webster Servicing LLC, offers a comprehensive consumer-directed employee benefit and healthcare solution that includes HSAs, health reimbursement arrangements, flexible spending accounts, and commuter benefits. HSAs are used in conjunction with high deductible health plans in order to facilitate tax advantages for account holders with respect to health care spending and savings. HSAs are distributed nationwide through employers for and to individual consumers, as well as through national and regional insurance carriers, benefit consultants, and financial advisors. HSA deposits provide long-duration, low-cost funding that is used to minimize the bank's use of wholesale funding in the support of its loan growth.
Consumer Banking segment
Consumer Banking operates a distribution network, primarily throughout southern New England and the New York metro and suburban markets, that comprises various banking centers and ATMs, a customer care center, and a full range of web and mobile-based banking services. Consumer Banking's business units consist of Consumer Lending and Small Business Banking.
Consumer Lending offers consumer deposit and fee-based services, residential mortgages, home equity lines, secured and unsecured loans, and credit card products.
Small Business Banking offers credit, deposit, and cash flow management products targeted to businesses and professional service firms with annual revenues of up to $2 million.
Deposits
The bank offers a wide variety of checking and savings deposit products designed to meet the transactional and investment needs of both its consumer and business customers. The bank’s deposit services include, but are not limited to, ATM and debit card use, direct deposit, ACH payments, mobile banking, internet-based banking, banking by mail, account transfers, and overdraft protection, among others. The bank manages the flow of funds in its deposit accounts and interest rates consistent with FDIC regulations.
Investment Securities
As of December 31, 2023, the company’s investment securities included government agency debentures; municipal bonds and notes; agency CMO; agency MBS; agency CMBS; CMBS; corporate debt securities; private label MBS; and other securities.
Supervision and Regulation
As a registered bank holding company and a financial holding company, the company is subject to regulation under the Bank Holding Company Act of 1956, as amended (BHC Act) and to inspection, examination, and supervision by its primary federal regulator, the Board of Governors of the Federal Reserve System. As a publicly-traded company, Webster is also subject to the disclosure and regulatory requirements of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended, both of which are administered by the U.S. Securities and Exchange Commission (SEC). As a publicly-traded company with securities listed on the NYSE, Webster is subject to the rules of the NYSE.
The bank is organized as a national banking association under the National Bank Act, as amended, and is subject to the supervision of and regular examination by the Office of the Comptroller of the Currency (OCC), its primary federal regulator, as well as by the Federal Deposit Insurance Corporation (FDIC), its deposit insurer. As a national banking association, the bank derives its lending, investment, and other bank activity powers from the National Bank Act, as amended, and the regulations of the OCC promulgated thereunder. In addition, the CFPB (Consumer Financial Protection Bureau) supervises the bank to ensure compliance with federal consumer financial protection laws.
The company’s non-bank subsidiaries are also subject to regulation by the Board of Governors of the Federal Reserve System and other applicable federal and state agencies.
The bank is a member of the Federal Home Loan Bank.
As an insured depository institution with more than $10 billion in total assets, the bank is subject to supervision by the CFPB. There are a number of federal laws, which the company is subject to, that are designed to protect borrowers and promote lending, including but not limited to, the Equal Credit Opportunity Act, the Fair Credit Reporting Act, the Fair Debt Collection Procedures Act, the Truth in Lending Act, the Home Mortgage Disclosure Act, the Real Estate Settlement Practices Act, and the Consumer Financial Protection Act of 2010.
The bank has a responsibility under the CRA (Community Reinvestment Act of 1977) to help meet the credit needs of its communities, including low and moderate-income neighborhoods.
The company has in place a Bank Secrecy Act and the Uniting and Strengthening America by Providing Appropriate Tools Requirement to Intercept and Obstruct Terrorism Act of 2001 compliance program and engages in very few transactions of any kind with foreign financial institutions or foreign persons. The company also complies with the sanctions administered by the OFAC (Office of Foreign Assets Control of the U.S. Department of the Treasury) of the U.S. Department of the Treasury, which is responsible for administering economic sanctions that affect transactions with designated foreign countries, nations, and others.
History
Webster Financial Corporation was founded in 1935. The company was incorporated under the laws of Delaware in 1982.
