Webster Financial Corp (WBS) 2010 Q4 法說會逐字稿

Good morning, and welcome to Webster Financial Corporation's fourth-quarter 2010 results conference call.

This conference is being recorded.

Also, this presentation includes forward-looking statements within the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995 with respect to Webster's financial condition, results of operations, and business and financial performance.

Webster has based these forward-looking statements on current expectations and projections about future events.

Actual results might differ materially from those projected in the forward-looking statements.

Additional information concerning risks and uncertainties, assumptions, and other factors that could cause actual results to materially differ from those in the forward-looking statements is contained in Webster Financial's public filings with the Securities and Exchange Commission, including our Form 8-K containing our earnings release for the fourth quarter of 2010.

I will now introduce your host, Jim Smith, Chairman and CEO of Webster.

Please go ahead, sir.

Thank you, Jackie.

Good morning, everyone.

Welcome to Webster's fourth-quarter earnings call and webcast.

You can find our earnings release that was issued earlier this morning along with the slides and accompanying supplemental information in the IR section of our website at WBST.com.

I'll provide an overview and Jerry Plush, our newly minted Chief Operating Officer, will provide a more detailed analysis of the quarter, then we will take your questions.

Webster registered a solid fourth quarter, driven by meaningful improvement in credit quality, net interest margin, and loan originations resulting in net loan growth, and punctuated by our exit from the Treasury's Capital Purchase Program.

Revenue was a tick higher quarter over quarter and year over year and all lines of business showed some improvement.

We are pleased with our progress but we want to be clear that we've only begun to implement the value-adding strategies that we believe will propel us to become a top-performing regional bank as measured by financial return, service quality, and customer satisfaction.

Asset quality continued to improve in the quarter as nonperforming and past-due loans each declined by more than 12% compared to Q3, while nonperforming loan reserve coverage reached 118%.

It's worth noting that 35% of our nonperforming loans are current in their payments.

This performance marks a convincing continuation of overall improvement in credit metrics and factored in our decision to reserve less than we charged off in the quarter.

The widening net interest margin was driven by the steepening yield curve, increasing loan originations at wider spreads, and a continuing decline in deposit costs primarily resulting from pricing discipline, which has become a pillar of our business model.

In particular, I want to highlight net loan growth of $116 million in the quarter, spurred by a sharp increase in loan originations to $979 million from $644 million in the third quarter.

Of that amount, $489 million was from commercial middle market, small business and commercial real estate, areas where we believe we have significant growth opportunities and where we are focusing a considerable amount of our resources.

This production was more than double the previous quarter and 6 times a year ago.

We recorded net loan growth even while continuing our decline by design approach to out of region lending in our equipment finance and asset-based lending businesses, both of which recorded net pay-downs in the quarter.

There are several reasons for our solid loan growth, even as usage remains fairly flat.

One has been Webster's commitment to stand by time-tested viable businesses through the great recession.

We believe we are reaping the benefit of our reputation as a homegrown, relationship-focused bank.

Being a homegrown institution has become an increasingly valuable asset.

In addition, our recent entries in the neighboring markets have helped to fuel loan growth.

In Boston, our commercial loan originations were $15 million above the previous quarter.

Our decision a year ago to plan for the economic recovery by hiring more seasoned business bankers is paying off in the form of high-quality loan production and comprehensive relationship development.

In addition, we have continued to invest in systems and support, including cash management services, that position is to deliver on our promise of competitive products and superior service quality.

Middle-market and small-business banking will be primary drivers of growth going forward, including consumer relationship growth, and we intend to invest a larger portion of capital and resources in this area as we believe it offers high economic return.

Our approach to the market is relationship based and guided by credit and pricing discipline.

Loan growth has come with widening spreads as the entire commercial bank saw its spreads increase in 2010 by 38 basis points on $4 billion in loans.

We actively seek and often require operating accounts and other deposits.

For example, average deposit balances rose about 25% in the middle market segment in 2010.

Every new relationship must clear our hurdles for risk-adjusted return on capital.

Underpinning these commercial banking gains is slow but steady growth in employment and home values in the region.

The most recent Fed Beige Book cited rising optimism for 2011 among businesses in the Boston district, along with year over year sales increases for retailers and manufacturing expansion.

Perhaps the most important milestone of the quarter was our issuance of 8.7 million shares of common stock and the related redemption of the remaining $200 million of the US treasuries preferred stock, as you can see on slide 4.

The offering was favorably received by the market, and we accomplished the repayment with one of the smallest equity raises in relation to the total CPP investment among banks to date.

We are pleased to have completed this orderly, responsible repurchase of CPP stock in a shareholder-considerate manner.

Treasury still owns 3.3 million warrants in Webster at a strike price of $18.28 a share.

We're currently evaluating whether to submit a bid to buy the warrants outright or to participate in a Treasury auction, or in the aftermarket, with the goal of ultimately repurchasing the warrants at a fair price.

With the common equity offering and repayment of CPP, we've strengthened Webster's already well-capitalized balance sheet.

At year end, the tangible common equity ratio rose nearly a full percentage point to 6.82% from Q3.

And our Tier 1 common risk-weighted assets ratio climbed 168 basis points to 9.87%, standing a full 2% higher than a year ago and putting us comfortably above our long-term target.

The decline in our risk-based regulatory ratios was directly related to the net of the equity raise $150 million repayment of CPP during the quarter.

As we indicated at the time of the offering, we have no plans for additional equity raises as we believe we already Basel III compliant, including conservation buffers.

Should our earnings continue to improve, we would anticipate that the board will have the option to evaluate increasing the dividend later this year, as well as considering other capital deployment strategies, including M&A activity, though that's not a priority for us right now.

Notably during the fourth quarter, we launched a redesign of our suite of checking products for consumers and small businesses.

This revamping was undertaken to counterbalance the impact of Reg E revisions which were enacted in Q3.

Early in Q4, we notified customers that we would charge monthly fees for checking account with low balances or low usage of debit cards.

The revenue stream from the new fees began in mid to late December and, therefore, had minimal impact on Q4 results.

Our overdraft fee income is tracking in line with our earlier guidance, estimated to be down about $4 million per quarter in 2011 from the average quarterly run rate in the first half of 2010.

You may recall that we reduced the overdraft fee to $20 per debit overdraft to acknowledge the difference in the way people use their debit cards versus their credit cards or checks.

Frequent users of our overdraft services have indicated their strong preference for paying the fee instead of having a debit card purchase rejected at the point-of-sale.

Similarly, implementation of our checking redesign is playing out reasonably close to our expectations.

We've designed tiered checking products, so that, as we say, it's easy to be free, though no longer automatic.

We reward customers who choose Webster to be their primary relationship bank with value-added products and services like unlimited free transactions, mobile banking, and remote deposit capture for small businesses.

Since we originally had estimated quarterly fee income of about $2 million from the account redesign, we've instituted some fee waivers in response to customer feedback, including, for example, seniors with direct deposit.

These waivers overall have reduced the estimated quarterly income by about $700,000.

As we expected, we've seen some runoff of low balance accounts.

Some of the account closures involve second or third accounts and relationships with us.

In these cases, customers are merely consolidating accounts and continue to maintain their primary relationship with Webster.

In other cases, low balance customers seeking to avoid fees and minimums are migrating elsewhere.

For example, [a trading] consumer households to date had an average household balance of less than $400.

Total consumer balances lost by less than $10 million.

In small-business, where we established a $2500 minimum balance, total balances lost to date amount to only $6 million.

Meanwhile, opening balances in new accounts have risen considerably and consumer and small business DDAs grew in Q4.

Clearly, we need to make additional product changes as interchange fee income is under attack by the Durbin amendment and the Fed proposal, and we will.

We are strenuously opposed to Durbin as poorly-crafted legislation, wrong on policy, which creates market distortion.

The proposed regulatory changes guarantee no benefit to the consumer while granting a windfall to retailers at the consumer's ultimate expense.

It will undoubtedly result in higher transaction account fees to consumers.

We'll likely curtail credit card or credit usage, card usage, by triggering debit-card transaction limits from many credit card issuers, and it will surely swell the ranks of the un-banked.

It will accelerate branch consolidation in the industry as the costs associated with serving customers will need to be rationalized.

Its unintended consequences will overwhelm any good that might possibly come of it.

Webster will participate actively in industry efforts to reverse or mitigate this unhealthy legislation.

I chose to focus on the subject of Reg E and product redesign because our decisions around these changes will define us.

Our actions get to the core of what we've been telling you for several quarters.

Webster will win on service quality and relationship value and not on price.

As the competitive or regulatory landscape changes and undermines the business model that has served us well over time, we will respond.

We are prepared to lead when it comes to protecting economic value as we've done here.

Turning for a moment to strategic priorities, all areas of the Company have built their strategic plans with an eye to meeting our strategic priorities for 2011 to 2013 as shown on the next couple of slides.

These including growing non-interest-bearing deposit accounts in all lines of business, where you can see we've made good progress; growing interest-earning loans more than 5% per year; and optimizing expenses across all areas, managing the Company to an efficiency ratio of 60% or better over the planning cycle.

Our goals are clear and concise and you will be able to see how we measure up as we will be reporting on our progress in earnings calls and investor meetings in 2011 and beyond.

One highlight I want to note before concluding is that HSA Bank reached the $1 billion threshold in total deposits and assets under administration last week.

As a leading administrator and custodian for HSA accounts, this business has significant growth potential and creates a stable source of low-cost core deposits to fund future loan growth.

The final topic I want to cover is the recent promotion of Jerry Plush to Vice Chairman and Chief Operating Officer in addition to his continuing responsibilities as CFO.

Since joining Webster as CFO in July 2006, Jerry has played a pivotal role in leading the buildout and centralization of our finance function and in strengthening our capital structure.

He enhanced our credit risk and operational risk management while serving as Chief Risk Officer, and most recently assumed responsibility for strategic planning, including the adoption of a rigorous process for strategy development and measurement.

This promotion recognizes those contributions and further expands Jerry's influence over the operations of Webster.

It pleases me greatly to tell you how Jerry has earned the opportunity to take on more responsibility, and I'm sure he will excel in his new responsibilities.

With that, I'll turn it over to Vice Chairman, Jerry Plush.

Thanks, Jim, and good morning, everyone.

Let's start with a review of core earnings for the fourth quarter.

We are pleased to report continued positive results and reported pretax income for Q4 of $40.4 million compared to the $27.3 million for the third quarter.

Our pretax, pre-provision earnings were $52.9 million compared to $56.4 million in Q3.

Positives for the fourth quarter were a higher net interest margin of 3.4%, increased non-interest income in a number of line items, such as loan fees, wealth management and mortgage banking activities.

As shown on the slide, the $52.9 million of Q4 reflects an additional $1.8 million negative impact on deposit service fees from Reg E when compared to 3Q results, and about $3.9 million in increased compensation expense specific to the quarter.

The quarter also includes about $2.2 million of loan workout expense, which is improved from the $3.4 million that we incurred in Q3.

Some more details will be provided as we cover the next slide.

So when we compare reported earnings to the pretax, pre-provision number for the quarter, as in prior quarters, we adjust for certain non-core items.

In this quarter, there was a $2.3 million positive fair value adjustment and gain on sale of stock classified as trading.

We had about $600,000 in severance expenses and about $100,000 in RE-owned repossessed equipment write-downs.

We also received an insurance recovery of $5.2 million on a previously disclosed former employee situation.

We also recorded a branch and facility optimization charges of $4.3 million in connection with the five offices that we recently announced that we'll be closing as part of our branch network optimization initiative, along with the sale of two corporate facilities in Massachusetts.

Let's turn to the next slide to cover core performance.

So here on slide 8 are the core earnings drivers in Q4 with a comparison to the third quarter of 2010 and the fourth quarter of 2009.

The $3.5 million decline in core earnings from Q3 reflects a number of revenue and expense items which we will cover now in detail.

Our net interest income of $136.3 million in Q4 -- it's the highest level in the five quarters shown on this slide, and it's driven by a 4 basis point increase in the net interest margin of 3.4%.

This quarter's results reflect the positive impact of disciplined loan and deposit pricing efforts we've been talking about on prior calls, and we will review that in detail on the corresponding loan and deposit sides.

In addition, the NIM was helped by the maturity of a high-cost FHLB advance at the end of Q3 and an improved deposit mix, which more than offset the impact of declining residential and consumer loan yields from refinancing.

The increase in longer-term rates during the quarter had a further favorable impact in the net interest margin as our investment yields fell less than we had expected, although actual prepayments which lagged changes in market rates were elevated during the quarter.

The recent rise in longer-term rates will result in slower speeds in Q1 of 2011.

And as we previously described when talking about long end-up scenarios, our investment yields are impacted immediately and positively from the reduced premium amortization associated with mortgage-backed securities and CMOs.

Our non-interest income decreased by $1.3 million as a result of the $1.8 million decline in deposit service fees previously referenced.

We'll begin to see some partial offset of the full Reg E effect of $4 million beginning in Q1 in connection with the recent product redesign that Jim was covering.

We saw increases in revenue for mortgage banking activities, which increased $560,000 in Q4 in connection with the recent favorable origination environment.

The increase in revenue here was a result of both volume and spread.

Our wealth fees were higher by $430,000, driven by improved sales from our investment advisory business.

Loan fees improved in the quarter, up nearly $450,000 from increased origination volumes.

And the higher fair value adjustment from stock held in trading reported for the quarter when compared to Q3 -- that offset a decline that we've reported in other income.

Our core expenses increased by $3.8 million from Q3, and that's largely related to the aforementioned $3.9 million in compensation and benefit expense in the quarter.

Let me give a little bit more detail on this.

Much of the increase is specific to the quarter and reflects $1.1 million higher in group insurance claims, about $1.1 million higher in stock-related compensation expenses from higher valuation at quarter end, along with about $700,000 in recruiting, relocation, training, and temp help specific in the quarter.

So, in the base, about $0.5 million related to higher run rate base comp related to all the new hires that we've made in 2010, and another $0.5 million in increased incentive comp was recorded in the quarter.

Turning now to direct workout costs, they totaled $2.2 million in Q4 and were up to $9.8 million for the full year and associated comp expenses related to that were about $1 million each quarter.

These costs will decline as the credit environment improves, but this support statements we made at our recent Investor Day when we noted a key priority for us is nonperforming asset resolution in order to reduce our operating expenses going forward.

Our other expenses increased in the quarter.

We recorded a $1.1 million provision for the loan repurchase reserve compared to about $500,000 in Q3.

And this was driven primarily by an increase in specific reserves for presentments.

It takes us about an average of 10.5 months for a presented repurchase to get resolved, so as we get closer to resolution, we are able to more accurately estimate our potential losses, and the increase in specific provisions reflect that.

There's a couple of trends that were noted in Q4 that warrant some mention.

First, presentments peaked in November of 2009.

They've consistently fallen since then.

And then, second, the average claim size has fallen in the recent quarter as well, so we hope that that will bode well for this reserve in the future quarters.

Finally, we also recorded higher provision from unfunded commitments in the fourth quarter of about $589,000 in comparison to no provision in the prior quarter.

We'll turn now to slide nine and cover investment securities.

This portfolio increased about $132 million in the quarter and that's primarily in the available for sale component.

We stayed the course.

We've continued to buy relatively short-duration CMOS with limited extension risk, and we sold some higher premium MBS in the fourth quarter.

The $42 million of MBS we sold in the quarter were at a gain of about $800,000.

We also sold two TruP positions for a loss of about $800,000.

Right now we have nine remaining pooled TruP securities totaling only $53 million.

The portfolio's overall duration increased to four years due to the rise in long-term interest rates during the quarter, and that's primarily seen in the HTM portfolio.

About 56% of our portfolio is held to maturity and that provides protection or a capital position in a rising rate environment.

And about 44% is in AFS, which consist of shorter-duration investments and it's an excellent source of liquidity for us to fund loan growth.

The overall yield was down about 8 basis points given paydowns on higher-yielding securities, and the aforementioned shorter-duration purchases that we've made during the quarter.

We will turn now in the next slide to take a look at loan mix and yields.

Here, you will see the yields in the overall portfolio remained relatively stable, which, again, reflects the strong pricing discipline previously noted.

The resi yield declined by 16 basis points reflecting the impact of payoffs and paydowns on higher yielding loans compared to new production being booked.

The consumer yield declined by 4 basis points, while the relatively stable commercial and CRE yields helped moderate the effect of the declines in the other two segments.

The truly positive sign is that loan balances increased $116 million in total from Q3.

Our commercial portfolio saw an increase of $92.4 million in middle market in connection with the growth initiatives that Jim was referencing.

And that was offset by a planned decline of about $48.5 million in equipment finance and a seasonal decline of $40.9 million in asset-based loans.

We had solid growth in CRE, as you can see, all with well-known sponsors, and we had growth of $52 million in residential, which reflects the consumer response to the low interest rate environment.

We will turn now to take a look at asset quality progressions on slide 11.

Here, as in the past, we provided a five-quarter trend in total nonperforming loans, REO, repossessed property and past-due loans.

So, like prior quarters, individual credit and other performance data for our principal loan segments, that's all included in the supplemental information that's been posted in the Investor Relations section of our website.

But what you can see here is overall improving trends in all categories.

So first, you can see nonperforming loans continued with what is now five consecutive quarters of decline.

We'll go into more detail on that in the next slide, but a $37.5 million decline in NPLs from September 30 was supported by cures during the quarter, exceeding and offsetting, basically, the inflow of new non-accruals.

Note that over one-third of our NPLs, about $96 million, are paying as we've been actively identifying and addressing problem situations through loan modification.

And the overall balance of $274 million NPLs are carried at less than 60% of original balance.

Our REO and repossessed equipment portfolio saw a decline of $4.7 million in the quarter.

That's primarily by a decline of $4 million in repossessed equipment.

I think this is reflective of the continued focus we've placed in the remediation of, and resolution of, repossessed property and equipment over the past year.

Our past-due loans have been below 1% of total loans for three quarters now, and have reached only 67 basis points at December 31.

Declines in all categories is another positive sign.

But again, I ask that you see the tables included in our press release for some more detail there.

Here on slide 12, we've provided a reconciliation of NPLs over the past year.

Our new non-accruals were $77.9 million, and that's a decline of $16.5 million from what we reported in the third quarter.

And that's driven by lower numbers from ABL and small business, which saw declines of $10.2 million and $4.9 million, respectively.

We saw continued progress in cures and exits, and that, combined with charge-offs and transfers to REO, drove a lower level of nonperforming loans.

Also, here, you can see the favorable trend of a declining level of gross charge-offs since the fourth quarter of 2009.

Just 8% of our troubled resolve loans in the consumer channel since March of 2009 have resulted in foreclosure.

And this demonstrates our commitment to keeping borrowers in their homes.

Our re-default rate on modified residential as well as consumer loans is approximately 9.5%, and that continues to have a favorable impact on our results.

This is reflected in our cure numbers once again this quarter.

Our performance here has been very solid in comparison to industry rates, and it reflects our overall approach in successfully working with at-risk borrowers.

It's also kept our resi foreclosures to a minimum, and allowed us to handle such transactions without issue.

Turning now to take a look at the allowance for loan losses, here on slide 13, you can see that the provision for losses declined for the sixth consecutive quarter.

Provision totaled $15 million in Q4, and that's noticeably below the net charge-offs of $33.7 million.

This is clearly a change for us as we've been consistently providing above charge-off levels through the second quarter of the year, and then just slightly below net charge-offs in the third quarter.

The ability to record a provision less than net charge-offs reflects the continued improvement in the key asset quality indicators and the adequacy of the allowance in the fourth quarter.

The $33.7 million of net charge-offs, that's after $3.5 million in recoveries, and we continue to see good performance in recoveries throughout 2010.

The allowance for loan losses now represents 2.92% of total loans and provides a coverage ratio of 118% of total NPLs.

So even with the lower provisioning, our coverage of NPLs improved.

And it's also important to note that our coverage on the continuing portfolio of nonperforming loans is now also over 105%.

Again, details are available when you review the supplemental slides on the website including five-quarter trend statistics and information on each of the loan segments.

Let's turn now to slide 14, and you can see that our total deposits increased slightly.

They're up about $35 million over September 30.

Non-interest-bearing deposits increased by $376 million.

That's a result of market conditions and the product redesign that we implemented during the fourth quarter.

Our non-interest-bearing deposits are now over 16% of total deposit base, and our core to total deposit ratio increased to 77% at December 31 compared to just 71% a year ago.

We had an increase of $83 million in savings accounts in the quarter and declines of $178 million in what we term non-HSA NOW accounts; $150 million decline in money market, primarily in our government banking line of business from seasonality; and $153 million in time deposits.

Note that approximately $160 million of that non-HSA NOW decline was from the aforementioned product redesign, switch from NOW to non-interest-bearing DDA.

Our core deposits have grown by $743 million or 7.7% over the past year while CDs declined by $767 million over that same time frame.

With the improved mix, we've also seen a 36 basis point reduction in the cost of deposits over the past year.

We'll take a look at deposit mix by line of business next.

We've talked a good deal over the last -- over really this past year of how one of our competitive advantages comes in deposit gathering, given we can generate deposits from five lines of business that you see here.

And, again, it's also noteworthy that we brought the cost of deposits down in all five lines of business again this quarter while showing slight overall balance growth.

So even with continued CD maturities, the retail segment grew by $30 million while reducing their cost 8 basis points, and HSA grew by $35 million while reducing their costs there by 11 basis points.

Commercial clearly showed the most significant balance increase while their costs there declined by 4 basis points.

We will turn now to slide 16, and here we will view some changes in borrowing mix and cost.

You can see here our FHLB costs declined while balances increased, and that reflects a temporary increase in short-term advances, funding some of the year-end asset growth that we've covered previously.

Our ratio of borrowings to assets was 14% at December 31 compared to the range of 11% to 12% over the prior periods in the slide, and the 36 basis point decrease from the third quarter, you can see in the cost of borrowings to 2.51%.

That's just reflective of lower repo and FHLB advance costs.

So, before I turn things back to Jim for his concluding remarks, let me provide some perspective on the first quarter and a few comments on what we see going into 2011.

So first, let's cover the NIM.

We would expect the NIM to be in a slightly lower range than the high point of 3.40% that we just reported in Q4.

So even with continued discipline in both loan and deposit pricing, the impact of lower yields on new lending and on securities, coupled with pay-downs and higher coupon loans and securities, could have some impact on our earning asset yields.

Accordingly, we believe a range of 3.35% to 3.40% is more likely for the first quarter.

Overall, our average interest earning assets are projected to improve to slightly higher levels in the first quarter.

So given the December loan growth, coupled with our pipeline update and our increased business development workforce, our expectations are for average loan growth in Q1.

We would expect at this point to maintain our investment balances.

Regarding credit, deposit [of] trends we've experienced in all key asset metrics continue through Q4.

And if you make the assumption that the key asset quality indicators hold up and they continue to show improvement, you could anticipate continued lower provisioning in the first quarter.

Our core non-interest income is expected to be comparable to Q4, exclusive of mortgage banking activities, which we would expect to decline as spreads tighten, and also exclusive of any gains on sales of securities and fair value adjustments.

On the non-interest expense side in Q1, expect some higher marketing expense, so that would be up about $1 million compared to Q4, but also some lower other expenses and an offset.

Comps should decline from the exclusion of all those fourth-quarter specific items that we covered, but it will contain some seasonal FICA tax increases, and also contain the run rate impact of new hires and increased incentives related to increased loan production.

We're also evaluating a number of new ideas to reduce expenses, including the next phase of opportunities and facilities and also in distribution optimization that we believe can create meaningful savings in 2011 and in future periods.

Generating efficiency ideas and executing quickly on them for savings are more than necessary for us given the goals the Jim outlined of improving efficiency to a 60% goal, and especially given there may be some unknown costs likely with financial regulatory reform.

We estimate our effective tax rate for the year would be at 28.5%, so we would use that as well for the first quarter.

Also note, we will not have $2.5 million of preferred dividend experience per quarter, given the final $200 million in CPP repayment, and that's $10 million worth of savings on an annual basis.

Again, that's just referencing on the final $200 million.

And of course, regarding fully diluted shares, we would assume about 92.1 million for the first quarter and fully diluted.

So at this point, I'll turn it back to Jim and let him make his concluding remarks.

Thanks, Jerry.

Looking back on Webster's 75th year shows that we've undertaken a series of decisive actions that are intended to create value for customers and shareholders.

In 2011, we will complete the shift in our value proposition to quality service at a fair price.

We're focused on the strategic priorities that we have outlined in this call, and we are committed to allocate capital and other resources in support of strategies that maximize economic profits over time.

This concludes our prepared remarks.

We'd be pleased to take your questions.

(Operator Instructions).

Mark Fitzgibbon, Sandler O'Neill.

First question I had for you, Jerry, I wonder if credit trends continue at a similar pace to what you saw in the fourth quarter, how much you think that loan loss provision line is likely to come down in say the first quarter?

Hey, Mark, I think just given the coverage ratios, which is something that we're keying in on, as well as if you see -- continue to see these positive trends in past dues, again, remember there's going to be some lumpiness here because we will have some commercial credits that will bop in and out of the numbers so you could see NPLs pop up and down; same thing with REO.

We have a couple of things that could foreclose in the quarter.

But generally speaking, my sense is that you could see a number at or below what we just reported.

Okay.

And then secondly, what were your TDRs for the fourth quarter?

Yes, the increase was $33.5 million.

Overall, the total TDRs on accrual are $327.8 million.

And the TDRs of nonaccrual are $88.3 million.

Okay.

And then last question I had for you is the consensus range of estimates for 2011, the range is very, very wide.

I think it spans from $0.75 to $1.25.

Could you give us a sense for which end of that range you feel more comfortable with for this year?

You know, Mark, I would hope, based on the comments that I made, I think we gave quite a bit of detail related to every component of the income statement that folks would be able to reassess their models and tighten that range up.

Obviously, there's a wide view of what would happen with the margin, what might happen with the provision.

Hopefully, there's some good views from the management side of what we are seeing going into Q1 and enable people to trend that better going forward to tighten that up.

Thank you.

Bruce Harting, Barclays Capital.

A really terrific job these last two years getting to this place.

Just on the -- can you talk about the non-interest-bearing -- non-interest deposit growth, and then also what you are seeing with this loan growth that seems to be just sort of butting up here; can you talk about where you are sourcing that and size of loans and what the outlook for 2011 would be on loan growth?

Thanks.

Hey, Bruce.

First of all, thanks for the comments.

In terms of -- let's talk about deposits first.

I've referenced around $160 million or so of that $370 million increase is really what you will call a re-class between the NOW line.

So look at the true net growth there of the delta.

So it's still very strong, very positive.

I think it's a combination of things.

One is, we do have to reflect that there's some seasonality in those numbers.

You do see some buildup on the commercial side.

But I also think, more importantly, again, this is the focus across the organization.

And I think you see this in all of the business units, as well as in our municipal unit, of where we are going after, and we want to be the primary bank.

And this is something that we're proud to say that this is not just volume, but obviously, you are seeing it in relationships and you can see in the growth in the business units as well.

So, we think it's a competitive disadvantage for us.

When we talked at Investor Day about some of the disconnects that we saw in terms of the best top performers in our asset size range in the mid-cap space, and that's something that we are very, very, very focused on.

The incentives have changed around that.

We're not referring to anyone other than as a business development officer.

We're trying to reflect the terminology change away from folks focused on loans versus deposit gathering.

No, our folks are focused on business development and it's all about deposits first.

So I think that's showing up in the numbers.

In terms of on the loan side, we're really pleased with the growth that we saw.

Again, it's primarily in the middle market space we've seen a fair bit of growth, as well in CRE space.

In CRE, it's well-known sponsors.

The vast majority of that, you know, we've talked before, it's that Philly to Boston Carter.

It's in classes that we like.

I know there's a good-sized apartment deal in there.

There's a retail deal in there.

There's a couple of office deals in there, all folks that we're really pleased to do business and very good structures, very low loan to values.

Strong occupancy numbers in those particular credits.

You know in the middle-market side, I think, again, this is reflective of the focus in all seven regions.

We've added some really good players in each of those regions.

And I think the existing team has, obviously, as well, done a very good job.

And as we've talked before, they're now under the very capable leadership of John Ciulla, I think that that's -- we're putting a lot of emphasis there and it's really starting to come through.

Hey Bruce, it's Jim.

I just wanted to say thank you for your comment, and add that in the remarks this morning, we said that we hope to grow our earning assets by 5% or so this coming year, and most of that would be in the loan category for sure.

And I think Jerry has made the good points here about because of our geographic expansion within the region that we have more opportunity, we've got the seasoned business bankers, those that have been with us for a long time and those that are more recent, where we added to our team early on in 2010, we have the focus on relationship building.

And I think being a homegrown institution also contributes, the fact that we were there for our customers and they know it, we think that's permeating the market and giving us, if not a halo effect, certainly giving us the opportunity to grow as the homegrown entry.

Thank you.

I'm happy to get back in the queue.

I just had one thought.

With the Tier 1 common at 9.87%, and your recent conversations with regulators, what's your sense of where most banks need to be on that?

You would seem to be well above any bogey, but can you sort of segue that answer into your outlook on the dividend if I missed it on your prepared remarks?

Thanks.

Well we did say that we're well above our internal target.

We wouldn't want to try to guess what the threshold was from a regulatory perspective.

I think it's different for every institution, but in our case, we're very comfortable with where we are.

And we made the comment in the remarks that should our earnings continue to improve, that the Board will be in a position to be able to consider a return of capital, say, in the form of a dividend sometime in 2011 and that we could look at other means of capital deployment, possibly M&A as well, even though that's not our top priority.

Okay.

Thank you.

Casey Haire, Jefferies.

So following up on the dividend, would 30% of trailing EPS -- is that something you guys would shoot for or --?

I think, you know, let's take one step at a time.

We'll talk about plans for considering an increase in the dividend at the appropriate time.

And then, as earnings strengthened, I think you would anticipate that the payout ratio would climb as well.

And then we've got -- we have to balance it in consideration of other uses of the capital -- how fast will our loans grow for example?

What other opportunities may be out there in terms of combination with like-minded partners, for example?

So, we're hesitant to put a number on it except to say that we think the direction is positive.

Got you.

And that we would expect to return a portion of our earnings in the form of dividends.

Okay.

And then, on interchange front, I apologize if I missed that.

Did you guys talk to what you would expect to lose, and vis-a-vis your goal to get to the 60% efficiency ratio, what you might do to offset that drag?

Actually we did talk about it.

We didn't give a number.

I would say if you are zeroing in on the 80% to 85% of interchange income, we're somewhere up over $18 million as the amount of interchange revenue that could be at risk.

And of course, we need to respond to that.

What does it mean for the costs in the branch system and the other means of delivering our services to our customers?

We also indicated that we will do everything we can to work with the industry on litigation, legislative and regulatory possible solutions to the current state of the interchange proposal.

I hope you get a transcript of the remarks because we spent some time on it.

Okay.

And then finally, the -- I saw you guys close some branches this past quarter.

Is that something you see more of an opportunity of going forward, just given the move towards a more C&I middle-market focus?

Hey, Casey, it's Jerry.

I think that what we are spending our time doing is really understanding how our customers utilize us in terms of via contact center, via online, a lot of push from us if you get a chance to travel through our four-state franchise, you're going to see a lot of billboards up around the emphasis we're placing in mobile banking, and there's just been great response to all of that.

And folks are clearly migrating more and more of their usage to electronic versus physical.

It doesn't mean that we're not committed to what I guess we would all call traditional bricks and sticks, but we are certainly looking at where we can optimize.

And I think it's important to note that we actually, while we announced five closing down, we announce three that are going up.

And the interesting thing about the three that are opening, two of the three right out of the gate I can say will be much smaller, one of which -- they will all be full-service, but there will be much more of a push towards looking at where they're high transactions, how should a branch size be there versus where is there the broader array of products and services necessary?

And that may be a little bit more sizable.

But we're looking at all of the system and rationalizing that.

And I think it's important to know that we are doing the same thing with our facilities.

The fact that we announced the two facilities that we had sold, we had gotten to a point where there was virtually no occupancy.

We've done a lot that we have centralized back into the regional hubs.

And you would expect that we will continue to look for opportunities for that.

We're very focused because I think when you look at the regulatory reports as well as, you know, the filings even we did today, we're very focused on reducing occupancy expense.

It's an enormous expense for the organization, and it's something that we're going to continue to do in 2011.

We're very committed to that.

I just want to add to that, that if you looked at the branches that are being consolidated, the five branches, that approximately 85% of the customers who do business in those branches also use other delivery means from Webster, whether it's other branches or electronic delivery, or a predominant use of online banking and the like.

So we believe that a vast portion of these customers will be absorbed, and in the meantime, we'll be able to lower our costs.

And you know we know that we absolutely must lower the fixed costs of our delivery systems, so we're trying to migrate with our customers to the lower-cost delivery channels.

And my guess is that we will be -- or I would say with some certainty that we will be continuing to look with a keen eye toward optimization of the system.

Got you.

Thanks, guys.

Steven Alexopoulos, JPMorgan.

Hey, good morning, everyone.

I wanted to start, at the Investor Day, you guys had implied that without a rise in rates, the HIM would be under pressure through 2011.

Just wondering, beyond the 1Q guidance that Jerry gave us, is this still the case that the NIM trends down in 2011, or does the steepness of the curve change that to a degree?

Yes, Steve, good question, and I think it depends on how steep that curve remains, and the longer it stays, the short end stays down, I think there's some obvious positive that comes from that.

We do think with the -- with what clearly seems like signs, good signs, of our beginnings of recovery here, that you will start to see that there will be pressure on the short end of rates.

So, I think our sense is that it may get pushed out awhile, to answer your question.

But I do think the one thing we did cover is there's a likely compression, not just for Webster, for many banks because of, as rates were dropping down, there were a lot of us that put loan floors in place in a number of asset classes.

And you've got to then re-price back up in order to get that.

So if rates short end moves, you're not going to see the immediate impact, so there will be an interesting play here in terms of what will happen with rates and the impacts that will have.

But I think we're -- what we said was it was a point in time look.

It really wasn't -- it was without management actions, and wanted to give people a sense that a shift like that could obviously have had that kind of impact.

We would still expect that we would see some degradation in the yield, excuse me, in the NIM in the outer quarters this year just because we would expect that there would be some movement on the short end.

Okay.

So if the curve stays where it is and the short end stays near zero, should we just assume maybe the securities pressure yield we've seen maybe stabilizes and then you really need loan growth to start replacing those earning assets to see the NIM really stabilize?

Yes, good question.

I think the case here is that the production that's getting booked today is still at lower yield than the payments that are payments or pay-downs that are taking place.

So, you're going to get some natural pressure on your low yields and on your securities yields.

And especially given the fact that we've got a fair bit on the securities side, as you know, in mortgage-backed securities.

So, to the extent that you see -- and is of course, if there's any drop at all in the long end of the curve, we'll start to see pre-paid speeds pick up.

But I think the fact that it did elevate, certainly extended duration, we saw a clear slowdown, and you see some improvement in terms of what that looks like.

But my view would still be that the fact that you are producing new loans at basically where current market rates are, that could have some impact in terms of what's paying off in the portfolios, as well as the securities portfolio.

The other issue, which is clear, we're getting just -- we've had such a great rundown in the cost of deposits.

We've also had a fair number of maturities in federal home loan bank advances.

There really aren't a number of material advances maturing in 2011.

So now what you start to look at is at what level do you start to hit bottom in terms of your deposit pricing?

So then, the pressure is that we've been able to more than offset, as you know, and keep boosting the NIM by being very disciplined in terms of our pricing on the deposit side.

So now it will really be a test as to what we can do to try and keep yields up as much as practical, as we practically can on the asset side.

Thanks for all that color, Jerry.

Maybe just one question on provision.

When you guys looked at the $15 million this quarter, is this level generally in line with what you guys had expected heading into the quarter?

And then if you could talk on what portfolio is driving all these cures and exits?

Thanks.

Yes, take those one at a time.

In terms of, on the provision side, you know, I guess my sense is, provision is a result of determining the adequacy as of a point in time.

So, we take into account all the factors, so the lineup is what's the total number of classifieds and what are the trends there?

What do the past-due trends look like?

What do we look like when the teams go through their watch and [worse] reviews and the calls that take place between the risk team and the business development side of the organization and all the different asset classes.

All of that gets factored in, and candidly, the provisions is the result of what we need.

So, I think before, we've taken probably a -- because of the declining trend in every one of those stats, you almost get to a point where the $15 million is probably still a pretty conservative number to have booked given where we stand.

And then we have got to just keep measuring that at those points in time.

As far as how we've thought, I mean clearly if the projections were that we've done I think a pretty good job of trying to move and resolve from immediate credit issues, at the clip that we are thinking, do we think this was possible?

We certainly thought that the charge-off numbers were in and around the range, and the others came into line.

So I would say that there clearly was, with a number of 25 in the guidance I gave last time, last quarter, was that you could see a lower number this quarter and I think that we're pretty much -- I know it's a better number than folks expected, and I think it's a result of how strong the credit performance really was.

In terms of cures and exits, you see it pretty widespread.

We get it across the board.

We've certainly had a really good track record as we were talking about in the resi and the consumer portfolios.

There will be more color on that coming up in some of this -- and then as well as the CRE.

I hope that's helpful.

Yes, thank you.

Damon DelMonte, Keefe, Bruyette & Woods.

Good morning, guys.

How are you?

If you guys could provide a little color on your outlook for the earning asset growth, Jim, I think you mentioned -- you're hoping for about 5% during 2011.

Are you expecting this growth to be reflective of improved economic environment?

Or are you guys gaining ground and taking market share from competitors?

We're definitely taking share.

There hasn't been a lot of natural growth.

There hasn't been an increase in usage.

But we, as I mentioned, I think to some degree, there's a homegrown advantage here and in part because of the way that we worked with our clients through the great recession, I think we have good standing in the market.

We've added bankers, whether it be in the business professional banking group or the middle-market group, so we're very active in the market.

We actually think that given The Beige Book report and the outlook for the economy generally, that there likely is to be economic growth in 2011.

There will be job creation as well.

We are anticipating, if anything, the surprise we think might be on the upside at least around Q2 or Q3.

But in the end, we are putting a goal out there to be able to grow by 5%.

We just have to see how it works out in concert with our emphasis on credit quality and pricing discipline, but we think we've got a pretty good leg up.

Pipelines are pretty strong across the board.

We have broad lending capability as well as deposit gathering capability, which we think gives us an advantage in the market as well.

Okay, that's helpful.

Thank you.

And then, Jerry, just with regards to the growth you've seen in commercial and CRE, could you remind us what your sweet spot is for the loan side?

Well, Damon, I don't think there's necessarily a sweet spot.

We did credits in the quarter in CRE anywhere between the $7.5 million and $10 million range.

There was one in the low $20 millions.

So that should give you an idea of how broad that range is.

We're looking for credit quality.

Again, it's about the sponsors.

It's about the quality of each of the properties.

And it's also -- and as I was referencing, we look for the strength in the loan to value.

We look at the strength in terms of the occupancy and what the underlying tenant's credit quality looks like.

So I think I'm more focused on the quality of the credits as much as -- as opposed to necessarily just the size.

And I think that gives you an idea of the range of sizes that we have taken a look at.

That's great.

Thanks.

And then just lastly with regards to the reserve level, obviously, you'd built it up to a very healthy level.

As you kind of look out over the next call it four to six quarters, where would you kind of expect your overall reserve level to shake out?

You know, we've got $301 million worth of nonperforming assets on our books.

So, and then let's just break that off to really where the reserve relates to specifically is more around the nonperformers in the $274 million, $275 million range, etc.

So, the reality of the coverage tells you a little bit about, yes, we're still being appropriately conservative, I don't think any different than a lot of other banks.

But our view is you're going to see some charges as we start to move further and further.

And the separation that you saw this quarter I think is a harbinger of the way I would think about 2011.

We want to reduce these and we're going to be out there trying to move as much of these issues off our books as possible.

I think we gave everyone a goal at Investor Day that we want to be reducing in the range of 25% or so per annum.

I certainly want to tell you that we want to reduce more than that, but that's obviously contingent on a number of factors.

And we certainly don't want to just have it be that it's a result of just taking ridiculous haircuts.

We want to do what's economically appropriate for the organization, and that's the measured approach that we're going to continue to take.

You know, if you were to look at the provisioning, I would expect, again, if the credit quality stuff just continues to hold up, with the past-due trending that you have seen, the classifieds coming down, then you know, you could see that we would be doing lower and lower numbers.

But you know, that -- a lot of moving parts here and there is also an economy that has to also play its part by being stable if not improving.

So I think that that's -- they are all key things to take into account when you think about that.

Okay.

That's all I had.

All my other questions were answered.

Thank you.

Bob Ramsey, Friedman, Billings, Ramsey.

Good morning, guys.

Most of my questions have been answered, but maybe if you could just provide a little more detail around a 60% efficiency goal, is that something that you all hope to see by year end?

Or is it more of a longer-term target?

Hey, Bob, it's definitely more of a longer-term target.

But you know, again, self identified; we have recognized, it's been very challenging given the fact that we've had to spend so much time focused, as everyone knows, on the economy, the economic impact that it's had, the credit issues that we've had, etc.

You know, it's nice to be able to say that now our focus is back on the core business, and where else we need to go.

And again, it comes from a combination of fixing that efficiency ratio.

It's still growing those non-interest-bearing accounts; it's still showing all that growth in the core banking side.

And it's also zealously going through every single thing that we do, where we are spending money and is every dollar being spent on the optimal side, giving us the best return for the buck that's been spent.

So, I would say to you that, to look for continued progress throughout 2011, but it's moving parts on both the top and the bottom of the income statement that are going to get us there.

And it's also doing a number of things that would change in terms of on the composition side of the balance sheet.

So when you think of the alignment of all those strategic priorities, just that the prior question on trying to resolve some of the residual asset quality things, we obviously and again, we reported out today, a lot of drag to our P&L related to workouts, the compensation on workout, etc.

And those folks are all doing a great job and we are trying to expedite it as quickly as possible.

The faster that gets done and the more people we could turn back towards business generation, that's all -- they're all positive things.

So it's not going to be one specific thing or two that's going to happen.

It's not just going to come from expense reviews, but that is a critical component as well.

And we've got -- we will have to focus on all the components within the expense side of the income statement.

So hopefully you begin to see these ideas around branch optimization and facilities optimization.

There's a number of other initiatives that we will be undertaking this year that should bear a lot of fruit as we go forward.

Okay, great.

Thanks, guys.

Dave Rochester, Credit Suisse.

Good morning, guys.

Nice pickup on the loan growth.

I know you've made a lot of investments on building out the C&I platform, which you talked about a lot, and I know some other banks in your markets are doing that as well, so I was just wondering if you could give us a little color on any changes in the level of competition you are seeing there, and where you think the bulk of that market share grab is coming from, if you think it's coming from bigger banks, smaller banks, any disruption in the market from mergers that are going on, perhaps some color there?

I'll start with the second question and say really all of the above.

And we're targeting the market, so to the extent that we are growing through taking share, it's at the expense of the market overall.

We're not specifically targeting any particular institutions in the market.

We think we've got a good product suite.

We've got a great group of seasoned professional bankers who are in the market that have high credibility with their customers.

I mentioned that I think we've got a very good reputation as a homegrown commercial bank, and being the homegrown commercial bank I think gives us a big advantage over others in the market.

So that's been a big part of where the growth has come from.

Okay, great.

And just one last one.

I know you mentioned M&A isn't something high on the list right now, but maybe if you could just mention where you think you need to be in the progression of your strategy before you start looking more closely at other opportunities?

Yes, I would say that we are focused on our core franchise business and creating more value from what we do every day.

That's got to occupy 99% of our energy and our resources to make sure that we get it right.

If you want to export it to somebody else, you have to be sure that you are generating the kind of returns that will ensure that you will do that as the larger entity.

We also believe that as our performance improves, that our valuation should improve as well, which will give us a stronger currency to use at the appropriate time.

So for now, we are laser-like focused on the business plan for Webster for organic growth, but we imagine that there will be opportunities for us down the line to consider negotiated deals with like-minded partners.

Okay.

Great.

Thanks, guys.

John Pancari, Evercore Partners.

Good morning.

Just on credit, can you give us a little bit of color on your -- I know you gave us the 30-day to 90-day past dues, but can you give us a little color on the trend in the credit size watchlist credits?

John, what specifically are you trying to look for?

Just the directional trend in your watchlist in the quarter.

Yes, everything is down, John, across-the-board.

Everything is down.

I mean, you know, and again, while we don't go through and talk about all of that, we saw substantial improvement across the board in the categories there as well, and it's a big component of how we come up with the adequacy of the allowance.

Okay, all right.

And then secondly, in terms of the loan loss reserve, is it likely that we can see the continued -- a release next quarter?

I know you mentioned a decline in the provision, and likely, therefore, some downward trend in charge-offs, but, likely to see a continued release this coming quarter?

Hey, John, let's clarify one.

On the charge-off side, I wouldn't expect there necessarily to be a decline.

We're going to resolve credits and keep things moving.

So, part of as we talk about this, it's just going to be depending on where we are in negotiations on each of those as to whether we get deals done or we've exhausted all opportunity to try and collect.

Expect to see charge-offs continue to stay at a pretty good clip because this is actually right now where I would think in the cycle you would really see this huge disparity in our -- or not necessarily disparity, but gap between what folks would provide and where they would charge off because now all the focus is going to be in trying to get the remaining nonperformers off the books.

In terms of the provisioning, again, I just want to reiterate that it's always going to come down to how we see trends quarter by quarter, so I want to continue to be a little bit cautious there and just indicate to everyone that our sense is there could be a little bit of when you think about it, if everything stayed in the same trajectory, then yes, we would expect that we wouldn't have to have the level of provisioning that we saw, certainly, in these last two quarters, and certainly not -- and maybe even more positive than we just saw this quarter.

But at the same point in time, there's some blips, we've got to be cautious right now.

We're not out of the woods totally, but there are certainly lots of good signs here to tell you that we're on the right way.

But, fair to assume that the bulk of those credits that you're going to address, and therefore the lumpiness in charge-offs have been reserved for?

Yes, absolutely.

All right.

And then lastly, in terms of loan growth, for the quarter, for this quarter itself, I know you indicated that you are taking share, so the growth you put on this quarter, you would say is more from the new hires that are hitting the road now in terms of seeing some of the benefit of their relationships that they're pulling over?

I wouldn't want to just leave it on the new hires.

It's the team, and it's a good team, and it's relationship-based commercial banking, and it's investments that we are making in the commercial banking and the business of professional banking platform.

That's the portion that's in the retail bank.

And so, it's from the total resources that we have focused on the market that we expect that we'll continue to see some growth, and we've got a pretty decent pipeline heading into the first quarter.

Yes; and specifically on the CRE side, that team has been in place, and the folks who have been spending obviously a lot of time focused on their portfolios, real strong group.

And again, it's the whole crowd that's Philly up through Westchester and out to Boston.

And they had a good production that took place for us in the latter 45 days of the quarter.

So, all existing folks that were part of the organization had been added all throughout these last couple of years had been with us.

Okay.

And commercial utilization rate in the quarter was -- I believe you indicated was stable, right?

It was pretty stable, down in asset-based lending, pretty much stable across the rest of the commercial bank.

Okay, great.

Thanks for taking my question.

Eric Anderson, Hartford Financial.

Yes, good morning.

Congratulations on another very strong quarter.

Most of my questions have been answered, but let me just ask you sort of a bigger picture question in terms of, of all the dislocations that are going on now in banking, how do you view your competitive landscape as shaping up on the retail side for the major franchise areas that you concentrate on?

There is a lot of change, there's no doubt about it, and we are changing too.

I think that the fact that we are a stable, homegrown institution, I know I've said this four or five times today, is a great asset to us.

I think we made good, sound decisions at balancing high-quality services to the customer at a fair price against our desire to create economic property for our shareholders.

I think that because we have no longer automatically free checking as an example, although we do have what we call easy to be free checking, that we may not have the same acquisition rate that we had before, but we will have more profitable relationships that we will bring on board.

And our team is very well developed and trained to be able to maximize the value of these relationships as they come onboard.

So we see ourselves as building broader, deeper relationships with a core set of customers that we have identified as the primary customer for Webster.

We continue to evolve and focus on the segments that we think will be most valuable for us.

And I think that's an advantage for us because we know what we are trying to do.

We've already gone ahead and done the product redesign.

We've been very clear about our position as a leader in the market in this regard.

So stable, things are settling down.

We've seen some of the outflows related to low-balance customers that are seeking totally free elsewhere.

So we think that in our purposeful way, that we have an opportunity to be a leader and to attract consumers and businesses to Webster in part as a result of all the disruption that's out there.

So with the margin, is it fair to say that these customers are becoming more profitable to the bank?

Well, on the one hand, you've got the attack on the revenue side, where you see lower income from overdrafts and you have what may ultimately be the effect of Durbin.

So they -- we're trying to make sure that our customers are at least as profitable as step one, and then more profitable down the line.

So we are focused on customer profitability.

We're also focused on product profitability.

So we think that over time, our average customer will be significantly more profitable to Webster in a year or two than was the case probably a year or so ago.

Okay.

Thanks very much.

Collyn Gilbert, Stifel Nicolaus & Co.

Thanks; good morning, guys.

Just one really quick question, on the loan growth, Jim, I know you had mentioned, I think it was Jim or maybe Jerry, that in terms of the originations that you saw this quarter, I think you said greater than $15 million came from Boston.

Do you have kind of a rough geographic breakdown of the remainder of that sort of $600 million, kind of the regions in which drove the loan growth?

You know, it's not that big a region really.

It's the Boston Providence area.

So we had growth, generally speaking, in that corridor.

I would say it's pretty much across the franchise.

We saw some growth down in Westchester County.

We've seen growth in Connecticut.

So I think it's pretty much consistent across the franchise.

Okay, okay.

That's all I had.

Thanks.

Sure.

Thank you.

Thank you.

There are no further questions at this time.

I would like to hand the floor back over to management for any closing comments.

Thank you, Jackie, and thank you all for being with us today.

Look forward to seeing you soon.

This concludes today's teleconference.

You may disconnect your lines at this time.

Thank you all for your participation.