Regional banking company Webster Financial (NYSE: WBS) met Wall Street’s revenue expectations in Q2 CY2025, with sales up 16.5% year on year to $715.8 million. Its GAAP profit of $1.52 per share was 7.9% above analysts’ consensus estimates.
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Webster Financial (WBS) Q2 CY2025 Highlights:
- Net Interest Income: $621.2 million vs analyst estimates of $617.1 million (8.5% year-on-year growth, 0.7% beat)
- Net Interest Margin: 3.4% vs analyst estimates of 3.4% (12 basis point year-on-year increase, 2.4 bps beat)
- Revenue: $715.8 million vs analyst estimates of $714 million (16.5% year-on-year growth, in line)
- Efficiency Ratio: 45.4% vs analyst estimates of 48.3% (2.9 percentage point beat)
- EPS (GAAP): $1.52 vs analyst estimates of $1.41 (7.9% beat)
- Market Capitalization: $9.83 billion
Company Overview
Founded during the Great Depression in 1935 and evolving into a major Northeastern financial institution, Webster Financial (NYSE: WBS) is a bank holding company that provides commercial banking, consumer banking, and employee benefits solutions through its Webster Bank and HSA Bank division.
Sales Growth
In general, banks make money from two primary sources. The first is net interest income, which is interest earned on loans, mortgages, and investments in securities minus interest paid out on deposits. The second source is non-interest income, which can come from bank account, credit card, wealth management, investing banking, and trading fees.
Over the last five years, Webster Financial grew its revenue at an incredible 17.8% compounded annual growth rate. Its growth beat the average bank company and shows its offerings resonate with customers.
We at StockStory place the most emphasis on long-term growth, but within financials, a half-decade historical view may miss recent interest rate changes, market returns, and industry trends. Webster Financial’s recent performance shows its demand has slowed significantly as its revenue was flat over the last two years. 
Note: Quarters not shown were determined to be outliers, impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.
This quarter, Webster Financial’s year-on-year revenue growth was 16.5%, and its $715.8 million of revenue was in line with Wall Street’s estimates.
Net interest income made up 82.9% of the company’s total revenue during the last five years, meaning Webster Financial barely relies on non-interest income to drive its overall growth.
While banks generate revenue from multiple sources, investors view net interest income as the cornerstone - its predictable, recurring characteristics stand in sharp contrast to the volatility of non-interest income.
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Tangible Book Value Per Share (TBVPS)
Banks profit by intermediating between depositors and borrowers, making them fundamentally balance sheet-driven enterprises. Market participants emphasize balance sheet quality and sustained book value growth when evaluating these institutions.
Because of this, tangible book value per share (TBVPS) emerges as the critical performance benchmark. By excluding intangible assets with uncertain liquidation values, this metric captures real, liquid net worth per share. Other (and more commonly known) per-share metrics like EPS can sometimes be murky due to M&A or accounting rules allowing for loan losses to be spread out.
Webster Financial’s TBVPS grew at a decent 5.1% annual clip over the last five years. TBVPS growth has accelerated recently, growing by 8.8% annually over the last two years from $29.69 to $35.13 per share.
Over the next 12 months, Consensus estimates call for Webster Financial’s TBVPS to grow by 12.1% to $39.38, top-notch growth rate.
Key Takeaways from Webster Financial’s Q2 Results
It was encouraging to see Webster Financial beat analysts’ EPS expectations this quarter. We were also happy its tangible book value per share narrowly outperformed Wall Street’s estimates. Overall, this print had some key positives. The stock remained flat at $58.80 immediately after reporting.
Is Webster Financial an attractive investment opportunity at the current price? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here, it’s free.
