Webster Financial Corporation

good morning and welcome to webster financial corporation first quarter 2025 earnings conference call please note this event is being recorded i would now like to introduce webster's director of investor relations and lynn harman to introduce the call mr harman please go ahead

Good morning. Before we begin our remarks, I want to remind you that the comments made by management may include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and are subject to the Safe Harbor rules. Please review the forward-looking disclaimer and Safe Harbor language in today's press release and presentation for more information about risks and uncertainties which may affect us. The presentation accompanying management's remarks can be found on the company's investor relations site at investors.websterbank.com. For the Q&A portion of the call, we ask that each participant ask just one question and one follow-up before returning to the queue. I will now turn it over to Webster Financial CEO and Chairman John Siula. Thanks, Emily.

Good morning and welcome to Webster Financial Corporation's first quarter 2025 earnings call. We appreciate you joining us this morning. I will provide some high-level remarks on our performance, after which our CFO, Neil Holland, will cover the financials in more detail. Our President and Chief Operating Officer, Luis Maciani, is also joining us for the Q&A portion of the call today. Webster's first quarter financial performance was fundamentally solid, with consistent execution across each of our business segments. As illustrated on slide two, we had good balance sheet growth and pre-provisioned net revenue trends that put us on path to achieve the full-year guidance we provided to you at the beginning of the year. Deposit growth of 1.3% included robust core deposit growth. Our loan-to-deposit ratio of 81% provides significant flexibility as we move forward. Better-than-market loan growth of 1% was achieved with contributions across business lines and loan categories, including meaningful growth in traditional full-relationship middle market banking. Our NIM expanded by four basis points, and with an efficiency ratio of 45.8%, we continue to operate a highly profitable company, even as we invest in our differentiated businesses, risks, technology, and back office infrastructure. We report an EPS of $1.30, a return on assets of 1.15%, and a return on tangible common equity just below 16%. Our sound operating position allows us to be opportunistic. Given significant excess capital and stable fundamentals, we elected to repurchase 3.6 million shares during the quarter. During our CECL process this quarter, we increased our recession case probability to 30%, resulting in us adding approximately $20 million to this quarter's provision. We believe that this was a prudent move given the significant uncertainty surrounding the path of our economy following recent policy announcements. Have we not made the change in economic scenario weightings, our provision would have been roughly in line with charge-offs given stabilizing trends in risk rating migration. Absent the macro-driven additional reserves, our ROATC for the quarter would have been approximately 17% and our ROA would have been 1.25% in the range of our adjusted returns for the past several quarters. Our underlying credit trends and risk rating migration met our internal expectations and were consistent with the comments we made in January and comments that I made at an industry conference in March. Namely, we continue to anticipate an inflection point in non-accrual and classified migration during 2025, absent a substantial change in the macro environment. Two, we saw a material slowdown in negative migration, and importantly, overall criticized loans actually declined in one queue. And finally, the drivers of our charge-offs and sticky NPAs continue to be centered in CREE office and healthcare asset classes. We've yet to see any real impact on credit related to the tariff announcements, but as you can imagine, we're spending a ton of time consulting with our clients on potential impacts and looking for potential vulnerabilities in our portfolio. We don't have disproportionate exposure to industries we believe will be most directly impacted, and many of our borrowers have strategies in place to manage costs and supply chain and pass along price increases. While our borrowers remain in generally good financial health, we have selectively seen clients delay strategic actions as they assess the potential impacts of the proposed tariffs. We entered 2025 with a cautious view on accelerating economic activity, and the current environment falls within the realm of our initial expectations. Turning to slide three, Webster continues to generate diverse and granular deposit growth. Every one of the five major business areas we highlight on this slide grew deposits this quarter, with corporate deposits the only category to exhibit a decline. The quality of our deposit franchise allows Webster to pursue persistent and profitable balance sheet growth through a variety of operating environments. Executing on initiatives that enhance our funding profile will continue to be a primary focus of our management team. With that, I'll turn it over to Neil to provide some additional detail on our financial performance in the quarter.