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Key Takeaways from One Bank's Recent Growth


Connecticut-based Webster Financial has pursued a successful strategy of loan growth, geographic diversification, and has recently hired a new CIO.


Webster Financial, a $27-billion-dollar asset bank, posted earnings of $96.7 million in the fourth quarter, driven primarily by growth in commercial loans and the health savings account (HSA) unit. Both lines have seen solid growth over the year.

Webster Financial made a comeback from the financial crisis.

It’s a far cry from the Connecticut-based bank’s performance in the 2008 financial crisis. Webster Financial needed to be bailed out by the government to the tune of $400 million (which has since been repaid). Company stock plummeted to $3.00 per share and its credit quality was poor.

How did it make a comeback? John Ciulla, Webster’s chief executive officer, observed in an interview that earnings results were spurred by a focus on growing its loan portfolio, diversifying geographically, and issuing consumer loans nationally. 

Growth in Loans in Diverse Markets

In part, growing loans has meant moving into new markets geographically from the bank’s Connecticut base. Loan growth in Connecticut is slow. But the company has pursued aggressive strategies outside of it, where growth – particularly in commercial real estate — is higher.

Currently, for example, commercial banking teams operate in Boston, Providence, White Plains, New York, New York City, and Philadelphia. Webster’s commercial real estate and asset-based lending operations are in Baltimore and Washington, D.C. There are also asset-based lending operations in Atlanta, Chicago, and Dallas. 

The bank wants to strategize its relationship with fintech, based on what customers want.

Fintech: Moving Forward Strategically to Gain Advantages

What about financial technology (fintech)? As Ciulla observes, fintech is a particularly challenging area for many banks, particularly midsize ones. Larger banks with a fintech presence or partnership can see considerable advantages, and their midsize siblings have to ensure that they don’t lose out.

Asked whether they buy, build, or partner, Ciulla emphasized both buying and building as potential paths – but ones that need to have demonstrated customer utility.

For example, in 2018, the bank hired a new chief information officer, Karen Higgins-Carter, who has worked both at large commercial banks and companies, including JPMorgan Chase, GE, and others. 

But he also emphasized the need to ascertain what customers expect from the bank in terms of fintech. Then, Webster will strategize where it needs to be differentiated from the competition and where it can be simply at market without losing any advantage, to realize a competitive, efficient, and effective strategy. 

The hiring of a CIO may indicate growth is in their future. Partnerships are in their present, as Webster currently partners with other firms to process loans.

Let an experienced Advisor Help You Make Profitable Deals

Banks face competitive challenges in loan growth and markets. Competitive forces may be particularly high in fintech, where banks are realizing advantages in building their own technology, engaging in acquisitions between fintechs and banks, and partnering to save money and drive innovation.

At Garnet Capital, we are experts at maximizing bank portfolios while also driving cost efficiencies. We can set up these profitable relationships with banks and fintechs. 

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Read on to learn how one bank CEO views his institution's recent growth, and how your business can learn from his example.