Regional banking company Webster Financial (NYSE: WBS) announced better-than-expected revenue in Q4 CY2025, with sales up 3.9% year on year to $746.2 million. Its GAAP profit of $1.55 per share was 0.9% above analysts’ consensus estimates.
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Webster Financial (WBS) Q4 CY2025 Highlights:
- Net Interest Income: $632.9 million vs analyst estimates of $633.1 million (4% year-on-year growth, in line)
- Net Interest Margin: 3.4% vs analyst estimates of 3.3% (2.3 basis point beat)
- Revenue: $746.2 million vs analyst estimates of $729.2 million (3.9% year-on-year growth, 2.3% beat)
- Efficiency Ratio: 47% vs analyst estimates of 48.4% (146 basis point beat)
- EPS (GAAP): $1.55 vs analyst estimates of $1.54 (0.9% beat)
- Tangible Book Value per Share: $37.20 vs analyst estimates of $37.40 (12.9% year-on-year growth, 0.5% miss)
- Market Capitalization: $10.68 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
Two primary revenue streams drive bank earnings. While net interest income, which is earned by charging higher rates on loans than paid on deposits, forms the foundation, fee-based services across banking, credit, wealth management, and trading operations provide additional income. Luckily, Webster Financial’s revenue grew at an exceptional 19.7% compounded annual growth rate over the last five years. Its growth beat the average banking company and shows its offerings resonate with customers.
Long-term growth is the most important, but within financials, a half-decade historical view may miss recent interest rate changes and market returns. Webster Financial’s recent performance shows its demand has slowed significantly as its annualized revenue growth of 3.8% over the last two years was well below its five-year trend. 
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 reported modest year-on-year revenue growth of 3.9% but beat Wall Street’s estimates by 2.3%.
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.
Markets consistently prioritize net interest income growth over fee-based revenue, recognizing its superior quality and recurring nature compared to the more unpredictable non-interest income streams.
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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.
When analyzing banks, tangible book value per share (TBVPS) takes precedence over many other metrics. This measure isolates genuine per-share value by removing intangible assets of debatable liquidation worth. 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 5.8% annual clip over the last five years. TBVPS growth has accelerated recently, growing by 7.2% annually over the last two years from $32.39 to $37.20 per share.
Over the next 12 months, Consensus estimates call for Webster Financial’s TBVPS to grow by 12% to $41.66, mediocre growth rate.
Key Takeaways from Webster Financial’s Q4 Results
It was encouraging to see Webster Financial beat analysts’ revenue expectations this quarter, leading to a small EPS beat. On the other hand, its tangible book value per share fell slightly short of Wall Street’s estimates. Overall, this was a mixed quarter. The stock remained flat at $66.44 immediately after reporting.
So do we think Webster Financial is an attractive buy at the current price? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).
