Shares in Webster Financial Corp. jumped nearly 8 percent on Thursday, after the Waterbury-based lender reported record quarterly profits and higher-than-expected revenue growth.
Shares in the parent of Webster Bank rose $2.27, to $31.38 on the New York Stock Exchange.
Early Thursday, Webster posted record net income of $51 million, or 53 cents a diluted share, in the fourth quarter, compared with $43.7 million, or 45 cents a diluted share. The results were boosted by strong loan demand, particularly from commerical borrowers.
The per-share earnings were in line with the Wall Street consensus estimate in a survey of analysts by ThomsonOneAnalytics.
"Strong loan demand boosted revenue and profit in the fourth quarter and full year 2014," James C. Smith, Webster's chairman and chief executive, said. "Revenue grew for the twenty-first consecutive quarter and net income reached record levels."
Webster noted a 19-percent increase in deposits in its health savings account business compared with a year earlier. Webster entered the business in 2004, buying a small bank in Wisconsin, whose health savings accounts had about $100 million deposited in them.
As of Dec. 31, Webster had $2.6 billion in deposits and brokerage balances in its health savings account business, a lucrative source of fee income and another source of deposit to fund increasing lending.
Earlier this month, Webster completed the acquisition of JPMorgan Chase's health savings account business, adding another $1.3 billion in deposits.
For all of 2014, net income was $189.2 million, or $2.08 a diluted share, compared with $168.7 million, or $1.86 a diluted share, a year earlier.
Smith noted that record levels of lending to businesses led all loan categories.