Company: WBS-PG
Filing Date: 2025-08-11
Form Type: 10-Q
Source: 0000801337-25-000083
Chunk: 139

Company: WEBSTER FINANCIAL CORP
Filing Date: 2025-08-11
Form: 10-Q
Item: Part I, Item 2
Chunk 139
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 Condensed Consolidated Financial Statements contained in Part I - Item 1. Financial Statements of this report. Additional information regarding defined benefit pension and other postretirement benefit plans, income taxes, and the multifamily securitization can be found within Note 19: Retirement Benefit Plans, Note 9: Income Taxes, and Note 5: Transfers and Servicing of Financial Assets, respectively, in the Notes to the Consolidated Financial Statements contained in Part II - Item 8. Financial Statements and Supplementary Data of the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

Asset/Liability Management and Market Risk

The Company’s ALCO uses four main tools to manage interest rate risk: (i) the size, duration, and credit risk of the investment portfolio; (ii) the size and duration of the wholesale funding portfolio; (iii) interest rate contracts; and (iv) the pricing and structure of loans and deposits. Interest rate risk is measured using simulation analysis and asset/liability modeling software to calculate the Company’s earnings at risk and equity at risk. Earnings at risk is defined as the change in net interest income due to change in interest rates. Equity at risk is defined as the change in the net economic value of financial assets, financial liabilities, and off-balance sheet financial instruments, due to changes in interest rates compared to a base net economic value.

Information regarding the key model assumptions and methods used to calculate the Company’s earnings at risk and equity at risk, along with other information regarding the Company’s asset/liability management process overall, can be found under the section captioned “Asset/Liability Management and Market Risk” contained in Part II - Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations of the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. There were no changes to management’s asset/liability management process during the six months ended June 30, 2025, that had a material impact on its measurement of interest rate risk.

The following table summarizes the estimated impact that gradual parallel changes in interest rates of up and down 100, 200, and 300 basis points might have on the Company’s net interest income over a 12-month period starting at June 30, 2025, and December 31, 2024, as compared to actual net interest income and assuming no changes in interest rates:

-300bp-200bp-100bp+