Part III: DefinitivePortions of the Proxy Statement (the “Proxy Statement”) for the Annual Meeting of ShareholdersStockholders to be held on April 28, 2022.24, 2024 (the “Proxy Statement”).

INDEX

PART I

Webster Financial Corporation (the Holding Company) is a bank holding company and financial holding company under the Bank Holding CompanyBHC Act, of 1956, as amended (BHC Act), incorporated under the laws of Delaware in 1986, and headquartered in Stamford, Connecticut. Webster Bank, National Association (Webster Bank), and its HSA Bank division (HSA Bank), deliverDivision, is a leading commercial bank in the Northeast that provides a wide range of banking, investment,digital and traditional financial services to individuals, families,solutions across three differentiated lines of business: Commercial Banking, HSA Bank, and businesses. Webster Bank serves consumer and business customers with mortgage lending, financial planning, trust, and investment services through a distribution network consisting of banking centers, ATMs, a customer care center, and a full range of web and mobile-based banking services throughoutConsumer Banking. While its core footprint spans the northeastern U.S. from New York to Massachusetts. It also offers equipment financing, commercial real estate lending, asset-based lending, and treasury and payment solutions, primarilyMassachusetts, certain businesses operate in the eastern U.S.extended geographies. HSA Bank is a leading providerone of health savings accounts (HSAs)the largest providers of employee benefits solutions in the U.S.

The Company files reports with the SEC, and makes available, free of charge, within the investor relations section of its internet website (http://investors.websterbank.com), its Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and also delivers health reimbursement arrangements,amendments to those reports as soon as reasonably practicable after it electronically files such material with, or furnishes it to, the SEC. The SEC website (http://www.sec.gov) makes reports, proxy and flexible spendinginformation statements, and commuter benefit account administration servicesother information filed electronically with the SEC available to employersthe public free of charge. Information contained on the Company's website is not incorporated by reference into this Annual Report on Form 10-K.

Additional information regarding Webster's merger with Sterlingthe Company's mergers and acquisitions can be found in Part II under the section captioned "Recent Developments" contained in Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations, and within Note 3: Business Developments2: Mergers and Acquisitions in the Notes to Consolidated Financial Statements contained in Item 8. Financial Statements and Supplementary Data.

AtThe Holding Company's principal consolidated subsidiary is the Bank. As of December 31, 2021, Webster Financial Corporation's consolidated2023, the Bank's significant
wholly-owned subsidiaries included Webster Bank (the Bank), Webster Wealth Advisors, Inc., and Webster Licensing, LLC. Webster Bank's significant subsidiaries included: Webster Business Credit Corporation, Webster Capital Finance Inc., Webster Servicing LLC, Webster Public Finance Corporation, andSterling National Funding Corporation, Webster Mortgage Investment Corporation, a passive investment subsidiary whose primary function is to provide servicing on qualified passive investments, such as residentialSterling Business Credit LLC, Webster Wealth Advisors, Inc., Webster Licensing, LLC, Bend Financial, Inc., Interlink Insured Sweep LLC, Webster Investment Services, Inc., Webster Preferred Capital Corporation, and commercial mortgage loans acquired fromWebster Community Development Corporation.

As of December 31, 2023, the Bank. Webster Bank'sCompany's operations are organized into three reportable segments whichthat represent its primary businesses.businesses: Commercial Banking, HSA Bank, and Consumer Banking.

Additional information regarding Webster'sthe Company's reportable segments can be found in Part II under the section captioned "Segment Reporting" contained in Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations, and within Note 21: Segment Reporting in the Notes to Consolidated Financial Statements contained in Item 8. Financial Statements and Supplementary Data.

Human Capital Resources

As a values-driven organization, our employees are the cornerstone of our success. At December 31, 2021, Webster2023, the Company had 3,245 total employees, which included 2,4244,131 full-time 452 part-time, and 369 temporary employees and consisted130 part-time employees, comprised of approximately 60%61% female and 40%39% male employees. None of our employees were represented by a collective bargaining agreement.The average full-time and part-time employee tenure at the Company is approximately 9.0 years.

Diversity, Equity, Inclusion and Belonging

We believeThe Company believes DEIB is critical to its growth and success as a leading commercial bank. The Company's commitment to DEIB starts with the senior leadership team, who works to ensure that our focus on diversity, equity, inclusion, and belonging (DEIB)DEIB is a critical component of how we supportintegrated into the way the Company does business. Meeting the increasingly diverse perspectivesneeds of our employees and clients. Itclients is not onlya key to ourthe Company’s long-term growth, but alsosuccess, and having a workforce comprised ofwith diverse identities, backgrounds and experiences better helps the clients and communities we serve. Our commitmentthat the Company serves to DEIB starts with Webster's senior leadership team, who continuously work to ensure that DEIB is integrated into the way we do business. Websterachieve their financial goals.

The Company has established a DEIB Council, which serves as a platform where senior leaders and representatives of our various internal business resource groups meet quarterly to shape the strategy and actions of ourthe Company’s DEIB efforts. The DEIB Council currently comprises 22is comprised of 39 employee members across the organization and is co-chaired by ourthe Chief Executive Officer and Executive Vice President of Business Banking, both of whom makeBanking. The DEIB Council makes recommendations on ways to integrate DEIB in the areas of education and awareness, talent development, employee engagement, and client and community service. We also have an appointedservice, and reports quarterly to the Company’s Corporate Responsibility Committee. The Company's Senior Managing Director of DEIB Officer to expand ouris responsible for strengthening DEIB programsefforts with employees, clients, and grow partnerships within our local communities,community partners, and to promotepromoting a diverse workforce in an open, inclusive environment.

Compensation and Benefits

Webster'sThe Company's compensation program aimsis designed to attract, retain, and reward high-performing talent at all levelsperformance and align incentives with the achievement of the organization through a pay-for-performance philosophy. Variable payment opportunities are available to all employees, including corporate incentive plans, sales/service commission or incentive plans,strategic goals and equity plans for senior-level executives. Comprehensive benefits and wellness resources are provided to employees, including medical, dental, vision, wellness incentives, life insurance, voluntary supplemental life insurance, short-termboth short- and long-term disability,operating objectives. The Company has an Incentive Compensation Oversight Committee that reviews and approves all business-line incentives and sales plans each year, which ensures consistent governance and behavior. The Company’s Rewards and Recognition Program drives a culture of appreciation, recognizes leadership, and provides employees with meaningful monetary awards, as well as anon-monetary recognition.

Competitive benefits packages that reflect the needs of the Company’s workforce are offered to employees, which include medical, dental, and vision plans, prescription benefits, life insurance and disability benefits, HSAs, wellness incentives, health coaching, and telemedicine, as well as paid parental leave, paid time off and paid holidays, matching 401(k) retirement savings plan with a company match,plans, Employee Stock Purchase Plan, Employee Assistance Program, parental leave,back-up child and paid time off. Webster shares in the costs of benefits with its employees by paying approximately 80% of allelder care, Student Loan Repayment Program, pet insurance, costs. In addition, Webster contributes to participating employees’ HSAs through earned incentives for completing activities such as biometric screenings,and other wellness physicals, and dental exams.programs. Benefit trends are reviewed regularly and plans are adjusted accordinglycontinually reviewed and evolved as necessary to remain competitive. We believe that our current benefits practices play a key role in employee retention. At December 31, 2021,competitive and meet the average employee tenure was approximately 8.2 years.

Learning and Development

We areThe Company is focused on investing in ourits current and future talent by actively supporting the success, growth, and career progression of ourits employees. Webster's learning and development strategy comprises five core areas: (i) business education and job-specific training, (ii) professional development, (iii) leadership development, (iv) compliance training, and (v) career programs and certifications. Our employeesEmployees have access to hundreds of offeringsmore than 490 courses offered through Webster Bank University, the Company's internal destination for learning where we have made available various types of virtual content, fromresource that offers on-demand webinars, to podcastse-learning, and e-learning modules. Websterin-person learning programs. The Company also provides freeunlimited access to onlineself-directed e-learning courses taught by industry experts with curated learning paths that are designed specifically for their professional interests.interests through the Company's LinkedIn partnership.

Competition

WebsterThe Company is subject to strong competition from other commercial banks, thrifts,savings banks, credit unions, non-bank health savings account trustees, consumer finance companies, investment companies, insurance companies, and online lending and savings institutions.institutions, and other non-bank financial services companies. Certain of these competitors are larger financial institutions with substantially greater resources, lending limits, larger branch systems, and a wider array of commercial and consumer banking services than Webster.the Company. Competition could intensify in the future as a result of industry consolidation, the increasing availability of products and services from non-bank organizations including financial technology companies, greater technological developments in the industry, and continued bank regulatory reforms.

WebsterThe Company faces substantial competition for deposits and loans throughout its market areas. The primary factors in competing for deposits are interest rates, personalized services, the quality and range of financial services, convenience of office locations and hours, mobile banking, and other automated services. Competition for deposits comes from other commercial banks, thrifts,savings banks, credit unions, non-bank health savings account trustees, money market mutual funds, financial technology companies, and other investment alternatives.non-bank financial services companies. The primary factors in competing for consumercommercial and commercialconsumer loans are interest rates, loan origination fees, ease and convenience of loan origination channels, the quality and range of lending services, personalized service, and the ability to close within customers’each customer's desired time frame. Competition for the origination of loans comes primarily from commercial banks, non-bank lenders, savings institutions, mortgage banking firms, mortgage brokers, online lenders, and insurance companies. Other factors that affect competition include the general and local economic conditions, current interest rate levels, and volatility in the lending markets.

Supervision and Regulation

WebsterThe Holding Company and its bank and non-bank subsidiaries are subject to extensive regulation under federal and state laws. The regulatory framework applicable to bank holding companies and their depository institutions is intended to protect depositors, the Federal Deposit Insurance Fund,FDIF, consumers, and the U.S. banking system as a whole, not necessarily investors in bank holding companies such as Webster.whole.

Set forth in the paragraphs below is a summary of the significant elements of the laws and regulations applicable to Websterthe Holding Company and its bank and non-bank subsidiaries. The description that follows is qualified in its entirety by reference to the full text of the statutes, regulations, and policies that are described. Banking statutes, regulations, and policies are continually under review by Congress, state legislatures, and federal and state regulatory agencies. Changes in the statutes, regulations, or regulatory policies applicable to Websterthe Holding Company and its bank and non-bank subsidiaries, including how they are implemented or interpreted, could have a material effect on the results of the Company.

Regulatory Agencies

Webster Financial CorporationThe Holding Company is a separate and distinct legal entity from Websterthe Bank and its other subsidiaries. As a registered bank holding company and a financial holding company, Webster Financial Corporation is subject to regulation under the BHC Act and to inspection, examination, and supervision by its primary federal regulator, the Board of Governors of the Federal Reserve System. As a publicly-traded company, Webster is also subject to the disclosure and regulatory requirements of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended, both of which are administered by the United States Securities and Exchange Commission (SEC).SEC. As a publicly-traded company with securities listed on the New York Stock Exchange (NYSE),NYSE, Webster is subject to the rules of the NYSE for listed companies.NYSE.

WebsterThe Bank is organized as a national banking association under the National Bank Act, as amended, and is subject to the supervision of and regular examination by the Office of the Comptroller of the Currency (OCC),OCC, its primary federal regulator, as well as by the Federal Deposit Insurance Corporation (FDIC),FDIC, its deposit insurer. As a national banking association, Websterthe Bank derives its lending, investment, and other bank activity powers from the National Bank Act, as amended, and the regulations of the OCC promulgated thereunder. In addition, the Consumer Financial Protection Bureau (CFPB)CFPB supervises the Bank to ensure compliance with federal consumer financial protection laws.

Webster’sThe Holding Company’s non-bank subsidiaries are also subject to regulation by the Board of Governors of the Federal Reserve System and other applicable federal and state agencies.

Bank Holding Company Activities

In general, the BHC Act limits the business of bank holding companies to banking, managing, or controlling banks and other activities that the Board of Governors of the Federal Reserve System has determined to be closely related to banking. Bank holding companies that qualify and elect to become financial holding companies, such as Webster Financial Corporation, may engage in any activity, or acquire and retain the shares of a company engaged in any activity, that is either (i) financial in nature or incidental to such financial activity (as determined by the Board of Governors of the Federal Reserve System in consultation with the Secretary of the Treasury), or (ii) complementary to a financial activity, and that does not pose a substantial risk to the safety and soundness of depository institutions or the financial system (as solely determined by the Board of Governors of the Federal Reserve System). Activities that are financial in nature include securities underwriting, dealing and market making, sponsoring mutual funds and investment companies, insurance underwriting, and merchant banking. If a financial holding company or its bank ceases to be well capitalized or well managed, the Board of Governors of the Federal Reserve System may impose corrective capital and managerial requirements and activity restrictions.

Under the BHC Act, prior approval from the Board of Governors of the Federal Reserve System is required in order for any bank holding company to (i) acquire direct or indirect ownership or control of more than 5% of the voting shares of any bank, (ii) acquire all or substantially all of the assets of a bank, or (iii) merge or consolidate with any other bank holding company. On January 30, 2020,Generally, the Holding Company is not required to obtain prior approval from the Board of Governors of the Federal Reserve System issuedto acquire a final rulenon-bank that revised its regulations relatedengages in activities that are financial in nature or incidental to determinationsactivities that are financial in nature, as long as the Holding Company meets the capital, managerial, and CRA requirements to qualify as a financial holding company. However, the Holding Company is required to receive prior approval from the Board of whether a company has the ability to exercise a controlling influence over another company for purposesGovernors of the BHC Act, thereby expanding the number of presumptions for use in such determination and providing greater transparency on the types of relationships that the Federal Reserve System generally views as supporting a determination of control. The new rule became effective April 1, 2020.for an acquisition in which the total consolidated assets to be acquired exceeds $10 billion.

Pursuant to Section 18(c) of the Federal Deposit Insurance Act (FDIA),FDIA, more commonly known as the Bank Merger Act, and for national banks relying on certain other sources of merger authority, prior written approval from a bank's primary federal regulator is required before any insured depository institution may consummate a merger transaction, which includes a merger, consolidation, assumption of deposit liabilities, and certain asset transfers between or among two or more institutions. Prior written approval of a bank's primary federal regulator is also required for merger transactions between or among affiliated institutions, as well as for merger transactions between or among non-affiliated institutions. Transactions that do not involve a transfer of deposit liabilities typically do not require prior approval under the Bank Merger Act unless the transaction involves the acquisition of all or substantially all of an institution's assets. When evaluating and acting on proposed merger transactions, regulators consider the extent of existing competition between and among the merging institutions, other depository institutions, and other providers of similar or equivalent services in the relevant product and geographic markets, the convenience and needs of the community to be served, capital adequacy and earnings prospects, and the effectiveness the merger institutions in combating money-laundering activities, among other factors.

Further, the Change in Bank Control Act of 1978 generally prohibits any person, acting directly or indirectly or in concert with other persons, from acquiring control of a covered institution without providing at least 60 days prior written notice to the FDIC or upon receipt of written notice that the FDIC does not disapprove of the acquisition.

The Board of Governors of the Federal Reserve System, the OCC, and the FDIC have adopted the regulatory capital standards in accordance with Basel III, as developed by the Basel Committee on Banking Supervision (Basel III Capital Rules).Supervision. The Basel III Capital Rules which were fully phased-in on January 1, 2019, strengthened international capital adequacy standards by increasing institutions' minimum capital requirements and holdings of high quality
high-quality liquid assets and decreasing bank leverage.

Under the Basel III Capital Rules, Webster'sthe Company's assets, exposures, and certain off-balance sheet commitments and obligations are subject to risk weights used to determine risk-weighted assets. Risk weights can range from 0% for U.S. government securities to 1,250% for certain tranches of complex securitization or equity exposures. Risk-weighted assets serve as the base against which regulatory capital is measured, and are used to calculate Webster'sthe Holding Company's and Webster Banks'the Bank's minimum capital ratios of CET1 capital to total risk-weighted assets (CET1 risk-based capital),Risk-Based Capital, Tier 1 capital to total risk-weighted assets (Tier 1 risk-based capital),Risk-Based Capital, Total capital to total risk-weighted assets (Total risk-based capital),Risk-Based Capital, and Tier 1 capital to average tangible assets (Tier 1 leverage capital),Leverage Capital, as defined in the regulations, which Websterthe Company is required to maintain. CET1 capital consists of common shareholders'stockholders' equity less deductions for goodwill and other intangible assets, and certain deferred tax adjustments. At the time of initial adoption of the Basel III Capital Rules, Websterthe Company had elected to opt-out of the requirement to include certain components of accumulated other comprehensive income (AOCI)AOCI in CET1 capital. Tier 1 capital consists of CET1 capital plus preferred stock. Total capital consists of Tier 1 capital and Tier 2 capital, (asas defined in the regulations).regulations. Tier 2 capital includes qualifying subordinated debt and the permissible portion of the ACL.

The following table summarizes the ratio thresholds applicable to Websterthe Company pursuant to the Basel III Capital Rules:Rules as of December 31, 2023:

In addition, the Basel III Capital Rules mandate that most deductions from or adjustments to regulatory capital be made to CET1 capital, not to the other components. For instance, the deduction of mortgage servicing assets, certain deferred tax assets (DTAs),DTAs, and capital investments in unconsolidated financial institutions is required to the extent that any one such category exceeds 10% of CET1 capital or exceeds 15% of CET1 capital in the aggregate.

The Basel III Capital Rules also include a capital conservation buffer comprised entirely of CET1 capital, which is considered in addition to the 4.5% CET1 capital ratio and is equal to 2.5% of risk-weighted assets for both Websterthe Holding Company and Websterthe Bank. This buffer is designed to absorb losses during periods of economic stress, and is generally required in order to avoid limitations on capital distributions and certain discretionary bonus payments to executive officers.

On July 22, 2019, the federal banking agencies issued a final rule that simplified the regulatory capital treatment for mortgage servicing assets, certain DTAs arising from temporary differences, investments in the capital of unconsolidated financial institutions, and the calculation of minority interest. These provisions were effective as of April 1, 2020.

Prompt Corrective Action

Pursuant to Section 38 of the FDIA, the federal banking agencies are required to take prompt corrective action if an insured depository institution fails to meet certain capital adequacy standards.

In addition, an insured depository institution with a ratio of tangible equity less than or equal to 2% is considered to be critically under capitalized. If an insured depository institution has been determined, after notice and opportunity for a heading,hearing, to be in an unsafe or unsound condition, or if it receives a less-than-satisfactory rating for asset quality, management, earnings, or liquidity in its most recent examination, the appropriate federal banking agency may downgrade a well capitalized, adequately capitalized, or under capitalized insured depository institution to the next lower capital category.

All insured depository institutions, regardless of their capital category, are prohibited from making capital distributions or paying management fees if such distributions or payments would result in the insured depository institution becoming under capitalized, unless it is shown that the capital distribution would improve financial condition, or the management fee is being paid to a person or entity without a controlling interest in the insured depository institution. Restrictions are placed on certain brokered deposit activity and on deposit rates offered as the capital category declines below well capitalized. Further, if an insured depository institution receives notice that it is under capitalized, significantly under capitalized, or critically under capitalized, the insured depository institution generally must file a written capital restoration plan with the appropriate federal banking agency within 45 days of receipt, and the bank holding company must guarantee the performance of that plan.

Section 165 of the Dodd-Frank Act requires theThe Board of Governors of the Federal Reserve System to establishestablished enhanced prudential standards for larger bank holding companies.companies based on size and certain risk-based indicators. On October 10, 2019, pursuant to the enactment of the EGRRCPA, the Federal Reserve Board, along with other federal bank regulatory agencies, adopted two rules outlining tailored these prudential standards allowing bank holding companies with total consolidated assets of $250 billion or less such as Webster Financial Corporation, to be exempt from certain enhanced capital and liquidity prudential standards, imposed under Section 165, including company-run stress testing, capital planning, liquidity coverage ratio, and resolution planning requirements, among others. Although Webster Financial Corporation is no longer required to conduct company-run stress testing for itself and Webster Bank,the Holding Company's total consolidated assets are beneath the $250 billion threshold, the Company continues to performperforms certain stress tests internally and incorporates the economic models and information developed through its stress testing program into its risk management and capital planning activities, which continue to be subject to the regular supervisory processes of the Federal Reserve System and the OCC.

In addition, under a prior rule issued by the Federal Reserve Board that implemented Section 165 of the Dodd-Frank Act's enhanced prudential standards, certain publicly tradedpublicly-traded bank holding companies with $50 billion or more in total consolidated assets are required to establishmaintain a risk committee that is responsible for the oversight of enterprise risk management (ERM) practices and that meets other statutory requirements. The EGRRCPA raised the threshold for mandatory application of the risk committee requirement from publicly traded bank holding companies with $10 billion or more in total consolidated assets to $50 billion or more. Notwithstanding this change implemented by EGRRCPA, Webster has maintained itsCompany maintains a standing Risk Committee of the Board of Directors which is comprisedthat oversees its risk management program.

Section 619 of the Dodd-Frank Act, commonly referred to as theThe Volcker Rule prohibits banking entities, such as the Holding Company and Websterthe Bank, from (i) engaging in short-term proprietary trading of certain securities, derivatives, commodity futures, and options on these investments for their own account, and (ii) imposes limits on investments in, and other relationships with hedge funds or private equity funds. Like the Dodd-Frank Act, the Volcker Rule provides exemptions for certain activities, including market making, underwriting, hedging, trading in government obligations, insurance company activities, and organizing and offering hedge funds or private equity funds. The Volcker rule also clarifies that certain activities are not prohibited, including acting as agent, broker, or custodian. Banking entities with significant trading operations (those with between $1 and $20 billion or more in average trading assets and liabilities) are requiredsubject to establish a detailedsimplified Volcker Rule compliance programprogram. The Company has incorporated Volcker Rule compliance by reference to which their Chief Executive Officers are required to attest that the program is reasonably designed to achievestatutory requirements in existing policies, procedures, and compliance withprograms where relevant and as appropriate for its activities, size, scope, and complexity. The Volcker Rule does not have a material impact on the Volcker Rule.Company.

Federal Reserve System

Federal Reserve System regulations require depository institutions to maintain reserves against its transaction accounts and non-personal time deposits for the purposes of implementing monetary policy. The reserve requirement must be satisfied in the form of vault cash and, if vault cash is insufficient, by maintaining a balance in an account at a Federal Reserve Bank (FRB).FRB. The Federal Reserve Act (FRA)FRA authorizes different ranges of reserve requirement ratios depending on the amount of transaction account balances held at each depository institution. Pursuant to the FRA, a zero percent reserve requirement ratio shall be applied to total reservable liabilities that do not exceed a certain amount, known as the reserve requirement exemption amount. In addition, transaction account balances maintained over the reserve requirement exemption amount and up to a certain amount, known as the low reserve tranche, may be subject to a reserve requirement ratio of not more than 3 percent (and which may be zero), and transaction account balances over the low reserve tranche may be subject to a reserve requirement ratio of not more than 14 percent (and which may be zero). The reserve requirement exemption and the low reserve tranche are both subject to adjustment on an annual basis, as applicable, by the Board of Governors of the Federal Reserve System.

Further, as a national bank and a member of the Federal Reserve System, theWebster Bank is required to subscribe to the capital stock of its district FRB in an amount equal to 6% of its capital and surplus, of which 50% is paid. The remaining 50% is subject to call by the Board of Governors of the Federal Reserve System. At December 31, 2021, Webster2023, the Bank held an FRB of BostonNew York stock investment of $60.5$227.9 million.

Federal Home Loan Bank System

The Federal Home Loan Bank (FHLB)FHLB System provides a central credit facility for its member institutions. WebsterThe Bank, as a member of the FHLB, is required to purchase and hold shares of FHLB capital stock for its membership and other activities in an amount equal to 0.35%0.05% of the aggregate principal amounttotal assets as of its unpaid residential mortgage loans and similar obligations at the beginning of each year,December 31, 2022, up to a maximum of $25$5 million, plus an amount that varies from 3.0% to 4.5%4.0% depending on the maturities of its FHLB advances, of which there were $11.0 million$2.4 billion outstanding at December 31, 2021. Webster2023. The Bank was in compliance with these requirements at December 31, 2021,2023, and held ana FHLB of Boston stock investment of $11.3$99.0 million.

Source of Strength Doctrine

Section 616 of the Dodd-Frank Act and Federal Reserve System regulations require that bankBank holding companies are required to serve as a source of financial strength to their subsidiary banks and commit resources to support each of their subsidiary banks. This support may be required at times when the Holding Company is not in a financial position to provide such resources without adversely affecting its ability to meet other obligations. The Federal Reserve System may require a bank holding company to make capital injections into a troubled subsidiary bank and may charge the bank holding company with engaging in unsafe and unsound practices if it fails to commit resources to such a subsidiary bank, or if it undertakes actions that the Federal Reserve System believes might jeopardize the bank holding company's ability to commit resources to such subsidiary bank. Capital loans by banking holding companies to its subsidiary banks would be subordinate in right of payment to deposits and certain other debts of the subsidiary bank. In the event of bankruptcy, any commitment by a bank holding company to a federal bank regulatory agency to maintain the capital of a subsidiary bank would be assumed by the bankruptcy trustee and entitled to a priority of payment.

In addition, under the National Bank Act, if Websterthe Bank's capital stock is impaired by losses or otherwise, the OCC is authorized to require payment of the deficiency by assessment upon the Holding Company. If the assessment is not paid within three months after receiving notice thereof, the OCC could order a sale of Websterthe Bank stock held to cover any deficiency.

Safety and Soundness Standards

The federal banking agencies have adopted the rules and regulations under the Interagency Guidelines Establishing Standards for Safety and Soundness, pursuant to Section 39 of the FDIA, which are applicable to all insured depository institutions. These guidelines prescribe standards relating to internal controls, information systems, internal audit systems, loan documentation, credit underwriting, interest rate exposure, asset growth, compensation, fees, and benefits, asset quality, earnings, and stock valuation, as determined to be appropriate.

If a federal banking agency determines that an institution fails to meet any of the established standards, the agency may require the institution to submit an acceptable plan to achieve compliance with the standard. In the event that an institution fails to submit an acceptable plan within the time allowed, or fails, in any material respect, to implement an accepted plan, the agency must require the institution to correct the deficiency and may take other supervisory and enforcement actions until the deficiency is corrected.

In more serious instances, enforcement actions may include (i) the issuance of directives to increase capital, the issuance of formal and informal agreements, (ii) the imposition of civil monetary penalties, (iii) the issuance of a cease and desist order that can be judicially enforced, (iv) the issuance of removal and prohibition orders against officers, directors, and other institution affiliated parties, (v) the termination of the insured depository institution’s deposit insurance, (vi) the appointment of a conservator or receiver for the insured depository institution, and (vii) injunctions or restraining orders based upon a judicial determination that the FDIC, as receiver, would be harmed if such equitable relief was not granted.

Transactions with Affiliates and Insiders

Transactions between insured depository institutions and their affiliates are governed by Sections 23A and 23B of the FRA and Federal Reserve Regulation W. In a bank holding company context, at a minimum, the parent holding company of a national bank, and any companies that are controlled by such parent holding company, are considered affiliates of the bank. Generally, sections 23A and 23B of the FRA are intended to protect insured depository institutions from losses arising from transactions with non-insured affiliates by (i) limiting the extent to which an institution or its subsidiaries may engage in covered transactions with any one affiliate and with all affiliates in the aggregate, and (ii) requiring that all such transactions be on terms substantially the same, or at least favorable, to the institution or subsidiary as those provided to a non-affiliate. The term covered transaction includes the making of loans, purchase of assets, the issuance of a guarantee, and similar types of transactions. Certain covered transactions must be collateralized according to a schedule set forth in the statue.

In addition, Section 22(h) of the FRA and Federal Reserve Regulation O restricts loans to directors, executive officers, and principal stockholders or insiders. Pursuant to Section 22(h), loans to directors, executive officers, and principal stockholders must be made on terms substantially the same as offered in comparable transactions to other persons, except that such insiders may receive preferential loans made under a benefit or compensation program that is widely available to the institution's employees and does not give preference to the insider over the employees. Further, loans to insiders and their related interests may not exceed, together with all other outstanding loans to such persons and affiliated entities, the institution’s total capital and surplus. Loans to insiders above specified amounts must receive prior approval from the Company's Board of Directors. Section 22(g) of the FRA places additional limitations on loans to executive officers.

Consumer Protection and Consumer Financial Protection Bureau Supervision

The Dodd-Frank Act centralized the responsibilityCFPB is responsible for consumer financial protection through the establishment of the CFPB, an independent agency charged with implementing, enforcing, and examining compliance with federal consumer financial protection laws. As an insured depository institution with more than $10 billion in total assets, Websterthe Bank is subject to supervision by the CFPB. Webster is subject toThere are a number of federal laws, which the Company is subject to, that are designed to protect borrowers and promote lending, including, but not limited to, the Equal Credit Opportunity Act, the Fair Credit Reporting Act, the Fair Debt Collection Procedures Act, the Truth in Lending Act, the Home Mortgage Disclosure Act, the Real Estate Settlement Practices Act, and the Consumer Financial Protection Act of 2010, which is part of the Dodd-Frank Act. The Dodd-Frank Act permits states to adopt more stringent consumer protection laws and allows state attorneys general to enforce the consumer protection rules issued by the CFPB.

The Commodity Futures Trading Commission and SEC jointly issued final rules and guidelines, implementing provisions of the Dodd-Frank Act, that required certainCertain regulated entities are required to establish programs to address risks of identity theft. In accordance with these rules, financial institutions and creditors are required to develop and implement a written identity theft prevention program designed to detect, prevent, and mitigate identity theft in connection with certain existing accounts or the opening of new accounts. The rules include guidelines to assist entities in the formulation and maintenance of programs that would satisfy the requirements of the rules. Further, the rules established special requirements for any credit and debit card issuers that are subject to the Commodity Futures Trading Commission and SEC jurisdictions to assess the validity of notifications of changes of address under certain circumstances. WebsterCompany has an Identity Theft Prevention Program in place, which is approved by the Board of Directors, satisfying its compliance with these requirements.

Financial Privacy and Data Security

WebsterThe Company is subject to federal and certain state laws and regulations containing consumer privacy and data protection provisions. The Gramm-Leach-Bliley Act, along with the implemented regulations issued by the federal banking regulatory agencies, governprovisions addressing the treatment of nonpublic personal information about consumers by financial institutions. Subject to certain exceptions, the Financial Privacy Rule of the Gramm-Leach-Bliley Act states that financial institutions are prohibited from disclosing nonpublic personal information about a consumer to nonaffiliated third parties, unless the institution satisfies various notice and opt-out requirements, and the consumer has not elected to opt out of the disclosure. Regardless as to whether a financial institution shares nonpublic personal information, the institution must provide notice of its privacy policies and practices to its consumers, and must follow redisclosure and reuse limitations on any nonpublic personal information it receives from a nonaffiliated financial institution.

In addition, the Safeguards Rule of the Gramm-Leach-Bliley Act requires that each financial institution develops, implements, and maintains a comprehensive written information security program that is inclusive of certain prescribed elements and contains appropriate administrative, technical, and physical safeguards to protect consumer information. The federal banking regulatory agencies have also adopted guidelines for establishing information security standards and programs to protect such information, with an increased focus on risk management and processes related to information technology, and the use of third-parties. The expectation from the federal banking regulatory agencies is that financial institutions have established lines of defense to ensure that their risk management processes address the risks posed by compromised customer credentials, and that the financial institution has sufficient business continuity planning processes to ensure rapid recovery, resumption, and maintenance of operations after a cyber-attack.

On November 29, 2023, the FDIC published a final rule implementing a special assessment for certain banks to recover losses incurred by protecting uninsured depositors of Silicon Valley Bank and Signature Bank upon their failure in March 2023. The final rule also requireslevies a bank service providerspecial assessment to notify each affected banking organization customercertain banks at a quarterly rate of 3.36 basis points based on their uninsured deposits balance reported as soon as possible when the bank service provider determines thatof December 31, 2022. The special assessment is has experienced a computer-security incident that has caused, or is reasonably likely to cause, a material service disruption or degradationbe collected for four or more hours. The final rule becomes effective April 1, 2022, and compliancean anticipated total of eight quarterly assessment periods beginning with the final rule is required by May 1, 2022.

The FDIC may terminate a depository institution's deposit insurance upon a finding that the institution's financial condition is unsafe or unsound, or that the institution has engaged in unsafe and unsound practices, or has violated any applicable law, regulation, rule, hasorder, or condition imposed by the FDIC. The Company’s management is not yet been published,aware of any practice, violation, or condition that might lead to the proposed rules were considered to apply to depository institutions and depository institution holding companies with total consolidated assetstermination of $50 billion or more, which includes Webster effective February 1, 2022.its deposit insurance.

Depositor Preference

The FDIA provides that, inIn the event of the liquidation or other resolution of an insured depository institution, including the Bank, the claims of depositors of the institution (including the claims of the FDIC as subrogee of insured depositors) and certain claims for administrative expenses of the FDIC as a receiver will have priority over other general unsecured claims against the institution. If an insured depository institution fails, claims of insured and uninsured depositors, along with claims of the FDIC, would have priority in payment ahead of unsecured, non-deposit creditors, including the Holding Company, with respect to any extensions of credit they have made to such insured depository institution.

The standard deposit insurance coverage limit is $250,000 per depositor, per FDIC-insured bank, for each account ownership category. The Federal Deposit Insurance Fund is funded mainly through quarterly assessments on insured depository institutions, suchA major focus of U.S. federal governmental policy as Webster Bank, and provides insurance coverage for certain deposits upit relates to this maximum amount.

Financial institutions also are required to establish internal anti-money laundering programs. The effectiveness of a financial institution in combating money laundering activities is a factor to be considered in any application submitted by the financial institution under the Bank Merger Act. WebsterThe Company has in place a Bank Secrecy Act and USA PATRIOT Act compliance program and engages in very few transactions of any kind with foreign financial institutions or foreign persons.

The Sarbanes-Oxley ActBoard of 2002 (Sarbanes-Oxley) implementedGovernors of the Federal Reserve System requires that the amount of any interchange transaction fee that a broad rangedebit card issuer may receive or charge with respect to an electronic debit transaction shall be reasonable and proportional to the cost incurred by the debit card issuer with respect to the transaction, and imposes requirements regarding routing and exclusivity of corporate governanceelectronic debit transactions and accounting measuresthe usability of debit cards across networks. Interchange fees for certain electronic debit transactions are capped at 21 cents plus 0.05% of the transaction value for issuers with over $10 billion in consolidated assets, such as the Bank. The regulation also allows covered debit card issuers to increase corporate responsibility, to providereceive 1 cent per transaction for enhanced penalties for accounting and auditing improprieties at publicly traded companies, and to protect investorsfraud-prevention costs, provided that the debit card issuer meets the fraud-prevention standards established by improving the accuracy and reliability of disclosures under federal securities laws. We areFRB. HSA Bank's interchange revenue is not subject to Sarbanes-Oxley because we are required to file periodic reports with the SEC under the Securities and Exchange Act of 1934. Among other things, Sarbanes-Oxley and/or its implementing regulations have established new membership requirements and additional responsibilities for our audit committee, imposed restrictions on the relationship between us and our outside auditors (including restrictions on the types of non-audit services our auditors may provide to us), imposed additional responsibilities for our external financial statements on our Chief Executive Officer and Chief Financial Officer, expanded the disclosure requirements for our corporate insiders, required our management to evaluate our disclosure controls and procedures and our internal control over financial reporting, and required our auditors to issue a report on our internal control over financial reporting.these rules.

Risk Management Framework

WebsterThe Company defines risk as the potential that events, expected or unexpected, may have an adverse effect on its earnings, capital, or franchise/enterprise value. WebsterThe Company maintains a structured ERMrisk management framework that provides an integrated, forward-looking approach to identifying, prioritizing, and managing keyall risk categories across the organization, including strategic, financial (treasuryorganization: Information, Reputational, Operational, Credit, Compliance, Financial, and accounting), information, credit, operational, compliance, legal,Strategic.

The Chief Executive Officer and reputational risk.

A three line of defense model is utilizedThe Company has adopted the Three Line Model, in which the First Line manages risks, ensures compliance, performs control activities, and works in coordination with regardthe Second Line, who in turn provides additional expertise, support, and tools, and challenges risk management to Webster’s risk management:

Internal Audit, also referred to as the Third Line Function, independently assesses the Company’s risk management on mattersprocesses and controls using methodology developed from professional auditing standards and regulatory guidance. Internal Audit undertakes these responsibilities through periodic reviews of the Company’s business activities, operations, and systems, and through special or retrospective reviews that require remediation.may be specifically requested by the Audit Committee or management. Internal Audit is led by the Chief Audit Executive who reports to the Audit Committee.

Risk identification at the Company is a continuous process and occurs at the transaction, portfolio, and enterprise levels. Approaches used to identify risk include workshops, interviews, process and data analysis, key risk indicators, and risk assessment and data analysis.assessments. Identified risks are assessed based on qualitative and quantitative factors to understand the likelihood that such events will occur and the degree to which they will impact Webster’sthe Company’s ability to achieve its strategic and business objectives if they occur. Risk assessments which are performed by the first or second line of defense functions, evaluate inherent risk (likelihood and impact) and existing controls (control environment) to arrive at residual risk.

Webster’s risk appetite statementThe Company has established and maintains a Risk Appetite Statement which provides guidance to management regarding the nature and level of residual risk that Websterit is willing to take in pursuit of its objectives. The appetite balances a qualitative risk appetite statement, which is approved annually by the Board of Directors, with quantitative metrics in the form of corporate-levelboard-level and business-levelmanagement-level scorecards comprising key risk indicators with established risk tolerance levels. Tolerance levels are periodically reviewed by the respective oversight committees to ensure the alignment of risk appetite with Webster’sthe Company’s risk profile.

WebsterThe Company has established operating and oversight structures including policies, processes, people, and control/oversight systems that support risk-related decision makingdecision-making designed to ensure appropriate authority, accountability, independence, and clarity of roles and responsibilities. The Board of Directors oversees Webster's ERMthe Company's approach to risk management and delegates its authority to Webster'sthe Risk Committee to provide oversight and effective challenge. Along with assisting the Board of Directors in fulfilling its oversight responsibilities, regarding Webster's ERM program, the Risk Committee which is comprised of at least three independent Directors, is responsible for reviewing information regarding Webster'sthe Company's policies, procedures, and practices relating to risk. The Chief Risk Officer has the primary responsibility for the design and implementation of Webster'sthe Company's risk management framework.

The Enterprise Risk Management Committee (ERMC),ERMC, which is chaired by the Chief Risk Officer, is the management committee responsible for overseeing Webster'sthe Company's risk management process, including monitoring the severity, direction, and trend of current and emerging risks relative to business strategies and market conditions, assessing management’s abilitythe quality of risk programs to manage and mitigate risks, and ensuring implementation of Webster'sthe Company's risk appetite and strategy. It also directly oversees strategic risk and reputational risk, and reviews identified emerging risks to Webster. TheTo support the ERMC in its oversight responsibilities, it has sixseven subcommittees: (i) theInformation Risk Committee, (ii) Operational Risk Management Committee, (ii) the(iii) Litigation Risk Management Committee (iv) Credit Risk Management Committee, (iii) the Asset Liability(v) Regulatory Compliance Committee, (iv) the Information Risk Committee, (v) the Regulatory(vi) Bank Secrecy Act and Fraud Oversight Committee, and (vii) the Litigation Risk Management Committee. The ERMC subcommittees aggregate and report risk information using established taxonomies and rating methodologies, which categorize risk data based on shared characteristics in order to assess risks on a common scale, and regularly report and submit their findings to the ERMC and the Risk Committee of the Board of Directors.

Information Risk

Information risk encompasses Information Technology and Information Security risks. Informational Technology risk is comprised of (i) information security risk, or the risk of unauthorized access, use, disclosure, disruption, modification, perusal, inspection, recording, or destruction of electronic or physical data, and (ii) informational technology risk, ordefined as the risk that systems handing information and process flows may not meet quality and efficiency standards in line with industry, customer, and regulatory expectations, or may fail causing outages, or that new systems may not be implemented in a timely manner. Information Security risk is defined as the risk of unauthorized access, use, disclosure, disruption, modification, perusal, inspection, recording, or destruction of electronic or physical data.

The increased use of technology to store and process information, particularly the ability to conduct financial transactions on mobile devices and cloud technologies, exposes Websterthe Company to moderate risk of potential operational disruption or information security incidents, whether caused by deliberate or accidental acts. WebsterThe Company is committed to preventing, detecting, and responding timely to incidents that may impact the confidentiality, integrity, and availability of information assets through its robust information security and technology risk programs, which are managed under the direction of the Chief Information Security Officer and Senior Managing Director of CIO Governance.

CreditReputational Risk

CreditReputational risk is defined as the potential that negative publicity regarding the Company's conduct, business practices, or associations, whether true or not, will adversely affect its revenues, operations, and customer base, or require costly litigation or other defensive measures. Reputational risk of customer or counterparty default due to their lack of willingness ormay also impair the Company's competitiveness by affecting its ability to meetestablish new relationships or continue servicing existing customers. Reputational risk is inherent in all Company's activities, especially when dealing with stakeholders such as customers, counterparties, investors, regulators, colleagues, and communities.

In addition, reputational risk arises when the Company associates its brand with solutions and services offered through outsourced arrangements, negative publicity regarding matters such as unethical or deceptive business practices, violations of laws or regulations, high profile litigation, poor financial obligations. Sourcesperformance, poor execution, or inferior customer service.

Reputational risk is managed through strong corporate governance, risk culture, and a Code of creditEthics. Setting the tone at the top, the Board of Directors and executive leadership actively support risk could include concentrations, deal structure, asset quality,awareness by mandating accurate and collateral values. Webster mitigates credit risk within its loan, investment,timely management information and derivative portfolioscommunication. The Company's ethical standards are reinforced through established credit policies, underwriting guidelines, portfolio management,recruiting, training, and troubled asset monitoring tools in orderperformance management. The Company also maintains strong fair and responsible banking practices, which permeate interactions with clients, vendors, and counterparties. The ERMC provides primary oversight to limit its exposure to default. Credit approval and reporting requirements are also implemented to ensure proper risk identification, decision rationale, risk ratings, and disclosure of policy exceptions. The credit risk management program is led by the Chief Credit Officer along with a team of credit executives who are independent of the loan production and treasury functions.

Operational and Compliance RisksRisk

Operational risk is defined as the risk of loss, resulting from inadequatewhether direct or failed internalindirect, due to the inadequacy or failure of processes people, and systems, human error, or from external events. At Webster,Operational risk encompasses the category of operational risk includes third party, business operations (process), fraud, human capital, model, and physical security. The operational risk management program is predominantly focused on developing and implementing tools for assessing business operations risk (process design, execution, and documentation). Other operational risks associated with people, systems, and external events are managed through a combination of first and second line defense programs under the supervision of the Chief Financial Officer, Chief Information Officer, Chieffollowing risks: Fraud, Third Parties, Human Resources Officer, and Chief Risk Officer. The Operational Risk Management Committee, a subcommittee of the ERMC, oversees and provides credible challenge on operational risks facing the organization, along with mitigation programs and strategies for these risks. In addition, the Operational Risk Management Committee establishes tolerance levels for the most significant operational risks and monitors performance against them. The Director of Enterprise and Operational Risk Management and the Senior Operational Risk Manager serve as co-chairs of the Operational Risk Management Committee, and its members include representatives from the corporate functions and lines of business.

The LitigationCompany mitigates Operational risk through the establishment of an Operational Risk Management Program, which provides for a set of tools to identify, assess, monitor, and report operational risk activities. The program enables the lines of business and corporate functions to establish accountability for performance and execution, and allows for timely and effective management of identified risks, control failures, or other related gap/deficiencies that are reinforced through incentive structures. The Company seeks to control operational risk within an acceptable range, which is determined by the types of businesses in which it engages, and the volume of activity within those lines of business. Control of operational losses depends on identifying the types of transactions and operational risks faced at the enterprise and business level, and ensuring effective internal control processes are in place to mitigate these risks. The Operational Risk Management Committee provides primary oversight to Operational risk as a subcommitteewhole. The Litigation Risk Committee provides primary oversight to Legal risk.

Diversification of the ERMC, oversees Webster's litigationloan portfolio across commercial and industrial, specialty finance, and real estate lending is important in managing credit risk. Accordingly, management aims to actively measure and management concentrations by portfolio, industry sector and specific sub-sectors, geography, single obligor, and other guidelines. The Company is primarily a relationship lender. In addition, the Company will only assume credit risk management. when it can effectively manage from an infrastructure or operational perspective, and it has industry, product, and market expertise.

The primary responsibility of the LitigationCredit Risk Management Committee provides primary oversight to Credit risk.

Compliance risk is to collect and review information on all pending litigation deemed to present materialdefined as the risk to Webstercurrent or anticipated earnings or capital arising from violations of, or non-compliance with, laws, rules, regulations, prescribed practices, internal policies and procedures, or prudent ethical standards. Compliance risk exposes the Company to fines, civil monetary penalties, payment of damages, and the voiding of contracts. The Company's activities subject to overall compliance, consumer protection, and regulatory risk include deposit account management, lending products and services, privacy protections, investment management, and fiduciary services.

Compliance risk is managed through the execution of a comprehensive Compliance Management Program, which is designed to identify and evaluate risks of non-compliance, assess, test, and monitor the effectiveness of internal controls, and report and escalate significant issues. The Regulatory Compliance Committee provides primary oversight to Compliance risk as a wholewhole. The BSA and Fraud Oversight Committee provides primary oversight to Compliance risks specific to the BSA.

Financial risk encompasses Treasury and Accounting risk. Treasury risk includes the risk (i) of capital levels falling below supervisory expectations or anybeing incommensurate with the level of its constituent entities. Other responsibilities include reviewingrisk; (ii) that the value of a security or investment will decrease; (iii) changes in interest rates could contribute to a reduction in earnings and making recommendations regardingnet worth; and (iv) from decreases or changes in funding sources. Accounting risk includes the litigation related standardsrisks that arise from the inability to (i) comply with GAAP and procedures at Websterregulatory laws/guidelines; (ii) ensure a high integrity financial reporting process; and (iii) disclose appropriate information.

Strategic risk is defined as the risk to ensure such do not increase the magnitude for likelihoodCompany's current or projected financial condition, expected returns and resilience arising from the inability to select and execute strategic choices, suboptimal company positioning, ineffective organizational structures, poor implementation of litigationpriorities and initiatives, inadequate risk as well as identifying, monitoring, and reporting on emerging trends in litigation and developmentsmanagement infrastructure, or the lack of responsiveness to changes in the law relatingfinancial services ecosystem and operating environment.

The Company seeks to Webster's conduct of business. General Counsel servesachieve its performance objectives by making management decisions, such as the chairselection of strategic choices, applying planning assumptions, assessing internal capabilities and the external environment, ensuring capital and resources are dedicated to the right priorities, and ensuring effective execution by periodically reviewing specific plans. Strategic risk underscores the need for balance between risk and return, evaluating opportunity against the risk of loss of value.

The long-range strategic planning process ensures that strategic choices and initiatives are viewed with the overarching goal of allocating capital and resources to support strategies that create value for customers and stockholders and sustainably grow economic profit over time. The impact of a strategic plan on the Company's risk appetite and risk profile is evaluated as part of the Litigationstrategic planning process. The long-range strategic planning process is managed by the Corporate Strategy Officer. The ERMC and Risk Management Committee and its members include the Chief Risk Officer, Chief Accounting Officer or Controller, and Chief Financial Officer.provide primary oversight to Strategic risk.

Additional information regarding risks and uncertainties, along withand relevant risk factors that could impact Webster'sthe Company's business, results of operations, or financial condition can be found in Part I - Item 1A. Risk Factors and throughout Part II of this report.

ITEM 1A. RISK FACTORS

Investment in Webster's securitiesWebster stock involves risks and uncertainties, some of which are inherent in the financial services industry and others of which are more specific to our business. The discussion in the paragraphs below addresses the material risks and uncertainties, of which we are currently aware, that could adversely affect our business, results of operations, or financial condition. Before making an investment decision, you should carefully consider the risks and uncertainties together with all of the other information included or incorporated by reference in this report. If any of these events or circumstances actually occurs, our business, results of operations, or financial condition could be significantly impacted.

A failure or breach of our information systems, or those of our third-party vendors and service providers, including as a result of cyber-attacks, could disrupt our businesses, result in the misuse of confidential or proprietary information, damage our reputation, and cause losses.

As a financial institution, we depend on our ability to process, record, and monitor a large number of customer transactions. Accordingly, our operational systems and technology infrastructure must continue to be safeguarded and monitored for potential failures, disruptions, and breakdowns. Our business, financial, accounting, data processing, systems, or other operating systems and facilities, including mobile banking and other recently developed technologies, may stop operating properly or become disabled or compromised as a result of a number of factors that may be beyond our control. For example, there could be sudden increases in customer transaction volume, electrical or telecommunications outages, natural disasters, pandemics, events arising from political or social matters, including terrorist acts and cyber-attacks. cyber-attacks, all of which may contribute to a cybersecurity threat.

Although we have business continuity plans and robust information security proceduresand technology processes and controls in place, we are at risk of cybersecurity threats due to disruptions or failures in the physical infrastructureoperational systems or operating systemstechnology infrastructures that support our businesses and customers, or cyber-attacks or security breaches of the networks, systems, or devices on which customers’ personal information isassets are stored and that they useor are used by customers to access our products and services,services. Any of these incidents could result in customer attrition, regulatory fines, penalties or intervention, reputational damage, reimbursement, or other compensation costs, which could have a materiallymaterial adverse effect on our business strategy, results of operations, andor financial condition.

Additionally, third parties with whom we do business or that facilitate our business activities, including exchanges, clearing houses, financial intermediaries, or vendors that provide services or security solutions for our operations, could also be sources of operational risk and information security risk, to us, including breakdowns or failures of their own systems, capacity constraints, and cyber-attacks.cyber-attacks, each of which could pose a cybersecurity risk.

In recent years, information security risks for financial institutions have risen due to the increased sophistication and activities of organized crime, hackers, terrorists, hostile foreign governments, activists, and other external parties. There have been instances involving financial services and consumer-based companies reporting unauthorized access to, and disclosure of, client or customer information or the destruction or theft of corporate data. There have also been highly publicized cases where hackers have requested ransom-payments in exchange for allowing access to systems and/or not disclosing customer information. In addition, as a result of the COVID-19 pandemic and the related increase in remote working by our personnel and the personnel of other companies, the risk of cyber-attacks, breaches or similar events, whether through our systems or those of third parties on which we rely, has increased.

Although Webster has not experienced any material losses relating to cyber-attacks or other information security breaches, there can be no assurance that we will not suffer such losses in the future. Our inherent risk and exposure to theseinformation security matters remains heightened, and as a result, the continued development and enhancement of our controls, processes, and practices designed to protect and facilitate the recovery of ouroperational systems, computers, software, data, and networks from attack, damage, or unauthorized access remains a high priority for us. While we have purchased network and privacy liability insurance coverage, (whichwhich includes digital asset loss, business interruption loss, network security liability, privacy liability, network extortion, and data breach coverage), there can be no assurance thatcoverage, such insurance willmay not cover any and all actual losses. As cybercybersecurity threats and related regulations continue to evolve, we may be required to expend significant additional resources to modify our protective measures or to investigate and remediate any information security vulnerabilities.

Our allowance for credit losses on loans and leases may be insufficient.

We maintain an ACL on loans and leases, which is a reserve established through a provision for credit losses charged to expense, that represents management’s best estimate of probableexpected credit losses over the life of the loan or lease within our existing portfolio. The determination of the appropriate level of ACL on loans and leases inherently involves a high degree of subjectivity and requires us to make significant estimates of current credit risks and trends using existing qualitative and quantitative information and reasonable supportable forecasts of future economic conditions, all of which may undergo frequent and material changes. Changes in economic conditions affecting borrowers, the softening of macroeconomic variables that we are more susceptible to, along with new information regarding existing loans, identification of additional problems loans, and other factors, both within and outside our control, may indicate the need for an increase in the ACL on loans and leases.

Bank regulatory agencies also periodically review our ACL and may require an increase in the provision for credit losses or the recognition of additional loan charge-offs, based on judgments different than those of management. In addition, if charge-offs in future periods exceed the ACL, we may need, depending on an analysis of the adequacy of the ACL, additional provisions to increase the ACL. An increase in the ACL would result in a decrease in net income, and could have a material adverse effect on our financial condition, results of operations, and regulatory capital position.

The soundness of other financial institutions could adversely affect our business.

Our ability to engage in routine funding transactions could be adversely affected by the actions and commercial soundness of other financial institutions. Financial services institutions are interrelated as a result of trading, clearing, counterparty, or other relationships. We have exposure to many different industries and counterparties, and we routinely execute transactions with counterparties in the financial services industry, including brokers and dealers, commercial banks, investment banks, mutual and hedge funds, and other institutional clients. As a result, defaults by, or even rumors or questions about one or more financial services companies, or the financial services industry in general, have led, and may further lead to market-wide liquidity problems and could lead to losses or defaults by us or by other institutions. Many of these transactions could expose us to credit risk in the event of default of our counterparty or client. In addition, our credit risk may be impacted if the collateral held by us cannot be realized or is liquidated at prices not sufficient to recover the full amount of the financial instrument’s exposure due to us. There is no assurance that anyAny such losses would notcould materially or adversely affect our business, financial condition, or results of operations.

We are subject to the risk of default by our counterparties and clients, particularly with respect to certain types of commercial loans.

Many of our routine transactions expose us to credit risk in the event of default of our counterparties or clients. Our credit risk may be exacerbated when the collateral held cannot be realized or is liquidated at prices insufficient to cover the full amount of the loan or derivative exposure to us. In deciding whether to extend credit or enter into other transactions, we may rely on information furnished by or on behalf of counterparties and clients, including financial statements, credit reports, and other information. We may also rely on representations of those counterparties, clients, or other third parties, such as independent auditors, as to the accuracy and completeness of that information. The inaccuracy of that information or those representationrepresentations affects our ability to accurately evaluate the default risk of a counterparty or client accurately and could cause us to enter into unfavorable transactions, which could have a material adverse effect on our financial condition and results of operations.

In addition, we consider our commercial real estate loans and commercial and industrial loans to be higher risk categories in our loan portfolio because these loans are particularly sensitive to economic conditions. Commercial real estate loans generally have large balances and can be significantly affected by adverse economic conditions in the economy that are outside of the borrower’s control because payments on such loans typically depend on the successful operation and management of the businesses that hold the loans. In the case of commercial and industrial loans, related collateral often consists of accounts receivable, inventory, and equipment. This type of collateral typically does not yield substantial recovery in the event of foreclosure and may rapidly deteriorate, disappear, or be misdirected in advance of foreclosure. In addition, many of our commercial real estate and commercial and industrial borrowers have more than one loan outstanding with us. Consequently, an adverse development with respect to one loan or one credit relationship may expose us to significantly greater risk of loss. The risks associated with these types of loans could have a significant negative affect on our earnings in any quarter. In 2023, higher interest rates and inflation affected the profitability of new commercial real estate developments, the feasibility of some projects, and the volume of commercial real estate investments. The commercial real estate market has experienced increased property vacancies and declining rent growth.

We are subject to extensive government regulation and supervision, which may interfere with our ability to conduct our business operations.

We are subject to extensive federal and applicable state regulation and supervision, primarily through Webster Bank and certain non-bank subsidiaries. Banking regulations are primarily intended to protect depositors, the Federal Deposit Insurance Fund,FDIF, and the safety and soundness of the U.S banking system as a whole, not shareholders.stockholders. These regulations affect our lending practices, capital structure, investment practices, dividend policy, and growth, among other things. Congress and federal regulatory agencies continuously review banking laws, regulations, and policies for possible changes, and proposed changes are to be expected fromif there is a change in the current Administration.office of the President of the U.S. Changes to statutes, regulations, or regulatory policies, including changes in interpretation or implementation thereof, could affect us in substantial and unpredictable ways. For example, such changes could subject us to additional costs, limit the types of financial services and products we may offer, and restrict what we are able to charge for certain banking services. Failure to comply with laws, regulations, or policies could result in sanctions by regulatory agencies, civil penalties, and reputation damage, which could have a material adverse effect on our business, financial condition, and results of operations. While we have policies and procedures designed to prevent these types of violations, there can be no assurance that such violations will not occur.

We face risks related to the adoption of future legislation and potential changes in federal regulatory agency leadership, policies, and priorities.

UnderAs a result of the current Administration, financial institutions have recently become subject to increased scrutiny and therefore,bank failures in 2023, it is expected that the bakingbanking sector will be subject to more extensive legal and regulatory requirements within the next few years than under the prior presidential and congressional regime.years. In addition, changes in key personnel at the regulatory agencies, including the federal banking regulators, may result in differing interpretations of existing rules and guidelines, including more stringent enforcement and more severe penalties than previously.

Changes in federal, state, or local tax laws may negatively impact our financial performance.

We are subject to changes in tax laws that could increase our effective tax rates or cause an increase or decrease in our income tax liabilities. These law changes may be retroactive to previous periods and as a result, could negatively impact our current and future financial performance. On September 13, 2021, the House Ways and Means Committee released their proposed tax reform legislation, which includes an increase in the federal corporate tax rate from 21% to 26.5% for corporations earning more than $5 million, and alters selected provisions

We are subject to examinations and challenges by taxing authorities.

We are subject to federal and applicable state and local income tax regulations. Income tax regulations are often complex and require interpretation. In the normal course of business, we are routinely subject to examinations and challenges from federal and applicable state and local taxing authorities regarding the amount of taxes due in connection with investments we have made and the businesses in which we have engaged. Recently, federal and state and local taxing authorities have been increasingly aggressive in challenging tax positions taken by financial institutions. These tax positions may relate to compliance, sales and use, franchise, gross receipts, payroll, property, and income tax issues such as tax base, apportionment, and tax credit planning. The challenges made by taxing authorities may result in adjustments to the timing or amount of taxable income or deductions, or the allocation of income among tax jurisdictions. If any such challenges are made and are not resolved in our favor, they could have a material adverse effect on our financial condition and results of operations.

The enactment of future health care reform affecting HSAs at the federal or state level may affect our HSA Bank division as a bank custodian of HSAs. We cannot predict if any such reforms will occur, ultimately become law, or if enacted, what the terms or regulations promulgated pursuant to such laws will be. Any health care reform enacted may be phased in over a number of years, but could, with respect to the operations of HSA Bank, reduce revenues, increase costs, and require us to revise the ways in which we conduct business or put us at risk for loss of business. In addition, our results of operations, financial position, and cash flows could be materially adversely affected by such changes.

Third parties perform significant operational services on our behalf. For instance, we depend on our vendor-provided core banking processing systems to process a large number of increasingly complex transactions on a daily basis. Accordingly, we are exposed toDifficult conditions or volatility in the risk that vendorsU.S. economy and third-party service providers might not perform in accordance with their contracts or service agreements, whether due to changes in their organizational structure, strategic focus, support for existing products, technology, services, financial condition, or for any other reason. Their failure to perform could be disruptive to our operations, which couldmarkets may have a materially adverse impact on our business, results of operations, and financial condition. Although we require third-party service providers to have business continuity and disaster recovery plans that are aligned with our plans, we cannot be assured that such plans will operate successfully or in a timely manner so as to prevent any such material adverse impact.

The risks associated with our business become more acute in periods of a slowing economy or slow growth. In particular, we could face some of the transition could:following risks in connection with a downturn in the U.S. economic and market environment:

The U.S. economy and financial markets have experienced volatility in recent years and may continue to do so in the foreseeable future. Robust demand, labor shortages and supply chain constraints has led to persistent inflationary pressures throughout the economy. In response to these inflationary pressures, the FRB has raised benchmark interest rates receivedin recent months and may continue to raise interest rates in response to economic conditions, particularly a continued high rate of inflation. Amidst these uncertainties, financial markets have continued to experience volatility. If financial markets remain volatile or paid onif the revenues and expenses associated withaforementioned conditions result in further economic stress or recession, the performance of various segments of our business, including the value of our LIBOR-based assetsinvestment securities portfolio, could be significantly impacted.

Inflation rose sharply throughout 2022, and liabilities, orcontinued to rise through the valuethird quarter of 2023, at levels not seen for over 40 years. Prolonged periods of inflation may further impact our profitability by negatively impacting our fixed costs and expenses, including increasing funding costs and expense related to talent acquisition and retention. If significant inflation continues, our business could be negatively affected by, among other securities or financial arrangements, given LIBOR's rolethings, increased default rates leading to credit losses which could decrease our appetite for new credit extensions. In addition, a prolonged period of inflation could cause an increase in determining market interest rates globally;

The transition away from LIBOR to SOFR will requireOur profitability depends significantly on local economic conditions in the transition to or development of appropriate systems, models, and analytics to effectively transition our risk management and other processes from LIBOR-based products to those based on SOFR. Webster has developed a Working Group, Steering Committee, and LIBOR transition plan aligned with regulatory guidance and ARRC best practices and is actively working to develop processes, systems, and personnel to support this transition. Timelines and priorities include assessing the impact on our customers, as well as assessing system requirements for operational processes. There can be no guarantee that our efforts will successfully mitigate the operational risks associated with the transition away from LIBOR to SOFR as the alternative reference rate. The effect of these developments on our funding costs, loan, investment, and securities portfolios is uncertain and could adversely impact our business and increase operational and legal costs.

The naturesuccess of our business ordinarily resultsalso depends on the general economic conditions of the significant markets in certain legal proceedingswhich we operate, particularly Connecticut, Massachusetts, Rhode Island, New York, and claims. Whether claimsNew Jersey. Difficult economic conditions or legal actions are foundedadverse changes in such local markets, whether caused by inflation, recession, unemployment, changes in housing or unfounded, if such claims and legal actions are not resolved in a manner favorable to us, they may result in significant financial liability and/securities markets, or adversely affect how the market perceives us, the products and services we offer, as well as customerother factors, could reduce demand for those productsour loans and services. Anydeposits, increase problem loans and charge-offs, cause a decline in the value of collateral securing loans, and otherwise negatively affect our performance and financial liability or reputation damage couldcondition.

Changes in interest rates and spreads may have a materialmaterially adverse effect on our business, financial condition, and results of operations.

In a rising interest rate environment, which has occurred recently, competition for cost-effective deposits increases, making it more costly for the Bank to fund loan growth. Rapid and unexpected volatility in turn,interest rates creates additional uncertainty and potential for adverse financial effects. There can be no assurance that the Bank will not be materially adversely affected by future changes in interest rates.

Although management believes that it has designed and implemented effective asset and liability management strategies to reduce the potential effects of changes in interest rates on our financial condition and results of operations, interest rates are affected by many factors outside of our control and any unexpected or prolonged period of interest rate changes could have a material adverse effect on our financial condition and results of operations. Further, our interest rate modeling techniques and assumption may not fully predict or capture the impact of actual interest rate changes on net interest income.

As market interest rates have increased, we have experienced significant unrealized losses on our available-for-sale securities portfolio. Unrealized losses related to available-for-sale securities are reflected in (AOCL) in our Consolidated Balance Sheets and reduce the level of our tangible common equity. Such unrealized losses do not affect our regulatory capital ratios. We assessactively monitor our liabilitiesavailable-for-sale securities portfolio and contingencies in connection with outstanding legal proceedings and certain threatened claims and assessments using the latest and most reliable information. For matters identified wherebelieve that it is probablenot more likely than not that wethe Company will incurbe required to sell securities before the recovery of the amortized cost basis. Nonetheless, our access to liquidity sources, financial condition, and results of operations, could be affected by unrealized losses if securities must be sold at a loss. Additionally, significant unrealized losses could negatively impact market and/or customer perceptions of the Company, which could lead to a loss of depositor confidence and result in an increase in withdrawals, particularly among those with uninsured deposits.

The proportion of our deposit account balances that exceed the amount can be reasonably estimated, we will establishFDIC insurance limits may expose the Bank to enhanced liquidity risk in times of financial distress.

In its assessment of the failures of Silicon Valley Bank and Signature Bank in the first quarter of 2023, the FDIC concluded that a significant contributing factor to the failures of these institutions was the proportion of deposits held by each institution that exceeded FDIC insurance limits. The FDIC similarly concluded that an accrual foroverreliance on uninsured deposits contributed to the loss. Once established,subsequent failure of First Republic Bank in the accrual is then adjusted, as needed,second quarter of 2023.

In response to reflect any relevant developments. However, the actual costfailures of an outstanding legal proceeding or threatened claimSilicon Valley Bank, Signature Bank, and assessment, may turn out to be substantially higher thanFirst Republic Bank, many large depositors across the amount accrued by management.

Higher mortgage rates and for personal injury or property damage. In addition, environmental contamination could materially reduce the affected property’s value or limitlow inventory adversely impact our ability to useoriginate or sellrefinance residential mortgage loans.

The residential mortgage lending business is sensitive to changes in interest rates, especially long-term interest rates. Lower interest rates generally increase the affected property. Although wevolume of mortgage originations and refinancing, while higher interest rates generally cause that volume to decrease. Therefore, our residential mortgage performance is typically correlated to fluctuations in interest rates. The 10-year Treasury rate averaged 3.96% during 2023, which is 251 basis points higher than average rates experienced during 2021. The sustained higher rates experienced throughout 2023 and 2022 have policiesnegatively impacted the mortgage market, including our loan origination volume and procedures to perform environmental reviews prior to lending against or initiating any foreclosure action on real property, these reviews may not be sufficient to detect all potential environmental hazards. Further, if we are the owner or former owner of a contaminated site, we may be subject to common law claims based on damagesrefinancing activity. Adverse market conditions, including increased volatility, changes in interest rates and costs incurred by others due to environmental contamination emanating from the property. These remediation costsmortgage spreads, and liabilitiesreduced market demand could result in greater risk in retaining mortgage loans. A reduction in our residential mortgage origination and refinancing volume could have a materialmaterially adverse effect on our financial condition and results of operations.

Our stock price can be volatile.

Stock price volatility may make it more difficult for shareholdersstockholders to resell their common stock when they want and at prices that they find attractive. Our stock price can fluctuate significantly in response to a variety of factors including, among other things:

General market fluctuations, including real or anticipated changes in the strength of the economy, industry factors and general economic and political conditions and events, such as economic slowdowns or recessions, interest rate changes, credit loss trends, among other factors, could also cause Webster'sour stock price to decrease regardless of operating results.

The effectsHolding Company may not pay dividends to stockholders if it is not able to receive dividends from its subsidiary, Webster Bank.

The Holding Company is a separate and distinct legal entity from the Bank and its non-banking subsidiaries. A substantial portion of COVID-19the Holding Company’s revenues comes from dividends paid by the Bank. These dividends are the principal source of funds to pay dividends to common and preferred stockholders. Whether the Bank is able to pay dividends depends on its ability to generate sufficient net income and meet certain regulatory requirements, and the amount of such dividends may then be limited by federal and state laws. In the event the Bank is unable to pay the Holding Company dividends, we may not be able to pay dividends to our common and preferred stockholders.

The preparation of the Company's Consolidated Financial Statements, and the accompanying Notes thereto, in conformity with GAAP requires management to make difficult, subjective, or complex judgments about matters that are uncertain, which include assumptions and estimates of current risks and future trends, all of which may undergo material changes. Materially different amounts could be reported under different conditions or using different assumptions and estimates. Because of the inherent uncertainty of estimates involved in preparing our financial statements, we may be required to significantly adjust the financial statements as actual events unfold, which could have a material adverse effect on our financial condition and results of operations. Material estimates subject to change include, among other items, the allowance for credit losses, the carrying value of goodwill or other intangible assets, the fair value estimates of certain assets and liabilities, and the realization of deferred tax assets and liabilities.

We may not be able to attract and retain skilled people, and the loss of key employees or the inability to maintain appropriate staffing may disrupt relationships with customers and adversely impacted,impact our business.

Our success depends, in large part, on our ability to attract, develop, compensate, motivate, and retain skilled people, including executives, managers, and other key employees with the skills and know-how necessary to run our business. The failure to attract or retain talented executives, managers, and employees with diverse backgrounds and experiences, or the loss of certain executives, managers, and key employees, could have a material adverse impact on our business. These risks may be heightened when U.S. labor markets, or segments of those markets, are especially competitive.

Further, our business is primarily relationship-driven, in that many of our key employees have extensive customer relationships. The loss of a key employee with such customer relationships may lead to the loss of business if the customers were to follow that employee to a competitor or otherwise choose to transition to another financial services provider. While we believe that our relationships with key personnel are good, we cannot guarantee that all of our key personnel will likelyremain with our organization.

The financial services industry could become even more competitive as a result of legislative and regulatory changes, and continued consolidation. In addition, as customer preferences and expectations continue to evolve, technology has lowered barriers to entry and has made it possible for non-banks to offer products and services traditionally provided by banks. The financial services industry also faces increasing competitive pressure from the introduction of disruptive new technologies, such as blockchain and digital payments, often by non-traditional competitors and financial technology companies. Among other things, technology and other changes are allowing customers to complete financial transactions that historically have involved banks at one or both ends of the transaction.

Failure to keep pace with and adapt to technological change could adversely impact our business.

The financial services industry is continually undergoing rapid technological change with frequent introductions of new technology-driven products and services and the use of artificial intelligence. These new technologies may be superior to, or render obsolete, the technologies currently used in our products and services. Our future success depends, in part, upon our ability to address the needs of our customers by using technology and information to provide products and services that will satisfy customer demands, as well as to create additional efficiencies in our operations. Many of our competitors have substantially greater resources to invest in technological improvements because of their larger size and available capital. Developing or acquiring new technologies and incorporating them into our products and services may require significant investment, take considerable time, and ultimately may not be successful. We cannot predict which technological developments or innovations will become widely adopted or how those technologies may be regulated. We also may not be able to effectively market new technology-driven products and services to our customers. Failure to successfully keep pace with and adapt to technological change affecting the financial services industry could have a material adverse impact on our business and, in turn, our financial condition and results of operations.

The COVID-19 pandemic has severely disrupted economic activityloss of key partnerships could adversely affect our HSA Bank division and deposit administration activities.

Our HSA Bank division, the sweep deposit management program that we acquired with interLINK in January 2023, and the U.S.insurance claim settlement funds platform that we acquired in with Ametros in January 2024, all rely on partnerships with either health insurance carriers or other financial services partners to maximize our distribution model. To the extent that we fail to maintain such partnerships, which may be due to mergers and/or acquisitions and continuesmay result in changes to cause disruption both worldwidetheir business processes, or our partners choosing to align with competitors or develop their own solutions, our business, financial condition, and in the markets in which we operate. The extentresults of these impacts will depend on future developments, including among others, governmental, regulatory, and private sector actions and responses, actions taken to contain or prevent further spread, the continued emergenceoperations could be adversely affected. In particular, health plan partners who provide high deductible health plan options are a significant source of new and highly contagious variantsexisting HSA holders. If these health plan partners or other partners choose to align with our competitors or develop their own solutions, our business, financial condition, and results of operations could be adversely affected.

There is significant competition for our existing partners, and our failure to retain our existing larger partner relationships upon expiration or the virus, and the use and effectivenessearlier loss of vaccines and other treatments, each of which cannot be predicted with certainty.

None.

Effective January 31, 2022, in connection with its merger with Sterling, Webster relocated itsThe Company's corporate headquarters from Waterbury tois located in Stamford, Connecticut. This leased facility houses the Company’s primary executive and administrative functions and serves as the principal banking headquarters of Websterthe Bank. Additional administrativecorporate functions are housed in owned facilities in Waterbury, and New Britain, Connecticut, and in leased facilities in Southington, Connecticut,Hartford, and New Haven, Connecticut; Providence, Rhode Island; Boston, Massachusetts; Jericho, Pearl River, White Plains, and New York, New York. WebsterYork; and Paramus, New Jersey. The Company considers its properties to be suitable and adequate for its current business needs.

Additional information regarding Webster'sthe Company's owned facilities and leased locations can be found within Note 7:6: Premises and Equipment and Note 8:7: Leasing, respectively, in the Notes to the Consolidated Financial Statements contained in
Part II - Item 8. Financial Statements and Supplementary Data, respectively.Data.

Information regarding legal proceedings can be found within Note 23: Commitments and Contingencies in the Notes to Consolidated Financial Statements contained in Part II - Item 8. Financial Statements and Supplementary Data, which is incorporated herein by reference.

Not applicableapplicable.

PART II

Webster Financial Corporation'sThe Company's common stock is traded on the NYSE under the symbol WBS. At February 18, 2022,23, 2024, there were 7,526 shareholders
8,352 holders of record, as determined by Broadridge Corporate Issuer Solutions, Inc., Webster'sthe Company's transfer agent.

Information regarding dividend restrictions can be found under the section captioned "Supervision and Regulation" in Part I - Item 1. Business and within Note 15:14: Regulatory Capital and Restrictions in the Notes to the Consolidated Financial Statements contained in Part II - Item 8. Financial Statements and Supplementary Data, which are incorporated herein by reference.

There were no unregistered securities sold by Websterthe Company during the three year period ended December 31, 2021.2023.

The following table provides information with respect to any purchase of equity securities for Webster Financial Corporation’sthe Company’s common stock made by or on behalf of Websterthe Company or any “affiliated purchaser,” as defined in Rule 10b-18(a)(3) under the Securities Exchange Act of 1934, during the three months ended December 31, 2021:2023:

Performance Graph

The performance graph compares the yearly percentage change in Webster'sthe Company's cumulative total shareholderstockholder return on its common stock over the last five fiscal years to the cumulative total return of (i) the Standard & Poor’s 500 Index (S&P 500 Index) and (ii) the Keefe, Bruyette & Woods Regional Banking Index (KRX Index), assuming the reinvestment of dividends and an initial investment of $100 on December 31, 2016.2018. The KRX Index is a market-capitalization weighted index comprised of 50 regional banks or thrifts located throughout the United States.

Cumulative total shareholderstockholder return is measured by dividing the sum of the cumulative amount of dividends for the measurement period, assuming dividend reinvestment, and the difference between the share price at the end and the beginning of the measurement period, by the share price at the beginning of the measurement period. The plotted points represent the cumulative total shareholderstockholder return on the last trading day of the fiscal year indicated. Historical performance shown on the graph is not necessarily indicative of future performance.

Throughout 2023, the banking legal,industry experienced significant volatility with multiple high-profile bank failures and consulting,concerns related to liquidity, deposit outflows, unrealized losses on securities, the credit quality of commercial real estate portfolios, and employee severance and retention costs. The combined company has approximately $65 billioneroding consumer confidence in assets, $44 billion in loans, and $53 billion inthe banking system.

Despite these negative industry developments, the Company's total deposits based on balances at December 31, 20212023, were $60.8 billion, representing a net $6.8 billion increase as compared to its total deposits at December 31, 2022. The Holding Company's and operates 202 financial centers across the Northeast region.

Additional information regarding Webster's mergers and acquisitionsregulatory capital ratios can be found in Part I under the section captioned "Supervision and Regulation" contained in Item 1. Business and within Note 3: Business Developments14: Regulatory Capital and Restrictions in the Notes to Consolidated Financial Statements contained in Part II - Item 8. Financial Statements and Supplementary Data.

DuringOn January 24, 2024, the fourth quarterBank acquired Ametros, a custodian and administrator of 2020,medical funds from insurance claims settlements that helps individuals manage their ongoing medical care through its CareGuard service and proprietary technology platform. The Company believes that the Company launchedacquisition will provide a strategic plan to drive incremental revenuefast-growing source of low-cost and cost savings measures across the organization through the consolidationlong-duration deposits, new sources of banking centersnon-interest income, and corporate facilities, process automation, ancillary spend reduction,enhance its employee benefit and other organizational actions. At December 31, 2021, key project milestones have been completed, including the completion of all planned banking center closures, the delivery of a new digital onboarding platform for retail consumers, an investment in foundational technology modernization, and the realignment of certain business banking and investment service operations across the Company's reportable segments. These initiatives collectively contributed to the realization of operational efficiencies and ancillary spend reductions in 2021. As a result of Webster's merger with Sterling, various strategic initiatives were paused in 2021 but are expected to still be delivered throughout the merger integration period. In the second quarter of 2022, the Company plans to launch a new HSA Bank digital experience for employers, with consumers to follow thereafter.

Additional information regarding the financial statement impactacquisition of these strategic initiatives, as well as further details specific to the Company's segment changes,Ametros can be found in Part II within Note 3: Business Developments and Note 21: Segment Reporting, respectively,25: Subsequent Events in the Notes to Consolidated Financial Statements contained in Part II - Item 8. Financial Statements and Supplementary Data,Data.

On January 11, 2023, the Bank acquired interLINK, a technology-enabled deposit management platform that administers over $9 billion of deposits from FDIC-insured cash sweep programs between banks and broker/dealers and clearing firms. The acquisition expanded the section captioned "Segment Reporting"Company's core deposit funding sources and scalable liquidity and added another technology-enabled channel to its already differentiated, omnichannel deposit gathering capabilities. At December 31, 2023, interLINK provided the Company with an additional $5.7 billion of money market deposits.

Additional information regarding the acquisition of interLINK can be found within Note 2: Mergers and Acquisitions in the Notes to Consolidated Financial Statements contained elsewhere in Part II - Item 7. Management's Discussion8. Financial Statements and AnalysisSupplementary Data.

On January 31, 2022, the Company completed its merger with Sterling. In July 2023, the Company executed and completed its transition to a unified core operating system (“core conversion”). This involved changing and/or merging the legacy Webster and legacy Sterling platforms and software that had historically been used to process the Bank's daily operating activities, as well as other internal systems and applications. The completion of Financial Condition and Results of Operations.

During 2021, the United States' economy began to recover fromyear ended December 31, 2023, the COVID-19 pandemic,Company recorded merger-related expenses, primarily as the increased availability and distribution of COVID-19 vaccines allowed for the easing of restrictive measures that had previously been imposed by state and local governments. Despite these improvements, certain adverse effects of the COVID-19 pandemic may continue to impact the macroeconomic environment for some time, including labor shortages, disruptions to global supply chains, and rising inflationary pressures. These effects are anticipated to continue throughout 2022 but remain uncertain and difficult to predict, including any impact to Webster's business, liquidity, financial condition, and results of operations.

Additional information regarding the COVID-19 pandemic. However,merger with Sterling can be found within Note 2: Mergers and Acquisitions in responsethe Notes to inflationary pressures, the FRB has announced that it will begin to taper its purchaseConsolidated Financial Statements contained in Part II - Item 8. Financial Statements and Supplementary Data.

The non-GAAP financial measures identified in the preceding table provide both management and investors with information useful in understanding Webster'sthe Company's financial position, operating results of operations, the strength of its capital position, and overall business performance. These non-GAAP financial measures are used by management for performance measurement purposes, as well as for internal planning and forecasting, purposes, as well asand by securities analysts, investors, and other interested parties to assess peer company operating performance. Management believes that this presentation, together with the accompanying reconciliations, provides investors with a more complete understanding of the factors and trends affecting the Company's business and allows investors to view its performance in a similar manner.

Tangible book value per common share represents shareholders’stockholders’ equity less preferred stock and goodwill and other intangible assets (tangible common equity) divided by common shares outstanding at the end of the reporting period. The tangible common equity ratio represents shareholders’tangible common equity less preferred stock, goodwill, and other intangible assets, divided by total assets less goodwill and other intangible assets.assets (tangible assets). Both of these measures are used by management to evaluate the strength of the Company's capital position. The annualized return on average tangible common shareholders'stockholders' equity is calculated using the Company's net income available to common shareholders,stockholders, adjusted for the annualized tax-effected amortization of intangible assets, as a percentage of average shareholders’ equity less average preferred stock, average goodwill, and average other intangible assets.tangible common equity. This measure is used by management to assess Webster'sthe Company's performance against its peer financial institutions. The efficiency ratio, which represents the costs expended to generate a dollar of revenue, is calculated excluding certain non-operational items in order to measure how well the Company is managing its recurring operating expenses.

These non-GAAP financial measures should not be considered a substitute for GAAP basis financial measures. Because
non-GAAP financial measures are not standardized, it may not be possible to compare these with other companies that present financial measures having the same or similar names.

The following tables reconcile non-GAAP financial measures to the most comparable financial measures defined by GAAP:

Net interest income is Webster'sthe Company's primary source of revenue, representing 73.6%, 75.8%88.1%, and 77.0%82.2% of total revenues for the years ended December 31, 2021, 2020,2023, and 2019, respectively, and2022, respectively. Net interest income is the difference between interest income on
interest-earning assets such as(i.e., loans and leases and investment securities,securities) and interest expense on interest-bearing liabilities such as
(i.e., deposits and borrowings,borrowings), which are used to fund interest-earningsinterest-earning assets and other activities. Net interest margin is calculated as the ratio of tax-equivalentFTE net interest income to average interest-earning assets. Tax-equivalent

Net interest income, net interest margin, yields, and ratios on an FTE basis are considered non-GAAP financial measures, and are used by management to evaluate the comparability of the Company's revenue arising from both taxable and non-taxable sources. FTE adjustments are determined assuming a statutory federal income tax rate of 21%.

Net interest income and net interest margin are influenced by the volume and mix of interest-earning assets and interest-bearing liabilities, changes in interest rate levels, re-pricing frequencies, contractual maturities, prepayment behavior, and the use of interest rate derivative financial instruments. These factors are affected by changes in economic conditions which in turn, impacts monetary policies, competition for loans and deposits, as well as the extent of interest lost on non-performing assets.

NetGiven the merger with Sterling on January 31, 2022, net interest income increased $9.7 million, or 1.1%, from $891.4 million for the year ended December 31, 20202022, does not reflect a full year of combined average balances and combined average yields/rates when compared to $901.1 million for the year ended December 31, 2021.2023. The increase is primarily attributedtiming of the Sterling merger was a contributing factor to funding optimization and balance sheet growththe year over year change in the continued low interest rate environment. On a fully tax-equivalent basis, netmajority of the Company's interest-earning assets and interest-bearing liabilities, in addition to the drivers that are discussed in more detail below.

Net interest income increased $9.3 million from 2020 to 2021.

Average total interest-earning assets increased $8.3 billion, or 14.0%, from $59.2 billion for the year ended December 31, 2022, to $67.5 billion for the year ended December 31, 2023, primarily due to increases of $0.2$6.8 billion, $0.6$1.0 billion, $0.3 billion, and $1.3$0.1 billion in average loans and leases, taxable and non-taxableaverage interest-bearing deposits, average total investment securities, and interest-bearing deposits held at theaverage FHLB and FRB stock, respectively. The average yield on interest-earning assets decreased 40increased 151 basis points from 3.37% during 20203.91% for the year ended December 31, 2022, to 2.97% during 2021,5.42% for the year ended December 31, 2023, primarily due to lower market rates,the higher interest rate environment, partially offset by the aforementioned increases in average earning balances.lower purchase accounting accretion on interest-earning assets that were acquired from Sterling.

Average interest-bearing liabilitiesloans and leases increased $1.8$6.8 billion, or 6.4%15.7%, from $28.6$43.8 billion for the year ended December 31, 20202022, to $30.4$50.6 billion for the year ended December 31, 2021,2023, primarily due to anorganic loan growth. At December 31, 2023, and 2022, average loans and leases comprised 75.0% and 73.9% of average total interest-earning assets, respectively. The average yield on loans and leases increased 165 basis points from 4.50% for the year ended December 31, 2022, to 6.15% for the year ended December 31, 2023, primarily due to the higher interest rate environment, partially offset by lower purchase accounting accretion on loans and leases that were acquired from Sterling.

Average FHLB and FRB stock increased $0.1 billion, or 41.1%, from $0.3 billion for the year ended December 31, 2022, to $0.4 billion for the year ended December 31, 2023, primarily due to the additional FHLB stock investment required as a result of the increase in average FHLB advances. At December 31, 2023, and 2022, average FHLB and FRB stock comprised 0.6% and 0.5% of $3.2total average interest-earning assets, respectively. The average yield on FHLB and FRB stock increased 303 basis points from 3.03% for the year ended December 31, 2022, to 6.06% for the year ended December 31, 2023, primarily due to the higher interest rate environment.

Average total interest-bearing liabilities increased $8.1 billion, or 14.4%, from $55.9 billion for the year ended December 31, 2022, to $64.0 billion for the year ended December 31, 2023, primarily due to increases of $6.4 billion and $2.3 billion in average total deposits and average FHLB advances, respectively, partially offset by decreases of $0.7$0.4 billion, and $0.6$0.3 billion in average federal funds purchased and FHLB advances,average securities sold under agreements to repurchase, respectively. The average rate on interest-bearing liabilities decreased 25increased 157 basis points from 0.39% during 20200.45% for the year ended December 31, 2022, to 0.14% during 2021,2.02% for the year ended December 31, 2023, primarily due to borrowings mixthe higher interest rate environment.

Average total deposits increased $6.4 billion, or 12.4%, from $51.8 billion for the year ended December 31, 2022, to $58.2 billion for the year ended December 31, 2023, reflecting an increase of $7.7 billion in interest-bearing deposits, partially offset by a decrease of $1.3 billion in non-interest-bearing deposits. The overall increase in deposits was primarily due to the acquisition of interLINK, as well as time deposit and HSA deposit growth, partially offset by decreases in non-interest-bearing and savings deposits. The decreases in non-interest bearing and savings deposits, and the increase in time deposits, were driven by increased market interest rates as customers sought higher yielding deposit products. December 31, 2023, and 2022, average total deposits comprised 91.1% and 92.7% of average total interest-bearing liabilities, respectively. The average rate on deposits increased 148 basis points from 0.27% for the year ended December 31, 2022, to 1.75% for the year ended December 31, 2023, primarily due to the higher interest rate environment and growth in higher costing deposit products. Average higher cost time deposits as a percentage of average total interest-bearing deposits increased from 7.3% for the year ended December 31, 2022, to 14.0% for the year ended December 31, 2023, primarily due to a shift in customer preferences from lower market rates.rate checking and savings products into higher rate certificates of deposit products.

The following table summarizes daily average balances, interest, and average yield/rate by major category, and net interest margin on a fully tax-equivalentan FTE basis: