Hartford Business Journal

9 HARTFORDBUSINESS.COM | FEBRUARY 28, 2022 Ciulla: Scale key to Webster Bank-Sterling merger as banks face major digital investment pressures By Greg Bordonaro gbordonaro@hartfordbusiness.com J ohn Ciulla is now overseeing the largest federally-insured bank headquartered in Connecticut. And soon, the in-state competition won't be close in size. Ciulla is the president and CEO of Webster Bank and Webster Financial Corp., which recently completed its $10 billion merger of equals with New York-based Sterling Bancorp, parent of Sterling National Bank. The newly-combined company now has $65 billion in assets, $44 billion in loans, 202 branches and a new Stamford headquarters. Its closest in-state competitor, People's United Bank, with $63.5 billion in assets, is in the process of being acquired by New York-based M&T Bank. Once that deal is completed, Webster Bank's closest in-state rival will be Middletown-based Liberty Bank, with $7.4 billion in assets. Of course, Webster has other national and regional competitors — Bank of America, JPMorgan Chase, Citizens Bank, etc. — that are still larger. And to Ciulla, size matters, especially in a world where investment in technology is never ending, and the ability to make larger loans to growing commercial customers offers a competitive advantage. "There is a lot of M&A activity in the banking space right now," Ciulla said in a recent interview with the Hartford Business Journal. "We were really thoughtful about this deal. It wasn't necessarily the first priority but there was a priority to gain scale." Webster Bank has a long history in Connecticut having been founded in 1935 by Harold Webster Smith, who ran the company until the late 1980s, before turning over the reins to his son, Jim Smith. Ciulla, 56, was named CEO in 2018, after a 14-year career at the bank, rising the ranks from vice president for middle market lending to chief credit risk officer, before being named chief executive. Ciulla said keeping the bank headquartered in Connecticut was a key part of the merger negotiations. And the bank is coming off a strong fourth quarter, nearly doubling its profits to $108.4 million, or $1.20 per diluted share, helped by strong commercial loan growth, which is the company's key focus area. In fact, pre-merger, 68% of Webster Bank's $22.3 billion loan portfolio was tied up in commercial loans, a higher percentage than many competitors. It grew its commercial loan portfolio 9.7% in 2021, excluding Paycheck Protection Program loans. And while its new retail branch footprint remains concentrated regionally in the Northeast — stretching from Philadelphia to Boston, up and down the I-95 corridor — it has a more national commercial lending strategy. Webster Bank also owns HSA Bank in Milwaukee, which provides administrative services and support for health savings accounts. "We have historically been able to do 10% in annual loan growth, which has been kind of unique, but in the fourth quarter we also benefited from some of the reopening activity, people seeing the potential end of the pandemic despite what happened with omicron," Ciulla said. Here's what else Ciulla had to say about the bank's recent merger and go-forward strategy: Q: You've talked a lot about scale being important in the banking industry and being a key reason you merged with Sterling National Bank. Why does scale matter? A: Scale matters for several reasons. First technology is becoming increasingly important and so having a larger revenue base and leveraging some economies of scale frees up investment dollars for technology. Also, for us, unlike many of our competitors, we are largely commercially focused. A disproportionate amount of our revenue and customer base comes from commercial banking activity dealing with small businesses, middle On The Record | Q&A Following its Sterling National Bank merger, Webster Bank CEO John Ciulla is now overseeing the largest bank headquartered in Connecticut. JOHN CIULLA President and CEO Webster Financial Corp. Education: Bachelor's degree in political science and history, Williams College; MBA, Columbia Business School; law degree, Fordham University School of Law Age: 56 HBJ FILE PHOTO

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