5 Best Bank Stocks to Buy According to Matthew Lindenbaum’s Basswood Capital

2. Webster Financial Corporation (NYSE:WBS)

Basswood Capital Stake: $64,949,000

Percentage of Basswood Capital’s Portfolio: 4.08%

Number of Hedge Fund Holders: 32

Webster Financial Corporation (NYSE:WBS) is a diversified financial service provider operating in the United States. The company offers mortgages and consumer and commercial banking services to its clients. Matthew Lindenbaum added to his investment in Webster Financial Corporation (NYSE:WBS) by 21% during Q2 2022. The fund now holds 1,540,896 shares of the company as per its last filing.

The shares of Webster Financial Corporation (NYSE:WBS) have not performed well in 2022 and are down 14.91% YTD as of October 20, 2022. The bank had a good Q3 2022, as it reported a revenue of $664.6 million for the quarter, beating market estimates by $23.98 million. The normalized EPS was also ahead of estimates by $0.04, as the bank posted an EPS of $1.46 for the quarter.

Here is what Diamond Hill Small Cap Fund has to say about Webster Financial Corporation (NYSE:WBS) in its Q1 2022 investor letter:

Webster Financial Corporation (NYSE:WBS) is also a new name in the portfolio, having completed its merger of our prior holding Sterling Bank. The combination means that Webster’s large health care savings (HSA) account platform, which is a good source of low-cost deposits, will be paired with Sterling’s organic loan generation engine.

At the end of the second quarter of 2022, 32 hedge funds in Insider’s Monkey database held stakes in Webster Financial Corporation (NYSE:WBS). Diamond Hill Capital had the biggest stake in Webster Financial Corporation (NYSE:WBS), amounting to approximately $135 million.