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JP Morgan makes small bank Webster Financial a top pick after CEO meeting

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Webster Bank branch in Hamden, CT
Source: John Phelan | Wikimedia Commons

Webster Financial shares will thrive due to strong growth from its commercial banking and health savings account businesses, according to J.P. Morgan.

The firm reiterated its overweight rating for Webster Financial's stock and added it to J.P. Morgan's focus list, predicting the bank will generate earnings per share above expectations next year.

"We recently held investor meetings with Webster's senior management team including CEO John Ciulla … Overall, we found the tone from the meetings to be very positive," analyst Steven Alexopoulos said in a note to clients Friday. "With the company having the unique ability to fund high yielding commercial loans with low-cost HSA deposits, we see WBS pulling further ahead of the pack."

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