Press Release

EX-99.1 2 dex991.htm PRESS RELEASE Press Release

Exhibit 99.1

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Media Contact				Investor Contact
Ed Steadham 203-578-2287				Terry Mangan 203-578-2318
esteadham@websterbank.com				tmangan@websterbank.com

WEBSTER REPORTS FIRST QUARTER RESULTS

WATERBURY, Conn., April 22, 2010 – Webster Financial Corporation (NYSE: WBS), the holding company for Webster Bank, N.A., today announced consolidated net income of $1.4 million for the quarter ended March 31, 2010. The net loss to common shareholders was $6.1 million for the quarter ended March 31, 2010 and included $5.9 million of preferred dividends and $1.6 million from accelerated accretion of a discount related to Webster’s repurchase of $100 million, or 25 percent, of the Series B preferred shares issued under the Capital Purchase Program.

Key points for the quarter:

Core pre-tax, pre-provision earnings were $57.3 million, comparable to the fourth quarter of 2009.

Reduced levels of provision for loan losses and net charge-offs of $43.0 million and $40.3 million, respectively, compared to $67.0 million and $51.8 million in the fourth quarter of 2009.

Nonperforming loans declined by 6.5 percent to $348.8 million compared to $373.0 million at December 31, 2009.

Improved net interest margin of 3.28 percent compared to 3.26 percent for the fourth quarter of 2009.

Improved core to total deposit ratio of 74 percent compared to 71 percent at December 31, 2009, reflecting core deposit growth of $613 million.

Loan-to-deposit ratio of 78 percent compared to 81 percent at December 31, 2009.

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Webster Chairman and Chief Executive Officer James C. Smith said, “We are pleased to report that Webster returned to profitability from continuing operations in the quarter as our operating fundamentals improved, led by positive credit metrics, expansion in the net interest margin and strong core deposit growth. Business loan originations expanded nearly 60 percent in the quarter as we deliver on our pledge to finance the region’s economic recovery.”

Net interest income

•

Net interest margin improved to 3.28 percent in the quarter with the increase reflecting an 11 basis point decline in the cost of funds offsetting an 8 basis point decline in the yield on interest-earning assets. The margin includes a 3 basis point negative impact from accelerated Freddie Mac loan buybacks from mortgage backed securities during the first quarter based on a recently announced policy change.

•

Average interest-earning assets totaled $16.46 billion, up from $16.35 billion last quarter.

Provision for loan losses

•

$34.8 million of the $43.0 million provision for loan losses recorded in the quarter was related to the Company’s continuing portfolios, and $8.2 million was related to the liquidating portfolio.

•

Net charge-offs were $40.3 million in the quarter compared to $51.8 million for the quarter ended December 31, 2009; $31.4 million was related to the continuing portfolios compared to $43.2 million and $8.9 million was related to the liquidating portfolio compared to $8.5 million.

“Improvement was seen in several key asset quality indicators in the quarter, including reduced charge-off levels, lower provision for loan losses as well as lower levels of non-performing loans and assets, the result of reduced inflow of new nonaccrual loans and higher levels of cures and exits from nonperforming status,” noted Webster Senior Executive Vice President and Chief Financial Officer/Chief Risk Officer Jerry Plush. “While we remain cautious with regard to credit, these positive outcomes favorably impacted our results in the quarter.”

Non-interest income

•

Non-interest income includes a net gain on sale of investment securities of $4.3 million compared to a net gain of $53,000 in the fourth quarter. First quarter results also include a loss of $3.7 million on the write-down of investments to fair value. Fourth quarter results included a net gain of $3.6 million on the fair value accounting mark on warrants issued in connection with the Warburg Pincus investment.

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Non-interest expenses

•

Non-interest expenses, inclusive of other costs, increased $1.4 million from the fourth quarter and included $11.1 million related to previously announced fraud-related costs. Foreclosed and repossessed asset write-downs of $2.1 million and $2.7 million are also included in non-interest expenses in the respective periods.

Income taxes

•

The Company recorded $0.4 million of income tax expense in the quarter on the $1.8 million of pre-tax income applicable to continuing operations in the period based on an estimated annual effective tax rate of 20.0%.

Investment securities

•

Total investment securities were $5.3 billion at March 31, 2010 compared to $4.8 billion at December 31, 2009. The carrying value of the available for sale portfolio included $0.8 million in net unrealized losses compared to net unrealized losses of $2.8 million at December 31, 2009, while the carrying value of the held to maturity portfolio does not reflect $77.0 million in net unrealized gains compared to net unrealized gains of $61.3 million at December 31, 2009.

Loans

•

Total loans were $10.9 billion at March 31, 2010 compared to $11.0 billion at December 31, 2009. Total originations for the quarter were $383 million compared to $472 million in the fourth quarter of 2009, as a $42 million increase in commercial non-mortgage originations was offset by a $115 million decline in residential mortgage lending. In the quarter, commercial, commercial real estate, residential mortgage and consumer loans declined by $39.9 million, $27.6 million, $9.3 million and $63.4 million, respectively. The decline in commercial loans reflects an increase of $34.0 million in core franchise lending offset by reductions of $51.2 million in equipment finance loans and $22.7 million in asset based loans. The decline in commercial real estate mostly reflects a reduction of $17.1 million in residential development outstandings while the decline in consumer reflects seasonal paydowns as well as continued pricing discipline on new production.

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•

The liquidating portfolio of indirect home equity and national construction loans, included in the consumer and residential loan portfolios, declined by $13.4 million from December 31, 2009 to $207.3 million and $3.3 million, respectively.

•

National construction loans that have converted to permanent financing and are included in the residential loan portfolio declined by $4.2 million from December 31, 2009 to $32.6 million.

Asset quality

•

Total nonperforming loans were $348.8 million or 3.20 percent of total loans at March 31, 2010 compared to $373.0 million or 3.38 percent at December 31, 2009. The decrease in nonperforming loans reflects a combined decrease of $41.6 million in nonaccrual loans in all loan categories except asset based lending and equipment financing, which increased $14.7 million and $2.8 million respectively. Paying nonperforming loans totaled $103 million at March 31, 2010 compared to $114 million at December 31, 2009.

•

Past due loans for the continuing portfolios increased to $105.6 million at March 31, 2010 compared to $90.5 million at December 31, 2009. Past due loans for the liquidating portfolio decreased to $8.6 million at March 31, 2010 compared to $10.4 million at December 31, 2009. The increase in past due loans in the continuing portfolios at March 31, 2010 included two commercial credits, aggregating $14 million, which cured subsequent to the quarter end.

Deposits and borrowings

•

Total deposits were $14.0 billion at March 31, 2010 compared to $13.6 billion at December 31, 2009. The core categories of non-interest bearing, NOW, money market and savings increased by a combined amount of $612.9 million while certificates of deposit and brokered deposits decreased by $217.1 million and $34.4 million, respectively.

•

Total borrowings of $2.0 billion were essentially flat compared to December 31, 2009. Borrowings represented 11 percent of total assets at both March 31, 2010 and December 31, 2009.

Capital

•

On March 3, 2010, Webster repurchased $100 million, or 25%, of the Series B Preferred Stock issued to the U.S. Treasury and recorded a $1.6 million reduction in retained earnings in the first quarter of 2010 from accelerated accretion of a discount related to the repurchased shares. Also in the first quarter, the Company downstreamed $100 million from the holding company to Webster Bank to improve bank-level leverage and total capital ratios to 8.00% and 13.33%, respectively, which exceed OCC individual minimum capital requirements of 7.5% and 12%, respectively, that go into effect on June 30, 2010.

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Webster Financial Corporation is the holding company for Webster Bank, National Association. With $18.0 billion in assets, Webster provides business and consumer banking, mortgage, financial planning, trust and investment services through 181 banking offices, 500 ATMs, telephone banking and the Internet. Webster Bank owns the asset-based lending firm Webster Business Credit Corporation, Webster Capital Finance (formerly Center Capital Corporation), an equipment finance company headquartered in Farmington, Conn., and provides health savings account trustee and administrative services through HSA Bank, a division of Webster Bank. Member FDIC and equal housing lender. For more information about Webster, including past press releases and the latest annual report, visit Webster’s website at www.websterbank.com.

***

Conference Call

A conference call covering Webster’s first quarter earnings announcement will be held today, Thursday, April 22, at 9:00 a.m. EDT and may be heard through Webster’s investor relations website at www.wbst.com, or in listen-only mode by calling 1-877-407-8289 or 201-689-8341 internationally. The call will be archived on the website and available for future retrieval.

Forward-Looking Statements

This release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Act”). Forward-looking statements can be identified by words such as “believes”, “anticipates”, “expects”, “intends”, “targeted”, “continue”, “remain”, “will”, “should”, “may”, “plans”, “estimates” and similar references to future periods, however such words are not the exclusive means of identifying such statements. Examples of forward-looking statements include, but are not limited to: (i) projections of revenues, expenses, income or loss, earnings or loss per share, and other financial items; (ii) statements of plans, objectives and expectations of Webster or its management or Board of Directors; (iii) statements of future economic performance; and (iv) statements of assumptions underlying such statements. Forward-looking statements are based on Webster’s current expectations and assumptions regarding its business, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Webster’s actual results may differ materially from those contemplated by the forward-looking statements, which are neither statements of historical fact nor guarantees or assurances of future performance. Factors that could cause actual results to differ from those discussed in the forward-looking statements include, but are not limited to: (1) local, regional, national and international economic conditions; (2) government intervention in the U.S. financial system; (3) changes in the level of non-performing assets and charge-offs; (4) inflation, interest rate, securities market and monetary fluctuations, and management’s estimates and projections of such fluctuations; (5) the timely development and acceptance of new products and services and perceived overall value of these products and services by users; (6) changes in management’s estimate of the adequacy of the allowance for loan losses; (7) the risks associated with the continued diversification of assets and adverse changes to credit quality; (8) technological changes; (9) the Company’s ability to increase market share and control expenses; (10) changes in laws, regulations and policies (including tax, banking, securities and insurance laws, regulations and policies); (11) changes in applicable accounting policies and practice; (12) legal and regulatory developments including the resolution of legal proceedings or regulatory or other governmental inquiries and the results of regulatory examinations or reviews; (13) the Company’s success at managing the risks involved in the foregoing items; and (14) the other factors that are described in the Company’s Annual Report on Form 10-K under the heading “Risk Factors.” Any forward-looking statement made by the Company in this release speaks only as of the date on which it is made. Factors or events that could cause the Company’s actual results to differ may emerge from time to time, and it is not possible for the Company to predict all of them. The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.

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Non-GAAP Financial Measures

In addition to results presented in accordance with GAAP, this press release contains certain non-GAAP financial measures. A reconciliation of net income and other performance ratios, as adjusted, is included in the accompanying selected financial highlights table.

We believe that providing certain non-GAAP financial measures provides investors with information useful in understanding our financial performance, our performance trends and financial position. Specifically, we provide measures based on what we believe are our operating earnings on a consistent basis and exclude non-core operating items which affect the GAAP reporting of results of operations. We utilize these measures for internal planning and forecasting purposes. We, as well as securities analysts, investors and other interested parties, also use these measures to compare peer company operating performance. We believe that our presentation and discussion, together with the accompanying reconciliations, provides a complete understanding of factors and trends affecting our business and allows investors to view performance in a manner similar to management. These non-GAAP measures should not be considered a substitute for GAAP basis measures and results and we strongly encourage investors to review our consolidated financial statements in their entirety and not to rely on any single financial measure. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies’ non-GAAP financial measures having the same or similar names.

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WEBSTER FINANCIAL CORPORATION

Selected Financial Highlights (unaudited)


	At or for the Three Months Ended March 31,
*(In thousands, except per share data)*	2010			2009
Net income (loss) and performance ratios (annualized):
Net income (loss) attributable to Webster Financial Corporation	$	1,421		$	(11,126	)
Net loss available to common shareholders		(6,069	)		(21,557	)
Net loss per diluted common share		(0.08	)		(0.41	)
Return on average shareholders’ equity		0.30	%		(2.39	)%
Return on average tangible equity		0.41			(3.40	)
Return on average assets		0.03			(0.25	)

Income (loss) and performance ratios, (annualized), attributable Webster Financial Corporation from continuing operations:
Income (loss) from continuing operations	$	1,421		$	(11,126	)
Net loss available to common shareholders		(6,069	)		(21,557	)
Net loss from continuing operations per diluted common share		(0.08	)		(0.41	)
Return on average shareholders’ equity		0.30	%		(2.39	)%
Return on average tangible equity		0.41			(3.40	)
Return on average assets		0.03			(0.25	)
Noninterest income as a percentage of total revenue		26.35			31.41
Efficiency ratio (a)		64.75			67.45

Asset quality:
Allowance for loan losses	$	343,871		$	270,929
Non-performing assets		379,321			348,351
Allowance for loan losses / total loans		3.16	%		2.24	%
Net charge-offs / average loans (annualized)		1.47			0.99
Non-performing loans / total loans		3.20			2.61
Non-performing assets / total loans plus OREO		3.47			2.87
Allowance for loan losses / non-performing loans		98.57			85.69

Other ratios (annualized):
Tangible capital ratio		7.39	%		7.75	%
Tangible common equity ratio		5.53			4.05
Tier 1 risk-based capital ratio (d)		12.51			11.99
Total-risk based capital (d)		14.37			14.03
Tier 1 common equity / risk weighted assets (d)		7.90			5.26
Shareholders’ equity / total assets		10.24			10.75
Interest-rate spread		3.23			2.91
Net interest margin		3.28			2.99

Share and equity related:
Common equity	$	1,521,932		$	1,238,734
Book value per common share		19.41			23.45
Tangible book value per common share		12.44			13.02
Common stock closing price		17.49			4.25
Dividends declared per common share		0.01			0.01
Common shares issued and outstanding		78,420			52,830
Basic shares (average)		77,922			52,102
Diluted shares (average)		77,922			52,102

Footnotes:

(a)	Calculated using SNL’s methodology—noninterest expense (excluding foreclosed property expenses, intangible amortization, goodwill impairments and other charges) as a percentage of net interest income (FTE basis) plus noninterest income (excluding gain/loss on securities and other charges).

(b)	For purposes of the yield computation, unrealized gains (losses) on securities available for sale are excluded from the average balance.

(c)	NCLC is defined as National Construction Lending Center.

(d)	The ratios presented are projected for the 2010 reporting periods and actual for the 2009 reporting periods.

WEBSTER FINANCIAL CORPORATION

Consolidated Balance Sheets (unaudited)


	*March 31,*			*December 31,*			*March 31,*
*(In thousands)*	2010			2009			2009
Assets:
Cash and due from banks	$	158,065		$	171,184		$	208,862
Short-term investments		162,193			390,310			19,942
Investment securities:
Available for sale, at fair value		2,365,956			2,126,043			1,097,229
Held-to-maturity		2,915,923			2,658,869			2,429,887

Total securities		5,281,879			4,784,912			3,527,116
Loans held for sale		29,790			12,528			48,876
Loans:
Commercial		2,890,353			2,930,239			3,415,051
Commercial real estate		2,154,534			2,182,120			2,250,295
Residential mortgages		2,894,291			2,903,637			3,184,082
Consumer		2,957,342			3,020,713			3,246,031

Total loans		10,896,520			11,036,709			12,095,459
Allowance for loan losses		(343,871	)		(341,184	)		(270,929	)

Loans, net		10,552,649			10,695,525			11,824,530
Prepaid FDIC premiums		73,752			79,241			—
Federal Home Loan Bank and Federal Reserve Bank stock		140,874			140,874			134,874
Premises and equipment, net		171,178			178,422			182,629
Goodwill and other intangible assets, net		555,355			556,752			562,462
Cash surrender value of life insurance policies		290,786			289,486			282,399
Deferred tax asset, net		121,010			121,733			199,531
Accrued interest receivable and other assets		487,184			318,230			265,513

Total Assets	$	18,024,715		$	17,739,197		$	17,256,734


Liabilities and Equity:
Deposits:
Non-interest bearing deposits	$	1,662,122		$	1,664,958		$	1,530,335
NOW accounts		2,909,737			2,912,510			1,935,926
Money market deposit accounts		2,384,297			1,991,423			1,794,943
Savings accounts		3,372,260			3,146,603			2,576,058
Certificates of deposit		3,613,735			3,830,865			4,638,977
Brokered deposits		51,375			85,768			218,520

Total deposits		13,993,526			13,632,127			12,694,759
Securities sold under agreements to repurchase and other short-term debt		849,876			856,846			1,146,852
Federal Home Loan Bank advances		574,378			544,651			671,294
Long-term debt		588,540			588,419			661,968
Accrued expenses and other liabilities		162,678			159,120			216,734

Total liabilities		16,168,998			15,781,163			15,391,607
Webster Financial Corporation shareholders’ equity		1,846,076			1,948,393			1,855,495
Non controlling interests		9,641			9,641			9,632

Total equity		1,855,717			1,958,034			1,865,127

Total Liabilities and Equity	$	18,024,715		$	17,739,197		$	17,256,734

See Selected Financial Highlights for footnotes.

WEBSTER FINANCIAL CORPORATION

Consolidated Statements of Operations (unaudited)


	Three Months Ended March 31,
*(In thousands, except per share data)*	2010			2009
Interest income:
Interest and fees on loans and leases	$	123,350		$	140,767
Investment securities		54,156			50,827
Loans held for sale		314			164

Total interest income		177,820			191,758


Interest expense:
Deposits		31,951			52,908
Borrowings		14,485			20,653

Total interest expense		46,436			73,561

Net interest income		131,384			118,197
Provision for loan losses		43,000			66,000

Net interest income after provision for loan losses		88,384			52,197

Non-interest income:
Deposit service fees		27,784			27,959
Loan related fees		6,005			6,482
Wealth and investment services		5,835			5,750
Mortgage banking activities		(138	)		606
Increase in cash surrender value of life insurance policies		2,578			2,592
Net gain on sale of investment securities		4,318			4,457
Other income		4,314			276

		50,696			48,122
Gain on early extinguishment of subordinated notes		—			5,993
Loss on write-down of investment securities to fair value		(3,680	)		—

Total non-interest income		47,016			54,115

Non-interest expenses:
Compensation and benefits		61,079			56,469
Occupancy		14,440			14,295
Technology and equipment expense		15,268			15,140
Marketing		4,791			3,106
Professional and outside services		2,602			3,784
Intangible assets amortization		1,397			1,464
Foreclosed and repossessed asset expenses		1,692			1,179
Foreclosed and repossessed asset write-downs		2,061			3,450
Deposit insurance		6,085			4,590
Other expenses		13,146			14,301

		122,561			117,778
Other including fraud related costs		11,063			240

Total non-interest expenses		133,624			118,018

Income (loss) from continuing operations before income taxes		1,776			(11,706	)
Income tax expense (benefit)		355			(593	)

Income (loss) from continuing operations		1,421			(11,113	)
Income from discontinued operations, net of tax		—			—

Consolidated net income (loss)	$	1,421		$	(11,113	)
Less: Net income attributable to noncontrolling interests		—			13

Net income (loss) attributable to Webster Financial Corp.		1,421			(11,126	)
Preferred stock dividends and accretion		(7,490	)		(10,431	)

Net loss available to common shareholders	$	(6,069	)	$	(21,557	)

Diluted shares (average)		77,922			52,102
Net loss per common share:
Basic
Loss from continuing operations	$	(0.08	)	$	(0.41	)
Net loss available to common shareholders		(0.08	)		(0.41	)
Diluted
Loss from continuing operations		(0.08	)		(0.41	)
Net loss available to common shareholders		(0.08	)		(0.41	)

See Selected Financial Highlights for footnotes.

WEBSTER FINANCIAL CORPORATION

Five Quarter Consolidated Statements of Operations (unaudited)


	Three Months Ended
*(In thousands, except per share data)*	*March 31,* 2010			*Dec. 31,* 2009			*Sept. 30,* 2009			*June 30,* 2009			*March 31,* 2009
Interest income:
Interest and fees on loans and leases	$	123,350		$	127,069		$	131,266		$	137,533		$	140,767
Investment securities		54,156			54,029			52,975			48,799			50,827
Loans held for sale		314			364			716			833			164

Total interest income		177,820			181,462			184,957			187,165			191,758

Interest expense:
Deposits		31,951			35,937			41,977			49,982			52,908
Borrowings		14,485			15,044			16,308			17,895			20,653

Total interest expense		46,436			50,981			58,285			67,877			73,561

Net interest income		131,384			130,481			126,672			119,288			118,197
Provision for loan losses		43,000			67,000			85,000			85,000			66,000

Net interest income after provision for loan losses		88,384			63,481			41,672			34,288			52,197

Non-interest income:
Deposit service fees		27,784			30,634			30,844			29,984			27,959
Loan related fees		6,005			6,501			5,557			6,350			6,482
Wealth and investment services		5,835			6,009			6,160			6,081			5,750
Mortgage banking activities		(138	)		1,456			1,406			3,433			606
Increase in cash surrender value of life insurance policies		2,578			2,680			2,692			2,665			2,592
Net gain (loss) on sale of investment securities		4,318			54			(4,728	)		(13,593	)		4,457
Other income		4,314			2,648			3,517			1,325			276

		50,696			49,982			45,448			36,245			48,122
Gain on the exchange of trust preferreds for common stock		—			—			—			24,336			—
Gain on early extinguishment of subordinated notes		—			—			—			—			5,993
Loss on write-down of investment securities to fair value		(3,680	)		(77	)		(1,290	)		(27,110	)		—
Warrants - fair value adjustment		—			3,552			—			—			—
Visa share transactions		—			—			—			1,907			—

Total non-interest income		47,016			53,457			44,158			35,378			54,115

Non-interest expenses:
Compensation and benefits		61,079			61,644			59,772			59,189			56,469
Occupancy		14,440			14,061			13,572			13,594			14,295
Technology and equipment expense		15,268			15,299			15,199			15,288			15,140
Marketing		4,791			4,365			3,802			3,196			3,106
Professional and outside services		2,602			4,209			3,628			3,394			3,784
Intangible assets amortization		1,397			1,408			1,421			1,450			1,464
Foreclosed and repossessed asset expenses		1,692			2,349			1,733			1,799			1,179
Foreclosed and repossessed asset write-downs		2,061			2,588			2,232			2,829			3,450
Deposit insurance		6,085			5,565			5,942			5,959			4,590
Other expenses		13,146			14,192			15,616			14,066			14,301

		122,561			125,680			122,917			120,764			117,778
Other including fraud related costs		11,063			6,533			4,169			1,313			240
FDIC special assessment		—			—			—			8,000			—

Total non-interest expenses		133,624			132,213			127,086			130,077			118,018

Income (loss) from continuing operations before income taxes		1,776			(15,275	)		(41,256	)		(60,411	)		(11,706	)
Income tax expense (benefit)		355			(1,593	)		(22,014	)		(28,536	)		(593	)

Income (loss) from continuing operations		1,421			(13,682	)		(19,242	)		(31,875	)		(11,113	)
Income (loss) from discontinued operations, net of tax		—			(11	)		—			313			—

Consolidated net income (loss)	$	1,421		$	(13,693	)	$	(19,242	)	$	(31,562	)	$	(11,113	)
Less: Net income attributable to noncontrolling interests		—			1			8			—			13

Net income (loss) attributable to Webster Financial Corp.		1,421			(13,694	)	$	(19,250	)	$	(31,562	)	$	(11,126	)
Preferred stock dividends, accretion and extinguishment gain		(7,490	)		(40,700	)		(6,850	)		48,361			(10,431	)

Net (loss) income available to common shareholders	$	(6,069	)	$	(54,394	)	$	(26,100	)	$	16,799		$	(21,557	)

Diluted shares (average)		77,922			72,747			66,281			53,398			52,102
Net (loss) income per common share:
Basic
(Loss) income from continuing operations	$	(0.08	)	$	(0.76	)	$	(0.39	)	$	0.31		$	(0.41	)
Net (loss) income available to common shareholders		(0.08	)		(0.76	)		(0.39	)		0.31			(0.41	)
Diluted
Loss from continuing operations		(0.08	)		(0.84	)		(0.39	)		(0.66	)		(0.41	)
Net loss available to common shareholders		(0.08	)		(0.84	)		(0.39	)		(0.65	)		(0.41	)

See Selected Financial Highlights for footnotes.

WEBSTER FINANCIAL CORPORATION

Five Quarter Interest-Rate Spreads and Margin (unaudited)


	Three Months Ended
	March 31, 2010			December 31, 2009			September 30, 2009		June 30, 2009			March 31, 2009
Interest-rate spread
Yield on interest-earning assets		4.42	%		4.50	%	4.60	%		4.72	%		4.82	%
Cost of interest-bearing liabilities		1.19			1.30		1.48			1.76			1.91

Interest-rate spread		3.23	%		3.20	%	3.12	%		2.96	%		2.91	%


Net interest margin		3.28	%		3.26	%	3.18	%		3.04	%		2.99	%


*Consolidated Average Balances, Yields and Rates Paid (unaudited)*

*Three Months Ended March 31,*	2010								2009
*(Dollars in thousands)*	Average balance			Interest			Fully tax- equivalent yield/rate		Average balance			Interest			Fully tax- equivalent yield/rate

Assets:
Interest-earning assets:
Loans	$	10,976,610		$	123,350		4.51	%	$	12,151,016		$	140,767		4.65	%
Investment securities (b)		5,066,951			56,835		4.49			3,811,555			53,885		5.48
Loans held for sale		27,446			314		4.58			20,415			164		3.22
Federal Home Loan and Federal Reserve Bank stock		140,874			716		2.06			134,874			626		1.88
Short-term investments		250,458			162		0.26			20,148			32		0.63

Total interest-earning assets		16,462,339			181,377		4.42			16,138,008			195,474		4.82

Noninterest-earning assets		1,398,593								1,466,046

Total assets	$	17,860,932							$	17,604,054


Liabilities and Shareholders’ Equity:
Interest-bearing liabilities:
Demand deposits	$	1,641,654		$	—		—	%	$	1,507,206		$	—		—	%
Savings, NOW and money market deposits		8,365,705			13,878		0.67			5,943,285			15,711		1.07
Certificates of deposit		3,783,167			18,073		1.94			4,838,449			37,197		3.12

Total deposits		13,790,526			31,951		0.94			12,288,940			52,908		1.75

Securities sold under agreements to repurchase and other short-term debt		828,213			4,003		1.93			1,695,580			5,800		1.37
Federal Home Loan Bank advances		576,674			4,418		3.06			870,368			7,054		3.24
Long-term debt		588,800			6,064		4.12			681,371			7,799		4.58

Total borrowings		1,993,687			14,485		2.91			3,247,319			20,653		2.54

Total interest-bearing liabilities		15,784,213			46,436		1.19			15,536,259			73,561		1.91

Noninterest-bearing liabilities		150,447								199,648

Total liabilities		15,934,660								15,735,907

Noncontrolling interests		9,641								9,632

Webster Financial Corp. shareholders’ equity		1,916,631								1,858,515

Total liabilities and equity	$	17,860,932							$	17,604,054

Tax-equivalent net interest income					134,941								121,913
Less: tax-equivalent adjustment					(3,557	)							(3,716	)

Net interest income				$	131,384							$	118,197


Interest-rate spread							3.23	%							2.91	%

Net interest margin							3.28	%							2.99	%

See Selected Financial Highlights for footnotes.

WEBSTER FINANCIAL CORPORATION

Five Quarter Loan Balances (unaudited)


*(Dollars in thousands)*	March 31, 2010			Dec. 31, 2009			Sept. 30, 2009			June 30, 2009			March 31, 2009
Loan Balances (actuals):
*Continuing Portfolio:*
Commercial	$	1,539,975		$	1,505,956		$	1,619,284		$	1,711,995		$	1,738,640
Equipment financing		846,562			897,802			951,500			998,258			1,016,718
Asset based lending		503,816			526,481			598,641			623,357			659,694
Commercial real estate		2,057,361			2,067,862			2,086,298			2,091,811			2,094,751
Residential development		97,173			114,258			128,643			143,965			155,544
Residential mortgages		2,890,982			2,898,820			2,837,240			2,875,415			3,170,908
Consumer		2,750,084			2,801,588			2,863,622			2,910,275			2,979,117

Total continuing		10,685,953			10,812,767			11,085,228			11,355,076			11,815,372
Allowance for loan losses		(291,171	)		(287,784	)		(269,306	)		(264,159	)		(226,562	)

Total continuing, net		10,394,782			10,524,983			10,815,922			11,090,917			11,588,810

*Liquidating Portfolio:*
NCLC ^(c)		3,309			4,817			5,826			6,540			13,174
Consumer		207,258			219,125			231,305			249,086			266,913

Total liquidating portfolio		210,567			223,942			237,131			255,626			280,087
Allowance for loan losses		(52,700	)		(53,400	)		(57,100	)		(41,840	)		(44,367	)

Total liquidating, net		157,867			170,542			180,031			213,786			235,720


Total Loan Balances (actuals)		10,896,520			11,036,709			11,322,359			11,610,702			12,095,459
Allowance for loan losses		(343,871	)		(341,184	)		(326,406	)		(305,999	)		(270,929	)

Loans, (net)	$	10,552,649		$	10,695,525		$	10,995,953		$	11,304,703		$	11,824,530


Loan Balances (average):
*Continuing Portfolio:*
Commercial	$	1,520,157		$	1,548,470		$	1,675,289		$	1,750,996		$	1,784,062
Equipment finance		871,972			930,050			975,552			1,011,999			1,026,322
Asset based lending		523,938			577,330			622,472			652,197			701,263
Commercial real estate		2,062,769			2,075,754			2,089,643			2,090,615			2,083,861
Residential development		107,343			125,320			139,040			150,674			158,924
Residential mortgages		2,892,797			2,860,204			2,831,440			3,127,099			3,092,512
Consumer		2,780,063			2,834,923			2,884,543			2,951,691			3,012,178

Total continuing		10,759,039			10,952,051			11,217,979			11,735,271			11,859,122
Allowance for loan losses		(291,281	)		(277,870	)		(260,472	)		(248,701	)		(204,619	)

Total continuing, net		10,467,758			10,674,181			10,957,507			11,486,570			11,654,503

*Liquidating Portfolio:*
NCLC ^(c)		4,558			5,661			6,414			10,090			15,675
Consumer		213,013			224,351			240,675			258,001			276,219

Total liquidating portfolio		217,571			230,012			247,089			268,091			291,894
Allowance for loan losses		(52,700	)		(53,400	)		(57,100	)		(41,840	)		(44,367	)

Total liquidating, net		164,871			176,612			189,989			226,251			247,527


Total Loan Balances (average)		10,976,610			11,182,063			11,465,068			12,003,362			12,151,016
Allowance for loan losses		(343,981	)		(331,270	)		(317,572	)		(290,541	)		(248,986	)

Loans, (net)	$	10,632,629		$	10,850,793		$	11,147,496		$	11,712,821		$	11,902,030

See Selected Financial Highlights for footnotes.

WEBSTER FINANCIAL CORPORATION

Five Quarter Non-performing Assets (unaudited)


*(Dollars in thousands)*	March 31, 2010		Dec. 31, 2009		Sept. 30, 2009		June 30, 2009		March 31, 2009

Non-performing loans:
*Continuing Portfolio:*
Commercial	$	46,486	$	56,632	$	61,746	$	68,979	$	65,073
Equipment financing		32,985		30,152		31,784		35,675		16,056
Asset based lending		28,647		13,982		5,064		24,456		29,353
Commercial real estate		50,711		56,144		47,644		16,707		12,604
Residential development		34,651		47,264		44,821		46,808		54,147
Residential mortgages		70,908		70,311		66,180		59,775		55,962
Performing non-accrual residential mortgages		34,699		39,256		43,581		33,822		10,849
Consumer		27,832		31,299		33,837		33,816		37,518
Performing non-accrual consumer		5,735		7,456		6,000		4,534		2,652

Nonperforming loans - continuing portfolio		332,654		352,496		340,657		324,572		284,214

*Liquidating Portfolio:*
NCLC ^(c)		2,483		3,408		4,089		5,628		12,259
Performing non-accrual NCLC		825		825		825		—		—
Consumer		10,895		13,915		14,030		19,521		19,510
Performing non-accrual consumer		1,990		2,333		1,475		674		185

Nonperforming loans - liquidating portfolio		16,193		20,481		20,419		25,823		31,954

Total non-performing loans	$	348,847	$	372,977	$	361,076	$	350,395	$	316,168


Other real estate owned and repossessed assets:
*Continuing Portfolio:*
Commercial	$	13,464	$	11,621	$	13,225	$	9,340	$	10,361
Equipment financing		6,654		6,522		8,479		10,322		13,352
Asset based lending		—		—		—		—		—
Commercial real estate		—		—		—		—		—
Residential development		—		—		—		—		—
Residential mortgages		4,461		4,131		2,872		1,808		1,399
Consumer		4,025		5,017		4,833		5,571		369

Total continuing		28,604		27,291		29,409		27,041		25,481

*Liquidating Portfolio:*
NCLC ^(c)		1,744		1,401		3,108		5,836		5,563
Consumer		126		296		—		931		1,139

Total liquidating		1,870		1,697		3,108		6,767		6,702

Total other real estate owned and repossessed assets	$	30,474	$	28,988	$	32,517	$	33,808	$	32,183

Total non-performing assets	$	379,321	$	401,965	$	393,593	$	384,203	$	348,351

See Selected Financial Highlights for footnotes.

WEBSTER FINANCIAL CORPORATION

Five Quarter Past Due Loans (unaudited)


*(Dollars in thousands)*	March 31, 2010		Dec. 31, 2009		Sept. 30, 2009		June 30, 2009		March 31, 2009

Past due 30-89 days:

Accruing loans:
*Continuing Portfolio:*
Commercial	$	17,124	$	7,871	$	9,735	$	8,460	$	8,033
Equipment financing		11,030		10,642		10,407		13,464		16,404
Asset based lending		—		—		—		—		145
Commercial real estate		16,950		8,183		23,872		19,053		8,373
Residential development		2,528		551		776		3,210		1,004
Residential mortgages		30,843		36,086		38,927		39,955		45,798
Consumer		27,099		27,214		31,178		28,354		33,092

Past Due 30-89 days - continuing portfolio		105,574		90,547		114,895		112,496		112,849

*Liquidating Portfolio:*
NCLC ^(c)		—		582		910		1		1
Consumer		8,596		9,804		11,680		9,880		12,244

Past Due 30-89 days - liquidating portfolio		8,596		10,386		12,590		9,881		12,245

Accruing loans past due 90 days or more:
Commercial		350		50		2,685		445		573
Equipment financing		—		—		—		—		—
Asset based lending		—		—		—		—		—
Commercial real estate		365		236		206		475		—
Residential development		—		—		—		—		150
Residential mortgages		—		—		—		—		—
Consumer		—		—		—		—		—

Accruing loans past due 90 days or more:		715		286		2,891		920		723

Total past due loans	$	114,885	$	101,219	$	130,376	$	123,297	$	125,817

See Selected Financial Highlights for footnotes.

WEBSTER FINANCIAL CORPORATION

Five Quarter Changes in the Allowance for Credit Losses (unaudited)


	For the Three Months Ended
*(Dollars in thousands)*	March 31, 2010			Dec. 31, 2009			Sept. 30, 2009		June 30, 2009			March 31, 2009

Beginning balance	$	351,289		$	336,511		$	316,037	$	281,729		$	245,829
Provision		43,000			67,000			85,000		85,000			66,000
Allowance for sold loans		—			(469	)		—		—			—

Charge-offs continuing portfolio:
Commercial		5,271			6,094			13,729		8,983			5,388
Equipment financing		5,108			13,302			7,939		6,324			2,236
Asset based lending		2,447			1,099			15,926		5,297			2,981
Commercial real estate		1,382			4,605			—		—			—
Residential development		5,131			6,600			3,019		2,350			48
Residential mortgages		4,455			2,858			2,721		4,793			2,964
Consumer		9,896			10,723			10,237		10,242			6,541

Charge-offs continuing portfolio		33,690			45,281			53,571		37,989			20,158

Charge-offs liquidating portfolio:
NCLC ^(c)		70			1,068			135		3,387			2,086
Consumer		9,315			8,232			13,256		10,825			9,911

Charge-offs liquidating portfolio		9,385			9,300			13,391		14,212			11,997

Total charge-offs		43,075			54,581			66,962		52,201			32,155


Recoveries continuing portfolio:
Commercial		515			476			435		230			378
Equipment financing		952			898			821		203			287
Asset based lending		254			55			—		—			5
Commercial real estate		—			—			—		—			—
Residential development		—			—			—		9			—
Residential mortgages		80			82			277		115			24
Consumer		455			535			642		702			766

Recoveries continuing portfolio		2,256			2,046			2,175		1,259			1,460


Recoveries liquidating portfolio:
NCLC ^(c)		302			614			62		825			528
Consumer		204			168			132		187			67

Recoveries liquidating portfolio		506			782			194		1,012			595

Total recoveries		2,762			2,828			2,369		2,271			2,055

Total net charge-offs		40,313			51,753			64,593		49,930			30,100

Change in unfunded commitments		(278	)		—			67		(762	)		—
Ending balance	$	353,698		$	351,289		$	336,511	$	316,037		$	281,729


Components:
Allowance for loan losses	$	343,871		$	341,184		$	326,406	$	305,999		$	270,929
Reserve for unfunded credit commitments		9,827			10,105			10,105		10,038			10,800

Allowance for credit losses	$	353,698		$	351,289		$	336,511	$	316,037		$	281,729

See Selected Financial Highlights for footnotes.

WEBSTER FINANCIAL CORPORATION

Asset Quality Ratios


	For the Three Months Ended
*(Dollars in thousands)*	March 31, 2010		Dec. 31, 2009		Sept. 30, 2009		June 30, 2009		March 31, 2009

*Total Portfolio*
Allowance for loan losses / total loans	3.16	%	3.09	%	2.88	%	2.64	%	2.24	%
Net charge-offs / average loans (annualized)	1.47		1.85		2.25		1.66		0.99
Nonperforming loans / total loans	3.20		3.38		3.19		3.02		2.61
Nonperforming assets / total loans plus OREO	3.47		3.63		3.47		3.30		2.87
Allowance for loan losses / nonperforming loans	98.57		91.48		90.40		87.33		85.69

*Continuing Portfolio*
Allowance for loan losses / total loans	2.72	%	2.66	%	2.43	%	2.33	%	1.92	%
Net charge-offs / average loans (annualized)	1.17		1.58		1.83		1.25		0.63
Nonperforming loans / total loans	3.11		3.26		3.07		2.86		2.41
Nonperforming assets / total loans plus OREO	3.37		3.50		3.33		3.09		2.62
Allowance for loan losses / nonperforming loans	87.53		81.64		79.05		81.39		79.72

*Liquidating Portfolio*

NCLC^(C)
Allowance for loan losses / total loans	21.15	%	18.68	%	17.16	%	23.00	%	30.86	%
Net charge-offs (recoveries) / average loans (annualized)	(20.36	)	32.08		4.55		101.57		39.76
Nonperforming loans / total loans	99.97		87.88		84.35		86.06		93.05
Allowance for loan losses / nonperforming loans	21.16		21.26		20.35		26.72		33.16

Consumer
Allowance for loan losses / total loans	25.09	%	23.96	%	24.25	%	16.19	%	15.10	%
Net charge-offs / average loans (annualized)	17.11		14.38		21.81		16.49		14.26
Nonperforming loans / total loans	6.22		7.41		6.70		8.11		7.38
Allowance for loan losses / nonperforming loans	403.57		323.12		361.82		199.73		204.63

See Selected Financial Highlights for footnotes.