Webster Financial Reports Record Annual Earnings for 2000

Jan 23, 2001

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WATERBURY, Conn.--(BUSINESS WIRE)--Jan. 23, 2001--Webster Financial Corporation (Nasdaq: WBST), holding company for Webster Bank, today reported record 2000 net income of $118.3 million or $2.55 per diluted share, compared to $95.4 million or $2.10 per diluted share in 1999.

Net operating earnings in 2000 increased to $114.8 million or $2.47 per diluted share, excluding nonrecurring items with a net benefit of $4.7 million. Net operating earnings in 1999 were $102.2 million or $2.25 per diluted share, excluding a nonrecurring acquisition related expense of $9.5 million resulting from the New England Community Bancorp, Inc. merger.

Net income for the fourth quarter ended Dec. 31, 2000 was $31.8 million, or $0.64 per diluted share, compared to $19.6 million, or $0.43 per diluted share, for the previous year. Webster reported net operating earnings of $29.4 million, or $0.60 per diluted share, for the quarter compared to $26.4 million, or $0.58 per diluted share, for the 1999 period.

"The year 2000 was exciting and eventful for Webster as we moved decisively to strengthen our franchise and enhance our capabilities as a leading Connecticut-based financial services provider," said James C. Smith, chairman and chief executive officer. "Webster completed its acquisition of Mechanics Savings Bank and the purchase of 10 branch banking offices from FleetBoston and Chase Manhattan. In addition, we acquired two more insurance agencies, formed Webster Financial Advisors, launched an improved Web site, and bought a controlling interest in Duff & Phelps. All of these initiatives were pursued in the interest of building strong customer relationships that increase shareholder value."

Webster also announced today that it has declared a regular quarterly cash dividend of $.16 per common share. The dividend is payable on Feb. 19, 2001, to shareholders of record on Feb. 5, 2001. This is the 54th consecutive quarterly dividend since Webster first paid a dividend in 1987.

Financial Highlights

Net interest margin (net interest income as a percentage of average earning assets) was 3.32 percent in the fourth quarter, compared to 3.34 percent in the year-ago period and 3.30 percent in the third quarter of 2000. The net interest margin has remained stable as rising retail spreads have offset the impact of higher wholesale borrowing costs.

Revenue from fee based services and other noninterest income in 2000, excluding gains, increased 31 percent to $110.0 million from $83.9 million in 1999 due to revenue related to trust and investment services, investment banking services, insurance commissions and expanded product offerings to Webster's growing customer base. For the fourth quarter of 2000 income from fee based services exceeded 26 percent of total revenue.

Cash return on average shareholders' equity before non-recurring items was 18.9 percent for 2000, up from 18.2 percent in the previous year.

The annual results exclude one-time gains of $5.3 million from the sale of branch offices and a $1.1 million life insurance benefit, as well as $1.7 million of nonrecurring expenses related to occupancy, furniture and equipment. The branch and equipment items were recorded in the fourth quarter.

Asset quality remained strong in the quarter with nonaccrual assets amounting to 0.39 percent of total assets at Dec. 31, 2000 down from 0.44 percent a year earlier and 0.43 percent in the third quarter. The allowance for loan losses as a percent of nonaccrual loans was 221 percent, compared to 189 percent a year earlier and 200 percent in the third quarter. Allowances for nonaccrual assets as a percent of nonaccrual assets were 204 percent, up from 167 percent in the year ago period and 185 percent in the third quarter. Allowances as a percent of total loans increased to 1.31 percent at Dec. 31, 2000, from 1.19 percent in the year-ago period and 1.28 percent in the third quarter, reflecting the increase in the commercial loan portfolio.

Book value per common share increased 29 percent to $18.19 from $14.09 at Dec. 31, 1999 due primarily to the impact of net income, increases in the fair value of available for sale securities, and common shares issued in conjunction with the Mechanics Savings Bank acquisition. Shareholders equity reached $890 million at the close of 2000, up from $636 million at the end of 1999, representing 7.9% percent of total assets. Webster had 48.9 million shares outstanding at Dec. 31, 2000.

2000 Strategic Actions

In June 2000, Webster completed the acquisition of Mechanics Savings Bank, a state-chartered savings bank. The acquisition enhanced Webster's market share in Hartford County, where Webster already ranked second in deposit market share.

Also during the year, Webster completed the purchase of four branch offices from FleetBoston Financial that were divested as the result of the Fleet-BankBoston merger and six Connecticut branches of Chase Manhattan Bank in transactions that strengthened and extended the retail banking franchise. The FleetBoston branches were located in Brookfield, Guilford, Meriden, and Thomaston. The Chase branches were located in Cheshire, Middlebury, North Haven, Waterbury (2) and Watertown.

In June, Webster combined its existing Trust operations with new private banking services in an organization called Webster Financial Advisors offering a full range of investment, credit and fiduciary services for high-net worth clients. Services include investment management, trust and estate planning, retirement wealth management, tax planning, credit services and insurance.

Webster also was actively engaged during 2000 in building a dynamic statewide insurance operation, purchasing the Levine agency, based in Waterford, and Folis Wylie & Lane of Hamden. Webster entered the insurance agency business in 1998. The acquisition of Musante Reihl, a Cheshire agency specializing in group benefits, long-term care and life insurance was announced earlier this month. Webster Insurance offers a full line of commercial and personal insurance; risk management services; employee benefit plans; life insurance and annuities. Webster Insurance has a staff of 130 employees and writes in excess of $180 million in annual premiums.

In November, Webster Bank announced several enhancements to its Web banking offering and a completely redesigned Web site at www.websterbank.com. The site provides customers with the highest level of security available, and uses the latest Web technology to make navigation easy and intuitive.

Also in the fourth quarter, Webster purchased a 65 percent interest in Duff & Phelps, LLC, an independent privately owned financial advisor and investment bank headquartered in Chicago, with offices in New York, Los Angeles and Raleigh-Durham. Terms were not disclosed. Duff & Phelps provides expertise in middle-market mergers and acquisitions, private placements, fairness opinions, valuations, ESOP and ERISA advisory services, and special financial advisory services. The Duff & Phelps transaction is expected to be marginally accretive to Webster's 2001 earnings per share, adding in excess of $20 million of fee-based revenue, and further accelerates progress toward the strategic objective of broadening commercial bank product offerings and increasing revenue from fee-based services.

Other 2000 Highlights

In the fourth quarter of 2000, Webster completed the sale of its Olde Port Bank division consisting of two bank branches to Granite Bank, a New Hampshire state-chartered commercial bank, whose parent company is Granite State Bankshares, Inc. (Nasdaq: GSBI) of Keene, NH. Terms of the transaction were not disclosed. The two branch offices in Portsmouth and Hampton have a total of $43 million in loans and $44 million in deposits. Webster acquired the former Olde Port Bank & Trust with the purchase of New England Community Bancorp, which was completed in late 1999.

Also in the fourth quarter, Webster announced it had completed the private placement of $126 million of senior unsecured notes, due in 2007 with a fixed coupon rate of 8.72 percent. The notes were placed with a variety of institutions. Net proceeds from the note placement are designated for general corporate purposes.

Connecticut-based Webster Bank provides business and consumer banking, mortgage, insurance, trust and investment services through more than 110 banking offices, 200 ATMs and the Internet (www.websterbank.com). Webster's online mortgage subsidiary at www.nowlending.com on the Worldwide Web originates low-cost mortgages across the United States.

For more information on Webster, including past press releases and the latest Annual Report, visit the Webster Bank website at www.websterbank.com.

Conference Call

A conference call covering today's announcement will be held today, Tuesday, Jan. 23, at 1 p.m., Eastern Time and may be heard through Webster's investor relations website at www.wbst.com, or in listen-only mode by calling 1-800-521-5431 (Access Code: 905310). The call will be archived on the website and available for future retrieval.

Statements in this press release regarding Webster Financial Corporation's business that are not historical facts are "forward looking statements" that involve risks and uncertainties. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statement, see "Forward Looking Statements" in the Company's Annual Report for the most recently ended fiscal year.

                     WEBSTER FINANCIAL CORPORATION

----------------------------------------------------------------------
Consolidated Statements of Condition (unaudited)
----------------------------------------------------------------------
                                           December 31,   December 31,
         (Dollars in thousands)                   2000           1999
----------------------------------------------------------------------
Assets:

Cash and due from depository institutions     $ 265,035     $ 245,783
Interest-bearing deposits                         1,751        37,838
Securities:
  Trading, at fair value                              6        50,854
  Available for sale, at fair value           3,143,327     2,700,585
  Held to maturity, (fair value: $248,215
    in 2000; $300,282 in 1999)                  261,747       315,462
Loans receivable:
  Residential loans                           4,146,780     3,898,943
  Commercial and industrial loans             1,207,398       915,035
  Commercial real estate loans                  857,033       741,168
  Home equity loans                             609,293       492,684
  Other consumer loans                           89,514        47,064
  Allowance for loan losses                     (90,809)      (72,658)
                                             ----------  ------------
Loans receivable, net                         6,819,209     6,022,236

Accrued interest receivable                      69,733        58,918
Premises and equipment, net                      94,263       103,403
Foreclosed properties, net                        3,295         4,909
Intangible assets                               326,142       138,829
Cash surrender value of life insurance          174,295       148,252
Prepaid expenses and other assets                90,705       104,675
                                             ----------  ------------

  Total assets                             $ 11,249,508   $ 9,931,744
                                           ============   ===========


Liabilities and Shareholders' Equity:

Deposits:
  Checking and NOW                          $ 1,603,671   $ 1,375,692
  Savings and MMDAs                           1,916,543     1,719,562
  Certificates of deposit                     3,421,308     3,095,837
                                             ----------  ------------
Total deposits                                6,941,522     6,191,091

Borrowed funds                                3,030,225     2,788,445
Accrued expenses and other liabilities          187,810       116,964
                                             ----------  ------------
  Total liabilities                          10,159,557     9,096,500
                                             ----------  ------------


Corporation-obligated mandatorily redeemable
  capital securities of subsidiary trusts       150,000       150,000

Preferred stock of subsidiary corporation        49,577        49,577

Shareholders' equity                            890,374       635,667
                                             ----------  ------------

  Total liabilities and 
   shareholders' equity                    $ 11,249,508   $ 9,931,744
                                           ============   ===========


----------------------------------------------------------------------
Consolidated Statements of Income (unaudited)
----------------------------------------------------------------------
                                Three Months Ended Twelve Months Ended
                                    December 31,       December 31,
(Dollars in thousands, except 
 per share data)                     2000     1999      2000     1999
--------------------------------------------------  ------------------
Interest income:
Loans                            $141,315 $113,642  $518,315 $435,326
Securities and interest-bearing 
 deposits                          55,407   50,132   220,596  210,466
                                 -------- --------  -------- --------
  Total interest income           196,722  163,774   738,911  645,792
                                 -------- --------  -------- --------

Interest expense:
Deposits                           61,849   50,596   224,294  203,805
Borrowings                         49,470   36,640   188,101  138,474
                                 -------- --------  -------- --------
  Total interest expense          111,319   87,236   412,395  342,279
                                 -------- --------  -------- --------

Net interest income                85,403   76,538   326,516  303,513
Provision for loan losses           3,200    2,322    11,800    9,000
                                 -------- --------  -------- --------
Net interest income after 
 provision for loan losses         82,203   74,216   314,716  294,513
                                 -------- --------  -------- --------

Noninterest income:
Fees and service charges           17,311   13,878    60,059   49,523
Trust and investment services       4,618    3,572    18,184   10,246
Investment banking revenue          1,290        -     1,290        -
Insurance commissions               3,451    1,807    14,360    7,167
Gain on sale of loans and loan 
 servicing, net                       453      330     3,956    4,434
Gain on sale of securities, net       616    1,835     8,445    4,248
Gain on sale of deposits            4,859        -     4,859        -
Increase in cash surrender value 
 of life insurance                  2,322    1,983     8,555    7,892
Other noninterest income            2,484    3,176     9,113    9,120
                                 -------- --------  -------- --------
  Total noninterest income         37,404   26,581   128,821   92,630
                                 -------- --------  -------- --------

Noninterest expenses:
Compensation and benefits          31,506   28,463   122,257  106,493
Occupancy expense                   7,123    5,637    24,774   20,892
Furniture and equipment expense     7,472    6,251    26,302   22,302
Intangible amortization expense     7,335    3,976    22,400   13,780
Marketing expense                   2,541    2,618     9,118    9,584
Professional services expense       2,228    2,117     7,399    9,144
Acquisition-related expenses            -    9,500         -    9,500
Capital securities expense          3,615    3,661    14,323   14,645
Dividends on preferred stock of 
 subsidiary corporation             1,038    1,038     4,151    4,151
Other operating expenses            9,518    8,146    36,406   33,970
                                 -------- --------  -------- --------
  Total noninterest expenses       72,376   71,407   267,130  244,461
                                 -------- --------  -------- --------

Income before income taxes         47,231   29,390   176,407  142,682
Income taxes                       15,441    9,760    58,116   47,332
                                 -------- --------  -------- --------
Net income                       $ 31,790 $ 19,630  $118,291 $ 95,350
                                 ======== ========  ======== ========

Net Income per common share 
 before acquisition-related expense
 and other non-recurring items:
  Basic                             $0.60    $0.59     $2.50    $2.29
  Diluted                           $0.60    $0.58     $2.47    $2.25

Net income per common share 
 after acquisition-related 
 expense and other non-recurring 
 items:
  Basic                             $0.65    $0.44     $2.58    $2.14
  Diluted                           $0.64    $0.43     $2.55    $2.10

----------------------------------------------------------------------
Selected Financial Highlights 
 (unaudited)
----------------------------------------------------------------------
                       At or for the Three     At or for the Twelve
                   Months Ended December 31, Months Ended December 31,
(Dollars in thousands, 
 except per share data)     2000        1999         2000        1999
----------------------------------------------------------------------
Operating and 
 Performance Ratios 
 (annualized):
----------------------
GAAP earnings (a)       $ 31,790    $ 19,630    $ 118,291    $ 95,350

Return on average 
 shareholders' equity      15.09%      12.21%       16.72%      15.33%
Return on average 
 shareholders' equity 
 before non-recurring 
 items (b)                 13.97       16.44        16.23       16.42

Return on average  
 assets                     1.14        0.80         1.11        0.98
Return on average 
 assets before 
 non-recurring items (b)    1.06        1.08         1.08        1.05

Cash earnings           $ 38,146    $ 22,855    $ 137,317   $ 106,125

Cash return on 
 average shareholders' 
 equity (c)                18.11%      14.22%       19.40%      17.06%
Cash return on 
 average shareholders' 
 equity before 
 non-recurring 
 items (d)                 16.99       18.45        18.91       18.16

Fee income as a 
 percentage of total 
 revenue                   26.63       24.19        25.20       21.67

Noninterest expenses 
 / average assets           2.60        2.93         2.51        2.51
Noninterest expenses 
 / average assets (e)       2.11        2.17         2.11        2.07

Efficiency ratio (e)       50.49       52.27        51.67       52.13
Efficiency ratio (f)       54.49       56.91        55.92       56.98

Shareholders' equity 
 / total assets             7.91        6.40         7.91        6.40
Interest-rate spread        3.19        3.23         3.16        3.18
Net interest margin         3.32        3.34         3.29        3.32

Loan originations:
Residential            $ 157,626   $ 188,383    $ 658,367  $1,168,228
Commercial               199,100     207,955      691,323     634,396
Consumer                  97,657      60,950      341,797     269,910

Asset Quality:
--------------
Nonaccrual loans        $ 41,034    $ 38,394     $ 41,034    $ 38,394
Nonaccrual assets, net    44,329      43,302       44,329      43,302
Allowance for loan 
 losses                   90,809      72,658       90,809      72,658
Allowances for 
 nonaccrual assets        91,001      72,908       91,001      72,908
Net loan charge-offs       1,308       2,653        4,629       5,190
Nonaccrual assets 
 / total assets             0.39%       0.44%        0.39%       0.44%
Allowance for loan 
 losses / gross loans       1.31        1.19         1.31        1.19
Allowance for loan 
 losses / nonaccrual 
 loans                    221.30      189.24       221.30      189.24
Allowances for 
 nonaccrual assets / 
 nonaccrual assets        204.40      167.40       204.40      167.40

Share Related:
--------------
Book value per 
 common share            $ 18.19     $ 14.09      $ 18.19     $ 14.09 
Tangible book value 
 per common share          11.53       11.02        11.53       11.02
Common stock closing 
 price                     28.31       23.56        28.31       23.56
Dividend declared 
 per common share         $ 0.16      $ 0.12       $ 0.62     $  0.47
Common shares issued 
 and outstanding      48,939,426  45,103,770   48,939,426  45,103,770
Basic shares          48,780,586  45,108,608   45,910,447  44,553,859
Diluted shares        49,307,867  45,882,093   46,427,507  45,393,488

(a) Net income applying General Accepted Accounting Principles.

(b) Excludes income from a one-time life insurance benefit of $1.1
    million recorded in June 2000, gain on sale of deposits and
    related facilities of $5.3 million (net of taxes, $3.5 million),
    recorded in December 2000, non-recurring facilities expenses of
    $1.7 million (net of taxes, $1.1 million) recorded in December
    2000 and non-recurring acquisition expense of $9.5 million (net of
    taxes, $6.8 million) recorded in December 1999.

(c) Net income, excluding tax-effected intangible amortization,
    divided by average shareholders' equity.

(d) Net income, excluding tax-effected intangible amortization, income
    from a one-time life insurance benefit of $1.1 million, gain on
    sale of deposits and related facilities of $5.3 million (net of
    taxes, $3.5 million), non-recurring facilities expenses of $1.7
    million (net of taxes, $1.1 million) and non-recurring acquisition
    expense of $9.5 million (net of taxes, $6.8 million).

(e) Excludes non-recurring items, intangible amortization, capital
    securities, preferred dividend and foreclosed property expenses.

(f) Excludes non-recurring items, intangible amortization, and
    foreclosed property expenses.


----------------------------------------------------------------------
Retail and Wholesale Interest-Rate Spreads   (unaudited)
----------------------------------------------------------------------

Three months ended,         December  September June   March  December
                                2000       2000 2000    2000      1999
----------------------------------------------------------------------

Interest-rate spread
Total interest-earning 
 assets (a)                      7.62%   7.56%   7.32%   7.21%   7.14%
Total interest-bearing 
 liabilities                     4.43    4.38    4.14    4.11    3.91
                                -----   -----   -----   -----   -----
    Interest-rate spread         3.19%   3.18%   3.18%   3.10%   3.23%
    Net interest margin          3.32    3.30    3.29    3.22    3.34

Retail interest-rate spread
Yield on loans                   8.12%   8.06%   7.79%   7.68%   7.57%
Rate on deposits                 3.52    3.44    3.25    3.27    3.23
                                -----   -----   -----   -----   -----
    Spread                       4.60%   4.62%   4.54%   4.41%   4.34%
                                =====   =====   =====   =====   =====

Wholesale interest-rate spread
Yield on securities (a)          6.58%   6.58%   6.46%   6.35%   6.32%
Rate on borrowings               6.53    6.43    6.13    5.85    5.57
                                -----   -----   -----   -----   -----
    Spread                       0.05%   0.15%   0.33%   0.50%   0.75%
                                =====   =====   =====   =====   =====

----------------------------------------------------------------------
Consolidated Average Statements of Condition   (unaudited)
----------------------------------------------------------------------

    Three months ended December 31,                 2000
----------------------------------------------------------------------
                                                            Fully tax 
                                        Average             equivalent
            (Dollars in thousands)      balance   Interest  yield/rate
----------------------------------------------------------------------

Assets:
  Interest-earning assets:
  Loans                                $6,945,093  $ 141,315   8.12%  
  Securities and interest-bearing 
   deposits                             3,313,372     55,407   6.58(a)
                                      -----------  ---------   ----
     Total interest-earning assets     10,258,465    196,722   7.62   
                                                   ---------          
  Noninterest-earning assets              874,980                     
                                      -----------  
     Total assets                     $11,133,445   
                                      ===========                   

Liabilities and Shareholders' Equity:
  Interest-bearing liabilities:
  Interest-bearing deposits            $6,146,087   $ 61,849   4.00%  
  Noninterest-bearing deposits            845,196         -       -   
  Federal Home Loan Bank advances       2,230,705     36,974   6.59   
  Repurchase agreements and 
   other borrowings                       739,628     11,506   6.19   
  Senior notes                             45,196        990   8.76   
                                      -----------  ---------   ----
     Total interest-bearing 
      liabilities                      10,006,812    111,319   4.43   
                                      -----------  ---------
  Noninterest-bearing liabilities          84,524                     
                                      -----------                     
     Total liabilities                 10,091,336                     

  Capital securities and preferred 
   stock of subsidiary corporation        199,577                     

  Shareholders' Equity                    842,532                     
                                      -----------                     
     Total liabilities and 
      shareholders' equity            $11,133,445                     
                                      ===========                   

  Net interest income                               $ 85,403          
                                                    ========     

  Interest-rate spread                                         3.19%  
                                                               ====
  Net interest margin                                          3.32%  
                                                               ====


----------------------------------------------------------------------
    Three months ended December 31,                 1999
----------------------------------------------------------------------
                                                             Fully tax
                                         Average            equivalent
                                         balance   Interest yield/rate
----------------------------------------------------------------------

Assets:                                     
  Interest-earning assets:                  
  Loans                                $5,987,112   $113,642   7.57%  
  Securities and interest-bearing 
   deposits                             3,173,573     50,132   6.32(a)
                                       ----------   --------   ----
     Total interest-earning assets      9,160,685    163,774   7.14   
                                                    --------          
  Noninterest-earning assets              602,956                     
                                       ----------                     
     Total assets                      $9,763,641                     
                                       ==========                     

Liabilities and Shareholders' Equity:                                 
  Interest-bearing liabilities:                                       
  Interest-bearing deposits            $5,621,272    $50,596   3.57%  
  Noninterest-bearing deposits            592,762          -      -   
  Federal Home Loan Bank advances       1,583,239     21,457   5.38   
  Repurchase agreements and 
   other borrowings                       985,016     14,268   5.75   
  Senior notes                             40,000        915   9.15   
                                       ----------   --------   ----
     Total interest-bearing 
      liabilities                       8,822,289     87,236   3.91   
                                       ----------   --------
  Noninterest-bearing liabilities          98,807                     
                                       ----------                     
     Total liabilities                  8,921,096                     

  Capital securities and preferred 
   stock of subsidiary corporation        199,577                     

  Shareholders' Equity                    642,968                     
                                       ----------                     
     Total liabilities and                                            
      shareholders' equity             $9,763,641                     
                                       ==========                     

  Net interest income                               $76,538           
                                                   =========          

  Interest-rate spread                                         3.23%  
                                                               ====
  Net interest margin                                          3.34%  
                                                               ====


(a) For purposes of this computation, unrealized gains (losses) are
    excluded from the average rate calculations.


----------------------------------------------------------------------
Consolidated Average Statements of Condition   (unaudited)
----------------------------------------------------------------------


----------------------------------------------------------------------
     Twelve months ended December 31,               2000          
----------------------------------------------------------------------
                                                            Fully tax 
                                       Average              equivalent
             (Dollars in thousands)    balance     Interest yield/rate
----------------------------------------------------------------------

Assets:
  Interest-earning assets:
  Loans                               $ 6,541,659   $518,315   7.92%  
  Securities and interest-bearing 
   deposits                             3,298,959    220,596   6.49(a)
                                       ----------   --------   ----
     Total interest-earning assets      9,840,618    738,911   7.43   
                                                    ---------         
  Noninterest-earning assets              799,597                     
                                      ------------                    
     Total assets                     $ 10,640,215                    
                                      ============                    

Liabilities and Shareholders' Equity:
  Interest-bearing liabilities:
  Interest-bearing deposits           $ 5,879,940   $224,294   3.81%  
  Noninterest-bearing deposits            759,650          -      -   
  Federal Home Loan Bank advances       2,047,743    128,447   6.27   
  Repurchase agreements and other 
   borrowings                             935,629     56,744   6.06   
  Senior notes                             31,142      2,910   9.34   
                                       ----------   --------   ----
     Total interest-bearing 
      liabilities                       9,654,104    412,395   4.27   
                                                    ---------         
  Noninterest-bearing liabilities          78,870                     
                                      ------------                    
     Total liabilities                  9,732,974                     

  Capital securities and preferred 
   stock of subsidiary corporation        199,577                     

  Shareholders' Equity                    707,664                     
                                      ------------                    
     Total liabilities and 
      shareholders' equity           $ 10,640,215                     
                                     ============                     

  Net interest income                               $326,516          
                                                    ========          

  Interest-rate spread                                         3.16%  
                                                               ====
  Net interest margin                                          3.29%  
                                                               ====


----------------------------------------------------------------------
     Twelve months ended December 31,               1999
----------------------------------------------------------------------
                                                            Fully tax 
                                         Average            equivalent
             (Dollars in thousands)      balance   Interest yield/rate
----------------------------------------------------------------------
Assets:                               
  Interest-earning assets:            
  Loans                               $ 5,802,453   $435,326   7.50%  
  Securities and interest-bearing                                     
   deposits                             3,342,188    210,466   6.30(a)
                                       ----------   --------   ----
     Total interest-earning assets      9,144,641    645,792   7.06   
                                                    --------          
  Noninterest-earning assets              600,483                     
                                      ------------                    
     Total assets                     $ 9,745,124                     
                                      ============                    

Liabilities and Shareholders' Equity:                                 
  Interest-bearing liabilities:                                       
  Interest-bearing deposits           $ 5,618,130   $203,805   3.63%  
  Noninterest-bearing deposits            608,135          -      -   
  Federal Home Loan Bank advances       1,585,458     84,498   5.33   
  Repurchase agreements and other                                     
   borrowings                             978,581     50,316   5.14   
  Senior notes                             40,000      3,660   9.15   
                                       ----------   --------   ----
     Total interest-bearing                                           
      liabilities                       8,830,304    342,279   3.88   
                                                    --------
  Noninterest-bearing liabilities          93,252                     
                                      ------------                    
     Total liabilities                   8,923,556                    

  Capital securities and preferred                                    
   stock of subsidiary corporation        199,577                     

  Shareholders' Equity                    621,991                     
                                      ------------                    
     Total liabilities and                                            
      shareholders' equity             $9,745,124                     
                                      ===========                     

  Net interest income                               $303,513          
                                                    ========          

  Interest-rate spread                                         3.18%  
                                                               ====
  Net interest margin                                          3.32%  
                                                               ====


(a) For purposes of this computation, unrealized gains (losses) are
    excluded from the average rate calculations.

--30--db/ny*

CONTACT: Webster Contacts:
Media: Michael G. Bazinet, 203/578-2391
mbazinet@websterbank.com
or
Jim Kalach, 203/578-2461
jkalach@websterbank.com
or
Investors: James M. Sitro, 203/578-2399
jsitro@websterbank.com