Webster Net Income Increases 12 Percent in First Quarter

Apr 19, 2005

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WATERBURY, Conn., April 19 /PRNewswire-FirstCall/ -- Webster Financial Corporation (NYSE: WBS), the holding company for Webster Bank, N.A., today announced a 12 percent increase in net income to $47.5 million in the first quarter from $42.3 million a year ago. Net income per diluted share was $.88 in the first quarter compared to $.90 a year ago. Net income per share included $.01 from gains on the sale of securities in the first quarter while the year-ago period included $.08 of gains. Diluted shares outstanding in the first quarter include 6.7 million shares issued in last year's second quarter acquisition of FIRSTFED AMERICA BANCORP, INC. (FIRSTFED).

Cash net income, which adds stock-based compensation and intangible amortization expenses back to net income, increased by 14 percent to $52.1 million from $45.6 million a year ago. Cash net income per share was $.96 in the first quarter compared to $.97 a year ago while the cash return on average tangible equity improved to 23.4 percent from 20.9 percent a year ago.

"We are pleased with the high quality of first quarter results and the measurable progress toward achieving our strategic and financial goals," said Webster Chairman and Chief Executive Officer James C. Smith. "Strong performance included improvement in the net interest margin, solid asset quality and expense control even as we continue to invest in our de novo branching initiative and our information technology platform. In addition, Webster entered the rapidly growing health savings account market with the acquisition of an established industry leader, HSA Bank."

Revenues

Total revenues (net interest income plus total noninterest income) were $181.3 million in the first quarter, compared to $160.5 million a year ago, an increase of 13 percent. Adjusting for securities gains in both periods and for the sale of Duff & Phelps in the first quarter of 2004, total revenues would have grown by 19 percent.

Net interest income was $128.2 million in the first quarter of 2005, compared to $105.8 million in the year-ago period and $127.6 million in the fourth quarter. The increase over the prior year reflects double-digit growth in the loan portfolio and a higher net interest margin, while the increase over the fourth quarter is due to a higher net interest margin partially offset by lower earning assets attributable to the balance sheet de-leveraging in the fourth quarter.

Webster's net interest margin (annualized tax-equivalent net interest income as a percentage of average earning assets) improved 23 basis points to 3.32 percent from 3.09 percent in the year-ago period and compares to 3.25 percent in the fourth quarter. The increases reflect the benefit of the de- leveraging and the impact of higher interest rates on earning asset yields.

The provision for loan losses totaled $3.5 million in the first quarter and exceeded net-charge-offs by $2.4 million. This compares to a provision of $5.0 million a year ago, which exceeded net charge-offs by $1.9 million. The reduction in the provision is due to Webster's improved asset quality and the reduced level of net charge-offs. The annualized net charge-off ratio was 0.04 percent of average loans in the first quarter compared to 0.13 percent a year ago.

In the first quarter of 2005, total noninterest income was $53.0 million compared to $54.7 million in the year-ago period. Excluding securities gains and the sale of Duff & Phelps, noninterest income increased in the first quarter to $52.3 million from $45.4 million in the year-ago period.

Webster's core fee revenues reflect growth in our businesses over the past year and the acquisition of FIRSTFED. Revenues from deposit service fees, insurance, loan and loan servicing and wealth management totaled $45.3 million in the first quarter and grew by 11 percent compared to a year ago. Deposit service fees totaled $19.1 million and grew by 11 percent from a year ago. Consistent with an industry trend, deposit service fees on a linked-quarter basis declined by $1.6 million, a larger than normal amount than in prior years. Gains on sales of loans and loan servicing totaled $2.5 million in the quarter and increased by $1.5 million from a year ago primarily as a result of increased volumes of mortgage loan originations through Webster's People's Mortgage Corporation subsidiary. Other income of $2.2 million in the first quarter included $1.2 million of non-recurring insurance proceeds.

Expenses

Total noninterest expenses for the 2005 first quarter were $107.8 million, which includes $1.1 million of non-recurring charges under Webster's core infrastructure conversion project, compared to $92.1 million in the year-ago period. Adjusting each period for acquisitions, Duff & Phelps, investments in de novo branch expansion and the core infrastructure conversion, total noninterest expenses were $90.8 million in the first quarter and $86.6 million a year ago for an increase of 5 percent.

Further adjusting the $90.8 million for $12.0 million of FIRSTFED operating expenses in the first quarter, expenses totaled $102.8 million and were flat with the fourth quarter when $45.8 million in debt prepayment penalties and $3.4 million of non-recurring items are removed from that quarter. The deceleration of expense growth reflects Webster's ongoing efforts to streamline processes and control discretionary costs while continuing to invest for the future.

Balance Sheet Trends

At March 31, 2005, total assets were $17.4 billion, up 15 percent from $15.1 billion a year ago. Total loans of $11.7 billion at March 31, 2005 increased 23 percent from $9.5 billion the prior year, while deposits were $11.0 billion, up 28 percent from $8.6 billion a year ago. Excluding the FIRSTFED and HSA Bank acquisitions, total loans increased by 7 percent over the past year while total deposits increased 8 percent.

"The acquisition of HSA Bank on March 1 brought Webster $155 million in deposits, and our de novo branch expansion program generated $53 million in new deposits during the quarter," stated Webster President and Chief Operating Officer William T. Bromage. "As a result, we are able to reduce our reliance on borrowed money at a time of rising interest rates and improve our overall balance sheet structure."

At the end of the first quarter, commercial loans including commercial real estate were $4.4 billion, up 29 percent from $3.4 billion a year ago. Commercial real estate loans were $1.7 billion, up 31 percent from last year. Consumer loans, primarily home equity loans and lines, increased 20 percent to $2.6 billion compared to $2.2 billion a year ago. Excluding FIRSTFED, commercial loans including commercial real estate were up 13 percent, commercial real estate loans were up 16 percent, and consumer loans increased 9 percent. Commercial and consumer loans comprised 60 percent of total loans at March 31, 2005 compared to 58 percent a year ago.

Core deposits (consisting of checking, money market and savings accounts) of $7.1 billion at March 31, 2005 increased by 22 percent from a year ago and represented 65 percent of total deposits. Excluding FIRSTFED and HSA Bank, core deposits grew 10 percent. Webster's overall growth in deposits has been driven in part by its High Performance Checking products and continued growth of its de novo branches in Fairfield County, Connecticut and Westchester County, New York.

Book value per common share of $29.07 at March 31, 2005 increased from $26.18 a year ago. Tangible book value per share of $16.26 at March 31, 2005 decreased from $19.60 last year, principally reflecting an increase in intangible assets related to the FIRSTFED acquisition.

Asset Quality

Nonperforming assets totaled $49.1 million or 0.28 percent of total assets at March 31, 2005, compared to $41.3 million or 0.27 percent a year ago and $39.2 million or 0.23 percent at December 31, 2004.

"Webster's disciplined approach to credit risk management has resulted in strong reserve coverage and a low net charge-off ratio that ranks among the best in our peer group," stated Webster Chief Financial Officer William J. Healy. "Our adherence to consistent standards allows us to manage and control risk in the loan portfolio."

The allowance for loan losses was $152.5 million, or 1.30 percent of total loans at March 31, 2005, compared to $123.6 million, or 1.30 percent, a year ago and $150.1 million, or 1.28 percent, at December 31, 2004. The ratio of the allowance to nonperforming loans at March 31, 2005 was 334 percent compared to 338 percent a year ago and 416 percent at December 31, 2004.

Strategic Actions

On March 1, 2005, Webster completed the acquisition of Eastern Wisconsin Bancshares, Inc., the holding company of State Bank of Howards Grove, which operates under the trade name HSA Bank. Webster is divesting State Bank's retail branches and related loans and deposits and retaining the bank's HSA operation and HSA deposits, which totaled $169 million at March 31, 2005 compared to $95 million when the acquisition was announced on September 7, 2004.

Webster completed the organizational phase of its integration of the former FIRSTFED division on April 5, 2005. The Webster brand was officially introduced to the Massachusetts and Rhode Island markets with a signage unveiling ceremony at its Swansea-based regional headquarters.

During the first quarter, Webster opened new branches in Norwalk and Bridgeport, Connecticut, increasing its presence in Fairfield County. Webster now operates 21 branch locations in 14 Fairfield County towns.

Webster Financial Corporation is the holding company for Webster Bank, National Association and Webster Insurance. With $17.4 billion in assets, Webster provides business and consumer banking, mortgage, insurance, financial planning, trust and investment services through 153 banking offices, 291 ATMs, telephone banking and the Internet. Webster Bank owns the asset-based lending firm Webster Business Credit Corporation, the insurance premium finance company Budget Installment Corp., Center Capital Corporation, an equipment finance company headquartered in Farmington, Connecticut and provides health savings account trustee and administrative services through HSA Bank, a division of Webster Bank.

For more information about Webster, including past press releases and the latest Annual Report, visit the Webster website at http://www.websteronline.com.

Conference Call

A conference call covering Webster's 2005 first quarter earnings announcement will be held today, Tuesday, April 19, at 11:00 a.m. Eastern Time and may be heard through Webster's investor relations website at http://www.wbst.com, or in listen-only mode by calling 1-877-407-8291 or 201-689-8345 internationally. 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 that could cause actual results to differ from those contained in the forward-looking statement, see "Forward Looking Statements" in Webster's Annual Report for 2004.

For reconciliation of cash basis income to net income, see accompanying financial tables elsewhere in this report.

    Selected Financial Highlights (unaudited)
                                                      At or for the Three
                                                     Months Ended March 31,
    (In thousands, except per share data)           2005              2004

    Net income and performance ratios (annualized):
    Net income                                   $47,495           $42,323
    Net income per diluted common share             0.88              0.90
    Return on average shareholders' equity         12.13%            14.28%
    Return on average tangible equity              21.37             19.34
    Return on average assets                        1.11              1.15
    Noninterest income as a percentage of
     total revenue                                 29.26             34.09
    Efficiency Ratio (a)                           59.46             57.40

    Cash income and performance ratios (annualized)(b):
    Net income                                   $47,495           $42,323
    Stock-based compensation, net of tax           1,420               647
    Intangible amortization, net of tax            3,186             2,660
    Cash income                                   52,101            45,630

    Cash income per diluted common share            0.96              0.97
    Cash return on average shareholders' equity    13.31%            15.40%
    Cash return on average tangible equity         23.44             20.85
    Cash return on average assets                   1.22              1.24

    Asset quality:
    Allowance for loan losses                   $152,519          $123,613
    Nonperforming assets                          49,130            41,262
    Allowance for loan losses / total loans         1.30%             1.30%
    Net charge-offs/ average loans (annualized)     0.04              0.13
    Nonperforming loans / total loans               0.39              0.38
    Nonperforming assets / total assets             0.28              0.27
    Allowance for loan losses /
     nonperforming loans                          334.21            338.30

    Other ratios (annualized):
    Tangible capital ratio                          5.08%             6.02%
    Shareholders' equity / total assets             8.98              8.03
    Interest-rate spread                            3.28              3.04
    Net interest margin                             3.32              3.09

    Share related:
    Book value per common share                   $29.07            $26.18
    Tangible book value per common share           16.26             19.60
    Common stock closing price                     45.41             50.71
    Dividends declared per common share             0.23              0.21

    Common shares issued and outstanding          53,787            46,299
    Basic shares (average)                        53,571            46,146
    Diluted shares (average)                      54,217            47,059

    Footnotes:
     (a) Noninterest expense as a percentage of net interest income plus
         noninterest income.
     (b) Cash income represents net income excluding the after tax effects of
         non-cash charges related to the amortization of intangible assets and
         stock-based compensation, which includes stock options and restricted
         stock.
     (c) For purposes of this computation, unrealized gains (losses) are
         excluded from the average balance for rate calculations.


    Consolidated Statements of Condition   (unaudited)
                                           March 31, December 31,    March 31,
    (In thousands)                           2005        2004          2004

      Assets:

      Cash and due from depository
       institutions                        $266,088     $248,825     $230,137
      Short-term investments                 79,676       17,629       22,130

      Securities:
        Trading, at fair value                1,038          -          2,845
        Available for sale, at fair value 2,591,270    2,494,406    4,231,102
        Held-to-maturity securities       1,212,934    1,229,613      200,531
           Total securities               3,805,242    3,724,019    4,434,478

      Loans held for sale                   352,233      147,211      135,771

      Loans:
        Residential mortgages             4,722,897    4,775,344    3,972,123
        Commercial                        2,674,901    2,584,738    2,101,195
        Commercial real estate            1,690,973    1,715,047    1,288,509
        Consumer                          2,608,303    2,637,646    2,169,011
          Total loans                    11,697,074   11,712,775    9,530,838
      Allowance for loan losses            (152,519)    (150,112)    (123,613)
          Loans, net                     11,544,555   11,562,663    9,407,225

      Accrued interest receivable            67,953       63,406       51,297
      Premises and equipment, net           161,635      149,069       99,866
      Goodwill and intangible assets        714,490      694,165      322,483
      Cash surrender value of life
       insurance                            230,823      228,120      182,511
      Prepaid expenses and other assets     190,133      185,490      204,372

      Total Assets                      $17,412,828  $17,020,597  $15,090,270

      Liabilities and Shareholders'
       Equity:

      Deposits:
        Demand deposits                  $1,426,798   $1,409,682   $1,081,455
        NOW accounts                      1,535,595    1,368,213    1,098,972
        Money market deposit accounts     1,904,158    1,996,918    1,779,468
        Savings accounts                  2,276,623    2,253,073    1,891,298
        Certificates of deposit           3,545,287    3,376,718    2,676,910
          Total retail deposits          10,688,461   10,404,604    8,528,103
        Treasury deposits                   295,073      166,684      109,979
       Deposits held in divested branches    48,301          -            -
          Total deposits                 11,031,835   10,571,288    8,638,082

      Federal Home Loan Bank advances     2,319,722    2,590,335    2,437,014
      Securities sold under agreements
       to repurchase and other
        short-term debt                   1,670,950    1,428,483    2,150,719
      Other long-term debt                  674,240      680,015      532,760
      Accrued expenses and other
       liabilities                          142,910      196,925      110,156
          Total liabilities              15,839,657   15,467,046   13,868,731


      Preferred stock of subsidiary
       corporation                            9,577        9,577        9,577

      Shareholders' equity                1,563,594    1,543,974    1,211,962

      Total Liabilities and
       Shareholders' Equity             $17,412,828  $17,020,597  $15,090,270


    Consolidated Statements of Income (unaudited)
                                                       Three Months Ended
                                                           March 31,
    (In thousands, except per share data)           2005              2004

      Interest income:
      Loans                                       $158,787          $118,591
      Securities and short-term
       investments                                  40,899            44,608
      Loans held for sale                            2,732             1,070
        Total interest income                      202,418           164,269

      Interest expense:
      Deposits                                      35,868            25,830
      Borrowings                                    38,318            32,633
        Total interest expense                      74,186            58,463

       Net interest income                         128,232           105,806
      Provision for loan losses                      3,500             5,000
       Net interest income after provision
        for loan losses                            124,732           100,806

      Noninterest income:
      Deposit service fees                          19,129            17,185
      Insurance revenue                             11,802            11,638
      Loan and loan servicing fees                   8,929             6,649
      Wealth and investment services                 5,395             5,116
      Financial advisory services                      -               3,808
      Gain on sale of loans and loan
       servicing, net                                2,536             1,025
      Increase in cash surrender value of
       life insurance                                2,238             1,954
      Other                                          2,243             1,848
                                                    52,272            49,223
      Gain on sale of securities                       756             5,500
       Total noninterest income                     53,028            54,723

      Noninterest expenses:
      Compensation and benefits                     57,902            53,127
      Occupancy                                     10,859             8,365
      Furniture and equipment                       10,798             7,641
      Intangible amortization                        4,902             4,092
      Marketing                                      3,283             2,984
      Professional services                          3,770             2,899
      Conversion and infrastructure costs            1,134               -
      Acquisition costs                                178               -
      Other                                         14,948            13,033
        Total noninterest expenses                 107,774            92,141


      Income before income taxes                    69,986            63,388
      Income taxes                                  22,491            21,065
        Net income                                 $47,495           $42,323

      Diluted shares (average)                      54,217            47,059

      Net income per common share:
        Basic                                        $0.89             $0.92
        Diluted                                       0.88              0.90


    Consolidated Statements of Income (unaudited)

                                            Three Months Ended

                             March 31,  Dec. 31, Sept. 30,  June 30, March 31,
    (In thousands, except      2005      2004      2004      2004      2004
     per share data)

    Interest income:
    Loans                    $158,787  $154,177  $145,456  $129,084  $118,591
    Securities and short-
     term investments          40,899    42,807    45,541    45,162    44,608
    Loans held for sale         2,732     1,718     1,755     2,139     1,070
      Total interest income   202,418   198,702   192,752   176,385   164,269

    Interest expense:
    Deposits                   35,868    32,993    32,611    29,172    25,830
    Borrowings                 38,318    38,109    38,853    33,746    32,633
      Total interest expense   74,186    71,102    71,464    62,918    58,463

      Net interest income     128,232   127,600   121,288   113,467   105,806
    Provision for loan losses   3,500     4,000     4,000     5,000     5,000
      Net interest income
       after provision for
        loan losses           124,732   123,600   117,288   108,467   100,806

    Noninterest income:
    Deposit service fees       19,129    20,712    20,596    19,250    17,185
    Insurance revenue          11,802    10,348    10,924    10,596    11,638
    Loan and loan servicing
     fees                       8,929     7,727     6,893     7,305     6,649
    Wealth and investment
     services                   5,395     5,198     6,044     5,849     5,116
    Financial advisory
     services                     -         -         -         -       3,808
    Gain on sale of loans
     and loan servicing, net    2,536     2,492     4,467     5,321     1,025
    Increase in cash
     surrender value of life
      insurance                 2,238     2,283     2,421     2,177     1,954
    Other                       2,243     2,692     1,912       964     1,848
                               52,272    51,452    53,257    51,462    49,223
    Gain (loss) on sale
     of securities                756    (2,646)    5,843     5,616     5,500
      Total noninterest
       income                  53,028    48,806    59,100    57,078    54,723

    Noninterest expenses:
    Compensation and
     benefits                  57,902    57,128    55,406    53,659    53,127
    Occupancy                  10,859     9,909     9,144     8,402     8,365
    Furniture and equipment    10,798    10,889    10,103     8,993     7,641
    Intangible amortization     4,902     4,844     4,827     4,582     4,092
    Marketing                   3,283     2,533     4,233     3,630     2,984
    Professional services       3,770     5,523     4,294     2,938     2,899
    Conversion and
     infrastructure costs       1,134       300       200       -         -
    Acquisition cost              178       426       -         265       -
    Debt prepayment penalties     -      45,761       -         -         -
    Other                      14,948    16,735    15,562    14,710    13,033
      Total noninterest
       expenses               107,774   154,048   103,769    97,179    92,141


    Income before income
     taxes                     69,986    18,358    72,619    68,366    63,388
    Income taxes               22,491     2,052    23,258    22,523    21,065
      Net income              $47,495   $16,306   $49,361   $45,843   $42,323

    Diluted shares (average)   54,217    54,045    53,767    50,475    47,059

    Net income per common
     share:
      Basic                     $0.89     $0.31     $0.93     $0.92     $0.92
      Diluted                    0.88      0.30      0.92      0.91      0.90


    Retail and Wholesale Interest-Rate Spreads   (unaudited)

    Three Months Ended,               March December September June   March
                                       2005    2004    2004    2004    2004

      Interest-rate spread
      Total interest-earning assets    5.22%   5.02%   4.82%   4.68%   4.78%
      Total interest-bearing
       liabilities                     1.94    1.80    1.78    1.69    1.74
          Interest-rate spread         3.28%   3.22%   3.04%   2.99%   3.04%
          Net interest margin          3.32    3.25    3.06    3.02    3.09

      Retail interest-rate spread
      Yield on loans and loans held
       for sale                        5.44%   5.25%   5.07%   4.93%   5.05%
      Cost of deposits                 1.37    1.25    1.25    1.23    1.24
          Spread                       4.07%   4.00%   3.82%   3.70%   3.81%

      Wholesale interest-rate spread
      Yield on securities and short-
       term investments                4.52%   4.37%   4.18%   4.09%   4.19%
      Cost of borrowings               3.23    2.91    2.80    2.50    2.56
          Spread                       1.29%   1.46%   1.38%   1.59%   1.63%


    Consolidated Average Statements of Condition (unaudited)

    Three Months Ended March 31,
    (Dollars in thousands)
                                 2005                        2004
                                         Fully tax-                 Fully tax-
                      Average            equivalent Average         equivalent
                      balance  Interest  yield/     balance Interest   yield/
                                          rate                          rate

    Assets:
     Interest-earning assets:
     Loans         $11,685,261  $158,787  5.45%  $9,368,169  $118,591  5.05%
     Securities      3,750,867    42,690  4.54(c) 4,331,501    45,161  4.22(c)
     Loans held for
      sale             213,952     2,732  5.11       85,276     1,070  5.02
     Short-term
      investments       26,855       141  2.10       35,759        66  0.73
      Total
       interest-
        earning
         assets     15,676,935   204,350  5.22   13,820,705   164,888  4.78
     Noninterest-
      earning
       assets        1,401,298                      889,392
       Total
        assets     $17,078,233                  $14,710,097

    Liabilities and Shareholders' Equity:

     Interest-bearing
      liabilities:
     Demand
      deposits      $1,345,366         -     -   $1,058,849         -     -
     Savings, NOW and
      money market
       deposit
        accounts     5,604,282    12,959  0.94    4,539,038     8,984   0.80
     Time deposits   3,692,642    22,909  2.52    2,789,750    16,846   2.43
      Total
       deposits     10,642,290    35,868  1.37    8,387,637    25,830   1.24
     Federal Home
      Loan Bank
       advances      2,407,150    18,587  3.09    2,428,829    19,004   3.10
     Repurchase
      agreements and
       other short-term
        debt         1,659,605     9,543  2.30    2,093,519     5,431   1.03
     Other long-term
       debt            681,120    10,188  5.98      532,760     8,198   6.16
      Total
       borrowings    4,747,875    38,318  3.23    5,055,108    32,633   2.56
      Total interest-
       bearing
        liabilities 15,390,165    74,186  1.94   13,442,745    58,463   1.74
    Noninterest-
     bearing
      liabilities      112,679                       72,405
       Total
        liabilities 15,502,844                   13,515,150
    Preferred stock
     of subsidiary
      corporation        9,577                        9,577

    Shareholders'
     equity          1,565,812                    1,185,370
      Total liabilities
       and shareholders'
        equity     $17,078,233                   $14,710,097
                                 130,164                      106,425
    Less: tax-equivalent
     adjustment                   (1,932)                        (619)

    Net interest income         $128,232                     $105,806

    Interest-rate spread                  3.28%                         3.04%
    Net interest margin                   3.32%                         3.09%

    See Selected Financial Highlights for footnotes.


                                      At or for the Three Months Ended
                             March 31, Dec. 31, Sept. 30,   June 30, March 31,
    (Dollars in thousands)     2005      2004      2004       2004    2004
    Asset Quality

    Nonperforming loans:
     Commercial:
      Commercial              $17,112   $14,624   $12,407   $15,895  $16,851
      Equipment financing       3,800     3,383     4,501     5,021    5,561
       Total commercial        20,912    18,007    16,908    20,916   22,412

     Commercial real estate    15,609     8,431    11,157    13,757    5,583
     Residential                7,528     7,796     7,695     8,599    7,941
     Consumer                   1,586     1,894     1,204       826      604

    Total nonperforming loans  45,635    36,128    36,964    44,098   36,540

    Loans held for sale           492         -         -         -        -

    Other real estate owned and
     repossessed assets:
     Commercial                 2,472     2,824     2,482     3,192    4,273

       Residential                446       100       527       238      325
       Consumer                    85       114        20       130      124

     Total other real estate
      owned and repossessed
       assets                   3,003     3,038     3,029     3,560    4,722

     Total nonperforming
      assets                  $49,130   $39,166   $39,993   $47,658  $41,262


    Allowance for Loan Losses

    Beginning balance        $150,112  $148,179  $146,511  $123,613 $121,674
    Allowance for
     purchased loans                -       617         -    20,081        -
    Provision                   3,500     4,000     4,000     5,000    5,000

    Charge-offs:
     Commercial                 2,155     3,432     3,556     2,646    3,075
     Residential                  167       367        92       187      983
     Consumer                     142       147       195       174       97
      Total charge-offs         2,464     3,946     3,843     3,007    4,155
     Recoveries                (1,371)   (1,262)   (1,511)     (824)  (1,094)
      Net loan charge-offs      1,093     2,684     2,332     2,183    3,061
    Ending balance           $152,519  $150,112  $148,179  $146,511 $123,613

    Asset Quality Ratios:
    Allowance for loan losses/
     total loans                 1.30%     1.28%     1.28%     1.30%    1.30%
    Net charge-offs/average
     loans (annualized)          0.04      0.09      0.08      0.08     0.13
    Nonperforming loans/
     total loans                 0.39      0.31      0.32      0.39     0.38
    Nonperforming assets/
     total assets                0.28      0.23      0.22      0.28     0.27
    Allowance for loan losses/
     nonperforming loans       334.21    415.50    400.87    332.24   338.30


     Media Contact                             Investor Contact
     Meghan Thompson 203-578-2287              Terry Mangan 203-578-2318
     mthompson@websterbank.com                 tmangan@websterbank.com
SOURCE  Webster Financial Corporation
    -0-                             04/19/2005
    /CONTACT:  Media Contact - Meghan Thompson, +1-203-578-2287,
mthompson@websterbank.com, or Investor Contact - Terry Mangan,
+1-203-578-2318, tmangan@websterbank.com, both of Webster Financial
Corporation/
    /Web site:  http://www.websterbank.com
                http://www.websteronline.com
                http://www.wbst.com /
    (WBS)

CO:  Webster Financial Corporation
ST:  Connecticut
IN:  FIN
SU:  ERN CCA

EA
-- NYTU074 --
5848 04/19/2005 07:30 EDT http://www.prnewswire.com