Webster Financial (WBS) 8-K Webster Reports 13 Percent Increase In Net Income for the Second Quarter

Exhibit 99.1

Media Contact:	Investor Contact:
Meghan Thompson 203-578-2287	Terry Mangan 203-578-2318
mthompson@websterbank.com	tmangan@websterbank.com

WEBSTER REPORTS 13 PERCENT INCREASE IN NET INCOME FOR THE
SECOND QUARTER

WATERBURY, Conn., July 15, 2004 — Webster Financial Corporation (NYSE: WBS), the holding company for Webster Bank, today announced net income of $45.8 million in the second quarter, compared to $40.6 million in the year-ago period, an increase of 13 percent. Net income per diluted share was $.91 in the second quarter, compared to $.88 in the year-ago period, an increase of 3 percent.

For the first six months of 2004, net income was $88.2 million compared to $80.5 million in the year-ago period, an increase of 9 percent. Net income per diluted share was $1.81 compared to $1.74 in the year-ago period, an increase of 4 percent.

“We are pleased to report higher quarterly earnings and continuing progress in pursuit of Webster’s strategic objectives. Continued double-digit organic growth in loans and deposits, combined with strength in our fee-based businesses, helped to offset effects of continuing lower interest rates on asset yields,” stated Webster chairman and chief executive officer James C. Smith. “We achieved two significant strategic milestones in the quarter. Webster converted to a national commercial bank charter and became a bank holding company. In addition, we completed our merger with FIRSTFED, making Webster the largest independent bank headquartered in southern New England.”

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Webster previously announced the completion of its acquisition of FIRSTFED AMERICA BANCORP, INC., which became effective on May 14, 2004. FIRSTFED had assets of $2.7 billion, including loans of $1.5 billion, and deposits of $1.5 billion with 26 branches and 33 ATM’s. FIRSTFED’s results of operations are included in Webster’s consolidated financial statements subsequent to the date of acquisition, and reflect the sale and de-leveraging of $750 million of FIRSTFED’s securities portfolio.

Revenues and Expenses

Total revenues (net interest income plus total noninterest income) were $170.5 million in the second quarter, compared to $158.9 million a year ago. Impacting the quarter and the first half of this year was the implementation on December 31, 2003 of Financial Accounting Standards Board Interpretation No. (“FIN”) 46 (revised), which required the reclassification of capital trust securities expense as of January 1, 2004 from noninterest expenses to interest expense. Adjusting the second quarter of 2003 for $2.7 million of this expense, total revenues would have grown by $14.4 million, or 9 percent, from a year ago.

Net interest income was $113.5 million in the second quarter of 2004, compared to $100.6 million in the year-ago period and $105.8 million in the first quarter. Adjusting for the effect of FIN 46R, net interest income grew by $15.6 million, or 16 percent, from a year ago and by $7.7 million, or 7 percent, from the first quarter. The increase over the prior year reflects strong growth in the loan portfolio funded predominantly by core deposits, while the increase over the first quarter is mainly due to the FIRSTFED acquisition.

Webster’s net interest margin (annualized net interest income as a percentage of average earning assets) was 3.02 percent in the quarter compared to FIN 46R-adjusted 3.01 percent in the year-ago period and 3.09 percent in the first quarter. The decline from the first quarter reflects the continuing effect of lower interest rates on our asset yields and the impact of FIRSTFED’s lower net interest margin.

In the second quarter of 2004, total noninterest income was $57.1 million, compared to $58.3 million in the year-ago period, a decline of 2 percent. Excluding securities gains, noninterest income increased by 4 percent in the second quarter to $51.5 million from $49.6 million in the year-ago period. Growth in the core fee categories of deposit services, insurance, loan and servicing and wealth management offset a $5.2 million decline in financial advisory services due to the sale of Duff & Phelps in the first quarter. Excluding securities gains, the acquisition of FIRSTFED and the sale of Duff & Phelps, noninterest income increased by 7 percent in the second quarter compared to a year ago.

Total noninterest expenses for the 2004 second quarter were $97.2 million, an increase of 4 percent from $93.2 million in the year-ago period. Adjusting the prior year for the effect of FIN 46R, and excluding FIRSTFED and Duff & Phelps, expenses grew by 6

2

percent in the second quarter. These increases reflect continuing investment in personnel, technology andde novobranches under our strategic plan for growth.

Balance Sheet Growth

At June 30, 2004, total assets were $17.0 billion, up 18 percent from $14.5 billion a year ago. Total loans of $11.3 billion at June 30, 2004 increased 30 percent from $8.7 billion the prior year, while deposits were $10.4 billion, up 28 percent from $8.1 billion a year ago. Excluding FIRSTFED, total loans increased by $1.0 billion, or 12 percent, over the past year, while total deposits increased $0.8 billion, or 10 percent.

“Strong organic growth in both our loans and deposits was augmented by strategic acquisitions,” stated Webster president and chief operating officer William T. Bromage. “This success demonstrates how theWe Find a Wayattitude of our employees is establishing Webster as the trusted local provider of financial services in our southern New England marketplace.”

At the end of the second quarter, commercial loans, including commercial real estate, were $4.0 billion, up 28 percent from $3.2 billion a year ago. Consumer loans, primarily home equity loans and lines, increased 26 percent to $2.5 billion, compared to $2.0 billion one year ago. Excluding FIRSTFED, commercial loans, including commercial real estate, increased 12 percent while consumer loans increased 13 percent.

Core deposits (consisting of checking, money market and savings accounts) of $7.1 billion at June 30, 2004 increased by 30 percent from one year ago and represented 68 percent of total deposits. Excluding FIRSTFED, core deposits grew 12 percent. Webster’s overall growth in deposits has been driven in part by its High Performance Checking products and the continuing success of itsde novobranches in Fairfield County, Connecticut and Westchester County, New York.

Book value per common share of $27.37 at June 30, 2004 increased from $24.09 one year ago. Tangible book value per share of $15.02 at June 30, 2004 decreased from $17.59 one year ago, principally reflecting an increase in intangible assets related to the FIRSTFED acquisition.

Asset Quality

Nonperforming assets totaled $47.7 million or 0.28 percent of total assets at June 30, 2004, compared to $57.0 million or 0.39 percent a year ago and $41.3 million or 0.27 percent at March 31, 2004.

“We are pleased to report continued strong asset quality in the second quarter,” stated Webster chief financial officer William J. Healy. “The loan loss reserve remains strong given Webster’s loan portfolio mix.”

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The allowance for loan losses was $146.5 million, or 1.30 percent of total loans at June 30, 2004, compared to $119.2 million, or 1.37 percent, a year ago and $123.6 million, or 1.30 percent, at March 31, 2004. The ratio of the allowance to nonperforming loans at June 30, 2004 was 332 percent, compared to 228 percent a year ago and 338 percent at March 31, 2004.

The provision for loan losses totaled $5.0 million in the second quarter, unchanged from a year ago. Net loan charge-offs were $2.2 million, compared to $4.4 million in the year-ago period. The annualized net charge-off ratio was 0.08 percent of average loans in the second quarter, compared to 0.20 percent a year ago.

Strategic Actions

In April, Webster announced a 10 percent increase in its annual dividend to $.92 per common share, or $.23 on a quarterly basis. The announcement marked the 67th consecutive quarterly dividend since Webster first paid a dividend in 1987 and the 14th time the dividend has been increased.

During the second quarter, Webster announced the opening of new branches in Monroe and Danbury, CT and Scarsdale, NY. With the new Monroe and Danbury offices, Webster now operates 19 branch locations in 13 Fairfield County towns. The Scarsdale branch is Webster’s first branch in New York State under our plan to open 12 to 15 branches in Westchester County over the next three years.

Webster held its second annual Investor Day presentation for analysts and portfolio managers in Southbury, CT on June 10th. Webster senior management delivered presentations on the corporation’s strategic objectives and business activities. The presentation slides and a replay of the audio webcast are available at the Investor Relations section of Webster’s website, www.wbst.com.

Earlier this month, Webster announced the appointment of Denis W. St. Marie to the position of executive vice president, Consumer Finance, for Webster Bank, N.A. In this capacity, St. Marie is responsible for residential and consumer lending, mortgage banking and secondary marketing. Prior to joining Webster, St. Marie was president of KeyMortgage Services, where he led the company’s consumer lending and mortgage operations centers and its national vendor management company.

***

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Webster Financial Corporation is the holding company for Webster Bank, National Association and Webster Insurance. With $17 billion in assets, Webster provides business and consumer banking, mortgage, insurance, financial planning, trust and investment services through 147 banking offices, 268 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., and Center Capital Corporation, an equipment finance company headquartered in Farmington, Connecticut.

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

***

Conference Call

A conference call covering Webster’s 2004 second quarter earnings announcement will be held today, Thursday, July 15, at 1:00 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 1-800-299-8538 (Access Code: 32555118). 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 2003.

—30—

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     Webster Financial Corporation

Selected Financial Highlights (unaudited)

	At or for the Three						At or for the Six
	Months Ended June 30,						Months Ended June 30,
(In thousands, except per share data)	2004			2003			2004			2003
Net income and performance ratios (annualized):
Net income	$	45,843		$	40,610		$	88,166		$	80,547
Net income per diluted common share		0.91			0.88			1.81			1.74
Return on average shareholders’ equity		13.86	%		15.01	%		14.06	%		15.10	%
Return on average tangible equity		22.13			20.69			20.70			20.91
Return on average assets		1.12			1.15			1.14			1.16
Noninterest income as a percentage of total revenue		33.47			36.68			33.77			35.18
Efficiency Ratio (a)		56.98			58.65			57.18			58.73
Cash income and performance ratios (annualized) (b):
Net income	$	45,843		$	40,610		$	88,166		$	80,547
Tax-effected stock-based compensation		1,206			971			1,981			1,877
Tax-effected intangible amortization		2,978			2,579			5,638			5,155
Cash income		50,027			44,160			95,785			87,579
Cash income per diluted common share		0.99			0.95			1.96			1.89
Cash return on average shareholders’ equity		15.12	%		16.32	%		15.27	%		16.42	%
Cash return on average tangible equity		24.15			22.50			22.48			22.74
Cash return on average assets		1.22			1.26			1.23			1.26
Asset quality:
Allowance for loan losses	$	146,511		$	119,239		$	146,511		$	119,239
Nonperforming assets		47,658			57,038			47,658			57,038
Allowance for loan losses / total loans		1.30	%		1.37	%		1.30	%		1.37	%
Net charge-offs/ average loans (annualized)		0.08			0.20			0.11			0.18
Nonperforming loans / total loans		0.39			0.60			0.39			0.60
Nonperforming assets / total assets		0.28			0.39			0.28			0.39
Allowance for loan losses / nonperforming loans		332.24			228.06			332.24			228.06
Other ratios (annualized):
Shareholders’ equity / total assets		8.52	%		7.61	%		8.52	%		7.61	%
Interest-rate spread (c)		2.99			3.06			3.02			3.16
Net interest margin (c)		3.02			3.10			3.05			3.20
Share related:
Book value per common share	$	27.37		$	24.09		$	27.37		$	24.09
Tangible book value per common share		15.02			17.59			15.02			17.59
Common stock closing price		47.02			37.80			47.02			37.80
Dividends declared per common share		0.23			0.21			0.44			0.40
Common shares issued and outstanding		53,016			45,640			53,016			45,640
Basic shares (average)		49,699			45,446			47,922			45,453
Diluted shares (average)		50,475			46,242			48,767			46,217

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)	Webster adopted FIN 46R on December 31, 2003, and in accordance with its provisions, deconsolidated the capital trusts and reported the associated liabilities as other long-term debt. Commencing in 2004, the costs have been reclassified from noninterest expenses to interest expense.
(d)	For purposes of this computation, unrealized gains (losses) are excluded from the average balance for rate calculations.

Consolidated Statements of Condition (unaudited)

	June 30,			March 31,			June 30,
(In thousands)	2004			2004			2003
Assets:
Cash and due from depository institutions	$	252,818		$	230,137		$	254,645
Short-term investments		39,887			22,130			20,671
Securities:
Trading, at fair value		1,944			2,845			3,893
Available for sale, at fair value		3,853,154			4,231,102			4,395,400
Held-to-maturity securities		284,392			200,531			—
Total securities		4,139,490			4,434,478			4,399,293
Loans held for sale		153,396			135,771			321,055
Loans:
Residential mortgages		4,731,950			3,972,123			3,541,922
Commercial		2,455,512			2,101,195			2,010,109
Commercial real estate		1,572,289			1,288,509			1,144,429
Consumer		2,530,443			2,169,011			2,013,486
Total loans		11,290,194			9,530,838			8,709,946
Allowance for loan losses		(146,511	)		(123,613	)		(119,239	)
Loans, net		11,143,683			9,407,225			8,590,707
Accrued interest receivable		59,737			51,297			54,034
Premises and equipment, net		132,842			99,866			85,062
Goodwill and intangible assets		681,252			322,483			316,989
Cash surrender value of life insurance		224,082			182,511			176,324
Prepaid expenses and other assets		198,683			204,372			233,792
Total Assets	$	17,025,870		$	15,090,270		$	14,452,572
Liabilities and Shareholders’ Equity:
Deposits:
Demand deposits	$	1,362,339		$	1,081,455		$	1,035,389
NOW accounts		1,423,822			1,098,972			1,064,336
Money market deposit accounts		2,013,894			1,779,468			1,544,692
Savings accounts		2,281,312			1,891,298			1,821,089
Certificates of deposit		3,184,991			2,676,910			2,526,429
Total retail deposits		10,266,358			8,528,103			7,991,935
Treasury deposits		106,564			109,979			93,767
Total deposits		10,372,922			8,638,082			8,085,702
Federal Home Loan Bank advances		2,731,332			2,437,014			2,185,830
Federal funds purchased and securities sold under agreements to repurchase		1,670,594			2,150,719			2,480,666
Other long-term debt (c)		695,417			532,760			326,000
Accrued expenses and other liabilities		95,112			110,156			155,233
Total liabilities		15,565,377			13,868,731			13,233,431
Corporation-obligated mandatorily redeemable capital securities of subsidiary trusts (c)		—			—			110,255
Preferred stock of subsidiary corporation		9,577			9,577			9,577
Shareholders’ equity		1,450,916			1,211,962			1,099,309
Total Liabilities and Shareholders’ Equity	$	17,025,870		$	15,090,270		$	14,452,572

See Selected Financial Highlights for footnotes.

Consolidated Statements of Income (unaudited)

	Three Months Ended				Six Months Ended
	June 30,				June 30,
(In thousands, except per share data)	2004		2003		2004		2003
Interest income:
Loans	$	129,084	$	114,734	$	247,675	$	227,944
Securities and short-term investments		45,162		45,772		89,770		97,517
Loans held for sale		2,139		4,231		3,209		8,723
Total interest income		176,385		164,737		340,654		334,184
Interest expense:
Deposits		29,172		28,750		55,002		58,168
Borrowings		33,746		35,368		66,379		70,721
Total interest expense		62,918		64,118		121,381		128,889
Net interest income		113,467		100,619		219,273		205,295
Provision for loan losses		5,000		5,000		10,000		10,000
Net interest income after provision for loan losses		108,467		95,619		209,273		195,295
Noninterest income:
Deposit service fees		19,250		17,529		36,435		34,419
Insurance revenue		10,596		9,980		22,234		20,944
Loan and loan servicing fees		7,305		4,723		13,954		10,628
Wealth and investment services		5,849		4,521		10,965		9,099
Financial advisory services		—		5,229		3,808		10,660
Gain on sale of loans and loan servicing, net		5,321		4,066		6,346		6,837
Increase in cash surrender value of life insurance		2,177		2,143		4,131		4,258
Other		964		1,423		2,812		3,284
		51,462		49,614		100,685		100,129
Gain on sale of securities, net		5,616		8,666		11,116		11,299
Total noninterest income		57,078		58,280		111,801		111,428
Noninterest expenses:
Compensation and benefits		53,659		50,506		106,786		101,067
Occupancy		8,402		7,672		16,767		15,771
Furniture and equipment		8,993		7,575		16,634		15,096
Intangible amortization		4,582		3,968		8,674		7,930
Marketing		3,630		3,236		6,614		6,721
Professional services		2,938		2,994		5,837		5,472
Acquisition costs		265		6		265		6
Capital trust securities (c)		—		2,743		—		5,665
Other		14,710		14,499		27,743		28,277
Total noninterest expenses		97,179		93,199		189,320		186,005
Income before income taxes		68,366		60,700		131,754		120,718
Income taxes		22,523		20,090		43,588		40,171
Net income	$	45,843	$	40,610	$	88,166	$	80,547
Net income per common share:
Basic	$	0.92	$	0.89	$	1.84	$	1.77
Diluted		0.91		0.88		1.81		1.74

See Selected Financial Highlights for footnotes.

Consolidated Statements of Income (unaudited)

	Three Months Ended
	June 30,		March 31,		Dec. 31,			Sept. 30,		June 30,
(In thousands, except per share data)	2004		2004		2003			2003		2003
Interest income:
Loans	$	129,084	$	118,591	$	117,982		$	114,750	$	114,724
Securities and short-term investments		45,162		44,608		43,065			42,050		45,772
Loans held for sale		2,139		1,070		1,791			4,896		4,241
Total interest income		176,385		164,269		162,838			161,696		164,737
Interest expense:
Deposits		29,172		25,830		26,319			26,824		28,750
Borrowings		33,746		32,633		29,224			33,943		35,368
Total interest expense		62,918		58,463		55,543			60,767		64,118
Net interest income		113,467		105,806		107,295			100,929		100,619
Provision for loan losses		5,000		5,000		5,000			10,000		5,000
Net interest income after provision for loan losses		108,467		100,806		102,295			90,929		95,619
Noninterest income:
Deposit service fees		19,250		17,185		17,731			17,868		17,529
Insurance revenue		10,596		11,638		9,077			9,954		9,980
Loan and loan servicing fees		7,305		6,649		8,001			7,755		4,723
Wealth and investment services		5,849		5,116		4,416			4,826		4,521
Financial advisory services		—		3,808		7,265			4,833		5,229
Gain on sale of loans and loan servicing, net		5,321		1,025		2,854			9,829		4,066
Increase in cash surrender value of life insurance		2,177		1,954		2,082			2,150		2,143
Other		964		1,848		2,402			2,737		1,423
		51,462		49,223		53,828			59,952		49,614
Gain on sale of securities, net		5,616		5,500		2,715			4,560		8,666
Total noninterest income		57,078		54,723		56,543			64,512		58,280
Noninterest expenses:
Compensation and benefits		53,659		53,127		53,722			51,592		50,506
Occupancy		8,402		8,365		7,470			7,457		7,672
Furniture and equipment		8,993		7,641		7,792			8,255		7,575
Intangible amortization		4,582		4,092		4,067			4,001		3,968
Marketing		3,630		2,984		2,058			2,729		3,236
Professional services		2,938		2,899		3,654			2,582		2,994
Capital trust securities (c)		—		—		3,485	��		2,774		2,743
Acquisition costs		265		—		1,349			142		6
Other		14,710		13,033		14,683			14,165		14,499
Total noninterest expenses		97,179		92,141		98,280			93,697		93,199
Income before income taxes		68,366		63,388		60,558			61,744		60,700
Income taxes		22,523		21,065		19,172			20,429		20,090
Net income	$	45,843	$	42,323	$	41,386		$	41,315	$	40,610
Net income per common share:
Basic	$	0.92	$	0.92	$	0.90		$	0.91	$	0.89
Diluted		0.91		0.90		0.89			0.89		0.88

See Selected Financial Highlights for footnotes.

Retail and Wholesale Interest-Rate Spreads (unaudited)

Three Months Ended,	June			March			December			September			June
	2004			2004			2003			2003			2003
Interest-rate spread
Total interest-earning assets		4.68	%		4.78	%		4.81	%		4.75	%		5.06	%
Total interest-bearing liabilities		1.69			1.74			1.68			1.80			2.00
Interest-rate spread		2.99	%		3.04	%		3.13	%		2.95	%		3.06	%
Net interest margin		3.02			3.09			3.18			2.99			3.10
Retail interest-rate spread
Yield on loans and loans held for sale		4.93	%		5.05	%		5.09	%		5.09	%		5.30	%
Cost of deposits		1.23			1.24			1.26			1.32			1.46
Spread		3.70	%		3.81	%		3.83	%		3.77	%		3.84	%
Wholesale interest-rate spread
Yield on securities and short-term investments		4.09	%		4.19	%		4.17	%		4.02	%		4.52	%
Cost of borrowings		2.50			2.56			2.41			2.55			2.88
Spread		1.59	%		1.63	%		1.76	%		1.47	%		1.64	%

Consolidated Average Statements of Condition (unaudited)

Three Months Ended June 30,	2004								2003
						Fully tax-								Fully tax-
	Average					equivalent			Average					equivalent
(Dollars in thousands)	balance		Interest			yield/rate			balance		Interest			yield/rate
Assets:
Interest-earning assets:
Loans	$	10,440,916	$	129,084			4.93	%	$	8,629,616	$	114,736			5.30	%
Securities		4,485,738		46,277			4.11	(d)		4,146,519		46,086			4.54	(d)
Loans held for sale		169,092		2,139			5.06			322,371		4,229			5.25
Short-term investments		29,891		84			1.11			23,724		56			0.93
Total interest-earning assets		15,125,637		177,584			4.68			13,122,230		165,107			5.06
Noninterest-earning assets		1,219,002								949,376
Total assets	$	16,344,639							$	14,071,606
Liabilities and Shareholders’ Equity:
Interest-bearing liabilities:
Demand deposits	$	1,205,224	$	—			—	%	$	989,619	$	—			—	%
Savings, NOW and money market deposit accounts		5,282,018		11,456			0.87			4,276,209		11,348			1.06
Time deposits		3,056,167		17,716			2.33			2,649,670		17,402			2.63
Total deposits		9,543,409		29,172			1.23			7,915,498		28,750			1.46
Federal Home Loan Bank advances		2,827,253		19,905			2.79			2,386,590		23,286			3.86
Fed funds and repurchase agreements		1,860,747		4,888			1.04			2,153,916		6,783			1.25
Other long-term debt (c)		671,223		8,953			5.34			326,000		5,299			6.50
Total borrowings		5,359,223		33,746			2.50			4,866,506		35,368			2.88
Total interest-bearing liabilities		14,902,632		62,918			1.69			12,782,004		64,118			2.00
Noninterest-bearing liabilities		109,360								83,574
Total liabilities		15,011,992								12,865,578
Capital securities and preferred stock of subsidiary corporation (c)		9,577								123,475
Shareholders’ equity		1,323,070								1,082,553
Total liabilities and shareholders’ equity	$	16,344,639							$	14,071,606
				114,666								100,989
Less: tax-equivalent adjustment				(1,199	)							(370	)
Net interest income			$	113,467							$	100,619
Interest-rate spread							2.99	%							3.06	%
Net interest margin							3.02	%							3.10	%

See Selected Financial Highlights for footnotes.

Consolidated Average Statements of Condition (unaudited)

Six Months Ended June 30,	2004								2003
						Fully tax-								Fully tax-
	Average					equivalent			Average					equivalent
(Dollars in thousands)	balance		Interest			yield/rate			balance		Interest			yield/rate
Assets:
Interest-earning assets:
Loans	$	9,904,542	$	247,675			4.99	%	$	8,428,441	$	227,942			5.41	%
Loans held for sale		127,184		3,209			5.05			324,980		8,725			5.37
Securities		4,408,620		91,438			4.16	(d)		4,177,334		98,113			4.80	(d)
Short-term investments		32,825		150			0.90			25,483		118			0.92
Total interest-earning assets		14,473,171		342,472			4.73			12,956,238		334,898			5.20
Noninterest-earning assets		1,054,197								942,439
Total assets	$	15,527,368							$	13,898,677
Liabilities and Shareholders’ Equity:
Interest-bearing liabilities:
Demand deposits	$	1,132,037	$	—			—	%	$	970,530	$	—			—	%
Savings, NOW and money market deposit accounts		4,910,528		20,440			0.84			4,130,329		22,552			1.10
Time deposits		2,922,958		34,562			2.38			2,656,542		35,616			2.70
Total deposits		8,965,523		55,002			1.23			7,757,401		58,168			1.51
Federal Home Loan Bank advances		2,628,041		38,909			2.93			2,483,365		47,077			3.77
Fed funds and repurchase agreements		1,977,133		10,319			1.03			2,077,451		13,035			1.25
Other long-term debt (c)		601,991		17,151			5.70			311,635		10,609			6.81
Total borrowings		5,207,165		66,379			2.53			4,872,451		70,721			2.89
Total interest-bearing liabilities		14,172,688		121,381			1.71			12,629,852		128,889			2.04
Noninterest-bearing liabilities		90,883								75,137
Total liabilities		14,263,571								12,704,989
Capital securities and preferred stock of subsidiary corporation (c)		9,577								127,133
Shareholders’ equity		1,254,220								1,066,555
Total liabilities and shareholders’ equity	$	15,527,368							$	13,898,677
				221,091								206,009
Less: tax-equivalent adjustment				(1,818	)							(714	)
Net interest income			$	219,273							$	205,295
Interest-rate spread							3.02	%							3.16	%
Net interest margin							3.05	%							3.20	%

See Selected Financial Highlights for footnotes.

Asset Quality (unaudited)

	At or for the Three Months Ended
	June 30,			March 31,			Dec. 31,			Sept. 30,			June 30,
(Dollars in thousands)	2004			2004			2003			2003			2003
Nonperforming Assets
Nonperforming loans:
Commercial:
Commercial	$	15,895		$	11,832		$	14,266		$	17,024		$	27,881
Specialized industry		—			5,019			6,427			6,493			3,399
Equipment financing		5,021			5,561			5,583			8,241			8,722
Total commercial		20,916			22,412			26,276			31,758			40,002
Commercial real estate		13,757			5,583			4,281			1,940			4,920
Residential		8,599			7,941			6,128			7,087			6,596
Consumer		826			604			959			718			767
Total nonperforming loans		44,098			36,540			37,644			41,503			52,285
Other real estate owned and repossessed assets:
Commercial		3,192			4,273			4,296			4,019			4,224
Residential		238			325			942			541			520
Consumer		130			124			—			—			9
Total other real estate owned and repossessed assets		3,560			4,722			5,238			4,560			4,753
Total nonperforming assets	$	47,658		$	41,262		$	42,882		$	46,063		$	57,038
Summary of Classified Loans
Substandard:
Accruing	$	90,421		$	87,477		$	72,638		$	69,216		$	62,064
Nonaccruing		39,600			31,595			29,403			36,365			44,313
Total substandard		130,021			119,072			102,041			105,581			106,377
Doubtful:
Nonaccruing		3,286			4,377			6,791			3,792			6,617
Loss		—			—			—			—			—
Total classified loans	$	133,307		$	123,449		$	108,832		$	109,373		$	112,994
Classified as a percent of total loans		1.2	%		1.3	%		1.2	%		1.2	%		1.3	%

Allowance for Loan Losses (unaudited)

	At or for the Three Months Ended
	June 30,			March 31,			Dec. 31,			Sept. 30,			June 30,
(Dollars in thousands)	2004			2004			2003			2003			2003
Allowance for Loan Losses
Beginning balance	$	123,613		$	121,674		$	117,707		$	119,239		$	118,596
Allowance for purchased loans		20,081			—			1,970			—			—
Provision		5,000			5,000			5,000			10,000			5,000
Charge-offs:
Commercial:
Specialized industry		—			826			558			3,870			327
All other commercial		2,646			2,249			2,949			9,361			4,232
Total commercial		2,646			3,075			3,507			13,231			4,559
Residential		187			983			330			39			160
Consumer		174			97			174			122			153
Total charge-offs		3,007			4,155			4,011			13,392			4,872
Recoveries		(824	)		(1,094	)		(1,008	)		(1,860	)		(515	)
Net loan charge-offs		2,183			3,061			3,003			11,532			4,357
Ending balance	$	146,511		$	123,613		$	121,674		$	117,707		$	119,239
Asset Quality Ratios:
Allowance for loan losses / total loans		1.30	%		1.30	%		1.32	%		1.29	%		1.37	%
Net charge-offs/ average loans (annualized)		0.08			0.13			0.13			0.52			0.20
Nonperforming loans / total loans		0.39			0.38			0.41			0.46			0.60
Nonperforming assets / total assets		0.28			0.27			0.29			0.32			0.39
Allowance for loan losses / nonperforming loans		332.24			338.30			323.22			263.61			228.06