Webster Financial (WBS) 8-K Webster Reports Quarterly Earnings Per Share of $.82; Loan and Deposit Growth Remain Strong

Exhibit 99.1

Media Contact	Investor Contact
Clark Finley 203-578-2287	Terry Mangan 203-578-2318
cfinley@websterbank.com	tmangan@websterbank.com

WEBSTER REPORTS QUARTERLY EARNINGS PER SHARE OF $.82; LOAN
AND DEPOSIT GROWTH REMAIN STRONG

WATERBURY, Conn., April 18, 2006 — Webster Financial Corporation (NYSE: WBS), the holding company for Webster Bank, N.A., today announced net income of $43.9 million in the first quarter compared to $47.5 million a year ago. Net income per diluted share was $.82 compared to $.88 a year ago.

Performance in the quarter was impacted by a flattened yield curve resulting from the interest rate environment of the past year, which reduced wholesale spread revenues from our investment securities activities. Revenues from these activities were $.04 per share in the first quarter compared to $.15 a year ago with the reduction attributable to the cost of borrowed funds rising faster than the yield on securities over the past year.

Cash net income, which adds stock-based compensation and intangible amortization expenses back to net income, was $48.1 million compared to $52.1 million in the year-ago quarter. Cash net income per share was $.90 in the first quarter compared to $.96 a year ago.

“Webster’s first quarter results reflect solid performance in a challenging interest rate environment. We continue to have success in growing loans and deposits, building a stronger balance sheet and delivering higher quality earnings consistent with our strategic plan for growth,” stated Webster Chairman and Chief Executive Officer James C. Smith. “We have become a strong competitive force as we deliver more services to more customers across a broader franchise.”

Revenues

Total revenues, consisting of net interest income plus total noninterest income, were $185.4 million in the first quarter compared to $181.3 million a year ago, an increase of 2 percent. Net interest income totaled $130.2 million in the first quarter compared to $128.2 million in the year-ago period, an increase of 2 percent. This increase reflects strong growth in higher yielding loans funded by deposits, partially offset by reduced wholesale spread revenue from the securities portfolio.

Webster’s net interest margin (annualized tax-equivalent net interest income as a percentage of average earning assets) was 3.24 percent in the first quarter compared to 3.32 percent a year ago. The flattening of the yield curve and rise in short-term rates caused our deposit and borrowing costs to increase faster than the yield on earning assets over the past year.

Total noninterest income was $55.2 million in the first quarter compared to $53.0 million a year ago. Excluding securities gains of $1.0 million and $0.8 million in the respective periods, noninterest income totaled $54.2 million and increased 4 percent from a year ago. Deposit service fees totaled $21.9 million and increased 14 percent from a year ago reflecting an increased contribution from HSA Bank and growth in retail banking activities. Wealth management fees totaled $6.4 million and increased 18 percent based on equally strong performances from trust fees and investment product sales. These increases were partially offset by declines of $1.1 million each in insurance revenue and loan servicing fees.

The provision for credit losses totaled $2.0 million in the first quarter and exceeded net loan charge-offs by $0.3 million. The provision was $3.5 million a year ago which exceeded net loan charge-offs by $2.4 million. The annualized net loan charge-off ratio was 0.05 percent of average loans in the first quarter compared to 0.04 percent a year ago.

Expenses

Total noninterest expenses were $119.2 million in the first quarter compared to $107.8 million a year ago. Contributing to this increase were investments inde novobranch expansion, HSA Bank and the higher net cost of our new core systems. Further adjusting for expenses that were particular to each quarter, noninterest expenses increased by 5 percent to $108.5 million compared to $103.0 million a year ago. This increase reflects new revenue-generating personnel in Webster’s lines of business, build-out of the compliance function and other employee-related costs.

Balance Sheet Trends

Total assets were $17.9 billion at March 31, 2006 and increased 3 percent from a year ago. Total loans were $12.6 billion and increased $0.9 billion, or 8 percent, from a year ago. Deposits were $12.1 billion and increased $1.0 billion, or 9 percent, from a year ago aided by ourde novobranching program and continued growth in health savings account deposits at HSA Bank. The ratio of loans to deposits improved to 104 percent at March 31 compared to 106 percent a year ago.

“Our client relationship-driven model with tailored products and services resulted in another strong increase in commercial loans during the quarter,” stated Webster President and Chief Operating Officer William T. Bromage. “Webster has become a commercial bank financial services provider fully capable of serving the breadth of needs of the many small and mid-sized businesses in our markets.”

Commercial loans, consisting of commercial and industrial and commercial real estate, were $4.9 billion at March 31, 2006, up 12 percent from a year ago. Commercial and industrial loans were $3.0 billion, up 14 percent, and commercial real estate loans were $1.9 billion, up 9 percent. Consumer loans, primarily home equity loans and lines, increased 8 percent to $2.8 billion compared to $2.6 billion a year ago. Commercial and consumer loans grew at a combined rate of 10 percent from a year ago while residential loans, which totaled $4.9 billion, grew by 4 percent.

Demand and NOW deposits grew by 6 percent compared to a year ago while certificates of deposit balances grew by 24 percent as customers continued to shift balances to this product category. Deposit growth in excess of loan growth combined with a reduction in the securities portfolio contributed to a $600 million reduction in wholesale borrowings over the past year. As a result, wholesale borrowings declined to 22 percent of total assets at March 31 compared to 27 percent a year ago.

“First quarter performance reflects more loans and deposits and fewer securities and borrowings, resulting in more franchise earnings and less wholesale contribution,” stated Webster Chief Financial Officer William J. Healy. “Webster continues to make significant progress in strengthening the balance sheet and increasing earnings from our core banking activities.”

Book value per common share of $31.09 at March 31, 2006 increased from $29.07 a year ago. Tangible book value per share of $18.18 at March 31 increased from $16.26 last year. The ratio of tangible equity to tangible assets increased to 5.48 percent at March 31 compared to 5.08 percent a year ago. Return on average tangible equity was 17.8 percent in the first quarter compared to 21.4 percent a year ago while the cash return on average tangible equity was 19.6 percent and 23.4 percent in the respective periods.

Asset Quality

Nonperforming assets declined during the quarter and totaled $61.9 million, or 0.35 percent of total assets, at March 31, 2006 compared to $73.0 million, or 0.41 percent, at December 31 and $49.1 million, or 0.28 percent, a year ago.

The allowance for credit losses, which consists of the allowance for loan losses and the reserve for unfunded commitments, was $156.0 million, or 1.24 percent of total loans, at March 31 compared to $152.5 million, or 1.30 percent, a year ago. The ratio of the allowance to nonperforming loans was 263 percent at March 31 compared to 334 percent a year ago.

***

Webster Financial Corporation is the holding company for Webster Bank, National Association and Webster Insurance. With $17.9 billion in assets, Webster provides business and consumer banking, mortgage, insurance, financial planning, trust and investment services through 158 banking offices, 306 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 atwww.websteronline.com.

***

Conference Call

A conference call covering Webster’s 2006 first quarter earnings announcement will be held today, Tuesday, April 18, at 11:00 a.m. Eastern Time and may be heard through Webster’s investor relations website atwww.wbst.com, or in listen-only mode by calling 1-877-407-3980 or 201-689-8475 internationally. The call will be archived on the website and available for future retrieval.

Forward-looking Statements

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 2005. Except as required by law, Webster does not undertake to update any such forward looking information.

Non-GAAP Financial Measures

In addition to results presented in accordance with GAAP, this press release contains certain non-GAAP financial measures. We believe that providing certain non-GAAP financial measures, such as cash basis net income, provides investors with information useful in understanding our financial performance, our performance trends and financial position. A reconciliation of cash basis net income to net income is included in the accompanying financial tables, elsewhere in this report.

—30—

WEBSTER FINANCIAL CORPORATION
Selected Financial Highlights (unaudited)

	At or for the Three
	Months Ended March 31,
(In thousands, except per share data)	2006			2005
Net income and performance ratios (annualized):
Net income	$	43,852		$	47,495
Net income per diluted common share		0.82			0.88
Return on average shareholders’ equity		10.55	%		12.13	%
Return on average tangible equity		17.83			21.37
Return on average assets		0.99			1.11
Noninterest income as a percentage of total revenue		29.78			29.26
Efficiency ratio (a,d)		64.29			59.46
Cash income and performance ratios (annualized) (b):
Net income	$	43,852		$	47,495
Stock-based compensation, net of tax		1,387			1,420
Intangible amortization, net of tax		2,845			3,186
Cash income		48,084			52,101
Cash income per diluted common share		0.90			0.96
Cash return on average shareholders’ equity		11.56	%		13.31	%
Cash return on average tangible equity		19.55			23.44
Cash return on average assets		1.08			1.22
Asset quality:
Allowance for credit losses		155,957		$	152,519
Nonperforming assets		61,892			49,130
Allowance for credit losses / total loans		1.24	%		1.30	%
Net charge-offs/ average loans (annualized)		0.05			0.04
Nonperforming loans / total loans		0.47			0.39
Nonperforming assets / total assets		0.35			0.28
Allowance for credit losses / nonperforming loans		262.72			334.21
Other ratios (annualized):
Tangible capital ratio		5.48	%		5.08	%
Shareholders’ equity / total assets		9.16			8.98
Interest-rate spread		3.19			3.28
Net interest margin		3.24			3.32
Share related:
Book value per common share	$	31.09		$	29.07
Tangible book value per common share		18.18			16.26
Common stock closing price		48.46			45.41
Dividends declared per common share		0.25			0.23
Common shares issued and outstanding		52,776			53,787
Basic shares (average)		53,094			53,571
Diluted shares (average)		53,703			54,217

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)	For purposes of this computation, unrealized gains (losses) are excluded from the average balance for rate calculations.
(d)	Excluding conversion and infrastructure costs, the efficiency ratio would have been 58.83% for the three months ended March 31, 2005.
(e)	Effective December 31, 2005, Webster transferred the portion of the allowance for loan losses related to commercial and consumer lending commitments and letters of credit to the reserve for unfunded credit commitments.

Consolidated Statements of Condition (unaudited)

	March 31,			December 31,			March 31,
(In thousands)	2006			2005			2005
Assets:
Cash and due from depository institutions	$	267,541		$	293,706		$	266,088
Short-term investments		11,889			36,302			79,676
Securities:
Trading, at fair value		1,042			2,257			1,038
Available for sale, at fair value		2,472,699			2,555,419			2,591,270
Held-to-maturity securities		1,116,386			1,142,909			1,212,934
Total securities		3,590,127			3,700,585			3,805,242
Loans held for sale		201,210			267,919			352,233
Loans:
Residential mortgages		4,890,887			4,828,564			4,722,897
Commercial		3,038,930			2,876,528			2,674,901
Commercial real estate		1,851,035			1,808,494			1,690,973
Consumer		2,809,785			2,771,700			2,608,303
Total loans		12,590,637			12,285,286			11,697,074
Allowance for loan losses		(146,383	)		(146,486	)		(152,519	)
Loans, net		12,444,254			12,138,800			11,544,555
Accrued interest receivable		94,602			85,779			67,953
Premises and equipment, net		184,831			182,856			161,635
Goodwill and intangible assets		698,557			698,570			714,490
Cash surrender value of life insurance		240,426			237,822			230,823
Prepaid expenses and other assets		173,749			194,223			190,133
Total Assets	$	17,907,186		$	17,836,562		$	17,412,828
Liabilities and Shareholders’ Equity:
Deposits:
Demand deposits	$	1,459,855		$	1,546,096		$	1,426,798
NOW accounts		1,683,677			1,622,403			1,535,595
Money market deposit accounts		1,761,016			1,789,781			1,904,158
Savings accounts		2,004,375			2,015,045			2,276,623
Certificates of deposit		4,392,731			4,249,874			3,545,287
Treasury deposits		776,623			407,946			295,073
Deposits held in divested branches		—			—			48,301
Total deposits		12,078,277			11,631,145			11,031,835
Federal Home Loan Bank advances		2,383,118			2,214,010			2,319,722
Securities sold under agreements to repurchase and other short-term debt		1,007,439			1,522,381			1,670,950
Other long-term debt		631,568			640,906			674,240
Reserve for unfunded commitments (e)		9,574			9,146			—
Accrued expenses and other liabilities		146,871			162,171			142,910
Total liabilities		16,256,847			16,179,759			15,839,657
Preferred stock of subsidiary corporation		9,577			9,577			9,577
Shareholders’ equity		1,640,762			1,647,226			1,563,594
Total Liabilities and Shareholders’ Equity	$	17,907,186		$	17,836,562		$	17,412,828

See Selected Financial Highlights for footnotes.

Consolidated Statements of Income (unaudited)

	Three Months Ended
	March 31,
(In thousands, except per share data)	2006		2005
Interest income:
Loans	$	195,574	$	158,787
Securities and short-term investments		41,595		40,899
Loans held for sale		3,339		2,732
Total interest income		240,508		202,418
Interest expense:
Deposits		62,354		35,868
Borrowings		47,995		38,318
Total interest expense		110,349		74,186
Net interest income		130,159		128,232
Provision for credit losses		2,000		3,500
Net interest income after provision for credit losses		128,159		124,732
Noninterest income:
Deposit service fees		21,869		19,129
Insurance revenue		10,724		11,802
Loan and loan servicing fees		7,824		8,929
Wealth and investment services		6,354		5,395
Gain on sale of loans and loan servicing, net		3,273		2,536
Increase in cash surrender value of life insurance		2,371		2,238
Other		1,775		2,243
		54,190		52,272
Gain on sale of securities, net		1,012		756
Total noninterest income		55,202		53,028
Noninterest expenses:
Compensation and benefits		65,003		57,902
Occupancy		12,182		10,859
Furniture and equipment		13,595		10,798
Intangible amortization		4,377		4,902
Marketing		3,624		3,283
Professional services		3,544		3,770
Conversion and infrastructure costs		—		1,134
Other		16,846		15,126
Total noninterest expenses		119,171		107,774
Income before income taxes		64,190		69,986
Income taxes		20,338		22,491
Net income	$	43,852	$	47,495
Diluted shares (average)		53,703		54,217
Net income per common share:
Basic	$	0.83	$	0.89
Diluted		0.82		0.88

See Selected Financial Highlights for footnotes.

Consolidated Statements of Income (unaudited)

	Three Months Ended
	March 31,		Dec. 31,		Sept. 30,		June 30,		March 31,
(In thousands, except per share data)	2006		2005		2005		2005		2005
Interest income:
Loans	$	195,574	$	187,607	$	175,680	$	166,967	$	158,787
Securities and short-term investments		41,595		42,503		43,775		42,684		40,899
Loans held for sale		3,339		3,563		3,686		2,964		2,732
Total interest income		240,508		233,673		223,141		212,615		202,418
Interest expense:
Deposits		62,354		57,132		51,338		44,099		35,868
Borrowings		47,995		46,879		42,191		38,681		38,318
Total interest expense		110,349		104,011		93,529		82,780		74,186
Net interest income		130,159		129,662		129,612		129,835		128,232
Provision for credit losses		2,000		2,000		2,000		2,000		3,500
Net interest income after provision for credit losses		128,159		127,662		127,612		127,835		124,732
Noninterest income:
Deposit service fees		21,869		22,909		22,182		21,747		19,129
Insurance revenue		10,724		10,678		10,973		10,562		11,802
Loan and loan servicing fees		7,824		9,290		7,739		7,274		8,929
Wealth and investment services		6,354		6,174		5,554		6,028		5,395
Gain on sale of loans and loan servicing, net		3,273		2,322		3,703		3,012		2,536
Increase in cash surrender value of life insurance		2,371		2,360		2,341		2,302		2,238
Other		1,775		3,470		2,347		2,013		2,243
		54,190		57,203		54,839		52,938		52,272
Gain on sale of securities, net		1,012		1,026		1,141		710		756
Total noninterest income		55,202		58,229		55,980		53,648		53,028
Noninterest expenses:
Compensation and benefits		65,003		64,905		60,808		57,854		57,902
Occupancy		12,182		11,141		10,482		10,810		10,859
Furniture and equipment		13,595		14,810		13,009		11,611		10,798
Intangible amortization		4,377		5,001		5,001		5,009		4,902
Marketing		3,624		3,981		3,339		3,664		3,283
Professional services		3,544		3,594		3,626		3,972		3,770
Conversion and infrastructure costs		—		1,281		2,217		3,506		1,134
Other		16,846		14,646		16,450		17,079		15,126
Total noninterest expenses		119,171		119,359		114,932		113,505		107,774
Income before income taxes		64,190		66,532		68,660		67,978		69,986
Income taxes		20,338		21,032		22,058		21,720		22,491
Net income	$	43,852	$	45,500	$	46,602	$	46,258	$	47,495
Diluted shares (average)		53,703		54,129		54,310		54,278		54,217
Net income per common share:
Basic	$	0.83	$	0.85	$	0.87	$	0.86	$	0.89
Diluted		0.82		0.84		0.86		0.85		0.88

See Selected Financial Highlights for footnotes.

Retail and Wholesale Interest-Rate Spreads (unaudited)

	March			December			September			June			March
Three Months Ended,	2006			2005			2005			2005			2005
Interest-rate spread
Yield on interest-earning assets		5.97	%		5.73	%		5.55	%		5.40	%		5.22	%
Cost of interest-bearing liabilities		2.78			2.55			2.33			2.11			1.94
Interest-rate spread		3.19	%		3.18	%		3.22	%		3.29	%		3.28	%
Net interest margin		3.24			3.22			3.26			3.32			3.32
Retail interest-rate spread
Yield on loans and loans held for sale		6.32	%		6.02	%		5.83	%		5.66	%		5.44	%
Cost of deposits		2.16			1.94			1.76			1.57			1.37
Spread		4.16	%		4.08	%		4.07	%		4.09	%		4.07	%
Wholesale interest-rate spread
Yield on securities and short-term investments		4.76	%		4.75	%		4.67	%		4.62	%		4.52	%
Cost of borrowings		4.44			4.19			3.84			3.54			3.23
Spread		0.32	%		0.56	%		0.83	%		1.08	%		1.29	%

Consolidated Average Statements of Condition (unaudited)

Three Months Ended March 31,	2006								2005
						Fully tax-								Fully tax-
	Average					equivalent			Average					equivalent
(Dollars in thousands)	balance		Interest			yield/rate			balance		Interest			yield/rate
Assets:
Interest-earning assets:
Loans	$	12,392,022	$	195,574			6.33	%	$	11,685,261	$	158,787			5.45	%
Securities		3,630,986		43,819			4.77	(c)		3,750,867		42,690			4.54	(c)
Loans held for sale		228,695		3,339			5.84			213,952		2,732			5.11
Short-term investments		15,181		112			2.95			26,855		141			2.10
Total interest-earning assets		16,266,884		242,844			5.97			15,676,935		204,350			5.22
Noninterest-earning assets		1,500,627								1,401,298
Total assets	$	17,767,511							$	17,078,233
Liabilities and Shareholders’ Equity:
Interest-bearing liabilities:
Demand deposits	$	1,451,677	$	—			—	%	$	1,345,366		—			—
Savings, NOW and money market deposit accounts		5,309,282		19,808			1.51			5,604,282		12,959			0.94
Time deposits		4,906,912		42,546			3.52			3,692,642		22,909			2.52
Total deposits		11,667,871		62,354			2.16			10,642,290		35,868			1.37
Federal Home Loan Bank advances		2,397,872		24,496			4.09			2,407,150		18,587			3.09
Repurchase agreements and other short-term debt		1,289,102		11,830			3.67			1,659,605		9,543			2.30
Other long-term debt		640,804		11,669			7.28			681,120		10,188			5.98
Total borrowings		4,327,778		47,995			4.44			4,747,875		38,318			3.23
Total interest-bearing liabilities		15,995,649		110,349			2.78			15,390,165		74,186			1.94
Noninterest-bearing liabilities		98,991								112,679
Total liabilities		16,094,640								15,502,844
Preferred stock of subsidiary corporation		9,577								9,577
Shareholders’ equity		1,663,294								1,565,812
Total liabilities and shareholders’ equity	$	17,767,511							$	17,078,233
				132,495								130,164
Less: tax-equivalent adjustment				(2,336	)							(1,932	)
Net interest income			$	130,159							$	128,232
Interest-rate spread							3.19	%							3.28	%
Net interest margin							3.24	%							3.32	%

See Selected Financial Highlights for footnotes.

	At or for the Three Months Ended
(Unaudited)	March 31,			Dec. 31,			Sept. 30,			June 30,			March 31,
(Dollars in thousands)	2006			2005			2005			2005			2005
Asset Quality
Nonperforming loans:
Commercial:
Commercial	$	20,721		$	32,678		$	27,544		$	19,073		$	17,112
Equipment financing		2,864			3,065			3,209			3,466			3,800
Total commercial		23,585			35,743			30,753			22,539			20,912
Commercial real estate		24,012			22,678			19,650			11,654			15,609
Residential		8,891			6,979			6,436			6,690			7,528
Consumer		2,875			1,829			1,699			1,019			1,586
Total nonperforming loans		59,363			67,229			58,538			41,902			45,635
Loans held for sale		—			—			181			—			492
Other real estate owned and repossessed assets:
Commercial		1,712			5,126			1,408			2,217			2,472
Residential		456			232			218			112			446
Consumer		361			427			10			10			85
Total other real estate owned and repossessed assets		2,529			5,785			1,636			2,339			3,003
Total nonperforming assets	$	61,892		$	73,014		$	60,355		$	44,241		$	49,130
Allowance for Credit Losses
Beginning balance	$	155,632		$	155,052		$	154,822		$	152,519		$	150,112
Provision		2,000			2,000			2,000			2,000			3,500
Charge-offs:
Commercial		1,629			3,272			2,204			1,432			2,155
Residential		75			110			378			178			167
Consumer		362			153			137			201			142
Total charge-offs		2,066			3,535			2,719			1,811			2,464
Recoveries		(391	)		(2,115	)		(949	)		(2,114	)		(1,371	)
Net loan charge-offs (recoveries)		1,675			1,420			1,770			(303	)		1,093
Ending balance	$	155,957		$	155,632		$	155,052		$	154,822		$	152,519
Components: (e)
Allowance for loan losses	$	146,383		$	146,486		$	155,052		$	154,822		$	152,519
Reserve for unfunded credit commitments		9,574			9,146			—			—			—
Allowance for credit losses	$	155,957		$	155,632		$	155,052		$	154,822		$	152,519
Asset Quality Ratios:
Allowance for loan losses / total loans		1.16	%		1.19	%		1.27	%		1.31	%		1.30	%
Allowance for credit losses / total loans		1.24			1.27			1.27			1.31			1.30
Net charge-offs (recoveries)/ average loans (annualized)		0.05			0.05			0.06			(0.01	)		0.04
Nonperforming loans / total loans		0.47			0.55			0.48			0.35			0.39
Nonperforming assets / total assets		0.35			0.41			0.34			0.25			0.28
Allowance for credit losses / nonperforming loans		262.72			231.50			264.87			369.49			334.21

See Selected Financial Highlights for footnotes.