Webster Financial (WBS) 8-K Webster Reports Quarterly Earnings Per Share of $.81

[Webster Bank Letterhead]

Press Release

Exhibit 99.1

Media Contact
Clark Finley 203-578-2287 Investor Contact
Terry Mangan 203-578-2318

WEBSTER REPORTS QUARTERLY EARNINGS PER SHARE OF $.81

               SECOND QUARTER TRENDS COMPARED TO PRIOR YEAR:

               •     Commercial loans grow by 12 percent

               •     Deposits grow by 6 percent

               •     Noninterest income increases by 6 percent

               •     Wholesale borrowings decline to 22 percent of assets

WATERBURY, Conn., July 25, 2006 – Webster Financial Corporation (NYSE: WBS), the holding company for Webster Bank, N.A., today announced net income of $43.1 million in the second quarter compared to $46.3 million a year ago. Net income per diluted share was $.81 compared to $.85 a year ago. For the first six months of 2006, net income was $87.0 million compared to $93.8 million a year ago. Net income per share was $1.63 and $1.73 in the respective periods.

Among the factors impacting the quarter were a change in the timing of dividends from the Federal Home Loan Bank of Boston (FHLB Boston) and the continuing effects of a flattened yield curve. Webster did not record any dividend income on its FHLB Boston investment during the quarter, but the FHLB Boston has indicated that it expects to declare the equivalent of two dividend payments in the third quarter. Earnings for the second quarter of 2006 would have been $.02 per share higher had the dividend been recorded. The flattened yield curve reduced wholesale spread revenues from investment securities activities in the quarter, as the cost of borrowings exceeded the yield on securities and reduced earnings per share by $.01 compared to a favorable wholesale spread contribution of $.13 per share a year ago.

Cash net income, which adds stock-based compensation and intangible amortization expenses back to net income, was $46.9 million, or $.88 per share, compared to $51.1 million, or $.94 per share, in the year-ago quarter. For the first six months, cash net income was $94.9 million, or $1.78 per share, compared to $103.2 million, or $1.90 per share, a year ago.

[Webster Bank Letterhead]

Press Release

“Solid growth in our core franchise activities underscores Webster’s strategic progress,” stated Webster Chairman and Chief Executive Officer James C. Smith. “Double-digit combined growth in commercial and consumer loans, coupled with solid growth in deposits and fees and reductions in securities and borrowings, further strengthens our balance sheet and improves earnings quality. We’re building on our position as the largest independent bank headquartered in New England.”

Commercial loans, including commercial real estate loans, were $5.0 billion at June 30, 2006, up 12 percent from a year ago. Commercial and industrial loans were $3.2 billion, up 14 percent, and commercial real estate loans were $1.8 billion, up 9 percent. Consumer loans, primarily home equity loans and lines, increased 7 percent to $2.9 billion compared to $2.7 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.

The company also noted that Webster Bank has reached an informal agreement with the Office of the Comptroller of the Currency to address general bank compliance, including bank secrecy act and related money laundering risks, flood acts compliance and the internal audit program. These increased compliance efforts, already well under way and receiving significant management attention, are not expected to have a material impact on Webster’s operations or earnings.

Revenues

Total revenues, consisting of net interest income plus total noninterest income, were $183.9 million in the second quarter compared to $183.5 million a year ago. Net interest income totaled $126.8 million in the second quarter compared to $129.8 million in the year-ago period, a decrease of 2 percent. FHLB Boston’s decision to defer the timing of dividends represented $1.8 million of the decline. Strong growth in higher yielding commercial and consumer loans was 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 3.13 percent compared to 3.32 percent in the second quarter of 2005. The net interest margin would have been 4 basis points higher in this quarter had FHLB Boston dividend income been recorded as in prior periods. The decline from a year ago primarily reflects deposit and borrowing costs increasing faster than yields on earning assets due to the flattening of the yield curve.

[Webster Bank Letterhead]

Press Release

Total noninterest income was $57.1 million in the second quarter compared to $53.6 million a year ago, an increase of 6 percent. Deposit service fees totaled $24.2 million and increased 11 percent from a year ago reflecting growth in retail banking activities. Loan and loan servicing fees totaled $9.2 million and increased 26 percent aided by higher levels of line usage fees and prepayment penalties. Wealth management fees totaled $6.9 million and increased 15 percent based on strength in trust fees and investment services revenues. These increases were partially offset by declines of $0.6 million in insurance revenue and $0.5 million in gains on sale of loans.

The provision for credit losses totaled $3.0 million in the second quarter and exceeded net loan charge-offs by $0.5 million. The provision was $2.0 million in the second quarter of 2005, which exceeded net loan charge-offs by $2.3 million as a result of a net loan recovery of $0.3 million in that quarter. The annualized net loan charge-off ratio was 0.08 percent of average loans compared to (0.01) percent in the second quarter a year ago and 0.03 percent for the full year 2005.

Expenses

Total noninterest expenses were $117.3 million in the second quarter compared to $113.5 million a year ago, an increase of 3 percent. Contributing to this increase were ongoing investments inde novobranch expansion, HSA Bank and the higher net cost of our new core systems. Adjusting for these items and non-recurring core infrastructure conversion project charges in the second quarter of 2005, noninterest expenses increased by 2 percent to $107.7 million compared to $105.4 million a year ago. This increase includes new revenue-generating personnel in Webster’s lines of business, the ongoing build-out of the compliance function and other employee-related costs.

Balance Sheet Trends

Total assets were $18.0 billion at June 30, 2006 and increased 3 percent from a year ago. Total loans were $12.7 billion and increased $0.9 billion, or 8 percent, from a year ago while securities totaled $3.4 billion and declined by $0.4 billion, or 11 percent. Deposits were $12.2 billion and increased $0.6 billion, or 6 percent, with contributions from ourde novo branching program and ongoing growth in health savings account deposits at HSA Bank.

“Webster continues to deliver sustained organic growth through the strength of our customer relationships,” stated Webster President and Chief Operating Officer William T. Bromage.

[Webster Bank Letterhead]

Press Release

“Our ability to address the totality of customer financial needs in our expanding markets underpins Webster’s future opportunities for growth.”

Demand and NOW deposits each grew by 3 percent compared to a year ago while certificates of deposit balances grew by 16 percent as customers continued to shift balances to this product category. The $0.4 billion reduction in securities compared to a year ago funded $0.3 billion of loan growth in excess of deposit growth and contributed to a $0.2 billion reduction in wholesale borrowings over the past year. As a result, wholesale borrowings declined to 22 percent of total assets at June 30 compared to 24 percent a year ago.

Book value per common share of $31.27 at June 30, 2006 increased from $29.94 a year ago. Tangible book value per share of $18.36 at June 30 increased from $17.18 last year. The ratio of tangible equity to tangible assets increased to 5.48 percent at June 30 compared to 5.38 percent a year ago. Return on average tangible equity was 17.4 percent in the second quarter compared to 20.2 percent a year ago while the cash return on average tangible equity was 18.9 percent and 22.3 percent in the respective periods.

Asset Quality

Nonperforming assets totaled $64.3 million, or 0.36 percent of total assets, at June 30, 2006 compared to $61.9 million, or 0.35 percent, at March 31 and $44.2 million, or 0.25 percent, a year ago.

The allowance for credit losses, which consists of the allowance for loan losses and the reserve for unfunded commitments, was $156.5 million, or 1.23 percent of total loans, at June 30 compared to $154.8 million, or 1.31 percent, a year ago. The ratio of the allowance to nonperforming loans was 253 percent at June 30 compared to 369 percent a year ago.

***

[Webster Bank Letterhead]

Press Release

Webster Financial Corporation is the holding company for Webster Bank, National Association and Webster Insurance. With $18.0 billion in assets, Webster provides business and consumer banking, mortgage, insurance, financial planning, trust and investment services through 160 banking offices, 308 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 www.websteronline.com.

***

Conference Call

A conference call covering Webster’s 2006 second quarter earnings announcement will be held today, Tuesday, July 25, 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						At or for the Six
	Months Ended June 30,						Months Ended June 30,
(In thousands, except per share data)	2006			2005			2006			2005
Net income and performance ratios (annualized):
Net income	$	43,143		$	46,258		$	86,995		$	93,753
Net income per diluted common share		0.81			0.85			1.63			1.73
Return on average shareholders’ equity		10.34	%		11.57	%		10.44	%		11.85	%
Return on average tangible equity		17.44			20.20			17.63			20.74
Return on average assets		0.96			1.07			0.98			1.09
Noninterest income as a percentage of total revenue		31.04			29.24			30.41			29.25
Efficiency ratio (a,d)		63.80			61.86			64.05			60.67
Cash income and performance ratios (annualized) (b):
Net income	$	43,143		$	46,258		$	86,995		$	93,753
Stock-based compensation, net of tax		1,408			1,620			2,796			3,023
Intangible amortization, net of tax		2,304			3,256			5,149			6,442
Cash income		46,855			51,134			94,940			103,218
Cash income per diluted common share		0.88			0.94			1.78			1.90
Cash return on average shareholders’ equity		11.22	%		12.78	%		11.39	%		13.04	%
Cash return on average tangible equity		18.94			22.33			19.24			22.83
Cash return on average assets		1.05			1.18			1.06			1.20
Asset quality:
Allowance for credit losses	$	156,471		$	154,822		$	156,471		$	154,822
Nonperforming assets		64,319			44,241			64,319			44,241
Allowance for credit losses / total loans		1.23	%		1.31	%		1.23	%		1.31	%
Net charge-offs (recoveries) / average loans (annualized)		0.08			(0.01	)		0.07			0.01
Nonperforming loans / total loans		0.49			0.35			0.49			0.35
Nonperforming assets / total assets		0.36			0.25			0.36			0.25
Allowance for credit losses / nonperforming loans		253.44			369.49			253.44			369.49
Other ratios (annualized):
Tangible capital ratio		5.48	%		5.38	%		5.48	%		5.38	%
Shareholders’ equity / total assets		9.13			9.22			9.13			9.22
Interest-rate spread		3.06			3.29			3.13			3.28
Net interest margin		3.13			3.32			3.18			3.32
Share related:
Book value per common share	$	31.27		$	29.94		$	31.27		$	29.94
Tangible book value per common share		18.36			17.18			18.36			17.18
Common stock closing price		47.44			46.69			47.44			46.69
Dividends declared per common share		0.27			0.25			0.52			0.48
Common shares issued and outstanding		52,610			53,807			52,610			53,807
Basic shares (average)		52,637			53,618			52,864			53,594
Diluted shares (average)		53,252			54,278			53,468			54,244

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 59.95% and 59.39% for the three and six months ended June 30, 2005, respectively.
(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.
(f)	The recording of the FHLB dividend of $1.8 million in the second quarter of 2006 would have increased the yield by 19 basis points (bp) and improved the wholesale spread from (24) bp to (5) bp.
(g)	Cost of borrowings includes long-term debt such as Trust Preferred Securities and subordinated debt.

Consolidated Statements of Condition (unaudited)

	June 30,			March 31,			June 30,
(In thousands)	2006			2006			2005
Assets:
Cash and due from depository institutions	$	327,622		$	267,541		$	322,376
Short-term investments		59,666			11,889			13,088
Securities:
Trading, at fair value		2,698			1,042			1,409
Available for sale, at fair value		2,317,645			2,472,699			2,649,930
Held-to-maturity securities		1,088,206			1,116,386			1,196,368
Total securities		3,408,549			3,590,127			3,847,707
Loans held for sale		275,240			201,210			245,174
Loans:
Residential mortgages		4,875,134			4,890,887			4,690,318
Commercial		3,160,200			3,038,930			2,781,938
Commercial real estate		1,819,635			1,851,035			1,666,235
Consumer		2,855,558			2,809,785			2,671,197
Total loans		12,710,527			12,590,637			11,809,688
Allowance for loan losses		(147,401	)		(146,383	)		(154,822	)
Loans, net		12,563,126			12,444,254			11,654,866
Accrued interest receivable		85,719			94,602			67,380
Premises and equipment, net		188,125			184,831			171,579
Goodwill and intangible assets		695,014			698,557			708,387
Cash surrender value of life insurance		242,740			240,426			233,129
Prepaid expenses and other assets		176,341			173,749			208,511
Total Assets	$	18,022,142		$	17,907,186		$	17,472,197
Liabilities and Shareholders’ Equity:
Deposits:
Demand deposits	$	1,549,051		$	1,459,855		$	1,509,957
NOW accounts		1,687,297			1,683,677			1,640,692
Money market deposit accounts		1,888,179			1,761,016			1,892,664
Savings accounts		1,954,298			2,004,375			2,284,076
Certificates of deposit		4,447,504			4,392,731			3,830,999
Treasury deposits		690,136			776,623			420,846
Total deposits		12,216,465			12,078,277			11,579,234
Federal Home Loan Bank advances		1,804,140			2,383,118			2,126,437
Securities sold under agreements to repurchase and other short-term debt		1,528,224			1,007,439			1,345,910
Other long-term debt		622,267			631,568			674,117
Reserve for unfunded commitments (e)		9,070			9,574			—
Accrued expenses and other liabilities		187,445			146,871			126,011
Total liabilities		16,367,611			16,256,847			15,851,709
Preferred stock of subsidiary corporation		9,577			9,577			9,577
Shareholders’ equity		1,644,954			1,640,762			1,610,911
Total Liabilities and Shareholders’ Equity	$	18,022,142		$	17,907,186		$	17,472,197

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)	2006		2005		2006		2005
Interest income:
Loans	$	207,097	$	166,967	$	402,671	$	325,754
Securities and short-term investments		39,134		42,684		80,729		83,583
Loans held for sale		3,317		2,964		6,656		5,696
Total interest income		249,548		212,615		490,056		415,033
Interest expense:
Deposits		72,593		44,099		134,947		79,967
Borrowings		50,150		38,681		98,145		76,999
Total interest expense		122,743		82,780		233,092		156,966
Net interest income		126,805		129,835		256,964		258,067
Provision for credit losses		3,000		2,000		5,000		5,500
Net interest income after provision for credit losses		123,805		127,835		251,964		252,567
Noninterest income:
Deposit service fees		24,150		21,747		46,019		40,876
Insurance revenue		9,988		10,562		20,712		22,364
Loan and loan servicing fees		9,162		7,274		16,986		16,203
Wealth and investment services		6,930		6,028		13,284		11,423
Gain on sale of loans and loan servicing, net		2,538		3,012		5,811		5,548
Increase in cash surrender value of life insurance		2,314		2,302		4,685		4,540
Other		1,284		2,013		3,059		4,256
		56,366		52,938		110,556		105,210
Gain on sale of securities, net		702		710		1,714		1,466
Total noninterest income		57,068		53,648		112,270		106,676
Noninterest expenses:
Compensation and benefits		64,585		57,854		129,588		115,756
Occupancy		11,824		10,810		24,006		21,669
Furniture and equipment		13,962		11,611		27,557		22,409
Intangible amortization		3,544		5,009		7,921		9,911
Marketing		4,292		3,664		7,916		6,947
Professional services		3,464		3,972		7,008		7,742
Conversion and infrastructure costs		—		3,506		—		4,640
Other		15,647		17,079		32,493		32,205
Total noninterest expenses		117,318		113,505		236,489		221,279
Income before income taxes		63,555		67,978		127,745		137,964
Income taxes		20,412		21,720		40,750		44,211
Net income	$	43,143	$	46,258	$	86,995	$	93,753
Diluted shares (average)		53,252		54,278		53,468		54,244
Net income per common share:
Basic	$	0.82	$	0.86	$	1.65	$	1.75
Diluted		0.81		0.85		1.63		1.73

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)	2006		2006		2005		2005		2005
Interest income:
Loans	$	207,097	$	195,574	$	187,607	$	175,680	$	166,967
Securities and short-term investments		39,134		41,595		42,503		43,775		42,684
Loans held for sale		3,317		3,339		3,563		3,686		2,964
Total interest income		249,548		240,508		233,673		223,141		212,615
Interest expense:
Deposits		72,593		62,354		57,132		51,338		44,099
Borrowings		50,150		47,995		46,879		42,191		38,681
Total interest expense		122,743		110,349		104,011		93,529		82,780
Net interest income		126,805		130,159		129,662		129,612		129,835
Provision for credit losses		3,000		2,000		2,000		2,000		2,000
Net interest income after provision for credit losses		123,805		128,159		127,662		127,612		127,835
Noninterest income:
Deposit service fees		24,150		21,869		22,909		22,182		21,747
Insurance revenue		9,988		10,724		10,678		10,973		10,562
Loan and loan servicing fees		9,162		7,824		9,290		7,739		7,274
Wealth and investment services		6,930		6,354		6,174		5,554		6,028
Gain on sale of loans and loan servicing, net		2,538		3,273		2,322		3,703		3,012
Increase in cash surrender value of life insurance		2,314		2,371		2,360		2,341		2,302
Other		1,284		1,775		3,470		2,347		2,013
		56,366		54,190		57,203		54,839		52,938
Gain on sale of securities, net		702		1,012		1,026		1,141		710
Total noninterest income		57,068		55,202		58,229		55,980		53,648
Noninterest expenses:
Compensation and benefits		64,585		65,003		64,905		60,808		57,854
Occupancy		11,824		12,182		11,141		10,482		10,810
Furniture and equipment		13,962		13,595		14,810		13,009		11,611
Intangible amortization		3,544		4,377		5,001		5,001		5,009
Marketing		4,292		3,624		3,981		3,339		3,664
Professional services		3,464		3,544		3,594		3,626		3,972
Conversion and infrastructure costs		—		—		1,281		2,217		3,506
Other		15,647		16,846		14,646		16,450		17,079
Total noninterest expenses		117,318		119,171		119,359		114,932		113,505
Income before income taxes		63,555		64,190		66,532		68,660		67,978
Income taxes		20,412		20,338		21,032		22,058		21,720
Net income	$	43,143	$	43,852	$	45,500	$	46,602	$	46,258
Diluted shares (average)		53,252		53,703		54,129		54,310		54,278
Net income per common share:
Basic	$	0.82	$	0.83	$	0.85	$	0.87	$	0.86
Diluted		0.81		0.82		0.84		0.86		0.85

See Selected Financial Highlights for footnotes.

Retail and Wholesale Interest-Rate Spreads (unaudited)

	Three Months Ended
	June			March			December			September			June
	2006			2006			2005			2005			2005
Interest-rate spread
Yield on interest-earning assets		6.11	%		5.97	%		5.73	%		5.55	%		5.40	%
Cost of interest-bearing liabilities		3.05			2.78			2.55			2.33			2.11
Interest-rate spread		3.06	%		3.19	%		3.18	%		3.22	%		3.29	%
Net interest margin		3.13			3.24			3.22			3.26			3.32
Retail interest-rate spread
Yield on loans and loans held for sale		6.52	%		6.32	%		6.02	%		5.83	%		5.66	%
Cost of deposits		2.43			2.16			1.94			1.76			1.57
Spread		4.09	%		4.16	%		4.08	%		4.07	%		4.09	%
Wholesale interest-rate spread
Yield on securities and short-term investments(f)		4.61	%		4.76	%		4.75	%		4.67	%		4.62	%
Cost of borrowings(g)		4.85			4.44			4.19			3.84			3.54
Spread(f)		(0.24	)%		0.32	%		0.56	%		0.83	%		1.08	%

Consolidated Average Statements of Condition (unaudited)

Three Months Ended June 30,	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	$	12,625,061	$	207,097			6.54	%	$	11,727,278	$	166,968			5.68	%
Securities		3,496,863		40,991			4.61	(c)		3,851,741		44,687			4.62	(c)
Loans held for sale		230,268		3,317			5.76			242,351		2,964			4.89
Short-term investments		38,412		407			4.19			13,260		131			3.91
Total interest-earning assets		16,390,604		251,812			6.11			15,834,630		214,750			5.40
Noninterest-earning assets		1,507,337								1,493,233
Total assets	$	17,897,941							$	17,327,863
Liabilities and Shareholders’ Equity:
Interest-bearing liabilities:
Demand deposits	$	1,457,462	$	—			—	%	$	1,451,236	$	—			—	%
Savings, NOW and money market deposit accounts		5,371,432		22,489			1.68			5,749,931		16,181			1.13
Time deposits		5,147,276		50,104			3.90			4,078,793		27,918			2.75
Total deposits		11,976,170		72,593			2.43			11,279,960		44,099			1.57
Federal Home Loan Bank advances		2,241,811		25,329			4.47			2,210,809		18,160			3.25
Repurchase agreements and other short-term debt		1,230,394		12,606			4.05			1,449,355		9,872			2.69
Other long-term debt		628,735		12,215			7.77			674,178		10,649			6.32
Total borrowings		4,100,940		50,150			4.85			4,334,342		38,681			3.54
Total interest-bearing liabilities		16,077,110		122,743			3.05			15,614,302		82,780			2.11
Noninterest-bearing liabilities		141,469								104,104
Total liabilities		16,218,579								15,718,406
Preferred stock of subsidiary corporation		9,577								9,577
Shareholders’ equity		1,669,785								1,599,880
Total liabilities and shareholders’ equity	$	17,897,941							$	17,327,863
				129,069								131,970
Less: tax-equivalent adjustment				(2,264	)							(2,135	)
Net interest income			$	126,805							$	129,835
Interest-rate spread							3.06	%							3.29	%
Net interest margin							3.13	%							3.32	%

See Selected Financial Highlights for footnotes.

Consolidated Average Statements of Condition (unaudited)

Six Months Ended June 30,	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	$	12,509,184	$	402,671			6.44	%	$	11,706,386	$	325,755			5.56	%
Securities		3,563,554		84,810			4.70	(c)		3,801,582		87,376			4.58	(c)
Loans held for sale		229,486		6,656			5.80			228,230		5,696			4.99
Short-term investments		26,861		519			3.84			20,020		273			2.71
Total interest-earning assets		16,329,085		494,656			6.04			15,756,218		419,100			5.31
Noninterest-earning assets		1,504,001								1,447,520
Total assets	$	17,833,086							$	17,203,738
Liabilities and Shareholders’ Equity:
Interest-bearing liabilities:
Demand deposits	$	1,454,585	$	—			—	%	$	1,398,593	$	—			—	%
Savings, NOW and money market deposit accounts		5,340,529		42,297			1.60			5,677,509		29,140			1.04
Time deposits		5,027,758		92,650			3.72			3,886,783		50,827			2.64
Total deposits		11,822,872		134,947			2.30			10,962,885		79,967			1.47
Federal Home Loan Bank advances		2,319,410		49,825			4.27			2,308,437		36,747			3.17
Repurchase agreements and other short-term debt		1,259,585		24,436			3.86			1,553,899		19,415			2.49
Other long-term debt		634,736		23,884			7.53			677,630		20,837			6.15
Total borrowings		4,213,731		98,145			4.64			4,539,966		76,999			3.38
Total interest-bearing liabilities		16,036,603		233,092			2.91			15,502,851		156,966			2.03
Noninterest-bearing liabilities		120,349								108,370
Total liabilities		16,156,952								15,611,221
Preferred stock of subsidiary corporation		9,577								9,577
Shareholders’ equity		1,666,557								1,582,940
Total liabilities and shareholders’ equity	$	17,833,086							$	17,203,738
				261,564								262,134
Less: tax-equivalent adjustment				(4,600	)							(4,067	)
Net interest income			$	256,964							$	258,067
Interest-rate spread							3.13	%							3.28	%
Net interest margin							3.18	%							3.32	%

See Selected Financial Highlights for footnotes.

	At or for the Three Months Ended
(Unaudited)	June 30,			March 31,			Dec. 31,			Sept. 30,			June 30,
(Dollars in thousands)	2006			2006			2005			2005			2005
Asset Quality
Nonperforming loans:
Commercial:
Commercial	$	25,052		$	20,721		$	32,678		$	27,544		$	19,073
Equipment financing		2,693			2,864			3,065			3,209			3,466
Total commercial		27,745			23,585			35,743			30,753			22,539
Commercial real estate		23,711			24,012			22,678			19,650			11,654
Residential		7,218			8,891			6,979			6,436			6,690
Consumer		3,065			2,875			1,829			1,699			1,019
Total nonperforming loans		61,739			59,363			67,229			58,538			41,902
Loans held for sale		—			—			—			181			—
Other real estate owned and repossessed assets:
Commercial		2,254			1,712			5,126			1,408			2,217
Residential		316			456			232			218			112
Consumer		10			361			427			10			10
Total other real estate owned and repossessed assets		2,580			2,529			5,785			1,636			2,339
Total nonperforming assets	$	64,319		$	61,892		$	73,014		$	60,355		$	44,241
Allowance for Credit Losses
Beginning balance	$	155,957		$	155,632		$	155,052		$	154,822		$	152,519
Provision		3,000			2,000			2,000			2,000			2,000
Charge-offs:
Commercial		2,775			1,629			3,272			2,204			1,432
Residential		65			75			110			378			178
Consumer		239			362			153			137			201
Total charge-offs		3,079			2,066			3,535			2,719			1,811
Recoveries		(593	)		(391	)		(2,115	)		(949	)		(2,114	)
Net loan charge-offs (recoveries)		2,486			1,675			1,420			1,770			(303	)
Ending balance	$	156,471		$	155,957		$	155,632		$	155,052		$	154,822
Components: (e)
Allowance for loan losses	$	147,401		$	146,383		$	146,486		$	155,052		$	154,822
Reserve for unfunded credit commitments		9,070			9,574			9,146			—			—
Allowance for credit losses	$	156,471		$	155,957		$	155,632		$	155,052		$	154,822
Asset Quality Ratios:
Allowance for loan losses / total loans		1.16	%		1.16	%		1.19	%		1.27	%		1.31	%
Allowance for credit losses / total loans		1.23			1.24			1.27			1.27			1.31
Net charge-offs (recoveries)/ average loans (annualized)		0.08			0.05			0.05			0.06			(0.01	)
Nonperforming loans / total loans		0.49			0.47			0.55			0.48			0.35
Nonperforming assets / total assets		0.36			0.35			0.41			0.34			0.25
Allowance for credit losses / nonperforming loans		253.44			262.72			231.50			264.87			369.49

See Selected Financial Highlights for footnotes.