Webster Financial (WBS) 8-K Webster Reports 2011 First Quarter Profit

Exhibit 99.1

Media Contact	Investor Contact
Bob Guenther 203-578-2391	Terry Mangan 203-578-2318
rguenther@websterbank.com	tmangan@websterbank.com

WEBSTER REPORTS 2011 FIRST QUARTER PROFIT

WATERBURY, Conn., April 15, 2011 – Webster Financial Corporation (NYSE: WBS), the holding company for Webster Bank, N.A., today announced consolidated net income available to common shareholders of $33.5 million or $.36 per diluted share, for the quarter ended March 31, 2011, compared to $25 million or $.30 per diluted share, for the quarter ended December 31, 2010.

Key points for the quarter compared to the fourth quarter of 2010 (unless otherwise noted):

Improved net interest margin of 3.44 percent compared to 3.40 percent, and compared to 3.28 percent for the first quarter a year ago.

Higher average interest-earning assets of $16.71 billion compared to $16.42 billion, and compared to $16.46 billion for the first quarter a year ago.

Growth in commercial non-mortgage loans of 3.3 percent and commercial real estate loans of 1.0 percent.

Continued improvement in asset quality as indicated by a 4.3 percent reduction in non-performing loans.

Reduced provision for loan losses of $10.0 million compared to $15.0 million, and compared to $43.0 million for the first quarter a year ago.

Deposit growth of $516 million, or 3.8 percent, primarily in retail, small business, government, and HSA Bank, combined.

Webster Chairman and Chief Executive Officer James C. Smith said, “Webster’s operating performance continues to improve. Higher earnings for the quarter were driven primarily by further improvement in asset quality along with a higher net interest margin and higher level of interest-earning assets, including growth in business lending. The growth in deposits reflects our focus on expanding relationships in multiple lines of business.”

Net interest income

• The net interest margin increased by 4 basis points to 3.44 percent, reflecting a 4 basis point decline in the cost of funds partially offset by a 1 basis point decline in the yield on interest-earning assets.

• Average interest-earning assets totaled $16.7 billion, up from $16.4 billion.

Provision for loan losses

• Of the $10.0 million provision for loan losses recorded in the quarter, $8.7 million was related to the Company’s continuing portfolios, and $1.3 million was related to the liquidating portfolio. In the fourth quarter of 2010, of the $15.0 million provision for loan losses recorded, $12.5 million was related to the Company’s continuing portfolios, and $2.5 million was related to the liquidating portfolio.

• Net charge-offs were $33.7 million for both quarters ended March 31, 2011 and December 31, 2010; $29.2 million was related to the continuing portfolios compared to $27.4 million for the previous quarter, and $4.5 million was related to the liquidating portfolio compared to $6.3 million for the previous quarter.

Webster Vice Chairman and Chief Operating Officer, Jerry Plush, stated, “Improvement in key asset quality indicators, including the fifth consecutive quarter of lower new non-accrual loans, continued strong coverage of the allowance for loan losses to non-performing loans, and further reduction in the level of classified loans, resulted in lower provision expense this quarter. We also continue to explore opportunities to expedite further reductions in non-performing asset levels to minimize the impact carrying these assets has on ongoing operating results.”

Non-interest income

• Total non-interest income declined $2.8 million compared to the fourth quarter, primarily from reduced net gains on investment securities of $377,000 compared to $2.3 million for the fourth quarter. First quarter results include higher deposit services fees of $314,000, higher wealth and investment services of $70,000, and increased other income of $1.6 million, which were offset by lower loan related fees of $1.7 million, due in part to lower origination volumes and to decreased income from mortgage banking activities, which were $969,000 lower compared to the fourth quarter.

Non-interest expenses

• Non-interest expenses increased $1.2 million from the fourth quarter. Compensation and benefits rose by $3.1 million compared to the fourth quarter, reflecting the seasonal increase in employer payroll taxes and benefit matches that reset in the first quarter of each year. Occupancy expense increased $864,000, primarily the result of higher snow removal expense, and marketing expense increased $1.2 million related to new campaigns and branding efforts compared to the fourth quarter. Offsetting these increases were a $2.1 million reduction in professional services and a $1.2 million reduction in other expense compared to the fourth quarter. Loan workout expenses were lower by $428,000, and foreclosed and repossessed asset expenses and write-downs were lower by $435,000 and $363,000, respectively, compared to the fourth quarter.

Income taxes

The Company recorded $12.3 million of income tax expense in the quarter on the $44.6 million of pre-tax income applicable to continuing operations in the period. The effective tax rate for the quarter was 27.6 percent.

Investment securities

• Total investment securities were $5.4 billion at March 31, 2011 compared to $5.5 billion at December 31, 2010. The carrying value of the available for sale portfolio included $35.9 million in net unrealized gains compared to net unrealized gains of $29.9 million at December 31, while the carrying value of the held to maturity portfolio does not reflect $73.7 million in net unrealized gains compared to net unrealized gains of $69.3 million at December 31.

Loans

• Total loans were $11.0 billion at both March 31, 2011 and December 31, 2010. Originations for the first quarter consisted of $135 million in residential, $175 million in commercial non-mortgage, $118 million in consumer, $19 million in equipment finance, $47 million in asset based lending, and $55 million in commercial real estate. In the quarter, residential mortgage loans increased by $2.8 million, while consumer loans declined by $47.7 million. Commercial non-mortgage loans and asset based lending increased $55.0 million and $28.6 million, respectively, while equipment finance declined $67.5 million.

Asset quality

• Total non-performing loans were $261.9 million, or 2.38 percent, of total loans at March 31, 2011 compared to $273.6 million, or 2.48 percent, at December 31, 2010. The decrease in non-performing loans reflects a combined decrease of $11.7 million, or 4.3 percent, in non-accrual loans. Paying non-performing loans totaled $76.9 million at March 31 compared to $95.7 million at December 31.

• Past due loans for the continuing portfolios increased to $78.0 million at March 31 compared to $67.4 million at December 31. Included in past due loans at March 31 is a $13.5 million commercial real estate loan that contractually matured during the first quarter, is paying interest, and is expected to refinance in the second quarter. Past due loans for the liquidating portfolio were $6.0 million at March 31 compared to $6.1 million at December 31.

Deposits and borrowings

• Total deposits were $14.1 billion at March 31, 2011 compared to $13.6 billion at December 31, 2010. Increases of $177.5 million in NOW, $235.2 million in money market, and $134.7 million in savings were offset by declines of $33.3 million and $40.3 million, in demand and certificates of deposits, respectively. Core to total deposits and loans to deposits were both 78 percent, compared to 77 percent and 81 percent, respectively, at December 31.

• Total borrowings were $1.8 billion at March 31 compared to $2.4 billion at December 31. Borrowings represented 10 percent of total assets at March 31 compared to 14 percent at December 31.

Capital

• The tangible common equity and Tier 1 common equity to risk weighted assets ratios increased to 7.10 percent and 10.50 percent, respectively, compared to 6.82 percent and 9.92 percent at December 31, 2010.

***

Webster Financial Corporation is the holding company for Webster Bank, National Association. With $18.0 billion in assets, Webster provides business and consumer banking, mortgage, financial planning, trust and investment services through 176 banking offices, 488 ATMs, mobile and telephone banking, and the Internet. Webster Bank owns the asset based lending firm Webster Business Credit Corporation; the equipment finance firm Webster Capital Finance; and provides health savings account trustee and

administrative services through HSA Bank, a division of Webster Bank. Member FDIC and equal housing lender. For more information about Webster, including past press releases and the latest annual report, visit the Webster website atwww.websterbank.com.

***

Conference Call

A conference call covering Webster’s fourth quarter earnings announcement will be held today, Friday, April 15, at 9:00 a.m. (Eastern) and may be heard through Webster’s investor relations website atwww.wbst.com, or in listen-only mode by calling 1-877-407-8289 or 201-689-8341 internationally. The call will be archived on the website and available for future retrieval.

Forward-Looking Statements

This release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Act”). Forward-looking statements can be identified by words such as “believes,” “anticipates,” “expects,” “intends,” “targeted,” “continue,” “remain,” “will,” “should,” “may,” “plans,” “estimates,” and similar references to future periods; however, such words are not the exclusive means of identifying such statements. Examples of forward-looking statements include, but are not limited to: (i) projections of revenues, expenses, income or loss, earnings or loss per share, and other financial items; (ii) statements of plans, objectives, and expectations of Webster or its management or Board of Directors; (iii) statements of future economic performance; and (iv) statements of assumptions underlying such statements. Forward-looking statements are based on Webster’s current expectations and assumptions regarding its business, the economy, and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict. Webster’s actual results may differ materially from those contemplated by the forward-looking statements, which are neither statements of historical fact nor guarantees or assurances of future performance. Factors that could cause actual results to differ from those discussed in the forward-looking statements include, but are not limited to: (1) local, regional, national, and international economic conditions and the impact they may have on us and our customers and our assessment of that impact; (2) volatility and disruption in national and international financial markets; (3) government intervention in the U.S. financial system; (4) changes in the level of non-performing assets and charge-offs; (5) changes in estimates of future reserve requirements based upon the periodic review thereof under relevant regulatory and accounting requirements; (6) adverse conditions in the securities markets that lead to impairment in the value of securities in our investment portfolio; (7) inflation, interest rate, securities market, and monetary fluctuations; (8) the timely development and acceptance of new products and services and perceived overall value of these products and services by customers; (9) changes in consumer spending, borrowings, and savings habits; (10) technological changes; (11) the ability to increase market share and control expenses; (12) changes in the competitive environment among banks, financial holding companies, and other financial service providers; (13) the effect of changes in laws and regulations (including laws and regulations concerning taxes, banking, securities, and insurance) with which we and our subsidiaries must comply, including those under the recently enacted Dodd-Frank Wall Street Reform and Consumer Protection Act and the Basel III update to the Basel Accords that is under development; (14) the effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Public Company Accounting Oversight Board, the Financial Accounting Standards Board, and other accounting standard setters; (15) the costs and effects of legal and regulatory developments including the resolution of legal proceedings or regulatory or other governmental inquiries and the results of regulatory examinations or reviews; and (16) our success at managing the risks involved in the foregoing items and (17) the other factors that are described in the Company’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q under the heading “Risk Factors.” Any forward-looking statement made by the Company in this release speaks only as of the date on which it is made. Factors or events that could cause the Company’s actual results to differ may emerge from time to time, and it is not possible for the

Company to predict all of them. The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.

Non-GAAP Financial Measures

In addition to results presented in accordance with GAAP, this press release contains certain non-GAAP financial measures. A reconciliation of net income and other performance ratios, as adjusted, is included in the accompanying selected financial highlights table.

We believe that providing certain non-GAAP financial measures provides investors with information useful in understanding our financial performance, our performance trends and financial position. Specifically, we provide measures based on what we believe are our operating earnings on a consistent basis and exclude non-core operating items which affect the GAAP reporting of results of operations. We utilize these measures for internal planning and forecasting purposes. We, as well as securities analysts, investors, and other interested parties, also use these measures to compare peer company operating performance. We believe that our presentation and discussion, together with the accompanying reconciliations, provides a complete understanding of factors and trends affecting our business and allows investors to view performance in a manner similar to management. These non-GAAP measures should not be considered a substitute for GAAP basis measures and results, and we strongly encourage investors to review our consolidated financial statements in their entirety and not to rely on any single financial measure. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies’ non-GAAP financial measures having the same or similar names.

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WEBSTER FINANCIAL CORPORATION

Selected Financial Highlights (unaudited)

	At or for the Three Months Ended
(In thousands, except per share data)	March 2011			December 2010			March 2010
Net income (loss) and performance ratios (annualized):
Net income attributable to Webster Financial Corporation	$	34,296		$	32,569		$	1,421
Net income (loss) available to common shareholders		33,465			24,958			(6,069	)
Net income (loss) per diluted common share		0.36			0.30			(0.08	)
Return on average shareholders’ equity		7.66	%		7.11	%		0.30	%
Return on average tangible equity		11.00			10.11			0.41
Return on average assets		0.76			0.73			0.03
Income (loss) and performance ratios, (annualized), attributable to Webster Financial Corporation from continuing operations:
Income from continuing operations	$	32,301		$	32,475		$	1,421
Net income (loss) available to common shareholders		31,470			24,864			(6,069	)
Net income (loss) from continuing operations per diluted common share		0.34			0.30			(0.08	)
Return on average shareholders’ equity		7.21	%		7.09	%		0.30	%
Return on average tangible equity		10.36			10.08			0.41
Return on average assets		0.72			0.73			0.03
Non-interest income as a percentage of total revenue		24.11			25.66			26.35
Efficiency ratio (a)		67.61			67.82			64.75
Asset quality:
Allowance for loan losses	$	297,948		$	321,665		$	343,871
Non-performing assets		290,349			301,804			379,322
Allowance for loan losses / total loans		2.71	%		2.92	%		3.16	%
Net charge-offs / average loans (annualized)		1.22			1.24			1.47
Non-performing loans / total loans		2.38			2.48			3.20
Non-performing assets / total loans plus OREO		2.63			2.73			3.47
Allowance for loan losses / non-performing loans		113.78			117.58			98.57
Other ratios (annualized):
Tangible capital ratio		7.27	%		6.99	%		7.39	%
Tangible common equity ratio		7.10			6.82			5.53
Tier 1 risk-based capital ratio(c)		12.65			12.12			12.51
Total-risk based capital(c)		14.22			13.99			14.37
Tier 1 common equity / risk weighted assets (c)		10.50			9.92			7.90
Shareholders’ equity / total assets		10.10			9.83			10.24
Interest-rate spread		3.40			3.37			3.23
Net interest margin		3.44			3.40			3.28
Share and equity related:
Common equity	$	1,786,114		$	1,744,483		$	1,521,932
Book value per common share		20.42			20.01			19.41
Tangible book value per common share		14.21			13.78			12.44
Common stock closing price		21.43			19.70			17.49
Dividends declared per common share		0.01			0.01			0.01
Common shares issued and outstanding		87,474			87,160			78,420
Basic shares (average)		86,896			78,663			77,922
Diluted shares (average)		92,554			82,766			77,922

Footnotes:

(a) Calculated using SNL’s methodology - noninterest expense (excluding foreclosed property expenses, intangible amortization, goodwill impairments and other charges) as a percentage of net interest income (FTE basis) plus noninterest income (excluding gain/loss on securities and other charges).

(b) For purposes of the yield computation, unrealized gains (losses) on securities available for sale are excluded from the average balance.

(c) The ratios presented are projected for the 2011 reporting period and actual for the 2010 reporting periods.

WEBSTER FINANCIAL CORPORATION

Consolidated Balance Sheets (unaudited)

(In thousands)	March 31, 2011			December 31, 2010			March 31, 2010
Assets:
Cash and due from banks	$	170,691		$	159,849		$	158,065
Interest bearing deposits		104,982			52,811			162,193
Investment securities:
Trading, at fair value		—			11,554			—
Available for sale, at fair value		2,195,109			2,413,776			2,365,956
Held-to-maturity		3,211,047			3,072,453			2,915,923
Total securities		5,406,156			5,497,783			5,281,879
Loans held for sale		10,809			52,224			29,790
Loans:
Commercial		2,836,007			2,819,938			2,890,353
Commercial real estate		2,216,206			2,197,988			2,154,534
Residential mortgages		3,150,269			3,147,492			2,894,291
Consumer		2,811,568			2,859,221			2,957,342
Total loans		11,014,050			11,024,639			10,896,520
Allowance for loan losses		(297,948	)		(321,665	)		(343,871	)
Loans, net		10,716,102			10,702,974			10,552,649
Prepaid FDIC premiums		52,121			57,548			73,752
Federal Home Loan Bank and Federal Reserve Bank stock		143,874			143,874			140,874
Premises and equipment, net		155,464			157,724			171,178
Goodwill and other intangible assets, net		549,767			551,164			555,355
Cash surrender value of life insurance policies		300,683			298,149			290,786
Deferred tax asset, net		95,209			104,774			121,010
Accrued interest receivable and other assets		259,088			259,194			487,184
Total Assets	$	17,964,946		$	18,038,068		$	18,024,715
Liabilities and Equity:
Deposits:
Demand	$	2,183,665		$	2,216,987		$	1,662,122
NOW		2,371,707			2,194,239			2,909,737
Money market		2,696,076			2,460,918			2,384,297
Savings		3,721,445			3,586,732			3,372,260
Certificates of deposit		3,030,707			3,071,030			3,613,735
Brokered		121,068			78,879			51,375
Total deposits		14,124,668			13,608,785			13,993,526
Securities sold under agreements to repurchase and other short-term		857,394			1,091,477			849,876
Federal Home Loan Bank advances		403,297			768,005			574,378
Long-term debt		570,637			582,837			588,540
Accrued expenses and other liabilities		184,320			203,898			162,678
Total liabilities		16,140,316			16,255,002			16,168,998
Webster Financial Corporation shareholders’ equity		1,815,053			1,773,422			1,846,076
Non controlling interests		9,577			9,644			9,641
Total equity		1,824,630			1,783,066			1,855,717
Total Liabilities and Equity	$	17,964,946		$	18,038,068		$	18,024,715

See Selected Financial Highlights for footnotes.

WEBSTER FINANCIAL CORPORATION

Consolidated Statements of Operations (unaudited)

	Three Months Ended March 31,
(In thousands, except per share data)	2011			2010
Interest income:
Interest and fees on loans and leases	$	121,231		$	123,350
Interest and dividends on securities		53,844			54,156
Loans held for sale		422			314
Total interest income		175,497			177,820
Interest expense:
Deposits		22,769			31,951
Borrowings		13,279			14,485
Total interest expense		36,048			46,436
Net interest income		139,449			131,384
Provision for loan losses		10,000			43,000
Net interest income after provision for loan losses		129,449			88,384
Non-interest income:
Deposit service fees		25,340			27,784
Loan related fees		4,829			6,005
Wealth and investment services		6,722			5,835
Mortgage banking activities		1,253			(138	)
Increase in cash surrender value of life insurance policies		2,533			2,578
Net gain on investment securities		377			638
Other income		3,248			4,314
Total non-interest income		44,302			47,016
Non-interest expense:
Compensation and benefits		67,071			60,956
Occupancy		14,735			14,440
Technology and equipment expense		15,392			15,268
Marketing		5,520			4,791
Professional and outside services		2,430			2,602
Intangible assets amortization		1,397			1,397
Foreclosed and repossessed asset expenses		884			1,692
Foreclosed and repossessed asset (gains) write-downs		(315	)		2,061
Loan workout expenses		1,800			1,925
Deposit insurance		5,781			6,085
Other expenses		13,865			11,344
		128,560			122,561
Provision for litigation and settlements		292			—
Branch and facility optimization		273			—
Fraud loss		—			11,056
Severance and other		—			7
Total non-interest expense		129,125			133,624
Income from continuing operations before income taxes		44,626			1,776
Income tax expense		12,326			355
Income from continuing operations		32,300			1,421
Income from discontinued operations, net of tax		1,995			—
Consolidated net income		34,295			1,421
Less: Net (loss) income attributable to noncontrolling interests		(1	)		—
Net income attributable to Webster Financial Corp.		34,296			1,421
Preferred stock dividends		(831	)		(5,455	)
Preferred stock accretion and accounting adjustments		—			(2,035	)
Net income (loss) available to common shareholders	$	33,465		$	(6,069	)
Diluted shares (average)		92,554			77,922
Net income (loss) per common share available to common shareholders:
Basic
Income (loss) from continuing operations	$	0.36		$	(0.08	)
Net income (loss)		0.38			(0.08	)
Diluted
Income (loss) from continuing operations		0.34			(0.08	)
Net income (loss)		0.36			(0.08	)

See Selected Financial Highlights for footnotes.

WEBSTER FINANCIAL CORPORATION

Five Quarter Consolidated Statements of Operations (unaudited)

	Three Months Ended
(In thousands, except per share data)	March 31, 2011			Dec. 31, 2010			Sept. 30, 2010			June 30, 2010			March 31, 2010
Interest income:
Interest and fees on loans and leases	$	121,231		$	121,944		$	123,042		$	122,447		$	123,350
Interest and dividends on securities		53,844			51,652			53,182			55,443			54,156
Loans held for sale		422			433			79			144			314
Total interest income		175,497			174,029			176,303			178,034			177,820
Interest expense:
Deposits		22,769			23,787			26,409			30,482			31,951
Borrowings		13,279			13,892			15,160			15,210			14,485
Total interest expense		36,048			37,679			41,569			45,692			46,436
Net interest income		139,449			136,350			134,734			132,342			131,384
Provision for loan losses		10,000			15,000			25,000			32,000			43,000
Net interest income after provision for loan losses		129,449			121,350			109,734			100,342			88,384
Non-interest income:
Deposit service fees		25,340			25,026			26,822			29,345			27,784
Loan related fees		4,829			6,568			6,119			7,225			6,005
Wealth and investment services		6,722			6,652			6,220			6,218			5,835
Mortgage banking activities		1,253			2,222			1,658			427			(138	)
Increase in cash surrender value of life insurance policies		2,533			2,650			2,677			2,612			2,578
Net gain on investment securities		377			2,295			1,262			18,192			638
Other income		3,248			1,639			2,510			1,501			4,314
Total non-interest income		44,302			47,052			47,268			65,520			47,016
Non-interest expense:
Compensation and benefits		67,071			64,001			60,124			60,327			60,956
Occupancy		14,735			13,871			13,777			13,546			14,440
Technology and equipment expense		15,392			16,044			15,886			15,657			15,268
Marketing		5,520			4,317			4,634			5,226			4,791
Professional and outside services		2,430			4,515			4,038			3,566			2,602
Intangible assets amortization		1,397			1,397			1,397			1,397			1,397
Foreclosed and repossessed asset expenses		884			1,319			1,596			1,009			1,692
Foreclosed and repossessed asset (gains) write-downs		(315	)		48			2,157			891			2,061
Loan workout expenses		1,800			2,228			3,477			2,200			1,925
Deposit insurance		5,781			5,407			5,882			7,161			6,085
Other expenses		13,865			15,057			13,650			16,135			11,344
		128,560			128,204			126,618			127,115			122,561
Provision for litigation and settlements		292			—			2,800			19,676			—
Branch and facility optimization		273			4,307			—			—			—
Fraud (recovery) loss		—			(5,195	)		—			—			11,056
Severance and other		—			646			303			876			7
Total non-interest expense		129,125			127,962			129,721			147,667			133,624
Income from continuing operations before income taxes		44,626			40,440			27,281			18,195			1,776
Income tax expense		12,326			7,966			4,597			550			355
Income from continuing operations		32,300			32,474			22,684			17,645			1,421
Income from discontinued operations, net of tax		1,995			94			—			—			—
Consolidated net income		34,295			32,568			22,684			17,645			1,421
Less: Net (loss) income attributable to noncontrolling interests		(1	)		(1	)		(3	)		7			—
Net income attributable to Webster Financial Corp.		34,296			32,569			22,687			17,638			1,421
Preferred stock dividends		(831	)		(3,469	)		(4,581	)		(4,581	)		(5,455	)
Preferred stock accretion and accounting adjustments		—			(4,141	)		(327	)		(327	)		(2,035	)
Net income (loss) available to common shareholders	$	33,465		$	24,959		$	17,779		$	12,730		$	(6,069	)
Diluted shares (average)		92,554			82,766			82,128			82,721			77,922
Net income (loss) per common share available to common shareholders:
Basic
Income (loss) from continuing operations	$	0.36		$	0.32		$	0.23		$	0.16		$	(0.08	)
Net income (loss)		0.38			0.32			0.23			0.16			(0.08	)
Diluted
Income (loss) from continuing operations		0.34			0.30			0.22			0.15			(0.08	)
Net income (loss)		0.36			0.30			0.22			0.15			(0.08	)

See Selected Financial Highlights for footnotes.

WEBSTER FINANCIAL CORPORATION

Five Quarter Interest-Rate Spreads and Margin (unaudited)

	Three Months Ended
	March 31, 2011			December 31, 2010			September 30, 2010			June 30, 2010			March 31, 2010
Interest-rate spread
Yield on interest-earning assets		4.31	%		4.32	%		4.36	%		4.37	%		4.42	%
Cost of interest-bearing liabilities		0.91			0.95			1.05			1.15			1.19
Interest-rate spread		3.40	%		3.37	%		3.31	%		3.22	%		3.23	%
Net interest margin		3.44	%		3.40	%		3.36	%		3.27	%		3.28	%

Consolidated Average Balances, Yields and Rates Paid (unaudited)

Three Months Ended March 31,	2011								2010
(Dollars in thousands)	Average balance		Interest			Fully tax- equivalent yield/rate			Average balance		Interest			Fully tax- equivalent yield/rate
Assets:
Interest-earning assets:
Loans	$	11,065,594	$	121,231			4.39	%	$	10,976,610	$	123,350			4.51	%
Investment securities (b)		5,402,046		56,844			4.23			5,066,951		56,835			4.49
Loans held for sale		36,891		422			4.57			27,446		314			4.58
Federal Home Loan and Federal Reserve Bank stock		143,874		831			2.34			140,874		716			2.06
Interest bearing deposits		61,308		34			0.22			250,458		162			0.26
Total interest-earning assets		16,709,713		179,362			4.31			16,462,339		181,377			4.42
Non-interest-earning assets		1,333,398								1,398,593
Total assets	$	18,043,111							$	17,860,932
Liabilities and Shareholders’ Equity:
Interest-bearing liabilities:
Deposits:
Demand	$	2,161,761	$	—			—	%	$	1,641,654	$	—			—	%
Savings, NOW and money market		8,642,941		10,583			0.50			8,365,705		13,878			0.67
Certificates of deposit		3,110,684		12,186			1.59			3,783,167		18,073			1.94
Total deposits		13,915,386		22,769			0.66			13,790,526		31,951			0.94
Securities sold under agreements to repurchase and other short-term borrowings		994,718		3,562			1.43			828,213		4,003			1.93
Federal Home Loan Bank advances		554,562		3,355			2.42			576,674		4,418			3.06
Long-term debt		581,578		6,362			4.38			588,800		6,064			4.12
Total borrowings		2,130,858		13,279			2.49			1,993,687		14,485			2.91
Total interest-bearing liabilities		16,046,244		36,048			0.91			15,784,213		46,436			1.19
Non-interest-bearing liabilities		196,361								150,447
Total liabilities		16,242,605								15,934,660
Noncontrolling interests		9,635								9,641
Webster Financial Corp. shareholders’ equity		1,790,871								1,916,631
Total liabilities and equity	$	18,043,111							$	17,860,932
Tax-equivalent net interest income				143,314								134,941
Less: tax-equivalent adjustment				(3,865	)							(3,557	)
Net interest income			$	139,449							$	131,384
Interest-rate spread							3.40	%							3.23	%
Net interest margin							3.44	%							3.28	%

See Selected Financial Highlights for footnotes.

WEBSTER FINANCIAL CORPORATION

Five Quarter Loan Balances(unaudited)

(Dollars in thousands)	March 31, 2011			Dec. 31, 2010			Sept. 30, 2010			June 30, 2010			March 31, 2010
Loan Balances (actuals):
Continuing Portfolio:
Commercial	$	1,709,592		$	1,654,615		$	1,562,633		$	1,538,924		$	1,539,975
Equipment financing		643,388			710,925			759,416			804,871			846,562
Asset based lending		483,027			454,398			495,317			487,842			503,816
Commercial real estate		2,160,097			2,138,314			2,041,237			2,044,264			2,057,361
Residential development		56,109			59,674			66,495			82,589			97,173
Residential mortgages		3,150,268			3,147,491			3,093,581			2,978,601			2,890,982
Consumer		2,642,533			2,682,645			2,702,920			2,722,348			2,750,084
Total continuing		10,845,014			10,848,062			10,721,599			10,659,439			10,685,953
Allowance for loan losses		(258,140	)		(278,665	)		(293,541	)		(294,187	)		(291,171	)
Total continuing, net		10,586,874			10,569,397			10,428,058			10,365,252			10,394,782
Liquidating Portfolio:
National Construction Lending Center (NCLC)		1			1			1,558			2,383			3,309
Consumer		169,035			176,576			185,026			194,738			207,258
Total liquidating portfolio		169,036			176,577			186,584			197,121			210,567
Allowance for loan losses		(39,808	)		(43,000	)		(46,800	)		(49,900	)		(52,700	)
Total liquidating, net		129,228			133,577			139,784			147,221			157,867
Total Loan Balances (actuals)		11,014,050			11,024,639			10,908,183			10,856,560			10,896,520
Allowance for loan losses		(297,948	)		(321,665	)		(340,341	)		(344,087	)		(343,871	)
Loans, (net)	$	10,716,102		$	10,702,974		$	10,567,842		$	10,512,473		$	10,552,649
Loan Balances (average):
Continuing Portfolio:
Commercial	$	1,691,452		$	1,570,641		$	1,555,430		$	1,542,994		$	1,520,157
Equipment finance		688,767			733,611			784,215			825,581			871,972
Asset based lending		488,181			488,639			496,871			497,673			523,938
Commercial real estate		2,144,904			2,049,658			2,039,180			2,049,162			2,062,769
Residential development		58,152			62,223			73,510			88,866			107,343
Residential mortgages		3,158,754			3,124,899			3,029,900			2,932,305			2,892,797
Consumer		2,662,454			2,693,191			2,714,835			2,737,076			2,780,063
Total continuing		10,892,664			10,722,862			10,693,941			10,673,657			10,759,039
Allowance for loan losses		(280,589	)		(288,003	)		(295,414	)		(294,079	)		(291,281	)
Total continuing, net		10,612,075			10,434,859			10,398,527			10,379,578			10,467,758
Liquidating Portfolio:
NCLC		1			1,246			1,975			2,574			4,558
Consumer		172,929			180,888			190,104			201,766			213,013
Total liquidating portfolio		172,930			182,134			192,079			204,340			217,571
Allowance for loan losses		(39,808	)		(43,000	)		(46,800	)		(49,900	)		(52,700	)
Total liquidating, net		133,122			139,134			145,279			154,440			164,871
Total Loan Balances (average)		11,065,594			10,904,996			10,886,020			10,877,997			10,976,610
Allowance for loan losses		(320,397	)		(331,003	)		(342,214	)		(343,979	)		(343,981	)
Loans, (net)	$	10,745,197		$	10,573,993		$	10,543,806		$	10,534,018		$	10,632,629

See Selected Financial Highlights for footnotes.

WEBSTER FINANCIAL CORPORATION

Five Quarter Non-performing Assets(unaudited)

(Dollars in thousands)	March 31, 2011		Dec. 31, 2010		Sept. 30, 2010		June 30, 2010		March 31, 2010
Non-performing loans:
Continuing Portfolio:
Commercial	$	40,534	$	34,366	$	45,877	$	48,533	$	46,486
Equipment financing		16,602		20,482		23,300		28,271		32,985
Asset based lending		5,062		7,832		15,779		21,903		28,647
Commercial real estate		47,095		51,991		62,721		53,826		50,711
Residential development		17,300		15,477		19,487		26,941		34,651
Residential mortgages		53,578		53,768		55,517		60,512		70,908
Performing non-accrual residential mortgages		42,172		45,360		42,472		33,112		34,699
Consumer		22,065		23,592		24,129		23,290		27,832
Performing non-accrual consumer		9,657		10,983		10,765		8,348		5,735
Non-performing loans - continuing portfolio		254,065		263,851		300,047		304,736		332,654
Liquidating Portfolio:
NCLC		—		—		1,557		1,557		2,483
Performing non-accrual NCLC		—		—		—		825		826
Consumer		5,657		7,310		7,784		8,549		10,895
Performing non-accrual consumer		2,145		2,412		1,736		1,644		1,990
Non-performing loans - liquidating portfolio		7,802		9,722		11,077		12,575		16,194
Total non-performing loans	$	261,867	$	273,573	$	311,124	$	317,311	$	348,848
Other real estate owned and repossessed assets:
Continuing Portfolio:
Commercial	$	19,959	$	20,033	$	17,916	$	14,918	$	13,464
Equipment financing		1,486		1,023		5,056		4,757		6,654
Asset based lending		—		—		—		—		—
Commercial real estate		—		—		—		—		—
Residential development		—		—		—		—		—
Residential mortgages		5,056		5,794		5,883		4,309		4,461
Consumer		978		937		1,041		4,542		4,025
Total continuing		27,479		27,787		29,896		28,526		28,604
Liquidating Portfolio:
NCLC		1,003		444		2,380		2,939		1,744
Consumer		—		—		591		427		126
Total liquidating		1,003		444		2,971		3,366		1,870
Total other real estate owned and repossessed assets	$	28,482	$	28,231	$	32,867	$	31,892	$	30,474
Total non-performing assets	$	290,349	$	301,804	$	343,991	$	349,203	$	379,322

See Selected Financial Highlights for footnotes.

WEBSTER FINANCIAL CORPORATION

Five Quarter Past Due Loans(unaudited)

(Dollars in thousands)	March 31, 2011		Dec. 31, 2010		Sept. 30, 2010		June 30, 2010		March 31, 2010
Past due 30-89 days:
Accruing loans:
Continuing Portfolio:
Commercial	$	8,746	$	5,201	$	9,026	$	11,295	$	17,124
Equipment financing		10,520		7,937		6,043		8,818		11,030
Asset based lending		—		—		—		—		—
Commercial real estate		22,229		11,006		7,354		11,069		16,950
Residential development		—		194		—		200		2,528
Residential mortgages		19,080		21,513		27,821		28,015		30,843
Consumer		17,457		21,539		25,546		27,378		27,099
Past Due 30-89 days - continuing portfolio		78,032		67,390		75,790		86,775		105,574
Liquidating Portfolio:
NCLC		—		—		—		—		—
Consumer		5,966		6,128		8,133		6,496		8,596
Past Due 30-89 days - liquidating portfolio		5,966		6,128		8,133		6,496		8,596
Accruing loans past due 90 days or more:		97		91		150		2,138		715
Total past due loans	$	84,095	$	73,609	$	84,073	$	95,409	$	114,885

See Selected Financial Highlights for footnotes.

WEBSTER FINANCIAL CORPORATION

Five Quarter Changes in the Allowance for Loan Losses (unaudited)

	For the Three Months Ended
(Dollars in thousands)	March 31, 2011		Dec. 31, 2010		Sept. 30, 2010		June 30, 2010		March 31, 2010
Beginning balance	$	321,665	$	340,341	$	344,087	$	343,871	$	341,184
Provision		10,000		15,000		25,000		32,000		43,000
Allowance for sold loans		—		—		—		—		—
Charge-offs continuing portfolio:
Commercial		10,611		4,955		4,069		4,101		5,271
Equipment financing		1,134		4,079		3,972		3,601		5,108
Asset based lending		500		1,500		4,686		5,200		2,447
Commercial real estate		7,169		5,466		2,260		94		1,382
Residential development		191		871		1,167		2,110		5,131
Residential mortgages		3,318		3,998		2,666		3,067		4,455
Consumer		10,354		9,732		9,472		10,166		9,896
Charge-offs continuing portfolio		33,277		30,601		28,292		28,339		33,690
Charge-offs liquidating portfolio:
NCLC		32		1,566		—		1,170		70
Consumer		4,634		5,004		6,158		6,469		9,315
Charge-offs liquidating portfolio		4,666		6,570		6,158		7,639		9,385
Total charge-offs		37,943		37,171		34,450		35,978		43,075
Recoveries continuing portfolio:
Commercial		487		824		408		764		515
Equipment financing		1,469		1,042		1,473		1,100		952
Asset based lending		929		94		1,136		497		254
Commercial real estate		—		—		—		—		—
Residential development		—		—		616		172		—
Residential mortgages		67		284		380		141		80
Consumer		1,086		971		1,277		1,153		455
Recoveries continuing portfolio		4,038		3,215		5,290		3,827		2,256
Recoveries liquidating portfolio:
NCLC		61		194		73		217		302
Consumer		127		86		341		150		204
Recoveries liquidating portfolio		188		280		414		367		506
Total recoveries		4,226		3,495		5,704		4,194		2,762
Total net charge-offs		33,717		33,676		28,746		31,784		40,313
Ending balance	$	297,948	$	321,665	$	340,341	$	344,087	$	343,871