WEBSTER FINANCIAL
CORPORATION
[GRAPHIC OMITTED]
ACQUISITION OF EAGLE FINANCIAL CORP.
OCTOBER 27, 1997
1:15 PM (EST)
CONFERENCE CALL: (800) 289-0495
ACCESS CODE: 394366
TAPED RE-BROADCAST: (888) 567-0738 (AVAIL. UNTIL 10/30/97)
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DISCLAIMER
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This presentation contains forward looking statements with respect to the
financial condition, results of operations and business of Webster Financial
Corporation and, assuming the consummation of the merger, a combined
Webster/Eagle including statements relating to: (a) the cost savings and
accretion to reported earnings that will be realized from the merger; (b) the
impact on revenues of the merger; and (c) the restructuring charges expected to
be incurred in connection with the merger. These forward looking statements
involve certain risks and uncertainties. Factors that may cause actual results
to differ materially from those contemplated by such foward looking statements
include, among others, the following possibilities: (1) expected cost savings
from the merger cannot be fully realized or realized within the expected time
frame; (2) revenues following the merger are lower than expected; (3)
competitive pressure among depository institutions increases significantly; (4)
costs or difficulties related to the integration of the business of Webster
Financial Corporation and Eagle Financial Corporation are greater than expected;
(5) changes in the interest rate environment reduce interest margins; (6)
general economic conditions, either nationally or in Connecticut, are less
favorable than expected; or (7) legislation or regulatory changes adversely
affect the businesses in which the combined company would engage.
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TRANSACTION SUMMARY
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TRANSACTION TYPE: Stock-for-stock exchange
FIXED EXCHANGE RATIO: 0.840
ACCOUNTING TREATMENT: Pooling-of-interests
IMPLIED TRANSACTION PRICE: $55.44 PER SHARE ($54.44(a))
IMPLIED AGGREGATE TRANSACTION VALUE: $362 million(a)
TRANSACTION MULTIPLES:
PRICE/BOOK VALUE 2.50x
PRICE/1998 EPS 18.97x
PRICE/1998 CASH EPS 16.43x
PRICE/1998 ADJUSTED CASH EPS(b) 11.67x
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(a) Calculated using Webster closing stock price of $66.00 on October 24, 1997
and adjusted to reflect cost of 222,970 Eagle shares already owned by
Webster.
(b) Adjusted to reflect transaction synergies equal to 45% of Eagle's 1998
estimated G&A expense base.
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TRANSACTION SUMMARY
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WALKAWAY: Eagle has the right to terminate the transaction
if Webster's stock price falls both by more than
20% on an absolute basis and 15% compared to an
index unless Webster exercises its right to "top
up"
OPTION AGREEMENT: Eagle has granted Webster a 19.9% option at $41.25
per share exercisable under certain conditions
BOARD REPRESENTATION: Webster's Board expanded to add three existing
Eagle board members
EXPECTED CLOSING: First quarter 1998
PRE-TAX COST SAVINGS: $14.3 million, or 45% of Eagle's estimated 1998
G&A expenses, with 75% achieved in 1998
IMPACT ON PROJECTED EPS:
1998 Accretion 3.6%
1999 Accretion 5.3%
ACQUISITION CHARGE: $18.9 million pre-tax, $13.3 after-tax
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TRANSACTION HIGHLIGHTS
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o In-market transaction offering significant cost savings
o Strong EPS accretion in 1998 and beyond
o Marginally dilutive to stated and tangible book value
o Significantly enhances banking franchise:
o Meaningful market share gains in Hartford and Litchfield Counties
o Leading Connecticut based bank with $5.6 billion in deposits in 114
branch offices (before consolidation)
o Improves projected returns on assets and equity
o Improves capital ratios
o Compatible strategies and operations
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CONNECTICUT BRANCH NETWORK
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CREATES LEADING CONNECTICUT BASED BANK
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TOTAL MARKET NUMBER OF
RANK COMPANY TYPE DEPOSITS SHARE BRANCHES
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1 Fleet Financial Group Bank $13,043,362 23.75% 175
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WEBSTER/EAGLE PRO FORMA THRIFT 5,918,294 10.78 114
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2 Peoples Bank, MHC Thrift 5,702,947 10.38 105
3 First Union Corp Bank 4,707,682 8.57 108
4 Webster Financial Corp Thrift 4,534,248 8.26 83
5 BankBoston Corporation Bank 3,123,764 5.69 62
6 Chase Manhattan Corporation Bank 1,695,309 3.09 49
7 News Haven SB Thrift 1,591,000 2.90 31
8 Citizens Financial Group Thrift 1,468,581 2.67 38
9 Eagle Financial Corporation Thrift 1,384,046 2.52 28
10 Hubco, Inc. Bank 1,180,781 2.15 31
Total (83 Institutions) 54,925,085 1,138
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Source: SNL Securities. Deposits as of June 30, 1996, pro forma for pending
acquisitions.
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PROVIDES ADDITIONAL STRENGTH IN HARTFORD COUNTY
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TOTAL MARKET NUMBER OF
RANK COMPANY TYPE DEPOSITS SHARE BRANCHES
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1 Fleet Financial Group Bank $6,767,884 38.06% 53
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WEBSTER/EAGLE PRO FORMA THRIFT 3,084,001 17.35 70
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2 Webster Financial Corp Thrift 1,969,808 11.08 48
3 BankBoston Corporation Bank 1,893,960 10.65 31
4 Eagle Financial Corporation Thrift 1,114,193 6.27 22
5 American SB Thrift 1,014,573 5.71 11
6 Mechanics SB Thrift 644,483 3.62 14
7 Connecticut Bancshares, MHC Thrift 627,735 3.53 13
8 Peoples Bank, MHC Thrift 589,439 3.31 19
9 N.E. Community Bancorp Bank 486,530 2.74 13
10 First FS&LA, East Hartford Thrift 440,618 2.48 9
Total (33 Institutions) $17,783,085 288
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Source: SNL Securities. Deposits as of June 30, 1996, pro forma for pending
acquisitions.
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OBTAIN NUMBER ONE POSITION IN LITCHFIELD COUNTY
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TOTAL MARKET NUMBER OF
RANK COMPANY TYPE DEPOSITS SHARE BRANCHES
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WEBSTER/EAGLE PRO FORMA THRIFT 401,410 14.12% 8
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1 Torrington SB Thrift 376,283 13.24 4
2 Eagle Financial Corporation Thrift 261,777 9.21 5
3 Thomaston SB Thrift 238,144 8.38 5
4 Fleet Financial Group Bank 208,928 7.35 6
5 First Union Corp. Bank 206,776 7.27 4
6 BankBoston Corporation Bank 194,187 6.83 6
7 Newmil Bancorp Thrift 179,206 6.30 10
8 New Milford B&T Co. Bank 176,213 6.20 5
9 First Litchfield Financial
Corp. Bank 150,519 5.30 5
10 Salisbury B&T Co. Bank 141,401 4.97 2
11 Webster Financial Corp. Thrift 139,633 4.91 3
Total (24 Institutions) $2,842,539 83
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Source: SNL Securities. Deposits as of June 30, 1996, pro forma for pending acquisitions.
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SUMMARY PRO FORMA BALANCE SHEET
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(dollars in thousands)
WEBSTER EAGLE
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At 9/30/97 Adjustments(a) At 9/30/97 Adjustments(b)
Webster
Pro Forma
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Cash & Securities $2,833,670 $ 16,373 $ 895,429 ($7,760) $3,737,712
Loans, Net 3,732,498 -- 1,128,381 -- 4,860,879
Intangibles 50,525 -- 29,574 -- 80,099
Other Assets 194,321 -- 43,795 -- 238,116
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Total Assets $6,811,014 16,373 2,097,179 ($7,760) $8,916,806
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Total Deposits $4,265,011 -- $1,353,274 -- $5,618,285
Borrowings 2,011,466 -- 521,423 -- 2,532,889
Other Liabilities 70,953 -- 29,154 -- 100,107
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Total Liabilities 6,347,430 -- 1,903,851 -- 8,251,281
Capital Securities 100,000 -- 48,627 -- 148,627
Total Equity 363,584 16,373 144,701 (7,760) 516,898
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Total Liabilities
& Equity $6,811,014 $ 16,373 $2,097,179 ($7,760) $8,916,806
========== ========= ========== ======= ==========
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(a) Webster's current ownership in Eagle ($5.7MM) retired as treasury stock and
earnings to close.
(b) Additional costs related to the acquisition net of taxes and earnings to
close.
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KEY RATIOS (a)
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WEBSTER(b) EAGLE PRO FORMA(c)
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CAPITAL ADEQUACY
Total Equity / Assets 5.57% 6.55% 5.80%
Tang. Common Equity / Tang. Assets 4.86 5.21 4.94
Intangibles / Equity 13.30 21.60 15.50
ASSETS QUALITY
NPL's / Loans 1.01% 0.39% 0.87%
NPA's / Assets 0.72 0.39 0.64
Reserves / NPL's 136.60 218.07 145.14
Reserves / NPA's 106.07 118.62 107.93
Reserves / Loans 1.38 0.86 1.26
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(a) Webster and Eagle are adjusted for projected earnings to close. Earnings
are based on First Call mean estimates
(b) Webster's current ownership in Eagle retired as treasury stock and earnings
to close.
(c) Adjusted for pre-tax restructuring charge of $18.9 million.
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PROJECTED COST SAVINGS
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(dollars in thousands)
PROJECTED SAVINGS
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1998 1999
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OPERATING EXPENSES
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Compensation & Benefits $ 4.2 $ 5.6
Occupancy & Equipment 1.0 1.4
Other Operating Expenses 5.5 7.3
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Total $10.7 $14.3
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Costs Savings as a % of Eagle's
Projected Operating Expenses 33.75% 45.0%
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SOURCES OF REVENEUE GROWTH
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o Numerous opportunities exist to increase revenue:
\
/ COMMERCIAL BANKING
\
/ INVESTMENT PRODUCTS
\
/ GOVERNMENT FINANCE
\
/ CASH MANAGEMENT
\
/ TRUST
\
/ CREDIT / DEBIT CARDS
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SUMMARY EPS IMPACT(a)
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(dollars in millions, except per share amounts)
1998 1999
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TOTAL PER SHARE TOTAL PER SHARE
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Webster Adjusted Net Income(b) $58.9 $4.22 $64.7 $4.64
Projected Eagle Net Income(c) 18.9 2.87 20.8 3.16
Projected After Tax Synergies 6.7 - 9.0 -
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Pro Forma Net Income $84.5 $4.37 $94.5 $4.89
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Accretion 3.6% 5.3%
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(a) The following analysis reflects Webster's fully-diluted shares outstanding
of 13,945,630 and Eagle's fully-diluted shares outstanding of 6,593,642
(assuming an exchange ratio of 0.840) and Webster Pro Forma fully-diluted
shares outstanding of 19,339,043.
(b) Webster's earnings estimates are based on First Call estimates for 1998 and
grown at 10% for 1999. Earnings have been adjusted to reflect the
elimination of dividend income received from Webster's pre-acquisition
ownership in Eagle.
(c) Eagle's earnings estimates are based on First Call estimates for 1998 and
grown at 10% for 1999.
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IMPROVES PROFITABILITY
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LASTEST QUARTER ENDED 9/30/97
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WEBSTER EAGLE PRO FORMA(a)
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Efficiency Ratio 51.86% 49.32% 46.56%
Return on Equity (annualized) 16.72% 12.18% 17.71%
Return on Assets (annualized) 0.90% 0.84% 0.99%
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(a) Pro Forma income ratios reflect the combined results plus the full effect
of transaction synergies and restructuring charge.
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ESTIMATED COSTS RELATED TO ACQUISITION
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(dollars in millions)
PRE-TAX AFTER TAX
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CREDIT RELATED $ 1.5 $ 0.9
MERGER RELATED COSTS:
Employee Related 8.7 5.5
Property, Furniture & Fixtures 2.0 1.3
Fees and Other Conversion Costs 6.7 5.6
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TOTAL COSTS RELATED TO ACQUISITION $18.9 $13.3
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EXTENSIVE ACQUISITION EXPERIENCE
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o Since 1991, Webster has completed nine acquisitions:
ASSETS
DATE ACQUIRED
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1991 Suffield Bank $ 264 million
1992 First Constitution Bank 1,100
1993 Bristol Savings Bank 504
1994 Shoreline Bank & Trust Co. 51
1995 Shelton Bancorp 295
1996 Shawmut Branch Purchase 850
1997 DS Bancor 1,260
1997 People's Savings Financial 464
1997 Sachem Trust National Association NM
o Webster expects to fully consolidated Eagle within 30 days of closing
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SUMMARY
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o In-market transaction offering significant cost savings
o Highly accretive to earnings
o Significantly improves profitability
o Strengthens retail banking franchise
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EXHIBITS
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PRO FORMA LOAN BREAKDOWN
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Source: Company financial reports as of September 30, 1997.
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PRO FORMA DEPOSIT MIX
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Source: Company financial reports as of September 30, 1997.