Regulatory Matters

9 Months Ended

Sep. 30, 2012

Regulatory Matters Disclosure [Abstract]

Regulatory Matters

Regulatory Matters

Regulatory Capital Requirements. Banks and bank holding companies are subject to various regulatory capital requirements administered by federal banking agencies. Capital adequacy guidelines and, additionally for banks, prompt corrective action regulations, involve quantitative measures of assets, liabilities, and certain off-balance-sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators about components, risk weighting and other factors.

Quantitative measures established by regulations to ensure capital adequacy require the maintenance of minimum amounts and ratios (set forth in the following table) of Total and Tier 1 capital (as defined in the regulations) to risk-weighted assets (as defined), and of Tier 1 capital to adjusted quarterly average assets (as defined).

The Tier 1 and total capital ratios are calculated by dividing the respective capital amounts by risk-weighted assets. Risk-weighted assets are calculated based on regulatory requirements and include total assets, excluding goodwill and other intangible assets, allocated by risk weight category, and certain off-balance-sheet items (primarily loan commitments). The leverage ratio is calculated by dividing Tier 1 capital by adjusted quarterly average total assets, which exclude goodwill and other intangible assets.

The following table provides information on the capital ratios for Webster and Webster Bank:

	Actual				Capital Requirements				Well Capitalized
(Dollars in thousands)	Amount		Ratio		Amount		Ratio		Amount		Ratio
At September 30, 2012
Webster Financial Corporation
Total risk-based capital	$	1,722,253	13.2	%	$	1,047,193	8.0	%	$	1,308,991	10.0	%
Tier 1 capital	1,557,359		11.9		523,596		4.0		785,395		6.0
Tier 1 leverage capital ratio	1,557,359		8.2		756,176		4.0		945,220		5.0
Webster Bank, N.A.
Total risk-based capital	$	1,691,800	13.0	%	$	1,044,669	8.0	%	$	1,305,836	10.0	%
Tier 1 capital	1,528,224		11.7		522,334		4.0		783,502		6.0
Tier 1 leverage capital ratio	1,528,224		8.1		754,935		4.0		943,668		5.0
At December 31, 2011
Webster Financial Corporation
Total risk-based capital	$	1,766,468	14.6	%	$	967,017	8.0	%	$	1,208,772	10.0	%
Tier 1 capital	1,577,991		13.1		483,509		4.0		725,263		6.0
Tier 1 leverage capital ratio	1,577,991		8.9		713,319		4.0		891,648		5.0
Webster Bank, N.A.
Total risk-based capital	$	1,681,769	14.0	%	$	964,184	8.0	%	$	1,205,230	10.0	%
Tier 1 capital	1,494,529		12.4		482,092		4.0		723,138		6.0
Tier 1 leverage capital ratio	1,494,529		8.4		711,572		4.0		889,466		5.0

Webster is subject to the regulatory capital requirements administered by the Federal Reserve, while Webster Bank is subject to the regulatory capital requirements administered by the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation. Regulatory authorities can initiate certain mandatory actions if Webster or Webster Bank fails to meet minimum capital requirements, which could have a direct material effect on the Company’s financial statements. At December 31, 2011 Webster Bank was required to maintain a Tier 1 leverage ratio of at least 7.5% of adjusted total assets and a total risk-based capital ratio of at least 12% of risk-weighted assets. On May 8, 2012, Webster Bank, N.A. was notified by the Office of the Comptroller of the Currency that the previously disclosed individual minimum capital ratios applicable to the Bank were terminated effective May 3, 2012.

Dividend Restrictions. In the ordinary course of business, Webster is dependent upon dividends from Webster Bank to provide funds for the payment of dividends to shareholders and to provide for other cash requirements. Banking regulations may limit the amount of dividends that may be paid. Approval by regulatory authorities is required if the effect of dividends declared would cause the regulatory capital of Webster Bank to fall below specified minimum levels. Approval is also required if dividends declared exceed the net profits for that year combined with the retained net profits for the preceding two years. In addition, the OCC has the discretion to prohibit any otherwise permitted capital distribution on general safety and soundness grounds. Dividends paid by Webster Bank to Webster Financial Corporation during the nine months endedSeptember 30, 2012 and 2011 totaled $110.0 million and $125.0 million, respectively.

Trust Preferred Securities. In accordance with the applicable accounting standard related to variable interest entities, the common stock of trusts which have issued trust preferred securities have not been included in the consolidated financial statements. Webster Financial Corporation completed the redemption at par of all the $136.1 million outstanding principal amount of Webster Capital Trust IV 7.65% fixed to floating-rate trust preferred securities on July 18, 2012, and accordingly Webster does not include in its Tier 1 capital these trust preferred securities at September 30, 2012.