Regulatory Matters

6 Months Ended

Jun. 30, 2013

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. 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 in the regulations), and of Tier 1 capital to adjusted quarterly average assets (as defined in the regulations). Capital amounts and classifications are also subject to qualitative judgments by regulators about components, risk weighting and other factors.

The Total and Tier 1 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 Financial Corporation and Webster Bank:

	Actual				Capital Requirements				Well Capitalized
(Dollars in thousands)	Amount		Ratio		Amount		Ratio		Amount		Ratio
At June 30, 2013
Webster Financial Corporation
Total risk-based capital	$	1,910,010	14.2	%	$	1,077,158	8.0	%	$	1,346,447	10.0	%
Tier 1 capital	1,740,688		12.9		538,579		4.0		807,868		6.0
Tier 1 leverage capital	1,740,688		8.9		779,609		4.0		974,511		5.0
Webster Bank, N.A.
Total risk-based capital	$	1,767,623	13.2	%	$	1,072,356	8.0	%	$	1,341,570	10.0	%
Tier 1 capital	1,599,922		11.9		536,628		4.0		804,942		6.0
Tier 1 leverage capital	1,599,922		8.2		778,073		4.0		972,591		5.0
At December 31, 2012
Webster Financial Corporation
Total risk-based capital	$	1,840,736	13.7	%	$	1,072,749	8.0	%	$	1,340,936	10.0	%
Tier 1 capital	1,672,009		12.5		536,375		4.0		804,562		6.0
Tier 1 leverage capital	1,672,009		8.7		767,289		4.0		959,111		5.0
Webster Bank, N.A.
Total risk-based capital	$	1,718,564	12.9	%	$	1,069,652	8.0	%	$	1,337,064	10.0	%
Tier 1 capital	1,551,238		11.6		534,826		4.0		802,239		6.0
Tier 1 leverage capital	1,551,238		8.1		766,025		4.0		957,532		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 ("OCC" ) 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.

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, or if dividends declared exceed the net profits for that year combined with the retained net profits for the preceding 2 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 the Company during the six months ended June 30, 2013 and 2012 totaled $50.0 million and $90.0 million, respectively.

Trust Preferred Securities. The Company owns the common stock of a trust which has issued trust preferred securities. This trust is a variable interest entity in which the Company is not the primary beneficiary and, therefore, is not consolidated. At June 30, 2013 and December 31, 2012, $75.0 million in trust preferred securities have been included in the Tier 1 capital of Webster Financial Corporation for regulatory reporting purposes pursuant to the Federal Reserve's capital adequacy guidelines. Certain provisions of the Basel III final rule require the Company to phase out trust preferred securities from Tier 1 capital beginning January 1, 2015. Excluding trust preferred securities from the Tier 1 capital at June 30, 2013 and December 31, 2012 would not affect the Company's ability to meet all capital adequacy requirements to which it is subject. Trust preferred securities will continue to be entitled to be treated as Tier 2 capital after they are phased out of Tier 1 capital.