WEBSTER FINANCIAL CORPORATION

Exhibit 99.1


Media Contact:		Investor Contact:
Meghan Thompson 203-578-2287 mthompson@websterbank.com		Terry Mangan 203-578-2318 tmangan@websterbank.com

WEBSTER REPORTS 19 PERCENT INCREASE IN NET INCOME FOR THE
THIRD QUARTER

WATERBURY, Conn., October 21, 2004 — Webster Financial Corporation (NYSE: WBS), the holding company for Webster Bank, N.A., today announced net income of $49.4 million in the third quarter, compared to $41.3 million in the year-ago period, an increase of 19 percent. Net income per diluted share was $.92 in the third quarter, compared to $.89 in the year-ago period, an increase of 3 percent.

For the first nine months of 2004, net income was $137.5 million compared to $121.9 million in the year-ago period, an increase of 13 percent. Net income per diluted share was $2.73 compared to $2.63 the prior year, an increase of 4 percent.

“Webster has grown to be the largest independent bank based in southern New England and is well positioned for future growth. We are pleased to report higher earnings and continuing double-digit growth in loans and deposits in a quarter marked by a higher net interest margin and improved asset quality,” said Webster chairman and chief executive officer James C. Smith. “We also announced in the quarter the strategic acquisition of the leading bank administrator in the fast-growing arena of health savings accounts, which will become a new source of core deposits and fee revenue.”

The third quarter of 2004 results reflect the first full quarter of Webster’s acquisition of FIRSTFED AMERICA BANCORP, INC., which became effective on May 14, 2004. Upon acquisition, FIRSTFED had loans of $1.5 billion and deposits of $1.5 billion with 26 branches and 33 ATMs.

Revenues and Expenses

Total revenues (net interest income plus total noninterest income) were $180.4 million in the third quarter, compared to $165.4 million a year ago. Impacting the quarter and the first nine months of this year was the implementation on December 31, 2003 of Financial Accounting Standards Board Interpretation No. (“FIN”) 46 (revised), which required the reclassification of capital trust securities expense as of January 1, 2004 from noninterest expenses to interest expense. Adjusting the third quarter of 2003 for $2.8 million of this expense, total revenues would have grown by $17.7 million, or 11 percent, from a year ago.

Net interest income was $121.3 million in the third quarter of 2004, compared to $100.9 million in the year-ago period and $113.5 million in the second quarter. Adjusting for the effect of FIN 46R, net interest income grew by $23.1 million, or 24 percent, from a year ago and by $7.8 million, or 7 percent, from the second quarter. The increase over the prior year reflects growth in loans funded by core deposit growth, while the increase over the second quarter is mainly due to loan growth plus improvement in the net interest margin.

Webster’s net interest margin (annualized net interest income as a percentage of average earning assets) improved four basis points to 3.06 percent from 3.02 percent in the second quarter. This compares to 2.91 percent in the year-ago period adjusted for FIN 46R. The increases reflect the growth in higher yielding loans and the benefit of rising rates during the quarter.

In the third quarter of 2004, total noninterest income was $59.1 million, compared to $64.5 million in the year-ago period. Excluding securities gains, noninterest income declined in the third quarter to $53.3 million from $60.0 million in the year-ago period. This decline is explained by a one-time gain of $4.2 million from the sale of telecommunication loans that were Held for Sale and proceeds of $1.6 million from an insurance investment in the year-ago quarter and $4.8 million of revenue from Duff & Phelps, which was sold in the first quarter of this year. The core fee categories of deposit services, insurance, loan and loan servicing and wealth management grew by 10 percent, 6 percent excluding FIRSTFED. Gains on sales of loans, excluding the telecommunication loan gains, declined by $1.2 million due to a slowdown in the volume of mortgage originations.

Total noninterest expenses for the 2004 third quarter were $103.8 million, an increase of 11 percent from $93.7 million in the year-ago period. Adjusting the prior year for the effect of FIN 46R, and excluding FIRSTFED and Duff & Phelps, expenses grew by 7 percent in the third quarter. This increase reflects continuing investment in personnel, technology and de novo branches under our strategic plan for growth.

Balance Sheet Trends

At September 30, 2004, total assets were $17.8 billion, up 22 percent from $14.6 billion a year ago. Total loans of $11.6 billion at September 30, 2004 increased 27 percent from $9.1 billion the prior year, while deposits were $10.4 billion, up 28 percent from $8.1 billion a year ago. Excluding FIRSTFED, total loans increased by $1.0 billion, or 11 percent, over the past year, while total deposits increased $0.8 billion, or 10 percent.

“Webster continues to achieve strong, double-digit growth in loans and deposits through the execution of our strategic plan,” stated Webster president and chief operating officer William T. Bromage. “We look forward to carrying these strategies into Massachusetts and Rhode Island, creating new growth opportunities through our FIRSTFED acquisition.”

At the end of the third quarter, commercial loans including commercial real estate were $4.2 billion, up 31 percent from $3.2 billion a year ago. Commercial real estate loans were $1.6 billion, up 36 percent. Consumer loans, primarily home equity loans and lines, increased 22 percent to $2.6 billion, compared to $2.1 billion one year ago. Excluding FIRSTFED, commercial loans including commercial real estate were up 16 percent, commercial real estate loans were up 19%, and consumer loans increased 10 percent.

Core deposits (consisting of checking, money market and savings accounts) of $7.0 billion at September 30, 2004 increased by 29 percent from a year ago and represented 67 percent of total deposits. Excluding FIRSTFED, core deposits grew 11 percent. Webster’s overall growth in deposits has been driven in part by its High Performance Checking products and the continuing success of its de novo branches in Fairfield County, Connecticut and Westchester County, New York.

Book value per common share of $28.54 at September 30, 2004 increased from $24.22 one year ago. Tangible book value per share of $16.30 at September 30, 2004 decreased from $17.73 one year ago, principally reflecting an increase in intangible assets related to the FIRSTFED acquisition.

Asset Quality

Nonperforming assets totaled $40.0 million or 0.22 percent of total assets at September 30, 2004, compared to $46.1 million or 0.32 percent a year ago and $47.7 million or 0.28 percent at June 30, 2004.

“Webster’s asset quality strengthened further in the third quarter” stated Webster chief financial officer William J. Healy. “Nonperforming assets have declined substantially compared to a year ago and June 30, and our allowance for loan losses now exceeds four-times the level of our nonperforming loans.”

The allowance for loan losses was $148.2 million, or 1.28 percent of total loans at September 30, 2004, compared to $117.7 million, or 1.29 percent, a year ago and $146.5

million, or 1.30 percent, at June 30, 2004. The ratio of the allowance to nonperforming loans at September 30, 2004 was 401 percent, compared to 284 percent a year ago and 332 percent at June 30, 2004.

The provision for loan losses totaled $4.0 million in the third quarter, $1.7 million more than net loan charge-offs of $2.3 million, compared to a provision of $10.0 million and net loan charge-offs of $11.5 million a year ago. The annualized net charge-off ratio was 0.08 percent of average loans in the third quarter, compared to 0.52 percent a year ago. The prior-year amounts reflect the charge-off of a single commercial nonperforming loan during the third quarter of 2003.

Webster Announces Plans to Complete 2003 Balance Sheet Restructuring Program

In light of the current interest rate environment, Webster plans to implement and complete during the fourth quarter a balance sheet de-leveraging through the sale of approximately $750 million of securities with an effective duration of 2.1 years. This transaction follows an initial de-leveraging of $750 million in securities that occurred during the second quarter in connection with the FIRSTFED acquisition. Proceeds from this de-leveraging will be used to prepay approximately $500 million of Federal Home Loan Bank advances that were swapped to floating rates and approximately $250 million of overnight borrowings. The current yield on the securities being sold is 3.53 percent while the current cost on the borrowings being repaid is 4.27 percent. The de-leveraging is expected to result in an after-tax loss of approximately $34 million ($50 million pre-tax) that will be reflected in Webster’s financial results for the fourth quarter.

On a pro-forma basis over the next twelve months assuming implied levels of forward interest rates, the de-leveraging improves the tangible capital ratio by an additional 22 basis points, significantly reduces sensitivity to interest rate increases and improves the net interest margin, depending upon the movement of interest rates, by approximately 15 — 20 basis points. In addition, the pro-forma ratios of securities and borrowings as a percent of assets each decline by 3 percent immediately.

“Completion of this $750 million balance sheet restructuring at this time strengthens Webster’s capital position and reduces our vulnerability to potential increases in interest rates by moving our balance sheet to a modest asset sensitive position,” stated Mr. Healy. “In addition, the de-leveraging enhances our position as an emerging commercial bank by improving our ongoing net interest margin and reducing our securities and borrowings.”

In a related transaction, Webster announced that it completed earlier this month the transfer of $921 million of 15-year mortgage-backed securities from its Available for Sale portfolio to its Held to Maturity portfolio. These bonds represent the longest duration securities that Webster owns. This transfer further protects Webster’s tangible capital from upward movements in interest rates.

Strategic Actions

In July, Webster announced a definitive agreement to acquire First City Bank (Amex: FBK), headquartered in New Britain, Connecticut, with assets totaling $187 million at June 30, 2004. The agreement is a combination cash and stock transaction valued at approximately $33 million or $27 per common share of First City stock, payable 60% in Webster stock and 40% in cash. This acquisition is expected to close in December.

Webster entered the health savings account market in September with the announcement of its definitive agreement to acquire Eastern Wisconsin Bancshares, the holding company for State Bank of Howards Grove, for $26 million in cash. The State Bank of Howards Grove, which operates under the trade name “HSA Bank,” will make Webster the nation’s leading bank administrator of health savings accounts. Health savings accounts, paired with high-deductible health plans, Webster believes, will be a catalyst toward improving the cost, quality and availability of health care in the United States in the future. HSA Bank had $157 million in assets and $138 million in deposits at June 30, 2004. The acquisition is expected to close in the first quarter of 2005.

Also in September, Webster announced a ten-year agreement with Fidelity Information Services, Inc. (FIS), under which FIS will provide information technology and application processing services. Webster will use new software for core data processing services and to support its transition to a commercial bank, enhancing both capacity and speed for customer benefit in consumer, commercial mortgage and small business accounts in Fidelity’s application service provider (ASP) environment. Webster will complete its migration to the new technology platform in the third quarter of 2005.

***

Webster Financial Corporation is the holding company for Webster Bank, National Association and Webster Insurance. With $17.8 billion in assets, Webster provides business and consumer banking, mortgage, insurance, financial planning, trust and investment services through 148 banking offices, 273 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., and Center Capital Corporation, an equipment finance company headquartered in Farmington, Connecticut.

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 2004 third quarter earnings announcement will be held today, Thursday, October 21, at 1:00 p.m. Eastern Time and may be heard through Webster’s investor relations website at www.wbst.com, or in listen-only mode by calling 1-800-638-5495 (Access Code: 91089965). The call will be archived on the website and available for future retrieval.

Webster Financial Corporation

Selected Financial Highlights (unaudited)


	At or for the Three						At or for the Nine
	Months Ended September 30,						Months Ended September 30,
(In thousands, except per share data)	2004			2003			2004			2003
Net income and performance ratios (annualized):
Net income	$	49,361		$	41,315		$	137,527		$	121,862
Net income per diluted common share		0.92			0.89			2.73			2.63
Return on average shareholders’ equity		13.25	%		15.54	%		13.75	%		15.25	%
Return on average tangible equity		23.56			21.57			21.64			21.14
Return on average assets		1.13			1.13			1.13			1.15
Noninterest income as a percentage of total revenue		32.76			38.99			33.41			36.49
Efficiency Ratio (a)		57.53			56.63			57.30			58.01

Cash income and performance ratios (annualized) (b):
Net income	$	49,361		$	41,315		$	137,527		$	121,862
Tax-effected stock-based compensation		1,260			971			3,242			2,855
Tax-effected intangible amortization		3,138			2,601			8,776			7,755

Cash income		53,759			44,887			149,545			132,472

Cash income per diluted common share		1.00			0.97			2.96			2.86
Cash return on average shareholders’ equity		14.43	%		16.88	%		14.95	%		16.58	%
Cash return on average tangible equity		25.65			23.43			23.53			22.98
Cash return on average assets		1.23			1.23			1.23			1.25

Asset quality:
Allowance for loan losses	$	148,179		$	117,707		$	148,179		$	117,707
Nonperforming assets		39,993			46,063			39,993			46,063
Allowance for loan losses / total loans		1.28	%		1.29	%		1.28	%		1.29	%
Net charge-offs/ average loans (annualized)		0.08			0.52			0.10			0.30
Nonperforming loans / total loans		0.32			0.46			0.32			0.46
Nonperforming assets / total assets		0.22			0.32			0.22			0.32
Allowance for loan losses / nonperforming loans		400.87			283.61			400.87			283.61

Other ratios (annualized):
Tangible capital ratio		4.92	%		5.51	%		4.92	%		5.51	%
Shareholders’ equity / total assets		8.53			7.55			8.53			7.55
Interest-rate spread (c)		3.04			2.95			3.02			3.09
Net interest margin (c)		3.06			2.99			3.05			3.13

Share related:
Book value per common share	$	28.54		$	24.22		$	28.54		$	24.22
Tangible book value per common share		16.30			17.73			16.30			17.73
Common stock closing price		49.39			39.88			49.39			39.88
Dividends declared per common share		0.23			0.21			0.67			0.61
Common shares issued and outstanding		53,185			45,562			53,185			45,562
Basic shares (average)		52,938			45,444			49,606			45,450
Diluted shares (average)		53,767			46,313			50,448			46,249

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)
Webster adopted FIN 46R on December 31, 2003, and in accordance with its provisions, deconsolidated the capital trusts and reported the associated liabilities as other long-term debt. Commencing in 2004, the costs have been reclassified from noninterest expenses to interest expense.

(d) For purposes of this computation, unrealized gains (losses) are excluded from the average balance for rate calculations.

Consolidated Statements of Condition (unaudited)


	September 30,			June 30,			September 30,
(In thousands)	2004			2004			2003
Assets:
Cash and due from depository institutions	$	234,449		$	252,818		$	214,566
Short-term investments		25,783			39,887			26,196
Securities:
Trading, at fair value		2,635			1,944			56
Available for sale, at fair value		4,164,056			3,853,154			4,284,134
Held-to-maturity securities		323,378			284,392			—

Total securities		4,490,069			4,139,490			4,284,190

Loans held for sale		111,175			153,396			278,402

Loans:
Residential mortgages		4,773,284			4,731,950			3,758,106
Commercial		2,586,351			2,455,512			2,018,279
Commercial real estate		1,619,968			1,572,289			1,187,065
Consumer		2,595,629			2,530,443			2,131,878

Total loans		11,575,232			11,290,194			9,095,328
Allowance for loan losses		(148,179	)		(146,511	)		(117,707	)

Loans, net		11,427,053			11,143,683			8,977,621

Accrued interest receivable		65,812			59,737			53,091
Premises and equipment, net		136,385			132,842			85,521
Goodwill and intangible assets		676,176			681,252			315,556
Cash surrender value of life insurance		226,503			224,082			178,474
Prepaid expenses and other assets		408,837			198,683			195,166

Total Assets	$	17,802,242		$	17,025,870		$	14,608,783

Liabilities and Shareholders’ Equity:
Deposits:
Demand deposits	$	1,356,924		$	1,362,339		$	1,017,870
NOW accounts		1,271,553			1,423,822			1,010,071
Money market deposit accounts		2,153,852			2,013,894			1,606,342
Savings accounts		2,243,949			2,281,312			1,807,891
Certificates of deposit		3,204,624			3,184,991			2,590,513

Total retail deposits		10,230,902			10,266,358			8,032,687
Treasury deposits		208,521			106,564			100,884

Total deposits		10,439,423			10,372,922			8,133,571

Federal Home Loan Bank advances		3,021,503			2,731,332			2,149,762
Federal funds purchased and securities sold under agreements to repurchase		1,973,478			1,670,594			2,531,875
Other long-term debt (c)		695,316			695,417			326,000
Accrued expenses and other liabilities		144,963			95,112			169,301

Total liabilities		16,274,683			15,565,377			13,310,509

Corporation-obligated mandatorily redeemable capital securities of subsidiary trusts (c)		—			—			185,255

Preferred stock of subsidiary corporation		9,577			9,577			9,577

Shareholders’ equity		1,517,982			1,450,916			1,103,442

Total Liabilities and Shareholders’ Equity	$	17,802,242		$	17,025,870		$	14,608,783

See Selected Financial Highlights for footnotes.

Consolidated Statements of Income (unaudited)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(In thousands, except per share data)	2004		2003		2004		2003
Interest income:
Loans	$	145,456	$	114,750	$	393,131	$	342,695
Securities and short-term investments		45,541		42,050		135,311		139,567
Loans held for sale		1,755		4,896		4,964		13,618

Total interest income		192,752		161,696		533,406		495,880

Interest expense:
Deposits		32,611		26,824		87,613		84,992
Borrowings		38,853		33,943		105,232		104,664

Total interest expense		71,464		60,767		192,845		189,656

Net interest income		121,288		100,929		340,561		306,224
Provision for loan losses		4,000		10,000		14,000		20,000

Net interest income after provision for loan losses		117,288		90,929		326,561		286,224

Noninterest income:
Deposit service fees		20,596		17,868		57,031		52,287
Insurance revenue		10,924		9,954		33,158		30,898
Loan and loan servicing fees		6,893		7,755		20,847		18,383
Wealth and investment services		6,044		4,826		17,009		13,925
Financial advisory services		—		4,833		3,808		15,493
Gain on sale of loans and loan servicing, net		4,467		9,829		10,813		16,666
Increase in cash surrender value of life insurance		2,421		2,150		6,552		6,408
Other		1,912		2,737		4,724		6,021

		53,257		59,952		153,942		160,081
Gain on sale of securities, net		5,843		4,560		16,959		15,859

Total noninterest income		59,100		64,512		170,901		175,940

Noninterest expenses:
Compensation and benefits		55,606		51,592		162,392		152,659
Occupancy		9,144		7,457		25,911		23,228
Furniture and equipment		10,103		8,255		26,737		23,351
Intangible amortization		4,827		4,001		13,501		11,931
Marketing		4,233		2,729		10,847		9,450
Professional services		4,294		2,582		10,131		8,054
Acquisition costs		—		142		265		148
Capital trust securities (c)		—		2,774		—		8,439
Other		15,562		14,165		43,305		42,442

Total noninterest expenses		103,769		93,697		293,089		279,702

Income before income taxes		72,619		61,744		204,373		182,462
Income taxes		23,258		20,429		66,846		60,600

Net income	$	49,361	$	41,315	$	137,527	$	121,862

Diluted shares (average)		53,767		46,313		50,448		46,249

Net income per common share:
Basic	$	0.93	$	0.91	$	2.77	$	2.68
Diluted		0.92		0.89		2.73		2.63

See Selected Financial Highlights for footnotes.

Consolidated Statements of Income (unaudited)


	Three Months Ended
	Sept. 30,		June 30,		March 31,		Dec. 31,		Sept. 30,
(In thousands, except per share data)	2004		2004		2004		2003		2003
Interest income:
Loans	$	145,456	$	129,084	$	118,591	$	117,982	$	114,750
Securities and short-term investments		45,541		45,162		44,608		43,065		42,050
Loans held for sale		1,755		2,139		1,070		1,791		4,896

Total interest income		192,752		176,385		164,269		162,838		161,696

Interest expense:
Deposits		32,611		29,172		25,830		26,319		26,824
Borrowings		38,853		33,746		32,633		29,224		33,943

Total interest expense		71,464		62,918		58,463		55,543		60,767

Net interest income		121,288		113,467		105,806		107,295		100,929
Provision for loan losses		4,000		5,000		5,000		5,000		10,000

Net interest income after provision for loan losses		117,288		108,467		100,806		102,295		90,929

Noninterest income:
Deposit service fees		20,596		19,250		17,185		17,731		17,868
Insurance revenue		10,924		10,596		11,638		9,077		9,954
Loan and loan servicing fees		6,893		7,305		6,649		8,001		7,755
Wealth and investment services		6,044		5,849		5,116		4,416		4,826
Financial advisory services		—		—		3,808		7,265		4,833
Gain on sale of loans and loan servicing, net		4,467		5,321		1,025		2,854		9,829
Increase in cash surrender value of life insurance		2,421		2,177		1,954		2,082		2,150
Other		1,912		964		1,848		2,402		2,737

		53,257		51,462		49,223		53,828		59,952
Gain on sale of securities, net		5,843		5,616		5,500		2,715		4,560

Total noninterest income		59,100		57,078		54,723		56,543		64,512

Noninterest expenses:
Compensation and benefits		55,606		53,659		53,127		53,722		51,592
Occupancy		9,144		8,402		8,365		7,470		7,457
Furniture and equipment		10,103		8,993		7,641		7,792		8,255
Intangible amortization		4,827		4,582		4,092		4,067		4,001
Marketing		4,233		3,630		2,984		2,058		2,729
Professional services		4,294		2,938		2,899		3,654		2,582
Capital trust securities (c)		—		—		—		3,485		2,774
Acquisition costs		—		265		—		1,349		142
Other		15,562		14,710		13,033		14,683		14,165

Total noninterest expenses		103,769		97,179		92,141		98,280		93,697

Income before income taxes		72,619		68,366		63,388		60,558		61,744
Income taxes		23,258		22,523		21,065		19,172		20,429

Net income	$	49,361	$	45,843	$	42,323	$	41,386	$	41,315

Diluted shares (average)		53,767		50,475		47,059		46,699		46,313

Net income per common share:
Basic	$	0.93	$	0.92	$	0.92	$	0.90	$	0.91
Diluted		0.92		0.91		0.90		0.89		0.89

See Selected Financial Highlights for footnotes.

Retail and Wholesale Interest-Rate Spreads (unaudited)


	September			June			March			December			September
Three Months Ended,	2004			2004			2004			2003			2003
Interest-rate spread
Total interest-earning assets		4.82	%		4.68	%		4.78	%		4.81	%		4.75	%
Total interest-bearing liabilities		1.78			1.69			1.74			1.68			1.80

Interest-rate spread		3.04	%		2.99	%		3.04	%		3.13	%		2.95	%
Net interest margin		3.06			3.02			3.09			3.18			2.99

Retail interest-rate spread
Yield on loans and loans held for sale		5.07	%		4.93	%		5.05	%		5.09	%		5.09	%
Cost of deposits		1.25			1.23			1.24			1.26			1.32

Spread		3.82	%		3.70	%		3.81	%		3.83	%		3.77	%

Wholesale interest-rate spread
Yield on securities and short-term investments		4.18	%		4.09	%		4.19	%		4.17	%		4.02	%
Cost of borrowings		2.80			2.50			2.56			2.41			2.55

Spread		1.38	%		1.59	%		1.63	%		1.76	%		1.47	%

Consolidated Average Statements of Condition (unaudited)


Three Months Ended September 30,	2004								2003
						Fully tax-								Fully tax-
	Average					equivalent			Average					equivalent
(Dollars in thousands)	balance		Interest			yield/rate			balance		Interest			yield/rate
Assets:
Interest-earning assets:
Loans	$	11,401,076	$	145,456			5.06	%	$	8,953,970	$	114,792			5.09	%
Securities		4,456,849		47,095			4.20	(d)		4,201,679		42,408			4.04	(d)
Loans held for sale		129,157		1,755			5.44			385,059		4,854			5.04
Short-term investments		31,231		106			1.33			18,593		56			1.18

Total interest-earning assets		16,018,313		194,412			4.82			13,559,301		162,110			4.75

Noninterest-earning assets		1,413,030								1,017,648

Total assets	$	17,431,343							$	14,576,949

Liabilities and Shareholders’ Equity:
Interest-bearing liabilities:
Demand deposits	$	1,357,230	$	—			—	%	$	1,042,556	$	—			—	%
Savings, NOW and money market deposit accounts		5,673,797		12,703			0.89			4,393,262		9,851			0.89
Time deposits		3,366,232		19,908			2.35			2,642,488		16,973			2.55

Total deposits		10,397,259		32,611			1.25			8,078,306		26,824			1.32

Federal Home Loan Bank advances		3,147,887		23,373			2.91			2,319,927		22,127			3.73
Fed funds and repurchase agreements		1,608,818		5,919			1.44			2,576,065		7,486			1.14
Other long-term debt (c)		695,365		9,561			5.50			326,000		4,330			5.31

Total borrowings		5,452,070		38,853			2.80			5,221,992		33,943			2.55

Total interest-bearing liabilities		15,849,329		71,464			1.78			13,300,298		60,767			1.80

Noninterest-bearing liabilities		82,696								81,836

Total liabilities		15,932,025								13,382,134

Capital securities and preferred stock of subsidiary corporation (c)		9,577								131,220

Shareholders’ equity		1,489,741								1,063,595

Total liabilities and shareholders’ equity	$	17,431,343							$	14,576,949

				122,948								101,343
Less: tax-equivalent adjustment				(1,660	)							(414	)

Net interest income			$	121,288							$	100,929

Interest-rate spread							3.04	%							2.95	%

Net interest margin							3.06	%							2.99	%

See Selected Financial Highlights for footnotes.

Consolidated Average Statements of Condition (unaudited)


Nine Months Ended September 30,	2004									2003
						Fully tax-									Fully tax-
	Average					equivalent				Average					equivalent
(Dollars in thousands)	balance		Interest			yield/rate				balance		Interest			yield/rate
Assets:
Interest-earning assets:
Loans	$	10,407,028	$	393,131			5.01	%		$	8,605,386	$	342,695			5.29	%
Loans held for sale		127,846		4,964			5.18				345,382		13,618			5.26
Securities		4,424,813		138,533			4.18	(d	)		4,185,538		140,521			4.54	(d	)
Short-term investments		32,290		256			1.04				23,161		174			0.99

Total interest-earning assets		14,991,977		536,884			4.76				13,159,467		497,008			5.05

Noninterest-earning assets		1,174,680									967,783

Total assets	$	16,166,657								$	14,127,250

Liabilities and Shareholders’ Equity:
Interest-bearing liabilities:
Demand deposits	$	1,207,649	$	—			—	%		$	994,803	$	—			—	%
Savings, NOW and money market deposit accounts		5,166,808		33,143			0.86				4,218,937		32,403			1.03
Time deposits		3,071,795		54,470			2.37				2,651,806		52,589			2.65

Total deposits		9,446,252		87,613			1.24				7,865,546		84,992			1.44

Federal Home Loan Bank advances		2,802,588		62,282			2.92				2,428,287		69,204			3.76
Fed funds and repurchase agreements		1,853,465		16,238			1.15				2,245,481		20,521			1.21
Other long-term debt (c)		633,343		26,712			5.62				316,476		14,939			6.29

Total borrowings		5,289,396		105,232			2.62				4,990,244		104,664			2.77

Total interest-bearing liabilities		14,735,648		192,845			1.74				12,855,790		189,656			1.96

Noninterest-bearing liabilities		88,132									77,393

Total liabilities		14,823,780									12,933,183

Capital securities and preferred stock of subsidiary corporation (c)		9,577									128,510

Shareholders’ equity		1,333,300									1,065,557

Total liabilities and shareholders’ equity	$	16,166,657								$	14,127,250

				344,039									307,352
Less: tax-equivalent adjustment				(3,478	)								(1,128	)

Net interest income			$	340,561								$	306,224

Interest-rate spread							3.02	%								3.09	%

Net interest margin							3.05	%								3.13	%

See Selected Financial Highlights for footnotes.

Asset Quality (unaudited)


	At or for the Three Months Ended
	Sept. 30,			June 30,			March 31,			Dec. 31,			Sept. 30,
( Dollars in thousands)	2004			2004			2004			2003			2003
Nonperforming Assets

Nonperforming loans:
Commercial:
Commercial	$	12,407		$	15,895		$	11,832		$	14,266		$	17,024
Specialized industry		—			—			5,019			6,427			6,493
Equipment financing		4,501			5,021			5,561			5,583			8,241

Total commercial		16,908			20,916			22,412			26,276			31,758

Commercial real estate		11,157			13,757			5,583			4,281			1,940
Residential		7,695			8,599			7,941			6,128			7,087
Consumer		1,204			826			604			959			718

Total nonperforming loans		36,964			44,098			36,540			37,644			41,503

Other real estate owned and repossessed assets:
Commercial		2,482			3,192			4,273			4,296			4,019
Residential		527			238			325			942			541
Consumer		20			130			124			—			—

Total other real estate owned and repossessed assets		3,029			3,560			4,722			5,238			4,560

Total nonperforming assets	$	39,993		$	47,658		$	41,262		$	42,882		$	46,063

Summary of Classified Loans

Substandard:
Accruing	$	89,463		$	90,421		$	87,477		$	72,638		$	69,216
Nonaccruing		32,234			39,600			31,595			29,403			36,365

Total substandard		121,697			130,021			119,072			102,041			105,581

Doubtful:
Nonaccruing		3,615			3,286			4,377			6,791			3,792

Loss		—			—			—			—			—

Total classified loans	$	125,312		$	133,307		$	123,449		$	108,832		$	109,373

Classified as a percent of total loans		1.1	%		1.2	%		1.3	%		1.2	%		1.2	%

Allowance for Loan Losses (unaudited)


	At or for the Three Months Ended
	Sept. 30,			June 30,			March. 31,			Dec. 31,			Sept. 30,
( Dollars in thousands)	2004			2004			2004			2003			2003
Allowance for Loan Losses

Beginning balance	$	146,511		$	123,613		$	121,674		$	117,707		$	119,239

Allowance for purchased loans		—			20,081			—			1,970			—
Provision		4,000			5,000			5,000			5,000			10,000

Charge-offs:
Commercial:
Specialized industry		—			—			826			558			3,870
All other commercial		3,556			2,646			2,249			2,949			9,361

Total commercial		3,556			2,646			3,075			3,507			13,231
Residential		92			187			983			330			39
Consumer		195			174			97			174			122

Total charge-offs		3,843			3,007			4,155			4,011			13,392
Recoveries		(1,511	)		(824	)		(1,094	)		(1,008	)		(1,860	)

Net loan charge-offs		2,332			2,183			3,061			3,003			11,532

Ending balance	$	148,179		$	146,511		$	123,613		$	121,674		$	117,707

Asset Quality Ratios:

Allowance for loan losses / total loans		1.28	%		1.30	%		1.30	%		1.32	%		1.29	%
Net charge-offs/ average loans (annualized)		0.08			0.08			0.13			0.13			0.52
Nonperforming loans / total loans		0.32			0.39			0.38			0.41			0.46
Nonperforming assets / total assets		0.22			0.28			0.27			0.29			0.32
Allowance for loan losses / nonperforming loans		400.87			332.24			338.30			323.22			283.61


Delaware	001-31486	06-1187536

(State or other jurisdiction	(Commission	(IRS Employer
of incorporation)	File Number)	Identification No.)


Item 2.02 Results of Operations and Financial Condition
Item 9.01 Financial Statements and Exhibits
SIGNATURES
EXHIBIT INDEX
EX-99.1 PRESS RELEASE


Exhibit No.		Description

99.1		Press release dated, October 21, 2004.


		WEBSTER FINANCIAL CORPORATION

		(Registrant)

		/s/ William J. Healy

		William J. Healy
		Executive Vice President and
		Chief Financial Officer


Exhibit No.		Description

99.1		Press release dated, October 21, 2004

Table of Contents

Table of Contents

Table of Contents

Table of Contents

(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)		Webster adopted FIN 46R on December 31, 2003, and in accordance with its provisions, deconsolidated the capital trusts and reported the associated liabilities as other long-term debt. Commencing in 2004, the costs have been reclassified from noninterest expenses to interest expense.
(d)		For purposes of this computation, unrealized gains (losses) are excluded from the average balance for rate calculations.