Exhibit 99.1

Media Contact	Investor Contact
Arthur House 203-578-2391	Terry Mangan 203-578-2318
ahouse@websterbank.com	tmangan@websterbank.com

WEBSTER REPORTS 2007 FOURTH QUARTER RESULTS AND

2008 OUTLOOK AND FOCUS

    Fourth Quarter 2007:

• Reported diluted loss per share of $.16 including the effect of a previously announced $40.0 million ($26.0 million net of tax, or $.49 per share) special provision for credit losses for the discontinued indirect residential construction and home equity portfolios and other charges specific to the quarter aggregating $.39 per share).

• Announced ATM branding arrangement for 131 locations in Massachusetts, 20 in Rhode Island and 7 in Connecticut as part of expansion toward Boston.

• Opened 2 new branches in East Longmeadow, Massachusetts and Woodbridge, Connecticut; 29 branches now opened since 2002.

WATERBURY, Conn., January 24, 2008 – Webster Financial Corporation (NYSE: WBS), the holding company for Webster Bank, N.A., today announced a net loss for the fourth quarter of 2007 of $8.7 million or $.16 per diluted share, compared to $35.0 million in net income or $.64 in earnings per share for the third quarter of 2007 and $37.8 million in net income or $.67 in earnings per share for the fourth quarter of 2006. Results in the fourth quarter of 2007 reflect previously announced charges of $.86 per share, including a special provision of $40.0 million ($26.0 million net of tax or $.49 per share) for credit losses for the discontinued residential construction and home equity portfolios, and other charges taken in the quarter aggregating $.37 per share. For the twelve months ended December 31, 2007, net income from continuing operations totaled $110.7 million or $2.01 per diluted share compared to $133.7 million or $2.47 per share for the twelve months ended December 31, 2006.

“Webster closes 2007 having addressed head-on the challenges facing the financial services industry and taken aggressive, constructive action,” said Webster Chairman and CEO James C. Smith. “Our future is in-market and contiguous franchise growth and lending relationships that are direct to consumer and commercial customers. We look forward with confidence in our strategy and in our ability to be New England’s bank.”

Webster will provide details on its 2008 outlook and ongoing business focus during its fourth quarter earnings conference call later today (refer to details for the conference call at the end of this release). Additional details are also available on our website at http://www.wbst.com.

Webster had previously announced that it discontinued indirect residential construction lending and indirect out of market home equity lending. In the aggregate, these two indirect loan portfolios totaled $424.0 million and have been placed into a liquidating portfolio which will be managed by a designated credit team. With the addition of the $40.0 million special provision as of December 31, 2007, the allowance for loan losses for these portfolios totals $49.9 million at year end 2007.

Smith further stated: “Our objective in setting up the liquidating portfolio was to identify, segregate and reserve against estimated losses inherent in these portfolios using default rates and loss rates that reflect our view that such rates will significantly worsen from current levels.”

Regarding the other previously announced charges taken in the fourth quarter, $14.0 million or $.27 per share related to the company’s anticipated sale of its insurance operations. The company expects that the sale will be structured such that the consideration will comprise an upfront payment and additional potential consideration over a multi-year earn-out period. Given this structure, Webster has accordingly written down the carrying value of its investment and as of year end 2007 is reporting Webster Insurance separately from its continuing operations.

The company also recorded other previously announced charges totaling $8.5 million or $.10 per share. Included in the other charges was a $3.6 million pre-tax write down in value in a direct investment based on management’s assessment that the decline in market value of the underlying securities will not be recovered in the near term and on uncertainty of intent to continue to hold this investment in the future. Other charges in the fourth quarter of 2007 include $1.4 million in pre-tax, nonrecurring charges related to a retail office lease termination and a technology service contract settlement. Webster also discontinued all national wholesale mortgage banking activities and, as a result, is closing its wholesale lending offices in Seattle, Washington; Phoenix, Arizona; Cheshire, Connecticut; and Chicago, Illinois. As a result, the company recorded severance and other costs, primarily for lease terminations and outplacement, of $3.5 million (pre tax) in the fourth quarter of 2007. Webster’s remaining mortgage and home equity operations in Cheshire, CT will now focus solely on direct to consumer retail originations.

In addition, fourth quarter 2007 results include an additional pre-tax charge of $2.0 million or $.03 per share consisting of $0.5 million of other severance costs and $1.5 million for the recording of a liability relating to Visa Inc. legal dispute settlements

reflecting Webster’s share as a Visa U.S.A. member. If Visa Inc. is successful in completing its planned public offering, Webster expects that shares received from an anticipated Class B common stock redemption related to its ownership interest in Visa Inc. will more than offset the Visa U.S.A.-related liability.

Also as previously announced, Webster has launched an earnings optimization program, assigning senior officers from each line of business and shared services area to teams dedicated to enhance revenues and reduce expenses. Harvest Earnings Group, LLC, a highly regarded firm with expertise in this area, will assist with this employee-led program. The effort to ensure that positive operating leverage and improved operating efficiency are achieved will be undertaken over the next four months and implemented through the end of the year and into 2009. The company anticipates that some job eliminations will be necessary as an outcome of this initiative.

During the fourth quarter, Webster announced an ATM branding agreement with plans for 158 in-store Webster branded ATMs in select Walgreens stores in Massachusetts (131 locations, primarily in the eastern part of the state), Rhode Island (20 locations) and Connecticut (7 locations). The project is scheduled to begin and reach completion in the first quarter of 2008. This branding agreement complements Webster’s branch expansion program and establishes another distribution platform for future growth in Rhode Island and the Boston market. Also during the fourth quarter, Webster opened two new branches, one in East Longmeadow, Massachusetts and one in Woodbridge, Connecticut. In 2007, Webster added four de novo branches for a total of 29 branches opened since 2002.

Revenues

Total revenue, which consists of net interest income plus total noninterest income, totaled $170.7 million in the fourth quarter. This compares to total revenue of $178.5 million in the third quarter and $172.2 million a year ago.

Net interest income totaled $122.7 million in the fourth quarter compared to $127.1 million in the third quarter and $129.2 million a year ago with the reductions compared to the fourth quarter of 2007 reflecting lower levels of average interest-earning assets in 2007 from Webster’s balance sheet repositioning actions. The net interest margin was 3.26 percent in the fourth quarter of 2007 compared to 3.38 percent in the third quarter of 2007 and 3.23 percent a year ago. The 12 basis point reduction from the third quarter relates to stock buyback activity in the fourth quarter coupled with the negative near term impact of recent Fed Funds rate reductions and higher levels of nonaccrual loans. The spread between the yield on interest-earning assets and the cost of interest-bearing liabilities was 3.18 percent in the fourth quarter compared to 3.29 percent in the third quarter and 3.14 percent a year ago.

Total noninterest income was $48.0 million in the fourth quarter, inclusive of the aforementioned $3.6 million loss on the write-down of a direct investment to fair value. This compares to $51.4 million in the third quarter and $43.1 million a year ago, which was reduced by a $5.7 million loss on the sale of mortgage loans. Deposit service fees totaled $30.6 million compared to $30.0 million in the third quarter and $25.5 million a year ago, with growth partly reflecting the implementation of a new consumer fee structure during 2007. Loan-related fees were $7.3 million compared to $7.7 million in the third quarter and $9.6 million a year ago, which included higher commercial real estate prepayment fees. Wealth and investment services revenues totaled $7.5 million compared to $7.1 million in the third quarter and $7.2 million a year ago. Income from mortgage banking activities was $1.3 million in the fourth quarter compared to income of $1.8 million in the third quarter and $2.9 million a year ago. Other non-interest income was $2.1 million compared to $1.7 million in the third quarter and $3.8 million a year ago, which included a $1.4 million gain on the sale of properties.

Provision For Credit Losses

The provision for credit losses was $45.25 million compared to $15.25 million in the third quarter and $3.0 million a year ago. As previously disclosed, $40.0 million of the provision for credit losses recorded in the fourth quarter was to increase the allowance for credit losses for $424.0 million of loans in the discontinued indirect residential construction lending and indirect out of footprint home equity portfolios.

Net loan charge-offs totaled $11.7 million during the fourth quarter of 2007, of which $7.1 million and $1.8 million were in the discontinued indirect national construction and indirect, out of footprint home equity portfolios, respectively.

The allowance for credit losses, which consists of the allowance for loan losses and the reserve for unfunded credit commitments, was $197.6 million or 1.58 percent of total loans at December 31, 2007, compared to 1.32 percent of total loans at September 30, 2007 and 1.20 percent at December 31, 2006. Of the total allowance for credit losses as of December 31, 2007, $49.9 million was allocated toward the discontinued indirect residential construction lending and indirect out of footprint home equity portfolios.

Noninterest Expenses

Total noninterest expenses were $120.3 million in the fourth quarter, or $113.4 million excluding $6.9 million of severance and other costs. This amount compares to $113.6 million in the third quarter, which included $0.5 million of severance and other costs in connection with Webster’s recently completed strategic review, and $112.7 million a year ago, which included $2.0 million of acquisition costs. Adjusting for the aforementioned costs particular to each quarter, noninterest expenses increased slightly from the third quarter and increased by 2 percent from a year ago.

Balance Sheet Trends

Total assets were $17.2 billion at December 31, 2007 compared to $17.1 billion a year ago. Total loans were $12.5 billion, a decrease of $0.4 billion or 3 percent from a year ago that reflects a $0.8 billion reduction in residential loans primarily from loans that were securitized and transferred into the securities portfolio during the first quarter of 2007. Securities totaled $2.7 billion and increased by $0.9 billion primarily due to the aforementioned securitization of residential loans. Commercial loans (consisting of commercial and industrial and commercial real estate) and consumer loans increased at a combined rate of 4 percent compared to a year ago and totaled $8.8 billion at December 31, 2007. Commercial and consumer loans represent 71 percent of total loans at December 31, 2007 compared to 66 percent a year ago. Securities represented 16 percent of total assets at December 31, 2007 compared to 11 percent a year ago.

Total deposits were $12.4 billion, a decrease of $0.1 billion or 1 percent from a year ago, as a result of a $0.2 billion decline in brokered deposits. Borrowings totaled $2.9 billion, an increase of $350 million primarily in repurchase agreements, from a year ago. Total borrowings were 17 percent of total assets at December 31, 2007 compared to 15 percent a year ago.

The loan to deposit ratio was 101 percent at December 31, 2007 compared to 104 percent a year ago. Improvement from a year ago reflects completion of balance sheet repositioning actions.

Book value per common share of $33.09 at December 31, 2007 compared to $33.25 a year ago. Tangible book value per share was $18.73 at December 31, 2007 compared to $19.76 a year ago. The ratio of tangible equity to tangible assets was 5.89 percent at December 31, 2007 compared to 6.72 percent a year ago. Webster’s projected leverage ratio was 7.99 at December 31, 2007 compared to 7.43% a year ago, and projected total risk based ratio was 11.5% at December 31, 2007 compared with 11.45% a year ago. Webster repurchased 1.3 million shares of its common stock during the fourth quarter and 4.39 million shares throughout 2007. As of December 31, 2007, Webster had 2.1 million shares remaining under a 2.7 million share authorization that was announced on September 26, 2007. Given the target levels the company has established for tangible, leverage and total risk based capital, it does not intend to continue to repurchase its stock in the near term.

Asset Quality

Non-performing assets totaled $121.1 million or 0.97 percent of total loans and other real estate owned at December 31, 2007 compared to $104.2 million or 0.84 percent at September 30, 2007 and $61.8 million or 0.48 percent a year ago. Non-performing loans in the liquidating indirect national construction and indirect out of footprint home equity portfolio totaled $22.8 million and $7.1 million at December 31, 2007, respectively compared to $18.5 million and $4.2 million at September 30, 2007 respectively and $1.1 million and $2.5 million a year ago. Non-performing assets from the ongoing portfolios totaled $91.2 million or 0.73 percent of total loans at December 31, 2007. The increase in non-performing assets from September 30, 2007 was primarily composed of $4.7 million in residential, $1.8 million in home equity, and $4.3 million and $2.9 million from the discontinued liquidating indirect national construction and indirect, out of footprint home equity portfolios.

The ratio of the allowance for credit losses to non-performing loans was 175 percent at December 31, 2007 compared to 172 percent at September 30, 2007 and 263 percent a year ago. At December 31, 2007, the $49.9 million allowance for the discontinued indirect portfolios was 153 percent of non-performing loans from the discontinued portfolios, while the $147.7 million allowance for the continuing portfolios was 184 percent of non-performing loans from the continuing portfolios.

***

Webster Financial Corporation is the holding company for Webster Bank, National Association and Webster Insurance. With $17.2 billion in assets, Webster provides business and consumer banking, mortgage, insurance, financial planning, trust and investment services through 181 banking offices, 343 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., Center Capital Corporation, an equipment finance company, and provides health savings account trustee and administrative services through HSA Bank, a division of Webster Bank.

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 fourth quarter earnings announcement will be held today, Thursday, January 24, at 9:00 a.m. EST and may be heard through Webster’s investor relations website at www.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

Statements in this press release regarding Webster Financial Corporation’s business that are not historical facts are “forward-looking statements” that involve risks and uncertainties. For a discussion of such risks and uncertainties that could cause actual results to differ from those contained in the forward-looking statement, see “Forward Looking Statements” in Webster’s Annual Report for 2006. Except as required by law, Webster does not undertake to update any such forward looking information.

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 December 31,						At or for the Twelve Months Ended December 31,
(In thousands, except per share data)	2007			2006 (c)			2007			2006 (c)
Adjusted net income and performance ratios, net of tax (annualized):
Income from continuing operations	$	5,169		$	38,808		$	110,696		$	133,680
Net debt prepayment expense		—			—			4,427			—
Recognition of loss on direct investments		2,317			—			2,317			—
Closing costs-National Wholesale Operations		2,250			—			2,250			—
Software development cost write-off		—			—			2,212			—
Severance and other costs		2,233			—			5,184			—
Closing costs-Peoples Mortgage Company		—			—			1,509			—
Write-down of construction loans held for sale		—			—			1,071			—
Recognition of loss on AFS securities		—			1,560			—			33,328
Loss on sale of mortgage loans		—			3,713			—			3,713
NewMil acquisition costs		—			1,312			—			1,918
Net gain from pension plan curltailment		—			(195	)		—			(195	)
Gain on sale of properties		—			(910	)		—			(910	)
Adjusted net income from continuing operations		11,969			44,288			129,666			171,534
Net income from continuing operations per diluted common share		0.23			0.78			2.36			3.17
Return on average shareholders’ equity		2.68	%		9.46	%		7.00	%		9.99	%
Return on average tangible equity		4.63			15.80			11.84			16.26
Return on average assets		0.29			0.99			0.77			0.96
Noninterest income as a percentage of total revenue		29.61			28.39			28.79			27.05
Efficiency ratio (a)		65.07			62.31			64.20			62.41
Net income and performance ratios (annualized):
Income from continuing operations	$	5,169		$	38,808		$	110,696		$	133,680
Net income from continuing operations per diluted common share		0.10			0.69			2.01			2.47
Return on average shareholders’ equity		1.16	%		8.29	%		5.97	%		7.78	%
Return on average tangible equity		2.00			13.84			10.10			12.67
Return on average assets		0.13			0.87			0.66			0.75
Noninterest income as a percentage of total revenue		28.14			25.01			28.48			20.56
Efficiency ratio (a)		70.47			65.42			68.12			68.16
Asset quality:
Allowance for credit losses	$	197,586		$	154,994		$	197,586		$	154,994
Nonperforming assets		121,071			61,825			121,071			61,825
Allowance for credit losses / total loans		1.58	%		1.20	%		1.58	%		1.20	%
Net charge-offs / average loans (annualized)		0.38			0.27			0.20			0.13
Nonperforming loans / total loans		0.90			0.46			0.90			0.46
Nonperforming assets / total loans plus OREO		0.97			0.48			0.97			0.48
Allowance for credit losses / nonperforming loans		175.01			263.09			175.01			263.09
Other ratios (annualized):
Tangible capital ratio		5.89	%		6.72	%		5.89	%		6.72	%
Shareholders’ equity / total assets		10.10			10.96			10.10			10.96
Interest-rate spread		3.18			3.14			3.32			3.09
Net interest margin		3.26			3.23			3.40			3.16
Share related:
Book value per common share	$	33.09		$	33.24		$	33.09		$	33.24
Tangible book value per common share		18.73			19.76			18.73			19.76
Common stock closing price		31.97			48.72			31.97			48.72
Dividends declared per common share		0.30			0.27			1.17			1.06
Common shares issued and outstanding		52,475			56,389			52,475			56,389
Basic shares (average)		52,400			55,753			54,469			53,435
Diluted shares (average)		52,795			56,452			54,996			54,065

Footnotes:

(a) Noninterest expense as a percentage of net interest income plus noninterest income.

(b) For purposes of the yield computation, unrealized gains (losses) are excluded from the average balance.

(c) Certain previously reported information has been reclassified for the effect of reporting Webster Insurance as discontinued operations.

Consolidated Statements of Condition (unaudited)

(In thousands)	December 31, 2007			September 30, 2007 (c)			December 31, 2006 (c)
Assets:
Cash and due from depository institutions	$	306,654		$	264,929		$	311,888
Short-term investments		5,112			80,270			175,648
Federal Home Loan and Federal Reserve Bank stock		110,962			110,962			137,755
Trading, at fair value		2,340			635			4,842
Available for sale, at fair value		640,117			344,546			366,163
Held-to-maturity		2,107,227			2,051,277			1,453,973
Loans held for sale		221,568			211,659			354,798
Loans:
Residential mortgages		3,641,602			3,677,682			4,424,634
Commercial		3,516,213			3,562,394			3,386,274
Commercial real estate		2,059,881			1,896,566			1,904,597
Consumer		3,258,247			3,283,914			3,207,986
Total loans		12,475,943			12,420,556			12,923,491
Allowance for loan losses		(188,086	)		(154,532	)		(147,719	)
Loans, net		12,287,857			12,266,024			12,775,772
Accrued interest receivable		80,432			86,654			90,565
Premises and equipment, net		193,063			192,880			191,492
Goodwill and other intangible assets		768,015			769,893			777,659
Cash surrender value of life insurance		269,366			266,729			259,318
Assets held for disposition		51,603			64,971			69,580
Prepaid expenses and other assets		157,644			140,418			127,937
Total Assets	$	17,201,960		$	16,851,847		$	17,097,390
Liabilities and Shareholders’ Equity:
Deposits:
Demand deposits	$	1,538,083		$	1,479,503		$	1,588,783
NOW accounts		1,718,757			1,664,025			1,671,778
Money market deposit accounts		1,828,656			2,065,474			1,908,496
Savings accounts		2,259,747			2,211,125			1,985,202
Certificates of deposit		4,772,624			4,847,060			4,911,860
Brokered deposits		236,291			286,806			392,277
Total deposits		12,354,158			12,553,993			12,458,396
Federal Home Loan Bank advances		1,052,228			628,445			1,074,933
Securities sold under agreements to repurchase and other short-term debt		1,238,012			994,624			893,206
Long-term debt		650,643			666,236			621,936
Reserve for unfunded credit commitments		9,500			9,479			7,275
Liabilities held for disposition		9,261			9,310			10,807
Accrued expenses and other liabilities		141,949			175,140			147,126
Total liabilities		15,455,751			15,037,227			15,213,679
Preferred stock of subsidiary corporation		9,577			9,577			9,577
Shareholders’ equity		1,736,632			1,805,043			1,874,134
Total Liabilities and Shareholders’ Equity	$	17,201,960		$	16,851,847		$	17,097,390

See Selected Financial Highlights for footnotes.

Consolidated Statements of Income (unaudited)

	Three Months Ended December 31,						Twelve Months Ended December 31,
(In thousands, except per share data)	2007			2006 (c)			2007			2006 (c)
Interest income:
Loans	$	205,363		$	225,634		$	837,711		$	843,398
Securities and short-term investments		36,318			32,514			136,324			154,127
Loans held for sale		3,276			6,191			21,560			17,213
Total interest income		244,957			264,339			995,595			1,014,738
Interest expense:
Deposits		89,510			90,195			361,307			310,199
Borrowings		32,748			44,994			126,096			195,989
Total interest expense		122,258			135,189			487,403			506,188
Net interest income		122,699			129,150			508,192			508,550
Provision for credit losses		45,250			3,000			67,750			11,000
Net interest income after provision for credit losses		77,449			126,150			440,442			497,550
Noninterest income:
Deposit service fees		30,577			25,494			114,645			96,765
Loan related fees		7,328			9,643			30,830			34,389
Wealth and investment services		7,507			7,161			29,164			27,183
Mortgage banking activities		1,276			2,917			9,316			8,542
Increase in cash surrender value of life insurance		2,637			2,550			10,386			9,603
Gain (loss) on sale of securities, net		195			(2,732	)		1,721			1,289
Other		2,094			3,761			7,685			8,426
		51,614			48,794			203,747			186,197
Loss on write-down of investments to fair value		(3,565	)		—			(3,565	)		—
Loss on write-down of AFS securities to fair value		—			—			—			(48,879	)
Loss on sale of mortgage loans		—			(5,713	)		—			(5,713	)
Gain on Webster Capital Trust I and II securities		—			—			2,130			—
Total noninterest income		48,049			43,081			202,312			131,605
Noninterest expenses:
Compensation and benefits		59,910			57,552			243,515			229,556
Occupancy		12,321			12,396			48,878			46,083
Furniture and equipment		15,353			14,352			59,771			54,828
Intangible amortization		1,881			3,322			10,374			13,865
Marketing		1,727			3,338			14,213			15,417
Professional services		3,721			5,253			15,038			15,927
Other		18,513			14,451			66,078			57,708
		113,426			110,664			457,867			433,384
Debt redemption premium		—			—			8,940			—
Severance and other costs		6,898			—			17,163			—
Acquisition costs		—			2,018			—			2,951
Total noninterest expenses		120,324			112,682			483,970			436,335
Income from continuing operations before income taxes		5,174			56,549			158,784			192,820
Income taxes		5			17,741			48,088			59,140
Income from continuing operations		5,169			38,808			110,696			133,680
(Loss) income from discontinued operations, net of tax		(13,867	)		(1,010	)		(13,923	)		110
Net (loss) income	$	(8,698	)	$	37,798		$	96,773		$	133,790
Diluted shares (average)		52,795			56,452			54,996			54,065
Net income per common share:
Basic
Income from continuing operations	$	0.10		$	0.70		$	2.03		$	2.50
Net (loss) income		(0.17	)		0.68			1.78			2.50
Diluted
Income from continuing operations		0.10			0.69			2.01			2.47
Net (loss) income		(0.16	)		0.67			1.76			2.47

See Selected Financial Highlights for footnotes.

Consolidated Statements of Income (unaudited)

	Three Months Ended
(In thousands, except per share data)	Dec. 31, 2007			Sept. 30, 2007 (c)		June 30, 2007 (c)			March 31, 2007 (c)			Dec. 31, 2006 (c)
Interest income:
Loans	$	205,363		$	212,847	$	210,337		$	209,164		$	225,634
Securities and short-term investments		36,318			34,163		32,563			33,280			32,514
Loans held for sale		3,276			4,616		7,419			6,249			6,191
Total interest income		244,957			251,626		250,319			248,693			264,339
Interest expense:
Deposits		89,510			94,484		89,683			87,630			90,195
Borrowings		32,748			30,083		30,283			32,982			44,994
Total interest expense		122,258			124,567		119,966			120,612			135,189
Net interest income		122,699			127,059		130,353			128,081			129,150
Provision for credit losses		45,250			15,250		4,250			3,000			3,000
Net interest income after provision for credit losses		77,449			111,809		126,103			125,081			126,150
Noninterest income:
Deposit service fees		30,577			29,956		28,758			25,354			25,494
Loan related fees		7,328			7,661		7,901			7,940			9,643
Wealth and investment services		7,507			7,142		7,637			6,878			7,161
Mortgage banking activities		1,276			1,849		3,962			2,229			2,917
Increase in cash surrender value of life insurance		2,637			2,629		2,586			2,534			2,550
Gain (loss) on sale of securities, net		195			482		503			541			(2,732	)
Other		2,094			1,688		2,025			1,878			3,761
		51,614			51,407		53,372			47,354			48,794
Loss on write-down of investments to fair value		(3,565	)		—		—			—			—
Gain on Webster Capital Trust I and II securities		—			—		2,130			—			—
Loss on sale of mortgage loans		—			—		—			—			(5,713	)
Total noninterest income		48,049			51,407		55,502			47,354			43,081
Noninterest expenses:
Compensation and benefits		59,910			61,171		60,899			61,535			57,552
Occupancy		12,321			11,932		12,064			12,561			12,396
Furniture and equipment		15,353			14,846		15,014			14,558			14,352
Intangible amortization		1,881			2,027		3,144			3,322			3,322
Marketing		1,727			4,123		4,175			4,188			3,338
Professional services		3,721			3,625		3,181			4,511			5,253
Other		18,513			15,377		16,224			15,964			14,451
		113,426			113,101		114,701			116,639			110,664
Debt redemption premium		—			—		8,940			—			—
Severance and other costs		6,898			452		5,291			4,522			—
Acquisition costs		—			—		—			—			2,018
Total noninterest expenses		120,324			113,553		128,932			121,161			112,682
Income from continuing operations before income taxes		5,174			49,663		52,673			51,274			56,549
Income taxes		5			15,088		16,801			16,194			17,741
Income from continuing operations		5,169			34,575		35,872			35,080			38,808
(Loss) income from discontinued operations, net of tax		(13,867	)		393		(405	)		(44	)		(1,010	)
Net (loss) income	$	(8,698	)	$	34,968	$	35,467		$	35,036		$	37,798
Diluted shares (average)		52,795			54,259		56,243			56,762			56,452
Net income per common share:
Basic
Income from continuing operations	$	0.10		$	0.64	$	0.64		$	0.63		$	0.70
Net (loss) income		(0.17	)		0.65		0.64			0.62			0.68
Diluted
Income from continuing operations		0.10			0.64		0.64			0.62			0.69
Net (loss) income		(0.16	)		0.64		0.63			0.62			0.67

See Selected Financial Highlights for footnotes.

Interest-Rate Spread (unaudited)

	Three Months Ended
	December 31, 2007		September 30, 2007		June 30, 2007		March 31, 2007		December 31, 2006
Interest-rate spread
Yield on interest-earning assets	6.42	%	6.61	%	6.62	%	6.61	%	6.52	%
Cost of interest-bearing liabilities	3.24		3.32		3.25		3.29		3.38
Interest-rate spread	3.18	%	3.29	%	3.37	%	3.32	%	3.14	%
Net interest margin	3.26	%	3.38	%	3.47	%	3.41	%	3.23	%

Consolidated Average Statements of Condition (unaudited)

Three Months Ended December 31,	2007							2006
(Dollars in thousands)	Average balance		Interest			Fully tax- equivalent yield/rate		Average balance		Interest			Fully tax- equivalent yield/rate
Assets:
Interest-earning assets:
Loans	$	12,422,076	$	205,363		6.54	%	$	13,362,185	$	225,634		6.69	%
Securities (b)		2,561,459		37,569		5.85			2,289,026		32,085		5.63
Loans held for sale		208,199		3,276		6.29			417,479		6,191		5.93
Federal Home Loan and Federal Reserve Bank stock		110,962		1,760		6.29			146,960		2,610		7.05
Short-term investments		18,464		132		2.79			29,896		368		4.82
Total interest-earning assets		15,321,160		248,100		6.42			16,245,546		266,888		6.52
Noninterest-earning assets		1,564,878							1,617,888
Total assets	$	16,886,038						$	17,863,434
Liabilities and Shareholders’ Equity:
Interest-bearing liabilities:
Demand deposits	$	1,492,936	$	—		—	%	$	1,522,571	$	—		—	%
Savings, NOW and money market deposit accounts		5,795,625		31,608		2.16			5,582,187		29,609		2.10
Time deposits		5,104,534		57,902		4.50			5,405,010		60,586		4.44
Total deposits		12,393,095		89,510		2.86			12,509,768		90,195		2.86
Federal Home Loan Bank advances		797,713		8,812		4.32			1,444,155		18,169		4.92
Repurchase agreements and other short-term debt		1,072,976		11,560		4.22			1,239,065		14,100		4.45
Long-term debt		662,904		12,376		7.47			637,853		12,725		7.98
Total borrowings		2,533,593		32,748		5.10			3,321,073		44,994		5.33
Total interest-bearing liabilities		14,926,688		122,258		3.24			15,830,841		135,189		3.38
Noninterest-bearing liabilities		161,761							149,623
Total liabilities		15,088,449							15,980,464
Preferred stock of subsidiary corporation		9,577							9,577
Shareholders’ equity		1,788,012							1,873,393
Total liabilities and shareholders’ equity	$	16,886,038						$	17,863,434
				125,842							131,699
Less: tax-equivalent adjustment				(3,143	)						(2,549	)
Net interest income			$	122,699						$	129,150
Interest-rate spread						3.18	%						3.14	%
Net interest margin						3.26	%						3.23	%

See Selected Financial Highlights for footnotes.

Consolidated Average Statements of Condition (unaudited)

Twelve Months Ended December 31,	2007							2006
(Dollars in thousands)	Average balance		Interest			Fully tax- equivalent yield/rate		Average balance		Interest			Fully tax- equivalent yield/rate
Assets:
Interest-earning assets:
Loans	$	12,390,955	$	837,711		6.76	%	$	12,800,864	$	843,398		6.59	%
Securities (b)		2,356,669		136,398		5.79			3,061,432		152,832		4.93
Loans held for sale		344,663		21,560		6.26			288,892		17,213		5.96
Federal Home Loan and Federal Reserve Bank stock		113,731		7,954		6.99			163,344		9,672		5.92
Short-term investments		59,345		3,045		5.13			25,514		1,079		4.23
Total interest-earning assets		15,265,363		1,006,668		6.60			16,340,046		1,024,194		6.25
Noninterest-earning assets		1,590,282							1,531,421
Total assets	$	16,855,645						$	17,871,467
Liabilities and Shareholders’ Equity:
Interest-bearing liabilities:
Demand deposits	$	1,506,696	$	—		—	%	$	1,470,861	$	—		—	%
Savings, NOW and money market deposit accounts		5,749,378		125,590		2.18			5,427,812		100,165		1.85
Time deposits		5,218,449		235,717		4.52			5,193,608		210,034		4.04
Total deposits		12,474,523		361,307		2.90			12,092,281		310,199		2.57
Federal Home Loan Bank advances		757,367		35,302		4.66			2,035,786		94,322		4.63
Repurchase agreements and other short-term debt		996,341		44,769		4.49			1,243,269		52,301		4.21
Long-term debt		609,371		46,025		7.55			633,667		49,366		7.79
Total borrowings		2,363,079		126,096		5.34			3,912,722		195,989		5.01
Total interest-bearing liabilities		14,837,602		487,403		3.28			16,005,003		506,188		3.16
Noninterest-bearing liabilities		156,083							139,057
Total liabilities		14,993,685							16,144,060
Preferred stock of subsidiary corporation		9,577							9,577
Shareholders’ equity		1,852,383							1,717,830
Total liabilities and shareholders’ equity	$	16,855,645						$	17,871,467
				519,265							518,006
Less: tax-equivalent adjustment				(11,073	)						(9,456	)
Net interest income			$	508,192						$	508,550
Interest-rate spread						3.32	%						3.09	%
Net interest margin						3.40	%						3.16	%

See Selected Financial Highlights for footnotes.

Nonperforming Assets (unaudited)

(Dollars in thousands)	Dec. 31, 2007		Sept. 30, 2007		June 30, 2007		March 31, 2007		Dec. 31, 2006
Nonperforming loans:
Continuing Portfolio:
Commercial:
Commercial	$	26,804	$	25,845	$	20,142	$	13,679	$	21,105
Equipment financing		6,473		5,054		2,584		2,405		2,616
Total commercial		33,277		30,899		22,726		16,084		23,721
Commercial real estate		12,896		14,238		12,242		18,524		17,618
Residential:
Residential construction to permanent		2,820		—		—		—		—
All other		19,532		14,811		13,288		10,838		10,231
Total residential		22,352		14,811		13,288		10,838		10,231
Consumer		14,455		12,688		8,164		8,114		3,779
Nonperforming loans - continuing portfolio		82,980		72,636		56,420		53,560		55,349
Liquidating Portfolio:
NCLC		22,797		18,486		13,395		2,635		1,076
Consumer		7,126		4,199		2,711		2,694		2,487
Nonperforming loans - liquidating portfolio		29,923		22,685		16,106		5,329		3,563
Total nonperforming loans		112,903		95,321		72,526		58,889		58,912
Other real estate owned and repossessed assets:
Commercial		2,211		5,233		3,950		4,833		1,922
Residential		1,061		985		711		350		383
Consumer		4,896		2,635		1,467		758		608
Total other real estate owned and repossessed assets		8,168		8,853		6,128		5,941		2,913
Total nonperforming assets	$	121,071	$	104,174	$	78,654	$	64,830	$	61,825
Accruing loans 90 or more days past due	$	1,891	$	1,286	$	2,088	$	4,636	$	1,490

See Selected Financial Highlights for footnotes.

Past Due Loans (unaudited)

(Dollars in thousands)	Dec. 31, 2007		Sept. 30, 2007		June 30, 2007		March 31, 2007		Dec. 31, 2006
Past Due 30-89 days:
Continuing Portfolio:
Commercial:
Commercial	$	13,291	$	4,237	$	9,999	$	20,537	$	5,672
Equipment financing		5,644		3,057		3,355		3,582		1,443
Total commercial		18,935		7,294		13,354		24,119		7,115
Commercial real estate		12,054		21,017		13,452		6,429		26,476
Residential:
Residential construction to permanent		3,743		1,656		536		—		—
All other		19,967		22,501		14,556		10,354		14,269
Total residential		23,710		24,157		15,092		10,354		14,269
Consumer		22,347		17,836		17,005		6,801		11,730
Past Due 30-89 days - continuing portfolio		77,046		70,304		58,903		47,703		59,590
Liquidating Portfolio:
NCLC		13,143		10,209		9,037		1,835		685
Consumer		8,793		7,815		5,379		2,815		2,288
Past Due 30-89 days - liquidating portfolio		21,936		18,024		14,416		4,650		2,973
Past Due 90 days or more:
Commercial		1,141		1,031		1,188		1,361		1,490
Commercial real estate		750		255		900		3,275		—
Total	$	100,873	$	89,614	$	75,407	$	56,989	$	64,053

See Selected Financial Highlights for footnotes.

Allowance for Credit Losses (unaudited)

	For the Three Months Ended
(Dollars in thousands)	Dec. 31, 2007			Sept. 30, 2007			June 30, 2007			March 31, 2007			Dec. 31, 2006
Beginning balance	$	164,011		$	152,750		$	152,660		$	154,994		$	156,331
Provision		45,250			15,250			4,250			3,000			3,000
Allowance for acquired loans		—			—			—			—			4,724
Charge-offs continuing portfolio:
Commercial		2,485			1,992			2,034			2,293			9,352
Residential		71			364			286			442			199
Consumer		1,833			1,613			1,892			1,136			382
Charge-offs continuing portfolio:		4,389			3,969			4,212			3,871			9,933
Charge-offs liquidating portfolio:
NCLC		7,051			69			—			2,139			—
Consumer		1,846			969			1,284			857			72
Charge-offs liquidating portfolio:		8,897			1,038			1,284			2,996			72
Total charge-offs		13,286			5,007			5,496			6,867			10,005
Recoveries		(1,611	)		(1,018	)		(1,336	)		(1,533	)		(944	)
Net loan charge-offs		11,675			3,989			4,160			5,334			9,061
Ending balance	$	197,586		$	164,011		$	152,750		$	152,660		$	154,994
Components:
Allowance for loan losses	$	188,086		$	154,532		$	144,974		$	145,367		$	147,719
Reserve for unfunded credit commitments		9,500			9,479			7,776			7,293			7,275
Allowance for credit losses	$	197,586		$	164,011		$	152,750		$	152,660		$	154,994
Asset Quality Ratios:
Allowance for loan losses / total loans		1.51	%		1.24	%		1.17	%		1.18	%		1.14	%
Allowance for credit losses / total loans		1.58			1.32			1.23			1.24			1.20
Net charge-offs / average loans (annualized)		0.38			0.13			0.14			0.17			0.27
Nonperforming loans / total loans		0.90			0.77			0.58			0.48			0.46
Nonperforming assets / total loans plus OREO		0.97			0.84			0.63			0.53			0.48
Allowance for credit losses / nonperforming loans		175.01			172.06			210.61			259.23			263.09
Continuing Portfolio
Allowance for loan losses / total loans		1.15	%		n/a			n/a			n/a			n/a
Allowance for credit losses / total loans		1.23			n/a			n/a			n/a			n/a
Net charge-offs / average loans (annualized)		0.09			n/a			n/a			n/a			n/a
Nonperforming loans / total loans		0.69			n/a			n/a			n/a			n/a
Nonperforming assets / total loans plus OREO		0.76			n/a			n/a			n/a			n/a
Allowance for credit losses / nonperforming loans		177.98			n/a			n/a			n/a			n/a
Liquidating Portfolio
NCLC
Allowance for loan losses / total loans		20.65	%		n/a			n/a			n/a			n/a
Net charge-offs / average loans (annualized)		25.43			n/a			n/a			n/a			n/a
Nonperforming loans / total loans		27.37			n/a			n/a			n/a			n/a
Allowance for loan losses / nonperforming loans		75.45			n/a			n/a			n/a			n/a
Consumer
Allowance for loan losses / total loans		9.60	%		n/a			n/a			n/a			n/a
Net charge-offs / average loans (annualized)		2.17			n/a			n/a			n/a			n/a
Nonperforming loans / total loans		2.09			n/a			n/a			n/a			n/a
Allowance for loan losses / nonperforming loans		458.88			n/a			n/a			n/a			n/a

See Selected Financial Highlights for footnotes.