Fitch upgrades Webster ratings

NEW YORK – Fitch Ratings upgraded the long- and short-term ratings of Webster Financial Corp. last week, citing the company’s efforts to improve its balance sheet and capital levels.
Waterbury, Conn.-based Webster Financial, parent to Webster Bank, has a stable ratings outlook, Fitch said.
The bank’s capital levels are “more than sufficient” to absorb potential credit costs, even though Webster has paid back some of the $400 million it received from the federal government through the Troubled Asset Relief Program, Fitch said.
Fitch also cited Webster’s “robust” reserve levels, which exceeded industry peers. The agency noted that the bank has returned to profitability because revenue streams have remained steady while credit costs have declined.
“Given the more stable geography of its markets and disciplined underwriting in its continuing portfolio, Fitch expects credit stress to remain at manageable levels,” the agency said. “Overall, the economy of [Webster’s] footprint has fared better than other regions during the recession.”
Fitch upgraded Webster’s long-term issuer default rating and senior unsecured rating to BBB from BBB-. The preferred stock rating was bumped up to BB+ from BB, or to noninvestment grade from speculative.
Among other upgrades, Webster Bank’s long-term issuer default rating was raised to BBB from BBB-; long-term deposits to BBB+ from BBB; subordinated debt to BBB- from BB+; and short-term issuer default rating to F2 from F3.