FBR upgrades Webster Financial rating

WATERBURY, Conn. – FBR Capital Markets upgraded Webster Financial Corp. last week after the company said it will issue 11.28 million shares of common stock and announced a successful stock exchange offer.
FBR raised the rating on Webster Financial, parent of Webster Bank, which operates branches in Rhode Island, from “under perform” to “market perform.” FBR analyst Bob Ramsey also boosted his target price on the stock from $6 to $8.
Recently, Webster Financial was one of 18 national and regional banks that had its credit ratings cut by Standard & Poor’s because of concerns about continued turmoil in the financial sector.
Webster said the issuance of common stock and the recent preferred stock exchange helped the bank raise capital. The offer involved exchanging convertible preferred stock for cash and common stock and exchanging trust preferred securities for common stock.
“The successful completion of the exchange offer increases Webster’s tier-1 common equity to risk-weighted asset ratio by 128 basis points, reduces interest and dividend expenses by $19.2 million a year, and enhances internal capital generation,” said James C. Smith, Webster chairman and CEO. “We are very pleased with the outcome of this exchange offer.”
Webster Financial Corp. (NYSE: WBS) – a $17.1 billion company based in Waterbury, Conn. – is the holding company for Webster Bank N.A., a financial services company with more than 180 branches, including 10 branches in Rhode Island. Additional information is available at www.WebsterOnline.com.