WATERBURY, Conn. – Webster Financial Corp. says it is selling 6.63 million shares of common stock and using the proceeds to end its involvement in the federal government’s Troubled Asset Relief Program.
Webster, the parent of Waterbury-based Webster Bank, issued the shares to the public at $18 per share on Dec. 27.
In addition to the public offering, private equity firm Warburg Pincus and one of its affiliates, both of which are stockholders, have agreed to buy an additional 2.07 million shares of common stock.
The proceeds will be used to repurchase the remaining $200 million of the shares of preferred stock issued to the U.S. Treasury under the federal Capital Purchase Program.
Webster enrolled in the program, which is part of TARP, in December 2008. The program allowed the federal government to buy shares of healthy banks in hopes it would help thaw credit markets.
Many of the banks that initially signed on have since exited the program, citing restrictive government requirements on matters including executive compensation.
Webster received $400 million in new capital and, in return, issued 400,000 shares of preferred stock.
“With this common stock offering, we are not only exiting the Capital Purchase Program but also are bolstering our already strong tangible common equity ratio. This transaction further positions Webster to finance our regional economic recovery,” James C. Smith, chairman, president and CEO of Webster, said in a statement.
