Good morning, ladies and gentlemen, and welcome to the Webster Financial Corporation’s First Quarter 2009 Earnings Results Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. (Operator instructions) As a reminder, ladies and gentlemen, this conference is being recorded. Also this presentation includes forward-looking statements within the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995 with respect to Webster’s financial condition results of operations in business and financial performance. Webster has based these forward-looking statements on current expectations and projections about future events. These forward-looking statements are subject to risks, uncertainties, and assumptions as described in Webster Financial’s public filings with the Securities and Exchange Commission, which could cause future results to differ materially from historical performance or future expectations. I would now like to introduce your host for today’s conference, Mr. James C. Smith, Chairman and Chief Executive Officer. Thank you. Please go ahead, sir.

Thanks Claudia, good morning, everyone. And welcome to Webster’s first quarter earnings call and webcast. Joining me, are Jerry Plush, our Chief Financial Officer; Terry Mangan, responsible for Investor Relations and other Webster officers who will participate in responding to questions. I hope you all had a chance to review our earnings release that was issued earlier this morning. Before we begin, allow me to outline the flow of the call and to note that we are now including slides to accompany our comments in order to ensure that you can follow along. You could find the slides on the Investor Relations page of our website websteronline.com or wbst.com. I will provide an overview on the quarter while Jerry will provide a more detailed review of the financials with special emphasis on credit metrics. Then I will offer some closing remarks and we'll reserve time for your questions at the end. In the first quarter Webster reported a net operating loss of $11.3 million or $0.24 a share before preferred dividends. Of course we are not pleased with the loss; however, during the quarter we added significant provisions for loan loss reserves. While, these reserves are well in excess of current period credit losses, we are looking down the road in an economy that we think is certain to undergo credit stress more severe than we have seen in prior periods and we want to be ready for whatever maybe still to come. I will also note that in this quarter we had no additional other than temporary impairment and other comprehensive income on the securities portfolio was neutral. A notable reflection of the full marks that we put in our securities portfolio through the end of last year. Of course we will continue to actively manage and monitor this…

Thank you, Jim. Good morning, everyone. On slide 4, we've provided a view of core earnings for the quarter. We are outlining several items to take into consideration by looking to see what the pre-tax pre-provisioning earnings of the company were in Q1. This was a fairly straightforward quarter, and that there are only a few items to consider. We have backed out net gains, first the gain of $6 million in connection with the $22.5 million of subordinated debt related swaps that were tendered in March. We also back out $4.5 million in net gains from security sales in order to get down to true core earnings. In addition, we are excluding direct investment write-downs taking into quarter of $.1.6 million and $3.5 million in ROE write-down as well given the size in non-recurring nature of these particular charges. Our results also included a provision compared to losses of $66 million, $54 million of which relates to the continuing portfolio and $12 million related to the liquidating portfolio So, with all of this taking into account our underlying operating performance in the quarter remains solid. It's clearly lower than in Q4 but not unexpected as Q1 has seasonally higher expenses, lower deposit fees which is clearly impacted by the Fed moves affecting the NIM for the full quarter. Turning to page five, here is our income statement. You can see this on a summary level here with the key drivers for each line item are. First as previously mentioned the defined in net interest income reflects the full quarter impact of the Fed moves that occured in October and December of 2008 and we are going to talk about that in a more detail in a few slides. Our non-interest income was lower as deposit service fee declined $2.1…

Thanks, Jerry. I pretty well covered the capital ratios in my earlier remarks. Suffice it to say that our ratios are quite solid. In fact, our regulatory ratios run from a 144% to 200% of the requirement for well capitalized, putting us among the best capitalized Federal Reserve bank holding companies. And as I said, tangible equity increased in the quarter to the highest levels since the early 1990s. I would like to conclude with some remarks reiterating the highlights of the quarter. One; we continue to aggressively identify our credit issues and maintain strong loan loss coverage. We are realistic in estimating credit losses and set our provisions well in excess of the amount of net charge offs. As the recession has deepened and credit has deteriorated, our reserves have tracked almost dollar-for-dollar against rising non-performing loans. Two, our capital position remains rock solid, both in terms of tangible and regulatory capital, even in the pessimistic scenarios run by multiple respected analysts, Webster's capital ratios remain more than sufficient to see us through the credit cycle. Three, we are leveraging our strong customer relationships and our brand to grow deposits. In the first, our loan-to-deposit ratio dropped to 95%, reducing our need for wholesale funding. And four, our One Webster earnings optimization efforts are on track to deliver total earnings enhancements and cost savings of $66 million all-in by the middle of next year, but only about half of those have been realized to-date. My final point is that Webster boasts solid pre-provision earnings power that will help us emerge from this credit cycle with the strength and momentum needed to seize the opportunities that lie ahead. Thank you for participating in our call this morning. Jerry and I'd be pleased to take your questions.

Thank you. Ladies and gentlemen, we will now be conducting a question-and-answer session. (Operator instructions). Our first question is coming from Ken Zerbe with Morgan Stanley. Please state your question.

Thanks, good morning.

Good morning, Ken.

I guess, probably my hardest question for you guys. Can you just tell us why it's been so hard to reserve correctly for your discontinued portfolio? Its been three quarters in a row of additional reserve build or provision expense here. And I think it’s one of the good things about these portfolios is you were able to isolate from the rest from the continuing portfolio and say here is the reserve but it just doesn’t seem that things are working out the way you had expected?

Hi Ken its Jerry. In response to your question I think over the past several quarters what we have noted is we did add to I believe in Q3 about $5 million, another $25 million or so in the fourth quarter and again here in this quarter. What we are looking at is a go-forward of expected charge-offs over a respective time period and we have adjusted it now to the tune of being able to look at as you can see here, we basically reported just about what we charged-off in the quarter and the reserves that we have up you could take a look over say a perspective 12 month period in terms of our expected views on the ROE rate and say that that’s about what we have got in reserves. We closely monitor this portfolio, it’s being worked very hard and I think that we have isolated the specific segment in there and I feel pretty confident that it’s not going to be a reserved position that you can look at and say we have won and done. So, we are not treating this in the same way that we looked into permanent NCLC portfolio where we looked at the balance of the NCLC construction, it's the true construction in process that was left there. So this one’s going to be a portfolio that we continue to add to in future quarters and what we want to try and do is make sure that people see that you can slip between what we are putting up against that particular discontinued segment versus what we are doing against the ongoing portfolios going forward.

Alright, so you have 12 month going forward essentially the provision that you put up in each quarter, essential reflects the loss expectations for the 5th quarter out if I am understanding that correct.

Yes. And basically that's our thinking at this point in time. Obviously that's subject to change but I will tell you that we are doing this now from three quarters in a row and I feel this will be the practice that we’ll use specifically for this segment.

Understood. Okay. And then I guess on the deposit growth, obviously you had a very strong deposit growth but it seems that almost every bank across the country regardless of region is also having phenomenal deposit growth. Maybe you can take a step back, if you have any comments on what is just driving system-wide core deposit growth?

Sure. I will make a comment that people are saving more than they have in a very long time. People have gotten much more conservative. I think people also see the strength and stability and safety in their local banks and so perhaps there has been a bit of benefit from that as well. And we would like to think that we done a good job, we take your banking personally brand and getting that out into the markets with all our proactive marketing programs with the particular expertise that we have whether you are talking about in the government finance or an HSA bank or all the cash management services that we offer in commercial and small business banking and our proactive marketing programs in the retail bank. We think it’s all coming together at a time where customers are more inclined to be savings so such that we are deriving a significant benefits.

Hey Kevin, it's Jerry. What I think it's different to add to Jim's comment is that you can see that our deposit growth is spread over all five channels. And I would say that I think what you see in most banks across the country is clearly the change in consumer behavior to much more of a saver mentality, what we clearly are seeing in Webster is the push and the additions to staff and the focus both in the commercial sides, so in commercial and small business. HAS I think this is clearly the season and you can see that quarter when you look at Q1 of 2008 versus Q1 of 2009, we have had fairly comparable growth there, so again another very solid performance. Clearly we have been making some good inroads in the government finance business and picking up good core relationships there, so we feel good that what’s different about Webster is the diversity here that you see is coming through all five channels as opposed to really being more consumer specific in terms of the higher savings rate that Jim has mentioned.

Alright, great. Thank you very much.

Our next question is coming from Mark Fitzgibbon with Sandler O’Neill. Please state your question. Mark Fitzgibbon - Sandler O’Neill: Good morning.

Good morning. Mark Fitzgibbon - Sandler O’Neill: Guys, you gave some updated LTV’s on page 14 of your slide presentation. Are those based upon new appraisals or is there sort of a model that helps you arrive at those new average LTV’s?

Mark, you are referring to in the residential portfolio? Mark Fitzgibbon - Sandler O’Neill: Exactly.

These are updated Case-Schiller indications of value, we run those at least quarterly and are very consistent with way we have recorded things and Q4 I think also in Q3, you are just getting the full update that we run the entire portfolio both for updated FICOs as well as the updated multi-values. So we feel fairly consistent quarter-over-quarter, little bit of differentiation here, very-very tight in terms of both FICO and CLTV when you look at the consumer portfolio virtually the same number quarter-over-quarter. Mark Fitzgibbon - Sandler O’Neill: And then in the CNI portfolio, you had (inaudible) in non-performing loans. Was there any particular industry concentration or was there one large loan that accounted for that increase.

Hi Mark, this is John. Jerry referenced in his comments in the CNI non-mortgage we had three publishing credits all each individually less than $10 million, an exposure that represented half in that category across all of CNI including our national businesses. We had a couple of credits in WBCC and then the remaining were smaller credits embedded in the middle market divisions across the footprint. So, it really was kind of a cross CNI generally. Good news was there weren’t any significantly high single point exposures in that group. Mark Fitzgibbon - Sandler O’Neill: Okay, and then John within the company’s footprint are there markets that you think are doing meaningfully better or worse. I mean where would you say the hot spots are?

Now if you think about our footprint and you look at our business and professional banking and core middle market performance across our geographies Massachusetts, Rhode Island obviously in Connecticut and down into Westchester there has not been, even though you can talk about unemployment in Rhode Island being sort of an outlier in the group. There is nothing in our performance metrics geographically within our footprint that would indicate that any one area is doing particularly better, particularly worse than any other. Mark Fitzgibbon - Sandler O’Neill: Okay. And the last question I have and it's not really an easy one to answer but can you help us think about the provision over the next quarter or two.

Yes, Mark, it's Jerry. I think the view that we have certainly not just this quarter but in the next quarter or two, is we believe in this market just given the uncertainty that you are going to continue to see as worker provision that is in access of what we charge off. We believe that having a very strong allowance is critical to provide some safety net here for and also gives you a gauge of how the management team here, specifically the line of business leaders and the lenders working very closely with the credit risk folks at really assessing risk across the portfolio. So, without really giving a number, I can just tell you that our view is, this year in particular more than ever its important to understand that we will continue to be taking a look at, what's happening across the footprint, what's happening across each of the segments continue to trying to figure it out, if there are any emerging hot spots and be very, very proactive in trying to address those. Mark Fitzgibbon - Sandler O’Neill: Thank you.

Our next question is coming from David Darst with FTN Equity. Please state your question.

Good morning.

Good morning, David.

Could you go over some of the activity within was the preferred portfolio, on supplemental page number 3, it's like the fair value increase significantly in sort of the amortizing cost.

David what's happen during the quarter, if you do a comparison, well on that particular slide is there a number of downgrades that have taken place within the quarter. So it's very difficult from a comparability standpoint to take a look at last quarter versus this quarter because of the significant level of downgrades that we either saw with these securities either whether it was S&P or Moody's. So the big thing I think that we did during the quarter and I think that we certainly looked at upgrading our modeling capability to do a lot more detailed credit works split apart from trying to understand what was credit related versus what was liquidity related and our views which by the way I just want to state very factually, we are within several million dollars of what Moody's would tell you values would come out at in and looking at our CDO portfolio. Clearly the income of those values are nearly zero, I think we have actually stated the map way on the schedule. And we continue to see deterioration because of the downgrades that a lot of the big single issuers even had during the first quarter of the year, virtually all the good single names there where downgraded either to BBB or further to below investment grade. So, really not a big there is a change within the components in terms of how we look at it from value there are certainly a lot of moving parts as it relates to downgrades that took place overall net net we are really pretty much in the same position, where we were fourth quarter in terms of looking at this from a market valuation standpoint versus the fourth quarter.

So, considering the downgrade you anticipate that as you change your mark-to-market accounting that there will be any material differences in the credit related?

No, I think, the biggest issue to take into account is that these securities are consistently being reviewed there is more information coming out about all these financial institutions all the time. So, in any given security you could have a material change depending on who, how material that issuer is within the security, they can change your credit rating. I would have to say that we have certainly done an awful lot of our own credit work. We have taken very conservative views as it relates to credit and taking that certainly into account we have come up with evaluations. I think that's why when you look at this quarter in particular and were our values came out versus the fourth quarter clearly the benefit of some of the prior action that we could take were reflected because a lot of the work that we had done previously unfortunately came about in the first quarter and the resulting downgrades that you see across a lot of these securities.

Okay and then could you give some outlook for the asset management portfolio where you have been reducing your disclosures?

You know I'm going to give a broad comment but I’ll let John just continue to you know give you maybe a point or two from his view. But generally speaking we are not emphasizing the out-of-market portfolios at this time and our view is in particularly here the folks down at you know the work in ABL have done a very good job of managing down overall the commitments that they have outstanding in the market and working in their way through any customers that have had some issues. And clearly we have been very aggressive in working on the specific cases where we have had issues. And you know it’s really very much a planned activity that a lot of our folks are really in the assistance mode of springing overall commitments to commercial customers down where warranted and certainly affirming where we still continue to feel comfortable. So John, any thoughts to add to that.

No I think that’s exactly right, a combination of just generally what’s going on in the business cycle with respect to inventories and receivables and lower outstanding. But also very aggressive proactive asset management to give you an indication over the last four quarters we have reduced single point exposures over $15 million in that business down from $42 units to 30 units and they have done a great job in a difficult environment managing the troubled or I shouldn’t say troubled but the adversely risk rated assets out of the portfolio before they have hurt us.

Yeah thanks.

Great.

Our next question is coming from the line of Damon DelMonte with KBW. Please state your questions.

Hi good morning guys. How are you?

Fine Damon

Hi, Damon.

Jerry, I think you mentioned part of the increase in non-performing commercial loans were due to out of market exposure. Could you just give us little color on what's you have for out of market commercial exposure?

Yes, Damon, I think my specific comments in the commercial non-mortgage was related to a number of publishing credits that went to NPL’s this quarter and everything else was there is another four credits for the $40 million that was attributable to market. I think John made the comment let me turn it to him to provide little more color again on those.

Yes, the three publishing credits were out of market credits and resided in our old specialized lending portfolio, national syndicated portfolio. The bulk of the rest of the non-accruals we talked about were embedded in our core middle market and footprint business.

And how big is that specialized lending there or national credit portfolio?

We talked about it before the specialized portfolio that we talked about for years, We stopped originating in that business about two years ago. And we have less than $200 million in funded loans remaining and that book is largely attiring obviously with the state-of-the-capital market. It's not refinancing and (inaudible) as quickly as we had originally planned, but we are not originating and adding to that portfolio. The rest of our sneak balance and sneak exposure in the bank is contained within middle market or within our national business and asset based lending or our segment business. But those are sneaks definitionally but their direct relationships where we have direct access to management and we cross sell products, private banking products to the bank it work to the corporation or cash management products. So there maybe a participation in the sneak transaction but they are in the context of a direct relationship.

Okay. But you said it is about 200 where they were in direct relationship, alright?

Correct, less then $200 million.

Got you. Okay, great. And then Jerry with regard to the margin, could you tell us what the margin was at the end of March?

Yeah, Damon, we came up a little over 3, so what you are beginning to see is, it's going to take each month throughout the quarter to begin to see some of the benefits. So when we gave some previous guidance that we thought this quarter would be in and around 3%, we knew that was going to be difficult just given where we saw some of the non-accruals pop in, particularly in February and we started to see that level off and also see the effects of the deposits coming through in the month of March. Clearly, what also should we taken into account when you think about our margin is, we have made the deliberate decision to minimize what we were funding overnight or funding short. So in the short-term that clearly is having some detrimental impact as it relates to the NIM. But again, we are focusing on the strategic goal that we want to be totally funded and then some by deposits. So we think building the core relationships is clearly much more important throughout the course of this cycle than us just continuing to try and to tweak and pick up a little bit here and there from using more overnight funding.

Okay, Great. And then just lastly, kind of sticking on the margin theme, could you tell us what the average yield is on the OTTIs that are going to be re-pricing in second and third quarters?

Suffice it to say that you know that they are going to be North of 3%, when you think of the portfolio. So I would like to leave that one fairly, generic, but you can get an idea that where several billion are coming through, and just depending on competitively where we price and also candidly where consumer preference is. So awful lot of consumers that have much stronger preference for putting the money into savings now, in money market and the current markets, so I think if we continue to see transfers into those categories, clearly there is some benefit, the customer benefits from having obviously much more readily available accesses to their funds. So our view is that the way you can think about it is several billion over the next couple of quarters and a little over 3% when you think of the total on that portfolio.

Okay, great. Thank you very much.

Sure

Our next question is coming from Amanda Larsen with Raymond James. Please state your question.

Good morning

Good morning, Amanda.

Hi. I wanted to see if it would be possible to obtain reserved ratios on a couple of the loan buckets i.e. the resi mortgage that's NCLC, also resi construction in residential. CRE construction, and also CRE for residential development?

Yeah, Amanda, we don't provide that level of detail. And I think, we are going to continue to abide by that practice. I think we look at the portfolios clearly at that level of granularity when we set the reserves and the way we position it when we report in our public filings in a much more summary fashion and that's the level to which we are willing to disclose at this point.

Okay, that's fine. But would you be able to break out what was resi constructions in residential, and what was CRE construction and CRE, because I think you do, do that in a Q usually.

Yeah. I think as it relates to residential, clearly when you look at what was the permNCLC and you look at what is in national construction, we are probably at about a $9.4 million reserve against that remaining $50 million balance, and outstandings in the permanent national construction loan. Those are completed homes, we've got clearly we have had seen some activity in terms of pay downs and a little bit a charge-off in the quarter. And then international construction portfolio were just a shade over $4 million left on about $13.2 million in outstanding balances.

And that reserve is established on a file-by-file review. It's a small enough portfolio that it's easy to really get granular around how we establish the reserve.

Okay. Are you able to breakout just the actual size of the portfolio on what is residential construction, the regular resi construction out of the residential portfolio?

Yeah.

Sorry?

Are you referring to residential development contained in commercial real estate?

No, I am referring to residential construction in residential.

Outside of MCO, the numbers are de minimus.

Okay. And then do you have the size of the portfolio for CRE construction that is just for commercial real estate, not for resi development?

Yeah. Commercial real estate, the construction exposure is about a $141 million contained in our investment CRE portfolio.

Okay.

Which is about $1.47 billion. That's the investment CRE portfolio, which is contained in the slides here in the CRE, or just over $2 billion of total CRE exposure. So $141 million would be the construction amount.

Okay. That's all, thanks so much.

Our next question is coming from Matthew Kelley with Sterne Agee. Please state your question.

Yeah, hi. Just a couple follow ups on commercial real estate. Just wondering if you can give a little bit more detail or some of your insights and what you are seeing for pricing supply, vacancy, NOI trends maybe a breakdown of the average class that you hold in A and B, and also the percentage in Fairfield County similar to what you provided for the residential and home equity?

Yes Matt why don’t I do this, we will have John give you sort of an overall comment on all of that, we are not going to necessarily be able to get into all of that level of detail. But basically when you think about our three portfolio, John, so you can get some type of views in terms of what we are seeing in breakouts of Class A and B, etcetera.

In investment credit?

Yes.

I would say, obviously we have been very comforted by the performance in the portfolio. We have got a very strong management team, and it's an institutional like real estate portfolio. In fact yesterday we just completed a full file review of the 50 top exposures which represent 50% of our outstandings. We clearly see coming down the road and working with management and credit risk aligned. Pressure obviously on NOY and leasing activity, what could ultimately be valued deterioration in our market as we have seen in other markets. But so far with respect to our portfolio, as you see in the statistics we have shown, we really have minimal delinquencies, virtually known non-accruals and the cash flows because we underwrote pretty consistently at debt service coverage is above 1.4 times and LTV is generally below 65%. We still feel even with the changing metrics while we are obviously concerned and we take all of the trending in the consideration on our reserving on our portfolio management, we still feel pretty comfortable with where we are right now in this part of the cycle.

Okay. Give a percentage in the Fairfield?

Yes, Matt I think as you think about the residential development portfolio, we have got about $35 million that’s in Fairfield. So, that $107 million we report on the res-dev side. You can think about that and thats spread over about 20 different projects.

Yes, I don’t have that number right off hand but that’s something that I can get back to broader group with.

Okay. And then question on the FDIC deposit insurance premiums, what was the gross number last year before your credits. Could you give us a sense of where you were on a basis point level?

Yes, Matt, what I will do I will have Terry get back to you specifically on that and then provide anyone else who's guided interest. No problem we will get back to you.

Okay. Alright, thank you very much.

Thank you, Matt.

Our next question is coming from Collyn Gilbert with Stifel Nicolaus. Please state your question.

Thanks. Good morning, guys.

Good morning.

Just a follow-up on the question on this SNC portfolio, John, you had said that just less than $200 million was funded, what's the portion is unfunded?

Hi, Collyn it is Jerry. What John said was there is what we refer to over a period of time as a specialized lending in that portfolio itself is in an around $200 million. So, John if you could give a little more color specific to that.

Okay, that’s helpful, thanks. And then just a few quick questions, Jerry, if we look at the expense side and we know we back out the one-time items that you posted this quarter. So, are we looking at a run-rate, should we assume a run-rate going forward of about $112 million is that still a good number?

Yes, Collyn are you including the repo expenses. Tell me a little bit about what’s that?

I just backed out of foreclose, the REO, the direct investment and then I think you said there is like 200,000 some odd of one initiative.

Yes, what you are going to see is that number declining quarter-over-quarter. So, you will continue to see remember the phasing of One Webster, you are probably looking at a number that's closer to 113 for Q2, 112, 110. So, you will continue to see declines quarter-after-quarter as those ideas come in. so the timing of ideas is really important. So, from a perspective of, I am not going to be able to give you some, a fairly smoother contested number. You are going to continue to see those benefits working the way through the numbers.

Okay. Alright that's fine. Let me just jump back to the SNC portfolio. And John, I think you ran through this in sort of general terms. So just wondering if you could get a little bit more specific on how much of within your total portfolio is actually sort of Fed defined as SNC and I know you separated between your direct relationship versus not, but as the Fed would define it as shared national credit, do you know what the size of that portfolio is?

It's about $867 million funded, $772 million of that is across C&I with the balance being in investment commercial real estate. And again if you take the delta between just under $200 million we talked about in the specialized portfolio which is sort of the legacy of the purchased paper, the rest of it is spread across the various middle market lending groups with in market larger companies, our segment lending group, commercial real estate and nationally through Webster business credit. All under the general confines of their being direct relationship and not just buying deals off of some syndicators desk, but actually having direct calling efforts on the company before choosing to participate in a SNC.

Got you. Okay, alright that’s helpful. And then just in terms of tax rate going forward which might tie in then to my question which I know, you unnecessarily don't give earnings guidance, but just sort of conceptually here any sense of when you all expect to return to a profit. And then may be that can help me determine what the tax rate we should use going forward would be?

Yes Collyn, for calculation purposes, we continue to stick by the 27.5%, in terms of return to profitability, it’s a function of where we are going to be as it relates to, as I mentioned earlier in the call what we are going to report quarter-by-quarter. We are going to continue to look at our pre-tax, pre-provision. We are going to record what we need to record in any given quarter based on how we assess Views. You could be thinking about a rate it goes as well as 20% in next couple quarters as well as we tweak through a few things. But we stuck with the 27.5 and I would tell that we are probably going to trend closer to 20% in the outer quarters.

So then that would indicate profitability than, it should somehow should be achieved than in the next couple quarters right.

You are going to continue to see what we planned is that we have got some level of growth, the restoring of more normalized fee levels and continued reduction in expenses. So, I think I have given you a kind of the road map that you will see, expansion in net interest income you would see some better non-interest income, you would see some better non-interest expense. So all the right components are in place to show that we should have better pre-tax, pre-provision earnings on a go forward basis.

Okay. Okay that was all I had. Thank you.

Sure.

Our last question is coming from James Abbott with FBR Capital Markets. Please state your question.

Well hey, good afternoon or good morning and I feel honored to be the last question. Hey real quick on the equipment finance. I am curious to understand a little bit of your experience on collecting on the value of assets and what you have seen in the change of value there and maybe give us a little bit of detail on the underwriting standard. So we just, just to frame it a little bit what the original loan value is, I know it’s usually pretty high but maybe tell us what Webster does and then again what you are seeing as you try to liquidate collateral there?

Yeah this is Jerry and then obviously John is going to chime in and give some tidbits as well. But you know high level clearly this is a really seasoned team. They have been through a number of cycles. They certainly are seeing just as much challenge as anyone else given current market conditions. One of the clear issues that you have got to grapple with in the equipment finance arena is that there has got to be a ready market to buy this what you have got to either repossesse in order to get yourself initially your full recovery. Remember that in a lot of these cases virtually I think in all cases you have got personal guarantees. So ultimate recovery in the equipment finance business I think we still feel really strong and solid about, the issue is in the short-term. What we should be looking at as we take equipment back in if you were to look at the market there is certainly soft spots in some of the segments. So you know right now we would tell you that the transportation segment looks pretty good, is performing fairly well, we are starting to see some stronger things going on in vis-à-vis construction. So it really depends I think there are certain smaller segments within the portfolios. We are depending on the specific type of equipment so little bit more troublesome to try and work your way through those but again that’s to be expected just depending on as you start to see any type of recovery or resurgence in some of these particular industry segments. It’s all about supply and demand and there is a fair bit of supply in the market. So from our perspective as we take things in to repossessed equipment, we are certainly going to be taking probably harder looks at what we should do to take that into account as opposed to having to take any type of write downs on the other side of it. So and I just, John, any additions to that?

No, I think Jerry covered the issues with respect to liquidity in the market on the equipment. I think from an underwriting perspective it's difficult to be really specific because they do, look its not a leasing company, it's a finance company and vast majority of overwhelming majority of outstanding are funded loans and their cash flow lenders, collateral value lenders and then as Jerry said most of the transactions have credit enhancement, through personal guarantees. So, I think the LTV ends up being a function of the level of the relationship, how seasoned it is, the type of equipment, what the strength of the guarantors are, the average life of the equipment, the tenor of the facility. So I just think they had a long track record over 18 years of sort of executing through cycles and really being able to specifically underwrite our borrowers and the equipment at the appropriate LTV levels.

Let me maybe try a little different approach because of the and I do appreciate the color generally speaking but if you look at the charge offs of $1.9 million what was the face value of those loans that was charged off loss given the fall if you will on that this particular quarter?

Yes, I don not have that number right in front of me but I will also tell you it's difficult with the way we recognizing loss and obviously. And then we still have time for ultimately recovery to go after the guarantors. The charge off numbers that are posted in this period may not reflect the ultimate loss given default on a particular credit and I can tell you specifically on what's in this quarter, we have significant identifiable recovery available against that charge-off.

So tell us how you charge, what's your methodology to charge-off fee, so you charge-off very aggressively upfront then I assume.

Yeah. James, this is Jerry. Yeah, I think that was kind of what I was alluding to is that we have been looking at recover the value of the asset in terms of recovery, coupled with the strength of the guarantees that we have for the underlying borrowers, as basically we are trying to resolve the credits simultaneously. I would say, the situation where some resolution of whatever the shortfall would be use the guarantee from the borrower, We are now shifting our view specific in this business just giving the market changes and liquidity for the assets sales to be more on reflective of that before they get transferred into repossession as opposed to at repossession or subsequent to repossession. I will call subsequent to repossession. And I think that's a little bit of a subtle shift for us as an organization. And again, we are just being responsive to what we are seeing in the marketplace.

There is not a lot of ownership or foreclosed property and that kind of thing in our OREO balance was associated with as you are charging most of that down, upfront and then repossessing and than recollecting on the backend?

I mean the bottom line is, we fair value what we repossess. And specifically in a lot of these small and lot of these particular in a equipment finance a lot of the stuff we are talking very small dollar amount. So it's a pretty consistent practice that we will be following in 2009, in terms of how we are going to make sure that we are very consistent in fair valuing upfront reflective of current market conditions in inventory levels, because I think that’s the big difference of what you could have seen in a repossession say back in the third quarter of last year to a repossession that may be taking place in Q1 or had taken place in Q1 or taking place in Q2 of 2009.

Okay. And then real quickly to recap what you mentioned on the 30 to 90-day delinquency number there. Was it a granular amount there that caused that increase, or was it one or two specific loans?

In CRE in particular?

Yeah. I am sorry on slide 16, so I am not sure the brand name of.

It's granular.

It's granular?

I mean we are seeing increases in delinquency, and this is also seasonally first quarter’s high watermark. But also obviously, what's going on cyclically is driving higher delinquencies.

Okay. All right, thanks and best of luck.

Thank you.

There are no further questions at this time. I would like to turn the floor over to management for any closing comments.

Thank you again for being with us today.