Good morning, and welcome to Webster Financial Corporation's Fourth Quarter 2013 Results Conference Call. 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 and business and financial performance. Webster has based these forward-looking statements on current expectations and projections about future events. Actual results may differ materially from those projected in the forward-looking statements. Additional information concerning risks, uncertainties, assumptions and other factors that could cause actual results to materially differ from those in the forward-looking statements is contained in Webster Financial's public filings with the Securities and Exchange Commission, including our Form 8-K, containing our earnings release for the fourth quarter of 2013. I'll now introduce your host, Jim Smith, Chairman and CEO of Webster. Please go ahead, sir.

Thank you, Rob. Good morning, everyone. Welcome to Webster's Fourth Quarter Earnings Call and Webcast. I'm joined by CFO, Glenn MacInnes, for about 20 minutes of prepared remarks focused on business and financial performance in the quarter followed by your questions. First things first, I want to congratulate Joe Savage who has also joined us here today on his promotion to President of Webster Financial Corporation and Webster Bank, as well as his election to the Bank’s Board of Directors. Joe earned this promotion through his consistently high performance leading commercial banking over nearly a dozen years and because he models the values that bring Webster’s 3,000 bankers together and set us apart. Our culture defines and differentiates us in our markets and Joe reinforces that winning culture every day. He’ll now bring his special talents to bear for the benefit of the entire organization. Turning to the fourth quarter and beginning on Slide 2, Webster delivered another solid performance as our bankers continued to excel in service to our customers and communities. Strong overall performance was driven by multiple factors. In a nutshell, record core revenues, positive operating leverage once again, strong commercial loan growth, improving asset quality and a steeper yield curve, produced a record level of quality core pretax pre-provision earnings of over $80 million. Net interest income increased 2.6% linked quarter and over 5% year-over-year to another quarterly record, driven by a four basis point increase in the net interest margin and ongoing strength in commercial lending. Overall loan balances are $12.7 billion, an increase of just under 2% from September 30 and about 6% from a year ago. Balances in every key category are higher linked quarter, except for asset based lending where most of the linked quarter decline was seasonal and the ABL portfolio…

Thank you, Jim. I'll begin on Slide 8 which summarizes our quarterly trend of net income available to common shareholders and key performance metrics. Of note, earnings declined $3.6 million from Q3 as a result of $4.7 million after tax OTTI charge related to the Volcker Rule. Apart from this, reported earnings increased $1.1 million, led by an increase of 7.2% in core pretax, pre-provision earnings. Compared to a year ago, earnings declined $6.8 million, again largely as a result of the OTTI charge. Excluding OTTI, earnings were down only $2.1 million from a year ago, absorbing an after tax impact of $3.7 million in lower mortgage banking revenue and $2 million of additional preferred dividend cost related to our issuance in December of 2012. Let me take a moment to provide more detail on the OTTI charge that we recognized in the quarter. The pretax OTTI charge of $7.3 million was comprised of $4.7 million for CDOs and $2.6 million for CLOs. With respect to the CDOs, the recent guidance on the Volcker Rule permits banks to hold pool trust preferred securities only if the underlying collateral was issued by banks with under $15 billion in assets. The four CDOs we impaired were all collateralized primarily by debt issued by insurance companies. Important to note that earlier this week we sold those same CDOs at a gain of $4.3 million, which will be recorded in the first quarter. With respect to CLOs, there’s still uncertainty as to whether and for how long we can own these securities. Consequently, the proper accounting required us to record the OTTI charge and we will continue to monitor the situation. Note that both the CDOs and CLOs have been held in AFS portfolio and marked each quarter through OCI. The recognition of OTTI…

Thank you, Glenn. Just briefly, it’s clear that we’re making progress along the path to high performance. Revenue and profits are improving. Lending activities are strong. Efficiency is sustainable. Performance relative to our peers continues to improve. We’re happy to take your comments and questions.

(Operator Instructions). Our first question is from the line of Dave Rochester with Deutsche Bank. Please proceed with your question. Dave Rochester – Deutsche Bank: That was a really nice jump in Wealth Management fees. I know you talked about that a little bit. Are any of those performance-related? Is this a good run rate going forward as you grow that business?

When you say performance related --? Dave Rochester – Deutsche Bank: More like one time-ish annual 4Q type of thing or will that stick around?

No, we expect it probably will stick around most of these are like RA type performance and we’re seeing strength both in Webster investment services and in the private bank. So as I mentioned, this is a key area of focus for us in strategic investment and we’re expecting bigger things from wealth and investment services. Dave Rochester – Deutsche Bank: Great and just switching to the margin, regarding loan yields, was there any impact from a change in prepayment penalty income? Sorry if I missed that if you gave it.

A change in prepayment? Dave Rochester – Deutsche Bank: Prepayment penalty income. I think it was about $1 million or so last quarter.

Yeah. I think it’s about 5 basis points. Dave Rochester – Deutsche Bank: And you talked about the pipeline still being strong. Was just wondering how it compares to the pipeline going into the quarter at the end of 3Q? Were you stronger than that level? Should we expect stronger originations or will we be stepping down?

We’ve got the information, but take us a second to dig it out. Let’s focus on the commercial pipeline is bigger than it was at the end of Q3 and 15% higher than it was and it’s the highest level at yearend in at least the last three years. Dave Rochester – Deutsche Bank: And just switching to the Commercial Banking origination yield, I know you talked about that being down a little bit and potentially being a driver for margin pressure in 1Q. Are you not expecting that yield to rebound? I know you mentioned a mix shift in the production. Is this the mix we should expect going forward and should we see the low 3% range on originations in that --?

I’ll ask Joe Savage to respond.

Hey Dave, Joe Savage. Yeah, our expectation would be that it would rebound. And again we’re talking about yields. More specifically as James said in his opening comments, we did more floaters on the CRE side and that was the preponderance share of the book on originations. So assuming that doesn’t stay at that particular level and then we see a step up which we would expect to see in our segment banking side, my guess is you’ll see improvement in the overall yields. I think it would be important however to say that there is market pressure and you can read that in all the statistics. You look at the BB, B universe, down year-over-year some 60 basis points in yields. And so there’s going to be that pressure, but we’re highly dependent upon mix. We’re highly dependent upon fixed versus float and in the case of CRE for example we had a greater proportion of float versus fix and that doesn’t crush the spread so much, although spreads were down. But it will push the yield around.

And I would just add that if you look at our payoffs for the quarter, you see coming down with an average rate of about 366. So you can put that in the context of where our NIM is and get some sense of what’s coming back on.

Our next question is from the line of Dave Darst with Guggenheim Securities. Please proceed with your question. Dave Darst – Guggenheim Securities: You had an announcement earlier in the week where you've appointed someone as the Director of Continuous Improvement. Could you maybe talk about what's new to this role and what are the things that you may accomplish here that you haven't maybe been able to do in the past 18 months? Because you’ve made a lot of progress on the expense side and I think internally in these types of areas.

Sure. So it’s David Hadd who joined us I guess a couple of weeks back and we are very focused -- continuous improvement to us is to continue to rationalize our distribution channels. That’s a big focus for us as well as and you know that we’re working under e-forms or electronifying all our paper. So that process is finding its way through the whole bank. So there’s a lot going on that David we’re fortunate to have is going to head up and coordinate throughout the bank. Dave Darst – Guggenheim Securities: Do you have any expense guidance or are there any points in the year when we should see some benefit of these activities?

Yeah. I think you’re starting to see some of it already in our number and the fact that we’re sub 60. But the expense itself will most likely come in the second half of the year, particularly with respect to e-forms and that will allow us to keep control on costs and also quite frankly to invest in those businesses where we will get additional revenue. Dave Darst – Guggenheim Securities: Okay. And then with your capital ratios continuing to lift, could you comment on what you see as the ability to return more capital this year either in further repurchases or raising the dividend?

Sure. We did note that our capital levels allow us that flexibility and I think we focus more on the dividend improving. We’re somewhere in the 30% or so of payout range. So as earnings improve there’s an opportunity to increase the dividend. We may look a little harder at what that payout ratio ought to be. We’ve got 50 million of approved unused buyback authority as well. We’d probably use that opportunistically rather than as an ongoing event. Dave Darst – Guggenheim Securities: Is any of that based on the outcome of the stress test?

No. the stress test -- I think we’ve tried to be very clear about that is to say that the way we look at the stress test is we want to make sure that we have ample capital in the event of a severely adverse scenario and that we can look forward a couple of years and say all right, what would our ratios have to be now to make sure that we remained well capitalized with a buffer in the event of a severe adverse scenario. And so we peg that at about 10% for tier one common. We’re right now at close to 11.5%. So we have plenty of capital. And then we look at that and say well, we can capitalize our asset growth because we think we’ve got great opportunity for loan growth, particularly in the commercial area and then we can look at how we’re going to return the capital as well.

Our next question is from the line of Matthew Clark with Credit Suisse. Please proceed with your question. Matthew Clark – Credit Suisse: In the -- you may have mentioned it during your prepared comments, but the uptick in Other Income, can you just remind us where that came from there?

In Other Income primarily swap, customer swap fees quarter-over-quarter increase about a $1.2 million Matthew Clark – Credit Suisse: Okay. And then on the expenses, as we look out beyond the upcoming quarter, it sounds like there's some seasonality here in the first. And I think you had mentioned your guidance for the quarter was around a 60% efficiency ratio. I assume we’ll get some relief as we move throughout the year. Is that fair?

I think that’s fair. It’s all about operating leveraging for us. So you’ll see some -- just see an improve as the year goes on. Matthew Clark – Credit Suisse: Okay. All right, that’s it for me. I think you guys covered the rest. Thanks.

The next question is from the line of Casey Haire with Jefferies. Please go ahead with your question. Casey Haire – Jefferies & Company: Glenn, just wanted to follow up on your remarks about preparing for short rates. I know that’s a bit of a longer term phenomenon given your expectation for short rates coming up in the second half of 2015. But was wondering what you were planning to do to prepare for that eventuality this year, be it shortening duration or otherwise.

There’s a couple of things, extending liabilities through cash and derivative markets throughout 2014. Obviously growing, continuing to grow our commercial bank which for the most part is floating rate sensitive type assets and then really focus on increasing our personal deposits. I think if you look along those broad minds, that’s pretty much what we’re focused on in preparation for rising short term rates. And then on top of that you have obviously the clear benefit we get from our partners in our health savings account business as far as volume. Casey Haire – Jefferies & Company: Okay, but no change in the investment strategy really this year?

No change, no. Casey Haire – Jefferies & Company: And then switching to credit, the loan-loss reserve coverage ratio at 1.20%, how much lower can we go from here?

As I said, asset quality continues to improve and it’s something we monitor. We don’t have a target that we’re drifting toward, but it could go lower, but it’s all going to be driven by obviously loan growth and asset quality. We’d like to see the charge off level which is 47 basis points come down much more. We think the normal for us is probably around 30 bps. Casey Haire – Jefferies & Company: Okay, great. And just to clarify, the fee guide, that's the modest increases off of that 51.5. So it’s X the OTTI charge, correct?

Yes. It does not include the gain that we realized this week from the sale of the CDOs. I think that is not -- I would write that out.

Both are out.

Both are out.

The next question is from the line of Bob Ramsey of FBR. Please proceed with your question. Bob Ramsey – FBR: I know you highlighted early in the prepared comments that since you launched mobile deposit in June that I think 21% of your mobile users have made at least one mobile deposit. I’m curious how that affects you all from a cost perspective and in terms of what does it cost to process a mobile deposit versus an ATM or teller-handled deposit?

I know you highlighted early in the prepared comments that since you launched mobile deposit in June that I think 21% of your mobile users have made at least one mobile deposit. I’m curious how that affects you all from a cost perspective and in terms of what does it cost to process a mobile deposit versus an ATM or teller-handled deposit?

I don’t have the stats right in front of me, but it’s cheaper and cheaper is the way I say it and particularly in terms of the load it takes off of the universal banker in the banking center so that they can provide counsel and advice. So it is multiples cheaper obviously than an over the counter transaction and marginally cheaper than an ATM transaction.

Bob, it’s Glenn. We can come back to you with those numbers. I know that we track that. So I can give you a sense of that. Bob Ramsey – FBR: Great. No, that sounds great. And one other question; I know you guys highlighted at your Analyst Day this year the opportunity over the next several years to bring down the square footage in your branch network. I am curious as you think about 2014, what are plans to consolidate branches or otherwise tweak the distribution channel?

Great. No, that sounds great. And one other question; I know you guys highlighted at your Analyst Day this year the opportunity over the next several years to bring down the square footage in your branch network. I am curious as you think about 2014, what are plans to consolidate branches or otherwise tweak the distribution channel?

It probably is more tweak than anything else and we have some consolidations that are planned, a couple of two into ones, maybe a three into one. Don’t have a lot of closures on the horizon because we’ve taken care of a lot of that along the way. We’re trying to match up some of our activities against the expiration of leases in some of our branches. So I think you really have to look at this as at least a three year process to make that happen. So we’re down around 744 right now. We were at one point at least 800. So we’re making some progress. We’ll continue to make progress through this year and then as the leases come up, that will accelerate later this year and into next year.

The next question comes from the line of Matthew Kelley of Sterne, Agee. Please go ahead with your question. Matthew Kelley – Sterne, Agee & Leach, Inc.: Just staying on that topic, the decline in branch-based transaction and the increase in mobile, is that transition happening faster than what you thought it would this time last year? What’s the pace of that transition relative to your expectations?

Yeah. I’d say it’s faster than we could have anticipated. I think the world is startled at how quickly that it’s happening, that you have no customers in mobile a little bit over a year ago and now you’ve got 40% of the base in there and then the fact that 21% of them in a period of less than six months actually made a mobile deposit is really astonishing. And for us, it’s reinforcing that we say this is really important. We have go to ahead and make this ahead. Going back to where we said we’ve got to have all of our ATMs be image capture oriented. And so we accelerated that investment because we thought we’d get a good return on it. And that inspired us to move forward more quickly with the mobile and I think we’re seeing a dividend from having made those choices. But yes, it is happening faster and we expect it will continue to surprise on the upside. And that’s going to help us to rationalize the banking center expenses. One of the things that’s happening is we’re running our community banking operation more efficiently by far than we were before. And one of the benefits of that in reducing the expenses is we’re able to reinvest that. To Glenn’s point, it’s not just about reducing expenses. It’s about investing in the businesses that are going to give us the highest return on capital. And so we’ve been able to shift some of that spend into the commercial group and into the private bank. Matthew Kelley – Sterne, Agee & Leach, Inc.: And are all your branches now operating on the universal model that you’ve designed and implemented or is there more?

Yes, they are and we noted that as a result of that, we need fewer people obviously in the branches because we’re not doing transactions. So we’re down about 7% year-over-year. We expect that number will continue to shrink marginally in 2014 and ’15. Matthew Kelley – Sterne, Agee & Leach, Inc.: Got you. And on the commercial real estate business, you had mentioned that you had a good slug that was a floating rate. What was that percentage in the quarter and how did that compare to the full year?

This is Joe. Is this Matt? Matthew Kelley – Sterne, Agee & Leach, Inc.: Yes.

In the fourth quarter we had 23% of that CRE book was fixed. In the third quarter it was 7% and that really more than anything explains the yield comment. I’d have to take a look at the full year, but it was 23% Q4 fixed and 7% CRE in the prior quarter. And as Jim said right in his opening comments, the beautiful net results of all that was $1 million improvement in our swap income. So it wasn’t a bad outcome. Matthew Kelley – Sterne, Agee & Leach, Inc.: And then last question, Jim, how would you handicap the likelihood for traditional bank M&A for Webster as we head into -- as we start ‘14 compared to last year, this time last year?

I guess I’d give the same response I have for many quarters now which is that we are laser liked focused on improving our performance because we think that’s where we’re going to get the biggest reward. And as we move closer to returning an excess of our cost of capital, we know that there’s more progress that we can make there. So we’re really not focused on M&A. I think the environment is such that there’s likely to be some consolidation, but it isn’t a key element of our strategy at this point because we’re focused on improving ourselves. The more we improve ourselves, the more that will create potential opportunity.

(Operator Instructions). The next question is from Collyn Gilbert of KBW. Please go ahead with your question. Collyn Gilbert – Keefe, Bruyette & Woods: Just a question on the commercial pipeline, what is your approval rate or your pass-through rate that you’re seeing on your commercial pipeline and how would you say that is compared to say a year ago?

Collyn, this is Joe. How are you? Collyn Gilbert – Keefe, Bruyette & Woods: Good. Thanks.

Good. Our approval rate, we’ve done studies on this. Typically we don’t put something on our pipeline until it meets several tests. The RMS has to say there’s a better than a 50-50 chance that it will go through. It generally is 2 million or greater in terms of revenues, 180 days is the expectation when it would close. When we tested those assumptions we -- because we have some account officers who don't like to put anything on until they’re absolutely certain it’s going to happen, we get to about a 66% realization rate. And so the real story for us this year is that gosh, we drained everything last year and this year surprisingly we built that pipeline and I think we’re sitting at 370 now versus 200 last year. So when Glenn gave you an outlook for Q1 as opposed to nothing occurring first quarter last year, it should be a good first quarter for us this year. So I’m not sure I got all your questions, but I hope that gives you a feel. It’s about a 66% is what we get out of that 367. We would expect that to roll in over a three to six month period of time. Collyn Gilbert – Keefe, Bruyette & Woods: Okay, that is helpful. And how does that 66% compared to say either a year ago or three years ago? I’m sure it’s way different than three years ago, but just trying to get a --

The 66% is the cumulative run over an extended period of time. I’d be a liar to tell you that I knew exactly what that take rate was last year versus two or three years ago as a cumulative run. Collyn Gilbert – Keefe, Bruyette & Woods: Okay. That's helpful, thanks. And then, I don't know if this is for Glenn or Joe, but what’s the effective duration right now on your loan portfolio?

Total? Collyn Gilbert – Keefe, Bruyette & Woods: Yes.

I would say about one year. If you look at it -- I’m sorry Joe, but I guess that’s the weighted duration of the total.

Yeah. Collyn, the commercial book is -- the one thing I think that perhaps is relevant is it’s about 80% float. And we generally see those assets roll off, even they might have, they might have contractual maturities in the five to seven year period of time. Don’t last about a year and a half, two years and that’s what accelerates oftentimes that deferred income that we speak about.

If you look at it about of the total loan book and this includes residential, commercial, everything, about 35% fixed and the rest is either periodic or floating, meaning periodic being within 30 days, floating being less than 30 days. And as Joe indicated I think on the whole book I think it’s about one and a half years. Collyn Gilbert – Keefe, Bruyette & Woods: Okay. That's great. And then just one I guess final question, big picture question, maybe for you, Jim. How do you think about like what the appropriate growth is for the Company as you’re looking out over the next, say, year to three years' cycle? Are you really looking at it from a top-down approach? Are you taking a bottoms-up approach based on the people on the ground? Just trying to get a sense of how you’re thinking about where your growth can go and really what’s driving that.

I would say really it’s both ways. It’s bottom up and top down and we look at it with the businesses that are able to give us the highest return or the ones that we’re going to be investing in, building those deeper relationships that add value for the client as well as add value for us. We try to balance the investment in that growth, including people and all against our desire to have sustainable efficiency. But there is no limit in terms of -- we’ll grow as fast as we can in the businesses that are going to give us the best return.

Our final question is from the line of Jake Civiello of RBC Capital Markets. Please go ahead with your question. Jake Civiello – RBC Capital Markets: I know you said the reserve ratio could have room to move lower, but would you say there’s a particular level where the rate -- where keeping the ratio below it would make you uncomfortable, especially given what transpired over the course three or four years ago?

No. I don’t have a specific number. I can just tell you we’re very cautious as we’ve been for the last couple of years at 120. We feel very good about it. We do a lot -- we talk a lot about it. Like I said, I think charge offs and asset quality they continue to improve and we’ll feel better about the portfolio. No specific number though.

Yeah, completely agree. It’s about asset quality, loan growth and the overall outlook and we’re very comfortable where we are and we could be comfortable at a lower level. Jake Civiello – RBC Capital Markets: Was there any unusual negative impact in the professional service expense associated with Volcker interpretation that won't be repeated in the first quarter?

Nothing significant. Anything that you see in other expense, whether it was professional fees or not would have been relative to investment in the business quarter-over-quarter. Nothing on Volcker Jake Civiello – RBC Capital Markets: And then I know you’ve talked about this in the past, but can you give a little more thoughts about your decision to extend duration in the investment securities portfolio? In a flattening yield curve environment where the short end increases, but the long end does not move higher as you’re currently expecting, could your strategy lead to a meaningful change in OCI? Or what are some of the issues that could pop up as a result of -- I hesitate to call it a bet that you’re making, but as a result of the decision that you’ve -- say for the path that you have chosen?

I don't think that we’ve extended the duration in our investment portfolio. I’m just looking for the chart that we show because I think we’re still in the 3.9. We’ve been about 3.9 to 4. We do look at it and we look at the impact rates could have on the extension. But even 100 basis point shock, rate shock wouldn’t extend the portfolio out anything over five years. So we feel good about that. So there’s no -- we’ve made no conscious decision to extend our portfolio. Jake Civiello – RBC Capital Markets: Okay. I guess I wasn't referring to specifically in the fourth quarter, but more or less over the course of the year as the total duration went from closer to 3 at the end of last year to 4 at the end of this year.

Right. I think that’s all and we used to have a chart and I guess we’ll have to put it back there, but the rise in the rates really is what drove the extension in the investment portfolio. We used to show and we can come back to you Jake with that and show you, we plotted out against the tenure and you can see the impact the tenure has on the effect on -- the effect that tenure has on -- and rising tenure on the duration of the investment portfolio.

:

Yeah, and the tenure was up 100 basis points in 2013. So I think that’s really what’s accounting for most of the extension on the investor portfolio. Again when we look at it and I have right in front of me when we look at even a 200 basis point rate shock based on the way we’re structured right now would only bring the investment portfolio to five years. And it would never, even at a 300 or 400 basis point rate shock, it would never go over five years. And it’s the combination of both AFS and HTM. So I think we’re good from that standpoint or protected from that standpoint.

There are no further questions at this time. I'll turn the floor back to management for closing comments.

Okay Rob. Thank you very much. Thank you all for being with us today. Have a good day.