Webster Financial Shares Climb On RBC Upgrade

BOSTON (AP) — Webster Financial Corp. shares climbed Thursday after an RBC Capital Markets analyst upgraded the stock, citing the regional bank's improved capital position.

Gerard Cassidy raised his rating to "Outperform" from "Sector Perform," saying the stock's current price overestimates risks from credit deterioration. Large credit losses over the next year to two years are a "low probability," he said, given losses Webster has already incurred, Cassidy said in a research note.

For example, in the six months ended in June, the provision for credit losses amounted to $151 million, up from $40.8 million in the same time during 2008.

Cassidy said RBC's credit challenges are "in the early stages of stabilization," and a recent $115 million capital infusion by private-equity company Warburg Pincus makes the potential for a common stock sale by Webster "minimal." Such an offering would dilute the value of existing shareholders' stock.

Shares of Webster Financial rose 27 cents, or about 2.1 percent, to $13.06 in morning trading. The stock has lost half its value in the past 52 weeks.