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Webster to Sell Portfolio

Third-quarter earnings fall.

Webster Financial

(WBS) - Get Webster Financial Corporation Report

said profit fell 80.7% for the third quarter.

The company also said it decided to sell all of its $1.9 billion mortgage-backed securities classified as available for sale, citing market conditions. The decision resulted in a $31.8 million charge.

The Waterbury, Conn.-based company earned $9 million, or 17 cents a share, in the quarter, compared with $46.6 million, or 86 cents a share, a year ago. Excluding the charge, the company earned 77 cents a share. Analysts polled by Thomson First Call were expecting earnings of 76 cents a share.

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Third-quarter revenue, which includes net interest income and non-interest income, were $178.2 apart from the securities portfolio repositioning charge compared with $185.6 million a year ago. Analysts were expecting revenue of $182.45 million.

The company intends to use about $1.25 billion of proceeds to pay off wholesale funding and the remaining $650 million of proceeds to purchase different securities to extend duration and improve the overall portfolio yield.

Webster expects the repositioning will help net interest income to improve by about $15 million in 2007 and also an improvement in net interest margin.

The company expects the sale of these securities to result in an additional aggregate pretax loss of about $6 million, which will be recognized in the fourth quarter.

Shares rose $1.21 to $48.55.

This story was created through a joint venture between TheStreet.com and IRIS.