Webster Financial's ( WBS), the holding company for Webster Bank, profit fell 6.7% for the second quarter, due to change in timing of dividends from the Federal Home Loan Bank of Boston and the effects of a flattened yield curve.

The Waterbury, Conn.-based company earned $43.14 million, or 81 cents a share, in the quarter, compared with $46.26 million, or 85 cents a share, a year ago. Analysts polled by Thomson First Call were expecting earnings of 82 cents a share.

Second-quarter revenue, which includes net interest income and non-interest income, rose 0.2% to $183.9 million as against analysts' expectation of $186.1 million.

Net interest income fell 2.3% to $126.81 and net interest margin, a measure of the profitability of a bank's deposit and investment operation, went down to 3.13% from 3.32% in the second quarter of 2005.

Non-interest income for the second quarter increased 6.4% from a year ago to $57.07 million.

Nonperforming assets ratio increased to 0.36% at the end of the second quarter compared with 0.25% a year ago.

"Solid growth in our core franchise activities underscores Webster's strategic progress," said the company. "Double-digit combined growth in commercial and consumer loans, coupled with solid growth in deposits and fees and reductions in securities and borrowings, further strengthens our balance sheet and improves earnings quality. We're building on our position as the largest independent bank headquartered in New England."
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