WATERBURY, Conn. – Webster Financial Corp. (NYSE: WBS) said today that it has received preliminary approval for $400 million in new capital under the U.S. Treasury’s equity-purchase program.

The additional money would be used to pursue growth opportunities, “including acquisition of like-minded partners that share Webster’s vision to be New England’s bank,” the company said in a statement.

Webster is the first regional bank with local connections to take advantage of what's been called the Capital Purchase Program, which allows the federal government to buy shares of healthy banks in hopes that the infusion of cash will thaw credit markets.

Other banks in the area have said they are examining whether to apply for federal investments under the $250 billion program, which is part of the larger $700 billion rescue package passed by Congress in September.

Webster Financial – the parent company of Webster Bank, which operates 10 branches in Rhode Island – will be able to issue up to $400 million in senior preferred shares for the federal government to purchase and will provide warrants for up to an additional $60 million in common stock.

“Participating in the program is the right thing to do,” said James C. Smith, Webster’s chairman and CEO. “While Webster is already well-capitalized, we support the Treasury’s objective to ensure that sufficient credit is available for the borrowing needs of consumers and businesses.”

Without the new capital, Webster already exceeds the federal standards for a “well-capitalized” institution. Webster said the additional $400 million would increase the bank’s Tier 1 leverage ratio from 8.7 percent to 11.1 percent and its total risk-based capital ratio from 13.2 percent to 16.2 percent.

Also today, Webster announced today it will continue participating in the Federal Deposit Insurance Corporation (FDIC)’s Temporary Liquidity Guarantee Program for non-interest bearing transaction deposit accounts after the automatic enrollment period ends.

Launched by the FDIC on Oct. 14, the program provides unlimited deposit insurance on funds in noninterest-bearing transaction deposit accounts not otherwise covered by the existing deposit insurance limit of $250,000 until Dec. 31, 2009.

Eligible institutions were automatically enrolled in the program during the introductory period at no cost. Webster will continue participating when the FDIC starts to assess fees.

Webster Financial Corp. (NYSE: WBS) – a $17.1 billion company based in Waterbury, Conn. – is the holding company for Webster Bank N.A., a financial services company with more than 180 branches. Additional information is available at www.WebsterOnline.com.

Information about the U.S. Emergency Economic Stabilization Act and other efforts to stabilize financial markets is available from the U.S. Treasury Department at www.treas.gov or from a new multiagency site at EconomicRecovery.gov. Information about the Temporary Liquidity Guarantee Program is available from the Federal Deposit Insurance Corporation at www.fdic.gov.