Webster Financial (NYSE:WBS) Raising Capital to Pay TARP

Webster Financial (NYSE:WBS) shares are moving up on the announcement they're going to raise common equity to pay back what they owe to TARP.

FBR said, "We reiterate our rating and price target for Webster Financial following its announcement that it will raise common equity in order to repay TARP. We note that the capital raise and TARP repayment is accretive to tangible book, and modestly accretive to EPS in the near term (and neutral to longer-term earnings). Further, the successful exit should remove an overhang from the shares and boost common equity capital ratios (6.95% pro forma TCE). We adjust our 2011 operating EPS estimate to $1.05 (from $1.00) and reiterate our 2012 of $1.30. Our estimate of $1.50 to $1.75 of normalized EPS is unchanged."

FBR Capital maintains a "Market Perform" rating on Webster Financial, which closed Tuesday at $18.62, up $0.13, or 0.70 percent. FBR has a price target of $19 on them.