UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549

                                    FORM 10-Q

[X]    Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
       Exchange Act of 1934 for the quarter ended March 31, 2003

                                       OR

[ ]    Transition Report Pursuant to Section 13 or 15(d) of the Securities
       Exchange Act of 1934
       For the transition period from             to

       Commission File Number:   0-23513

                      WEBSTER PREFERRED CAPITAL CORPORATION
                      -------------------------------------
             (Exact name of registrant as specified in its charter)

                CONNECTICUT                                06-1478208
                -----------                                ----------
       (State or other jurisdiction of                  (I. R. S. Employer
        incorporation or organization)                Identification Number)


   145 BANK STREET, WATERBURY, CONNECTICUT                    06702
   ---------------------------------------                  ----------
   (Address of principal executive offices)                 (Zip Code)

       Registrant's telephone number, including area code: (203) 578-2286

   SECURITIES REGISTERED PURSUANT TO SECTION 12(a) OF THE ACT: Not Applicable

           SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

               Title of Class                          Exchange where listed
               --------------                          ---------------------
        Preferred Stock, $1 par value                          NASDAQ

         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.      Yes  X     No      .
                                                  -----      -----

         Indicate by check mark whether the registrant is an accelerated filer
(as defined in Exchange Act Rule 12b-2).       Yes        No   X  .
                                                  -----      -----

         The number of shares outstanding of each of the registrant's classes of
common stock, as of April 30, 2003 is: 100 shares

<PAGE>


WEBSTER PREFERRED CAPITAL CORPORATION

                                      INDEX

<TABLE>
<CAPTION>


                                                                                                               PAGE
                                                                                                               ----

<S>                                                                                                             <C>

PART I - FINANCIAL INFORMATION

ITEM 1.  Interim Financial Statements:

             Statements of Condition at March 31, 2003 (unaudited) and December 31, 2002.....................    3

             Statements of Income for the Three Months Ended
             March 31, 2003 and 2002 (unaudited).............................................................    4

             Consolidated Statements of Comprehensive Income for the Three Months Ended
             March 31, 2003 and 2002 (unaudited).............................................................    4

             Statements of Cash Flows for the Three Months Ended March 31, 2003 and 2002 (unaudited).........    5

             Notes to Interim Financial Statements...........................................................    6

ITEM 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations...............    9

ITEM 3.  Quantitative and Qualitative Disclosures about Market Risk..........................................   13

ITEM 4.  Controls and Procedures.............................................................................   14

PART II - OTHER INFORMATION..................................................................................   14

SIGNATURE....................................................................................................   15

CERTIFICATIONS...............................................................................................   16

EXHIBITS.....................................................................................................   18

</TABLE>




                                       2

<PAGE>


WEBSTER PREFERRED CAPITAL CORPORATION

ITEM 1. INTERIM FINANCIAL STATEMENTS

                             STATEMENTS OF CONDITION

<TABLE>
<CAPTION>

                                                                                  (UNAUDITED)
(Dollars in thousands, except per share data)                                    March 31, 2003   December 31, 2002
------------------------------------------------------------------------------------------------------------------------
<S>                                                                                 <C>               <C>
ASSETS

Cash                                                                                $   1,768         $  28,292
Interest-bearing deposits                                                             117,500           110,500
Mortgage-backed securities available for sale, at fair value (Note 2)                 110,518           110,061
Residential mortgage loans, net (Note 3)                                              405,829           379,590
Accrued interest receivable                                                             1,166             1,192
Other real estate owned                                                                    --                79
Prepaid expenses and other assets                                                       1,594             1,523
------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS                                                                        $ 638,375         $ 631,237
========================================================================================================================

LIABILITIES AND SHAREHOLDERS' EQUITY

Accrued dividends payable                                                           $     180         $     180
Accrued expenses and other liabilities                                                     62                65
------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES                                                                         242               245
------------------------------------------------------------------------------------------------------------------------

SHAREHOLDERS' EQUITY

Series B 8.625% cumulative redeemable preferred stock,
     liquidation preference $10 per share; par value $1.00 per share;
     1,000,000 shares authorized, issued and outstanding                                1,000             1,000
Common stock, par value $.01 per share:
     Authorized - 1,000 shares
     Issued and outstanding - 100 shares                                                    1                 1
Paid-in capital                                                                       628,799           628,799
Retained earnings (distributions in excess of accumulated earnings)                     4,659            (3,037)
Accumulated other comprehensive income                                                  3,674             4,229
------------------------------------------------------------------------------------------------------------------------
TOTAL SHAREHOLDERS' EQUITY                                                            638,133           630,992
========================================================================================================================
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                                          $ 638,375         $ 631,237
========================================================================================================================

</TABLE>


See accompanying notes to interim financial statements.



                                       3

<PAGE>


WEBSTER PREFERRED CAPITAL CORPORATION

                              STATEMENTS OF INCOME
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                                 Three Months Ended March 31,
(Dollars in thousands, except per share data)                    2003                     2002
------------------------------------------------------------------------------------------------
<S>                                                           <C>                      <C>
Interest income:
Loans (Note 4)                                                $   6,375                $   9,044
Securities and interest bearing deposits                          1,826                    3,412
------------------------------------------------------------------------------------------------
        Total interest income                                     8,201                   12,456
Provision for loan losses (Note 3)                                   --                       --
------------------------------------------------------------------------------------------------
Interest income after provision for loan losses                   8,201                   12,456

Noninterest expense:
Advisory fee expense paid to parent                                  48                       47
Other                                                                32                       24
------------------------------------------------------------------------------------------------
        Total noninterest expense                                    80                       71
------------------------------------------------------------------------------------------------

NET INCOME                                                        8,121                   12,385
Preferred stock dividends                                           216                      216
------------------------------------------------------------------------------------------------

Net income available to common shareholder                    $   7,905                $  12,169
================================================================================================


Net income per common share:
               Basic                                          $  79,048                $ 121,693
               Diluted                                        $  79,048                $ 121,693
------------------------------------------------------------------------------------------------

</TABLE>

                       STATEMENTS OF COMPREHENSIVE INCOME
                                  (UNAUDITED)
<TABLE>
<CAPTION>

                                                                 Three Months Ended March 31,
(In thousands)                                                   2003                     2002
------------------------------------------------------------------------------------------------

<S>                                                           <C>                      <C>
Net income                                                    $   8,121                $  12,385

Other comprehensive loss:
   Unrealized net holding loss on securities
   available for sale arising during the period                    (555)                  (1,402)

------------------------------------------------------------------------------------------------
Comprehensive income                                          $   7,566                $  10,983
================================================================================================

</TABLE>


See accompanying notes to interim financial statements.

                                       4

<PAGE>


WEBSTER PREFERRED CAPITAL CORPORATION

                            STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                                            Three Months Ended March 31,
(In thousands)                                                               2003                 2002
--------------------------------------------------------------------------------------------------------
<S>                                                                        <C>                  <C>
OPERATING ACTIVITIES:
Net income                                                                 $  8,121             $ 12,385
Adjustments to reconcile net income to net cash provided by
    operating activities:
         Amortization of mortgage premiums                                       29                   50
         Amortization (accretion) of securities discount                         58                  (69)
         Amortization of net deferred loan costs                                123                  319
         Decrease in accrued interest receivable                                 26                  189
         Decrease in accrued liabilities                                         (3)                 (58)
         (Increase) decrease in prepaid expenses and other assets               (71)               4,888
--------------------------------------------------------------------------------------------------------
Net cash provided by operating activities                                     8,283               17,704
--------------------------------------------------------------------------------------------------------
INVESTING ACTIVITIES:
Purchase of securities                                                      (30,530)                  --
Purchase of loans                                                           (70,302)                  --
Principal repayments on mortgage-backed securities                           29,460                8,466
Proceeds from OREO sale                                                          79                   88
Increase in interest-bearing deposits                                        (7,000)             (91,000)
Principal repayments of loans, net                                           43,911               62,469
--------------------------------------------------------------------------------------------------------
Net cash used by investing activities                                       (34,382)             (19,977)
--------------------------------------------------------------------------------------------------------
FINANCING ACTIVITIES:
Dividends paid on common and preferred stock                                   (425)                (730)
--------------------------------------------------------------------------------------------------------
Decrease in cash and cash equivalents                                       (26,524)              (3,003)
Cash and cash equivalents at beginning of period                             28,292                3,850
--------------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of period                                 $  1,768             $    847
========================================================================================================

SUPPLEMENTAL SCHEDULE OF NONCASH FINANCING ACTIVITY:
       Transfer of residential mortgage loans to other real estate
          owned                                                            $     --             $    103

--------------------------------------------------------------------------------------------------------

</TABLE>

See accompanying notes to interim financial statements

                                       5

<PAGE>


WEBSTER PREFERRED CAPITAL CORPORATION

NOTES TO INTERIM FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

NOTE 1: BASIS OF PRESENTATION

The accompanying interim financial statements represent the accounts of Webster
Preferred Capital Corporation (the "Company" or "WPCC") and have been prepared
in conformity with accounting principles generally accepted in the United States
of America. The statements include all adjustments which are, in the opinion of
management, necessary for a fair presentation of the results for the interim
periods presented. All adjustments were of a normal recurring nature. The
results of operations for interim periods are not necessarily indicative of the
results which may be expected for the year as a whole. These interim financial
statements should be read in conjunction with the financial statements and notes
thereto included in WPCC's 2002 Annual Report on Form 10-K. The Company has no
subsidiaries.

NOTE 2: MORTGAGE-BACKED SECURITIES AVAILABLE FOR SALE, AT FAIR VALUE

The following table sets forth certain information regarding the mortgage-backed
securities:


--------------------------------------------------------------------------------
                                   Amortized   Gross   Unrealized    Estimated
(In thousands)                          Cost    Gains     Losses     Fair Value
--------------------------------------------------------------------------------
MARCH 31, 2003:
   Available for sale portfolio     $106,844   $3,674    $   --      $110,518
================================================================================

DECEMBER 31, 2002:
   Available for sale portfolio     $105,832   $4,229    $   --      $110,061
================================================================================

At March 31, 2003 and December 31, 2002, all mortgage-backed securities
available for sale were issued by government or government-sponsored agencies.


There were no sales of mortgage-backed securities in the first quarter of 2003
or 2002.






                                       6

<PAGE>


WEBSTER PREFERRED CAPITAL CORPORATION

NOTES TO INTERIM FINANCIAL STATEMENTS (continued)
--------------------------------------------------------------------------------

NOTE 3:  RESIDENTIAL MORTGAGE LOANS, NET

A summary of the Company's residential mortgage loans, net, follows:


                                                        March 31,   December 31,
                                                          2003          2002
--------------------------------------------------------------------------------
                                                         Carrying     Carrying
(In thousands)                                            Amount       Amount
--------------------------------------------------------------------------------
Fixed-rate loans:
       15 yr. loans                                     $  70,333    $  55,956
       20 yr. loans                                         4,979        3,132
       25 yr. loans                                         3,666        2,542
       30 yr. loans                                       177,048      138,008
--------------------------------------------------------------------------------

        Total fixed-rate loans                            256,026      199,638
================================================================================
Variable-rate loans:
       15 yr. loans                                         1,411        1,605
       20 yr. loans                                         2,368        3,127
       25 yr. loans                                         2,648        2,680
       30 yr. loans                                       144,155      173,482
--------------------------------------------------------------------------------

        Total variable-rate loans                         150,582      180,894
--------------------------------------------------------------------------------
       Total residential mortgage loans                   406,608      380,532

       Premiums and deferred costs on loans, net            1,327        1,164
       Less: allowance for loan losses                     (2,106)      (2,106)
--------------------------------------------------------------------------------
       Residential mortgage loans, net                  $ 405,829    $ 379,590
================================================================================



As of March 31, 2003 approximately 63.0% of the Company's residential mortgage
loans were fixed-rate loans and approximately 37.0% were adjustable-rate loans.

A detail of the change in the allowance for loan losses, for the periods
indicated follows:

                                         Three Months Ended   Three Months Ended
(In thousands)                              March 31, 2003       March 31, 2002
--------------------------------------------------------------------------------
Balance at beginning of period                 $ 2,106             $ 2,139
Charge-offs                                         --                 (33)
--------------------------------------------------------------------------------
Balance at end of period                       $ 2,106             $ 2,106
================================================================================





                                       7

<PAGE>


WEBSTER PREFERRED CAPITAL CORPORATION

NOTES TO INTERIM FINANCIAL STATEMENTS (continued)
--------------------------------------------------------------------------------

NOTE 4:  SERVICING

The mortgage loans owned by the Company are serviced by Webster Bank pursuant to
the terms of a servicing agreement. Webster Bank in its role as servicer under
the terms of the servicing agreement is herein referred to as the "Servicer."
The Servicer receives fees at an annual rate of (i) 8 basis points for
fixed-rate loan servicing and collection, (ii) 8 basis points for variable-rate
loan servicing and collection and (iii) 5 basis points for all other services to
be provided, as needed, in each case based on the daily outstanding balances of
all the Company's loans for which the Servicer is responsible. The Company
estimates that the fees paid to Webster Bank for servicing approximate fees that
would be paid if the Company operated as an unaffiliated entity. Servicing fees
paid for the three months ended March 31, 2003 and 2002 were $94,000 and
$111,000, respectively. Servicing fees are included in interest income on the
Statements of Income, as they are classified as a reduction in yield to the
Company.

The Servicer is entitled to retain any late payment charges, prepayment fees,
penalties and assumption fees collected in connection with mortgage loans
serviced by it. The Servicer receives the benefit, if any, derived from interest
earned on collected principal and interest payments between the date of
collection and the date of remittance to the Company and from interest earned on
tax and insurance impound funds with respect to mortgage loans serviced by it.
At the end of each calendar month, the Servicer is required to invoice the
Company for all fees and charges due to the Servicer.
















                                       8

<PAGE>


WEBSTER PREFERRED CAPITAL CORPORATION

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS
--------------------------------------------------------------------------------

GENERAL
-------

The Company is a subsidiary of Webster Bank and has elected to be treated as a
real estate investment trust ("REIT") under the Internal Revenue Code of 1986
(the "Code"). The Company will generally not be subject to federal income tax
for as long as it maintains its qualification as a REIT, requiring among other
things, that it currently distribute to stockholders at least 90% of its "REIT
taxable income" (not including capital gains and certain items of noncash
income). The following discussion of the Company's financial condition and
results of operations should be read in conjunction with the Company's financial
statements and other financial data included elsewhere herein and in conjunction
with the Company's 2002 Annual Report on Form 10-K.

FORWARD LOOKING STATEMENTS
--------------------------

This report contains forward-looking statements within the meaning of the
Securities Exchange Act of 1934, as amended. Actual results, performance or
developments may differ materially from those expressed or implied by such
forward-looking statements as a result of market uncertainties and other
factors. Some important factors that would cause actual results to differ from
those in any forward-looking statements include changes in interest rates and
the general economy in the Connecticut market area where a substantial portion
of the real estate securing the Company's loans are located, legislative and
regulatory changes, changes in tax laws and policies, and changes in accounting
policies, principles or guidelines. Such developments could have an adverse
impact on the Company's financial position and results of operations. An example
of such a forward-looking statement is the "Quantitative and Qualitative
Disclosures About Market Risk" section in Management's Discussion and Analysis.

CHANGES IN FINANCIAL CONDITION
------------------------------

Total assets were $638.4 million at March 31, 2003, an increase of $7.2 million
from $631.2 million at December 31, 2002. The primary factor causing the
increase in total assets was net income of $8.1 million. The change in the
components of total assets was the result of purchasing $70.3 million of
residential loans and $30.5 million of mortgage-backed securities, offset by
principal payments of $43.9 million and $29.5 million, respectively.
Shareholders' equity was $638.1 million at March 31, 2003 and $631.0 million at
December 31, 2002.

Excess cash balances were invested in interest-bearing deposits, which increased
$7.0 million over the first quarter. The increase in other assets from $1.5
million to $1.6 million was due to an increase in the balance of mortgage
payments collected by Webster Bank, the Company's loan servicer, but remitted
subsequent to quarter end.

ASSET QUALITY
-------------

The Company maintains asset quality by investing in residential real estate
loans that have been conservatively underwritten and by aggressively managing
nonperforming assets. At March 31, 2003, residential real estate loans comprised
the entire loan portfolio. The Company also invests in government agency or
government-sponsored agency issued mortgage-backed securities.

The following table details the Company's nonperforming assets:

                                                   March 31,   December 31,
(In thousands)                                       2003          2002
--------------------------------------------------------------------------------
Loans accounted for on a nonaccrual basis:
        Residential fixed-rate loans                 $402          $247
        Residential variable-rate loans               209           209
--------------------------------------------------------------------------------
           Total nonperforming loans                  611           456
Other real estate owned                                --            79
--------------------------------------------------------------------------------
           Total nonperforming assets                $611          $535
================================================================================


                                       9

<PAGE>


WEBSTER PREFERRED CAPITAL CORPORATION

MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
--------------------------------------------------------------------------------

At both March 31, 2003 and December 31, 2002, the allowance for loan losses was
approximately $2.1 million, or 345% and 462% of nonperforming loans,
respectively. Management believes that the allowance for loan losses is adequate
to cover expected losses in the portfolio.

LIQUIDITY AND CAPITAL RESOURCES
-------------------------------

The primary sources of liquidity for the Company are principal and interest
payments from the residential mortgage loans and mortgage-backed securities
portfolios. The primary uses of liquidity are purchases of residential mortgage
loans and mortgage-backed securities and the payment of dividends on the common
and preferred stock.

While scheduled loan amortization, maturing securities, short-term investments
and securities repayments are predictable sources of funds, loan and
mortgage-backed security prepayments can vary greatly and are influenced by
factors such as general interest rates, economic conditions and competition. One
of the inherent risks of investing in loans and mortgage-backed securities is
the ability of such instruments to incur prepayments of principal prior to
maturity at prepayment rates different than those estimated at the time of
purchase. This generally occurs because of changes in market interest rates.

Dividends on the Series B Preferred Stock are payable at the rate of 8.625% per
annum (an amount equal to $.8625 per annum per share), in all cases if, when and
as declared by the Board of Directors of the Company. Dividends on the preferred
shares are cumulative and, if declared, payable on January 15, April 15, July 15
and October 15 in each year. The Company periodically makes dividend payments on
its common stock in accordance with Company by-laws. Common stock dividends are
paid to comply with REIT qualification rules. REIT qualification rules require
that at least 90% of net taxable income for the year be distributed to
shareholders.

ASSET/LIABILITY MANAGEMENT
--------------------------

The goal of the Company's asset/liability management policy is to manage
interest rate risk so as to maximize net interest income over time in changing
interest rate environments while maintaining acceptable levels of market risk.
The Company prepares estimates of the level of prepayments and the effect of
such prepayments on the level of future earnings due to reinvestment of funds at
rates different than those that currently exist. The Company is unable to
predict future fluctuations in interest rates. The market values of certain of
the Company's financial assets are sensitive to fluctuations in market interest
rates. The market values of fixed rate loans and mortgage-backed securities tend
to decline in value as interest rates rise. If interest rates decrease, the
market value of loans and mortgage-backed securities generally will tend to
increase with the level of prepayments also normally increasing. The interest
income earned on the Company's variable rate, interest sensitive instruments,
which represent primarily variable rate mortgage loans, may change due to
changes in quoted interest rate indices. The variable rate mortgage loans
generally reprice based on a stated margin over U.S. Treasury Securities indices
of varying maturities, the terms of which are established at the time the loan
is closed. At March 31, 2003, 37.0% of the Company's residential mortgage loans
were variable rate loans.




                                       10


<PAGE>


WEBSTER PREFERRED CAPITAL CORPORATION

MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
--------------------------------------------------------------------------------

RESULTS OF OPERATIONS
---------------------

For the three months ended March 31, 2003 and 2002, the Company reported net
income of $8.1 million and $12.4 million, respectively, or $79,048 and $121,693,
respectively, per common share on a diluted basis.

Total interest income for the three months ended March 31, 2003 and 2002
amounted to $8.2 million and $12.5 million, respectively, net of servicing fees.
The following table shows the major categories of average interest-earning
assets, together with their respective interest income and the rates earned by
the Company:

<TABLE>
<CAPTION>

                                        Three Months Ended March 31, 2003            Three Months Ended March 31, 2002
                                     Average        Interest         Average     Average         Interest          Average
(In Thousands)                       Balance         Income           Yield      Balance          Income            Yield
---------------------------------------------------------------------------------------------------------------------------
<S>                                 <C>             <C>                <C>       <C>             <C>                <C>
Mortgage loans, net                 $437,082        $  6,375           5.83%     $568,100        $  9,044           6.37%
Mortgage-backed securities           110,542           1,615           5.84%      151,546           2,492           6.58%
Interest bearing deposits             74,106             211           1.14%      205,317             920           1.79%
---------------------------------------------------------------------------------------------------------------------------
     Total                          $621,730        $  8,201           5.28%     $924,963        $ 12,456           5.39%
===========================================================================================================================

</TABLE>


The decline in interest income of $4.3 million, or 34.2%, from first quarter
2002 to first quarter 2003 was due to a decline in yield on earning assets. Due
to the declining interest rate environment during 2002 and 2003, mortgage
prepayments accelerated. These assets were replaced with ones earning a lower
yield. In addition, a significant portion of the mortgage portfolio have
adjustable rates and repriced down as rates declined. During 2002, a return of
capital dividend of $300 million reduced the amount of interest earning assets.
The lower rate environment also effected the yield earned on deposits, which
declined by 65 basis points.

Net interest income also can be understood in terms of the impact of changing
rates and changing volumes. The following table describes the extent to which
changes in interest rates and changes in volume of interest-earning assets and
interest-bearing liabilities have impacted interest income and interest expense
during the periods indicated. Information is provided in each category with
respect to (i) changes attributable to changes in volume (changes in volume
multiplied by prior rate), (ii) changes attributable to changes in rates
(changes in rates multiplied by prior volume) and (iii) the net change. The
change attributable to the combined impact of volume and rate has been allocated
proportionately to the change due to volume and the change due to rate.


                                                  Three months ended March 31,
                                                           2003 V. 2002
--------------------------------------------------------------------------------
                                                    Increase (Decrease) due to
(In thousands)                                     Rate      Volume       Total
--------------------------------------------------------------------------------
Interest on interest-earning assets:
  Mortgage loans, net                           $  (717)    $(1,952)    $(2,669)
  Mortgage-backed securities                       (257)       (620)       (877)
  Interest-bearing deposits                        (257)       (452)       (709)
--------------------------------------------------------------------------------
Net change in fully taxable-equivalent
  net interest income                           $(1,231)    $(3,024)    $(4,255)
================================================================================


                                       11

<PAGE>


WEBSTER PREFERRED CAPITAL CORPORATION

MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
--------------------------------------------------------------------------------

There was no provision for loan losses for the three months ended March 31, 2003
and 2002.

There were no sales of mortgage-backed securities for the three months ended
March 31, 2003 and 2002.

Noninterest expense for the three months ended March 31, 2003 and 2002 amounted
to $80,000 and $71,000, respectively, and included advisory fees.

RECENT FINANCIAL ACCOUNTING STANDARDS
-------------------------------------

In April 2003, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS" or "Statement") No. 149,
"Accounting for Derivative Instruments and Hedging Activities - an amendment of
FASB Statement No. 133." This Statement amends SFAS No. 133, "Accounting for
Derivative Instruments and Hedging Activities," to provide a clearer definition
of a derivative, especially in regards to a contract involving an initial net
investment. In addition, this Statement amends the meaning of underlying to be
accounted for in accordance with FASB Interpretation No. 45, "Guarantor's
Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others." This amendment should promote more
consistency as to the reporting of contracts that fall under the scope of
derivatives or hybrids. SFAS No. 149 is to be applied prospectively to all
hedging activities and contracts revised or created after June 30, 2003.






                                       12

<PAGE>


WEBSTER PREFERRED CAPITAL CORPORATION

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
--------------------------------------------------------------------------------

The following table summarizes the estimated market value of the Company's
interest-sensitive assets and interest-sensitive liabilities at March 31, 2003
and December 31, 2002 and the projected change to market values if interest
rates instantaneously increase or decrease by 100 basis points.

<TABLE>
<CAPTION>

                                                                                   Estimated Market Value Impact
                                                                                   -------------------------------
(In thousands)                            Amortized Cost       Market Value          -100 BP            +100 BP
------------------------------------------------------------------------------------------------------------------
<S>                                          <C>                 <C>                <C>                <C>

AT MARCH 31, 2003
Interest Sensitive Assets:
      Mortgage-backed securities             $ 106,844           $ 110,518          $   2,430          $  (3,153)
      Variable-rate residential loans          150,582             153,731              1,984             (2,202)
      Fixed-rate residential loans             256,026             267,551              3,593             (7,457)
------------------------------------------------------------------------------------------------------------------
                                                                                    $   8,007          $ (12,812)
                                                                                    ==============================

AT DECEMBER 31, 2002
Interest Sensitive Assets:
      Mortgage-backed securities             $ 105,832           $ 110,061          $   1,942          $  (2,912)
      Variable-rate residential loans          180,894             186,182              1,629             (1,610)
      Fixed-rate residential loans             199,638             211,622              1,110             (5,741)
------------------------------------------------------------------------------------------------------------------
                                                                                    $   4,681          $ (10,263)
                                                                                    ==============================

</TABLE>


Interest-sensitive assets, when impacted by an instantaneous 100 basis point
rate decrease results in a projected increase in net market value of $8.0
million at March 31, 2003 compared to a projected increase in net market value
of $4.7 million at December 31, 2002. These changes in net market value
represent 1.51% of interest-sensitive assets at March 31, 2003 and 0.92% of
interest-sensitive assets at December 31, 2002. Interest-sensitive assets, when
impacted by an instantaneous 100 basis point rate increase results in a
projected decrease in net market value of $12.8 million at March 31, 2003
compared to a projected decrease in net market value of $10.3 million at
December 31, 2002. These changes in net market value represent 2.41% of
interest-sensitive assets at March 31, 2003 and 2.02% of interest-sensitive
assets at December 31, 2002. Changes in the projected net market value due to an
instantaneous 100 basis point rate increase or decrease when comparing such
amounts at March 31, 2003 and December 31, 2002 are a result of changes in
outstanding balances of the assets and an overall decline in market interest
rates.

Based on the Company's asset/liability mix at March 31, 2003, simulation
analyses project that an instantaneous 100 basis point increase in interest
rates would increase net income over the next twelve months by approximately
7.6%, compared to a projected increase of 8.6% at December 31, 2002. An
instantaneous 100 basis point decrease in interest rates would decrease net
income by approximately 9.4% at March 31, 2003, compared to a decrease of 10.0%
at December 31, 2002.

In particular, the Company's interest rate sensitive assets are subject to
prepayment risk. Prepayment risk is inherently difficult to estimate and is
dependent upon a number of economic, financial and behavioral variables. The
Company uses a sophisticated mortgage prepayment modeling system to estimate
prepayments and the corresponding impact on market value and net interest
income. The model uses information that includes the instrument type, coupon
spread, loan age and other factors in its projections.

These assumptions are inherently uncertain and, as a result, the simulation
analyses cannot precisely estimate the impact that higher or lower rate
environments will have on net interest income. Actual results will differ from
simulated results due to timing, magnitude and frequency of interest rate
changes, changes in cash flow patterns and market conditions, as well as changes
in management's strategies. Management believes that the Company's interest-rate
risk position at March 31, 2003, represents a reasonable level of risk.



                                       13
<PAGE>


WEBSTER PREFERRED FINANCIAL CORPORATION

ITEM 4.  CONTROLS AND PROCEDURES
--------------------------------------------------------------------------------

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
------------------------------------------------

The Company's management, including the Principal Executive Officer and
Principal Financial Officer, evaluated the effectiveness of the design and
operation of the Company's disclosure controls and procedures (as defined in
Rule 13a-14(c) under the Securities Exchange Act of 1934, as amended) (the
"Exchange Act") as of a date (the "Evaluation Date") within 90 days prior to
this report. Based upon that evaluation, the Company's management, including the
Principal Executive Officer and Principal Financial Officer concluded that, as
of the Evaluation Date, the Company's disclosure controls and procedures were
effective in alerting them in a timely manner to any material information
relating to the Company required to be included in the Company's Exchange Act
filings.

CHANGES IN INTERNAL CONTROLS
----------------------------

There were no significant changes made in the Company's internal controls or in
other factors that could significantly affect these internal controls subsequent
to the date of the evaluation performed by the Company's Principal Executive
Officer and Principal Financial Officer.

PART II - OTHER INFORMATION
---------------------------

ITEM 1. LEGAL PROCEEDINGS

There are no material pending legal proceedings, other than ordinary routine
litigation incident to the registrant's business, to which the Company is a
party or of which any of its property is subject.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

Not Applicable.

ITEM 3.  DEFAULT UPON SENIOR SECURITIES

Not Applicable.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Not Applicable.

ITEM 5. OTHER INFORMATION

Not Applicable.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits

    Exhibit Number                        Description
    --------------                        -----------

         99.1            Additional Exhibit - Written Statement pursuant to
                         Section 906 of the Sarbanes-Oxley Act of 2002, signed
                         by the Company's Principal Executive Officer.

         99.2            Additional Exhibit - Written Statement pursuant to
                         Section 906 of the Sarbanes-Oxley Act of 2002, signed
                         by the Company's Principal Financial Officer.

(b) No reports on Form 8-K were filed during the quarter ended March 31, 2003.





                                       14

<PAGE>


                                    SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.




                                WEBSTER PREFERRED CAPITAL CORPORATION
                                -------------------------------------
                                           Registrant


                                BY:   /s/ Gregory S. Madar
                                      ------------------------------------------
                                      Gregory S. Madar,
                                      Senior Vice President,
                                      Treasurer & Assistant Secretary
                                      Principal Financial and Accounting Officer

                                Date: May 14, 2003









                                       15


<PAGE>

                                 CERTIFICATIONS

I, Ross M. Strickland, certify that:

         1. I have reviewed this quarterly report on Form 10-Q of Webster
Preferred Capital Corporation.

         2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this
quarterly report;

         3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

         4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

         a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this quarterly report is being prepared;

         b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and

         c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our evaluation
as of the Evaluation Date;

         5. The registrant's other certifying officer and I have disclosed,
based on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):

         a) all significant deficiencies in the design or operations of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and

         b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal
controls; and

         6. The registrant's other certifying officer and I have indicated in
this quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

Date:  May 14, 2003

By:   /s/ Ross M. Strickland
     ---------------------------------------------------------
      Ross M. Strickland
      President and Principal Executive Officer



                                       16

<PAGE>


I, Gregory S. Madar, certify that:

         1. I have reviewed this quarterly report on Form 10-Q of Webster
Preferred Capital Corporation.

         2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this
quarterly report;

         3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

         4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

         a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this quarterly report is being prepared;

         b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and

         c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our evaluation
as of the Evaluation Date;

         5. The registrant's other certifying officer and I have disclosed,
based on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):

         a) all significant deficiencies in the design or operations of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and

         b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal
controls; and

         6. The registrant's other certifying officer and I have indicated in
this quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

Date:  May 14, 2003

By:   /s/ Gregory S. Madar
     ---------------------------------------
      Gregory S. Madar
      SVP, Treasurer & Assistant Secretary
      Principal Financial & Accounting Officer




                                       17