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, 2000

                                       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


     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      .
     -----    ------

     The number of shares  outstanding  of each of the  registrant's  classes of
common stock, as of the latest practicable date is: 100 shares

<PAGE>


WEBSTER PREFERRED CAPITAL CORPORATION



                                      INDEX


<TABLE>
<CAPTION>
                                                                                                                PAGE
                                                                                                                ----

PART I - FINANCIAL INFORMATION (UNAUDITED)


<S>                                                                                                             <C>
Statements of Condition at March 31, 2000 and December 31, 1999..............................................    3

Statements of Income for the Three Months Ended March 31, 2000 and March 31, 1999 ...........................    4

Statements of Cash Flows for the Three Months Ended March 31, 2000 and March 31, 1999........................    5

Condensed Notes to Financial Statements......................................................................    6

Management's Discussion and Analysis of Financial Statements.................................................    9

Quantitative and Qualitative Disclosures About Market Risk...................................................   12

Forward Looking Statements...................................................................................   12

PART II - OTHER INFORMATION..................................................................................   13

SIGNATURES...................................................................................................   14

INDEX TO EXHIBITS ...........................................................................................   15
</TABLE>


                                       2
<PAGE>




WEBSTER PREFERRED CAPITAL CORPORATION
STATEMENTS OF CONDITION (UNAUDITED)
(Dollars in Thousands, Except Share Data)


<TABLE>
<CAPTION>
                                                                                   March 31, 2000  December 31, 1999
------------------------------------------------------------------------------------------------------------------------
<S>                                                                                     <C>          <C>
ASSETS

Cash                                                                                    $  57,671    $       16,667
Mortgage-Backed Securities Available for Sale, at Fair Value (Note 2)                      42,844            95,647
Residential Mortgage Loans, Net (Note 3)                                                  827,174           849,210
Accrued Interest Receivable                                                                 5,193             5,285
Other Real Estate Owned                                                                        36                60
Prepaid Expenses and Other Assets                                                          48,607               340
------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS                                                                            $ 981,525    $      967,209
========================================================================================================================

LIABILITIES AND SHAREHOLDERS' EQUITY

Accrued Dividends Payable                                                                 $   794    $          885
Accrued Expenses and Other Liabilities                                                         85                97
------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES                                                                             879               982
------------------------------------------------------------------------------------------------------------------------

MANDATORILY REDEEMABLE PREFERRED STOCK (NOTE 4)

Series A 7.375% Cumulative  Redeemable Preferred Stock,
     Liquidation preference $1,000 per share; par value $1.00 per share;
     40,000 shares authorized, issued and outstanding                                      40,000            40,000

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                                                                      928,799           928,799
Distributions in Excess of Accumulated Earnings                                                 -            (2,134)
Retained Earnings                                                                          13,083                 -
Accumulated Other Comprehensive Income                                                     (2,237)           (1,439)
------------------------------------------------------------------------------------------------------------------------
TOTAL SHAREHOLDERS' EQUITY                                                                940,646           926,227
------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                                           $    981,525    $      967,209
========================================================================================================================
</TABLE>


See accompanying condensed notes to financial statements



                                       3
<PAGE>

WEBSTER PREFERRED CAPITAL CORPORATION
STATEMENTS OF INCOME (UNAUDITED)
(Dollars In Thousands, Except Share Data)

<TABLE>
<CAPTION>
                                                                                     Three Months Ended March 31,
                                                                                       2000                  1999
------------------------------------------------------------------------------------------------------------------------
<S>                                                                              <C>                    <C>
Interest Income:
Loans                                                                           $   14,316              $  13,617
Securities                                                                           2,013                  1,889
------------------------------------------------------------------------------------------------------------------------
        Total Interest Income                                                       16,329                 15,506
Provision for Loan Losses (Note 3)                                                     110                    120
------------------------------------------------------------------------------------------------------------------------
Interest Income After Provision for Loan Losses                                     16,219                 15,386

Noninterest Income:
Gain on Sale of Investments                                                             96                      -

Noninterest Expenses:
Advisory Fee Expense Paid to Parent                                                     39                     38
Dividends on Mandatorily Redeemable Preferred Stock                                    737                    738
Other Noninterest Expenses                                                             107                    100
------------------------------------------------------------------------------------------------------------------------
        Total Noninterest Expenses                                                     883                    876

Income Before Taxes                                                                 15,432                 14,510
Income Taxes                                                                             -                      -
------------------------------------------------------------------------------------------------------------------------
Net Income                                                                          15,432                 14,510
Preferred Stock Dividends                                                              216                    216
------------------------------------------------------------------------------------------------------------------------

Net Income Available to Common Shareholder                                      $   15,216              $  14,294
========================================================================================================================

Net Income Per Common Share:
               Basic                                                            $  152,160              $ 142,940
               Diluted                                                          $  152,160              $ 142,940

------------------------------------------------------------------------------------------------------------------------
</TABLE>

See accompanying condensed notes to financial statements



                                       4
<PAGE>

WEBSTER PREFERRED CAPITAL CORPORATION
STATEMENTS OF CASH FLOWS (UNAUDITED)
(Dollars In Thousands)

<TABLE>
<CAPTION>
                                                                                     Three Months Ended March 31,
                                                                                        2000               1999
-------------------------------------------------------------------------------------------------------------------------
<S>                                                                               <C>                  <C>
OPERATING ACTIVITIES:
Net Income                                                                        $    15,432          $    14,510
Adjustments to Reconcile Net Cash Provided by Operating Activities:
         Provision for Loan Losses                                                        110                  120
         Amortization on Mortgage Premiums                                                 50                    -
         Accretion of Securities Discount                                                  (5)                 (17)
         Amortization of Deferred Loan Fees and Premiums                                  141                  415
         Gain on Sale of Securities                                                       (96)                   -
         Decrease in Accrued Interest Receivable                                           92                   29
         Increase in Accrued Liabilities                                                  634                1,255
         Decrease in Prepaid Expenses and Other Assets                                     84                   85
-------------------------------------------------------------------------------------------------------------------------
Net Cash  Provided by Operating Activities                                             16,442               16,397
-------------------------------------------------------------------------------------------------------------------------
INVESTING ACTIVITIES:
Principal Collected on Mortgage-backed Securities                                       3,755                5,587
Purchase of Loans                                                                           -              (80,767)
Principal Repayments of Loans, Net                                                     21,760               55,359
-------------------------------------------------------------------------------------------------------------------------
Net Cash Provided (Used) by Investing Activities                                       25,515              (19,821)
-------------------------------------------------------------------------------------------------------------------------
FINANCING ACTIVITIES:
Dividends Paid on Common and Preferred Stock                                             (953)              (1,178)
-------------------------------------------------------------------------------------------------------------------------
Net Cash Used by Financing Activities                                                    (953)              (1,178)
-------------------------------------------------------------------------------------------------------------------------

Increase (Decrease) in Cash and Cash Equivalents                                       41,004               (4,602)
Cash and Cash Equivalents at Beginning of Period                                       16,667               26,964
-------------------------------------------------------------------------------------------------------------------------
Cash and Cash Equivalents at End of Period                                        $    57,671          $    22,362
=========================================================================================================================

SUPPLEMENTAL DISCLOSURES:
       Income Taxes Paid                                                          $         -          $         -
       Interest Paid                                                              $         -          $         -
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING ACTIVITY:
       Sale of  Mortgage-backed  Securities  recorded  as  Trade  Date
       sale, cash settlement date April 1, 2000                                   $    48,351          $         -

SUPPLEMENTAL SCHEDULE OF NONCASH FINANCING ACTIVITY:
       Transfer of Residential Mortgage Loans to Other Real Estate
          Owned                                                                   $        25          $         -

-------------------------------------------------------------------------------------------------------------------------
</TABLE>

See accompanying condensed notes to financial statements



                                       5
<PAGE>

WEBSTER PREFERRED CAPITAL CORPORATION

CONDENSED NOTES TO FINANCIAL STATEMENTS

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

NOTE 1: BASIS OF PRESENTATION

The accompanying  financial 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 the three month  period ended March 31, 2000 are
not necessarily  indicative of the results which may be expected for the year as
a whole.  These  financial  statements  should be read in  conjunction  with the
financial statements and notes thereto included in the Webster Preferred Capital
Corporation 1999 Annual Report to shareholders.

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

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


<TABLE>
<CAPTION>
(In Thousands)                                                          Mortgage-Backed Securities
----------------------------------------------------------------------------------------------------------------------
                                                             Recorded        Unrealized    Unrealized       Estimated
March 31, 2000                                                  Value             Gains        Losses      Fair Value
----------------------------------------------------------------------------------------------------------------------
<S>                                                          <C>                  <C>        <C>             <C>
      Available for Sale Portfolio                           $ 45,081             $   -      $(2,237)        $ 42,844
----------------------------------------------------------------------------------------------------------------------


<CAPTION>
                                                             Recorded        Unrealized    Unrealized       Estimated
December 31, 1999                                               Value             Gains        Losses      Fair Value
----------------------------------------------------------------------------------------------------------------------
<S>                                                          <C>                <C>          <C>             <C>
      Available for Sale Portfolio                           $ 97,086           $   989      $(2,428)        $ 95,647
----------------------------------------------------------------------------------------------------------------------
</TABLE>

All mortgage-backed securities have a contractual maturity of over 10 years. The
weighted  average  yield at March 31, 2000 is 6.79%.  Although  the stated final
maturity of these  obligations are long-term,  the weighted average life is much
shorter due to scheduled  repayments  and  prepayments.  Gains and losses on the
sales of securities are recorded using the specific identification method.



                                       6
<PAGE>

WEBSTER PREFERRED CAPITAL CORPORATION

CONDENSED NOTES TO FINANCIAL STATEMENTS (continued)

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

NOTE 3:  RESIDENTIAL  MORTGAGE LOANS, NET

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

<TABLE>
<CAPTION>
                                                           March 31,          December 31,
                                                             2000                 1999
------------------------------------------------------------------------------------------
                                                           Carrying             Carrying
(In Thousands)                                              Amount               Amount
------------------------------------------------------------------------------------------
<S>                                                       <C>                   <C>
Fixed-Rate Loans:
       15 yr. Loans                                       $  111,013            $ 113,950
       20 yr. Loans                                            5,228                5,322
       25 yr. Loans                                            2,744                2,758
       30 yr. Loans                                          225,712              227,977
------------------------------------------------------------------------------------------

        Total Fixed-Rate Loans                               344,697              350,007
------------------------------------------------------------------------------------------
Variable-Rate Loans:
       15 yr. Loans                                            5,810                6,108
       20 yr. Loans                                            7,415                7,839
       25 yr. Loans                                            6,339                6,759
       30 yr. Loans                                          461,339              476,647
------------------------------------------------------------------------------------------

        Total Variable-Rate Loans                            480,903              497,353
------------------------------------------------------------------------------------------

       Total Residential Mortgage Loans                   $  825,600            $ 847,360

       Premiums and Deferred Fees on Loans, Net                3,571                3,762
       Less: Allowance for Loan Losses                        (1,997)              (1,912)
------------------------------------------------------------------------------------------
       Residential Mortgage Loans, Net                    $  827,174            $ 849,210
==========================================================================================
</TABLE>


As of March 31, 2000,  approximately 41.8% of the Company's residential mortgage
loans were fixed-rate loans and approximately 58.2% were adjustable-rate loans.

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

<TABLE>
<CAPTION>
(In Thousands)                                                           Three Months Ended
                                                                           March 31, 2000
----------------------------------------------------------------------------------------------
<S>                                                                          <C>
Balance at Beginning of Period                                               $   1,912
Provision Charged to Operations                                                    110
Charge-offs                                                                        (25)
Recoveries                                                                           -
----------------------------------------------------------------------------------------------
Balance at End of Period                                                     $   1,997
----------------------------------------------------------------------------------------------
</TABLE>



                                       7
<PAGE>

WEBSTER PREFERRED CAPITAL CORPORATION

CONDENSED NOTES TO FINANCIAL STATEMENTS (continued)

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

NOTE 4: MANDATORILY REDEEMABLE PREFERRED STOCK

The Company is required to redeem all outstanding  Series A Preferred  Shares on
January 15, 2001 at a  redemption  price of $1,000 per share,  plus  accrued and
unpaid dividends.

The Series A  Preferred  Shares may be  redeemed at the option of the Company at
any time on and after January 15, 1999 through January 14, 2001.

NOTE 5: OTHER COMPREHENSIVE INCOME

The  following   table   summarizes   reclassification   adjustments  for  other
comprehensive  income and the related tax  effects  for the three  months  ended
March 31, 2000 and 1999:

<TABLE>
<CAPTION>
                                                                      Before             Income tax
                                                                       tax               (expense)         Net-of-tax
  (In Thousands)                                                      amount             or benefit          amount
  -----------------------------------------------------------------------------------------------------------------------
<S>                                                                  <C>                   <C>              <C>
  Unrealized (loss) on available for sale securities:
     Unrealized holding losses arising during the period             $    (702)              -              $    (702)
     Less: Reclassification adjustment for gains
        realized during the period                                          96               -                     96
  -----------------------------------------------------------------------------------------------------------------------

      Other comprehensive income at March 31, 2000                   $    (798)              -              $    (798)
  -----------------------------------------------------------------------------------------------------------------------

  Unrealized (loss) on available for sale securities:
     Unrealized holding losses arising during the period             $    (193)              -              $    (193)
     Less: Reclassification adjustment for gains
        realized during the period                                           -               -                     -
  -----------------------------------------------------------------------------------------------------------------------

      Other comprehensive income at March 31, 1999                   $    (193)              -              $    (193)
  -----------------------------------------------------------------------------------------------------------------------
</TABLE>


                                       8
<PAGE>

WEBSTER PREFERRED CAPITAL CORPORATION

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL STATEMENTS

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


GENERAL

The Company is a subsidiary of Webster Bank and was  incorporated  in March 1997
to provide a  cost-effective  means of raising funds,  including  capital,  on a
consolidated basis for Webster Bank. Total assets at March 31, 2000 and December
31,1999  were  $981.5  million  and  $967.2  million,  respectively,  consisting
primarily of residential mortgage loans and mortgage-backed securities.

The Company has elected to be treated as a real estate investment trust ("REIT")
under the Internal Revenue Code of 1986 (the "Code"),  and 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 95% of its "REIT  taxable  income"  (not  including  capital  gains and
certain items of noncash income).  Webster Bank will also benefit  significantly
from state tax  treatment  of  dividends  paid by the Company as a result of its
qualification  as a REIT.  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.

CHANGES IN FINANCIAL CONDITION

Total assets were $981.5 million at March 31, 2000, an increase of $14.3 million
from $967.2  million at  December  31,  1999.  The  increase in total  assets is
primarily  attributable  to net  income of $15.4  million  less the  payment  of
preferred stock dividends of $953,125.  Shareholders'  equity was $940.6 million
at March 31, 2000 and $926.2 million at December 31, 1999.

ASSET QUALITY

The Company  maintains high asset quality by acquiring  residential  real estate
loans  that  have  been  conservatively   underwritten,   aggressively  managing
nonaccrual assets and maintaining adequate reserve coverage.  At March 31, 2000,
residential  real estate loans comprised the entire loan portfolio.  The Company
also invests in highly rated mortgage-backed securities.

The aggregate  amount of  nonaccrual  assets was $1.2 million at March 31, 2000.
The following  table details the Company's  nonaccrual  assets at March 31, 2000
and December 31, 1999:

<TABLE>
<CAPTION>
                                                                                        March 31,       December 31,
(In Thousands)                                                                            2000             1999
---------------------------------------------------------------------------------------------------------------------
<S>                                                                                   <C>              <C>
Loans Accounted for on a Nonaccrual Basis:
        Residential Fixed-Rate Loans                                                  $        320     $     319
        Residential Variable-Rate Loans                                                        830           830
OREO Properties                                                                                 36            60
---------------------------------------------------------------------------------------------------------------------
              Total Nonaccrual Assets                                                 $      1,186     $   1,209
---------------------------------------------------------------------------------------------------------------------
</TABLE>

At March 31, 2000 the allowance for loan losses was approximately  $2.0 million,
or 169% of nonaccrual  assets.  Management  believes that the allowance for loan
losses is adequate to cover expected losses in the portfolio.



                                       9
<PAGE>

WEBSTER PREFERRED CAPITAL CORPORATION

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL STATEMENTS (continued)

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

LIQUIDITY AND CAPITAL RESOURCES

The  primary  sources  of  liquidity  for the  Company  are net cash  flows from
operating activities,  investing activities and financing  activities.  Net cash
flows from operating  activities  primarily  include net income,  net changes in
prepaid expenses and other assets,  accrued interest  receivable and adjustments
for noncash  items such as  amortization  on  deferred  fees and  premiums,  and
mortgage-backed  securities net amortization and accretion.  Net cash flows from
investing   activities   primarily   include  the  purchase  and  repayments  of
residential real estate loans and mortgage backed securities that are classified
as  available  for sale.  Net cash flows  from  financing  activities  primarily
include net changes in capital  generally  related to stock  issuances,  capital
contributions from Webster Bank and dividend payments.

While scheduled loan amortization,  maturing securities,  short-term investments
and  securities   repayments  are  predictable   sources  of  funds,   loan  and
mortgage-backed  security prepayments are greatly influenced by 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.  The  market  values of
fixed-rate loans and mortgage-backed securities are sensitive to fluctuations in
market  interest  rates,  declining in value as interest rates rise. If interest
rates  decrease,  the market value of loans generally will tend to increase with
the level of prepayments also normally increasing.

Dividends on the Series A Preferred  Stock are payable at the rate of 7.375% per
annum (an amount equal to $73.75 per annum per share),  and the 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.

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 risk. The
Company must provide for sufficient liquidity for daily operations.  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 and as such the market values of
certain of the  Company's  financial  assets are  sensitive to  fluctuations  in
market  interest  rates.  Changes in interest  rates can affect the value of its
loans  and  other  interest-earning  assets.  At March  31,  2000,  58.2% of the
Company's  residential  mortgage loans were  variable-rate  loans. The Company's
management  believes these  residential  mortgage loans are less likely to incur
prepayments of principal.


                                       10
<PAGE>

WEBSTER PREFERRED CAPITAL CORPORATION

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL STATEMENTS  (continued)

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

RESULTS OF OPERATIONS

For the three  months  ended March 31, 2000 and 1999,  the Company  reported net
income of $15.4  million  and  $14.5  million,  respectively,  or  $152,160  and
$142,940, respectively, per common share on a diluted basis.

Total  interest  income  for the three  months  ended  March  31,  2000 and 1999
amounted to $16.3  million and $15.5  million,  respectively,  net of  servicing
fees. The following table shows the major categories of average interest-earning
assets, their respective interest income and the rates earned by the Company:

<TABLE>
<CAPTION>
                                        Three Months Ended March 31, 2000       Three Months Ended March 31, 1999
                                        Average      Interest        Average        Average       Interest      Average
(In Thousands)                          Balance       Income          Yield         Balance        Income        Yield
------------------------------------------------------------------------------------------------------------------------
<S>                                   <C>          <C>               <C>        <C>              <C>             <C>
Mortgage Loans                        $   842,709  $    14,316       6.80%      $   808,654      $   13,617      6.74%
Mortgage-Backed Securities                 94,424        1,611       6.82%          113,641           1,791      6.30%
Interest Bearing Deposits                  29,240          402       5.50%            9,749              98      4.02%
------------------------------------------------------------------------------------------------------------------------
     Total                            $   966,373  $    16,329       6.76%      $   932,044      $   15,506      6.66%
------------------------------------------------------------------------------------------------------------------------
</TABLE>

The  provision  for loan  losses for the three  months  ended March 31, 2000 and
March 31, 1999 was $110,000 and $120,000  respectively.  The  provision for loan
losses reflects the decrease in the total residential mortgage loan portfolio.

Noninterest expenses for the three months ended March 31, 2000 and 1999 amounted
to $883,000 and $876,000, respectively, and included advisory fees and dividends
on Series A  Preferred  Stock.  No income tax expense  was  recorded  for either
period.

RECENT FINANCIAL ACCOUNTING STANDARDS

In June 1998,  the  Financial  Accounting  Standards  Board issued  Statement of
Financial  Accounting  Standards  ("SFAS") No. 133,  "Accounting  for Derivative
Instruments and Hedging Activities." This statement  establishes  accounting and
reporting  standards for derivative  instruments,  including certain  derivative
instruments   imbedded  in  other  contracts,   (collectively   referred  to  as
derivatives) and for hedging activities.  The accounting for changes in the fair
value of a  derivative  depends on the intended  use of the  derivative  and the
resulting  designation.  Under this  statement,  an entity  that elects to apply
hedge  accounting  is required to  establish  at the  inception of the hedge the
method it will use for assessing the effectiveness of the hedging derivative and
the measurement  approach for  determining the ineffective  aspect of the hedge.
Those methods must be consistent  with the entity's  approach to managing  risk.
SFAS No.  133,  as  amended by SFAS No.  137,  is now  effective  for all fiscal
quarters of fiscal years beginning  after June 15, 2000. Upon adoption,  hedging
relationships must be designated anew and documented  pursuant to the provisions
of this statement. Early adoption is permitted; however, retroactive application
is prohibited. This SFAS is not expected to impact the Company since the Company
does not engage in hedging activities or utilize derivative instruments.


                                       11
<PAGE>

WEBSTER PREFERRED CAPITAL CORPORATION

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL STATEMENTS (continued)

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


YEAR 2000 READINESS DISCLOSURE STATEMENT

There has been no disruption to the Company's  operations  since January 1, 2000
and any future disruption is not expected.  The Company will continue to monitor
its position


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, 2000
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)                                  Book Value        Market Value            -100 BP             +100 BP
----------------------------------------------------------------------------------------------------------------------
<S>                                              <C>            <C>                 <C>                   <C>
AT MARCH 31, 2000
Interest Sensitive Assets:
      Mortgage-Backed Securities                 $  45,081      $       42,844      $       2,266         $   (2,898)
      Variable-Rate Residential Loans              480,903             471,956              9,187            (11,123)
      Fixed-Rate Residential Loans                 344,697             321,118             11,128            (13,173)
Interest-Sensitive Liabilities:
      Series A Preferred Stock                      40,000              40,000              2,488             (2,959)
----------------------------------------------------------------------------------------------------------------------

<CAPTION>
                                                                                        Estimated Market Value Impact
                                                                                --------------------------------------
(In Thousands)                                  Book Value        Market Value            -100 BP             +100 BP
----------------------------------------------------------------------------------------------------------------------
<S>                                              <C>            <C>                 <C>                   <C>
AT MARCH 31, 1999
Interest Sensitive Assets:
      Mortgage-Backed Securities                 $ 112,498      $      112,499      $       2,024         $   (3,436)
      Variable-Rate Residential Loans              513,139             523,075              6,464             (9,829)
      Fixed-Rate Residential Loans                 329,201             339,358              7,219            (13,330)
Interest-Sensitive Liabilities:
      Series A Preferred Stock                      40,000              40,000                533             (3,935)
----------------------------------------------------------------------------------------------------------------------
</TABLE>


FORWARD LOOKING STATEMENTS

Statements  in  Management's  Discussion  and Analysis in the section  captioned
"Quantitative   and   Qualitative   Disclosures   about   Market   Risk"   is  a
forward-looking  statement 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  that  differ  from  those in any  forward-looking
statements  include  changes in  interest  rates and  general  economics  in the
Connecticut market area where a substantial  portion of the real estate securing
the Company's loans is located.  Such developments  could have an adverse impact
on the Company's financial position and results of operations.


                                       12
<PAGE>

WEBSTER PREFERRED CAPITAL CORPORATION

PART II - OTHER INFORMATION

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Item 6:  Exhibits and Reports on Form 8-K

(a)      Exhibits

         Exhibit Numbers       Description
         ---------------       -----------
               27              Financial Data Schedule

(b)      No reports on Form 8-K were filed  during the  quarter  ended March 31,
         2000.




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                                   SIGNATURES

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/ Peter J. Swiatek
                                             -----------------------------------
                                             Peter J. Swiatek,
                                             Vice President & Treasurer
                                             Principal Financial Officer
                                             Principal Accounting Officer

                                   Date: May 10, 2000



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                                INDEX TO EXHIBITS



    Exhibit Number       Description
    --------------       -----------
          27             Financial Data Schedule.




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