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 June 30, 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 the registrant's common stock as of the
latest practicable date is: 100 shares.

<PAGE>

WEBSTER PREFERRED CAPITAL CORPORATION

                                      INDEX

<TABLE>
<CAPTION>
                                                                                                     PAGE
                                                                                                     ----

PART I - FINANCIAL INFORMATION

<S>                                                                                                  <C>
Statements of Condition at June 30, 2000 and December 31, 1999....................................    3

Statements of Income for the Three and Six Months Ended June 30, 2000 and June 30, 1999 ..........    4

Statements of Cash Flows for the Six Months Ended June 30, 2000 and June 30, 1999.................    5

Notes to the 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
CONDENSED STATEMENTS OF CONDITION (UNAUDITED)
(Dollars in Thousands, Except Share Data)

<TABLE>
<CAPTION>

                                                                                    June 30, 2000      December 31, 1999
-------------------------------------------------------------------------------------------------------------------------
ASSETS

<S>                                                                                     <C>                  <C>
Cash                                                                                    $  93,736            $  16,667
Mortgage-Backed Securities Available for Sale, at Fair Value (Note 2)                      41,754               95,647
Residential Mortgage Loans, Net (Note 3)                                                  830,889              849,210
Accrued Interest Receivable                                                                 4,786                5,285
Other Real Estate Owned                                                                        --                   60
Prepaid Expenses and Other Assets                                                          10,459                  340
--------------------------------------------------------------------------- ---------------------- --------------------
      TOTAL ASSETS                                                                      $ 981,624           $  967,209
=========================================================================== ====================== ====================

LIABILITIES AND SHAREHOLDERS' EQUITY

Accrued Dividends Payable                                                                 $   794              $   885
Accrued Expenses and Other Liabilities                                                         14                   97
------------------------------------------ -------------------------------- ---------------------- --------------------
      TOTAL LIABILITIES                                                                       808                  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                                                                    13,255                   --
      Accumulated Other Comprehensive Income (Loss)                                        (2,239)              (1,439)
---------------------------------------------------------------------------- ---------------------- --------------------
      TOTAL SHAREHOLDERS' EQUITY                                                          940,816              926,227
---------------------------------------------------------------------------- ---------------------- --------------------
      TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                                       $  981,624            $ 967,209
============================================================================ ====================== ====================
</TABLE>

See accompanying notes to the financial statements

                                       3


<PAGE>


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


<TABLE>
<CAPTION>

                                                                Three  Months  Ended June 30,    Six Months Ended June 30,
                                                                     2000           1999            2000          1999
--------------------------------------------------------------------------------------------------------------------------
<S>                                                             <C>            <C>             <C>           <C>
Interest Income:
Loans                                                           $ 14,330       $ 14,427        $ 28,646      $ 28,044
Securities                                                         1,953          1,773           3,966         3,662
--------------------------------------------------------------------------------------------------------------------------
        Total Interest Income                                     16,283         16,200          32,612        31,706
Provision for Loan Losses (Note 3)                                    20            120             130           240
--------------------------------------------------------------------------------------------------------------------------
Interest Income After Provision for Loan Losses                   16,263         16,080          32,482        31,466
Noninterest Income:
Gain (Loss) on Sale of Investments                                    (2)            --              94            --
Noninterest Expenses:
Advisory Fee Expense Paid to Parent                                   40             37              79            75
Dividends on Mandatorily Redeemable Preferred Stock                  738            737           1,475         1,475
Other Noninterest Expenses                                            96            109             203           209
--------------------------------------------------------------------------------------------------------------------------
        Total Noninterest Expenses                                   874            883           1,757         1,759
--------------------------------------------------------------------------------------------------------------------------
Income Before Taxes                                               15,387         15,197          30,819        29,707
Income Taxes                                                          --             --              --            --
--------------------------------------------------------------------------------------------------------------------------
NET INCOME                                                        15,387         15,197          30,819        29,707
Preferred Stock Dividends                                            215            215             431           431
Net Income Available to Common Shareholder                      $ 15,172       $ 14,982        $ 30,388      $ 29,276
==========================================================================================================================
Net Income Per Common Share:
               Basic                                           $ 151,720      $ 149,820        $303,880      $292,760
               Diluted                                         $ 151,720      $ 149,820        $303,880      $292,760
--------------------------------------------------------------------------------------------------------------------------
</TABLE>

See accompanying notes to the financial statements

                                       4
<PAGE>

<TABLE>
<CAPTION>

WEBSTER PREFERRED CAPITAL CORPORATION
CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
(Dollars In Thousands)
                                                                                      Six Months Ended June 30,
                                                                                      2000                  1999
--------------------------------------------------------------------------------------------------------------------------
OPERATING ACTIVITIES:

<S>                                                                                <C>                      <C>
Net Income                                                                         $ 30,819                 $ 29,707
Adjustments to Reconcile Net Cash Provided by Operating Activities:
         Provision for Loan Losses                                                      130                      240
         Accretion of Securities Discount                                               (11)                     (24)
         Amortization of Deferred Loan Cost (Fees) and Premiums                         412                      683
         Gains on Sale of Securities                                                    (94)                      --
         Decrease in Accrued Interest Receivable                                        287                       50
         Increase in Accrued Liabilities                                              1,301                       43
         (Increase) Decrease in Prepaid Expenses and Other Assets                   (10,118)                     169
--------------------------------------------------------------------------------------------------------------------------
Net Cash Provided by Operating Activities                                            22,726                   30,868
--------------------------------------------------------------------------------------------------------------------------
INVESTING ACTIVITIES:
Proceeds Collected from Sale of Mortgage Backed Securities                            47,600                      --
Principal Collected on Mortgage-Backed Securities                                      5,811                  12,308
Purchase of Loans                                                                    (31,087)               (134,532)
Proceeds from REO Sale                                                                    35                      --
Purchase of Deferred Fees                                                                657                      --
Principal Repayments of Loans, Net                                                    48,233                  98,403
--------------------------------------------------------------------------------------------------------------------------
Net Cash Provided (Used) by Investing Activities                                      71,249                 (23,821)
--------------------------------------------------------------------------------------------------------------------------
FINANCING ACTIVITIES:

Dividends Paid on Common and Preferred Stock                                         (16,906)                (10,656)
--------------------------------------------------------------------------------------------------------------------------
Net Cash Used by Financing Activities                                                (16,906)                (10,656)
--------------------------------------------------------------------------------------------------------------------------
Increase (Decrease) in Cash and Cash Equivalents                                      77,069                  (3,609)
Cash and Cash Equivalents at Beginning of Period                                      16,667                  26,964
--------------------------------------------------------------------------------------------------------------------------
Cash and Cash Equivalents at End of Period                                          $ 93,736                $ 23,355
==========================================================================================================================
SUPPLEMENTAL DISCLOSURES:
       Income Taxes Paid
                                                                                    $     --                $     --
       Interest Paid

                                                                                     $    --                $     --
</TABLE>

See accompanying notes to the financial statements


                                       5

<PAGE>

WEBSTER PREFERRED CAPITAL CORPORATION

NOTES TO THE CONDENSED 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 and six month  periods  ended June 30,
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
------------------------------------------------------------------------------------------------------------------------
                                                       Amortized   Unrealized    Unrealized   Estimated Fair
June 30, 2000                                            Cost         Gains        Losses         Value
------------------------------------------------------------------------------------------------------------------------
<S>                                                          <C>                  <C>       <C>               <C>
      Available for Sale Portfolio                           $ 43,993             $   -     $ (2,239)         $ 41,754
========================================================================================================================
                                                       Amortized   Unrealized     Unrealized   Estimated Fair
December 31, 1999                                          Cost      Gains          Losses            Value
------------------------------------------------------------------------------------------------------------------------
       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 June 30, 2000 is 6.61%.  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>

                                                        June 30,       December 31,
                                                          2000              1999
--------------------------------------------------------------------------------------------

                                                          Carrying                 Carrying
(In Thousands)                                             Amount                   Amount
--------------------------------------------------------------------------------------------
<S>                                                         <C>                 <C>
Fixed-Rate Loans:
       15 yr. Loans                                          108,415             $113,950
       20 yr. Loans                                            5,188                5,322
       25 yr. Loans                                            2,930                2,758
       30 yr. Loans                                          229,949              227,977
--------------------------------------------------------------------------------------------
        Total Fixed-Rate Loans                               346,482              350,007
--------------------------------------------------------------------------------------------
Variable-Rate Loans:
       15 yr. Loans                                            5,690                6,108
       20 yr. Loans                                            8,989                7,839
       25 yr. Loans                                            6,608                6,759
       30 yr. Loans                                          462,444              476,647
--------------------------------------------------------------------------------------------
        Total Variable-Rate Loans                            483,731              497,353
--------------------------------------------------------------------------------------------
       Total Residential Mortgage Loans                    $ 830,213             $847,360
       Premiums and Deferred Costs on Loans, Net               2,693                3,762
       Less: Allowance for Loan Losses                        (2,017)              (1,912)
--------------------------------------------------------------------------------------------
        Residential Mortgage Loans, Net                    $ 830,889             $849,210
============================================================================================
</TABLE>

As of June 30, 2000,  approximately 41.7% of the Company's  residential mortgage
loans are fixed-rate loans and approximately 58.3% are adjustable-rate loans.

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

<TABLE>
<CAPTION>

                                                    Three Months Ended June 30,          Six Months Ended June 30,
(In Thousands)                                        2000             1999                2000              1999
-------------------------------------------------------------------------------------------------------------------
<S>                                                 <C>            <C>                  <C>                <C>
Balance at Beginning of Period                      $ 1,997        $ 1,675              $ 1,912            $ 1,555
Provision Charged to Operations                          20            120                  130                240
Charge-offs                                              --            (53)                 (25)               (53)
-------------------------------------------------------------------------------------------------------------------
Balance at End of Period                            $ 2,017        $ 1,742              $ 2,017            $ 1,742
===================================================================================================================

</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 at the
applicable early redemption price.

NOTE 5: OTHER COMPREHENSIVE INCOME

The  following   table   summarizes   reclassification   adjustments  for  other
comprehensive income and the related tax effects:

<TABLE>
<CAPTION>

                                                                      BEFORE            INCOME TAX
  THREE MONTHS ENDED JUNE 30, 2000 AND 1999                            TAX               (EXPENSE)         NET-OF-TAX
  (In Thousands)                                                      AMOUNT            OR BENEFIT           AMOUNT
  -----------------------------------------------------------------------------------------------------------------------
 <S>                                                                     <C>                                      <C>
 Unrealized loss on available for sale securities:
     Unrealized holding losses arising during the period                 $    (4)             --              $       (4)
     Less: Reclassification adjustment for losses
        realized during the period                                            (2)             --                      (2)
  -----------------------------------------------------------------------------------------------------------------------

      Other comprehensive loss at June 30, 2000                          $    (2)             --              $       (2)
  =======================================================================================================================

  Unrealized loss on available for sale securities:

      Unrealized holding losses arising during the period                $(1,703)             --              $   (1,703)
     Less: Reclassification adjustment for gains

        realized during the period                                           --               --                      --
  -----------------------------------------------------------------------------------------------------------------------

      Other comprehensive loss at June 30, 1999                          $(1,703)             --              $   (1,703)
  =======================================================================================================================
</TABLE>

<TABLE>
<CAPTION>

                                                                      BEFORE             INCOME TAX
  SIX MONTHS ENDED JUNE 30, 2000 AND 1999                              TAX               (EXPENSE)         NET-OF-TAX
  (In Thousands)                                                      AMOUNT             OR BENEFIT          AMOUNT
  ----------------------------------------------------------------------------------------------------------------------

<S>                                                                      <C>                                   <C>
  Unrealized loss on available for sale securities:
      Unrealized holding losses arising during the period                $  (706)                  --          $   (706)
     Less: Reclassification adjustment for gains
        realized during the period                                            94                   --                94
  ----------------------------------------------------------------------------------------------------------------------
      Other comprehensive loss at June 30, 2000                          $  (800)                  --          $   (800)
  ======================================================================================================================
  Unrealized gain on available for sale securities:
      Unrealized holding gains arising during the period                $ (1,896)                  --          $ (1,896)
     Less: Reclassification adjustment for gains
        realized during the period                                           --                    --                --
  ----------------------------------------------------------------------------------------------------------------------
      Other comprehensive income at June 30, 1999                       $ (1,896)                  --          $ (1,896)
  ======================================================================================================================

</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 June 30, 2000 and December
31,1999  were  $981.6  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 also benefits 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,   consisting   primarily  of   residential   mortgage  loans  and
mortgage-backed securities, were $981.6 million at June 30, 2000, an increase of
$14.4  million from $967.2  million at December 31, 1999.  The increase in total
assets is primarily attributable to net income of $30.8 million less the payment
of common and preferred  stock dividend of $16.9 million.  Shareholders'  equity
was $940.8 million at June 30, 2000 and $926.2 million at December 31, 1999.

ASSET QUALITY

The Company's asset quality reflects the residential real estate loans that have
been acquired from Webster Bank.  The Company  aggressively  manages  nonaccrual
assets.  At June 30, 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  loans was $599,000 at June 30, 2000.  The
following  table  details the  Company's  nonaccrual  loans at June 30, 2000 and
December 31, 1999:

<TABLE>
<CAPTION>

                                                                             June 30,      December 31,
(In Thousands)                                                                 2000           1999
-------------------------------------------------------------------------------------------------------
<S>                                                                          <C>           <C>
Loans Accounted for on a Nonaccrual Basis:
        Residential Fixed-Rate Loans                                          $  418        $   319
        Residential Variable-Rate Loans                                          181            830
Other Real Estate Owned                                                           --             60
-------------------------------------------------------------------------------------------------------
        Total Nonaccrual Assets                                               $  599        $ 1,209
-------------------------------------------------------------------------------------------------------
</TABLE>

At June 30, 2000 the allowance for loan losses was  approximately  $2.0 million,
or 337% 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 payable on January 15,  April 15, July 15 and October 15 of 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 June  30,  2000,  58.3%  of the
Company's  residential  mortgage  loans were  variable-rate  loans.  The Company
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 and six months  ended June 30,  2000,  the  Company  reported  net
income of $15.4  million  and  $30.8  million,  respectively,  or  $151,723  and
$303,883,  respectively,  per common share on a diluted  basis,  compared to the
three and six months  ended June 30, 1999 which  amounted  to $15.2  million and
$29.7 million, respectively, or $149,820 and $292,760,  respectively, per common
share on a diluted basis.

Total interest  income for the three and six months ended June 30, 2000 amounted
to $16.3  million  and  $32.6  million,  respectively,  net of  servicing  fees,
compared to the three and six months ended June 30, 1999 which amounted to $16.2
million and $31.7  million,  respectively.  The following  table shows the major
categories of average  interest-earning assets, their respective interest income
and the yields earned by the Company:

<TABLE>
<CAPTION>


                                          THREE MONTHS ENDED JUNE 30, 2000          THREE MONTHS ENDED JUNE 30, 1999
                                           Average      Interest  Average            Average       Interest      Average
(In Thousands)                             Balance        Income   Yield             Balance        Income        Yield
-----------------------------------------------------------------------------------------------------------------------
<S>                                      <C>            <C>            <C>          <C>           <C>            <C>
Mortgage Loans                           $ 837,955      $ 14,330       6.84%        $ 860,862     $ 14,427       6.70%
Mortgage-Backed Securities                  56,387           942       6.68%          107,017        1,678       6.50%
Interest Bearing Deposits                   66,579         1,011       6.07%            9,541           95       3.94%
-----------------------------------------------------------------------------------------------------------------------
     Total                               $ 960,921      $ 16,283       6.78%        $ 977,420     $ 16,200       6.65%
-----------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>

                                            SIX MONTHS ENDED JUNE 30, 2000            SIX MONTHS ENDED JUNE 30, 1999
                                           Average      Interest  Average            Average     Interest     Average
(In Thousands)                             Balance        Income       Yield         Balance       Income      Yield
-----------------------------------------------------------------------------------------------------------------------
<S>                                      <C>            <C>            <C>          <C>           <C>            <C>
Mortgage Loans                           $ 840,332      $ 28,646       6.82%        $ 834,901     $ 28,044       6.72%
Mortgage-Backed Securities                  75,406         2,553       6.77%          110,311        3,469       6.29%
Interest Bearing Deposits                   47,910         1,413       5.90%            9,644          193       3.98%
-----------------------------------------------------------------------------------------------------------------------
    Total                                $ 963,648      $ 32,612       6.77%         $954,856      $31,706       6.66%
-----------------------------------------------------------------------------------------------------------------------
</TABLE>

The  provision for loan losses for the three and six months ended June 30, 2000,
amounted  to $20,000  and  $130,000,  respectively,  compared  to  $120,000  and
$240,000 for the three and six months ended June 30, 1999.  The reduction in the
provision for loan losses reflects the decline in the total residential mortgage
loan portfolio.

Noninterest  expenses for the three and six months ended June 30, 2000  amounted
to $874,000 and $1.8 million, respectively, compared to the noninterest expenses
for the three and six months ended June 30, 1999 which  amounted to $883,000 and
$1.8 million,  respectively.  Noninterest  expenses  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

                                       11

<PAGE>



WEBSTER PREFERRED CAPITAL CORPORATION

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

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.

YEAR 2000 READINESS DISCLOSURE STATEMENT

There has been no disruption of 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 June 30, 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 JUNE 30, 2000
Interest Sensitive Assets:

      Mortgage-Backed Securities                  $ 43,993              41,754              1,831             (2,138)
      Variable-Rate Residential Loans              483,731             478,169              9,246            (10,963)
      Fixed-Rate Residential Loans                 346,482             334,525             11,200            (13,266)
Interest-Sensitive Liabilities:
      Series A Preferred Stock                      40,000              40,000              2,488             (2,959)
---------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>

                                                                                        Estimated Market Value Impact
                                                                                --------------------------------------
(In Thousands)                                  Book Value        Market Value            -100 BP             +100 BP
<S>                                              <C>                   <C>                  <C>               <C>
AT JUNE 30, 1999
Interest Sensitive Assets:
      Mortgage-Backed Securities                 $ 104,862             104,084              2,524             (3,671)
      Variable-Rate Residential Loans              508,231             511,287              9,308            (12,939)
      Fixed-Rate Residential Loans                 344,359             345,088             11,726            (16,029)
Interest-Sensitive Liabilities:
      Series A Preferred Stock                      40,000              40,000              2,230             (2,929)
-----------------------------------------------------------------------------------------------------------------------
</TABLE>


FORWARD LOOKING STATEMENTS

Statements  in  Management's  Discussion  and Analysis in the section  captioned
"Quantitative and Qualitative Disclosures About Market Risk" are 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.  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
--------------------------------------------------------------------------------

Item 4:   Submission of Matters to a Vote of Security Holders

     The Company held an annual meeting of  stockholders on March 22, 2000. Each
of the Company's three  directors,  Peter J. Swiatek,  Harriet Munrett Wolfe and
Ross M. Strickland,  was elected at the meeting, and each such director received
100 votes  cast for  election  (which  votes  constitute  100% of the issued and
outstanding common stock).

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 June 30, 2000.

                                       13


<PAGE>

                                   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

                                    Director


                                 Date: August , 2000


                                       14

<PAGE>


                                INDEX TO EXHIBITS


    EXHIBIT NUMBER       DESCRIPTION
    ------------         -----------
        27               Financial Data Schedule.




                                       15