The somewhat lackluster stock performance of Webster Financial Corp. last year may be the Waterbury, Conn., company’s opportunity to outperform the recent correction that has hit many thrifts in recent weeks.

But analysts say they are still lukewarm on the stock because of some syndicated loan problems and the possible effect a slower economy could have on the company’s earnings.

“This is a great franchise, and there aren’t many in Connecticut,” wrote Joy D. Palmer, a director of research at the San Francisco office of Merrill Lynch & Co. On Thursday she reinitiated coverage of Webster but gave its stock a modest “accumulate” rating.

“Webster is trading at a 10% discount to the Merrill Lynch thrift/community bank index and a 20% discount to the regional bank index,” Ms. Palmer wrote in her report. However, the stock is up 0.5% from a year ago, which compares favorably with the 3% decline in the thrift group in the same period.

The stock got a boost in December and has managed to hold onto its gain, even as others were falling in recent weeks. Analysts say Webster has likely benefited from a investors’ willingness to support financial stocks that had been considered too risky before the Federal Reserve’s interest rate cuts.

Webster’s earnings outlook is solid, and the company has a number of strategic acquisitions under its belt, Ms. Palmer wrote. However, slower economic growth in Connecticut could limit the company’s deposit and loan growth, and last year’s earnings of $2.55 per share, a 21.4% jump from a year earlier, was aided by the sale of the certain securities, she wrote.

The company’s stock earned 64 cents a share in the fourth quarter, more than triple its earnings from a year earlier.

Webster is transforming itself from a traditional thrift structure by adding an investment management business and the diversifying its loan portfolio from residential to syndicated lending.

But such a transformation has also introduced Webster to some new problems in the form of bad corporate credit. Safety Kleen, an industrial waste company to which Webster had some exposure, filed for bankruptcy in June. But according to Ms. Palmer, “This is the only delinquency in their syndicated loan portfolio.”

Heather L. Dilbeck of Ryan, Beck & Co. of Livingston, N.J., said that Webster has hired an experienced team to manage the syndicated loan portfolio. “This is positive for Webster.”

Other analysts commended Webster for the way it has navigated its problems.

Laurie Hunsicker of Friedman Billings Ramsey & Co. in Arlington, Va., said the management did well in disclosing the issue early to investors and analysts, and asset quality is not a major problem for the company.

The percentage of nonperforming assets fell 5 basis points last year, to 0.39% of total assets, according to the company’s report. Ms. Hunsicker has a “buy” rating for its stock.

Among Webster’s deals last year were the acquisition of a 65% stake in Duff & Phelps, a Chicago financial advisory firm, and the insurance agencies Levine in Waterford, Conn., and Folis Wylie & Lane in Hamden. The company said those acquisitions were meant to expand its fee-based revenues, which made up 25.2% of total earnings.

“These acquisitions make it more bank-like, and they have a good record in integrating,” Ms. Palmer said.

But now analysts are advising the company’s management to refrain from further deals, which could hurt the recent recovery of its stock, and concentrate on share buybacks instead to increase the value of the franchise.

But Webster may have to wait for upgrades, at least from some companies. Ms. Dilbeck said the valuation has to come down again before she considers changing her “hold” to a more favorable rating.

On Thursday, Webster’s stock dropped 68.75 cents, or 2.42%, to close at $27.75.

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