Loans and Leases | Loans and Leases Recorded Investment in Loans and Leases The following tables summarize the recorded investment in loans and leases: At September 30, 2015 (In thousands) Residential Consumer Commercial Commercial Real Estate (1) Equipment Financing Total (2) Recorded Investment: Individually evaluated for impairment $ 135,947 $ 49,280 $ 54,759 $ 42,404 $ 102 $ 282,492 Collectively evaluated for impairment 3,891,845 2,609,689 4,098,768 3,823,287 552,748 14,976,337 Recorded investment in loans and leases 4,027,792 2,658,969 4,153,527 3,865,691 552,850 15,258,829 Less: Accrued interest 11,953 8,267 13,548 8,536 — 42,304 Loans and leases $ 4,015,839 $ 2,650,702 $ 4,139,979 $ 3,857,155 $ 552,850 $ 15,216,525 At December 31, 2014 (In thousands) Residential Consumer Commercial Commercial Real Estate (1) Equipment Financing Total (2) Recorded Investment: Individually evaluated for impairment $ 142,435 $ 50,374 $ 36,454 $ 103,045 $ 632 $ 332,940 Collectively evaluated for impairment 3,377,196 2,507,060 3,723,991 3,460,116 537,119 13,605,482 Recorded investment in loans and leases 3,519,631 2,557,434 3,760,445 3,563,161 537,751 13,938,422 Less: Accrued interest 10,456 8,033 11,175 8,733 — 38,397 Loans and leases $ 3,509,175 $ 2,549,401 $ 3,749,270 $ 3,554,428 $ 537,751 $ 13,900,025 (1) Includes certain loans individually evaluated for impairment under the Company's loan policy that were deemed not to be impaired at both September 30, 2015 and December 31, 2014 . (2) Loans and leases include net deferred fees and net premiums and discounts of $17.8 million and $10.6 million at September 30, 2015 and December 31, 2014 , respectively. At September 30, 2015 , the Company had pledged $6.1 billion of eligible loan collateral to support borrowing capacity at the Federal Home Loan Bank of Boston and the Federal Reserve Bank of Boston. Loans and Leases Portfolio Aging The following tables summarize the aging of the recorded investment in loans and leases: At September 30, 2015 (In thousands) 30-59 Days Past Due and Accruing 60-89 Days 90 or More Days Past Due and Accruing Non-accrual Total Past Due and Non-accrual Current Recorded Investment in Loans and Leases Residential $ 12,229 $ 3,181 $ 2,335 $ 57,723 $ 75,468 $ 3,952,324 $ 4,027,792 Consumer: Home equity 11,688 3,821 — 36,415 51,924 2,395,753 2,447,677 Other consumer 978 578 — 582 2,138 209,154 211,292 Commercial: Commercial non-mortgage 3,822 633 — 40,114 44,569 3,390,905 3,435,474 Asset-based — — — — — 718,053 718,053 Commercial real estate: Commercial real estate 798 1,223 — 20,372 22,393 3,549,047 3,571,440 Commercial construction — — — 3,473 3,473 290,778 294,251 Equipment financing 593 146 — 403 1,142 551,708 552,850 Total $ 30,108 $ 9,582 $ 2,335 $ 159,082 $ 201,107 $ 15,057,722 $ 15,258,829 At December 31, 2014 (In thousands) 30-59 Days 60-89 Days Past Due and Accruing 90 or More Days Past Due Non-accrual Total Past Due and Non-accrual Current Recorded Investment in Loans and Leases Residential (1) $ 11,521 $ 5,931 $ 2,039 $ 64,117 $ 83,608 $ 3,436,023 $ 3,519,631 Consumer: Home equity 11,516 5,161 — 40,025 56,702 2,424,584 2,481,286 Other consumer 720 425 — 281 1,426 74,722 76,148 Commercial: Commercial non-mortgage 1,971 156 50 6,449 8,626 3,088,656 3,097,282 Asset-based — — — — — 663,163 663,163 Commercial real estate: Commercial real estate 2,348 397 — 15,038 17,783 3,310,765 3,328,548 Commercial construction — — — 3,659 3,659 230,954 234,613 Equipment financing 551 150 — 578 1,279 536,472 537,751 Total $ 28,627 $ 12,220 $ 2,089 $ 130,147 $ 173,083 $ 13,765,339 $ 13,938,422 (1) U.S. Government guaranteed loans of approximately $2.0 million were reclassified from non-accrual to over 90 days past due and accruing reflective of a policy change effective in the first quarter of 2015 . See Note 1: Summary of Significant Accounting Policies . Interest on non-accrual loans and leases that would have been recorded as additional interest income for the three and nine months ended September 30, 2015 and 2014 , had the loans and leases been current in accordance with their original terms, totaled $2.6 million and $6.3 million and $3.0 million and $7.6 million , respectively. Allowance for Loan and Lease Losses The following tables summarize the allowance for loan and lease losses: At or for the three months ended September 30, 2015 (In thousands) Residential Consumer Commercial Commercial Real Estate Equipment Financing Total Allowance for loan and lease losses: Balance, beginning of period $ 24,463 $ 40,807 $ 66,241 $ 30,768 $ 5,581 $ 167,860 Provision (benefit) charged to expense 1,150 6,864 3,089 1,961 (64 ) 13,000 Charge-offs (1,588 ) (4,831 ) (2,204 ) (1,346 ) — (9,969 ) Recoveries 281 1,004 715 69 32 2,101 Balance, end of period $ 24,306 $ 43,844 $ 67,841 $ 31,452 $ 5,549 $ 172,992 Individually evaluated for impairment $ 10,773 $ 3,540 $ 11,478 $ 4,527 $ 5 $ 30,323 Collectively evaluated for impairment $ 13,533 $ 40,304 $ 56,363 $ 26,925 $ 5,544 $ 142,669 At or for the three months ended September 30, 2014 (In thousands) Residential Consumer Commercial Commercial Real Estate Equipment Financing Total Allowance for loan and lease losses: Balance, beginning of period $ 21,178 $ 35,902 $ 55,074 $ 36,790 $ 5,924 $ 154,868 Provision (benefit) charged to expense 1,883 5,255 1,951 69 342 9,500 Charge-offs (1,870 ) (6,329 ) (2,738 ) (139 ) (491 ) (11,567 ) Recoveries 261 1,947 1,017 120 336 3,681 Balance, end of period $ 21,452 $ 36,775 $ 55,304 $ 36,840 $ 6,111 $ 156,482 Individually evaluated for impairment $ 11,501 $ 4,165 $ 1,717 $ 3,818 $ 29 $ 21,230 Collectively evaluated for impairment $ 9,951 $ 32,610 $ 53,587 $ 33,022 $ 6,082 $ 135,252 At or for the nine months ended September 30, 2015 (In thousands) Residential Consumer Commercial Commercial Real Estate Equipment Financing Total Allowance for loan and lease losses: Balance, beginning of period $ 25,452 $ 43,518 $ 52,114 $ 32,102 $ 6,078 $ 159,264 Provision (benefit) charged to expense 3,100 10,091 18,468 4,617 (776 ) 35,500 Charge-offs (5,004 ) (12,980 ) (5,000 ) (5,590 ) (30 ) (28,604 ) Recoveries 758 3,215 2,259 323 277 6,832 Balance, end of period $ 24,306 $ 43,844 $ 67,841 $ 31,452 $ 5,549 $ 172,992 Individually evaluated for impairment $ 10,773 $ 3,540 $ 11,478 $ 4,527 $ 5 $ 30,323 Collectively evaluated for impairment $ 13,533 $ 40,304 $ 56,363 $ 26,925 $ 5,544 $ 142,669 At or for the nine months ended September 30, 2014 (In thousands) Residential Consumer Commercial Commercial Real Estate Equipment Financing Total Allowance for loan and lease losses: Balance, beginning of period $ 23,027 $ 41,951 $ 51,001 $ 32,408 $ 4,186 $ 152,573 Provision (benefit) charged to expense 2,265 7,063 10,763 6,755 904 27,750 Charge-offs (4,868 ) (16,501 ) (9,571 ) (2,991 ) (511 ) (34,442 ) Recoveries 1,028 4,262 3,111 668 1,532 10,601 Balance, end of period $ 21,452 $ 36,775 $ 55,304 $ 36,840 $ 6,111 $ 156,482 Individually evaluated for impairment $ 11,501 $ 4,165 $ 1,717 $ 3,818 $ 29 $ 21,230 Collectively evaluated for impairment $ 9,951 $ 32,610 $ 53,587 $ 33,022 $ 6,082 $ 135,252 Impaired Loans and Leases The following tables summarize impaired loans and leases: At September 30, 2015 (In thousands) Unpaid Principal Balance Total Recorded Investment Recorded Investment No Allowance Recorded Investment With Allowance Related Valuation Allowance Residential $ 149,553 $ 135,947 $ 23,251 $ 112,696 $ 10,773 Consumer 56,803 49,280 25,954 23,326 3,540 Commercial 59,652 54,759 21,318 33,441 11,478 Commercial real estate: Commercial real estate 38,475 35,754 7,684 28,070 4,526 Commercial construction 7,012 5,985 5,950 35 1 Equipment financing 102 102 — 102 5 Total $ 311,597 $ 281,827 $ 84,157 $ 197,670 $ 30,323 At December 31, 2014 (In thousands) Unpaid Principal Balance Total Recorded Investment Recorded Investment No Allowance Recorded Investment With Allowance Related Valuation Allowance Residential $ 157,152 $ 142,435 $ 24,388 $ 118,047 $ 12,094 Consumer 60,424 50,374 26,464 23,910 4,237 Commercial 41,019 36,454 16,064 20,390 2,710 Commercial real estate: Commercial real estate 99,687 96,160 40,575 55,585 6,222 Commercial construction 7,218 6,177 5,956 221 10 Equipment financing 629 632 — 632 28 Total $ 366,129 $ 332,232 $ 113,447 $ 218,785 $ 25,301 The following table summarizes the average recorded investment and interest income recognized for impaired loans and leases: Three months ended September 30, Nine months ended September 30, 2015 2014 2015 2014 (In thousands) Average Recorded Investment Accrued Interest Income Cash Basis Interest Income Average Accrued Cash Basis Interest Income Average Recorded Investment Accrued Cash Basis Interest Income Average Recorded Investment Accrued Cash Basis Interest Income Residential $ 137,590 $ 1,114 $ 290 $ 142,757 $ 1,144 $ 305 $ 139,191 $ 3,322 $ 847 $ 143,613 $ 3,482 $ 912 Consumer 49,260 371 271 51,492 372 307 49,827 1,094 827 51,841 1,100 930 Commercial 54,894 262 — 42,698 617 — 45,607 936 — 46,764 1,787 — Commercial real estate: Commercial real estate 44,391 137 — 89,931 933 — 65,957 1,024 — 89,593 2,585 — Commercial construction 6,070 33 — 8,231 75 — 6,081 99 — 9,428 216 — Equipment financing 111 2 — 963 11 — 367 15 — 985 17 — Total $ 292,316 $ 1,919 $ 561 $ 336,072 $ 3,152 $ 612 $ 307,030 $ 6,490 $ 1,674 $ 342,224 $ 9,187 $ 1,842 Credit Quality Indicators. To measure credit risk for the commercial, commercial real estate, and equipment financing portfolios, the Company employs a dual grade credit risk grading system for estimating the probability of borrower default and the loss given default. The credit risk grade system assigns a rating to each borrower and to the facility, which together form a Composite Credit Risk Profile (“CCRP”). The credit risk grade system categorizes borrowers by common financial profiles that measure the credit strength of borrowers and facilities by common structural characteristics. The CCRP has 10 grades, with each grade corresponding to a progressively greater risk of default. Grades 1 through 6 are considered pass ratings, and 7 through 10 are criticized as defined by the regulatory agencies. Risk ratings, assigned to differentiate risk within the portfolio, are reviewed on an ongoing basis and revised to reflect changes in the borrowers’ current financial positions and outlooks, risk profiles, and the related collateral and structural positions. Loan officers review updated financial information at least annually for all pass rated loans to assess the accuracy of the risk grade. All criticized loans undergo frequent review and enhanced monitoring of the underlying borrower. A “Special Mention” (7) credit has the potential weakness that, if left uncorrected, may result in deterioration of the repayment prospects for the asset. “Substandard” (8) assets have a well-defined weakness that jeopardizes the full repayment of the debt. An asset rated “Doubtful” (9) has all of the same weaknesses as a substandard credit with the added characteristic that the weakness makes collection or liquidation in full, given current facts, conditions, and values, improbable. Assets classified as “Loss” (10) in accordance with regulatory guidelines are considered uncollectible and charged off. The recorded investment in commercial loans, commercial real estate loans, and equipment financing leases segregated by risk rating exposure is as follows: Commercial Commercial Real Estate Equipment Financing (In thousands) At September 30, At December 31, At September 30, At December 31, At September 30, At December 31, (1) - (6) Pass $ 3,856,346 $ 3,555,559 $ 3,730,394 $ 3,416,214 $ 538,548 $ 516,115 (7) Special Mention 108,256 89,064 57,982 33,580 1,943 4,364 (8) Substandard 185,775 115,653 76,943 112,874 12,359 17,272 (9) Doubtful 3,150 169 372 493 — — (10) Loss — — — — — — Total $ 4,153,527 $ 3,760,445 $ 3,865,691 $ 3,563,161 $ 552,850 $ 537,751 For residential and consumer loans, the Company considers factors such as updated FICO scores, employment status, home prices, loan to value, geography, loans discharged in bankruptcy, and the status of first lien position loans on second lien position loans as credit quality indicators. On an ongoing basis for portfolio monitoring purposes, the Company estimates the current value of property secured as collateral for both home equity and residential first mortgage lending products. The estimate is based on home price indices compiled by the S&P/Case-Shiller Home Price Indices. The Case-Shiller data indicates trends for Metropolitan Statistical Areas. The trend data is applied to the loan portfolios taking into account the age of the most recent valuation and geographic area. Troubled Debt Restructurings ("TDRs") The following table summarizes information for TDRs: (Dollars in thousands) At September 30, 2015 At December 31, 2014 Recorded investment of TDRs: Accrual status $ 156,999 $ 243,231 Non-accrual status 99,177 76,939 Total recorded investment of TDRs $ 256,176 $ 320,170 Accruing TDRs performing under modified terms more than one year 58.9 % 67.6 % Specific reserves for TDRs included in the balance of allowance for loan and lease losses $ 20,991 $ 23,785 Additional funds committed to borrowers in TDR status 1,104 552 In the three and nine months ended September 30, 2015 and 2014 , Webster charged off $1.7 million and $7.6 million and $2.1 million and $10.3 million , respectively, for the portion of TDRs deemed to be uncollectible. TDRs may be modified by means of extended maturity, below market adjusted interest rates, a combination of rate and maturity, or other means, including covenant modifications, forbearance, loans discharged under Chapter 7 bankruptcy, or other concessions. The following table provides information on the type of concession for loans and leases modified as TDRs: Three months ended September 30, Nine months ended September 30, 2015 2014 2015 2014 Number of Loans and Leases Post- Modification Recorded Investment (1) Number of Loans and Leases Post- Modification Recorded Investment (1) Number of Loans and Leases Post- Modification Recorded Investment (1) Number of Loans and Leases Post- Modification Recorded Investment (1) (Dollars in thousands) Residential: Extended Maturity 4 $ 998 10 $ 1,383 19 $ 3,301 24 $ 3,191 Adjusted Interest Rate 1 160 1 103 2 464 3 448 Maturity/Rate Combined 4 1,006 2 275 18 3,138 16 3,522 Other 9 1,594 32 7,600 23 3,387 47 10,433 Consumer: Extended Maturity 4 296 4 143 9 935 18 911 Adjusted Interest Rate — — — — — — 1 51 Maturity/Rate Combined — — 1 110 8 444 6 412 Other 20 1,357 34 1,750 50 3,087 73 3,717 Commercial: Extended Maturity — — — — 3 256 4 356 Adjusted Interest Rate — — — — 1 24 1 25 Maturity/Rate Combined 1 74 5 342 5 371 18 974 Other 5 1,772 2 101 9 8,062 5 6,647 Commercial real estate: Extended Maturity 1 315 — — 1 315 — — Maturity/Rate Combined — — — — 1 43 — — Other 1 405 — — 1 405 — — Equipment Financing Extended Maturity — — 1 492 — — 1 492 Total TDRs 50 $ 7,977 92 $ 12,299 150 $ 24,232 217 $ 31,179 (1) Post-modification balances approximate pre-modification balances. The aggregate amount of charge-offs as a result of the restructurings was not significant. The Company's loan and lease portfolio includes loans that have been restructured into an A-Note/B Note structure as a result of evaluating the cash flow of the borrowers to support repayment. Webster immediately charged off the balances of the B-Notes. The restructuring agreements specify a market interest rate equal to that which would be provided to a borrower with similar credit at the time of restructuring. The following table provides information on loans and leases modified as TDRs within the previous 12 months and for which there was a payment default during the periods presented: Three months ended September 30, Nine months ended September 30, 2015 2014 2015 2014 (Dollars in thousands) Number of Loans and Leases Recorded Investment Number of Loans and Leases Recorded Investment Number of Loans and Leases Recorded Investment Number of Loans and Leases Recorded Investment Residential — $ — 3 $ 196 — $ — 3 $ 196 Consumer 1 3 2 22 2 326 4 48 Commercial 1 9 — — 1 9 — — Total 2 $ 12 5 $ 218 3 $ 335 7 $ 244 The recorded investment of TDRs in commercial, commercial real estate, and equipment financing segregated by risk rating exposure is as follows: (In thousands) At September 30, 2015 At December 31, 2014 (1) - (6) Pass $ 13,305 $ 40,943 (7) Special Mention 3,056 8,304 (8) Substandard 51,173 77,771 (9) Doubtful 3,416 343 (10) Loss — — Total $ 70,950 $ 127,361 |