Loans and Leases | Loans and Leases The following table summarizes loans and leases: (In thousands) At June 30, At December 31, 2015 Residential $ 4,156,665 $ 4,061,001 Consumer 2,728,452 2,702,560 Commercial 4,577,482 4,315,999 Commercial Real Estate 4,191,087 3,991,649 Equipment Financing 618,343 600,526 Loans and leases (1) (2) $ 16,272,029 $ 15,671,735 (1) Loans and leases include net deferred fees and net premiums and discounts of $20.0 million and $18.0 million at June 30, 2016 and December 31, 2015 , respectively. (2) At June 30, 2016 , the Company had pledged $6.1 billion of eligible residential and consumer loans as collateral to support borrowing capacity at the FHLB Boston and the FRB of Boston. Loans and Leases Portfolio Aging The following tables summarize the aging of loans and leases: At June 30, 2016 (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 Total Loans Residential $ 7,497 $ 2,145 $ — $ 52,528 $ 62,170 $ 4,094,495 $ 4,156,665 Consumer: Home equity 7,893 3,343 — 36,230 47,466 2,380,719 2,428,185 Other consumer 1,539 1,103 — 1,190 3,832 296,435 300,267 Commercial: Commercial non-mortgage 1,813 242 5,739 28,662 36,456 3,761,980 3,798,436 Asset-based — — — — — 779,046 779,046 Commercial real estate: Commercial real estate 2,156 877 — 10,489 13,522 3,892,910 3,906,432 Commercial construction — — — 3,450 3,450 281,205 284,655 Equipment financing 239 166 — 480 885 617,458 618,343 Total $ 21,137 $ 7,876 $ 5,739 $ 133,029 $ 167,781 $ 16,104,248 $ 16,272,029 At December 31, 2015 (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 Total Loans Residential $ 10,365 $ 4,703 $ 2,029 $ 54,201 $ 71,298 $ 3,989,703 $ 4,061,001 Consumer: Home equity 9,061 4,242 — 37,337 50,640 2,402,758 2,453,398 Other consumer 1,390 615 — 560 2,565 246,597 249,162 Commercial: Commercial non-mortgage 768 3,288 22 27,037 31,115 3,531,669 3,562,784 Asset-based — — — — — 753,215 753,215 Commercial real estate: Commercial real estate 1,624 625 — 16,767 19,016 3,673,408 3,692,424 Commercial construction — — — 3,461 3,461 295,764 299,225 Equipment financing 543 59 — 706 1,308 599,218 600,526 Total $ 23,751 $ 13,532 $ 2,051 $ 140,069 $ 179,403 $ 15,492,332 $ 15,671,735 Interest on non-accrual loans and leases that would have been recorded as additional interest income for the three and six months ended June 30, 2016 and 2015 , had the loans and leases been current in accordance with their original terms, totaled $3.0 million $5.4 million , $2.8 million and $3.0 million , respectively. Allowance for Loan and Lease Losses The following tables summarize the ALLL: At or for the three months ended June 30, 2016 Residential Consumer Commercial Commercial Real Estate Equipment Financing Total Allowance for loan and lease losses: Balance, beginning of period $ 27,330 $ 41,636 $ 66,471 $ 33,318 $ 5,446 $ 174,201 Provision (benefit) charged to expense (2,412 ) 4,682 10,560 1,087 83 14,000 Charge-offs (638 ) (4,556 ) (3,525 ) (995 ) (70 ) (9,784 ) Recoveries 133 1,194 316 212 156 2,011 Balance, end of period $ 24,413 $ 42,956 $ 73,822 $ 33,622 $ 5,615 $ 180,428 At or for the three months ended June 30, 2015 (In thousands) Residential Consumer Commercial Commercial Real Estate Equipment Financing Total Allowance for loan and lease losses: Balance, beginning of period $ 27,749 $ 42,616 $ 55,628 $ 30,549 $ 5,428 $ 161,970 Provision (benefit) charged to expense (2,194 ) 995 12,625 1,258 66 12,750 Charge-offs (1,461 ) (3,853 ) (2,541 ) (1,091 ) (15 ) (8,961 ) Recoveries 369 1,049 529 52 102 2,101 Balance, end of period $ 24,463 $ 40,807 $ 66,241 $ 30,768 $ 5,581 $ 167,860 At or for the six months ended June 30, 2016 (In thousands) Residential Consumer Commercial Commercial Real Estate Equipment Financing Total Allowance for loan and lease losses: Balance, beginning of period $ 25,876 $ 42,052 $ 66,686 $ 34,889 $ 5,487 $ 174,990 Provision (benefit) charged to expense (85 ) 7,473 21,096 968 148 29,600 Charge-offs (2,232 ) (8,977 ) (14,733 ) (2,521 ) (221 ) (28,684 ) Recoveries 854 2,408 773 286 201 4,522 Balance, end of period $ 24,413 $ 42,956 $ 73,822 $ 33,622 $ 5,615 $ 180,428 Individually evaluated for impairment $ 10,018 $ 3,027 $ 6,422 $ 1,649 $ 17 $ 21,133 Collectively evaluated for impairment $ 14,395 $ 39,929 $ 67,400 $ 31,973 $ 5,598 $ 159,295 Loan and lease balances: Individually evaluated for impairment $ 127,965 $ 47,576 $ 59,550 $ 32,208 $ 421 $ 267,720 Collectively evaluated for impairment 4,028,700 2,680,876 4,517,932 4,158,879 617,922 16,004,309 Loans and leases $ 4,156,665 $ 2,728,452 $ 4,577,482 $ 4,191,087 $ 618,343 $ 16,272,029 At or for the six months ended June 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 1,950 3,227 15,379 2,656 (712 ) 22,500 Charge-offs (3,416 ) (8,149 ) (2,796 ) (4,244 ) (30 ) (18,635 ) Recoveries 477 2,211 1,544 254 245 4,731 Balance, end of period $ 24,463 $ 40,807 $ 66,241 $ 30,768 $ 5,581 $ 167,860 Individually evaluated for impairment $ 10,592 $ 3,564 $ 11,703 $ 4,824 $ 6 $ 30,689 Collectively evaluated for impairment $ 13,871 $ 37,243 $ 54,538 $ 25,944 $ 5,575 $ 137,171 Loan and lease balances: Individually evaluated for impairment $ 138,810 $ 49,119 $ 54,811 $ 59,063 $ 120 $ 301,923 Collectively evaluated for impairment 3,694,680 2,557,320 3,967,094 3,711,189 545,320 14,475,603 Loans and leases $ 3,833,490 $ 2,606,439 $ 4,021,905 $ 3,770,252 $ 545,440 $ 14,777,526 Impaired Loans and Leases The following tables summarize impaired loans and leases: At June 30, 2016 (In thousands) Unpaid Principal Balance Total Recorded Investment No Allowance Recorded Investment With Allowance Related Valuation Allowance Residential $ 140,099 $ 127,965 $ 22,310 $ 105,655 $ 10,018 Consumer 53,265 47,576 24,409 23,167 3,027 Commercial 64,798 59,550 22,059 37,491 6,422 Commercial real estate: Commercial real estate 28,695 27,816 9,181 18,635 1,648 Commercial construction 5,450 4,392 4,380 12 1 Equipment financing 636 421 — 421 17 Total $ 292,943 $ 267,720 $ 82,339 $ 185,381 $ 21,133 At December 31, 2015 (In thousands) Unpaid Principal Balance Total Recorded Investment No Allowance Recorded Investment With Allowance Related Valuation Allowance Residential $ 148,144 $ 134,448 $ 23,024 $ 111,424 $ 10,364 Consumer 56,680 48,425 25,130 23,295 3,477 Commercial 67,116 56,581 31,600 24,981 5,197 Commercial real estate: Commercial real estate 36,980 33,333 9,204 24,129 3,160 Commercial construction 7,010 5,962 5,939 23 3 Equipment financing 612 422 328 94 3 Total $ 316,542 $ 279,171 $ 95,225 $ 183,946 $ 22,204 The following table summarizes the average recorded investment and interest income recognized for impaired loans and leases: Three months ended June 30, Six months ended June 30, 2016 2015 2016 2015 (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 $ 129,049 $ 1,124 $ 297 $ 140,024 $ 1,149 $ 301 $ 131,207 $ 2,239 $ 614 $ 140,834 $ 2,208 $ 557 Consumer 47,836 344 257 50,037 362 274 48,001 693 516 49,807 723 556 Commercial 62,199 475 — 52,324 247 — 58,066 947 — 45,741 674 — Commercial real estate: Commercial real estate 28,737 149 — 60,071 357 — 30,575 297 — 74,594 887 — Commercial construction 5,177 34 — 6,160 33 — 5,177 69 — 6,166 66 — Equipment financing 717 1 — 376 2 — 422 2 — 376 13 — Total $ 273,715 $ 2,127 $ 554 $ 308,992 $ 2,150 $ 575 $ 273,448 $ 4,247 $ 1,130 $ 317,518 $ 4,571 $ 1,113 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 CCRP. The credit risk grade system categorizes borrowers by common financial characteristics 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 considered 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 on at least an annual basis for all pass rated loans to assess the accuracy of the risk grade. Criticized loans undergo more frequent reviews and enhanced monitoring. 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 following table summarizes commercial, commercial real estate and equipment financing loans and leases segregated by risk rating exposure: Commercial Commercial Real Estate Equipment Financing (In thousands) At June 30, At December 31, At June 30, At December 31, At June 30, At December 31, (1) - (6) Pass $ 4,256,800 $ 4,023,255 $ 4,036,504 $ 3,857,019 $ 600,389 $ 586,445 (7) Special Mention 120,395 70,904 62,502 55,030 30 1,628 (8) Substandard 199,404 220,389 91,878 79,289 17,924 12,453 (9) Doubtful 883 1,451 203 311 — — Total $ 4,577,482 $ 4,315,999 $ 4,191,087 $ 3,991,649 $ 618,343 $ 600,526 For residential and consumer loans, the Company considers factors such as past due status, updated FICO scores, employment status, collateral, 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 trend data is applied to the loan portfolios taking into account the age of the most recent valuation and geographic area. Troubled Debt Restructurings The following table summarizes information for TDRs: (Dollars in thousands) At June 30, 2016 At December 31, 2015 Accrual status $ 168,030 $ 171,784 Non-accrual status 79,468 100,906 Total recorded investment of TDRs (1) $ 247,498 $ 272,690 Accruing TDRs performing under modified terms more than one year 56.5 % 55.0 % Specific reserves for TDRs included in the balance of ALLL $ 18,008 $ 21,405 Additional funds committed to borrowers in TDR status 2,307 1,133 (1) Total recorded investment of TDRs excludes $1.0 million and $1.1 million of accrued interest receivable at June 30, 2016 and December 31, 2015 , respectively. In the three and six months ended June 30, 2016 and 2015 , Webster charged off $3.3 million , $14.9 million , $2.0 million and $5.9 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 June 30, Six months ended June 30, 2016 2015 2016 2015 Number of Post- (1) Number of Post- (1) Number of Post- (1) Number of Post- (1) (Dollars in thousands) Residential: Extended Maturity 2 $ 338 6 $ 958 7 $ 1,002 15 $ 2,303 Adjusted Interest Rate — — 1 304 1 236 1 304 Maturity/Rate Combined 7 895 4 464 7 895 14 2,132 Other (2) 8 1,476 11 1,257 15 2,891 14 1,793 Consumer: Extended Maturity 6 193 1 140 7 292 5 639 Adjusted Interest Rate — — — — — — — — Maturity/Rate Combined 4 359 — — 8 659 8 444 Other (2) 22 839 9 398 29 1,177 30 1,730 Commercial: Extended Maturity — — 2 223 9 14,649 3 256 Adjusted Interest Rate — — 1 24 — — 1 24 Maturity/Rate Combined 1 644 2 165 2 648 4 297 Other (2) 3 64 4 6,290 7 374 4 6,290 Commercial real estate: Extended Maturity — — — — — — — — Maturity/Rate Combined — — 1 43 1 444 1 43 Other (2) — — — — 1 509 — — Equipment Financing Extended Maturity — — — — 1 4 — — Total TDRs 53 $ 4,808 42 $ 10,266 95 $ 23,780 100 $ 16,255 (1) Post-modification balances approximate pre-modification balances. The aggregate amount of charge-offs as a result of the restructurings was not significant. (2) Other includes covenant modifications, forbearance, loans discharged under Chapter 7 bankruptcy, or other concessions. 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 June 30, Six months ended June 30, 2016 2015 2016 2015 (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 1 $ 54 — $ — 1 $ 54 — $ — Consumer 1 18 1 327 1 18 2 356 Commercial 1 1,363 — — 1 1,363 — — Commercial real estate — — 1 10,889 — — 1 10,889 Total 3 $ 1,435 2 $ 11,216 3 $ 1,435 3 $ 11,245 The recorded investment of TDRs in commercial, commercial real estate, and equipment financing segregated by risk rating exposure is as follows: (In thousands) At June 30, 2016 At December 31, 2015 (1) - (6) Pass $ 11,813 $ 12,970 (7) Special Mention 2,927 2,999 (8) Substandard 57,043 72,132 (9) Doubtful 175 1,717 Total $ 71,958 $ 89,818 |