Loans and Leases | Loans and Leases The following table summarizes loans and leases: (In thousands) At June 30, At December 31, 2016 Residential $ 4,388,308 $ 4,254,682 Consumer 2,599,318 2,684,500 Commercial 5,144,171 4,940,931 Commercial Real Estate 4,556,208 4,510,846 Equipment Financing 585,673 635,629 Loans and leases (1) (2) $ 17,273,678 $ 17,026,588 (1) Loans and leases include net deferred fees and net premiums/discounts of $18.8 million and $17.3 million at June 30, 2017 and December 31, 2016 , respectively. (2) At June 30, 2017 , the Company had pledged $6.2 billion of eligible residential, consumer and commercial loans as collateral to support borrowing capacity at the FHLB Boston and the FRB of Boston. Loans and Leases Aging The following tables summarize the aging of loans and leases: At June 30, 2017 (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 $ 6,157 $ 3,697 $ — $ 46,090 $ 55,944 $ 4,332,364 $ 4,388,308 Consumer: Home equity 7,961 3,307 — 38,974 50,242 2,293,538 2,343,780 Other consumer 1,788 1,337 — 1,272 4,397 251,141 255,538 Commercial: Commercial non-mortgage 1,269 648 1,185 68,181 71,283 4,211,685 4,282,968 Asset-based — — — — — 861,203 861,203 Commercial real estate: Commercial real estate 832 184 — 10,637 11,653 4,182,700 4,194,353 Commercial construction — — — 543 543 361,312 361,855 Equipment financing 883 — — 547 1,430 584,243 585,673 Total $ 18,890 $ 9,173 $ 1,185 $ 166,244 $ 195,492 $ 17,078,186 $ 17,273,678 At December 31, 2016 (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 $ 8,631 $ 2,609 $ — $ 47,279 $ 58,519 $ 4,196,163 $ 4,254,682 Consumer: Home equity 8,831 5,782 — 35,926 50,539 2,359,354 2,409,893 Other consumer 2,233 1,485 — 1,663 5,381 269,226 274,607 Commercial: Commercial non-mortgage 1,382 577 749 38,190 40,898 4,094,727 4,135,625 Asset-based — — — — — 805,306 805,306 Commercial real estate: Commercial real estate 6,357 1,816 — 9,871 18,044 4,117,742 4,135,786 Commercial construction — — — 662 662 374,398 375,060 Equipment financing 903 693 — 225 1,821 633,808 635,629 Total $ 28,337 $ 12,962 $ 749 $ 133,816 $ 175,864 $ 16,850,724 $ 17,026,588 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, 2017 and 2016 , had the loans and leases been current in accordance with their original terms, totaled $2.6 million and $4.5 million , and $3.0 million and $5.4 million , respectively. Allowance for Loan and Lease Losses The following tables summarize the activity in, as well as the loan and lease balances that were evaluated for, the ALLL: At or for the three months ended June 30, 2017 Residential Consumer Commercial Commercial Real Estate Equipment Financing Total ALLL: Balance, beginning of period $ 20,264 $ 45,408 $ 76,354 $ 50,727 $ 6,354 $ 199,107 (Benefit) provision charged to expense (1,621 ) 1,562 5,489 1,771 49 7,250 Charge-offs (623 ) (5,602 ) (2,196 ) (100 ) (119 ) (8,640 ) Recoveries 407 1,120 317 4 13 1,861 Balance, end of period $ 18,427 $ 42,488 $ 79,964 $ 52,402 $ 6,297 $ 199,578 At or for the three months ended June 30, 2016 (In thousands) Residential Consumer Commercial Commercial Real Estate Equipment Financing Total ALLL: Balance, beginning of period $ 27,330 $ 41,636 $ 66,471 $ 33,318 $ 5,446 $ 174,201 (Benefit) provision 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 six months ended June 30, 2017 (In thousands) Residential Consumer Commercial Commercial Real Estate Equipment Financing Total ALLL: Balance, beginning of period $ 23,226 $ 45,233 $ 71,905 $ 47,477 $ 6,479 $ 194,320 (Benefit) provision charged to expense (4,088 ) 6,888 9,739 5,116 95 17,750 Charge-offs (1,355 ) (12,076 ) (2,319 ) (202 ) (304 ) (16,256 ) Recoveries 644 2,443 639 11 27 3,764 Balance, end of period $ 18,427 $ 42,488 $ 79,964 $ 52,402 $ 6,297 $ 199,578 Individually evaluated for impairment $ 5,105 $ 1,829 $ 10,951 $ 324 $ 27 $ 18,236 Collectively evaluated for impairment $ 13,322 $ 40,659 $ 69,013 $ 52,078 $ 6,270 $ 181,342 Loan and lease balances: Individually evaluated for impairment $ 117,820 $ 47,310 $ 83,206 $ 18,677 $ 6,332 $ 273,345 Collectively evaluated for impairment 4,270,488 2,552,008 5,060,965 4,537,531 579,341 17,000,333 Loans and leases $ 4,388,308 $ 2,599,318 $ 5,144,171 $ 4,556,208 $ 585,673 $ 17,273,678 At or for the six months ended June 30, 2016 (In thousands) Residential Consumer Commercial Commercial Real Estate Equipment Financing Total ALLL: Balance, beginning of period $ 25,876 $ 42,052 $ 66,686 $ 34,889 $ 5,487 $ 174,990 (Benefit) provision 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 Impaired Loans and Leases The following tables summarize impaired loans and leases: At June 30, 2017 (In thousands) Unpaid Principal Balance Total Recorded Investment No Allowance Recorded Investment With Allowance Related Valuation Allowance Residential $ 129,421 $ 117,820 $ 27,130 $ 90,690 $ 5,105 Consumer 52,666 47,310 22,923 24,387 1,829 Commercial 90,351 83,206 25,250 57,956 10,951 Commercial real estate: Commercial real estate 19,273 18,135 13,086 5,049 239 Commercial construction 645 542 — 542 85 Equipment financing 6,332 6,332 5,736 596 27 Total $ 298,688 $ 273,345 $ 94,125 $ 179,220 $ 18,236 At December 31, 2016 (In thousands) Unpaid Principal Balance Total Recorded Investment No Allowance Recorded Investment With Allowance Related Valuation Allowance Residential $ 131,468 $ 119,424 $ 21,068 $ 98,356 $ 8,090 Consumer 52,432 45,719 22,746 22,973 2,903 Commercial 57,732 53,037 26,006 27,031 7,422 Commercial real estate: Commercial real estate 24,146 23,568 19,591 3,977 169 Commercial construction 1,188 1,187 1,187 — — Equipment financing 6,398 6,420 6,197 223 9 Total $ 273,364 $ 249,355 $ 96,795 $ 152,560 $ 18,593 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, 2017 2016 2017 2016 (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 $ 119,398 $ 1,036 $ 286 $ 129,049 $ 1,124 $ 297 $ 118,622 $ 2,106 $ 701 $ 131,207 $ 2,239 $ 614 Consumer 47,296 335 249 47,836 344 257 46,514 657 562 48,001 693 516 Commercial 85,006 233 — 62,199 475 — 68,122 455 — 58,066 947 — Commercial real estate: Commercial real estate 20,454 98 — 28,737 149 — 20,851 233 — 30,575 297 — Commercial construction 862 — — 5,177 34 — 865 12 — 5,177 69 — Equipment financing 6,240 67 — 717 1 — 6,376 138 — 422 2 — Total $ 279,256 $ 1,769 $ 535 $ 273,715 $ 2,127 $ 554 $ 261,350 $ 3,601 $ 1,263 $ 273,448 $ 4,247 $ 1,130 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. 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 Composite Credit Risk Profile has ten grades, with each grade corresponding to a progressively greater risk of default. Grades (1) - (6) are considered pass ratings, and (7) - (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 a borrower's current financial position and outlook, risk profile, and the related collateral and structural position. 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 (7) "Special Mention" credit has the potential weakness that, if left uncorrected, may result in deterioration of the repayment prospects for the asset. An (8) "Substandard" asset has a well defined weakness that jeopardizes the full repayment of the debt. An asset rated (9) "Doubtful" 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 (10) "Loss" 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 $ 4,828,252 $ 4,655,007 $ 4,358,273 $ 4,357,458 $ 567,168 $ 618,084 (7) Special Mention 86,109 56,240 92,245 69,023 3,802 1,324 (8) Substandard 207,831 226,603 105,690 84,365 14,703 16,221 (9) Doubtful 21,979 3,081 — — — — Total $ 5,144,171 $ 4,940,931 $ 4,556,208 $ 4,510,846 $ 585,673 $ 635,629 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, At December 31, 2016 Accrual status $ 136,047 $ 147,809 Non-accrual status 87,052 75,719 Total recorded investment of TDRs $ 223,099 $ 223,528 Specific reserves for TDRs included in the balance of ALLL $ 12,101 $ 14,583 Additional funds committed to borrowers in TDR status 4,819 459 For the three and six months ended June 30, 2017 , and 2016 , Webster charged off $0.6 million and $2.6 million , and $3.3 million and $14.9 million , respectively, for the portion of TDRs deemed to be uncollectible. 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, 2017 2016 2017 2016 Number of Post- (1) Number of Post- (1) Number of Post- (1) Number of Post- (1) (Dollars in thousands) Residential: Extended Maturity 4 $ 420 2 $ 338 9 $ 1,390 7 $ 1,002 Adjusted Interest Rate 2 335 — — 2 335 1 236 Maturity/Rate Combined 2 354 7 895 5 846 7 895 Other (2) 7 1,176 8 1,476 26 4,114 15 2,891 Consumer: Extended Maturity 4 625 6 193 6 664 7 292 Maturity/Rate Combined 4 830 4 359 11 2,813 8 659 Other (2) 10 701 22 839 43 2,894 29 1,177 Commercial: Extended Maturity 6 778 — — 8 813 9 14,649 Maturity/Rate Combined 5 8,854 1 644 5 8,854 2 648 Other (2) — — 3 64 1 4 7 374 Commercial real estate: Maturity/Rate Combined — — — — — — 1 444 Other (2) — — — — — — 1 509 Equipment Financing Extended Maturity — — — — — — 1 4 Total TDRs 44 $ 14,073 53 $ 4,808 116 $ 22,727 95 $ 23,780 (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, 2017 2016 2017 2016 (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 18 Commercial 1 23 1 1,363 1 23 1 1,363 Total 1 $ 23 3 $ 1,435 1 $ 23 3 $ 1,435 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, 2017 At December 31, 2016 (1) - (6) Pass $ 8,241 $ 10,210 (7) Special Mention 367 7 (8) Substandard 46,705 45,509 (9) Doubtful 2,656 2,738 Total $ 57,969 $ 58,464 |