Loans and Leases | Loans and Leases The following table summarizes loans and leases: (In thousands) At September 30, At December 31, 2017 Residential $ 4,415,063 $ 4,490,878 Consumer 2,441,181 2,590,225 Commercial 6,174,396 5,368,694 Commercial Real Estate 4,771,325 4,523,828 Equipment Financing 519,054 550,233 Loans and leases (1) (2) $ 18,321,019 $ 17,523,858 (1) Loans and leases include net deferred fees and net premiums/discounts of $13.6 million and $20.6 million at September 30, 2018 and December 31, 2017 , respectively. (2) At September 30, 2018 the Company had pledged $7.1 billion of eligible residential, consumer, and commercial loans as collateral to support borrowing capacity at the Federal Home Loan Bank (FHLB) of Boston and the Federal Reserve Bank (FRB) of Boston. Loans and Leases Aging The following tables summarize the aging of loans and leases: At September 30, 2018 (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 $ 9,023 $ 5,510 $ — $ 49,469 $ 64,002 $ 4,351,061 $ 4,415,063 Consumer: Home equity 9,519 3,442 — 35,174 48,135 2,165,340 2,213,475 Other consumer 1,819 898 — 1,490 4,207 223,499 227,706 Commercial: Commercial non-mortgage 659 543 147 55,040 56,389 5,148,962 5,205,351 Asset-based — — — 1,029 1,029 968,016 969,045 Commercial real estate: Commercial real estate 2,715 35 — 7,254 10,004 4,564,320 4,574,324 Commercial construction — — — — — 197,001 197,001 Equipment financing 1,371 3,617 — 3,339 8,327 510,727 519,054 Total $ 25,106 $ 14,045 $ 147 $ 152,795 $ 192,093 $ 18,128,926 $ 18,321,019 At December 31, 2017 (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 $ 8,643 $ 5,146 $ — $ 44,481 $ 58,270 $ 4,432,608 $ 4,490,878 Consumer: Home equity 12,668 5,770 — 35,645 54,083 2,298,185 2,352,268 Other consumer 2,556 1,444 — 1,707 5,707 232,250 237,957 Commercial: Commercial non-mortgage 5,212 603 644 39,214 45,673 4,488,242 4,533,915 Asset-based — — — 589 589 834,190 834,779 Commercial real estate: Commercial real estate 478 77 248 4,484 5,287 4,238,987 4,244,274 Commercial construction — — — — — 279,554 279,554 Equipment financing 1,732 626 — 393 2,751 547,482 550,233 Total $ 31,289 $ 13,666 $ 892 $ 126,513 $ 172,360 $ 17,351,498 $ 17,523,858 Interest on non-accrual loans and leases that would have been recorded as additional interest income had the loans and leases been current in accordance with the original terms totaled $4.3 million and $2.8 million for the three months ended September 30, 2018 and 2017 , respectively, and $7.9 million and $6.4 million for the nine months ended September 30, 2018 and 2017 , 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 allowance for loan and lease losses (ALLL): At or for the three months ended September 30, 2018 Residential Consumer Commercial Commercial Real Estate Equipment Financing Total ALLL: Balance, beginning of period $ 19,007 $ 31,759 $ 95,340 $ 55,833 $ 5,383 $ 207,322 Provision (benefit) charged to expense 407 474 5,686 4,146 (213 ) 10,500 Charge-offs (874 ) (4,863 ) (740 ) (1,922 ) (136 ) (8,535 ) Recoveries 133 1,827 431 143 11 2,545 Balance, end of period $ 18,673 $ 29,197 $ 100,717 $ 58,200 $ 5,045 $ 211,832 At or for the three months ended September 30, 2017 (In thousands) Residential Consumer Commercial Commercial Real Estate Equipment Financing Total ALLL: Balance, beginning of period $ 18,427 $ 42,488 $ 79,964 $ 52,402 $ 6,297 $ 199,578 (Benefit) provision charged to expense (348 ) (41 ) 12,166 (2,129 ) 502 10,150 Charge-offs (585 ) (6,197 ) (3,002 ) (749 ) (121 ) (10,654 ) Recoveries 280 1,894 466 10 79 2,729 Balance, end of period $ 17,774 $ 38,144 $ 89,594 $ 49,534 $ 6,757 $ 201,803 At or for the nine months ended September 30, 2018 (In thousands) Residential Consumer Commercial Commercial Real Estate Equipment Financing Total ALLL: Balance, beginning of period $ 19,058 $ 36,190 $ 89,533 $ 49,407 $ 5,806 $ 199,994 Provision (benefit) charged to expense 1,316 2,967 17,596 10,678 (557 ) 32,000 Charge-offs (2,545 ) (14,844 ) (7,869 ) (2,039 ) (246 ) (27,543 ) Recoveries 844 4,884 1,457 154 42 7,381 Balance, end of period $ 18,673 $ 29,197 $ 100,717 $ 58,200 $ 5,045 $ 211,832 Individually evaluated for impairment $ 4,319 $ 1,428 $ 10,491 $ 1,544 $ 15 $ 17,797 Collectively evaluated for impairment $ 14,354 $ 27,769 $ 90,226 $ 56,656 $ 5,030 $ 194,035 Loan and lease balances: Individually evaluated for impairment $ 105,600 $ 39,808 $ 104,353 $ 9,767 $ 6,489 $ 266,017 Collectively evaluated for impairment 4,309,463 2,401,373 6,070,043 4,761,558 512,565 18,055,002 Loans and leases $ 4,415,063 $ 2,441,181 $ 6,174,396 $ 4,771,325 $ 519,054 $ 18,321,019 At or for the nine months ended September 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 (4,436 ) 6,847 21,905 2,987 597 27,900 Charge-offs (1,940 ) (18,273 ) (5,321 ) (951 ) (425 ) (26,910 ) Recoveries 924 4,337 1,105 21 106 6,493 Balance, end of period $ 17,774 $ 38,144 $ 89,594 $ 49,534 $ 6,757 $ 201,803 Individually evaluated for impairment $ 4,925 $ 1,689 $ 10,844 $ 290 $ 38 $ 17,786 Collectively evaluated for impairment $ 12,849 $ 36,455 $ 78,750 $ 49,244 $ 6,719 $ 184,017 Loan and lease balances: Individually evaluated for impairment $ 116,706 $ 46,224 $ 85,385 $ 18,199 $ 3,642 $ 270,156 Collectively evaluated for impairment 4,382,735 2,520,759 5,262,918 4,446,718 563,135 17,176,265 Loans and leases $ 4,499,441 $ 2,566,983 $ 5,348,303 $ 4,464,917 $ 566,777 $ 17,446,421 Impaired Loans and Leases The following tables summarize impaired loans and leases: At September 30, 2018 (In thousands) Unpaid Principal Balance Total Recorded Investment No Allowance Recorded Investment With Allowance Related Valuation Allowance Residential $ 115,959 $ 105,600 $ 66,484 $ 39,116 $ 4,319 Consumer - home equity 45,299 39,808 30,924 8,884 1,428 Commercial : Commercial non-mortgage 117,223 103,324 65,968 37,356 10,491 Asset-based 1,074 1,029 1,029 — — Commercial real estate 12,239 9,767 2,561 7,206 1,544 Equipment financing 6,536 6,489 6,164 325 15 Total $ 298,330 $ 266,017 $ 173,130 $ 92,887 $ 17,797 At December 31, 2017 (In thousands) Unpaid Principal Balance Total Recorded Investment No Allowance Recorded Investment With Allowance Related Valuation Allowance Residential $ 125,352 $ 114,295 $ 69,759 $ 44,536 $ 4,805 Consumer - home equity 50,809 45,436 34,418 11,018 1,668 Commercial : Commercial non-mortgage 79,900 71,882 27,313 44,569 9,786 Asset-based 3,272 589 589 — — Commercial real estate 11,994 11,226 6,387 4,839 272 Equipment financing 3,409 3,325 2,932 393 23 Total $ 274,736 $ 246,753 $ 141,398 $ 105,355 $ 16,554 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, 2018 2017 2018 2017 (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 $ 107,618 $ 923 $ 301 $ 118,841 $ 1,027 $ 285 $ 109,948 $ 2,852 $ 819 $ 118,065 $ 3,133 $ 986 Consumer - home equity 40,722 292 238 46,753 341 246 42,622 876 738 45,972 998 808 Commercial: Commercial non-mortgage 94,618 847 — 81,816 249 — 87,603 2,257 — 64,932 704 — Asset based 1,095 — — 4,279 — — 809 — — 4,279 — — Commercial real estate: Commercial real estate 11,222 30 — 20,249 96 — 10,497 164 — 20,647 329 — Commercial construction — — — 828 — — — — — 831 12 — Equipment financing 6,337 41 — 4,895 30 — 4,907 112 — 5,031 168 — Total $ 261,612 $ 2,133 $ 539 $ 277,661 $ 1,743 $ 531 $ 256,386 $ 6,261 $ 1,557 $ 259,757 $ 5,344 $ 1,794 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 default (PD) and the loss given default (LGD). 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 September 30, At December 31, At September 30, At December 31, At September 30, At December 31, (1) - (6) Pass $ 5,742,170 $ 5,048,162 $ 4,561,901 $ 4,355,916 $ 499,167 $ 525,105 (7) Special Mention 188,905 104,594 105,778 62,065 1,574 8,022 (8) Substandard 236,246 206,883 103,646 105,847 18,313 17,106 (9) Doubtful 7,075 9,055 — — — — Total $ 6,174,396 $ 5,368,694 $ 4,771,325 $ 4,523,828 $ 519,054 $ 550,233 For residential and consumer loans, the primary credit quality indicator that the Company considers is past due status. Other factors, such as, updated Fair Isaac Corporation (FICO) scores, employment status, collateral, geography, loans discharged in bankruptcy, and the status of first lien position loans on second lien position loans, may also be evaluated as credit quality indicators. On an ongoing basis for portfolio monitoring purposes, the Company estimates the current value of property secured as collateral for 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 real estate price 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 troubled debt restructurings (TDRs): (Dollars in thousands) At September 30, At December 31, 2017 Accrual status $ 145,219 $ 147,113 Non-accrual status 95,154 74,291 Total recorded investment of TDRs $ 240,373 $ 221,404 Specific reserves for TDRs included in the balance of ALLL $ 16,338 $ 12,384 Additional funds committed to borrowers in TDR status 2,926 2,736 For the portion of TDRs deemed to be uncollectible, Webster charged off $1.1 million and $0.4 million for the three months ended September 30, 2018 and 2017 , respectively, and $6.3 million , and $3.0 million for the nine months ended September 30, 2018 and 2017 , respectively. 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, 2018 2017 2018 2017 Number of Post- (1) Number of Post- (1) Number of Post- (1) Number of Post- (1) (Dollars in thousands) Residential Extended Maturity 1 $ 20 — $ — 1 $ 20 9 $ 1,390 Adjusted Interest Rate — — — — — — 2 335 Maturity/Rate Combined 4 440 4 570 7 716 9 1,416 Other (2) 3 356 6 1,357 16 2,798 32 5,471 Consumer - home equity Extended Maturity 1 148 2 158 3 341 8 822 Adjusted Interest Rate — — 1 247 — — 1 247 Maturity/Rate Combined 3 170 2 399 6 618 13 3,212 Other (2) 5 258 12 839 30 1,951 55 3,733 Commercial non - mortgage Extended Maturity 4 537 — — 7 622 8 813 Maturity/Rate Combined 8 8,185 8 299 10 8,236 13 9,153 Other (2) 8 10,585 — — 17 39,328 1 4 Commercial real estate Extended Maturity — — — — 2 97 — — Maturity/Rate Combined — — — — 1 245 — — Other (2) — — — — 1 5,111 — — Total TDRs 37 $ 20,699 35 $ 3,869 101 $ 60,083 151 $ 26,596 (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. Loans and leases modified as TDRs within the previous 12 months and for which there was a payment default, consisted of 1 residential loan with an recorded investment of $241 thousand and 1 residential loan with an recorded investment $248 thousand for the three months ended September 30, 2018 and 2017 , respectively, and 2 residential loans with an recorded investment of $261 thousand and 1 residential loan with an recorded investment $248 thousand for the nine months ended September 30, 2018 and 2017 , respectively. 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, 2018 At December 31, 2017 (1) - (6) Pass $ 12,733 $ 8,268 (7) Special Mention 334 355 (8) Substandard 74,822 53,050 (9) Doubtful 7,075 — Total $ 94,964 $ 61,673 |