Loans and Leases | Loans and Leases The following table summarizes loans and leases: (In thousands) At September 30, At December 31, 2018 Commercial $ 6,488,056 $ 6,216,606 Commercial Real Estate 5,398,084 4,927,145 Equipment Financing 521,828 508,397 Residential 4,873,726 4,416,637 Consumer 2,269,952 2,396,704 Loans and leases (1) (2) $ 19,551,646 $ 18,465,489 (1) Includes net deferred fees/costs and net premiums/discounts of $13.9 million at both September 30, 2019 and December 31, 2018 . (2) At September 30, 2019 the Company had pledged $7.6 billion of eligible loans as collateral to support borrowing capacity at the Federal Home Loan Bank (FHLB) of Boston and the Federal Reserve Bank (FRB) of Boston. The equipment financing portfolio includes net investment in leases of $164.2 million at September 30, 2019 . Total undiscounted cash flows to be received from the Company's net investment in leases are $178.5 million at September 30, 2019 and are primarily due within the next five years. The Company's lessor portfolio has recognized interest income of $1.2 million and $4.0 million for the three and nine months ended September 30, 2019 , respectively. Loans and Leases Aging The following tables summarize the aging of loans and leases: At September 30, 2019 (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 Commercial: Commercial non-mortgage $ 2,760 $ 450 $ 92 $ 58,750 $ 62,052 $ 5,303,238 $ 5,365,290 Asset-based — — — 9,162 9,162 1,113,604 1,122,766 Commercial real estate: Commercial real estate 1,296 141 — 9,852 11,289 5,087,967 5,099,256 Commercial construction — — — 2,968 2,968 295,860 298,828 Equipment financing 1,666 525 — 5,488 7,679 514,149 521,828 Residential 6,752 6,727 — 43,839 57,318 4,816,408 4,873,726 Consumer: Home equity 9,192 2,290 — 31,452 42,934 2,007,428 2,050,362 Other consumer 3,075 697 — 1,388 5,160 214,430 219,590 Total $ 24,741 $ 10,830 $ 92 $ 162,899 $ 198,562 $ 19,353,084 $ 19,551,646 At December 31, 2018 (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 Commercial: Commercial non-mortgage $ 1,011 $ 702 $ 104 $ 55,810 $ 57,627 $ 5,189,808 $ 5,247,435 Asset-based — — — 224 224 968,947 969,171 Commercial real estate: Commercial real estate 1,275 245 — 8,242 9,762 4,698,552 4,708,314 Commercial construction — — — — — 218,831 218,831 Equipment financing 510 405 — 6,314 7,229 501,168 508,397 Residential 8,513 4,301 — 49,188 62,002 4,354,635 4,416,637 Consumer: Home equity 9,250 5,385 — 33,495 48,130 2,121,049 2,169,179 Other consumer 1,774 957 — 1,494 4,225 223,300 227,525 Total $ 22,333 $ 11,995 $ 104 $ 154,767 $ 189,199 $ 18,276,290 $ 18,465,489 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 $3.1 million and $4.3 million for the three months ended September 30, 2019 and 2018 , respectively, and $8.9 million and $7.9 million for the nine months ended September 30, 2019 and 2018 , 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 three months ended September 30, 2019 (In thousands) Commercial Commercial Real Estate Equipment Financing Residential Consumer Total ALLL: Balance, beginning of period $ 98,800 $ 61,068 $ 4,476 $ 21,221 $ 26,106 $ 211,671 Provision (benefit) charged to expense 11,202 (423 ) (176 ) (689 ) 1,386 11,300 Charge-offs (11,255 ) (32 ) (36 ) (872 ) (3,765 ) (15,960 ) Recoveries 124 3 49 356 1,609 2,141 Balance, end of period $ 98,871 $ 60,616 $ 4,313 $ 20,016 $ 25,336 $ 209,152 At or for three months ended September 30, 2018 (In thousands) Commercial Commercial Real Estate Equipment Financing Residential Consumer Total ALLL: Balance, beginning of period $ 95,340 $ 55,833 $ 5,383 $ 19,007 $ 31,759 $ 207,322 Provision (benefit) charged to expense 5,686 4,146 (213 ) 407 474 10,500 Charge-offs (740 ) (1,922 ) (136 ) (874 ) (4,863 ) (8,535 ) Recoveries 431 143 11 133 1,827 2,545 Balance, end of period $ 100,717 $ 58,200 $ 5,045 $ 18,673 $ 29,197 $ 211,832 At or for the nine months ended September 30, 2019 (In thousands) Commercial Commercial Real Estate Equipment Financing Residential Consumer Total ALLL: Balance, beginning of period $ 98,793 $ 60,151 $ 5,129 $ 19,599 $ 28,681 $ 212,353 Provision (benefit) charged to expense 22,820 3,901 (208 ) 2,865 2,422 31,800 Charge-offs (24,106 ) (3,478 ) (679 ) (3,277 ) (11,836 ) (43,376 ) Recoveries 1,364 42 71 829 6,069 8,375 Balance, end of period $ 98,871 $ 60,616 $ 4,313 $ 20,016 $ 25,336 $ 209,152 Individually evaluated for impairment $ 14,555 $ 735 $ 177 $ 3,625 $ 1,274 $ 20,366 Collectively evaluated for impairment $ 84,316 $ 59,881 $ 4,136 $ 16,391 $ 24,062 $ 188,786 Loan and lease balances: Individually evaluated for impairment $ 117,418 $ 16,224 $ 5,487 $ 95,666 $ 35,836 $ 270,631 Collectively evaluated for impairment 6,370,638 5,381,860 516,341 4,778,060 2,234,116 19,281,015 Loans and leases $ 6,488,056 $ 5,398,084 $ 521,828 $ 4,873,726 $ 2,269,952 $ 19,551,646 At or for the nine months ended September 30, 2018 (In thousands) Commercial Commercial Real Estate Equipment Financing Residential Consumer Total ALLL: Balance, beginning of period $ 89,533 $ 49,407 $ 5,806 $ 19,058 $ 36,190 $ 199,994 Provision (benefit) charged to expense 17,596 10,678 (557 ) 1,316 2,967 32,000 Charge-offs (7,869 ) (2,039 ) (246 ) (2,545 ) (14,844 ) (27,543 ) Recoveries 1,457 154 42 844 4,884 7,381 Balance, end of period $ 100,717 $ 58,200 $ 5,045 $ 18,673 $ 29,197 $ 211,832 Individually evaluated for impairment $ 10,491 $ 1,544 $ 15 $ 4,319 $ 1,428 $ 17,797 Collectively evaluated for impairment $ 90,226 $ 56,656 $ 5,030 $ 14,354 $ 27,769 $ 194,035 Loan and lease balances: Individually evaluated for impairment $ 104,353 $ 9,767 $ 6,489 $ 105,600 $ 39,808 $ 266,017 Collectively evaluated for impairment 6,070,043 4,761,558 512,565 4,309,463 2,401,373 18,055,002 Loans and leases $ 6,174,396 $ 4,771,325 $ 519,054 $ 4,415,063 $ 2,441,181 $ 18,321,019 Impaired Loans and Leases The following tables summarize impaired loans and leases: At September 30, 2019 (In thousands) Unpaid Principal Balance Total Recorded Investment Recorded Investment No Allowance Recorded Investment With Allowance Related Valuation Allowance Commercial non-mortgage $ 148,932 $ 108,256 $ 36,250 $ 72,006 $ 14,550 Asset-based 9,490 9,162 9,013 149 5 Commercial real estate 19,270 13,256 7,202 6,054 735 Commercial construction 2,969 2,968 2,968 — — Equipment financing 5,540 5,487 2,403 3,084 177 Residential 105,576 95,666 61,236 34,430 3,625 Consumer - home equity 64,723 35,836 28,023 7,813 1,274 Total $ 356,500 $ 270,631 $ 147,095 $ 123,536 $ 20,366 At December 31, 2018 (In thousands) Unpaid Principal Balance Total Recorded Investment Recorded Investment No Allowance Recorded Investment With Allowance Related Valuation Allowance Commercial non-mortgage $ 120,165 $ 99,287 $ 65,724 $ 33,563 $ 7,818 Asset-based 550 225 — 225 6 Commercial real estate 13,355 10,828 2,125 8,703 1,661 Equipment financing 6,368 6,315 2,946 3,369 196 Residential 113,575 103,531 64,899 38,632 4,286 Consumer - home equity 44,654 39,144 30,576 8,568 1,383 Total $ 298,667 $ 259,330 $ 166,270 $ 93,060 $ 15,350 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, 2019 2018 2019 2018 (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 Commercial non-mortgage $ 102,996 $ 751 $ — $ 94,618 $ 847 $ — $ 103,772 $ 2,515 $ — $ 87,603 $ 2,257 $ — Asset based 4,673 — — 1,095 — — 4,694 — — 809 — — Commercial real estate: Commercial real estate 13,567 60 — 11,222 30 — 12,042 194 — 10,497 164 — Commercial construction 1,484 — — — — — 1,484 — — — — — Equipment financing 4,718 — — 6,337 41 — 5,901 — — 4,907 112 — Residential 97,917 862 271 107,618 923 301 99,599 2,682 817 109,948 2,852 819 Consumer - home equity 36,584 247 246 40,722 292 238 37,490 803 767 42,622 876 738 Total $ 261,939 $ 1,920 $ 517 $ 261,612 $ 2,133 $ 539 $ 264,982 $ 6,194 $ 1,584 $ 256,386 $ 6,261 $ 1,557 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 or other loan factors 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 $ 6,122,391 $ 5,781,138 $ 5,253,649 $ 4,773,298 $ 512,219 $ 494,585 (7) Special Mention 97,969 206,351 81,256 75,338 915 1,303 (8) Substandard 263,833 222,405 63,179 78,509 8,694 12,509 (9) Doubtful 3,863 6,712 — — — — Total $ 6,488,056 $ 6,216,606 $ 5,398,084 $ 4,927,145 $ 521,828 $ 508,397 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, 2018 Accrual status $ 137,493 $ 138,479 Non-accrual status 111,643 91,935 Total recorded investment of TDRs $ 249,136 $ 230,414 Specific reserves for TDRs included in the balance of ALLL $ 20,015 $ 11,930 Additional funds committed to borrowers in TDR status 3,621 3,893 For the portion of TDRs deemed to be uncollectible, Webster charged off $11.0 million and $1.1 million for the three months ended September 30, 2019 and 2018 , respectively, and $16.7 million , and $6.3 million for the nine months ended September 30, 2019 and 2018 , 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, 2019 2018 2019 2018 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) Commercial non - mortgage Extended Maturity 2 $ 29 4 $ 537 8 $ 222 7 $ 622 Adjusted Interest Rate 1 12 — — 2 112 — — Maturity/Rate Combined 3 225 8 8,185 6 296 10 8,236 Other (2) 6 30,586 8 10,585 25 64,642 17 39,328 Commercial real estate Extended Maturity — — — — — — 2 97 Maturity/Rate Combined — — — — — — 1 245 Other (2) 1 2,180 — — 3 4,816 1 5,111 Residential Extended Maturity 1 67 1 20 5 1,007 1 20 Maturity/Rate Combined 1 368 4 440 14 2,216 7 716 Other (2) 2 243 3 356 6 785 16 2,798 Consumer - home equity Extended Maturity 1 134 1 148 5 504 3 341 Maturity/Rate Combined 2 30 3 170 4 140 6 618 Other (2) 8 375 5 258 27 1,595 30 1,951 Total TDRs 28 $ 34,249 37 $ 20,699 105 $ 76,335 101 $ 60,083 (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 for the three and nine months ended September 30, 2019 and 2018 . Three months ended September 30, Nine months ended September 30, 2019 2018 2019 2018 (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 Commercial non - mortgage 4 $ 3,940 — $ — 4 $ 3,940 — $ — Residential — — 1 241 — — 2 261 Consumer - home equity 1 78 — — 1 78 — — Total 5 $ 4,018 1 $ 241 5 $ 4,018 2 $ 261 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, 2019 At December 31, 2018 (1) - (6) Pass $ 11,877 $ 13,165 (7) Special Mention 68 84 (8) Substandard 101,825 67,880 (9) Doubtful 3,863 6,610 Total $ 117,633 $ 87,739 |