Loans and Leases | Loans and Leases The following table summarizes loans and leases: (In thousands) At March 31, At December 31, 2019 Commercial non-mortgage $ 5,838,673 $ 5,296,611 Asset-based 1,180,328 1,046,886 Commercial real estate 6,122,474 5,949,339 Equipment financing 546,946 537,341 Total commercial portfolio 13,688,421 12,830,177 Residential 4,991,512 4,972,685 Home equity 1,992,372 2,014,544 Other consumer 219,219 219,580 Total consumer portfolio 7,203,103 7,206,809 Loans and leases (1) (2) (3) $ 20,891,524 $ 20,036,986 (1) Loan balances include net deferred fees/costs and net premiums/discounts of $19.7 million and $17.6 million at March 31, 2020 and December 31, 2019, respectively. (2) At March 31, 2020 the Company had pledged $7.7 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. (3) Loan balances exclude accrued interest receivable of $61.5 million and $59.0 million at March 31, 2020 and December 31, 2019, respectively, which is included in accrued interest and other assets in the consolidated balance sheet. Equipment financing includes net investment in leases of $179.1 million at March 31, 2020. Total undiscounted cash flows to be received from the Company's net investment in leases are $194.5 million at March 31, 2020 and are primarily due within the next five years. The Company's lessor activity has recognized interest income of $1.5 million and $1.4 million for the three months ended March 31, 2020 and 2019, respectively. Loans and Leases Aging The following tables summarize the aging of loans and leases: At March 31, 2020 (In thousands) 30-59 Days 60-89 Days 90 or More Days Past Due Non-accrual Total Past Due and Non-accrual Current Total Loans Commercial non-mortgage $ 3,303 $ 515 $ 75 $ 65,139 $ 69,032 $ 5,769,641 $ 5,838,673 Asset-based — — — 137 137 1,180,191 1,180,328 Commercial real estate 2,222 — — 12,910 15,132 6,107,342 6,122,474 Equipment financing 3,922 483 — 8,950 13,355 533,591 546,946 Residential 7,603 4,232 — 42,465 54,300 4,937,212 4,991,512 Home equity 8,230 4,462 — 31,796 44,488 1,947,884 1,992,372 Other consumer 1,230 791 — 1,033 3,054 216,165 219,219 Total $ 26,510 $ 10,483 $ 75 $ 162,430 $ 199,498 $ 20,692,026 $ 20,891,524 At December 31, 2019 (In thousands) 30-59 Days 60-89 Days 90 or More Days Past Due Non-accrual Total Past Due and Non-accrual Current Total Loans Commercial non-mortgage $ 2,094 $ 617 $ — $ 59,369 $ 62,080 $ 5,234,531 $ 5,296,611 Asset-based — — — 139 139 1,046,747 1,046,886 Commercial real estate 1,256 454 — 11,563 13,273 5,936,066 5,949,339 Equipment financing 5,493 292 — 5,433 11,218 526,123 537,341 Residential 7,166 6,441 — 43,193 56,800 4,915,885 4,972,685 Home equity 8,267 5,551 — 30,170 43,988 1,970,556 2,014,544 Other consumer 4,269 807 — 1,192 6,268 213,312 219,580 Total $ 28,545 $ 14,162 $ — $ 151,059 $ 193,766 $ 19,843,220 $ 20,036,986 The following table provides additional detail related to loans and leases on non-accrual status: At March 31, 2020 At December 31, 2019 (In thousands) Nonaccrual Nonaccrual With No Allowance Nonaccrual Nonaccrual With No Allowance Commercial non-mortgage $ 65,139 $ 33,604 $ 59,369 $ 13,584 Asset-based 137 — 139 — Commercial real estate 12,910 5,654 11,563 4,717 Equipment financing 8,950 564 5,433 2,159 Total commercial portfolio 87,136 39,822 76,504 20,460 Residential 42,465 33,779 43,193 19,271 Home equity 31,796 24,159 30,170 15,195 Other consumer 1,033 65 1,192 — Total consumer portfolio 75,294 58,003 74,555 34,466 Total $ 162,430 $ 97,825 $ 151,059 $ 54,926 Interest income on non-accrual loans for the three months ended March 31, 2020 and the three months ended March 31, 2019 for residential was $0.3 million for both periods and for home equity was $0.5 million and $0.4 million, respectively. 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 $3.3 million and $3.0 million for the three months ended March 31, 2020 and 2019, respectively. Refer to Note 1 to the Consolidated Financial Statements included in the Company's Form 10-K, for the year ended December 31, 2019, for details of non-accrual policies. Allowance for Credit Losses on Loans and Leases The following tables summarize the activity in, as well as the loan and lease balances that were evaluated for, ACL on loans and leases: At or for the three months ended March 31, 2020 At or for the three months ended March 31, 2019 (In thousands) Commercial Portfolio Consumer Portfolio Total Commercial Portfolio Consumer Portfolio Total ACL on loans and leases: Balance, beginning of period $ 161,669 $ 47,427 $ 209,096 $ 164,073 $ 48,280 $ 212,353 Adoption of ASU No. 2016-13 (CECL) 34,024 23,544 57,568 — — — Provision charged to expense 71,243 4,842 76,085 7,990 610 8,600 Charge-offs (5,574) (4,587) (10,161) (8,810) (4,223) (13,033) Recoveries 564 1,779 2,343 804 2,665 3,469 Balance, end of period $ 261,926 $ 73,005 $ 334,931 $ 164,057 $ 47,332 $ 211,389 Individually evaluated for impairment $ 8,235 $ 4,777 $ 13,012 $ 8,262 $ 5,543 $ 13,805 Collectively evaluated for impairment $ 253,691 $ 68,228 $ 321,919 $ 155,795 $ 41,789 $ 197,584 Loan and lease balances: Individually evaluated for impairment $ 177,012 $ 155,105 $ 332,117 $ 133,203 $ 141,173 $ 274,376 Collectively evaluated for impairment 13,511,409 7,047,998 20,559,407 11,709,564 6,830,350 18,539,914 Loans and leases $ 13,688,421 $ 7,203,103 $ 20,891,524 $ 11,842,767 $ 6,971,523 $ 18,814,290 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 PD and the LGD. The Company's credit risk grading system has not changed with the adoption of CECL. 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 loss. 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 borrowers’ 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. A (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. For residential and consumer loans, the most relevant credit characteristic is FICO score. FICO scores are a widely used credit score and range from 300 to 850. A lower FICO score is indicative of higher credit risk. FICO scores are updated at least quarterly. The following table summarizes commercial, commercial real estate, and equipment financing loans and leases segregated by origination year and risk rating exposure under the Composite Credit Risk Profile grades as of March 31, 2020: (In thousands) 2020 2019 2018 2017 2016 Prior Revolving Loans Amortized Cost Basis Total Commercial non-mortgage Pass $ 430,104 $ 1,385,259 $ 1,117,948 $ 608,794 $ 324,107 $ 334,448 $ 1,322,658 $ 5,523,318 Special mention — 12,935 7,306 15,837 — 9,014 3,703 48,795 Substandard 1,014 35,271 40,267 55,992 22,609 40,292 67,257 262,702 Doubtful — 3,378 — 480 — — — 3,858 Total commercial non-mortgage 431,118 1,436,843 1,165,521 681,103 346,716 383,754 1,393,618 5,838,673 Asset-based Pass — 24,171 21,757 14,218 11,445 24,754 1,011,753 1,108,098 Special mention — 2,333 850 — — 1,613 32,686 37,482 Substandard — — — — — — 34,748 34,748 Total asset-based — 26,504 22,607 14,218 11,445 26,367 1,079,187 1,180,328 Commercial real estate Pass 319,742 1,493,595 1,304,836 671,838 678,616 1,521,662 41,126 6,031,415 Special mention — — 22,684 3,865 567 3,240 — 30,356 Substandard — — 529 23,053 2,178 34,943 — 60,703 Total commercial real estate 319,742 1,493,595 1,328,049 698,756 681,361 1,559,845 41,126 6,122,474 Equipment financing Pass 58,694 195,860 104,696 46,139 70,410 38,836 — 514,635 Special mention 45 4,209 4,515 — 302 262 — 9,333 Substandard 163 1,324 6,358 3,014 5,232 6,887 — 22,978 Total equipment financing 58,902 201,393 115,569 49,153 75,944 45,985 — 546,946 Total commercial portfolio $ 809,762 $ 3,158,335 $ 2,631,746 $ 1,443,230 $ 1,115,466 $ 2,015,951 $ 2,513,931 $ 13,688,421 The following table summarizes residential and consumer loans segregated by origination year and risk rating exposure under FICO score groupings as of March 31, 2020: (In thousands) 2020 2019 2018 2017 2016 Prior Revolving Loans Amortized Cost Basis Total Residential 800+ $ 22,988 $ 317,512 $ 84,511 $ 246,445 $ 342,342 $ 1,024,460 $ — $ 2,038,258 740-799 85,134 477,768 106,474 223,136 234,160 667,180 — 1,793,852 670-739 33,038 199,222 64,161 106,085 108,279 334,075 — 844,860 580-669 856 32,110 11,471 13,141 19,061 121,294 — 197,933 579 and below — 24,367 412 4,967 4,684 82,179 — 116,609 Total residential 142,016 1,050,979 267,029 593,774 708,526 2,229,188 — 4,991,512 Home equity 800+ 3,447 17,876 32,108 19,123 18,729 73,163 548,752 713,198 740-799 5,357 20,881 27,965 16,554 17,693 55,972 481,738 626,160 670-739 4,416 13,677 16,389 12,336 10,556 56,375 337,893 451,642 580-669 341 2,938 3,474 3,038 2,943 21,931 104,333 138,998 579 and below 49 738 1,303 1,108 732 13,607 44,837 62,374 Total home equity 13,610 56,110 81,239 52,159 50,653 221,048 1,517,553 1,992,372 Other consumer 800+ 1,293 3,920 2,689 791 197 238 7,329 16,457 740-799 7,752 23,298 14,404 2,638 956 681 3,472 53,201 670-739 18,745 62,579 29,506 7,793 3,425 2,239 6,993 131,280 580-669 1,839 5,395 2,798 1,212 578 581 2,227 14,630 579 and below 410 613 425 121 84 262 1,736 3,651 Total other consumer 30,039 95,805 49,822 12,555 5,240 4,001 21,757 219,219 Total consumer portfolio 185,665 1,202,894 398,090 658,488 764,419 2,454,237 1,539,310 7,203,103 Total commercial portfolio 809,762 3,158,335 2,631,746 1,443,230 1,115,466 2,015,951 2,513,931 13,688,421 Total loans and leases $ 995,427 $ 4,361,229 $ 3,029,836 $ 2,101,718 $ 1,879,885 $ 4,470,188 $ 4,053,241 $ 20,891,524 Individually Assessed Loans and Leases The following tables summarize individually assessed loans and leases (At December 31, 2019, partially charged-off consumer loans and leases were included in collectively evaluated for impairment): At March 31, 2020 (In thousands) Unpaid Amortized Cost Amortized Cost No Allowance Amortized Cost With Allowance Related Commercial non-mortgage $ 188,458 $ 143,415 $ 53,032 $ 90,383 $ 6,527 Asset-based 463 137 — 137 3 Commercial real estate 30,540 24,509 15,699 8,810 1,044 Equipment financing 9,063 8,951 549 8,402 661 Residential 119,579 105,460 68,788 36,672 3,438 Home equity 114,212 48,612 35,606 13,006 1,137 Other consumer 2,675 1,033 65 968 202 Total $ 464,990 $ 332,117 $ 173,739 $ 158,378 $ 13,012 At December 31, 2019 (In thousands) Unpaid Amortized Cost Amortized Cost No Allowance Amortized Cost With Allowance Related Commercial non-mortgage $ 140,096 $ 102,254 $ 29,739 $ 72,515 $ 7,862 Asset-based 465 139 — 139 5 Commercial real estate 29,292 23,297 14,818 8,479 1,143 Equipment financing 5,591 5,433 2,159 3,274 418 Residential 98,790 90,096 56,231 33,865 3,618 Home equity 38,503 35,191 27,672 7,519 1,203 Other consumer — — — — — Total $ 312,737 $ 256,410 $ 130,619 $ 125,791 $ 14,249 The following table summarizes the average amortized cost and interest income recognized for individually assessed loans and leases: Three months ended March 31, 2020 2019 (In thousands) Average Accrued Cash Basis Interest Income Average Accrued Cash Basis Interest Income Commercial non-mortgage $ 122,835 $ 1,053 $ — $ 107,529 $ 920 $ — Asset-based 138 — — 222 — — Commercial real estate 23,903 146 — 11,544 73 — Equipment financing 7,192 — — 5,634 — — Residential 97,778 830 630 102,926 908 264 Home equity 41,902 391 830 38,998 269 280 Other consumer 512 17 — — — — Total $ 294,260 $ 2,437 $ 1,460 $ 266,853 $ 2,170 $ 544 Collateral Dependent Loans and Leases. The ACL on loans and leases specific to collateral dependent loans is individually assessed based on the fair value of the collateral, less costs to sell, as of the reporting date. A loan is considered collateral dependent when the borrower is experiencing financial difficulty and when the loan is expected to be repaid substantially through the sale or operation of the collateral. Commercial non-mortgage, asset based, and equipment financing are collateralized by equipment, inventory, receivables, or other non-real estate assets. Commercial real estate, residential, and home equity are collateralized by real estate. The following table summarizes whether, or not, individually assessed loans and leases are collateral dependent: March 31, 2020 December 31, 2019 (In thousands) Collateral Dependent Not Considered Collateral Dependent Total Collateral Dependent Not Considered Collateral Dependent Total Commercial non-mortgage $ 21,219 $ 122,196 $ 143,415 $ 10,682 $ 91,572 $ 102,254 Asset-based — 137 137 — 139 139 Commercial real estate 20,157 4,352 24,509 14,097 9,200 23,297 Equipment financing — 8,951 8,951 — 5,433 5,433 Residential 36,663 68,797 105,460 17,635 72,461 90,096 Home equity 27,987 20,625 48,612 17,136 18,055 35,191 Other consumer — 1,033 1,033 — — — Total amortized cost of CDA $ 106,026 $ 226,091 $ 332,117 $ 59,550 $ 196,860 $ 256,410 Collateral value $ 362,368 $ 362,368 $ 109,810 $ 109,810 Troubled Debt Restructurings The following table summarizes information for TDRs: (In thousands) At March 31, At December 31, 2019 Accrual status $ 157,235 $ 136,449 Non-accrual status 100,892 100,989 Total TDRs $ 258,127 $ 237,438 Specific reserves for TDRs included in the balance of ACL on loans and leases $ 11,984 $ 12,956 Additional funds committed to borrowers in TDR status 6,949 4,856 For the portion of TDRs deemed to be uncollectible, Webster charged off $1.2 million and $1.4 million for the three months ended March 31, 2020 and 2019, respectively. The following table provides information on the type of concession for loans and leases modified as TDRs: Three months ended March 31, 2020 2019 Number of Post- Modification Recorded Investment (1) Number of Post- Modification Recorded Investment (1) (Dollars in thousands) Commercial non-mortgage Extended Maturity 2 $ 104 2 $ 124 Maturity/Rate Combined 5 274 1 25 Other (2) 10 27,137 15 22,027 Commercial real estate Extended Maturity — — — — Maturity/Rate Combined 1 278 — — Other (2) — — 2 2,636 Residential Extended Maturity 1 264 1 519 Maturity/Rate Combined 3 443 5 451 Other (2) 3 613 2 261 Consumer Extended Maturity — — 2 145 Maturity/Rate Combined 1 13 — — Other (2) 11 1,113 13 754 Total TDRs 37 $ 30,239 43 $ 26,942 (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. There were no significant amounts of loans and leases modified as TDRs within the previous 12 months and for which there was a payment default for the three months ended March 31, 2020 and 2019, respectively. TDRs in commercial, commercial real estate, and equipment financing segregated by risk rating exposure is as follows: (In thousands) At March 31, 2020 At December 31, 2019 (1) - (6) Pass $ 4,125 $ 3,952 (7) Special Mention 59 63 (8) Substandard 129,525 104,277 (9) Doubtful 3,857 3,860 Total $ 137,566 $ 112,152 |