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Loans and Leases
 6 Months Ended
Jun. 30, 2013
Loans and Leases Receivable Disclosure [Abstract]  
Loans and Leases
Loans and Leases
Recorded Investment in Loans and Leases. The following tables summarize the principal amounts of loans and leases outstanding net of unamortized premiums, discounts, deferred fees/costs, plus accrued interest ("recorded investment") by portfolio segment:
 
At June 30, 2013
(In thousands)
Residential
Consumer
Commercial
Commercial
Real Estate
Equipment
Financing
Total
Loans and Leases:
 
 
 
 
 
 
Ending balance (1)
$
3,313,833

$
2,557,719

$
3,107,269

$
2,866,814

$
400,658

$
12,246,293

Accrued interest
10,147

7,855

10,953

7,733

—

36,688

Recorded investment
$
3,323,980

$
2,565,574

$
3,118,222

$
2,874,547

$
400,658

$
12,282,981

Recorded investment: individually evaluated for impairment
$
146,486

$
53,706

$
64,078

$
148,613

$
385

$
413,268

Recorded investment: collectively evaluated for impairment
$
3,177,494

$
2,511,868

$
3,054,144

$
2,725,934

$
400,273

$
11,869,713

 
 
At December 31, 2012
(In thousands)
Residential
Consumer
Commercial
Commercial
Real Estate
Equipment
Financing
Total
Loans and Leases:
 
 
 
 
 
 
Ending balance (1)
$
3,291,724

$
2,630,867

$
2,903,733

$
2,783,061

$
419,311

$
12,028,696

Accrued interest
10,271

8,095

9,453

7,541

—

35,360

Recorded investment
$
3,301,995

$
2,638,962

$
2,913,186

$
2,790,602

$
419,311

$
12,064,056

Recorded investment: individually evaluated for impairment
$
146,944

$
54,793

$
69,426

$
154,978

$
1,980

$
428,121

Recorded investment: collectively evaluated for impairment
$
3,155,051

$
2,584,169

$
2,843,760

$
2,635,624

$
417,331

$
11,635,935

 
(1)
The ending balance includes net deferred fees and unamortized premiums of $12.5 million and $12.7 million at June 30, 2013 and December 31, 2012, respectively.
At June 30, 2013, the Company had pledged $5.5 billion of eligible loan collateral to support available borrowing capacity at the FHLB of Boston and the Federal Reserve discount window.
Loans and Leases Portfolio Aging. The following tables summarize the recorded investment of the Company’s loans and leases portfolio aging by class:
 
At June 30, 2013
 
(In thousands)
30-59 Days
Past Due and
Accruing
60-89 Days
Past Due and
Accruing
> 90 Days Past
Due and Accruing
Non-accrual
Total Past Due
Current
Total Loans
and Leases
Residential:
 
 
 
 
 
 
 
1-4 family
$
10,779

$
5,511

$
—

$
93,406

$
109,696

$
3,164,877

$
3,274,573

Construction
—

—

—

926

926

48,481

49,407

Consumer:
 
 
 
 
 
 
 
Home equity loans
11,248

4,566

—

44,718

60,532

2,341,508

2,402,040

Liquidating portfolio-home equity loans
1,489

462

—

7,636

9,587

103,837

113,424

Other consumer
310

119

—

87

516

49,594

50,110

Commercial:
 
 
 
 
 
 
 
Commercial non-mortgage
4,795

6,265

1,002

17,266

29,328

2,495,248

2,524,576

Asset-based loans
—

—

—

—

—

593,646

593,646

Commercial real estate:
 
 
 
 
 
 
 
Commercial real estate
1,426

649

555

16,568

19,198

2,681,289

2,700,487

Commercial construction
—

—

—

49

49

147,192

147,241

Residential development
—

740

—

4,445

5,185

21,634

26,819

Equipment financing
510

274

—

1,852

2,636

398,022

400,658

Total
$
30,557

$
18,586

$
1,557

$
186,953

$
237,653

$
12,045,328

$
12,282,981

 
At December 31, 2012
 
(In thousands)
30-59 Days
Past Due and
Accruing
60-89 Days
Past Due and
Accruing
> 90 Days Past
Due and Accruing
Non-accrual
Total Past Due
Current
Total Loans
and Leases
Residential:
 
 
 
 
 
 
 
1-4 family
$
16,955

$
8,250

$
—

$
94,853

$
120,058

$
3,142,220

$
3,262,278

Construction
—

360

—

823

1,183

38,535

39,718

Consumer:
 
 
 
 
 
 
 
Home equity loans
17,745

6,993

—

49,516

74,254

2,396,944

2,471,198

Liquidating portfolio-home equity loans
2,063

1,626

—

8,200

11,889

111,760

123,649

Other consumer
338

195

—

135

668

43,446

44,114

Commercial:
 
 
 
 
 
 
 
Commercial non-mortgage
2,248

552

347

17,547

20,694

2,386,775

2,407,469

Asset-based loans
—

—

—

—

—

505,717

505,717

Commercial real estate:
 
 
 
 
 
 
 
Commercial real estate
1,081

13,784

910

15,658

31,433

2,617,213

2,648,646

Commercial construction
—

—

—

49

49

114,097

114,146

Residential development
—

—

—

5,044

5,044

22,766

27,810

Equipment financing
1,593

333

—

3,325

5,251

414,060

419,311

Total
$
42,023

$
32,093

$
1,257

$
195,150

$
270,523

$
11,793,533

$
12,064,056


Loans and Leases on Non-accrual Status. When placed on non-accrual status, the accrual of interest is discontinued and any unpaid accrued interest is reversed and charged against interest income. Residential and consumer loans are placed on non-accrual status after 90 days past due or at the date when the Company is notified that the borrower is discharged in bankruptcy. All commercial and commercial real estate loans and equipment financing leases are subject to a detailed review when 90 days past due or when payment is uncertain and a specific determination is made to put a loan or lease on non-accrual status.
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, 2013 and 2012, had the loans and leases been current in accordance with their original terms, totaled $5.7 million and $8.6 million and $3.8 million and $7.2 million, respectively.
Allowance for Loan and Lease Losses. The following tables summarize the ALLL by portfolio segment: 
 
Three months ended June 30, 2013
(In thousands)
Residential
Consumer
Commercial
Commercial
Real Estate
Equipment
Financing
Unallocated
Total
Allowance for loan and lease losses:
 
 
 
 
 
 
 
Balance, beginning of period
$
27,891

$
50,369

$
44,050

$
30,894

$
3,636

$
11,000

$
167,840

Provision (benefit) charged to expense
657

4,360

4,895

(479
)
(933
)
—

8,500

Losses charged off
(2,112
)
(7,331
)
(6,156
)
(2,510
)
(4
)
—

(18,113
)
Recoveries
440

2,261

1,058

552

904

—

5,215

Balance, end of period
$
26,876

$
49,659

$
43,847

$
28,457

$
3,603

$
11,000

$
163,442

Ending balance: individually evaluated for impairment
$
14,010

$
3,506

$
880

$
3,522

$
—

$
—

$
21,918

Ending balance: collectively evaluated for impairment
$
12,866

$
46,153

$
42,967

$
24,935

$
3,603

$
11,000

$
141,524

 
 
Three months ended June 30, 2012
(In thousands)
Residential
Consumer
Commercial
Commercial
Real Estate
Equipment
Financing
Unallocated
Total
Allowance for loan and lease losses:
 
 
 
 
 
 
 
Balance, beginning of period
$
32,039

$
64,263

$
51,003

$
40,187

$
7,796

$
15,000

$
210,288

Provision (benefit) charged to expense
3,840

6,621

1,763

(2,661
)
(3,313
)
(1,250
)
5,000

Losses charged off
(3,952
)
(11,349
)
(5,676
)
(1,066
)
(165
)
—

(22,208
)
Recoveries
136

2,702

1,678

46

1,115

—

5,677

Balance, end of period
$
32,063

$
62,237

$
48,768

$
36,506

$
5,433

$
13,750

$
198,757

Ending balance: individually evaluated for impairment
$
17,086

$
4,568

$
5,761

$
5,652

$
3

$
—

$
33,070

Ending balance: collectively evaluated for impairment
$
14,977

$
57,669

$
43,007

$
30,854

$
5,430

$
13,750

$
165,687


 
Six months ended June 30, 2013
(In thousands)
Residential
Consumer
Commercial
Commercial
Real Estate
Equipment
Financing
Unallocated
Total
Allowance for loan and lease losses:
 
 
 
 
 
 
 
Balance, beginning of period
$
29,474

$
54,254

$
46,566

$
30,834

$
4,001

$
12,000

$
177,129

Provision (benefit) charged to expense
1,760

9,060

5,119

3,100

(2,039
)
(1,000
)
16,000

Losses charged off
(5,048
)
(17,738
)
(10,495
)
(6,270
)
(91
)
—

(39,642
)
Recoveries
690

4,083

2,657

793

1,732

—

9,955

Balance, end of period
$
26,876

$
49,659

$
43,847

$
28,457

$
3,603

$
11,000

$
163,442

Ending balance: individually evaluated for impairment
$
14,010

$
3,506

$
880

$
3,522

$
—

$
—

$
21,918

Ending balance: collectively evaluated for impairment
$
12,866

$
46,153

$
42,967

$
24,935

$
3,603

$
11,000

$
141,524

 
Six months ended June 30, 2012
(In thousands)
Residential
Consumer
Commercial
Commercial
Real Estate
Equipment
Financing
Unallocated
Total
Allowance for loan and lease losses:
 
 
 
 
 
 
 
Balance, beginning of period
$
34,565

$
67,785

$
60,681

$
45,013

$
8,943

$
16,500

$
233,487

Provision (benefit) charged to expense
4,288

11,096

5,279

(2,739
)
(6,174
)
(2,750
)
9,000

Losses charged off
(7,067
)
(21,400
)
(20,670
)
(6,914
)
(799
)
—

(56,850
)
Recoveries
277

4,756

3,478

1,146

3,463

—

13,120

Balance, end of period
$
32,063

$
62,237

$
48,768

$
36,506

$
5,433

$
13,750

$
198,757

Ending balance: individually evaluated for impairment
$
17,086

$
4,568

$
5,761

$
5,652

$
3

$
—

$
33,070

Ending balance: collectively evaluated for impairment
$
14,977

$
57,669

$
43,007

$
30,854

$
5,430

$
13,750

$
165,687


Impaired Loans and Leases. The following tables summarize impaired loans and leases by class:
 
At June 30, 2013
(In thousands)
Unpaid
Principal
Balance
Total
Recorded
Investment
Recorded
Investment
No Allowance
Recorded
Investment
With Allowance
Related
Valuation
Allowance
 
Residential:
 
 
 
 
 
 
1-4 family
$
162,021

$
146,226

$
23,327

$
122,900

$
14,005

 
Construction
446

260

156

103

5

 
Consumer:
 
 
 
 
 
 
Home equity loans
55,281

46,931

24,003

22,929

2,947

 
Liquidating portfolio-home equity loans
8,749

6,775

3,839

2,936

559

 
Commercial:
 
 
 
 
 
 
Commercial non-mortgage
69,357

64,078

35,871

28,206

880

 
Commercial real estate:
 
 
 
 
 
 
Commercial real estate
127,285

122,226

70,144

52,082

3,404

 
Commercial construction
—

—

—

—

—

 
Residential development
13,694

12,764

4,833

7,932

118

 
Equipment financing
423

385

290

95

—

 
Totals:
 
 
 
 
 
 
Residential
162,467

146,486

23,483

123,003

14,010

 
Consumer
64,030

53,706

27,842

25,865

3,506

 
Commercial
69,357

64,078

35,871

28,206

880

 
Commercial real estate
140,979

134,990

74,977

60,014

3,522

 
Equipment financing
423

385

290

95

—

 
Total
$
437,256

$
399,645

$
162,463

$
237,183

$
21,918

 
 
 
At December 31, 2012
(In thousands)
Unpaid
Principal
Balance
Total
Recorded
Investment
Recorded
Investment
No Allowance
Recorded
Investment
With Allowance
Related
Valuation
Allowance
 
Residential:
 
 
 
 
 
 
1-4 family
$
160,490

$
146,683

$
24,267

$
122,416

$
14,726

 
Construction
446

261

156

105

5

 
Consumer:
 
 
 
 
 
 
Home equity loans
56,815

47,755

23,967

23,788

2,960

 
Liquidating portfolio-home equity loans
11,788

7,038

3,663

3,375

651

 
Commercial:
 
 
 
 
 
 
Commercial non-mortgage
90,627

69,426

21,942

47,484

6,423

 
Commercial real estate:
 
 
 
 
 
 
Commercial real estate
123,861

121,193

65,212

55,981

2,572

 
Commercial construction
7,177

7,185

7,185

—

—

 
Residential development
13,444

12,771

5,029

7,742

111

 
Equipment financing
2,357

1,980

1,781

199

1

 
Totals:
 
 
 
 
 
 
Residential
160,936

146,944

24,423

122,521

14,731

 
Consumer
68,603

54,793

27,630

27,163

3,611

 
Commercial
90,627

69,426

21,942

47,484

6,423

 
Commercial real estate
144,482

141,149

77,426

63,723

2,683

 
Equipment financing
2,357

1,980

1,781

199

1

 
Total
$
467,005

$
414,292

$
153,202

$
261,090

$
27,449

 

The following table summarizes average recorded investment and interest income recognized by class of impaired loans and leases:
 
 
Three months ended
Six months ended
 
 
Three months ended
Six months ended
 
June 30, 2013
June 30, 2013
June 30, 2013
 
June 30, 2012
June 30, 2012
June 30, 2012
(In thousands)
Average
Recorded
Investment
Total
Interest
Income
Total
Interest
Income
 
Average
Recorded
Investment
Total
Interest
Income
Total
Interest
Income
Residential:
 
 
 
 
 
 
 
1-4 family
$
146,455

$
1,563

$
3,037

 
$
135,902

$
1,361

$
2,751

Construction
261

—

2

 
118

2

2

Consumer:
 
 
 
 
 
 
 
Home equity loans
47,343

578

1,149

 
30,592

352

703

Liquidating portfolio-home equity loans
6,907

119

237

 
5,071

64

131

Other consumer
—

—

—

 
3

—

—

Commercial:
 
 
 
 
 
 
 
Commercial non-mortgage
66,752

685

1,393

 
93,846

1,073

2,205

Asset-based loans
—

—

—

 
1,029

—

—

Commercial real estate:
 
 
 
 
 
 
 
Commercial real estate
121,710

1,165

2,566

 
163,422

1,250

2,442

Commercial construction
3,593

67

134

 
7,350

72

146

Residential development
12,768

95

187

 
14,360

82

171

Equipment financing
1,183

6

13

 
3,221

9

23

Totals:
 
 
 
 
 
 
 
Residential
146,716

1,563

3,039

 
136,020

1,363

2,753

Consumer
54,250

697

1,386

 
35,666

416

834

Commercial
66,752

685

1,393

 
94,875

1,073

2,205

Commercial real estate
138,071

1,327

2,887

 
185,132

1,404

2,759

Equipment financing
1,183

6

13

 
3,221

9

23

Total
$
406,972

$
4,278

$
8,718

 
$
454,914

$
4,265

$
8,574


Of the total interest income recognized for the residential and consumer portfolios, $0.9 million and $1.8 million and $0.4 million and $0.7 million of interest income was recognized on a cash basis method of accounting for the three and six months ended June 30, 2013 and 2012, respectively.
Credit Risk Management. The Company has certain credit policies and procedures in place designed to maximize loan income within an acceptable level of risk. Management reviews and approves these policies and procedures on a regular basis and reviews reports related to loan production, loan quality, concentration of credit, loan delinquencies, and non-performing and potential problem loans.
Commercial and industrial loans are underwritten after evaluating and understanding the borrower’s ability to operate profitably and prudently expand its business. Underwriting standards are designed to promote relationships rather than transactional banking. Once it is determined that the borrower’s management possesses sound ethics and solid business acumen, the Company’s management examines current and projected cash flows to determine the ability of the borrower to repay obligations as agreed. Commercial and industrial loans are primarily made based on the identified cash flows of the borrower and secondarily on the underlying collateral provided by the borrower. Most commercial and industrial loans are secured by the assets being financed and may incorporate a personal guarantee; however, some loans may be made on an unsecured basis. The cash flows of borrowers, however, may not be as expected and the collateral securing these loans may fluctuate in value.
Commercial real estate loans are subject to underwriting standards and processes similar to commercial and industrial loans, in addition to those specific to real estate loans. These loans are viewed primarily as cash flow loans and secondarily as loans secured by real estate. Repayment of these loans is largely dependent on the successful operation of the property securing the loan, the market in which the property is located and the tenants that conduct business at the property securing the loan. Commercial real estate loans may be adversely affected by conditions in the real estate markets or in the general economy. The properties securing the Company’s commercial real estate portfolio are diverse in terms of type and geographic location, which help reduce the Company's exposure to adverse economic events that may affect any single market or industry. Management monitors and evaluates commercial real estate loans based on collateral, geography and risk grade criteria. The Company also utilizes third-party experts to provide insight and guidance about economic conditions and trends affecting its loan portfolio.
Construction loans on commercial properties have unique risk characteristics and are provided to experienced developers/sponsors with strong track records of successful completion and sound financial condition and are underwritten utilizing feasibility studies, independent appraisal reviews, sensitivity analysis of absorption and lease rates, and financial analysis of the developers and property owners. Construction loans are generally based upon estimates of costs and value associated with the complete project. These estimates may be subject to change as the construction project proceeds. Sources of repayment for these types of loans may be pre-committed permanent loans from approved long-term lenders, sales of developed property, or interim loan commitments from the Company until permanent financing is obtained. These loans are closely monitored by on-site inspections by third-party professionals and internal staff.
To monitor and manage consumer loan risk, policies and procedures are developed and modified, as needed, jointly by line and Risk Management personnel. Policies and procedures, coupled with relatively small loan amounts, and predominately collateralized structures spread across many individual borrowers, minimize risk. Trend and outlook reports are reviewed by management on a regular basis. Underwriting factors for mortgage and home equity loans include the borrower’s FICO score, the loan amount relative to property value and the borrower’s debt to income level and are also influenced by regulatory requirements.
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 (“CCRP”). The credit risk grading system categorizes borrowers by common financial characteristics that measure the credit strength of borrowers and facilities by common structural characteristics. The CCRP has ten 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 criticized as defined by the regulatory agencies. The rating model assumptions are actively reviewed and tested against industry data and actual experience. Risk ratings are assigned to differentiate risk within the portfolio and are reviewed on an ongoing basis and revised to reflect changes in the borrowers’ current financial positions and outlook, risk profiles, and the related collateral and structural positions. Loan officers review updated financial information for all pass rated loans to review the accuracy of the risk grade on at least an annual basis. Criticized loans are assigned to undergo reviews and enhanced monitoring of the underlying borrowers.
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 the same weaknesses as 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 recorded investment in commercial and commercial real estate loans and equipment financing leases segregated by risk rating exposure is as follows:
(In thousands)
Commercial
 
Commercial Real Estate
 
Equipment Financing
 
At June 30,
2013
 
At December 31,
2012
 
At June 30,
2013
 
At December 31,
2012
 
At June 30,
2013
 
At December 31,
2012
(1) - (6) Pass
$
2,885,779

 
$
2,701,061

 
$
2,714,549

 
$
2,588,987

 
$
376,433

 
$
381,304

(7) Special Mention
90,482

 
43,856

 
25,702

 
56,023

 
9,501

 
12,893

(8) Substandard
139,644

 
167,485

 
133,826

 
143,904

 
14,724

 
25,114

(9) Doubtful
2,317

 
784

 
470

 
1,688

 
—

 
—

(10) Loss
—

 
—

 
—

 
—

 
—

 
—

Total
$
3,118,222

 
$
2,913,186

 
$
2,874,547

 
$
2,790,602

 
$
400,658

 
$
419,311


For residential and consumer loans, the Company considers factors such as updated FICO scores, employment status, home prices, loan to value, 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 (“current LTV”). The estimate is based on home price indices compiled by the S&P/Case-Shiller Home Price Indices. The Case-Shiller data indicates trends for Metropolitan Statistical Areas (“MSA”). 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 the information for the Company’s TDRs:
(Dollars in thousands)
At June 30,
2013
 
At December 31,
2012
Recorded investment of TDRs:
 
 
 
Accrual status
$
272,922

 
$
288,578

Non-accrual status
118,208

 
115,583

Total recorded investment
$
391,130

 
$
404,161

Accruing TDRs performing under modified terms more than one year
57.4
%
 
60.2
%
TDR specific reserves included in the balance of allowance for loan and lease losses
$
21,882

 
$
27,317

Additional funds committed to borrowers in TDR status (1)
5,854

 
3,263

 
(1)
This amount may be limited by contractual rights and/or the underlying collateral supporting the loan or lease.
For the three and six months ended June 30, 2013 and 2012, Webster charged off $9.1 million and $14.1 million and $4.5 million and $23.5 million, respectively, for the portion of TDRs deemed to be uncollectible.
The following tables provide information on loans and leases modified as TDRs in the period:
 
Three months ended June 30,
 
2013
 
2012
(Dollars in thousands)
Number of
Loans and
Leases
Pre-
Modification
Recorded
Investment
Post-
Modification
Recorded
Investment
Post-
Modification
Coupon
Rate
 
Number of
Loans and
Leases
Pre-
Modification
Recorded
Investment
Post-
Modification
Recorded
Investment
Post-
Modification
Coupon
Rate
Residential:
 
 
 
 
 
 
 
 
 
1-4 family
40

$
7,845

$
7,845

3.9
%
 
26

$
4,768

$
4,768

3.4
%
Construction
—

—

—

—

 
1

104

104

6.9

Consumer:
 
 
 
 
 
 
 
 
 
Home equity loans
28

1,581

1,581

4.3

 
15

1,319

1,319

4.0

Liquidating portfolio-home equity loans
4

345

345

4.4

 
2

35

35

9.2

Commercial:
 
 
 
 
 
 
 
 
 
Commercial non-mortgage
7

7,300

7,300

7.4

 
13

5,758

5,758

7.4

Commercial real estate:
 
 
 
 
 
 
 
 
 
Commercial real estate
1

38

38

4.5

 
2

2,167

2,167

4.9

Residential development
—

—

—

—

 
—

—

—

—

Equipment financing
—

—

—

—

 
4

142

142

7.6

Total TDRs
80

$
17,109

$
17,109

5.4
%
 
63

$
14,293

$
14,293

5.4
%

 
Six months ended June 30,
 
2013
 
2012
(Dollars in thousands)
Number of
Loans and
Leases
Pre-
Modification
Recorded
Investment
Post-
Modification
Recorded
Investment
Post-
Modification
Coupon
Rate
 
Number of
Loans and
Leases
Pre-
Modification
Recorded
Investment
Post-
Modification
Recorded
Investment
Post-
Modification
Coupon
Rate
Residential:
 
 
 
 
 
 
 
 
 
1-4 family
72

$
14,258

$
14,258

3.9
%
 
50

$
8,828

$
8,828

3.7
%
Construction
—

—

—

—

 
1

104

104

6.9

Consumer:
 
 
 
 
 
 
 
 
 
Home equity loans
65

3,978

3,978

4.2

 
27

2,272

2,272

4.0

Liquidating portfolio-home equity loans
9

434

434

5.0

 
4

35

35

9.1

Commercial:
 
 
 
 
 
 
 
 
 
Commercial non-mortgage
10

8,188

8,188

7.1

 
25

16,986

16,986

7.2

Commercial real estate:
 
 
 
 
 
 
 
 
 
Commercial real estate
3

11,713

11,713

2.7

 
3

2,412

2,412

5.0

Residential development
2

189

189

5.3

 
—

—

—

—

Equipment financing
—

—

—

—

 
7

342

342

7.2

Total TDRs
161

$
38,760

$
38,760

4.3
%
 
117

$
30,979

$
30,979

5.8
%

TDR loans may be modified by means of extended maturity, below market adjusted interest rates, a combination of rate and maturity, or by other means including covenant modifications, or other concessions.The following tables provide information on how loans and leases were modified as TDRs in the period:
 
Three months ended June 30,
 
2013
 
2012
(In thousands)
Extended
Maturity
Adjusted
Interest
Rates
Combination
of Rate and
Maturity
Other (1)
Total
 
Extended
Maturity
Adjusted
Interest
Rates
Combination
of Rate and
Maturity
Other (1)
Total
Residential:
 
 
 
 
 
 
 
 
 
 
 
1-4 family
$
1,615

$
493

$
2,722

$
3,015

$
7,845

 
$
398

$
723

$
1,160

$
2,487

$
4,768

Construction
—

—

—

—

—

 
—

—

104

—

104

Consumer:
 
 
 
 
 
 
 
 
 
 
 
Home equity loans
467

—

133

981

1,581

 
891

—

249

179

1,319

Liquidating portfolio-home equity loans
80

—

—

265

345

 
35

—

—

—

35

Commercial:
 
 
 
 
 
 
 
 
 
 
 
Commercial non-mortgage
7,018

—

282

—

7,300

 
287

—

—

5,471

5,758

Commercial real estate:
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate
38

—

—

—

38

 
2,068

—

—

99

2,167

Residential development
—

—

—

—

—

 
—

—

—

—

—

Equipment financing
—

—

—

—

—

 
142

—

—

—

142

Total TDRs
$
9,218

$
493

$
3,137

$
4,261

$
17,109

 
$
3,821

$
723

$
1,513

$
8,236

$
14,293


 
Six months ended June 30,
 
2013
 
2012
(In thousands)
Extended
Maturity
Adjusted
Interest
Rates
Combination
of Rate and
Maturity
Other (1)
Total
 
Extended
Maturity
Adjusted
Interest
Rates
Combination
of Rate and
Maturity
Other (1)
Total
Residential:
 
 
 
 
 
 
 
 
 
 
 
1-4 family
$
2,520

$
1,234

$
6,071

$
4,433

$
14,258

 
$
1,030

$
1,006

$
3,564

$
3,228

$
8,828

Construction
—

—

—

—

—

 
—

—

104

—

104

Consumer:
 
 
 
 
 
 
 
 
 
 
 
Home equity loans
575

154

1,217

2,032

3,978

 
955

107

887

323

2,272

Liquidating portfolio-home equity loans
80

—

—

354

434

 
35

—

—

—

35

Commercial:
 
 
 
 
 
 
 
 
 
 
 
Commercial non-mortgage
7,520

—

629

39

8,188

 
314

—

286

16,386

16,986

Commercial real estate:
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate
38

—

11,675

—

11,713

 
2,068

—

245

99

2,412

Residential development
189

—

—

—

189

 
—

—

—

—

—

Equipment financing
—

—

—

—

—

 
142

—

40

160

342

Total TDRs
$
10,922

$
1,388

$
19,592

$
6,858

$
38,760

 
$
4,544

$
1,113

$
5,126

$
20,196

$
30,979

(1)
Includes covenant modifications, forbearance, loans discharged under Chapter 7 bankruptcy (2013 only), and/or other concessions.
The Company’s loan and lease portfolio at June 30, 2013 included eleven loans with an A Note/B Note structure, with a combined recorded investment of $38.5 million. The loans were restructured into A Note/B Note structures as a result of evaluating the cash flow of the borrowers to support repayment. Webster immediately charged off the balance of B Notes totaling $17.3 million. TDR classification has been removed from two A Notes with the combined recorded investment of $13.7 million, as the borrowers passed the minimum compliance with the modified terms requirements. The restructuring agreement specifies an interest rate equal to that which would be provided to a borrower with similar credit at the time of restructuring. The A Notes are paying under the terms of the modified loan agreements. Of the eleven A Notes, eight are on accrual status as the borrowers are paying under the terms of the loan agreements prior to and subsequent to the modification. The remaining A Notes are on non-accrual status due to the continuing financial difficulties of the borrower.
The following tables provide information on loans and leases modified as a TDR within the previous 12 months and for which there was a payment default during the periods presented:
 
Three months ended June 30,
 
2013
 
2012
(Dollars in thousands)
Number of
Loans and
Leases
Recorded
Investment
 
Number of
Loans and
Leases
Recorded
Investment
Residential:
 
 
 
 
 
1-4 family
3

$
622

 
2

$
441

Consumer:
 
 
 
 
 
Home equity loans
—

—

 
2

535

Liquidating portfolio-home equity loans
2

81

 
—

—

Commercial:
 
 
 
 
 
Commercial non-mortgage
—

—

 
—

—

Commercial real estate:
 
 
 
 
 
Commercial real estate
1

2,561

 
—

—

Total
6

$
3,264

 
4

$
976


 
Six months ended June 30,
 
2013
 
2012
(Dollars in thousands)
Number of
Loans and
Leases
Recorded
Investment
 
Number of
Loans and
Leases
Recorded
Investment
Residential:
 
 
 
 
 
1-4 family
5

$
989

 
2

$
441

Consumer:
 
 
 
 
 
Home equity loans
3

38

 
2

535

Liquidating portfolio-home equity loans
2

81

 
—

—

Commercial:
 
 
 
 
 
Commercial non-mortgage
—

—

 
—

—

Commercial real estate:
 
 
 
 
 
Commercial real estate
1

2,561

 
—

—

Total
11

$
3,669

 
4

$
976



The recorded investment in commercial, commercial real estate and equipment financing TDRs segregated by risk rating exposure is as follows:
(In thousands)
At June 30,
2013
 
At December 31,
2012
(1) - (6) Pass
$
60,582

 
$
56,661

(7) Special Mention
4,745

 
—

(8) Substandard
125,211

 
143,903

(9) Doubtful
401

 
1,860

(10) Loss
—

 
—

Total
$
190,939

 
$
202,424