Segment Reporting

12 Months Ended

Dec. 31, 2015

Segment Reporting [Abstract]

Segment Reporting

Segment Reporting

Beginning in January of 2015, Webster’s operations are divided into four reportable segments that represent its core businesses – Commercial Banking, Community Banking, HSA Bank, and Private Banking. Community Banking includes the operating segments of Webster's Personal Banking and Business Banking. With the acquisition of a health savings account business in early 2015, the reported revenue of the HSA Bank segment grew in excess of 10% of the combined revenue of all operating segments. As a result, beginning in the first quarter of 2015. we began reporting the HSA Bank and Private Banking segments separately. These segments reflect how executive management responsibilities are assigned by the chief operating decision maker for each of the core businesses, the products and services provided, the type of customer served, and reflects how discrete financial information is currently evaluated. The Company’s Treasury unit and consumer liquidating portfolio are included in the Corporate and Reconciling category along with the amounts required to reconcile profitability metrics to GAAP reported amounts. The 2014 and 2013 segment results have been adjusted for comparability to the 2015 segment presentation.

Webster’s reportable segment results are intended to reflect each segment as if it were a stand-alone business. Webster uses an internal profitability reporting system to generate information by operating segment, which is based on a series of management estimates and allocations regarding funds transfer pricing, provision for loan and lease losses, non-interest expense, income taxes, and equity capital. These estimates and allocations, certain of which are subjective in nature, are periodically reviewed and refined. Changes in estimates and allocations that affect the reported results of any operating segment do not affect the consolidated financial position or results of operations of Webster as a whole. The full profitability measurement reports, which are prepared for each operating segment, reflect non-GAAP reporting methodologies. The differences between full profitability and GAAP results are reconciled in the Corporate and Reconciling category.

The Company uses a matched maturity funding concept, called funds transfer pricing (“FTP”), to allocate interest income and interest expense to each business while also transferring the primary interest rate risk exposures to the Corporate and Reconciling category. The allocation process considers the specific interest rate risk and liquidity risk of financial instruments and other assets and liabilities in each line of business. The matched maturity funding concept considers the origination date and the earlier of the maturity date or the repricing date of a financial instrument to assign an FTP rate for loans and deposits originated each day. Loans are assigned an FTP rate for funds used and deposits are assigned an FTP rate for funds provided. This process is executed by the Company’s Financial Planning and Analysis division and is overseen by the Company’s Asset/Liability Committee.

Webster allocates the provision for loan and lease losses to each segment based on management’s estimate of the inherent loss content in each of the specific loan and lease portfolios. Provision expense for certain elements of risk that are not deemed specifically attributable to a reportable segment, such as the provision for the consumer liquidating portfolio, is shown as part of the Corporate and Reconciling category.

Webster allocates a majority of non-interest expense to each reportable segment using a full-absorption costing process. Costs, including corporate overhead, are analyzed, pooled by process, and assigned to the appropriate reportable segment. Income tax expense is allocated to each reportable segment based on the consolidated effective income tax rate for the period shown.

The following tables present the results for Webster’s reportable segments and the Corporate and Reconciling category, which incorporates the allocation of the provision for loan and lease losses and income tax expense:

	Year ended December 31, 2015
(In thousands)	Commercial Banking		Community Banking		HSA Bank		Private Banking			Corporate and Reconciling			Consolidated Total
Net interest income (loss)	$	255,845	$	354,709	$	73,433	$	10,240		$	(29,602	)	$	664,625
Provision (benefit) for loan and lease losses	30,160		19,603		—		386			(849		)	49,300
Net interest income (loss) after provision for loan and lease losses	225,685		335,106		73,433		9,854			(28,753		)	615,325
Non-interest income	37,784		108,604		64,243		9,183			19,731			239,545
Non-interest expense	109,718		330,692		80,662		19,781			13,701			554,554
Income (loss) before income tax expense	153,751		113,018		57,014		(744		)	(22,723		)	300,316
Income tax expense (benefit)	48,112		35,366		17,841		(233		)	(7,110		)	93,976
Net income (loss)	$	105,639	$	77,652	$	39,173	$	(511	)	$	(15,613	)	$	206,340

	Year ended December 31, 2014
(In thousands)	Commercial Banking		Community Banking		HSA Bank		Private Banking			Corporate and Reconciling			Consolidated Total
Net interest income (loss)	$	238,186	$	354,781	$	38,822	$	8,877		$	(12,225	)	$	628,441
Provision (benefit) for loan and lease losses	13,088		26,345		—		765			(2,948		)	37,250
Net interest income (loss) after provision for loan and lease losses	225,098		328,436		38,822		8,112			(9,277		)	591,191
Non-interest income	37,270		103,543		28,553		9,843			22,899			202,108
Non-interest expense	102,374		324,312		40,900		18,691			15,323			501,600
Income (loss) before income tax expense	159,994		107,667		26,475		(736		)	(1,701		)	291,699
Income tax expense (benefit)	50,446		33,947		8,311		(232		)	(499		)	91,973
Net income (loss)	$	109,548	$	73,720	$	18,164	$	(504	)	$	(1,202	)	$	199,726

	Year ended December 31, 2013
(In thousands)	Commercial Banking		Community Banking		HSA Bank		Private Banking			Corporate and Reconciling			Consolidated Total
Net interest income	$	217,582	$	347,395	$	32,807	$	8,185		$	(9,241	)	$	596,728
Provision (benefit) for loan and lease losses	17,971		19,219		—		397			(4,087		)	33,500
Net interest income after provision for loan and lease losses	199,611		328,176		32,807		7,788			(5,154		)	563,228
Non-interest income	30,797		116,182		21,963		10,963			11,145			191,050
Non-interest expense	99,801		337,795		29,962		19,783			10,368			497,709
Income before income tax expense	130,607		106,563		24,808		(1,032		)	(4,377		)	256,569
Income tax expense	39,260		32,029		7,423		(310		)	(1,289		)	77,113
Net income (loss)	$	91,347	$	74,534	$	17,385	$	(722	)	$	(3,088	)	$	179,456

	Total Assets
(In thousands)	Commercial Banking		Community Banking		HSA Bank		Private Banking		Corporate and Reconciling		Consolidated Total
At December 31, 2015	$	7,505,513	$	8,441,950	$	95,815	$	493,571	$	8,140,971	$	24,677,820
At December 31, 2014	6,550,868		8,123,928		26,680		398,893		7,432,803		22,533,172
At December 31, 2013	5,682,129		7,738,597		19,524		346,338		7,066,557		20,853,145