Loans and Leases

The following table summarizes loans and leases:



	At December 31,
(In thousands)	2016		2015
Residential	$	4,254,682	$	4,061,001
Consumer	2,684,500		2,702,560
Commercial	4,940,931		4,315,999
Commercial Real Estate	4,510,846		3,991,649
Equipment Financing	635,629		600,526
Loans and leases ^{(1) (2)}	$	17,026,588	$	15,671,735


(1)	Loans and leases include net deferred fees and net premiums and discounts of $17.3 million and $18.0 million at December 31, 2016 and December 31, 2015, respectively.


(2)	At December 31, 2016, the Company had pledged $6.4 billion of eligible loans as collateral to support borrowing capacity at the FHLB of Boston and the FRB of Boston.

Loans and Leases Portfolio Aging

The following tables summarize the aging of loans and leases:



	At December 31, 2016
(In thousands)	30-59 Days Past Due and Accruing		60-89 Days Past Due and Accruing		90 or More Days Past Due and Accruing		Non-accrual		Total Past Due and Non-accrual		Current		Total Loans and Leases
Residential	$	8,631	$	2,609	$	—	$	47,279	$	58,519	$	4,196,163	$	4,254,682
Consumer:
Home equity	8,831		5,782		—		35,926		50,539		2,359,354		2,409,893
Other consumer	2,233		1,485		—		1,663		5,381		269,226		274,607
Commercial:
Commercial non-mortgage	1,382		577		749		38,190		40,898		4,094,727		4,135,625
Asset-based	—		—		—		—		—		805,306		805,306
Commercial real estate:
Commercial real estate	6,357		1,816		—		9,871		18,044		4,117,742		4,135,786
Commercial construction	—		—		—		662		662		374,398		375,060
Equipment financing	903		693		—		225		1,821		633,808		635,629
Total	$	28,337	$	12,962	$	749	$	133,816	$	175,864	$	16,850,724	$	17,026,588



	At December 31, 2015
(In thousands)	30-59 Days Past Due and Accruing		60-89 Days Past Due and Accruing		90 or More Days Past Due and Accruing		Non-accrual		Total Past Due and Non-accrual		Current		Total Loans and Leases
Residential	$	10,365	$	4,703	$	2,029	$	54,201	$	71,298	$	3,989,703	$	4,061,001
Consumer:
Home equity	9,061		4,242		—		37,337		50,640		2,402,758		2,453,398
Other consumer	1,390		615		—		560		2,565		246,597		249,162
Commercial:
Commercial non-mortgage	768		3,288		22		27,037		31,115		3,531,669		3,562,784
Asset-based	—		—		—		—		—		753,215		753,215
Commercial real estate:
Commercial real estate	1,624		625		—		16,767		19,016		3,673,408		3,692,424
Commercial construction	—		—		—		3,461		3,461		295,764		299,225
Equipment financing	543		59		—		706		1,308		599,218		600,526
Total	$	23,751	$	13,532	$	2,051	$	140,069	$	179,403	$	15,492,332	$	15,671,735

Interest on non-accrual loans and leases that would have been recorded as additional interest income for the years ended December 31, 2016, 2015, and 2014, had the loans and leases been current in accordance with their original terms, totaled $11.0 million, $8.2 million, and $9.3 million, 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 the Year ended December 31, 2016
(In thousands)	Residential			Consumer			Commercial			Commercial Real Estate			Equipment Financing			Total
Allowance for loan and lease losses:
Balance at January 1, 2016	$	25,876		$	42,052		$	59,977		$	41,598		$	5,487		$	174,990
Provision (benefit) charged to expense	230			18,507			28,662			7,930			1,021			56,350
Losses charged off	(4,636		)	(20,669		)	(18,360		)	(2,682		)	(565		)	(46,912		)
Recoveries	1,756			5,343			1,626			631			536			9,892
Balance at December 31, 2016	$	23,226		$	45,233		$	71,905		$	47,477		$	6,479		$	194,320
Individually evaluated for impairment	$	8,090		$	2,903		$	7,422		$	169		$	9		$	18,593
Collectively evaluated for impairment	$	15,136		$	42,330		$	64,483		$	47,308		$	6,470		$	175,727

Loan and lease balances:
Individually evaluated for impairment	$	119,424		$	45,719		$	53,037		$	24,755		$	6,420		$	249,355
Collectively evaluated for impairment	4,135,258			2,638,781			4,887,894			4,486,091			629,209			16,777,233
Loans and leases	$	4,254,682		$	2,684,500		$	4,940,931		$	4,510,846		$	635,629		$	17,026,588



	At or for the Year ended December 31, 2015
(In thousands)	Residential			Consumer			Commercial			Commercial Real Estate			Equipment Financing			Total
Allowance for loan and lease losses:
Balance at January 1, 2015	$	25,452		$	43,518		$	47,068		$	37,148		$	6,078		$	159,264
Provision (benefit) charged to expense	6,057			11,847			21,693			11,381			(1,678		)	49,300
Losses charged off	(6,508		)	(17,679		)	(11,522		)	(7,578		)	(273		)	(43,560		)
Recoveries	875			4,366			2,738			647			1,360			9,986
Balance at December 31, 2015	$	25,876		$	42,052		$	59,977		$	41,598		$	5,487		$	174,990
Individually evaluated for impairment	$	10,364		$	3,477		$	5,197		$	3,163		$	3		$	22,204
Collectively evaluated for impairment	$	15,512		$	38,575		$	54,780		$	38,435		$	5,484		$	152,786

Loan and lease balances:
Individually evaluated for impairment	$	134,448		$	48,425		$	56,581		$	39,295		$	422		$	279,171
Collectively evaluated for impairment	3,926,553			2,654,135			4,259,418			3,952,354			600,104			15,392,564
Loans and leases	$	4,061,001		$	2,702,560		$	4,315,999		$	3,991,649		$	600,526		$	15,671,735



	At or for the Year ended December 31, 2014
(In thousands)	Residential			Consumer			Commercial			Commercial Real Estate			Equipment Financing			Total
Allowance for loan and lease losses:
Balance at January 1, 2014	$	23,027		$	41,951		$	46,655		$	36,754		$	4,186		$	152,573
Provision (benefit) charged to expense	7,315			17,224			9,712			2,746			253			37,250
Losses charged off	(6,214		)	(20,712		)	(13,668		)	(3,237		)	(595		)	(44,426		)
Recoveries	1,324			5,055			4,369			885			2,234			13,867
Balance at December 31, 2014	$	25,452		$	43,518		$	47,068		$	37,148		$	6,078		$	159,264
Individually evaluated for impairment	$	12,094		$	4,237		$	2,710		$	6,232		$	28		$	25,301
Collectively evaluated for impairment	$	13,358		$	39,281		$	44,358		$	30,916		$	6,050		$	133,963

Loan and lease balances:
Individually evaluated for impairment	$	141,982		$	50,249		$	36,176		$	101,817		$	632		$	330,856
Collectively evaluated for impairment	3,367,193			2,499,152			3,713,094			3,452,611			537,119			13,569,169
Loans and leases	$	3,509,175		$	2,549,401		$	3,749,270		$	3,554,428		$	537,751		$	13,900,025

Impaired Loans and Leases

The following tables summarize impaired loans and leases:



	At December 31, 2016
(In thousands)	Unpaid Principal Balance		Total Recorded Investment		Recorded Investment No Allowance		Recorded Investment With Allowance		Related Valuation Allowance
Residential:
1-4 family	$	131,468	$	119,424	$	21,068	$	98,356	$	8,090
Consumer:
Home equity	52,432		45,719		22,746		22,973		2,903
Commercial:
Commercial non-mortgage	57,732		53,037		26,006		27,031		7,422
Commercial real estate:
Commercial real estate	24,146		23,568		19,591		3,977		169
Commercial construction	1,188		1,187		1,187		—		—
Equipment financing	6,398		6,420		6,197		223		9
Total	$	273,364	$	249,355	$	96,795	$	152,560	$	18,593



	At December 31, 2015
(In thousands)	Unpaid Principal Balance		Total Recorded Investment		Recorded Investment No Allowance		Recorded Investment With Allowance		Related Valuation Allowance
Residential:
1-4 family	$	148,144	$	134,448	$	23,024	$	111,424	$	10,364
Consumer:
Home equity	56,680		48,425		25,130		23,295		3,477
Commercial:
Commercial non-mortgage	67,116		56,581		31,600		24,981		5,197
Commercial real estate:
Commercial real estate	36,980		33,333		9,204		24,129		3,160
Commercial construction	7,010		5,962		5,939		23		3
Equipment financing	612		422		328		94		3
Total	$	316,542	$	279,171	$	95,225	$	183,946	$	22,204

The following table summarizes the average recorded investment and interest income recognized for impaired loans and leases:



	Years ended December 31,
	2016						2015						2014
(In thousands)	Average Recorded Investment		Accrued Interest Income		Cash Basis Interest Income		Average Recorded Investment		Accrued Interest Income		Cash Basis Interest Income		Average Recorded Investment		Accrued Interest Income		Cash Basis Interest Income
Residential	$	126,936	$	4,377	$	1,200	$	138,215	$	4,473	$	1,139	$	142,198	$	4,644	$	1,221
Consumer	47,072		1,361		985		49,337		1,451		1,099		51,171		1,484		1,203
Commercial	54,708		1,540		—		46,379		1,319		—		44,097		2,326		—
Commercial real estate:
Commercial real estate	28,451		511		—		64,495		1,165		—		93,209		3,429		—
Commercial construction	3,574		92		—		6,062		133		—		8,381		269		—
Equipment financing	3,421		184		—		527		16		—		421		28		—
Total	$	264,162	$	8,065	$	2,185	$	305,015	$	8,557	$	2,238	$	339,477	$	12,180	$	2,424

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 CCRP. 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 CCRP has 10 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. Risk ratings, assigned to differentiate risk within the portfolio, are reviewed on an ongoing basis and revised to reflect changes in the borrowers’ current financial position and outlook, risk profile, and their 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 "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 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 "Loss" (10) 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 December 31, 2016		At December 31, 2015		At December 31, 2016		At December 31, 2015		At December 31, 2016		At December 31, 2015
(1) - (6) Pass	$	4,655,007	$	4,023,255	$	4,357,458	$	3,857,019	$	618,084	$	586,445
(7) Special Mention	56,240		70,904		69,023		55,030		1,324		1,628
(8) Substandard	226,603		220,389		84,365		79,289		16,221		12,453
(9) Doubtful	3,081		1,451		—		311		—		—
Total	$	4,940,931	$	4,315,999	$	4,510,846	$	3,991,649	$	635,629	$	600,526

For residential and consumer loans, the Company considers factors such as past due status, 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. 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. 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 information for TDRs:



	At December 31,
(Dollars in thousands)	2016			2015
Accrual status	$	147,809		$	171,784
Non-accrual status	75,719			100,906
Total recorded investment of TDR ⁽¹⁾	$	223,528		$	272,690
Accruing TDR performing under modified terms more than one year	57.1		%	55.0		%
Specific reserves for TDR included in the balance of ALLL	$	14,583		$	21,405
Additional funds committed to borrowers in TDR status	459			1,133


(1)	Total recorded investment of TDRs exclude $0.7 million and $1.1 million at December 31, 2016 and December 31, 2015, respectively, of accrued interest receivable.

For years ended December 31, 2016, 2015 and 2014, Webster charged off $18.6 million, $11.8 million, and $13.5 million, respectively, for the portion of TDRs deemed to be uncollectible.

The following table provides information on the type of concession for loans and leases modified as TDRs:



	Years ended December 31,
	2016			2015			2014
	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)	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⁾
Residential:
Extended Maturity	17	$	2,801	27	$	4,909	27	$	3,547
Adjusted Interest rates	2	528		3	573		3	448
Combination Rate and Maturity	13	1,537		26	5,315		22	4,220
Other ⁽²⁾	24	4,090		30	4,366		55	11,791
Consumer:
Extended Maturity	11	484		12	1,012		19	944
Adjusted Interest rates	—	—		—	—		1	51
Combination Rate and Maturity	15	1,156		12	945		6	411
Other ⁽²⁾	52	3,131		68	3,646		90	4,931
Commercial:
Extended Maturity	12	14,883		3	254		7	422
Adjusted Interest rates	—	—		1	24		1	25
Combination Rate and Maturity	2	648		7	5,361		22	1,212
Other ⁽²⁾	13	1,767		20	22,048		6	7,431
Commercial real estate:
Extended Maturity	3	4,921		1	315		—	—
Adjusted Interest rates	1	237		—	—		—	—
Combination Rate and Maturity	2	335		1	42		2	11,106
Other ⁽²⁾	1	509		1	405		—	—
Equipment Financing
Extended Maturity	7	6,642		—	—		1	492
Total	175	$	43,669	212	$	49,215	262	$	47,031


(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, and/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 during the periods presented:



	Years ended December 31,
	2016			2015			2014
(Dollars in thousands)	Number of Loans and Leases	Recorded Investment		Number of Loans and Leases	Recorded Investment		Number of Loans and Leases	Recorded Investment
Residential	—	$	—	1	$	55	7	$	1,494
Consumer	—	—		1	3		2	24
Total	—	$	—	2	$	58	9	$	1,518

The recorded investment of TDRs in commercial, commercial real estate, and equipment financing segregated by risk rating exposure is as follows:



	At December 31,
(In thousands)	2016		2015
(1) - (6) Pass	$	10,210	$	12,970
(7) Special Mention	7		2,999
(8) Substandard	45,509		72,132
(9) Doubtful	2,738		1,717
Total	$	58,464	$	89,818