Segment Reporting

12 Months Ended

Dec. 31, 2016

Segment Reporting [Abstract]

Segment Reporting

Segment Reporting

Webster’s operations are organized into four reportable segments that represent its primary businesses - Commercial Banking, Community Banking, HSA Bank, and Private Banking. These four reportable segments reflect how executive management responsibilities are assigned by the chief operating decision maker for each of the primary 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.

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.

Webster allocates interest income and interest expense to each business, while also transferring the primary interest rate risk exposures to the Corporate and Reconciling category, using a matched maturity funding concept called Funds Transfer Pricing. 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 ALCO.

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 operating results, including all appropriate allocations, for Webster’s reportable segments and the Corporate and Reconciling category:

	Year ended December 31, 2016
(In thousands)	Commercial Banking		Community Banking		HSA Bank		Private Banking		Corporate and Reconciling			Consolidated Total
Net interest income (loss)	$	276,246	$	365,151	$	81,451	$	11,350	$	(15,685	)	$	718,513
Provision (benefit) for loan and lease losses	36,594		21,690		—		861		(2,795		)	56,350
Net interest income (loss) after provision for loan and lease losses	239,652		343,461		81,451		10,489		(12,890		)	662,163
Non-interest income	47,435		110,157		71,710		9,818		25,358			264,478
Non-interest expense	118,159		364,549		97,152		20,220		23,111			623,191
Income (loss) before income tax expense	168,928		89,069		56,009		87		(10,643		)	303,450
Income tax expense (benefit)	53,622		28,273		17,779		27		(3,378		)	96,323
Net income (loss)	$	115,306	$	60,796	$	38,230	$	60	$	(7,265	)	$	207,127

	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		62,475		9,183			19,731			237,777
Non-interest expense	109,718		330,692		81,449		19,781			13,701			555,341
Income (loss) before income tax expense	153,751		113,018		54,459		(744		)	(22,723		)	297,761
Income tax expense (benefit)	48,037		35,310		17,016		(233		)	(7,098		)	93,032
Net income (loss)	$	105,714	$	77,708	$	37,443	$	(511	)	$	(15,625	)	$	204,729

	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

The following table presents total assets for Webster's reportable segments and the Corporate and Reconciling category:

	Total Assets
(In thousands)	Commercial Banking		Community Banking		HSA Bank		Private Banking		Corporate and Reconciling		Consolidated Total
At December 31, 2016	$	8,518,830	$	8,655,789	$	83,987	$	550,615	$	8,263,308	$	26,072,529
At December 31, 2015	7,505,513		8,441,950		95,815		493,571		8,104,269		24,641,118