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Loans and Leases
 6 Months Ended
Jun. 30, 2019
Loans and Leases Receivable Disclosure [Abstract]  
Loans and Leases Loans and Leases
The following table summarizes loans and leases:
(In thousands)
At June 30,
2019
 
At December 31, 2018
Residential
$
4,718,704

 
$
4,416,637

Consumer
2,301,291

 
2,396,704

Commercial
6,519,953

 
6,216,606

Commercial Real Estate
5,224,382

 
4,927,145

Equipment Financing
505,553

 
508,397

Loans and leases (1) (2)
$
19,269,883

 
$
18,465,489


(1)
Includes net deferred fees and net premiums/discounts of $8.2 million and $13.9 million at June 30, 2019 and December 31, 2018, respectively.
(2)
At June 30, 2019 the Company had pledged $6.8 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.
The equipment financing portfolio includes net investment in leases of $164.0 million at June 30, 2019. Total undiscounted cash flows to be received from the Company's net investment in leases are $178.5 million at June 30, 2019 and are primarily due within the next five years. The Company's lessor portfolio has recognized interest income of $1.5 million and $2.9 million for the three and six months ended June 30, 2019, respectively.
Loans and Leases Aging
The following tables summarize the aging of loans and leases:
 
At June 30, 2019
(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
$
6,922

$
3,955

$
—

$
48,228

$
59,105

$
4,659,599

$
4,718,704

Consumer:
 
 
 
 
 
 
 
Home equity
7,451

2,574

—

31,870

41,895

2,035,234

2,077,129

Other consumer
2,776

1,180

—

1,190

5,146

219,016

224,162

Commercial:
 
 
 
 
 
 
 
Commercial non-mortgage
1,300

688

410

52,452

54,850

5,387,985

5,442,835

Asset-based
—

—

—

184

184

1,076,934

1,077,118

Commercial real estate:
 
 
 
 
 
 
 
Commercial real estate
1,189

125

—

10,428

11,742

4,957,572

4,969,314

Commercial construction
1,355

—

—

—

1,355

253,713

255,068

Equipment financing
2,241

219

—

3,949

6,409

499,144

505,553

Total
$
23,234

$
8,741

$
410

$
148,301

$
180,686

$
19,089,197

$
19,269,883

 
At December 31, 2018
(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
$
8,513

$
4,301

$
—

$
49,188

$
62,002

$
4,354,635

$
4,416,637

Consumer:
 
 
 
 
 
 
 
Home equity
9,250

5,385

—

33,495

48,130

2,121,049

2,169,179

Other consumer
1,774

957

—

1,494

4,225

223,300

227,525

Commercial:
 
 
 
 
 
 
 
Commercial non-mortgage
1,011

702

104

55,810

57,627

5,189,808

5,247,435

Asset-based
—

—

—

224

224

968,947

969,171

Commercial real estate:
 
 
 
 
 
 
 
Commercial real estate
1,275

245

—

8,242

9,762

4,698,552

4,708,314

Commercial construction
—

—

—

—

—

218,831

218,831

Equipment financing
510

405

—

6,314

7,229

501,168

508,397

Total
$
22,333

$
11,995

$
104

$
154,767

$
189,199

$
18,276,290

$
18,465,489

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 $3.4 million and $2.4 million for the three months ended June 30, 2019 and 2018, respectively, and $6.1 million and $4.3 million for the six months ended June 30, 2019 and 2018, 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 three months ended June 30, 2019
 
Residential
Consumer
Commercial
Commercial
Real Estate
Equipment
Financing
Total
ALLL:
 
 
 
 
 
 
Balance, beginning of period
$
20,413

$
26,919

$
100,174

$
58,893

$
4,990

$
211,389

Provision (benefit) charged to expense
2,667

1,313

3,391

4,615

(86
)
11,900

Charge-offs
(2,154
)
(4,098
)
(5,218
)
(2,473
)
(439
)
(14,382
)
Recoveries
295

1,972

453

33

11

2,764

Balance, end of period
$
21,221

$
26,106

$
98,800

$
61,068

$
4,476

$
211,671

 
At or for the three months ended June 30, 2018
(In thousands)
Residential
Consumer
Commercial
Commercial
Real Estate
Equipment
Financing
Total
ALLL:
 
 
 
 
 
 
Balance, beginning of period
$
18,777

$
34,239

$
95,573

$
51,436

$
5,324

$
205,349

Provision (benefit) charged to expense
659

813

4,490

4,428

110

10,500

Charge-offs
(754
)
(4,907
)
(5,632
)
(40
)
(65
)
(11,398
)
Recoveries
325

1,614

909

9

14

2,871

Balance, end of period
$
19,007

$
31,759

$
95,340

$
55,833

$
5,383

$
207,322

 
At or for the six months ended June 30, 2019
(In thousands)
Residential
Consumer
Commercial
Commercial
Real Estate
Equipment
Financing
Total
ALLL:
 
 
 
 
 
 
Balance, beginning of period
$
19,599

$
28,681

$
98,793

$
60,151

$
5,129

$
212,353

Provision (benefit) charged to expense
3,554

1,036

11,618

4,324

(32
)
20,500

Charge-offs
(2,405
)
(8,071
)
(12,851
)
(3,446
)
(643
)
(27,416
)
Recoveries
473

4,460

1,240

39

22

6,234

Balance, end of period
$
21,221

$
26,106

$
98,800

$
61,068

$
4,476

$
211,671

Individually evaluated for impairment
$
3,969

$
1,292

$
8,696

$
656

$
168

$
14,781

Collectively evaluated for impairment
$
17,252

$
24,814

$
90,104

$
60,412

$
4,308

$
196,890

 
 
 
 
 
 
 
Loan and lease balances:
 
 
 
 
 
 
Individually evaluated for impairment
$
100,168

$
37,332

$
97,919

$
13,879

$
3,949

$
253,247

Collectively evaluated for impairment
4,618,536

2,263,959

6,422,034

5,210,503

501,604

19,016,636

Loans and leases
$
4,718,704

$
2,301,291

$
6,519,953

$
5,224,382

$
505,553

$
19,269,883

 
At or for the six months ended June 30, 2018
(In thousands)
Residential
Consumer
Commercial
Commercial
Real Estate
Equipment
Financing
Total
ALLL:
 
 
 
 
 
 
Balance, beginning of period
$
19,058

$
36,190

$
89,533

$
49,407

$
5,806

$
199,994

Provision (benefit) charged to expense
909

2,493

11,910

6,532

(344
)
21,500

Charge-offs
(1,671
)
(9,981
)
(7,129
)
(117
)
(110
)
(19,008
)
Recoveries
711

3,057

1,026

11

31

4,836

Balance, end of period
$
19,007

$
31,759

$
95,340

$
55,833

$
5,383

$
207,322

Individually evaluated for impairment
$
4,330

$
1,498

$
6,007

$
2,061

$
18

$
13,914

Collectively evaluated for impairment
$
14,677

$
30,261

$
89,333

$
53,772

$
5,365

$
193,408

 
 
 
 
 
 
 
Loan and lease balances:
 
 
 
 
 
 
Individually evaluated for impairment
$
109,636

$
41,636

$
87,071

$
12,677

$
6,185

$
257,205

Collectively evaluated for impairment
4,345,944

2,444,059

5,894,485

4,567,523

516,780

17,768,791

Loans and leases
$
4,455,580

$
2,485,695

$
5,981,556

$
4,580,200

$
522,965

$
18,025,996


Impaired Loans and Leases
The following tables summarize impaired loans and leases:
 
At June 30, 2019
(In thousands)
Unpaid
Principal
Balance
Total
Recorded
Investment
Recorded
Investment
No Allowance
Recorded
Investment
With Allowance
Related
Valuation
Allowance
Residential
$
109,366

$
100,168

$
64,494

$
35,674

$
3,969

Consumer - home equity
40,761

37,332

29,295

8,037

1,292

Commercial non-mortgage
127,092

97,735

61,199

36,536

8,691

Asset-based
510

184

—

184

5

Commercial real estate
19,734

13,879

6,920

6,959

656

Equipment financing
3,949

3,949

771

3,178

168

Total
$
301,412

$
253,247

$
162,679

$
90,568

$
14,781

 
At December 31, 2018
(In thousands)
Unpaid
Principal
Balance
Total
Recorded
Investment
Recorded
Investment
No Allowance
Recorded
Investment
With Allowance
Related
Valuation
Allowance
Residential
$
113,575

$
103,531

$
64,899

$
38,632

$
4,286

Consumer - home equity
44,654

39,144

30,576

8,568

1,383

Commercial non-mortgage
120,165

99,287

65,724

33,563

7,818

Asset-based
550

225

—

225

6

Commercial real estate
13,355

10,828

2,125

8,703

1,661

Equipment financing
6,368

6,315

2,946

3,369

196

Total
$
298,667

$
259,330

$
166,270

$
93,060

$
15,350


The following table summarizes the average recorded investment and interest income recognized for impaired loans and leases:
 
Three months ended June 30,
 
Six months ended June 30,
 
2019
 
2018
 
2019
 
2018
(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
 
Average
Recorded
Investment
Accrued
Interest
Income
Cash Basis Interest Income
Residential
$
101,245

$
912

$
282

 
$
110,787

$
948

$
265

 
$
101,850

$
1,820

$
546

 
$
111,965

$
1,929

$
518

Consumer - home equity
38,092

287

241

 
42,112

290

250

 
38,238

556

521

 
43,536

584

500

Commercial non-mortgage
106,753

844

—

 
80,475

871

—

 
98,511

1,764

—

 
78,896

1,410

—

Asset based
201

—

—

 
1,347

—

—

 
204

—

—

 
875

—

—

Commercial real estate
13,070

61

—

 
11,802

38

—

 
12,354

134

—

 
11,951

134

—

Equipment financing
4,451

—

—

 
6,320

35

—

 
5,132

—

—

 
4,755

71

—

Total
$
263,812

$
2,104

$
523

 
$
252,843

$
2,182

$
515

 
$
256,289

$
4,274

$
1,067

 
$
251,978

$
4,128

$
1,018


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 default (PD) and the loss given default (LGD). 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 default. 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 borrower's current financial position and outlook, risk profile, and the related collateral and structural position. Loan officers review updated financial information or other loan factors 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. An (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.
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 June 30,
2019
 
At December 31,
2018
 
At June 30,
2019
 
At December 31,
2018
 
At June 30,
2019
 
At December 31,
2018
(1) - (6) Pass
$
6,124,187

 
$
5,781,138

 
$
5,047,238

 
$
4,773,298

 
$
495,381

 
$
494,585

(7) Special Mention
168,290

 
206,351

 
95,528

 
75,338

 
2,560

 
1,303

(8) Substandard
220,758

 
222,405

 
81,616

 
78,509

 
7,612

 
12,509

(9) Doubtful
6,718

 
6,712

 
—

 
—

 
—

 
—

Total
$
6,519,953

 
$
6,216,606

 
$
5,224,382

 
$
4,927,145

 
$
505,553

 
$
508,397


For residential and consumer loans, the primary credit quality indicator that the Company considers is past due status. Other factors, such as, updated Fair Isaac Corporation (FICO) scores, employment status, collateral, geography, loans discharged in bankruptcy, and the status of first lien position loans on second lien position loans, may also be evaluated as credit quality indicators. On an ongoing basis for portfolio monitoring purposes, the Company estimates the current value of property secured as collateral for 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 real estate price 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 troubled debt restructurings (TDRs):
(Dollars in thousands)
At June 30,
2019
 
At December 31, 2018
Accrual status
$
136,081

 
$
138,479

Non-accrual status
106,986

 
91,935

Total recorded investment of TDRs
$
243,067

 
$
230,414

 
 
 
 
Specific reserves for TDRs included in the balance of ALLL
$
14,368

 
$
11,930

Additional funds committed to borrowers in TDR status
6,160

 
3,893


For the portion of TDRs deemed to be uncollectible, Webster charged off $4.2 million and $4.5 million for the three months ended June 30, 2019 and 2018, respectively, and $5.6 million, and $5.2 million for the six months ended June 30, 2019 and 2018, respectively.
The following table provides information on the type of concession for loans and leases modified as TDRs:
 
Three months ended June 30,
 
Six months ended June 30,
 
2019
 
2018
 
2019
 
2018
 
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)
 
Number of
Loans and
Leases
Post-
Modification
Recorded
Investment(1)
(Dollars in thousands)
 
Residential
 
 
 
 
 
 
 
 
 
 
 
Extended Maturity
3
$
421

 
—

$
—

 
4
$
940

 
—
$
—

Maturity/Rate Combined
8
1,397

 
3

276

 
13
1,848

 
3
276

Other (2)
2
281

 
8

1,685

 
4
542

 
13
2,442

Consumer - home equity
 
 
 
 
 
 
 
 
 
 
 
Extended Maturity
2
225

 
—

—

 
4
370

 
2
193

Maturity/Rate Combined
2
110

 
1

335

 
2
110

 
3
448

Other (2)
6
466

 
14

915

 
19
1,220

 
25
1,693

Commercial non - mortgage
 
 
 


 
 
 
 
 
 
 
Extended Maturity
4
69

 
—

—

 
6
193

 
3
85

Adjusted Interest Rate
1
100

 
—

—

 
1
100

 
—
—

Maturity/Rate Combined
2
46

 
2

51

 
3
71

 
2
51

Other (2)
4
12,029

 
7

24,059

 
19
34,056

 
9
28,743

Commercial real estate
 
 
 
 
 
 
 
 
 
 
 
Extended Maturity
—
—

 
1

52

 
—
—

 
2
97

Adjusted Interest rates
—
—

 
1

245

 
—
—

 
1
245

Maturity/Rate Combined
—
—

 
1

5,111

 
—
—

 
1
5,111

Other (2)
—
—

 
—

—

 
2
2,636

 
—
—

Total TDRs
34
$
15,144

 
38

$
32,729

 
77
$
42,086

 
64
$
39,384


(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 and six months ended June 30, 2019 and 2018.
 

The recorded investment of TDRs in commercial, commercial real estate, and equipment financing segregated by risk rating exposure is as follows:
(In thousands)
At June 30, 2019
 
At December 31, 2018
(1) - (6) Pass
$
19,295

 
$
13,165

(7) Special Mention
72

 
84

(8) Substandard
79,482

 
67,880

(9) Doubtful
6,718

 
6,610

Total
$
105,567

 
$
87,739