Company: WBS-PG
Filing Date: 2025-11-10
Form Type: 10-Q
Source: 0000801337-25-000104
Chunk: 28

Company: WEBSTER FINANCIAL CORP
Filing Date: 2025-11-10
Form: 10-Q
Item: Part I, Item 1
Chunk 28
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) “Special Mention” rating has a potential weakness that, if left uncorrected, may result in deterioration of the repayment prospects for the asset. An (8) “Substandard” rating has a well-defined weakness that jeopardizes the full repayment of the debt. A (9) “Doubtful” rating has all of the same weaknesses as a substandard asset with the added characteristic that the weakness makes collection or liquidation in full, given current facts, conditions, and values, improbable. Assets classified as a (10) “Loss” rating are considered uncollectible and charged-off. Risk ratings, which are 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.To measure credit risk for the consumer portfolio, the most relevant credit characteristic is the FICO score, which is a widely used credit scoring system that ranges from 300 to 850. A lower FICO score is indicative of higher credit risk and a higher FICO score is indicative of lower credit risk. FICO scores are updated at least quarterly. Factors such as past due status, employment status, collateral, geography, loans discharged in bankruptcy, and the status of first lien position loans on second lien position loans, are also considered to be consumer portfolio credit quality indicators. For portfolio monitoring purposes, the Company estimates the current value of property secured as collateral for home equity and residential first mortgage lending products on an ongoing basis. The estimate is based on home price indices compiled by the S&P/Case-Shiller Home Price Indices. Real estate price data is applied to the loan portfolios taking into account the age of the most recent valuation and geographic area.

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The following tables summarize the amortized cost basis of commercial loans and leases by Composite Credit Risk Profile grade and origination year:September 30, 2025(In thousands)20252024202320222021PriorRevolving Loans Amortized Cost BasisTotalCommercial non-mortgage:Risk rating:Pass$2,696,636 $2,449,010 $1,574,054 $2,099,247 $971,914 $1,484,948 $6,989,619 $18,265