Company: WBS-PG
Filing Date: 2025-05-09
Form Type: 10-Q
Source: 0000801337-25-000026
Chunk: 106

Company: WEBSTER FINANCIAL CORP
Filing Date: 2025-05-09
Form: 10-Q
Item: Part I, Item 2
Chunk 106
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 reviewed to determine whether an incremental third-party appraisal is warranted. New appraisals are obtained sooner if a loan becomes adversely classified, substandard, or non-accrual.

Consumer loans are subject to policies and procedures developed to manage the specific risk characteristics of the portfolio. These policies and procedures, coupled with relatively small individual loan amounts and predominately collateralized loan structures, are spread across many different borrowers, minimizing the level of credit risk. Trend and outlook reports are reviewed by management on a regular basis, and policies and procedures are modified or developed, as needed. Underwriting factors for residential mortgage and home equity loans include the borrower’s FICO score, the loan amount relative to property value, and the borrower’s debt-to-income level. The Bank originates both qualified mortgage and non-qualified mortgage loans.

Allowance for Credit Losses on Loans and Leases

The ACL on loans and leases increased $23.7 million, or 3.4%, from $689.6 million at December 31, 2024, to $713.3 million at March 31, 2025, primarily due to additional loan and lease reserves resulting from uncertainty in the current macroeconomic environment and risk rating migration, partially offset by net charge-offs.

The following table summarizes the percentage allocation of the ACL across the loans and leases categories:March 31, 2025December 31, 2024(Dollars in thousands)Amount% (1)Amount% (1)Commercial non-mortgage$281,67539.5 %$270,61339.2 %Asset-based31,0814.4 30,0494.4 Commercial real estate249,76635.0 245,12435.5 Multi-family67,3899.4 70,99810.3 Equipment financing19,5392.7 19,0872.8 Residential32,1444.5 27,3544.0 Home equity20,6482.9 19,6252.8 Other consumer11,0791.6 6,7161.0 Total ACL on loans and leases$713,321100.0 %$689,566100.0 %

(1)The ACL allocated to a single loan and lease category does not preclude its availability to absorb losses in other categories.

17

Methodology

The Company’s ACL on loans and leases is considered to be a critical accounting policy. The ACL on loans