Company: WBS-PG
Filing Date: 2025-03-03
Form Type: 10-K
Source: 0000801337-25-000004
Chunk: 159

Company: WEBSTER FINANCIAL CORP
Filing Date: 2025-03-03
Form: 10-K
Item: Item 1
Chunk 159
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 finance, commercial real estate, and residential lending is important in managing credit risk. Accordingly, management aims to actively measure and manage concentrations by portfolio, industry sector and specific sub-sectors, geography, affiliated obligors, and other guidelines. Webster is primarily a relationship lender. In addition, Webster will only assume credit risk when it can be effectively managed from an infrastructure or operational perspective, and it has industry, product, and market expertise.

The Chief Credit Risk Officer is responsible for credit risk oversight. The Credit Risk Management Committee is also responsible for providing oversight and governance of credit risk for the Bank.

Compliance Risk 

Compliance risk is the risk to current or anticipated earnings or capital arising from violations of, or non-compliance with, laws, rules, regulations, prescribed practices, internal policies and procedures, or prudent ethical standards. Compliance risk exposes Webster to fines, civil monetary penalties, payment of damages, and the voiding of contracts. 

Webster’s activities with overall compliance, consumer protection, and regulatory risk include deposit account management, lending products and services, privacy protections, investment management, and fiduciary services. Compliance risk is inherently high for banks, given the complexity of implementation and level of regulatory scrutiny, reliance on third party service providers, likelihood of regulatory enforcement actions, and the potential for the assessment of penalties and fines.

Corporate Compliance, a second line function, manages compliance risk through the execution of a comprehensive Compliance Management Program, which is designed to identify and evaluate risks of non-compliance, assess, test, and monitor the effectiveness of internal controls, and report and escalate significant issues. 

BSA Compliance, a second line function, monitors and evaluates attempts to launder money, finance terrorism or conduct other illegal activities through Webster that arise from different sources, certain solutions, services, customers, entities, and geographic locations which may be more susceptible to these activities.

The Chief Compliance Officer is responsible for compliance risk oversight. Likewise, the BSA Officer is responsible for BSA, Anti-Money Laundering, and OFAC related risks. Additionally, the Regulatory Compliance Committee is responsible for providing oversight and governance of compliance risk, while the BSA/Fraud Oversight Committee is responsible for providing oversight and governance of BSA and Fraud risk.

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Financial Risk 

Financial risk is made up of treasury risk and accounting risk. Treasury risk includes the risk of capital levels falling below supervisory expectations or being incommensurate with the level of risk; the risk that the value of a security or investment will decrease or losses may be incurred due to changes