Company: WBS-PG
Filing Date: 2025-11-10
Form Type: 10-Q
Source: 0000801337-25-000104
Chunk: 125

Company: WEBSTER FINANCIAL CORP
Filing Date: 2025-11-10
Form: 10-Q
Item: Part I, Item 2
Chunk 125
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4.4 Commercial real estate250,45234.3 245,12435.5 Multi-family62,2698.6 70,99810.3 Equipment financing15,6892.2 19,0872.8 Residential40,5925.6 27,3544.0 Home equity26,4383.6 19,6252.8 Other consumer18,1652.5 6,7161.0 Total ACL on loans and leases$727,897100.0 %$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.

20

Methodology

The Company’s ACL on loans and leases is considered to be a critical accounting policy. The ACL on loans and leases is a contra-asset account that offsets the amortized cost basis of loans and leases for the credit losses that are expected to occur over the life of the asset. Executive management reviews and advises on the adequacy of the allowance on a quarterly basis, which is maintained at a level that management deems to be sufficient to cover expected losses within the loan and lease portfolios.

The ACL on loans and leases is determined using the CECL model, whereby an expected lifetime credit loss is recognized at the origination or purchase of an asset, including those acquired through a business combination, which is then reassessed at each reporting date over the contractual life of the asset. The calculation of expected credit losses includes consideration of past events, current conditions, and reasonable and supportable economic forecasts that affect the collectability of the reported amounts. Generally, expected credit losses are determined through a pooled, collective assessment of loans and leases with similar risk characteristics. However, if the risk characteristics of a loan or lease change such that it no longer aligns to that of the collectively assessed pool, it is removed from the population and individually assessed for credit losses. The total ACL on loans and leases recorded by management represents the aggregated estimated credit loss determined through both the collective and individual assessments.

Collectively Assessed Loans and Leases. Collectively assessed loans and leases are segmented based on product type and credit quality, and expected losses are determined using models that follow a PD, LGD, or EAD framework. Under these frameworks, expected credit losses are calculated as the product of the probability of a loan defaulting, expected loss given the occurrence of a default, and the expected exposure of a loan at