Company: WBS-PG
Filing Date: 2025-08-11
Form Type: 10-Q
Source: 0000801337-25-000083
Chunk: 121

Company: WEBSTER FINANCIAL CORP
Filing Date: 2025-08-11
Form: 10-Q
Item: Part I, Item 2
Chunk 121
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 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 $32.4 million, or 4.7%, from $689.6 million at December 31, 2024, to $722.0 million at June 30, 2025, primarily due to additional reserves resulting from uncertainty in the current macroeconomic environment and organic loan growth, partially offset by net charge-offs and improvements in risk rating migration. 

The following table summarizes the percentage allocation of the ACL across the loans and leases categories:June 30, 2025December 31, 2024(Dollars in thousands)Amount% (1)Amount% (1)Commercial non-mortgage$299,74541.5 %$270,61339.2 %Asset-based23,8403.3 30,0494.4 Commercial real estate250,81034.7 245,12435.5 Multi-family66,1959.2 70,99810.3 Equipment financing17,9532.5 19,0872.8 Residential31,9204.4 27,3544.0 Home equity20,2022.8 19,6252.8 Other consumer11,3811.6 6,7161.0 Total ACL on loans and leases$722,046100.0 %$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.

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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