A Webster Bank branch in Boston, Massachusetts. Commercial Record file photo

Webster Bank executives say the bank is preparing for a potential recession as it strengthened its allowance for loan losses in the first quarter.

The provision for credit losses was $77.5 million, a $23.8 million increase in the allowance for credit losses on loans and leases from the prior quarter. The provision for credit losses was $63.5 million in the prior quarter and $45.5 million a year ago.

“We increased our recession case probability to 30 percent resulting in us adding approximately $20 million to this quarter’s provision,” John R. Ciulla, chairman and CEO, said in the bank’s first-quarter earnings call this week. “We believe that this was a prudent move given the significant uncertainty surrounding the path of our economy following recent policy announcements.”

Still, Webster saw average loans and leases totaling $52.6 billion, an increase of $1.6 billion, or 3.2 percent. Residential mortgages increased by $269.3 million, and consumer loans increased by $85.8 million.

Loan originations for Webster’s portfolio were $2.7 billion, compared to $3.4 billion in the prior quarter and $2.5 billion a year ago.

“We obviously had a good first quarter with respect to loan growth, and it was pretty diverse across categories, as you mentioned, consumer and commercial,” Ciulla said. “I think what I said at the outset, and I think you’ve heard on almost every other call is that our commercial and consumer borrowers remain healthy, and they remain relatively optimistic, but everybody’s kind of waiting for the dust to settle.”