The following table presents the major types of loans and leases, net of deferred fees and costs, as of June 30, 2019 and December 31, 2018:



(in thousands)	June 30, 2019		December 31, 2018
Commercial real estate
Non-owner occupied term, net	$	3,537,084	$	3,573,065
Owner occupied term, net	2,396,674		2,480,371
Multifamily, net	3,341,547		3,304,763
Construction & development, net	732,932		736,254
Residential development, net	199,421		196,890
Commercial
Term, net	2,271,346		2,232,923
Lines of credit & other, net	1,280,587		1,169,525
Leases & equipment finance, net	1,449,579		1,330,155
Residential
Mortgage, net	3,995,643		3,635,073
Home equity loans & lines, net	1,215,215		1,176,477
Consumer & other, net	533,343		587,170
Total loans, net of deferred fees and costs	$	20,953,371	$	20,422,666

The loan balances are net of deferred fees and costs of $72.8 million and $70.4 million as of June 30, 2019 and December 31, 2018, respectively. Net loans also include discounts on acquired loans of $41.3 million and $50.0 million as of June 30, 2019 and December 31, 2018, respectively. As of June 30, 2019, loans totaling $12.9 billion were pledged to secure borrowings and available lines of credit.

The outstanding contractual unpaid principal balance of purchased impaired loans, excluding acquisition accounting adjustments, was $158.8 million and $183.7 million at June 30, 2019 and December 31, 2018, respectively. The carrying balance of purchased impaired loans was $113.6 million and $134.5 million at June 30, 2019 and December 31, 2018, respectively.

The following table presents the changes in the accretable yield for purchased impaired loans for the three and six months ended June 30, 2019 and 2018:



(in thousands)	Three Months Ended						Six Months Ended
	June 30, 2019			June 30, 2018			June 30, 2019			June 30, 2018
Balance, beginning of period	$	51,073		$	66,677		$	56,564		$	74,268
Accretion to interest income	(5,433		)	(7,123		)	(10,318		)	(15,901		)
Disposals	(2,230		)	(2,838		)	(4,573		)	(7,854		)
Reclassifications from non-accretable difference	2,609			6,250			4,346			12,453
Balance, end of period	$	46,019		$	62,966		$	46,019		$	62,966

Umpqua, through its commercial equipment leasing subsidiary, FinPac, is a direct provider of commercial equipment leasing and financing throughout the United States, originating business through three distinct channels: small and mid-ticket third party originators, vendor finance, and Umpqua Bank Equipment Leasing & Finance. All of these leases typically have terms of three to five years and are considered to be direct financing leases. Interest income recognized on these leases is $8.1 million and $16.5 million for the three and six months ended June 30, 2019, respectively.

Residual values on leases are established at the time equipment is leased based on an estimate of the value of the leased equipment when the Company expects to dispose of the equipment, typically at the termination of the lease. An annual evaluation is also performed each fiscal year by an independent valuation specialist and equipment residuals are confirmed or adjusted in conjunction with such evaluation.



(in thousands)	June 30, 2019			December 31, 2018
Minimum lease payments receivable	$	471,092		$	450,258
Estimated guaranteed and unguaranteed residual values	80,742			79,455
Initial direct costs - net of accumulated amortization	10,017			10,950
Unearned income	(74,280		)	(79,777		)
Net investment in direct financing leases	$	487,571		$	460,886

In the course of managing the loan and lease portfolio, at certain times, management may decide to sell loans and leases. The following table summarizes the carrying value of loans and leases sold by major loan type during the three and six months ended June 30, 2019 and 2018:



(in thousands)	Three Months Ended				Six Months Ended
	June 30, 2019		June 30, 2018		June 30, 2019		June 30, 2018
Commercial real estate
Non-owner occupied term, net	$	2,943	$	763	$	7,762	$	5,154
Owner occupied term, net	8,261		8,542		12,971		14,092
Commercial
Term, net	10,522		9,331		15,963		19,789
Leases & equipment finance, net	17,571		—		17,571		—
Residential
Mortgage, net	—		—		109		—
Total	$	39,297	$	18,636	$	54,376	$	39,035