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Loans and Leases (Tables)

3 Months Ended

Mar. 31, 2020

Schedule of composition of loans portfolio

The following table summarizes the composition of our loans and leases held for investment as of the dates indicated:



	March 31,			December 31,
	2020			2019
	(In thousands)
Real estate mortgage	$	8,018,704		$	7,982,383
Real estate construction and land	2,913,843			2,773,209
Commercial	8,443,966			7,714,358
Consumer	429,881			440,790
Total gross loans and leases held for investment	19,806,394			18,910,740
Deferred fees, net	(61,089		)	(63,868		)
Total loans and leases held for investment, net of deferred fees	19,745,305			18,846,872
Allowance for loan and lease losses	(221,292		)	(138,785		)
Total loans and leases held for investment, net ⁽¹⁾	$	19,524,013		$	18,708,087

Delinquent loans in loan portfolio

The following tables present an aging analysis of our loans and leases held for investment, net of deferred fees, by loan portfolio segment and class as of the dates indicated:



	March 31, 2020
	30 - 89		90 or More
	Days		Days		Total
	Past Due		Past Due		Past Due		Current		Total
	(In thousands)
Real estate mortgage:
Commercial	$	4,569	$	6,241	$	10,810	$	4,209,839	$	4,220,649
Income producing and other residential	1,337		682		2,019		3,786,276		3,788,295
Total real estate mortgage	5,906		6,923		12,829		7,996,115		8,008,944
Real estate construction and land:
Commercial	—		—		—		1,087,505		1,087,505
Residential	241		—		241		1,792,507		1,792,748
Total real estate construction and land	241		—		241		2,880,012		2,880,253
Commercial:
Asset-based	—		—		—		3,938,402		3,938,402
Venture capital	3,272		2,989		6,261		2,709,576		2,715,837
Other commercial	4,884		2,022		6,906		1,765,079		1,771,985
Total commercial	8,156		5,011		13,167		8,413,057		8,426,224
Consumer	518		102		620		429,264		429,884
Total	$	14,821	$	12,036	$	26,857	$	19,718,448	$	19,745,305



	December 31, 2019
	30 - 89		90 or More
	Days		Days		Total
	Past Due		Past Due		Past Due		Current		Total
	(In thousands)
Real estate mortgage:
Commercial	$	2,448	$	5,919	$	8,367	$	4,194,320	$	4,202,687
Income producing and other residential	2,105		802		2,907		3,767,153		3,770,060
Total real estate mortgage	4,553		6,721		11,274		7,961,473		7,972,747
Real estate construction and land:
Commercial	—		—		—		1,082,368		1,082,368
Residential	1,429		—		1,429		1,654,005		1,655,434
Total real estate construction and land	1,429		—		1,429		2,736,373		2,737,802
Commercial:
Asset-based	19		—		19		3,748,388		3,748,407
Venture capital	—		—		—		2,179,422		2,179,422
Other commercial	2,781		4,164		6,945		1,760,722		1,767,667
Total commercial	2,800		4,164		6,964		7,688,532		7,695,496
Consumer	1,006		200		1,206		439,621		440,827
Total	$	9,788	$	11,085	$	20,873	$	18,825,999	$	18,846,872

Financing Receivable, Nonaccrual

The following table presents our nonaccrual and performing loans and leases held for investment, net of deferred fees, by loan portfolio segment and class as of the dates indicated:



	March 31, 2020						December 31, 2019
	Nonaccrual		Performing		Total		Nonaccrual		Performing		Total
	(In thousands)
Real estate mortgage:
Commercial	$	19,088	$	4,201,561	$	4,220,649	$	18,346	$	4,184,341	$	4,202,687
Income producing and other residential	2,308		3,785,987		3,788,295		2,478		3,767,582		3,770,060
Total real estate mortgage	21,396		7,987,548		8,008,944		20,824		7,951,923		7,972,747
Real estate construction and land:
Commercial	351		1,087,154		1,087,505		364		1,082,004		1,082,368
Residential	—		1,792,748		1,792,748		—		1,655,434		1,655,434
Total real estate construction and land	351		2,879,902		2,880,253		364		2,737,438		2,737,802
Commercial:
Asset-based	17,104		3,921,298		3,938,402		30,162		3,718,245		3,748,407
Venture capital	18,612		2,697,225		2,715,837		12,916		2,166,506		2,179,422
Other commercial	37,726		1,734,259		1,771,985		27,594		1,740,073		1,767,667
Total commercial	73,442		8,352,782		8,426,224		70,672		7,624,824		7,695,496
Consumer	413		429,471		429,884		493		440,334		440,827
Total	$	95,602	$	19,649,703	$	19,745,305	$	92,353	$	18,754,519	$	18,846,872

CV of loans held for investment by class by performing and nonperforming



	March 31, 2020
	Classified		Special Mention		Pass		Total
	(In thousands)
Real estate mortgage:
Commercial	$	33,908	$	371,668	$	3,815,073	$	4,220,649
Income producing and other residential	7,083		2,491		3,778,721		3,788,295
Total real estate mortgage	40,991		374,159		7,593,794		8,008,944
Real estate construction and land:
Commercial	351		10,577		1,076,577		1,087,505
Residential	—		—		1,792,748		1,792,748
Total real estate construction and land	351		10,577		2,869,325		2,880,253
Commercial:
Asset-based	23,218		152,136		3,763,048		3,938,402
Venture capital	31,110		173,947		2,510,780		2,715,837
Other commercial	51,498		186,368		1,534,119		1,771,985
Total commercial	105,826		512,451		7,807,947		8,426,224
Consumer	537		1,471		427,876		429,884
Total	$	147,705	$	898,658	$	18,698,942	$	19,745,305



	December 31, 2019
	Classified		Special Mention		Pass		Total
	(In thousands)
Real estate mortgage:
Commercial	$	33,535	$	30,070	$	4,139,082	$	4,202,687
Income producing and other residential	8,600		1,711		3,759,749		3,770,060
Total real estate mortgage	42,135		31,781		7,898,831		7,972,747
Real estate construction and land:
Commercial	364		—		1,082,004		1,082,368
Residential	—		1,429		1,654,005		1,655,434
Total real estate construction and land	364		1,429		2,736,009		2,737,802
Commercial:
Asset-based	32,223		38,936		3,677,248		3,748,407
Venture capital	35,316		74,813		2,069,293		2,179,422
Other commercial	65,261		174,785		1,527,621		1,767,667
Total commercial	132,800		288,534		7,274,162		7,695,496
Consumer	613		1,212		439,002		440,827
Total	$	175,912	$	322,956	$	18,348,004	$	18,846,872

Finance Receivable Investment And Interest Income, Nonaccrual



	At and For the Three Months Ended
	March 31, 2020
	Nonaccrual		Interest
	Recorded		Income
	Investment		Recognized
	(In thousands)
With An Allowance Recorded:
Real estate mortgage:
Commercial	$	342	$	—
Income producing and other residential	1,534		—
Commercial:
Venture capital	15,524		—
Other commercial	28,782		—
Consumer	413		—
With No Related Allowance Recorded:
Real estate mortgage:
Commercial	$	18,746	$	84
Income producing and other residential	774		—
Real estate construction and land:
Commercial	351		—
Commercial:
Asset based	17,103		—
Venture capital	3,089		—
Other commercial	8,944		24
Total Loans and Leases With and
Without an Allowance Recorded:
Real estate mortgage	$	21,396	$	84
Real estate construction and land	351		—
Commercial	73,442		24
Consumer	413		—
Total	$	95,602	$	108

Finance Receivable, Loans By Origination Year

The following tables present our loans held for investment by loan portfolio segment and class, by credit quality indicator (internal risk ratings), and by year of origination (vintage year) as of the date indicated:



																	Revolving
																	Converted
Amortized Cost Basis	Term Loans by Origination Year													Revolving			to Term
March 31, 2020	2020		2019		2018		2017		2016		Prior			Loans			Loans		Total
	(In thousands)
Real Estate Mortgage:
Commercial
Internal risk rating:
1-2 High pass	$	—	$	—	$	15,151	$	10,230	$	8,439	$	54,639		$	—		$	—	$	88,459
3-4 Pass	257,882		535,541		729,459		824,199		372,166		937,158			66,377			3,832		3,726,614
5 Special mention	—		56,577		90,921		18,806		75,754		129,610			—			—		371,668
6-8 Classified	—		—		183		7,516		4,468		21,741			—			—		33,908
Total	$	257,882	$	592,118	$	835,714	$	860,751	$	460,827	$	1,143,148		$	66,377		$	3,832	$	4,220,649
Current YTD period:
Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	325		$	—		$	—	$	325
Gross recoveries	—		—		—		—		—		(119		)	—			—		(119		)
Net	$	—	$	—	$	—	$	—	$	—	$	206		$	—		$	—	$	206

Real Estate Mortgage:
Income Producing and
Other Residential
Internal risk rating:
1-2 High pass	$	—	$	37,036	$	87,849	$	44,165	$	55,736	$	49,408		$	—		$	—	$	274,194
3-4 Pass	78,326		851,712		1,254,556		703,249		276,705		227,298			111,585			1,096		3,504,527
5 Special mention	—		—		—		—		—		—			2,300			191		2,491
6-8 Classified	—		—		—		—		—		5,588			112			1,383		7,083
Total	$	78,326	$	888,748	$	1,342,405	$	747,414	$	332,441	$	282,294		$	113,997		$	2,670	$	3,788,295
Current YTD period:
Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—		$	—		$	175	$	175
Gross recoveries	—		—		—		—		—		(4		)	(1		)	—		(5		)
Net	$	—	$	—	$	—	$	—	$	—	$	(4	)	$	(1	)	$	175	$	170

Real Estate Construction
and Land: Commercial
Internal risk rating:
1-2 High pass	$	—	$	—	$	—	$	—	$	—	$	—		$	—		$	—	$	—
3-4 Pass	15,749		244,344		331,283		210,871		129,186		136,050			5,470			3,624		1,076,577
5 Special mention	—		—		10,577		—		—		—			—			—		10,577
6-8 Classified	—		—		—		—		—		351			—			—		351
Total	$	15,749	$	244,344	$	341,860	$	210,871	$	129,186	$	136,401		$	5,470		$	3,624	$	1,087,505
Current YTD period:
Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—		$	—		$	—	$	—
Gross recoveries	—		—		—		—		—		—			—			—		—
Net	$	—	$	—	$	—	$	—	$	—	$	—		$	—		$	—	$	—



																				Revolving
																				Converted
Amortized Cost Basis	Term Loans by Origination Year																Revolving			to Term
March 31, 2020	2020		2019			2018		2017			2016			Prior			Loans			Loans		Total
	(In thousands)
Real Estate Construction
and Land: Residential
Internal risk rating:
1-2 High pass	$	—	$	—		$	—	$	—		$	—		$	—		$	—		$	—	$	—
3-4 Pass	23,686		253,764			711,007		634,325			127,324			2,075			8,909			31,658		1,792,748
5 Special mention	—		—			—		—			—			—			—			—		—
6-8 Classified	—		—			—		—			—			—			—			—		—
Total	$	23,686	$	253,764		$	711,007	$	634,325		$	127,324		$	2,075		$	8,909		$	31,658	$	1,792,748
Current YTD period:
Gross charge-offs	$	—	$	—		$	—	$	—		$	—		$	—		$	—		$	—	$	—
Gross recoveries	—		—			—		—			—			—			—			—		—
Net	$	—	$	—		$	—	$	—		$	—		$	—		$	—		$	—	$	—

Commercial: Asset-Based
Internal risk rating:
1-2 High pass	$	10,832	$	164,402		$	188,677	$	74,590		$	150,284		$	97,445		$	701,522		$	—	$	1,387,752
3-4 Pass	44,396		202,867			123,136		39,665			69,392			66,816			1,806,634			22,390		2,375,296
5 Special mention	—		35,967			48,345		19,652			15,461			1,568			31,143			—		152,136
6-8 Classified	—		—			—		—			—			15,872			7,346			—		23,218
Total	$	55,228	$	403,236		$	360,158	$	133,907		$	235,137		$	181,701		$	2,546,645		$	22,390	$	3,938,402
Current YTD period:
Gross charge-offs	$	—	$	—		$	—	$	—		$	—		$	11,550		$	—		$	—	$	11,550
Gross recoveries	—		—			—		—			—			(323		)	(42		)	—		(365		)
Net	$	—	$	—		$	—	$	—		$	—		$	11,227		$	(42	)	$	—	$	11,185

Commercial: Venture
Capital
Internal risk rating:
1-2 High pass	$	—	$	4,798		$	—	$	(8	)	$	(2	)	$	996		$	389,952		$	—	$	395,736
3-4 Pass	84,493		162,533			104,081		14,226			37,176			10,833			1,694,848			6,854		2,115,044
5 Special mention	1,000		39,663			36,436		—			—			—			96,848			—		173,947
6-8 Classified	—		(822		)	11,167		6,868			—			5,967			7,930			—		31,110
Total	$	85,493	$	206,172		$	151,684	$	21,086		$	37,174		$	17,796		$	2,189,578		$	6,854	$	2,715,837
Current YTD period:
Gross charge-offs	$	—	$	—		$	83	$	—		$	(7	)	$	182		$	85		$	—	$	343
Gross recoveries	—		—			—		(46		)	(119		)	(3		)	(17		)	—		(185		)
Net	$	—	$	—		$	83	$	(46	)	$	(126	)	$	179		$	68		$	—	$	158



																					Revolving
																					Converted
Amortized Cost Basis	Term Loans by Origination Year																	Revolving			to Term
March 31, 2020	2020		2019			2018			2017			2016			Prior			Loans			Loans		Total
	(In thousands)
Commercial: Other
Commercial
Internal risk rating:
1-2 High pass	$	13	$	462		$	8		$	16,915		$	2		$	3,204		$	127,406		$	160	$	148,170
3-4 Pass	11,586		101,273			118,985			102,457			35,130			114,158			884,472			17,888		1,385,949
5 Special mention	—		89			—			694			2,134			42,241			141,173			37		186,368
6-8 Classified	2		4			35			90			4,325			10,324			32,565			4,153		51,498
Total	$	11,601	$	101,828		$	119,028		$	120,156		$	41,591		$	169,927		$	1,185,616		$	22,238	$	1,771,985
Current YTD period:
Gross charge-offs	$	—	$	—		$	—		$	52		$	—		$	190		$	6,375		$	722	$	7,339
Gross recoveries	—		—			(8		)	(12		)	(55		)	(230		)	(100		)	—		(405		)
Net	$	—	$	—		$	(8	)	$	40		$	(55	)	$	(40	)	$	6,275		$	722	$	6,934

Consumer
Internal risk rating:
1-2 High pass	$	16	$	—		$	10		$	27		$	—		$	—		$	651		$	—	$	704
3-4 Pass	27,755		150,949			90,399			59,058			65,145			19,383			14,476			7		427,172
5 Special mention	—		276			564			175			186			270			—			—		1,471
6-8 Classified	—		39			19			—			62			364			11			42		537
Total	$	27,771	$	151,264		$	90,992		$	59,260		$	65,393		$	20,017		$	15,138		$	49	$	429,884
Current YTD period:
Gross charge-offs	$	—	$	—		$	85		$	114		$	263		$	—		$	11		$	—	$	473
Gross recoveries	—		—			—			(2		)	(1		)	(13		)	—			—		(16		)
Net	$	—	$	—		$	85		$	112		$	262		$	(13	)	$	11		$	—	$	457

Total Loans and Leases
Internal risk rating:
1-2 High pass	$	10,861	$	206,698		$	291,695		$	145,919		$	214,459		$	205,692		$	1,219,531		$	160	$	2,295,015
3-4 Pass	543,873		2,502,983			3,462,906			2,588,050			1,112,224			1,513,771			4,592,771			87,349		16,403,927
5 Special mention	1,000		132,572			186,843			39,327			93,535			173,689			271,464			228		898,658
6-8 Classified	2		(779		)	11,404			14,474			8,855			60,207			47,964			5,578		147,705
Total	$	555,736	$	2,841,474		$	3,952,848		$	2,787,770		$	1,429,073		$	1,953,359		$	6,131,730		$	93,315	$	19,745,305
Current YTD period:
Gross charge-offs	$	—	$	—		$	168		$	166		$	256		$	12,247		$	6,471		$	897	$	20,205
Gross recoveries	—		—			(8		)	(60		)	(175		)	(692		)	(160		)	—		(1,095		)
Net	$	—	$	—		$	160		$	106		$	81		$	11,555		$	6,311		$	897	$	19,110

Troubled debt restructurings on financing receivables

The following table presents our troubled debt restructurings of loans held for investment by loan portfolio segment and class for the periods indicated:



	Three Months Ended March 31,
	2020					2019
		Pre-		Post-			Pre-		Post-
		Modification		Modification			Modification		Modification
	Number	Outstanding		Outstanding		Number	Outstanding		Outstanding
	of	Recorded		Recorded		of	Recorded		Recorded
Troubled Debt Restructurings	Loans	Investment		Investment		Loans	Investment		Investment
	(Dollars in thousands)
Real estate mortgage:
Commercial	—	$	—	$	—	1	$	37	$	—
Income producing and other residential	—	—		—		3	789		789
Commercial:
Asset-based	4	1,741		1,741		—	—		—
Venture capital	2	2,047		2,047		6	2,105		1,242
Other commercial	15	22,165		20,389		8	585		585
Total	21	$	25,953	$	24,177	18	$	3,516	$	2,616

Lease Income of Direct Financing Leases

The following table provides the components of leases receivable income for the periods indicated:



	Three Months Ended
	March 31,
	2020		2019
	(In thousands)
Component of leases receivable income:
Interest income on net investments in leases	$	2,252	$	3,140

Assets and Liabilities, Lessor

The following table presents the components of leases receivable as of the dates indicated:



	March 31, 2020		December 31, 2019
	(In thousands)
Net investment in direct financing leases:
Lease payments receivable	$	149,740	$	147,729
Unguaranteed residual assets	20,459		20,806
Deferred costs and other	581		655
Aggregate net investment in leases	$	170,780	$	169,190

Sales-type and Direct Financing Leases, Lease Receivable, Maturity

The following table presents maturities of leases receivable as of the date indicated:



	March 31, 2020
	(In thousands)
Period ending December 31,
2020	$	53,576
2021	59,334
2022	23,920
2023	13,324
2024	9,691
2025 and thereafter	2,352
Total undiscounted cash flows	162,197
Less: Unearned income	(12,457		)
Present value of lease payments	$	149,740

Finance Receivable, Allowance For Loan Losses

The following tables present a summary of the activity in the allowance for loan and lease losses on loans and leases held for investment by loan portfolio segment for the periods indicated:



	Three Months Ended March 31, 2020
				Real Estate
	Real Estate			Construction
	Mortgage			and Land			Commercial			Consumer			Total
	(In thousands)
Allowance for Loan and Lease Losses:
Balance, beginning of period	$	44,575		$	30,544		$	61,528		$	2,138		$	138,785
Charge-offs	(500		)	—			(19,232		)	(473		)	(20,205		)
Recoveries	124			—			955			16			1,095
Net charge-offs	(376		)	—			(18,277		)	(457		)	(19,110		)
Provision	41,865			18,221			37,459			455			98,000
Cumulative effect of change in accounting
principle - CECL	5,308			(8,592		)	6,860			41			3,617
Balance, end of period	$	91,372		$	40,173		$	87,570		$	2,177		$	221,292

Ending Allowance by
Evaluation Methodology:
Individually evaluated	$	230		$	—		$	6,462		$	—		$	6,692
Collectively evaluated	$	91,142		$	40,173		$	81,108		$	2,177		$	214,600

Ending Loans and Leases by
Evaluation Methodology:
Individually evaluated	$	25,901		$	1,816		$	72,280		$	—		$	99,997
Collectively evaluated	7,983,043			2,878,437			8,353,944			429,884			19,645,308
Ending balance	$	8,008,944		$	2,880,253		$	8,426,224		$	429,884		$	19,745,305



	Three Months Ended March 31, 2019
				Real Estate
	Real Estate			Construction
	Mortgage			and Land			Commercial			Consumer			Total
	(In thousands)
Allowance for Loan and Lease Losses:
Balance, beginning of period	$	46,021		$	28,209		$	56,360		$	1,882		$	132,472
Charge-offs	(196		)	—			(3,003		)	(266		)	(3,465		)
Recoveries	143			—			3,106			25			3,274
Net (charge-offs) recoveries	(53		)	—			103			(241		)	(191		)
Provision (negative provision)	(214		)	(1,001		)	5,033			182			4,000
Balance, end of period	$	45,754		$	27,208		$	61,496		$	1,823		$	136,281

Ending Allowance by
Evaluation Methodology:
Individually evaluated	$	270		$	—		$	5,931		$	—		$	6,201
Collectively evaluated	$	45,484		$	27,208		$	55,565		$	1,823		$	130,080

Ending Loans and Leases by
Evaluation Methodology:
Individually evaluated	$	23,908		$	5,432		$	71,660		$	—		$	101,000
Collectively evaluated	8,135,550			2,346,292			7,352,694			372,161			18,206,697
Ending balance	$	8,159,458		$	2,351,724		$	7,424,354		$	372,161		$	18,307,697

Collateral-dependent Finance Receivable

The following table summarizes collateral-dependent loans held for investment by collateral type as of the following date:



	March 31, 2020
	Real		Business
	Property		Assets		Total
	(In thousands)
Real estate mortgage	$	19,310	$	—	$	19,310
Real estate construction and land	1,816		—		1,816
Commercial	—		22,530		22,530
Total	$	21,126	$	22,530	$	43,656

Allowance for credit losses on financing receivables

The following tables present a summary of the activity in the allowance for loan and lease losses and reserve for unfunded loan commitments for the periods indicated:



	Three Months Ended
	March 31, 2020
	Allowance for			Reserve for		Total
	Loan and			Unfunded Loan		Allowance for
	Lease Losses			Commitments		Credit Losses
	(In thousands)
Balance, beginning of period	$	138,785		$	35,861	$	174,646
Charge-offs	(20,205		)	—		(20,205		)
Recoveries	1,095			—		1,095
Net charge-offs	(19,110		)	—		(19,110		)
Provision	98,000			14,000		112,000
Cumulative effect of change in accounting
principle - CECL	3,617			3,710		7,327
Balance, end of period	$	221,292		$	53,571	$	274,863



	Three Months Ended
	March 31, 2019
	Allowance for			Reserve for		Total
	Loan and			Unfunded Loan		Allowance for
	Lease Losses			Commitments		Credit Losses
	(In thousands)
Balance, beginning of period	$	132,472		$	36,861	$	169,333
Charge-offs	(3,465		)	—		(3,465		)
Recoveries	3,274			—		3,274
Net charge-offs	(191		)	—		(191		)
Provision	4,000			—		4,000
Balance, end of period	$	136,281		$	36,861	$	173,142