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Loans and Leases
 6 Months Ended
Jun. 30, 2020
Receivables [Abstract]  
Loans and Leases LOANS AND LEASES
Our loans are carried at the principal amount outstanding, net of deferred fees and costs, and in the case of acquired and purchased loans, net of purchase discounts and premiums. Deferred fees and costs and purchase discounts and premiums on acquired loans are recognized as an adjustment to interest income over the contractual life of the loans primarily using the effective interest method or taken into income when the related loans are paid off or included in the carrying amount of loans that are sold.
Loans and Leases Held for Investment
The following table summarizes the composition of our loans and leases held for investment as of the dates indicated:
June 30,December 31,
20202019
(In thousands)
Real estate mortgage$7,963,898  $7,982,383  
Real estate construction and land3,371,672  2,773,209  
Commercial8,033,592  7,714,358  
Consumer411,314  440,790  
Total gross loans and leases held for investment19,780,476  18,910,740  
Deferred fees, net(85,845) (63,868) 
Total loans and leases held for investment, net of deferred fees19,694,631  18,846,872  
Allowance for loan and lease losses(301,050) (138,785) 
Total loans and leases held for investment, net (1)
$19,393,581  $18,708,087  
____________________
(1) Excludes accrued interest receivable of $63.0 million and $67.5 million at June 30, 2020 and December 31, 2019, respectively, which is recorded in "Other assets" on the condensed consolidated balance sheets.
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:
June 30, 2020
30 - 8990 or More
DaysDaysTotal
Past DuePast DuePast DueCurrentTotal
 (In thousands)
Real estate mortgage:
Commercial$42,784  $6,985  $49,769  $4,172,306  $4,222,075  
Income producing and other residential50  654  704  3,732,955  3,733,659  
Total real estate mortgage42,834  7,639  50,473  7,905,261  7,955,734  
Real estate construction and land:
Commercial—  —  —  1,167,609  1,167,609  
Residential1,022  —  1,022  2,171,897  2,172,919  
Total real estate construction and land1,022  —  1,022  3,339,506  3,340,528  
Commercial:
Asset-based3,697  17,725  21,422  3,391,009  3,412,431  
Venture capital3,939  —  3,939  1,810,402  1,814,341  
Other commercial7,991  1,877  9,868  2,750,410  2,760,278  
Total commercial15,627  19,602  35,229  7,951,821  7,987,050  
Consumer1,067  215  1,282  410,037  411,319  
Total$60,550  $27,456  $88,006  $19,606,625  $19,694,631  
December 31, 2019
30 - 8990 or More
DaysDaysTotal
Past DuePast DuePast DueCurrentTotal
 (In thousands)
Real estate mortgage:
Commercial$2,448  $5,919  $8,367  $4,194,320  $4,202,687  
Income producing and other residential2,105  802  2,907  3,767,153  3,770,060  
Total real estate mortgage4,553  6,721  11,274  7,961,473  7,972,747  
Real estate construction and land:
Commercial—  —  —  1,082,368  1,082,368  
Residential1,429  —  1,429  1,654,005  1,655,434  
Total real estate construction and land1,429  —  1,429  2,736,373  2,737,802  
Commercial:
Asset-based19  —  19  3,748,388  3,748,407  
Venture capital—  —  —  2,179,422  2,179,422  
Other commercial2,781  4,164  6,945  1,760,722  1,767,667  
Total commercial2,800  4,164  6,964  7,688,532  7,695,496  
Consumer1,006  200  1,206  439,621  440,827  
Total$9,788  $11,085  $20,873  $18,825,999  $18,846,872  
It is our policy to discontinue accruing interest when principal or interest payments are past due 90 days or more (unless the loan is both well secured and in the process of collection) or when, in the opinion of management, there is a reasonable doubt as to the collectability of a loan or lease in the normal course of business. Interest income on nonaccrual loans is recognized only to the extent cash is received and the principal balance of the loan is deemed collectable.
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:  
 June 30, 2020December 31, 2019
NonaccrualPerformingTotalNonaccrualPerformingTotal
 (In thousands)
Real estate mortgage:
Commercial$61,771  $4,160,304  $4,222,075  $18,346  $4,184,341  $4,202,687  
Income producing and other residential2,207  3,731,452  3,733,659  2,478  3,767,582  3,770,060  
Total real estate mortgage63,978  7,891,756  7,955,734  20,824  7,951,923  7,972,747  
Real estate construction and land:
Commercial337  1,167,272  1,167,609  364  1,082,004  1,082,368  
Residential—  2,172,919  2,172,919  —  1,655,434  1,655,434  
Total real estate construction and land337  3,340,191  3,340,528  364  2,737,438  2,737,802  
Commercial:
Asset-based19,013  3,393,418  3,412,431  30,162  3,718,245  3,748,407  
Venture capital8,270  1,806,071  1,814,341  12,916  2,166,506  2,179,422  
Other commercial73,995  2,686,283  2,760,278  27,594  1,740,073  1,767,667  
Total commercial101,278  7,885,772  7,987,050  70,672  7,624,824  7,695,496  
Consumer520  410,799  411,319  493  440,334  440,827  
Total$166,113  $19,528,518  $19,694,631  $92,353  $18,754,519  $18,846,872  
At June 30, 2020, nonaccrual loans and leases included $27.5 million of loans and leases 90 or more days past due, $52.6 million of loans and leases 30 to 89 days past due, and $86.0 million of loans and leases current with respect to contractual payments that were placed on nonaccrual status based on management’s judgment regarding their collectability. At December 31, 2019, nonaccrual loans and leases included $11.1 million of loans and leases 90 or more days past due, $1.2 million of loans and leases 30 to 89 days past due, and $80.0 million of current loans and leases that were placed on nonaccrual status based on management’s judgment regarding their collectability.
As of June 30, 2020, our three largest loan relationships on nonaccrual status had an aggregate carrying value of $86.5 million and represented 52% of total nonaccrual loans and leases.
The following tables present the credit risk rating categories for loans and leases held for investment, net of deferred fees, by loan portfolio segment and class as of the dates indicated. Classified loans and leases are those with a credit risk rating of either substandard or doubtful.
June 30, 2020
ClassifiedSpecial MentionPassTotal
(In thousands)
Real estate mortgage:
Commercial$71,446  $322,312  $3,828,317  $4,222,075  
Income producing and other residential6,941  6,150  3,720,568  3,733,659  
Total real estate mortgage78,387  328,462  7,548,885  7,955,734  
Real estate construction and land:
Commercial337  12,354  1,154,918  1,167,609  
Residential—  —  2,172,919  2,172,919  
Total real estate construction and land337  12,354  3,327,837  3,340,528  
Commercial:
Asset-based25,008  186,813  3,200,610  3,412,431  
Venture capital29,054  138,403  1,646,884  1,814,341  
Other commercial159,814  82,313  2,518,151  2,760,278  
Total commercial213,876  407,529  7,365,645  7,987,050  
Consumer 630  18,052  392,637  411,319  
Total$293,230  $766,397  $18,635,004  $19,694,631  

December 31, 2019
ClassifiedSpecial MentionPassTotal
(In thousands)
Real estate mortgage:
Commercial$33,535  $30,070  $4,139,082  $4,202,687  
Income producing and other residential8,600  1,711  3,759,749  3,770,060  
Total real estate mortgage42,135  31,781  7,898,831  7,972,747  
Real estate construction and land:
Commercial364  —  1,082,004  1,082,368  
Residential—  1,429  1,654,005  1,655,434  
Total real estate construction and land364  1,429  2,736,009  2,737,802  
Commercial:
Asset-based32,223  38,936  3,677,248  3,748,407  
Venture capital35,316  74,813  2,069,293  2,179,422  
Other commercial65,261  174,785  1,527,621  1,767,667  
Total commercial132,800  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  
The following table presents our nonaccrual loans and leases by loan portfolio segment and class and by with and without an allowance recorded as of the date indicated and interest income recognized on nonaccrual loans and leases for the period indicated:
At and For the Three Months EndedAt and For the Six Months Ended
 June 30, 2020June 30, 2020
NonaccrualInterestNonaccrualInterest
Recorded Income RecordedIncome
InvestmentRecognizedInvestmentRecognized
 (In thousands)(In thousands)
With An Allowance Recorded:  
Real estate mortgage:
Commercial$304  $—  $304  $—  
Income producing and other residential1,445  —  1,445  —  
Commercial:
Asset based2,458  —  2,458  —  
Venture capital8,270  —  8,270  —  
Other commercial45,569  —  45,569  —  
Consumer520  —  520  —  
With No Related Allowance Recorded:
Real estate mortgage:
Commercial$61,467  $62  $61,467  $130  
Income producing and other residential762  —  762  —  
Real estate construction and land:
Commercial337  —  337  —  
Commercial:
Asset based16,555  —  16,555  —  
Other commercial28,426  1,196  28,426  1,220  
Total Loans and Leases With and
Without an Allowance Recorded:
Real estate mortgage$63,978  $62  $63,978  $130  
Real estate construction and land337  —  337  —  
Commercial101,278  1,196  101,278  1,220  
Consumer520  —  520  —  
Total$166,113  $1,258  $166,113  $1,350  
The following tables present our loans held for investment by loan portfolio segment and class, by credit quality indicator (internal risk ratings), and by year of origination (vintage year) as of the date indicated:
Revolving
Converted
Amortized Cost BasisTerm Loans by Origination YearRevolvingto Term
June 30, 202020202019201820172016PriorLoansLoansTotal
(In thousands)
Real Estate Mortgage:
Commercial
Internal risk rating:
1-2 High pass$—  $—  $15,131  $15,672  $10,233  $62,921  $—  $—  $103,957  
3-4 Pass338,636  538,666  720,870  805,795  358,812  890,775  66,993  3,813  3,724,360  
5 Special mention—  55,250  92,175  2,558  77,811  94,518  —  —  322,312  
6-8 Classified—  1,367  183  21,747  2,909  45,240  —  —  71,446  
Total$338,636  $595,283  $828,359  $845,772  $449,765  $1,093,454  $66,993  $3,813  $4,222,075  
Current YTD period:
Gross charge-offs$—  $—  $—  $1,831  $—  $2,676  $—  $—  $4,507  
Gross recoveries—  —  —  —  —  (237) —  —  (237) 
Net $—  $—  $—  $1,831  $—  $2,439  $—  $—  $4,270  
Real Estate Mortgage:
Income Producing and
Other Residential
Internal risk rating:
1-2 High pass$—  $34,966  $76,744  $46,031  $54,261  $28,639  $—  $—  $240,641  
3-4 Pass148,116  843,413  1,243,035  653,956  260,740  220,111  109,783  773  3,479,927  
5 Special mention—  —  2,888  962  —  —  2,300  —  6,150  
6-8 Classified—  —  —  —  —  5,452  106  1,383  6,941  
Total$148,116  $878,379  $1,322,667  $700,949  $315,001  $254,202  $112,189  $2,156  $3,733,659  
Current YTD period:
Gross charge-offs$—  $—  $—  $—  $—  $—  $—  $175  $175  
Gross recoveries—  —  —  —  —  (13) (1) —  (14) 
Net $—  $—  $—  $—  $—  $(13) $(1) $175  $161  
Real Estate Construction
and Land: Commercial
Internal risk rating:
1-2 High pass$—  $—  $—  $—  $—  $—  $—  $—  $—  
3-4 Pass22,576  285,286  362,367  216,294  119,503  137,008  7,112  4,772  1,154,918  
5 Special mention—  —  12,354  —  —  —  —  —  12,354  
6-8 Classified—  —  —  —  —  337  —  —  337  
Total$22,576  $285,286  $374,721  $216,294  $119,503  $137,345  $7,112  $4,772  $1,167,609  
Current YTD period:
Gross charge-offs$—  $—  $—  $—  $—  $—  $—  $—  $—  
Gross recoveries—  —  —  —  —  —  —  —  —  
Net $—  $—  $—  $—  $—  $—  $—  $—  $—  
Revolving
Converted
Amortized Cost BasisTerm Loans by Origination YearRevolvingto Term
June 30, 202020202019201820172016PriorLoansLoansTotal
(In thousands)
Real Estate Construction
and Land: Residential
Internal risk rating:
1-2 High pass$—  $—  $—  $—  $—  $—  $—  $—  $—  
3-4 Pass177,247  366,209  783,534  671,665  110,532  2,051  18,714  42,967  2,172,919  
5 Special mention—  —  —  —  —  —  —  —  —  
6-8 Classified—  —  —  —  —  —  —  —  —  
Total$177,247  $366,209  $783,534  $671,665  $110,532  $2,051  $18,714  $42,967  $2,172,919  
Current YTD period:
Gross charge-offs$—  $—  $—  $—  $—  $—  $—  $—  $—  
Gross recoveries—  —  —  —  —  —  —  —  —  
Net $—  $—  $—  $—  $—  $—  $—  $—  $—  
Commercial: Asset-Based
Internal risk rating:
1-2 High pass$22,993  $178,052  $116,797  $65,756  $130,266  $95,166  $288,230  $98,416  $995,676  
3-4 Pass45,866  141,935  111,495  40,166  58,534  60,573  1,722,555  23,810  2,204,934  
5 Special mention—  66,446  52,740  22,597  18,793  1,429  19,720  5,088  186,813  
6-8 Classified—  —  —  —  —  15,854  8,836  318  25,008  
Total$68,859  $386,433  $281,032  $128,519  $207,593  $173,022  $2,039,341  $127,632  $3,412,431  
Current YTD period:
Gross charge-offs$—  $—  $—  $—  $—  $11,550  $—  $—  $11,550  
Gross recoveries(8) —  —  —  —  (323) (56) —  (387) 
Net $(8) $—  $—  $—  $—  $11,227  $(56) $—  $11,163  
Commercial: Venture
Capital
Internal risk rating:
1-2 High pass (1)
$—  $5,649  $—  $(6) $(6) $(2) $237,484  $—  $243,119  
3-4 Pass50,908  172,879  82,954  11,696  34,275  9,055  1,036,748  5,250  1,403,765  
5 Special mention9,499  28,162  27,430  4,000  610  —  66,685  2,017  138,403  
6-8 Classified—  (866) 10,871  —  —  3,632  12,574  2,843  29,054  
Total$60,407  $205,824  $121,255  $15,690  $34,879  $12,685  $1,353,491  $10,110  $1,814,341  
Current YTD period:
Gross charge-offs$—  $—  $6,532  $—  $(8) $149  $140  $—  $6,813  
Gross recoveries—  —  (41) (104) (136) (3) (15) —  (299) 
Net $—  $—  $6,491  $(104) $(144) $146  $125  $—  $6,514  
____________________
(1) Amounts with negative balances are loans with zero principal balances but have deferred loan origination fees.
Revolving
Converted
Amortized Cost BasisTerm Loans by Origination YearRevolvingto Term
June 30, 202020202019201820172016PriorLoansLoansTotal
(In thousands)
Commercial: Other
Commercial
Internal risk rating:
1-2 High pass$1,209,264  $432  $8  $16,894  $1  $3,076  $97,116  $136  $1,326,927  
3-4 Pass19,833  102,743  112,650  97,807  33,596  108,841  698,428  17,326  1,191,224  
5 Special mention—  109  —  818  1,995  4,892  73,339  1,160  82,313  
6-8 Classified1  3  35  70  4,126  46,522  105,085  3,972  159,814  
Total$1,229,098  $103,287  $112,693  $115,589  $39,718  $163,331  $973,968  $22,594  $2,760,278  
Current YTD period:
Gross charge-offs$—  $—  $—  $52  $—  $996  $10,031  $1,229  $12,308  
Gross recoveries—  —  (8) (19) (73) (2,459) (100) (2) (2,661) 
Net $—  $—  $(8) $33  $(73) $(1,463) $9,931  $1,227  $9,647  
Consumer
Internal risk rating:
1-2 High pass$23  $—  $10  $18  $—  $—  $752  $—  $803  
3-4 Pass51,068  138,584  71,591  50,523  53,886  15,445  10,735  2  391,834  
5 Special mention—  637  9,971  2,097  3,592  1,755  —  —  18,052  
6-8 Classified—  57  116  —  62  355  1  39  630  
Total$51,091  $139,278  $81,688  $52,638  $57,540  $17,555  $11,488  $41  $411,319  
Current YTD period:
Gross charge-offs$—  $97  $86  $135  $295  $—  $21  $4  $638  
Gross recoveries—  —  (1) (5) (14) (21) —  —  (41) 
Net $—  $97  $85  $130  $281  $(21) $21  $4  $597  
Total Loans and Leases
Internal risk rating:
1-2 High pass$1,232,280  $219,099  $208,690  $144,365  $194,755  $189,800  $623,582  $98,552  $2,911,123  
3-4 Pass854,250  2,589,715  3,488,496  2,547,902  1,029,878  1,443,859  3,671,068  98,713  15,723,881  
5 Special mention9,499  150,604  197,558  33,032  102,801  102,594  162,044  8,265  766,397  
6-8 Classified1  561  11,205  21,817  7,097  117,392  126,602  8,555  293,230  
Total$2,096,030  $2,959,979  $3,905,949  $2,747,116  $1,334,531  $1,853,645  $4,583,296  $214,085  $19,694,631  
Current YTD period:
Gross charge-offs$—  $97  $6,618  $2,018  $287  $15,371  $10,192  $1,408  $35,991  
Gross recoveries(8) —  (50) (128) (223) (3,056) (172) (2) (3,639) 
Net $(8) $97  $6,568  $1,890  $64  $12,315  $10,020  $1,406  $32,352  
TDRs are a result of rate reductions, term extensions, fee concessions, and debt forgiveness, or a combination thereof. The Company has granted various consumer and commercial loan modifications to provide borrowers relief from the economic impacts of COVID-19. In accordance with the CARES Act, the Company has elected to not apply TDR classification to COVID-19 related loan modifications that met all of the requisite criteria as stipulated in the CARES Act. 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 June 30,
 20202019
Pre-Post-Pre-Post-
ModificationModificationModificationModification
NumberOutstandingOutstandingNumberOutstandingOutstanding
of RecordedRecordedof RecordedRecorded
Troubled Debt RestructuringsLoansInvestmentInvestmentLoansInvestmentInvestment
 (Dollars in thousands)
Real estate mortgage:
Commercial7  $3,745  $3,745  —  $—  $—  
Income producing and other residential5  787  787  3  456  456  
Commercial:
Asset-based 6  1,234  1,234  1  620  620  
Venture capital—  —  —  4  13,971  14,972  
Other commercial19  18,840  15,726  3  107  107  
Consumer3  212  212  —  —  —  
Total 40  $24,818  $21,704  11  $15,154  $16,155  

Six Months Ended June 30,
 20202019
Pre-Post-Pre-Post-
ModificationModificationModificationModification
NumberOutstandingOutstandingNumberOutstandingOutstanding
of RecordedRecordedof RecordedRecorded
Troubled Debt RestructuringsLoansInvestmentInvestmentLoansInvestmentInvestment
 (Dollars in thousands)
Real estate mortgage:
Commercial8  $3,745  $3,745  1  $37  $—  
Income producing and other residential5  787  787  6  1,245  1,245  
Commercial:
Asset-based 7  1,741  1,741  1  620  620  
Venture capital2  2,047  2,047  10  16,076  16,214  
Other commercial30  23,219  21,444  11  692  692  
Consumer3  212  212  —  —  —  
Total 55  $31,751  $29,976  29  $18,670  $18,771  
During the three and six months ended June 30, 2020, there was one $2.0 million venture capital loan restructured in the preceding 12-month period that subsequently defaulted.
During the three months ended June 30, 2019, there were two venture capital loans totaling $447,000 and one other commercial loan of $81,000, restructured in the preceding 12-month period that subsequently defaulted. During the six months ended June 30, 2019, there were two venture capital loans totaling $447,000 and three other commercial loans totaling $140,000, restructured in the preceding 12-month period that subsequently defaulted.
Leases Receivable
We provide equipment financing to our customers primarily with operating and direct financing leases. For direct financing leases, lease receivables are recorded on the balance sheet but the leased equipment is not, although we generally retain legal title to the leased equipment until the end of each lease. Direct financing leases are stated at the net amount of minimum lease payments receivable, plus any unguaranteed residual value, less the amount of unearned income and net acquisition discount at the reporting date. Direct lease origination costs are amortized using the effective interest method over the life of the leases. Direct financing leases are subject to our accounting for allowance for loan and lease losses. See Note 8. Leases for information regarding operating leases where we are the lessor.
The following table provides the components of leases receivable income for the periods indicated:
Three Months EndedSix Months Ended
June 30,June 30,
2020201920202019
(In thousands)
Component of leases receivable income:
Interest income on net investments in leases$2,103  $2,886  $4,355  $6,026  

The following table presents the components of leases receivable as of the dates indicated:
June 30, 2020December 31, 2019
(In thousands)
Net investment in direct financing leases:
Lease payments receivable$137,984  $147,729  
Unguaranteed residual assets18,653  20,806  
Deferred costs and other577  655  
Aggregate net investment in leases$157,214  $169,190  
The following table presents maturities of leases receivable as of the date indicated:
June 30, 2020
(In thousands)
Period ending December 31,
2020$35,218  
202161,182  
202224,981  
202314,366  
202410,469  
2025 and thereafter2,766  
Total undiscounted cash flows148,982  
Less: Unearned income(10,998) 
Present value of lease payments$137,984  
Allowance for Loan and Lease 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 June 30, 2020
Real Estate
Real EstateConstruction
Mortgageand LandCommercialConsumerTotal
(In thousands)
Allowance for Loan and Lease Losses:
Balance, beginning of period$91,372  $40,173  $87,570  $2,177  $221,292  
Charge-offs(4,182) —  (11,439) (165) (15,786) 
Recoveries127  —  2,392  25  2,544  
Net charge-offs(4,055) —  (9,047) (140) (13,242) 
Provision43,407  29,940  19,424  229  93,000  
Balance, end of period$130,724  $70,113  $97,947  $2,266  $301,050  

Six Months Ended June 30, 2020
Real Estate
Real EstateConstruction
Mortgageand LandCommercialConsumerTotal
(In thousands)
Allowance for Loan and Lease Losses:
Balance, beginning of period$44,575  $30,544  $61,528  $2,138  $138,785  
Charge-offs(4,682) —  (30,671) (638) (35,991) 
Recoveries251  —  3,347  41  3,639  
Net charge-offs(4,431) —  (27,324) (597) (32,352) 
Provision85,272  48,161  56,883  684  191,000  
Cumulative effect of change in accounting
principle - CECL5,308  (8,592) 6,860  41  3,617  
Balance, end of period$130,724  $70,113  $97,947  $2,266  $301,050  
Ending Allowance by
Evaluation Methodology:
Individually evaluated $211  $—  $8,282  $—  $8,493  
Collectively evaluated $130,513  $70,113  $89,665  $2,266  $292,557  
Ending Loans and Leases by
Evaluation Methodology:
Individually evaluated $68,240  $1,799  $105,661  $—  $175,700  
Collectively evaluated 7,887,494  3,338,729  7,881,389  411,319  19,518,931  
Ending balance$7,955,734  $3,340,528  $7,987,050  $411,319  $19,694,631  
Three Months Ended June 30, 2019
Real Estate
Real EstateConstruction
Mortgageand LandCommercialConsumerTotal
(In thousands)
Allowance for Loan and Lease Losses:
Balance, beginning of period$45,754  $27,208  $61,496  $1,823  $136,281  
Charge-offs(534) —  (16,927) (176) (17,637) 
Recoveries240  —  6,080  73  6,393  
Net charge-offs(294) —  (10,847) (103) (11,244) 
Provision (negative provision)1,366  (830) 8,752  712  10,000  
Balance, end of period$46,826  $26,378  $59,401  $2,432  $135,037  

Six Months Ended June 30, 2019
Real Estate
Real EstateConstruction
Mortgageand LandCommercialConsumerTotal
(In thousands)
Allowance for Loan and Lease Losses:
Balance, beginning of period $46,021  $28,209  $56,360  $1,882  $132,472  
Charge-offs(730) —  (19,930) (442) (21,102) 
Recoveries383  —  9,186  98  9,667  
Net charge-offs(347) —  (10,744) (344) (11,435) 
Provision (negative provision)1,152  (1,831) 13,785  894  14,000  
Balance, end of period$46,826  $26,378  $59,401  $2,432  $135,037  
Ending Allowance by
Evaluation Methodology:
Individually evaluated $260  $—  $4,482  $—  $4,742  
Collectively evaluated $46,566  $26,378  $54,919  $2,432  $130,295  
Ending Loans and Leases by
Evaluation Methodology:
Individually evaluated $27,594  $5,376  $60,380  $—  $93,350  
Collectively evaluated 8,048,432  2,370,754  7,513,934  446,382  18,379,502  
Ending balance$8,076,026  $2,376,130  $7,574,314  $446,382  $18,472,852  
The allowance for loan and lease losses increased by $79.8 million in the second quarter of 2020 to $301.1 million due primarily to a provision for loan and lease losses of $93.0 million driven by the impact from the significant deterioration and continued uncertainty in the key macro-economic forecast variables such as unemployment and GDP as a result of COVID-19.
We actively participated in the Paycheck Protection Program ("PPP"), under the provisions of the Coronavirus Aid, Relief, and Economic Security ("CARES") Act during the second quarter of 2020. As of June 30, 2020, we processed approximately $1.2 billion in loans through the PPP. The loans have two-year terms, are fully guaranteed by the SBA, and do not carry an allowance.
A loan is considered collateral-dependent, and is individually evaluated for reserve purposes, when the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of the collateral. The following table summarizes collateral-dependent loans held for investment by collateral type as of the following date:
June 30, 2020
RealBusiness
PropertyAssetsTotal
(In thousands)
Real estate mortgage$62,021  $—  $62,021  
Real estate construction and land1,799  —  1,799  
Commercial—  32,135  32,135  
     Total$63,820  $32,135  $95,955  
Allowance for Credit Losses
The allowance for credit losses is the combination of the allowance for loan and lease losses and the reserve for unfunded loan commitments. The reserve for unfunded loan commitments is included within "Accrued interest payable and other liabilities" on the condensed consolidated balance sheets.
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
June 30, 2020
Allowance for Reserve forTotal
Loan and Unfunded LoanAllowance for
Lease LossesCommitmentsCredit Losses
(In thousands)
Balance, beginning of period$221,292  $53,571  $274,863  
Charge-offs(15,786) —  (15,786) 
Recoveries2,544  —  2,544  
Net charge-offs(13,242) —  (13,242) 
Provision 93,000  27,000  120,000  
Balance, end of period$301,050  $80,571  $381,621  

Six Months Ended
June 30, 2020
Allowance for Reserve forTotal
Loan and Unfunded LoanAllowance for
Lease LossesCommitmentsCredit Losses
(In thousands)
Balance, beginning of period $138,785  $35,861  $174,646  
Charge-offs(35,991) —  (35,991) 
Recoveries3,639  —  3,639  
Net charge-offs(32,352) —  (32,352) 
Provision191,000  41,000  232,000  
Cumulative effect of change in accounting
principle - CECL3,617  3,710  7,327  
Balance, end of period$301,050  $80,571  $381,621  
Three Months Ended
June 30, 2019
Allowance for Reserve forTotal
Loan and Unfunded LoanAllowance for
Lease LossesCommitmentsCredit Losses
(In thousands)
Balance, beginning of period$136,281  $36,861  $173,142  
Charge-offs(17,637) —  (17,637) 
Recoveries6,393  —  6,393  
Net charge-offs(11,244) —  (11,244) 
Provision (negative provision)10,000  (2,000) 8,000  
Balance, end of period$135,037  $34,861  $169,898  

Six Months Ended
June 30, 2019
Allowance for Reserve forTotal
Loan and Unfunded LoanAllowance for
Lease LossesCommitmentsCredit Losses
(In thousands)
Balance, beginning of period$132,472  $36,861  $169,333  
Charge-offs(21,102) —  (21,102) 
Recoveries9,667  —  9,667  
Net charge-offs(11,435) —  (11,435) 
Provision (negative provision)14,000  (2,000) 12,000  
Balance, end of period$135,037  $34,861  $169,898