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Loans and Leases

6 Months Ended

Jun. 30, 2021

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,
	2021		2020
	(In thousands)
Real estate mortgage	$	8,420,546	$	7,905,193
Real estate construction and land	3,544,890		3,393,145
Commercial	7,249,917		7,534,801
Consumer	365,378		320,218
Total gross loans and leases held for investment	19,580,731		19,153,357
Deferred fees, net	(74,474)		(69,980)
Total loans and leases held for investment, net of deferred fees	19,506,257		19,083,377
Allowance for loan and lease losses	(225,600)		(348,181)
Total loans and leases held for investment, net (1)	$	19,280,657	$	18,735,196

____________________

(1) Excludes accrued interest receivable of $73.5 million and $79.7 million at June 30, 2021 and December 31, 2020, 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, 2021
	30 - 89		90 or More
	Days		Days		Total
	Past Due		Past Due		Past Due		Current		Total
	(In thousands)
Real estate mortgage:
Commercial	$	445	$	2,955	$	3,400	$	3,788,798	$	3,792,198
Income producing and other residential	2,179		4,957		7,136		4,613,686		4,620,822
Total real estate mortgage	2,624		7,912		10,536		8,402,484		8,413,020
Real estate construction and land:
Commercial	—		—		—		930,785		930,785
Residential	22,714		1,934		24,648		2,550,151		2,574,799
Total real estate construction and land	22,714		1,934		24,648		3,480,936		3,505,584
Commercial:
Asset-based	—		1,484		1,484		3,549,419		3,550,903
Venture capital	—		335		335		1,749,097		1,749,432
Other commercial	320		1,740		2,060		1,919,849		1,921,909
Total commercial	320		3,559		3,879		7,218,365		7,222,244
Consumer	1,454		287		1,741		363,668		365,409
Total	$	27,112	$	13,692	$	40,804	$	19,465,453	$	19,506,257


	December 31, 2020
	30 - 89		90 or More
	Days		Days		Total
	Past Due		Past Due		Past Due		Current		Total
	(In thousands)
Real estate mortgage:
Commercial	$	6,750	$	29,145	$	35,895	$	4,060,776	$	4,096,671
Income producing and other residential	600		373		973		3,802,292		3,803,265
Total real estate mortgage	7,350		29,518		36,868		7,863,068		7,899,936
Real estate construction and land:
Commercial	—		—		—		1,117,121		1,117,121
Residential	759		—		759		2,242,401		2,243,160
Total real estate construction and land	759		—		759		3,359,522		3,360,281
Commercial:
Asset-based	—		2,128		2,128		3,427,155		3,429,283
Venture capital	540		—		540		1,697,968		1,698,508
Other commercial	2,323		4,766		7,089		2,368,025		2,375,114
Total commercial	2,863		6,894		9,757		7,493,148		7,502,905
Consumer	1,260		111		1,371		318,884		320,255
Total	$	12,232	$	36,523	$	48,755	$	19,034,622	$	19,083,377

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, 2021						December 31, 2020
	Nonaccrual		Performing		Total		Nonaccrual		Performing		Total
	(In thousands)
Real estate mortgage:
Commercial	$	32,065	$	3,760,133	$	3,792,198	$	43,731	$	4,052,940	$	4,096,671
Income producing and other residential	6,133		4,614,689		4,620,822		1,826		3,801,439		3,803,265
Total real estate mortgage	38,198		8,374,822		8,413,020		45,557		7,854,379		7,899,936
Real estate construction and land:
Commercial	284		930,501		930,785		315		1,116,806		1,117,121
Residential	1,934		2,572,865		2,574,799		—		2,243,160		2,243,160
Total real estate construction and land	2,218		3,503,366		3,505,584		315		3,359,966		3,360,281
Commercial:
Asset-based	1,973		3,548,930		3,550,903		2,679		3,426,604		3,429,283
Venture capital	2,717		1,746,715		1,749,432		1,980		1,696,528		1,698,508
Other commercial	11,337		1,910,572		1,921,909		40,243		2,334,871		2,375,114
Total commercial	16,027		7,206,217		7,222,244		44,902		7,458,003		7,502,905
Consumer	360		365,049		365,409		389		319,866		320,255
Total	$	56,803	$	19,449,454	$	19,506,257	$	91,163	$	18,992,214	$	19,083,377

At June 30, 2021, nonaccrual loans and leases included $13.7 million of loans and leases 90 or more days past due, $0.5 million of loans and leases 30 to 89 days past due, and $42.6 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, 2020, nonaccrual loans and leases included $36.5 million of loans and leases 90 or more days past due, $3.4 million of loans and leases 30 to 89 days past due, and $51.3 million of current loans and leases that were placed on nonaccrual status based on management’s judgment regarding their collectability.

As of June 30, 2021, our three largest loan relationships on nonaccrual status had an aggregate carrying value of $12.9 million and represented 23% 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, 2021
	Classified		Special Mention		Pass		Total
	(In thousands)
Real estate mortgage:
Commercial	$	62,827	$	242,159	$	3,487,212	$	3,792,198
Income producing and other residential	12,681		60,843		4,547,298		4,620,822
Total real estate mortgage	75,508		303,002		8,034,510		8,413,020
Real estate construction and land:
Commercial	284		67,292		863,209		930,785
Residential	1,934		8,234		2,564,631		2,574,799
Total real estate construction and land	2,218		75,526		3,427,840		3,505,584
Commercial:
Asset-based	24,351		102,734		3,423,818		3,550,903
Venture capital	5,708		33,910		1,709,814		1,749,432
Other commercial	39,005		18,340		1,864,564		1,921,909
Total commercial	69,064		154,984		6,998,196		7,222,244
Consumer	477		2,540		362,392		365,409
Total	$	147,267	$	536,052	$	18,822,938	$	19,506,257


	December 31, 2020
	Classified		Special Mention		Pass		Total
	(In thousands)
Real estate mortgage:
Commercial	$	91,543	$	262,462	$	3,742,666	$	4,096,671
Income producing and other residential	8,767		61,384		3,733,114		3,803,265
Total real estate mortgage	100,310		323,846		7,475,780		7,899,936
Real estate construction and land:
Commercial	42,558		107,592		966,971		1,117,121
Residential	—		759		2,242,401		2,243,160
Total real estate construction and land	42,558		108,351		3,209,372		3,360,281
Commercial:
Asset-based	27,867		153,301		3,248,115		3,429,283
Venture capital	6,508		118,125		1,573,875		1,698,508
Other commercial	87,557		14,930		2,272,627		2,375,114
Total commercial	121,932		286,356		7,094,617		7,502,905
Consumer	462		2,732		317,061		320,255
Total	$	265,262	$	721,285	$	18,096,830	$	19,083,377

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 periods indicated:


			Three Months		Six Months				Three Months		Six Months
			Ended		Ended				Ended		Ended
	June 30,		June 30,		June 30,		June 30,		June 30,		June 30,
	2021		2021		2021		2020		2020		2020
	Nonaccrual		Interest		Interest		Nonaccrual		Interest		Interest
	Recorded		Income		Income		Recorded		Income		Income
	Investment		Recognized		Recognized		Investment		Recognized		Recognized
	(In thousands)
With An Allowance Recorded:
Real estate mortgage:
Commercial	$	74	$	—	$	—	$	304	$	—	$	—
Income producing and other residential	2,806		—		—		1,445		—		—
Real estate construction and land:

Residential	403		—		—		—		—		—
Commercial:
Asset based	1,484		—		—		2,458		—		—
Venture capital	2,717		—		—		8,270		—		—
Other commercial	1,472		—		—		45,569		—		—
Consumer	360		—		—		520		—		—
With No Related Allowance Recorded:
Real estate mortgage:
Commercial	$	31,991	$	140	$	430	$	61,467	$	62	$	130
Income producing and other residential	3,327		—		—		762		—		—
Real estate construction and land:
Commercial	284		—		—		337		—		—
Residential	1,531		—		—		—		—		—
Commercial:
Asset based	489		—		—		16,555		—		—

Other commercial	9,865		1,814		3,644		28,426		1,196		1,220

Total Loans and Leases With and
Without an Allowance Recorded:
Real estate mortgage	$	38,198	$	140	$	430	$	63,978	$	62	$	130
Real estate construction and land	2,218		—		—		337		—		—
Commercial	16,027		1,814		3,644		101,278		1,196		1,220
Consumer	360		—		—		520		—		—
Total	$	56,803	$	1,954	$	4,074	$	166,113	$	1,258	$	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 dates indicated:


															Revolving
															Converted
Amortized Cost Basis (1)	Term Loans by Origination Year												Revolving		to Term
June 30, 2021	2021		2020		2019		2018		2017		Prior		Loans		Loans		Total
	(In thousands)
Real Estate Mortgage:
Commercial
Internal risk rating:
1-2 High pass	$	—	$	3,604	$	53,211	$	5,853	$	9,062	$	38,846	$	3	$	—	$	110,579
3-4 Pass	171,826		541,881		352,574		532,213		622,252		1,079,673		61,007		15,207		3,376,633
5 Special mention	—		2,596		80,292		94,499		8,158		56,614		—		—		242,159
6-8 Classified	—		500		3,967		7,665		12,648		38,047		—		—		62,827
Total	$	171,826	$	548,581	$	490,044	$	640,230	$	652,120	$	1,213,180	$	61,010	$	15,207	$	3,792,198
Current YTD period:
Gross charge-offs	$	—	$	—	$	190	$	168	$	53	$	168	$	—	$	—	$	579
Gross recoveries	—		—		—		—		—		(5,421)		—		—		(5,421)
Net	$	—	$	—	$	190	$	168	$	53	$	(5,253)	$	—	$	—	$	(4,842)

Real Estate Mortgage:
Income Producing and
Other Residential
Internal risk rating:
1-2 High pass	$	7,474	$	40,341	$	65,881	$	30,001	$	12,927	$	27,593	$	—	$	—	$	184,217
3-4 Pass	632,881		634,036		794,568		1,037,846		644,016		343,522		276,013		199		4,363,081
5 Special mention	358		12,595		4,207		42,581		947		—		155		—		60,843
6-8 Classified	—		2,727		—		3,059		117		6,018		—		760		12,681
Total	$	640,713	$	689,699	$	864,656	$	1,113,487	$	658,007	$	377,133	$	276,168	$	959	$	4,620,822
Current YTD period:
Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	55	$	—	$	—	$	55
Gross recoveries	—		—		—		—		—		(5)		(1)		—		(6)
Net	$	—	$	—	$	—	$	—	$	—	$	50	$	(1)	$	—	$	49

Real Estate Construction
and Land: Commercial
Internal risk rating:
1-2 High pass	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
3-4 Pass	12,713		88,977		359,970		384,692		730		16,127		—		—		863,209
5 Special mention	—		—		—		—		67,292		—		—		—		67,292
6-8 Classified	—		—		—		—		—		284		—		—		284
Total	$	12,713	$	88,977	$	359,970	$	384,692	$	68,022	$	16,411	$	—	$	—	$	930,785
Current YTD period:
Gross charge-offs	$	—	$	—	$	—	$	775	$	—	$	—	$	—	$	—	$	775
Gross recoveries	—		—		—		—		—		—		—		—		—
Net	$	—	$	—	$	—	$	775	$	—	$	—	$	—	$	—	$	775


															Revolving
															Converted
Amortized Cost Basis (1)	Term Loans by Origination Year												Revolving		to Term
June 30, 2021	2021		2020		2019		2018		2017		Prior		Loans		Loans		Total
	(In thousands)
Real Estate Construction
and Land: Residential
Internal risk rating:
1-2 High pass	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
3-4 Pass	562,843		487,332		935,712		388,440		111,140		23,121		—		56,043		2,564,631
5 Special mention	3,679		4,555		—		—		—		—		—		—		8,234
6-8 Classified	547		974		413		—		—		—		—		—		1,934
Total	$	567,069	$	492,861	$	936,125	$	388,440	$	111,140	$	23,121	$	—	$	56,043	$	2,574,799
Current YTD period:
Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Gross recoveries	—		—		—		—		—		—		—		—		—
Net	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Commercial: Asset-Based
Internal risk rating:
1-2 High pass	$	58,134	$	82,132	$	165,284	$	113,965	$	72,924	$	203,548	$	480,376	$	73,966	$	1,250,329
3-4 Pass	66,807		104,947		67,780		56,499		20,667		42,132		1,802,197		12,460		2,173,489
5 Special mention	—		—		53,097		31,720		—		—		13,601		4,316		102,734
6-8 Classified	—		—		—		—		—		19,738		5,513		(900)		24,351
Total	$	124,941	$	187,079	$	286,161	$	202,184	$	93,591	$	265,418	$	2,301,687	$	89,842	$	3,550,903
Current YTD period:
Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Gross recoveries	—		—		—		—		—		(359)		(14)		—		(373)
Net	$	—	$	—	$	—	$	—	$	—	$	(359)	$	(14)	$	—	$	(373)

Commercial: Venture
Capital
Internal risk rating:
1-2 High pass	$	—	$	1,999	$	—	$	—	$	(5)	$	22	$	227,411	$	—	$	229,427
3-4 Pass	54,712		63,937		74,756		18,347		2,256		18,158		1,238,948		9,273		1,480,387
5 Special mention	—		8,380		20,625		—		4,986		—		(81)		—		33,910
6-8 Classified	—		—		—		3,000		—		—		326		2,382		5,708
Total	$	54,712	$	74,316	$	95,381	$	21,347	$	7,237	$	18,180	$	1,466,604	$	11,655	$	1,749,432
Current YTD period:
Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	620	$	—	$	—	$	620
Gross recoveries	—		—		—		(13)		(70)		(18)		—		—		(101)
Net	$	—	$	—	$	—	$	(13)	$	(70)	$	602	$	—	$	—	$	519

____________________

(1) Amounts with negative balances are loans with zero principal balances and deferred loan origination fees.


															Revolving
															Converted
Amortized Cost Basis (1)	Term Loans by Origination Year												Revolving		to Term
June 30, 2021	2021		2020		2019		2018		2017		Prior		Loans		Loans		Total
	(In thousands)
Commercial: Other
Commercial
Internal risk rating:
1-2 High pass	$	357,890	$	252,019	$	310	$	9	$	302	$	375	$	77,917	$	695	$	689,517
3-4 Pass	198,420		90,403		79,878		82,235		65,037		95,808		552,735		10,531		1,175,047
5 Special mention	—		1,639		3,364		2,546		115		10,231		445		—		18,340
6-8 Classified	2,042		1		593		23		16		4,611		26,405		5,314		39,005
Total	$	558,352	$	344,062	$	84,145	$	84,813	$	65,470	$	111,025	$	657,502	$	16,540	$	1,921,909
Current YTD period:
Gross charge-offs	$	—	$	—	$	—	$	47	$	1	$	359	$	53	$	1,771	$	2,231
Gross recoveries	—		—		(18)		—		(34)		(1,127)		—		(73)		(1,252)
Net	$	—	$	—	$	(18)	$	47	$	(33)	$	(768)	$	53	$	1,698	$	979

Consumer
Internal risk rating:
1-2 High pass	$	—	$	12	$	—	$	6	$	9	$	—	$	666	$	—	$	693
3-4 Pass	115,446		34,877		83,346		50,146		27,398		41,878		8,573		35		361,699
5 Special mention	331		602		966		318		54		269		—		—		2,540
6-8 Classified	—		55		262		—		15		121		3		21		477
Total	$	115,777	$	35,546	$	84,574	$	50,470	$	27,476	$	42,268	$	9,242	$	56	$	365,409
Current YTD period:
Gross charge-offs	$	—	$	—	$	209	$	156	$	108	$	71	$	—	$	—	$	544
Gross recoveries	—		—		—		(26)		(5)		(38)		(1)		—		(70)
Net	$	—	$	—	$	209	$	130	$	103	$	33	$	(1)	$	—	$	474

Total Loans and Leases
Internal risk rating:
1-2 High pass	$	423,498	$	380,107	$	284,686	$	149,834	$	95,219	$	270,384	$	786,373	$	74,661	$	2,464,762
3-4 Pass	1,815,648		2,046,390		2,748,584		2,550,418		1,493,496		1,660,419		3,939,473		103,748		16,358,176
5 Special mention	4,368		30,367		162,551		171,664		81,552		67,114		14,120		4,316		536,052
6-8 Classified	2,589		4,257		5,235		13,747		12,796		68,819		32,247		7,577		147,267
Total	$	2,246,103	$	2,461,121	$	3,201,056	$	2,885,663	$	1,683,063	$	2,066,736	$	4,772,213	$	190,302	$	19,506,257
Current YTD period:
Gross charge-offs	$	—	$	—	$	399	$	1,146	$	162	$	1,273	$	53	$	1,771	$	4,804
Gross recoveries	—		—		(18)		(39)		(109)		(6,968)		(16)		(73)		(7,223)
Net	$	—	$	—	$	381	$	1,107	$	53	$	(5,695)	$	37	$	1,698	$	(2,419)

______________________

(1) Amounts with negative balances are loans with zero principal balances and deferred loan origination fees.


															Revolving
															Converted
Amortized Cost Basis (1)	Term Loans by Origination Year												Revolving		to Term
December 31, 2020	2020		2019		2018		2017		2016		Prior		Loans		Loans		Total
	(In thousands)
Real Estate Mortgage:
Commercial
Internal risk rating:
1-2 High pass	$	—	$	28,304	$	4,848	$	13,184	$	12,241	$	41,222	$	—	$	—	$	99,799
3-4 Pass	554,143		413,785		574,497		725,503		405,367		893,008		62,586		13,978		3,642,867
5 Special mention	2,622		78,484		99,397		14,625		9,967		57,367		—		—		262,462
6-8 Classified	504		1,255		7,489		7,869		16,797		57,629		—		—		91,543
Total	$	557,269	$	521,828	$	686,231	$	761,181	$	444,372	$	1,049,226	$	62,586	$	13,978	$	4,096,671
Current YTD period:
Gross charge-offs	$	—	$	—	$	154	$	3,330	$	—	$	6,694	$	—	$	—	$	10,178
Gross recoveries	—		—		—		(9)		—		(280)		—		—		(289)
Net	$	—	$	—	$	154	$	3,321	$	—	$	6,414	$	—	$	—	$	9,889

Real Estate Mortgage:
Income Producing and
Other Residential
Internal risk rating:
1-2 High pass	$	58,714	$	55,826	$	28,831	$	33,017	$	18,991	$	9,265	$	—	$	—	$	204,644
3-4 Pass	491,504		850,978		1,067,109		577,906		238,499		187,959		113,987		528		3,528,470
5 Special mention	12,307		4,207		42,455		1,554		—		—		861		—		61,384
6-8 Classified	—		—		2,862		—		—		4,950		118		837		8,767
Total	$	562,525	$	911,011	$	1,141,257	$	612,477	$	257,490	$	202,174	$	114,966	$	1,365	$	3,803,265
Current YTD period:
Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	51	$	—	$	457	$	508
Gross recoveries	—		—		—		—		—		(327)		(1)		—		(328)
Net	$	—	$	—	$	—	$	—	$	—	$	(276)	$	(1)	$	457	$	180

Real Estate Construction
and Land: Commercial
Internal risk rating:
1-2 High pass	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
3-4 Pass	66,114		369,588		357,295		118,586		36,027		11,778		7,583		—		966,971
5 Special mention	—		—		40,396		67,196		—		—		—		—		107,592
6-8 Classified	—		—		—		—		42,243		315		—		—		42,558
Total	$	66,114	$	369,588	$	397,691	$	185,782	$	78,270	$	12,093	$	7,583	$	—	$	1,117,121
Current YTD period:
Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Gross recoveries	—		—		—		—		—		—		—		—		—
Net	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—


															Revolving
															Converted
Amortized Cost Basis (1)	Term Loans by Origination Year												Revolving		to Term
December 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	345,134		670,894		849,819		285,072		28,725		688		9,034		53,035		2,242,401
5 Special mention	759		—		—		—		—		—		—		—		759
6-8 Classified	—		—		—		—		—		—		—		—		—
Total	$	345,893	$	670,894	$	849,819	$	285,072	$	28,725	$	688	$	9,034	$	53,035	$	2,243,160
Current YTD period:
Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Gross recoveries	—		—		—		—		—		(21)		—		—		(21)
Net	$	—	$	—	$	—	$	—	$	—	$	(21)	$	—	$	—	$	(21)

Commercial: Asset-Based
Internal risk rating:
1-2 High pass	$	116,247	$	173,457	$	111,630	$	69,244	$	121,838	$	88,201	$	275,093	$	72,017	$	1,027,727
3-4 Pass	155,221		84,798		85,539		42,928		8,227		46,663		1,750,934		46,078		2,220,388
5 Special mention	—		59,822		41,789		9,022		14,274		482		23,257		4,655		153,301
6-8 Classified	—		—		—		—		19,417		551		8,799		(900)		27,867
Total	$	271,468	$	318,077	$	238,958	$	121,194	$	163,756	$	135,897	$	2,058,083	$	121,850	$	3,429,283
Current YTD period:
Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	11,817	$	—	$	—	$	11,817
Gross recoveries	(52)		—		—		—		—		(420)		(236)		—		(708)
Net	$	(52)	$	—	$	—	$	—	$	—	$	11,397	$	(236)	$	—	$	11,109

Commercial: Venture
Capital
Internal risk rating:
1-2 High pass	$	1,999	$	4,797	$	—	$	(4)	$	(4)	$	52	$	167,296	$	—	$	174,136
3-4 Pass	48,132		103,437		37,818		7,789		29,738		5,494		1,161,606		5,725		1,399,739
5 Special mention	21,645		42,499		2,202		—		—		—		46,765		5,014		118,125
6-8 Classified	—		(1,710)		4,000		—		—		3,690		528		—		6,508
Total	$	71,776	$	149,023	$	44,020	$	7,785	$	29,734	$	9,236	$	1,376,195	$	10,739	$	1,698,508
Current YTD period:
Gross charge-offs	$	—	$	—	$	6,533	$	—	$	(8)	$	150	$	144	$	—	$	6,819
Gross recoveries	—		—		(478)		(176)		(154)		(3)		(450)		—		(1,261)
Net	$	—	$	—	$	6,055	$	(176)	$	(162)	$	147	$	(306)	$	—	$	5,558


															Revolving
															Converted
Amortized Cost Basis (1)	Term Loans by Origination Year												Revolving		to Term
December 31, 2020	2020		2019		2018		2017		2016		Prior		Loans		Loans		Total
	(In thousands)
Commercial: Other
Commercial
Internal risk rating:
1-2 High pass	$	1,057,405	$	380	$	4	$	366	$	69	$	1,350	$	74,206	$	80	$	1,133,860
3-4 Pass	88,875		95,110		99,434		77,557		23,305		89,865		657,088		7,533		1,138,767
5 Special mention	—		40		2,145		564		484		10,440		335		922		14,930
6-8 Classified	2		564		80		230		755		3,813		75,046		7,067		87,557
Total	$	1,146,282	$	96,094	$	101,663	$	78,717	$	24,613	$	105,468	$	806,675	$	15,602	$	2,375,114
Current YTD period:
Gross charge-offs	$	—	$	—	$	—	$	506	$	239	$	33,521	$	27,332	$	1,871	$	63,469
Gross recoveries	—		(18)		(8)		(34)		(226)		(3,155)		(100)		(19)		(3,560)
Net	$	—	$	(18)	$	(8)	$	472	$	13	$	30,366	$	27,232	$	1,852	$	59,909

Consumer
Internal risk rating:
1-2 High pass	$	15	$	—	$	8	$	14	$	—	$	—	$	509	$	—	$	546
3-4 Pass	40,585		110,993		62,833		39,036		41,623		12,831		8,536		78		316,515
5 Special mention	45		137		1,628		261		422		239		—		—		2,732
6-8 Classified	—		35		—		36		56		306		2		27		462
Total	$	40,645	$	111,165	$	64,469	$	39,347	$	42,101	$	13,376	$	9,047	$	105	$	320,255
Current YTD period:
Gross charge-offs	$	—	$	97	$	86	$	177	$	363	$	44	$	22	$	9	$	798
Gross recoveries	—		—		(1)		(10)		(16)		(174)		—		—		(201)
Net	$	—	$	97	$	85	$	167	$	347	$	(130)	$	22	$	9	$	597

Total Loans and Leases
Internal risk rating:
1-2 High pass	$	1,234,380	$	262,764	$	145,321	$	115,821	$	153,135	$	140,090	$	517,104	$	72,097	$	2,640,712
3-4 Pass	1,789,708		2,699,583		3,134,344		1,874,377		811,511		1,248,286		3,771,354		126,955		15,456,118
5 Special mention	37,378		185,189		230,012		93,222		25,147		68,528		71,218		10,591		721,285
6-8 Classified	506		144		14,431		8,135		79,268		71,254		84,493		7,031		265,262
Total	$	3,061,972	$	3,147,680	$	3,524,108	$	2,091,555	$	1,069,061	$	1,528,158	$	4,444,169	$	216,674	$	19,083,377
Current YTD period:
Gross charge-offs	$	—	$	97	$	6,773	$	4,013	$	594	$	52,277	$	27,498	$	2,337	$	93,589
Gross recoveries	(52)		(18)		(487)		(229)		(396)		(4,380)		(787)		(19)		(6,368)
Net	$	(52)	$	79	$	6,286	$	3,784	$	198	$	47,897	$	26,711	$	2,318	$	87,221

______________________

(1) Amounts with negative balances are loans with zero principal balances and deferred loan origination fees.

TDRs are a result of rate reductions, term extensions, fee concessions, transfers to foreclosed assets, discounted loan payoffs, and debt forgiveness, or a combination thereof. The Company has granted various commercial and consumer loan modifications to provide borrowers relief from the economic impacts of COVID-19. In accordance with the Coronavirus Aid, Relief, and Economic Security ("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,
	2021					2020
		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	$	—	$	—	7	$	3,745	$	3,745
Income producing and other residential	—	—		—		5	787		787
Real estate construction and land:

Residential	1	208		208		—	—		—
Commercial:
Asset-based	—	—		—		6	1,234		1,234
Venture capital	1	2,408		2,408		—	—		—
Other commercial	25	16,358		16,358		19	18,840		15,726
Consumer	—	—		—		3	212		212
Total	28	$	18,974	$	18,974	40	$	24,818	$	21,704


	Six Months Ended June 30,
	2021					2020
		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	2	$	647	$	—	8	$	3,745	$	3,745
Income producing and other residential	2	266		266		5	787		787
Real estate construction and land:

Residential	1	208		208		—	—		—
Commercial:
Asset-based	1	503		503		7	1,741		1,741
Venture capital	3	4,502		2,529		2	2,047		2,047
Other commercial	35	48,608		30,634		30	23,219		21,444
Consumer	1	20		20		3	212		212
Total	45	$	54,754	$	34,160	55	$	31,751	$	29,976

During the three and six months ended June 30, 2021, there were two other commercial loans totaling $134,000 restructured in the preceding 12-month period that subsequently defaulted. During the three 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 six months ended June 30, 2020, there was one $2.0 million venture capital loan and one $7,000 other commercial loan 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 9. 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 Ended				Six Months Ended
	June 30,				June 30,
	2021		2020		2021		2020
	(In thousands)
Component of leases receivable income:
Interest income on net investments in leases	$	2,278	$	2,103	$	4,358	$	4,355

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


	June 30, 2021		December 31, 2020
	(In thousands)
Net investment in direct financing leases:
Lease payments receivable	$	173,058	$	158,740
Unguaranteed residual assets	21,831		19,303
Deferred costs and other	1,285		996
Aggregate net investment in leases	$	196,174	$	179,039

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


	June 30, 2021
	(In thousands)
Period ending December 31,
2021	$	39,885
2022	49,531
2023	36,807
2024	31,357
2025	17,956
Thereafter	16,335
Total undiscounted cash flows	191,871
Less: Unearned income	(18,813)
Present value of lease payments	$	173,058

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, 2021
			Real Estate
	Real Estate		Construction
	Mortgage		and Land		Commercial		Consumer		Total
	(In thousands)
Allowance for Loan and Lease Losses:
Balance, beginning of period	$	141,122	$	66,775	$	78,716	$	5,832	$	292,445
Charge-offs	(266)		(75)		(277)		(198)		(816)
Recoveries	4,882		—		1,029		60		5,971
Net (charge-offs) recoveries	4,616		(75)		752		(138)		5,155
Provision	(38,725)		(12,118)		(21,771)		614		(72,000)
Balance, end of period	$	107,013	$	54,582	$	57,697	$	6,308	$	225,600


	Six Months Ended June 30, 2021
			Real Estate
	Real Estate		Construction
	Mortgage		and Land		Commercial		Consumer		Total
	(In thousands)
Allowance for Loan and Lease Losses:
Balance, beginning of period	$	138,342	$	78,356	$	126,403	$	5,080	$	348,181



Charge-offs	(634)		(775)		(2,851)		(544)		(4,804)
Recoveries	5,427		—		1,726		70		7,223
Net (charge-offs) recoveries	4,793		(775)		(1,125)		(474)		2,419
Provision	(36,122)		(22,999)		(67,581)		1,702		(125,000)
Balance, end of period	$	107,013	$	54,582	$	57,697	$	6,308	$	225,600

Ending Allowance by
Evaluation Methodology:
Individually evaluated	$	203	$	—	$	3,265	$	—	$	3,468
Collectively evaluated	$	106,810	$	54,582	$	54,432	$	6,308	$	222,132

Ending Loans and Leases by
Evaluation Methodology:
Individually evaluated	$	41,145	$	3,254	$	46,400	$	—	$	90,799
Collectively evaluated	8,371,875		3,502,330		7,175,844		365,409		19,415,458
Ending balance	$	8,413,020	$	3,505,584	$	7,222,244	$	365,409	$	19,506,257


	Three Months Ended June 30, 2020
			Real Estate
	Real Estate		Construction
	Mortgage		and Land		Commercial		Consumer		Total
	(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)
Recoveries	127		—		2,392		25		2,544
Net charge-offs	(4,055)		—		(9,047)		(140)		(13,242)
Provision	43,407		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 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
Cumulative effect of change in accounting
principle - CECL	5,308		(8,592)		6,860		41		3,617
Balance, January 1, 2020	49,883		21,952		68,388		2,179		142,402
Charge-offs	(4,682)		—		(30,671)		(638)		(35,991)
Recoveries	251		—		3,347		41		3,639
Net charge-offs	(4,431)		—		(27,324)		(597)		(32,352)
Provision	85,272		48,161		56,883		684		191,000
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

The allowance for loan and lease losses decreased by $66.8 million in the second quarter of 2021 to $225.6 million due primarily to a provision for loan and lease losses benefit of $72.0 million driven by improvement in both key macro-economic variables and loan portfolio credit quality metrics along with decreased provisions for individually evaluated loans and leases.

We actively participated in both rounds of the Paycheck Protection Program ("PPP") under the provisions of the CARES Act during 2020 and 2021. As of June 30, 2021, PPP loans had an outstanding balance of approximately $624.8 million. The loans 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 dates:


	June 30, 2021						December 31, 2020
	Real		Business				Real		Business
	Property		Assets		Total		Property		Assets		Total
	(In thousands)
Real estate mortgage	$	35,146	$	—	$	35,146	$	43,656	$	—	$	43,656
Real estate construction and land	3,254		—		3,254		1,766		—		1,766
Commercial	—		4,100		4,100		—		31,100		31,100
Total	$	38,400	$	4,100	$	42,500	$	45,422	$	31,100	$	76,522

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, 2021
	Allowance for		Reserve for		Total
	Loan and		Unfunded Loan		Allowance for
	Lease Losses		Commitments		Credit Losses
	(In thousands)
Balance, beginning of period	$	292,445	$	90,571	$	383,016
Charge-offs	(816)		—		(816)
Recoveries	5,971		—		5,971
Net recoveries	5,155		—		5,155
Provision	(72,000)		(16,000)		(88,000)
Balance, end of period	$	225,600	$	74,571	$	300,171


	Six Months Ended
	June 30, 2021
	Allowance for		Reserve for		Total
	Loan and		Unfunded Loan		Allowance for
	Lease Losses		Commitments		Credit Losses
	(In thousands)
Balance, beginning of period	$	348,181	$	85,571	$	433,752
Charge-offs	(4,804)		—		(4,804)
Recoveries	7,223		—		7,223
Net recoveries	2,419		—		2,419
Provision	(125,000)		(11,000)		(136,000)
Balance, end of period	$	225,600	$	74,571	$	300,171


	Three Months Ended
	June 30, 2020
	Allowance for		Reserve for		Total
	Loan and		Unfunded Loan		Allowance for
	Lease Losses		Commitments		Credit Losses
	(In thousands)
Balance, beginning of period	$	221,292	$	53,571	$	274,863
Charge-offs	(15,786)		—		(15,786)
Recoveries	2,544		—		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 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
Cumulative effect of change in accounting
principle - CECL	3,617		3,710		7,327
Balance, January 1, 2020	142,402		39,571		181,973
Charge-offs	(35,991)		—		(35,991)
Recoveries	3,639		—		3,639
Net charge-offs	(32,352)		—		(32,352)
Provision	191,000		41,000		232,000
Balance, end of period	$	301,050	$	80,571	$	381,621