Loans and Leases

12 Months Ended

Dec. 31, 2020

Loans and leases were as follows:


	At December 31,
(In thousands)	2020		2019
Commercial loan and lease portfolio:
Commercial and industrial(1)	$	11,422,383	$	11,439,602
Commercial real estate	9,702,587		9,136,870
Lease financing	2,817,231		2,699,869
Total commercial loan and lease portfolio	23,942,201		23,276,341
Consumer loan portfolio:
Residential mortgage	6,182,045		6,179,805
Home equity	3,108,736		3,498,907
Consumer installment	1,233,426		1,542,411
Total consumer loan portfolio	10,524,207		11,221,123
Total loans and leases(2)	$	34,466,408	$	34,497,464

(1)Includes $1.6 billion of PPP loans at December 31, 2020.

(2)Loans and leases are reported at historical cost including net direct fees and costs associated with originating and acquiring loans and leases, lease residuals, unearned income and unamortized purchase premiums and discounts. The aggregate amount of these loan and lease adjustments was $(118.6) million and $(201.5) million at December 31, 2020 and 2019, respectively.

Accrued interest receivable for loans and leases was $93.6 million and $106.5 million at December 31, 2020 and December 31, 2019, respectively, and is included in other assets on the Consolidated Statements of Financial Condition.

Acquired Loans and Leases The Corporation acquires loans and leases through business combinations and purchases of loan and lease portfolios. These loans and leases are recorded at fair value at acquisition and the fair value discount or premium is recognized as an adjustment to yield over the remaining life of each loan or lease. The Corporation purchased jumbo residential mortgage loans at their fair value of $1.1 billion during the year ended December 31, 2020, none of which qualified as PCD loans.

See "Note 2. Summary of Significant Accounting Policies" for further acquired loans and leases policy information.

Leases The components of the net investment in direct financing and sales-type leases were as follows:


	At December 31,
(In thousands)	2020		2019
Carrying amount	$	2,893,070	$	2,794,212
Unguaranteed residual assets	170,930		152,030
Net direct fees and costs and unearned income	(246,769)		(246,373)

Total net investment in direct financing and sales-type leases	$	2,817,231	$	2,699,869

The carrying amount of the sales-type and direct financing leases subject to residual value guarantees was $344.3 million and $277.1 million at December 31, 2020 and December 31, 2019, respectively.

The components of total lease income were as follows:


	Year Ended December 31,
(In thousands)	2020		2019
Interest and fees on loans and leases (Interest income):
Interest income on net investment in direct financing and sales-type leases	$	133,272	$	131,547


Leasing revenue (Noninterest income):
Lease income from operating lease payments	95,530		100,975
Profit (loss) recorded on commencement date on sales-type	21,556		35,694
Gain (losses) on sales of leased equipment	25,637		27,049
Leasing revenue	142,723		163,718
Total lease income	$	275,995	$	295,265

Lease financing equipment depreciation on equipment leased to others was $73.2 million and the net book value of equipment leased to others and related initial direct costs under operating leases was $326.9 million at December 31, 2020. Lease financing equipment depreciation on equipment leased to others was $76.4 million and the net book value of equipment leased to others and related initial direct costs under operating leases was $289.7 million at December 31, 2019.

Undiscounted future minimum lease payments receivable for direct financing and sales-type leases, and a reconciliation to the carrying amount recorded at December 31, 2020 were as follows:


(In thousands)
2021	$	288,066
2022	408,137
2023	549,555
2024	589,430
2025	511,514
Thereafter	311,070
Equipment under leases not yet commenced	30,782
Total undiscounted future minimum lease payments receivable for direct financing and sales-type leases	2,688,554
Third-party residual value guarantees	204,516
Total carrying amount of direct financing and sales-type leases	$	2,893,070

Undiscounted future minimum lease payments expected to be received for operating leases at December 31, 2020 were as follows:


(In thousands)
2021	$	75,689
2022	54,222
2023	33,560
2024	15,660
2025	5,042
Thereafter	1,957
Total undiscounted future minimum lease payments	$	186,130

Loan and Lease Sales The following table summarizes the net gains on sales of loans and leases. The Corporation retains servicing on a majority of loans sold. See "Note 11. Loan Servicing Rights" for further information.


	Year Ended December 31,
(In thousands)	2020		2019		2018
Sale proceeds, net	$	2,556,022	$	2,951,445	$	1,275,960
Recorded investment in loans and leases sold, including accrued interest	2,446,969		2,888,408		1,238,018
Changes in fair value of loans held-for-sale and related derivative instruments, capitalized servicing and other	(22,277)		(36,729)		(4,247)
Net gains on sales of loans and leases	$	86,776	$	26,308	$	33,695

During 2019, the Corporation completed the sale of the Legacy TCF auto finance portfolio of $1.1 billion, which had previously been included within loans held-for-sale, resulting in a $27.5 million loss for the year, included in net gains on sales of loans and leases.

The remaining interest-only strips on the balance sheet related to loan sales were as follows:


	At December 31,
(In thousands)	2020		2019
Interest-only strips	$	7,823	$	12,813

We recorded $224 thousand, $62 thousand and $661 thousand of impairment charges on interest-only strips in 2020, 2019 and 2018, respectively.

The Corporation's agreements to sell consumer loans typically contain certain representations, warranties and covenants regarding the loans sold or securitized. These representations, warranties and covenants generally relate to, among other things, the ownership of the loan, the validity, priority and perfection of the lien securing the loan, accuracy of information supplied to the buyer or investor, the loan's compliance with the criteria set forth in the agreement, the manner in which the loans will be serviced, payment delinquency and compliance with applicable laws and regulations. These agreements generally require the repurchase of loans or indemnification in the event we breach these representations, warranties or covenants and such breaches are not cured. In addition, some agreements contain a requirement to repurchase loans as a result of early payoffs by the borrower, early payment default of the borrower or the failure to obtain valid title. Losses related to repurchases pursuant to such representations, warranties and covenants were immaterial for 2020, 2019 and 2018.