Loans and Leases

3 Months Ended

Mar. 31, 2021

Loans and leases were as follows:


(In thousands)	At March 31, 2021		At December 31, 2020
Commercial loan and lease portfolio:
Commercial and industrial(1)	$	12,856,701	$	11,422,383
Commercial real estate	9,881,341		9,702,587
Lease financing	2,956,626		2,817,231
Total commercial loan and lease portfolio	25,694,668		23,942,201
Consumer loan portfolio:
Residential mortgage	6,510,981		6,182,045
Home equity	2,864,142		3,108,736
Consumer installment	1,151,228		1,233,426
Total consumer loan portfolio	10,526,351		10,524,207
Total loans and leases(2)	$	36,221,019	$	34,466,408

(1)Includes $1.9 billion and $1.6 billion of PPP loans at March 31, 2021 and December 31, 2020, respectively.

(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 $(85.4) million and $(118.6) million at March 31, 2021 and December 31, 2020, respectively.

Accrued interest receivable for loans and leases was $94.2 million and $93.6 million at March 31, 2021 and December 31, 2020, 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. On January 29, 2021, TCF acquired BB&T Commercial Equipment Capital, Corp. ("CEC") through a business combination, which included a portfolio of $1.0 billion of commercial loans and leases. During the three months ended March 31, 2021, the Corporation acquired total loans and leases with a fair value of $1.8 billion, which primarily included the CEC commercial loans and leases and jumbo residential mortgage loans.

Lease Income The components of total lease income were as follows:


	Three Months Ended March 31,
(In thousands)	2021		2020
Interest and fees on loans and leases (Interest income):
Interest income on net investment in direct financing and sales-type leases	$	34,189	$	34,156

Leasing revenue (Noninterest income):
Lease income from operating lease payments	25,550		23,902
Profit recorded on commencement date on sales-type leases	6,541		3,580
Gains on sales of leased equipment	4,362		6,083
Leasing revenue	36,453		33,565
Total lease income	$	70,642	$	67,721

Loan and Lease Sales The following table summarizes the net gains on sales of loans and leases related to all loan and lease sales. The Corporation retains servicing on a majority of loans sold. See "Note 10. Loan Servicing Rights" for further information.


	Three Months Ended March 31,
(In thousands)	2021		2020
Sale proceeds, net	$	593,347	$	555,182
Recorded investment in loans and leases sold, including accrued interest	563,489		537,180
Other	(8,135)		2,588
Net gains on sales of loans and leases related to all loan and lease sales(1)	$	21,723	$	20,590

(1)Three months ended March 31, 2021 amount included within net gain on sales of loans and leases ($6.1 million) and mortgage banking income ($15.7 million). Three months ended March 31, 2020 amounts included within net gain on sales of loans and leases ($7.6 million) and mortgage banking income ($13.0 million).

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


(In thousands)	At March 31, 2021		At December 31, 2020
Interest-only strips	$	6,737	$	7,823

The Corporation recorded $262 thousand of impairment charges related to interest-only strips during the three months ended March 31, 2021 and $224 thousand of impairment charges for the three months ended March 31, 2020.

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 of the purchaser in the event these representations are breached, 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 the three months ended March 31, 2021 and 2020.