Loans and Leases

9 Months Ended

Sep. 30, 2022

Loans and Leases.

Loans and Leases

3. Loans and Leases

As of September 30, 2022 and December 31, 2021, loans and leases were comprised of the following:

	September 30,		December 31,
(dollars in thousands)	2022		2021
Commercial and industrial	$	2,043,807	$	2,087,099
Commercial real estate		4,103,310		3,639,623
Construction		765,862		813,969
Residential:
Residential mortgage		4,252,041		4,083,367
Home equity line		1,010,631		876,608
Total residential		5,262,672		4,959,975
Consumer		1,218,885		1,229,939
Lease financing		305,838		231,394
Total loans and leases	$	13,700,374	$	12,961,999

Outstanding loan balances are reported net of deferred loan costs and fees of $54.6 million and $42.2 million at September 30, 2022 and December 31, 2021, respectively.

Accrued interest receivable related to loans and leases was $51.9 million and $49.0 million as of September 30, 2022 and December 31, 2021, respectively, and is recorded separately from the amortized cost basis of loans and leases on the Company’s unaudited interim consolidated balance sheets.

As of September 30, 2022, residential real estate loans totaling $2.1 billion were pledged to collateralize the Company’s borrowing capacity at the Federal Home Loan Bank of Des Moines (“FHLB”), and consumer, commercial and industrial, commercial real estate and residential real estate loans totaling $1.7 billion were pledged to collateralize the Company’s borrowing capacity at the Federal Reserve Bank of San Francisco (“FRB”). As of December 31, 2021, residential real estate loans totaling $2.4 billion were pledged to collateralize the Company’s borrowing capacity at the FHLB, and consumer, commercial and industrial, commercial real estate and residential real estate loans totaling $1.7 billion were pledged to collateralize the Company’s borrowing capacity at the FRB. Residential real estate loans collateralized by properties that were in the process of foreclosure totaled $4.7 million as of both September 30, 2022 and December 31, 2021.

In the course of evaluating the credit risk presented by a customer and the pricing that will adequately compensate the Company for assuming that risk, management may require a certain amount of collateral support. The type of collateral held varies, but may include accounts receivable, inventory, land, buildings, equipment, income-producing commercial properties and residential real estate. The Company applies the same collateral policy for loans whether they are funded immediately or on a delayed basis. The loan and lease portfolio is principally located in Hawaii and, to a lesser extent, on the U.S. Mainland, Guam and Saipan. The risk inherent in the portfolio depends upon both the economic strength and stability of the state or territories, which affects property values, and the financial strength and creditworthiness of the borrowers.