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Loans and Allowance for Loan Losses (Tables)
 6 Months Ended
Jun. 30, 2013
Receivables [Abstract]  
Loans and Allowance for Loan Losses
The composition of loans, net of unearned income of $83 million and $77 million at June 30, 2013 and December 31, 2012, respectively, is presented in the following table:
(Dollars in thousands)
 
June 30, 2013
 
December 31, 2012
Commercial loans:
 
 
 
 
Software
 
$
3,558,323

 
$
3,261,489

Hardware
 
1,205,541

 
1,118,370

Venture capital/private equity
 
1,923,516

 
1,732,699

Life science
 
1,084,720

 
1,066,199

Premium wine
 
142,562

 
143,511

Other
 
309,517

 
315,453

Total commercial loans
 
8,224,179

 
7,637,721

Real estate secured loans:
 
 
 
 
Premium wine (1)
 
465,962

 
413,513

Consumer loans (2)
 
778,482

 
685,300

Total real estate secured loans
 
1,244,444

 
1,098,813

Construction loans
 
66,587

 
65,742

Consumer loans
 
86,962

 
144,657

Total loans, net of unearned income (3)
 
$
9,622,172

 
$
8,946,933

 
 
(1)
Included in our premium wine portfolio are gross construction loans of $132 million and $148 million at June 30, 2013 and December 31, 2012, respectively.
(2)
Consumer loans secured by real estate at June 30, 2013 and December 31, 2012 were comprised of the following:
(Dollars in thousands)
 
June 30, 2013
 
December 31, 2012
Loans for personal residence
 
$
593,988

 
$
503,378

Loans to eligible employees
 
115,974

 
110,584

Home equity lines of credit
 
68,520

 
71,338

Consumer loans secured by real estate
 
$
778,482

 
$
685,300


(3)
Included within our total loan portfolio are credit card loans of $78 million and $64 million at June 30, 2013 and December 31, 2012, respectively.
Composition of Loans, Net of Unearned Income, Broken Out by Portfolio Segment and Class of Financing Receivable
The composition of loans, net of unearned income of $83 million and $77 million at June 30, 2013 and December 31, 2012, respectively, broken out by portfolio segment and class of financing receivable is as follows:
(Dollars in thousands)
 
June 30, 2013
 
December 31, 2012
Commercial loans:
 
 
 
 
Software
 
$
3,558,323

 
$
3,261,489

Hardware
 
1,205,541

 
1,118,370

Venture capital/private equity
 
1,923,516

 
1,732,699

Life science
 
1,084,720

 
1,066,199

Premium wine
 
608,524

 
557,024

Other
 
376,104

 
381,195

Total commercial loans
 
8,756,728

 
8,116,976

Consumer loans:
 
 
 
 
Real estate secured loans
 
778,482

 
685,300

Other consumer loans
 
86,962

 
144,657

Total consumer loans
 
865,444

 
829,957

Total loans, net of unearned income
 
$
9,622,172

 
$
8,946,933
Aging of Gross Loans, Broken out by Portfolio Segment and Class of Financing Receivable
The following table summarizes the aging of our gross loans, broken out by portfolio segment and class of financing receivable as of June 30, 2013 and December 31, 2012:
(Dollars in thousands)
 
30 - 59
  Days Past  
Due
 
60 - 89
  Days Past  
Due
 
Greater
Than 90
  Days Past  
Due
 
  Total Past  
Due
 
Current  
 
  Loans Past Due  
90 Days or
More Still
Accruing
Interest
June 30, 2013:
 
 
 
 
 
 
 
 
 
 
 
 
Commercial loans:
 
 
 
 
 
 
 
 
 
 
 
 
Software
 
$
765

 
$
1,082

 
$
727

 
$
2,574

 
$
3,584,748

 
$
727

Hardware
 
7,493

 
56

 
—

 
7,549

 
1,185,481

 
—

Venture capital/private equity
 
3,311

 
4,670

 
—

 
7,981

 
1,934,594

 
—

Life science
 
185

 
415

 
722

 
1,322

 
1,094,259

 
722

Premium wine
 
636

 
4,035

 
—

 
4,671

 
604,873

 
—

Other
 
109

 
92

 
412

 
613

 
375,006

 
412

Total commercial loans
 
12,499

 
10,350

 
1,861

 
24,710

 
8,778,961

 
1,861

Consumer loans:
 
 
 
 
 
 
 
 
 
 
 
 
Real estate secured loans
 
—

 
—

 
—

 
—

 
774,692

 
—

Other consumer loans
 
25

 
—

 
—

 
25

 
85,917

 
—

Total consumer loans
 
25

 
—

 
—

 
25

 
860,609

 
—

Total gross loans excluding impaired loans
 
12,524

 
10,350

 
1,861

 
24,735

 
9,639,570

 
1,861

Impaired loans
 
—

 
1,365

 
16,649

 
18,014

 
23,145

 
—

Total gross loans
 
$
12,524

 
$
11,715

 
$
18,510

 
$
42,749

 
$
9,662,715

 
$
1,861

December 31, 2012:
 
 
 
 
 
 
 
 
 
 
 
 
Commercial loans:
 
 
 
 
 
 
 
 
 
 
 
 
Software
 
$
5,890

 
$
238

 
$
19

 
$
6,147

 
$
3,284,489

 
$
19

Hardware
 
167

 
32

 
—

 
199

 
1,107,422

 
—

Venture capital/private equity
 
7

 
—

 
—

 
7

 
1,749,896

 
—

Life science
 
207

 
117

 
—

 
324

 
1,076,468

 
—

Premium wine
 
—

 
—

 
—

 
—

 
554,886

 
—

Other
 
280

 
—

 
—

 
280

 
378,619

 
—

Total commercial loans
 
6,551

 
387

 
19

 
6,957

 
8,151,780

 
19

Consumer loans:
 
 
 
 
 
 
 
 
 
 
 
 
Real estate secured loans
 
—

 
—

 
—

 
—

 
683,254

 
—

Other consumer loans
 
111

 
—

 
—

 
111

 
143,867

 
—

Total consumer loans
 
111

 
—

 
—

 
111

 
827,121

 
—

Total gross loans excluding impaired loans
 
6,662

 
387

 
19

 
7,068

 
8,978,901

 
19

Impaired loans
 
3,901

 
9,676

 
2,269

 
15,846

 
22,433

 
—

Total gross loans
 
$
10,563

 
$
10,063

 
$
2,288

 
$
22,914

 
$
9,001,334

 
$
19
Impaired Loans and Allowance for Loan Losses, Broken out by Portfolio Segment and Class of Financing Receivable
The following table summarizes our impaired loans as they relate to our allowance for loan losses, broken out by portfolio segment and class of financing receivable as of June 30, 2013 and December 31, 2012:
(Dollars in thousands)
 
Impaired loans for  
which there is a
related allowance
for loan losses
 
Impaired loans for  
which there is no
related allowance
for loan losses
 
Total carrying value of impaired loans
 
Total unpaid
principal of impaired loans (1)  
June 30, 2013:
 
 
 
 
 
 
 
 
Commercial loans:
 
 
 
 
 
 
 
 
Software
 
$
5,637

 
$
995

 
$
6,632

 
$
6,936

Hardware
 
22,595

 
1,987

 
24,582

 
45,444

Venture capital/private equity
 
89

 
—

 
89

 
89

Premium wine
 
—

 
1,511

 
1,511

 
1,794

Other
 
—

 
3,772

 
3,772

 
4,562

Total commercial loans
 
28,321

 
8,265

 
36,586

 
58,825

Consumer loans:
 
 
 
 
 
 
 
 
Real estate secured loans
 
—

 
3,619

 
3,619

 
9,593

Other consumer loans
 
954

 
—

 
954

 
1,192

Total consumer loans
 
954

 
3,619

 
4,573

 
10,785

Total
 
$
29,275

 
$
11,884

 
$
41,159

 
$
69,610

December 31, 2012:
 
 
 
 
 
 
 
 
Commercial loans:
 
 
 
 
 
 
 
 
Software
 
$
3,191

 
$
72

 
$
3,263

 
$
4,475

Hardware
 
21,863

 
—

 
21,863

 
38,551

Venture capital/private equity
 
—

 
—

 
—

 
—

Premium wine
 
—

 
4,398

 
4,398

 
4,716

Other
 
—

 
5,415

 
5,415

 
9,859

Total commercial loans
 
25,054

 
9,885

 
34,939

 
57,601

Consumer loans:
 
 
 
 
 
 
 
 
Real estate secured loans
 
—

 
2,239

 
2,239

 
7,341

Other consumer loans
 
1,101

 
—

 
1,101

 
1,300

Total consumer loans
 
1,101

 
2,239

 
3,340

 
8,641

Total
 
$
26,155

 
$
12,124

 
$
38,279

 
$
66,242


 
 
(1)
The unpaid principal balances for hardware and real estate secured consumer loans as of December 31, 2012 have been corrected from previously reported amounts resulting in the total unpaid principal of impaired loans at December 31, 2012 changing from $55.4 million to $66.2 million.
Average Impaired Loans, Broken out by Portfolio Segment and Class of Financing Receivable
The following table summarizes our average impaired loans, broken out by portfolio segment and class of financing receivable for the three and six months ended June 30, 2013 and 2012:
 
 
Three months ended June 30,
 
Six months ended June 30,
(Dollars in thousands)
 
2013
 
2012
 
2013
 
2012
Average impaired loans:
 
 
 
 
 
 
 
 
Commercial loans:
 
 
 
 
 
 
 
 
Software
 
$
5,473

 
$
1,896

 
$
4,794

 
$
1,716

Hardware
 
24,519

 
21,468

 
24,076

 
16,865

Venture capital/private equity
 
30

 
—

 
15

 
—

Life science
 
596

 
88

 
455

 
117

Premium wine
 
1,536

 
3,527

 
2,936

 
3,455

Other
 
4,165

 
3,506

 
4,692

 
4,075

Total commercial loans
 
36,319

 
30,485

 
36,968

 
26,228

Consumer loans:
 
 
 
 
 
 
 
 
Real estate secured loans
 
4,071

 
2,645

 
3,374

 
7,746

Other consumer loans
 
1,069

 
2,170

 
1,099

 
2,595

Total consumer loans
 
5,140

 
4,815

 
4,473

 
10,341

Total average impaired loans
 
$
41,459

 
$
35,300

 
$
41,441

 
$
36,569
Activity in Allowance for Loan Losses Broken out by Portfolio Segment
The following tables summarize the activity relating to our allowance for loan losses for the three and six months ended June 30, 2013 and 2012, broken out by portfolio segment:
Three months ended June 30, 2013 (dollars in thousands)
 
Beginning Balance March 31, 2013
 
Charge-offs
 
Recoveries
 
Provision for
(Reduction of) Loan Losses
 
Ending Balance June 30, 2013
Commercial loans:
 
 
 
 
 
 
 
 
 
 
Software
 
$
45,010

 
$
(3,574
)
 
$
397

 
$
4,965

 
$
46,798

Hardware
 
27,869

 
(4,434
)
 
403

 
9,350

 
33,188

Venture capital/private equity
 
10,482

 
—

 
—

 
3,111

 
13,593

Life science
 
13,946

 
(491
)
 
886

 
(2,600
)
 
11,741

Premium wine
 
3,699

 
—

 
41

 
53

 
3,793

Other
 
3,975

 
(6,007
)
 
2,375

 
3,311

 
3,654

Total commercial loans
 
104,981

 
(14,506
)
 
4,102

 
18,190

 
112,767

Consumer loans
 
7,224

 
(869
)
 
67

 
382

 
6,804

Total allowance for loan losses
 
$
112,205

 
$
(15,375
)
 
$
4,169

 
$
18,572

 
$
119,571

Six months ended June 30, 2013 (dollars in thousands)
 
Beginning Balance December 31, 2012
 
Charge-offs
 
Recoveries
 
Provision for
(Reduction of) Loan Losses
 
Ending Balance June 30, 2013
Commercial loans:
 
 
 
 
 
 
 
 
 
 
Software
 
$
42,648

 
$
(5,092
)
 
$
639

 
$
8,603

 
$
46,798

Hardware
 
29,761

 
(6,431
)
 
849

 
9,009

 
33,188

Venture capital/private equity
 
9,963

 
—

 
—

 
3,630

 
13,593

Life science
 
13,606

 
(2,561
)
 
1,089

 
(393
)
 
11,741

Premium wine
 
3,523

 
—

 
131

 
139

 
3,793

Other
 
3,912

 
(6,048
)
 
2,381

 
3,409

 
3,654

Total commercial loans
 
103,413

 
(20,132
)
 
5,089

 
24,397

 
112,767

Consumer loans
 
7,238

 
(869
)
 
447

 
(12
)
 
6,804

Total allowance for loan losses
 
$
110,651

 
$
(21,001
)
 
$
5,536

 
$
24,385

 
$
119,571

 
 
 
 
 
 
 
 
 
 
 
Three months ended June 30, 2012 (dollars in thousands)
 
Beginning Balance March 31, 2012
 
Charge-offs
 
Recoveries
 
Provision for(Reduction of)
 Loan Losses
 
Ending Balance June 30, 2012
Commercial loans:
 
 
 
 
 
 
 
 
 
 
Software
 
$
35,425

 
$
(2,118
)
 
$
1,329

 
$
3,345

 
$
37,981

Hardware
 
30,348

 
(10,413
)
 
329

 
2,368

 
22,632

Venture capital/private equity
 
7,214

 
—

 
—

 
2,438

 
9,652

Life science
 
10,292

 
(122
)
 
92

 
1,398

 
11,660

Premium wine
 
3,738

 
(584
)
 
187

 
55

 
3,396

Other
 
4,802

 
(286
)
 
1,107

 
(681
)
 
4,942

Total commercial loans
 
91,819

 
(13,523
)
 
3,044

 
8,923

 
90,263

Consumer loans
 
9,103

 
(607
)
 
331

 
(924
)
 
7,903

Total allowance for loan losses
 
$
100,922

 
$
(14,130
)
 
$
3,375

 
$
7,999

 
$
98,166

Six months ended June 30, 2012 (dollars in thousands)
 
Beginning Balance December 31, 2011
 
Charge-offs
 
Recoveries
 
Provision for
(Reduction of) Loan Losses
 
Ending Balance June 30, 2012
Commercial loans:
 
 
 
 
 
 
 
 
 
 
Software
 
$
38,263

 
$
(2,977
)
 
$
4,088

 
$
(1,393
)
 
$
37,981

Hardware
 
16,810

 
(14,261
)
 
434

 
19,649

 
22,632

Venture capital/private equity
 
7,319

 
—

 
—

 
2,333

 
9,652

Life science
 
10,243

 
(235
)
 
313

 
1,339

 
11,660

Premium wine
 
3,914

 
(584
)
 
265

 
(199
)
 
3,396

Other
 
5,817

 
(2,456
)
 
1,151

 
430

 
4,942

Total commercial loans
 
82,366

 
(20,513
)
 
6,251

 
22,159

 
90,263

Consumer loans
 
7,581

 
(607
)
 
560

 
369

 
7,903

Total allowance for loan losses
 
$
89,947

 
$
(21,120
)
 
$
6,811

 
$
22,528

 
$
98,166
Allowance for Loan Losses Individually and Collectively Evaluated for Impairment
The following table summarizes the allowance for loan losses individually and collectively evaluated for impairment as of June 30, 2013 and December 31, 2012, broken out by portfolio segment:
 
 
June 30, 2013
 
December 31, 2012
(Dollars in thousands)
 
Individually Evaluated for  
Impairment
 
Collectively Evaluated for  
Impairment
 
Individually
Evaluated for  
Impairment
 
Collectively
Evaluated for  
Impairment
Commercial loans:
 
 
 
 
 
 
 
 
Software
 
$
1,365

 
$
45,433

 
$
762

 
$
41,886

Hardware
 
8,756

 
24,432

 
5,251

 
24,510

Venture capital/private equity
 
45

 
13,548

 
—

 
9,963

Life science
 
—

 
11,741

 
—

 
13,606

Premium wine
 
—

 
3,793

 
—

 
3,523

Other
 
—

 
3,654

 
—

 
3,912

Total commercial loans
 
10,166

 
102,601

 
6,013

 
97,400

Consumer loans
 
187

 
6,617

 
248

 
6,990

Total allowance for loan losses
 
$
10,353

 
$
109,218

 
$
6,261

 
$
104,390
Credit Quality Indicators, Broken out by Portfolio Segment and Class of Financing Receivables
The following table summarizes the credit quality indicators, broken out by portfolio segment and class of financing receivables as of June 30, 2013 and December 31, 2012:
(Dollars in thousands)
 
Pass
 
  Performing  
  (Criticized)  
 
Impaired  
 
Total
June 30, 2013:
 
 
 
 
 
 
 
 
Commercial loans:
 
 
 
 
 
 
 
 
Software
 
$
3,310,603

 
$
276,719

 
$
6,632

 
$
3,593,954

Hardware
 
973,721

 
219,310

 
24,582

 
1,217,613

Venture capital/private equity
 
1,941,817

 
758

 
89

 
1,942,664

Life science
 
992,121

 
103,460

 
—

 
1,095,581

Premium wine
 
596,685

 
12,859

 
1,511

 
611,055

Other
 
359,870

 
15,750

 
3,772

 
379,392

Total commercial loans
 
8,174,817

 
628,856

 
36,586

 
8,840,259

Consumer loans:
 
 
 
 
 
 
 
 
Real estate secured loans
 
768,434

 
6,257

 
3,619

 
778,310

Other consumer loans
 
81,332

 
4,609

 
954

 
86,895

Total consumer loans
 
849,766

 
10,866

 
4,573

 
865,205

Total gross loans
 
$
9,024,583

 
$
639,722

 
$
41,159

 
$
9,705,464

December 31, 2012:
 
 
 
 
 
 
 
 
Commercial loans:
 
 
 
 
 
 
 
 
Software
 
$
3,050,449

 
$
240,187

 
$
3,263

 
$
3,293,899

Hardware
 
970,802

 
136,819

 
21,863

 
1,129,484

Venture capital/private equity
 
1,748,663

 
1,240

 
—

 
1,749,903

Life science
 
956,276

 
120,516

 
—

 
1,076,792

Premium wine
 
545,697

 
9,189

 
4,398

 
559,284

Other
 
360,291

 
18,608

 
5,415

 
384,314

Total commercial loans
 
7,632,178

 
526,559

 
34,939

 
8,193,676

Consumer loans:
 
 
 
 
 
 
 
 
Real estate secured loans
 
663,911

 
19,343

 
2,239

 
685,493

Other consumer loans
 
132,818

 
11,160

 
1,101

 
145,079

Total consumer loans
 
796,729

 
30,503

 
3,340

 
830,572

Total gross loans
 
$
8,428,907

 
$
557,062

 
$
38,279

 
$
9,024,248
Summary of Loans Modified in Troubled Debt Restructurings ("TDRs") by Portfolio Segment and Class of Financing Receivables
The following table summarizes our loans modified in TDRs, broken out by portfolio segment and class of financing receivables at June 30, 2013 and December 31, 2012:
(Dollars in thousands)
 
June 30, 2013
 
December 31, 2012
Loans modified in TDRs:
 
 
 
 
Commercial loans:
 
 
 
 
Software
 
$
2,251

 
$
2,021

Hardware
 
23,318

 
20,514

Venture capital/ private equity
 
676

 
—

Premium wine
 
1,511

 
2,593

Other
 
4,197

 
5,900

Total commercial loans
 
31,953

 
31,028

Consumer loans:
 
 
 
 
Real estate secured loans
 
1,373

 
2,199

Other consumer loans
 
954

 
1,101

Total consumer loans
 
2,327

 
3,300

Total
 
$
34,280

 
$
34,328
Recorded Investment in Loans Modified in TDRs
The following table summarizes the recorded investment in loans modified in TDRs, broken out by portfolio segment and class of financing receivable, for modifications made during the three and six months ended June 30, 2013 and 2012:
 
 
Three months ended June 30,
 
Six months ended June 30,
(Dollars in thousands)
 
2013
 
2012
 
2013
 
2012
Loans modified in TDRs during the period:
 
 
 
 
 
 
 
 
Commercial loans:
 
 
 
 
 
 
 
 
Software
 
$
778

 
$
—

 
$
778

 
$
100

Hardware
 
5,629

 
12,747

 
5,629

 
13,198

Venture capital/ private equity
 
89

 
—

 
676

 
—

Premium wine
 
—

 
—

 
—

 
275

Other
 
—

 
535

 
—

 
2,440

Total commercial loans
 
6,496

 
13,282

 
7,083

 
16,013

Consumer loans:
 
 
 
 
 
 
 
 
Real estate secured loans
 
—

 
289

 
—

 
411

Other consumer loans
 
—

 
—

 
70

 
—

Total consumer loans
 
—

 
289

 
70

 
411

Total loans modified in TDR’s during the period (1)
 
$
6,496

 
$
13,571

 
$
7,153

 
$
16,424

 
 
(1)
There were partial charge-offs of $1.2 million on loans classified as TDRs for both the three and six months ended June 30, 2013. There were partial charge-offs of $10.0 million and $10.9 million, respectively, on loans classified as TDRs during the three and six months ended June 30, 2012.
Recorded Investment in Loans Modified in TDRs within Previous 12 months Subsequently Defaulted
The following table summarizes the recorded investment in loans modified in TDRs within the previous 12 months that subsequently defaulted during the three and six months ended June 30, 2013 and 2012, broken out by portfolio segment and class of financing receivable:
 
 
Three months ended June 30,
 
Six months ended June 30,
(Dollars in thousands)
 
2013
 
2012
 
2013
 
2012
TDRs modified within the previous 12 months that defaulted during the period:
 
 
 
 
 
 
 
 
Commercial loans:
 
 
 
 
 
 
 
 
Software
 
$
—

 
$
—

 
$
—

 
$
100

Hardware
 
4,154

 
452

 
4,154

 
452

Premium wine
 
—

 
1,859

 
—

 
1,859

Other
 
—

 
—

 
2,750

 
—

Total commercial loans
 
4,154

 
2,311

 
6,904

 
2,411

Consumer loans
 
70

 
1,289

 
70

 
1,289

Total TDRs modified within the previous 12 months that defaulted in the period
 
$
4,224

 
$
3,600

 
$
6,974

 
$
3,700