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Loans and Allowance for Loan Losses (Tables)
 9 Months Ended
Sep. 30, 2014
Receivables [Abstract]  
Loans and Allowance for Loan Losses
The composition of loans, net of unearned income of $95 million and $89 million at September 30, 2014 and December 31, 2013, respectively, is presented in the following table:
(Dollars in thousands)
 
September 30, 2014
 
December 31, 2013
Commercial loans:
 
 
 
 
Software
 
$
4,503,369

 
$
4,102,636

Hardware
 
1,072,102

 
1,213,032

Venture capital/private equity
 
2,921,184

 
2,386,054

Life science
 
1,245,527

 
1,170,220

Premium wine
 
186,675

 
149,841

Other
 
241,815

 
288,904

Total commercial loans
 
10,170,672

 
9,310,687

Real estate secured loans:
 
 
 
 
Premium wine (1)
 
562,893

 
514,993

Consumer loans (2)
 
1,047,935

 
873,255

Other
 
30,152

 
30,743

Total real estate secured loans
 
1,640,980

 
1,418,991

Construction loans
 
80,102

 
76,997

Consumer loans
 
125,427

 
99,711

Total loans, net of unearned income (3)
 
$
12,017,181

 
$
10,906,386

 
 
(1)
Included in our premium wine portfolio are gross construction loans of $111 million and $112 million at September 30, 2014 and December 31, 2013, respectively.
(2)
Consumer loans secured by real estate at September 30, 2014 and December 31, 2013 were comprised of the following:
(Dollars in thousands)
 
September 30, 2014
 
December 31, 2013
Loans for personal residence
 
$
860,024

 
$
685,327

Loans to eligible employees
 
129,979

 
121,548

Home equity lines of credit
 
57,932

 
66,380

Consumer loans secured by real estate
 
$
1,047,935

 
$
873,255


(3)
Included within our total loan portfolio are credit card loans of $122 million and $85 million at September 30, 2014 and December 31, 2013, 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 $95 million and $89 million at September 30, 2014 and December 31, 2013, respectively, broken out by portfolio segment and class of financing receivable, is as follows:
(Dollars in thousands)
 
September 30, 2014
 
December 31, 2013
Commercial loans:
 
 
 
 
Software
 
$
4,503,369

 
$
4,102,636

Hardware
 
1,072,102

 
1,213,032

Venture capital/private equity
 
2,921,184

 
2,386,054

Life science
 
1,245,527

 
1,170,220

Premium wine
 
749,568

 
664,834

Other
 
352,069

 
396,644

Total commercial loans
 
10,843,819

 
9,933,420

Consumer loans:
 
 
 
 
Real estate secured loans
 
1,047,935

 
873,255

Other consumer loans
 
125,427

 
99,711

Total consumer loans
 
1,173,362

 
972,966

Total loans, net of unearned income
 
$
12,017,181

 
$
10,906,386
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 September 30, 2014 and December 31, 2013:
(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
September 30, 2014:
 
 
 
 
 
 
 
 
 
 
 
 
Commercial loans:
 
 
 
 
 
 
 
 
 
 
 
 
Software
 
$
4,565

 
$
4,334

 
$
125

 
$
9,024

 
$
4,527,570

 
$
125

Hardware
 
247

 
3,609

 
—

 
3,856

 
1,078,234

 
—

Venture capital/private equity
 
5

 
3

 
—

 
8

 
2,948,327

 
—

Life science
 
265

 
2,573

 
—

 
2,838

 
1,253,292

 
—

Premium wine
 
5

 
—

 
—

 
5

 
750,726

 
—

Other
 
66

 
65

 
—

 
131

 
354,456

 
—

Total commercial loans
 
5,153

 
10,584

 
125

 
15,862

 
10,912,605

 
125

Consumer loans:
 
 
 
 
 
 
 
 
 
 
 
 
Real estate secured loans
 
1,250

 
—

 
—

 
1,250

 
1,046,029

 
—

Other consumer loans
 
32

 
1

 
—

 
33

 
125,008

 
—

Total consumer loans
 
1,282

 
1

 
—

 
1,283

 
1,171,037

 
—

Total gross loans excluding impaired loans
 
6,435

 
10,585

 
125

 
17,145

 
12,083,642

 
125

Impaired loans
 
251

 
211

 
1,062

 
1,524

 
10,163

 
—

Total gross loans
 
$
6,686

 
$
10,796

 
$
1,187

 
$
18,669

 
$
12,093,805

 
$
125

December 31, 2013:
 
 
 
 
 
 
 
 
 
 
 
 
Commercial loans:
 
 
 
 
 
 
 
 
 
 
 
 
Software
 
$
9,804

 
$
1,291

 
$
99

 
$
11,194

 
$
4,102,546

 
$
99

Hardware
 
2,679

 
3,965

 
—

 
6,644

 
1,198,169

 
—

Venture capital/private equity
 
4

 
—

 
—

 
4

 
2,408,382

 
—

Life science
 
395

 
131

 
—

 
526

 
1,179,462

 
—

Premium wine
 
—

 
—

 
—

 
—

 
665,755

 
—

Other
 
1,580

 
142

 
—

 
1,722

 
397,416

 
—

Total commercial loans
 
14,462

 
5,529

 
99

 
20,090

 
9,951,730

 
99

Consumer loans:
 
 
 
 
 
 
 
 
 
 
 
 
Real estate secured loans
 
240

 
—

 
—

 
240

 
872,586

 
—

Other consumer loans
 
8

 
—

 
—

 
8

 
98,965

 
—

Total consumer loans
 
248

 
—

 
—

 
248

 
971,551

 
—

Total gross loans excluding impaired loans
 
14,710

 
5,529

 
99

 
20,338

 
10,923,281

 
99

Impaired loans
 
4,657

 
7,043

 
4,339

 
16,039

 
35,610

 
—

Total gross loans
 
$
19,367

 
$
12,572

 
$
4,438

 
$
36,377

 
$
10,958,891

 
$
99
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 September 30, 2014 and December 31, 2013:
(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
September 30, 2014:
 
 
 
 
 
 
 
 
Commercial loans:
 
 
 
 
 
 
 
 
Software
 
$
8,730

 
$
—

 
$
8,730

 
$
12,069

Life science
 
1,000

 
—

 
1,000

 
1,000

Premium wine
 
—

 
1,339

 
1,339

 
1,752

Other
 
186

 
—

 
186

 
798

Total commercial loans
 
9,916

 
1,339

 
11,255

 
15,619

Consumer loans:
 
 
 
 
 
 
 
 
Real estate secured loans
 
—

 
208

 
208

 
1,416

Other consumer loans
 
224

 
—

 
224

 
526

Total consumer loans
 
224

 
208

 
432

 
1,942

Total
 
$
10,140

 
$
1,547

 
$
11,687

 
$
17,561

December 31, 2013:
 
 
 
 
 
 
 
 
Commercial loans:
 
 
 
 
 
 
 
 
Software
 
$
27,308

 
$
310

 
$
27,618

 
$
28,316

Hardware
 
19,329

 
338

 
19,667

 
35,317

Venture capital/private equity
 
40

 
—

 
40

 
40

Life science
 
—

 
1,278

 
1,278

 
4,727

Premium wine
 
—

 
1,442

 
1,442

 
1,778

Other
 
690

 
—

 
690

 
718

Total commercial loans
 
47,367

 
3,368

 
50,735

 
70,896

Consumer loans:
 
 
 
 
 
 
 
 
Real estate secured loans
 
—

 
244

 
244

 
1,434

Other consumer loans
 
670

 
—

 
670

 
941

Total consumer loans
 
670

 
244

 
914

 
2,375

Total
 
$
48,037

 
$
3,612

 
$
51,649

 
$
73,271
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 nine months ended September 30, 2014 and 2013:
 
 
Three months ended September 30,
 
Nine months ended September 30,
(Dollars in thousands)
 
2014
 
2013
 
2014
 
2013
Average impaired loans:
 
 
 
 
 
 
 
 
Commercial loans:
 
 
 
 
 
 
 
 
Software
 
$
10,651

 
$
4,306

 
$
13,690

 
$
4,631

Hardware
 
1,540

 
25,456

 
8,140

 
24,536

Venture capital/private equity
 
—

 
75

 
—

 
35

Life science
 
333

 
—

 
636

 
303

Premium wine
 
1,364

 
1,502

 
1,398

 
2,458

Other
 
674

 
3,648

 
1,383

 
4,344

Total commercial loans
 
14,562

 
34,987

 
25,247

 
36,307

Consumer loans:
 
 
 
 
 
 
 
 
Real estate secured loans
 
212

 
3,426

 
224

 
3,391

Other consumer loans
 
261

 
866

 
375

 
1,021

Total consumer loans
 
473

 
4,292

 
599

 
4,412

Total average impaired loans
 
$
15,035

 
$
39,279

 
$
25,846

 
$
40,719
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 nine months ended September 30, 2014 and 2013, broken out by portfolio segment:
Three months ended September 30, 2014 (dollars in thousands)
 
Beginning Balance June 30, 2014
 
Charge-offs
 
Recoveries
 
Provision for
(Reduction of) Loan Losses
 
Ending Balance September 30, 2014
Commercial loans:
 
 
 
 
 
 
 
 
 
 
Software
 
$
53,239

 
$
(6,907
)
 
$
790

 
$
11,078

 
$
58,200

Hardware
 
24,780

 
(2,643
)
 
113

 
2,491

 
24,741

Venture capital/private equity
 
19,004

 
—

 
—

 
845

 
19,849

Life science
 
10,597

 
—

 
53

 
1,591

 
12,241

Premium wine
 
3,546

 
(35
)
 
—

 
710

 
4,221

Other
 
3,218

 
(1,072
)
 
1,306

 
(530
)
 
2,922

Total commercial loans
 
114,384

 
(10,657
)
 
2,262

 
16,185

 
122,174

Consumer loans
 
6,344

 
—

 
118

 
425

 
6,887

Total allowance for loan losses
 
$
120,728

 
$
(10,657
)
 
$
2,380

 
$
16,610

 
$
129,061


Nine months ended September 30, 2014 (dollars in thousands)
 
Beginning Balance December 31, 2013
 
Charge-offs
 
Recoveries
 
Provision for Loan Losses
 
Ending Balance September 30, 2014
Commercial loans:
 
 
 
 
 
 
 
 
 
 
Software
 
$
64,084

 
$
(18,932
)
 
$
1,023

 
$
12,025

 
$
58,200

Hardware
 
36,553

 
(15,230
)
 
2,070

 
1,348

 
24,741

Venture capital/private equity
 
16,385

 
—

 
—

 
3,464

 
19,849

Life science
 
11,926

 
(930
)
 
341

 
904

 
12,241

Premium wine
 
3,914

 
(35
)
 
238

 
104

 
4,221

Other
 
3,680

 
(3,062
)
 
1,316

 
988

 
2,922

Total commercial loans
 
136,542

 
(38,189
)
 
4,988

 
18,833

 
122,174

Consumer loans
 
6,344

 
—

 
325

 
218

 
6,887

Total allowance for loan losses
 
$
142,886

 
$
(38,189
)
 
$
5,313

 
$
19,051

 
$
129,061


Three months ended September 30, 2013 (dollars in thousands)
 
Beginning Balance June 30, 2013
 
Charge-offs
 
Recoveries
 
Provision for
(Reduction of) Loan Losses
 
Ending Balance September 30, 2013
Commercial loans:
 
 
 
 
 
 
 
 
 
 
Software
 
$
46,798

 
$
(2,527
)
 
$
816

 
$
4,369

 
$
49,456

Hardware
 
33,188

 
(5,544
)
 
1,149

 
7,370

 
36,163

Venture capital/private equity
 
13,593

 
—

 
—

 
617

 
14,210

Life science
 
11,741

 
(57
)
 
246

 
(780
)
 
11,150

Premium wine
 
3,793

 
—

 
4

 
81

 
3,878

Other
 
3,654

 
(21
)
 
77

 
(24
)
 
3,686

Total commercial loans
 
112,767

 
(8,149
)
 
2,292

 
11,633

 
118,543

Consumer loans
 
6,804

 
—

 
382

 
(995
)
 
6,191

Total allowance for loan losses
 
$
119,571

 
$
(8,149
)
 
$
2,674

 
$
10,638

 
$
124,734

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

 
$
(7,619
)
 
$
1,455

 
$
12,972

 
$
49,456

Hardware
 
29,761

 
(11,975
)
 
1,998

 
16,379

 
36,163

Venture capital/private equity
 
9,963

 
—

 
—

 
4,247

 
14,210

Life science
 
13,606

 
(2,618
)
 
1,335

 
(1,173
)
 
11,150

Premium wine
 
3,523

 
—

 
135

 
220

 
3,878

Other
 
3,912

 
(6,069
)
 
2,458

 
3,385

 
3,686

Total commercial loans
 
103,413

 
(28,281
)
 
7,381

 
36,030

 
118,543

Consumer loans
 
7,238

 
(869
)
 
829

 
(1,007
)
 
6,191

Total allowance for loan losses
 
$
110,651

 
$
(29,150
)
 
$
8,210

 
$
35,023

 
$
124,734
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 September 30, 2014 and December 31, 2013, broken out by portfolio segment:
 
 
September 30, 2014
 
December 31, 2013
 
 
Individually Evaluated for  
Impairment
 
Collectively Evaluated for  
Impairment
 
Individually Evaluated for  
Impairment
 
Collectively Evaluated for  
Impairment
(Dollars in thousands)
 
Allowance for loan losses
Recorded investment in loans
 
Allowance for loan losses
Recorded investment in loans
 
Allowance for loan losses
Recorded investment in loans
 
Allowance for loan losses
Recorded investment in loans
Commercial loans:
 
 
 
 
 
 
 
 
 
 
 
 
Software
 
$
2,057

$
8,730

 
$
56,143

$
4,494,639

 
$
11,261

$
27,617

 
$
52,823

$
4,075,019

Hardware
 
—

—

 
24,741

1,072,102

 
9,673

19,667

 
26,880

1,193,365

Venture capital/private equity
 
—

—

 
19,849

2,921,184

 
19

39

 
16,366

2,386,015

Life science
 
191

1,000

 
12,050

1,244,527

 
—

1,278

 
11,926

1,168,942

Premium wine
 
—

1,339

 
4,221

748,229

 
—

1,442

 
3,914

663,392

Other
 
4

186

 
2,918

351,883

 
156

690

 
3,524

395,954

Total commercial loans
 
2,252

11,255

 
119,922

10,832,564

 
21,109

50,733

 
115,433

9,882,687

Consumer loans
 
73

432

 
6,814

1,172,930

 
168

915

 
6,176

972,051

Total
 
$
2,325

$
11,687

 
$
126,736

$
12,005,494

 
$
21,277

$
51,648

 
$
121,609

$
10,854,738
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 September 30, 2014 and December 31, 2013:
(Dollars in thousands)
 
Pass
 
  Performing  
  (Criticized)  
 
Impaired  
 
Total
September 30, 2014:
 
 
 
 
 
 
 
 
Commercial loans:
 
 
 
 
 
 
 
 
Software
 
$
4,179,638

 
$
356,956

 
$
8,730

 
$
4,545,324

Hardware
 
885,407

 
196,683

 
—

 
1,082,090

Venture capital/private equity
 
2,932,711

 
15,624

 
—

 
2,948,335

Life science
 
1,093,451

 
162,679

 
1,000

 
1,257,130

Premium wine
 
732,605

 
18,126

 
1,339

 
752,070

Other
 
338,187

 
16,400

 
186

 
354,773

Total commercial loans
 
10,161,999

 
766,468

 
11,255

 
10,939,722

Consumer loans:
 
 
 
 
 
 
 
 
Real estate secured loans
 
1,042,547

 
4,732

 
208

 
1,047,487

Other consumer loans
 
122,736

 
2,305

 
224

 
125,265

Total consumer loans
 
1,165,283

 
7,037

 
432

 
1,172,752

Total gross loans
 
$
11,327,282

 
$
773,505

 
$
11,687

 
$
12,112,474

December 31, 2013:
 
 
 
 
 
 
 
 
Commercial loans:
 
 
 
 
 
 
 
 
Software
 
$
3,875,043

 
$
238,697

 
$
27,618

 
$
4,141,358

Hardware
 
995,055

 
209,758

 
19,667

 
1,224,480

Venture capital/private equity
 
2,408,386

 
—

 
40

 
2,408,426

Life science
 
1,091,993

 
87,995

 
1,278

 
1,181,266

Premium wine
 
652,747

 
13,008

 
1,442

 
667,197

Other
 
383,602

 
15,536

 
690

 
399,828

Total commercial loans
 
9,406,826

 
564,994

 
50,735

 
10,022,555

Consumer loans:
 
 
 
 
 
 
 
 
Real estate secured loans
 
868,789

 
4,037

 
244

 
873,070

Other consumer loans
 
95,586

 
3,387

 
670

 
99,643

Total consumer loans
 
964,375

 
7,424

 
914

 
972,713

Total gross loans
 
$
10,371,201

 
$
572,418

 
$
51,649

 
$
10,995,268
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 September 30, 2014 and December 31, 2013:
(Dollars in thousands)
 
September 30, 2014
 
December 31, 2013
Loans modified in TDRs:
 
 
 
 
Commercial loans:
 
 
 
 
Software
 
$
7,848

 
$
5,860

Hardware
 
—

 
13,329

Venture capital/ private equity
 
—

 
77

Premium wine
 
1,953

 
1,442

Other
 
275

 
1,055

Total commercial loans
 
10,076

 
21,763

Consumer loans:
 
 
 
 
Other consumer loans
 
224

 
670

Total consumer loans
 
224

 
670

Total
 
$
10,300

 
$
22,433
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 nine months ended September 30, 2014 and 2013:
 
 
Three months ended September 30,
 
Nine months ended September 30,
(Dollars in thousands)
 
2014
 
2013
 
2014
 
2013
Loans modified in TDRs during the period:
 
 
 
 
 
 
 
 
Commercial loans:
 
 
 
 
 
 
 
 
Software
 
$
496

 
$
1,007

 
$
7,848

 
$
1,007

Hardware
 
—

 
6,330

 
—

 
7,783

Venture capital/ private equity
 
—

 
—

 
—

 
88

Premium wine
 
—

 
—

 
614

 
—

Other
 
—

 
—

 
—

 
734

Total commercial loans
 
496

 
7,337

 
8,462

 
9,612

Consumer loans:
 
 
 
 
 
 
 
 
Other consumer loans
 
—

 
—

 
—

 
41

Total consumer loans
 
—

 
—

 
—

 
41

Total loans modified in TDRs during the period (1)
 
$
496

 
$
7,337

 
$
8,462

 
$
9,653

 
 
(1)
There were no partial charge-offs on loans classified as TDRs for the three and nine months ended September 30, 2014. There were partial charge-offs of $1.2 million and $2.4 million on loans classified as TDRs for the three and nine months ended September 30, 2013, respectively.