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Loans, Allowance for Loan Losses and Allowance for Unfunded Credit Commitments
 6 Months Ended
Jun. 30, 2019
Receivables [Abstract]  
Loans, Allowance for Loan Losses and Allowance for Unfunded Credit Commitments
Loans, Allowance for Loan Losses and Allowance for Unfunded Credit Commitments
We serve a variety of commercial clients in the technology, life science/healthcare, private equity/venture capital and premium wine industries. Our technology clients generally tend to be in the industries of hardware (semiconductors, communications, data, storage, and electronics), software/internet (such as infrastructure software, applications, software services, digital content and advertising technology), and energy and resource innovation (“ERI”). Because of the diverse nature of ERI products and services, for our loan-related reporting purposes, ERI-related loans are reported under our hardware, software/internet, life science/healthcare and other commercial loan categories, as applicable. Our life science/healthcare clients primarily tend to be in the industries of biotechnology, medical devices, healthcare information technology and healthcare services. Loans made to private equity/venture capital firm clients typically enable them to fund investments prior to their receipt of funds from capital calls. Loans to the premium wine industry focus on vineyards and wineries that produce grapes and wines of high quality.
In addition to commercial loans, we make consumer loans through SVB Private Bank and provide real estate secured loans to eligible employees through our EHOP. Our private banking clients are primarily private equity/venture capital professionals and executive leaders in the innovation companies they support. These products and services include real estate secured home equity lines of credit, which may be used to finance real estate investments and loans used to purchase, renovate or refinance personal residences. These products and services also include restricted stock purchase loans and capital call lines of credit.
We also provide community development loans made as part of our responsibilities under the Community Reinvestment Act. These loans are included within “Construction loans” below and are primarily secured by real estate.
The composition of loans, net of unearned income of $161 million and $173 million at June 30, 2019 and December 31, 2018, respectively, is presented in the following table:
(Dollars in thousands)
 
June 30, 2019
 
December 31, 2018
Commercial loans:
 
 
 
 
Software/internet
 
$
6,000,284

 
$
6,154,755

Hardware
 
1,328,589

 
1,234,557

Private equity/venture capital
 
14,684,900

 
14,110,560

Life science/healthcare
 
2,382,847

 
2,385,612

Premium wine
 
236,116

 
249,266

Other
 
384,247

 
321,978

Total commercial loans
 
25,016,983

 
24,456,728

Real estate secured loans:
 
 
 
 
Premium wine (1)
 
753,468

 
710,397

Consumer loans (2)
 
2,808,707

 
2,612,971

Other
 
39,666

 
40,435

Total real estate secured loans
 
3,601,841

 
3,363,803

Construction loans
 
126,895

 
97,077

Consumer loans
 
463,854

 
420,672

Total loans, net of unearned income (3)
 
$
29,209,573

 
$
28,338,280

 
 
(1)
Included in our premium wine portfolio are gross construction loans of $94 million and $99 million at June 30, 2019 and December 31, 2018, respectively.
(2)
Consumer loans secured by real estate at June 30, 2019 and December 31, 2018 were comprised of the following:
(Dollars in thousands)
 
June 30, 2019
 
December 31, 2018
Loans for personal residence
 
$
2,418,103

 
$
2,251,292

Loans to eligible employees
 
330,374

 
290,194

Home equity lines of credit
 
60,230

 
71,485

Consumer loans secured by real estate
 
$
2,808,707

 
$
2,612,971


(3)
Included within our total loan portfolio are credit card loans of $377 million and $335 million at June 30, 2019 and December 31, 2018, respectively.
Credit Quality
The composition of loans, net of unearned income of $161 million and $173 million at June 30, 2019 and December 31, 2018, respectively, broken out by portfolio segment and class of financing receivable, is as follows:
(Dollars in thousands)
 
June 30, 2019
 
December 31, 2018
Commercial loans:
 
 
 
 
Software/internet
 
$
6,000,284

 
$
6,154,755

Hardware
 
1,328,589

 
1,234,557

Private equity/venture capital
 
14,684,900

 
14,110,560

Life science/healthcare
 
2,382,847

 
2,385,612

Premium wine
 
989,584

 
959,663

Other
 
550,808

 
459,490

Total commercial loans
 
25,937,012

 
25,304,637

Consumer loans:
 
 
 
 
Real estate secured loans
 
2,808,707

 
2,612,971

Other consumer loans
 
463,854

 
420,672

Total consumer loans
 
3,272,561

 
3,033,643

Total loans, net of unearned income
 
$
29,209,573

 
$
28,338,280


The following table summarizes the aging of our gross loans, broken out by portfolio segment and class of financing receivable as of June 30, 2019 and December 31, 2018:
(Dollars in thousands)
 
30 - 59
  Days Past  
Due
 
60 - 89
  Days Past  
Due
 
Equal to or Greater
Than 90
  Days Past  
Due
 
  Total Past  
Due
 
Current  
 
  Loans Past Due  
90 Days or
More Still
Accruing
Interest
June 30, 2019:
 
 
 
 
 
 
 
 
 
 
 
 
Commercial loans:
 
 
 
 
 
 
 
 
 
 
 
 
Software/internet
 
$
4,693

 
$
20,568

 
$
97

 
$
25,358

 
$
5,909,916

 
$
97

Hardware
 
347

 
2,507

 
3

 
2,857

 
1,318,806

 
3

Private equity/venture capital
 
5,526

 
14

 
—

 
5,540

 
14,682,798

 
—

Life science/healthcare
 
1,895

 
378

 
11

 
2,284

 
2,394,468

 
11

Premium wine
 
821

 
—

 
—

 
821

 
988,290

 
—

Other
 
367

 
—

 
—

 
367

 
589,456

 
—

Total commercial loans
 
13,649

 
23,467

 
111

 
37,227

 
25,883,734

 
111

Consumer loans:
 
 
 
 
 
 
 
 
 
 
 
 
Real estate secured loans
 
—

 
3,294

 
—

 
3,294

 
2,796,397

 
—

Other consumer loans
 
60

 
—

 
—

 
60

 
464,168

 
—

Total consumer loans
 
60

 
3,294

 
—

 
3,354

 
3,260,565

 
—

Total gross loans excluding impaired loans
 
13,709

 
26,761

 
111

 
40,581

 
29,144,299

 
111

Impaired loans
 
2,051

 
4,281

 
14,954

 
21,286

 
164,237

 
—

Total gross loans
 
$
15,760

 
$
31,042

 
$
15,065

 
$
61,867

 
$
29,308,536

 
$
111

December 31, 2018:
 
 
 
 
 
 
 
 
 
 
 
 
Commercial loans:
 
 
 
 
 
 
 
 
 
 
 
 
Software/internet
 
$
28,134

 
$
6,944

 
$
378

 
$
35,456

 
$
6,059,672

 
$
378

Hardware
 
300

 
34

 
4

 
338

 
1,233,956

 
4

Private equity/venture capital
 
59,481

 
11

 
—

 
59,492

 
14,054,940

 
—

Life science/healthcare
 
16,082

 
817

 
19

 
16,918

 
2,410,091

 
19

Premium wine
 
2,953

 
14

 
—

 
2,967

 
956,285

 
—

Other
 
7,391

 
163

 
1

 
7,555

 
477,442

 
1

Total commercial loans
 
114,341

 
7,983

 
402

 
122,726

 
25,192,386

 
402

Consumer loans:
 
 
 
 
 
 
 
 
 
 
 
 
Real estate secured loans
 
3,598

 
1,750

 
1,562

 
6,910

 
2,598,496

 
1,562

Other consumer loans
 
361

 
—

 
—

 
361

 
420,359

 
—

Total consumer loans
 
3,959

 
1,750

 
1,562

 
7,271

 
3,018,855

 
1,562

Total gross loans excluding impaired loans
 
118,300

 
9,733

 
1,964

 
129,997

 
28,211,241

 
1,964

Impaired loans
 
2,843

 
1,181

 
25,092

 
29,116

 
140,958

 
—

Total gross loans
 
$
121,143

 
$
10,914

 
$
27,056

 
$
159,113

 
$
28,352,199

 
$
1,964


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, 2019 and December 31, 2018:
(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
June 30, 2019:
 
 
 
 
 
 
 
 
Commercial loans:
 
 
 
 
 
 
 
 
Software/internet
 
$
37,016

 
$
72,060

 
$
109,076

 
$
114,285

Hardware
 
8,868

 
6,667

 
15,535

 
15,641

Private equity/venture capital
 
—

 
—

 
—

 
—

Life science/healthcare
 
41,639

 
9,372

 
51,011

 
78,471

Premium wine
 
244

 
784

 
1,028

 
1,108

Other
 
3,230

 
—

 
3,230

 
3,230

Total commercial loans
 
90,997

 
88,883

 
179,880

 
212,735

Consumer loans:
 
 
 
 
 
 
 
 
Real estate secured loans
 
1,818

 
3,812

 
5,630

 
9,348

Other consumer loans
 
13

 
—

 
13

 
13

Total consumer loans
 
1,831

 
3,812

 
5,643

 
9,361

Total
 
$
92,828

 
$
92,695

 
$
185,523

 
$
222,096

December 31, 2018:
 
 
 
 
 
 
 
 
Commercial loans:
 
 
 
 
 
 
 
 
Software/internet
 
$
49,625

 
$
65,225

 
$
114,850

 
$
131,858

Hardware
 
1,256

 
10,250

 
11,506

 
12,159

Private equity/venture capital
 
—

 
3,700

 
3,700

 
3,700

Life science/healthcare
 
17,791

 
16,276

 
34,067

 
44,446

Premium wine
 
—

 
1,301

 
1,301

 
1,365

Other
 
411

 
—

 
411

 
411

Total commercial loans
 
69,083

 
96,752

 
165,835

 
193,939

Consumer loans:
 
 
 
 
 
 
 
 
Real estate secured loans
 
3,919

 
320

 
4,239

 
5,969

Other consumer loans
 
—

 
—

 
—

 
—

Total consumer loans
 
3,919

 
320

 
4,239

 
5,969

Total
 
$
73,002

 
$
97,072

 
$
170,074

 
$
199,908





The following tables summarize our average impaired loans and interest income recognized on impaired loans, broken out by portfolio segment and class of financing receivable for the three and six months ended June 30, 2019 and 2018:
Three months ended June 30,
 
Average impaired loans
 
Interest income recognized on impaired loans
(Dollars in thousands)
 
2019

2018

2019

2018
Commercial loans:
 
 
 
 
 
 
 
 
Software/internet
 
$
101,813

 
$
110,101

 
$
1,232

 
$
315

Hardware
 
15,131

 
37,058

 
95

 
237

Private equity/venture capital
 
3,860

 
72

 
—

 
—

Life science/healthcare
 
55,219

 
21,790

 
246

 
5

Premium wine
 
1,051

 
2,604

 
14

 
36

Other
 
1,078

 
379

 
—

 
—

Total commercial loans
 
178,152

 
172,004

 
1,587

 
593

Consumer loans:
 
 
 
 
 
 
 
 
Real estate secured loans
 
5,412

 
4,466

 
—

 
3

Other consumer loans
 
13

 
693

 
—

 
—

Total consumer loans
 
5,425

 
5,159

 
—

 
3

Total average impaired loans
 
$
183,577

 
$
177,163

 
$
1,587

 
$
596


Six months ended June 30,
 
Average impaired loans
 
Interest income recognized on impaired loans
(Dollars in thousands)
 
2019
 
2018
 
2019
 
2018
Commercial loans:
 
 
 
 
 
 
 
 
Software/internet
 
$
103,062

 
$
109,444

 
$
1,835

 
$
562

Hardware
 
15,973

 
37,742

 
347

 
289

Private equity/venture capital
 
4,529

 
187

 
—

 
—

Life science/healthcare
 
49,691

 
22,234

 
593

 
11

Premium wine
 
1,154

 
2,686

 
33

 
72

Other
 
609

 
195

 
—

 
—

Total commercial loans
 
175,018

 
172,488

 
2,808

 
934

Consumer loans:
 
 
 
 
 
 
 
 
Real estate secured loans
 
7,513

 
3,765

 
54

 
8

Other consumer loans
 
9

 
716

 
—

 
—

Total consumer loans
 
7,522

 
4,481

 
54

 
8

Total average impaired loans
 
$
182,540

 
$
176,969

 
$
2,862

 
$
942


The following tables summarize the activity relating to our allowance for loan losses for the three and six months ended June 30, 2019 and 2018, broken out by portfolio segment:
Three months ended June 30, 2019
 
Beginning Balance March 31, 2019
 
Charge-offs
 
Recoveries
 
Provision for
Loan Losses
 
Foreign Currency Translation Adjustments
 
Ending Balance June 30, 2019
(Dollars in thousands)
 
 
 
 
 
 
Commercial loans:
 
 
 
 
 
 
 
 
 
 
 
 
Software/internet
 
$
95,683

 
$
(2,937
)
 
$
6,716

 
$
2,646

 
$
(110
)
 
$
101,998

Hardware
 
25,121

 
(2,992
)
 
3,013

 
1,868

 
(78
)
 
26,932

Private equity/venture capital
 
97,460

 
(2,047
)
 
—

 
10,550

 
(439
)
 
105,524

Life science/healthcare
 
55,814

 
(17,495
)
 
76

 
1,889

 
(78
)
 
40,206

Premium wine
 
3,799

 
—

 
—

 
208

 
(9
)
 
3,998

Other
 
3,208

 
(4
)
 
—

 
1,134

 
(47
)
 
4,291

Total commercial loans
 
281,085

 
(25,475
)
 
9,805

 
18,295

 
(761
)
 
282,949

Total consumer loans
 
19,066

 
(960
)
 
15

 
853

 
(35
)
 
18,939

Total allowance for loan losses
 
$
300,151

 
$
(26,435
)
 
$
9,820

 
$
19,148

 
$
(796
)
 
$
301,888

Three months ended June 30, 2018
 
Beginning Balance March 31, 2018
 
Charge-offs
 
Recoveries
 
Provision for
(Reduction of) Loan Losses
 
Foreign Currency Translation Adjustments
 
Ending Balance June 30, 2018
(Dollars in thousands)
 
 
 
 
 
 
Commercial loans:
 
 
 
 
 
 
 
 
 
 
 
 
Software/internet
 
$
103,295

 
$
(13,402
)
 
$
404

 
$
13,179

 
$
(828
)
 
$
102,648

Hardware
 
28,472

 
(461
)
 
643

 
6,447

 
(406
)
 
34,695

Private equity/venture capital
 
91,618

 
(112
)
 
—

 
(2,237
)
 
140

 
89,409

Life science/healthcare
 
25,806

 
—

 
3

 
9,876

 
(621
)
 
35,064

Premium wine
 
3,365

 
—

 
—

 
78

 
(5
)
 
3,438

Other
 
3,482

 
(1,164
)
 
566

 
13

 
(1
)
 
2,896

Total commercial loans
 
256,038

 
(15,139
)
 
1,616

 
27,356

 
(1,721
)
 
268,150

Total consumer loans
 
18,256

 
(289
)
 
310

 
300

 
(18
)
 
18,559

Total allowance for loan losses
 
$
274,294

 
$
(15,428
)
 
$
1,926

 
$
27,656

 
$
(1,739
)
 
$
286,709

Six months ended June 30, 2019
 
Beginning Balance December 31, 2018
 
Charge-offs
 
Recoveries
 
Provision for
(Reduction of) Loan Losses
 
Foreign Currency Translation Adjustments
 
Ending Balance June 30, 2019
(Dollars in thousands)
 
 
 
 
 
 
Commercial loans:
 
 
 
 
 
 
 
 
 
 
 
 
Software/internet
 
$
103,567

 
$
(11,191
)
 
$
7,770

 
$
1,988

 
$
(136
)
 
$
101,998

Hardware
 
19,725

 
(3,245
)
 
3,069

 
7,252

 
131

 
26,932

Private equity/venture capital
 
98,581

 
(2,047
)
 
—

 
9,471

 
(481
)
 
105,524

Life science/healthcare
 
32,180

 
(17,518
)
 
181

 
24,561

 
802

 
40,206

Premium wine
 
3,355

 
—

 
—

 
635

 
8

 
3,998

Other
 
3,558

 
(415
)
 
—

 
1,193

 
(45
)
 
4,291

Total commercial loans
 
260,966

 
(34,416
)
 
11,020

 
45,100

 
279

 
282,949

Total consumer loans
 
19,937

 
(1,019
)
 
225

 
(131
)
 
(73
)
 
18,939

Total allowance for loan losses
 
$
280,903

 
$
(35,435
)
 
$
11,245

 
$
44,969

 
$
206

 
$
301,888


Six months ended June 30, 2018
 
Beginning Balance December 31, 2017
 
Charge-offs
 
Recoveries
 
Provision for
(Reduction of) Loan Losses
 
Foreign Currency Translation Adjustments
 
Ending Balance June 30, 2018
(Dollars in thousands)
 
 
 
 
 
 
Commercial loans:
 
 
 
 
 
 
 
 
 
 
 
 
Software/internet
 
$
96,104

 
$
(20,073
)
 
$
977

 
$
25,980

 
$
(340
)
 
$
102,648

Hardware
 
27,614

 
(3,414
)
 
1,231

 
9,551

 
(287
)
 
34,695

Private equity/venture capital
 
82,468

 
(112
)
 
10

 
6,568

 
475

 
89,409

Life science/healthcare
 
24,924

 
(864
)
 
56

 
11,507

 
(559
)
 
35,064

Premium wine
 
3,532

 
—

 
—

 
(83
)
 
(11
)
 
3,438

Other
 
3,941

 
(1,263
)
 
1,103

 
(893
)
 
8

 
2,896

Total commercial loans
 
238,583

 
(25,726
)
 
3,377

 
52,630

 
(714
)
 
268,150

Total consumer loans
 
16,441

 
(289
)
 
337

 
2,022

 
48

 
18,559

Total allowance for loan losses
 
$
255,024

 
$
(26,015
)
 
$
3,714

 
$
54,652

 
$
(666
)
 
$
286,709


The following table summarizes the activity relating to our allowance for unfunded credit commitments for the three and six months ended June 30, 2019 and 2018:
 
 
Three months ended June 30,
 
Six months ended June 30,
(Dollars in thousands)
 
2019

2018
 
2019
 
2018
Allowance for unfunded credit commitments, beginning balance
 
$
57,970

 
$
52,823

 
$
55,183

 
$
51,770

Provision for unfunded credit commitments
 
4,798

 
1,424

 
7,528

 
2,400

Foreign currency translation adjustments
 
(104
)
 
(143
)
 
(47
)
 
(66
)
Allowance for unfunded credit commitments, ending balance (1)
 
$
62,664

 
$
54,104

 
$
62,664


$
54,104

 
(1)
See Note 16—“Off-Balance Sheet Arrangements, Guarantees and Other Commitments” of the “Notes to Interim Consolidated Financial Statements (unaudited)” under Part I, Item 1 of this report for additional disclosures related to our commitments to extend credit.
The following table summarizes the allowance for loan losses individually and collectively evaluated for impairment as of June 30, 2019 and December 31, 2018, broken out by portfolio segment:
 
 
June 30, 2019
 
December 31, 2018
 
 
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/internet
 
$
25,284

 
$
109,076

 
$
76,714

 
$
5,891,208

 
$
28,527

 
$
114,850

 
$
75,040

 
$
6,039,905

Hardware
 
8,389

 
15,535

 
18,543

 
1,313,054

 
1,253

 
11,506

 
18,472

 
1,223,051

Private equity/venture capital
 
—

 
—

 
105,524

 
14,684,900

 
—

 
3,700

 
98,581

 
14,106,860

Life science/healthcare
 
17,722

 
51,011

 
22,484

 
2,331,836

 
7,484

 
34,067

 
24,696

 
2,351,545

Premium wine
 
244

 
1,028

 
3,754

 
988,556

 
—

 
1,301

 
3,355

 
958,362

Other
 
1,284

 
3,230

 
3,007

 
547,578

 
411

 
411

 
3,147

 
459,079

Total commercial loans
 
52,923

 
179,880

 
230,026

 
25,757,132

 
37,675

 
165,835

 
223,291

 
25,138,802

Total consumer loans
 
144

 
5,643

 
18,795

 
3,266,918

 
266

 
4,239

 
19,671

 
3,029,404

Total
 
$
53,067

 
$
185,523

 
$
248,821

 
$
29,024,050

 
$
37,941

 
$
170,074

 
$
242,962

 
$
28,168,206



Credit Quality Indicators
For each individual client, we establish an internal credit risk rating for that loan, which is used for assessing and monitoring credit risk as well as performance of the loan and the overall portfolio. Our internal credit risk ratings are also used to summarize the risk of loss due to failure by an individual borrower to repay the loan. For our internal credit risk ratings, each individual loan is given a risk rating of 1 through 10. Loans risk-rated 1 through 4 are performing loans and translate to an internal rating of “Pass," with loans risk-rated 1 being cash secured. Loans risk-rated 5 through 7 are performing loans; however, we consider them as demonstrating higher risk, which requires more frequent review of the individual exposures; these translate to an internal rating of “Performing (Criticized)." When full repayment of a criticized loan has been deemed improbable under the original contractual terms but full repayment remains probable overall, the loan is considered to be a “Performing Impaired (Criticized)” loan. All of our nonaccrual loans are risk-rated 8 or 9 and are classified under the nonperforming impaired category. (For further description of nonaccrual loans, refer to Note 2—“Summary of Significant Accounting Policies” under Part II, Item 8 of our 2018 Form 10-K). Loans rated 10 are charged-off and are not included as part of our loan portfolio balance. We review our credit quality indicators for performance and appropriateness of risk ratings as part of our evaluation process for our allowance for loan losses.
The following table summarizes the credit quality indicators, broken out by portfolio segment and class of financing receivables as of June 30, 2019 and December 31, 2018:
(Dollars in thousands)
 
Pass
 
Performing (Criticized)
 
Performing Impaired (Criticized)
 
Nonperforming Impaired (Nonaccrual)
 
Total
June 30, 2019:
 
 
 
 
 
 
 
 
 
 
Commercial loans:
 
 
 
 
 
 
 
 
 
 
Software/internet
 
$
5,457,188

 
$
478,086

 
$
72,060

 
$
37,016

 
$
6,044,350

Hardware
 
1,185,161

 
136,502

 
6,667

 
8,868

 
1,337,198

Private equity/venture capital
 
14,688,329

 
9

 
—

 
—

 
14,688,338

Life science/healthcare
 
2,310,262

 
86,490

 
9,371

 
41,640

 
2,447,763

Premium wine
 
925,649

 
63,462

 
784

 
244

 
990,139

Other
 
574,978

 
14,845

 
—

 
3,230

 
593,053

Total commercial loans
 
25,141,567

 
779,394

 
88,882

 
90,998

 
26,100,841

Consumer loans:
 
 
 
 
 
 
 
 
 
 
Real estate secured loans
 
2,787,853

 
11,838

 
—

 
5,630

 
2,805,321

Other consumer loans
 
463,850

 
378

 
—

 
13

 
464,241

Total consumer loans
 
3,251,703

 
12,216

 
—

 
5,643

 
3,269,562

Total gross loans
 
$
28,393,270

 
$
791,610

 
$
88,882

 
$
96,641

 
$
29,370,403

December 31, 2018:
 
 
 
 
 
 
 
 
 
 
Commercial loans:
 
 
 
 
 
 
 
 
 
 
Software/internet
 
$
5,574,332

 
$
520,796

 
$
48,069

 
$
66,781

 
$
6,209,978

Hardware
 
1,146,985

 
87,309

 
10,250

 
1,256

 
1,245,800

Private equity/venture capital
 
14,098,281

 
16,151

 
—

 
3,700

 
14,118,132

Life science/healthcare
 
2,291,356

 
135,653

 
16,276

 
17,791

 
2,461,076

Premium wine
 
909,965

 
49,287

 
1,017

 
284

 
960,553

Other
 
467,653

 
17,344

 
—

 
411

 
485,408

Total commercial loans
 
24,488,572

 
826,540

 
75,612

 
90,223

 
25,480,947

Consumer loans:
 
 
 
 
 
 
 
 
 
 
Real estate secured loans
 
2,584,261

 
21,145

 
320

 
3,919

 
2,609,645

Other consumer loans
 
419,771

 
949

 
—

 
—

 
420,720

Total consumer loans
 
3,004,032

 
22,094

 
320

 
3,919

 
3,030,365

Total gross loans
 
$
27,492,604

 
$
848,634

 
$
75,932

 
$
94,142

 
$
28,511,312



Troubled Debt Restructurings
As of June 30, 2019, we had 20 TDRs with a total carrying value of $112.0 million where concessions have been granted to borrowers experiencing financial difficulties, in an attempt to maximize collection. There were $4.3 million of unfunded commitments available for funding to the clients associated with these TDRs as of June 30, 2019.
The following table summarizes our loans modified in TDRs, broken out by portfolio segment and class of financing receivables at June 30, 2019 and December 31, 2018:
(Dollars in thousands)
 
June 30, 2019
 
December 31, 2018
Loans modified in TDRs:
 
 
 
 
Commercial loans:
 
 
 
 
Software/internet
 
$
79,512

 
$
58,089

Hardware
 
8,159

 
9,665

Life science/healthcare
 
19,592

 
12,738

Premium wine
 
2,587

 
2,883

Total commercial loans
 
109,850

 
83,375

Consumer loans:
 
 
 
 
Other consumer loans
 
2,181

 
320

Total loans modified in TDRs
 
$
112,031

 
$
83,695


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, 2019 and 2018:
 
 
Three months ended June 30,
 
Six months ended June 30,
(Dollars in thousands)
 
2019

2018
 
2019
 
2018
Loans modified in TDRs during the period:
 
 
 
 
 
 
 
 
Commercial loans:
 
 
 
 
 
 
 
 
Software/internet
 
$
55,065

 
$
14,783

 
$
55,681

 
$
14,783

Hardware
 
—

 
1,954

 
—

 
3,448

Life science/healthcare
 
11,227

 
6,231

 
11,227

 
7,461

Total commercial loans
 
66,292

 
22,968

 
66,908

 
25,692

Consumer loans:
 
 
 
 
 
 
 
 
Other consumer loans
 
1,865

 
—

 
1,865

 
325

Total loans modified in TDRs during the period (1)
 
$
68,157

 
$
22,968

 
$
68,773

 
$
26,017

 
 
(1)
There were $3.4 million and $5.6 million of partial charge-offs for the three and six months ended June 30, 2019, respectively, and $8.5 million of partial charge-offs for both the three and six months ended June 30, 2018.
During the three and six months ended June 30, 2019, $66.3 million and $66.9 million, respectively, were modified through payment deferrals granted to our clients. During the three and six months ended June 30, 2019, $1.9 million were modified through partial forgiveness of principal for both periods presented. During the three and six months ended June 30, 2018, all new TDRs of $23.0 million and $26.0 million, respectively, were modified through payment deferrals granted to our clients.
The related allowance for loan losses for the majority of our TDRs is determined on an individual basis by comparing the carrying value of the loan to the present value of the estimated future cash flows, discounted at the pre-modification contractual interest rate. For certain TDRs, the related allowance for loan losses is determined based on the fair value of the collateral if the loan is collateral dependent.
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, 2019 and 2018:
 
 
Three months ended June 30,
 
Six months ended June 30,
(Dollars in thousands)
 
2019
 
2018
 
2019
 
2018
TDRs modified within the previous 12 months that defaulted during the period:
 
 
 
 
 
 
 
 
Commercial loans:
 
 
 
 
 
 
 
 
Software/internet
 
$
—

 
$
19,625

 
$
—

 
$
22,657

Hardware
 
—

 
3,449

 
—

 
3,449

Life science/healthcare
 
—

 
1,230

 
—

 
1,230

Total TDRs modified within the previous 12 months that defaulted in the period
 
$
—

 
$
24,304

 
$
—

 
$
27,336


Charge-offs and defaults on previously restructured loans are evaluated to determine the impact to the allowance for loan losses, if any. The evaluation of these defaults may impact the assumptions used in calculating the reserve on other TDRs and impaired loans as well as management’s overall outlook of macroeconomic factors that affect the reserve on the loan portfolio as a whole. After evaluating the charge-offs and defaults experienced on our TDRs we determined that no change to our reserving methodology for TDRs was necessary to determine the allowance for loan losses as of June 30, 2019.