Loans and Allowance for Credit Losses: Loans and Unfunded Credit Commitments (Tables)

6 Months Ended

Jun. 30, 2022

Receivables [Abstract]

Loans and Allowance for Loan Losses

The composition of loans at amortized cost basis broken out by class of financing receivable at June 30, 2022 and December 31, 2021 is presented in the following table:

(Dollars in millions)	June 30, 2022		December 31, 2021
Global fund banking	$	40,316	$	37,958
Investor dependent:
Early stage	1,856		1,593
Growth stage	4,159		3,951
Total investor dependent	6,015		5,544
Cash flow dependent - SLBO	1,859		1,798
Innovation C&I	7,753		6,673
Private bank	9,770		8,743
CRE	2,617		2,670
Premium wine	1,065		985
Other C&I	1,136		1,257
Other	365		317
PPP	59		331
Total loans (1) (2) (3)	$	70,955	$	66,276
ACL	(545)		(422)
Net loans	$	70,410	$	65,854

(1)    Total loans at amortized cost is net of unearned income, deferred fees and costs, and net unamortized premiums and discounts of $222 million and $250 million at June 30, 2022 and December 31, 2021, respectively.

(2)     Included within our total loan portfolio are credit card loans of $619 million and $583 million at June 30, 2022 and December 31, 2021, respectively.

(3)     Included within our total loan portfolio are construction loans of $443 million and $367 million at June 30, 2022 and December 31, 2021, respectively.

Credit Quality Indicators, Broken out by Portfolio Segment and Class of Financing Receivables

The following tables summarize the credit quality indicators, broken out by class of financing receivable and vintage year, as of June 30, 2022 and December 31, 2021:

	Term Loans by Origination Year
June 30, 2022 (Dollars in millions)	2022		2021		2020		2019		2018		Prior		Revolving Loans		Revolving Loans Converted to Term Loans		Unallocated (1)		Total
Global fund banking:
Risk rating:
Pass	$	415	$	176	$	101	$	32	$	3	$	11	$	39,578	$	—	$	—	$	40,316
Criticized	—		—		—		—		—		—		—		—		—		—
Nonperforming	—		—		—		—		—		—		—		—		—		—
Total global fund banking	$	415	$	176	$	101	$	32	$	3	$	11	$	39,578	$	—	$	—	$	40,316
Investor dependent:
Early stage:
Risk rating:
Pass	$	497	$	710	$	124	$	51	$	6	$	1	$	202	$	—	$	—	$	1,591
Criticized	37		116		43		12		1		2		31		—		—		242
Nonperforming	—		14		5		1		2		—		1		—		—		23
Total early stage	$	534	$	840	$	172	$	64	$	9	$	3	$	234	$	—	$	—	$	1,856
Growth stage:

	Term Loans by Origination Year
June 30, 2022 (Dollars in millions)	2022		2021		2020		2019		2018		Prior		Revolving Loans		Revolving Loans Converted to Term Loans		Unallocated (1)		Total
Risk rating:
Pass	$	1,115	$	1,670	$	488	$	94	$	34	$	8	$	307	$	—	$	—	$	3,716
Criticized	77		191		62		15		8		3		61		—		—		417
Nonperforming	—		19		1		5		—		—		1		—		—		26
Total growth stage	$	1,192	$	1,880	$	551	$	114	$	42	$	11	$	369	$	—	$	—	$	4,159
Total investor dependent	$	1,726	$	2,720	$	723	$	178	$	51	$	14	$	603	$	—	$	—	$	6,015
Cash flow dependent - SLBO:
Risk rating:
Pass	$	484	$	688	$	206	$	233	$	89	$	57	$	41	$	—	$	—	$	1,798
Criticized	—		—		16		3		1		23		7		—		—		50
Nonperforming	—		—		—		—		9		—		2		—		—		11
Total cash flow dependent - SLBO	$	484	$	688	$	222	$	236	$	99	$	80	$	50	$	—	$	—	$	1,859
Innovation C&I
Risk rating:
Pass	$	1,214	$	1,910	$	893	$	177	$	45	$	55	$	2,922	$	—	$	—	$	7,216
Criticized	17		136		120		32		11		—		215		—		—		531
Nonperforming	—		2		—		—		—		—		4		—		—		6
Total innovation C&I	$	1,231	$	2,048	$	1,013	$	209	$	56	$	55	$	3,141	$	—	$	—	$	7,753
Private bank:
Risk rating:
Pass	$	1,668	$	2,863	$	1,791	$	977	$	456	$	1,104	$	873	$	7	$	—	$	9,739
Criticized	—		—		—		2		—		11		3		—		—		16
Nonperforming	—		—		1		2		1		10		1		—		—		15
Total private bank	$	1,668	$	2,863	$	1,792	$	981	$	457	$	1,125	$	877	$	7	$	—	$	9,770
CRE
Risk rating:
Pass	$	270	$	299	$	197	$	253	$	118	$	914	$	92	$	5	$	—	$	2,148
Criticized	2		4		45		138		37		203		18		12		—		459
Nonperforming	—		—		—		9		—		1		—		—		—		10
Total CRE	$	272	$	303	$	242	$	400	$	155	$	1,118	$	110	$	17	$	—	$	2,617
Premium wine:
Risk rating:
Pass	$	168	$	213	$	113	$	146	$	49	$	153	$	154	$	34	$	—	$	1,030
Criticized	—		5		1		—		9		10		10		—		—		35
Nonperforming	—		—		—		—		—		—		—		—		—		—
Total premium wine	$	168	$	218	$	114	$	146	$	58	$	163	$	164	$	34	$	—	$	1,065
Other C&I
Risk rating:
Pass	$	32	$	169	$	164	$	74	$	83	$	318	$	250	$	10	$	—	$	1,100
Criticized	—		4		4		6		3		5		10		2		—		34
Nonperforming	—		—		—		—		1		1		—		—		—		2
Total other C&I	$	32	$	173	$	168	$	80	$	87	$	324	$	260	$	12	$	—	$	1,136
Other:
Risk rating:
Pass	$	7	$	115	$	175	$	38	$	20	$	—	$	15	$	—	$	(41)	$	329
Criticized	—		—		13		23		—		—		—		—		—		36
Nonperforming	—		—		—		—		—		—		—		—		—		—
Total other	$	7	$	115	$	188	$	61	$	20	$	—	$	15	$	—	$	(41)	$	365
PPP:
Risk rating:
Pass	$	—	$	45	$	13	$	—	$	—	$	—	$	—	$	—	$	(6)	$	52
Criticized	—		6		1		—		—		—		—		—		—		7
Nonperforming	—		—		—		—		—		—		—		—		—		—
Total PPP	$	—	$	51	$	14	$	—	$	—	$	—	$	—	$	—	$	(6)	$	59
Total loans	$	6,003	$	9,355	$	4,577	$	2,323	$	986	$	2,890	$	44,798	$	70	$	(47)	$	70,955

(1)    These amounts consist of fees and clearing items that have not yet been allocated at the loan level.

	Term Loans by Origination Year
December 31, 2021 (Dollars in millions)	2021		2020		2019		2018		2017		Prior		Revolving Loans		Revolving Loans Converted to Term Loans		Unallocated (1)		Total
Global fund banking:
Risk rating:
Pass	$	764	$	115	$	36	$	6	$	8	$	4	$	36,955	$	—	$	—	$	37,888
Criticized	50		18		—		—		—		1		1		—		—		70
Nonperforming	—		—		—		—		—		—		—		—		—		—
Total global fund banking	$	814	$	133	$	36	$	6	$	8	$	5	$	36,956	$	—	$	—	$	37,958
Investor dependent:
Early stage:
Risk rating:
Pass	$	754	$	287	$	122	$	26	$	6	$	1	$	171	$	—	$	—	$	1,367
Criticized	64		87		30		5		—		—		29		—		—		215
Nonperforming	2		5		3		—		—		—		1		—		—		11
Total early stage	$	820	$	379	$	155	$	31	$	6	$	1	$	201	$	—	$	—	$	1,593
Growth stage:
Risk rating:
Pass	$	2,072	$	910	$	265	$	78	$	14	$	1	$	286	$	5	$	—	$	3,631
Criticized	159		85		27		6		3		—		34		—		—		314
Nonperforming	2		—		1		2		—		—		1		—		—		6
Total growth stage	$	2,233	$	995	$	293	$	86	$	17	$	1	$	321	$	5	$	—	$	3,951
Total investor dependent	$	3,053	$	1,374	$	448	$	117	$	23	$	2	$	522	$	5	$	—	$	5,544
Cash flow dependent - SLBO:
Risk rating:
Pass	$	875	$	384	$	252	$	72	$	76	$	2	$	35	$	—	$	—	$	1,696
Criticized	—		—		20		25		—		13		10		—		—		68
Nonperforming	—		—		12		10		7		—		5		—		—		34
Total cash flow dependent - SLBO	$	875	$	384	$	284	$	107	$	83	$	15	$	50	$	—	$	—	$	1,798
Innovation C&I:
Risk rating:
Pass	$	2,230	$	1,058	$	288	$	123	$	58	$	—	$	2,411	$	—	$	—	$	6,168
Criticized	64		130		62		12		—		—		236		—		—		504
Nonperforming	—		—		—		—		—		—		1		—		—		1
Total Innovation C&I	$	2,294	$	1,188	$	350	$	135	$	58	$	—	$	2,648	$	—	$	—	$	6,673
Private bank:
Risk rating:
Pass	$	2,952	$	2,015	$	1,122	$	520	$	432	$	952	$	705	$	8	$	—	$	8,706
Criticized	—		—		2		—		2		9		3		—		—		16
Nonperforming	—		—		2		9		—		8		2		—		—		21
Total private bank	$	2,952	$	2,015	$	1,126	$	529	$	434	$	969	$	710	$	8	$	—	$	8,743
CRE
Risk rating:
Pass	$	326	$	215	$	344	$	155	$	236	$	868	$	110	$	2	$	—	$	2,256
Criticized	3		39		114		37		47		139		18		12		—		409
Nonperforming	—		—		5		—		—		—		—		—		—		5
Total CRE	$	329	$	254	$	463	$	192	$	283	$	1,007	$	128	$	14	$	—	$	2,670
Premium wine:
Risk rating:
Pass	$	217	$	112	$	156	$	69	$	71	$	162	$	125	$	34	$	—	$	946
Criticized	1		7		11		9		—		—		11		—		—		39
Nonperforming	—		—		—		—		—		—		—		—		—		—
Total Premium wine	$	218	$	119	$	167	$	78	$	71	$	162	$	136	$	34	$	—	$	985
Other C&I
Risk rating:
Pass	$	181	$	175	$	82	$	86	$	28	$	301	$	350	$	11	$	—	$	1,214
Criticized	5		6		6		7		2		—		8		5		—		39
Nonperforming	—		—		—		2		—		1		1		—		—		4
Total other C&I	$	186	$	181	$	88	$	95	$	30	$	302	$	359	$	16	$	—	$	1,257
Other:

	Term Loans by Origination Year
December 31, 2021 (Dollars in millions)	2021		2020		2019		2018		2017		Prior		Revolving Loans		Revolving Loans Converted to Term Loans		Unallocated (1)		Total
Risk rating:
Pass	$	61	$	144	$	82	$	20	$	14	$	—	$	7	$	—	$	(21)	$	307
Criticized	—		7		1		—		2		—		—		—		—		10
Nonperforming	—		—		—		—		—		—		—		—		—		—
Total other	$	61	$	151	$	83	$	20	$	16	$	—	$	7	$	—	$	(21)	$	317
PPP:
Risk rating:
Pass	$	226	$	72	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	298
Criticized	22		9		—		—		—		—		—		—		—		31
Nonperforming	2		—		—		—		—		—		—		—		—		2
Total PPP	$	250	$	81	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	331
Total loans	$	11,032	$	5,880	$	3,045	$	1,279	$	1,006	$	2,462	$	41,516	$	77	$	(21)	$	66,276

(1)    These amounts consist of fees and clearing items that have not yet been allocated at the loan level.

Activity in Allowance for Loan Losses Broken out by Portfolio Segment

The following tables summarize the activity relating to our ACL for loans for the three and six months ended June 30, 2022 and 2021, broken out by portfolio segment:

Three months ended June 30, 2022	Beginning Balance March 31, 2022		Charge-offs		Recoveries		Provision (Reduction) for Credit Loss for Loans		Foreign Currency Translation Adjustments		Ending Balance June 30, 2022
(Dollars in millions)
Global fund banking	$	66	$	—	$	—	$	23	$	—	$	89
Investor dependent	148		(16)		1		90		1		224
Cash flow dependent and innovation C&I	115		(4)		—		19		—		130
Private bank	37		—		—		8		—		45
CRE	34		—		—		—		—		34
Other C&I	12		(1)		—		1		—		12
Premium wine and other	9		(1)		1		5		(3)		11
Total ACL	$	421	$	(22)	$	2	$	146	$	(2)	$	545

Three months ended June 30, 2021	Beginning Balance March 31, 2021		Charge-offs		Recoveries		Provision (Reduction) for Credit Loss for Loans		Foreign Currency Translation Adjustments		Ending Balance June 30, 2021
(Dollars in millions)
Global fund banking	$	60	$	—	$	—	$	6	$	—	$	66
Investor dependent	168		(6)		3		(7)		—		158
Cash flow dependent and innovation C&I	112		(7)		—		14		—		119
Private bank	44		(2)		—		5		—		47
Premium wine and other	8		—		—		(2)		—		6
Total ACL	$	392	$	(15)	$	3	$	16	$	—	$	396

Six months ended June 30, 2022	Beginning Balance December 31, 2021		Charge-offs		Recoveries		Provision (Reduction) for Credit Loss for Loans		Foreign Currency Translation Adjustments		Ending Balance June 30, 2022
(Dollars in millions)
Global fund banking	$	67	$	—	$	—	$	22	$	—	$	89
Investor dependent	146		(33)		9		101		1		224
Cash flow dependent and innovation C&I	118		(4)		—		16		—		130
Private Bank	33		—		2		10		—		45
CRE	36		—		—		(2)		—		34
Other C&I	14		(2)		—		—		—		12
Premium wine and other	8		(1)		1		7		(4)		11
Total ACL	$	422	$	(40)	$	12	$	154	$	(3)	$	545

Six months ended June 30, 2021	Beginning Balance December 31, 2020		Charge-offs		Recoveries		Provision (Reduction) for Credit Loss for Loans		Foreign Currency Translation Adjustments		Ending Balance June 30, 2021
(Dollars in millions)
Global fund banking	$	46	$	(80)	$	—	$	100	$	—	$	66
Investor dependent	213		(20)		8		(43)		—		158
Cash flow dependent and innovation C&I	125		(7)		—		1		—		119
Private Bank	53		(2)		—		(4)		—		47
Premium wine and other	9		(1)		—		(2)		—		6
PPP	2		—		—		(2)		—		—
Total ACL	$	448	$	(110)	$	8	$	50	$	—	$	396

The following table summarizes the activity relating to our ACL for unfunded credit commitments for the three and six months ended June 30, 2022 and 2021:

	Three months ended June 30,				Six months ended June 30,
(Dollars in millions)	2022		2021		2022		2021
ACL: unfunded credit commitments, beginning balance	$	175	$	105	$	171	$	121
Provision for (reduction in) credit losses	50		15		54		(1)
Foreign currency translation adjustments	(1)		—		(1)		—
ACL: unfunded credit commitments, ending balance (1)	$	224	$	120	$	224	$	120

(1)The “ACL: unfunded credit commitments” is included as a component of “other liabilities” on our unaudited interim consolidated balance sheets. See Note 11 — “Off-Balance Sheet Arrangements, Guarantees and Other Commitments” of this report for additional disclosures related to our commitments to extend credit.

Financing Receivable, Past Due

The following table summarizes the aging of our loans broken out by class of financing receivable as of June 30, 2022 and December 31, 2021:

(Dollars in millions)	30 - 59   Days Past   Due		60 - 89   Days Past   Due		Equal to or Greater Than 90   Days Past   Due		Total Past   Due		Current		Total		Loans Past Due 90 Days or More Still Accruing Interest
June 30, 2022:
Global fund banking	$	—	$	—	$	—	$	—	$	40,316	$	40,316	$	—
Investor dependent:
Early stage	1		3		1		5		1,851		1,856		—
Growth stage	11		4		—		15		4,144		4,159		—
Total investor dependent	12		7		1		20		5,995		6,015		—
Cash flow dependent - SLBO	—		—		—		—		1,859		1,859		—
Innovation C&I	16		2		—		18		7,735		7,753		—
Private bank	—		—		7		7		9,763		9,770		—
CRE	1		—		1		2		2,615		2,617		—
Premium wine	3		—		—		3		1,062		1,065		—
Other C&I	—		—		—		—		1,136		1,136		—
Other	15		—		—		15		350		365		—
PPP	3		6		—		9		50		59		—
Total loans	$	50	$	15	$	9	$	74	$	70,881	$	70,955	$	—
December 31, 2021:
Global fund banking	$	—	$	—	$	—	$	—	$	37,958	$	37,958	$	—
Investor dependent:
Early stage	6		5		—		11		1,582		1,593		—
Growth stage	16		—		—		16		3,935		3,951		—
Total investor dependent	22		5		—		27		5,517		5,544		—
Cash flow dependent - SLBO	—		—		—		—		1,798		1,798		—
Innovation C&I	7		—		7		14		6,659		6,673		7
Private bank	28		1		12		41		8,702		8,743		—
CRE	1		—		—		1		2,669		2,670		—
Premium wine	3		—		—		3		982		985		—
Other C&I	1		2		1		4		1,253		1,257		—
Other	—		—		—		—		317		317		—
PPP	1		—		—		1		330		331		—
Total loans	$	63	$	8	$	20	$	91	$	66,185	$	66,276	$	7

Financing Receivable, Nonaccrual

The following table summarizes our nonaccrual loans with no allowance for credit loss at June 30, 2022 and December 31, 2021:

	June 30, 2022				December 31, 2021
(Dollars in millions)	Nonaccrual Loans		Nonaccrual Loans with no Allowance for Credit Loss		Nonaccrual Loans		Nonaccrual Loans with no Allowance for Credit Loss
Investor dependent:
Early stage	$	23	$	5	$	11	$	—
Growth stage	26		—		6		—
Total investor dependent	49		5		17		—
Cash flow dependent - SLBO	11		—		34		—
Innovation C&I	6		3		1		1
Private bank	15		7		21		8
CRE	10		10		5		—
Other C&I	2		—		4		—
PPP	—		—		2		—
Total nonaccrual loans	$	93	$	25	$	84	$	9

Summary of Loans Modified in Troubled Debt Restructurings ("TDRs") by Risk-based Segment

The following table summarizes our loans modified in TDRs, broken out by class of financing receivable at June 30, 2022 and December 31, 2021:

(Dollars in millions)	June 30, 2022		December 31, 2021
Loans modified in TDRs:
Investor dependent:
Early stage	$	1	$	12
Growth stage	20		3
Total investor dependent	21		15
Cash flow dependent - SLBO	12		34
Private bank	12		12
CRE	33		33
Other C&I	2		2
Total loans modified in TDRs	$	80	$	96

Recorded Investment in Loans Modified in TDRs

The following table summarizes the recorded investment in loans modified in TDRs, broken out by class of financing receivable, for modifications made during the three and six months ended June 30, 2022 and 2021:

	Three months ended June 30,				Six months ended June 30,
(Dollars in millions)	2022		2021		2022		2021
Loans modified in TDRs during the period:
Investor dependent:
Early stage	$	—	$	1	$	—	$	1
Growth stage	19		—		20		—
Total investor dependent	19		1		20		1
Cash flow dependent - SLBO	—		—		—		13
Private bank	—		1		1		3
Total loans modified in TDRs during the period (1)	$	19	$	2	$	21	$	17

(1)There were no partial charge-offs for the three months ended June 30, 2022, and $5 million of partial charge-offs for the six months then ended. There were $6 million and $7 million of partial charge-offs for the three and six months ended June 30, 2021, respectively.

Activity Relating to ACL for Unfunded Credit Commitments

The following tables summarize the activity relating to our ACL for loans for the three and six months ended June 30, 2022 and 2021, broken out by portfolio segment:

Three months ended June 30, 2022	Beginning Balance March 31, 2022		Charge-offs		Recoveries		Provision (Reduction) for Credit Loss for Loans		Foreign Currency Translation Adjustments		Ending Balance June 30, 2022
(Dollars in millions)
Global fund banking	$	66	$	—	$	—	$	23	$	—	$	89
Investor dependent	148		(16)		1		90		1		224
Cash flow dependent and innovation C&I	115		(4)		—		19		—		130
Private bank	37		—		—		8		—		45
CRE	34		—		—		—		—		34
Other C&I	12		(1)		—		1		—		12
Premium wine and other	9		(1)		1		5		(3)		11
Total ACL	$	421	$	(22)	$	2	$	146	$	(2)	$	545

Three months ended June 30, 2021	Beginning Balance March 31, 2021		Charge-offs		Recoveries		Provision (Reduction) for Credit Loss for Loans		Foreign Currency Translation Adjustments		Ending Balance June 30, 2021
(Dollars in millions)
Global fund banking	$	60	$	—	$	—	$	6	$	—	$	66
Investor dependent	168		(6)		3		(7)		—		158
Cash flow dependent and innovation C&I	112		(7)		—		14		—		119
Private bank	44		(2)		—		5		—		47
Premium wine and other	8		—		—		(2)		—		6
Total ACL	$	392	$	(15)	$	3	$	16	$	—	$	396

Six months ended June 30, 2022	Beginning Balance December 31, 2021		Charge-offs		Recoveries		Provision (Reduction) for Credit Loss for Loans		Foreign Currency Translation Adjustments		Ending Balance June 30, 2022
(Dollars in millions)
Global fund banking	$	67	$	—	$	—	$	22	$	—	$	89
Investor dependent	146		(33)		9		101		1		224
Cash flow dependent and innovation C&I	118		(4)		—		16		—		130
Private Bank	33		—		2		10		—		45
CRE	36		—		—		(2)		—		34
Other C&I	14		(2)		—		—		—		12
Premium wine and other	8		(1)		1		7		(4)		11
Total ACL	$	422	$	(40)	$	12	$	154	$	(3)	$	545

Six months ended June 30, 2021	Beginning Balance December 31, 2020		Charge-offs		Recoveries		Provision (Reduction) for Credit Loss for Loans		Foreign Currency Translation Adjustments		Ending Balance June 30, 2021
(Dollars in millions)
Global fund banking	$	46	$	(80)	$	—	$	100	$	—	$	66
Investor dependent	213		(20)		8		(43)		—		158
Cash flow dependent and innovation C&I	125		(7)		—		1		—		119
Private Bank	53		(2)		—		(4)		—		47
Premium wine and other	9		(1)		—		(2)		—		6
PPP	2		—		—		(2)		—		—
Total ACL	$	448	$	(110)	$	8	$	50	$	—	$	396

The following table summarizes the activity relating to our ACL for unfunded credit commitments for the three and six months ended June 30, 2022 and 2021:

	Three months ended June 30,				Six months ended June 30,
(Dollars in millions)	2022		2021		2022		2021
ACL: unfunded credit commitments, beginning balance	$	175	$	105	$	171	$	121
Provision for (reduction in) credit losses	50		15		54		(1)
Foreign currency translation adjustments	(1)		—		(1)		—
ACL: unfunded credit commitments, ending balance (1)	$	224	$	120	$	224	$	120

(1)The “ACL: unfunded credit commitments” is included as a component of “other liabilities” on our unaudited interim consolidated balance sheets. See Note 11 — “Off-Balance Sheet Arrangements, Guarantees and Other Commitments” of this report for additional disclosures related to our commitments to extend credit.