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

9 Months Ended

Sep. 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 September 30, 2022 and December 31, 2021 is presented in the following table:

(Dollars in millions)	September 30, 2022		December 31, 2021
Global fund banking	$	40,337	$	37,958
Investor dependent:
Early stage	1,911		1,593
Growth stage	4,398		3,951
Total investor dependent	6,309		5,544
Cash flow dependent - SLBO	1,845		1,798
Innovation C&I	8,321		6,673
Private bank	10,102		8,743
CRE	2,609		2,670
Premium wine	1,117		985
Other C&I	1,087		1,257
Other	374		317
PPP	28		331
Total loans (1) (2) (3)	$	72,129	$	66,276
ACL	(557)		(422)
Net loans	$	71,572	$	65,854

(1)    Total loans at amortized cost is net of unearned income, deferred fees and costs, and net unamortized premiums and discounts of $244 million and $250 million at September 30, 2022 and December 31, 2021, respectively.

(2)     Included within our total loan portfolio are credit card loans of $582 million and $583 million at September 30, 2022 and December 31, 2021, respectively.

(3)     Included within our total loan portfolio are construction loans of $454 million and $367 million at September 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 September 30, 2022 and December 31, 2021:

	Term Loans by Origination Year
September 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	$	512	$	95	$	63	$	31	$	1	$	10	$	39,616	$	—	$	—	$	40,328
Criticized	—		—		—		—		—		—		9		—		—		9
Nonperforming	—		—		—		—		—		—		—		—		—		—
Total global fund banking	$	512	$	95	$	63	$	31	$	1	$	10	$	39,625	$	—	$	—	$	40,337
Investor dependent:
Early stage:
Risk rating:
Pass	$	727	$	626	$	73	$	36	$	2	$	1	$	191	$	—	$	—	$	1,656
Criticized	67		122		27		7		—		2		26		—		—		251
Nonperforming	1		1		—		—		—		—		2		—		—		4
Total early stage	$	795	$	749	$	100	$	43	$	2	$	3	$	219	$	—	$	—	$	1,911

	Term Loans by Origination Year
September 30, 2022 (Dollars in millions)	2022		2021		2020		2019		2018		Prior		Revolving Loans		Revolving Loans Converted to Term Loans		Unallocated (1)		Total
Growth stage:
Risk rating:
Pass	$	1,684	$	1,456	$	360	$	72	$	28	$	6	$	243	$	5	$	—	$	3,854
Criticized	147		233		53		14		5		—		49		—		—		501
Nonperforming	19		18		2		—		—		—		4		—		—		43
Total growth stage	$	1,850	$	1,707	$	415	$	86	$	33	$	6	$	296	$	5	$	—	$	4,398
Total investor dependent	$	2,645	$	2,456	$	515	$	129	$	35	$	9	$	515	$	5	$	—	$	6,309
Cash flow dependent - SLBO:
Risk rating:
Pass	$	678	$	609	$	199	$	203	$	14	$	39	$	30	$	—	$	—	$	1,772
Criticized	20		—		16		2		1		22		5		—		—		66
Nonperforming	—		—		—		—		5		—		2		—		—		7
Total cash flow dependent - SLBO	$	698	$	609	$	215	$	205	$	20	$	61	$	37	$	—	$	—	$	1,845
Innovation C&I
Risk rating:
Pass	$	1,788	$	1,734	$	773	$	166	$	18	$	54	$	3,102	$	—	$	—	$	7,635
Criticized	49		148		121		32		11		—		324		—		—		685
Nonperforming	—		—		—		—		—		—		1		—		—		1
Total innovation C&I	$	1,837	$	1,882	$	894	$	198	$	29	$	54	$	3,427	$	—	$	—	$	8,321
Private bank:
Risk rating:
Pass	$	2,210	$	2,817	$	1,753	$	948	$	441	$	1,054	$	818	$	5	$	—	$	10,046
Criticized	—		16		—		2		—		15		10		—		—		43
Nonperforming	—		—		1		2		1		8		1		—		—		13
Total private bank	$	2,210	$	2,833	$	1,754	$	952	$	442	$	1,077	$	829	$	5	$	—	$	10,102
CRE
Risk rating:
Pass	$	406	$	292	$	181	$	240	$	143	$	894	$	96	$	5	$	—	$	2,257
Criticized	2		4		51		135		24		114		17		—		—		347
Nonperforming	—		—		—		5		—		—		—		—		—		5
Total CRE	$	408	$	296	$	232	$	380	$	167	$	1,008	$	113	$	5	$	—	$	2,609
Premium wine:
Risk rating:
Pass	$	255	$	213	$	91	$	137	$	47	$	144	$	156	$	34	$	—	$	1,077
Criticized	1		5		—		7		9		9		9		—		—		40
Nonperforming	—		—		—		—		—		—		—		—		—		—
Total premium wine	$	256	$	218	$	91	$	144	$	56	$	153	$	165	$	34	$	—	$	1,117
Other C&I
Risk rating:
Pass	$	31	$	149	$	161	$	70	$	81	$	304	$	234	$	10	$	—	$	1,040
Criticized	1		—		3		6		3		19		11		1		—		44
Nonperforming	—		—		1		—		1		1		—		—		—		3
Total other C&I	$	32	$	149	$	165	$	76	$	85	$	324	$	245	$	11	$	—	$	1,087
Other:
Risk rating:
Pass	$	25	$	151	$	172	$	30	$	—	$	—	$	11	$	—	$	(44)	$	345
Criticized	—		3		17		9		—		—		—		—		—		29
Nonperforming	—		—		—		—		—		—		—		—		—		—
Total other	$	25	$	154	$	189	$	39	$	—	$	—	$	11	$	—	$	(44)	$	374
PPP:
Risk rating:
Pass	$	—	$	16	$	3	$	—	$	—	$	—	$	—	$	—	$	—	$	19
Criticized	—		3		6		—		—		—		—		—		—		9
Nonperforming	—		—		—		—		—		—		—		—		—		—
Total PPP	$	—	$	19	$	9	$	—	$	—	$	—	$	—	$	—	$	—	$	28

	Term Loans by Origination Year
September 30, 2022 (Dollars in millions)	2022		2021		2020		2019		2018		Prior		Revolving Loans		Revolving Loans Converted to Term Loans		Unallocated (1)		Total
Total loans	$	8,623	$	8,711	$	4,127	$	2,154	$	835	$	2,696	$	44,967	$	60	$	(44)	$	72,129

(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 nine months ended September 30, 2022 and 2021, broken out by portfolio segment:

Three months ended September 30, 2022	Beginning Balance June 30, 2022		Charge-offs		Recoveries		Provision (Reduction) for Credit Loss for Loans		Foreign Currency Translation Adjustments		Ending Balance September 30, 2022
(Dollars in millions)
Global fund banking	$	89	$	—	$	6	$	(4)	$	—	$	91
Investor dependent	224		(20)		4		25		1		234
Cash flow dependent and innovation C&I	130		(5)		—		11		—		136
Private bank	45		—		—		2		—		47
CRE	34		—		—		(7)		—		27
Other C&I	12		(1)		1		—		—		12
Premium wine and other	11		—		—		3		(4)		10
Total ACL	$	545	$	(26)	$	11	$	30	$	(3)	$	557

Three months ended September 30, 2021	Beginning Balance June 30, 2021		Initial Allowance on PCD Loans		Charge-offs		Recoveries		Provision (Reduction) for Credit Loss for Loans		Ending Balance September 30, 2021
(Dollars in millions)
Global fund banking	$	66	$	—	$	—	$	—	$	(7)	$	59
Investor dependent	158		—		(17)		5		(8)		138
Cash flow dependent and innovation C&I	119		—		(1)		3		(12)		109
Private bank	47		1		(1)		—		(16)		31
CRE	—		17		—		—		23		40
Other C&I	—		4		—		—		8		12
Premium wine and other	6		—		—		—		3		9
Total ACL	$	396	$	22	$	(19)	$	8	$	(9)	$	398

Nine months ended September 30, 2022	Beginning Balance December 31, 2021		Charge-offs		Recoveries		Provision (Reduction) for Credit Loss for Loans		Foreign Currency Translation Adjustments		Ending Balance September 30, 2022
(Dollars in millions)
Global fund banking	$	67	$	—	$	6	$	18	$	—	$	91
Investor dependent	146		(53)		13		126		2		234
Cash flow dependent and innovation C&I	118		(9)		—		27		—		136
Private Bank	33		—		2		12		—		47
CRE	36		—		—		(9)		—		27
Other C&I	14		(3)		1		—		—		12
Premium wine and other	8		(1)		1		10		(8)		10
Total ACL	$	422	$	(66)	$	23	$	184	$	(6)	$	557

Nine months ended September 30, 2021	Beginning Balance December 31, 2020		Initial Allowance on PCD Loans		Charge-offs		Recoveries		Provision (Reduction) for Credit Loss for Loans		Ending Balance September 30, 2021
(Dollars in millions)
Global fund banking	$	46	$	—	$	(80)	$	—	$	93	$	59
Investor dependent	213		—		(37)		13		(51)		138
Cash flow dependent and innovation C&I	125		—		(8)		3		(11)		109
Private Bank	53		1		(3)		—		(20)		31
CRE	—		17		—		—		23		40
Other C&I	—		4		—		—		8		12
Premium wine and other	9		—		(1)		—		1		9
PPP	2		—		—		—		(2)		—
Total ACL	$	448	$	22	$	(129)	$	16	$	41	$	398

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

	Three months ended September 30,				Nine months ended September 30,
(Dollars in millions)	2022		2021		2022		2021
ACL: unfunded credit commitments, beginning balance	$	224	$	120	171		$	121
Provision for (reduction in) credit losses	42		29		96		28
Foreign currency translation adjustments	(1)		—		(2)		—
ACL: unfunded credit commitments, ending balance (1)	$	265	$	149	$	265	$	149

(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 September 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
September 30, 2022:
Global fund banking	$	—	$	—	$	—	$	—	$	40,337	$	40,337	$	—
Investor dependent:
Early stage	2		2		1		5		1,906		1,911		—
Growth stage	26		13		2		41		4,357		4,398		—
Total investor dependent	28		15		3		46		6,263		6,309		—
Cash flow dependent - SLBO	4		—		—		4		1,841		1,845		—
Innovation C&I	6		3		—		9		8,312		8,321		—
Private bank	1		12		5		18		10,084		10,102		1
CRE	1		7		5		13		2,596		2,609		—
Premium wine	3		—		—		3		1,114		1,117		—
Other C&I	—		3		—		3		1,084		1,087		—
Other	—		—		—		—		374		374		—
PPP	—		—		6		6		22		28		5
Total loans	$	43	$	40	$	19	$	102	$	72,027	$	72,129	$	6
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 September 30, 2022 and December 31, 2021:

	September 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	$	4	$	—	$	11	$	—
Growth stage	43		1		6		—
Total investor dependent	47		1		17		—
Cash flow dependent - SLBO	7		—		34		—
Innovation C&I	1		—		1		1
Private bank	13		6		21		8
CRE	5		—		5		—
Other C&I	3		—		4		—
PPP	—		—		2		—
Total nonaccrual loans	$	76	$	7	$	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 September 30, 2022 and December 31, 2021:

(Dollars in millions)	September 30, 2022		December 31, 2021
Loans modified in TDRs:
Investor dependent:
Early stage	$	1	$	12
Growth stage	32		3
Total investor dependent	33		15
Cash flow dependent - SLBO	8		34
Innovation C&I	1		—
Private bank	8		12
CRE	33		33
Other C&I	2		2
Total loans modified in TDRs	$	85	$	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 nine months ended September 30, 2022 and 2021:

	Three months ended September 30,				Nine months ended September 30,
(Dollars in millions)	2022		2021		2022		2021
Loans modified in TDRs during the period:
Investor dependent:
Early stage	$	1	$	—	$	1	$	1
Growth stage	12		8		32		8
Total investor dependent	13		8		33		9
Cash flow dependent - SLBO	—		—		—		12
Innovation C&I	1		—		1		—
Private bank	—		2		1		2
CRE	5		43		5		43
Total loans modified in TDRs during the period (1)	$	19	$	53	$	40	$	66

(1)There were $4 million of partial charge-offs for the three months ended September 30, 2022 and $9 million of partial charge-offs for the nine months then ended. There were no partial charge-offs for the three months ended September 30, 2021 and $7 million of partial charge-offs for the nine months then ended.

Activity Relating to ACL for Unfunded Credit Commitments

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

Three months ended September 30, 2022	Beginning Balance June 30, 2022		Charge-offs		Recoveries		Provision (Reduction) for Credit Loss for Loans		Foreign Currency Translation Adjustments		Ending Balance September 30, 2022
(Dollars in millions)
Global fund banking	$	89	$	—	$	6	$	(4)	$	—	$	91
Investor dependent	224		(20)		4		25		1		234
Cash flow dependent and innovation C&I	130		(5)		—		11		—		136
Private bank	45		—		—		2		—		47
CRE	34		—		—		(7)		—		27
Other C&I	12		(1)		1		—		—		12
Premium wine and other	11		—		—		3		(4)		10
Total ACL	$	545	$	(26)	$	11	$	30	$	(3)	$	557

Three months ended September 30, 2021	Beginning Balance June 30, 2021		Initial Allowance on PCD Loans		Charge-offs		Recoveries		Provision (Reduction) for Credit Loss for Loans		Ending Balance September 30, 2021
(Dollars in millions)
Global fund banking	$	66	$	—	$	—	$	—	$	(7)	$	59
Investor dependent	158		—		(17)		5		(8)		138
Cash flow dependent and innovation C&I	119		—		(1)		3		(12)		109
Private bank	47		1		(1)		—		(16)		31
CRE	—		17		—		—		23		40
Other C&I	—		4		—		—		8		12
Premium wine and other	6		—		—		—		3		9
Total ACL	$	396	$	22	$	(19)	$	8	$	(9)	$	398

Nine months ended September 30, 2022	Beginning Balance December 31, 2021		Charge-offs		Recoveries		Provision (Reduction) for Credit Loss for Loans		Foreign Currency Translation Adjustments		Ending Balance September 30, 2022
(Dollars in millions)
Global fund banking	$	67	$	—	$	6	$	18	$	—	$	91
Investor dependent	146		(53)		13		126		2		234
Cash flow dependent and innovation C&I	118		(9)		—		27		—		136
Private Bank	33		—		2		12		—		47
CRE	36		—		—		(9)		—		27
Other C&I	14		(3)		1		—		—		12
Premium wine and other	8		(1)		1		10		(8)		10
Total ACL	$	422	$	(66)	$	23	$	184	$	(6)	$	557

Nine months ended September 30, 2021	Beginning Balance December 31, 2020		Initial Allowance on PCD Loans		Charge-offs		Recoveries		Provision (Reduction) for Credit Loss for Loans		Ending Balance September 30, 2021
(Dollars in millions)
Global fund banking	$	46	$	—	$	(80)	$	—	$	93	$	59
Investor dependent	213		—		(37)		13		(51)		138
Cash flow dependent and innovation C&I	125		—		(8)		3		(11)		109
Private Bank	53		1		(3)		—		(20)		31
CRE	—		17		—		—		23		40
Other C&I	—		4		—		—		8		12
Premium wine and other	9		—		(1)		—		1		9
PPP	2		—		—		—		(2)		—
Total ACL	$	448	$	22	$	(129)	$	16	$	41	$	398

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

	Three months ended September 30,				Nine months ended September 30,
(Dollars in millions)	2022		2021		2022		2021
ACL: unfunded credit commitments, beginning balance	$	224	$	120	171		$	121
Provision for (reduction in) credit losses	42		29		96		28
Foreign currency translation adjustments	(1)		—		(2)		—
ACL: unfunded credit commitments, ending balance (1)	$	265	$	149	$	265	$	149

(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.