The following table presents the balance and associated percentage of each major loan category in our bank loan portfolio at December 31, 2021 and 2020 (in thousands, except percentages):

At December 31, 2021 and 2020, Stifel Bancorp had loans outstanding to its executive officers and directors and executive officers and directors of certain affiliated entities in the amount of $27.2 million and $23.6 million, respectively.

At December 31, 2021 and 2020, we had loans held for sale of $207.7 million and $551.2 million, respectively. For the years ended December 31, 2021, 2020, and 2019, we recognized gains, included in other income in the consolidated statements of operations, of $29.8 million, $41.2 million, and $13.1 million, respectively, from the sale of originated loans, net of fees and costs.

During the year ended December 31, 2021, we sold $208.0 million in unpaid principal balance of loans. Based upon the terms of the sale, we recognized a $2.5 million gain, which is reflected in other income on the consolidated statements of operations.

At December 31, 2021 and 2020, loans, primarily consisting of residential and commercial real estate loans of $4.9 billion and $3.8 billion, respectively, were pledged at the Federal Home Loan Bank as collateral for borrowings.

Accrued interest receivable for loans and loans held for sale at December 31, 2021 and 2020, was $27.4 million and $20.8 million, respectively, and is reported in other assets on the consolidated statement of financial condition.

The following table details activity in the allowance for loan losses by portfolio segment for the years ended December 31, 2021 and 2020 (in thousands).


	Year Ended December 31, 2021
	Beginning Balance		Provision			Charge- offs			Recoveries		Ending Balance
Commercial and industrial	$	67,222	$	(8,462	)	$	(5,232	)	$	1	$	53,529
Residential real estate		16,300		12,260			—			—		28,560
Construction and land		17,275		(8,739	)		—			—		8,536
Securities-based loans		2,015		1,991			—			—		4,006
Commercial real estate		8,580		(4,646	)		—			—		3,934
Home equity lines of credit		374		137			—			—		511
Other		263		5			—			—		268
	$	112,029	$	(7,454	)	$	(5,232	)	$	1	$	99,344


	Year Ended December 31, 2020
	Beginning Balance		CECL Adoption			Provision			Charge- offs			Recoveries		Ending Balance
Commercial and industrial	$	69,949	$	(19,940	)	$	17,341		$	(153	)	$	25	$	67,222
Construction and land		4,613		2,674			9,988			—			—		17,275
Residential real estate		14,253		3,499			(1,452	)		—			—		16,300
Commercial real estate		3,564		791			4,225			—			—		8,580
Securities-based loans		2,361		1,346			(1,692	)		—			—		2,015
Home equity lines of credit		442		39			(195	)		—			88		374
Other		397		(145	)		49			(40	)		2		263
	$	95,579	$	(11,736	)	$	28,264		$	(193	)	$	115	$	112,029

On January 1, 2020, we adopted the new accounting standard that requires the measurement of the allowance for credit losses to be based on management’s best estimate of lifetime expected credit losses inherent in our company’s relevant financial assets. Upon adoption of the new accounting standard, we recorded a $10.4 million increase in the allowance for credit losses on January 1, 2020, which was comprised of a net increase to the allowance for loan losses and an adjustment to the reserve for unfunded lending commitments. During the year ended December 31, 2020, we recorded $28.3 million of net credit loss reserves reflecting the impact of change in our company’s outlook on estimated lifetime expected credit losses under the CECL standard due to the COVID-19 pandemic. During the year ended December, 31, 2021, we released $11.5 million of net credit loss reserves, including $7.5 million of the allowance for credit losses and $4.0 million of the reserve for unfunded lending commitments, reflecting the improvement in our economic projections. For more information on our company’s credit loss accounting policies, including the allowance for credit losses, see Note 2 – Summary of Significant Accounting Policies. For more information on the reserve for unfunded lending commitments, see Note 23 – Off-Balance Sheet Credit Risk.

At December 31, 2021, we had $17.3 million of impaired loans, net of discounts, which included $0.2 million in troubled debt restructurings. The specific allowance on impaired loans at December 31, 2021, was $6.2 million. At December 31, 2020, we had $13.8 million of impaired loans, net of discounts, which included $0.2 million in troubled debt restructurings. The specific allowance on impaired loans at December 31, 2020, was $8.2 million. The gross interest income related to impaired loans, which would have been recorded had these loans been current in accordance with their original terms, and the interest income recognized on these loans during the year ended December 31, 2021 and 2020, were insignificant to the consolidated financial statements.

The following tables present the aging of the recorded investment in past due loans at December 31, 2021 and 2020, by portfolio segment (in thousands):


	December 31, 2021
	30-89 Days Past Due		90 or More Days Past Due		Total Past Due		Current Balance		Total
Commercial and industrial	$	9,290	$	6,571	$	15,861	$	7,329,892		7,345,753
Residential real estate		6,194		1,332		7,526		5,474,500		5,482,026
Securities-based loans		—		—		—		2,880,158		2,880,158
Construction and land		—		—		—		511,084		511,084
Commercial real estate		—		1		1		409,846		409,847
Home equity lines of credit		—		—		—		82,508		82,508
Other		44		—		44		32,067		32,111
Total	$	15,528	$	7,904	$	23,432	$	16,720,055	$	16,743,487


	December 31, 2021 *
	Nonaccrual		Restructured		Nonperforming loans with no allowance		Total
Commercial and industrial	$	15,861	$	—	$	—	$	15,861
Residential real estate		1,332		154		—		1,486
Commercial real estate		—		—		1		1
Total	$	17,193	$	154	$	1	$	17,348

* There were no loans past due 90 days and still accruing interest at December 31, 2021.


	December 31, 2020
	30 - 89 Days Past Due		90 or More Days Past Due		Total Past Due		Current Balance		Total
Commercial and industrial	$	14	$	12,237	$	12,251	$	4,283,838		4,296,089
Residential real estate		4,554		1,249		5,803		3,950,867		3,956,670
Securities-based loans		—		—		—		1,933,974		1,933,974
Construction and land		—		—		—		501,681		501,681
Commercial real estate		—		144		144		366,341		366,485
Home equity lines of credit		12		—		12		75,495		75,507
Other		31		—		31		40,376		40,407
Total	$	4,611	$	13,630	$	18,241	$	11,152,572	$	11,170,813


	December 31, 2020 *
	Nonaccrual		Restructured		Nonperforming loans with no allowance		Total
Commercial and industrial	$	12,251	$	—	$	—	$	12,251
Residential real estate		—		158		1,249		1,407
Commercial real estate		144		—		—		144
Total	$	12,395	$	158	$	1,249	$	13,802

* There were no loans past due 90 days and still accruing interest at December 31, 2020.

As of December 31, 2021, bank loans were primarily extended to non-investment-grade borrowers. Substantially all of these loans align with the U.S. federal bank regulatory agencies’ definition of Pass. Loans meet the definition of Pass when they are performing and/or do not demonstrate adverse characteristics that are likely to result in a credit loss. A loan is determined to be impaired when principal or interest becomes 90 days past due or when collection becomes uncertain. At the time a loan is determined to be impaired, the accrual of interest and amortization of deferred loan origination fees is discontinued (nonaccrual status), and any accrued and unpaid interest income is reversed.

We closely monitor economic conditions and loan performance trends to manage and evaluate our exposure to credit risk. Trends in delinquency ratios are an indicator, among other considerations, of credit risk within our loan portfolio. The level of nonperforming assets represents another indicator of the potential for future credit losses. Accordingly, key metrics we track and use in evaluating the credit quality of our loan portfolio include delinquency and nonperforming asset rates, as well as charge-off rates and our internal risk ratings of the loan portfolio. In general, we are a secured lender. At December 31, 2021 and 2020, 98.5% and 98.8% of our loan portfolio was collateralized, respectively. Collateral is required in accordance with the normal credit evaluation process based upon the creditworthiness of the customer and the credit risk associated with the particular transaction. The Company uses the following definitions for risk ratings:

Pass. A credit exposure rated pass has a continued expectation of timely repayment, all obligations of the borrower are current, and the obligor complies with material terms and conditions of the lending agreement.

Special Mention. Extensions of credit that have potential weakness that deserve management’s close attention and, if left uncorrected, may, at some future date, result in the deterioration of the repayment prospects or collateral position.

Substandard. Obligor has a well-defined weakness that jeopardizes the repayment of the debt and has a high probability of payment default with the distinct possibility that the Company will sustain some loss if noted deficiencies are not corrected.

Doubtful. Inherent weakness in the exposure makes the collection or repayment in full, based on existing facts, conditions, and circumstances, highly improbable, and the amount of loss is uncertain.

Substandard loans are regularly reviewed for impairment. Doubtful loans are considered impaired. When a loan is impaired, the impairment is measured based on the present value of expected future cash flows discounted at the loan’s effective interest rate, or as a practical expedient, the observable market price of the loan or the fair value of the collateral if the loan is collateral dependent.

Commercial and industrial (“C&I”). C&I loans primarily include commercial and industrial lending used for general corporate purposes, working capital and liquidity, and “event-driven.” “Event-driven” loans support client merger, acquisition, or recapitalization activities. C&I lending is structured as revolving lines of credit, letter of credit facilities, term loans, and bridge loans. Risk factors considered in determining the allowance for corporate loans include the borrower’s financial strength, seniority of the loan, collateral type, leverage, volatility of collateral value, debt cushion, and covenants.

Real Estate. Real estate loans include residential real estate non-conforming loans, residential real estate conforming loans, commercial real estate, and home equity lines of credit. The allowance methodology related to real estate loans considers several factors, including, but not limited to, loan-to-value ratio, FICO score, home price index, delinquency status, credit limits, and utilization rates.

Securities-based loans. Securities-based loans allow clients to borrow money against the value of qualifying securities for any suitable purpose other than purchasing, trading, or carrying securities or refinancing margin debt. The majority of consumer loans are structured as revolving lines of credit and letter of credit facilities and are primarily offered through Stifel’s Pledged Asset (“SPA”) program. The allowance methodology for securities-based lending considers the collateral type underlying the loan, including the liquidity and trading volume of the collateral, position concentration, and other borrower specific factors such as personal guarantees.

Construction and land. Short-term loans used to finance the development of a real estate project.

Based on the most recent analysis performed, the risk category of our loan portfolio was as follows: (in thousands):


	December 31, 2021
	Pass		Special Mention		Substandard		Doubtful		Total
Commercial and industrial	$	7,193,435	$	38,000	$	107,747	$	6,571	$	7,345,753
Residential real estate		5,480,693		—		84		1,249		5,482,026
Securities-based loans		2,880,158		—		—		—		2,880,158
Construction and land		476,844		14,240		20,000		—		511,084
Commercial real estate		407,298		2,548		—		1		409,847
Home equity lines of credit		82,479		29		—		—		82,508
Other		32,111		—		—		—		32,111
Total	$	16,553,018	$	54,817	$	127,831	$	7,821	$	16,743,487


	December 31, 2020
	Pass		Special Mention		Substandard		Doubtful		Total
Commercial and industrial	$	3,995,351	$	105,759	$	182,728	$	12,251	$	4,296,089
Residential real estate		3,955,421		—		—		1,249		3,956,670
Securities-based loans		1,933,974		—		—		—		1,933,974
Construction and land		467,441		14,240		20,000		—		501,681
Commercial real estate		356,008		10,333		—		144		366,485
Home equity lines of credit		75,507		—		—		—		75,507
Other		40,407		—		—		—		40,407
Total	$	10,824,109	$	130,332	$	202,728	$	13,644	$	11,170,813


	Term Loans Amortized Cost Basis by Origination Year – December 31, 2021
	2021		2020		2019		2018		2017		Prior		Revolving Loans Amortized Cost Basis		Total
Commercial and industrial:
Pass	$	1,811,189	$	370,279	$	319,732	$	450,087	$	239,314	$	287,333	$	3,715,501	$	7,193,435
Special Mention		—		—		30,000		8,000		—		—		—		38,000
Substandard		—		515		27,227		55,521		11,850		7,716		4,918		107,747
Doubtful		—		—		—		—		6,571		—		—		6,571
	$	1,811,189	$	370,794	$	376,959	$	513,608	$	257,735	$	295,049	$	3,720,419	$	7,345,753
Residential real estate:
Pass	$	2,732,407	$	1,234,315	$	579,526	$	241,934	$	199,960	$	492,551	$	—	$	5,480,693
Special Mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		84		—		84
Doubtful		—		—		—				149		1,100		—		1,249
	$	2,732,407	$	1,234,315	$	579,526	$	241,934	$	200,109	$	493,735	$	—	$	5,482,026
Securities-based loans:
Pass	$	73,341	$	41,618	$	92,278	$	—	$	140	$	10,172	$	2,662,609	$	2,880,158
Special Mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—
	$	73,341	$	41,618	$	92,278	$	—	$	140	$	10,172	$	2,662,609	$	2,880,158
Construction and land:
Pass	$	33,187	$	127,479	$	182,290	$	65,880	$	61,858	$	6,150	$	—	$	476,844
Special Mention		—		—		—		14,240		—		—		—		14,240
Substandard		—		—		—		20,000		—		—		—		20,000
Doubtful		—		—		—		—		—		—		—		—
	$	33,187	$	127,479	$	182,290	$	100,120	$	61,858	$	6,150	$	—	$	511,084
Commercial real estate:
Pass	$	123,920	$	73,157	$	142,304	$	22,199	$	36,014	$	9,704	$	—	$	407,298
Special Mention		—		—		—		—		—		2,548		—		2,548
Substandard		—		—		—		—		—		—		—		—
Doubtful		—		—		—		1		—		—		—		1
	$	123,920	$	73,157	$	142,304	$	22,200	$	36,014	$	12,252	$	—	$	409,847
Home equity lines of credit:
Pass	$	—	$	—	$	—	$	—	$	—	$	—	$	82,479	$	82,479
Special Mention		—		—		—		—		—		—		29		29
Substandard		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—
	$	—	$	—	$	—	$	—	$	—	$	—	$	82,508	$	82,508
Other:
Pass	$	782	$	10,000	$	—	$	286	$	—	$	19,156	$	1,887	$	32,111
Special Mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—
	$	782	$	10,000	$	—	$	286	$	—	$	19,156	$	1,887	$	32,111