Loans and Leases

12 Months Ended

Dec. 31, 2023

The following table presents the major types of loans and leases, net of deferred fees and costs, as of December 31, 2023 and 2022:


(in thousands)	December 31, 2023		December 31, 2022
Commercial real estate
Non-owner occupied term, net	$	6,482,940	$	3,894,840
Owner occupied term, net	5,195,605		2,567,761
Multifamily, net	5,704,734		5,285,791
Construction & development, net	1,747,302		1,077,346
Residential development, net	323,899		200,838
Commercial
Term, net	5,536,765		3,029,547
Lines of credit & other, net	2,430,127		960,054
Leases & equipment finance, net	1,729,512		1,706,172
Residential
Mortgage, net	6,157,166		5,647,035
Home equity loans & lines, net	1,938,166		1,631,965
Consumer & other, net	195,735		154,632
Total loans and leases, net of deferred fees and costs	$	37,441,951	$	26,155,981

The Company elected to exclude accrued interest receivable from the amortized cost basis of loans disclosed throughout this footnote. Interest accrued on loans totaled $154.9 million and $86.8 million as of December 31, 2023 and December 31, 2022, respectively, and is included in other assets on the Consolidated Balance Sheets. As of December 31, 2023, loans totaling $21.2 billion were pledged to secure borrowings and available lines of credit.

Originated loans are reported at the principal amount outstanding, net of unearned interest and deferred fees and costs, and any partial charge-offs recorded. Purchased loans are recorded at fair value at the date of purchase. As of December 31, 2023 and 2022, the net deferred fees and costs were $71.8 million and $84.7 million, respectively.

The Company evaluates purchased loans for more-than-insignificant deterioration at the date of purchase. Purchased loans that have experienced more-than-insignificant deterioration from origination are considered PCD loans. All other purchased loans are considered non-PCD loans. Total discounts on acquired loans were $552.5 million and $6.1 million as of December 31, 2023 and 2022, respectively. The outstanding contractual unpaid principal balance of PCD loans, excluding acquisition accounting adjustments, was $331.9 million as of December 31, 2023. The carrying balance of PCD loans was $300.2 million as of December 31, 2023.

The Bank, through its commercial equipment leasing subsidiary, FinPac, is a provider of commercial equipment leasing and financing. Direct finance leases are included within the lease and equipment finance segment within the loans and leases, net line item. These direct financing leases typically have terms of three to five years. Interest income recognized on these leases was $18.8 million at both December 31, 2023 and 2022.

Residual values on leases are established at the time equipment is leased based on an estimate of the value of the leased equipment when the Company expects to dispose of the equipment, typically at the termination of the lease. An annual evaluation is also performed each fiscal year by an independent valuation specialist and equipment residuals are confirmed or adjusted in conjunction with such evaluation.

The following table presents the net investment in direct financing leases as of December 31, 2023 and 2022:


(in thousands)	December 31, 2023		December 31, 2022
Minimum lease payments receivable	$	362,152	$	316,823
Estimated guaranteed and unguaranteed residual values	74,880		98,175
Initial direct costs - net of accumulated amortization	5,373		6,033
Unearned income	(48,433)		(41,571)
Net investment in direct financing leases	$	393,972	$	379,460

The following table presents the scheduled minimum lease payments receivable as of December 31, 2023:


(in thousands)
Year	Amount
2024	$	112,497
2025	90,557
2026	68,639
2027	47,308
2028	27,955
Thereafter	15,196
Total minimum lease payments receivable	$	362,152

In the course of managing the loan and lease portfolio, at certain times, management may decide to sell pools of loans and leases. For the year ended December 31, 2023, the Bank sold a total of $743.9 million loans from its portfolio, of which $666.3 million were transactional, non-relationship jumbo residential mortgage, commercial, and commercial real estate loans. For the year ended December 31, 2022, the Bank sold a total of $142.3 million loans and leases. For the years ended December 31, 2023 and 2022, the above loan sales include SBA loan sales of $77.6 million and $105.3 million, respectively.