v3.23.1
Loans and Leases
 3 Months Ended
Mar. 31, 2023
Receivables [Abstract]  
Loans and Leases LOANS AND LEASES
Our loans are carried at the principal amount outstanding, net of deferred fees and costs, and in the case of acquired and purchased loans, net of purchase discounts and premiums. Deferred fees and costs and purchase discounts and premiums on acquired loans are recognized as an adjustment to interest income over the contractual life of the loans primarily using the effective interest method or taken into income when the related loans are paid off or included in the carrying amount of loans that are sold.
Loans and Leases Held for Investment
The following table summarizes the composition of our loans and leases held for investment as of the dates indicated:
March 31,December 31,
20232022
(In thousands)
Real estate mortgage$15,436,731 $15,762,351 
Real estate construction and land (1)
4,674,473 4,221,853 
Commercial5,232,521 8,297,182 
Consumer427,187 444,630 
Total gross loans and leases held for investment25,770,912 28,726,016 
Deferred fees, net(98,531)(116,887)
Total loans and leases held for investment, net of deferred fees25,672,381 28,609,129 
Allowance for loan and lease losses(210,055)(200,732)
Total loans and leases held for investment, net (2)
$25,462,326 $28,408,397 
____________________
(1)    Includes land and acquisition and development loans of $142.9 million and $153.5 million at March 31, 2023 and December 31, 2022.
(2)    Excludes accrued interest receivable of $131.7 million and $124.3 million at March 31, 2023 and December 31, 2022, respectively, which is recorded in "Other assets" on the condensed consolidated balance sheets.
The following tables present an aging analysis of our loans and leases held for investment, net of deferred fees, by loan portfolio segment and class as of the dates indicated:
March 31, 2023
30 - 8990 or More
DaysDaysTotal
Past DuePast DuePast DueCurrentTotal
 (In thousands)
Real estate mortgage:
Commercial$3,524 $21,578 $25,102 $3,783,649 $3,808,751 
Multi-family— — — 5,523,320 5,523,320 
Other residential138,372 27,080 165,452 5,910,088 6,075,540 
Total real estate mortgage141,896 48,658 190,554 15,217,057 15,407,611 
Real estate construction and land:
Commercial— — — 910,327 910,327 
Residential— — — 3,698,113 3,698,113 
Total real estate construction and land— — — 4,608,440 4,608,440 
Commercial:
Asset-based— 420 420 2,067,907 2,068,327 
Venture capital— — — 2,058,237 2,058,237 
Other commercial941 352 1,293 1,101,250 1,102,543 
Total commercial941 772 1,713 5,227,394 5,229,107 
Consumer1,594 506 2,100 425,123 427,223 
Total$144,431 $49,936 $194,367 $25,478,014 $25,672,381 
December 31, 2022
30 - 8990 or More
DaysDaysTotal
Past DuePast DuePast DueCurrentTotal
 (In thousands)
Real estate mortgage:
Commercial$1,721 $29,269 $30,990 $3,815,841 $3,846,831 
Multi-family— — — 5,607,865 5,607,865 
Other residential101,728 39,875 141,603 6,134,025 6,275,628 
Total real estate mortgage103,449 69,144 172,593 15,557,731 15,730,324 
Real estate construction and land:
Commercial— — — 898,592 898,592 
Residential— — — 3,253,580 3,253,580 
Total real estate construction and land— — — 4,152,172 4,152,172 
Commercial:
Asset-based— 434 434 5,139,775 5,140,209 
Venture capital— — — 2,033,302 2,033,302 
Other commercial461 1,195 1,656 1,106,795 1,108,451 
Total commercial461 1,629 2,090 8,279,872 8,281,962 
Consumer1,935 149 2,084 442,587 444,671 
Total$105,845 $70,922 $176,767 $28,432,362 $28,609,129 
It is our policy to discontinue accruing interest when principal or interest payments are past due 90 days or more (unless the loan is both well secured and in the process of collection) or when, in the opinion of management, there is a reasonable doubt as to the collectability of a loan or lease in the normal course of business. Interest income on nonaccrual loans is recognized only to the extent cash is received and the principal balance of the loan is deemed collectable.
The following table presents our nonaccrual and performing loans and leases held for investment, net of deferred fees, by loan portfolio segment and class as of the dates indicated:  
 March 31, 2023December 31, 2022
NonaccrualPerformingTotalNonaccrualPerformingTotal
 (In thousands)
Real estate mortgage:
Commercial$32,996 $3,775,755 $3,808,751 $42,509 $3,804,322 $3,846,831 
Multi-family— 5,523,320 5,523,320 — 5,607,865 5,607,865 
Other residential50,060 6,025,480 6,075,540 55,893 6,219,735 6,275,628 
Total real estate mortgage83,056 15,324,555 15,407,611 98,402 15,631,922 15,730,324 
Real estate construction and land:
Commercial— 910,327 910,327 — 898,592 898,592 
Residential— 3,698,113 3,698,113 — 3,253,580 3,253,580 
Total real estate construction and land— 4,608,440 4,608,440 — 4,152,172 4,152,172 
Commercial:
Asset-based420 2,067,907 2,068,327 865 5,139,344 5,140,209 
Venture capital— 2,058,237 2,058,237 — 2,033,302 2,033,302 
Other commercial3,123 1,099,420 1,102,543 4,345 1,104,106 1,108,451 
Total commercial3,543 5,225,564 5,229,107 5,210 8,276,752 8,281,962 
Consumer525 426,698 427,223 166 444,505 444,671 
Total$87,124 $25,585,257 $25,672,381 $103,778 $28,505,351 $28,609,129 
At March 31, 2023, nonaccrual loans and leases included $49.9 million of loans and leases 90 or more days past due, $15.1 million of loans and leases 30 to 89 days past due, and $22.1 million of loans and leases current with respect to contractual payments that were placed on nonaccrual status based on management’s judgment regarding their collectability. At December 31, 2022, nonaccrual loans and leases included $70.9 million of loans and leases 90 or more days past due, $6.8 million of loans and leases 30 to 89 days past due, and $26.0 million of current loans and leases that were placed on nonaccrual status based on management’s judgment regarding their collectability.
As of March 31, 2023, our three largest loan relationships on nonaccrual status had an aggregate carrying value of $23.8 million and represented 27% of total nonaccrual loans and leases.
The following tables present the credit risk rating categories for loans and leases held for investment, net of deferred fees, by loan portfolio segment and class as of the dates indicated. Classified loans and leases are those with a credit risk rating of either substandard or doubtful.
March 31, 2023
ClassifiedSpecial MentionPassTotal
(In thousands)
Real estate mortgage:
Commercial$35,596 $109,020 $3,664,135 $3,808,751 
Multi-family3,586 116,092 5,403,642 5,523,320 
Other residential76,382 44,810 5,954,348 6,075,540 
Total real estate mortgage115,564 269,922 15,022,125 15,407,611 
Real estate construction and land:
Commercial— 93,641 816,686 910,327 
Residential— 44,997 3,653,116 3,698,113 
Total real estate construction and land— 138,638 4,469,802 4,608,440 
Commercial:
Asset-based420 33,133 2,034,774 2,068,327 
Venture capital2,615 126,422 1,929,200 2,058,237 
Other commercial13,126 5,036 1,084,381 1,102,543 
Total commercial16,161 164,591 5,048,355 5,229,107 
Consumer 698 7,002 419,523 427,223 
Total$132,423 $580,153 $24,959,805 $25,672,381 
December 31, 2022
ClassifiedSpecial MentionPassTotal
(In thousands)
Real estate mortgage:
Commercial$43,737 $106,493 $3,696,601 $3,846,831 
Multi-family3,611 60,330 5,543,924 5,607,865 
Other residential60,557 58,063 6,157,008 6,275,628 
Total real estate mortgage107,905 224,886 15,397,533 15,730,324 
Real estate construction and land:
Commercial— 91,334 807,258 898,592 
Residential— 45,155 3,208,425 3,253,580 
Total real estate construction and land— 136,489 4,015,683 4,152,172 
Commercial:
Asset-based865 56,836 5,082,508 5,140,209 
Venture capital2,753 127,907 1,902,642 2,033,302 
Other commercial6,473 13,233 1,088,745 1,108,451 
Total commercial10,091 197,976 8,073,895 8,281,962 
Consumer 275 6,908 437,488 444,671 
Total$118,271 $566,259 $27,924,599 $28,609,129 
The following table presents our nonaccrual loans and leases by loan portfolio segment and class and by with and without an allowance recorded as of the date indicated and interest income recognized on nonaccrual loans and leases for the periods indicated:                 
Three MonthsThree Months
EndedEnded
March 31,March 31,March 31,March 31,
 2023202320222022
NonaccrualInterestNonaccrualInterest
Recorded Income RecordedIncome
InvestmentRecognizedInvestmentRecognized
 (In thousands)
With An Allowance Recorded:  
Real estate mortgage:
Commercial$60 $— $68 $— 
Multi-family— — — — 
Other residential364 — 4,109 — 
Real estate construction and land:
Commercial— — — — 
Residential— — 493 — 
Commercial:
Asset based— — 874 — 
Venture capital— — 3,659 — 
Other commercial927 — 1,274 — 
Consumer525 — 387 — 
With No Related Allowance Recorded:
Real estate mortgage:
Commercial$32,936 $3 $32,004 $17 
Multi-family— — — — 
Other residential49,696 — 13,982 — 
Real estate construction and land:
Commercial— — — — 
Residential— — 5,093 — 
Commercial:
Asset based420 — 449 — 
Venture capital— — — — 
Other commercial2,196 1 4,146 354 
Consumer— — — — 
Total Loans and Leases With and
Without an Allowance Recorded:
Real estate mortgage$83,056 $3 $50,163 $17 
Real estate construction and land— — 5,586 — 
Commercial3,543 1 10,402 354 
Consumer525 — 387 — 
Total$87,124 $4 $66,538 $371 
The following tables present our loans held for investment by loan portfolio segment and class, by credit quality indicator (internal risk ratings), and by year of origination (vintage year) as of the dates indicated:
Revolving
Converted
Amortized Cost Basis (1)
Term Loans by Origination YearRevolvingto Term
March 31, 202320232022202120202019PriorLoansLoansTotal
(In thousands)
Real Estate Mortgage:
Commercial
Internal risk rating:
1-2 High pass$— $4,935 $2,712 $10,178 $27,110 $40,532 $1,305 $— $86,772 
3-4 Pass43,528 537,793 498,774 460,109 317,986 1,623,820 85,376 9,977 3,577,363 
5 Special mention— — — 724 14,957 93,339 — — 109,020 
6-8 Classified— — 552 458 1,265 33,321 — — 35,596 
Total$43,528 $542,728 $502,038 $471,469 $361,318 $1,791,012 $86,681 $9,977 $3,808,751 
Current YTD period:
Gross charge-offs$— $— $— $— $— $6,926 $— $— $6,926 
Real Estate Mortgage:
Multi-family
Internal risk rating:
1-2 High pass$— $23,561 $84,153 $26,843 $55,542 $104,508 $— $— $294,607 
3-4 Pass1,380 1,916,440 1,084,926 441,047 672,385 936,345 56,512 — 5,109,035 
5 Special mention— — — 37,211 29,430 49,451 — — 116,092 
6-8 Classified— — — — — 3,586 — — 3,586 
Total$1,380 $1,940,001 $1,169,079 $505,101 $757,357 $1,093,890 $56,512 $— $5,523,320 
Current YTD period:
Gross charge-offs$— $— $— $— $— $— $— $— $— 
Real Estate Mortgage:
Other residential
Internal risk rating:
1-2 High pass$— $— $— $— $— $— $1,500 $— $1,500 
3-4 Pass299,234 2,432,852 3,077,525 78,709 — 20,047 44,380 101 5,952,848 
5 Special mention— 18,810 26,000 — — — — — 44,810 
6-8 Classified(1,456)26,587 41,041 7,683 — 2,368 — 159 76,382 
Total$297,778 $2,478,249 $3,144,566 $86,392 $— $22,415 $45,880 $260 $6,075,540 
Current YTD period:
Gross charge-offs$— $1,600 $1,214 $91 $— $4 $— $— $2,909 
____________________
(1)    Amounts with negative balances are loans with zero principal balances and deferred loan origination fees.
Revolving
Converted
Amortized Cost Basis (1)
Term Loans by Origination YearRevolvingto Term
March 31, 202320232022202120202019PriorLoansLoansTotal
(In thousands)
Real Estate Construction
and Land: Commercial
Internal risk rating:
1-2 High pass$— $— $— $— $— $— $— $— $— 
3-4 Pass— 356,981 182,400 80,045 173,735 23,525 — — 816,686 
5 Special mention— — — — — 93,641 — — 93,641 
6-8 Classified— — — — — — — — — 
Total$— $356,981 $182,400 $80,045 $173,735 $117,166 $— $— $910,327 
Current YTD period:
Gross charge-offs$— $— $— $— $— $— $— $— $— 
Real Estate Construction
and Land: Residential
Internal risk rating:
1-2 High pass$— $— $— $— $— $— $— $— $— 
3-4 Pass10,606 810,532 1,592,751 869,174 206,942 128,373 34,738 — 3,653,116 
5 Special mention— — — — 44,997 — — — 44,997 
6-8 Classified— — — — — — — — — 
Total$10,606 $810,532 $1,592,751 $869,174 $251,939 $128,373 $34,738 $— $3,698,113 
Current YTD period:
Gross charge-offs$— $— $— $— $— $— $— $— $— 
Commercial: Asset-Based
Internal risk rating:
1-2 High pass$1,493 $270,573 $219,771 $46,719 $148,394 $319,219 $(20)$— $1,006,149 
3-4 Pass30,268 351,394 170,393 47,637 33,991 44,076 349,019 1,847 1,028,625 
5 Special mention— 177 — — — 14,473 18,451 32 33,133 
6-8 Classified— — — — — 420 — — 420 
Total$31,761 $622,144 $390,164 $94,356 $182,385 $378,188 $367,450 $1,879 $2,068,327 
Current YTD period:
Gross charge-offs$— $— $— $— $— $— $— $— $— 
Commercial: Venture
Capital
Internal risk rating:
1-2 High pass
$(53)$(16)$— $1,999 $— $27 $174,702 $(557)$176,102 
3-4 Pass(10)137,072 146,732 22,178 3,711 2,173 1,375,198 66,044 1,753,098 
5 Special mention— 14,303 42,585 4,484 22,258 — 37,799 4,993 126,422 
6-8 Classified— — 2,615 — — — — — 2,615 
Total$(63)$151,359 $191,932 $28,661 $25,969 $2,200 $1,587,699 $70,480 $2,058,237 
Current YTD period:
Gross charge-offs$— $— $— $— $— $— $— $— $— 
____________________
(1)    Amounts with negative balances are loans with zero principal balances and deferred loan origination fees.
Revolving
Converted
Amortized Cost Basis (1)
Term Loans by Origination YearRevolvingto Term
March 31, 202320232022202120202019PriorLoansLoansTotal
(In thousands)
Commercial: Other
Commercial
Internal risk rating:
1-2 High pass$655 $2,328 $8,215 $(20)$65 $(36)$21,365 $— $32,572 
3-4 Pass3,579 96,573 274,960 51,500 37,466 127,936 456,166 3,629 1,051,809 
5 Special mention— — 317 151 610 2,386 1,488 84 5,036 
6-8 Classified— 6,702 — — 300 2,542 2,725 857 13,126 
Total$4,234 $105,603 $283,492 $51,631 $38,441 $132,828 $481,744 $4,570 $1,102,543 
Current YTD period:
Gross charge-offs$— $— $— $— $— $— $47 $90 $137 
Consumer
Internal risk rating:
1-2 High pass$— $32 $28 $6 $— $— $1,041 $— $1,107 
3-4 Pass66 61,167 217,470 19,885 45,584 64,999 9,245 — 418,416 
5 Special mention— 1,379 3,557 451 1,225 250 140 — 7,002 
6-8 Classified— — 356 38 176 108 1 19 698 
Total$66 $62,578 $221,411 $20,380 $46,985 $65,357 $10,427 $19 $427,223 
Current YTD period:
Gross charge-offs$— $79 $31 $— $144 $170 $1 $— $425 
Total Loans and Leases
Internal risk rating:
1-2 High pass$2,095 $301,413 $314,879 $85,725 $231,111 $464,250 $199,893 $(557)$1,598,809 
3-4 Pass388,651 6,700,804 7,245,931 2,070,284 1,491,800 2,971,294 2,410,634 81,598 23,360,996 
5 Special mention— 34,669 72,459 43,021 113,477 253,540 57,878 5,109 580,153 
6-8 Classified(1,456)33,289 44,564 8,179 1,741 42,345 2,726 1,035 132,423 
Total$389,290 $7,070,175 $7,677,833 $2,207,209 $1,838,129 $3,731,429 $2,671,131 $87,185 $25,672,381 
Current YTD period:
Gross charge-offs$— $1,679 $1,245 $91 $144 $7,100 $48 $90 $10,397 
______________________
(1)    Amounts with negative balances are loans with zero principal balances and deferred loan origination fees.
Revolving
Converted
Amortized Cost Basis (1)
Term Loans by Origination YearRevolvingto Term
December 31, 202220222021202020192018PriorLoansLoansTotal
(In thousands)
Real Estate Mortgage:
Commercial
Internal risk rating:
1-2 High pass$4,957 $3,791 $7,215 $26,132 $4,690 $35,343 $1,290 $— $83,418 
3-4 Pass537,931 501,576 467,792 322,448 539,701 1,148,386 85,284 10,065 3,613,183 
5 Special mention— — 728 16,394 2,294 87,077 — — 106,493 
6-8 Classified— 559 464 1,310 27,396 14,008 — — 43,737 
Total$542,888 $505,926 $476,199 $366,284 $574,081 $1,284,814 $86,574 $10,065 $3,846,831 
Current YTD period:
Gross charge-offs$— $67 $— $79 $2,258 $326 $— $— $2,730 
Real Estate Mortgage:
Multi-family
Internal risk rating:
1-2 High pass$— $89,251 $19,945 $58,275 $66,219 $69,805 $— $— $303,495 
3-4 Pass1,940,337 1,084,467 523,645 676,169 446,987 511,185 57,639 — 5,240,429 
5 Special mention— — 4,944 16,974 7,003 31,409 — — 60,330 
6-8 Classified— — — — 2,750 861 — — 3,611 
Total$1,940,337 $1,173,718 $548,534 $751,418 $522,959 $613,260 $57,639 $— $5,607,865 
Current YTD period:
Gross charge-offs$— $— $— $— $— $— $— $— $— 
Real Estate Mortgage:
Other residential
Internal risk rating:
1-2 High pass$— $— $— $— $— $— $1,000 $— $1,000 
3-4 Pass2,805,533 3,200,013 83,580 — 237 20,394 46,155 96 6,156,008 
5 Special mention27,272 25,766 4,916 — 109 — — — 58,063 
6-8 Classified19,248 33,218 5,333 — — 2,555 — 203 60,557 
Total$2,852,053 $3,258,997 $93,829 $— $346 $22,949 $47,155 $299 $6,275,628 
Current YTD period:
Gross charge-offs$249 $1,084 $912 $— $— $81 $— $— $2,326 
____________________
(1)    Amounts with negative balances are loans with zero principal balances and deferred loan origination fees.
Revolving
Converted
Amortized Cost Basis (1)
Term Loans by Origination YearRevolvingto Term
December 31, 202220222021202020192018PriorLoansLoansTotal
(In thousands)
Real Estate Construction
and Land: Commercial
Internal risk rating:
1-2 High pass$— $— $— $— $— $— $— $— $— 
3-4 Pass299,538 170,397 74,634 237,294 17,763 7,632 — — 807,258 
5 Special mention— — — — 91,334 — — — 91,334 
6-8 Classified— — — — — — — — — 
Total$299,538 $170,397 $74,634 $237,294 $109,097 $7,632 $— $— $898,592 
Current YTD period:
Gross charge-offs$— $— $— $— $— $— $— $— $— 
Real Estate Construction
and Land: Residential
Internal risk rating:
1-2 High pass$— $— $— $— $— $— $— $— $— 
3-4 Pass605,683 1,302,061 844,041 282,076 125,805 204 48,555 — 3,208,425 
5 Special mention— — — 45,155 — — — — 45,155 
6-8 Classified— — — — — — — — — 
Total$605,683 $1,302,061 $844,041 $327,231 $125,805 $204 $48,555 $— $3,253,580 
Current YTD period:
Gross charge-offs$— $— $— $— $— $— $— $— $— 
Commercial: Asset-Based
Internal risk rating:
1-2 High pass$225,140 $209,272 $57,727 $202,063 $121,600 $208,542 $850,031 $— $1,874,375 
3-4 Pass547,675 188,269 52,711 35,811 33,426 40,714 2,239,785 69,742 3,208,133 
5 Special mention— — — 43,409 — 3,505 9,922 — 56,836 
6-8 Classified— — — — — 434 — 431 865 
Total$772,815 $397,541 $110,438 $281,283 $155,026 $253,195 $3,099,738 $70,173 $5,140,209 
Current YTD period:
Gross charge-offs$— $— $— $— $— $— $750 $— $750 
Commercial: Venture
Capital
Internal risk rating:
1-2 High pass
$(40)$— $2,000 $— $134 $3 $216,535 $503 $219,135 
3-4 Pass92,015 136,296 18,075 3,705 1,833 910 1,365,101 65,572 1,683,507 
5 Special mention13,970 40,924 4,483 23,202 — — 40,335 4,993 127,907 
6-8 Classified— 2,753 — — — — — — 2,753 
Total$105,945 $179,973 $24,558 $26,907 $1,967 $913 $1,621,971 $71,068 $2,033,302 
Current YTD period:
Gross charge-offs$— $— $— $— $— $— $940 $— $940 
____________________
(1)    Amounts with negative balances are loans with zero principal balances and deferred loan origination fees.
Revolving
Converted
Amortized Cost Basis (1)
Term Loans by Origination YearRevolvingto Term
December 31, 202220222021202020192018PriorLoansLoansTotal
(In thousands)
Commercial: Other
Commercial
Internal risk rating:
1-2 High pass$3,591 $10,880 $12 $161 $3 $14 $20,958 $— $35,619 
3-4 Pass84,930 278,208 54,542 41,908 47,771 87,645 454,438 3,684 1,053,126 
5 Special mention7,038 796 184 695 1,526 2,858 47 89 13,233 
6-8 Classified— 806 — 319 (3)2,653 1,600 1,098 6,473 
Total$95,559 $290,690 $54,738 $43,083 $49,297 $93,170 $477,043 $4,871 $1,108,451 
Current YTD period:
Gross charge-offs$— $209 $— $1 $— $2,537 $1,906 $474 $5,127 
Consumer
Internal risk rating:
1-2 High pass$34 $30 $7 $— $1 $— $854 $— $926 
3-4 Pass62,868 226,084 20,798 48,542 31,693 37,838 8,739 — 436,562 
5 Special mention1,252 3,490 464 1,126 278 238 60 — 6,908 
6-8 Classified47 — — 59 79 74 — 16 275 
Total$64,201 $229,604 $21,269 $49,727 $32,051 $38,150 $9,653 $16 $444,671 
Current YTD period:
Gross charge-offs$309 $529 $237 $728 $— $354 $— $7 $2,164 
Total Loans and Leases
Internal risk rating:
1-2 High pass$233,682 $313,224 $86,906 $286,631 $192,647 $313,707 $1,090,668 $503 $2,517,968 
3-4 Pass6,976,510 7,087,371 2,139,818 1,647,953 1,245,216 1,854,908 4,305,696 149,159 25,406,631 
5 Special mention49,532 70,976 15,719 146,955 102,544 125,087 50,364 5,082 566,259 
6-8 Classified19,295 37,336 5,797 1,688 30,222 20,585 1,600 1,748 118,271 
Total$7,279,019 $7,508,907 $2,248,240 $2,083,227 $1,570,629 $2,314,287 $5,448,328 $156,492 $28,609,129 
Current YTD period:
Gross charge-offs$558 $1,889 $1,149 $808 $2,258 $3,298 $3,596 $481 $14,037 
____________________
(1)    Amounts with negative balances are loans with zero principal balances and deferred loan origination fees.
On January 1, 2023, the Company adopted ASU 2022-02, "Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures", which eliminated the accounting guidance for troubled debt restructurings while enhancing disclosure requirements for certain loan refinancing and restructurings by creditors when a borrower is experiencing financial difficulty. This guidance was applied on a prospective basis. The following table presents our loan modifications made to borrowers experiencing financial difficulty by type of modification for the period indicated with related amortized cost balances as of the date indicated:
Three Months Ended March 31, 2023
Loan Modifications
Balances (Amortized Cost Basis) at
March 31, 2023
Combination - Term
Extension andCombination - Term
Interest RateExtension andTotal Loan
Term ExtensionPayment DelayReductionPayment DelayModifications
% of% of% of% of% of
LoanLoanLoanLoanLoan
PortfolioPortfolioPortfolioPortfolioPortfolio
BalanceClassBalanceClassBalanceClassBalanceClassBalanceClass
(Dollars in thousands)
Real estate
mortgage:
Other
residential$12,716 0.2 %$— — %$— — %$— — %$12,716 0.2 %
Commercial:
Venture
capital— — %— — %— — %613 — %613 — %
Other
commercial2,057 0.2 %45 — %— — %— — %2,102 0.2 %
Consumer— — %— — %3 — %— — %3 — %
Total$14,773 $45 $3 $613 $15,434 
The following tables present the financial effect of our loan modifications made to borrowers experiencing financial difficulty by type of modification for the period indicated:
Three Months Ended March 31, 2023
Term Extension - Financial Effect
Real estate mortgage:
Other residentialExtended maturity by a weighted average seven months.
Commercial:
Other commercialExtended maturity by a weighted average 12 months.
Three Months Ended March 31, 2023
Payment Delay - Financial Effect
Commercial:
Other commercialProvided six months of reduced payments to borrowers without extending the loan term.
Three Months Ended March 31, 2023
Combination - Term Extension and Interest Rate Reduction
Consumer
Extended maturity by a weighted average 2 years and reduced weighted average contractual interest rate from 9.5% to 2.0%.
Three Months Ended March 31, 2023
Combination - Term Extension and Payment Delay
Commercial:
Venture capitalExtended maturity by a weighted average 11 months and provided 11 months of interest only payments to borrowers.
The following table presents the payment status of our loan modifications made during the period indicated with related amortized cost balances as of the date indicated:
Three Months Ended March 31, 2023
Loan Modifications
Payment Status (Amortized Cost Basis) at
March 31, 2023
30-89 Days90 or More Days
CurrentPast DuePast DueTotal
(In thousands)
Real estate mortgage:
Commercial$— $— $— $— 
Multi-family— — — — 
Other residential8,780 3,936 — 12,716 
Real estate construction and land:
Commercial— — — — 
Residential— — — — 
Commercial:
Asset-based— — — — 
Venture capital613 — — 613 
Other commercial2,102 — — 2,102 
Consumer3 — — 3 
Total$11,498 $3,936 $— $15,434 
TDRs are a result of rate reductions, term extensions, fee concessions, transfers to foreclosed assets, discounted loan payoffs, and debt forgiveness, or a combination thereof. The following table presents our troubled debt restructurings of loans held for investment by loan portfolio segment and class for the period indicated:
Three Months Ended March 31, 2022
Pre-Post-
ModificationModification
NumberOutstandingOutstanding
of RecordedRecorded
Troubled Debt RestructuringsLoansInvestmentInvestment
 (In thousands)
Real estate mortgage:
Multi-family1 $304 $— 
Commercial:
Other commercial13 1,074 1,074 
Total 14 $1,378 $1,074 
During the three months ended March 31, 2022, there were two other commercial loans totaling $78,000 restructured in the preceding 12-month period that subsequently defaulted.
Leases Receivable
We provide equipment financing to our customers primarily with operating and direct financing leases. For direct financing leases, lease receivables are recorded on the balance sheet but the leased equipment is not, although we generally retain legal title to the leased equipment until the end of each lease. Direct financing leases are stated at the net amount of minimum lease payments receivable, plus any unguaranteed residual value, less the amount of unearned income and net acquisition discount at the reporting date. Direct lease origination costs are amortized using the effective interest method over the life of the leases. Direct financing leases are subject to our accounting for allowance for loan and lease losses. See Note 8. Leases for information regarding operating leases where we are the lessor.
The following table provides the components of leases receivable income for the periods indicated:
Three Months Ended
March 31,
20232022
(In thousands)
Component of leases receivable income:
Interest income on net investments in leases$3,749 $2,388 
The following table presents the components of leases receivable as of the dates indicated:
March 31, 2023December 31, 2022
(In thousands)
Net Investment in Direct Financing Leases:
Lease payments receivable$235,396 $232,909 
Unguaranteed residual assets23,866 23,561 
Deferred costs and other1,781 1,815 
Aggregate net investment in leases$261,043 $258,285 
The following table presents maturities of leases receivable as of the date indicated:
March 31, 2023
(In thousands)
Period ending December 31,
2023$55,009 
202473,615 
202555,299 
202636,835 
202723,704 
Thereafter18,570 
Total undiscounted cash flows263,032 
Less: Unearned income(27,636)
Present value of lease payments$235,396 
Allowance for Loan and Lease Losses
The following tables present a summary of the activity in the allowance for loan and lease losses on loans and leases held for investment by loan portfolio segment for the periods indicated:
Three Months Ended March 31, 2023
Real Estate
Real EstateConstruction
Mortgageand LandCommercialConsumerTotal
(In thousands)
Allowance for Loan and Lease Losses:
Balance, beginning of period$87,309 $52,320 $52,849 $8,254 $200,732 
Charge-offs(9,835)— (137)(425)(10,397)
Recoveries200 — 975 45 1,220 
Net (charge-offs) recoveries(9,635)— 838 (380)(9,177)
Provision 31,809 2,714 (16,492)469 18,500 
Balance, end of period$109,483 $55,034 $37,195 $8,343 $210,055 
Ending Allowance by
Evaluation Methodology:
Individually evaluated $— $— $— $— $— 
Collectively evaluated $109,483 $55,034 $37,195 $8,343 $210,055 
Ending Loans and Leases by
Evaluation Methodology:
Individually evaluated $82,835 $— $2,616 $— $85,451 
Collectively evaluated 15,324,776 4,608,440 5,226,491 427,223 25,586,930 
Ending balance$15,407,611 $4,608,440 $5,229,107 $427,223 $25,672,381 
Three Months Ended March 31, 2022
Real Estate
Real EstateConstruction
Mortgageand LandCommercialConsumerTotal
(In thousands)
Allowance for Loan and Lease Losses:
Balance, beginning of period $98,624 $44,508 $48,718 $8,714 $200,564 
Charge-offs(168)— (2,833)(233)(3,234)
Recoveries163 149 1,735 21 2,068 
Net (charge-offs) recoveries (5)149 (1,098)(212)(1,166)
Provision (11,391)(1,009)9,436 964 (2,000)
Balance, end of period$87,228 $43,648 $57,056 $9,466 $197,398 
Ending Allowance by
Evaluation Methodology:
Individually evaluated $156 $— $1,023 $— $1,179 
Collectively evaluated $87,072 $43,648 $56,033 $9,466 $196,219 
Ending Loans and Leases by
Evaluation Methodology:
Individually evaluated $51,280 $6,515 $17,813 $— $75,608 
Collectively evaluated 12,457,784 3,217,201 8,096,882 504,597 24,276,464 
Ending balance$12,509,064 $3,223,716 $8,114,695 $504,597 $24,352,072 
The allowance for loan and lease losses increased by $9.3 million in the first quarter of 2023 to $210.1 million due primarily to a provision for loan and lease losses of $18.5 million driven by an increase in qualitative reserves for loans secured by commercial real estate and higher net charge-offs, offset partially by a decline in the balances of loans and leases held for investment. For additional information regarding the calculation of the allowance for loan and lease losses using the CECL methodology, including discussion of forecasts used to estimate the allowance, please see Note 1(j). Nature of Operations and Summary of Significant Accounting Policies - Allowance for Credit Losses on Loans and Leases Held for Investment of the Notes to Consolidated Financial Statements contained in "Item 8. Financial Statements and Supplementary Data" of the Form 10-K.
A loan is considered collateral-dependent, and is individually evaluated for reserve purposes, when the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of the collateral. The following table summarizes collateral-dependent loans held for investment by collateral type as of the following dates:
March 31, 2023December 31, 2022
RealBusiness RealBusiness
PropertyAssetsTotalPropertyAssetsTotal
(In thousands)
Real estate mortgage$81,541 $— $81,541 $90,485 $— $90,485 
Real estate construction and land— — — 1,402 — 1,402 
Commercial— 420 420 — 434 434 
     Total$81,541 $420 $81,961 $91,887 $434 $92,321 
Allowance for Credit Losses
The allowance for credit losses is the combination of the allowance for loan and lease losses and the reserve for unfunded loan commitments. The reserve for unfunded loan commitments is included within "Accrued interest payable and other liabilities" on the condensed consolidated balance sheets.
The following tables present a summary of the activity in the allowance for loan and lease losses and reserve for unfunded loan commitments for the periods indicated:
Three Months Ended
March 31, 2023
Allowance for Reserve forTotal
Loan and Unfunded LoanAllowance for
Lease LossesCommitmentsCredit Losses
(In thousands)
Balance, beginning of period $200,732 $91,071 $291,803 
Charge-offs(10,397)— (10,397)
Recoveries1,220 — 1,220 
Net charge-offs(9,177)— (9,177)
Provision18,500 (15,500)3,000 
Balance, end of period$210,055 $75,571 $285,626 

Three Months Ended
March 31, 2022
Allowance for Reserve forTotal
Loan and Unfunded LoanAllowance for
Lease LossesCommitmentsCredit Losses
(In thousands)
Balance, beginning of period$200,564 $73,071 $273,635 
Charge-offs(3,234)— (3,234)
Recoveries2,068 — 2,068 
Net charge-offs(1,166)— (1,166)
Provision (2,000)2,000 — 
Balance, end of period$197,398 $75,071 $272,469