LOANS AND LEASES

9 Months Ended

Sep. 30, 2021

NOTE 3 - LOANS AND LEASES

Loans held for investment are reported at the amount of their outstanding principal, net of charge-offs, unearned income, deferred loan origination fees and costs, and unamortized premiums or discounts on purchased loans.

The following table presents loans and leases, excluding LHFS.


(in millions)	September 30, 2021	December 31, 2020
Commercial and industrial(1)	$41,854	$44,173
Commercial real estate	14,508	14,652
Leases	1,593	1,968
Total commercial	57,955	60,793
Residential mortgages(2)	21,513	19,539
Home equity	11,889	12,149
Automobile	13,492	12,153
Education	13,000	12,308
Other retail	5,469	6,148
Total retail	65,363	62,297
Total loans and leases	$123,318	$123,090

(1) Includes $1.9 billion and $4.2 billion of PPP loans fully guaranteed by the SBA as of September 30, 2021 and December 31, 2020, respectively.

(2) Includes fully or partially guaranteed FHA, VA and USDA loans of $1.4 billion at September 30, 2021 and $249 million at December 31, 2020, including loans acquired through an exercise of the GNMA early buyout option.

Included in other assets is accrued interest receivable on loans and leases held for investment totaling $464 million and $449 million as of September 30, 2021 and December 31, 2020, respectively.

During the three months ended September 30, 2021 and 2020, the Company purchased $323 million and $801 million of education loans, and $119 million and $101 million of other retail loans, respectively. During the three months ended September 30, 2021, the Company purchased $478 million of residential mortgage loans as compared to none in the same period of 2020. During the nine months ended September 30, 2021 and 2020, the Company purchased $975 million and $1.7 billion of education loans, and $472 million and $628 million of other retail loans, respectively. During the nine months ended September 30, 2021, the Company purchased $478 million of residential mortgage loans as compared to none in the same period of 2020.

During the three months ended September 30, 2021 and 2020, the Company sold $202 million and $94 million of commercial loans, respectively. During the three months ended September 30, 2020, the Company sold $879 million of education loans as compared to none in the same period of 2021. During the nine months ended September 30, 2021 and 2020, the Company sold $765 million and $356 million of commercial loans, respectively. During the nine months ended September 30, 2020, the Company sold $1.5 billion of residential mortgage loans and $879 million of education loans as compared to none in the same period of 2021.

Loans pledged as collateral for FHLB borrowed funds, primarily residential mortgages and home equity products, totaled $25.2 billion and $25.5 billion at September 30, 2021 and December 31, 2020, respectively. Loans pledged as collateral to support the contingent ability to borrow at the FRB discount window, if necessary, were primarily comprised of education, automobile, commercial and industrial, and commercial real estate loans, and totaled $38.1 billion and $40.0 billion at September 30, 2021 and December 31, 2020, respectively.

Interest income on direct financing and sales-type leases was $12 million and $17 million for the three months ended September 30, 2021 and 2020, respectively, and is reported within interest and fees on loans and leases in the Consolidated Statements of Operations. For the nine months ended September 30, 2021 and 2020, this interest income was $37 million and $54 million, respectively.

The following table presents the composition of LHFS.


	September 30, 2021			December 31, 2020
(in millions)	Residential Mortgages(1)	Commercial(2)	Total		Residential Mortgages(1)	Commercial(2)	Total
Loans held for sale at fair value	$3,104	$73	$3,177		$3,416	$148	$3,564
Other loans held for sale	—	93	93		—	439	439

(1) Residential mortgage LHFS are originated for sale.

(2) Commercial LHFS at fair value consist of loans managed by the Company’s commercial secondary loan desk. Other commercial LHFS generally consist of loans associated with the Company’s syndication business.