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Loans and Leases

3 Months Ended

Mar. 31, 2024

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,
	2024		2023
	(In thousands)
Real estate mortgage	$	16,217,186	$	16,378,537
Real estate construction and land (1)	3,266,639		3,183,357
Commercial	5,831,666		5,780,346
Consumer	440,470		454,474
Total gross loans and leases held for investment	25,755,961		25,796,714
Unearned discounts, net (2)	(238,933)		(261,984)
Deferred fees, net	(44,006)		(45,043)
Total loans and leases held for investment, net of unearned discounts and deferred fees	25,473,022		25,489,687
Allowance for loan and lease losses	(291,503)		(281,687)
Total loans and leases held for investment, net (3)	$	25,181,519	$	25,208,000

____________________

(1) Includes land and acquisition and development loans of $235.7 million and $228.9 million at March 31, 2024 and December 31, 2023.

(2) Represents net acquisition discounts of $308.9 million and purchase premiums of $70.0 million at March 31, 2024, and net acquisition discounts of $334.2 million and purchase premiums of $72.2 million at December 31, 2023.

(3) Excludes accrued interest receivable of $109.3 million and $111.3 million at March 31, 2024 and December 31, 2023, 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, 2024
	30 - 89		90 or More
	Days		Days		Total
	Past Due		Past Due		Past Due		Current		Total
	(In thousands)
Real estate mortgage:
Commercial	$	69,213	$	6,828	$	76,041	$	4,820,503	$	4,896,544
Multi-family	9,046		—		9,046		6,112,426		6,121,472
Other residential	75,158		39,396		114,554		4,834,829		4,949,383
Total real estate mortgage	153,417		46,224		199,641		15,767,758		15,967,399
Real estate construction and land:
Commercial	—		—		—		775,021		775,021
Residential	4,606		—		4,606		2,465,727		2,470,333
Total real estate construction and land	4,606		—		4,606		3,240,748		3,245,354
Commercial:
Asset-based	11,701		2,325		14,026		2,046,990		2,061,016
Venture capital	—		—		—		1,513,641		1,513,641
Other commercial	5,887		8,440		14,327		2,231,583		2,245,910
Total commercial	17,588		10,765		28,353		5,792,214		5,820,567
Consumer	2,810		584		3,394		436,308		439,702
Total	$	178,421	$	57,573	$	235,994	$	25,237,028	$	25,473,022


	December 31, 2023
	30 - 89		90 or More
	Days		Days		Total
	Past Due		Past Due		Past Due		Current		Total
	(In thousands)
Real estate mortgage:
Commercial	$	12,618	$	15,168	$	27,786	$	4,998,711	$	5,026,497
Multi-family	2,302		1,020		3,322		6,021,857		6,025,179
Other residential	93,042		4,341		97,383		4,962,926		5,060,309
Total real estate mortgage	107,962		20,529		128,491		15,983,494		16,111,985
Real estate construction and land:
Commercial	—		—		—		759,585		759,585
Residential	—		—		—		2,399,684		2,399,684
Total real estate construction and land	—		—		—		3,159,269		3,159,269
Commercial:
Asset-based	608		2,689		3,297		2,185,788		2,189,085
Venture capital	—		—		—		1,446,362		1,446,362
Other commercial	1,276		6,993		8,269		2,121,591		2,129,860
Total commercial	1,884		9,682		11,566		5,753,741		5,765,307
Consumer	3,461		670		4,131		448,995		453,126
Total	$	113,307	$	30,881	$	144,188	$	25,345,499	$	25,489,687

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, 2024						December 31, 2023
	Nonaccrual		Performing		Total		Nonaccrual		Performing		Total
	(In thousands)
Real estate mortgage:
Commercial	$	66,527	$	4,830,017	$	4,896,544	$	15,669	$	5,010,828	$	5,026,497
Multi-family	953		6,120,519		6,121,472		1,020		6,024,159		6,025,179
Other residential	61,754		4,887,629		4,949,383		31,041		5,029,268		5,060,309
Total real estate mortgage	129,234		15,838,165		15,967,399		47,730		16,064,255		16,111,985
Real estate construction and land:
Commercial	—		775,021		775,021		—		759,585		759,585
Residential	—		2,470,333		2,470,333		—		2,399,684		2,399,684
Total real estate construction and land	—		3,245,354		3,245,354		—		3,159,269		3,159,269
Commercial:
Asset-based	2,325		2,058,691		2,061,016		2,689		2,186,396		2,189,085
Venture capital	—		1,513,641		1,513,641		325		1,446,037		1,446,362
Other commercial	13,390		2,232,520		2,245,910		10,972		2,118,888		2,129,860
Total commercial	15,715		5,804,852		5,820,567		13,986		5,751,321		5,765,307
Consumer	836		438,866		439,702		811		452,315		453,126
Total	$	145,785	$	25,327,237	$	25,473,022	$	62,527	$	25,427,160	$	25,489,687

At March 31, 2024, nonaccrual loans and leases included $57.6 million of loans and leases 90 or more days past due, $59.6 million of loans and leases 30 to 89 days past due, and $28.6 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, 2023, nonaccrual loans and leases included $19.1 million of loans and leases 90 or more days past due, $11.4 million of loans and leases 30 to 89 days past due, and $32.0 million of current loans and leases that were placed on nonaccrual status based on management’s judgment regarding their collectability.

As of March 31, 2024, our three largest loan relationships on nonaccrual status had an aggregate carrying value of $46.3 million and represented 32% 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, 2024
	Classified		Special Mention		Pass		Total
	(In thousands)
Real estate mortgage:
Commercial	$	174,525	$	196,450	$	4,525,569	$	4,896,544
Multi-family	74,646		94,218		5,952,608		6,121,472
Other residential	66,410		31,599		4,851,374		4,949,383
Total real estate mortgage	315,581		322,267		15,329,551		15,967,399
Real estate construction and land:
Commercial	—		—		775,021		775,021
Residential	—		3,005		2,467,328		2,470,333
Total real estate construction and land	—		3,005		3,242,349		3,245,354
Commercial:
Asset-based	8,495		11,316		2,041,205		2,061,016
Venture capital	10,453		198,311		1,304,877		1,513,641
Other commercial	31,222		15,080		2,199,608		2,245,910
Total commercial	50,170		224,707		5,545,690		5,820,567
Consumer	978		6,530		432,194		439,702
Total	$	366,729	$	556,509	$	24,549,784	$	25,473,022


	December 31, 2023
	Classified		Special Mention		Pass		Total
	(In thousands)
Real estate mortgage:
Commercial	$	75,739	$	219,687	$	4,731,071	$	5,026,497
Multi-family	74,954		108,356		5,841,869		6,025,179
Other residential	38,155		54,197		4,967,957		5,060,309
Total real estate mortgage	188,848		382,240		15,540,897		16,111,985
Real estate construction and land:
Commercial	—		—		759,585		759,585
Residential	—		2,757		2,396,927		2,399,684
Total real estate construction and land	—		2,757		3,156,512		3,159,269
Commercial:
Asset-based	4,561		12,506		2,172,018		2,189,085
Venture capital	7,805		98,633		1,339,924		1,446,362
Other commercial	26,044		9,984		2,093,832		2,129,860
Total commercial	38,410		121,123		5,605,774		5,765,307
Consumer	1,159		7,192		444,775		453,126
Total	$	228,417	$	513,312	$	24,747,958	$	25,489,687

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 Months				Three Months
			Ended				Ended
	March 31,		March 31,		March 31,		March 31,
	2024		2024		2023		2023
	Nonaccrual		Interest		Nonaccrual		Interest
	Recorded		Income		Recorded		Income
	Investment		Recognized		Investment		Recognized
	(In thousands)
With An Allowance Recorded:
Real estate mortgage:
Commercial	$	32,106	$	—	$	60	$	—
Multi-family	—		—		—		—
Other residential	389		—		364		—
Real estate construction and land:
Commercial	—		—		—		—
Residential	—		—		—		—
Commercial:
Asset-based	701		—		—		—
Venture capital	—		—		—		—
Other commercial	816		—		927		—
Consumer	832		—		525		—
With No Related Allowance Recorded:
Real estate mortgage:
Commercial	$	34,421	$	5	$	32,936	$	3
Multi-family	953		—		—		—
Other residential	61,365		—		49,696		—
Real estate construction and land:
Commercial	—		—		—		—
Residential	—		—		—		—
Commercial:
Asset-based	1,624		—		420		—
Venture capital	—		—		—		—
Other commercial	12,574		—		2,196		1
Consumer	4		—		—		—
Total Loans and Leases With and
Without an Allowance Recorded:
Real estate mortgage	$	129,234	$	5	$	83,056	$	3
Real estate construction and land	—		—		—		—
Commercial	15,715		—		3,543		1
Consumer	836		—		525		—
Total	$	145,785	$	5	$	87,124	$	4

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 Year												Revolving		to Term
March 31, 2024	2024		2023		2022		2021		2020		Prior		Loans		Loans		Total
	(In thousands)
Real Estate Mortgage:
Commercial
Internal risk rating:
1-3 High pass	$	—	$	—	$	26,137	$	15,151	$	13,787	$	88,693	$	1	$	—	$	143,769
4-6 Pass	2,941		169,935		918,384		759,995		508,887		1,924,197		62,325		35,136		4,381,800
7 Special mention	—		—		14,054		80,551		3,579		98,266		—		—		196,450
8-9 Classified	—		730		5,019		27,734		24,675		115,263		1,104		—		174,525
Total	$	2,941	$	170,665	$	963,594	$	883,431	$	550,928	$	2,226,419	$	63,430	$	35,136	$	4,896,544
Current YTD period:
Gross charge-offs	$	—	$	—	$	—	$	28	$	—	$	9	$	—	$	—	$	37

Real Estate Mortgage:
Multi-family
Internal risk rating:
1-3 High pass	$	—	$	—	$	45,501	$	158,588	$	67,642	$	174,599	$	—	$	—	$	446,330
4-6 Pass	18,571		88,432		2,226,235		1,196,320		578,112		1,339,150		11,478		47,980		5,506,278
7 Special mention	—		—		—		8,063		15,465		70,690		—		—		94,218
8-9 Classified	—		—		—		17,284		8,552		48,810		—		—		74,646
Total	$	18,571	$	88,432	$	2,271,736	$	1,380,255	$	669,771	$	1,633,249	$	11,478	$	47,980	$	6,121,472
Current YTD period:
Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Real Estate Mortgage:
Other residential
Internal risk rating:
1-3 High pass	$	—	$	—	$	—	$	—	$	—	$	—	$	6,693	$	—	$	6,693
4-6 Pass	1,795		184,141		1,764,313		2,757,120		64,163		19,743		53,324		82		4,844,681
7 Special mention	—		—		27,992		3,323		—		284		—		—		31,599
8-9 Classified	—		5,027		36,971		21,551		939		1,742		147		33		66,410
Total	$	1,795	$	189,168	$	1,829,276	$	2,781,994	$	65,102	$	21,769	$	60,164	$	115	$	4,949,383
Current YTD period:
Gross charge-offs	$	—	$	851	$	1,028	$	540	$	21	$	—	$	—	$	—	$	2,440

____________________

(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 Year												Revolving		to Term
March 31, 2024	2024		2023		2022		2021		2020		Prior		Loans		Loans		Total
	(In thousands)
Real Estate Construction
and Land: Commercial
Internal risk rating:
1-3 High pass	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
4-6 Pass	5,783		26,160		417,605		221,095		71,133		11,351		21,894		—		775,021
7 Special mention	—		—		—		—		—		—		—		—		—
8-9 Classified	—		—		—		—		—		—		—		—		—
Total	$	5,783	$	26,160	$	417,605	$	221,095	$	71,133	$	11,351	$	21,894	$	—	$	775,021
Current YTD period:
Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Real Estate Construction
and Land: Residential
Internal risk rating:
1-3 High pass	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
4-6 Pass	10,774		87,735		1,315,850		645,125		255,161		26,908		125,775		—		2,467,328
7 Special mention	—		—		—		3,005		—		—		—		—		3,005
8-9 Classified	—		—		—		—		—		—		—		—		—
Total	$	10,774	$	87,735	$	1,315,850	$	648,130	$	255,161	$	26,908	$	125,775	$	—	$	2,470,333
Current YTD period:
Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Commercial: Asset-Based
Internal risk rating:
1-3 High pass	$	16,929	$	38,274	$	230,364	$	213,767	$	32,957	$	316,425	$	85,599	$	—	$	934,315
4-6 Pass	(9)		111,264		215,198		125,887		16,485		32,016		606,049		—		1,106,890
7 Special mention	—		—		75		3		—		1		11,237		—		11,316
8-9 Classified	—		—		—		—		701		—		7,794		—		8,495
Total	$	16,920	$	149,538	$	445,637	$	339,657	$	50,143	$	348,442	$	710,679	$	—	$	2,061,016
Current YTD period:
Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Commercial: Venture
Capital
Internal risk rating:
1-3 High pass	$	(85)	$	(98)	$	(5)	$	—	$	1,998	$	(2)	$	148,410	$	1,407	$	151,625
4-6 Pass	24,976		71,914		102,487		106,549		5,821		6,774		749,806		84,925		1,153,252
7 Special mention	—		61,994		28,850		31,934		—		19,987		50,551		4,995		198,311
8-9 Classified	—		2,967		—		7,486		—		—		—		—		10,453
Total	$	24,891	$	136,777	$	131,332	$	145,969	$	7,819	$	26,759	$	948,767	$	91,327	$	1,513,641
Current YTD period:
Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	141	$	—	$	141

____________________

(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 Year												Revolving		to Term
March 31, 2024	2024		2023		2022		2021		2020		Prior		Loans		Loans		Total
	(In thousands)
Commercial: Other
Commercial
Internal risk rating:
1-3 High pass	$	505	$	785	$	4,273	$	4,855	$	105	$	1,221	$	61,631	$	—	$	73,375
4-6 Pass	44,466		81,764		175,174		278,317		49,333		180,267		1,314,086		2,826		2,126,233
7 Special mention	—		—		—		457		—		6,560		7,999		64		15,080
8-9 Classified	—		—		2,281		3,556		2,061		18,277		3,991		1,056		31,222
Total	$	44,971	$	82,549	$	181,728	$	287,185	$	51,499	$	206,325	$	1,387,707	$	3,946	$	2,245,910
Current YTD period:
Gross charge-offs	$	—	$	—	$	—	$	211	$	—	$	121	$	231	$	—	$	563

Consumer
Internal risk rating:
1-3 High pass	$	—	$	—	$	25	$	21	$	3	$	—	$	1,918	$	—	$	1,967
4-6 Pass	8,903		25,411		68,254		199,872		22,426		99,514		5,535		312		430,227
7 Special mention	—		—		1,119		3,712		103		1,596		—		—		6,530
8-9 Classified	—		—		128		502		43		290		—		15		978
Total	$	8,903	$	25,411	$	69,526	$	204,107	$	22,575	$	101,400	$	7,453	$	327	$	439,702
Current YTD period:
Gross charge-offs	$	—	$	—	$	335	$	643	$	209	$	646	$	—	$	—	$	1,833

Total Loans and Leases
Internal risk rating:
1-3 High pass	$	17,349	$	38,961	$	306,295	$	392,382	$	116,492	$	580,936	$	304,252	$	1,407	$	1,758,074
4-6 Pass	118,200		846,756		7,203,500		6,290,280		1,571,521		3,639,920		2,950,272		171,261		22,791,710
7 Special mention	—		61,994		72,090		131,048		19,147		197,384		69,787		5,059		556,509
8-9 Classified	—		8,724		44,399		78,113		36,971		184,382		13,036		1,104		366,729
Total	$	135,549	$	956,435	$	7,626,284	$	6,891,823	$	1,744,131	$	4,602,622	$	3,337,347	$	178,831	$	25,473,022
Current YTD period:
Gross charge-offs	$	—	$	851	$	1,363	$	1,422	$	230	$	776	$	372	$	—	$	5,014

______________________

(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 Year												Revolving		to Term
December 31, 2023	2023		2022		2021		2020		2019		Prior		Loans		Loans		Total
	(In thousands)
Real Estate Mortgage:
Commercial
Internal risk rating:
1-3 High pass	$	—	$	16,976	$	17,432	$	16,832	$	17,337	$	69,205	$	1	$	—	$	137,783
4-6 Pass	182,236		933,294		814,564		510,952		298,985		1,765,454		76,866		10,937		4,593,288
7 Special mention	—		14,021		32,235		25,485		17,147		129,549		1,250		—		219,687
8-9 Classified	749		—		26,172		439		17,063		29,566		1,750		—		75,739
Total	$	182,985	$	964,291	$	890,403	$	553,708	$	350,532	$	1,993,774	$	79,867	$	10,937	$	5,026,497
Current YTD period:
Gross charge-offs	$	34	$	—	$	—	$	—	$	76	$	14,185	$	—	$	—	$	14,295

Real Estate Mortgage:
Multi-family
Internal risk rating:
1-3 High pass	$	—	$	28,155	$	140,424	$	58,959	$	57,988	$	109,423	$	—	$	—	$	394,949
4-6 Pass	66,143		2,221,235		1,193,052		539,660		564,420		794,599		67,811		—		5,446,920
7 Special mention	—		2,610		17,784		12,201		39,808		35,953		—		—		108,356
8-9 Classified	—		—		17,283		8,576		26,543		22,552		—		—		74,954
Total	$	66,143	$	2,252,000	$	1,368,543	$	619,396	$	688,759	$	962,527	$	67,811	$	—	$	6,025,179
Current YTD period:
Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Real Estate Mortgage:
Other residential
Internal risk rating:
1-3 High pass	$	—	$	—	$	—	$	—	$	—	$	—	$	6,769	$	—	$	6,769
4-6 Pass	188,561		1,824,253		2,812,293		65,230		—		19,518		51,246		87		4,961,188
7 Special mention	—		46,263		7,568		—		—		—		366		—		54,197
8-9 Classified	3,847		18,263		12,908		1,223		—		1,764		65		85		38,155
Total	$	192,408	$	1,888,779	$	2,832,769	$	66,453	$	—	$	21,282	$	58,446	$	172	$	5,060,309
Current YTD period:
Gross charge-offs	$	3,402	$	23,544	$	5,385	$	740	$	—	$	4	$	—	$	—	$	33,075

____________________

(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 Year												Revolving		to Term
December 31, 2023	2023		2022		2021		2020		2019		Prior		Loans		Loans		Total
	(In thousands)
Real Estate Construction
and Land: Commercial
Internal risk rating:
1-3 High pass	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
4-6 Pass	23,916		388,165		214,303		68,833		16,781		27,175		20,412		—		759,585
7 Special mention	—		—		—		—		—		—		—		—		—
8-9 Classified	—		—		—		—		—		—		—		—		—
Total	$	23,916	$	388,165	$	214,303	$	68,833	$	16,781	$	27,175	$	20,412	$	—	$	759,585
Current YTD period:
Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Real Estate Construction
and Land: Residential
Internal risk rating:
1-3 High pass	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
4-6 Pass	64,341		1,185,297		668,083		336,636		—		26,896		115,674		—		2,396,927
7 Special mention	—		—		2,757		—		—		—		—		—		2,757
8-9 Classified	—		—		—		—		—		—		—		—		—
Total	$	64,341	$	1,185,297	$	670,840	$	336,636	$	—	$	26,896	$	115,674	$	—	$	2,399,684
Current YTD period:
Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Commercial: Asset-Based
Internal risk rating:
1-3 High pass	$	32,485	$	237,936	$	223,088	$	39,380	$	119,364	$	254,638	$	89,667	$	—	$	996,558
4-6 Pass	122,064		238,206		132,449		17,823		7,447		25,945		630,073		1,453		1,175,460
7 Special mention	—		101		—		—		—		1		12,394		10		12,506
8-9 Classified	—		—		—		701		—		340		3,520		—		4,561
Total	$	154,549	$	476,243	$	355,537	$	57,904	$	126,811	$	280,924	$	735,654	$	1,463	$	2,189,085
Current YTD period:
Gross charge-offs	$	—	$	—	$	—	$	60	$	—	$	—	$	—	$	150	$	210

Commercial: Venture
Capital
Internal risk rating:
1-3 High pass	$	(84)	$	(7)	$	—	$	1,998	$	—	$	(3)	$	136,339	$	(140)	$	138,103
4-6 Pass	101,038		128,485		113,183		6,473		6,216		622		770,941		74,863		1,201,821
7 Special mention	17,481		10,984		31,928		—		19,986		—		13,260		4,994		98,633
8-9 Classified	—		—		7,808		—		—		—		(3)		—		7,805
Total	$	118,435	$	139,462	$	152,919	$	8,471	$	26,202	$	619	$	920,537	$	79,717	$	1,446,362
Current YTD period:
Gross charge-offs	$	—	$	2,245	$	2,759	$	—	$	—	$	—	$	9	$	—	$	5,013

____________________

(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 Year												Revolving		to Term
December 31, 2023	2023		2022		2021		2020		2019		Prior		Loans		Loans		Total
	(In thousands)
Commercial: Other
Commercial
Internal risk rating:
1-3 High pass	$	815	$	4,350	$	5,216	$	130	$	29	$	2,148	$	66,827	$	—	$	79,515
4-6 Pass	98,643		201,215		285,249		50,582		39,951		158,810		1,176,946		2,921		2,014,317
7 Special mention	1,748		1,306		442		554		540		5,071		254		69		9,984
8-9 Classified	—		912		4,011		1,706		1,299		13,768		3,257		1,091		26,044
Total	$	101,206	$	207,783	$	294,918	$	52,972	$	41,819	$	179,797	$	1,247,284	$	4,081	$	2,129,860
Current YTD period:
Gross charge-offs	$	—	$	6,867	$	24	$	—	$	28	$	75	$	1,013	$	431	$	8,438

Consumer
Internal risk rating:
1-3 High pass	$	—	$	27	$	22	$	4	$	—	$	—	$	1,304	$	—	$	1,357
4-6 Pass	26,468		71,523		207,751		23,390		42,338		63,919		7,684		345		443,418
7 Special mention	—		1,286		4,224		371		1,100		181		30		—		7,192
8-9 Classified	—		281		42		135		198		486		1		16		1,159
Total	$	26,468	$	73,117	$	212,039	$	23,900	$	43,636	$	64,586	$	9,019	$	361	$	453,126
Current YTD period:
Gross charge-offs	$	—	$	432	$	540	$	76	$	255	$	1,081	$	1	$	12	$	2,397

Total Loans and Leases
Internal risk rating:
1-3 High pass	$	33,216	$	287,437	$	386,182	$	117,303	$	194,718	$	435,411	$	300,907	$	(140)	$	1,755,034
4-6 Pass	873,410		7,191,673		6,440,927		1,619,579		976,138		2,882,938		2,917,653		90,606		22,992,924
7 Special mention	19,229		76,571		96,938		38,611		78,581		170,755		27,554		5,073		513,312
8-9 Classified	4,596		19,456		68,224		12,780		45,103		68,476		8,590		1,192		228,417
Total	$	930,451	$	7,575,137	$	6,992,271	$	1,788,273	$	1,294,540	$	3,557,580	$	3,254,704	$	96,731	$	25,489,687
Current YTD period:
Gross charge-offs	$	3,436	$	33,088	$	8,708	$	876	$	359	$	15,345	$	1,023	$	593	$	63,428

____________________

(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" ("ASU 2022-02"), 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, 2024
	Loan Modifications
	Balances (Amortized Cost Basis) at
	March 31, 2024



	Term Extension
			% of
			Loan
			Portfolio
	Balance		Class
	(Dollars in thousands)
Real estate mortgage:
Commercial	$	1,250	—	%

Other residential	1,837		—	%



Commercial:




Other commercial	2,827		0.1	%

Total	$	5,914


	Three Months Ended March 31, 2023
	Loan Modifications
	Balances (Amortized Cost Basis) at
	March 31, 2023
									Combination - Term
									Extension and				Combination - Term
									Interest Rate				Extension and				Total Loan
	Term Extension				Payment Delay				Reduction				Payment Delay				Modifications
			% of				% of				% of				% of				% of
			Loan				Loan				Loan				Loan				Loan
			Portfolio				Portfolio				Portfolio				Portfolio				Portfolio
	Balance		Class		Balance		Class		Balance		Class		Balance		Class		Balance		Class
	(Dollars in thousands)
Real estate mortgage:


Other residential	$	12,716	0.2	%	$	—	—	%	$	—	—	%	$	—	—	%	$	12,716	0.2	%




Commercial:

Venture
capital	—		—	%	—		—	%	—		—	%	613		—	%	613		—	%
Other commercial	2,057		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, 2024

Term Extension - Financial Effect

Real estate mortgage:

Commercial

Extended maturity by a weighted average 5 months.

Other residential

Extended maturity by a weighted average 12 months.

Commercial:

Other commercial

Extended maturity by a weighted average 3 months.

Three Months Ended March 31, 2023

Term Extension - Financial Effect

Real estate mortgage:

Other residential

Extended maturity by a weighted average seven months.

Commercial:

Other commercial

Extended maturity by a weighted average 12 months.

Three Months Ended March 31, 2023

Payment Delay - Financial Effect

Commercial:

Other commercial

Provided 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 - Financial Effect

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 - Financial Effect

Commercial:

Venture capital

Extended 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 past 12 months with related amortized cost balances as of the date indicated:


	Payment Status (Amortized Cost Basis) at
	March 31, 2024
			30-89 Days		90 or More Days
	Current		Past Due		Past Due		Total
	(In thousands)
Real estate mortgage:
Commercial	$	2,250	$	—	$	—	$	2,250

Other residential	2,953		90		1,715		4,758



Commercial:


Other commercial	4,910		—		—		4,910
Consumer	13		—		—		13
Total	$	10,126	$	90	$	1,715	$	11,931

During the three months ended March 31, 2024, there were $2.2 million of other residential real estate loans modified in the form of a term extension during 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 7. 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,
	2024		2023
	(In thousands)
Component of leases receivable income:
Interest income on net investments in leases	$	4,735	$	3,749

The following table presents the components of leases receivable as of the dates indicated:


	March 31, 2024		December 31, 2023
	(In thousands)
Net Investment in Direct Financing Leases:
Lease payments receivable	$	249,900	$	249,223
Unguaranteed residual assets	25,915		25,488
Deferred costs and other	2,602		2,715
Aggregate net investment in leases	$	278,417	$	277,426

The following table presents maturities of leases receivable as of the date indicated:


	March 31, 2024
	(In thousands)
Period ending December 31,
2024	$	65,235
2025	74,910
2026	56,555
2027	37,965
2028	22,188
Thereafter	24,315
Total undiscounted cash flows	281,168
Less: Unearned income	(31,268)
Present value of lease payments	$	249,900

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, 2024
			Real Estate
	Real Estate		Construction
	Mortgage		and Land		Commercial		Consumer		Total
	(In thousands)
Allowance for Loan and Lease Losses:
Balance, beginning of period	$	186,827	$	33,830	$	45,156	$	15,874	$	281,687

Charge-offs	(2,477)		—		(704)		(1,833)		(5,014)
Recoveries	891		—		2,869		70		3,830
Net (charge-offs) recoveries	(1,586)		—		2,165		(1,763)		(1,184)
Provision	13,033		(3,819)		(267)		2,053		11,000
Balance, end of period	$	198,274	$	30,011	$	47,054	$	16,164	$	291,503

Ending Allowance by
Evaluation Methodology:
Individually evaluated	$	8,336	$	—	$	7	$	—	$	8,343
Collectively evaluated	$	189,938	$	30,011	$	47,047	$	16,164	$	283,160

Ending Loans and Leases by
Evaluation Methodology:
Individually evaluated	$	129,116	$	—	$	14,919	$	4	$	144,039
Collectively evaluated	15,838,283		3,245,354		5,805,648		439,698		25,328,983
Ending balance	$	15,967,399	$	3,245,354	$	5,820,567	$	439,702	$	25,473,022
















	Three Months Ended March 31, 2023
			Real Estate
	Real Estate		Construction
	Mortgage		and Land		Commercial		Consumer		Total
	(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)
Recoveries	200		—		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

The allowance for loan and lease losses increased by $9.8 million in the first quarter of 2024 to $291.5 million due primarily to an $11.0 million provision, offset partially by net charge-offs of $1.2 million. 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, 2024								December 31, 2023
	Real		Business						Real		Business
	Property		Assets		Consumer		Total		Property		Assets		Total
	(In thousands)
Real estate mortgage	$	130,567	$	—	$	—	$	130,567	$	47,952	$	—	$	47,952

Commercial	—		3,153		—		3,153		—		3,616		3,616
Consumer	—		—		4		4		—		—		—
Total	$	130,567	$	3,153	$	4	$	133,724	$	47,952	$	3,616	$	51,568

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, 2024
	Allowance for		Reserve for		Total
	Loan and		Unfunded Loan		Allowance for
	Lease Losses		Commitments		Credit Losses
	(In thousands)
Balance, beginning of period	$	281,687	$	29,571	$	311,258
Charge-offs	(5,014)		—		(5,014)
Recoveries	3,830		—		3,830
Net charge-offs	(1,184)		—		(1,184)
Provision	11,000		(1,000)		10,000
Balance, end of period	$	291,503	$	28,571	$	320,074
















	Three Months Ended
	March 31, 2023
	Allowance for		Reserve for		Total
	Loan and		Unfunded Loan		Allowance for
	Lease Losses		Commitments		Credit Losses
	(In thousands)
Balance, beginning of period	$	200,732	$	91,071	$	291,803
Charge-offs	(10,397)		—		(10,397)
Recoveries	1,220		—		1,220
Net charge-offs	(9,177)		—		(9,177)
Provision	18,500		(15,500)		3,000
Balance, end of period	$	210,055	$	75,571	$	285,626