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Loans and Lease Receivables | 12 Months Ended
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Dec. 31, 2019
Receivables [Abstract] |
Loans and Lease Receivables | Note 5—Loans and Lease Receivables Outstanding loan and lease receivables as of December 31, 2019 and 2018 were categorized as follows:
|  | 2019 |  |  | 2018 |
Commercial real estate |  | $ | 1,275,058 |  |  | $ | 1,261,594 |
Residential real estate |  |  | 711,499 |  |  |  | 704,899 |
Construction, land development, and other land |  |  | 279,403 |  |  |  | 186,258 |
Commercial and industrial |  |  | 1,330,418 |  |  |  | 1,145,240 |
Installment and other |  |  | 6,484 |  |  |  | 13,675 |
Lease financing receivables |  |  | 177,774 |  |  |  | 187,797 |
Total loans and leases |  |  | 3,780,636 |  |  |  | 3,499,463 |
Net unamortized deferred fees and costs |  |  | 2,289 |  |  |  | (1,293 | )
Initial direct costs |  |  | 2,736 |  |  |  | 3,456 |
Allowance for loan and lease losses |  |  | (31,936 | ) |  |  | (25,201 | )
Net loans and leases |  | $ | 3,753,725 |  |  | $ | 3,476,425 |
|  | 2019 |  |  | 2018 |
Lease financing receivables |  |  |  |  |  |  |  |
Net minimum lease payments |  | $ | 193,359 |  |  | $ | 204,646 |
Unguaranteed residual values |  |  | 1,347 |  |  |  | 1,535 |
Unearned income |  |  | (16,932 | ) |  |  | (18,384 | )
Total lease financing receivables |  |  | 177,774 |  |  |  | 187,797 |
Initial direct costs |  |  | 2,736 |  |  |  | 3,456 |
Lease financial receivables before allowance for lease losses |  | $ | 180,510 |  |  | $ | 191,253 |
Total loans and leases consist of originated loans and leases, acquired impaired loans, and acquired non-impaired loans and leases. At December 31, 2019 and 2018, total loans and leases included the guaranteed amount of U.S. government guaranteed loans of $119.8 million and $108.7 million, respectively. At December 31, 2019 and 2018, installment and other loans included overdraft deposits of $852,000 and $1.7 million, respectively, which were reclassified as loans. At December 31, 2019 and 2018, loans and loans held for sale pledged as security for borrowings were $1.8 billion and $1.4 billion, respectively. The minimum annual lease payments for lease financing receivables as of December 31, 2019 are summarized as follows:
|  | Minimum Lease Payments |
2020 |  | $ | 71,820 |
2021 |  |  | 55,396 |
2022 |  |  | 37,696 |
2023 |  |  | 20,466 |
2024 |  |  | 7,475 |
Thereafter |  |  | 506 |
Total |  | $ | 193,359 |
Note 5—Loans and Lease Receivables (continued) Originated loans and leases represent originations excluding loans initially acquired in a business combination. However, once an acquired non-impaired loan reaches its maturity date, and is re-underwritten and renewed, it is internally classified as an originated loan. Acquired impaired loans are loans acquired from a business combination with evidence of credit quality deterioration and are accounted for under ASC Topic 310-30. Acquired non-impaired loans and leases represent loans and leases acquired from a business combination without more than insignificant evidence of credit quality deterioration and are accounted for under ASC Topic 310-20. Acquired leases and revolving loans having evidence of credit quality deterioration do not qualify to be accounted for as acquired impaired loans and are accounted for under ASC Topic 310-20. The following tables summarize the balances for each respective loan and lease category as of December 31, 2019 and 2018:
2019 |  | Originated |  |  | Acquired Impaired |  |  | Acquired Non- Impaired |  |  | Total |
Commercial real estate |  | $ | 792,263 |  |  | $ | 135,914 |  |  | $ | 348,365 |  |  | $ | 1,276,542 |
Residential real estate |  |  | 483,072 |  |  |  | 100,223 |  |  |  | 128,527 |  |  |  | 711,822 |
Construction, land development, and other land |  |  | 235,794 |  |  |  | 5,373 |  |  |  | 37,490 |  |  |  | 278,657 |
Commercial and industrial |  |  | 1,160,996 |  |  |  | 16,909 |  |  |  | 153,660 |  |  |  | 1,331,565 |
Installment and other |  |  | 5,372 |  |  |  | 249 |  |  |  | 944 |  |  |  | 6,565 |
Lease financing receivables |  |  | 158,155 |  |  |  | — |  |  |  | 22,355 |  |  |  | 180,510 |
Total loans and leases |  | $ | 2,835,652 |  |  | $ | 258,668 |  |  | $ | 691,341 |  |  | $ | 3,785,661 |
2018 |  | Originated |  |  | Acquired Impaired |  |  | Acquired Non- Impaired |  |  | Total |
Commercial real estate |  | $ | 652,234 |  |  | $ | 146,808 |  |  | $ | 462,565 |  |  | $ | 1,261,607 |
Residential real estate |  |  | 466,309 |  |  |  | 113,934 |  |  |  | 124,659 |  |  |  | 704,902 |
Construction, land development, and other land |  |  | 144,128 |  |  |  | 3,779 |  |  |  | 37,442 |  |  |  | 185,349 |
Commercial and industrial |  |  | 803,508 |  |  |  | 12,617 |  |  |  | 328,672 |  |  |  | 1,144,797 |
Installment and other |  |  | 11,718 |  |  |  | 404 |  |  |  | 1,596 |  |  |  | 13,718 |
Lease financing receivables |  |  | 159,901 |  |  |  | — |  |  |  | 31,352 |  |  |  | 191,253 |
Total loans and leases |  | $ | 2,237,798 |  |  | $ | 277,542 |  |  | $ | 986,286 |  |  | $ | 3,501,626 |
Acquired impaired loans—As part of the Oak Park River Forest acquisition, the Bank acquired impaired loans in the amount of $52.9 million. As part of the First Evanston acquisition, the Bank acquired impaired loans that are accounted for under ASC 310‑30 in the amount of $25.0 million. Refer to Note 3—Acquisition of a Business for additional information regarding these transactions. There were no other acquired impaired loans purchased during 2019 or 2018. The following table presents a reconciliation of the undiscounted contractual cash flows, non‑accretable difference, accretable yield, and fair value of acquired impaired loans as of May 31, 2018 (First Evanston) and April 30, 2019 (Oak Park River Forest):
|  | Preliminary Estimates April 30, 2019 |  |  | May 31, 2018 |
|  | Oak Park River Forest |  |  | First Evanston |
Undiscounted contractual cash flows |  | $ | 74,092 |  |  | $ | 33,594 |
Undiscounted cash flows not expected to be collected (non-accretable difference) |  |  | (11,401 | ) |  |  | (5,003 | )
Undiscounted cash flows expected to be collected |  |  | 62,691 |  |  |  | 28,591 |
Accretable yield at acquisition |  |  | (9,764 | ) |  |  | (3,566 | )
Estimated fair value of impaired loans acquired at acquisition |  | $ | 52,927 |  |  | $ | 25,025 |
Note 5—Loans and Lease Receivables (continued) The outstanding balance and carrying amount of all acquired impaired loans are summarized below. The balances do not include an allowance for loan and lease losses of $2.8 million and $2.7 million, at December 31, 2019 and 2018, respectively.
|  | 2019 |  |  | 2018 |
|  | Outstanding Balance |  |  | Carrying Value |  |  | Outstanding Balance |  |  | Carrying Value |
Commercial real estate |  | $ | 189,969 |  |  | $ | 135,914 |  |  | $ | 216,137 |  |  | $ | 146,808 |
Residential real estate |  |  | 151,641 |  |  |  | 100,223 |  |  |  | 173,962 |  |  |  | 113,934 |
Construction, land development, and other land |  |  | 14,841 |  |  |  | 5,373 |  |  |  | 11,962 |  |  |  | 3,779 |
Commercial and industrial |  |  | 23,330 |  |  |  | 16,909 |  |  |  | 24,972 |  |  |  | 12,617 |
Installment and other |  |  | 1,099 |  |  |  | 249 |  |  |  | 1,735 |  |  |  | 404 |
Total acquired impaired loans |  | $ | 380,880 |  |  | $ | 258,668 |  |  | $ | 428,768 |  |  | $ | 277,542 |
The following table summarizes the changes in accretable yield for acquired impaired loans for the years ended December 31, 2019, 2018, and 2017:
|  | 2019 |  |  | 2018 |  |  | 2017 |
Beginning balance |  | $ | 37,115 |  |  | $ | 36,446 |  |  | $ | 36,868 |
Additions |  |  | 9,764 |  |  |  | 3,566 |  |  |  | — |
Accretion to interest income |  |  | (24,535 | ) |  |  | (23,982 | ) |  |  | (24,597 | )
Reclassification from nonaccretable difference |  |  | 17,665 |  |  |  | 21,085 |  |  |  | 24,175 |
Ending balance |  | $ | 40,009 |  |  | $ | 37,115 |  |  | $ | 36,446 |
Acquired non‑impaired loans and leases— The Company acquired non-impaired loans as part of the Oak Park River Forest acquisition in the amount of $204.5 million. The Company acquired non‑impaired loans as part of the First Evanston acquisition in the amount of $891.0 million. Refer to Note 3—Acquisition of a Business for additional information regarding these transactions. The unpaid principal balance and carrying value for acquired non‑impaired loans and leases at December 31, 2019 and 2018 were as follows:
|  | 2019 |  |  | 2018 |
|  | Unpaid Principal Balance |  |  | Carrying Value |  |  | Unpaid Principal Balance |  |  | Carrying Value |
Commercial real estate |  | $ | 356,787 |  |  | $ | 348,365 |  |  | $ | 473,262 |  |  | $ | 462,565 |
Residential real estate |  |  | 130,412 |  |  |  | 128,527 |  |  |  | 127,478 |  |  |  | 124,659 |
Construction, land development, and other land |  |  | 38,416 |  |  |  | 37,490 |  |  |  | 38,494 |  |  |  | 37,442 |
Commercial and industrial |  |  | 159,599 |  |  |  | 153,660 |  |  |  | 344,879 |  |  |  | 328,672 |
Installment and other |  |  | 971 |  |  |  | 944 |  |  |  | 1,831 |  |  |  | 1,596 |
Lease financing receivables |  |  | 23,976 |  |  |  | 22,355 |  |  |  | 32,977 |  |  |  | 31,352 |
Total acquired non-impaired loans and leases |  | $ | 710,161 |  |  | $ | 691,341 |  |  | $ | 1,018,921 |  |  | $ | 986,286 |

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- Definition The entire disclosure for claims held for amounts due a entity, excluding financing receivables. Examples include, but are not limited to, trade accounts receivables, notes receivables, loans receivables. Includes disclosure for allowance for credit losses. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -SubTopic 10 -URI http://asc.fasb.org/subtopic&trid=2196772 + Details
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