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Loan and Lease Receivables | 9 Months Ended
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Sep. 30, 2020
Receivables [Abstract] |
Loan and Lease Receivables | Note 5—Loan and Lease Receivables Outstanding loan and lease receivables as of the dates shown were categorized as follows:
|  | September 30, |  |  | December 31, |
|  | 2020 |  |  | 2019 |
Commercial real estate |  | $ | 1,345,060 |  |  | $ | 1,275,058 |
Residential real estate |  |  | 632,890 |  |  |  | 711,499 |
Construction, land development, and other land |  |  | 239,694 |  |  |  | 279,403 |
Commercial and industrial |  |  | 1,326,059 |  |  |  | 1,330,418 |
Paycheck Protection Program ("PPP") |  |  | 635,378 |  |  |  | — |
Installment and other |  |  | 3,072 |  |  |  | 6,484 |
Lease financing receivables |  |  | 196,977 |  |  |  | 177,774 |
Total loans and leases |  |  | 4,379,130 |  |  |  | 3,780,636 |
Net unamortized deferred fees and costs |  |  | (7,725 | ) |  |  | 2,289 |
Initial direct costs |  |  | 3,112 |  |  |  | 2,736 |
Allowance for loan and lease losses |  |  | (61,258 | ) |  |  | (31,936 | )
Net loans and leases |  | $ | 4,313,259 |  |  | $ | 3,753,725 |
|  | September 30, |  |  | December 31, |
|  | 2020 |  |  | 2019 |
Lease financing receivables |  |  |  |  |  |  |  |
Net minimum lease payments |  | $ | 209,606 |  |  | $ | 193,359 |
Unguaranteed residual values |  |  | 5,207 |  |  |  | 1,347 |
Unearned income |  |  | (17,836 | ) |  |  | (16,932 | )
Total lease financing receivables |  |  | 196,977 |  |  |  | 177,774 |
Initial direct costs |  |  | 3,112 |  |  |  | 2,736 |
Lease financial receivables before allowance for lease losses |  | $ | 200,089 |  |  | $ | 180,510 |
Total loans and leases consist of originated loans and leases, acquired impaired loans and acquired non-impaired loans and leases. At September 30, 2020 and December 31, 2019, total loans and leases included the guaranteed amount of U.S. government guaranteed loans of $765.7 million and $119.8 million, respectively. At September 30, 2020 and December 31, 2019, the discount on the unguaranteed portion of U.S. government guaranteed loans was $25.7 million and $23.1 million, respectively, which are included in total loans and leases. At September 30, 2020 and December 31, 2019, installment and other loans included overdraft deposits of $301,000 and $852,000, respectively, which were reclassified as loans. At September 30, 2020 and December 31, 2019, loans and leases and loans held for sale pledged as security for borrowings were $2.4 billion and $1.8 billion, respectively. The minimum annual lease payments for lease financing receivables as of September 30, 2020 are summarized as follows:
|  | Minimum Lease Payments |
2020 |  | $ | 18,955 |
2021 |  |  | 73,625 |
2022 |  |  | 55,426 |
2023 |  |  | 35,413 |
2024 |  |  | 18,775 |
Thereafter |  |  | 7,412 |
Total |  | $ | 209,606 |
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 September 30, 2020 and December 31, 2019:
September 30, 2020 |  | Originated |  |  | Acquired Impaired |  |  | Acquired Non-Impaired |  |  | Total |
Commercial real estate |  | $ | 919,862 |  |  | $ | 117,114 |  |  | $ | 310,879 |  |  | $ | 1,347,855 |
Residential real estate |  |  | 458,364 |  |  |  | 84,197 |  |  |  | 90,835 |  |  |  | 633,396 |
Construction, land development, and other land |  |  | 234,017 |  |  |  | 4,804 |  |  |  | 213 |  |  |  | 239,034 |
Commercial and industrial |  |  | 1,214,099 |  |  |  | 10,489 |  |  |  | 104,221 |  |  |  | 1,328,809 |
Paycheck Protection Program |  |  | 622,191 |  |  |  | — |  |  |  | — |  |  |  | 622,191 |
Installment and other |  |  | 2,346 |  |  |  | 214 |  |  |  | 583 |  |  |  | 3,143 |
Lease financing receivables |  |  | 185,700 |  |  |  | — |  |  |  | 14,389 |  |  |  | 200,089 |
Total loans and leases |  | $ | 3,636,579 |  |  | $ | 216,818 |  |  | $ | 521,120 |  |  | $ | 4,374,517 |
December 31, 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 |
Acquired impaired loans—As part of the Oak Park River Forest acquisition, the Bank acquired impaired loans in the amount of $52.9 million. Refer to Note 3—Acquisition for additional information regarding the transaction. 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 the acquisition date of April 30, 2019:
Undiscounted contractual cash flows |  | $ | 74,092 |
Undiscounted cash flows not expected to be collected (non-accretable difference) |  |  | (11,401 | )
Undiscounted cash flows expected to be collected |  |  | 62,691 |
Accretable yield at acquisition |  |  | (9,764 | )
Estimated fair value of impaired loans acquired at acquisition |  | $ | 52,927 |
The unpaid principal 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 $5.0 million and $2.8 million, at September 30, 2020 and December 31, 2019, respectively.
|  | September 30, 2020 |  |  | December 31, 2019 |
|  | Unpaid Principal Balance |  |  | Carrying Value |  |  | Unpaid Principal Balance |  |  | Carrying Value |
Commercial real estate |  | $ | 163,146 |  |  | $ | 117,114 |  |  | $ | 189,969 |  |  | $ | 135,914 |
Residential real estate |  |  | 132,232 |  |  |  | 84,197 |  |  |  | 151,641 |  |  |  | 100,223 |
Construction, land development, and other land |  |  | 14,085 |  |  |  | 4,804 |  |  |  | 14,841 |  |  |  | 5,373 |
Commercial and industrial |  |  | 16,287 |  |  |  | 10,489 |  |  |  | 23,330 |  |  |  | 16,909 |
Installment and other |  |  | 934 |  |  |  | 214 |  |  |  | 1,099 |  |  |  | 249 |
Total acquired impaired loans |  | $ | 326,684 |  |  | $ | 216,818 |  |  | $ | 380,880 |  |  | $ | 258,668 |
The following table summarizes the changes in accretable yield for acquired impaired loans for the three and nine months ended September 30, 2020 and 2019:
|  | Three Months Ended |  |  | Nine Months Ended |
|  | September 30, |  |  | September 30, |
|  | 2020 |  |  | 2019 |  |  | 2020 |  |  | 2019 |
Beginning balance |  | $ | 31,868 |  |  | $ | 46,538 |  |  | $ | 40,009 |  |  | $ | 37,115 |
Additions |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 8,501 |
Accretion to interest income |  |  | (5,763 | ) |  |  | (7,703 | ) |  |  | (15,420 | ) |  |  | (17,772 | )
Reclassification from nonaccretable difference, net |  |  | 5,727 |  |  |  | 5,153 |  |  |  | 7,243 |  |  |  | 16,144 |
Ending balance |  | $ | 31,832 |  |  | $ | 43,988 |  |  | $ | 31,832 |  |  | $ | 43,988 |
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 in 2019. Refer to Note 3—Acquisition for additional information regarding the transaction. The unpaid principal balance and carrying value for acquired non-impaired loans and leases at September 30, 2020 and December 31, 2019 were as follows:
|  | September 30, 2020 |  |  | December 31, 2019 |
|  | Unpaid Principal Balance |  |  | Carrying Value |  |  | Unpaid Principal Balance |  |  | Carrying Value |
Commercial real estate |  | $ | 318,725 |  |  | $ | 310,879 |  |  | $ | 356,787 |  |  | $ | 348,365 |
Residential real estate |  |  | 91,947 |  |  |  | 90,835 |  |  |  | 130,412 |  |  |  | 128,527 |
Construction, land development, and other land |  |  | 280 |  |  |  | 213 |  |  |  | 38,416 |  |  |  | 37,490 |
Commercial and industrial |  |  | 107,558 |  |  |  | 104,221 |  |  |  | 159,599 |  |  |  | 153,660 |
Installment and other |  |  | 602 |  |  |  | 583 |  |  |  | 971 |  |  |  | 944 |
Lease financing receivables |  |  | 15,930 |  |  |  | 14,389 |  |  |  | 23,976 |  |  |  | 22,355 |
Total acquired non-impaired loans and leases |  | $ | 535,042 |  |  | $ | 521,120 |  |  | $ | 710,161 |  |  | $ | 691,341 |

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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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