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 loans, net of purchase discounts and premiums. Deferred fees and costs and purchase discounts and premiums on acquired non-impaired 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. Prior to January 1, 2018, our loan and lease portfolio consisted of Non-PCI loans and leases and PCI loans. Non-PCI loans and leases were those we originated or those we acquired that were not credit impaired at the dates of acquisition. PCI loans were purchased loans for which there was, at the acquisition date, evidence of credit deterioration since their origination and for which it was probable that collection of all contractually required payments was unlikely. As our gross PCI loan portfolio represented less than 0.4% of total loans as of the end of 2017, beginning in 2018 the PCI loans were accounted for as Non-PCI loans. Accordingly, in the credit quality tables below under " Loans and leases held for investment, " amounts related to the 2018 period are for total loans and leases, and amounts related to the 2017 period are for Non-PCI loans and leases. 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: June 30, 2018 December 31, 2017 Total Non-PCI Total Loans Loans PCI Loans and Leases and Leases Loans and Leases (In thousands) Real estate mortgage $ 7,581,962 $ 7,815,355 $ 53,658 $ 7,869,013 Real estate construction and land 1,896,969 1,611,287 — 1,611,287 Commercial 7,089,887 7,137,978 4,158 7,142,136 Consumer 378,684 409,551 234 409,785 Gross loans and leases held for investment 16,947,502 16,974,171 58,050 17,032,221 Deferred fees, net (62,310 ) (59,464 ) (14 ) (59,478 ) Loans and leases held for investment, net of deferred fees 16,885,192 16,914,707 58,036 16,972,743 Allowance for loan and lease losses (132,139 ) (133,012 ) (6,444 ) (139,456 ) Total loans and leases held for investment, net $ 16,753,053 $ 16,781,695 $ 51,592 $ 16,833,287 The following tables present an aging analysis of our loans and leases held for investment, net of deferred fees, by portfolio segment and class as of the dates indicated: June 30, 2018 30 - 89 90 or More Days Days Total Past Due Past Due Past Due Current Total (In thousands) Real estate mortgage: Commercial $ 3,497 $ 10,377 $ 13,874 $ 4,996,806 $ 5,010,680 Residential 3,362 445 3,807 2,551,887 2,555,694 Total real estate mortgage 6,859 10,822 17,681 7,548,693 7,566,374 Real estate construction and land: Commercial — — — 831,462 831,462 Residential 5,969 — 5,969 1,036,595 1,042,564 Total real estate construction and land 5,969 — 5,969 1,868,057 1,874,026 Commercial: Asset-based — 662 662 3,183,638 3,184,300 Venture capital — 1,534 1,534 2,006,671 2,008,205 Other commercial 2,363 3,876 6,239 1,867,368 1,873,607 Total commercial 2,363 6,072 8,435 7,057,677 7,066,112 Consumer 75 28 103 378,577 378,680 Total $ 15,266 $ 16,922 $ 32,188 $ 16,853,004 $ 16,885,192 December 31, 2017 30 - 89 90 or More Days Days Total Past Due Past Due Past Due Current Total (In thousands) Real estate mortgage: Commercial $ 29,070 $ 9,107 $ 38,177 $ 5,323,310 $ 5,361,487 Residential 6,999 2,022 9,021 2,428,483 2,437,504 Total real estate mortgage 36,069 11,129 47,198 7,751,793 7,798,991 Real estate construction and land: Commercial — — — 769,075 769,075 Residential 2,081 — 2,081 820,073 822,154 Total real estate construction and land 2,081 — 2,081 1,589,148 1,591,229 Commercial: Asset-based 344 690 1,034 2,923,837 2,924,871 Venture capital 6,533 760 7,293 2,115,418 2,122,711 Other commercial 2,846 1,586 4,432 2,062,906 2,067,338 Total commercial 9,723 3,036 12,759 7,102,161 7,114,920 Consumer 562 — 562 409,005 409,567 Total (1) $ 48,435 $ 14,165 $ 62,600 $ 16,852,107 $ 16,914,707 ________________________ (1) Excludes loans held for sale carried at lower of cost or fair value and PCI loans. 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 portfolio segment and class as of the dates indicated: June 30, 2018 December 31, 2017 (1) Nonaccrual Performing Total Nonaccrual Performing Total (In thousands) Real estate mortgage: Commercial $ 33,105 $ 4,977,575 $ 5,010,680 $ 65,563 $ 5,295,924 $ 5,361,487 Residential 3,527 2,552,167 2,555,694 3,350 2,434,154 2,437,504 Total real estate mortgage 36,632 7,529,742 7,566,374 68,913 7,730,078 7,798,991 Real estate construction and land: Commercial — 831,462 831,462 — 769,075 769,075 Residential 10,450 1,032,114 1,042,564 — 822,154 822,154 Total real estate construction and land 10,450 1,863,576 1,874,026 — 1,591,229 1,591,229 Commercial: Asset-based 29,677 3,154,623 3,184,300 33,553 2,891,318 2,924,871 Venture capital 27,940 1,980,265 2,008,205 29,424 2,093,287 2,122,711 Other commercial 8,782 1,864,825 1,873,607 23,874 2,043,464 2,067,338 Total commercial 66,399 6,999,713 7,066,112 86,851 7,028,069 7,114,920 Consumer 264 378,416 378,680 20 409,547 409,567 Total $ 113,745 $ 16,771,447 $ 16,885,192 $ 155,784 $ 16,758,923 $ 16,914,707 ________________________ (1) Excludes loans held for sale carried at lower of cost or fair value and PCI loans. At June 30, 2018 , nonaccrual loans and leases totaled $113.7 million and included $16.9 million of loans and leases 90 or more days past due, $3.4 million of loans and leases 30 to 89 days past due, and $93.4 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. Nonaccrual loans and leases totaled $155.8 million at December 31, 2017 , including $14.2 million of the loans and leases 90 or more days past due, $3.2 million of loans and leases 30 to 89 days past due, and $138.4 million of current loans and leases that were placed on nonaccrual status based on management’s judgment regarding their collectability. As of June 30, 2018 , our ten largest loan relationships on nonaccrual status had an aggregate carrying value of $81.5 million and represented 71.6% of total nonaccrual loans and leases. The following table presents the credit risk rating categories for loans and leases held for investment, net of deferred fees, by 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. June 30, 2018 Classified Special Mention Pass Total (In thousands) Real estate mortgage: Commercial $ 71,030 $ 243,045 $ 4,696,605 $ 5,010,680 Residential 11,453 2,167 2,542,074 2,555,694 Total real estate mortgage 82,483 245,212 7,238,679 7,566,374 Real estate construction and land: Commercial 448 3,807 827,207 831,462 Residential 10,450 23,032 1,009,082 1,042,564 Total real estate construction and land 10,898 26,839 1,836,289 1,874,026 Commercial: Asset-based 35,429 67,628 3,081,243 3,184,300 Venture capital 54,219 99,485 1,854,501 2,008,205 Other commercial 52,829 66,615 1,754,163 1,873,607 Total commercial 142,477 233,728 6,689,907 7,066,112 Consumer 434 1,069 377,177 378,680 Total $ 236,292 $ 506,848 $ 16,142,052 $ 16,885,192 December 31, 2017 (1) Classified Special Mention Pass Total (In thousands) Real estate mortgage: Commercial $ 93,795 $ 122,488 $ 5,145,204 $ 5,361,487 Residential 8,425 4,582 2,424,497 2,437,504 Total real estate mortgage 102,220 127,070 7,569,701 7,798,991 Real estate construction and land: Commercial — — 769,075 769,075 Residential — 619 821,535 822,154 Total real estate construction and land — 619 1,590,610 1,591,229 Commercial: Asset-based 51,000 37,256 2,836,615 2,924,871 Venture capital 49,671 114,210 1,958,830 2,122,711 Other commercial 75,251 21,883 1,970,204 2,067,338 Total commercial 175,922 173,349 6,765,649 7,114,920 Consumer 263 1,130 408,174 409,567 Total $ 278,405 $ 302,168 $ 16,334,134 $ 16,914,707 ________________________ (1) Excludes loans held for sale carried at lower of cost or fair value and PCI loans. In addition to our internal risk rating process, our federal and state banking regulators, as an integral part of their examination process, periodically review the Company’s loan and lease risk rating classifications. Our regulators may require the Company to recognize rating downgrades based on their judgments related to information available to them at the time of their examinations. Risk rating downgrades generally result in increases in the provisions for credit losses and the allowance for credit losses. Nonaccrual loans and leases and performing TDRs are considered impaired for reporting purposes. TDRs are a result of rate reductions, term extensions, fee concessions, and debt forgiveness, or a combination thereof. The following table presents the composition of our impaired loans and leases held for investment, net of deferred fees, by portfolio segment as of the dates indicated: June 30, 2018 December 31, 2017 (1) Total Total Nonaccrual Impaired Nonaccrual Impaired Loans Loans Loans Loans and Performing and and Performing and Leases TDRs Leases Leases TDRs Leases (In thousands) Real estate mortgage $ 36,632 $ 50,500 $ 87,132 $ 68,913 $ 47,560 $ 116,473 Real estate construction and land 10,450 5,549 15,999 — 5,690 5,690 Commercial 66,399 1,982 68,381 86,851 3,488 90,339 Consumer 264 117 381 20 100 120 Total $ 113,745 $ 58,148 $ 171,893 $ 155,784 $ 56,838 $ 212,622 ________________________ (1) Excludes loans held for sale carried at lower of cost or fair value and PCI loans. The following tables present information regarding our impaired loans and leases held for investment, net of deferred fees, by portfolio segment and class as of and for the dates indicated: June 30, 2018 December 31, 2017 (1) Unpaid Unpaid Recorded Principal Related Recorded Principal Related Impaired Loans and Leases Investment Balance Allowance Investment Balance Allowance (In thousands) With An Allowance Recorded: Real estate mortgage: Commercial $ 7,786 $ 7,687 $ 248 $ 15,750 $ 16,548 $ 628 Residential 2,419 2,424 224 2,787 2,957 342 Commercial: Venture capital 26,181 27,429 7,120 16,565 17,203 4,267 Other commercial 1,360 1,360 1,360 20,404 29,951 8,368 Consumer — — — 100 100 16 With No Related Allowance Recorded: Real estate mortgage: Commercial $ 68,610 $ 88,748 $ 93,827 $ 105,923 Residential 8,317 10,845 4,109 4,481 Real estate construction and land: Commercial 5,549 5,552 5,690 5,689 Residential 10,450 11,074 — — Commercial: Asset-based 29,677 56,650 33,553 54,911 Venture capital 2,800 28,496 14,534 40,029 Other commercial 8,363 28,392 5,283 9,351 Consumer 381 543 20 93 Total Loans and Leases With and Without an Allowance Recorded: Real estate mortgage $ 87,132 $ 109,704 $ 472 $ 116,473 $ 129,909 $ 970 Real estate construction and land 15,999 16,626 — 5,690 5,689 — Commercial 68,381 142,327 8,480 90,339 151,445 12,635 Consumer 381 543 — 120 193 16 Total $ 171,893 $ 269,200 $ 8,952 $ 212,622 $ 287,236 $ 13,621 ________________________ (1) Excludes loans held for sale carried at lower of cost or fair value and PCI loans. Three Months Ended June 30, 2018 2017 Weighted Interest Weighted Interest Average Income Average Income Impaired Loans and Leases Balance (1) Recognized Balance (1) Recognized (In thousands) With An Allowance Recorded: Real estate mortgage: Commercial $ 7,786 $ 103 $ 17,591 $ 214 Residential 2,419 21 3,253 14 Commercial: Asset-based — — 202 — Venture capital 18,449 — 11,400 — Other commercial 688 — 34,065 34 Consumer — — 239 2 With No Related Allowance Recorded: Real estate mortgage: Commercial $ 58,733 $ 725 $ 90,778 $ 742 Residential 8,293 44 5,365 15 Real estate construction and land: Commercial 5,549 93 5,840 70 Residential 10,450 — — — Commercial: Asset-based 29,677 — 30,925 — Venture capital 2,800 — 6,045 — Other commercial 8,508 335 12,594 27 Consumer 355 2 120 — Total Loans and Leases With and Without an Allowance Recorded: Real estate mortgage $ 77,231 $ 893 $ 116,987 $ 985 Real estate construction and land 15,999 93 5,840 70 Commercial 60,122 335 95,231 61 Consumer 355 2 359 2 Total $ 153,707 $ 1,323 $ 218,417 $ 1,118 _________________________ (1) For loans and leases reported as impaired at June 30, 2018 and 2017 , amounts were calculated based on the period of time such loans and leases were impaired during the reported period. Six Months Ended June 30, 2018 2017 Weighted Interest Weighted Interest Average Income Average Income Impaired Loans and Leases Balance (1) Recognized Balance (1) Recognized (In thousands) With An Allowance Recorded: Real estate mortgage: Commercial $ 7,786 $ 204 $ 17,591 $ 425 Residential 2,419 42 3,252 27 Commercial: Asset-based — — 101 — Venture capital 15,715 — 6,900 — Other commercial 346 — 33,770 63 Consumer — — 213 4 With No Related Allowance Recorded: Real estate mortgage: Commercial $ 55,214 $ 1,378 $ 89,107 $ 1,289 Residential 8,277 88 5,334 29 Real estate construction and land: Commercial 5,549 184 5,840 140 Residential 5,254 — — — Commercial: Asset-based 29,677 — 30,756 — Venture capital 2,645 — 4,276 — Other commercial 7,946 1,377 9,488 44 Consumer 341 4 120 — Total Loans and Leases With and Without an Allowance Recorded: Real estate mortgage $ 73,696 $ 1,712 $ 115,284 $ 1,770 Real estate construction and land 10,803 184 5,840 140 Commercial 56,329 1,377 85,291 107 Consumer 341 4 333 4 Total $ 141,169 $ 3,277 $ 206,748 $ 2,021 _________________________ (1) For loans and leases reported as impaired at June 30, 2018 and 2017 , amounts were calculated based on the period of time such loans and leases were impaired during the reported period. The following table presents our troubled debt restructurings of loans held for investment by portfolio segment and class for the periods indicated: Three Months Ended June 30, 2018 2017 Pre- Post- Pre- Post- Modification Modification Modification Modification Outstanding Outstanding Outstanding Outstanding Number Recorded Recorded Number Recorded Recorded Troubled Debt Restructurings of Loans Investment Investment of Loans Investment Investment (Dollars in thousands) Real estate mortgage: Commercial — $ — $ — 3 $ 1,465 $ 1,465 Residential 3 1,704 645 3 720 437 Real estate construction and land: Residential — — — 1 362 — Commercial: Asset-based — — — 2 665 665 Venture capital 4 5,236 5,236 2 92 92 Other commercial 2 31 31 8 17,288 17,289 Consumer 1 27 27 — — — Total 10 $ 6,998 $ 5,939 19 $ 20,592 $ 19,948 Six Months Ended June 30, 2018 2017 Pre- Post- Pre- Post- Modification Modification Modification Modification Outstanding Outstanding Outstanding Outstanding Number Recorded Recorded Number Recorded Recorded Troubled Debt Restructurings of Loans Investment Investment of Loans Investment Investment (Dollars in thousands) Real estate mortgage: Commercial — $ — $ — 4 $ 1,529 $ 1,465 Residential 3 1,704 645 5 762 479 Real estate construction and land: Residential — — — 1 362 — Commercial: Asset-based — — — 2 665 665 Venture capital 4 5,236 5,236 5 13,157 13,157 Other commercial 4 11,814 11,814 12 18,007 18,008 Consumer 1 27 27 1 97 97 Total 12 $ 18,781 $ 17,722 30 $ 34,579 $ 33,871 In the three months ended June 30, 2018 , there were no loans restructured in the preceding 12-month period which subsequently defaulted after being restructured. In the six months ended June 30, 2018 , one other commercial loan of $2.1 million restructured in the preceding 12-month period defaulted after being restructured. In the three and six months ended June 30, 2017 , there were no loans restructured in the preceding 12-month period which subsequently defaulted after being restructured. 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 portfolio segment for the periods indicated: Three Months Ended June 30, 2018 Real Estate Real Estate Construction Mortgage and Land Commercial Consumer Total (In thousands) Allowance for Loan and Lease Losses: Balance, beginning of period $ 40,158 $ 18,190 $ 73,780 $ 2,147 $ 134,275 Charge-offs (4,747 ) — (13,425 ) (63 ) (18,235 ) Recoveries 120 17 912 50 1,099 Net (charge-offs) recoveries (4,627 ) 17 (12,513 ) (13 ) (17,136 ) Provision (negative provision) 9,936 8,003 (2,461 ) (478 ) 15,000 Balance, end of period $ 45,467 $ 26,210 $ 58,806 $ 1,656 $ 132,139 Six Months Ended June 30, 2018 Real Estate Real Estate Construction Mortgage and Land Commercial Consumer Total (In thousands) Allowance for Loan and Lease Losses: Balance, beginning of period $ 40,051 $ 13,055 $ 84,022 $ 2,328 $ 139,456 Charge-offs (7,345 ) — (22,949 ) (94 ) (30,388 ) Recoveries 1,777 26 6,399 95 8,297 Net (charge-offs) recoveries (5,568 ) 26 (16,550 ) 1 (22,091 ) Provision (negative provision) 10,984 13,129 (8,666 ) (673 ) 14,774 Balance, end of period $ 45,467 $ 26,210 $ 58,806 $ 1,656 $ 132,139 Ending Allowance by Impairment Methodology: Individually evaluated for impairment $ 472 $ — $ 8,480 $ — $ 8,952 Collectively evaluated for impairment $ 44,995 $ 26,210 $ 50,326 $ 1,656 $ 123,187 Ending Loans and Leases by Impairment Methodology: Individually evaluated for impairment $ 83,931 $ 15,998 $ 67,228 $ — $ 167,157 Collectively evaluated for impairment 7,482,443 1,858,028 6,998,884 378,680 16,718,035 Ending balance $ 7,566,374 $ 1,874,026 $ 7,066,112 $ 378,680 $ 16,885,192 Three Months Ended June 30, 2017 Real Estate Real Estate Construction Total Total Mortgage and Land Commercial Consumer Non-PCI PCI Total (In thousands) Allowance for Loan and Lease Losses: Balance, beginning of period $ 35,368 $ 10,476 $ 102,134 $ 1,848 $ 149,826 $ 11,481 $ 161,307 Charge-offs (142 ) — (22,696 ) (113 ) (22,951 ) (3,459 ) (26,410 ) Recoveries 20 9 1,953 22 2,004 58 2,062 Net (charge-offs) recoveries (122 ) 9 (20,743 ) (91 ) (20,947 ) (3,401 ) (24,348 ) Provision (negative provision) 1,876 833 6,973 318 10,000 (1,001 ) 8,999 Balance, end of period $ 37,122 $ 11,318 $ 88,364 $ 2,075 $ 138,879 $ 7,079 $ 145,958 Six Months Ended June 30, 2017 Real Estate Real Estate Construction Total Total Mortgage and Land Commercial Consumer Non-PCI PCI Total (In thousands) Allowance for Loan and Lease Losses: Balance, beginning of period $ 37,765 $ 10,045 $ 93,853 $ 2,092 $ 143,755 $ 13,483 $ 157,238 Charge-offs (1,686 ) — (41,981 ) (212 ) (43,879 ) (5,689 ) (49,568 ) Recoveries 250 17 4,401 75 4,743 58 4,801 Net (charge-offs) recoveries (1,436 ) 17 (37,580 ) (137 ) (39,136 ) (5,631 ) (44,767 ) Provision (negative provision) 793 1,256 32,091 120 34,260 (773 ) 33,487 Balance, end of period $ 37,122 $ 11,318 $ 88,364 $ 2,075 $ 138,879 $ 7,079 $ 145,958 Ending Allowance by Impairment Methodology: Individually evaluated for impairment $ 1,415 $ — $ 11,564 $ 333 $ 13,312 Collectively evaluated for impairment $ 35,707 $ 11,318 $ 76,800 $ 1,742 $ 125,567 Acquired loans with deteriorated credit quality $ 7,079 Ending Loans and Leases by Impairment Methodology: Individually evaluated for impairment $ 117,441 $ 5,840 $ 104,008 $ 485 $ 227,774 Collectively evaluated for impairment 5,954,357 1,157,500 7,733,659 397,741 15,243,257 Acquired loans with deteriorated credit quality $ 72,426 Ending balance $ 6,071,798 $ 1,163,340 $ 7,837,667 $ 398,226 $ 15,471,031 $ 72,426 $ 15,543,457 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, reserve for unfunded loan commitments for the periods indicated: Three Months Ended June 30, 2018 Allowance for Reserve for Total Loan and Unfunded Loan Allowance for Lease Losses Commitments Credit Losses (In thousands) Balance, beginning of period $ 134,275 $ 32,861 $ 167,136 Charge-offs (18,235 ) — (18,235 ) Recoveries 1,099 — 1,099 Net charge-offs (17,136 ) — (17,136 ) Provision 15,000 2,500 17,500 Balance, end of period $ 132,139 $ 35,361 $ 167,500 Six Months Ended June 30, 2018 Allowance for Reserve for Total Loan and Unfunded Loan Allowance for Lease Losses Commitments Credit Losses (In thousands) Balance, beginning of period $ 139,456 $ 28,635 $ 168,091 Charge-offs (30,388 ) — (30,388 ) Recoveries 8,297 — 8,297 Net charge-offs (22,091 ) — (22,091 ) Provision 14,774 6,726 21,500 Balance, end of period $ 132,139 $ 35,361 $ 167,500 Three Months Ended June 30, 2017 Non-PCI Allowance for Reserve for PCI Total Loan and Unfunded Loan Allowance for Allowance for Allowance for Lease Losses Commitments Credit Losses Loan Losses Credit Losses (In thousands) Balance, beginning of period $ 149,826 $ 17,763 $ 167,589 $ 11,481 $ 179,070 Charge-offs (22,951 ) — (22,951 ) (3,459 ) (26,410 ) Recoveries 2,004 — 2,004 58 2,062 Net charge-offs (20,947 ) — (20,947 ) (3,401 ) (24,348 ) Provision (negative provision) 10,000 2,500 12,500 (1,001 ) 11,499 Balance, end of period $ 138,879 $ 20,263 $ 159,142 $ 7,079 $ 166,221 Six Months Ended June 30, 2017 Non-PCI Allowance for Reserve for PCI Total Loan and Unfunded Loan Allowance for Allowance for Allowance for Lease Losses Commitments Credit Losses Loan Losses Credit Losses (In thousands) Balance, beginning of period $ 143,755 $ 17,523 $ 161,278 $ 13,483 $ 174,761 Charge-offs (43,879 ) — (43,879 ) (5,689 ) (49,568 ) Recoveries 4,743 — 4,743 58 4,801 Net charge-offs (39,136 ) — (39,136 ) (5,631 ) (44,767 ) Provision (negative provision) 34,260 2,740 37,000 (773 ) 36,227 Balance, end of period $ 138,879 $ 20,263 $ 159,142 $ 7,079 $ 166,221 |