| LOANS AND ALLOWANCE FOR CREDIT LOSSES | =640 5,669,217 5,373,028 3,622,485 1,011,873 183,689 182,436 16,042,728 37.6 % Total $ 12,948,205 $ 13,477,189 $ 9,090,276 $ 4,112,196 $ 1,569,236 $ 1,469,816 $ 42,666,918 100.0 % (1) Consists primarily of loans for which credit scores are not available or are not considered in the ALLL model. (2) Loans originated during the year-to-date ended June 30, 2021. (3) Excludes LHFS. As of December 31, 2020 RICs and auto loans (dollars in thousands) Amortized Cost by Origination Year (3) Credit Score Range 2020 (2) 2019 2018 2017 2016 Prior Total Percent No FICO (1) $ 1,326,026 $ 839,412 $ 450,539 $ 484,975 $ 230,382 $ 142,746 $ 3,474,080 8.5 % <600 6,056,260 4,373,991 2,648,215 1,126,742 685,830 634,480 15,525,518 38.2 % 600-639 2,782,566 1,912,731 1,001,985 335,111 229,690 173,501 6,435,584 15.8 % >=640 8,427,478 4,832,173 1,382,133 264,635 200,430 156,611 15,263,460 37.5 % Total $ 18,592,330 $ 11,958,307 $ 5,482,872 $ 2,211,463 $ 1,346,332 $ 1,107,338 $ 40,698,642 100.0 % (1) Consists primarily of loans for which credit scores are not available or are not considered in the ALLL model. (2) Loans originated during the year ended December 31, 2020. (3) Excludes LHFS. Consumer Lending Asset Quality Indicators-FICO and LTV Ratio For both residential and home equity loans, loss severity assumptions are incorporated in the loan and lease loss reserve models to estimate loan balances that will ultimately charge off. These assumptions are based on recent loss experience within various current LTV bands within these portfolios. LTVs are refreshed quarterly by applying Federal Housing Finance Agency Home price index changes at a state-by-state level to the last known appraised value of the property to estimate the current LTV. The Company's CECL loss calculation incorporates the refreshed LTV information to update the distribution of defaulted loans by LTV as well as the associated LGD for each LTV band. Reappraisals on a recurring basis at the individual property level are not considered cost-effective or necessary; however, reappraisals are performed on certain higher risk accounts to support line management activities, default servicing decisions, or when other situations arise for which the Company believes the additional expense is warranted. FICO scores are refreshed quarterly, where possible. The indicators disclosed represent the credit scores for loans as of the date presented based on the most recent assessment performed. NOTE 3. LOANS AND ALLOWANCE FOR CREDIT LOSSES (continued) Residential mortgage and home equity financing receivables by LTV and FICO range are summarized as follows: As of June 30, 2021 Residential Mortgages (1)(3) (dollars in thousands) Amortized Cost by Origination Year FICO Score 2021 (4) 2020 2019 2018 2017 Prior Grand Total N/A (2) LTV <= 70% $ — $ 734 $ — $ — $ 493 $ 2,640 $ 3,867 70.01-80% — — — — — — — 80.01-90% — — — — — — — 90.01-100% — — — — — — — 100.01-110% — — — — — — — LTV>110% — — — — — — — LTV - N/A (2) 28,009 3,018 2,354 1,241 1,672 6,709 43,003 <600 LTV <= 70% $ — $ 754 $ 7,893 $ 6,876 $ 9,429 $ 95,722 $ 120,674 70.01-80% — 2,141 2,863 8,661 7,997 2,357 24,019 80.01-90% — 1,873 7,598 2,740 176 428 12,815 90.01-100% — — — — — 366 366 100.01-110% — — — — — 70 70 LTV>110% — — — — — — — LTV - N/A(2) — — — — — 56 56 600-639 LTV <= 70% $ 1,003 $ 2,415 $ 9,599 $ 6,589 $ 11,464 $ 78,267 $ 109,337 70.01-80% 422 3,193 2,679 3,955 4,041 1,627 15,917 80.01-90% 401 4,394 9,382 1,225 — 276 15,678 90.01-100% 971 1,056 — — — 308 2,335 100.01-110% — — — — — — — LTV>110% — — — — — — — LTV - N/A (2) — — — — — — — 640-679 LTV <= 70% $ 2,054 $ 14,058 $ 16,537 $ 16,531 $ 18,661 $ 139,227 $ 207,068 70.01-80% 1,984 5,754 13,840 11,799 7,880 1,893 43,150 80.01-90% 337 5,940 13,579 5,149 — 1,337 26,342 90.01-100% 2,948 2,365 — — — 614 5,927 100.01-110% — — — — — 691 691 LTV>110% — — — — — 1,472 1,472 LTV - N/A (2) — — — — — 28 28 680-719 LTV <= 70% $ 21,723 $ 40,269 $ 57,747 $ 26,760 $ 62,979 $ 223,966 $ 433,444 70.01-80% 16,382 20,678 26,966 16,873 10,395 4,694 95,988 80.01-90% 1,757 18,216 32,416 5,241 — 1,717 59,347 90.01-100% 12,289 11,627 — — — 924 24,840 100.01-110% — — — — — 818 818 LTV>110% — — — — — 353 353 LTV - N/A(2) — — — — — 65 65 720-759 LTV <= 70% $ 92,290 $ 116,368 $ 106,311 $ 81,082 $ 100,504 $ 340,422 $ 836,977 70.01-80% 70,003 65,488 34,940 28,186 18,795 4,739 222,151 80.01-90% 3,707 31,953 52,597 7,444 339 1,311 97,351 90.01-100% 17,793 13,945 — — — 163 31,901 100.01-110% — — — — — 94 94 LTV>110% — — — — — 73 73 LTV - N/A (2) — — — — — 111 111 >=760 LTV <= 70% $ 229,249 $ 480,261 $ 296,105 $ 168,049 $ 336,315 $ 1,249,342 $ 2,759,321 70.01-80% 109,589 197,860 106,441 50,188 31,294 7,160 502,532 80.01-90% 9,260 63,769 77,187 13,979 78 3,199 167,472 90.01-100% 16,525 16,235 — — 564 333 33,657 100.01-110% — — — — — 414 414 LTV>110% — — — — — 1,498 1,498 LTV - N/A (2) — — — — — 324 324 Total - All FICO Bands LTV <= 70% $ 346,319 $ 654,859 $ 494,192 $ 305,887 $ 539,845 $ 2,129,586 $ 4,470,688 70.01-80% 198,380 295,114 187,729 119,662 80,402 22,470 903,757 80.01-90% 15,462 126,145 192,759 35,778 593 8,268 379,005 90.01-100% 50,526 45,228 — — 564 2,708 99,026 100.01-110% — — — — — 2,087 2,087 LTV>110% — — — — — 3,396 3,396 LTV - N/A (2) 28,009 3,018 2,354 1,241 1,672 7,293 43,587 Grand Total $ 638,696 $ 1,124,364 $ 877,034 $ 462,568 $ 623,076 $ 2,175,808 $ 5,901,546 (1) Excludes LHFS. (2) Balances in the "N/A" range for LTV or FICO score primarily represent loans serviced by others, in run-off portfolios or for which a current LTV or FICO score is unavailable. (3) The ALLL model considers LTV for financing receivables in first lien position and CLTV for financing receivables in second lien position for the Company. (4) Loans originated during the year-to-date ended June 30, 2021. NOTE 3. LOANS AND ALLOWANCE FOR CREDIT LOSSES (continued) As of June 30, 2021 Home Equity Loans and Lines of Credit (2) (in thousands) Amortized Cost by Origination Year FICO Score 2021 (4) 2020 2019 2018 2017 Prior Total Revolving N/A (2) LTV <= 70% $ — $ 166 $ 163 $ 252 $ 474 $ 875 $ 1,930 $ 1,847 70.01-90% 21 — — — — — 21 21 90.01-110% — — — — — — — — LTV>110% — — — — — — — — LTV - N/A (2) 1,084 3,559 4,923 6,076 5,725 78,805 100,172 51,107 <600 LTV <= 70% $ — $ 240 $ 2,428 $ 8,922 $ 12,497 $ 116,698 $ 140,785 $ 121,937 70.01-90% — 174 1,066 1,987 418 5,974 9,619 8,597 90.01-110% — — — — — 1,061 1,061 980 LTV>110% — — — — — 861 861 848 LTV - N/A (2) — — — — 15 489 504 504 600-639 LTV <= 70% $ 108 $ 1,339 $ 3,521 $ 9,128 $ 14,346 $ 95,298 $ 123,740 $ 116,680 70.01-90% — 626 2,576 1,594 613 6,511 11,920 11,083 90.01-110% — — — — — 1,692 1,692 1,666 LTV>110% — — — — — 2,783 2,783 2,698 LTV - N/A (2) — — — — 100 50 150 150 640-679 LTV <= 70% $ 260 $ 7,712 $ 12,673 $ 25,945 $ 20,918 $ 161,560 $ 229,068 $ 220,653 70.01-90% — 1,211 6,198 5,159 1,199 12,651 26,418 24,964 90.01-110% — — 56 — — 4,700 4,756 4,063 LTV>110% — 42 — — — 2,234 2,276 2,261 LTV - N/A (2) — — — — — 78 78 58 680-719 LTV <= 70% $ 5,994 $ 25,729 $ 31,718 $ 51,940 $ 53,408 $ 279,319 $ 448,108 $ 434,981 70.01-90% 1,003 4,630 12,727 6,901 2,390 17,650 45,301 44,653 90.01-110% — — — — — 4,572 4,572 4,092 LTV>110% 141 — — — — 4,649 4,790 4,576 LTV - N/A (2) — — — — — 152 152 152 720-759 LTV <= 70% $ 18,183 $ 40,990 $ 51,279 $ 75,175 $ 84,684 $ 365,405 $ 635,716 $ 624,459 70.01-90% 3,599 12,343 17,488 10,618 3,510 25,538 73,096 71,848 90.01-110% 648 — — — — 5,086 5,734 5,250 LTV>110% 80 — — — — 4,856 4,936 4,813 LTV - N/A (2) — 24 51 — — 136 211 201 >=760 LTV <= 70% $ 38,757 $ 128,490 $ 157,319 $ 203,816 $ 198,098 $ 982,100 $ 1,708,580 $ 1,676,594 70.01-90% 5,477 22,509 40,521 20,785 5,236 59,670 154,198 150,859 90.01-110% — 405 32 — — 15,762 16,199 15,069 LTV>110% 790 741 50 — — 6,567 8,148 8,062 LTV - N/A (2) 320 3 — 124 66 401 914 914 Total - All FICO Bands LTV <= 70% $ 63,302 $ 204,666 $ 259,101 $ 375,178 $ 384,425 $ 2,001,255 $ 3,287,927 $ 3,197,151 LTV 70.01 - 90% 10,100 41,493 80,576 47,044 13,36" id="sjs-B4">LOANS AND ALLOWANCE FOR CREDIT LOSSES Overall The Company's LHFI are generally reported at their outstanding principal balances net of any cumulative charge-offs, unamortized deferred fees and costs and unamortized premiums or discounts. Certain LHFI are accounted for at fair value under the FVO. Certain loans are pledged as collateral for borrowings, securitizations, or SPEs. These loans t otaled $47.2 billion at June 30, 2021 and $52.0 billion at December 31, 2020. Loans that the Company intends to sell are classified as LHFS. The LHFS portfolio balance at June 30, 2021 was $686.5 million, compared to $2.2 billion at December 31, 2020. For a discussion on the valuation of LHFS at fair value, see Note 13 to these Condensed Consolidated Financial Statements. LHFS in the residential mortgage portfolio that were originated with the intent to sell were $196.6 million as of June 30, 2021 and are reported at either estimated fair value (if the FVO is elected) or the lower of cost or fair value. Interest on loans is credited to income as it is earned. Loan origination fees and certain direct loan origination costs are deferred and recognized as adjustments to interest income in the Condensed Consolidated Statements of Operations over the contractual life of the loan utilizing the interest method. Loan origination costs and fees and premiums and discounts on RICs are deferred and recognized in interest income over their estimated lives using estimated prepayment speeds, which are updated on a monthly bas is. At June 30, 2021 and December 31, 2020, accrued interest receivable on the Company's loans was $506.9 million a nd $589.2 million, respectively. During the six months ended June 30, 2021 , SBNA approved and executed purchases of performing personal unsecured loans with a UPB of approximately $400.0 million. Also during the first quarter of 2021, SC sold RICs with a UPB of approximately $2.4 billion to third-parties in three separate transactions. Two of these transactions were accounted for as off-balance sheet securitizations. During the second quarter of 2021, SFS sold the majority of its commercial and consumer loan and REO HFS portfolios to third parties at their approximate fair values with no material gain or loss. In addition, during the second quarter of 2021, SC sold RICs with a UPB of approximately $310 million to a third party. NOTE 3. LOANS AND ALLOWANCE FOR CREDIT LOSSES (continued) Sale of the Personal Lending Portfolio During the first quarter of 2021, SC completed the sale of $1.3 billion in UPB of its Bluestem personal lending portfolio to a third party. In addition, SC executed a forward flow sale agreement with a third party to purchase all personal lending receivables that SC purchases from Bluestem through the term of the agreement with Bluestem. Prior to the sale, these loans were classified as LHFS. Loan and Lease Portfolio Composition The following presents the composition of gross loans and leases HFI by portfolio and by rate type: June 30, 2021 December 31, 2020 (dollars in thousands) Amount Percent Amount Percent Commercial LHFI: CRE loans $ 7,410,298 8.0 % $ 7,327,853 8.0 % C&I loans 15,941,764 17.1 % 16,537,899 17.9 % Multifamily loans 8,139,694 8.7 % 8,367,147 9.1 % Other commercial (2)(4) 7,997,606 8.6 % 7,455,504 8.1 % Total commercial LHFI 39,489,362 42.4 % 39,688,403 43.1 % Consumer loans secured by real estate: Residential mortgages 5,901,546 6.3 % 6,590,168 7.2 % Home equity loans and lines of credit 3,768,489 4.0 % 4,108,505 4.5 % Total consumer loans secured by real estate 9,670,035 10.3 % 10,698,673 11.7 % Consumer loans not secured by real estate: RICs and auto loans 42,666,918 45.8 % 40,698,642 44.1 % Personal unsecured loans 1,126,365 1.2 % 824,430 0.9 % Other consumer (3) 177,835 0.3 % 223,034 0.2 % Total consumer loans 53,641,153 57.6 % 52,444,779 56.9 % Total LHFI (1) $ 93,130,515 100.0 % $ 92,133,182 100.0 % Total LHFI: Fixed rate $ 65,717,718 70.6 % $ 64,036,154 69.5 % Variable rate 27,412,797 29.4 % 28,097,028 30.5 % Total LHFI (1) $ 93,130,515 100.0 % $ 92,133,182 100.0 % (1) Total LHFI includes deferred loan fees, net of deferred origination costs and unamortized purchase premiums, net of discounts as well as purchase accounting adjustments. These items resulted in a net increase in the loan balances o f $3.0 billion a nd $3.1 billion as of June 30, 2021 and December 31, 2020, respectively. (2) Other commercial includes CEVF leveraged leases and loans. (3) Other consumer primarily includes RV and marine loans. (4) Includes loans with a carrying value of $24.3 million for which a fair value hedge resulting in a fair value adjustment of ($0.1) million. Portfolio segments and classes The Company discloses information about the credit quality of its financing receivables at disaggregated levels, specifically defined as “portfolio segments” and “classes,” based on management’s systematic methodology for determining the ACL. The Company utilizes similar categorization compared to the financial statement categorization of loans to model and calculate the ACL and track the credit quality, delinquency and impairment status of the underlying loan populations. In disaggregating its financing receivables portfolio, the Company’s methodology begins with the commercial and consumer segments. The commercial segmentation reflects line of business distinctions. The CRE line of business includes C&I owner-occupied real estate and specialized lending for investment real estate. C&I includes non-real estate-related commercial loans. "Multifamily" represents loans for multifamily residential housing units. “Other commercial” includes loans to global customer relationships in Latin America which are not defined as commercial or consumer for regulatory purposes. The remainder of the portfolio primarily represents the CEVF portfolio. The Company's portfolio classes are substantially the same as its financial statement categorization of loans for consumer loan populations. “Residential mortgages” includes mortgages on residential property, including single family and 1-4 family units. "Home equity loans and lines of credit" include all organic home equity contracts and purchased home equity portfolios. "RICs and auto loans" includes the Company's direct automobile loan portfolios, but excludes RV and marine RICs. "Personal unsecured loans" includes personal revolving loans and credit cards. “Other consumer” includes an acquired portfolio of marine RICs and RV contracts as well as indirect auto loans. NOTE 3. LOANS AND ALLOWANCE FOR CREDIT LOSSES (continued) During the six-month periods ended June 30, 2021 and 2020, SC originated $8.3 billion and $7.3 billion, respectively, in CCAP loans (including through the SBNA originations program), which represented 56% and 62%, respectively, of the UPB of SC's total RIC originations (including the SBNA originations program). ACL Rollforward by Portfolio Segment The ACL is comprised of the ALLL and the reserve for unfunded lending commitments. The activity in the ACL by portfolio segment for the three-month and six-month periods ended June 30, 2021 and 2020 was as follows: Three-Month Period Ended June 30, 2021 (in thousands) Commercial Consumer Total ALLL, beginning of period (1) $ 716,347 $ 6,443,808 $ 7,160,155 Credit loss expense / (benefit) (47,609) (269,568) (317,177) Charge-offs (40,058) (561,326) (601,384) Recoveries 12,835 634,886 647,721 Charge-offs, net of recoveries (27,223) 73,560 46,337 ALLL, end of period $ 641,515 $ 6,247,800 $ 6,889,315 Reserve for unfunded lending commitments, beginning of period (1) $ 100,317 $ 24,072 $ 124,389 Credit loss expense / (benefit) on unfunded lending commitments 1,160 (1,265) (105) Reserve for unfunded lending commitments, end of period 101,477 22,807 124,284 Total ACL, end of period $ 742,992 $ 6,270,607 $ 7,013,599 Six-Month Period Ended June 30, 2021 (in thousands) Commercial Consumer Total ALLL, beginning of period $ 752,196 $ 6,586,297 $ 7,338,493 Credit loss expense / (benefit) (69,458) (149,586) (219,044) Charge-offs (79,687) (1,388,715) (1,468,402) Recoveries 38,464 1,199,804 1,238,268 Charge-offs, net of recoveries (41,223) (188,911) (230,134) ALLL, end of period $ 641,515 $ 6,247,800 $ 6,889,315 Reserve for unfunded lending commitments, beginning of period $ 119,129 $ 27,326 $ 146,455 Credit loss expense / (benefit) on unfunded lending commitments (17,652) (4,519) (22,171) Reserve for unfunded lending commitments, end of period 101,477 22,807 124,284 Total ACL, end of period $ 742,992 $ 6,270,607 $ 7,013,599 NOTE 3. LOANS AND ALLOWANCE FOR CREDIT LOSSES (continued) Three-Month Period Ended June 30, 2020 (in thousands) Commercial Consumer Unallocated Total ALLL, beginning of period $ 678,705 $ 5,945,031 $ — $ 6,623,736 Credit loss expense (benefit) (1) 116,724 907,846 — 1,024,570 Charge-offs (43,446) (899,773) — (943,219) Recoveries 7,617 400,035 — 407,652 Charge-offs, net of recoveries (35,829) (499,738) — (535,567) ALLL, end of period $ 759,600 $ 6,353,139 $ — $ 7,112,739 Reserve for unfunded lending commitments, beginning of period $ 129,740 $ 40,200 $ — $ 169,940 Credit loss expense / (release of) credit loss expense on unfunded lending commitments (34,718) (12,479) — (47,197) Reserve for unfunded lending commitments, end of period 95,022 27,721 — 122,743 Total ACL, end of period $ 854,622 $ 6,380,860 $ — $ 7,235,482 Six-Month Period Ended June 30, 2020 (in thousands) Commercial Consumer Unallocated Total ALLL, beginning of period $ 399,829 $ 3,199,612 $ 46,748 $ 3,646,189 Day 1: Adjustment to allowance for adoption of ASU 2016-13 198,920 2,383,710 (46,748) 2,535,882 Credit loss expense (benefit) (1) 239,467 1,903,011 — 2,142,478 Charge-offs (96,909) (2,144,485) — (2,241,394) Recoveries 18,293 1,011,291 — 1,029,584 Charge-offs, net of recoveries (78,616) (1,133,194) — (1,211,810) ALLL, end of period $ 759,600 $ 6,353,139 $ — $ 7,112,739 Reserve for unfunded lending commitments, beginning of period $ 85,934 $ 5,892 $ — $ 91,826 Day 1: Adjustment to allowance for adoption of ASU 2016-13 10,081 330 — 10,411 Credit loss expense / (release of) credit loss expense on unfunded lending commitments (1) (993) 21,499 — 20,506 Reserve for unfunded lending commitments, end of period 95,022 27,721 — 122,743 Total ACL, end of period $ 854,622 $ 6,380,860 $ — $ 7,235,482 (1) Includes a correction for the classification of ACL balances and certain activity between Commercial and Consumer from January 1, 2020 through June 30, 2020. This resulted in a cumulative $322.0 million reclassification required at June 30, 2020 increasing the Consumer and decreasing the Commercial ACL. The credit risk in the Company’s loan portfolios is driven by credit and collateral quality, and is affected by borrower-specific and economy-wide factors. In general, there is an inverse relationship between the credit quality of loans and projections of impairment losses so that loans with better credit quality require a lower expected loss reserve. The Company manages this risk through its underwriting, pricing strategies, credit policy standards, and servicing guidelines and practices, as well as the application of geographic and other concentration limits. NOTE 3. LOANS AND ALLOWANCE FOR CREDIT LOSSES (continued) The Company estimates CECL based on prospective information as well as account-level models based on historical data. Unemployment, HPI, GDP, CRE price index and used vehicle index growth rates, along with loan level characteristics, are the key inputs used in the models for prediction of the likelihood that the borrower will default in the forecasted period (the PD). To estimate the loss in the event of a default (the LGD), the models use unemployment, HPI, CRE and used vehicle indices, along with loan level characteristics as key inputs. The Company has determined the reasonable and supportable period to be three years, at which time the economic forecasts generally tend to revert to historical averages. The Company utilizes qualitative factors to capture any additional risks that may not be captured in either the economic forecasts or in the historical data, including consideration of the portfolio metrics and collateral value. The Company generally uses a third-party vendor's consensus baseline macroeconomic scenario for the quantitative estimate and additional positive and negative macroeconomic scenarios to make qualitative adjustments for macroeconomic uncertainty and considers adjustments to macroeconomic inputs and outputs based on market volatility. The Company's allowance for loan losses decreased by $270.8 million and $449.2 million for the three-month and six-month periods ended June 30, 2021, primarily due to an improved macroeconomic outlook and decrease of lifetime expected credit losses for non-TDR loans mainly due to increased used car prices. Non-accrual loans by Class of Financing Receivable The amortized cost basis of financial instruments that are either non-accrual with related expected credit loss or nonaccrual without related expected credit loss disaggregated by class of financing receivables and other non-performing assets is as follows: Non-accrual loans as of: Non-accrual loans with no allowance Interest Income recognized on nonaccrual loans (in thousands) June 30, 2021 December 31, 2020 June 30, 2021 June 30, 2021 Non-accrual loans: Commercial: CRE $ 97,952 $ 106,751 $ 88,518 $ — C&I 100,682 107,053 55,699 386 Multifamily 120,747 72,392 118,133 — Other commercial 14,700 20,019 8,533 — Total commercial loans 334,081 306,215 270,883 386 Consumer: Residential mortgages 119,883 160,172 46,687 — Home equity loans and lines of credit 96,277 91,606 40,627 — RICs and auto loans 937,264 1,174,317 194,293 46,326 Personal unsecured loans — — — — Other consumer 5,733 6,325 63 — Total consumer loans 1,159,157 1,432,420 281,670 46,326 Total non-accrual loans 1,493,238 1,738,635 552,553 46,712 OREO 4,276 29,799 — — Repossessed vehicles 229,477 204,653 — — Foreclosed and other repossessed assets 1,644 3,247 — — Total OREO and other repossessed assets 235,397 237,699 — — Total non-performing assets $ 1,728,635 $ 1,976,334 $ 552,553 $ 46,712 NOTE 3. LOANS AND ALLOWANCE FOR CREDIT LOSSES (continued) Age Analysis of Past Due Loans The Company generally considers an account delinquent when an obligor fails to pay substantially all (defined as 90%) of the scheduled payment by the due date. When an account is deferred, the loan is returned to accrual status during the deferral period and accrued interest related to the loan is evaluated for collectability. The age of amortized cost in past due loans and accruing loans 90 days or greater past due disaggregated by class of financing receivables is summarized as follows: As of: June 30, 2021 (in thousands) 30-89 90 Total Current Total Amortized Cost Commercial: CRE (3) $ 43,140 $ 32,924 $ 76,064 $ 7,343,189 $ 7,419,253 $ — C&I (1) 34,128 21,487 55,615 15,975,894 16,031,509 — Multifamily 48,261 34,058 82,319 8,057,375 8,139,694 — Other commercial 37,232 4,200 41,432 7,956,174 7,997,606 173 Consumer: Residential mortgages (2) 56,956 80,580 137,536 5,960,592 6,098,128 — Home equity loans and lines of credit 17,687 64,361 82,048 3,686,441 3,768,489 — RICs and auto loans (4) 2,639,469 188,716 2,828,185 40,229,942 43,058,127 — Personal unsecured loans 7,913 5,400 13,313 1,113,052 1,126,365 2,137 Other consumer 3,991 1,235 5,226 172,609 177,835 — Total $ 2,888,777 $ 432,961 $ 3,321,738 $ 90,495,268 $ 93,817,006 $ 2,310 (1) C&I loans include s $89.7 million of LHFS at June 30, 2021. (2) Residential mortgages includes $196.6 million of LHFS at June 30, 2021. (3) CRE loans include $9.0 million of LHFS at June 30, 2021. (4) RICs and auto loans includes $391.2 million of LHFS at June 30, 2021. As of December 31, 2020 (in thousands) 30-89 90 Total Current Total Recorded Commercial: CRE $ 41,320 $ 70,304 $ 111,624 $ 7,244,247 $ 7,355,871 $ — C&I (1) 59,759 45,883 105,642 16,654,606 16,760,248 — Multifamily 47,116 66,664 113,780 8,257,122 8,370,902 — Other commercial 80,993 9,214 90,207 7,365,629 7,455,836 56 Consumer: Residential mortgages (2) 209,274 111,698 320,972 6,673,411 6,994,383 — Home equity loans and lines of credit 31,488 72,197 103,685 4,004,820 4,108,505 — RICs and auto loans 2,944,376 284,985 3,229,361 38,143,329 41,372,690 — Personal unsecured loans (3) 56,041 56,582 112,623 1,605,286 1,717,909 52,807 Other consumer 5,358 1,688 7,046 215,988 223,034 — Total $ 3,475,725 $ 719,215 $ 4,194,940 $ 90,164,438 $ 94,359,378 $ 52,863 (1) C&I loans included $222.3 million of LHFS at December 31, 2020. (2) Residential mortgages included $404.2 million of LHFS at December 31, 2020. (3) Personal unsecured loans included $893.5 million of LHFS at December 31, 2020. (4) RICs and auto loans includes $674.0 million of LHFS at December 31, 2020. (5) Multifamily loans includes $3.8 million of LHFS at December 31, 2020. (6) Other Commercial loans includes $0.3 million of LHFS at December 31, 2020. (7) CRE loans include $28.0 million of LHFS at December 31, 2020. NOTE 3. LOANS AND ALLOWANCE FOR CREDIT LOSSES (continued) Commercial Lending Asset Quality Indicators The Company's Risk Department performs a credit analysis and classifies certain loans over an internal threshold based on the commercial lending classifications described below: PASS. Asset is well-protected by the current net worth and paying capacity of the obligor or guarantors, if any, or by the fair value less costs to acquire and sell any underlying collateral in a timely manner. SPECIAL MENTION. Asset has potential weaknesses that deserve management’s close attention, which, if left uncorrected, may result in deterioration of the repayment prospects for an asset at some future date. Special mention assets are not adversely classified. SUBSTANDARD. Asset is inadequately protected by the current net worth and paying capacity of the obligor or by the collateral pledged, if any. A well-defined weakness or weaknesses exist that jeopardize the liquidation of the debt. The loans are characterized by the distinct possibility that the Company will sustain some loss if deficiencies are not corrected. DOUBTFUL. Exhibits the inherent weaknesses of a substandard credit. Additional characteristics exist that make collection or liquidation in full highly questionable and improbable, on the basis of currently known facts, conditions and values. Possibility of loss is extremely high, but because of certain important and reasonable specific pending factors which may work to the advantage and strengthening of the credit, an estimated loss cannot yet be determined. LOSS. Credit is considered uncollectible and of such little value that it does not warrant consideration as an active asset. There may be some recovery or salvage value, but there is doubt as to whether, how much or when the recovery would occur. NOTE 3. LOANS AND ALLOWANCE FOR CREDIT LOSSES (continued) Each commercial loan is evaluated to determine its risk rating at least annually. The indicators represent the rating for loans as of the date presented based on the most recent assessment performed. Amortized cost basis of loans in the commercial portfolio segment by credit quality indicator, class of financing receivable, and year of origination are summarized as follows: June 30, 2021 Commercial Loan Portfolio (1) (dollars in thousands) Amortized Cost by Origination Year Regulatory Rating: 2021 (3) 2020 2019 2018 2017 Prior Total CRE Pass $ 229,212 $ 956,493 $ 1,599,341 $ 1,223,797 $ 617,515 $ 1,880,511 $ 6,506,869 Special mention — 30,227 18,669 120,075 111,279 67,193 347,443 Substandard — 3,379 125,112 141,644 51,976 242,830 564,941 Doubtful — — — — — — — N/A — — — — — — — Total CRE $ 229,212 $ 990,099 $ 1,743,122 $ 1,485,516 $ 780,770 $ 2,190,534 $ 7,419,253 C&I Pass $ 2,590,641 $ 3,827,844 $ 2,638,896 $ 1,610,770 $ 710,143 $ 2,647,226 $ 14,025,520 Special mention 44,919 31,694 138,140 94,925 34,297 204,284 548,259 Substandard 17,033 41,067 15,286 128,931 37,577 255,380 495,274 Doubtful — — — — — — — N/A (2) 305,676 338,603 238,686 56,964 10,277 12,250 962,456 Total C&I $ 2,958,269 $ 4,239,208 $ 3,031,008 $ 1,891,590 $ 792,294 $ 3,119,140 $ 16,031,509 Multifamily Pass $ 555,367 $ 777,771 $ 1,779,416 $ 1,205,373 $ 940,033 $ 1,433,694 $ 6,691,654 Special mention — 46,223 42,715 94,965 187,418 48,163 419,484 Substandard 4,200 53,614 225,341 332,545 173,136 239,720 1,028,556 Doubtful — — — — — — — N/A — — — — — — — Total Multifamily $ 559,567 $ 877,608 $ 2,047,472 $ 1,632,883 $ 1,300,587 $ 1,721,577 $ 8,139,694 Remaining commercial Pass $ 2,322,328 $ 2,475,720 $ 1,179,584 $ 594,958 $ 341,299 $ 1,041,999 $ 7,955,888 Special mention — 46 1,853 6,470 756 8,804 17,929 Substandard 502 2,230 4,093 3,635 2,535 10,576 23,571 Doubtful 173 — — 45 — — 218 N/A — — — — — — — Total Remaining commercial $ 2,323,003 $ 2,477,996 $ 1,185,530 $ 605,108 $ 344,590 $ 1,061,379 $ 7,997,606 Total Commercial loans Pass $ 5,697,548 $ 8,037,828 $ 7,197,237 $ 4,634,898 $ 2,608,990 $ 7,003,430 $ 35,179,931 Special mention 44,919 108,190 201,377 316,435 333,750 328,444 1,333,115 Substandard 21,735 100,290 369,832 606,755 265,224 748,506 2,112,342 Doubtful 173 — — 45 — — 218 N/A (2) 305,676 338,603 238,686 56,964 10,277 12,250 962,456 Total commercial loans $ 6,070,051 $ 8,584,911 $ 8,007,132 $ 5,615,097 $ 3,218,241 $ 8,092,630 $ 39,588,062 (1) Includ es $98.7 million of LHFS at June 30, 2021. (2) Consists of loans that have not been assigned a regulatory rating. (3) Loans originated during the year-to-date ended June 30, 2021. NOTE 3. LOANS AND ALLOWANCE FOR CREDIT LOSSES (continued) December 31, 2020 Commercial Loan Portfolio (1) (dollars in thousands) Amortized Cost by Origination Year Regulatory Rating: 2020 (3) 2019 2018 2017 2016 Prior Total CRE Pass $ 722,210 $ 1,424,392 $ 1,656,560 $ 816,607 $ 542,979 $ 1,536,812 $ 6,699,560 Special mention 28,876 15,480 81,167 43,368 79,555 83,751 332,197 Substandard 8,259 16,609 29,761 33,833 45,936 189,716 324,114 Doubtful — — — — — — — N/A — — — — — — — Total CRE $ 759,345 $ 1,456,481 $ 1,767,488 $ 893,808 $ 668,470 $ 1,810,279 $ 7,355,871 C&I Pass $ 4,661,409 $ 3,365,828 $ 2,798,209 $ 868,373 $ 585,083 $ 2,305,305 $ 14,584,207 Special mention 11,000 136,413 134,388 49,601 99,042 254,102 684,546 Substandard 60,034 15,309 173,900 59,814 84,642 213,908 607,607 Doubtful 3,153 145 80 1,616 1,282 11,226 17,502 N/A(2) 411,319 294,652 75,091 15,101 15,388 54,835 866,386 Total C&I $ 5,146,915 $ 3,812,347 $ 3,181,668 $ 994,505 $ 785,437 $ 2,839,376 $ 16,760,248 Multifamily Pass $ 880,199 $ 1,938,271 $ 1,361,178 $ 1,198,819 $ 503,267 $ 1,365,066 $ 7,246,800 Special mention — 39,433 147,872 110,906 31,348 59,072 388,631 Substandard 5,355 104,945 203,437 148,251 49,445 224,038 735,471 Doubtful — — — — — — — N/A — — — — — — — Total Multifamily $ 885,554 $ 2,082,649 $ 1,712,487 $ 1,457,976 $ 584,060 $ 1,648,176 $ 8,370,902 Remaining commercial Pass $ 3,530,625 $ 1,416,704 $ 766,454 $ 443,244 $ 199,297 $ 1,038,584 $ 7,394,908 Special mention 53 11,096 11,271 105 83 8,102 30,710 Substandard 2,115 3,974 4,181 4,246 5,983 9,160 29,659 Doubtful 351 — 99 — 101 8 559 N/A — — — — — — — Total Remaining commercial $ 3,533,144 $ 1,431,774 $ 782,005 $ 447,595 $ 205,464 $ 1,055,854 $ 7,455,836 Total Commercial loans Pass $ 9,794,443 $ 8,145,195 $ 6,582,401 $ 3,327,043 $ 1,830,626 $ 6,245,767 $ 35,925,475 Special mention 39,929 202,422 374,698 203,980 210,028 405,027 1,436,084 Substandard 75,763 140,837 411,279 246,144 186,006 636,822 1,696,851 Doubtful 3,504 145 179 1,616 1,383 11,234 18,061 N/A(2) 411,319 294,652 75,091 15,101 15,388 54,835 866,386 Total commercial loans $ 10,324,958 $ 8,783,251 $ 7,443,648 $ 3,793,884 $ 2,243,431 $ 7,353,685 $ 39,942,857 (1) Includes $254.5 million of LHFS at December 31, 2020. (2) Consists of loans that have not been assigned a regulatory rating. (3) Loans originated during the year ended December 31, 2020. NOTE 3. LOANS AND ALLOWANCE FOR CREDIT LOSSES (continued) Consumer Lending Asset Quality Indicators-Credit Score Consumer financing receivables for which either an internal or external credit score is a core component of the allowance model are summarized by credit score determined at origination as follows: As of June 30, 2021 RICs and auto loans (dollars in thousands) Amortized Cost by Origination Year (3) Credit Score Range 2021 (2) 2020 2019 2018 2017 Prior Total Percent No FICO (1) $ 913,313 $ 1,014,763 $ 616,930 $ 335,925 $ 321,124 $ 206,838 $ 3,408,893 8.0 % <600 4,318,538 4,954,403 3,421,888 2,022,609 825,967 841,067 16,384,472 38.4 % 600-639 2,047,137 2,134,995 1,428,973 741,789 238,456 239,475 6,830,825 16.0 % >=640 5,669,217 5,373,028 3,622,485 1,011,873 183,689 182,436 16,042,728 37.6 % Total $ 12,948,205 $ 13,477,189 $ 9,090,276 $ 4,112,196 $ 1,569,236 $ 1,469,816 $ 42,666,918 100.0 % (1) Consists primarily of loans for which credit scores are not available or are not considered in the ALLL model. (2) Loans originated during the year-to-date ended June 30, 2021. (3) Excludes LHFS. As of December 31, 2020 RICs and auto loans (dollars in thousands) Amortized Cost by Origination Year (3) Credit Score Range 2020 (2) 2019 2018 2017 2016 Prior Total Percent No FICO (1) $ 1,326,026 $ 839,412 $ 450,539 $ 484,975 $ 230,382 $ 142,746 $ 3,474,080 8.5 % <600 6,056,260 4,373,991 2,648,215 1,126,742 685,830 634,480 15,525,518 38.2 % 600-639 2,782,566 1,912,731 1,001,985 335,111 229,690 173,501 6,435,584 15.8 % >=640 8,427,478 4,832,173 1,382,133 264,635 200,430 156,611 15,263,460 37.5 % Total $ 18,592,330 $ 11,958,307 $ 5,482,872 $ 2,211,463 $ 1,346,332 $ 1,107,338 $ 40,698,642 100.0 % (1) Consists primarily of loans for which credit scores are not available or are not considered in the ALLL model. (2) Loans originated during the year ended December 31, 2020. (3) Excludes LHFS. Consumer Lending Asset Quality Indicators-FICO and LTV Ratio For both residential and home equity loans, loss severity assumptions are incorporated in the loan and lease loss reserve models to estimate loan balances that will ultimately charge off. These assumptions are based on recent loss experience within various current LTV bands within these portfolios. LTVs are refreshed quarterly by applying Federal Housing Finance Agency Home price index changes at a state-by-state level to the last known appraised value of the property to estimate the current LTV. The Company's CECL loss calculation incorporates the refreshed LTV information to update the distribution of defaulted loans by LTV as well as the associated LGD for each LTV band. Reappraisals on a recurring basis at the individual property level are not considered cost-effective or necessary; however, reappraisals are performed on certain higher risk accounts to support line management activities, default servicing decisions, or when other situations arise for which the Company believes the additional expense is warranted. FICO scores are refreshed quarterly, where possible. The indicators disclosed represent the credit scores for loans as of the date presented based on the most recent assessment performed. NOTE 3. LOANS AND ALLOWANCE FOR CREDIT LOSSES (continued) Residential mortgage and home equity financing receivables by LTV and FICO range are summarized as follows: As of June 30, 2021 Residential Mortgages (1)(3) (dollars in thousands) Amortized Cost by Origination Year FICO Score 2021 (4) 2020 2019 2018 2017 Prior Grand Total N/A (2) LTV <= 70% $ — $ 734 $ — $ — $ 493 $ 2,640 $ 3,867 70.01-80% — — — — — — — 80.01-90% — — — — — — — 90.01-100% — — — — — — — 100.01-110% — — — — — — — LTV>110% — — — — — — — LTV - N/A (2) 28,009 3,018 2,354 1,241 1,672 6,709 43,003 <600 LTV <= 70% $ — $ 754 $ 7,893 $ 6,876 $ 9,429 $ 95,722 $ 120,674 70.01-80% — 2,141 2,863 8,661 7,997 2,357 24,019 80.01-90% — 1,873 7,598 2,740 176 428 12,815 90.01-100% — — — — — 366 366 100.01-110% — — — — — 70 70 LTV>110% — — — — — — — LTV - N/A(2) — — — — — 56 56 600-639 LTV <= 70% $ 1,003 $ 2,415 $ 9,599 $ 6,589 $ 11,464 $ 78,267 $ 109,337 70.01-80% 422 3,193 2,679 3,955 4,041 1,627 15,917 80.01-90% 401 4,394 9,382 1,225 — 276 15,678 90.01-100% 971 1,056 — — — 308 2,335 100.01-110% — — — — — — — LTV>110% — — — — — — — LTV - N/A (2) — — — — — — — 640-679 LTV <= 70% $ 2,054 $ 14,058 $ 16,537 $ 16,531 $ 18,661 $ 139,227 $ 207,068 70.01-80% 1,984 5,754 13,840 11,799 7,880 1,893 43,150 80.01-90% 337 5,940 13,579 5,149 — 1,337 26,342 90.01-100% 2,948 2,365 — — — 614 5,927 100.01-110% — — — — — 691 691 LTV>110% — — — — — 1,472 1,472 LTV - N/A (2) — — — — — 28 28 680-719 LTV <= 70% $ 21,723 $ 40,269 $ 57,747 $ 26,760 $ 62,979 $ 223,966 $ 433,444 70.01-80% 16,382 20,678 26,966 16,873 10,395 4,694 95,988 80.01-90% 1,757 18,216 32,416 5,241 — 1,717 59,347 90.01-100% 12,289 11,627 — — — 924 24,840 100.01-110% — — — — — 818 818 LTV>110% — — — — — 353 353 LTV - N/A(2) — — — — — 65 65 720-759 LTV <= 70% $ 92,290 $ 116,368 $ 106,311 $ 81,082 $ 100,504 $ 340,422 $ 836,977 70.01-80% 70,003 65,488 34,940 28,186 18,795 4,739 222,151 80.01-90% 3,707 31,953 52,597 7,444 339 1,311 97,351 90.01-100% 17,793 13,945 — — — 163 31,901 100.01-110% — — — — — 94 94 LTV>110% — — — — — 73 73 LTV - N/A (2) — — — — — 111 111 >=760 LTV <= 70% $ 229,249 $ 480,261 $ 296,105 $ 168,049 $ 336,315 $ 1,249,342 $ 2,759,321 70.01-80% 109,589 197,860 106,441 50,188 31,294 7,160 502,532 80.01-90% 9,260 63,769 77,187 13,979 78 3,199 167,472 90.01-100% 16,525 16,235 — — 564 333 33,657 100.01-110% — — — — — 414 414 LTV>110% — — — — — 1,498 1,498 LTV - N/A (2) — — — — — 324 324 Total - All FICO Bands LTV <= 70% $ 346,319 $ 654,859 $ 494,192 $ 305,887 $ 539,845 $ 2,129,586 $ 4,470,688 70.01-80% 198,380 295,114 187,729 119,662 80,402 22,470 903,757 80.01-90% 15,462 126,145 192,759 35,778 593 8,268 379,005 90.01-100% 50,526 45,228 — — 564 2,708 99,026 100.01-110% — — — — — 2,087 2,087 LTV>110% — — — — — 3,396 3,396 LTV - N/A (2) 28,009 3,018 2,354 1,241 1,672 7,293 43,587 Grand Total $ 638,696 $ 1,124,364 $ 877,034 $ 462,568 $ 623,076 $ 2,175,808 $ 5,901,546 (1) Excludes LHFS. (2) Balances in the "N/A" range for LTV or FICO score primarily represent loans serviced by others, in run-off portfolios or for which a current LTV or FICO score is unavailable. (3) The ALLL model considers LTV for financing receivables in first lien position and CLTV for financing receivables in second lien position for the Company. (4) Loans originated during the year-to-date ended June 30, 2021. NOTE 3. LOANS AND ALLOWANCE FOR CREDIT LOSSES (continued) As of June 30, 2021 Home Equity Loans and Lines of Credit (2) (in thousands) Amortized Cost by Origination Year FICO Score 2021 (4) 2020 2019 2018 2017 Prior Total Revolving N/A (2) LTV <= 70% $ — $ 166 $ 163 $ 252 $ 474 $ 875 $ 1,930 $ 1,847 70.01-90% 21 — — — — — 21 21 90.01-110% — — — — — — — — LTV>110% — — — — — — — — LTV - N/A (2) 1,084 3,559 4,923 6,076 5,725 78,805 100,172 51,107 <600 LTV <= 70% $ — $ 240 $ 2,428 $ 8,922 $ 12,497 $ 116,698 $ 140,785 $ 121,937 70.01-90% — 174 1,066 1,987 418 5,974 9,619 8,597 90.01-110% — — — — — 1,061 1,061 980 LTV>110% — — — — — 861 861 848 LTV - N/A (2) — — — — 15 489 504 504 600-639 LTV <= 70% $ 108 $ 1,339 $ 3,521 $ 9,128 $ 14,346 $ 95,298 $ 123,740 $ 116,680 70.01-90% — 626 2,576 1,594 613 6,511 11,920 11,083 90.01-110% — — — — — 1,692 1,692 1,666 LTV>110% — — — — — 2,783 2,783 2,698 LTV - N/A (2) — — — — 100 50 150 150 640-679 LTV <= 70% $ 260 $ 7,712 $ 12,673 $ 25,945 $ 20,918 $ 161,560 $ 229,068 $ 220,653 70.01-90% — 1,211 6,198 5,159 1,199 12,651 26,418 24,964 90.01-110% — — 56 — — 4,700 4,756 4,063 LTV>110% — 42 — — — 2,234 2,276 2,261 LTV - N/A (2) — — — — — 78 78 58 680-719 LTV <= 70% $ 5,994 $ 25,729 $ 31,718 $ 51,940 $ 53,408 $ 279,319 $ 448,108 $ 434,981 70.01-90% 1,003 4,630 12,727 6,901 2,390 17,650 45,301 44,653 90.01-110% — — — — — 4,572 4,572 4,092 LTV>110% 141 — — — — 4,649 4,790 4,576 LTV - N/A (2) — — — — — 152 152 152 720-759 LTV <= 70% $ 18,183 $ 40,990 $ 51,279 $ 75,175 $ 84,684 $ 365,405 $ 635,716 $ 624,459 70.01-90% 3,599 12,343 17,488 10,618 3,510 25,538 73,096 71,848 90.01-110% 648 — — — — 5,086 5,734 5,250 LTV>110% 80 — — — — 4,856 4,936 4,813 LTV - N/A (2) — 24 51 — — 136 211 201 >=760 LTV <= 70% $ 38,757 $ 128,490 $ 157,319 $ 203,816 $ 198,098 $ 982,100 $ 1,708,580 $ 1,676,594 70.01-90% 5,477 22,509 40,521 20,785 5,236 59,670 154,198 150,859 90.01-110% — 405 32 — — 15,762 16,199 15,069 LTV>110% 790 741 50 — — 6,567 8,148 8,062 LTV - N/A (2) 320 3 — 124 66 401 914 914 Total - All FICO Bands LTV <= 70% $ 63,302 $ 204,666 $ 259,101 $ 375,178 $ 384,425 $ 2,001,255 $ 3,287,927 $ 3,197,151 LTV 70.01 - 90% 10,100 41,493 80,576 47,044 13,36 |
