Loans and Allowance for Credit Losses: Loans and Unfunded Credit Commitments | Loans and Allowance for Credit Losses: Loans and Unfunded Credit CommitmentsWe serve a variety of commercial clients in the technology, life science/healthcare, private equity/venture capital and premium wine industries. Our technology clients generally tend to be in the industries of hardware (such as semiconductors, communications, data, storage and electronics), software/internet (such as infrastructure software, applications, software services, digital content and advertising technology) and energy and resource innovation (“ERI”). Our life science/healthcare clients primarily tend to be in the industries of biotechnology, medical devices, healthcare information technology and healthcare services. Loans to our technology, life science/healthcare and ERI clients are reported under the Investor Dependent, Cash Flow Dependent and Balance Sheet Dependent risk-based segments below. Loans made to private equity/venture capital firm clients typically enable them to fund investments prior to their receipt of funds from capital calls and are reported under the Global Fund Banking (previously Private Equity/Venture Capital) portfolio segment below. Loans to the premium wine industry focus on vineyards and wineries that produce grapes and wines of high quality. In addition to commercial loans, we make consumer loans through SVB Private Bank and provide real estate secured loans to eligible employees through our EHOP. We also provide community development loans made as part of our responsibilities under the CRA. These loans are included within “construction loans” below and are primarily secured by real estate. Additionally, beginning in April 2020, we accepted applications under the PPP administered by the SBA under the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act") and originated loans to qualified small businesses. CECL Adoption On January 1, 2020, we adopted the new credit loss guidance, CECL, and all related amendments. Our loan portfolio was pooled into six portfolio segments that share similar risk characteristics and represent the level at which we developed our systematic methodology to determine our allowance for credit losses. Further, our portfolio segments were disaggregated and grouped into ten classes of financing receivable that represent the level at which we monitor and assess credit risk, which we refer to as "risk-based segments". As such, our funded loans and credit quality disclosures below are presented at the risk-based segment level of disaggregation. As of September 30, 2020, we have six portfolio segments and eleven risk-based segments reflective of the funding of SBA loans under the PPP. The comparative information below has been reclassified to conform to current period risk-based segment presentations. However, the financial results continue to be reported under the accounting standards in effect for those periods. Certain prior period credit quality disclosures related to impaired loans and our individually and collectively evaluated loan portfolio have been superseded with the current guidance and have not been included below, please refer to Note 10 - “Loans, Allowance for Loan Losses and Allowance for Unfunded Credit Commitments" under Part II, Item 8 of our 2019 Form 10-K for additional prior period information. Refer to Note 1 — “Basis of Presentation” of the “Notes to Interim Consolidated Financial Statements (unaudited)” under Part I, Item 1 of this report for additional information regarding the adoption of CECL. The composition of loans at amortized cost basis broken out by risk-based segment at September 30, 2020 and December 31, 2019 is presented in the following table: (Dollars in thousands) September 30, 2020 December 31, 2019 Global fund banking $ 19,584,518 $ 17,696,794 Investor dependent: Early stage 1,470,941 1,624,221 Mid stage 1,626,794 1,047,398 Later stage 2,013,934 1,663,576 Total investor dependent 5,111,669 4,335,195 Cash flow dependent: Sponsor led buyout 2,062,243 2,185,497 Other 2,600,157 2,238,741 Total cash flow dependent 4,662,400 4,424,238 Private bank (1) (5) 4,424,899 3,492,269 Balance sheet dependent 1,698,220 1,286,153 Premium wine (1) (5) 1,081,963 1,062,264 Other (1) (5) 48,206 867,723 SBA loans 1,802,016 — Total loans (2) (3) (4) $ 38,413,891 $ 33,164,636 Allowance for credit losses (512,958) (304,924) Net loans $ 37,900,933 $ 32,859,712 (1) As of September 30, 2020, as a result of enhanced portfolio characteristic definitions for our risk-based segments, loans in the amount of $411.2 million and $50.3 million that would have been reported in Other under historical definitions, are now being reported in our Private Bank and Premium Wine risk-based segments, respectively. (2) Total loans at amortized cost is net of unearned income of $222 million and $163 million at September 30, 2020 and December 31, 2019, respectively. (3) Included within our total loan portfolio are credit card loans of $329 million and $395 million at September 30, 2020 and December 31, 2019, respectively. (4) Included within our total loan portfolio are construction loans of $118 million and $183 million at September 30, 2020 and December 31, 2019, respectively. (5) Of our total loans, the table below includes those secured by real estate at amortized cost at September 30, 2020 and December 31, 2019 and were comprised of the following: (Dollars in thousands) September 30, 2020 December 31, 2019 Real estate secured loans: Private bank: Loans for personal residence $ 3,179,148 $ 2,829,880 Loans to eligible employees 449,551 401,396 Home equity lines of credit 50,929 55,461 Other 137,320 38,880 Total private bank loans secured by real estate $ 3,816,948 $ 3,325,617 Premium wine 831,182 820,730 Other 60,501 — Total real estate secured loans $ 4,708,631 $ 4,146,347 Credit Quality Indicators For each individual client, we establish an internal credit risk rating for that loan, which is used for assessing and monitoring credit risk as well as performance of the loan and the overall portfolio. Our internal credit risk ratings are also used to summarize the risk of loss due to failure by an individual borrower to repay the loan. For our internal credit risk ratings, each individual loan is given a risk rating of 1 through 10. Loans risk-rated 1 through 4 are performing loans and translate to an internal rating of “Pass,” with loans risk-rated 1 being cash secured. Loans risk-rated 5 through 7 are performing loans; however, we consider them as demonstrating higher risk, which requires more frequent review of the individual exposures; these translate to an internal rating of “Criticized.” All of our nonaccrual loans are risk-rated 8 or 9 and are classified under the nonperforming category. Loans rated 10 are charged-off and are not included as part of our loan portfolio balance. We review our credit quality indicators on a quarterly basis for performance and appropriateness of risk ratings as part of our evaluation process for our allowance for credit losses for loans. The following table summarizes the credit quality indicators, broken out by risk-based segment, as of September 30, 2020 and December 31, 2019: (Dollars in thousands) Pass Criticized Nonperforming (Nonaccrual) Total September 30, 2020: Global fund banking $ 19,576,723 $ 7,782 $ 13 $ 19,584,518 Investor dependent: Early stage 1,296,789 154,420 19,732 1,470,941 Mid stage 1,449,525 165,642 11,627 1,626,794 Later stage 1,795,229 180,130 38,575 2,013,934 Total investor dependent 4,541,543 500,192 69,934 5,111,669 Cash flow dependent: Sponsor led buyout 1,827,943 212,708 21,592 2,062,243 Other 2,314,453 279,419 6,285 2,600,157 Total cash flow dependent 4,142,396 492,127 27,877 4,662,400 Private bank 4,395,531 23,936 5,432 4,424,899 Balance sheet dependent 1,565,597 131,947 676 1,698,220 Premium wine 941,511 138,777 1,675 1,081,963 Other 48,041 61 104 48,206 SBA loans 1,663,383 138,633 — 1,802,016 Total loans (1) $ 36,874,725 $ 1,433,455 $ 105,711 $ 38,413,891 December 31, 2019: Global fund banking $ 17,708,550 $ 4,247 $ — $ 17,712,797 Investor dependent Early stage 1,436,022 206,310 11,093 1,653,425 Mid stage 924,002 125,451 17,330 1,066,783 Later stage 1,490,561 201,819 6,296 1,698,676 Total investor dependent 3,850,585 533,580 34,719 4,418,884 Cash flow dependent Sponsor led buyout 2,039,847 118,588 44,585 2,203,020 Other 2,141,766 93,400 17,681 2,252,847 Total cash flow dependent 4,181,613 211,988 62,266 4,455,867 Private bank 3,472,138 11,601 5,480 3,489,219 Balance sheet dependent 1,231,961 65,343 — 1,297,304 Premium wine 1,026,973 36,335 204 1,063,512 Other 890,059 62 — 890,121 Total loans (1) $ 32,361,879 $ 863,156 $ 102,669 $ 33,327,704 (1) As of September 30, 2020, loan amounts are disclosed using the amortized cost basis as a result of the adoption of CECL. Prior period loan amounts are disclosed using the gross basis. The following table summarizes the credit quality indicators, broken out by risk-based segment and vintage year, as of September 30, 2020: Term Loans by Origination Year (Dollars in thousands) 2020 2019 2018 2017 2016 Prior Revolving Loans Revolving Loans Converted to Term Loans Total Global fund banking: Risk rating: Pass $ 271,164 $ 156,714 $ 70,084 $ 36,907 $ 2,552 $ 11,588 $ 19,022,934 $ 4,780 $ 19,576,723 Criticized 8 — — — — — 994 6,780 7,782 Nonperforming — 8 — — — — 5 — 13 Total global fund banking $ 271,172 $ 156,722 $ 70,084 $ 36,907 $ 2,552 $ 11,588 $ 19,023,933 $ 11,560 $ 19,584,518 Investor dependent: Early stage: Risk rating: Pass $ 589,224 $ 452,550 $ 140,448 $ 37,911 $ 2,430 $ 390 $ 73,199 $ 637 $ 1,296,789 Criticized 20,744 68,381 36,841 10,878 2,530 363 13,750 933 154,420 Nonperforming 2,466 8,870 6,956 463 — 4 973 — 19,732 Total early stage $ 612,434 $ 529,801 $ 184,245 $ 49,252 $ 4,960 $ 757 $ 87,922 $ 1,570 $ 1,470,941 Mid stage: Risk rating: Pass $ 726,708 $ 344,458 $ 209,372 $ 39,603 $ 7,510 $ 2,725 $ 116,655 $ 2,494 $ 1,449,525 Criticized 59,623 43,386 32,668 12,725 1,966 — 15,274 — 165,642 Nonperforming 2 2,558 5,405 3,519 — — 143 — 11,627 Total mid stage $ 786,333 $ 390,402 $ 247,445 $ 55,847 $ 9,476 $ 2,725 $ 132,072 $ 2,494 $ 1,626,794 Later stage: Risk rating: Pass $ 790,085 $ 473,800 $ 178,768 $ 60,009 $ 562 $ 9,110 $ 277,911 $ 4,984 $ 1,795,229 Criticized 17,108 72,028 30,280 2,666 — 8,708 49,340 — 180,130 Nonperforming 17,506 1,886 12,434 — — — 6,749 — 38,575 Total later stage $ 824,699 $ 547,714 $ 221,482 $ 62,675 $ 562 $ 17,818 $ 334,000 $ 4,984 $ 2,013,934 Total investor dependent $ 2,223,466 $ 1,467,917 $ 653,172 $ 167,774 $ 14,998 $ 21,300 $ 553,994 $ 9,048 $ 5,111,669 Cash flow dependent: Sponsor led buyout: Risk rating: Pass $ 534,579 $ 601,938 $ 326,172 $ 226,326 $ 50,267 $ — $ 88,661 $ — $ 1,827,943 Criticized 43,221 70,050 53,043 21,400 12,238 — 12,756 — 212,708 Nonperforming 33 11,907 — 7,200 — — 2,452 — 21,592 Total sponsor led buyout $ 577,833 $ 683,895 $ 379,215 $ 254,926 $ 62,505 $ — $ 103,869 $ — $ 2,062,243 Other Risk rating: Pass $ 465,243 $ 574,231 $ 189,501 $ 116,918 $ 39,627 $ 346 $ 928,587 $ — $ 2,314,453 Criticized 9,589 55,118 74,916 956 416 — 138,424 — 279,419 Nonperforming — — 3,845 — — — 2,440 — 6,285 Total other $ 474,832 $ 629,349 $ 268,262 $ 117,874 $ 40,043 $ 346 $ 1,069,451 $ — $ 2,600,157 Total cash flow dependent $ 1,052,665 $ 1,313,244 $ 647,477 $ 372,800 $ 102,548 $ 346 $ 1,173,320 $ — $ 4,662,400 Private bank: Risk rating: Pass $ 1,191,024 $ 1,212,000 $ 420,440 $ 397,847 $ 342,594 $ 463,198 $ 368,107 $ 321 $ 4,395,531 Criticized 1,456 5,549 3,040 1,201 5,101 6,802 787 — 23,936 Nonperforming — 520 2,475 — — 1,702 735 — 5,432 Total private bank $ 1,192,480 $ 1,218,069 $ 425,955 $ 399,048 $ 347,695 $ 471,702 $ 369,629 $ 321 $ 4,424,899 Balance sheet dependent: Risk rating: Pass $ 374,768 $ 202,185 $ 237,529 $ 31,838 $ — $ — $ 717,771 $ 1,506 $ 1,565,597 Criticized 60,238 8,877 5,559 610 — — 56,663 — 131,947 Nonperforming — — — — — 675 1 — 676 Total balance sheet dependent $ 435,006 $ 211,062 $ 243,088 $ 32,448 $ — $ 675 $ 774,435 $ 1,506 $ 1,698,220 Premium wine: Risk rating: Pass $ 154,624 $ 181,416 $ 70,297 $ 84,221 $ 102,297 $ 156,397 $ 154,685 $ 37,574 $ 941,511 Criticized 14,001 26,446 35,898 338 13,674 8,210 40,210 — 138,777 Nonperforming — — — — 1,662 — 13 — 1,675 Total Premium wine $ 168,625 $ 207,862 $ 106,195 $ 84,559 $ 117,633 $ 164,607 $ 194,908 $ 37,574 $ 1,081,963 Other: Risk rating: Pass $ 1,474 $ 23,286 $ 13,092 $ 1,900 $ — $ 80 $ 8,209 $ — $ 48,041 Criticized 22 — — — — — 39 — 61 Nonperforming — 104 — — — — — — 104 Total other $ 1,496 $ 23,390 $ 13,092 $ 1,900 $ — $ 80 $ 8,248 $ — $ 48,206 SBA loans: Risk rating: Pass $ 1,663,383 $ — $ — $ — $ — $ — $ — $ — $ 1,663,383 Criticized 138,633 — — — — — — — 138,633 Nonperforming — — — — — — — — — Total SBA loans $ 1,802,016 $ — $ — $ — $ — $ — $ — $ — $ 1,802,016 Total loans $ 7,146,926 $ 4,598,266 $ 2,159,063 $ 1,095,436 $ 585,426 $ 670,298 $ 22,098,467 $ 60,009 $ 38,413,891 Allowance for Credit Losses: Loans In the third quarter of 2020, ACL for loans decreased $76.9 million primarily driven by an improved economic forecast in Moody’s Analytics September 2020 forecast utilized in our quantitative model, as compared to the forecast utilized in June 2020. Those assumptions included an improvement in the unemployment rate as a result of businesses re-opening and the effect of government aid programs. The gross domestic product contraction rate also improved in the September 2020 forecast. We determined the above forecast to be a reasonable view of the outlook for the economy given the available information at current quarter end. To the extent we identified credit risk considerations that were not captured by the Moody's Analytics September 2020 forecast, we addressed the risk through management's qualitative adjustments to our ACL. The following tables summarize the activity relating to our allowance for credit losses for loans for the three and nine months ended September 30, 2020 and 2019, broken out by risk-based segment: Three months ended September 30, 2020 Beginning Balance June 30, 2020 Charge-offs Recoveries (Reduction) Provision for Credit Losses Foreign Currency Translation Adjustments Ending Balance September 30, 2020 (Dollars in thousands) Global fund banking $ 53,723 $ — $ — $ (14,734) $ — $ 38,989 Investor dependent: Early stage 148,270 (14,950) 2,511 (33,171) (101) 102,559 Mid stage 56,393 (7,162) 697 12,578 (88) 62,418 Later stage 87,604 (6,205) 600 15,792 (80) 97,711 Total investor dependent 292,267 (28,317) 3,808 (4,801) (269) 262,688 Cash flow dependent: Sponsor led buyout 54,853 (130) — (3,062) — 51,661 Other 43,100 — — (2,779) — 40,321 Total cash flow dependent 97,953 (130) — (5,841) — 91,982 Private bank 91,345 — 15 (14,881) — 76,479 Balance sheet dependent 24,728 — — 4,341 — 29,069 Premium wine 12,319 — — (1,914) — 10,405 Other 13,635 (2) 531 (14,898) 1,600 866 SBA loans 3,858 — — (1,378) — 2,480 Total allowance for credit losses $ 589,828 $ (28,449) $ 4,354 $ (54,106) $ 1,331 $ 512,958 Three months ended September 30, 2019 Beginning Balance June 30, 2019 Charge-offs Recoveries Provision for (Reduction) Credit Losses Foreign Currency Translation Adjustments Ending Balance September 30, 2019 (Dollars in thousands) Global fund banking $ 101,253 $ — $ 1,200 $ 1,485 $ (22) $ 103,916 Investor dependent: Early stage 30,969 (7,524) 1,760 5,783 (85) 30,903 Mid stage 28,264 (16,581) 385 5,778 (85) 17,761 Later stage 37,940 (11,449) 276 17,513 (259) 44,021 Total investor dependent 97,173 (35,554) 2,421 29,074 (429) 92,685 Cash flow dependent: Sponsor led buyout 32,131 — — 9,663 (143) 41,651 Other 24,551 — 250 (3,199) 47 21,649 Total cash flow dependent 56,682 — 250 6,464 (96) 63,300 Private Bank 20,397 — 15 1,307 (19) 21,700 Balance sheet dependent 17,256 — — (2,496) 37 14,797 Premium wine 4,227 — — 27 — 4,254 Other 4,900 (1,266) 2 124 (2) 3,758 Total allowance for credit losses $ 301,888 $ (36,820) $ 3,888 $ 35,985 $ (531) $ 304,410 Nine months ended September 30, 2020 Beginning Balance December 31, 2019 Impact of adopting ASC 326 Charge-offs Recoveries Provision for (Reduction) Credit Losses Foreign Currency Translation Adjustments Ending Balance September 30, 2020 (Dollars in thousands) Global fund banking $ 107,285 $ (69,888) $ — $ — $ 1,772 $ (180) $ 38,989 Investor dependent: Early stage 26,245 39,911 (26,897) 6,474 57,494 (668) 102,559 Mid stage 15,936 6,963 (20,147) 5,303 54,584 (221) 62,418 Later stage 40,189 24,750 (20,189) 600 52,880 (519) 97,711 Total investor dependent 82,370 71,624 (67,233) 12,377 164,958 (1,408) 262,688 Cash flow dependent: Sponsor led buyout 42,939 3,151 (2,754) 2,845 5,613 (133) 51,661 Other 25,159 (3,056) (3,385) 1 21,727 (125) 40,321 Total cash flow dependent 68,098 95 (6,139) 2,846 27,340 (258) 91,982 Private bank 21,551 12,615 (1,616) 15 44,194 (280) 76,479 Balance sheet dependent 12,722 (1,364) (4,900) — 22,685 (74) 29,069 Premium wine 5,296 3,650 (192) — 1,691 (40) 10,405 Other 7,602 8,732 (320) 944 (18,426) 2,334 866 SBA loans — — — — 2,480 — 2,480 Total allowance for credit losses $ 304,924 $ 25,464 $ (80,400) $ 16,182 $ 246,694 $ 94 $ 512,958 Nine months ended September 30, 2019 Beginning Balance December 31, 2018 Charge-offs Recoveries Provision for (Reduction) Credit Losses Foreign Currency Translation Adjustments Ending Balance September 30, 2019 (Dollars in thousands) Global fund banking $ 93,781 $ (2,047) $ 1,200 $ 11,304 $ (322) $ 103,916 Investor dependent: Early stage 25,885 (16,819) 5,685 16,547 (395) 30,903 Mid stage 20,999 (36,492) 1,288 31,443 523 17,761 Later stage 25,217 (11,449) 2,053 28,616 (416) 44,021 Total investor dependent 72,101 (64,760) 9,026 76,606 (288) 92,685 Cash flow dependent: Sponsor led buyout 44,274 (2,402) — (253) 32 41,651 Other 21,754 (716) 4,647 (4,083) 47 21,649 Total cash flow dependent 66,028 (3,118) 4,647 (4,336) 79 63,300 Private Bank 20,583 (1,019) 240 1,999 (103) 21,700 Balance sheet dependent 21,707 — — (7,135) 225 14,797 Premium wine 3,646 — — 611 (3) 4,254 Other 3,057 (1,311) 20 1,905 87 3,758 Total allowance for credit losses $ 280,903 $ (72,255) $ 15,133 $ 80,954 $ (325) $ 304,410 The following table summarizes the aging of our loans broken out by risk-based segment as of September 30, 2020 and December 31, 2019: (Dollars in thousands) 30 - 59 60 - 89 Equal to or Greater Total Past Current Total Loans Past Due September 30, 2020: Global fund banking $ 6,285 $ — $ 14 $ 6,299 $ 19,578,219 $ 19,584,518 $ — Investor dependent: Early stage 605 323 367 1,295 1,469,646 1,470,941 — Mid stage 250 145 211 606 1,626,188 1,626,794 — Later stage 51 — — 51 2,013,883 2,013,934 — Total investor dependent 906 468 578 1,952 5,109,717 5,111,669 — Cash flow dependent: Sponsor led buyout — — — — 2,062,243 2,062,243 — Other 742 3 — 745 2,599,412 2,600,157 — Total cash flow dependent 742 3 — 745 4,661,655 4,662,400 — Private bank 4 4 — 8 4,424,891 4,424,899 — Balance sheet dependent 2,851 7 — 2,858 1,695,362 1,698,220 — Premium wine 3,117 4,355 — 7,472 1,074,491 1,081,963 — Other 23 — 155 178 48,028 48,206 — SBA loans — — — — 1,802,016 1,802,016 — Total loans (1) $ 13,928 $ 4,837 $ 747 $ 19,512 $ 38,394,379 $ 38,413,891 $ — December 31, 2019: Global fund banking $ 97,739 $ 383 $ 3,150 $ 101,272 $ 17,611,525 $ 17,712,797 $ 3,150 Investor dependent: Early stage 1,307 22,062 723 24,092 1,629,333 1,653,425 — Mid stage 10,025 6,999 — 17,024 1,049,759 1,066,783 — Later stage 8,113 500 10,569 19,182 1,679,494 1,698,676 — Total investor dependent 19,445 29,561 11,292 60,298 4,358,586 4,418,884 — Cash flow dependent Sponsor led buyout — — — — 2,203,020 2,203,020 — Other 2,426 3,061 2 5,489 2,247,358 2,252,847 — Total cash flow dependent 2,426 3,061 2 5,489 4,450,378 4,455,867 — Private bank 6,582 2,049 1,544 10,175 3,479,044 3,489,219 365 Balance sheet dependent 2,731 — — 2,731 1,294,573 1,297,304 — Premium wine 8,435 3,170 — 11,605 1,051,907 1,063,512 — Other 17 — — 17 890,104 890,121 — Total loans (1) $ 137,375 $ 38,224 $ 15,988 $ 191,587 $ 33,136,117 $ 33,327,704 $ 3,515 (1) As of September 30, 2020, loan amounts are disclosed using the amortized cost basis as a result of the adoption of CECL. Prior period loan amounts are disclosed using the gross basis. Nonaccrual Loans The following tables summarize our nonaccrual loan activity by risk-based segment for the three and nine months ended September 30, 2020 and 2019: Three months ended September 30, 2020 Beginning Balance June 30, 2020 Additions Paydowns and Other Reductions Charge-offs Ending Balance September 30, 2020 (Dollars in thousands) Global fund banking $ 9 $ 6 $ (2) $ — $ 13 Investor dependent: Early stage 24,422 6,269 (2,790) (8,169) 19,732 Mid stage 8,119 10,290 (292) (6,490) 11,627 Later stage 10,498 36,779 (3,500) (5,202) 38,575 Total investor dependent 43,039 53,338 (6,582) (19,861) 69,934 Cash flow dependent: Sponsor led buyout 21,658 172 (238) — 21,592 Other 5,317 12,356 (11,388) — 6,285 Total cash flow dependent 26,975 12,528 (11,626) — 27,877 Private bank 6,517 3,348 (4,433) — 5,432 Balance sheet dependent 11,842 675 (11,841) — 676 Premium wine 1,681 — (6) — 1,675 Other 61 105 (62) — 104 SBA loans 4,202 — (4,202) — — Total nonaccrual loans $ 94,326 $ 70,000 $ (38,754) $ (19,861) $ 105,711 Three months ended September 30, 2019 Beginning Balance June 30, 2019 Additions Paydowns and Other Reductions Charge-offs Ending Balance September 30, 2019 (Dollars in thousands) Global fund banking $ — $ — $ — $ — $ — Investor dependent: Early stage 10,290 12,409 (2,172) (1,569) 18,958 Mid stage 28,699 6 (8,151) (15,323) 5,231 Later stage 38,346 2,216 (6,462) (6,837) 27,263 Total investor dependent 77,335 14,631 (16,785) (23,729) 51,452 Cash flow dependent: Sponsor led buyout 8,365 37,294 (640) — 45,019 Other 79 13 — — 92 Total cash flow dependent 8,444 37,307 (640) — 45,111 Private bank 5,644 1,531 (86) — 7,089 Balance sheet dependent 4,974 — (4,974) — — Premium wine 244 174 (25) — 393 Other — — — — — Total nonaccrual loans (1) $ 96,641 $ 53,643 $ (22,510) $ (23,729) $ 104,045 Nine months ended September 30, 2020 Beginning Balance December 31, 2019 Additions Paydowns and Other Reductions Charge-offs Ending Balance September 30, 2020 (Dollars in thousands) Global fund banking $ — $ 15 $ (2) $ — $ 13 Investor dependent: Early stage 11,093 28,218 (8,695) (10,884) 19,732 Mid stage 17,330 22,875 (1,079) (27,499) 11,627 Later stage 6,296 48,962 (8,276) (8,407) 38,575 Total investor dependent 34,719 100,055 (18,050) (46,790) 69,934 Cash flow dependent: Sponsor led buyout 44,585 21,830 (42,199) (2,624) 21,592 Other 17,681 20,936 (32,314) (18) 6,285 Total cash flow dependent 62,266 42,766 (74,513) (2,642) 27,877 Private bank 5,480 5,982 (5,449) (581) 5,432 Balance sheet dependent — 17,417 (16,741) — 676 Premium wine 204 1,686 (23) (192) 1,675 Other — 339 (235) — 104 SBA loans — 4,202 (4,202) — — Total nonaccrual loans (1) $ 102,669 $ 172,462 $ (119,215) $ (50,205) $ 105,711 Nine months ended September 30, 2019 Beginning Balance December 31, 2018 Additions Paydowns and Other Reductions Charge-offs Ending Balance September 30, 2019 (Dollars in thousands) Global fund banking $ 3,700 $ 2,247 $ (3,900) $ (2,047) $ — Investor dependent: Early stage 7,616 25,221 (10,615) (3,264) 18,958 Mid stage 4,751 42,497 (9,541) (32,476) 5,231 Later stage 11,385 32,786 (10,071) (6,837) 27,263 Total investor dependent 23,752 100,504 (30,227) (42,577) 51,452 Cash flow dependent: Sponsor led buyout 39,534 37,294 (29,407) (2,402) 45,019 Other 17,156 92 (16,690) (466) 92 Total cash flow dependent 56,690 37,386 (46,097) (2,868) 45,111 Private bank 3,919 3,411 (174) (67) 7,089 Balance sheet dependent 5,004 238 (5,242) — — Premium wine 285 174 (66) — 393 Other 792 — (792) — — Total nonaccrual loans (1) $ 94,142 $ 143,960 $ (86,498) $ (47,559) $ 104,045 (1) For the three and nine months ended September 30, 2020, loan amounts are disclosed using the amortized cost basis as a result of the adoption of CECL. Prior period loan amounts are disclosed using the gross basis. The following table summarizes our nonaccrual loans with no allowance for credit loss at September 30, 2020 and December 31, 2019: September 30, 2020 December 31, 2019 (Dollars in thousands) Nonaccrual Loans Nonaccrual Loans with no Allowance for Credit Loss Nonaccrual Loans Nonaccrual Loans with no Allowance for Credit Loss Global fund banking $ 13 $ 8 $ — $ — Investor dependent: Early stage 19,732 10 11,093 460 Mid stage 11,627 — 17,330 274 Later stage 38,575 — 6,296 — Total investor dependent 69,934 10 34,719 734 Cash flow dependent: Sponsor led buyout 21,592 — 44,585 — Other 6,285 705 17,681 2,782 Total cash flow dependent 27,877 705 62,266 2,782 Private bank 5,432 4,912 5,480 3,714 Balance sheet dependent 676 — — — Premium wine 1,675 998 204 — Other 104 104 — — SBA loans — — — — Total nonaccrual loans (1) $ 105,711 $ 6,737 $ 102,669 $ 7,230 (1) As of September 30, 2020, loan amounts are disclosed using the amortized cost basis as a result of the adoption of CECL. Prior period loan amounts are disclosed using the gross basis. Troubled Debt Restructurings As of September 30, 2020, we had 16 TDRs with a total carrying value of $50.5 million where concessions have been granted to borrowers experiencing financial difficulties, in an attempt to maximize collection. There were no unfunded commitments available for funding to the clients associated with these TDRs as of September 30, 2020. The following table summarizes our loans modified in TDRs, broken out by risk-based segment, at September 30, 2020 and December 31, 2019: (Dollars in thousands) September 30, 2020 December 31, 2019 Loans modified in TDRs: Global fund banking $ — $ — Investor dependent: Early stage 7,771 9,471 Mid stage 3,781 5,189 Later stage 3,297 23,318 Total investor dependent 14,849 37,978 Cash flow dependent: Sponsor led buyout 30,799 55,443 Other 855 — Total cash flow dependent 31,654 55,443 Private bank — 2,104 Balance sheet dependent 675 — Premium wine 3,341 13,457 Other — — SBA loans — — Total loans modified in TDRs (1) $ 50,519 $ 108,982 (1) As of September 30, 2020, loan amounts are disclosed using the amortized cost basis as a result of the adoption of CECL. Prior period loan amounts are disclosed using the gross basis. The following table summarizes the recorded investment in loans modified in TDRs, broken out by risk-based segment, for modifications made during the three and nine months ended September 30, 2020 and 2019: Three months ended September 30, Nine months ended September 30, (Dollars in thousands) 2020 2019 2020 2019 Loans modified in TDRs during the period: Global fund banking $ — $ — $ — $ — Investor dependent: Early stage 4,043 2,205 4,193 2,205 Mid stage — — 209 3,480 Later stage — 6,361 3,297 17,324 Total investor dependent 4,043 8,566 7,699 23,009 Cash flow dependent: Sponsor led buyout 21,611 — 21,611 48,604 Other — — 855 — Total cash flow dependent 21,611 — 22,466 48,604 Private bank — — — 1,826 Balance sheet dependent 675 — 675 — Premium wine — — 998 — Other — — — — SBA loans — — — — Total loans modified in TDRs during the period (1) (2) $ 26,329 $ 8,566 $ 31,838 $ 73,439 (1) For the three and nine months ended September 30, 2020, loan amounts are disclosed using the amortized cost basis as a result of the adoption of CECL. Prior period loan amounts are disclosed using the gross basis. (2) There were $13.6 million and $31.1 million of partial charge-offs for the three and nine months ended September 30, 2020, respectively, and $3.7 million and $9.2 million of partial charge-offs for the three and nine months ended September 30, 2019. During the three months ended September 30, 2020, new TDRs of $25.6 million were modified through payment deferrals granted to our clients and $0.7 million were modified through forgiveness of principal. During the nine months ended September 30, 2020, new TDRs of $30.9 million were modified through payment deferrals granted to our clients and $0.9 million were modified through forgiveness of principal. During the three and nine months ended September 30, 2019 , $6.4 million and $69.4 million, respectively, were modified through payment deferrals granted to our clients. During the three and nine months ended September 30, 2019, $2.2 million and $4.0 million, respectively, were modified through partial forgiveness of principal. The following table summarizes the recorded investment in loans modified in TDRs within the previous 12 months that subsequently defaulted during the three and nine months ended September 30, 2020 and 2019: Three months ended September 30, Nine months ended September 30, (Dollars in thousands) 2020 2019 2020 2019 TDRs modified within the previous 12 months that defaulted during the period: Global fund banking $ — $ — $ — $ — Investor dependent: Early stage — — — — Mid stage — — — — Later stage — 10,963 — 10,963 Total investor dependent — 10,963 — 10,963 Cash flow dependent: Sponsor led buyout — 37,294 — 37,294 Other — — — — Total cash flow dependent — 37,294 — 37,294 Private bank — — — — Balance sheet dependent — — — — Premium wine 998 — 998 — Other — — — — SBA loans — — — — Total TDRs modified within the previous 12 months that defaulted in the period (1) $ 998 $ 48,257 $ 998 $ 48,257 (1) For the three and nine months ended September 30, 2020, loan amounts are disclosed using the amortized cost basis as a result of the adoption of CECL. Prior period loan amounts are disclosed using the gross basis. Charge-offs and defaults on previously restructured loans are evaluated to determine the impact to the allowance for credit losses for loans, if any. The evaluation of these defaults may impact the assumptions used in calculating the reserve on other TDRs and nonaccrual loans as well as management’s overall outlook of macroeconomic factors that affect the reserve on the loan portfolio as a whole. After evaluating the charge-offs and defaults experienced on our TDRs we determined that no change to our reserving methodology for TDRs was necessary to determine the allowance for credit losses for loans as of September 30, 2020. Allowance for Credit Losses: Unfunded Credit Commitments We maintain a separate allowance for credit losses for unfunded credit commitments that is determined using a methodology that is inherently similar to the methodology used for calculating the allowance for credit losses for loans. At September 30, 2020, our ACL estimates utilized the improved Moody's economic forecasts from September 2020 as mentioned above. The following table summarizes the activity relating to our allowance for credit losses for unfunded credit commitments for the three and nine months ended September 30, 2020 and 2019: Three months ended September 30, Nine months ended September 30, (Dollars in thousands) 2020 2019 2020 2019 Allowance for credit losses: unfunded credit commitments, beginning balance $ 99,294 $ 62,664 $ 67,656 $ 55,183 Impact of adopting ASC 326 — — 22,826 — Provision for credit losses 2,019 551 11,132 8,079 Foreign currency translation adjustments 202 (107) (99) (154) Allowance for credit losses: unfunded credit commitments, ending balance (1) $ 101,515 $ 63,108 $ 101,515 $ 63,108 (1) The “allowance for credit losses: unfunded credit commitments” is included as a component of “other liabilities” on our unaudited interim consolidated balance sheets. See Note 15 — “Off-Balance Sheet Arrangements, Guarantees and Other Commitments” of the “Notes to Interim Consolidated Financial Statements (unaudited)” under Part I, Item 1 of this report for additional disclosures related to our commitments to extend credit. |