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Loans, Allowance for Loan Losses and Allowance for Unfunded Credit Commitments
 9 Months Ended
Sep. 30, 2019
Receivables [Abstract]  
Loans, Allowance for Loan Losses and Allowance for Unfunded Credit Commitments
Loans, Allowance for Loan Losses and Allowance for Unfunded Credit Commitments
We 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 (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”). Because of the diverse nature of ERI products and services, for our loan-related reporting purposes, ERI-related loans are reported under our hardware, software/internet, life science/healthcare and other commercial loan categories, as applicable. Our life science/healthcare clients primarily tend to be in the industries of biotechnology, medical devices, healthcare information technology and healthcare services. Loans made to private equity/venture capital firm clients typically enable them to fund investments prior to their receipt of funds from capital calls. 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. Our private banking clients are primarily private equity/venture capital professionals and executive leaders in the innovation companies they support. These products and services include real estate secured home equity lines of credit, which may be used to finance real estate investments and loans used to purchase, renovate or refinance personal residences. These products and services also include restricted stock purchase loans and capital call lines of credit.
We also provide community development loans made as part of our responsibilities under the Community Reinvestment Act. These loans are included within “Construction loans” below and are primarily secured by real estate.
The composition of loans, net of unearned income of $165 million and $173 million at September 30, 2019 and December 31, 2018, respectively, is presented in the following table:
(Dollars in thousands)
 
September 30, 2019
 
December 31, 2018
Commercial loans:
 
 
 
 
Software/internet
 
$
6,009,518

 
$
6,154,755

Hardware
 
1,357,617

 
1,234,557

Private equity/venture capital
 
16,293,556

 
14,110,560

Life science/healthcare
 
2,381,822

 
2,385,612

Premium wine
 
234,555

 
249,266

Other
 
385,013

 
321,978

Total commercial loans
 
26,662,081

 
24,456,728

Real estate secured loans:
 
 
 
 
Premium wine (1)
 
749,259

 
710,397

Consumer loans (2)
 
3,015,396

 
2,612,971

Other
 
39,332

 
40,435

Total real estate secured loans
 
3,803,987

 
3,363,803

Construction loans
 
116,854

 
97,077

Consumer loans
 
481,072

 
420,672

Total loans, net of unearned income (3)
 
$
31,063,994

 
$
28,338,280

 
 
(1)
Included in our premium wine portfolio are gross construction loans of $96 million and $99 million at September 30, 2019 and December 31, 2018, respectively.
(2)
Consumer loans secured by real estate at September 30, 2019 and December 31, 2018 were comprised of the following:
(Dollars in thousands)
 
September 30, 2019
 
December 31, 2018
Loans for personal residence
 
$
2,577,623

 
$
2,251,292

Loans to eligible employees
 
380,677

 
290,194

Home equity lines of credit
 
57,096

 
71,485

Consumer loans secured by real estate
 
$
3,015,396

 
$
2,612,971


(3)
Included within our total loan portfolio are credit card loans of $396 million and $335 million at September 30, 2019 and December 31, 2018, respectively.
Credit Quality
The composition of loans, net of unearned income of $165 million and $173 million at September 30, 2019 and December 31, 2018, respectively, broken out by portfolio segment and class of financing receivable, is as follows:
(Dollars in thousands)
 
September 30, 2019
 
December 31, 2018
Commercial loans:
 
 
 
 
Software/internet
 
$
6,009,518

 
$
6,154,755

Hardware
 
1,357,617

 
1,234,557

Private equity/venture capital
 
16,293,556

 
14,110,560

Life science/healthcare
 
2,381,822

 
2,385,612

Premium wine
 
983,814

 
959,663

Other
 
541,199

 
459,490

Total commercial loans
 
27,567,526

 
25,304,637

Consumer loans:
 
 
 
 
Real estate secured loans
 
3,015,396

 
2,612,971

Other consumer loans
 
481,072

 
420,672

Total consumer loans
 
3,496,468

 
3,033,643

Total loans, net of unearned income
 
$
31,063,994

 
$
28,338,280


The following table summarizes the aging of our gross loans, broken out by portfolio segment and class of financing receivable as of September 30, 2019 and December 31, 2018:
(Dollars in thousands)
 
30 - 59
  Days Past  
Due
 
60 - 89
  Days Past  
Due
 
Equal to or Greater
Than 90
  Days Past  
Due
 
  Total Past  
Due
 
Current  
 
  Loans Past Due  
90 Days or
More Still
Accruing
Interest
September 30, 2019:
 
 
 
 
 
 
 
 
 
 
 
 
Commercial loans:
 
 
 
 
 
 
 
 
 
 
 
 
Software/internet
 
$
11,314

 
$
6,760

 
$
806

 
$
18,880

 
$
5,967,307

 
$
806

Hardware
 
2,934

 
342

 
—

 
3,276

 
1,354,693

 
—

Private equity/venture capital
 
21,493

 
92

 
—

 
21,585

 
16,288,499

 
—

Life science/healthcare
 
6,645

 
453

 
58

 
7,156

 
2,400,516

 
58

Premium wine
 
5,846

 
—

 
—

 
5,846

 
976,903

 
—

Other
 
13

 
8,050

 
—

 
8,063

 
546,943

 
—

Total commercial loans
 
48,245

 
15,697

 
864

 
64,806

 
27,534,861

 
864

Consumer loans:
 
 
 
 
 
 
 
 
 
 
 
 
Real estate secured loans
 
599

 
2,117

 
—

 
2,716

 
3,002,256

 
—

Other consumer loans
 
147

 
—

 
—

 
147

 
481,277

 
—

Total consumer loans
 
746

 
2,117

 
—

 
2,863

 
3,483,533

 
—

Total gross loans excluding impaired loans
 
48,991

 
17,814

 
864

 
67,669

 
31,018,394

 
864

Impaired loans
 
2,000

 
39,135

 
3,059

 
44,194

 
98,746

 
—

Total gross loans
 
$
50,991

 
$
56,949

 
$
3,923

 
$
111,863

 
$
31,117,140

 
$
864

December 31, 2018:
 
 
 
 
 
 
 
 
 
 
 
 
Commercial loans:
 
 
 
 
 
 
 
 
 
 
 
 
Software/internet
 
$
28,134

 
$
6,944

 
$
378

 
$
35,456

 
$
6,059,672

 
$
378

Hardware
 
300

 
34

 
4

 
338

 
1,233,956

 
4

Private equity/venture capital
 
59,481

 
11

 
—

 
59,492

 
14,054,940

 
—

Life science/healthcare
 
16,082

 
817

 
19

 
16,918

 
2,410,091

 
19

Premium wine
 
2,953

 
14

 
—

 
2,967

 
956,285

 
—

Other
 
7,391

 
163

 
1

 
7,555

 
477,442

 
1

Total commercial loans
 
114,341

 
7,983

 
402

 
122,726

 
25,192,386

 
402

Consumer loans:
 
 
 
 
 
 
 
 
 
 
 
 
Real estate secured loans
 
3,598

 
1,750

 
1,562

 
6,910

 
2,598,496

 
1,562

Other consumer loans
 
361

 
—

 
—

 
361

 
420,359

 
—

Total consumer loans
 
3,959

 
1,750

 
1,562

 
7,271

 
3,018,855

 
1,562

Total gross loans excluding impaired loans
 
118,300

 
9,733

 
1,964

 
129,997

 
28,211,241

 
1,964

Impaired loans
 
2,843

 
1,181

 
25,092

 
29,116

 
140,958

 
—

Total gross loans
 
$
121,143

 
$
10,914

 
$
27,056

 
$
159,113

 
$
28,352,199

 
$
1,964


The following table summarizes our impaired loans as they relate to our allowance for loan losses, broken out by portfolio segment and class of financing receivable as of September 30, 2019 and December 31, 2018:
(Dollars in thousands)
 
Impaired loans for  
which there is a
related allowance
for loan losses
 
Impaired loans for  
which there is no
related allowance
for loan losses
 
Total carrying value of impaired loans
 
Total unpaid
principal of impaired loans
September 30, 2019:
 
 
 
 
 
 
 
 
Commercial loans:
 
 
 
 
 
 
 
 
Software/internet
 
$
55,892

 
$
25,588

 
$
81,480

 
$
91,126

Hardware
 
5,441

 
4,482

 
9,923

 
10,175

Life science/healthcare
 
32,634

 
6,887

 
39,521

 
76,305

Premium wine
 
393

 
1,946

 
2,339

 
2,424

Other
 
2,589

 
—

 
2,589

 
2,639

Total commercial loans
 
96,949

 
38,903

 
135,852

 
182,669

Consumer loans:
 
 
 
 
 
 
 
 
Real estate secured loans
 
3,315

 
3,760

 
7,075

 
10,871

Other consumer loans
 
13

 
—

 
13

 
13

Total consumer loans
 
3,328

 
3,760

 
7,088

 
10,884

Total
 
$
100,277

 
$
42,663

 
$
142,940

 
$
193,553

December 31, 2018:
 
 
 
 
 
 
 
 
Commercial loans:
 
 
 
 
 
 
 
 
Software/internet
 
$
49,625

 
$
65,225

 
$
114,850

 
$
131,858

Hardware
 
1,256

 
10,250

 
11,506

 
12,159

Private equity/venture capital
 
—

 
3,700

 
3,700

 
3,700

Life science/healthcare
 
17,791

 
16,276

 
34,067

 
44,446

Premium wine
 
—

 
1,301

 
1,301

 
1,365

Other
 
411

 
—

 
411

 
411

Total commercial loans
 
69,083

 
96,752

 
165,835

 
193,939

Consumer loans:
 
 
 
 
 
 
 
 
Real estate secured loans
 
3,919

 
320

 
4,239

 
5,969

Other consumer loans
 
—

 
—

 
—

 
—

Total consumer loans
 
3,919

 
320

 
4,239

 
5,969

Total
 
$
73,002

 
$
97,072

 
$
170,074

 
$
199,908





The following tables summarize our average impaired loans and interest income recognized on impaired loans, broken out by portfolio segment and class of financing receivable for the three and nine months ended September 30, 2019 and 2018:
Three months ended September 30,
 
Average impaired loans
 
Interest income recognized on impaired loans
(Dollars in thousands)
 
2019

2018

2019

2018
Commercial loans:
 
 
 
 
 
 
 
 
Software/internet
 
$
59,336

 
$
118,840

 
$
507

 
$
607

Hardware
 
10,617

 
27,922

 
70

 
410

Private equity/venture capital
 
—

 
1,233

 
—

 
—

Life science/healthcare
 
42,242

 
38,545

 
192

 
365

Premium wine
 
2,308

 
2,384

 
41

 
35

Other
 
3,404

 
—

 
—

 
—

Total commercial loans
 
117,907

 
188,924

 
810

 
1,417

Consumer loans:
 
 
 
 
 
 
 
 
Real estate secured loans
 
7,113

 
4,330

 
—

 
4

Other consumer loans
 
9

 
—

 
—

 
—

Total consumer loans
 
7,122

 
4,330

 
—

 
4

Total average impaired loans
 
$
125,029

 
$
193,254

 
$
810

 
$
1,421


Nine months ended September 30,
 
Average impaired loans
 
Interest income recognized on impaired loans
(Dollars in thousands)
 
2019
 
2018
 
2019
 
2018
Commercial loans:
 
 
 
 
 
 
 
 
Software/internet
 
$
88,487

 
$
112,576

 
$
2,275

 
$
991

Hardware
 
14,188

 
34,469

 
417

 
499

Private equity/venture capital
 
3,019

 
536

 
—

 
—

Life science/healthcare
 
47,208

 
27,671

 
785

 
376

Premium wine
 
1,538

 
2,586

 
141

 
103

Other
 
1,541

 
130

 
—

 
—

Total commercial loans
 
155,981

 
177,968

 
3,618

 
1,969

Consumer loans:
 
 
 
 
 
 
 
 
Real estate secured loans
 
7,379

 
3,953

 
54

 
12

Other consumer loans
 
9

 
477

 
—

 
—

Total consumer loans
 
7,388

 
4,430

 
54

 
12

Total average impaired loans
 
$
163,369

 
$
182,398

 
$
3,672

 
$
1,981


The following tables summarize the activity relating to our allowance for loan losses for the three and nine months ended September 30, 2019 and 2018, broken out by portfolio segment:
Three months ended September 30, 2019
 
Beginning Balance June 30, 2019
 
Charge-offs
 
Recoveries
 
Provision for
(Reduction of) Loan Losses
 
Foreign Currency Translation Adjustments
 
Ending Balance September 30, 2019
(Dollars in thousands)
 
 
 
 
 
 
Commercial loans:
 
 
 
 
 
 
 
 
 
 
 
 
Software/internet
 
$
101,998

 
$
(27,128
)
 
$
988

 
$
22,679

 
$
(335
)
 
$
98,202

Hardware
 
26,932

 
(331
)
 
1,669

 
(4,290
)
 
64

 
24,044

Private equity/venture capital
 
105,524

 
—

 
1,200

 
1,834

 
(27
)
 
108,531

Life science/healthcare
 
40,206

 
(9,361
)
 
15

 
13,836

 
(204
)
 
44,492

Premium wine
 
3,998

 
—

 
—

 
46

 
(1
)
 
4,043

Other
 
4,291

 
—

 
—

 
(30
)
 
—

 
4,261

Total commercial loans
 
282,949

 
(36,820
)
 
3,872

 
34,075

 
(503
)
 
283,573

Total consumer loans
 
18,939

 
—

 
16

 
1,910

 
(28
)
 
20,837

Total allowance for loan losses
 
$
301,888

 
$
(36,820
)
 
$
3,888

 
$
35,985

 
$
(531
)
 
$
304,410

Three months ended September 30, 2018
 
Beginning Balance June 30, 2018
 
Charge-offs
 
Recoveries
 
Provision for
(Reduction of) Loan Losses
 
Foreign Currency Translation Adjustments
 
Ending Balance September 30, 2018
(Dollars in thousands)
 
 
 
 
 
 
Commercial loans:
 
 
 
 
 
 
 
 
 
 
 
 
Software/internet
 
$
102,648

 
$
(6,304
)
 
$
841

 
$
16,640

 
$
(335
)
 
$
113,490

Hardware
 
34,695

 
(12,697
)
 
227

 
(1,763
)
 
36

 
20,498

Private equity/venture capital
 
89,409

 
—

 
3

 
1,632

 
(33
)
 
91,011

Life science/healthcare
 
35,064

 
(2,076
)
 
189

 
2,322

 
(47
)
 
35,452

Premium wine
 
3,438

 
—

 
—

 
125

 
(3
)
 
3,560

Other
 
2,896

 
(1,128
)
 
771

 
118

 
(2
)
 
2,655

Total commercial loans
 
268,150

 
(22,205
)
 
2,031

 
19,074

 
(384
)
 
266,666

Total consumer loans
 
18,559

 
—

 
133

 
362

 
(7
)
 
19,047

Total allowance for loan losses
 
$
286,709

 
$
(22,205
)
 
$
2,164

 
$
19,436

 
$
(391
)
 
$
285,713

Nine months ended September 30, 2019
 
Beginning Balance December 31, 2018
 
Charge-offs
 
Recoveries
 
Provision for
Loan Losses
 
Foreign Currency Translation Adjustments
 
Ending Balance September 30, 2019
(Dollars in thousands)
 
 
 
 
 
 
Commercial loans:
 
 
 
 
 
 
 
 
 
 
 
 
Software/internet
 
$
103,567

 
$
(38,319
)
 
$
8,758

 
$
24,667

 
$
(471
)
 
$
98,202

Hardware
 
19,725

 
(3,576
)
 
4,738

 
2,962

 
195

 
24,044

Private equity/venture capital
 
98,581

 
(2,047
)
 
1,200

 
11,305

 
(508
)
 
108,531

Life science/healthcare
 
32,180

 
(26,879
)
 
196

 
38,397

 
598

 
44,492

Premium wine
 
3,355

 
—

 
—

 
681

 
7

 
4,043

Other
 
3,558

 
(415
)
 
—

 
1,163

 
(45
)
 
4,261

Total commercial loans
 
260,966

 
(71,236
)
 
14,892

 
79,175

 
(224
)
 
283,573

Total consumer loans
 
19,937

 
(1,019
)
 
241

 
1,779

 
(101
)
 
20,837

Total allowance for loan losses
 
$
280,903

 
$
(72,255
)
 
$
15,133

 
$
80,954

 
$
(325
)
 
$
304,410


Nine months ended September 30, 2018
 
Beginning Balance December 31, 2017
 
Charge-offs
 
Recoveries
 
Provision for
(Reduction of) Loan Losses
 
Foreign Currency Translation Adjustments
 
Ending Balance September 30, 2018
(Dollars in thousands)
 
 
 
 
 
 
Commercial loans:
 
 
 
 
 
 
 
 
 
 
 
 
Software/internet
 
$
96,104

 
$
(26,377
)
 
$
1,818

 
$
42,620

 
$
(675
)
 
$
113,490

Hardware
 
27,614

 
(16,111
)
 
1,458

 
7,788

 
(251
)
 
20,498

Private equity/venture capital
 
82,468

 
(112
)
 
13

 
8,200

 
442

 
91,011

Life science/healthcare
 
24,924

 
(2,940
)
 
245

 
13,829

 
(606
)
 
35,452

Premium wine
 
3,532

 
—

 
—

 
42

 
(14
)
 
3,560

Other
 
3,941

 
(2,391
)
 
1,874

 
(775
)
 
6

 
2,655

Total commercial loans
 
238,583

 
(47,931
)
 
5,408

 
71,704

 
(1,098
)
 
266,666

Total consumer loans
 
16,441

 
(289
)
 
470

 
2,384

 
41

 
19,047

Total allowance for loan losses
 
$
255,024

 
$
(48,220
)
 
$
5,878

 
$
74,088

 
$
(1,057
)
 
$
285,713


The following table summarizes the activity relating to our allowance for unfunded credit commitments for the three and nine months ended September 30, 2019 and 2018:
 
 
Three months ended September 30,
 
Nine months ended September 30,
(Dollars in thousands)
 
2019

2018
 
2019
 
2018
Allowance for unfunded credit commitments, beginning balance
 
$
62,664

 
$
54,104

 
$
55,183

 
$
51,770

Provision for unfunded credit commitments
 
551

 
(2,262
)
 
8,079

 
138

Foreign currency translation adjustments
 
(107
)
 
(34
)
 
(154
)
 
(100
)
Allowance for unfunded credit commitments, ending balance (1)
 
$
63,108

 
$
51,808

 
$
63,108


$
51,808

 
(1)
See Note 16—“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.
The following table summarizes the allowance for loan losses individually and collectively evaluated for impairment as of September 30, 2019 and December 31, 2018, broken out by portfolio segment:
 
 
September 30, 2019
 
December 31, 2018
 
 
Individually Evaluated for  
Impairment
 
Collectively Evaluated for  
Impairment
 
Individually Evaluated for  
Impairment
 
Collectively Evaluated for  
Impairment
(Dollars in thousands)
 
Allowance for loan losses
 
Recorded investment in loans
 
Allowance for loan losses
 
Recorded investment in loans
 
Allowance for loan losses
 
Recorded investment in loans
 
Allowance for loan losses
 
Recorded investment in loans
Commercial loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Software/internet
 
$
24,882

 
$
81,480

 
$
73,320

 
$
5,928,038

 
$
28,527

 
$
114,850

 
$
75,040

 
$
6,039,905

Hardware
 
5,230

 
9,923

 
18,814

 
1,347,694

 
1,253

 
11,506

 
18,472

 
1,223,051

Private equity/venture capital
 
—

 
—

 
108,531

 
16,293,556

 
—

 
3,700

 
98,581

 
14,106,860

Life science/healthcare
 
22,161

 
39,521

 
22,331

 
2,342,301

 
7,484

 
34,067

 
24,696

 
2,351,545

Premium wine
 
394

 
2,339

 
3,649

 
981,475

 
—

 
1,301

 
3,355

 
958,362

Other
 
910

 
2,589

 
3,351

 
538,610

 
411

 
411

 
3,147

 
459,079

Total commercial loans
 
53,577

 
135,852

 
229,996

 
27,431,674

 
37,675

 
165,835

 
223,291

 
25,138,802

Total consumer loans
 
151

 
7,088

 
20,686

 
3,489,380

 
266

 
4,239

 
19,671

 
3,029,404

Total
 
$
53,728

 
$
142,940

 
$
250,682

 
$
30,921,054

 
$
37,941

 
$
170,074

 
$
242,962

 
$
28,168,206



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 “Performing (Criticized)." When full repayment of a criticized loan has been deemed improbable under the original contractual terms but full repayment remains probable overall, the loan is considered to be a “Performing Impaired (Criticized)” loan. All of our nonaccrual loans are risk-rated 8 or 9 and are classified under the nonperforming impaired category. (For further description of nonaccrual loans, refer to Note 2—“Summary of Significant Accounting Policies” under Part II, Item 8 of our 2018 Form 10-K). Loans rated 10 are charged-off and are not included as part of our loan portfolio balance. We review our credit quality indicators for performance and appropriateness of risk ratings as part of our evaluation process for our allowance for loan losses.
The following table summarizes the credit quality indicators, broken out by portfolio segment and class of financing receivables as of September 30, 2019 and December 31, 2018:
(Dollars in thousands)
 
Pass
 
Performing (Criticized)
 
Performing Impaired (Criticized)
 
Nonperforming Impaired (Nonaccrual)
 
Total
September 30, 2019:
 
 
 
 
 
 
 
 
 
 
Commercial loans:
 
 
 
 
 
 
 
 
 
 
Software/internet
 
$
5,454,896

 
$
531,291

 
$
25,588

 
$
55,892

 
$
6,067,667

Hardware
 
1,251,074

 
106,895

 
4,482

 
5,441

 
1,367,892

Private equity/venture capital
 
16,310,056

 
28

 
—

 
—

 
16,310,084

Life science/healthcare
 
2,258,771

 
148,901

 
6,879

 
32,642

 
2,447,193

Premium wine
 
928,817

 
53,932

 
1,946

 
393

 
985,088

Other
 
537,852

 
17,154

 
—

 
2,589

 
557,595

Total commercial loans
 
26,741,466

 
858,201

 
38,895

 
96,957

 
27,735,519

Consumer loans:
 
 
 
 
 
 
 
 
 
 
Real estate secured loans
 
2,994,694

 
10,278

 
—

 
7,075

 
3,012,047

Other consumer loans
 
481,424

 
—

 
—

 
13

 
481,437

Total consumer loans
 
3,476,118

 
10,278

 
—

 
7,088

 
3,493,484

Total gross loans
 
$
30,217,584

 
$
868,479

 
$
38,895

 
$
104,045

 
$
31,229,003

December 31, 2018:
 
 
 
 
 
 
 
 
 
 
Commercial loans:
 
 
 
 
 
 
 
 
 
 
Software/internet
 
$
5,574,332

 
$
520,796

 
$
48,069

 
$
66,781

 
$
6,209,978

Hardware
 
1,146,985

 
87,309

 
10,250

 
1,256

 
1,245,800

Private equity/venture capital
 
14,098,281

 
16,151

 
—

 
3,700

 
14,118,132

Life science/healthcare
 
2,291,356

 
135,653

 
16,276

 
17,791

 
2,461,076

Premium wine
 
909,965

 
49,287

 
1,017

 
284

 
960,553

Other
 
467,653

 
17,344

 
—

 
411

 
485,408

Total commercial loans
 
24,488,572

 
826,540

 
75,612

 
90,223

 
25,480,947

Consumer loans:
 
 
 
 
 
 
 
 
 
 
Real estate secured loans
 
2,584,261

 
21,145

 
320

 
3,919

 
2,609,645

Other consumer loans
 
419,771

 
949

 
—

 
—

 
420,720

Total consumer loans
 
3,004,032

 
22,094

 
320

 
3,919

 
3,030,365

Total gross loans
 
$
27,492,604

 
$
848,634

 
$
75,932

 
$
94,142

 
$
28,511,312



Troubled Debt Restructurings
As of September 30, 2019, we had 20 TDRs with a total carrying value of $105.2 million where concessions have been granted to borrowers experiencing financial difficulties, in an attempt to maximize collection. There were $3.8 million of unfunded commitments available for funding to the clients associated with these TDRs as of September 30, 2019.
The following table summarizes our loans modified in TDRs, broken out by portfolio segment and class of financing receivables at September 30, 2019 and December 31, 2018:
(Dollars in thousands)
 
September 30, 2019
 
December 31, 2018
Loans modified in TDRs:
 
 
 
 
Commercial loans:
 
 
 
 
Software/internet
 
$
80,704

 
$
58,089

Hardware
 
—

 
9,665

Life science/healthcare
 
18,689

 
12,738

Premium wine
 
3,712

 
2,883

Total commercial loans
 
103,105

 
83,375

Consumer loans:
 
 
 
 
Other consumer loans
 
2,140

 
320

Total loans modified in TDRs
 
$
105,245

 
$
83,695


The following table summarizes the recorded investment in loans modified in TDRs, broken out by portfolio segment and class of financing receivable, for modifications made during the three and nine months ended September 30, 2019 and 2018:
 
 
Three months ended September 30,
 
Nine months ended September 30,
(Dollars in thousands)
 
2019

2018
 
2019
 
2018
Loans modified in TDRs during the period:
 
 
 
 
 
 
 
 
Commercial loans:
 
 
 
 
 
 
 
 
Software/internet
 
$
8,566

 
$
—

 
$
60,650

 
$
14,069

Hardware
 
—

 
10,398

 
—

 
12,347

Life science/healthcare
 
—

 
—

 
10,963

 
5,909

Total commercial loans
 
8,566

 
10,398

 
71,613

 
32,325

Consumer loans:
 
 
 
 
 
 
 
 
Other consumer loans
 
—

 
—

 
1,826

 
322

Total loans modified in TDRs during the period (1)
 
$
8,566

 
$
10,398

 
$
73,439

 
$
32,647

 
 
(1)
There were $3.7 million and $9.2 million of partial charge-offs for the three and nine months ended September 30, 2019, respectively, and $13.0 million and $21.5 million of partial charge-offs for the three and nine months ended September 30, 2018, respectively.
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. During the three and nine months ended September 30, 2018, all new TDRs of $10.4 million and $32.6 million, respectively, were modified through payment deferrals granted to our clients.
The related allowance for loan losses for the majority of our TDRs is determined on an individual basis by comparing the carrying value of the loan to the present value of the estimated future cash flows, discounted at the pre-modification contractual interest rate. For certain TDRs, the related allowance for loan losses is determined based on the fair value of the collateral if the loan is collateral dependent.
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, 2019 and 2018:
 
 
Three months ended September 30,
 
Nine months ended September 30,
(Dollars in thousands)
 
2019
 
2018
 
2019
 
2018
TDRs modified within the previous 12 months that defaulted during the period:
 
 
 
 
 
 
 
 
Commercial loans:
 
 
 
 
 
 
 
 
Software/internet
 
$
37,294

 
$
18,911

 
$
37,294

 
$
41,568

Hardware
 
—

 
2,100

 
—

 
5,549

Life science/healthcare
 
10,963

 
5,909

 
10,963

 
7,139

Total TDRs modified within the previous 12 months that defaulted in the period
 
$
48,257

 
$
26,920

 
$
48,257

 
$
54,256


Charge-offs and defaults on previously restructured loans are evaluated to determine the impact to the allowance for loan losses, if any. The evaluation of these defaults may impact the assumptions used in calculating the reserve on other TDRs and impaired 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 loan losses as of September 30, 2019.