BANK LOANS, NET (Tables)

6 Months Ended

Mar. 31, 2023

Schedule of Accounts, Notes, Loans and Financing Receivable

The following table presents the balances for held for investment loans by portfolio segment and held for sale loans.


$ in millions	March 31, 2023			September 30, 2022
SBL	$	14,227		$	15,297
C&I loans	11,259			11,173
CRE loans	7,054			6,549
REIT loans	1,717			1,592
Residential mortgage loans	8,079			7,386
Tax-exempt loans	1,643			1,501
Total loans held for investment	43,979			43,498
Held for sale loans	119			137
Total loans held for sale and investment	44,098			43,635
Allowance for credit losses	(415)			(396)
Bank loans, net (1)	$	43,683		$	43,239

ACL as a % of total loans held for investment	0.94		%	0.91		%
Accrued interest receivable on bank loans (included in “Other receivables, net”)	$	192		$	137

(1) Bank loans, net as of March 31, 2023 and September 30, 2022 are presented net of $89 million and $112 million, respectively, of net unamortized discount, unearned income, and deferred loan fees and costs. The net unamortized discount primarily arose from the acquisition date fair value purchase discount on bank loans acquired in the TriState Capital acquisition. See Note 3 of our 2022 Form 10-K for further information.

The following table presents the balances for our loans to financial advisors and the related accrued interest receivable.


$ in millions	March 31, 2023			September 30, 2022
Affiliated with the firm as of period-end (1)	$	1,130		$	1,173
No longer affiliated with the firm as of period-end (2)	8			8
Total loans to financial advisors	1,138			1,181
Allowance for credit losses	(30)			(29)
Loans to financial advisors, net	$	1,108		$	1,152
Accrued interest receivable on loans to financial advisors (included in “Other receivables, net”)	$	5		$	5
Allowance for credit losses as a percent of total loans to financial advisors	2.64		%	2.46		%

(1) These loans were predominantly current.

(2) These loans were predominantly past due for a period of 180 days or more.

Loan Purchases and Sales

The following table presents purchases and sales of loans held for investment by portfolio segment.


$ in millions	C&I loans		CRE loans		REIT loans		Residential mortgage loans		Total
Three months ended March 31, 2023
Purchases	$	194	$	—	$	—	$	110	$	304
Sales	$	147	$	—	$	—	$	—	$	147
Six months ended March 31, 2023
Purchases	$	357	$	39	$	24	$	300	$	720
Sales	$	147	$	—	$	—	$	—	$	147
Three months ended March 31, 2022
Purchases	$	441	$	—	$	—	$	223	$	664
Sales	$	61	$	—	$	—	$	—	$	61
Six months ended March 31, 2022
Purchases	$	780	$	—	$	—	$	407	$	1,187
Sales	$	112	$	—	$	—	$	—	$	112

Analysis of the Payment Status of Loans Held for Investment

The following table presents information on delinquency status of our loans held for investment.


$ in millions	30-89 days and accruing		90 days or more and accruing		Total past due and accruing		Nonaccrual with allowance		Nonaccrual with no allowance		Current and accruing		Total loans held for investment
March 31, 2023
SBL	$	—	$	—	$	—	$	—	$	—	$	14,227	$	14,227
C&I loans	—		—		—		32		—		11,227		11,259
CRE loans	—		—		—		34		18		7,002		7,054
REIT loans	—		—		—		—		—		1,717		1,717
Residential mortgage loans	4		—		4		—		15		8,060		8,079
Tax-exempt loans	—		—		—		—		—		1,643		1,643
Total loans held for investment	$	4	$	—	$	4	$	66	$	33	$	43,876	$	43,979

September 30, 2022
SBL	$	—	$	—	$	—	$	—	$	—	$	15,297	$	15,297
C&I loans	—		—		—		32		—		11,141		11,173
CRE loans	—		—		—		12		16		6,521		6,549
REIT loans	—		—		—		—		—		1,592		1,592
Residential mortgage loans	4		—		4		—		14		7,368		7,386
Tax-exempt loans	—		—		—		—		—		1,501		1,501
Total loans held for investment	$	4	$	—	$	4	$	44	$	30	$	43,420	$	43,498

Loans Pledged as Collateral


Loan type ($ in millions)	Nature of collateral	March 31, 2023		September 30, 2022

C&I loans	Commercial real estate and other business assets	$	9	$	11
CRE loans	Retail, industrial, office and health care real estate	$	52	$	21

Residential mortgage loans	Single family homes	$	6	$	6

Credit Quality of Held for Investment Loan Portfolio

The following tables present our held for investment bank loan portfolio by credit quality indicator. Loans classified as special mention, substandard or doubtful are all considered to be “criticized” loans.


	March 31, 2023
	Loans by origination fiscal year
$ in millions	2023		2022		2021		2020		2019		Prior		Revolving loans		Total
SBL
Risk rating:
Pass	$	20	$	18	$	92	$	41	$	26	$	82	$	13,948	$	14,227
Special mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—
Total SBL	$	20	$	18	$	92	$	41	$	26	$	82	$	13,948	$	14,227



C&I loans
Risk rating:
Pass	$	454	$	1,193	$	1,254	$	1,223	$	1,097	$	3,272	$	2,526	$	11,019
Special mention	—		10		29		38		—		1		7		85
Substandard	—		—		—		40		18		84		13		155
Doubtful	—		—		—		—		—		—		—		—
Total C&I loans	$	454	$	1,203	$	1,283	$	1,301	$	1,115	$	3,357	$	2,546	$	11,259



CRE loans
Risk rating:
Pass	$	613	$	2,346	$	1,195	$	784	$	654	$	1,180	$	149	$	6,921
Special mention	7		—		—		36		—		22		—		65
Substandard	—		—		—		2		13		53		—		68
Doubtful	—		—		—		—		—		—		—		—
Total CRE loans	$	620	$	2,346	$	1,195	$	822	$	667	$	1,255	$	149	$	7,054



REIT loans
Risk rating:
Pass	$	266	$	202	$	214	$	101	$	55	$	197	$	682	$	1,717
Special mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—
Total REIT loans	$	266	$	202	$	214	$	101	$	55	$	197	$	682	$	1,717



Residential mortgage loans
Risk rating:
Pass	$	915	$	2,956	$	1,661	$	965	$	455	$	1,057	$	40	$	8,049
Special mention	—		—		1		—		2		5		—		8
Substandard	—		2		—		—		—		20		—		22
Doubtful	—		—		—		—		—		—		—		—
Total residential mortgage loans	$	915	$	2,958	$	1,662	$	965	$	457	$	1,082	$	40	$	8,079



Tax-exempt loans
Risk rating:
Pass	$	165	$	298	$	165	$	56	$	108	$	851	$	—	$	1,643
Special mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—
Total tax-exempt loans	$	165	$	298	$	165	$	56	$	108	$	851	$	—	$	1,643


	September 30, 2022
	Loans by origination fiscal year
$ in millions	2022		2021		2020		2019		2018		Prior		Revolving loans		Total
SBL
Risk rating:
Pass	$	14	$	27	$	72	$	44	$	36	$	41	$	15,063	$	15,297
Special mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—
Total SBL	$	14	$	27	$	72	$	44	$	36	$	41	$	15,063	$	15,297




C&I loans
Risk rating:
Pass	$	1,011	$	1,448	$	1,301	$	1,124	$	1,389	$	2,200	$	2,380	$	10,853
Special mention	10		28		3		37		—		82		6		166
Substandard	1		—		60		28		40		6		14		149
Doubtful	—		—		—		—		5		—		—		5
Total C&I loans	$	1,022	$	1,476	$	1,364	$	1,189	$	1,434	$	2,288	$	2,400	$	11,173




CRE loans
Risk rating:
Pass	$	1,916	$	1,345	$	892	$	707	$	816	$	551	$	176	$	6,403
Special mention	—		1		—		—		36		2		—		39
Substandard	—		—		14		17		46		30		—		107
Doubtful	—		—		—		—		—		—		—		—
Total CRE loans	$	1,916	$	1,346	$	906	$	724	$	898	$	583	$	176	$	6,549




REIT loans
Risk rating:
Pass	$	169	$	230	$	96	$	53	$	40	$	222	$	782	$	1,592
Special mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—
Total REIT loans	$	169	$	230	$	96	$	53	$	40	$	222	$	782	$	1,592



Residential mortgage loans
Risk rating:
Pass	$	2,984	$	1,704	$	1,023	$	477	$	290	$	843	$	35	$	7,356
Special mention	1		1		—		2		—		4		—		8
Substandard	1		—		—		—		1		20		—		22
Doubtful	—		—		—		—		—		—		—		—
Total residential mortgage loans	$	2,986	$	1,705	$	1,023	$	479	$	291	$	867	$	35	$	7,386




Tax-exempt loans
Risk rating:
Pass	$	264	$	169	$	56	$	115	$	192	$	705	$	—	$	1,501
Special mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—
Total tax-exempt loans	$	264	$	169	$	56	$	115	$	192	$	705	$	—	$	1,501

The following table presents the held for investment residential mortgage loan portfolio by FICO score and by LTV ratio at origination.


	March 31, 2023
	Loans by origination fiscal year
$ in millions	2023		2022		2021		2020		2019		Prior		Revolving loans		Total
FICO score:
Below 600	$	6	$	1	$	3	$	2	$	3	$	55	$	—	$	70
600 - 699	51		155		107		88		31		83		4		519
700 - 799	718		2,383		1,265		700		334		647		25		6,072
800 +	139		416		283		174		84		293		8		1,397
FICO score not available	1		3		4		1		5		4		3		21
Total	$	915	$	2,958	$	1,662	$	965	$	457	$	1,082	$	40	$	8,079

LTV ratio:
Below 80%	$	639	$	2,262	$	1,300	$	755	$	341	$	832	$	36	$	6,165
80%+	276		696		362		210		116		250		4		1,914
Total	$	915	$	2,958	$	1,662	$	965	$	457	$	1,082	$	40	$	8,079


	September 30, 2022
	Loans by origination fiscal year
$ in millions	2022		2021		2020		2019		2018		Prior		Revolving loans		Total
FICO score:
Below 600	$	1	$	3	$	2	$	3	$	1	$	54	$	—	$	64
600 - 699	155		112		90		32		20		68		4		481
700 - 799	2,403		1,301		744		353		219		470		22		5,512
800 +	424		284		184		87		48		273		6		1,306
FICO score not available	3		5		3		4		3		2		3		23
Total	$	2,986	$	1,705	$	1,023	$	479	$	291	$	867	$	35	$	7,386

LTV ratio:
Below 80%	$	2,287	$	1,333	$	797	$	358	$	226	$	661	$	31	$	5,693
80%+	699		372		226		121		65		206		4		1,693
Total	$	2,986	$	1,705	$	1,023	$	479	$	291	$	867	$	35	$	7,386

Allowance for credit losses

The following table presents changes in the allowance for credit losses on held for investment bank loans by portfolio segment.


$ in millions	SBL			C&I loans			CRE loans			REIT loans			Residential mortgage loans			Tax-exempt loans			Total
Three months ended March 31, 2023
Balance at beginning of period	$	4		$	222		$	91		$	15		$	74		$	2		$	408



Provision for credit losses	1			18			9			—			—			—			28

Net (charge-offs)/recoveries:
Charge-offs	—			(20)			—			—			—			—			(20)
Recoveries	—			—			—			—			—			—			—
Net (charge-offs)/recoveries	—			(20)			—			—			—			—			(20)
Foreign exchange translation adjustment	—			(1)			—			—			—			—			(1)
Balance at end of period	$	5		$	219		$	100		$	15		$	74		$	2		$	415
ACL by loan portfolio segment as a % of total ACL	1.2		%	52.8		%	24.1		%	3.6		%	17.8		%	0.5		%	100.0		%

Six months ended March 31, 2023
Balance at beginning of period	$	3		$	226		$	87		$	21		$	57		$	2		$	396



Provision/(benefit) for credit losses	2			18			11			(6)			17			—			42

Net (charge-offs)/recoveries:
Charge-offs	—			(24)			(1)			—			—			—			(25)
Recoveries	—			—			3			—			—			—			3
Net (charge-offs)/recoveries	—			(24)			2			—			—			—			(22)
Foreign exchange translation adjustment	—			(1)			—			—			—			—			(1)
Balance at end of period	$	5		$	219		$	100		$	15		$	74		$	2		$	415
ACL by loan portfolio segment as a % of total ACL	1.2		%	52.8		%	24.1		%	3.6		%	17.8		%	0.5		%	100.0		%

Three months ended March 31, 2022
Balance at beginning of period	$	3		$	179		$	72		$	22		$	30		$	2		$	308

Provision/(benefit) for credit losses	—			17			(1)			3			2			—			21
Net (charge-offs)/recoveries:
Charge-offs	—			(1)			—			—			—			—			(1)
Recoveries	—			—			—			—			—			—			—
Net (charge-offs)/recoveries	—			(1)			—			—			—			—			(1)
Foreign exchange translation adjustment	—			—			—			—			—			—			—
Balance at end of period	$	3		$	195		$	71		$	25		$	32		$	2		$	328
ACL by loan portfolio segment as a % of total ACL	0.9		%	59.5		%	21.6		%	7.6		%	9.8		%	0.6		%	100.0		%

Six months ended March 31, 2022
Balance at beginning of period	$	4		$	191		$	66		$	22		$	35		$	2		$	320

Provision/(benefit) for credit losses	(1)			7			5			3			(4)			—			10
Net (charge-offs)/recoveries:
Charge-offs	—			(3)			—			—			—			—			(3)
Recoveries	—			—			—			—			1			—			1
Net (charge-offs)/recoveries	—			(3)			—			—			1			—			(2)
Foreign exchange translation adjustment	—			—			—			—			—			—			—
Balance at end of period	$	3		$	195		$	71		$	25		$	32		$	2		$	328
ACL by loan portfolio segment as a % of total ACL	0.9		%	59.5		%	21.6		%	7.6		%	9.8		%	0.6		%	100.0		%

Changes in the Allowance for Loan Losses

The following table presents changes in the allowance for credit losses on held for investment bank loans by portfolio segment.


$ in millions	SBL			C&I loans			CRE loans			REIT loans			Residential mortgage loans			Tax-exempt loans			Total
Three months ended March 31, 2023
Balance at beginning of period	$	4		$	222		$	91		$	15		$	74		$	2		$	408



Provision for credit losses	1			18			9			—			—			—			28

Net (charge-offs)/recoveries:
Charge-offs	—			(20)			—			—			—			—			(20)
Recoveries	—			—			—			—			—			—			—
Net (charge-offs)/recoveries	—			(20)			—			—			—			—			(20)
Foreign exchange translation adjustment	—			(1)			—			—			—			—			(1)
Balance at end of period	$	5		$	219		$	100		$	15		$	74		$	2		$	415
ACL by loan portfolio segment as a % of total ACL	1.2		%	52.8		%	24.1		%	3.6		%	17.8		%	0.5		%	100.0		%

Six months ended March 31, 2023
Balance at beginning of period	$	3		$	226		$	87		$	21		$	57		$	2		$	396



Provision/(benefit) for credit losses	2			18			11			(6)			17			—			42

Net (charge-offs)/recoveries:
Charge-offs	—			(24)			(1)			—			—			—			(25)
Recoveries	—			—			3			—			—			—			3
Net (charge-offs)/recoveries	—			(24)			2			—			—			—			(22)
Foreign exchange translation adjustment	—			(1)			—			—			—			—			(1)
Balance at end of period	$	5		$	219		$	100		$	15		$	74		$	2		$	415
ACL by loan portfolio segment as a % of total ACL	1.2		%	52.8		%	24.1		%	3.6		%	17.8		%	0.5		%	100.0		%

Three months ended March 31, 2022
Balance at beginning of period	$	3		$	179		$	72		$	22		$	30		$	2		$	308

Provision/(benefit) for credit losses	—			17			(1)			3			2			—			21
Net (charge-offs)/recoveries:
Charge-offs	—			(1)			—			—			—			—			(1)
Recoveries	—			—			—			—			—			—			—
Net (charge-offs)/recoveries	—			(1)			—			—			—			—			(1)
Foreign exchange translation adjustment	—			—			—			—			—			—			—
Balance at end of period	$	3		$	195		$	71		$	25		$	32		$	2		$	328
ACL by loan portfolio segment as a % of total ACL	0.9		%	59.5		%	21.6		%	7.6		%	9.8		%	0.6		%	100.0		%

Six months ended March 31, 2022
Balance at beginning of period	$	4		$	191		$	66		$	22		$	35		$	2		$	320

Provision/(benefit) for credit losses	(1)			7			5			3			(4)			—			10
Net (charge-offs)/recoveries:
Charge-offs	—			(3)			—			—			—			—			(3)
Recoveries	—			—			—			—			1			—			1
Net (charge-offs)/recoveries	—			(3)			—			—			1			—			(2)
Foreign exchange translation adjustment	—			—			—			—			—			—			—
Balance at end of period	$	3		$	195		$	71		$	25		$	32		$	2		$	328
ACL by loan portfolio segment as a % of total ACL	0.9		%	59.5		%	21.6		%	7.6		%	9.8		%	0.6		%	100.0		%