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BANK LOANS, NET
 12 Months Ended
Sep. 30, 2024
Receivables [Abstract]  
BANK LOANS, NET BANK LOANS, NET
Bank client receivables are comprised of loans originated or purchased by our Bank segment and include SBL, C&I loans, CRE loans, REIT loans, residential mortgage loans, and tax-exempt loans. These receivables are collateralized by first and, to a lesser extent, second mortgages on residential or other real property, other assets of the borrower, a pledge of revenue, securities, or are unsecured. We segregate our loan portfolio into six loan portfolio segments: SBL, C&I, CRE, REIT, residential mortgage, and tax-exempt. See Note 2 for a discussion of our accounting policies related to bank loans and the allowance for credit losses.

Loan balances in the following tables are presented at amortized cost (outstanding principal balance net of unamortized purchase discounts or premiums, unearned income, deferred origination fees and costs, and charge-offs), except for certain held for sale loans recorded at fair value. Bank loans are presented on our Consolidated Statements of Financial Condition at amortized cost (or fair value where applicable) less the allowance for credit losses. As it pertains to TriState Capital Bank’s
loans acquired as of June 1, 2022, the amortized cost of such purchased loans reflects the fair value of the loans on the acquisition date, and, as described further in Note 3, the purchase discount on such loans is accreted to interest income over the weighted-average life of the underlying loans, which may vary based on prepayments.

The following table presents the balances for held for investment loans by portfolio segment and held for sale loans.
September 30,
$ in millions20242023
SBL$16,233 $14,606 
C&I loans9,953 10,406 
CRE loans7,615 7,221 
REIT loans1,716 1,668 
Residential mortgage loans9,412 8,662 
Tax-exempt loans1,338 1,541 
Total loans held for investment46,267 44,104 
Held for sale loans184 145 
Total loans held for sale and investment46,451 44,249 
Allowance for credit losses(457)(474)
Bank loans, net
$45,994 $43,775 
ACL as a % of total loans held for investment0.99 %1.07 %
Accrued interest receivable on bank loans (included in “Other receivables, net”)$214 $200 

See Note 7 for additional information regarding bank loans pledged with the FHLB and FRB and Note 16 for additional information regarding borrowings from the FHLB.

Held for sale loans

We originated or purchased $2.80 billion, $2.74 billion, and $3.38 billion (exclusive of the loans acquired on June 1, 2022 in our acquisition of TriState Capital Bank) of loans held for sale during the years ended September 30, 2024, 2023, and 2022, respectively. The majority of these loans were purchases of the guaranteed portions of SBA loans that were initially classified as loans held for sale upon purchase and subsequently transferred to trading instruments once they had been securitized into pools. Proceeds from the sales of these loans held for sale and not securitized amounted to $618 million, $835 million, and $1.29 billion for the years ended September 30, 2024, 2023 and 2022, respectively. Net gains resulting from such sales were insignificant for each of the years ended September 30, 2024, 2023, and 2022.

Purchases and sales of loans held for investment

The following table presents purchases and sales of loans held for investment by portfolio segment.
$ in millionsC&I loansCRE loansREIT loansResidential mortgage loansTotal
Year ended September 30, 2024
Purchases$1,038 $— $5 $296 

$1,339 
Sales $376 $— $9 $— $385 
Year ended September 30, 2023
Purchases$465 $39 $24 $456 $984 
Sales $643 $— $— $— $643 
Year ended September 30, 2022
Purchases$1,288 $— $— $1,207 $2,495 
Sales $147 $— $— $1 $148 

Sales in the preceding table represent the recorded investment (i.e., net of charge-offs and discounts or premiums) of loans held for investment that were transferred to loans held for sale and subsequently sold to a third party during the respective period. As more fully described in Note 2, corporate loan sales generally occur as part of our credit management activities.
Past due, nonaccrual, and modified loans

The following table presents information on delinquency status of our loans held for investment.
$ in millions30-89
days and accruing		90 days
or more and accruing		Total past due and accruingNonaccrual with allowanceNonaccrual with no allowanceCurrent and accruingTotal loans held for
investment
September 30, 2024     
SBL$3 $— $3 $— $— $16,230 $16,233 
C&I loans
— — — 58 — 9,895 9,953 
CRE loans— — — 67 18 7,530 7,615 
REIT loans— — — 19 — 1,697 1,716 
Residential mortgage loans3 — 3 — 13 9,396 9,412 
Tax-exempt loans
— — — — — 1,338 1,338 
Total loans held for investment
$6 $— $6 $144 $31 $46,086 $46,267 
September 30, 2023     
SBL$9 $— $9 $— $— $14,597 $14,606 
C&I loans— — — 69 2 10,335 10,406 
CRE loans— — — 35 13 7,173 7,221 
REIT loans— — — — — 1,668 1,668 
Residential mortgage loans2 — 2 — 9 8,651 8,662 
Tax-exempt loans— — — — — 1,541 1,541 
Total loans held for investment$11 $— $11 $104 $24 $43,965 $44,104 
The preceding table includes $89 million and $96 million at September 30, 2024 and 2023, respectively, of nonaccrual loans which were current pursuant to their contractual terms.

On October 1, 2023, we adopted ASU 2022-02, which eliminated the recognition and measurement guidance for TDRs. See Note 2 for additional information about this guidance. Loans to borrowers experiencing financial difficulty which were modified during the year ended September 30, 2024 were not significant. As of September 30, 2023, TDRs were $21 million, $3 million, and $10 million for C&I loans, CRE loans, and residential first mortgage loans, respectively.

Other real estate owned, included in “Other assets” on our Consolidated Statements of Financial Condition, was insignificant at both September 30, 2024 and 2023.

Collateral-dependent loans

A loan is considered collateral-dependent when the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the sale of the underlying collateral. Collateral-dependent loans are recorded based upon the fair value of the collateral less the estimated selling costs. The following table presents the amortized cost of our collateral-dependent loans and the nature of the collateral.
September 30,
$ in millions
Nature of collateral20242023
C&I loansCommercial real estate and other business assets$9 $11 
CRE loansOffice, multi-family residential, healthcare, medical office, and industrial real estate$115 $47 
Residential mortgage loansSingle family homes$8 $5 

CRE collateral dependent loans as of September 30, 2024 included certain loans that were placed on nonaccrual status with an associated allowance during the year ended September 30, 2024.
Credit quality indicators

The credit quality of our bank loan portfolio is summarized monthly by management using internal risk ratings, which align with the standard asset classification system utilized by bank regulators.  These classifications are divided into three groups: Not Classified (Pass), Special Mention, and Classified or Adverse Rating (Substandard, Doubtful, and Loss). These terms are defined as follows:

Pass – Loans which are 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, of any underlying collateral and generally are performing in accordance with the contractual terms.

Special Mention – Loans which have potential weaknesses that deserve management’s close attention. These loans are not adversely classified and do not expose us to sufficient risk to warrant an adverse classification.

Substandard – Loans which are inadequately protected by the current sound worth and paying capacity of the obligor or by the collateral pledged, if any. Loans with this classification are characterized by the distinct possibility that we will sustain some loss if the deficiencies are not corrected.

Doubtful – Loans which have all the weaknesses inherent in loans classified as substandard with the added characteristic that the weaknesses make collection or liquidation in full highly questionable and improbable on the basis of currently-known facts, conditions and values.

Loss – Loans which are considered by management to be uncollectible and of such little value that their continuance on our books as an asset, without establishment of a specific valuation allowance or charge-off, is not warranted.  We do not have any loan balances within this classification because, in accordance with our accounting policy, loans, or a portion thereof considered to be uncollectible are charged-off prior to the assignment of this classification.
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.
As of and for the year ended September 30, 2024
Loans by origination fiscal year
$ in millions20242023202220212020PriorRevolving loansTotal
SBL
Risk rating:
Pass$131$30$15$76$27$52$15,900$16,231
Special mention————————
Substandard (1)
2——————2
Doubtful————————
Total SBL$133$30$15$76$27$52$15,900$16,233
Gross charge-offs
$—$—$—$—$—$—$—$—
C&I loans
Risk rating:
Pass$616$454$1,178$716$586$3,287$2,966$9,803
Special mention—41—541—60
Substandard————46251283
Doubtful—————527
Total C&I loans$616$458$1,179$716$686$3,318$2,980$9,953
Gross charge-offs
$—$—$—$3$4$38$—$45
CRE loans
Risk rating:
Pass$873$1,156$2,082$930$706$1,111$435$7,293
Special mention—3076—1416—136
Substandard—589598916186
Doubtful————————
Total CRE loans$873$1,244$2,167$935$729$1,216$451$7,615
Gross charge-offs
$—$—$—$—$—$21$—$21
REIT loans
Risk rating:
Pass$172$250$167$135$55$195$564$1,538
Special mention————————
Substandard—19——40—119178
Doubtful————————
Total REIT loans$172$269$167$135$95$195$683$1,716
Gross charge-offs
$—$—$—$—$—$—$—$—
Residential mortgage loans
Risk rating:
Pass$1,373$1,637$2,725$1,493$858$1,260$39$9,385
Special mention——11—5—7
Substandard——8——12—20
Doubtful————————
Total residential mortgage loans$1,373$1,637$2,734$1,494$858$1,277$39$9,412
Gross charge-offs
$—$—$—$—$—$—$—$—
Tax-exempt loans
Risk rating:
Pass$62$57$248$153$52$766$—$1,338
Special mention————————
Substandard————————
Doubtful————————
Total tax-exempt loans$62$57$248$153$52$766$—$1,338
Gross charge-offs
$—$—$—$—$—$—$—$—

(1)As of September 30, 2024, these balances relate to loans which were collateralized by private securities or other financial instruments with a limited trading market.
September 30, 2023
Loans by origination fiscal year
$ in millions20232022202120202019PriorRevolving loansTotal
SBL
Risk rating:
Pass$74$18$83$40$15$59$14,293$14,582
Special mention————————
Substandard (1)
——————2424
Doubtful————————
Total SBL$74$18$83$40$15$59$14,317$14,606
C&I loans
Risk rating:
Pass$672$1,148$1,091$965$1,020$2,675$2,564$10,135
Special mention—52969——4107
Substandard———62176517161
Doubtful—————3—3
Total C&I loans$672$1,153$1,120$1,096$1,037$2,743$2,585$10,406
CRE loans
Risk rating:
Pass$1,130$2,344$1,115$766$604$845$220$7,024
Special mention7——14555—81
Substandard——5321267—116
Doubtful————————
Total CRE loans$1,137$2,344$1,120$812$621$967$220$7,221
REIT loans
Risk rating:
Pass$258$200$214$101$172$176$547$1,668
Special mention————————
Substandard————————
Doubtful————————
Total REIT loans$258$200$214$101$172$176$547$1,668
Residential mortgage loans
Risk rating:
Pass$1,765$2,889$1,607$919$433$992$31$8,636
Special mention——2—25—9
Substandard—2—1—14—17
Doubtful————————
Total residential mortgage loans$1,765$2,891$1,609$920$435$1,011$31$8,662
Tax-exempt loans
Risk rating:
Pass$147$279$161$54$97$803$—$1,541
Special mention————————
Substandard————————
Doubtful————————
Total tax-exempt loans$147$279$161$54$97$803$—$1,541

(1)As of September 30, 2023, these balances relate to loans which were collateralized by private securities or other financial instruments with a limited trading market.
We also monitor the credit quality of the residential mortgage loan portfolio utilizing FICO scores and LTV ratios. A FICO score measures a borrower’s creditworthiness by considering factors such as payment and credit history. LTV measures the carrying value of the loan as a percentage of the value of the property securing the loan. The following table presents the held for investment residential mortgage loan portfolio by LTV ratio at origination and by FICO score.
September 30, 2024
Loans by origination fiscal year
$ in millions20242023202220212020PriorRevolving loansTotal
FICO score:
Below 600$1$7$13$5$3$14$—$43
600 - 699795210752441245463
700 - 7991,0939921,564793469636235,570
800 +1975841,050642341499103,323
FICO score not available32—214113
Total$1,373$1,637$2,734$1,494$858$1,277$39$9,412
LTV ratio:
Below 80%$988$1,155$2,104$1,182$665$973$38$7,105
80%+38548263031219330412,307
Total$1,373$1,637$2,734$1,494$858$1,277$39$9,412

September 30, 2023
Loans by origination fiscal year
$ in millions20232022202120202019PriorRevolving loansTotal
FICO score:
Below 600$7$1$3$2$3$55$—$71
600 - 699991541068330794555
700 - 7991,3812,3271,218666320609206,541
800 +2744072791687726561,476
FICO score not available423153119
Total$1,765$2,891$1,609$920$435$1,011$31$8,662
LTV ratio:
Below 80%$1,244$2,218$1,257$716$323$780$29$6,567
80%+52167335220411223122,095
Total$1,765$2,891$1,609$920$435$1,011$31$8,662
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 millionsSBLC&I loansCRE loansREIT loansResidential
mortgage
loans		Tax-exempt loansTotal
Year ended September 30, 2024     
Balance at beginning of year$7 $214 $161 $16 $74 $2 $474 
Provision/(benefit) for credit losses(1)1 48 7 (10)— 45 
Net (charge-offs)/recoveries:     
Charge-offs— (45)(21)— — — (66)
Recoveries— 3 — — 1 — 4 
Net (charge-offs)/recoveries— (42)(21)— 1 — (62)
Foreign exchange translation adjustment— — — — — — — 
Balance at end of year$6 $173 $188 $23 $65 $2 $457 
ACL by loan portfolio segment as a % of total ACL1.3 %38.0 %41.1 %5.0 %14.2 %0.4 %100.0 %
Year ended September 30, 2023     
Balance at beginning of year$3 $226 $87 $21 $57 $2 $396 
Provision/(benefit) for credit losses4 32 84 (5)17 — 132 
Net (charge-offs)/recoveries:  
Charge-offs— (45)(13)— — — (58)
Recoveries— 1 3 — — — 4 
Net (charge-offs)/recoveries— (44)(10)— — — (54)
Foreign exchange translation adjustment— — — — — — — 
Balance at end of year$7 $214 $161 $16 $74 $2 $474 
ACL by loan portfolio segment as a % of total ACL1.5 %45.1 %34.0 %3.4 %15.6 %0.4 %100.0 %
Year ended September 30, 2022
Balance at beginning of year$4 $191 $66 $22 $35 $2 $320 
Initial allowance on acquired PCD loans— 1 2 — — — 3 
Provision/(benefit) for credit losses:
Initial provision for credit losses on non-PCD loans acquired with TriState Capital Bank2 5 19 — — — 26 
Provision/(benefit) for credit losses(3)57 — (1)21 — 74 
Total provision/(benefit) for credit losses
(1)62 19 (1)21 — 100 
Net (charge-offs)/recoveries:
Charge-offs— (28)(4)— — — (32)
Recoveries— — 5 — 1 — 6 
Net (charge-offs)/recoveries— (28)1 — 1 — (26)
Foreign exchange translation adjustment— — (1)— — — (1)
Balance at end of year$3 $226 $87 $21 $57 $2 $396 
ACL by loan portfolio segment as a % of total ACL0.8 %57.0 %22.0 %5.3 %14.4 %0.5 %100.0 %

The allowance for credit losses on bank loans held for investment decreased $17 million during the year ended September 30, 2024, primarily resulting from net-charges off during the period, partially offset by the bank loan provision for credit losses of $45 million during the year. The bank loan provision for credit losses for the year ended September 30, 2024 primarily reflected the impacts of loan growth, specific reserves, loan downgrades, and charge-offs in our C&I and CRE loan portfolios, partially offset by the favorable impacts of an improved economic forecast, loan repayments, and loan sales in the C&I loan portfolio.

The allowance for credit losses on unfunded lending commitments, which is included in “Other payables” on our Consolidated Statements of Financial Condition, was $22 million at both September 30, 2024 and 2023 and $19 million at September 30, 2022.
LOANS TO FINANCIAL ADVISORS, NET
Loans to financial advisors are primarily comprised of loans originated as a part of our recruiting activities. See Note 2 for a discussion of our accounting policies related to loans to financial advisors and the related allowance for credit losses. The following table presents the balances for our loans to financial advisors and the related accrued interest receivable.
September 30,
$ in millions20242023
Affiliated with the firm as of year-end (1)
$1,350 $1,158 
No longer affiliated with the firm as of year-end (2)
16 10 
Total loans to financial advisors1,366 1,168 
Allowance for credit losses(40)(32)
Loans to financial advisors, net$1,326 $1,136 
Accrued interest receivable on loans to financial advisors (included in “Other receivables, net”)
$9 $6 
Allowance for credit losses as a percent of total loans to financial advisors
2.93 %2.74 %

(1)These loans were predominantly current.
(2)These loans were on nonaccrual status and approximately half were past due for a period of 180 days or more.