Loans and Leases

6 Months Ended

Jun. 30, 2023

Receivables [Abstract]

Loans and Leases

LOANS AND LEASES

Unless otherwise noted, loans held for sale are not included in the following tables. Leases in the following tables include finance leases, but exclude operating lease equipment. As disclosed in Note 2 — Business Combinations, the following tables and text data as of June 30, 2023 include loans acquired in the SVBB Acquisition.

Loans by Class

dollars in millions	June 30, 2023		December 31, 2022
Commercial
Commercial construction	$	3,182	$	2,804
Owner occupied commercial mortgage	14,748		14,473
Non-owner occupied commercial mortgage	10,733		9,902
Commercial and industrial	25,376		24,105
Leases	2,130		2,171
Total commercial	56,169		53,455
Consumer
Residential mortgage	14,065		13,309
Revolving mortgage	1,900		1,951
Consumer auto	1,425		1,414
Consumer other	657		652
Total consumer	18,047		17,326
SVB
Global fund banking	29,333		—
Investor dependent - early stage	1,840		—
Investor dependent - growth stage	4,052		—
Innovation C&I and cash flow dependent	8,905		—
Private Bank	9,580		—
CRE	2,530		—
Other	2,559		—
Total SVB	58,799		—
Total loans and leases	$	133,015	$	70,781

At June 30, 2023 and December 31, 2022, accrued interest receivable on loans included in other assets was $601 million and $203 million, respectively, and was excluded from the estimate of credit losses.

There was a discount on acquired loans because the fair value was lower than the UPB as further discussed in Note 2 — Business Combinations. The discount on acquired loans is accreted to interest income over the contractual life of the loan using the effective interest method as further discussed in Note 1 — Significant Accounting Policies and Basis of Presentation. Accretion for the discount on acquired loans was $243 million and $260 million for the three and six months ended June 30, 2023, respectively.

The following table presents selected components of the amortized cost of loans, including the unamortized discount on acquired loans.

Components of Amortized Cost

dollars in millions	June 30, 2023		December 31, 2022
Deferred (fees) costs, including unamortized costs and unearned fees on non-PCD loans	$	(17)	$	34
Net unamortized discount on acquired loans
Non-PCD	$	2,202	$	73
PCD	276		45
Total net unamortized discount	$	2,478	$	118

The aging of the outstanding loans and leases by class at June 30, 2023 and December 31, 2022 is provided in the tables below. Loans and leases less than 30 days past due are considered current, as various grace periods allow borrowers to make payments within a stated period after the due date and remain in compliance with the respective agreement.

Loans and Leases - Delinquency Status

dollars in millions	June 30, 2023
	30-59 Days Past Due		60-89 Days Past Due		90 Days or Greater		Total Past Due		Current		Total
Commercial
Commercial construction	$	—	$	9	$	1	$	10	$	3,172	$	3,182
Owner occupied commercial mortgage	20		9		39		68		14,680		14,748
Non-owner occupied commercial mortgage	38		115		260		413		10,320		10,733
Commercial and industrial	84		38		83		205		25,171		25,376
Leases	32		19		14		65		2,065		2,130
Total commercial	174		190		397		761		55,408		56,169
Consumer
Residential mortgage	113		21		46		180		13,885		14,065
Revolving mortgage	12		2		8		22		1,878		1,900
Consumer auto	8		1		1		10		1,415		1,425
Consumer other	3		2		3		8		649		657
Total consumer	136		26		58		220		17,827		18,047
SVB
Global fund banking	6		—		—		6		29,327		29,333
Investor dependent - early stage	3		3		21		27		1,813		1,840
Investor dependent - growth stage	—		8		12		20		4,032		4,052
Innovation C&I and cash flow dependent	15		2		19		36		8,869		8,905
Private Bank	9		10		17		36		9,544		9,580
CRE	1		2		—		3		2,527		2,530
Other	5		2		4		11		2,548		2,559
Total SVB	39		27		73		139		58,660		58,799
Total loans and leases	$	349	$	243	$	528	$	1,120	$	131,895	$	133,015
	December 31, 2022
	30-59 Days Past Due		60-89 Days Past Due		90 Days or Greater		Total Past Due		Current		Total
Commercial
Commercial construction	$	50	$	—	$	1	$	51	$	2,753	$	2,804
Owner occupied commercial mortgage	29		5		25		59		14,414		14,473
Non-owner occupied commercial mortgage	76		144		11		231		9,671		9,902
Commercial and industrial	173		26		53		252		23,853		24,105
Leases	59		17		16		92		2,079		2,171
Total commercial	387		192		106		685		52,770		53,455
Consumer
Residential mortgage	73		16		52		141		13,168		13,309
Revolving mortgage	9		3		8		20		1,931		1,951
Consumer auto	7		1		1		9		1,405		1,414
Consumer other	4		2		3		9		643		652
Total consumer	93		22		64		179		17,147		17,326
Total loans and leases	$	480	$	214	$	170	$	864	$	69,917	$	70,781

The amortized cost by class of loans and leases on non-accrual status, and loans and leases greater than 90 days past due and still accruing at June 30, 2023 and December 31, 2022 are presented below.

Loans on Non-Accrual Status (1) (2)

dollars in millions	June 30, 2023				December 31, 2022
	Non-Accrual Loans		Loans > 90 Days and Accruing		Non-Accrual Loans		Loans > 90 Days and Accruing
Commercial
Commercial construction	$	4	$	—	$	48	$	—
Owner occupied commercial mortgage	51		8		41		2
Non-owner occupied commercial mortgage	318		1		228		—
Commercial and industrial	216		30		184		41
Leases	33		3		28		7
Total commercial	622		42		529		50
Consumer
Residential mortgage	72		7		75		10
Revolving mortgage	17		—		18		—
Consumer auto	4		—		4		—
Consumer other	1		3		1		3
Total consumer	94		10		98		13
SVB
Global fund banking	—		—		—		—
Investor dependent - early stage	26		3		—		—
Investor dependent - growth stage	100		—		—		—
Innovation C&I and cash flow dependent	43		13		—		—
Private Bank	29		2		—		—
CRE	14		—		—		—
Other	1		4		—		—
Total SVB	213		22		—		—
Total loans and leases	$	929	$	74	$	627	$	63

(1)    Accrued interest that was reversed when the loan went to non-accrual status was $5 million for the six months ended June 30, 2023 and $4 million for the year ended December 31, 2022.

(2)    Non-accrual loans for which there was no related ACL totaled $74 million at June 30, 2023 and $63 million at December 31, 2022.

Other real estate owned (“OREO”) and repossessed assets were $64 million as of June 30, 2023 and $47 million as of December 31, 2022.

Credit Quality Indicators

Loans and leases are monitored for credit quality on a recurring basis. Commercial loans and leases and consumer loans have different credit quality indicators as a result of the unique characteristics of the loan classes being evaluated. The credit quality indicators for Non-PCD commercial loans and leases are developed through a review of individual borrowers on an ongoing basis. Commercial loans are evaluated periodically with more frequent evaluations done on criticized loans. The indicators as of the date presented are based on the most recent assessment performed and are defined below:

Pass – A pass rated asset is not adversely classified because it does not display any of the characteristics for adverse classification.

Special mention – A special mention asset has potential weaknesses which deserve management’s close attention. If left uncorrected, such potential weaknesses may result in deterioration of the repayment prospects or collateral position at some future date. Special mention assets are not adversely classified and do not warrant adverse classification.

Substandard – A substandard asset is inadequately protected by the current net worth and paying capacity of the borrower or of the collateral pledged, if any. Assets classified as substandard generally have a well-defined weakness, or weaknesses, that jeopardize the liquidation of the debt. These assets are characterized by the distinct possibility of loss if the deficiencies are not corrected.

Doubtful – An asset classified as doubtful has all the weaknesses inherent in an asset classified substandard with the added characteristic that the weaknesses make collection or liquidation in full highly questionable and improbable on the basis of currently existing facts, conditions and values.

Loss – Assets classified as loss are considered uncollectible and of such little value it is inappropriate to be carried as an asset. This classification is not necessarily equivalent to any potential for recovery or salvage value, but rather it is not appropriate to defer a full charge-off even though partial recovery may be affected in the future.

Ungraded – Ungraded loans represent loans not included in the individual credit grading process due to their relatively small balances or borrower type. The majority of ungraded loans at June 30, 2023 and December 31, 2022, relate to business credit cards. Business credit card loans are subject to automatic charge-off when they become 120 days past due in the same manner as unsecured consumer lines of credit.

The credit quality indicator for consumer loans is based on delinquency status of the borrower as of the date presented. As the borrower becomes more delinquent, the likelihood of loss increases. An exemption is applied to government guaranteed loans as the principal repayments are insured by the Federal Housing Administration and U.S. Department of Veterans Affairs and thus remain on accrual status regardless of delinquency status.

The following tables summarize the commercial and SVB loans disaggregated by year of origination and by risk rating. The consumer loan delinquency status by year of origination is also presented below. The tables reflect the amortized cost of the loans and include PCD loans.

Commercial Loans - Risk Classifications by Class

June 30, 2023
Risk Classification:	Term Loans by Origination Year														Revolving Converted to Term Loans
dollars in millions	2023		2022		2021		2020		2019		2018 & Prior		Revolving				Total
Commercial construction
Pass	$	369	$	1,260	$	775	$	374	$	99	$	60	$	85	$	—	$	3,022
Special Mention	—		58		—		49		30		—		—		—		137
Substandard	1		2		14		—		1		5		—		—		23
Doubtful	—		—		—		—		—		—		—		—		—
Ungraded	—		—		—		—		—		—		—		—		—
Total commercial construction	370		1,320		789		423		130		65		85		—		3,182
Owner occupied commercial mortgage
Pass	981		2,740		3,221		2,808		1,699		2,497		167		—		14,113
Special Mention	7		49		13		25		21		69		8		—		192
Substandard	6		35		98		70		43		185		6		—		443
Doubtful	—		—		—		—		—		—		—		—		—
Ungraded	—		—		—		—		—		—		—		—		—
Total owner occupied commercial mortgage	994		2,824		3,332		2,903		1,763		2,751		181		—		14,748
Non-owner occupied commercial mortgage
Pass	1,182		2,575		1,660		1,669		1,119		1,349		47		—		9,601
Special Mention	7		—		—		95		111		74		—		—		287
Substandard	1		2		12		92		382		301		—		—		790
Doubtful	—		—		—		—		46		9		—		—		55
Ungraded	—		—		—		—		—		—		—		—		—
Total non-owner occupied commercial mortgage	1,190		2,577		1,672		1,856		1,658		1,733		47		—		10,733
Commercial and industrial
Pass	5,139		5,141		3,512		1,706		1,233		1,285		5,421		4		23,441
Special Mention	58		114		135		91		52		40		110		—		600
Substandard	44		142		123		204		131		261		232		1		1,138
Doubtful	—		8		6		1		23		24		20		—		82
Ungraded	—		—		—		—		—		—		115		—		115
Total commercial and industrial	5,241		5,405		3,776		2,002		1,439		1,610		5,898		5		25,376
Leases
Pass	415		595		387		292		146		105		—		—		1,940
Special Mention	10		23		12		10		6		2		—		—		63
Substandard	14		34		26		22		9		11		—		—		116
Doubtful	—		4		3		2		1		1		—		—		11
Ungraded	—		—		—		—		—		—		—		—		—
Total leases	439		656		428		326		162		119		—		—		2,130
Total commercial	$	8,234	$	12,782	$	9,997	$	7,510	$	5,152	$	6,278	$	6,211	$	5	$	56,169

SVB - Risk Classifications by Class

June 30, 2023
Risk Classification:	Term Loans by Origination Year														Revolving Converted to Term Loans
dollars in millions	2023		2022		2021		2020		2019		2018 & Prior		Revolving				Total
Global fund banking
Pass	$	168	$	180	$	129	$	96	$	42	$	8	$	28,646	$	39	$	29,308
Special Mention	—		—		—		—		—		—		14		—		14
Substandard	—		—		—		—		—		—		11		—		11
Doubtful	—		—		—		—		—		—		—		—		—
Ungraded	—		—		—		—		—		—		—		—		—
Total global fund banking	168		180		129		96		42		8		28,671		39		29,333
Investor dependent - early stage
Pass	115		893		298		83		33		6		142		2		1,572
Special Mention	2		1		—		—		—		—		—		—		3
Substandard	1		69		85		19		7		2		55		—		238
Doubtful	—		16		3		2		—		—		6		—		27
Ungraded	—		—		—		—		—		—		—		—		—
Total investor dependent - early stage	118		979		386		104		40		8		203		2		1,840
Investor dependent - growth stage
Pass	333		1,219		988		460		119		145		233		5		3,502
Special Mention	—		19		55		19		—		1		—		—		94
Substandard	5		119		100		78		8		19		28		—		357
Doubtful	—		36		34		10		8		6		5		—		99
Ungraded	—		—		—		—		—		—		—		—		—
Total investor dependent - growth stage	338		1,393		1,177		567		135		171		266		5		4,052
Innovation C&I and cash flow dependent
Pass	406		1,527		1,112		1,123		594		479		2,682		—		7,923
Special Mention	—		85		37		—		27		49		72		—		270
Substandard	47		110		115		114		11		38		234		—		669
Doubtful	—		—		1		17		—		—		25		—		43
Ungraded	—		—		—		—		—		—		—		—		—
Total innovation C&I and cash flow dependent	453		1,722		1,265		1,254		632		566		3,013		—		8,905
Private bank
Pass	696		2,298		2,205		1,411		789		1,218		899		9		9,525
Special Mention	—		2		2		—		—		6		6		—		16
Substandard	—		—		—		—		2		9		4		—		15
Doubtful	—		—		—		1		1		22		—		—		24
Ungraded	—		—		—		—		—		—		—		—		—
Total private bank	696		2,300		2,207		1,412		792		1,255		909		9		9,580
CRE
Pass	171		543		251		182		196		876		85		5		2,309
Special Mention	—		3		11		3		3		17		—		—		37
Substandard	—		1		2		21		98		46		2		—		170
Doubtful	—		—		2		—		1		11		—		—		14
Ungraded	—		—		—		—		—		—		—		—		—
Total CRE	171		547		266		206		298		950		87		5		2,530
Other
Pass	97		456		416		311		139		543		372		65		2,399
Special Mention	—		13		8		13		—		16		5		—		55
Substandard	—		25		9		10		6		29		26		—		105
Doubtful	—		—		—		—		—		—		—		—		—
Ungraded	—		—		—		—		—		—		—		—		—
Total Other	97		494		433		334		145		588		403		65		2,559
Total SVB	$	2,041	$	7,615	$	5,863	$	3,973	$	2,084	$	3,546	$	33,552	$	125	$	58,799

Consumer Loans - Delinquency Status by Class

June 30, 2023
Days Past Due:	Term Loans by Origination Year														Revolving Converted to Term Loans
dollars in millions	2023		2022		2021		2020		2019		2018 & Prior		Revolving				Total
Residential mortgage
Current	$	1,221	$	3,513	$	3,615	$	1,984	$	740	$	2,804	$	8	$	—	$	13,885
30-59 days	3		15		11		7		6		71		—		—		113
60-89 days	—		2		5		2		1		11		—		—		21
90 days or greater	—		1		1		2		—		42		—		—		46
Total residential mortgage	1,224		3,531		3,632		1,995		747		2,928		8		—		14,065
Revolving mortgage
Current	—		—		—		—		—		—		1,792		86		1,878
30-59 days	—		—		—		—		—		—		9		3		12
60-89 days	—		—		—		—		—		—		1		1		2
90 days or greater	—		—		—		—		—		—		4		4		8
Total revolving mortgage	—		—		—		—		—		—		1,806		94		1,900
Consumer auto
Current	276		514		324		171		81		49		—		—		1,415
30-59 days	1		2		2		1		1		1		—		—		8
60-89 days	—		—		1		—		—		—		—		—		1
90 days or greater	—		1		—		—		—		—		—		—		1
Total consumer auto	277		517		327		172		82		50		—		—		1,425
Consumer other
Current	74		128		65		10		5		19		348		—		649
30-59 days	—		—		—		—		—		1		2		—		3
60-89 days	—		—		—		—		—		1		1		—		2
90 days or greater	—		—		—		—		—		1		2		—		3
Total consumer other	74		128		65		10		5		22		353		—		657
Total consumer	$	1,575	$	4,176	$	4,024	$	2,177	$	834	$	3,000	$	2,167	$	94	$	18,047

The following tables represent current credit quality indicators by origination year as of December 31, 2022:

Commercial Loans - Risk Classifications by Class

December 31, 2022
Risk Classification:	Term Loans by Origination Year														Revolving Converted to Term Loans
dollars in millions	2022		2021		2020		2019		2018		2017 & Prior		Revolving				Total
Commercial construction
Pass	$	1,140	$	759	$	511	$	157	$	27	$	75	$	42	$	—	$	2,711
Special Mention	4		—		18		18		—		—		—		—		40
Substandard	2		—		—		43		—		5		—		—		50
Doubtful	—		—		—		3		—		—		—		—		3
Ungraded	—		—		—		—		—		—		—		—		—
Total commercial construction	1,146		759		529		221		27		80		42		—		2,804
Owner occupied commercial mortgage
Pass	2,773		3,328		2,966		1,825		1,048		1,867		177		—		13,984
Special Mention	33		14		32		33		18		49		2		—		181
Substandard	24		47		41		28		47		114		6		—		307
Doubtful	—		—		—		—		—		1		—		—		1
Ungraded	—		—		—		—		—		—		—		—		—
Total owner occupied commercial mortgage	2,830		3,389		3,039		1,886		1,113		2,031		185		—		14,473
Non-owner occupied commercial mortgage
Pass	2,501		1,658		1,794		1,397		680		933		48		—		9,011
Special Mention	—		1		69		38		35		10		1		—		154
Substandard	3		11		68		324		58		236		—		—		700
Doubtful	—		—		—		17		—		20		—		—		37
Ungraded	—		—		—		—		—		—		—		—		—
Total non-owner occupied commercial mortgage	2,504		1,670		1,931		1,776		773		1,199		49		—		9,902
Commercial and industrial
Pass	7,695		4,145		2,035		1,533		872		845		5,252		29		22,406
Special Mention	87		153		79		63		52		23		40		—		497
Substandard	106		117		194		132		166		145		200		1		1,061
Doubtful	1		4		3		11		6		16		7		—		48
Ungraded	—		—		—		—		—		—		93		—		93
Total commercial and industrial	7,889		4,419		2,311		1,739		1,096		1,029		5,592		30		24,105
Leases
Pass	718		466		389		216		80		108		—		—		1,977
Special Mention	21		22		17		9		4		—		—		—		73
Substandard	32		32		27		12		7		1		—		—		111
Doubtful	2		3		2		1		1		—		—		—		9
Ungraded	—		—		—		—		—		1		—		—		1
Total leases	773		523		435		238		92		110		—		—		2,171
Total commercial	$	15,142	$	10,760	$	8,245	$	5,860	$	3,101	$	4,449	$	5,868	$	30	$	53,455

Consumer Loans - Delinquency Status by Class

December 31, 2022
Days Past Due:	Term Loans by Origination Year														Revolving Converted to Term Loans
dollars in millions	2022		2021		2020		2019		2018		2017 & Prior		Revolving				Total
Residential mortgage
Current	$	3,485	$	3,721	$	2,097	$	805	$	413	$	2,625	$	22	$	—	$	13,168
30-59 days	3		7		6		5		3		49		—		—		73
60-89 days	1		1		2		—		1		11		—		—		16
90 days or greater	—		1		1		2		2		46		—		—		52
Total residential mortgage	3,489		3,730		2,106		812		419		2,731		22		—		13,309
Revolving mortgage
Current	—		—		—		—		—		—		1,839		92		1,931
30-59 days	—		—		—		—		—		—		5		4		9
60-89 days	—		—		—		—		—		—		2		1		3
90 days or greater	—		—		—		—		—		—		5		3		8
Total revolving mortgage	—		—		—		—		—		—		1,851		100		1,951
Consumer auto
Current	599		398		216		111		59		22		—		—		1,405
30-59 days	1		2		2		1		1		—		—		—		7
60-89 days	—		1		—		—		—		—		—		—		1
90 days or greater	—		1		—		—		—		—		—		—		1
Total consumer auto	600		402		218		112		60		22		—		—		1,414
Consumer other
Current	160		82		13		6		2		19		361		—		643
30-59 days	—		—		—		—		—		1		3		—		4
60-89 days	—		—		—		—		—		1		1		—		2
90 days or greater	—		—		—		—		—		1		2		—		3
Total consumer other	160		82		13		6		2		22		367		—		652
Total consumer	$	4,249	$	4,214	$	2,337	$	930	$	481	$	2,775	$	2,240	$	100	$	17,326

Gross Charge-offs

Gross charge-off vintage disclosures by origination year and loan class are summarized in the following table for the six months ended June 30, 2023:

Gross Charge-offs

Six Months Ended June 30, 2023
	Term Loans by Origination Year														Revolving Converted to Term Loans
dollars in millions	2023		2022		2021		2020		2019		2018 & Prior		Revolving				Total
Commercial
Non-owner occupied commercial mortgage	$	—	$	—	$	—	$	—	$	17	$	12	$	—	$	—	$	29
Commercial and industrial	3		31		16		5		3		10		16		—		84
Leases	—		5		3		1		1		1		—		—		11
Total commercial	3		36		19		6		21		23		16		—		124
Consumer
Residential mortgage	—		—		—		—		—		2		—		—		2
Consumer auto	—		1		—		—		—		—		—		—		1
Consumer other	3		1		—		—		—		—		6		—		10
Total consumer	3		2		—		—		—		2		6		—		13
SVB
Investor dependent - early stage	12		13		5		—		—		—		—		—		30
Investor dependent - growth stage	1		5		10		3		1		—		4		—		24
Innovation C&I and cash flow dependent	—		—		—		42		—		—		5		—		47
Total SVB	13		18		15		45		1		—		9		—		101
Total loans and leases	$	19	$	56	$	34	$	51	$	22	$	25	$	31	$	—	$	238

Loan Modifications for Borrowers Experiencing Financial Difficulties

On January 1, 2023, we adopted ASU 2022-02 as further discussed in Note 1 — Significant Accounting Policies and Basis of Presentation. The Modification Disclosures required by ASU 2022-02 are included below.

As part of BancShares’ ongoing credit risk management practices, BancShares attempts to work with borrowers when necessary to extend or modify loan terms to better align with borrowers current ability to repay. BancShares’ modifications granted to debtors experiencing financial difficulties typically take the form of term extensions, interest rate reductions, other-than-insignificant payment delays, principal forgiveness, or a combination thereof. Modifications are made in accordance with internal policies and guidelines to conform to regulatory guidance.

The following tables present loan modifications made to debtors experiencing financial difficulty, disaggregated by class and type of loan modification. The tables also include the weighted average term extensions, as well as the modification total relative to the total period-end amortized cost basis of loans in the respective loan class.

Loan Modifications Made to Borrowers Experiencing Financial Difficulty (three months ended June 30, 2023)

dollars in millions	Term Extension(1)			Other Than Insignificant Payment Delay			Interest Rate Reduction
	Amortized Cost		Weighted Average Term Extension (Months)	Amortized Cost		Weighted Average Payment Delay (Months)	Amortized Cost		Weighted Average Interest Rate Reduction
Commercial
Commercial construction	$	—	47	$	—	—	$	—	—	%
Owner occupied commercial mortgage	12		13	—		—	1		3.50
Non-owner occupied commercial mortgage	161		15	—		—	—		—
Commercial and industrial	57		24	6		6	—		14.40
Total commercial	230		17	6		6	1		3.50
Consumer
Residential mortgage	2		90	—		—	—		—
Revolving mortgage	—		55	—		—	—		—
Consumer auto	—		19	—		—	—		—
Consumer other	—		60	—		—	—		9.21
Total consumer	2		84	—		—	—		9.21
SVB
Investor dependent - early stage	2		6	6		4	—		—
Innovation C&I and cash flow dependent	42		3	23		7	—		—
Total SVB	44		3	29		6	—		—
Total loans and leases	$	276	16	$	35	6	$	1	3.70	%

dollars in millions	Term Extension(1) and Interest Rate Reduction					Term Extension(1) and Other Than Insignificant Payment Delay				Total
	Amortized Cost		Weighted Average Term Extension (Months)	Weighted Average Interest Rate Reduction		Amortized Cost		Weighted Average Term Extension (Months)	Weighted Average Payment Delay (Months)	Amortized Cost		Total as a % of Loan and Lease Class
Commercial
Commercial construction	$	—	—	—	%	$	—	—	—	$	—	0.01	%
Owner occupied commercial mortgage	—		—	—		—		—	—	13		0.09
Non-owner occupied commercial mortgage	—		—	—		—		—	—	161		1.50
Commercial and industrial	—		28	5.18		—		—	—	63		0.25
Total commercial	—		28	5.18		—		—	—	237		0.42
Consumer								—
Residential mortgage	3		60	3.44		—		—	—	5		0.03
Revolving mortgage	—		44	0.41		—		—	—	—		0.01
Consumer auto	—		31	0.70		—		—	—	—		0.01
Consumer other	—		—	—		—		—	—	—		0.01
Total consumer	3		59	3.35		—		—	—	5		0.03
SVB
Investor dependent - early stage	—		—	—		—		—	—	8		0.41
Innovation C&I and cash flow dependent	—		—	—		—		—	—	65		0.73
Total SVB	—		—	—		—		—	—	73		0.12
Total loans and leases	$	3	58	3.43	%	$	—	0	0	$	315	0.24	%

Loan Modifications Made to Borrowers Experiencing Financial Difficulty (six months ended June 30, 2023)

dollars in millions	Term Extension(1)			Other Than Insignificant Payment Delay			Interest Rate Reduction
	Amortized Cost		Weighted Average Term Extension (Months)	Amortized Cost		Weighted Average Payment Delay (Months)	Amortized Cost		Weighted Average Interest Rate Reduction
Commercial
Commercial construction	$	1	22	$	—	—	$	—	—	%
Owner occupied commercial mortgage	22		12	—		—	2		3.63
Non-owner occupied commercial mortgage	212		13	—		—	—		—
Commercial and industrial	67		22	6		6	—		14.40
Total commercial	302		15	6		6	2		3.62
Consumer
Residential mortgage	3		62	—		—	—		—
Revolving mortgage	—		56	—		—	—		—
Consumer auto	—		19	—		—	—		—
Consumer other	—		60	—		—	—		9.33
Total consumer	3		61	—		—	—		9.33
SVB
Investor dependent - early stage	2		6	6		4	—		—
Innovation C&I and cash flow dependent	49		4	23		7	—		—
Other	—		17	—		—	—		—
Total SVB	51		4	29		6	—		—
Total loans and leases	$	356	13	$	35	6	$	2	3.86	%

dollars in millions	Term Extension(1) and Interest Rate Reduction					Term Extension(1) and Other Than Insignificant Payment Delay				Total
	Amortized Cost		Weighted Average Term Extension (Months)	Weighted Average Interest Rate Reduction		Amortized Cost		Weighted Average Term Extension (Months)	Weighted Average Payment Delay (Months)	Amortized Cost		Total as a % of Loan and Lease Class
Commercial
Commercial construction	$	—	—	—	%	$	—	—	—	$	1	0.03	%
Owner occupied commercial mortgage	—		36	2.00		—		—	—	24		0.16
Non-owner occupied commercial mortgage	—		—	—		—		—	—	212		1.97
Commercial and industrial	—		30	4.61		3		8	2	76		0.30
Total commercial	—		32	3.68		3		8	2	313		0.56
Consumer								—
Residential mortgage	3		60	3.44		—		—	—	6		0.04
Revolving mortgage	—		53	0.40		—		—	—	—		0.02
Consumer auto	—		31	0.70		—		—	—	—		0.01
Consumer other	—		—	—		—		—	—	—		0.01
Total consumer	3		59	3.31		—		—	—	6		0.04
SVB
Investor dependent - early stage	—		—	—		—		—	—	8		0.41
Innovation C&I and cash flow dependent	—		—	—		—		—	—	72		0.81
Other	—		—	—		—		—	—	—		—
Total SVB	—		—	—		—		—	—	80		0.14
Total loans and leases	$	3	57	3.34	%	$	3	8	2	$	399	0.30	%

(1) Term extensions include loans where the balloon payment has been deferred to a later date or is amortizing over an extended period.

Borrowers experiencing financial difficulties are typically identified in our credit risk management process before loan modifications occur. An assessment of whether a borrower is experiencing financial difficulty is reassessed or performed on the date of a modification. Since the effect of most modifications made to borrowers experiencing financial difficulty is already included in the allowance for credit losses because of the measurement methodologies used to estimate the allowance, a change to the allowance for credit losses is generally not recorded upon modification. Upon BancShares’ determination that a modified loan (or portion of a loan) has subsequently been deemed uncollectible, the loan (or a portion of the loan) is charged off. There were no significant amounts of modified loans that subsequently defaulted during the first and second quarters of 2023.

The following tables present the amortized cost and performance of modified loans to borrowers experiencing financial difficulties. The period of delinquency is based on the number of days the scheduled payment is contractually past due.

Modified Loans Payment Status (three months ended June 30, 2023)

dollars in millions	Current		30–59 Days Past Due		60–89 Days Past Due		90 days or greater Past Due		Total
Commercial
Commercial construction	$	—	$	—	$	—	$	—	$	—
Owner occupied commercial mortgage	13		—		—		—		13
Non-owner occupied commercial mortgage	126		—		—		35		161
Commercial and industrial	63		—		—		—		63
Total commercial	202		—		—		35		237
Consumer
Residential mortgage	5		—		—		—		5
Total consumer	5		—		—		—		5
SVB
Investor dependent - early stage	5		—		—		3		8
Innovation C&I and cash flow dependent	59		—		—		6		65
Total SVB	64		—		—		9		73
Total loans and leases	$	271	$	—	$	—	$	44	$	315

Modified Loans Payment Status (six months ended June 30, 2023)

dollars in millions	Current		30–59 Days Past Due		60–89 Days Past Due		90 days or greater Past Due		Total
Commercial
Commercial construction	$	1	$	—	$	—	$	—	$	1
Owner occupied commercial mortgage	24		—		—		—		24
Non-owner occupied commercial mortgage	177		—		—		35		212
Commercial and industrial	76		—		—		—		76
Total commercial	278		—		—		35		313
Consumer
Residential mortgage	6		—		—		—		6
Total consumer	6		—		—		—		6
SVB
Investor dependent - early stage	5		—		—		3		8
Innovation C&I and cash flow dependent	66		—		—		6		72
Total SVB	71		—		—		9		80
Total loans and leases	$	355	$	—	$	—	$	44	$	399

At June 30, 2023, there were $12 million of commitments to lend additional funds to debtors experiencing financial difficulty for which the terms of the loan were modified.

Prior Period Troubled Debt Restructuring

The following includes disclosures for certain loan modifications or restructurings as troubled debt restructurings (“TDRs”) for historical periods prior to adoption of ASU 2022-02. In general, a modification or restructuring of a loan was considered a TDR if, for economic or legal reasons related to a borrower’s financial difficulties, a concession is granted to the borrower that creditors would not otherwise consider. Many aspects of a borrower’s financial situation are assessed when determining whether they are experiencing financial difficulty.

Concessions may have related to the contractual interest rate, maturity date, payment structure or other actions. The assessments of whether a borrower was experiencing (or is likely to experience) financial difficulty, and whether a concession had been granted, were subjective in nature and management’s judgment was required when determining whether a modification was classified as a TDR. Modified loans that met the definition of a TDR were subject to BancShares’ individually reviewed loans policy.

The following table presents amortized cost of TDRs:

TDRs

dollars in millions	December 31, 2022
	Accruing		Non-Accruing		Total
Commercial
Commercial construction	$	2	$	1	$	3
Owner occupied commercial mortgage	46		9		55
Non-owner occupied commercial mortgage	24		30		54
Commercial and industrial	26		8		34
Leases	—		1		1
Total commercial	98		49		147
Consumer
Residential mortgage	33		17		50
Revolving mortgage	17		5		22
Consumer auto	2		—		2
Consumer other	—		—		—
Total consumer	52		22		74
Total TDRs	$	150	$	71	$	221

The following table summarizes the loan restructurings during the three and six months ended June 30, 2022 that were designated as TDRs. BancShares defines payment default as movement of the TDR to non-accrual status, which is generally 90 days past due, foreclosure or charge-off, whichever occurs first.

Restructurings

dollars in millions (except for number of loans)	Three Months Ended June 30, 2022			Six Months Ended June 30, 2022
	Number of Loans	Amortized Cost at Period End		Number of Loans	Amortized Cost at Period End
Loans and leases
Interest only	6	$	6	8	$	6
Loan term extension	41	4		76	23
Below market rates	25	3		45	5
Discharge from bankruptcy	18	2		42	4
Total	90	$	15	171	$	38

There were $1.5 million commitments to lend additional funds to borrowers whose loan terms were modified in TDRs as of December 31, 2022.

After a loan is determined to be a TDR, BancShares continues to track its performance under its most recent restructured terms. TDRs that subsequently defaulted during the three and six months ended June 30, 2022, and were classified as TDRs during the applicable 12-month period preceding June 30, 2022 were as follows:

TDR Defaults

dollars in millions	Three Months Ended		Six Months Ended
	June 30, 2022		June 30, 2022
TDR Defaults	$	1	$	3

Loans Pledged

The following table provides information regarding loans pledged as collateral for borrowing capacity through the FHLB of Atlanta and the Federal Reserve Bank (“FRB”) as of June 30, 2023 and December 31, 2022.

Loans Pledged

dollars in millions	June 30, 2023		December 31, 2022
FHLB of Atlanta
Lendable collateral value of pledged non-PCD loans	$	14,999	$	14,918
Less: Advances	2,425		4,250
Less: Letters of Credit	1,450		1,450
Available borrowing capacity	$	11,124	$	9,218
Pledged non-PCD loans (contractual balance)	$	23,969	$	23,491
FRB
Lendable collateral value of pledged non-PCD loans	$	4,817	$	4,203
Less: Advances	—		—
Available borrowing capacity	$	4,817	$	4,203
Pledged non-PCD loans (contractual balance)	$	5,995	$	5,697

In connection with the SVBB Acquisition, FCB and the FDIC entered into terms and conditions for a five-year, up to $70 billion line of credit to FCB provided by the FDIC and a Purchase Money Note, both of which are or will be primarily secured by all SVB loans acquired and related commitments that subsequently were drawn and outstanding. See Note 2 — Business Combinations for further discussion of the facility and note.