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Allowance for Credit Losses
 9 Months Ended
Sep. 30, 2023
Receivables [Abstract]  
Allowance for Credit Losses Allowance for Credit Losses
(In Thousands)

Allowance for Credit Losses on Loans

The allowance for credit losses is an estimate of expected losses inherent within the Company’s loans held for investment portfolio and is maintained at a level believed adequate by management to absorb credit losses inherent in the entire loan portfolio. Management evaluates the adequacy of the allowance for credit losses on a quarterly basis. Expected credit loss inherent in non-cancellable off-balance-sheet credit exposures is accounted for as a separate liability in the Consolidated Balance Sheets. The allowance for credit losses on loans held for investment, as reported in the Company’s Consolidated Balance Sheets, is adjusted by a provision for credit losses, which is reported in earnings, and reduced by net charge-offs. Loan losses are charged against the allowance for credit losses when management believes the uncollectability of a loan balance is confirmed and such losses are reasonably quantified. Subsequent recoveries, if any, are credited to the allowance. For more information about the Company’s policies and procedures for determining the amount of the allowance for credit losses, please refer to the discussion in Note 1, “Significant Accounting Policies,” in the Notes to the Consolidated Financial Statements in Item 8, Financial Statements and Supplementary Data, in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.
The Company has made an accounting policy election to exclude accrued interest from the measurement of the allowance for credit losses in the Company’s loan portfolio. As of September 30, 2023 and December 31, 2022, the Company had accrued interest receivable for loans of $53,565 and $49,850, respectively, which is recorded in the “Other assets” line item on the Consolidated Balance Sheets. Although the Company made the election to exclude accrued interest from the measurement of the allowance for credit losses, the Company did have an allowance for credit losses on interest deferred as part of the loan deferral program established in 2020 in response to the COVID-19 pandemic of $1,245 and $1,248 as of September 30, 2023 and December 31, 2022, respectively.
The following tables provide a roll-forward of the allowance for credit losses by loan category and a breakdown of the ending balance of the allowance based on the Company’s credit loss methodology for the periods presented:
CommercialReal Estate -
Construction		Real Estate -
1-4 Family
Mortgage		Real Estate  -
Commercial
Mortgage		Lease FinancingInstallment
Loans to Individuals		Total
Three Months Ended September 30, 2023
Allowance for credit losses:
Beginning balance$41,310 $19,125 $46,434 $75,667 $2,480 $9,375 $194,391 
Charge-offs(2,252)— (130)— (641)(607)(3,630)
Recoveries690 48 181 208 2 568 1,697 
Net (charge-offs) recoveries(1,562)48 51 208 (639)(39)(1,933)
Provision for (recovery of) credit losses on loans4,696 483 (686)(642)1,514 (50)5,315 
Ending balance$44,444 $19,656 $45,799 $75,233 $3,355 $9,286 $197,773 
Nine Months Ended September 30, 2023
Allowance for credit losses:
Beginning balance$44,255 $19,114 $44,727 $71,798 $2,463 $9,733 $192,090 
Initial impact of purchased credit deteriorated loans acquired during the period(26)— — — — — (26)
Charge-offs(7,720)(57)(345)(5,512)(641)(1,997)(16,272)
Recoveries2,689 48 375 697 13 1,884 5,706 
Net (charge-offs) recoveries(5,031)(9)30 (4,815)(628)(113)(10,566)
Provision for (recovery of) credit losses on loans5,246 551 1,042 8,250 1,520 (334)16,275 
Ending balance$44,444 $19,656 $45,799 $75,233 $3,355 $9,286 $197,773 
Period-End Amount Allocated to:
Individually evaluated$11,194 $— $77 $1,260 $856 $270 $13,657 
Collectively evaluated 33,250 19,656 45,722 73,973 2,499 9,016 184,116 
Ending balance$44,444 $19,656 $45,799 $75,233 $3,355 $9,286 $197,773 
Loans:
Individually evaluated$20,996 $— $13,007 $18,403 $1,047 $270 $53,723 
Collectively evaluated 1,798,895 1,407,364 3,385,869 5,294,763 119,677 107,732 12,114,300 
Ending balance$1,819,891 $1,407,364 $3,398,876 $5,313,166 $120,724 $108,002 $12,168,023 
Nonaccruing loans with no allowance for credit losses$1,987 $— $11,441 $11,226 $191 $— $24,845 
CommercialReal Estate -
Construction		Real Estate -
1-4 Family
Mortgage		Real Estate  -
Commercial
Mortgage		Lease FinancingInstallment Loans to IndividualsTotal
Three Months Ended September 30, 2022
Allowance for credit losses:
Beginning balance$30,193 $17,290 $41,910 $64,373 $1,802 $10,563 $166,131 
Charge-offs(373)— (208)(1,956)— (722)(3,259)
Recoveries415 — 378 50 113 728 1,684 
Net (charge-offs) recoveries42 — 170 (1,906)113 6 (1,575)
Provision for (recovery of) credit losses on loans268 1,454 1,452 6,800 399 (573)9,800 
Ending balance$30,503 $18,744 $43,532 $69,267 $2,314 $9,996 $174,356 
Nine Months Ended September 30, 2022
Allowance for credit losses:
Beginning balance$33,922 $16,419 $32,356 $68,940 $1,486 $11,048 $164,171 
Initial impact of purchased credit deteriorated loans acquired during the period1,648 — — — — — 1,648 
Charge-offs(4,714)— (532)(2,670)(7)(2,351)(10,274)
Recoveries1,982 — 725 397 136 2,271 5,511 
Net (charge-offs) recoveries(2,732)— 193 (2,273)129 (80)(4,763)
Provision for (recovery of) credit losses on loans(2,335)2,325 10,983 2,600 699 (972)13,300 
Ending balance$30,503 $18,744 $43,532 $69,267 $2,314 $9,996 $174,356 
Period-End Amount Allocated to:
Individually evaluated$4,064 $— $— $2,649 $— $370 $7,083 
Collectively evaluated26,439 18,744 43,532 66,618 2,314 9,626 167,273 
Ending balance$30,503 $18,744 $43,532 $69,267 $2,314 $9,996 $174,356 
Loans:
Individually evaluated$9,088 $153 $5,965 $19,043 $— $370 $34,619 
Collectively evaluated1,504,003 1,214,903 3,121,924 4,997,622 103,357 128,576 11,070,385 
Ending balance$1,513,091 $1,215,056 $3,127,889 $5,016,665 $103,357 $128,946 $11,105,004 
Nonaccruing loans with no allowance for credit losses$429 $153 $5,809 $4,633 $— $2 $11,026 
 
The Company recorded a provision for credit losses of $5,315 during the third quarter of 2023, as compared to a provision for credit losses $9,800 recorded in the third quarter of 2022. The Company’s allowance for credit losses model considers economic projections, primarily the national unemployment rate and GDP, over a reasonable and supportable period of two years. The provision for credit losses on loans of $5,315 in the third quarter of 2023 was primarily driven by loan growth.
Allowance for Credit Losses on Unfunded Loan Commitments
The Company maintains a separate allowance for credit losses on unfunded loan commitments, which is included in the “Other liabilities” line item on the Consolidated Balance Sheets. For more information about the Company’s policies and procedures for determining the amount of the allowance for credit losses on unfunded loan commitments, please refer to the discussion in Note 1, “Significant Accounting Policies,” in the Notes to the Consolidated Financial Statements in Item 8, Financial Statements and Supplementary Data, in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.
The following tables provide a roll-forward of the allowance for credit losses on unfunded loan commitments for the periods presented.
Three Months Ended September 30,20232022
Allowance for credit losses on unfunded loan commitments:
Beginning balance$17,618 $19,935 
Recovery of credit losses on unfunded loan commitments (included in other noninterest expense) (700)— 
Ending balance$16,918 $19,935 
Nine Months Ended September 30,20232022
Allowance for credit losses on unfunded loan commitments:
Beginning balance$20,118 $20,035 
Recovery of credit losses on unfunded loan commitments (included in other noninterest expense)(3,200)(100)
Ending balance$16,918 $19,935