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Allowance for Credit Losses | 9 Months Ended
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Sep. 30, 2024
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 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, 2023. 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, 2024 and December 31, 2023, the Company had accrued interest receivable for loans of $55,542 and $54,804, 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 $758 and $1,245 as of September 30, 2024 and December 31, 2023, 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:
| Commercial |  | Real Estate - Construction |  | Real Estate - 1-4 Family Mortgage |  | Real Estate - Commercial Mortgage |  | Lease Financing |  | Installment Loans to Individuals |  | Total
Three Months Ended September 30, 2024 |  |  |  |  |  |  |  |  |  |  |  |  |
Allowance for credit losses: |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning balance | $ | 44,951 |  |  | $ | 18,896 |  |  | $ | 47,421 |  |  | $ | 77,125 |  |  | $ | 2,515 |  |  | $ | 8,963 |  |  | $ | 199,871 |
Charge-offs | (347) |  |  | — |  |  | (256) |  |  | (10) |  |  | (642) |  |  | (649) |  |  | (1,904) |
Recoveries | 514 |  |  | — |  |  | 57 |  |  | 11 |  |  | 8 |  |  | 611 |  |  | 1,201 |
Net (charge-offs) recoveries | 167 |  |  | — |  |  | (199) |  |  | 1 |  |  | (634) |  |  | (38) |  |  | (703) |
Provision for (recovery of) credit losses on loans | (2,065) |  |  | (2,240) |  |  | (3) |  |  | 4,961 |  |  | 503 |  |  | 54 |  |  | 1,210 |
Ending balance | $ | 43,053 |  |  | $ | 16,656 |  |  | $ | 47,219 |  |  | $ | 82,087 |  |  | $ | 2,384 |  |  | $ | 8,979 |  |  | $ | 200,378 |
Nine Months Ended September 30, 2024 |  |  |  |  |  |  |  |  |  |  |  |  |
Allowance for credit losses: |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning balance | $ | 43,980 |  |  | $ | 18,612 |  |  | $ | 47,283 |  |  | $ | 77,020 |  |  | $ | 2,515 |  |  | $ | 9,168 |  |  | $ | 198,578 |
Charge-offs | (882) |  |  |  |  | (546) |  |  | (5,737) |  |  | (642) |  |  | (1,379) |  |  | (9,186) |
Recoveries | 1,385 |  |  |  |  | 130 |  |  | 116 |  |  | 26 |  |  | 1,181 |  |  | 2,838 |
Net (charge-offs) recoveries | 503 |  |  | — |  |  | (416) |  |  | (5,621) |  |  | (616) |  |  | (198) |  |  | (6,348) |
Provision for (recovery of) credit losses on loans | (1,430) |  |  | (1,956) |  |  | 352 |  |  | 10,688 |  |  | 485 |  |  | 9 |  |  | 8,148 |
Ending balance | $ | 43,053 |  |  | $ | 16,656 |  |  | $ | 47,219 |  |  | $ | 82,087 |  |  | $ | 2,384 |  |  | $ | 8,979 |  |  | $ | 200,378 |
Period-End Amount Allocated to: |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated | $ | 8,805 |  |  | $ | — |  |  | $ | — |  |  | $ | 4,878 |  |  | $ | — |  |  | $ | 270 |  |  | $ | 13,953 |
Collectively evaluated | 34,248 |  |  | 16,656 |  |  | 47,219 |  |  | 77,209 |  |  | 2,384 |  |  | 8,709 |  |  | 186,425 |
Ending balance | $ | 43,053 |  |  | $ | 16,656 |  |  | $ | 47,219 |  |  | $ | 82,087 |  |  | $ | 2,384 |  |  | $ | 8,979 |  |  | $ | 200,378 |
Loans: |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated | $ | 15,370 |  |  | $ | 241 |  |  | $ | 7,815 |  |  | $ | 47,321 |  |  | $ | 614 |  |  | $ | 270 |  |  | $ | 71,631 |
Collectively evaluated | 1,789,591 |  |  | 1,198,597 |  |  | 3,432,223 |  |  | 5,947,831 |  |  | 97,545 |  |  | 90,230 |  |  | 12,556,017 |
Ending balance | $ | 1,804,961 |  |  | $ | 1,198,838 |  |  | $ | 3,440,038 |  |  | $ | 5,995,152 |  |  | $ | 98,159 |  |  | $ | 90,500 |  |  | $ | 12,627,648 |
Nonaccruing loans with no allowance for credit losses | $ | 122 |  |  | $ | — |  |  | $ | 6,868 |  |  | $ | 25,016 |  |  | $ | 614 |  |  | $ | — |  |  | $ | 32,620 |
| Commercial |  | Real Estate - Construction |  | Real Estate - 1-4 Family Mortgage |  | Real Estate - Commercial Mortgage |  | Lease Financing |  | Installment 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) |
Recoveries | 690 |  |  | 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 loans | 4,696 |  |  | 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) |
Recoveries | 2,689 |  |  | 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 loans | 5,246 |  |  | 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 |
The Company recorded a provision for credit losses on loans of $1,210 during the third quarter of 2024, as compared to a provision for credit losses on loans of $5,315 recorded in the third quarter of 2023. 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 $1,210 in the third quarter of 2024 was primarily driven by loan growth and changes in credit metrics that influence the Company’s expectations of future losses, including but not limited to the balance of nonperforming loans, underlying collateral values, and historical levels of charge-offs, all considered in the context of the existing balance of the allowance for credit losses. 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, 2023. 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, | 2024 | 2023
Allowance for credit losses on unfunded loan commitments: |  |
Beginning balance | $ | 15,718 |  | $ | 17,618 |
Recovery of credit losses on unfunded loan commitments | (275) |  | (700) |
Ending balance | $ | 15,443 |  | $ | 16,918 |
Nine Months Ended September 30, | 2024 | 2023
Allowance for credit losses on unfunded loan commitments: |  |
Beginning balance | $ | 16,918 |  | $ | 20,118 |
Recovery of credit losses on unfunded loan commitments | (1,475) |  | (3,200) |
Ending balance | $ | 15,443 |  | $ | 16,918 |

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