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Loans and Allowance for Credit Losses | 12 Months Ended
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Dec. 31, 2024
Receivables [Abstract] |
Loans and Allowance for Credit Losses | LOANS AND ALLOWANCE FOR CREDIT LOSSES At December 31, 2024, the Company’s loan portfolio was $17.01 billion, compared to $16.85 billion at December 31, 2023. The various categories of loans are summarized as follows:
(In thousands) | 2024 |  | 2023
Consumer: |  |  |
Credit cards | $ | 181,675 |  |  | $ | 191,204 |
Other consumer | 127,319 |  |  | 127,462 |
Total consumer | 308,994 |  |  | 318,666 |
Real estate: |  |  |
Construction and development | 2,789,249 |  |  | 3,144,220 |
Single family residential | 2,689,946 |  |  | 2,641,556 |
Other commercial | 7,912,336 |  |  | 7,552,410 |
Total real estate | 13,391,531 |  |  | 13,338,186 |
Commercial: |  |  |
Commercial | 2,434,175 |  |  | 2,490,176 |
Agricultural | 261,154 |  |  | 232,710 |
Total commercial | 2,695,329 |  |  | 2,722,886 |
Other | 610,083 |  |  | 465,932 |
Total loans | $ | 17,005,937 |  |  | $ | 16,845,670 |
The above table presents total loans at amortized cost. The difference between amortized cost and unpaid principal balance is due to (i) premiums and discounts associated with acquisition date fair value adjustments on acquired loans of $7.2 million and $13.2 million at December 31, 2024 and 2023, respectively, and (ii) deferred origination costs and fees of $9.6 million and $6.5 million at December 31, 2024 and 2023, respectively. Accrued interest on loans, which is excluded from the amortized cost of loans held for investment, totaled $78.8 million and $77.1 million at December 31, 2024 and 2023, respectively, and is included in interest receivable on the consolidated balance sheets. Loan Origination/Risk Management – The Company seeks to manage its credit risk by diversifying its loan portfolio, determining that borrowers have adequate sources of cash flow for loan repayment without liquidation of collateral; obtaining and monitoring collateral; and providing an adequate allowance for credit losses by regularly reviewing loans through the internal loan review process. The loan portfolio is diversified by borrower, purpose and industry. The Company seeks to use diversification within the loan portfolio to reduce its credit risk, thereby minimizing the adverse impact on the portfolio if weaknesses develop in either the economy or a particular segment of borrowers. Collateral requirements are based on credit assessments of borrowers and may be used to recover the debt in case of default. Consumer – The consumer loan portfolio consists of credit card loans and other consumer loans. Credit card loans are diversified by geographic region to reduce credit risk and minimize any adverse impact on the portfolio. Although they are regularly reviewed to facilitate the identification and monitoring of creditworthiness, credit card loans are unsecured loans, making them more susceptible to economic downturns that result in increased unemployment. Other consumer loans include direct installment loans and account overdrafts. Loans in this portfolio segment are sensitive to unemployment and other key consumer economic measures. Real estate – The real estate loan portfolio consists of construction and development loans (“C&D”), single family residential loans and commercial loans. C&D and commercial real estate (“CRE”) loans can be particularly sensitive to valuation of real estate. CRE cycles are inevitable. The long planning and production process for new properties and rapid shifts in business conditions and employment create an inherent tension between supply and demand for commercial properties. While general economic trends often move individual markets in the same direction over time, the timing and magnitude of changes are determined by other forces unique to each market. CRE cycles tend to be local in nature and longer than other credit cycles. Factors influencing the CRE market are traditionally different from those affecting residential real estate markets; thereby making predictions for one market based on the other difficult. Additionally, submarkets within CRE – such as office, industrial, apartment, retail and hotel – also experience different cycles, providing an opportunity to lower the overall risk through diversification across types of CRE loans. Management realizes that local demand and supply conditions will also mean that different geographic areas will experience cycles of different amplitude and length. The Company monitors these loans closely. Commercial – The commercial loan portfolio includes commercial and agricultural loans, representing loans to commercial customers and farmers for use in normal business or farming operations to finance working capital needs, equipment purchases or other expansion projects. Paycheck Protection Program (“PPP”) loans are also included in the commercial loan portfolio. Collection risk in this portfolio is driven by the creditworthiness of the underlying borrowers, particularly cash flow from customers’ business or farming operations. The Company continues its efforts to keep loan terms short, reducing the negative impact of upward movement in interest rates. Term loans are generally set up with one or three year balloons, and the Company has instituted a pricing mechanism for commercial loans. It is standard practice to require personal guaranties on commercial loans for closely-held or limited liability entities. Paycheck Protection Program Loans - The Company originated loans pursuant to multiple PPP appropriations of the Coronavirus Aid, Relief and Economic Security Act which provided 100% federally guaranteed loans for small businesses to cover up to 24 weeks of payroll costs and assistance with mortgage interest, rent and utilities. Notably, these small business loans may be forgiven by the SBA if borrowers maintain their payrolls and satisfy certain other conditions. PPP loans have a zero percent risk-weight for regulatory capital ratios. As of December 31, 2024 and 2023, the total outstanding balance of PPP loans was $1.6 million and $4.8 million, respectively. Other – The other loan portfolio includes mortgage warehouse loans, representing warehouse lines of credit to mortgage originators for the disbursement of newly originated 1-4 family residential loans. Also included in the other loan portfolio are loans to public sector customers, including state and local governments. Nonaccrual and Past Due Loans – Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. Loans are placed on nonaccrual status when, in management’s opinion, the borrower may be unable to meet payment obligations as they become due, as well as when required by regulatory provisions. Loans may be placed on nonaccrual status regardless of whether or not such loans are considered past due. When interest accrual is discontinued, all unpaid accrued interest is reversed. Interest income is subsequently recognized only to the extent cash payments are received in excess of principal due. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. The amortized cost basis of nonaccrual loans segregated by class of loans are as follows:
(In thousands) | 2024 |  | 2023
Consumer: |  |  |
Credit cards | $ | 565 |  |  | $ | 487 |
Other consumer | 678 |  |  | 589 |
Total consumer | 1,243 |  |  | 1,076 |
Real estate: |  |  |
Construction and development | 10,681 |  |  | 2,457 |
Single family residential | 33,972 |  |  | 27,209 |
Other commercial | 28,524 |  |  | 11,960 |
Total real estate | 73,177 |  |  | 41,626 |
Commercial: |  |  |
Commercial | 35,161 |  |  | 39,886 |
Agricultural | 570 |  |  | 734 |
Total commercial | 35,731 |  |  | 40,620 |
Other | 3 |  |  | 3 |
Total | $ | 110,154 |  |  | $ | 83,325 |
As of December 31, 2024 and 2023, nonaccrual loans for which there was no related allowance for credit losses had an amortized cost of $1.7 million and $3.2 million, respectively. These loans are individually assessed and do not hold an allowance due to being adequately collateralized under the collateral-dependent valuation method. An age analysis of the amortized cost basis of past due loans, including nonaccrual loans, segregated by class of loans is as follows:
(In thousands) |  | Gross 30-89 Days Past Due |  | 90 Days or More Past Due |  | Total Past Due |  | Current |  | Total Loans |  | 90 Days Past Due & Accruing
December 31, 2024 |  |  |  |  |  |  |  |  |  |  |  |
Consumer: |  |  |  |  |  |  |  |  |  |  |  |
Credit cards |  | $ | 1,824 |  |  | $ | 635 |  |  | $ | 2,459 |  |  | $ | 179,216 |  |  | $ | 181,675 |  |  | $ | 529 |
Other consumer |  | 1,752 |  |  | 381 |  |  | 2,133 |  |  | 125,186 |  |  | 127,319 |  |  | — |
Total consumer |  | 3,576 |  |  | 1,016 |  |  | 4,592 |  |  | 304,402 |  |  | 308,994 |  |  | 529 |
Real estate: |  |  |  |  |  |  |  |  |  |  |  |
Construction and development |  | 332 |  |  | 10,530 |  |  | 10,862 |  |  | 2,778,387 |  |  | 2,789,249 |  |  | — |
Single family residential |  | 34,651 |  |  | 16,013 |  |  | 50,664 |  |  | 2,639,282 |  |  | 2,689,946 |  |  | — |
Other commercial |  | 5,433 |  |  | 26,973 |  |  | 32,406 |  |  | 7,879,930 |  |  | 7,912,336 |  |  | — |
Total real estate |  | 40,416 |  |  | 53,516 |  |  | 93,932 |  |  | 13,297,599 |  |  | 13,391,531 |  |  | — |
Commercial: |  |  |  |  |  |  |  |  |  |  |  |
Commercial |  | 3,535 |  |  | 27,059 |  |  | 30,594 |  |  | 2,403,581 |  |  | 2,434,175 |  |  | 74 |
Agricultural |  | 393 |  |  | 104 |  |  | 497 |  |  | 260,657 |  |  | 261,154 |  |  | — |
Total commercial |  | 3,928 |  |  | 27,163 |  |  | 31,091 |  |  | 2,664,238 |  |  | 2,695,329 |  |  | 74 |
Other |  | 276 |  |  | 3 |  |  | 279 |  |  | 609,804 |  |  | 610,083 |  |  | — |
Total |  | $ | 48,196 |  |  | $ | 81,698 |  |  | $ | 129,894 |  |  | $ | 16,876,043 |  |  | $ | 17,005,937 |  |  | $ | 603 |
December 31, 2023 |  |  |  |  |  |  |  |  |  |  |  |
Consumer: |  |  |  |  |  |  |  |  |  |  |  |
Credit cards |  | $ | 1,734 |  |  | $ | 892 |  |  | $ | 2,626 |  |  | $ | 188,578 |  |  | $ | 191,204 |  |  | $ | 791 |
Other consumer |  | 1,471 |  |  | 216 |  |  | 1,687 |  |  | 125,775 |  |  | 127,462 |  |  | — |
Total consumer |  | 3,205 |  |  | 1,108 |  |  | 4,313 |  |  | 314,353 |  |  | 318,666 |  |  | 791 |
Real estate: |  |  |  |  |  |  |  |  |  |  |  |
Construction and development |  | 3,171 |  |  | 2,190 |  |  | 5,361 |  |  | 3,138,859 |  |  | 3,144,220 |  |  | — |
Single family residential |  | 30,697 |  |  | 12,522 |  |  | 43,219 |  |  | 2,598,337 |  |  | 2,641,556 |  |  | 7 |
Other commercial |  | 4,702 |  |  | 3,612 |  |  | 8,314 |  |  | 7,544,096 |  |  | 7,552,410 |  |  | — |
Total real estate |  | 38,570 |  |  | 18,324 |  |  | 56,894 |  |  | 13,281,292 |  |  | 13,338,186 |  |  | 7 |
Commercial: |  |  |  |  |  |  |  |  |  |  |  |
Commercial |  | 13,799 |  |  | 22,750 |  |  | 36,549 |  |  | 2,453,627 |  |  | 2,490,176 |  |  | 349 |
Agricultural |  | 92 |  |  | 516 |  |  | 608 |  |  | 232,102 |  |  | 232,710 |  |  | — |
Total commercial |  | 13,891 |  |  | 23,266 |  |  | 37,157 |  |  | 2,685,729 |  |  | 2,722,886 |  |  | 349 |
Other |  | — |  |  | 3 |  |  | 3 |  |  | 465,929 |  |  | 465,932 |  |  | — |
Total |  | $ | 55,666 |  |  | $ | 42,701 |  |  | $ | 98,367 |  |  | $ | 16,747,303 |  |  | $ | 16,845,670 |  |  | $ | 1,147 |
Loan Modifications to Borrowers Experiencing Financial Difficulty The Company has internal loan modification programs for borrowers experiencing financial difficulties. Modifications to borrowers experiencing financial difficulties may include interest rate reductions, principal or interest forgiveness and/or term extensions. The Company primarily uses interest rate reduction and/or payment modifications or extensions, with an occasional forgiveness of principal. The following table presents a summary of the amortized cost basis of loan modifications granted to borrowers experiencing financial difficulty, segregated by class of loans and type of loan modification, for the year ended December 31, 2024.
|  |  | Percent of |  |  |  | Percent of
| Interest Rate |  | Total Class |  |  |  | Total Class
(Dollars in thousands) | Reduction |  | of Loans |  | Term Extension |  | of Loans
Real estate: |  |  |  |  |  |  |
Single family residential | $ | 1,241 |  |  | 0.05 | % |  | $ | — |  |  | — | %
Other commercial | — |  |  | — | % |  | 26,894 |  |  | 0.34 | %
Total real estate | $ | 1,241 |  |  |  |  | $ | 26,894 |  |  |
The financial effects of the modified loans made to borrowers experiencing financial difficulty in the single family residential real estate portfolio were not significant during the year ended December 31, 2024 and did not significantly impact the Company’s determination of the allowance for credit losses on loans during the year. During the year ended December 31, 2024, the Company modified one loan for a borrower experiencing financial difficulty related to the CRE portfolio, whereby the modification extended the term of the loan 1.5 years. As a result of the CRE loan modified during the year ended December 31, 2024 being collateral-dependent, the impact to the Company’s allowance for credit losses on loans was the difference between the fair value of the underlying collateral, adjusted for selling costs, and the remaining outstanding principal balance of the loan. The following table presents a summary of the amortized cost basis of loan modifications granted to borrowers experiencing financial difficulty, segregated by class of loans and type of loan modification, for the year ended December 31, 2023.
|  |  | Percent of |  |  |  | Percent of
| Interest Rate |  | Total Class |  |  |  | Total Class
(Dollars in thousands) | Reduction |  | of Loans |  | Term Extension |  | of Loans
Real estate: |  |  |  |  |  |  |
Single family residential | $ | 79 |  |  | — | % |  | $ | — |  |  | — | %
Other commercial | — |  |  | — | % |  | 30,493 |  |  | 0.40 | %
Total real estate | 79 |  |  |  |  | 30,493 |  |  |
Commercial: |  |  |  |  |  |  |
Commercial | — |  |  | — | % |  | 746 |  |  | 0.03 | %
Total commercial | — |  |  |  |  | 746 |  |  |
Total | $ | 79 |  |  |  |  | $ | 31,239 |  |  |
The financial effects of the modified loans made to borrowers experiencing financial difficulty in the single family residential real estate and commercial portfolios were not significant during the year ended December 31, 2023 and did not significantly impact the Company’s determination of the allowance for credit losses on loans during the year. During the year ended December 31, 2023, the Company modified one loan for a borrower experiencing financial difficulty related to the CRE portfolio, whereby the modification allowed for two months of interest only payments with the remaining balance due at maturity. Upon modification, a charge-off of $9.6 million was recorded in relation to this modified loan during 2023. As a result of the CRE loan modified during the year ended December 31, 2023 being collateral-dependent, the impact to the Company’s allowance for credit losses on loans was the difference between the fair value of the underlying collateral, adjusted for selling costs, and the remaining outstanding principal balance of the loan. The Company closely monitors the performance of loans that are modified to borrowers experiencing financial difficulty. There was one commercial loan to a borrower experiencing financial difficulty that was modified during the previous twelve months and which subsequently defaulted during the year ended December 31, 2024. A charge-off of $18,800 was recorded in relation to this commercial loan during the fourth quarter of 2024. There were no loans to borrowers experiencing financial difficulty that had a payment default during the year ended December 31, 2023 and were modified in the twelve months prior to default. In relation to loans modified to borrowers experiencing financial difficulty, the Company defines a payment default as a payment received more than 90 days after its due date. At December 31, 2024 and 2023, the Company had $4.0 million and $2.5 million, respectively, of consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings are in process. At December 31, 2024 and 2023, the Company had $1.3 million and $506,000, respectively, of OREO secured by residential real estate properties. Credit Quality Indicators – As part of the on-going monitoring of the credit quality of the Company’s loan portfolio, management tracks certain credit quality indicators including trends related to (i) the weighted-average risk rating of commercial and real estate loans, (ii) the level of classified commercial and real estate loans, (iii) net charge-offs, (iv) non-performing loans (see details above) and (v) the general economic conditions of the Company’s local markets. The Company utilizes a risk rating matrix to assign a risk rate to each of its commercial and real estate loans. Risk ratings are updated on an ongoing basis and are subject to change by continuous loan monitoring processes including lending management monitoring, executive management and board committee oversight, and independent credit review. A description of the general characteristics of the risk ratings is as follows: •Pass (Excellent) – This category includes loans which are virtually free of credit risk. Borrowers in this category represent the highest credit quality and greatest financial strength. •Pass (Good) - Loans under this category possess a nominal risk of default. This category includes borrowers with strong financial strength and superior financial ratios and trends. These loans are generally fully secured by cash or equivalents (other than those rated “excellent”). •Pass (Acceptable – Average) - Loans in this category are considered to possess a normal level of risk. Borrowers in this category have satisfactory financial strength and adequate cash flow coverage to service debt requirements. If secured, the perfected collateral should be of acceptable quality and within established borrowing parameters. •Pass (Monitor) - Loans in the Watch (Monitor) category exhibit an overall acceptable level of risk, but that risk may be increased by certain conditions, which represent “red flags”. These “red flags” require a higher level of supervision or monitoring than the normal “Pass” rated credit. The borrower may be experiencing these conditions for the first time, or it may be recovering from weakness, which at one time justified a higher rating. These conditions may include: weaknesses in financial trends; marginal cash flow; one-time negative operating results; non-compliance with policy or borrowing agreements; poor diversity in operations; lack of adequate monitoring information or lender supervision; questionable management ability/stability. •Special Mention - A loan in this category has potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or in the institution’s credit position at some future date. Special Mention loans are not adversely classified (although they are “criticized”) and do not expose an institution to sufficient risk to warrant adverse classification. Borrowers may be experiencing adverse operating trends or an ill-proportioned balance sheet. Non-financial characteristics of a Special Mention rating may include management problems, pending litigation, a non-existent or ineffective loan agreement or other material structural weakness, and/or other significant deviation from prudent lending practices. •Substandard - A Substandard loan is inadequately protected by the current sound worth and paying capacity of the borrower or of the collateral pledged, if any. Loans so classified must have a well-defined weakness, or weaknesses, that jeopardize the liquidation of the debt. The loans are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected. This does not imply ultimate loss of the principal, but may involve burdensome administrative expenses and the accompanying cost to carry the loan. •Doubtful - A loan classified Doubtful has all the weaknesses inherent in a substandard loan except that the weaknesses make collection or liquidation in full (on the basis of currently existing facts, conditions, and values) highly questionable and improbable. Doubtful borrowers are usually in default, lack adequate liquidity or capital, and lack the resources necessary to remain an operating entity. The possibility of loss is extremely high, but because of specific pending events that may strengthen the asset, its classification as loss is deferred. Pending factors include: proposed merger or acquisition; liquidation procedures; capital injection; perfection of liens on additional collateral; and refinancing plans. Loans classified as Doubtful are placed on nonaccrual status. •Loss - Loans classified Loss are considered uncollectible and of such little value that their continuance as bankable assets is not warranted. This classification does not mean that the loans has absolutely no recovery or salvage value, but rather it is not practical or desirable to defer writing off this basically worthless loan, even though partial recovery may be affected in the future. Borrowers in the Loss category are often in bankruptcy, have formally suspended debt repayments, or have otherwise ceased normal business operations. Loans should be classified as Loss and charged-off in the period in which they become uncollectible. The Company monitors credit quality in the consumer portfolio by delinquency status. The delinquency status of loans is updated daily. A description of the delinquency credit quality indicators is as follows: •Current - Loans in this category are either current in payments or are under 30 days past due. These loans are considered to have a normal level of risk. •30-89 Days Past Due - Loans in this category are between 30 and 89 days past due and are subject to the Company’s loss mitigation process. These loans are considered to have a moderate level of risk. •90+ Days Past Due - Loans in this category are 90 days or more past due and are placed on nonaccrual status. These loans have been subject to the Company’s loss mitigation process and foreclosure and/or charge-off proceedings have commenced. The Company uses a dual risk rating scale that utilizes quantitative models and qualitative factors (“score cards”) to assist in determining the appropriate risk rating for its commercial loans. This dual risk rating methodology incorporates a “probability of default” analysis which utilizes quantified metrics such as loan terms and financial performance, as well as a “loss given default” analysis which utilizes collateral values and economics of the market, among other attributes. Model outputs are reviewed and analyzed to ensure the projected risk levels are commensurate with underwriting and credit leader expectations. The risk rating scale includes Probability of Default levels of 1 – 16 and Loss Given Default levels of A – I. The scale allows for more granular recognition of risk and diversification of grading among traditional Pass grades. The following is a reconciliation between the expanded risk rating scale and the Company’s traditional risk rating segments utilized within the commercial loan classes presented in the credit quality indicator tables. •Pass - Includes loans with an expanded risk rating of 1 through 11. Loans with a risk rating of 10 and 11 equate to loans included on management’s “watch list” and is intended to be utilized on a temporary basis for pass grade borrowers where a significant risk-modifying action is anticipated in the near term. •Special Mention - Includes loans with an expanded risk rating of 12. •Substandard - Includes loans with an expanded risk rating of 13 and 14. •Doubtful and loss - Includes loans with an expanded risk rating of 15 and 16. The following table presents a summary of loans by credit quality indicator, as of December 31, 2024, segregated by class of loans.
| Term Loans Amortized Cost Basis by Origination Year |  |  |  |  |  |  |
(In thousands) | 2024 |  | 2023 |  | 2022 |  | 2021 |  | 2020 |  | 2019 and Prior |  | Lines of Credit (“LOC”) Amortized Cost Basis |  | LOC Converted to Term Loans Amortized Cost Basis |  | Total |
Consumer - credit cards |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Delinquency: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 179,216 |  |  | $ | — |  |  | $ | 179,216 |  |
30-89 days past due | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 1,824 |  |  | — |  |  | 1,824 |  |
90+ days past due | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 635 |  |  | — |  |  | 635 |  |
Total consumer - credit cards | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 181,675 |  |  | — |  |  | 181,675 |  |
Current-period consumer - credit cards gross charge-offs | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 6,437 |  |  | — |  |  | 6,437 |  |
Consumer - other |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Delinquency: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current | 63,986 |  |  | 17,227 |  |  | 17,877 |  |  | 4,713 |  |  | 1,304 |  |  | 893 |  |  | 19,186 |  |  | — |  |  | 125,186 |  |
30-89 days past due | 515 |  |  | 176 |  |  | 701 |  |  | 59 |  |  | 14 |  |  | 2 |  |  | 285 |  |  | — |  |  | 1,752 |  |
90+ days past due | 85 |  |  | 56 |  |  | 183 |  |  | 20 |  |  | — |  |  | 35 |  |  | 2 |  |  | — |  |  | 381 |  |
Total consumer - other | 64,586 |  |  | 17,459 |  |  | 18,761 |  |  | 4,792 |  |  | 1,318 |  |  | 930 |  |  | 19,473 |  |  | — |  |  | 127,319 |  |
Current-period consumer - other gross charge-offs | 192 |  |  | 680 |  |  | 553 |  |  | 98 |  |  | 13 |  |  | 10 |  |  | 292 |  |  | — |  |  | 1,838 |  |
Real estate - C&D |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Risk rating: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass | 50,288 |  |  | 113,056 |  |  | 71,908 |  |  | 28,921 |  |  | 18,187 |  |  | 20,653 |  |  | 2,468,334 |  |  |  |  | 2,771,347 |  |
Special mention | — |  |  | — |  |  | 50 |  |  | — |  |  | — |  |  | 376 |  |  | 2,862 |  |  |  |  | 3,288 |  |
Substandard | 59 |  |  | 409 |  |  | 66 |  |  | 532 |  |  | — |  |  | 88 |  |  | 13,460 |  |  |  |  | 14,614 |  |
Doubtful and loss | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  |  |  | — |  |
Total real estate - C&D | 50,347 |  |  | 113,465 |  |  | 72,024 |  |  | 29,453 |  |  | 18,187 |  |  | 21,117 |  |  | 2,484,656 |  |  | — |  |  | 2,789,249 |  |
Current-period real estate - C&D gross charge-offs | 162 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 521 |  |  |  |  | 683 |  |
Real estate - SF residential |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Delinquency: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current | 225,040 |  |  | 324,605 |  |  | 559,278 |  |  | 314,700 |  |  | 187,752 |  |  | 543,590 |  |  | 484,317 |  |  | — |  |  | 2,639,282 |  |
30-89 days past due | 1,205 |  |  | 4,201 |  |  | 9,578 |  |  | 3,316 |  |  | 1,525 |  |  | 12,389 |  |  | 2,437 |  |  | — |  |  | 34,651 |  |
90+ days past due | 1,016 |  |  | 606 |  |  | 4,578 |  |  | 630 |  |  | 1,299 |  |  | 3,951 |  |  | 3,933 |  |  | — |  |  | 16,013 |  |
Total real estate - SF residential | 227,261 |  |  | 329,412 |  |  | 573,434 |  |  | 318,646 |  |  | 190,576 |  |  | 559,930 |  |  | 490,687 |  |  | — |  |  | 2,689,946 |  |
Current-period real estate - SF residential gross charge-offs | 3 |  |  | 190 |  |  | 231 |  |  | — |  |  | 37 |  |  | 134 |  |  | 247 |  |  | — |  |  | 842 |  |
Real estate - other commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Risk rating: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass | 603,206 |  |  | 490,128 |  |  | 1,519,950 |  |  | 1,021,169 |  |  | 419,769 |  |  | 646,399 |  |  | 2,800,863 |  |  | — |  |  | 7,501,484 |  |
Special mention | 9,479 |  |  | 16,272 |  |  | 12,401 |  |  | 9,494 |  |  | 1,472 |  |  | 12,754 |  |  | 111,466 |  |  | — |  |  | 173,338 |  |
Substandard | 12,093 |  |  | 17,099 |  |  | 11,399 |  |  | 3,063 |  |  | 12,073 |  |  | 31,126 |  |  | 150,661 |  |  | — |  |  | 237,514 |  |
Doubtful and loss | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |
Total real estate - other commercial | 624,778 |  |  | 523,499 |  |  | 1,543,750 |  |  | 1,033,726 |  |  | 433,314 |  |  | 690,279 |  |  | 3,062,990 |  |  | — |  |  | 7,912,336 |  |
Current-period real estate - other commercial gross charge-offs | — |  |  | 5,202 |  |  | 38 |  |  | 15 |  |  | — |  |  | 1 |  |  | 168 |  |  | — |  |  | 5,424 |  |
| Term Loans Amortized Cost Basis by Origination Year |  |  |  |  |  |  |
(In thousands) | 2024 |  | 2023 |  | 2022 |  | 2021 |  | 2020 |  | 2019 and Prior |  | Lines of Credit (“LOC”) Amortized Cost Basis |  | LOC Converted to Term Loans Amortized Cost Basis |  | Total |
Commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Risk rating: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass | 245,945 |  |  | 253,518 |  |  | 257,227 |  |  | 118,910 |  |  | 28,620 |  |  | 44,606 |  |  | 1,411,467 |  |  | 200 |  |  | 2,360,493 |  |
Special mention | 112 |  |  | 583 |  |  | 523 |  |  | 313 |  |  | 6 |  |  | 1,025 |  |  | 7,498 |  |  | — |  |  | 10,060 |  |
Substandard | 10,743 |  |  | 2,035 |  |  | 8,317 |  |  | 2,876 |  |  | 2,954 |  |  | 5,923 |  |  | 30,771 |  |  | — |  |  | 63,619 |  |
Doubtful and loss | — |  |  | — |  |  | 3 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 3 |  |
Total commercial | 256,800 |  |  | 256,136 |  |  | 266,070 |  |  | 122,099 |  |  | 31,580 |  |  | 51,554 |  |  | 1,449,736 |  |  | 200 |  |  | 2,434,175 |  |
Current-period commercial - gross charge-offs | 536 |  |  | 1,087 |  |  | 5,311 |  |  | 3,500 |  |  | 913 |  |  | 1,994 |  |  | 13,289 |  |  | — |  |  | 26,630 |  |
Commercial - agriculture |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Risk rating: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass | 30,103 |  |  | 23,222 |  |  | 20,673 |  |  | 8,220 |  |  | 2,825 |  |  | 1,209 |  |  | 169,849 |  |  | — |  |  | 256,101 |  |
Special mention | — |  |  | — |  |  | 111 |  |  | — |  |  | — |  |  | — |  |  | 2,299 |  |  | — |  |  | 2,410 |  |
Substandard | 1,222 |  |  | 14 |  |  | 29 |  |  | — |  |  | 123 |  |  | 14 |  |  | 1,241 |  |  | — |  |  | 2,643 |  |
Doubtful and loss | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |
Total commercial - agriculture | 31,325 |  |  | 23,236 |  |  | 20,813 |  |  | 8,220 |  |  | 2,948 |  |  | 1,223 |  |  | 173,389 |  |  | — |  |  | 261,154 |  |
Current-period commercial - agriculture gross charge-offs | — |  |  | 222 |  |  | — |  |  | 8 |  |  | 6 |  |  | — |  |  | 1 |  |  | — |  |  | 237 |  |
Other |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Delinquency: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current | 71,671 |  |  | 35,574 |  |  | 136,416 |  |  | 26,930 |  |  | 1,287 |  |  | 30,085 |  |  | 307,841 |  |  | — |  |  | 609,804 |  |
30-89 days past due | — |  |  | 276 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 276 |  |
90+ days past due | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 3 |  |  | — |  |  | — |  |  | 3 |  |
Total other | 71,671 |  |  | 35,850 |  |  | 136,416 |  |  | 26,930 |  |  | 1,287 |  |  | 30,088 |  |  | 307,841 |  |  | — |  |  | 610,083 |  |
Current-period other - gross charge-offs | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 473 |  |  | — |  |  | 473 |  |
Total | $ | 1,326,768 |  |  | $ | 1,299,057 |  |  | $ | 2,631,268 |  |  | $ | 1,543,866 |  |  | $ | 679,210 |  |  | $ | 1,355,121 |  |  | $ | 8,170,447 |  |  | $ | 200 |  |  | $ | 17,005,937 |  |
The following table presents a summary of loans by credit quality indicator, as of December 31, 2023 segregated by class of loans.
| Term Loans Amortized Cost Basis by Origination Year |  |  |  |  |  |
(In thousands) | 2023 |  | 2022 |  | 2021 |  | 2020 |  | 2019 |  | 2018 and Prior |  | Lines of Credit (“LOC”) Amortized Cost Basis |  | LOC Converted to Term Loans Amortized Cost Basis |  | Total
Consumer - credit cards |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Delinquency: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 188,578 |  |  | $ | — |  |  | $ | 188,578 |
30-89 days past due | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 1,734 |  |  | — |  |  | 1,734 |
90+ days past due | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 892 |  |  | — |  |  | 892 |
Total consumer - credit cards | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 191,204 |  |  | — |  |  | 191,204 |
Current-period consumer - credit cards gross charge-offs | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 5,303 |  |  | — |  |  | 5,303 |
Consumer - other |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Delinquency: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current | 55,091 |  |  | 35,904 |  |  | 12,115 |  |  | 3,838 |  |  | 1,471 |  |  | 1,106 |  |  | 16,250 |  |  | — |  |  | $ | 125,775 |
30-89 days past due | 400 |  |  | 719 |  |  | 127 |  |  | 53 |  |  | 2 |  |  | 16 |  |  | 154 |  |  | — |  |  | 1,471 |
90+ days past due | 35 |  |  | 127 |  |  | 46 |  |  | — |  |  | — |  |  | — |  |  | 8 |  |  | — |  |  | 216 |
Total consumer - other | 55,526 |  |  | 36,750 |  |  | 12,288 |  |  | 3,891 |  |  | 1,473 |  |  | 1,122 |  |  | 16,412 |  |  | — |  |  | 127,462 |
Current-period consumer - other gross charge-offs | 220 |  |  | 826 |  |  | 493 |  |  | 79 |  |  | 29 |  |  | 128 |  |  | 449 |  |  | — |  |  | 2,224 |
Real estate - C&D |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Risk rating: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass | 138,749 |  |  | 143,711 |  |  | 52,081 |  |  | 45,027 |  |  | 10,278 |  |  | 13,632 |  |  | 2,710,853 |  |  | 504 |  |  | $ | 3,114,835 |
Special mention | — |  |  | 1,143 |  |  | 7,284 |  |  | — |  |  | — |  |  | 396 |  |  | 16,682 |  |  | — |  |  | 25,505 |
Substandard | — |  |  | 101 |  |  | 48 |  |  | — |  |  | — |  |  | 247 |  |  | 3,484 |  |  | — |  |  | 3,880 |
Doubtful and loss | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Total real estate - C&D | 138,749 |  |  | 144,955 |  |  | 59,413 |  |  | 45,027 |  |  | 10,278 |  |  | 14,275 |  |  | 2,731,019 |  |  | 504 |  |  | 3,144,220 |
Current-period real estate - C&D gross charge-offs | — |  |  | 1,148 |  |  | — |  |  | — |  |  | — |  |  | 8 |  |  | 349 |  |  | — |  |  | 1,505 |
Real estate - SF residential |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Delinquency: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current | 371,326 |  |  | 620,933 |  |  | 352,589 |  |  | 238,128 |  |  | 121,416 |  |  | 504,675 |  |  | 388,705 |  |  | 565 |  |  | $ | 2,598,337 |
30-89 days past due | 5,222 |  |  | 5,061 |  |  | 3,667 |  |  | 2,283 |  |  | 1,741 |  |  | 9,759 |  |  | 2,964 |  |  | — |  |  | 30,697 |
90+ days past due | 1,313 |  |  | 2,443 |  |  | 1,810 |  |  | 1,661 |  |  | 120 |  |  | 3,465 |  |  | 1,710 |  |  | — |  |  | 12,522 |
Total real estate - SF residential | 377,861 |  |  | 628,437 |  |  | 358,066 |  |  | 242,072 |  |  | 123,277 |  |  | 517,899 |  |  | 393,379 |  |  | 565 |  |  | 2,641,556 |
Current-period real estate - SF residential gross charge-offs | — |  |  | 111 |  |  | 12 |  |  | 73 |  |  | — |  |  | 677 |  |  | 232 |  |  | — |  |  | 1,105 |
Real estate - other commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Risk rating: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass | 729,602 |  |  | 1,651,010 |  |  | 1,237,810 |  |  | 621,595 |  |  | 171,230 |  |  | 417,122 |  |  | 2,333,637 |  |  | — |  |  | 7,162,006 |
Special mention | 37,302 |  |  | 8,458 |  |  | 10,149 |  |  | 7,844 |  |  | 1,364 |  |  | 11,604 |  |  | 84,978 |  |  | — |  |  | 161,699 |
Substandard | 40,664 |  |  | 10,290 |  |  | 4,495 |  |  | 16,646 |  |  | 6,293 |  |  | 9,861 |  |  | 140,454 |  |  | — |  |  | 228,703 |
Doubtful and loss | — |  |  | — |  |  | — |  |  | 2 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 2 |
Total real estate - other commercial | 807,568 |  |  | 1,669,758 |  |  | 1,252,454 |  |  | 646,087 |  |  | 178,887 |  |  | 438,587 |  |  | 2,559,069 |  |  | — |  |  | 7,552,410 |
Current-period real estate - other commercial gross charge-offs | — |  |  | — |  |  | — |  |  | 7 |  |  | 2 |  |  | 35 |  |  | 9,731 |  |  | — |  |  | 9,775 |
| Term Loans Amortized Cost Basis by Origination Year |  |  |  |  |  |
(In thousands) | 2023 |  | 2022 |  | 2021 |  | 2020 |  | 2019 |  | 2018 and Prior |  | Lines of Credit (“LOC”) Amortized Cost Basis |  | LOC Converted to Term Loans Amortized Cost Basis |  | Total
Commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Risk rating: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass | 440,872 |  |  | 354,016 |  |  | 200,941 |  |  | 67,320 |  |  | 27,374 |  |  | 42,953 |  |  | 1,271,826 |  |  | — |  |  | 2,405,302 |
Special mention | 157 |  |  | 14,117 |  |  | 316 |  |  | 367 |  |  | 98 |  |  | 889 |  |  | 8,228 |  |  | — |  |  | 24,172 |
Substandard | 1,998 |  |  | 11,874 |  |  | 6,272 |  |  | 2,934 |  |  | 1,722 |  |  | 3,392 |  |  | 32,510 |  |  | — |  |  | 60,702 |
Doubtful and loss | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Total commercial | 443,027 |  |  | 380,007 |  |  | 207,529 |  |  | 70,621 |  |  | 29,194 |  |  | 47,234 |  |  | 1,312,564 |  |  | — |  |  | 2,490,176 |
Current-period commercial - gross charge-offs | 463 |  |  | 2,081 |  |  | 778 |  |  | 197 |  |  | 244 |  |  | 815 |  |  | 1,351 |  |  | — |  |  | 5,929 |
Commercial - agriculture |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Risk rating: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass | 39,680 |  |  | 30,075 |  |  | 13,940 |  |  | 6,280 |  |  | 2,071 |  |  | 303 |  |  | 134,180 |  |  | — |  |  | 226,529 |
Special mention | 363 |  |  | 733 |  |  | 1,068 |  |  | — |  |  | — |  |  | — |  |  | 3,257 |  |  | — |  |  | 5,421 |
Substandard | 518 |  |  | 37 |  |  | 71 |  |  | 104 |  |  | 26 |  |  | — |  |  | 4 |  |  | — |  |  | 760 |
Doubtful and loss | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Total commercial - agriculture | 40,561 |  |  | 30,845 |  |  | 15,079 |  |  | 6,384 |  |  | 2,097 |  |  | 303 |  |  | 137,441 |  |  | — |  |  | 232,710 |
Current-period commercial - agriculture gross charge-offs | — |  |  | 7 |  |  | — |  |  | — |  |  | — |  |  | 26 |  |  | — |  |  | — |  |  | 33 |
Other |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Delinquency: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current | 45,234 |  |  | 144,732 |  |  | 28,413 |  |  | 2,543 |  |  | 3,255 |  |  | 36,719 |  |  | 205,033 |  |  | — |  |  | 465,929 |
30-89 days past due | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
90+ days past due | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 3 |  |  | — |  |  | — |  |  | 3 |
Total other | 45,234 |  |  | 144,732 |  |  | 28,413 |  |  | 2,543 |  |  | 3,255 |  |  | 36,722 |  |  | 205,033 |  |  | — |  |  | 465,932 |
Current-period other - gross charge-offs | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 298 |  |  | — |  |  | 298 |
Total | $ | 1,908,526 |  |  | $ | 3,035,484 |  |  | $ | 1,933,242 |  |  | $ | 1,016,625 |  |  | $ | 348,461 |  |  | $ | 1,056,142 |  |  | $ | 7,546,121 |  |  | $ | 1,069 |  |  | $ | 16,845,670 |
Allowance for Credit Losses Allowance for Credit Losses – The allowance for credit losses is a reserve established through a provision for credit losses charged to expense, which represents management’s best estimate of lifetime expected losses based on reasonable and supportable forecasts, quantitative factors, and other qualitative considerations. The allowance, in the judgment of management, is necessary to reserve for expected loan losses and risks inherent in the loan portfolio. The Company’s allowance for credit loss methodology includes reserve factors calculated to estimate current expected credit losses to amortized cost balances over the remaining contractual life of the portfolio, adjusted for prepayments, in accordance with ASC Topic 326-20, Financial Instruments - Credit Losses. Accordingly, the methodology is comprised of two components: individual assessments on loans with unique risk characteristics and collective assessments for loans that share similar risk characteristics. Loans with similar risk characteristics such as loan type, collateral type, and internal risk ratings are aggregated for collective assessment. The Company uses statistically-based models that leverage assumptions about current and future economic conditions throughout the contractual life of the loan. Expected credit losses are estimated by either lifetime loss rates or expected loss cash flows based on three key parameters: probability-of-default (“PD”), exposure-at-default (“EAD”), and loss-given-default (“LGD”). Future economic conditions are incorporated to the extent that they are reasonable and supportable. Beyond the reasonable and supportable periods, the economic variables revert to a historical equilibrium at a pace dependent on the state of the economy reflected within the economic scenarios. To determine the best estimate of credit losses as of December 31, 2024, the Company utilized a probability-weighted, multiple-scenario approach consisting of Baseline, Upside (S1), and Downside (S3) scenarios published by Moody’s Analytics in December 2024 that was updated to reflect the U.S. economic outlook. The Company also includes qualitative adjustments to the allowance based on factors and considerations that have not otherwise been fully accounted for. These factors may include but are not limited to portfolio trends and considerations, other economic considerations, policy actions, concentration risk, or imprecision risk. Loans with similar risk characteristics such as loan type, collateral type, and internal risk ratings are aggregated into homogeneous segments for assessment. Reserve factors are based on estimated probability of default and loss given default for each segment. The estimates are determined based on economic forecasts over the reasonable and supportable forecast period based on projected performance of economic variables that have a statistical relationship with the historical loss experience of the segments. Loans that have unique risk characteristics are evaluated on an individual basis. These evaluations are typically performed on loans with a deteriorated internal risk rating. For a collateral-dependent loan, the Company’s evaluation process includes a valuation by appraisal or other collateral analysis adjusted for selling costs, when appropriate. This valuation is compared to the remaining outstanding principal balance of the loan. If a loss is determined to be probable, the loss is included in the allowance for credit losses as a specific allocation. Loans for which the repayment is expected to be provided substantially through the operation or sale of collateral and where the borrower is experiencing financial difficulty had an amortized cost of $102.6 million and $144.6 million as of December 31, 2024 and 2023, respectively, as further detailed in the table below. The collateral securing these loans consist of commercial real estate properties, residential properties, and other business assets.
(In thousands) | Real Estate Collateral |  |  |  | Other Collateral |  | Total
December 31, 2024 |  |  |  |  |  |  |
Construction and development | $ | 1,251 |  |  |  |  | $ | — |  |  | $ | 1,251 |
Single family residential | — |  |  |  |  | — |  |  | — |
Other commercial real estate | 69,429 |  |  |  |  | — |  |  | 69,429 |
Commercial | — |  |  |  |  | 31,900 |  |  | 31,900 |
Total | $ | 70,680 |  |  |  |  | $ | 31,900 |  |  | $ | 102,580 |
December 31, 2023 |  |  |  |  |  |  |
Construction and development | $ | 43,826 |  |  |  |  | $ | — |  |  | $ | 43,826 |
Single family residential | 3,870 |  |  |  |  | — |  |  | 3,870 |
Other commercial real estate | 76,229 |  |  |  |  | — |  |  | 76,229 |
Commercial | — |  |  |  |  | 20,679 |  |  | 20,679 |
Total | $ | 123,925 |  |  |  |  | $ | 20,679 |  |  | $ | 144,604 |
The following table details activity in the allowance for credit losses by portfolio segment for the years ended December 31, 2024, 2023 and 2022. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories.
(In thousands) | Commercial |  | Real Estate |  | Credit Card |  | Other Consumer and Other |  | Total
December 31, 2024 |  |  |  |  |  |  |  |  |
Beginning balance, January 1, 2024 | $ | 36,470 |  |  | $ | 177,177 |  |  | $ | 5,868 |  |  | $ | 5,716 |  |  | $ | 225,231 |
Provision for credit loss expense | 30,389 |  |  | 10,249 |  |  | 5,485 |  |  | 662 |  |  | 46,785 |
Charge-offs | (26,867) |  |  | (6,949) |  |  | (6,437) |  |  | (2,311) |  |  | (42,564) |
Recoveries | 1,595 |  |  | 1,485 |  |  | 1,091 |  |  | 1,396 |  |  | 5,567 |
Net charge-offs | (25,272) |  |  | (5,464) |  |  | (5,346) |  |  | (915) |  |  | (36,997) |
Ending balance, December 31, 2024 | $ | 41,587 |  |  | $ | 181,962 |  |  | $ | 6,007 |  |  | $ | 5,463 |  |  | $ | 235,019 |
December 31, 2023 |  |  |  |  |  |  |  |  |
Beginning balance, January 1, 2023 | $ | 34,406 |  |  | $ | 150,795 |  |  | $ | 5,140 |  |  | $ | 6,614 |  |  | $ | 196,955 |
Provision for credit loss expense | 5,934 |  |  | 36,381 |  |  | 5,023 |  |  | 86 |  |  | 47,424 |
Charge-offs | (5,962) |  |  | (12,385) |  |  | (5,303) |  |  | (2,522) |  |  | (26,172) |
Recoveries | 2,092 |  |  | 2,386 |  |  | 1,008 |  |  | 1,538 |  |  | 7,024 |
Net charge-offs | (3,870) |  |  | (9,999) |  |  | (4,295) |  |  | (984) |  |  | (19,148) |
Ending balance, December 31, 2023 | $ | 36,470 |  |  | $ | 177,177 |  |  | $ | 5,868 |  |  | $ | 5,716 |  |  | $ | 225,231 |
(In thousands) | Commercial |  | Real Estate |  | Credit Card |  | Other Consumer and Other |  | Total
December 31, 2022 |  |  |  |  |  |  |  |  |
Beginning balance, January 1, 2022 | $ | 17,458 |  |  | $ | 179,270 |  |  | $ | 3,987 |  |  | $ | 4,617 |  |  | $ | 205,332 |
Acquisition adjustment for PCD loans | 6,433 |  |  | 3,187 |  |  | — |  |  | 2 |  |  | 9,622 |
Provision for credit loss expense | 22,412 |  |  | (34,456) |  |  | 3,991 |  |  | 2,674 |  |  | (5,379) |
Charge-offs | (14,270) |  |  | (4,122) |  |  | (3,862) |  |  | (1,876) |  |  | (24,130) |
Recoveries | 2,373 |  |  | 6,916 |  |  | 1,024 |  |  | 1,197 |  |  | 11,510 |
Net charge-offs | (11,897) |  |  | 2,794 |  |  | (2,838) |  |  | (679) |  |  | (12,620) |
Ending balance, December 31, 2022 | $ | 34,406 |  |  | $ | 150,795 |  |  | $ | 5,140 |  |  | $ | 6,614 |  |  | $ | 196,955 |
As of December 31, 2024, the Company’s allowance for credit losses was considered sufficient based upon expected losses that were supported by scenario-weighted economic forecasts. The provision expense for the periods ended December 31, 2024 and 2023 was primarily due to the loan growth experienced during the periods, as well as the impact of updated economic assumptions. For the year ended December 31, 2022, provision expense related to loans was recaptured during the year for a variety of factors including a release of $16.0 million driven by improvements in certain industry specific qualitative factors for the restaurant, hospitality, student housing and office space industries due to lower pandemic related stresses. The remaining recapture during 2022 was driven by the planned exit of several large oil and gas relationships during the year, along with the Company’s improved asset credit quality metrics, which combined with improved Moody’s economic modeling scenarios, more than offset the $30.3 million Day 2 provision expense required for loans acquired by the Company in the Spirit acquisition. Reserve for Unfunded Commitments In addition to the allowance for credit losses, the Company has established a reserve for unfunded commitments, classified in other liabilities. This reserve is maintained at a level management believes to be sufficient to absorb losses arising from unfunded loan commitments. The reserve for unfunded commitments was $25.6 million as of both periods ended December 31, 2024 and 2023. The adequacy of the reserve for unfunded commitments is determined quarterly based on methodology similar to the methodology for determining the allowance for credit losses. No adjustment was made to the reserve for unfunded commitments during the year ended December 31, 2024, as it was considered sufficient to cover any loss expectations. During 2023, $16.3 million was released from the reserve for unfunded commitments primarily due to a decline in unfunded commitments resulting from customers utilizing lines of credit during the year. During 2022, an adjustment to the reserve for unfunded commitments resulted in an expense of $16.0 million due to the overall increase in unfunded commitments, primarily made up of commercial construction loans, which receive a higher reserve allocation than other loans. Additionally, an adjustment to the reserve for unfunded commitments resulted in an expense of $3.5 million which was due to the Day 2 provision expense required for unfunded commitments related to the Spirit acquisition. These adjustments were included in the provision for credit losses in the statement of income. Provision for Credit Losses Provision for credit losses is determined by the Company as the amount to be added to the allowance for credit loss accounts for various types of financial instruments including loans, securities and off-balance-sheet credit exposure after net charge-offs have been deducted to bring the allowance to a level which, in management's best estimate, is necessary to absorb expected credit losses over the lives of the respective financial instruments. The components of provision for credit losses for the years ended December 31 were as follows:
(In thousands) | 2024 |  | 2023 |  | 2022
Provision for credit losses related to: |  |  |  |  |
Loans | $ | 46,785 |  |  | $ | 47,424 |  |  | $ | (5,379) |
Unfunded commitments | — |  |  | (16,300) |  |  | 19,453 |
Securities - HTM | — |  |  | 1,826 |  |  | — |
Securities - AFS | — |  |  | 9,078 |  |  | — |
Total | $ | 46,785 |  |  | $ | 42,028 |  |  | $ | 14,074 |
Purchased Credit Deteriorated Loans Purchased loans that reflect a more-than-insignificant deterioration of credit from origination are considered PCD. For PCD loans, the initial estimate of expected credit losses is recognized in the allowance for credit loss on the date of acquisition using the same methodology as discussed in the Allowance for Credit Losses section included above. The following table provides a summary of loans purchased as part of the Spirit acquisition with credit deterioration at acquisition:
(In thousands) | Commercial |  | Real Estate |  | Credit Card |  | Other Consumer and Other |  | Total
Unpaid principal balance | $ | 8,258 |  |  | $ | 66,534 |  |  | $ | — |  |  | $ | 59 |  |  | $ | 74,851 |
PCD allowance for credit loss at acquisition | (6,433) |  |  | (3,187) |  |  | — |  |  | (2) |  |  | (9,622) |
Non-credit related discount | (378) |  |  | (998) |  |  | — |  |  | (1) |  |  | (1,377) |
Fair value of PCD loans | $ | 1,447 |  |  | $ | 62,349 |  |  | $ | — |  |  | $ | 56 |  |  | $ | 63,852 |

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- Definition The entire disclosure for claims held for amounts due to entity, excluding financing receivables. Examples include, but are not limited to, trade accounts receivables, notes receivables, loans receivables. Includes disclosure for allowance for credit losses. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 310 -SubTopic 10 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/310-10/tableOfContent Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 835 -SubTopic 30 -Name Accounting Standards Codification -Section 45 -Paragraph 2 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482925/835-30-45-2 + Details
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