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Allowance for Credit Losses

3 Months Ended

Mar. 31, 2024

Note 6 Allowance for Credit Losses

The tables below detail the Company’s allowance for credit losses as of the dates shown:


	Three months ended March 31, 2024
			Non-owner
			occupied
			commercial		Residential
	Commercial		real estate		real estate		Consumer		Total
Beginning balance	$	45,304	$	32,665	$	19,550	$	428	$	97,947
Charge-offs		(24)		—		—		(254)		(278)
Recoveries		116		—		6		66		188
Provision expense (release) for credit losses		919		(1,827)		544		114		(250)
Ending balance	$	46,315	$	30,838	$	20,100	$	354	$	97,607


	Three months ended March 31, 2023
			Non-owner
			occupied
			commercial		Residential
	Commercial		real estate		real estate		Consumer		Total
Beginning balance	$	37,608	$	32,050	$	19,306	$	589	$	89,553
Charge-offs		—		—		—		(325)		(325)
Recoveries		41		1		7		16		65
Provision (release) expense for credit losses		(254)		839		261		204		1,050
Ending balance	$	37,395	$	32,890	$	19,574	$	484	$	90,343

In evaluating the loan portfolio for an appropriate ACL level, excluding loans evaluated individually, loans were grouped into segments based on broad characteristics such as primary use and underlying collateral. Within the segments, the portfolio was further disaggregated into classes of loans with similar attributes and risk characteristics for purposes of developing the underlying data used within the discounted cash flow model including, but not limited to, prepayment and recovery rates as well as loss rates tied to macro-economic conditions within management’s reasonable and supportable forecast. The ACL also includes subjective adjustments based upon qualitative risk factors including asset quality, loss trends, lending management, portfolio growth and loan review/internal audit results.

Net charge-offs on loans during the three months ended March 31, 2024 were $0.1 million. The Company recorded a decrease in the allowance for credit losses of $0.3 million during the three months ended March 31, 2024. Net charge-offs on loans during the three months ended March 31, 2023 were $0.3 million. The Company recorded an increase in the allowance for credit losses of $1.1 million during the three months ended March 31, 2023.

The Company has elected to exclude AIR from the allowance for credit losses calculation. As of March 31, 2024 and December 31, 2023, AIR from loans totaled $45.9 million and $42.4 million, respectively.