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Allowance for Credit Losses

12 Months Ended

Dec. 31, 2024

Note 7 Allowance for Credit Losses

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


	Year ended December 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		(5,082)		(4,715)		—		(981)		(10,778)
Recoveries		493		7		97		359		956
Provision expense (release) for credit losses		7,837		(1,821)		(221)		535		6,330
Ending balance	$	48,552	$	26,136	$	19,426	$	341	$	94,455


	Year ended December 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		(277)		—		(48)		(1,250)		(1,575)
Recoveries		290		3		26		125		444
Provision expense for credit losses		7,683		612		266		964		9,525
Ending balance	$	45,304	$	32,665	$	19,550	$	428	$	97,947

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.

At December 31, 2024 and 2023, the allowance for credit losses totaled $94.5 million and $97.9 million, respectively. The decrease during 2024 was driven by the resolution of non-performing loans and changes in the CECL model’s underlying macro-economic forecast. Net charge-offs on loans during the year ended December 31, 2024 were $9.8 million.

The Company recorded an increase in the allowance for credit losses of $8.4 million during the year ended December 31, 2023, driven by loan growth and an increase in specific reserves. Net charge-offs on loans during the year ended December 31, 2023 were $1.1 million.

The Company has elected to exclude AIR from the allowance for credit losses calculation. As of December 31, 2024 and December 31, 2023, AIR from loans totaled $41.5 million and $42.4 million, respectively.