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Allowance for Credit Losses

3 Months Ended

Mar. 31, 2025

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, 2025
			Non-owner
			occupied
			commercial		Residential
	Commercial		real estate		real estate		Consumer		Total
Beginning balance	$	48,552	$	26,136	$	19,426	$	341	$	94,455
Charge-offs		(13,569)		(1,467)		—		(215)		(15,251)
Recoveries		56		17		28		37		138
Provision expense (release) for credit losses		13,019		(1,192)		(1,147)		170		10,850
Ending balance	$	48,058	$	23,494	$	18,307	$	333	$	90,192


	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

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 March 31, 2025 and December 31, 2024, the allowance for credit losses totaled $90.2 million and $94.5 million, respectively. The decrease during the three months ended March 31, 2025 was primarily driven by the resolution of non-performing loans and changes

in the CECL model’s underlying macro-economic forecast. During the three months ended March 31, 2025, the Company recorded provision expense for credit losses on funded loans and unfunded loan commitments totaling $10.2 million, primarily to cover a charge-off on one credit driven by suspected fraudulent activity by the borrower. The Company recorded zero provision expense for credit losses on funded loans and unfunded loan commitments during the first quarter of 2024. Net charge-offs on loans during the three months ended March 31, 2025 and 2024 totaled $15.1 million and $0.1 million, respectively.

The Company has elected to exclude AIR from the allowance for credit losses calculation. As of March 31, 2025 and December 31, 2024, AIR from loans totaled $44.3 million and $41.5 million, respectively.