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Allowance for Credit Losses

6 Months Ended

Jun. 30, 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 June 30, 2025
			Non-owner
			occupied
			commercial		Residential
	Commercial		real estate		real estate		Consumer		Total
Beginning balance	$	48,058	$	23,494	$	18,307	$	333	$	90,192
Charge-offs		(977)		—		(1)		(180)		(1,158)
Recoveries		105		—		31		34		170
Provision expense (release) for credit losses		748		(1,275)		92		124		(311)
Ending balance	$	47,934	$	22,219	$	18,429	$	311	$	88,893

	Six months ended June 30, 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		(14,546)		(1,467)		(1)		(395)		(16,409)
Recoveries		161		17		59		71		308
Provision expense (release) for credit losses		13,767		(2,467)		(1,055)		294		10,539
Ending balance	$	47,934	$	22,219	$	18,429	$	311	$	88,893


	Three months ended June 30, 2024
			Non-owner
			occupied
			commercial		Residential
	Commercial		real estate		real estate		Consumer		Total
Beginning balance	$	46,315	$	30,838	$	20,100	$	354	$	97,607
Charge-offs		—		(4,422)		—		(183)		(4,605)
Recoveries		177		7		84		231		499
Provision expense (release) for credit losses		2,418		989		(425)		(26)		2,956
Ending balance	$	48,910	$	27,412	$	19,759	$	376	$	96,457


	Six months ended June 30, 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)		(4,422)		—		(437)		(4,883)
Recoveries		293		7		90		297		687
Provision expense (release) for credit losses		3,337		(838)		119		88		2,706
Ending balance	$	48,910	$	27,412	$	19,759	$	376	$	96,457

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 June 30, 2025 and December 31, 2024, the allowance for credit losses totaled $88.9 million and $94.5 million, respectively. The decrease during the six months ended June 30, 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 and six months ended June 30, 2025, the Company recorded provision expense for credit losses on funded loans and unfunded loan commitments totaling zero and $10.2 million, respectively, primarily to cover a charge-off on one credit driven by suspected fraudulent activity by the borrower. The Company recorded provision expense for credit losses on funded loans and unfunded loan commitments totaling $2.8 million during the three and six months ended June 30, 2024. Net charge-offs on loans during the three and six months ended June 30, 2025 totaled $1.0 million and $16.1 million, respectively. During the three and six months ended June 30, 2024, net charge-offs on loans totaled $4.1 million and $4.2 million, respectively.

The Company has elected to exclude AIR from the allowance for credit losses calculation. As of June 30, 2025 and December 31, 2024, AIR from loans totaled $38.9 million and $41.5 million, respectively.