Commitments and Contingencies

9 Months Ended

Sep. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and contingencies:

Commitments to extend credit & letters of credit

Some financial instruments, such as loan commitments, credit lines and letters of credit, are issued to meet customer financing needs. These unfunded loan commitment agreements provide credit or support the credit of others, as long as conditions established in the contract are met, and usually have expiration dates.

The same credit and underwriting policies the Company uses to evaluate and underwrite loans are also used to originate unfunded loan commitments, including obtaining collateral at exercise of the commitment. These unfunded loan commitments are only recorded in the consolidated financial statements when drawn upon and many expire without being used. The Company's maximum off-balance sheet exposure to credit loss from these unfunded loan commitments is represented by the contractual amount of these instruments.

	September 30,		December 31,
	2023		2022
Commitments to extend credit, excluding interest rate lock commitments	$	3,127,902	$	3,563,982
Letters of credit	70,602		71,250
Balance at end of period	$	3,198,504	$	3,635,232

As of September 30, 2023 and December 31, 2022, unfunded loan commitments included above with floating interest rates totaled $2,667,768 and $2,961,683, respectively.

As part of its credit loss process, the Company estimates expected credit losses on its unfunded loan commitments under the CECL methodology. When applying this methodology, the Company considers the likelihood that funding will occur, the contractual period of exposure to credit loss, the risk of loss, historical loss experience, and current conditions along with expectations of future economic conditions.

The table below presents activity within the allowance for credit losses on unfunded loan commitments included in accrued expenses and other liabilities on the Company's consolidated balance sheets:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Balance at beginning of period	$	14,810	$	20,399	$	22,969	$	14,380
(Reversal of) provision for credit losses on unfunded      commitments	(3,210)		3,178		(11,369)		9,197
Balance at end of period	$	11,600	$	23,577	$	11,600	$	23,577

Loan repurchases or indemnifications

In connection with the sale of mortgage loans to third party private investors or government sponsored agencies, the Company makes representations and warranties as to the propriety of its origination activities, which are typical and customary to these types of transactions. Occasionally, the investors require the Company to repurchase loans sold to them under the terms of the warranties. When this happens, the loans are recorded at fair value with a corresponding charge to a recorded valuation reserve. The total principal amount of loans repurchased (or indemnified for) was $1,631 and $6,328 for the three and nine months ended September 30, 2023, respectively and $4,442 and $5,988 for the three and nine months ended September 30, 2022, respectively. The Company has established a reserve associated with loan repurchases.

The following table summarizes the activity in the repurchase reserve included in accrued expenses and other liabilities on the Company's consolidated balance sheets:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Balance at beginning of period	$	1,129	$	3,445	$	1,621	$	4,802
Provision for loan repurchases or indemnifications	(200)		(800)		(650)		(1,989)
Losses on loans repurchased or indemnified	—		16		(42)		(152)
Balance at end of period	$	929	$	2,661	$	929	$	2,661

Legal Proceedings

Various legal claims arise from time to time in the normal course of business, which, in the opinion of management, will not have a material effect on the Company’s consolidated financial statements.