Commitments and Contingencies

12 Months Ended

Dec. 31, 2023

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and contingencies

Commitments to extend credit and 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.

	December 31,
	2023		2022
Commitments to extend credit, excluding interest rate lock commitments	$	2,906,016	$	3,563,982
Letters of credit	77,055		71,250
Balance at end of period	$	2,983,071	$	3,635,232

As of December 31, 2023 and 2022, unfunded loan commitments included above with floating interest rates totaled $2,459,669 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:

	Years Ended December 31,
	2023		2022		2021
Balance at beginning of period	$	22,969	$	14,380	$	16,378
(Reversal of) provision for credit losses on unfunded commitments	(14,199)		8,589		(1,998)
Balance at end of period	$	8,770	$	22,969	$	14,380

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 in loans held for investment. The total principal amount of loans repurchased (or indemnified for) was $8,552, $7,834 and $7,364 for years ended December 31, 2023, 2022, and 2021, respectively. The Company has established a reserve associated with potential 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:

	Years Ended December 31,
	2023		2022		2021
Balance at beginning of period	$	1,621	$	4,802	$	5,928
Provision for loan repurchases or indemnifications	(650)		(2,989)		(766)
Losses on loans repurchased or indemnified	(72)		(192)		(360)
Balance at end of period	$	899	$	1,621	$	4,802

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.