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Allowance for Credit Losses
 3 Months Ended
Mar. 31, 2023
Receivables [Abstract]  
Allowance for Credit Losses Allowance for Credit Losses
(In Thousands)

Allowance for Credit Losses on Loans

The allowance for credit losses is an estimate of expected losses inherent within the Company’s loans held for investment portfolio and is maintained at a level believed adequate by management to absorb credit losses inherent in the entire loan portfolio. Management evaluates the adequacy of the allowance for credit losses on a quarterly basis. Expected credit loss inherent in non-cancellable off-balance-sheet credit exposures is accounted for as a separate liability in the Consolidated Balance Sheets. The allowance for credit losses on loans held for investment, as reported in the Company’s Consolidated Balance Sheets, is adjusted by a provision for credit losses, which is reported in earnings, and reduced by net charge-offs. Loan losses are charged against the allowance for credit losses when management believes the uncollectability of a loan balance is confirmed and such losses are reasonably quantified. Subsequent recoveries, if any, are credited to the allowance. For more information about the Company’s policies and procedures for determining the amount of the allowance for credit losses, please refer to the discussion in Note 1, “Significant Accounting Policies,” in the Notes to the Consolidated Financial Statements in Item 8, Financial Statements and Supplementary Data, in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.
The Company has made an accounting policy election to exclude accrued interest from the measurement of the allowance for credit losses in the Company’s loan portfolio. As of March 31, 2023 and December 31, 2022, the Company had accrued interest receivable for loans of $52,202 and $49,850, respectively, which is recorded in the “Other assets” line item on the Consolidated Balance Sheets. Although the Company made the election to exclude accrued interest from the measurement of the allowance for credit losses, the Company did have an allowance for credit losses on interest deferred as part of the loan deferral program established in 2020 in response to the COVID-19 pandemic of $1,248 as of March 31, 2023 and December 31, 2022.
The following tables provide a roll-forward of the allowance for credit losses by loan category and a breakdown of the ending balance of the allowance based on the Company’s credit loss methodology for the periods presented:
CommercialReal Estate -
Construction		Real Estate -
1-4 Family
Mortgage		Real Estate  -
Commercial
Mortgage		Lease FinancingInstallment
Loans to Individuals		Total
Three Months Ended March 31, 2023
Allowance for credit losses:
Beginning balance$44,255 $19,114 $44,727 $71,798 $2,463 $9,733 $192,090 
Initial impact of purchased credit deteriorated (“PCD”) loans acquired
(26)— — — — — (26)
Charge-offs(529)— (3)(5,115)— (810)(6,457)
Recoveries725 — 24 211 5 760 1,725 
Net (charge-offs) recoveries196 — 21 (4,904)5 (50)(4,732)
Provision for (recovery of) credit losses on loans253 845 1,233 5,876 (31)(216)7,960 
Ending balance$44,678 $19,959 $45,981 $72,770 $2,437 $9,467 $195,292 
Period-End Amount Allocated to:
Individually evaluated$14,162 $35 $608 $1,734 $— $270 $16,809 
Collectively evaluated 30,516 19,924 45,373 71,036 2,437 9,197 178,483 
Ending balance$44,678 $19,959 $45,981 $72,770 $2,437 $9,467 $195,292 
Loans:
Individually evaluated$24,985 $652 $12,637 $10,375 $— $274 $48,923 
Collectively evaluated 1,715,793 1,423,700 3,266,343 5,075,438 121,146 115,082 11,717,502 
Ending balance$1,740,778 $1,424,352 $3,278,980 $5,085,813 $121,146 $115,356 $11,766,425 
Nonaccruing loans with no allowance for credit losses$768 $— $9,710 $5,511 $— $5 $15,994 
CommercialReal Estate -
Construction		Real Estate -
1-4 Family
Mortgage		Real Estate  -
Commercial
Mortgage		Lease FinancingInstallment Loans to IndividualsTotal
Three Months Ended March 31, 2022
Allowance for credit losses:
Beginning balance$33,922 $16,419 $32,356 $68,940 $1,486 $11,048 $164,171 
Initial impact of PCD loans acquired1,648 — — — — — 1,648 
Charge-offs(2,102)— (163)(6)(7)(779)(3,057)
Recoveries1,136 — 178 155 12 725 2,206 
Net (charge-offs) recoveries(966)— 15 149 5 (54)(851)
(Recovery of) provision for credit losses on loans(998)1,992 4,477 (3,858)91 (204)1,500 
Ending balance$33,606 $18,411 $36,848 $65,231 $1,582 $10,790 $166,468 
Period-End Amount Allocated to:
Individually evaluated$9,225 $— $396 $2,660 $— $570 $12,851 
Collectively evaluated24,381 18,411 36,452 62,571 1,582 10,220 153,617 
Ending balance$33,606 $18,411 $36,848 $65,231 $1,582 $10,790 $166,468 
Loans:
Individually evaluated$13,070 $— $4,477 $15,464 $— $570 $33,581 
Collectively evaluated1,432,537 1,222,052 2,836,502 4,562,400 89,842 136,545 10,279,878 
Ending balance$1,445,607 $1,222,052 $2,840,979 $4,577,864 $89,842 $137,115 $10,313,459 
Nonaccruing loans with no allowance for credit losses$435 $— $2,614 $5,298 $— $2 $8,349 
 
The Company recorded a provision for credit losses of $7,960 during the first quarter of 2023, as compared to a provision for credit losses $1,500 recorded in the first quarter of 2022. The Company’s allowance for credit losses model considers economic projections, primarily the national unemployment rate and GDP, over a reasonable and supportable period of two years. The increase in provision for credit losses on loans in the first quarter as compared to the provision in the first quarter of the prior year was driven by loan growth coupled with a slight deterioration in our economic forecast.
Allowance for Credit Losses on Unfunded Loan Commitments
The Company maintains a separate allowance for credit losses on unfunded loan commitments, which is included in the “Other liabilities” line item on the Consolidated Balance Sheets. For more information about the Company’s policies and procedures for determining the amount of the allowance for credit losses on unfunded loan commitments, please refer to the discussion in Note 1, “Significant Accounting Policies,” in the Notes to the Consolidated Financial Statements in Item 8, Financial Statements and Supplementary Data, in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.
The following table provides a roll-forward of the allowance for credit losses on unfunded loan commitments for the periods presented.
Three Months Ended March 31,20232022
Allowance for credit losses on unfunded loan commitments:
Beginning balance$20,118 $20,035 
Recovery of credit losses on unfunded loan commitments (included in other noninterest expense) (1,500)(550)
Ending balance$18,618 $19,485