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Allowance for Credit Losses
 6 Months Ended
Jun. 30, 2024
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 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, 2023.
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 June 30, 2024 and December 31, 2023, the Company had accrued interest receivable for loans of $56,403 and $54,804, 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 $1,245 as of June 30, 2024 and December 31, 2023.
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 June 30, 2024
Allowance for credit losses:
Beginning balance$45,921 $17,317 $47,566 $78,725 $2,554 $8,969 $201,052 
Charge-offs(186)— (208)(5,727)— (251)(6,372)
Recoveries525 — 25 99 10 232 891 
Net (charge-offs) recoveries339 — (183)(5,628)10 (19)(5,481)
Provision for (recovery of) credit losses on loans(1,309)1,579 38 4,028 (49)13 4,300 
Ending balance$44,951 $18,896 $47,421 $77,125 $2,515 $8,963 $199,871 
Six Months Ended June 30, 2024
Allowance for credit losses:
Beginning balance$43,980 $18,612 $47,283 $77,020 $2,515 $9,168 $198,578 
Charge-offs(535)(290)(5,727)(730)(7,282)
Recoveries871 73 105 18 570 1,637 
Net (charge-offs) recoveries336 — (217)(5,622)18 (160)(5,645)
Provision for (recovery of) credit losses on loans635 284 355 5,727 (18)(45)6,938 
Ending balance$44,951 $18,896 $47,421 $77,125 $2,515 $8,963 $199,871 
Period-End Amount Allocated to:
Individually evaluated$8,514 $— $— $1,220 $— $270 $10,004 
Collectively evaluated 36,437 18,896 47,421 75,905 2,515 8,693 189,867 
Ending balance$44,951 $18,896 $47,421 $77,125 $2,515 $8,963 $199,871 
Loans:
Individually evaluated$14,211 $— $6,942 $32,579 $— $270 $54,002 
Collectively evaluated 1,833,551 1,355,425 3,428,876 5,733,899 102,996 96,006 12,550,753 
Ending balance$1,847,762 $1,355,425 $3,435,818 $5,766,478 $102,996 $96,276 $12,604,755 
Nonaccruing loans with no allowance for credit losses$230 $— $6,318 $20,640 $— $— $27,188 
CommercialReal Estate -
Construction		Real Estate -
1-4 Family
Mortgage		Real Estate  -
Commercial
Mortgage		Lease FinancingInstallment Loans to IndividualsTotal
Three Months Ended June 30, 2023
Allowance for credit losses:
Beginning balance$44,678 $19,959 $45,981 $72,770 $2,437 $9,467 $195,292 
Charge-offs(4,939)(57)(212)(397)— (580)(6,185)
Recoveries1,274 — 170 278 6 556 2,284 
Net (charge-offs) recoveries(3,665)(57)(42)(119)6 (24)(3,901)
Provision for (recovery of) credit losses on loans297 (777)495 3,016 37 (68)3,000 
Ending balance$41,310 $19,125 $46,434 $75,667 $2,480 $9,375 $194,391 
Six Months Ended June 30, 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 loans acquired during the period(26)— — — — — (26)
Charge-offs(5,468)(57)(215)(5,512)— (1,390)(12,642)
Recoveries1,999 — 194 489 11 1,316 4,009 
Net (charge-offs) recoveries(3,469)(57)(21)(5,023)11 (74)(8,633)
Provision for (recovery of) credit losses on loans550 68 1,728 8,892 6 (284)10,960 
Ending balance$41,310 $19,125 $46,434 $75,667 $2,480 $9,375 $194,391 
Period-End Amount Allocated to:
Individually evaluated$10,773 $— $703 $1,269 $— $270 $13,015 
Collectively evaluated30,537 19,125 45,731 74,398 2,480 9,105 181,376 
Ending balance$41,310 $19,125 $46,434 $75,667 $2,480 $9,375 $194,391 
Loans:
Individually evaluated$21,418 $— $13,545 $40,239 $— $270 $75,472 
Collectively evaluated1,707,652 1,369,019 3,335,109 5,212,240 122,370 108,654 11,855,044 
Ending balance$1,729,070 $1,369,019 $3,348,654 $5,252,479 $122,370 $108,924 $11,930,516 
Nonaccruing loans with no allowance for credit losses$2,021 $— $10,516 $3,969 $— $— $16,506 
 
The Company recorded a provision for credit losses on loans of $4,300 during the second quarter of 2024, as compared to a provision for credit losses on loans of $3,000 recorded in the second quarter of 2023. 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 provision for credit losses on loans of $4,300 in the second quarter of 2024 was primarily driven by loan growth and changes in credit metrics that influence the Company’s expectations of future losses, including but not limited to the balance of nonperforming loans, underlying collateral values, and historical levels of charge-offs.
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, 2023.
The following tables provide a roll-forward of the allowance for credit losses on unfunded loan commitments for the periods presented.
Three Months Ended June 30,20242023
Allowance for credit losses on unfunded loan commitments:
Beginning balance$16,718 $18,618 
Recovery of credit losses on unfunded loan commitments(1,000)(1,000)
Ending balance$15,718 $17,618 
Six Months Ended June 30,20242023
Allowance for credit losses on unfunded loan commitments:
Beginning balance$16,918 $20,118 
Recovery of credit losses on unfunded loan commitments(1,200)(2,500)
Ending balance$15,718 $17,618