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Allowance for Credit Losses
 9 Months Ended
Sep. 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 September 30, 2024 and December 31, 2023, the Company had accrued interest receivable for loans of $55,542 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 $758 and $1,245 as of September 30, 2024 and December 31, 2023, respectively.
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 September 30, 2024
Allowance for credit losses:
Beginning balance$44,951 $18,896 $47,421 $77,125 $2,515 $8,963 $199,871 
Charge-offs(347)— (256)(10)(642)(649)(1,904)
Recoveries514 — 57 11 8 611 1,201 
Net (charge-offs) recoveries167 — (199)1 (634)(38)(703)
Provision for (recovery of) credit losses on loans(2,065)(2,240)(3)4,961 503 54 1,210 
Ending balance$43,053 $16,656 $47,219 $82,087 $2,384 $8,979 $200,378 
Nine Months Ended September 30, 2024
Allowance for credit losses:
Beginning balance$43,980 $18,612 $47,283 $77,020 $2,515 $9,168 $198,578 
Charge-offs(882)(546)(5,737)(642)(1,379)(9,186)
Recoveries1,385 130 116 26 1,181 2,838 
Net (charge-offs) recoveries503 — (416)(5,621)(616)(198)(6,348)
Provision for (recovery of) credit losses on loans(1,430)(1,956)352 10,688 485 9 8,148 
Ending balance$43,053 $16,656 $47,219 $82,087 $2,384 $8,979 $200,378 
Period-End Amount Allocated to:
Individually evaluated$8,805 $— $— $4,878 $— $270 $13,953 
Collectively evaluated 34,248 16,656 47,219 77,209 2,384 8,709 186,425 
Ending balance$43,053 $16,656 $47,219 $82,087 $2,384 $8,979 $200,378 
Loans:
Individually evaluated$15,370 $241 $7,815 $47,321 $614 $270 $71,631 
Collectively evaluated 1,789,591 1,198,597 3,432,223 5,947,831 97,545 90,230 12,556,017 
Ending balance$1,804,961 $1,198,838 $3,440,038 $5,995,152 $98,159 $90,500 $12,627,648 
Nonaccruing loans with no allowance for credit losses$122 $— $6,868 $25,016 $614 $— $32,620 
CommercialReal Estate -
Construction		Real Estate -
1-4 Family
Mortgage		Real Estate  -
Commercial
Mortgage		Lease FinancingInstallment Loans to IndividualsTotal
Three Months Ended September 30, 2023
Allowance for credit losses:
Beginning balance$41,310 $19,125 $46,434 $75,667 $2,480 $9,375 $194,391 
Charge-offs(2,252)— (130)— (641)(607)(3,630)
Recoveries690 48 181 208 2 568 1,697 
Net (charge-offs) recoveries(1,562)48 51 208 (639)(39)(1,933)
Provision for (recovery of) credit losses on loans4,696 483 (686)(642)1,514 (50)5,315 
Ending balance$44,444 $19,656 $45,799 $75,233 $3,355 $9,286 $197,773 
Nine Months Ended September 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(7,720)(57)(345)(5,512)(641)(1,997)(16,272)
Recoveries2,689 48 375 697 13 1,884 5,706 
Net (charge-offs) recoveries(5,031)(9)30 (4,815)(628)(113)(10,566)
Provision for (recovery of) credit losses on loans5,246 551 1,042 8,250 1,520 (334)16,275 
Ending balance$44,444 $19,656 $45,799 $75,233 $3,355 $9,286 $197,773 
Period-End Amount Allocated to:
Individually evaluated$11,194 $— $77 $1,260 $856 $270 $13,657 
Collectively evaluated33,250 19,656 45,722 73,973 2,499 9,016 184,116 
Ending balance$44,444 $19,656 $45,799 $75,233 $3,355 $9,286 $197,773 
Loans:
Individually evaluated$20,996 $— $13,007 $18,403 $1,047 $270 $53,723 
Collectively evaluated1,798,895 1,407,364 3,385,869 5,294,763 119,677 107,732 12,114,300 
Ending balance$1,819,891 $1,407,364 $3,398,876 $5,313,166 $120,724 $108,002 $12,168,023 
Nonaccruing loans with no allowance for credit losses$1,987 $— $11,441 $11,226 $191 $— $24,845 
 
The Company recorded a provision for credit losses on loans of $1,210 during the third quarter of 2024, as compared to a provision for credit losses on loans of $5,315 recorded in the third 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 $1,210 in the third 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, all considered in the context of the existing balance of the allowance for credit losses.
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 September 30,20242023
Allowance for credit losses on unfunded loan commitments:
Beginning balance$15,718 $17,618 
Recovery of credit losses on unfunded loan commitments(275)(700)
Ending balance$15,443 $16,918 
Nine Months Ended September 30,20242023
Allowance for credit losses on unfunded loan commitments:
Beginning balance$16,918 $20,118 
Recovery of credit losses on unfunded loan commitments(1,475)(3,200)
Ending balance$15,443 $16,918