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Allowance for Credit Losses
 9 Months Ended
Sep. 30, 2023
Receivables [Abstract]  
Allowance for Credit Losses Allowance for Credit Losses
Activity in the allowance for credit losses is summarized as follows:
 Three Months Ended September 30, 2023
(In thousands)Beginning
Balance		Provision
for Credit
Losses		Charge-
Offs		RecoveriesEnding
Balance
Construction and land development$6,960 $725 $— $— $7,685 
Commercial real estate - owner-occupied6,418 (353)— — 6,065 
Commercial real estate - non-owner occupied54,103 (1,677)— 15 52,441 
Residential real estate36,710 2,009 (44)60 38,735 
Commercial and financial40,272 2,932 (11,814)135 31,525 
Consumer15,252 (942)(1,265)165 13,210 
Totals$159,715 $2,694 $(13,123)$375 $149,661 

 Three Months Ended September 30, 2022
(In thousands)Beginning
Balance		Provision
for Credit
Losses		Charge-
Offs		RecoveriesTDR
Allowance
Adjustments		Ending
Balance
Construction and land development2,552 792 — 1 — 3,345 
Commercial real estate - owner occupied7,376 (2,182)— — — 5,194 
Commercial real estate - non-owner occupied46,459 (6,841)(179)23 — 39,462 
Residential real estate14,821 11,193 — 31 (8)26,037 
Commercial and financial17,144 (1,457)(77)92 (1)15,701 
Consumer2,417 3,171 (152)158 (4)5,590 
Totals$90,769 $4,676 $(408)$305 $(13)$95,329 
Nine Months Ended September 30, 2023
(In thousands)Beginning
Balance		Allowance on PCD Loans Acquired During the PeriodProvision
for Credit
Losses		Charge-
Offs		RecoveriesEnding
Balance
Construction and land development$6,464 $5 $1,208 $— $8 $7,685 
Commercial real estate - owner occupied6,051 139 (127)— 2 6,065 
Commercial real estate - non-owner occupied43,258 647 8,461 (109)184 52,441 
Residential real estate29,605 400 8,659 (312)383 38,735 
Commercial and financial15,648 17,527 11,548 (15,183)1,985 31,525 
Consumer12,869 161 3,779 (3,864)265 13,210 
Totals$113,895 $18,879 $33,528 $(19,468)$2,827 $149,661 
Nine Months Ended September 30, 2022
(In thousands)Beginning BalanceAllowance on PCD Loans Acquired During the PeriodProvision for Credit LossesCharge- OffsRecoveriesTDR Allowance AdjustmentsEnding Balance
Construction and land development$2,751 $— $529 $— $65 $— $3,345 
Commercial real estate - owner occupied8,579 — (3,385)— — — 5,194 
Commercial real estate - non-owner occupied36,617 31 2,961 (179)32 — 39,462 
Residential real estate12,811 17 12,901 (1)334 (25)26,037 
Commercial and financial19,744 3 (3,585)(899)440 (2)15,701 
Consumer2,813 — 2,633 (446)596 (6)5,590 
Totals$83,315 $51 $12,054 $(1,525)$1,467 $(33)$95,329 

Management establishes the allowance using relevant available information from both internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. Forecast data is sourced from Moody’s Analytics (“Moody’s”), a firm widely recognized for its research, analysis, and economic forecasts. The forecasts of future economic conditions are over a period that has been deemed reasonable and supportable, and in segments where it can no longer develop reasonable and supportable forecasts, the Company reverts to longer-term historical loss experience to estimate losses over the remaining life of the loans.
As of September 30, 2023 and December 31, 2022, the Company utilized a blend of Moody’s most recent “U.S. Macroeconomic Outlook Baseline” and “Alternative Scenario 3 Downside 90th Percentile” scenarios and considered the uncertainty associated with the assumptions in both scenarios, including continued actions taken by the Federal Reserve with regard to monetary policy and interest rates and the potential impact of those actions, the ongoing Russia-Ukraine conflict and the magnitude of the resulting market disruption, the potential impact of persistently high inflation on economic growth and expectations around a recession occurring over the next 12 to 24 months. Outcomes in any or all of these factors could differ from the scenarios identified above, and the Company incorporated qualitative considerations reflecting the risk of uncertain economic conditions, and for additional dimensions of risk not captured in the quantitative model.
The following section discusses changes in the level of the allowance for credit losses for the three months ended September 30, 2023.
In the Construction and Land Development segment, the increase in the allowance is due to an increase in expected credit losses driven by changes in collateral type and estimated collateral values. In this segment, the primary source of repayment is typically from proceeds of the sale, refinancing, or permanent financing of the underlying property; therefore, industry and collateral type and estimated collateral values are among the relevant factors in assessing expected losses.
In the Commercial Real Estate - Owner-Occupied segment, the allowance decreased from the prior quarter due to slight improvements in the forecast for macroeconomic factors such as the unemployment rate and BBB credit spread. Risk characteristics include but are not limited to, collateral type, note structure and loan seasoning.

In the Commercial Real Estate - Non Owner-Occupied segment, the decrease in the allowance is primarily attributed to lower loan balances. Repayment is often dependent upon rental income from the successful operation of the underlying property. Loan performance may be adversely affected by general economic conditions or conditions specific to the real estate market, including property types. Collateral type, note structure, and loan seasoning are among the risk characteristics analyzed for this segment.

The Residential Real Estate segment includes first mortgages secured by residential property, and home equity lines of credit. The increase in the allowance is due to an increase in loan balances and an increase in expected credit losses. Risk characteristics considered for this segment include, but are not limited to, borrower FICO score, lien position, loan to value ratios, and loan seasoning.

In the Commercial and Financial segment, borrowers are primarily small to medium sized professional firms and other businesses, and loans are generally supported by projected cash flows of the business, collateralized by business assets, and/or guaranteed by the business owners. The decrease in reserves is primarily attributed to a complete charge-off of an $11.3 million acquired loan that was fully reserved, partially offset by an increase in expected credit losses on commercial and industrial
unsecured loans. Industry, collateral type, estimated collateral values, and loan seasoning are among the relevant factors in assessing expected losses.

Consumer loans include installment and revolving lines, loans for automobiles, boats, and other personal or family purposes. Risk characteristics considered for this segment include, but are not limited to, collateral type, loan to value ratios, loan seasoning and FICO score. The decrease in the allowance is primarily due to a decrease in loan balances.

The allowance for credit losses is composed of specific allowances for loans individually evaluated and general allowances for loans grouped into loan pools based on similar characteristics, which are collectively evaluated. In the third quarter of 2023, $19.9 million of loans moved from individually evaluated to collectively evaluated as a result of a change in methodology for evaluating loans individually. The impact on the reserve was not material. The Company’s loan portfolio and related allowance at September 30, 2023 and December 31, 2022 are shown in the following tables:
 September 30, 2023
 Individually Evaluated Collectively EvaluatedTotal
(In thousands)Recorded
Investment		Associated
Allowance		Recorded
Investment		Associated
Allowance		Recorded
Investment		Associated
Allowance
Construction and land development$— $— $793,736 $7,685 $793,736 $7,685 
Commercial real estate - owner occupied1,908 — 1,673,973 6,065 1,675,881 6,065 
Commercial real estate - non-owner occupied8,519 530 3,277,455 51,911 3,285,974 52,441 
Residential real estate1,810 — 2,417,093 38,735 2,418,903 38,735 
Commercial and financial23,287 8,062 1,564,865 23,463 1,588,152 31,525 
Consumer— — 248,540 13,210 248,540 13,210 
Totals$35,524 $8,592 $9,975,662 $141,069 $10,011,186 $149,661 

 December 31, 2022
 Individually Evaluated Collectively Evaluated
 Total
(In thousands)Recorded
Investment		Associated
Allowance		Recorded
Investment		Associated
Allowance		Recorded
Investment		Associated
Allowance
Construction and land development$59 $— $587,273 $6,464 $587,332 $6,464 
Commercial real estate - owner occupied3,346 41 1,474,956 6,010 1,478,302 6,051 
Commercial real estate - non-owner occupied4,183 230 2,585,591 43,028 2,589,774 43,258 
Residential real estate11,333 275 1,838,170 29,330 1,849,503 29,605 
Commercial and financial12,167 2,639 1,341,059 13,009 1,353,226 15,648 
Consumer426 362 286,161 12,507 286,587 12,869 
Totals$31,514 $3,547 $8,113,210 $110,348 $8,144,724 $113,895