Allowance for Credit Losses (ACL)

3 Months Ended

Mar. 31, 2025

Allowance for Credit Losses (ACL)

Allowance for Credit Losses (ACL)

Note 7 — Allowance for Credit Losses (ACL)

See Note 2 — Summary of Significant Accounting Policies for further detailed descriptions of our estimation process and methodology related to the allowance for credit losses.

The following table presents a disaggregated analysis of activity in the allowance for credit losses for the three months ended March 31, 2025 and 2024:

	Residential		Residential				Residential		Comm Constr.								CRE Owner-		Non-Owner-
(Dollars in thousands)	Mortgage Sr.		Mortgage Jr.		HELOC		Construction		& Dev.		Consumer		Multifamily		Municipal		Occupied		Occupied CRE		C & I		Total
Three Months Ended March 31, 2025
Allowance for credit losses:
Balance at end of period December 31, 2024	$	42,687	$	432	$	14,845	$	9,298	$	65,553	$	17,484	$	22,279	$	1,197	$	78,753	$	111,538	$	101,214	$	465,280
Allowance Adjustment - FMV for Independent merger		1,852		—		—		—		6,448		114		3,561		—		8,075		93,820		4,773		118,643
Initial Allowance for Non-PCD loans acquired during period		8,910		85		91		4,700		11,751		254		3,805		1,947		3,186		31,557		13,685		79,971
Independent Day 1 Loan Charge-offs PCD (1)		(61)		—		—		—		—		(2,323)		—		—		(1,302)		(13,556)		(22,187)		(39,429)
Charge-offs		(507)		(13)		(229)		—		—		(1,805)		—		—		(204)		—		(4,664)		(7,422)
Recoveries		200		24		380		—		98		830		—		—		50		96		1,304		2,982
Net (charge-offs) recoveries		(368)		11		151		—		98		(3,298)		—		—		(1,456)		(13,460)		(25,547)		(43,869)
Provision (recovery) (2)		1,245		265		(219)		(1,443)		(5,309)		1,750		4,315		(2,037)		13,098		(51,121)		43,121		3,665
Balance at end of period March 31, 2025	$	54,326	$	793	$	14,868	$	12,555	$	78,541	$	16,304	$	33,960	$	1,107	$	101,656	$	172,334	$	137,246	$	623,690
Three Months Ended March 31, 2024
Allowance for credit losses:
Balance at end of period December 31, 2024	$	78,052	$	745	$	10,942	$	5,024	$	65,772	$	23,331	$	13,766	$	900	$	71,580	$	137,055	$	49,406	$	456,573
Charge-offs		(343)		—		(110)		(304)		(1,475)		(2,497)		—		—		—		(71)		(3,140)		(7,940)
Recoveries		123		39		292		7		1,007		1,125		25		—		103		10		2,530		5,261
Net (charge-offs) recoveries		(220)		39		182		(297)		(468)		(1,372)		25		—		103		(61)		(610)		(2,679)
Provision (recovery) (2)		9,652		446		600		(175)		(4,444)		1,394		3,221		(24)		914		(2,296)		6,472		15,760
Balance at end of period March 31, 2024	$	87,484	$	1,230	$	11,724	$	4,552	$	60,860	$	23,353	$	17,012	$	876	$	72,597	$	134,698	$	55,268	$	469,654

(1) The Day 1 loan charge-offs for Independent loans were recorded to conform with the Company’s charge-off policies and practices.

(2) A provision for credit losses for unfunded commitments of $16.9 million, including $12.1 million for the initial provision for credit losses recorded for unfunded commitments acquired from Independent, was recorded during the first quarter of 2025, compared to a negative provision for credit losses of ($3.1) million recorded during the first quarter of 2024, that is not included in the above table.