The Company measures expected credit losses for financial assets measured at amortized cost, including loans, investments and certain off-balance-sheet credit exposures in accordance with ASU 2016-13. See Note 1 - Summary of Significant Accounting Policies for a description of the Company's allowance methodology.

Under the standard, the Company's methodology for determining the allowance for credit losses on loans is based upon key assumptions, including the lookback periods, historic net charge-off factors, economic forecasts, reversion periods, prepayments and qualitative adjustments. The allowance is measured on a collective, or pool, basis when similar risk characteristics exist. Loans that do not share common risk characteristics are evaluated on an individual basis and are excluded from the collective evaluation. At December 31, 2023, loans totaling $8.25 billion were evaluated collectively and the allowance on these balances totaled $74.9 million and loans evaluated on an individual basis totaled $90.6 million with the specific allocations of the allowance for credit losses totaling $2.3 million.

Federal regulatory agencies, as an integral part of their examination process, review our loans and the corresponding allowance for credit losses. While we believe that our allowance for credit losses on loans in relation to our current loan portfolio is adequate to cover current and expected losses, we cannot assure you that we will not need to increase our allowance for credit losses on loans or that the regulators will not require us to increase this allowance. Future increases in our allowance for credit losses on loans could materially and adversely affect our earnings and profitability.


(in thousands)	2023		2022
Balance at beginning of the period	$	70,264	$	58,047

Initial allowance for credit losses on PCD loans	—		12,077
Charge-offs on PCD loans	—		(7,634)
Charge-offs	(769)		(733)
Recoveries	460		819
Net (charge-offs) recoveries	(309)		(7,548)
Provision for credit loss - loans	7,208		7,688
Balance at end of the period	$	77,163	$	70,264

Accrued interest receivable on loans, reported as a component of accrued interest receivable on the consolidated balance sheet, totaled $29.1 million and $24.5 million at December 31, 2023 and December 31, 2022, respectively. The Company made the election to exclude accrued interest receivable from the estimate of credit losses.

The allowance for credit losses increased to $77.2 million, 0.92% of total loans, at December 31, 2023, compared to $70.3 million, 0.89% of total loans, at December 31, 2022, primarily due to the an increase in the loan portfolio and to a change in environmental qualitative factors.


(in thousands)	Balance at December 31, 2022		Charge-offs		Recoveries		Provision (Benefit) for Credit Loss - Loans		Balance at December 31, 2023
Non-owner occupied commercial	$	23,462	$	—	$	—	$	857	$	24,319
Owner occupied commercial	6,696		—		6		(315)		6,387
Multifamily	9,425		—		—		321		9,746
Non-owner occupied residential	2,643		—		—		(243)		2,400

Commercial, industrial and other	8,836		(27)		232		3		9,044
Construction	2,968		(13)		—		(709)		2,246
Equipment finance	3,445		(307)		30		4,353		7,521
Residential mortgage	8,041		(128)		—		2,473		10,386
Consumer	4,748		(294)		192		468		5,114
Total	$	70,264	$	(769)	$	460	$	7,208	$	77,163


(in thousands)	Balance at December 31, 2021		Initial allowance for credit losses on PCD loans		Charge-offs		Recoveries		Provision (Benefit) for Credit Loss - Loans		Balance at December 31, 2022
Non owner occupied commercial	$	20,071	$	1,312	$	(4)	$	4	$	2,079	$	23,462
Owner occupied commercial	3,964		1,137		(38)		351		1,282		6,696
Multifamily	8,309		4		—		—		1,112		9,425
Non owner occupied residential	2,380		175		—		14		74		2,643
Commercial, industrial and other	9,891		2,413		(1,128)		151		(2,491)		8,836
Construction	838		6,843		(6,807)		3		2,091		2,968
Equipment finance	3,663		—		(184)		114		(148)		3,445
Residential mortgage	3,914		179		—		48		3,900		8,041
Consumer	5,017		14		(206)		134		(211)		4,748
Total	$	58,047	$	12,077	$	(8,367)	$	819	$	7,688	$	70,264


December 31, 2023	Loans								Allowance for Credit Losses
(in thousands)	Individually evaluated		Collectively evaluated		Acquired with deteriorated credit quality		Total		Individually evaluated		Collectively evaluated		Total
Non-owner occupied commercial	$	—	$	2,959,469	$	28,490	$	2,987,959	$	557	$	23,762	$	24,319
Owner occupied commercial	6,474		1,246,243		30,504		1,283,221		893		5,494		6,387
Multifamily	1,095		1,402,174		5,636		1,408,905		6		9,740		9,746
Non-owner occupied residential	522		212,460		1,004		213,986		14		2,386		2,400
Commercial, industrial and other	—		635,285		3,609		638,894		686		8,358		9,044
Construction	12,698		290,047		—		302,745		—		2,246		2,246
Equipment finance	—		179,171		—		179,171		—		7,521		7,521
Residential mortgage	—		985,398		370		985,768		56		10,330		10,386
Consumer	—		343,006		206		343,212		69		5,045		5,114
Total loans	$	20,789	$	8,253,253	$	69,819	$	8,343,861	$	2,281	$	74,882	$	77,163


December 31, 2022	Loans								Allowance for Credit Losses
(in thousands)	Individually evaluated for impairment		Collectively evaluated for impairment		Acquired with deteriorated credit quality		Total		Individually evaluated for impairment		Collectively evaluated for impairment		Total
Non owner occupied commercial	$	—	$	2,871,950	$	34,064	$	2,906,014	$	753	$	22,709	$	23,462
Owner occupied commercial	12,041		1,202,919		31,229		1,246,189		983		5,713		6,696
Multifamily	—		1,254,412		6,402		1,260,814		5		9,420		9,425
Non owner occupied residential	441		216,516		1,069		218,026		16		2,627		2,643
Commercial, industrial and other	2,806		594,568		9,337		606,711		2,150		6,686		8,836
Construction	980		379,120		—		380,100		—		2,968		2,968
Equipment finance	—		151,574		—		151,574		—		3,445		3,445
Residential mortgage	—		764,340		1,212		765,552		181		7,860		8,041
Consumer	—		330,920		150		331,070		3		4,745		4,748
Total loans	$	16,268	$	7,766,319	$	83,463	$	7,866,050	$	4,091	$	66,173	$	70,264

At December 31, 2023, the balance of the allowance for credit loss on available for sale and held to maturity securities was $0 and $146,000, respectively. At December 31, 2022, the Company reported an allowance for credit losses of $310,000 on available for sale securities and of $107,000 on held to maturity securities.


Available for Sale	For the Years Ended December 31,
(in thousands)	2023		2022
Balance at beginning of the period	$	310	$	83

Charge-offs	(6,640)		—
Recoveries	—		—
Net charge-offs	(6,640)		—
(Benefit) provision for credit loss expense	6,330		227
Balance at end of the period	$	—	$	310


Held to Maturity	For the Years Ended December 31,
(in thousands)	2023		2022
Balance in the beginning of the period	$	107	$	181
(Benefit) provision for credit loss expense	39		(74)
Balance at the end of the period	$	146	$	107

The provision for credit loss expense for available for sale securities increased from $227,000 for the year ended December 31, 2022 to $6.3 million for the year ended December 31, 2023 as a result of a $6.6 million provision and subsequent charge-off of subordinated debt securities of Signature Bank which failed in March 2023.

Accrued interest receivable on securities is reported as a component of accrued interest receivable on the consolidated balance sheet and totaled $8.1 million and $8.7 million at December 31, 2023 and December 31, 2022, respectively. The Company made the election to exclude accrued interest receivable from the estimate of credit losses on securities.

The allowance for credit losses on off-balance-sheet exposures is reported in other liabilities in the Consolidated Balance Sheets. The liability represents an estimate of expected credit losses arising from off-balance-sheet exposures such as letters of credit, guarantees and unfunded loan commitments. The process for measuring lifetime expected credit losses on these exposures is consistent with that for loans as discussed above, but is subject to an additional estimate reflecting the likelihood that funding will occur. No liability is recognized for off-balance-sheet credit exposures that are unconditionally cancellable by the Company. Adjustments to the liability are reported as a component of provision for credit losses.