The Company adopted ASU 2016-13, which requires the measurement of expected credit losses for financial assets measured at amortized cost, including loans and certain off-balance-sheet credit exposures on December 31, 2020, effective January 1, 2020. See Note 1 - Summary of Significant Accounting Policies for a description of the adoption of ASU 2016-13 and 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, 2021, loans totaling $5.95 billion were evaluated collectively and the allowance on these balances totaled $53.8 million and loans evaluated on an individual basis totaled $21.2 million with the specific allocations of the allowance for credit losses totaling $4.3 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)	2021		2020
Balance at beginning of the period	$	71,124	$	40,003
Impact of adopting ASU 2016-13	—		6,656
Charge-offs	(4,589)		(2,053)
Recoveries	2,427		541
Net charge-offs	(2,162)		(1,512)
Provision for credit loss - loans	(10,915)		25,977
Balance at end of the period	$	58,047	$	71,124

Accrued interest receivable on loans, reported as a component of accrued interest receivable on the consolidated balance sheet, totaled $13.9 million and $16.1 million at December 31, 2021 and December 31, 2020, respectively. The Company made the election to exclude accrued interest receivable from the estimate of credit losses.


(in thousands)	Balance at December 31, 2020		Charge-offs		Recoveries		(Benefit) Provision for Credit Loss - Loans		Balance at December 31, 2021
Non-owner occupied commercial	$	25,910	$	(2,708)	$	462	$	(3,593)	$	20,071
Owner occupied commercial	3,955		(282)		302		(11)		3,964
Multifamily	7,253		(28)		—		1,084		8,309
Non-owner occupied residential	3,321		(223)		165		(883)		2,380

Commercial, industrial and other	13,665		(401)		888		(4,261)		9,891
Construction	786		(54)		75		31		838
Equipment finance	6,552		(346)		61		(2,604)		3,663
Residential mortgage	3,623		(113)		177		227		3,914
Consumer	6,059		(434)		297		(905)		5,017
Total	$	71,124	$	(4,589)	$	2,427	$	(10,915)	$	58,047


(in thousands)	Balance at December 31, 2019 (1)		Impact of adopting ASU 2016-13		Charge-offs		Recoveries		(Benefit) Provision for Credit Loss - Loans		Balance at December 31, 2020
Non owner occupied commercial	$	—	$	17,027	$	(53)	$	29	$	8,907	$	25,910
Owner occupied commercial	—		3,080		(369)		21		1,223		3,955
Multifamily	—		3,717		—		—		3,536		7,253
Non owner occupied residential	—		2,801		—		22		498		3,321
Commercial, secured by real estate	28,950		(28,950)		—		—		—		—
Commercial, industrial and other	3,289		2,850		(814)		207		8,133		13,665
Construction	2,672		(2,396)		(77)		100		487		786
Equipment finance	957		2,481		(284)		65		3,333		6,552
Residential mortgage	1,725		1,217		(116)		21		776		3,623
Consumer	2,410		4,829		(340)		76		(916)		6,059
Total	$	40,003	$	6,656	$	(2,053)	$	541	$	25,977	$	71,124

The allowance for credit losses decreased to $58.0 million, 0.97% of total loans, at December 31, 2021, compared to $71.1 million, 1.18% of total loans, at December 31, 2020. The decrease from December 31, 2020, was primarily due to an improvement in forecasted macroeconomic conditions, a reduction in nonperforming assets and continued strength in asset quality. The change in the allowance within the loan segments during the two comparable periods is principally due to changes in the Company's level of loan growth and the impact of changes in various economic factors on particular segments. The Company adopted ASU 2016-13 at December 31, 2020, and recorded an increase in the allowance for credit losses on loans of $6.7 million effective January 1, 2020.


December 31, 2021	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	$	3,063	$	2,313,047	$	174	$	2,316,284	$	—	$	20,071	$	20,071
Owner occupied commercial	6,678		901,638		133		908,449		69		3,895		3,964
Multifamily	—		972,233		—		972,233		—		8,309		8,309
Non-owner occupied residential	2,567		174,463		67		177,097		—		2,380		2,380
Commercial, industrial and other	6,537		455,306		563		462,406		4,182		5,709		9,891
Construction	—		302,228		—		302,228		—		838		838
Equipment finance	—		123,212		—		123,212		—		3,663		3,663
Residential mortgage	1,416		437,294		—		438,710		—		3,914		3,914
Consumer	—		275,529		—		275,529		—		5,017		5,017
Total loans	$	20,261	$	5,954,950	$	937	$	5,976,148	$	4,251	$	53,796	$	58,047


December 31, 2020	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	$	12,112	$	2,382,717	$	4,117	$	2,398,946	$	355	$	25,555	$	25,910
Owner occupied commercial	16,547		809,935		610		827,092		96		3,859		3,955
Multifamily	—		813,225		—		813,225		—		7,253		7,253
Non owner occupied residential	1,459		198,334		436		200,229		43		3,278		3,321
Commercial, industrial and other	1,596		715,129		1,464		718,189		830		12,835		13,665
Construction	515		265,649		719		266,883		—		786		786
Equipment finance	—		116,690		—		116,690		—		6,552		6,552
Residential mortgage	1,490		375,482		408		377,380		—		3,623		3,623
Consumer	—		302,099		499		302,598		31		6,028		6,059
Total loans	$	33,719	$	5,979,260	$	8,253	$	6,021,232	$	1,355	$	69,769	$	71,124

At December 31, 2021, the balance of the allowance for credit loss on available for sale and held to maturity securities was $83,000 and $181,000, respectively. At December 31, 2020, the Company reported an allowance for credit losses on available for sale securities of $2,000 and no allowance for credit losses on held to maturity securities. For the year ended December 31, 2021, the Company recorded a provision for credit losses of $84,000 and $178,000 on securities available for sale and held to maturity, respectively, in the provision for credit losses on the Consolidated Statement of Income. For the year ended December 31, 2020, the Company, recorded a provision of $2,000 on securities available for sale and a benefit of $30,000 on securities held to maturity. The Company adopted ASU 2016-13 at December 31, 2020, and recorded an increase in the allowance for credit losses on held to maturity securities of $30,000 effective January 1, 2020. Prior year disclosures have not been restated.

Accrued interest receivable on securities is reported as a component of accrued interest receivable on the consolidated balance sheet and totaled $5.3 million and $3.3 million at December 31, 2021 and December 31, 2020, 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 credit loss expense.

At December 31, 2021 and December 31, 2020, the balance of the allowance for credit losses for off-balance-sheet exposures was $2.3 million and $2.6 million, respectively. The Company recorded a benefit for credit losses on off-balance-sheet exposures in other noninterest expense of $243,000 for the year ended December 31, 2021 and a provision for unfunded lending commitments in other noninterest expense of $1.3 million for the year ended December 31, 2020. The Company adopted ASU 2016-13 at December 31, 2020, and recorded a decrease in the allowance for credit losses for off-balance-sheet exposures of $498,000 effective January 1, 2020. Prior year disclosures have not been restated.