Loans | LOANS The following table presents a summary of loans by category: ($ in thousands) September 30, 2024 December 31, 2023 Commercial and industrial $ 4,631,613 $ 4,674,056 Real estate: Commercial - investor owned 2,526,696 2,452,402 Commercial - owner occupied 2,381,636 2,344,117 Construction and land development 896,768 760,122 Residential 354,888 371,995 Total real estate loans 6,159,988 5,928,636 Other 290,052 285,653 Loans, before unearned loan fees 11,081,653 10,888,345 Unearned loan fees, net (1,761) (4,227) Loans, including unearned loan fees $ 11,079,892 $ 10,884,118 The loan balance includes a net premium on acquired loans of $8.5 million and $9.6 million at September 30, 2024 and December 31, 2023, respectively. At September 30, 2024 and December 31, 2023, loans and securities of $5.5 billion and $4.8 billion, respectively, were pledged to the FHLB and the Federal Reserve Bank. Accrued interest totaled $52.5 million and $66.7 million at September 30, 2024 and December 31, 2023, respectively, and was reported in “Other Assets” on the consolidated balance sheets. SBA 7(a) guaranteed loans sold during the nine months ended September 30, 2024 totaled $23.1 million, resulting in a gain on sale of $1.4 million. SBA 7(a) guaranteed loans sold during the three and nine months ended September 30, 2023 totaled $33.3 million and $42.1 million, respectively. A gain on sale of $1.5 million and $2.0 million was recognized for the three and nine months ended September 30, 2023, respectively. There were no SBA 7(a) guaranteed loans sold in the three months ended September 30, 2024. No consumer mortgage loans secured by residential real estate were in the process of foreclosure at September 30, 2024, compared to $1.0 million at December 31, 2023. A summary of the activity, by loan category, in the ACL on loans for the three and nine months ended September 30, 2024 and 2023 is as follows: ($ in thousands) Commercial and industrial CRE - investor owned CRE - Construction and land development Residential real estate Other Total Allowance for credit losses on loans: Balance at June 30, 2024 $ 61,478 $ 31,903 $ 24,316 $ 11,504 $ 5,588 $ 4,675 $ 139,464 Provision (benefit) for credit losses 2,360 1,050 (935) 1,766 266 (343) 4,164 Charge-offs (440) — (906) (3,224) (19) (184) (4,773) Recoveries 662 30 25 21 140 45 923 Balance at September 30, 2024 $ 64,060 $ 32,983 $ 22,500 $ 10,067 $ 5,975 $ 4,193 $ 139,778 ($ in thousands) Commercial and industrial CRE - investor owned CRE - Construction and land development Residential real estate Other Total Allowance for credit losses on loans: Balance at December 31, 2023 $ 58,886 $ 31,280 $ 23,405 $ 10,198 $ 6,142 $ 4,860 $ 134,771 Provision (benefit) for credit losses 9,146 1,914 1,818 3,042 (415) (179) 15,326 Charge-offs (6,349) (305) (2,773) (3,224) (760) (725) (14,136) Recoveries 2,377 94 50 51 1,008 237 3,817 Balance at September 30, 2024 $ 64,060 $ 32,983 $ 22,500 $ 10,067 $ 5,975 $ 4,193 $ 139,778 ($ in thousands) Commercial and industrial CRE - investor owned CRE - Construction and land development Residential real estate Other Total Allowance for credit losses on loans: Balance at June 30, 2023 $ 60,318 $ 33,876 $ 22,700 $ 12,795 $ 7,421 $ 4,209 $ 141,319 Provision (benefit) for credit losses 3,914 2,851 2,705 (1,662) (939) 801 7,670 Charge-offs (2,794) (4,692) — — (131) (686) (8,303) Recoveries 1,038 27 28 14 271 69 1,447 Balance at September 30, 2023 $ 62,476 $ 32,062 $ 25,433 $ 11,147 $ 6,622 $ 4,393 $ 142,133 ($ in thousands) Commercial and industrial CRE - investor owned CRE - Construction and land development Residential real estate Other Total Allowance for credit losses on loans: Balance at December 31, 2022 $ 53,835 $ 36,191 $ 22,752 $ 11,444 $ 7,928 $ 4,782 $ 136,932 Provision (benefit) for credit losses 12,854 653 2,564 (342) (1,472) 509 14,766 Charge-offs (6,790) (4,869) — (9) (654) (1,129) (13,451) Recoveries 2,577 87 117 54 820 231 3,886 Balance at September 30, 2023 $ 62,476 $ 32,062 $ 25,433 $ 11,147 $ 6,622 $ 4,393 $ 142,133 The ACL on sponsor finance loans, which is included in the categories above, represented $23.0 million at both September 30, 2024 and December 31, 2023, respectively. The CECL methodology incorporates various economic scenarios. The Company utilizes three forecasts in the model: Moody’s baseline, a stronger near-term growth upside and a moderate recession downside forecast. The Company weights these scenarios at 40%, 30%, and 30%, respectively, which added approximately $14.5 million to the ACL on loans over the baseline model at September 30, 2024. The baseline forecast incorporates an expectation that the federal funds rate will continue to fall in the last quarter of 2024. It is also assumed that the bank failures in early 2023 were not an indication of a broader problem in the industry. The Company has also recognized various risks posed by loans in certain segments, including the commercial office and agricultural sectors, by allocating additional reserves to those segments. Some of the key risks to the forecasts that could result in future provision for credit losses are market reactions to the Federal Reserve policy actions that could push the economy into a recession, persistently higher inflation, tightening in the credit markets, and further weakness in the financial system. In addition to the CECL methodology, the Company incorporates qualitative adjustments into the ACL on loans to capture credit risks inherent within the loan portfolio that are not captured in the CECL model. Included in these risks are 1) changes in lending policies and procedures, 2) actual and expected changes in business and economic conditions, 3) changes in the nature and volume of the portfolio, 4) changes in lending management, 5) changes in volume and the severity of past due loans, 6) changes in the quality of the loan review system, 7) changes in the value of underlying collateral, 8) the existence and effect of concentrations of credit and 9) other factors such as the regulatory, legal and competitive environments and events such as natural disasters and pandemics. At September 30, 2024, the ACL on loans included a qualitative adjustment of approximately $49.1 million. Of this amount, approximately $16.1 million was allocated to sponsor finance loans due to their mostly unsecured nature. The current year-to-date gross charge-offs by loan class and year of origination is presented in the following tables: September 30, 2024 Term Loans by Origination Year ($ in thousands) 2024 2023 2022 2021 2020 Prior Revolving Loans Converted to Term Loans Revolving Loans Total Commercial and industrial $ 312 $ 2 $ 1,414 $ 35 $ 66 $ 767 $ — $ 3,589 $ 6,185 Real estate: Commercial - investor owned — — — 160 — 145 — — 305 Commercial - owner occupied — — 41 475 10 2,262 — — 2,788 Construction and land development — — — — 3,224 — — — 3,224 Residential — — 94 15 — 425 202 24 760 Other — — — 58 — 79 101 1 239 Total charge-offs by origination year $ 312 $ 2 $ 1,549 $ 743 $ 3,300 $ 3,678 $ 303 $ 3,614 $ 13,501 Total gross charge-offs by performing status 635 Total gross charge-offs $ 14,136 December 31, 2023 Term Loans by Origination Year ($ in thousands) 2023 2022 2021 2020 2019 Prior Revolving Loans Converted to Term Loans Revolving Loans Total Commercial and industrial $ 600 $ 2,999 $ 1,940 $ 2,539 $ — $ — $ 12,533 $ 15,178 $ 35,789 Real estate: Commercial - investor owned — — 170 — 4,692 7 — — 4,869 Construction and land development — — — — — 9 — — 9 Residential — — — — — 480 176 — 656 Other — 3 459 — — 319 12 — 793 Total charge-offs by origination year $ 600 $ 3,002 $ 2,569 $ 2,539 $ 4,692 $ 815 $ 12,721 $ 15,178 $ 42,116 Total gross charge-offs by performing status 1,099 Total gross charge-offs $ 43,215 The following tables present the recorded investment in nonperforming loans by category, excluding government guaranteed balances: September 30, 2024 ($ in thousands) Nonaccrual Loans over 90 days past due and still accruing interest Total nonperforming loans Nonaccrual loans with no allowance Commercial and industrial $ 6,648 $ 227 $ 6,875 $ 296 Real estate: Commercial - investor owned 14,284 — 14,284 — Commercial - owner occupied 6,432 — 6,432 4,577 Construction and land development 527 — 527 527 Residential 258 — 258 — Total $ 28,149 $ 227 $ 28,376 $ 5,400 December 31, 2023 ($ in thousands) Nonaccrual Loans over 90 days past due and still accruing interest Total nonperforming loans Nonaccrual loans with no allowance Commercial and industrial $ 7,641 $ 115 $ 7,756 $ 6,179 Real estate: Commercial - investor owned 20,404 — 20,404 19,466 Commercial - owner occupied 12,972 363 13,335 9,010 Construction and land development 1,205 64 1,269 464 Residential 959 — 959 959 Other — 5 5 — Total $ 43,181 $ 547 $ 43,728 $ 36,078 The nonperforming loan balances at September 30, 2024 and December 31, 2023 exclude government guaranteed balances of $11.9 million and $10.7 million respectively. Interest income recognized on nonaccrual loans was immaterial during the three and nine months ended September 30, 2024 and 2023. Collateral-dependent nonperforming loans by class of loan is presented as of the dates indicated: September 30, 2024 Type of Collateral ($ in thousands) Commercial Real Estate Residential Real Estate Blanket Lien Other Commercial and industrial $ 296 $ — $ — $ 3,733 Real estate: Commercial - investor owned 14,284 — — — Commercial - owner occupied 3,715 482 736 — Total $ 18,295 $ 482 $ 736 $ 3,733 December 31, 2023 Type of Collateral ($ in thousands) Commercial Real Estate Residential Real Estate Blanket Lien Other Commercial and industrial $ 527 $ 1,864 $ 344 $ 3,445 Real estate: Commercial - investor owned 19,467 — — — Commercial - owner occupied 5,904 1,638 1,831 — Construction and land development 528 741 — — Residential — 959 — — Total $ 26,426 $ 5,202 $ 2,175 $ 3,445 The aging of the recorded investment in past due loans by class and category is presented as of the dates indicated. September 30, 2024 ($ in thousands) 30-89 Days 90 or More Total Current Total Commercial and industrial $ 8,262 $ 2,452 $ 10,714 $ 4,620,899 $ 4,631,613 Real estate: Commercial - investor owned 273 14,284 14,557 2,512,139 2,526,696 Commercial - owner occupied 16,310 9,397 25,707 2,355,929 2,381,636 Construction and land development — 1,907 1,907 894,861 896,768 Residential 6,594 258 6,852 348,036 354,888 Other — — — 290,052 290,052 Loans, before unearned loan fees $ 31,439 $ 28,298 $ 59,737 $ 11,021,916 $ 11,081,653 Unearned loan fees, net (1,761) Total $ 11,079,892 December 31, 2023 ($ in thousands) 30-89 Days 90 or More Total Current Total Commercial and industrial $ 3,445 $ 9,037 $ 12,482 $ 4,661,574 $ 4,674,056 Real estate: Commercial - investor owned 1,905 18,395 20,300 2,432,102 2,452,402 Commercial - owner occupied 8,409 14,142 22,551 2,321,566 2,344,117 Construction and land development 770 1,908 2,678 757,444 760,122 Residential 1,620 959 2,579 369,416 371,995 Other 82 4 86 285,567 285,653 Loans, before unearned loan fees $ 16,231 $ 44,445 $ 60,676 $ 10,827,669 $ 10,888,345 Unearned loan fees, net (4,227) Total $ 10,884,118 The allowance for credit losses on loans incorporates an estimate of lifetime expected credit losses and is recorded on each asset upon origination or acquisition. The starting point for the estimate of the allowance for credit losses on loans is historical loss information, which includes losses from modifications of receivables to borrowers experiencing financial difficulty. The Company uses a probability of default and loss given default model to determine the allowance for credit losses on loans. An assessment of whether a borrower is experiencing financial difficulty is made on the date of a modification. The effect of most modifications made to borrowers experiencing financial difficulty is already included in the allowance for credit losses on loans because of the measurement methodologies used to estimate the allowance. The most common concession the Company provides to borrowers experiencing financial difficulty is a term extension. In limited circumstances, the Company may modify loans by providing principal forgiveness or an interest rate reduction. When principal forgiveness is provided, the amortized cost basis of the asset is written off against the allowance for credit losses on loans. The amount of the principal forgiveness is deemed to be uncollectible; therefore, that portion of the loan is written off, resulting in a reduction of the amortized cost basis and a corresponding adjustment to the allowance for credit losses on loans. In some cases, the Company will modify a loan by providing multiple types of concessions. Typically, one type of concession, such as a term extension, is granted initially. If the borrower continues to experience financial difficulty, another concession, such as an interest rate reduction or principal forgiveness, may be granted. The following tables show the recorded investment at the end of the dates listed for loans modified to borrowers experiencing financial difficulty, disaggregated by loan class and type of concession granted: Term Extension Three months ended ($ in thousands) September 30, 2024 Percent of Total Loan Class Commercial and industrial $ 9,996 0.22 % Real estate: Commercial - investor owned 258 0.01 % Total $ 10,254 Term Extension Payment Delay Total Nine months ended Nine months ended Nine months ended ($ in thousands) September 30, 2024 Percent of Total Loan Class September 30, 2024 Percent of Total Loan Class September 30, 2024 Percent of Total Loan Class Commercial and industrial $ 60,256 1.30 % $ 567 0.01 % $ 60,823 1.31 % Real estate: Commercial - investor owned 8,667 0.34 % — — % 8,667 0.34 % Commercial - owner occupied 94 NM — — % 94 NM Residential 7,644 2.15 % — — % 7,644 2.15 % Total $ 76,661 $ 567 $ 77,228 Term Extension Three months ended Nine months ended ($ in thousands) September 30, 2023 Percent of Total Loan Class September 30, 2023 Percent of Total Loan Class Commercial and industrial $ 66 — % $ 26,033 0.59 % Real estate: Commercial - investor owned 1,000 0.04 % 1,000 0.04 % Commercial - owner occupied — — % 94 — % Construction and land development — — % 1,137 0.16 % Residential 28 0.01 % 102 0.03 % Total $ 1,094 $ 28,366 The following tables summarize the financial impacts of loan modifications made to borrowers experiencing financial difficulty and outstanding at the date indicated: Weighted Average Term Extension Weighted Average Term Extension Payment Delay Three months ended Nine months ended ($ in thousands) September 30, 2024 September 30, 2024 Commercial and industrial 7 5 $ 85 Real estate: Commercial - investor owned — 4 — Commercial - owner occupied 12 3 — Residential — 12 — Weighted Average Term Extension Three months ended Nine months ended September 30, 2023 September 30, 2023 Commercial and industrial 4 9 Real estate: Commercial - investor owned 3 3 Commercial - owner occupied — 5 Construction and land development — 10 Residential 60 22 The following table shows the aging of the recorded investment in modified loans in the last 12 months by class at the date indicated: September 30, 2024 ($ in thousands) Current 30-89 Days 90 or More Total Commercial and industrial $ 52,488 $ — $ — $ 52,488 Real estate: Commercial - investor owned 259 — — 259 Commercial - owner occupied — 92 — 92 Residential 70 70 — 140 Total $ 52,817 $ 162 $ — $ 52,979 September 30, 2023 ($ in thousands) Current 30-89 Days 90 or More Total Commercial and industrial $ 25,483 $ 550 $ — $ 26,033 Real estate: Commercial - investor owned — 1,000 — 1,000 Commercial - owner occupied 94 — — 94 Construction and land development 741 396 — 1,137 Residential 102 — — 102 Total $ 26,420 $ 1,946 $ — $ 28,366 The following table summarizes loans that experienced a default during the nine months ended September 30, 2024, subsequent to being granted a modification in the preceding twelve months. All of these loans were charged-off during the preceding period. There were no loans that experienced a default during the three months ended September 30, 2024 or September 30, 2023, subsequent to being granted a modification in the preceding twelve months. Default is defined as movement to nonperforming status, foreclosure or charge-off. Term Extension Nine months ended ($ in thousands) September 30, 2024 Percent of Total Loan Class Commercial and industrial $ 1,000 0.02 % Real estate: Construction and land development 1,748 0.20 % Other 4 NM Total $ 2,752 As of September 30, 2024, the Company allocated an immaterial amount in specific reserves to loans that have been restructured. The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt, such as current financial information, payment experience, credit documentation, and current economic factors among other factors. This analysis is performed on a quarterly basis. The Company uses the following definitions for risk ratings: • Grades 1, 2, and 3 – Includes loans to borrowers with a continuous record of strong earnings, sound balance sheet condition and capitalization, ample liquidity with solid cash flow, and whose management team has experience and depth within their industry. • Grade 4 – Includes loans to borrowers with positive trends in profitability, satisfactory capitalization and balance sheet condition, and sufficient liquidity and cash flow. • Grade 5 – Includes loans to borrowers that may display fluctuating trends in sales, profitability, capitalization, liquidity, and cash flow. • Grade 6 – Includes loans to borrowers where an adverse change or perceived weakness has occurred, but may be correctable in the near future. Alternatively, this rating category may also include circumstances where the borrower is starting to reverse a negative trend or condition, or has recently been upgraded from a 7, 8, or 9 rating. • Grade 7 – Special Mention credits are borrowers that have experienced financial setback of a nature that is not determined to be severe or influence ‘ongoing concern’ expectations. Although possible, no loss is anticipated, due to strong collateral and/or guarantor support. • Grade 8 – Substandard credits include those borrowers characterized by significant losses and sustained downward trends in balance sheet condition, liquidity, and cash flow. Repayment reliance may have shifted to secondary sources. Collateral exposure may exist and additional reserves may be warranted. • Grade 9 – Doubtful credits include borrowers that may show deteriorating trends that are unlikely to be corrected. Collateral values may appear insufficient for full recovery, therefore requiring a partial charge-off, or debt renegotiation with the borrower. The borrower may have declared bankruptcy or bankruptcy is likely in the near term. All doubtful rated credits will be on non-accrual. The recorded investment by risk category of the loans by class and year of origination is presented in the following tables as of the dates indicated: September 30, 2024 Term Loans by Origination Year ($ in thousands) 2024 2023 2022 2021 2020 Prior Revolving Loans Converted to Term Loans Revolving Loans Total Commercial and industrial Pass (1-6) $ 1,082,070 $ 1,097,726 $ 680,423 $ 201,756 $ 137,028 $ 81,666 $ 18,343 $ 1,022,691 $ 4,321,703 Special Mention (7) 34,554 49,464 10,172 2,247 959 676 689 77,906 176,667 Classified (8-9) 20,350 3,565 24,641 — 93 265 3,818 44,109 96,841 Total Commercial and industrial $ 1,136,974 $ 1,150,755 $ 715,236 $ 204,003 $ 138,080 $ 82,607 $ 22,850 $ 1,144,706 $ 4,595,211 Commercial real estate-investor owned Pass (1-6) $ 356,106 $ 447,856 $ 496,385 $ 445,628 $ 283,675 $ 307,900 $ 7,301 $ 49,160 $ 2,394,011 Special Mention (7) 762 4,552 12,488 65,821 2,051 8,573 — 1,998 96,245 Classified (8-9) 259 — 273 42 13,158 4,653 — — 18,385 Total Commercial real estate-investor owned $ 357,127 $ 452,408 $ 509,146 $ 511,491 $ 298,884 $ 321,126 $ 7,301 $ 51,158 $ 2,508,641 Commercial real estate-owner occupied Pass (1-6) $ 333,337 $ 356,368 $ 448,514 $ 421,894 $ 254,424 $ 389,046 $ 6,100 $ 29,814 $ 2,239,497 Special Mention (7) 9,660 9,792 3,931 14,196 8,961 18,482 — — 65,022 Classified (8-9) — 3,019 4,803 5,729 3,953 37,019 828 1,708 57,059 Total Commercial real estate-owner occupied $ 342,997 $ 369,179 $ 457,248 $ 441,819 $ 267,338 $ 444,547 $ 6,928 $ 31,522 $ 2,361,578 Construction real estate Pass (1-6) $ 304,590 $ 239,275 $ 220,377 $ 79,666 $ 30,526 $ 3,920 $ 6 $ 4,645 $ 883,005 Special Mention (7) 10,486 35 1,093 297 — 226 — — 12,137 Classified (8-9) — — 600 — — 583 — — 1,183 Total Construction real estate $ 315,076 $ 239,310 $ 222,070 $ 79,963 $ 30,526 $ 4,729 $ 6 $ 4,645 $ 896,325 Residential real estate Pass (1-6) $ 28,158 $ 49,246 $ 36,088 $ 41,609 $ 28,738 $ 83,305 $ 2,171 $ 79,021 $ 348,336 Special Mention (7) 1,399 41 607 — 67 1,547 149 585 4,395 Classified (8-9) — 91 109 — — 1,623 71 — 1,894 Total residential real estate $ 29,557 $ 49,378 $ 36,804 $ 41,609 $ 28,805 $ 86,475 $ 2,391 $ 79,606 $ 354,625 Other Pass (1-6) $ 25,386 $ 6,514 $ 54,482 $ 60,313 $ 50,988 $ 32,456 $ 5 $ 42,474 $ 272,618 Special Mention (7) — 3,023 — — — 1,799 — 7,377 12,199 Classified (8-9) — — — — — 5 — — 5 Total Other $ 25,386 $ 9,537 $ 54,482 $ 60,313 $ 50,988 $ 34,260 $ 5 $ 49,851 $ 284,822 Total loans classified by risk category $ 2,207,117 $ 2,270,567 $ 1,994,986 $ 1,339,198 $ 814,621 $ 973,744 $ 39,481 $ 1,361,488 $ 11,001,202 Total loans classified by performing status 78,690 Total loans $ 11,079,892 December 31, 2023 Term Loans by Origination Year ($ in thousands) 2023 2022 2021 2020 2019 Prior Revolving Loans Converted to Term Loans Revolving Loans Total Commercial and industrial Pass (1-6) $ 1,567,738 $ 1,052,462 $ 345,292 $ 194,972 $ 123,425 $ 71,205 $ 12,163 $ 1,108,233 $ 4,475,490 Special Mention (7) 52,523 6,845 8,597 544 453 242 272 19,590 89,066 Classified (8-9) 12,824 19,306 1,833 812 339 363 508 45,830 81,815 Total Commercial and industrial $ 1,633,085 $ 1,078,613 $ 355,722 $ 196,328 $ 124,217 $ 71,810 $ 12,943 $ 1,173,653 $ 4,646,371 Commercial real estate-investor owned Pass (1-6) $ 495,131 $ 544,223 $ 492,974 $ 323,175 $ 165,343 $ 236,914 $ 5,222 $ 51,413 $ 2,314,395 Special Mention (7) 3,626 22,725 51,851 1,657 164 5,526 — — 85,549 Classified (8-9) 9,411 1,034 43 15,838 2,831 4,919 48 — 34,124 Total Commercial real estate-investor owned $ 508,168 $ 567,982 $ 544,868 $ 340,670 $ 168,338 $ 247,359 $ 5,270 $ 51,413 $ 2,434,068 Commercial real estate-owner occupied Pass (1-6) $ 407,901 $ 486,701 $ 489,589 $ 301,399 $ 183,872 $ 313,474 $ 5,083 $ 30,036 $ 2,218,055 Special Mention (7) 13,739 2,521 4,652 10,492 5,439 15,833 — 1,493 54,169 Classified (8-9) 3,389 3,413 2,247 3,181 8,878 24,857 5,056 — 51,021 Total Commercial real estate-owner occupied $ 425,029 $ 492,635 $ 496,488 $ 315,072 $ 198,189 $ 354,164 $ 10,139 $ 31,529 $ 2,323,245 Construction real estate Pass (1-6) $ 292,689 $ 325,010 $ 96,426 $ 30,956 $ 1,413 $ 3,408 $ 10 $ 3,700 $ 753,612 Special Mention (7) 42 2,958 1,046 210 123 114 — — 4,493 Classified (8-9) 1,137 704 — — 13 466 — — 2,320 Total Construction real estate $ 293,868 $ 328,672 $ 97,472 $ 31,166 $ 1,549 $ 3,988 $ 10 $ 3,700 $ 760,425 Residential real estate Pass (1-6) $ 59,259 $ 41,956 $ 51,436 $ 30,713 $ 17,793 $ 77,327 $ 1,464 $ 78,351 $ 358,299 Special Mention (7) 322 — — — 75 1,801 — 614 2,812 Classified (8-9) 127 1,073 69 — 30 1,492 74 7,500 10,365 Total residential real estate $ 59,708 $ 43,029 $ 51,505 $ 30,713 $ 17,898 $ 80,620 $ 1,538 $ 86,465 $ 371,476 Other Pass (1-6) $ 10,071 $ 55,923 $ 67,766 $ 53,569 $ 9,382 $ 19,657 $ 7 $ 28,464 $ 244,839 Special Mention (7) — — 14,472 — — — — 11,645 26,117 Classified (8-9) — — — — — 8 — — 8 Total Other $ 10,071 $ 55,923 $ 82,238 $ 53,569 $ 9,382 $ 19,665 $ 7 $ 40,109 $ 270,964 Total loans classified by risk category $ 2,929,929 $ 2,566,854 $ 1,628,293 $ 967,518 $ 519,573 $ 777,606 $ 29,907 $ 1,386,869 $ 10,806,549 Total loans classified by performing status 77,569 Total loans $ 10,884,118 In the tables above, loan originations in 2024 and 2023 with a classification of “special mention” or “classified” primarily represent renewals or modifications initially underwritten and originated in prior years. For certain loans, the Company evaluates credit quality based on the aging status. The following tables present the recorded investment on loans based on payment activity as of the dates indicated: September 30, 2024 ($ in thousands) Performing Non Performing Total Commercial and industrial $ 33,051 $ 226 $ 33,277 Real estate: Commercial - investor owned 17,352 — 17,352 Commercial - owner occupied 27,605 — 27,605 Residential 654 — 654 Other (198) — (198) Total $ 78,464 $ 226 $ 78,690 December 31, 2023 ($ in thousands) Performing Non Performing Total Commercial and industrial $ 26,076 $ 112 $ 26,188 Real estate: Commercial - investor owned 17,885 — 17,885 Commercial - owner occupied 28,373 — 28,373 Residential 712 — 712 Other 4,406 5 4,411 Total $ 77,452 $ 117 $ 77,569 |