Loan and Lease Receivables and Allowance for Credit Losses | Note 5—Loan and Lease Receivables and Allowance for Credit Losses Loan and Lease Receivables Outstanding loan and lease receivables as of the dates shown were categorized as follows: June 30, December 31, 2024 2023 Commercial real estate $ 2,290,656 $ 2,317,289 Residential real estate 727,092 718,733 Construction, land development, and other land 532,312 528,275 Commercial and industrial 2,620,828 2,444,405 Installment and other 2,788 3,138 Lease financing receivables 704,740 659,686 Total loans and leases 6,878,416 6,671,526 Net unamortized deferred fees and costs 6,471 6,600 Initial direct costs 6,317 6,180 Allowance for credit losses - loans and leases ( 99,730 ) ( 101,686 ) Net loans and leases $ 6,791,474 $ 6,582,620 June 30, December 31, 2024 2023 Lease financing receivables Net minimum lease payments $ 679,887 $ 644,507 Unguaranteed residual values 111,057 92,127 Unearned income ( 86,204 ) ( 76,948 ) Total lease financing receivables 704,740 659,686 Initial direct costs 6,317 6,180 Lease financial receivables before allowance for $ 711,057 $ 665,866 Total loans and leases consist of originated loans and leases, purchased credit deteriorated ("PCD") and acquired non-credit-deteriorated loans and leases. At June 30, 2024 and December 31, 2023, total loans and leases included the guaranteed amount of U.S. government guaranteed loans of $ 94.9 million a nd $ 93.3 million, respectively. At June 30, 2024 and December 31, 2023 , the discount on the unguaranteed portion of U.S. government guaranteed loans was $ 25.3 million and $ 26.2 million, respectively, which are included in total loans and leases. At June 30, 2024 and December 31, 2023 , installment and other loans included overdraft deposits of $ 693,000 and $ 754,000 , respectively, which were reclassified as loans. At June 30, 2024 and December 31, 2023 , loans and leases and loans held for sale pledged as security for borrowings were $ 2.0 billion and $ 2.2 billion, respectively. Accrued interest on loans and leases was $ 38.9 million for each of the quarters ended June 30, 2024 and December 31, 2023, respectively, and is included in the accrued interest receivable and other assets line item on the Condensed Consolidated Statement of Financial Condition. The minimum annual lease payments for lease financing receivables as of June 30, 2024 are summarized as follows: Minimum Lease 2024 $ 111,886 2025 220,017 2026 171,074 2027 110,416 2028 54,533 Thereafter 11,961 Total $ 679,887 Originated loans and leases represent originations excluding loans initially acquired in a business combination. However, once an acquired loan reaches its maturity date, and is re-underwritten and renewed, it is internally classified as an originated loan. PCD loans are those acquired from a business combination with evidence of credit quality deterioration and are accounted for under ASC Topic 326. Acquired non-credit-deteriorated loans and leases represent loans and leases acquired with an outstanding balance from a business combination without more than insignificant evidence of credit quality deterioration and are accounted for under ASC Topic 310-20. The following tables summarize the balances for each respective loan and lease category as of June 30, 2024 and December 31, 2023: June 30, 2024 Originated Purchased Credit Deteriorated Acquired Total Commercial real estate $ 1,924,797 $ 114,053 $ 254,858 $ 2,293,708 Residential real estate 498,578 40,728 188,489 727,795 Construction, land development, and other land 445,919 9 84,849 530,777 Commercial and industrial 2,493,229 17,796 113,997 2,625,022 Installment and other 2,576 116 153 2,845 Lease financing receivables 710,784 — 273 711,057 Total loans and leases $ 6,075,883 $ 172,702 $ 642,619 $ 6,891,204 December 31, 2023 Originated Purchased Credit Deteriorated Acquired Total Commercial real estate $ 1,907,029 $ 137,807 $ 275,476 $ 2,320,312 Residential real estate 465,133 42,510 211,887 719,530 Construction, land development, and other land 415,162 25,331 86,344 526,837 Commercial and industrial 2,311,563 19,460 117,538 2,448,561 Installment and other 2,919 125 156 3,200 Lease financing receivables 665,239 — 627 665,866 Total loans and leases $ 5,767,045 $ 225,233 $ 692,028 $ 6,684,306 PCD loans — The unpaid principal balance and carrying amount of PCD loans excluding an allowance for credit losses - loans and leases o f $ 8.0 million and $ 10.0 milli on at June 30, 2024 and December 31, 2023, respectively, were as follows: June 30, 2024 December 31, 2023 Unpaid Carrying Unpaid Carrying Commercial real estate $ 157,757 $ 114,053 $ 185,007 $ 137,807 Residential real estate 85,403 40,728 88,036 42,510 Construction, land development, and other land 6,678 9 32,140 25,331 Commercial and industrial 20,609 17,796 21,870 19,460 Installment and other 780 116 789 125 Total purchased credit deteriorated loans $ 271,227 $ 172,702 $ 327,842 $ 225,233 The following table is a reconciliation of acquired Inland PCD loans between their purchase price and their par value at the time of the acquisition. Refer to Note 3—Acquisition of a Business for further information. Fair value of loans at acquisition $ 214,573 Allowance for credit losses - loans and leases, at acquisition 10,596 Non-credit discount/premium at acquisition 17,909 Par value of acquired PCD loans at acquisition $ 243,078 Acquired non-credit-deteriorated loans and leases — The unpaid principal balance and carrying value for acquired non-credit deteriorated loans and leases, excluding an allowance for credit losses o f $ 3.9 million and $ 4.7 mil lion at June 30, 2024 and December 31, 2023, respectively, were as follows: June 30, 2024 December 31, 2023 Unpaid Carrying Unpaid Carrying Commercial real estate $ 262,635 $ 254,858 $ 284,819 $ 275,476 Residential real estate 202,288 188,489 227,392 211,887 Construction, land development, and other land 85,395 84,849 87,143 86,344 Commercial and industrial 119,085 113,997 123,540 117,538 Installment and other 165 153 170 156 Lease financing receivables 274 273 628 627 Total acquired non-credit-deteriorated $ 669,842 $ 642,619 $ 723,692 $ 692,028 The Company hedges interest rates on certain loans using interest rate swaps through which the Company pays variable amounts and receives fixed amounts. Refer to Note 16—Derivative Instruments and Hedging Activities for additional discussion. Allowance for Credit Losses Loans and leases considered for inclusion in the allowance for credit losses include acquired non-credit-deteriorated loans and leases, purchased credit deteriorated loans, and originated loans and leases. The Bank’s credit risk rating methodology assigns risk ratings from 1 to 10, where a higher rating represents higher risk. Risk ratings for all loans of $ 1.0 million or more are reviewed annually. The risk rating categories are described by the following groupings: Pass —1‑4, risk levels of borrowers and guarantors that offer a minimal to an acceptable level of risk. Watch —5, credit exposure that presents higher than average risk and warrants greater than routine attention. Special Mention —6, potential weaknesses that if left uncorrected may result in deterioration of the repayment prospects. Substandard Accrual —7, weaknesses in cash flow and collateral coverage resulting in a distinct possibility of losses if not corrected. Used in limited cases, where the borrower is current on payments and an agreed plan for credit remediation. Substandard Non‑Accrual —8, well‑defined weakness or weaknesses in cash flow and collateral coverage resulting in the distinct possibility of losses if not corrected. Doubtful —9, weaknesses inherent in substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable. Loss —10, is considered uncollectible and of such little value that its continuance as a realizable asset is not warranted. Revolving loans that are converted to term loans are treated as new originations and are presented by year of origination. Generally, existing term loans that are re-underwritten are reflected in the table in the year of renewal. The following tables summarize the risk rating categories of the loans and leases considered for inclusion in the allowance for credit losses - loans and leases calculation, as of June 30, 2024 and December 31, 2023: Term loans amortized cost by origination year Revolving Total June 30, 2024 2024 2023 2022 2021 2020 Prior Loans Loans Commercial Real Estate Pass $ 140,888 $ 246,084 $ 421,253 $ 453,722 $ 231,309 $ 493,618 $ 15,028 $ 2,001,902 Watch 2,281 26,344 26,638 39,933 32,761 69,916 — 197,873 Special Mention — — 2,911 9,794 2,572 31,237 — 46,514 Substandard — 2,953 3,750 4,937 839 34,940 — 47,419 Total $ 143,169 $ 275,381 $ 454,552 $ 508,386 $ 267,481 $ 629,711 $ 15,028 $ 2,293,708 Gross charge-offs for the six months $ — $ — $ 295 $ 187 $ 718 $ 2,299 $ — $ 3,499 Residential Real Estate Pass $ 19,634 $ 49,142 $ 133,696 $ 118,396 $ 51,791 $ 246,883 $ 57,520 $ 677,062 Watch — — 5,139 598 22,666 11,892 1,567 41,862 Special Mention — — — — 3,753 6 98 3,857 Substandard 200 579 29 101 11 3,179 915 5,014 Total $ 19,834 $ 49,721 $ 138,864 $ 119,095 $ 78,221 $ 261,960 $ 60,100 $ 727,795 Gross charge-offs for the six months $ — $ — $ — $ — $ — $ — $ — $ — Construction, Land Development, Pass $ 5,845 $ 141,785 $ 135,873 $ 159,474 $ 37,079 $ 2,898 $ 345 $ 483,299 Watch — 3,521 13,661 17,237 — 3,096 — 37,515 Special Mention — — 454 9,509 — — — 9,963 Substandard — — — — — — — — Total $ 5,845 $ 145,306 $ 149,988 $ 186,220 $ 37,079 $ 5,994 $ 345 $ 530,777 Gross charge-offs for the six months $ — $ — $ — $ — $ — $ — $ — $ — Commercial & Industrial Pass $ 224,599 $ 482,778 $ 477,896 $ 270,323 $ 97,392 $ 197,833 $ 547,736 $ 2,298,557 Watch 724 45,958 21,902 45,389 1,605 20,535 46,818 182,931 Special Mention — 1,381 23,847 10,395 1,724 4,980 43,089 85,416 Substandard 92 6,003 11,266 9,408 4,674 17,523 9,152 58,118 Total $ 225,415 $ 536,120 $ 534,911 $ 335,515 $ 105,395 $ 240,871 $ 646,795 $ 2,625,022 Gross charge-offs for the six months $ — $ 746 $ 3,777 $ 1,203 $ 497 $ 6,926 $ — $ 13,149 Installment and Other Pass $ 158 $ 378 $ 103 $ 44 $ 127 $ 360 $ 1,601 $ 2,771 Watch — — — — — 48 3 51 Special Mention — — — — — — — — Substandard — — — 23 — — — 23 Total $ 158 $ 378 $ 103 $ 67 $ 127 $ 408 $ 1,604 $ 2,845 Gross charge-offs for the six months $ — $ — $ — $ — $ — $ — $ — $ — Lease Financing Receivables Pass $ 162,555 $ 283,352 $ 169,324 $ 70,434 $ 20,328 $ 2,285 $ — $ 708,278 Watch — — 54 817 11 - — 882 Special Mention — — — — 130 66 — 196 Substandard — 122 988 543 7 41 — 1,701 Total $ 162,555 $ 283,474 $ 170,366 $ 71,794 $ 20,476 $ 2,392 $ — $ 711,057 Gross charge-offs for the six months $ — $ 334 $ 377 $ 284 $ 58 $ — $ — $ 1,053 Total Loans and Leases Pass $ 553,679 $ 1,203,519 $ 1,338,145 $ 1,072,393 $ 438,026 $ 943,877 $ 622,230 $ 6,171,869 Watch 3,005 75,823 67,394 103,974 57,043 105,487 48,388 461,114 Special Mention — 1,381 27,212 29,698 8,179 36,289 43,187 145,946 Substandard 292 9,657 16,033 15,012 5,531 55,683 10,067 112,275 Total $ 556,976 $ 1,290,380 $ 1,448,784 $ 1,221,077 $ 508,779 $ 1,141,336 $ 723,872 $ 6,891,204 Gross charge-offs for the six months $ — $ 1,080 $ 4,449 $ 1,674 $ 1,273 $ 9,225 $ — $ 17,701 Term loans amortized cost by origination year Revolving Total December 31, 2023 2023 2022 2021 2020 2019 Prior Loans Loans Commercial Real Estate Pass $ 247,856 $ 452,127 $ 516,624 $ 229,053 $ 143,283 $ 388,872 $ 28,360 $ 2,006,175 Watch 12,501 22,094 26,408 46,713 20,364 68,003 — 196,083 Special Mention — 799 10,752 2,618 12,751 25,790 — 52,710 Substandard — 2,888 5,841 1,771 7,483 46,532 829 65,344 Total $ 260,357 $ 477,908 $ 559,625 $ 280,155 $ 183,881 $ 529,197 $ 29,189 $ 2,320,312 Gross charge-offs, year ended $ — $ 193 $ 60 $ 1,511 $ 4,054 $ 3,911 $ — $ 9,729 Residential Real Estate Pass $ 55,178 $ 135,477 $ 104,005 $ 54,651 $ 37,806 $ 225,593 $ 57,865 $ 670,575 Watch — 4,811 — 17,417 7,167 8,708 1,597 39,700 Special Mention — — — 3,594 127 1 413 4,135 Substandard — — 107 189 349 3,523 952 5,120 Total $ 55,178 $ 140,288 $ 104,112 $ 75,851 $ 45,449 $ 237,825 $ 60,827 $ 719,530 Gross charge-offs, year ended $ — $ — $ — $ — $ — $ 21 $ — $ 21 Construction, Land Development, & Land Pass $ 82,449 $ 145,174 $ 184,544 $ 35,466 $ 9,772 $ 1,429 $ 174 $ 459,008 Watch 1,392 13,990 21,313 18,716 3,125 — — 58,536 Special Mention — — 9,279 — — — — 9,279 Substandard — — — — — 14 — 14 Total $ 83,841 $ 159,164 $ 215,136 $ 54,182 $ 12,897 $ 1,443 $ 174 $ 526,837 Gross charge-offs, year ended $ — $ — $ — $ — $ — $ — $ — $ — Commercial & Industrial Pass $ 475,720 $ 514,902 $ 288,392 $ 109,430 $ 73,059 $ 147,168 $ 524,348 $ 2,133,019 Watch 41,027 33,080 50,407 1,385 6,951 18,180 39,531 190,561 Special Mention — 6,164 10,595 2,631 1,112 6,643 36,354 63,499 Substandard — 7,332 6,067 6,431 10,116 18,381 13,155 61,482 Total $ 516,747 $ 561,478 $ 355,461 $ 119,877 $ 91,238 $ 190,372 $ 613,388 $ 2,448,561 Gross charge-offs, year ended $ 1,518 $ 1,938 $ 5,372 $ 4,451 $ 1,087 $ 1,045 $ — $ 15,411 Installment and Other Pass $ 564 $ 132 $ 79 $ 133 $ 28 $ 424 $ 1,814 $ 3,174 Watch — — 25 — — 1 — 26 Special Mention — — — — — — — — Substandard — — — — — — — — Total $ 564 $ 132 $ 104 $ 133 $ 28 $ 425 $ 1,814 $ 3,200 Gross charge-offs, year ended $ — $ — $ — $ — $ — $ 3 $ — $ 3 Lease Financing Receivables Pass $ 327,099 $ 207,640 $ 93,242 $ 29,343 $ 5,443 $ 856 $ — $ 663,623 Watch — 67 1,008 16 — — — 1,091 Special Mention — — — 179 101 36 — 316 Substandard 259 138 384 55 — — — 836 Total $ 327,358 $ 207,845 $ 94,634 $ 29,593 $ 5,544 $ 892 $ — $ 665,866 Gross charge-offs, year ended $ 734 $ 886 $ 549 $ 139 $ 75 $ 54 $ — $ 2,437 Total Loans and Leases Pass $ 1,188,866 $ 1,455,452 $ 1,186,886 $ 458,076 $ 269,391 $ 764,342 $ 612,561 $ 5,935,574 Watch 54,920 74,042 99,161 84,247 37,607 94,892 41,128 485,997 Special Mention — 6,963 30,626 9,022 14,091 32,470 36,767 129,939 Substandard 259 10,358 12,399 8,446 17,948 68,450 14,936 132,796 Total $ 1,244,045 $ 1,546,815 $ 1,329,072 $ 559,791 $ 339,037 $ 960,154 $ 705,392 $ 6,684,306 Gross charge-offs, year ended $ 2,252 $ 3,017 $ 5,981 $ 6,101 $ 5,216 $ 5,034 $ — $ 27,601 At June 30, 2024 and at December 31, 2023 there were no loans or leases which were risk rated Doubtful or Loss. As of June 30, 2024 and December 31, 2023 , respectively, there were $ 58.8 million and $ 52.2 million of term loans that had been converted from revolving loans. The following tables summarize contractual delinquency information of the loans and leases considered for inclusion in the allowance for credit losses - loans and leases calculation at June 30, 2024 and December 31, 2023: June 30, 2024 2024 2023 2022 2021 2020 Prior Revolving Total Commercial Real Estate Current $ 143,169 $ 272,428 $ 451,268 $ 504,037 $ 267,218 $ 607,648 $ 15,028 $ 2,260,796 30-59 Days Past Due — — — — — — — — 60-89 Days Past Due — — 636 172 — 742 — 1,550 Greater than 90 Accruing — — — — — — — — Non-accrual — 2,953 2,648 4,177 263 21,321 — 31,362 Total Past Due — 2,953 3,284 4,349 263 22,063 — 32,912 Total $ 143,169 $ 275,381 $ 454,552 $ 508,386 $ 267,481 $ 629,711 $ 15,028 $ 2,293,708 Residential Real Estate Current $ 19,634 $ 49,721 $ 136,347 $ 118,994 $ 78,221 $ 258,394 $ 58,885 $ 720,196 30-59 Days Past Due — — 2,488 — — 381 300 3,169 60-89 Days Past Due — — — — — 46 — 46 Greater than 90 Accruing — — — — — — — — Non-accrual 200 — 29 101 — 3,139 915 4,384 Total Past Due 200 — 2,517 101 — 3,566 1,215 7,599 Total $ 19,834 $ 49,721 $ 138,864 $ 119,095 $ 78,221 $ 261,960 $ 60,100 $ 727,795 Construction, Land Development, Current $ 5,845 $ 145,306 $ 149,988 $ 186,220 $ 37,079 $ 5,994 $ 345 $ 530,777 30-59 Days Past Due — — — — — — — — 60-89 Days Past Due — — — — — — — — Greater than 90 Accruing — — — — — — — — Non-accrual — — — — — — — — Total Past Due — — — — — — — — Total $ 5,845 $ 145,306 $ 149,988 $ 186,220 $ 37,079 $ 5,994 $ 345 $ 530,777 Commercial & Industrial Current $ 225,323 $ 534,074 $ 527,308 $ 333,045 $ 101,186 $ 229,335 $ 643,388 $ 2,593,659 30-59 Days Past Due — 70 201 — — — 574 845 60-89 Days Past Due — 516 1,508 116 991 1,042 — 4,173 Greater than 90 Accruing — — — — — — — — Non-accrual 92 1,460 5,894 2,354 3,218 10,494 2,833 26,345 Total Past Due 92 2,046 7,603 2,470 4,209 11,536 3,407 31,363 Total $ 225,415 $ 536,120 $ 534,911 $ 335,515 $ 105,395 $ 240,871 $ 646,795 $ 2,625,022 Installment and Other Current $ 158 $ 378 $ 103 $ 44 $ 127 $ 408 $ 1,604 $ 2,822 30-59 Days Past Due — — — — — — — — 60-89 Days Past Due — — — — — — — — Greater than 90 Accruing — — — — — — — — Non-accrual — — — 23 — — — 23 Total Past Due — — — 23 — — — 23 Total $ 158 $ 378 $ 103 $ 67 $ 127 $ 408 $ 1,604 $ 2,845 Lease Financing Receivables Current $ 162,268 $ 281,980 $ 167,798 $ 70,481 $ 20,178 $ 2,343 $ — $ 705,048 30-59 Days Past Due 272 778 564 425 226 9 — 2,274 60-89 Days Past Due 15 594 1,015 345 72 — — 2,041 Greater than 90 Accruing — — — — — — — — Non-accrual — 122 989 543 — 40 — 1,694 Total Past Due 287 1,494 2,568 1,313 298 49 — 6,009 Total $ 162,555 $ 283,474 $ 170,366 $ 71,794 $ 20,476 $ 2,392 $ — $ 711,057 Total Loans and Leases Current $ 556,397 $ 1,283,887 $ 1,432,812 $ 1,212,821 $ 504,009 $ 1,104,122 $ 719,250 $ 6,813,298 30-59 Days Past Due 272 848 3,253 425 226 390 874 6,288 60-89 Days Past Due 15 1,110 3,159 633 1,063 1,830 — 7,810 Greater than 90 Accruing — — — — — — — — Non-accrual 292 4,535 9,560 7,198 3,481 34,994 3,748 63,808 Total Past Due 579 6,493 15,972 8,256 4,770 37,214 4,622 77,906 Total $ 556,976 $ 1,290,380 $ 1,448,784 $ 1,221,077 $ 508,779 $ 1,141,336 $ 723,872 $ 6,891,204 Total non-accrual loans without an allowance included $ 10.1 million of commercial real estate loans, $ 790,000 of residential real estate, and $ 4.3 million of commercial and industrial loans as of June 30, 2024 . The Company recognized $ 1.1 million and $ 1.3 million of interest income on non-accrual loans and leases for the three and six months ended June 30, 2024, respectively. December 31, 2023 2023 2022 2021 2020 2019 Prior Revolving Total Commercial Real Estate Current $ 259,998 $ 474,878 $ 558,236 $ 279,098 $ 178,729 $ 501,620 $ 29,189 $ 2,281,748 30-59 Days Past Due 359 648 638 74 3,176 484 — 5,379 60-89 Days Past Due — 826 — 286 — 1,208 — 2,320 Greater than 90 Accruing — — — — — — — — Non-accrual — 1,556 751 697 1,976 25,885 — 30,865 Total Past Due 359 3,030 1,389 1,057 5,152 27,577 — 38,564 Total $ 260,357 $ 477,908 $ 559,625 $ 280,155 $ 183,881 $ 529,197 $ 29,189 $ 2,320,312 Residential Real Estate Current $ 55,178 $ 136,448 $ 102,973 $ 75,125 $ 45,050 $ 230,102 $ 59,476 $ 704,352 30-59 Days Past Due — 3,840 1,032 537 29 4,122 399 9,959 60-89 Days Past Due — — — — 21 127 — 148 Greater than 90 Accruing — — — — — — — — Non-accrual — — 107 189 349 3,474 952 5,071 Total Past Due — 3,840 1,139 726 399 7,723 1,351 15,178 Total $ 55,178 $ 140,288 $ 104,112 $ 75,851 $ 45,449 $ 237,825 $ 60,827 $ 719,530 Construction, Land Development, Current $ 83,841 $ 156,815 $ 215,136 $ 54,182 $ 12,897 $ 1,443 $ 174 $ 524,488 30-59 Days Past Due — — — — — — — — 60-89 Days Past Due — 2,349 — — — — — 2,349 Greater than 90 Accruing — — — — — — — — Non-accrual — — — — — — — — Total Past Due — 2,349 — — — — — 2,349 Total $ 83,841 $ 159,164 $ 215,136 $ 54,182 $ 12,897 $ 1,443 $ 174 $ 526,837 Commercial & Industrial Current $ 516,747 $ 552,251 $ 351,534 $ 114,859 $ 83,780 $ 177,239 $ 611,766 $ 2,408,176 30-59 Days Past Due — 1,545 1,099 238 2,513 400 455 6,250 60-89 Days Past Due — 1,505 — 234 3,416 1,139 496 6,790 Greater than 90 Accruing — — — — — — — — Non-accrual — 6,177 2,828 4,546 1,529 11,594 671 27,345 Total Past Due — 9,227 3,927 5,018 7,458 13,133 1,622 40,385 Total $ 516,747 $ 561,478 $ 355,461 $ 119,877 $ 91,238 $ 190,372 $ 613,388 $ 2,448,561 Installment and Other Current $ 564 $ 132 $ 104 $ 133 $ 28 $ 425 $ 1,814 $ 3,200 30-59 Days Past Due — — — — — — — — 60-89 Days Past Due — — — — — — — — Greater than 90 Accruing — — — — — — — — Non-accrual — — — — — — — — Total Past Due — — — — — — — — Total $ 564 $ 132 $ 104 $ 133 $ 28 $ 425 $ 1,814 $ 3,200 Lease Financing Receivables Current $ 325,833 $ 206,800 $ 93,795 $ 29,292 $ 5,537 $ 889 $ — $ 662,146 30-59 Days Past Due 726 426 153 38 4 2 — 1,349 60-89 Days Past Due 540 481 302 218 3 1 — 1,545 Greater than 90 Accruing — — — — — — — — Non-accrual 259 138 384 45 — — — 826 Total Past Due 1,525 1,045 839 301 7 3 — 3,720 Total $ 327,358 $ 207,845 $ 94,634 $ 29,593 $ 5,544 $ 892 $ — $ 665,866 Total Loans and Leases Current $ 1,242,161 $ 1,527,324 $ 1,321,778 $ 552,689 $ 326,021 $ 911,718 $ 702,419 $ 6,584,110 30-59 Days Past Due 1,085 6,459 2,922 887 5,722 5,008 854 22,937 60-89 Days Past Due 540 5,161 302 738 3,440 2,475 496 13,152 Greater than 90 Accruing — — — — — — — — Non-accrual 259 7,871 4,070 5,477 3,854 40,953 1,623 64,107 Total Past Due 1,884 19,491 7,294 7,102 13,016 48,436 2,973 100,196 Total $ 1,244,045 $ 1,546,815 $ 1,329,072 $ 559,791 $ 339,037 $ 960,154 $ 705,392 $ 6,684,306 Total non-accrual loans without an allo wance included $ 1.6 million of commercial real estate loans, $ 3.6 million of residential real e state loans , and $ 2.3 million of commercial and industrial loans , as of December 31, 2023. The Company recognized $ 1.0 million and $ 2.0 million of interest income on non-accrual loans and leases for the three and six months ended June 30, 2023, respectively. The following table summarize the balance and activity within the allowance for credit losses - loans and leases, the components of the allowance for credit losses - loans and leases by loans and leases individually and collectively evaluated for impairment, and corresponding loan and lease balances by type for the three and six months ended June 30, 2024 are as follows: June 30, 2024 Commercial Residential Construction, Commercial Installment Lease Total Allowance for credit losses - Three months ended Beginning balance $ 31,440 $ 3,348 $ 2,930 $ 56,231 $ 33 $ 8,384 $ 102,366 Provision/(recapture) ( 3,627 ) ( 326 ) ( 207 ) 10,561 ( 3 ) 480 6,878 Charge-offs ( 442 ) — — ( 9,530 ) — ( 680 ) ( 10,652 ) Recoveries 481 1 — 322 — 334 1,138 Ending balance $ 27,852 $ 3,023 $ 2,723 $ 57,584 $ 30 $ 8,518 $ 99,730 Six months ended Beginning balance $ 33,237 $ 3,495 $ 2,906 $ 53,782 $ 36 $ 8,230 $ 101,686 Provision/(recapture) ( 2,803 ) ( 474 ) ( 183 ) 16,397 ( 6 ) 838 13,769 Charge-offs ( 3,499 ) — — ( 13,149 ) — ( 1,053 ) ( 17,701 ) Recoveries 917 2 — 554 — 503 1,976 Ending balance $ 27,852 $ 3,023 $ 2,723 $ 57,584 $ 30 $ 8,518 $ 99,730 Ending balance: Individually evaluated $ 7,329 $ 57 $ — $ 16,185 $ — $ — $ 23,571 Collectively evaluated 20,523 2,966 2,723 41,399 30 8,518 76,159 Total allowance for credit $ 27,852 $ 3,023 $ 2,723 $ 57,584 $ 30 $ 8,518 $ 99,730 Loans and leases ending balance: Individually evaluated for $ 36,755 $ 3,788 $ — $ 35,210 $ — $ — $ 75,753 Collectively evaluated for 2,256,953 724,007 530,777 2,589,812 2,845 711,057 6,815,451 Total loans and leases $ 2,293,708 $ 727,795 $ 530,777 $ 2,625,022 $ 2,845 $ 711,057 $ 6,891,204 The following table summarize the balance and activity within the allowance for credit losses - loans and leases, the components of the allowance for credit losses - loans and leases by loans and leases individually and collectively evaluated for impairment, loans acquired with deteriorated credit quality, and corresponding loan and lease balances by type for the three and six months ended June 30, 2023: June 30, 2023 Commercial Residential Construction, Commercial Installment Lease Total Allowance for credit losses - Three months ended Beginning balance $ 24,738 $ 2,679 $ 3,498 $ 51,849 $ 25 $ 7,676 $ 90,465 Provision/(recapture) 4,359 ( 198 ) ( 1,563 ) 3,161 17 691 6,467 Charge-offs ( 2,945 ) — — ( 2,097 ) — ( 462 ) ( 5,504 ) Recoveries 225 63 — 727 1 221 1,237 Ending balance $ 26,377 $ 2,544 $ 1,935 $ 53,640 $ 43 $ 8,126 $ 92,665 Six months ended Beginning balance $ 26,061 $ 3,140 $ 3,134 $ 41,889 $ 24 $ 7,676 $ 81,924 Provision 3,240 ( 651 ) ( 1,199 ) 13,964 15 810 16,179 Charge-offs ( 3,911 ) ( 9 ) — ( 3,887 ) — ( 766 ) ( 8,573 ) Recoveries 987 64 — 1,674 4 406 3,135 Ending balance $ 26,377 $ 2,544 $ 1,935 $ 53,640 $ 43 $ 8,126 $ 92,665 Ending balance: Individually evaluated $ 8,555 $ — $ — $ 17,399 $ — $ — $ 25,954 Collectively evaluated 17,822 2,544 1,935 36,241 43 8,126 66,711 Total allowance for credit losses - $ 26,377 $ 2,544 $ 1,935 $ 53,640 $ 43 $ 8,126 $ 92,665 Loans and leases ending balance: Individually evaluated for $ 30,750 $ — $ — $ 38,485 $ — $ — $ 69,235 Collectively evaluated for 1,932,696 504,947 387,943 2,066,265 3,736 605,695 5,501,282 Total loans and leases $ 1,963,446 $ 504,947 $ 387,943 $ 2,104,750 $ 3,736 $ 605,695 $ 5,570,517 The Company decreased the allowance for credit losses - loans and leases by $ 2.6 million and $ 2.0 million for the three and six months ended June 30, 2024 , respectively. The Company increased the allowance for credit losses - loans and leases by $ 2.2 million and $ 10.7 million for the three and six months ended June 30, 2023, respectively. For loans individually evaluated for impairment, the Company increased allowance for credit losses - loans and leases by $ 1.9 million and recaptured $ 3.7 million for the three and six months ended June 30, 2024 , and increased the allowance for credit losses for loans individually evaluated by $ 3.9 million and $ 10.6 million for the three and six months ended June 30, 2023. For loans and leases collectively evaluated for impairment, the Company recaptured $ 4.5 million and increased the allowance by $ 1.7 million for the three and six months ended June 30, 2024 . For loans and leases collectively evaluated for impairment, the Company recaptured $ 1.7 million and increased the allowance by $ 124,000 for three and six months ended June 30, 2023, respectively. The decrease in allowance for credit losses - loans and leases was mainly due to charge-offs of individually assessed loans previously reserved for and improvement in macro-economic factors impacting the collectively assessed portfolio. There were no borrowers receiving loan modifications during the three months ended March 31, 2024. The following table presents loans with modified terms for the three and six months ended June 30, 2024: June 30, 2024 Term Modification Total Modified by Class % of Class of Loans and Leases Commercial real estate $ 2,501 $ 2,501 0.1 % Commercial and industrial 1,470 1,470 0.1 % Total loans and leases $ 3,971 $ 3,971 0.1 % The financial effect of the loan modifications presented above reflects a three-month weighted average extension of maturity date. The following table presents the amortized cost basis of loans that were both experiencing financial difficulty and modified during the three and six months ended June 30, 2023, by type of modification: Three Months Ended Payment Delay Term Modification Combination Term Modification and Interest Rate Reduction Total Modified by Class % of Class of Loans and Leases Commercial real estate $ 110 $ — $ — $ 110 0.0 % Commercial and industrial — 11,210 — 11,210 0.5 % Total modified loans $ 110 $ 11,210 $ — $ 11,320 0.2 % Six Months Ended Payment Delay Term Modification Combination Term Modification and Interest Rate Reduction Total Modified by Class % of Class of Loans and Leases Commercial real estate $ 110 $ — $ — $ 110 0.0 % Commercial and industrial 8,719 51,370 385 60,474 2.9 % Total modified loans $ 8,829 $ 51,370 $ 385 $ 60,584 1.1 % Loans reflected as having a payment delay included a general adjustment in loan terms similar to those of pass-rated credits. Loans having term modifications included extension of term as a result of a new borrower structure and other miscellaneous term adjustments. Loans having a combination of term modification and interest rate reduction reflect a longer amortization period and a reduced weighted average contractual rate from 8.85 % to 7.01 %. As of June 30, 2024, the amortized cost of commercial real estate loans that had a payment default and were modified in the twelve months prior to default was $ 2.8 million, which represented 0.14 % of outstanding commercial estate loans. As of December 31, 2023, the amortized cost of commercial and industrial loans that had a payment default and were modified in the twelve months prior to default was $ 406,000 , which represented 0.02 % of outstanding commercial and industrial loans. Modified loans are either collectively assessed based on portfolio risk segment and risk rating or individually assessed for loans exceeding $ 500,000 . Upon the Company’s determination that a modified loan has subsequently been deemed uncollectible, the loan (or a portion of the loan) is written off. Therefore, the amortized cost basis of the loan is reduced by the uncollectible amount and the allowance for credit losses is adjusted by the same amount. The following table presents the amortized cost basis of collateral-dependent loans and leases, which are individually evaluated to determine expected credit losses as of June 30, 2024 and December 31, 2023: June 30, 2024 Commercial Construction Non-owner Occupied Commercial Owner-Occupied Commercial Multi-Family Single Family Residence (1st Lien) Single Family Residence (2nd Lien) Business Assets Total Commercial real estate $ — $ 9,808 $ 26,947 $ — $ — $ — $ — $ 36,755 Residential real estate — — — 1,365 1,844 579 — 3,788 Commercial and industrial — — — — — — 35,210 35,210 Total $ — $ 9,808 $ 26,947 $ 1,365 $ 1,844 $ 579 $ 35,210 $ 75,753 December 31, 2023 Commercial Construction Non-owner Occupied Commercial Owner-Occupied Commercial Multi-Family Single Family Residence (1st Lien) Single Family Residence (2nd Lien) Business Assets Total Commercial real estate $ — $ 28,767 $ 35,572 $ — $ — $ — $ — $ 64,339 Residential real estate — — — 2,793 800 — — 3,593 Construction, land development, 813 — — — — — — 813 Commercial and industrial — — — — — — 44,749 44,749 Total $ 813 $ 28,767 $ 35,572 $ 2,793 $ 800 $ — $ 44,749 $ 113,494 The following table presents the change in the balance of the allowance for credit losses - unfunded commitments as of June 30, 2024 and 2023: For the Three Months Ended For the Six Months Ended June 30, June 30, 2024 2023 2024 2023 Beginning balance $ 3,388 $ 4,316 $ 3,636 $ 4,203 Recapture for unfunded commitments ( 833 ) ( 677 ) ( 1,081 ) ( 564 ) Ending balance $ 2,555 $ 3,639 $ 2,555 $ 3,639 |