| LOANS AND ALLOWANCE FOR CREDIT LOSSES | LOANS AND ALLOWANCE FOR CREDIT LOSSES The Company uses four different categories to classify loans in its portfolio based on the underlying collateral securing each loan. The loans grouped together in each category have been determined to share similar risk characteristics with respect to credit quality. Those four categories are commercial, financial and agriculture, commercial real estate, consumer real estate, consumer installment; Commercial, financial and agriculture – Commercial, financial and agriculture loans include loans to business entities issued for commercial, industrial, or other business purposes. This type of commercial loan shares a similar risk characteristic in that unlike commercial real estate loans, repayment is largely dependent on cash flow generated from the operation of the business. Commercial real estate – Commercial real estate loans are grouped as such because repayment is mainly dependent upon either the sale of the real estate, operation of the business occupying the real estate, or refinance of the debt obligation. This includes both owner-occupied and non-owner occupied CRE secured loans, because they share similar risk characteristics related to these variables. Consumer real estate – Consumer real estate loans consist primarily of loans secured by 1-4 family residential properties and/or residential lots. This includes loans for the purpose of constructing improvements on the residential property, as well as home equity lines of credit. Consumer installment – Installment and other loans are all loans issued to individuals that are not for any purpose related to operation of a business, and not secured by real estate. Repayment on these loans is mostly dependent on personal income, which may be impacted by general economic conditions. The following table shows the composition of the loan portfolio: ($ in thousands) September 30, 2024 December 31, 2023 Loans held for sale Mortgage loans held for sale $ 2,987 $ 2,914 Total LHFS $ 2,987 $ 2,914 Loans held for investment Commercial, financial and agriculture (1) $ 748,664 $ 800,324 Commercial real estate 3,235,566 3,059,155 Consumer real estate 1,287,144 1,252,795 Consumer installment 47,216 57,768 Total loans 5,318,590 5,170,042 Less allowance for credit losses (55,700) (54,032) Net LHFI $ 5,262,890 $ 5,116,010 ____________________________________________________________ (1) Loan balance includes $256 thousand and $386 thousand in Paycheck Protection Program (“PPP”) loans as of September 30, 2024 and December 31, 2023, respectively. Accrued interest receivable is not included in the amortized cost basis of the Company’s LHFI. At September 30, 2024 and December 31, 2023, accrued interest receivable for LHFI totaled $26.0 million and $24.7 million, respectively, with no related ACL and was reported in interest receivable on the accompanying consolidated balance sheet. Nonaccrual and Past Due LHFI Past due LHFI are loans contractually past due 30 days or more as to principal or interest payments. Generally, the Company will place a delinquent loan in nonaccrual status when the loan becomes 90 days or more past due. At the time a loan is placed in nonaccrual status, all interest which has been accrued on the loan but remains unpaid is reversed and deducted from earnings as a reduction of reported interest income. No additional interest is accrued on the loan balance until the collection of both principal and interest becomes reasonably certain. The following tables present the aging of the amortized cost basis in past due loans in addition to those loans classified as nonaccrual including purchase credit deteriorated (“PCD”) loans: ($ in thousands) September 30, 2024 Past Due Past Due Nonaccrual PCD Total Total Nonaccrual Commercial, financial and agriculture (1) $ 2,660 $ 527 $ 667 $ 342 $ 4,196 $ 748,664 $ 270 Commercial real estate 3,962 — 8,387 456 12,805 3,235,566 837 Consumer real estate 7,440 928 3,709 2,609 14,686 1,287,144 1,643 Consumer installment 245 — 114 — 359 47,216 13 Total $ 14,307 $ 1,455 $ 12,877 $ 3,407 $ 32,046 $ 5,318,590 $ 2,763 ___________________________________________________________ (1) Total loan balance includes $256 thousand in PPP loans as of September 30, 2024. December 31, 2023 ($ in thousands) Past Due Past Due 90 Nonaccrual PCD Total Total Nonaccrual Commercial, financial and agriculture (1) $ 2,043 $ 313 $ 353 $ 965 $ 3,674 $ 800,324 $ 465 Commercial real estate 1,698 630 3,790 647 6,765 3,059,155 410 Consumer real estate 3,992 220 1,806 3,098 9,116 1,252,795 680 Consumer installment 180 — 31 — 211 57,768 — Total $ 7,913 $ 1,163 $ 5,980 $ 4,710 $ 19,766 $ 5,170,042 $ 1,555 ___________________________________________________________ (1) Total loan balance includes $386 thousand in PPP loans as of December 31, 2023. Acquired Loans In connection with the acquisitions of HSBI and BBI, the Company acquired loans both with and without evidence of credit quality deterioration since origination. Acquired loans are recorded at their fair value at the time of acquisition with no carryover from the acquired institution's previously recorded allowance for credit losses. Acquired loans are accounted for following ASC 326, Financial Instruments - Credit Losses. The fair value for acquired loans recorded at the time of acquisition is based upon several factors including the timing and payment of expected cash flows, as adjusted for estimated credit losses and prepayments, and then discounting these cash flows using comparable market rates. The resulting fair value adjustment is recorded in the form of premium or discount to the unpaid principal balance of each acquired loan. As it relates to acquired PCD loans, the net premium or net discount is adjusted to reflect the Company's allowance for credit losses ("ACL") recorded for PCD loans at the time of acquisition, and the remaining fair value adjustment is accreted or amortized into interest income over the remaining life of the loan. As it relates to acquired loans not classified as PCD ("non-PCD") loans, the credit loss and yield components of the fair value adjustments are aggregated, and the resulting net premium or net discount is accreted or amortized into interest income over the average remaining life of those loans. The Company records an ACL for non-PCD loans at the time of acquisition through provision expense, and therefore, no further adjustments are made to the net premium or net discount for non-PCD loans. The estimated fair value of the non-PCD loans acquired in the BBI acquisition was $460.0 million, which is net of a $8.8 million discount. The gross contractual amounts receivable of the acquired non-PCD loans at acquisition was approximately $468.8 million, of which $6.4 million is the amount of contractual cash flows not expected to be collected. The estimated fair value of the non-PCD acquired in the HSBI acquisition was $1.091 billion, which is net of a $33.7 million discount. The gross contractual amounts receivable of the acquired non-PCD loans at acquisition was approximately $1.125 billion, of which $16.5 million is the amount of contractual cash flows not expected to be collected. The following table shows the carrying amount of loans acquired in the BBI and HSBI acquisitions for which there was, at the date of acquisition, more than insignificant deterioration of credit quality since origination: ($ in thousands) BBI HSBI Purchase price of loans at acquisition $ 27,669 $ 52,356 Allowance for credit losses at acquisition 1,303 3,176 Non-credit discount (premium) at acquisition 530 2,325 Par value of acquired loans at acquisition $ 29,502 $ 57,857 As of September 30, 2024, and December 31, 2023 the amortized cost of the Company’s PCD loans totaled $50.8 million and $57.8 million, respectively, which had an estimated ACL of $2.7 million and $3.7 million, respectively. Loan Modifications The Company adopted ASU No. 2022-02 effective January 1, 2023. These amendments eliminate the TDR recognition and measurement guidance and enhanced disclosures for loan modifications to borrowers experiencing financial difficulty. Occasionally, the Company modifies loans to borrowers in financial distress by providing principal forgiveness, term extension, and other-than-insignificant payment delay or interest rate reduction. When principal forgiveness is provided, the amount of forgiveness is charged-off against the allowance for credit losses. In some cases, the Company provides multiple types of concessions on one loan. Typically, one type of concession, such as term extension, is granted initially. If the borrower continues to experience financial difficulty, another concession, such as principal forgiveness, may be granted. For loans included in the "combination" columns below, multiple types of modifications have been made on the same loan within the current reporting period. The combination is at least two of the following: a term extension, principal forgiveness, an other-than-insignificant payment delay and/or an interest rate reduction. The following table presents the amortized cost basis of loans that were both experiencing financial difficulty and modified during the nine months ended September 30, 2024 and September 30, 2023, by class and by type of modification. The percentage of the amortized cost basis of loans that were modified to borrowers in financial distress as compared to the amortized cost basis of each class of financing receivable is also presented below: ($ in thousands) September 30, 2024 Payment Delay Payment Modification Term Extension Percentage of Total Loans Held for Investment Commercial, financial and agriculture $ 43 $ 100 $ — 0.01 % Commercial real estate — — 720 0.02 % Consumer real estate — 24 761 0.06 % Total $ 43 $ 124 $ 1,481 0.03 % September 30, 2023 Term Extension Percentage of Total Loans Held for Investment Consumer real estate $ 413 0.01 % Total $ 413 0.01 % The Company has not committed to lend additional amounts to the borrowers included in the previous table. Collateral Dependent Loans The following table presents the amortized cost basis of collateral dependent individually evaluated loans by class of loans as of September 30, 2024 and December 31, 2023: ($ in thousands) September 30, 2024 Real Property Equipment Miscellaneous Total Commercial, financial and agriculture $ — $ 72 $ 399 $ 471 Commercial real estate 838 — — 838 Consumer real estate 1,762 — — 1,762 Consumer installment — — 13 13 Total $ 2,600 $ 72 $ 412 $ 3,084 December 31, 2023 Real Property Equipment Miscellaneous Total Commercial, financial and agriculture $ — $ 496 $ 918 $ 1,414 Commercial real estate 710 — — 710 Consumer real estate 778 — — 778 Total $ 1,488 $ 496 $ 918 $ 2,902 A loan is collateral dependent when the borrower is experiencing financial difficulty and repayment of the loan is expected to be provided substantially through the sale of the collateral. The following provides a qualitative description by class of loan of the collateral that secures the Company’s collateral dependent LHFI: • Commercial, financial and agriculture – Loans within these loan classes are secured by equipment, inventory, accounts receivable, and other non-real estate collateral. • Commercial real estate – Loans within these loan classes are secured by commercial real property. • Consumer real estate - Loans within these loan classes are secured by consumer real property. • Consumer installment - Loans within these loan classes are secured by consumer goods, equipment, and non-real estate collateral. There have been no significant changes to the collateral that secures these financial assets during the period. Loan Participations The Company has loan participations, which qualify as participating interest, with other financial institutions. As of September 30, 2024, these loans totaled $325.5 million, of which $181.5 million had been sold to other financial institutions and $144.0 million was purchased by the Company. As of December 31, 2023, these loans totaled $304.0 million, of which $165.9 million had been sold to other financial institutions and $138.1 million was purchased by the Company. The loan participations convey proportionate ownership rights with equal priority to each participating interest holder; involving no recourse (other than ordinary representations and warranties) to, or subordination by, any participating interest holder; all cash flows are divided among the participating interest holders in proportion to each holder’s share of ownership; and no holder has the right to pledge the entire financial asset unless all participating interest holders agree. Credit Quality Indicators 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, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes loans individually to classify the loans as to credit risk. The Company uses the following definitions for risk ratings: Pass: Loans classified as pass are deemed to possess average to superior credit quality, requiring no more than normal attention. Special Mention: Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the Company’s credit position at some future date. Substandard: Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected. Doubtful: Loans classified as doubtful have all the weaknesses inherent in those classified as 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. These above classifications were the most current available as of September 30, 2024, and were generally updated within the prior year. The tables below present the amortized cost basis of loans by credit quality indicator and class of loans based on the most recent analysis performed at September 30, 2024 and December 31, 2023. Revolving loans converted to term as of the nine months ended September 30, 2024 and December 31, 2023 were not material to the total loan portfolio. As of September 30, 2024 Term Loans Amortized Cost Basis by Origination Year Revolving Total ($ in thousands) 2024 2023 2022 2021 2020 Prior Commercial, financial and agriculture: Risk Rating Pass $ 92,130 $ 88,294 $ 110,651 $ 88,411 $ 34,074 $ 80,766 $ 240,163 $ 734,489 Special mention — 1,103 73 628 2,368 759 4,933 9,864 Substandard — 908 544 369 293 1,530 667 4,311 Doubtful — — — — — — — — Total commercial, financial and agriculture $ 92,130 $ 90,305 $ 111,268 $ 89,408 $ 36,735 $ 83,055 $ 245,763 $ 748,664 Current period gross write offs $ — $ 70 $ 159 $ 287 $ 11 $ 305 $ — $ 832 Commercial real estate: Risk Rating Pass $ 353,455 $ 392,267 $ 824,061 $ 512,024 $ 340,788 $ 720,312 $ 3,364 $ 3,146,271 Special mention 1,374 — 1,340 5,827 2,929 19,831 — 31,301 Substandard 583 1,425 12,850 4,623 1,556 36,957 — 57,994 Doubtful — — — — — — — — Total commercial real estate $ 355,412 $ 393,692 $ 838,251 $ 522,474 $ 345,273 $ 777,100 $ 3,364 $ 3,235,566 Current period gross write offs $ — $ — $ — $ 20 $ — $ 71 $ — $ 91 Consumer real estate: Risk Rating Pass $ 141,382 $ 152,809 $ 303,506 $ 197,321 $ 117,042 $ 193,986 $ 156,879 $ 1,262,925 Special mention — — 423 489 — 1,815 668 3,395 Substandard 403 1,382 3,611 1,372 2,294 8,964 2,798 20,824 Doubtful — — — — — — — — Total consumer real estate $ 141,785 $ 154,191 $ 307,540 $ 199,182 $ 119,336 $ 204,765 $ 160,345 $ 1,287,144 Current period gross write offs $ — $ — $ 357 $ — $ — $ 18 $ — $ 375 Consumer installment: Risk Rating Pass $ 12,992 $ 12,498 $ 7,411 $ 4,862 $ 1,628 $ 1,431 $ 6,200 $ 47,022 Special mention — 52 89 9 27 — 17 194 Substandard — — — — — — — — Doubtful — — — — — — — — Total consumer installment $ 12,992 $ 12,550 $ 7,500 $ 4,871 $ 1,655 $ 1,431 $ 6,217 $ 47,216 Current period gross write offs $ 94 $ 289 $ 182 $ 87 $ 58 $ 882 $ 32 $ 1,624 Total Pass $ 599,959 $ 645,868 $ 1,245,629 $ 802,618 $ 493,532 $ 996,495 $ 406,606 $ 5,190,707 Special mention 1,374 1,155 1,925 6,953 5,324 22,405 5,618 44,754 Substandard 986 3,715 17,005 6,364 4,143 47,451 3,465 83,129 Doubtful — — — — — — — — Total $ 602,319 $ 650,738 $ 1,264,559 $ 815,935 $ 502,999 $ 1,066,351 $ 415,689 $ 5,318,590 Current period gross write offs $ 94 $ 359 $ 698 $ 394 $ 69 $ 1,276 $ 32 $ 2,922 As of December 31, 2023 Term Loans Amortized Cost Basis by Origination Year Revolving Total ($ in thousands) 2023 2022 2021 2020 2019 Prior Commercial, financial and: agriculture Risk Rating Pass $ 102,263 $ 150,420 $ 113,487 $ 47,313 $ 36,065 $ 64,020 $ 281,646 $ 795,214 Special mention — — — 141 797 3 10 951 Substandard 451 330 121 185 550 1,894 628 4,159 Doubtful — — — — — — — — Total commercial, financial and agriculture $ 102,714 $ 150,750 $ 113,608 $ 47,639 $ 37,412 $ 65,917 $ 282,284 $ 800,324 Current period gross write offs $ 14 $ 51 $ 225 $ 139 $ 206 $ 110 $ — $ 745 Commercial real estate: Risk Rating Pass $ 385,954 $ 825,505 $ 558,742 $ 377,085 $ 253,746 $ 569,428 $ 6,397 $ 2,976,857 Special mention — 660 6,118 3,111 9,545 22,648 — 42,082 Substandard 136 7,293 393 566 5,427 26,401 — 40,216 Doubtful — — — — — — — — Total commercial real estate $ 386,090 $ 833,458 $ 565,253 $ 380,762 $ 268,718 $ 618,477 $ 6,397 $ 3,059,155 Current period gross write offs $ — $ — $ 193 $ — $ — $ 57 $ — $ 250 Consumer real estate: Risk Rating Pass $ 176,144 $ 334,056 $ 219,071 $ 127,539 $ 59,615 $ 163,464 $ 153,821 $ 1,233,710 Special mention — 1,081 — — 643 3,246 412 5,382 Substandard 502 404 511 1,559 514 6,988 3,225 13,703 Doubtful — — — — — — — — Total consumer real estate $ 176,646 $ 335,541 $ 219,582 $ 129,098 $ 60,772 $ 173,698 $ 157,458 $ 1,252,795 Current period gross write offs $ 5 $ 19 $ — $ — $ — $ 25 $ — $ 49 Consumer installment: Risk Rating Pass $ 24,482 $ 12,408 $ 7,316 $ 2,919 $ 1,213 $ 1,195 $ 8,156 $ 57,689 Special mention — — — — — — — — Substandard — 8 17 42 11 — 1 79 Doubtful — — — — — — — — Total consumer installment $ 24,482 $ 12,416 $ 7,333 $ 2,961 $ 1,224 $ 1,195 $ 8,157 $ 57,768 Current period gross write offs $ 226 $ 567 $ 223 $ 179 $ 156 $ 576 $ 121 $ 2,048 Total Pass $ 688,843 $ 1,322,389 $ 898,616 $ 554,856 $ 350,639 $ 798,107 $ 450,020 $ 5,063,470 Special mention — 1,741 6,118 3,252 10,985 25,897 422 48,415 Substandard 1,089 8,035 1,042 2,352 6,502 35,283 3,854 58,157 Doubtful — — — — — — — — Total $ 689,932 $ 1,332,165 $ 905,776 $ 560,460 $ 368,126 $ 859,287 $ 454,296 $ 5,170,042 Current period gross write offs $ 245 $ 637 $ 641 $ 318 $ 362 $ 768 $ 121 $ 3,092 Allowance for Credit Losses The ACL is a valuation account that is deducted from loans’ amortized cost basis to present the net amount expected to be collected on the loans. It is comprised of a general allowance for loans that are collectively assessed in pools with similar risk characteristics and a specific allowance for individually assessed loans. The allowance is continuously monitored by management to maintain a level adequate to absorb expected losses inherent in the loan portfolio. The ACL represents the estimated losses for financial assets accounted for on an amortized cost basis. Expected losses are calculated using relevant information, from internal and external sources, about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. Historical credit loss experience provides the basis for the estimation of expected credit losses. Adjustments to historical loss information are made for differences in current loan-specific risk characteristics such as differences in underwriting standards, portfolio mix, delinquency level, or term as well as for changes in environment conditions, such as changes in unemployment rates, property values, or other relevant factors. Management may selectively apply external market data to subjectively adjust the Company’s own loss history including index or peer data. Expected losses are estimated over the contractual term of the loans, adjusted for expected prepayments. The contractual term excludes expected extensions, renewals, and modifications. Loans are charged-off against the allowance when management believes the uncollectibility of a loan balance is confirmed and recoveries are credited to the allowance when received. Expected recovery amounts may not exceed the aggregate of amounts previously charged-off. The ACL is measured on a collective basis when similar risk characteristics exist. Generally, collectively assessed loans are grouped by call code (segments). Segmenting loans by call code will group loans that contain similar types of collateral and purposes and are usually structured with similar terms making each loan’s risk profile very similar to the rest in that segment. Each of these segments then flows up into one of the four bands, Commercial, Financial, and Agriculture, Commercial Real Estate, Consumer Real Estate, and Consumer Installment. In accordance with the guidance in ASC 326, the Company redefined its LHFI portfolio segments and related loan classes based on the level at which risk is monitored within the ACL methodology. Construction loans for 1-4 family residential properties with a call code 1A1, and other construction, all land development and other land loans with a call code 1A2 were previously separated between the Commercial Real Estate or Consumer Real Estate bands based on loan type code. Under our ASC 326 methodology 1A1 loans are all defined as part of the Consumer Real Estate band and 1A2 loans are all defined as part of the Commercial Real Estate Band. The PD calculation analyzes the historical loan portfolio over the given lookback period to identify, by segment, loans that have defaulted. A default is defined as a loan that has moved to past due 90 days and greater, nonaccrual status, or experienced a charge-off during the period. The model observes loans over a 12-month window, detecting any events previously defined. This information is then used by the model to calculate annual iterative count-based PD rates for each segment. This process is then repeated for all dates within the historical data range. These averaged PD’s are used for an immediate reversion back to the historical mean. The historical data used to calculate this input was captured by the Company from 2009 through the most recent quarter end. The Company utilizes reasonable and supportable forecasts of future economic conditions when estimating the ACL on loans. The model’s calculation also includes a 24-month forecasted PD based on a regression model that calculated a comparison of the Company’s historical loan data to various national economic metrics during the same periods. The results showed the Company’s past losses having a high rate of correlation to unemployment, both regionally and nationally. Using this information, along with the most recently published Wall Street Journal survey of sixty economists’ forecasts predicting unemployment rates out over the next eight quarters, a corresponding future PD can be calculated for the forward-looking 24-month period. This data can also be used to predict loan losses at different levels of stress, including a baseline, adverse and severely adverse economic condition. After the forecast period, PD rates revert to the historical mean of the entire data set. The LGD calculation is based on actual losses (charge-offs, net recoveries) at a loan level experienced over the entire lookback period aggregated to get a total for each segment of loans. The aggregate loss amount is divided by the exposure at default to determine an LGD rate. Defaults occurring during the lookback period are included in the denominator, whether a loss occurred or not and exposure at default is determined by the loan balance immediately preceding the default event. If there is not a minimum of five past defaults in a loan segment, or less than 15.0% calculated LGD rate, or the total balance at default is less than 1% of the balance in the respective call code as of the model run date, a proxy index is used. This index is proprietary to the Company’s ACL modeling vendor derived from loss data of other client institutions similar in organization structure to the Company. The vendor also provides a “crisis” index derived from loss data between the post-recessionary years of 2008-2013 that the Company uses. The model then uses these inputs in a non-discounted version of DCF methodology to calculate the quantitative portion of estimated losses. The model creates loan level amortization schedules that detail out the expected monthly payments for a loan including estimated prepayments and payoffs. These expected cash flows are discounted back to present value using the loan’s coupon rate instead of the effective interest rate. On a quarterly basis, the Company uses internal credit portfolio data, such as changes in portfolio volume and composition, underwriting practices, and levels of past due loans, nonaccruals and classified assets along with other external information not used in the quantitative calculation to determine if any subjective qualitative adjustments are required so that all significant risks are incorporated to form a sufficient basis to estimate credit losses. The following table presents the activity in the allowance for credit losses by portfolio segment for the three and nine months ended September 30, 2024 and 2023: ($ in thousands) Three Months Ended September 30, 2024 Commercial, Commercial Consumer Consumer Total Allowance for credit losses: Beginning balance $ 8,731 $ 30,101 $ 15,560 $ 741 $ 55,133 Provision for credit losses 349 565 (67) 153 1,000 Loans charged-off (404) — (81) (901) (1,386) Recoveries 232 18 22 681 953 Total ending allowance balance $ 8,908 $ 30,684 $ 15,434 $ 674 $ 55,700 ($ in thousands) Nine Months Ended September 30, 2024 Commercial, Commercial Consumer Consumer Total Allowance for credit losses: Beginning balance $ 8,844 $ 29,125 $ 15,260 $ 803 $ 54,032 Provision for credit losses 652 1,093 493 412 2,650 Loans charged-off (832) (91) (375) (1,624) (2,922) Recoveries 244 557 56 1,083 1,940 Total ending allowance balance $ 8,908 $ 30,684 $ 15,434 $ 674 $ 55,700 ($ in thousands) Three Months Ended September 30, 2023 Commercial, Commercial Consumer Consumer Total Allowance for credit losses: Beginning balance $ 8,972 $ 28,726 $ 14,123 $ 793 $ 52,614 Provision for credit losses (709) 389 919 401 1,000 Loans charged-off (48) (27) (21) (533) (629) Recoveries 277 15 142 146 580 Total ending allowance balance $ 8,492 $ 29,103 $ 15,163 $ 807 $ 53,565 ($ in thousands) Nine Months Ended September 30, 2023 Commercial, Commercial Consumer Consumer Total Allowance for credit losses: Beginning balance $ 6,349 $ 20,389 $ 11,599 $ 580 $ 38,917 Initial allowance on PCD loans 727 2,260 182 7 3,176 Provision for credit losses 1,554 6,380 3,203 1,363 12,500 Loans charged-off (472) (27) (45) (1,551) (2,095) Recoveries 334 101 224 408 1,067 Total ending allowance balance $ 8,492 $ 29,103 $ 15,163 $ 807 $ 53,565 The Company recorded $2.7 million provision for credit losses for the nine months ended September 30, 2024, compared to $12.5 million provision for the same period in 2023. During January 2023, loans totaling $1.159 billion, net of purchase accounting adjustments, were acquired in the HSBI acquisition. The initial ACL on PCD loans recorded in March 2023, of $3.2 million was related to the HSBI acquisition. The 2023 provision for credit losses includes $10.7 million associated with day one post-merger accounting provision recorded for non-PCD loans and unfunded commitments acquired in the HSBI acquisition. The following table provides the ending balance in the Company’s LHFI and the ACL, broken down by portfolio segment as of September 30, 2024 and December 31, 2023. ($ in thousands) September 30, 2024 Commercial, Commercial Consumer Consumer Total LHFI Individually evaluated $ 471 $ 838 $ 1,762 $ 13 $ 3,084 Collectively evaluated 748,193 3,234,728 1,285,382 47,203 5,315,506 Total $ 748,664 $ 3,235,566 $ 1,287,144 $ 47,216 $ 5,318,590 Allowance for Credit Losses Individually evaluated $ 190 $ — $ — $ — $ 190 Collectively evaluated 8,718 30,684 15,434 674 55,510 Total $ 8,908 $ 30,684 $ 15,434 $ 674 $ 55,700 ($ in thousands) December 31, 2023 Commercial, Commercial Consumer Consumer Total LHFI Individually evaluated $ 1,414 $ 710 $ 778 $ — $ 2,902 Collectively evaluated 798,910 3,058,445 1,252,017 57,768 5,167,140 Total $ 800,324 $ 3,059,155 $ 1,252,795 $ 57,768 $ 5,170,042 Allowance for Credit Losses Individually evaluated $ 408 $ — $ — $ — $ 408 Collectively evaluated 8,436 29,125 15,260 803 53,624 Total $ 8,844 $ 29,125 $ 15,260 $ 803 $ 54,032 |
