v3.24.2
Loans and Allowance for Credit Losses on Loans
 6 Months Ended
Jun. 30, 2024
Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract]  
Loans and Allowance for Credit Losses on Loans Loans and Allowance for Credit Losses on Loans
Loans are summarized by portfolio segment as follows:
(in thousands)June 30, 2024December 31, 2023
Loans held for investment(1):
Commercial$10,533,930 $10,410,766 
Mortgage finance5,078,161 3,978,328 
Commercial real estate5,689,094 5,500,774 
Consumer557,951 530,948 
Gross loans held for investment21,859,136 20,420,816 
Unearned income (net of direct origination costs)(80,406)(80,258)
Total loans held for investment21,778,730 20,340,558 
Allowance for credit losses on loans(267,297)(249,973)
Total loans held for investment, net$21,511,433 $20,090,585 
Loans held for sale:
Mortgage loans, at fair value$424 $706 
Non-mortgage loans, at lower of cost or fair value36,361 43,399 
Total loans held for sale$36,785 $44,105 
(1)    Excludes accrued interest receivable of $121.9 million and $118.1 million at June 30, 2024 and December 31, 2023, respectively, that is recorded in accrued interest receivable and other assets on the consolidated balance sheets.
The following tables summarize gross loans held for investment by year of origination and internally assigned credit grades:
(in thousands)202420232022202120202019
and prior		Revolving lines of creditRevolving lines of credit converted to term loansTotal
June 30, 2024
Commercial
(1-7) Pass$517,216 $1,357,069 $1,369,181 $338,328 $100,090 $211,499 $6,149,823 $14,768 $10,057,974 
(8) Special mention— 66,078 111,902 22,457 3,872 8,374 50,228 250 263,161 
(9) Substandard - accruing— 23,648 29,184 8,404 124 27,386 40,277 — 129,023 
(9+) Non-accrual— 6,460 2,957 153 2,039 25,449 43,970 2,744 83,772 
Total commercial$517,216 $1,453,255 $1,513,224 $369,342 $106,125 $272,708 $6,284,298 $17,762 $10,533,930 
Mortgage finance
(1-7) Pass$— $— $— $— $— $— $5,078,161 $— $5,078,161 
(8) Special mention— — — — — — — — — 
(9) Substandard - accruing— — — — — — — — — 
(9+) Non-accrual— — — — — — — — — 
Total mortgage finance$— $— $— $— $— $— $5,078,161 $— $5,078,161 
Commercial real estate
(1-7) Pass$113,652 $876,609 $1,734,435 $1,009,872 $408,437 $858,189 $280,761 $25,408 $5,307,363 
(8) Special mention174 1,019 205,632 17,442 24,393 81,484 — — 330,144 
(9) Substandard - accruing— — 13,491 15,831 — 22,000 — — 51,322 
(9+) Non-accrual— — — 265 — — — — 265 
Total commercial real estate$113,826 $877,628 $1,953,558 $1,043,410 $432,830 $961,673 $280,761 $25,408 $5,689,094 
Consumer
(1-7) Pass$31,244 $27,983 $53,661 $77,266 $46,291 $111,547 $207,975 $— $555,967 
(8) Special mention— — — — — — — — — 
(9) Substandard - accruing— — — — — — 1,000 — 1,000 
(9+) Non-accrual— — — — — 984 — — 984 
Total consumer$31,244 $27,983 $53,661 $77,266 $46,291 $112,531 $208,975 $— $557,951 
Total$662,286 $2,358,866 $3,520,443 $1,490,018 $585,246 $1,346,912 $11,852,195 $43,170 $21,859,136 
Gross charge-offs$— $7,543 $311 $3,512 $— $7,173 $4,438 $— $22,977 
(in thousands)202320222021202020192018
and prior		Revolving lines of creditRevolving lines of credit converted to term loansTotal
December 31, 2023
Commercial
(1-7) Pass$1,546,257 $1,408,672 $279,266 $144,699 $142,301 $157,808 $6,284,464 $16,580 $9,980,047 
(8) Special mention22,148 118,991 35,619 285 823 13,385 40,647 89 231,987 
(9) Substandard - accruing12,477 50,876 9,334 18,547 — 78 38,372 — 129,684 
(9+) Non-accrual9,395 34,229 340 2,085 15,080 7,840 79 — 69,048 
Total commercial$1,590,277 $1,612,768 $324,559 $165,616 $158,204 $179,111 $6,363,562 $16,669 $10,410,766 
Mortgage finance
(1-7) Pass$— $— $— $— $— $— $3,978,328 $— $3,978,328 
(8) Special mention— — — — — — — — — 
(9) Substandard - accruing— — — — — — — — — 
(9+) Non-accrual— — — — — — — — — 
Total mortgage finance$— $— $— $— $— $— $3,978,328 $— $3,978,328 
Commercial real estate
(1-7) Pass$561,801 $1,689,325 $1,042,953 $419,703 $317,480 $559,026 $575,928 $28,175 $5,194,391 
(8) Special mention— 136,801 32,937 24,440 34,181 22,833 7,895 — 259,087 
(9) Substandard - accruing— 2,232 — — — 28,573 4,141 — 34,946 
(9+) Non-accrual— — 12,350 — — — — — 12,350 
Total commercial real estate$561,801 $1,828,358 $1,088,240 $444,143 $351,661 $610,432 $587,964 $28,175 $5,500,774 
Consumer
(1-7) Pass$31,876 $56,425 $78,096 $47,423 $14,141 $102,691 $199,171 $— $529,823 
(8) Special mention— — — — — — 100 41 141 
(9) Substandard - accruing— — — — — 984 — — 984 
(9+) Non-accrual— — — — — — — — — 
Total Consumer$31,876 $56,425 $78,096 $47,423 $14,141 $103,675 $199,271 $41 $530,948 
Total$2,183,954 $3,497,551 $1,490,895 $657,182 $524,006 $893,218 $11,129,125 $44,885 $20,420,816 
Gross charge-offs$8,364 $5,090 $25,578 $— $15,243 $883 $698 $871 $56,727 
The following table details activity in the allowance for credit losses on loans. Allocation of a portion of the allowance to one category does not preclude its availability to absorb losses in other categories.
(in thousands)CommercialMortgage
Finance		Commercial Real EstateConsumerTotal
Six Months Ended June 30, 2024
Beginning balance$171,437 $4,173 $71,829 $2,534 $249,973 
Provision for credit losses on loans26,200 1,445 12,245 153 40,043 
Charge-offs17,541 — 5,436 — 22,977 
Recoveries258 — — — 258 
Net charge-offs (recoveries)17,283 — 5,436 — 22,719 
Ending balance$180,354 $5,618 $78,638 $2,687 $267,297 
Six Months Ended June 30, 2023
Beginning balance$185,303 $10,745 $54,268 $3,153 $253,469 
Provision for credit losses on loans18,198 (3,660)(1,730)(785)12,023 
Charge-offs29,584 — — — 29,584 
Recoveries1,430 — — 5 1,435 
Net charge-offs (recoveries)28,154 — — (5)28,149 
Ending balance$175,347 $7,085 $52,538 $2,373 $237,343 
The Company recorded a $40.0 million provision for credit losses on loans for the six months ended June 30, 2024, compared to $12.0 million for the same period of 2023. The $40.0 million provision for credit losses on loans resulted primarily from growth in loans held for investment and $22.7 million in net charge-offs recorded during the six months ended June 30, 2024. Net charge-offs of $22.7 million were recorded during the six months ended June 30, 2024, compared to net charge-offs of $28.1 million during the same period of 2023. Criticized loans totaled $859.7 million at June 30, 2024, compared to $738.2 million at December 31, 2023.
A loan is considered collateral-dependent when the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of the collateral. At June 30, 2024, the Company had $41.9 million in collateral-dependent commercial loans, collateralized by business assets, and $1.0 million in collateral-dependent consumer loans, collateralized by real estate.
The table below provides an age analysis of gross loans held for investment:
(in thousands)30-59 Days
Past Due		60-89 Days
Past Due		90 Days or More Past DueTotal Past
Due		Non-accrual(1)CurrentTotalNon-accrual With No Allowance
June 30, 2024
Commercial$12,050 $6,092 $286 $18,428 $83,772 $10,431,730 $10,533,930 $13,035 
Mortgage finance— — — — — 5,078,161 5,078,161 — 
Commercial real estate— — — — 265 5,688,829 5,689,094 — 
Consumer1,975 — — 1,975 984 554,992 557,951 984 
Total$14,025 $6,092 $286 $20,403 $85,021 $21,753,712 $21,859,136 $14,019 
(1)As of June 30, 2024, $1.2 million of non-accrual loans were earning interest income on a cash basis compared to $358,000 as of December 31, 2023. Additionally, $161,000 of interest income was recognized on non-accrual loans for the six months ended June 30, 2024 compared to $37,000 for the same period in 2023. Accrued interest of $668,000 and $1.6 million was reversed during the six months ended June 30, 2024 and June 30, 2023, respectively.
Modifications to Borrowers Experiencing Financial Difficulty
The table below details gross loans held for investment as of June 30, 2024 and June 30, 2023 made to borrowers experiencing financial difficulty that were modified during the three and six months ended June 30, 2024 and June 30, 2023, by type of modification granted and the financial effect of those modifications:
Financial Statement Impact
($ in thousands)Payment
Deferral		Term
Extension		Payment
Deferral
and Term
Extension		Interest Rate
Reduction
and Term
Extension		TotalPercentage of Loans Held for InvestmentInterest Rate ReductionTerm Extension (in months)Payment Deferrals
Three Months Ended June 30, 2024
Commercial$16,147 $253 $7,439 $— $23,839 0.11 %—%
3 to 13
$1,176 
Commercial real estate— 15,831 — — 15,831 0.07 %—%
3
— 
Total$16,147 $16,084 $7,439 $— $39,670 0.18 %
Three Months Ended June 30, 2023
Commercial$— $261 $3,378 $— $3,639 0.02 %—%
4 to 12
$358 
Total$— $261 $3,378 $— $3,639 0.02 %
Six Months Ended June 30, 2024
Commercial$24,207 $703 $7,439 $— $32,349 0.15 %—%
3 to 13
$1,853 
Commercial real estate— 15,831 — — 15,831 0.07 %—%
3
— 
Total$24,207 $16,534 $7,439 $— $48,180 0.22 %
Six Months Ended June 30, 2023
Commercial$31,356 $1,144 $6,562 $14,532 $53,594 0.25 %0.70%
4 to 36
$5,080 
Total$31,356 $1,144 $6,562 $14,532 $53,594 0.25 %
The table below details gross loans held for investment as of June 30, 2024 and June 30, 2023 that experienced a default during the periods presented subsequent to being granted a modification in the prior twelve months. Default is defined as movement to nonperforming status, foreclosure or charge-off, whichever occurs first.
(in thousands)
Payment
Deferral		Term
Extension
Payment Deferral
and Term Extension
Total
Three Months Ended June 30, 2024
Commercial$— $— $— $— 
Total$— $— $— $— 
Three Months Ended June 30, 2023
Commercial$— $161 $— $161 
Commercial$— $161 $— $161 
Six Months Ended June 30, 2024
Commercial$— $— $1,570 $1,570 
Total$— $— $1,570 $1,570 
Six Months Ended June 30, 2023
Commercial$— $161 $— $161 
Commercial$— $161 $— $161 
The table below provides an age analysis of gross loans held for investment as of June 30, 2024 made to borrowers experiencing financial difficulty that were modified in the prior twelve months, and as of June 30, 2023 for loans that were modified since January 1, 2023, the date of adoptions of Accounting Standards Update 2022-02:
(in thousands)30-89 Days
Past Due		90+ Days
Past Due		Non-AccrualCurrentTotal
June 30, 2024
Commercial$— $— $11,297 $30,757 $42,054 
Commercial real estate
— — — 15,831 15,831 
Total$— $— $11,297 $46,588 $57,885 
June 30, 2023
Commercial$— $— $6,723 $46,871 $53,594 
Total$— $— $6,723 $46,871 $53,594