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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
For the quarterly period ended March 31, 2024
Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
For the transition period from              to             
Commission file number 001-34657
TEXAS CAPITAL BANCSHARES, INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware 75-2679109
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification Number)
2000 McKinney Avenue
Suite 700
                DallasTXUSA75201
(Address of principal executive offices)(Zip Code)
214/932-6600
(Registrant’s telephone number, including area code)

Securities registered under Section 12(b) of the Exchange Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.01 per shareTCBINasdaq Stock Market
5.75% Non-Cumulative Perpetual Preferred Stock Series B, par value $0.01 per shareTCBIONasdaq Stock Market
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes          No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes            No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
Large Accelerated Filerx Accelerated Filer 
Non-Accelerated FilerSmaller Reporting Company
Emerging Growth Company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act. Yes          No ý
On April 17, 2024, the number of shares set forth below was outstanding with respect to each of the issuer’s classes of common stock:
Common Stock, par value $0.01 per share 46,653,108


Table of Contents
Texas Capital Bancshares, Inc.
Form 10-Q
Quarter Ended March 31, 2024

Index
 
Item 1.
Item 2.
Item 3.
Item 4.
Item 1.
Item 1A.
Item 2.
Item 6.



Table of Contents
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
TEXAS CAPITAL BANCSHARES, INC.
CONSOLIDATED BALANCE SHEETS - UNAUDITED
(in thousands except share data)March 31, 2024December 31, 2023
Assets
Cash and due from banks$167,985 $200,493 
Interest bearing cash and cash equivalents3,148,157 3,042,357 
Available-for-sale debt securities3,491,510 3,225,892 
Held-to-maturity debt securities849,283 865,477 
Equity securities73,487 51,825 
Investment securities4,414,280 4,143,194 
Loans held for sale37,750 44,105 
Loans held for investment, mortgage finance4,153,313 3,978,328 
Loans held for investment16,677,691 16,362,230 
Less: Allowance for credit losses on loans263,962 249,973 
Loans held for investment, net20,567,042 20,090,585 
Premises and equipment, net49,899 32,366 
Accrued interest receivable and other assets793,976 801,670 
Goodwill and intangibles, net1,496 1,496 
Total assets$29,180,585 $28,356,266 
Liabilities and Stockholders’ Equity
Liabilities:
Non-interest bearing deposits$8,478,215 $7,328,276 
Interest bearing deposits15,475,822 15,043,563 
Total deposits23,954,037 22,371,839 
Accrued interest payable32,352 33,234 
Other liabilities413,711 392,904 
Short-term borrowings750,000 1,500,000 
Long-term debt859,823 859,147 
Total liabilities26,009,923 25,157,124 
Stockholders’ equity:
Preferred stock, $0.01 par value, $1,000 liquidation value:
Authorized shares - 10,000,000
Issued shares - 300,000 at March 31, 2024 and December 31, 2023
300,000 300,000 
Common stock, $0.01 par value:
Authorized shares - 100,000,000
Issued shares - 51,420,680 and 51,142,979 at March 31, 2024 and December 31, 2023, respectively
514 511 
Additional paid-in capital1,044,669 1,045,576 
Retained earnings2,457,222 2,435,393 
Treasury stock - 4,434,405 and 3,905,067 shares at cost at March 31, 2024 and December 31, 2023, respectively
(251,857)(220,334)
Accumulated other comprehensive loss, net of taxes(379,886)(362,004)
Total stockholders’ equity3,170,662 3,199,142 
Total liabilities and stockholders’ equity$29,180,585 $28,356,266 
See accompanying notes to consolidated financial statements.
3

Table of Contents
TEXAS CAPITAL BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF INCOME AND OTHER
COMPREHENSIVE INCOME - UNAUDITED
Three Months Ended March 31,
(in thousands except per share data)20242023
Interest income
Interest and fees on loans$330,879 $297,438 
Investment securities32,144 25,292 
Interest bearing cash and cash equivalents54,355 62,436 
Total interest income417,378 385,166 
Interest expense
Deposits175,600 120,094 
Short-term borrowings12,783 14,744 
Long-term debt13,986 14,983 
Total interest expense202,369 149,821 
Net interest income215,009 235,345 
Provision for credit losses19,000 28,000 
Net interest income after provision for credit losses196,009 207,345 
Non-interest income
Service charges on deposit accounts6,339 5,022 
Wealth management and trust fee income3,567 3,429 
Brokered loan fees1,911 1,895 
Investment banking and advisory fees18,424 14,564 
Trading income4,712 4,204 
Other6,366 8,289 
Total non-interest income41,319 37,403 
Non-interest expense
Salaries and benefits128,727 128,670 
Occupancy expense9,737 9,619 
Marketing6,036 9,044 
Legal and professional16,195 14,514 
Communications and technology21,114 17,523 
Federal Deposit Insurance Corporation insurance assessment8,421 2,170 
Other12,163 12,487 
Total non-interest expense202,393 194,027 
Income before income taxes34,935 50,721 
Income tax expense8,793 12,060 
Net income26,142 38,661 
Preferred stock dividends4,313 4,313 
Net income available to common stockholders$21,829 $34,348 
Other comprehensive income/(loss)
Change in unrealized gain/(loss)$(42,343)$42,953 
Amounts reclassified into net income19,708 12,973 
Other comprehensive income/(loss)(22,635)55,926 
Income tax expense/(benefit)(4,753)11,745 
Other comprehensive income/(loss), net of tax(17,882)44,181 
Comprehensive income
$8,260 $82,842 
Basic earnings per common share$0.46 $0.71 
Diluted earnings per common share$0.46 $0.70 
See accompanying notes to consolidated financial statements.
4

Table of Contents
TEXAS CAPITAL BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY - UNAUDITED

Preferred StockCommon StockAdditional Treasury StockAccumulated Other 
 Paid-inRetainedComprehensive 
(in thousands except share data)SharesAmountSharesAmountCapitalEarningsSharesAmountIncome/(Loss)Total
Balance at December 31, 2022 (audited)
300,000 $300,000 50,867,298 $509 $1,025,593 $2,263,502 (2,083,535)$(115,310)$(418,943)$3,055,351 
Comprehensive income:
Net income— — — — — 38,661 — — — 38,661 
Change in other comprehensive income/(loss), net of taxes
— — — — — — — — 44,181 44,181 
Total comprehensive income
82,842 
Stock-based compensation expense recognized in earnings
— — — — 8,438 — — — — 8,438 
Preferred stock dividend — — — — — (4,313)— — — (4,313)
Issuance of stock related to stock-based awards
— — 80,008  (2,126)— — — — (2,126)
Repurchase of common stock— — — — — — (1,011,909)(60,218)— (60,218)
Balance at March 31, 2023300,000 $300,000 50,947,306 $509 $1,031,905 $2,297,850 (3,095,444)$(175,528)$(374,762)$3,079,974 
Balance at December 31, 2023 (audited)
300,000 $300,000 51,142,979 $511 $1,045,576 $2,435,393 (3,905,067)$(220,334)$(362,004)$3,199,142 
Comprehensive income:
Net income— — — — — 26,142 — — — 26,142 
Change in other comprehensive income/(loss), net of taxes— — — — — — — — (17,882)(17,882)
Total comprehensive income8,260 
Stock-based compensation expense recognized in earnings
— — — — 8,026 — — — — 8,026 
Preferred stock dividend— — — — — (4,313)— — — (4,313)
Issuance of stock related to stock-based awards
— — 277,701 3 (8,933)— — — — (8,930)
Repurchase of common stock— — — — — — (529,338)(31,523)— (31,523)
Balance at March 31, 2024300,000 $300,000 51,420,680 $514 $1,044,669 $2,457,222 (4,434,405)$(251,857)$(379,886)$3,170,662 
See accompanying notes to consolidated financial statements.
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TEXAS CAPITAL BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended March 31,
(in thousands)20242023
Operating activities
Net income$26,142 $38,661 
Adjustments to reconcile net income to net cash provided by/(used in) operating activities:
Provision for credit losses19,000 28,000 
Depreciation and amortization10,906 8,683 
Net gain recognized on investment securities(4,034)(1,734)
Stock-based compensation expense8,534 8,438 
Proceeds from sales and repayments of loans held for sale15,605 8,749 
Changes in operating assets and liabilities:
Accrued interest receivable and other assets48,253 (28,286)
Accrued interest payable and other liabilities(28,586)(44,308)
Net cash provided by operating activities95,820 18,203 
Investing activities
Purchases of available-for-sale debt securities(596,610)(849,391)
Proceeds from sales of available-for-sale debt securities 56,923 
Proceeds from maturities, redemptions and pay-downs of available-for-sale debt securities317,717 45,716 
Proceeds from maturities, redemptions and pay-downs of held-to-maturity debt securities17,064 17,489 
Sales/(purchases) of equity securities, net(17,628)2,487 
Originations of loans held for investment, mortgage finance(16,389,564)(14,897,110)
Proceeds from pay-offs of loans held for investment, mortgage finance16,214,579 14,926,573 
Net increase in loans held for investment, excluding mortgage finance loans(335,475)(837,100)
Purchase of premises and equipment, net(20,043)(1,363)
Net cash used in investing activities
(809,960)(1,535,776)
Financing activities
Net increase/(decrease) in deposits1,582,198 (677,183)
Issuance of stock related to stock-based awards(8,930)(2,126)
Preferred dividends paid(4,313)(4,313)
Repurchase of common stock(31,523)(60,218)
Net increase/(decrease) in short-term borrowings(750,000)898,858 
Net cash provided by financing activities
787,432 155,018 
Net increase/(decrease) in cash and cash equivalents
73,292 (1,362,555)
Cash and cash equivalents at beginning of period3,242,850 5,012,260 
Cash and cash equivalents at end of period$3,316,142 $3,649,705 
Supplemental disclosures of cash flow information
Cash paid during the period for interest$267,955 $142,623 
Cash paid/(refunded) during the period for income taxes
(909)451 
Transfers of loans from held for investment to held for sale9,250  
See accompanying notes to consolidated financial statements.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED
(1) Operations and Summary of Significant Accounting Policies
Organization and Nature of Business
Texas Capital Bancshares, Inc. (“TCBI” or the “Company”), a Delaware corporation, was incorporated in 1996 and commenced banking operations in 1998. The consolidated financial statements include the accounts of TCBI and its wholly owned subsidiary, Texas Capital Bank (the “Bank”), a full-service financial services firm that delivers customized solutions to businesses, entrepreneurs and individual customers. The Company is headquartered in Dallas, with primary banking offices in Austin, Dallas, Fort Worth, Houston and San Antonio, and has built a network of clients across the country.
Basis of Presentation
The Company’s accounting and reporting policies conform to accounting principles generally accepted in the United States (“GAAP”) and to generally accepted practices within the banking industry. Certain prior period balances have been reclassified to conform to the current period presentation.
The consolidated interim financial statements are unaudited, and certain information and disclosures in the notes to consolidated unaudited financial statements that are presented in accordance with GAAP have been condensed or omitted. In the opinion of management, the interim financial statements include all normal and recurring adjustments and the disclosures made present a fair presentation of the Company’s financial position and results of operations. The consolidated financial statements have been prepared in accordance with GAAP for interim financial information and the instructions to Form 10-Q adopted by the U.S. Securities and Exchange Commission (“SEC”). Accordingly, the financial statements and the notes to the consolidated unaudited financial statements required by GAAP for complete annual financial statements do not include all of the information and should be read in conjunction with the consolidated financial statements, and notes thereto, for the year ended December 31, 2023, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 (the “2023 Form 10-K”). Operating results for the interim periods disclosed herein are not necessarily indicative of the results that may be expected for a full year or any future period.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates. The allowance for credit losses, the fair value of financial instruments and the status of contingencies are particularly susceptible to significant change.
(2) Earnings Per Share
The following table presents the computation of basic and diluted earnings per share:
Three Months Ended March 31,
(in thousands except share and per share data)20242023
Numerator:
Net income$26,142 $38,661 
Preferred stock dividends4,313 4,313 
Net income available to common stockholders$21,829 $34,348 
Denominator:
Basic earnings per common share—weighted average common shares47,278,681 48,264,121 
Effect of dilutive outstanding stock-settled awards432,511 616,604 
Dilutive earnings per common share—weighted average diluted common shares47,711,192 48,880,725 
Basic earnings per common share$0.46 $0.71 
Diluted earnings per common share$0.46 $0.70 
Anti-dilutive outstanding stock-settled awards127,145252,308

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(3) Investment Securities
The following is a summary of the Company’s investment securities: 
(in thousands)Amortized
Cost(1)
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Estimated
Fair
Value
March 31, 2024
Available-for-sale debt securities:
U.S. Treasury securities$401,652 $ $(16,099)$385,553 
U.S. government agency securities125,000  (19,230)105,770 
Residential mortgage-backed securities3,312,491 6,977 (331,542)2,987,926 
CRT securities13,427  (1,166)12,261 
Total available-for-sale debt securities3,852,570 6,977 (368,037)3,491,510 
Held-to-maturity debt securities:
Residential mortgage-backed securities849,283  (112,172)737,111 
Total held-to-maturity debt securities849,283  (112,172)737,111 
Equity securities73,487 
Total investment securities(2)$4,414,280 
December 31, 2023
Available-for-sale debt securities:
U.S. Treasury securities$651,112 $ $(14,639)$636,473 
U.S. government agency securities125,000  (18,408)106,592 
Residential mortgage-backed securities2,782,734 540 (312,442)2,470,832 
CRT securities13,636  (1,641)11,995 
Total available-for-sale debt securities3,572,482 540 (347,130)3,225,892 
Held-to-maturity securities:
Residential mortgage-backed securities865,477  (101,633)763,844 
Total held-to-maturity securities865,477  (101,633)763,844 
Equity securities51,825 
Total investment securities(2)$4,143,194 
(1)    Excludes accrued interest receivable of $10.4 million and $9.5 million at March 31, 2024 and December 31, 2023, respectively, related to available-for-sale debt securities and $1.4 million and $1.4 million at March 31, 2024 and December 31, 2023, respectively, related to held-to-maturity debt securities that is recorded in accrued interest receivable and other assets on the consolidated balance sheets.
(2)    Includes available-for-sale debt securities and equity securities at estimated fair value and held-to-maturity debt securities at amortized cost.
Debt Securities
The Company did not sell any available-for-sale debt securities in the first quarter of 2024. In the first quarter of 2023, the Company sold U.S. Treasury securities with an amortized cost of $56.4 million and realized a gain of $489,000.
The amortized cost and estimated fair value as of March 31, 2024, excluding accrued interest receivable, of available-for-sale and held-to-maturity debt securities are presented below by contractual maturity. Actual maturities may differ from contractual maturities of mortgage-backed securities because borrowers may have the right to call or prepay obligations with or without prepayment penalties.
Available-for-saleHeld-to-maturity
(in thousands)Amortized CostFair ValueAmortized CostFair Value
Due within one year$ $ $ $ 
Due after one year through five years451,652 429,431   
Due after five years through ten years105,716 88,977   
Due after ten years3,295,202 2,973,102 849,283 737,111 
Total$3,852,570 $3,491,510 $849,283 $737,111 
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The table below presents the weighted average yields for the Company’s available-for-sale debt securities for the three months ended March 31, 2024. Weighted average yields are calculated based on amortized cost on a tax-exempt basis assuming a 21% tax rate, where applicable.
U.S. Treasury securitiesU.S. government agency securitiesResidential mortgage-backed securitiesCRT securities
Due within one year % % % %
Due after one year through five years2.71 1.00   
Due after five years through ten years 1.21 1.23 5.45 
Due after ten years  3.32  
Total2.71 %1.13 %3.31 %5.45 %
The following table discloses the Company’s available-for-sale debt securities that have been in a continuous unrealized loss position for less than 12 months and those that have been in a continuous unrealized loss position for 12 or more months:
Less Than 12 Months12 Months or LongerTotal
(in thousands)Fair ValueUnrealized LossFair ValueUnrealized LossFair ValueUnrealized Loss
March 31, 2024
U.S. Treasury securities$ $ $385,553 $(16,099)$385,553 $(16,099)
U.S. government agency securities  105,771 (19,230)105,771 (19,230)
Residential mortgage-backed securities395,176 (4,230)2,291,560 (327,312)2,686,736 (331,542)
CRT securities  12,261 (1,166)12,261 (1,166)
Total$395,176 $(4,230)$2,795,145 $(363,807)$3,190,321 $(368,037)
December 31, 2023
U.S. Treasury securities$ $ $636,473 $(14,639)$636,473 $(14,639)
U.S. government agency securities  106,592 (18,408)106,592 (18,408)
Residential mortgage-backed securities910,999 (19,751)1,501,340 (292,691)2,412,339 (312,442)
CRT securities  11,995 (1,641)11,995 (1,641)
Total$910,999 $(19,751)$2,256,400 $(327,379)$3,167,399 $(347,130)
At March 31, 2024, the Company had 112 available-for-sale debt securities in an unrealized loss position, comprised of 10 U.S. Treasury securities, five U.S. government agency securities, 95 residential mortgage-backed securities and two CRT securities. The unrealized losses on the available-for-sale debt securities were the result of changes in market interest rates compared to the date the securities were acquired rather than the credit quality of the issuers or underlying loans. The Company does not currently intend to sell and based on current conditions it does not believe it is likely that the Company will be required to sell these available-for-sale debt securities before recovery of the amortized cost of such securities in an unrealized loss position and has therefore recorded the unrealized losses related to this portfolio in accumulated other comprehensive income/(loss), net (“AOCI”). Held-to-maturity securities consist of government guaranteed securities for which no loss is expected. At March 31, 2024 and December 31, 2023, no allowance for credit losses was established for available-for-sale or held-to-maturity debt securities.
At March 31, 2024 and December 31, 2023, debt securities with carrying values of approximately $1.5 million and $1.6 million, respectively, were pledged to secure certain customer deposits.
Equity Securities
Equity securities consist of investments that qualify for consideration under the regulations implementing the Community Reinvestment Act and investments in exchange traded funds. The following is a summary of unrealized and realized gains/(losses) recognized on equity securities included in other non-interest income on the consolidated statements of income and other comprehensive income:
Three Months Ended March 31,
(in thousands)20242023
Net gains/(losses) recognized during the period$4,034 $1,245 
Less: Realized net gains/(losses) recognized on securities sold312 (596)
Unrealized net gains/(losses) recognized on securities still held$3,722 $1,841 
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(4) Loans and Allowance for Credit Losses on Loans
Loans are summarized by portfolio segment as follows:
(in thousands)March 31, 2024December 31, 2023
Loans held for investment(1):
Commercial$10,383,184 $10,410,766 
Mortgage finance4,153,313 3,978,328 
Commercial real estate5,822,461 5,500,774 
Consumer549,963 530,948 
Gross loans held for investment20,908,921 20,420,816 
Unearned income (net of direct origination costs)(77,917)(80,258)
Total loans held for investment20,831,004 20,340,558 
Allowance for credit losses on loans(263,962)(249,973)
Total loans held for investment, net$20,567,042 $20,090,585 
Loans held for sale:
Mortgage loans, at fair value$700 $706 
Non-mortgage loans, at lower of cost or fair value37,050 43,399 
Total loans held for sale$37,750 $44,105 
(1)    Excludes accrued interest receivable of $114.0 million and $118.1 million at March 31, 2024 and December 31, 2023, respectively, that is recorded in accrued interest receivable and other assets on the consolidated balance sheets.


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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
March 31, 2024
Commercial
(1-7) Pass$259,505 $1,520,538 $1,318,364 $273,069 $121,851 $279,527 $6,133,867 $15,177 $9,921,898 
(8) Special mention 41,444 89,022 33,634 274 8,444 72,605  245,423 
(9) Substandard - accruing 21,802 48,945 16,246 17,859 3,478 27,017  135,347 
(9+) Non-accrual 12,835 3,204  1,891 23,159 39,427  80,516 
Total commercial$259,505 $1,596,619 $1,459,535 $322,949 $141,875 $314,608 $6,272,916 $15,177 $10,383,184 
Mortgage finance
(1-7) Pass$ $ $ $ $ $ $4,153,313 $ $4,153,313 
(8) Special mention         
(9) Substandard - accruing         
(9+) Non-accrual         
Total mortgage finance$ $ $ $ $ $ $4,153,313 $ $4,153,313 
Commercial real estate
(1-7) Pass$25,635 $783,034 $1,765,387 $1,104,942 $462,880 $996,932 $261,278 $25,810 $5,425,898 
(8) Special mention 1,019 240,303 268 24,416 72,393   338,399 
(9) Substandard - accruing  12,545 17,127  17,143   46,815 
(9+) Non-accrual     11,349   11,349 
Total commercial real estate$25,635 $784,053 $2,018,235 $1,122,337 $487,296 $1,097,817 $261,278 $25,810 $5,822,461 
Consumer
(1-7) Pass$15,677 $28,709 $53,989 $77,692 $45,897 $113,642 $212,667 $ $548,273 
(8) Special mention    689   17 706 
(9) Substandard - accruing         
(9+) Non-accrual     984   984 
Total consumer$15,677 $28,709 $53,989 $77,692 $46,586 $114,626 $212,667 $17 $549,963 
Total$300,817 $2,409,381 $3,531,759 $1,522,978 $675,757 $1,527,051 $10,900,174 $41,004 $20,908,921 
Gross charge-offs$ $6,731 $311 $3,512 $ $232 $83 $ $10,869 
(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 
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The following table details activity in the allowance for credit losses on loans. As discussed in Note 1 - Operations and Summary of Significant Accounting Policies in the Company’s 2023 Form 10-K, in the second quarter of 2023, changes were made to certain estimates used in the Company’s current expected credit loss model which resulted in adjustments being made to the Company’s portfolio segments. As a result, prior period balances in the table below have been reclassified to conform to the current period presentation of portfolio segments. 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
Three Months Ended March 31, 2024
Beginning balance$171,437 $4,173 $71,829 $2,534 $249,973 
Provision for credit losses on loans19,976 1,825 2,786 166 24,753 
Charge-offs7,544  3,325  10,869 
Recoveries105    105 
Net charge-offs (recoveries)7,439  3,325  10,764 
Ending balance$183,974 $5,998 $71,290 $2,700 $263,962