Loans Held for Investment and Allowance for Credit Losses on Loans (Tables)

6 Months Ended

Jun. 30, 2023

Receivables [Abstract]

Summary of Loans Held for Investment by Portfolio Segment

Loans held for investment are summarized by portfolio segment as follows:

	June 30, 2023		December 31, 2022
	(Dollars in thousands)
Real estate:
Commercial real estate owner occupied		969,914		908,494
Commercial real estate non-owner occupied		1,412,476		1,383,150
Construction and development < 60 months		549,068		475,236
Construction residential real estate < 60 months		276,726		303,305
Residential real estate first lien		1,189,944		1,117,899
Residential real estate all other		219,752		196,198
Agriculture		422,327		408,037
Commercial non-real estate		1,349,789		1,241,454
Consumer non-real estate		457,897		446,756
Oil and gas		450,799		463,034
Total (1)	$	7,298,692	$	6,943,563
(1) Excludes accrued interest receivable of $34.3 million at June 30, 2023 and $30.6 million at December 31, 2022, that is recorded in accrued interest receivable and other assets.

Summary of Other Real Estate Owned and Repossessed Assets

The following is a summary of other real estate owned and repossessed assets:

	June 30, 2023		December 31, 2022
	(Dollars in thousands)
Other real estate owned and repossessed assets	$	41,612	$	36,936

Summary of Rental Income and Operating Expenses

This property had the following rental income and operating expenses for the periods presented.

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(Dollars in thousands)
Rental income	$	2,778	$	2,643	$	5,468	$	5,313
Operating expense		2,967		2,299		5,348		4,738

Summary of Amounts Included in Nonaccrual Loans Segregated by Portfolio Segment

The following table is a summary of amounts included in nonaccrual loans, segregated by portfolio segment.

	June 30, 2023		December 31, 2022
	(Dollars in thousands)
Real estate:
Commercial real estate owner occupied	$	4,360	$	1,795
Commercial real estate non-owner occupied		706		667
Construction and development < 60 months		81		93
Construction residential real estate < 60 months		376		430
Residential real estate first lien		2,717		1,947
Residential real estate all other		845		55
Agriculture		2,141		2,734
Commercial non-real estate		6,497		7,066
Consumer non-real estate		241		192
Oil and gas		83		320
Total	$	18,047	$	15,299

Age Analysis of Loans Held for Investments

Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. The following table presents an age analysis of the Company's loans held for investment:

	Age Analysis of Past Due Loans
(Dollars in thousands)	30-59 Days Past Due		60-89 Days Past Due		90 Days and Greater		Total Past Due Loans		Current Loans		Total Loans		Accruing Loans 90 Days or More Past Due
As of June 30, 2023
Real estate:
Commercial real estate owner occupied	$	2,439	$	1,684	$	6,844	$	10,967	$	958,947	$	969,914	$	4,152
Commercial real estate non-owner occupied		236		8,752		875		9,863		1,402,613		1,412,476		213
Construction and development < 60 months		52		—		984		1,036		548,032		549,068		903
Construction residential real estate < 60 months		1,342		103		543		1,988		274,738		276,726		543
Residential real estate first lien		2,597		1,328		2,534		6,459		1,183,485		1,189,944		879
Residential real estate all other		1,092		280		840		2,212		217,540		219,752		61
Agriculture		833		268		838		1,939		420,388		422,327		50
Commercial non-real estate		3,795		928		6,055		10,778		1,339,011		1,349,789		1,567
Consumer non-real estate		2,405		807		569		3,781		454,116		457,897		431
Oil and gas		236		654		83		973		449,826		450,799		—
Total	$	15,027	$	14,804	$	20,165	$	49,996	$	7,248,696	$	7,298,692	$	8,799
	30-59 Days Past Due		60-89 Days Past Due		90 Days and Greater		Total Past Due Loans		Current Loans		Total Loans		Accruing Loans 90 Days or More Past Due
As of December 31, 2022
Real estate:
Commercial real estate owner occupied	$	1,314	$	1,524	$	4,580	$	7,418	$	901,076	$	908,494	$	4,580
Commercial real estate non-owner occupied		6,237		—		42		6,279		1,376,871		1,383,150		43
Construction and development < 60 months		535		40		114		689		474,547		475,236		81
Construction residential real estate < 60 months		1,320		282		148		1,750		301,555		303,305		—
Residential real estate first lien		3,415		1,076		844		5,335		1,112,564		1,117,899		349
Residential real estate all other		265		37		185		487		195,711		196,198		166
Agriculture		2,357		34		2,265		4,656		403,381		408,037		1,054
Commercial non-real estate		2,490		2,142		2,772		7,404		1,234,050		1,241,454		345
Consumer non-real estate		2,591		648		585		3,824		442,932		446,756		467
Oil and gas		654		—		—		654		462,380		463,034		—
Total	$	21,178	$	5,783	$	11,535	$	38,496	$	6,905,067	$	6,943,563	$	7,085

Gross Loans Held for Investment by Year of Origination and Internally Assigned Credit Grades

The following table summarizes the Company’s gross loans held for investment by year of origination and internally assigned credit grades:

	Term Loans Amortized Cost Basis by Origination Year												Revolving Loans
(Dollars in thousands)	2023		2022		2021		2020		2019		Prior		Amortized Cost Basis		Total
As of June 30, 2023
Commercial real estate owner occupied
Grade 1	$	75,514	$	174,029	$	131,583	$	96,065	$	91,649	$	150,940	$	51,100	$	770,880
Grade 2		22,851		42,130		30,830		24,524		19,136		30,000		18,248		187,719
Grade 3		19		—		4,450		1,193		883		1,459		212		8,216
Grade 4		—		314		345		311		1,166		624		—		2,760
Grade 5		—		—		—		—		339		—		—		339
Total commercial real estate owner occupied		98,384		216,473		167,208		122,093		113,173		183,023		69,560		969,914
Commercial real estate non-owner occupied
Grade 1	$	116,433	$	324,990	$	221,196	$	159,511	$	92,137	$	79,849	$	45,799	$	1,039,915
Grade 2		44,955		107,929		43,476		33,416		32,628		71,739		23,609		357,752
Grade 3		—		6,733		5		150		6,207		795		—		13,890
Grade 4		44		820		—		—		—		55		—		919
Total commercial real estate non-owner occupied		161,432		440,472		264,677		193,077		130,972		152,438		69,408		1,412,476
Construction and development < 60 months
Grade 1	$	88,593	$	139,210	$	77,235	$	14,074	$	4,622	$	6,522	$	70,118	$	400,374
Grade 2		42,927		36,862		15,894		1,584		13,984		2,418		33,679		147,348
Grade 3		—		903		103		98		—		7		154		1,265
Grade 4		—		81		—		—		—		—		—		81
Total construction and development < 60 months		131,520		177,056		93,232		15,756		18,606		8,947		103,951		549,068
Construction residential real estate < 60 months
Grade 1	$	106,520	$	80,355	$	1,897	$	257	$	6	$	39	$	33,846	$	222,920
Grade 2		25,787		26,221		38		22		—		388		90		52,546
Grade 3		99		785		—		—		—		—		—		884
Grade 4		376		—		—		—		—		—		—		376
Total construction residential real estate < 60 months		132,782		107,361		1,935		279		6		427		33,936		276,726
Residential real estate first lien
Grade 1	$	160,801	$	256,377	$	189,258	$	130,017	$	78,783	$	168,639	$	3,721	$	987,596
Grade 2		21,024		46,624		35,716		24,654		12,691		44,160		—		184,869
Grade 3		1,236		1,867		2,959		1,035		1,664		3,926		—		12,687
Grade 4		361		177		1,181		292		646		2,135		—		4,792
Total residential real estate first lien		183,422		305,045		229,114		155,998		93,784		218,860		3,721		1,189,944
Residential real estate all other
Grade 1	$	25,642	$	28,209	$	8,615	$	9,218	$	4,625	$	14,003	$	39,561	$	129,873
Grade 2		2,380		4,982		2,202		1,983		1,509		3,476		69,231		85,763
Grade 3		171		422		77		45		146		471		1,877		3,209
Grade 4		—		24		10		26		—		50		797		907
Total residential real estate all other		28,193		33,637		10,904		11,272		6,280		18,000		111,466		219,752
Agriculture
Grade 1	$	32,122	$	61,718	$	39,267	$	32,007	$	18,986	$	36,796	$	39,208	$	260,104
Grade 2		18,303		23,027		19,601		8,718		9,835		17,869		43,466		140,819
Grade 3		6,781		1,204		1,527		3,396		144		3,815		3,255		20,122
Grade 4		59		668		57		169		44		254		31		1,282
Total Agriculture		57,265		86,617		60,452		44,290		29,009		58,734		85,960		422,327
Commercial non-real estate
Grade 1	$	148,198	$	288,490	$	176,959	$	48,809	$	42,278	$	43,672	$	293,889	$	1,042,295
Grade 2		55,938		65,449		28,746		16,090		10,820		21,080		96,657		294,780
Grade 3		1,208		2,284		575		172		619		1,381		2,491		8,730
Grade 4		11		983		348		693		372		279		1,034		3,720
Grade 5		—		—		—		—		264		—		—		264
Total commercial non-real estate		205,355		357,206		206,628		65,764		54,353		66,412		394,071		1,349,789
Consumer non-real estate
Grade 1	$	118,847	$	146,280	$	76,246	$	27,782	$	13,664	$	4,737	$	26,330	$	413,886
Grade 2		7,960		16,721		8,236		2,766		971		1,804		1,642		40,100
Grade 3		155		984		1,013		401		245		115		16		2,929
Grade 4		39		392		352		44		85		25		4		941
Grade 5		—		41		—		—		—		—		—		41
Total consumer non-real estate		127,001		164,418		85,847		30,993		14,965		6,681		27,992		457,897
Oil and gas
Grade 1	$	62,557	$	13,971	$	96,748	$	12,909	$	2,273	$	17,373	$	159,813	$	365,644
Grade 2		6,779		5,334		2,251		432		18,470		255		47,498		81,019
Grade 3		—		2,091		240		3		—		—		1,719		4,053
Grade 4		—		83		—		—		—		—		—		83
Total oil and gas		69,336		21,479		99,239		13,344		20,743		17,628		209,030		450,799
Total loans held for investment	$	1,194,690	$	1,909,764	$	1,219,236	$	652,866	$	481,891	$	731,150	$	1,109,095	$	7,298,692

Gross Charge-offs by Year of Origination

The following tables summarize the Company’s gross charge-offs by year of origination for the periods indicated:

	Term Loans Amortized Cost Basis by Origination Year												Revolving Loans
(Dollars in thousands)	2023		2022		2021		2020		2019		Prior		Amortized Cost Basis		Total
Three months ended June 30, 2023
Commercial real estate owner occupied
Current-period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial real estate non-owner occupied
Current-period gross charge-offs		—		—		—		—		—		—		—		—
Construction and development < 60 months
Current-period gross charge-offs		—		—		—		2		—		—		—		2
Construction residential real estate < 60 months
Current-period gross charge-offs		—		—		—		—		—		—		—		—
Residential real estate first lien
Current-period gross charge-offs		—		—		19		21		—		2		—		42
Residential real estate all other
Current-period gross charge-offs		—		2		—		—		—		—		—		2
Agriculture
Current-period gross charge-offs		—		—		—		301		1		—		—		302
Commercial non-real estate
Current-period gross charge-offs		42		34		1		20		—		5		—		102
Consumer non-real estate
Current-period gross charge-offs		29		186		115		14		28		11		15		398
Oil and gas
Current-period gross charge-offs		—		2		—		—		—		—		—		2
Total current-period gross charge-offs	$	71	$	224	$	135	$	358	$	29	$	18	$	15	$	850

	Term Loans Amortized Cost Basis by Origination Year												Revolving Loans
(Dollars in thousands)	2023		2022		2021		2020		2019		Prior		Amortized Cost Basis		Total
Six months ended June 30, 2023
Commercial real estate owner occupied
Current-period gross charge-offs	$	—	$	7	$	1	$	22	$	18	$	—	$	—	$	48
Commercial real estate non-owner occupied
Current-period gross charge-offs		—		—		—		—		—		3		—		3
Construction and development < 60 months
Current-period gross charge-offs		—		2		—		2		—		—		—		4
Construction residential real estate < 60 months
Current-period gross charge-offs		—		—		—		—		—		—		—		—
Residential real estate first lien
Current-period gross charge-offs		—		—		19		21		—		4		—		44
Residential real estate all other
Current-period gross charge-offs		—		4		19		—		1		4		—		28
Agriculture
Current-period gross charge-offs		—		4		—		317		14		2		—		337
Commercial non-real estate
Current-period gross charge-offs		42		101		63		20		—		52		—		278
Consumer non-real estate
Current-period gross charge-offs		29		262		147		29		37		17		17		538
Oil and gas
Current-period gross charge-offs		—		2		—		—		—		—		—		2
Total current-period gross charge-offs	$	71	$	382	$	249	$	411	$	70	$	82	$	17	$	1,282

Activity in Allowance for Credit Losses on Loans

The following table details activity in the allowance for credit losses on loans for the period presented. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories.

	Allowance for Credit Losses
	Balance at beginning of period		Charge- offs			Recoveries		Net charge-offs			Provision for /(benefit from) credit losses on loans			Balance at end of period
	(Dollars in thousands)
Three Months Ended June 30, 2023
Real estate:
Commercial real estate owner occupied	$	6,547	$	—		$	3	$	3		$	258		$	6,808
Commercial real estate non-owner occupied		32,120		—			—		—			1,312			33,432
Construction and development < 60 months		3,608		(2	)		3		1			(169	)		3,440
Construction residential real estate < 60 months		3,226		—			—		—			327			3,553
Residential real estate first lien		4,454		(42	)		10		(32	)		333			4,755
Residential real estate all other		1,444		(2	)		1		(1	)		218			1,661
Agriculture		6,268		(302	)		7		(295	)		453			6,426
Commercial non-real estate		25,079		(102	)		127		25			23			25,127
Consumer non-real estate		4,232		(398	)		35		(363	)		475			4,344
Oil and gas		7,782		(2	)		—		(2	)		(406	)		7,374
Total	$	94,760	$	(850	)	$	186	$	(664	)	$	2,824		$	96,920

	Allowance for Credit Losses
	Balance at beginning of period		Charge- offs			Recoveries		Net charge-offs			Provision for /(benefit from) credit losses on loans			Balance at end of period
	(Dollars in thousands)
Six Months Ended June 30, 2023
Real estate:
Commercial real estate owner occupied	$	6,416	$	(48	)	$	52	$	4		$	388		$	6,808
Commercial real estate non-owner occupied		30,190		(3	)		—		(3	)		3,245			33,432
Construction and development < 60 months		3,778		(4	)		6		2			(340	)		3,440
Construction residential real estate < 60 months		3,275		—			—		—			278			3,553
Residential real estate first lien		4,092		(44	)		13		(31	)		694			4,755
Residential real estate all other		1,418		(28	)		3		(25	)		268			1,661
Agriculture		6,217		(337	)		13		(324	)		533			6,426
Commercial non-real estate		25,106		(278	)		149		(129	)		150			25,127
Consumer non-real estate		4,132		(538	)		92		(446	)		658			4,344
Oil and gas		8,104		(2	)		—		(2	)		(728	)		7,374
Total	$	92,728	$	(1,282	)	$	328	$	(954	)	$	5,146		$	96,920

	Allowance for Credit Losses
	Balance at beginning of period		Charge- offs			Recoveries		Net charge-offs			Provision for /(benefit from) credit losses on loans			Balance at end of period
	(Dollars in thousands)
Three Months Ended June 30, 2022
Real estate:
Commercial real estate owner occupied	$	8,262	$	(4	)	$	30	$	26		$	(1,360	)	$	6,928
Commercial real estate non-owner occupied		16,348		—			—		—			(33	)		16,315
Construction and development < 60 months		3,272		—			2		2			406			3,680
Construction residential real estate < 60 months		1,103		—			—		—			80			1,183
Residential real estate first lien		3,394		(5	)		6		1			(40	)		3,355
Residential real estate all other		1,560		(36	)		—		(36	)		(44	)		1,480
Agriculture		8,018		—			4		4			(66	)		7,956
Commercial non-real estate		25,163		(717	)		26		(691	)		898			25,370
Consumer non-real estate		3,730		(153	)		42		(111	)		431			4,050
Oil and gas		16,389		—			—		—			229			16,618
Total	$	87,239	$	(915	)	$	110	$	(805	)	$	501		$	86,935

	Allowance for Credit Losses
	Balance at beginning of period		Initial allowance on loans purchased with credit deterioration		Charge- offs			Recoveries		Net charge-offs			Provision for /(benefit from) credit losses on loans			Balance at end of period
	(Dollars in thousands)
Six Months Ended June 30, 2022
Real estate:
Commercial real estate owner occupied	$	7,550	$	—	$	(20	)	$	78	$	58		$	(680	)	$	6,928
Commercial real estate non-owner occupied		16,807		—		—			—		—			(492	)		16,315
Construction and development < 60 months		3,454		—		—			5		5			221			3,680
Construction residential real estate < 60 months		1,051		—		—			—		—			132			1,183
Residential real estate first lien		3,048		2		(49	)		13		(36	)		341			3,355
Residential real estate all other		1,567		—		(36	)		402		366			(453	)		1,480
Agriculture		8,392		—		(125	)		7		(118	)		(318	)		7,956
Commercial non-real estate		25,565		48		(774	)		136		(638	)		395			25,370
Consumer non-real estate		3,694		28		(233	)		80		(153	)		481			4,050
Oil and gas		12,808		—		—			—		—			3,810			16,618
Total	$	83,936	$	78	$	(1,237	)	$	721	$	(516	)	$	3,437		$	86,935

Purchased Credit Deteriorated Loans

The Company has purchased loans, for which there was, at acquisition, evidence of more than insignificant deterioration of credit quality since origination. The Company did not purchase credit-deteriorated loans during the six month period ended June 30, 2023. The credit-deteriorated loans purchased during the six months ended June 30, 2022 were as follows:

	Loans acquired with deteriorated credit quality
	(Dollars in thousands)
For the period ended June 30, 2022
Purchase price of loans at acquisition	$	661
Allowance for credit losses at acquisition		78
Par value of acquired loans at acquisition	$	739

Collateral-Dependent Gross Loans Held for Investment by Collateral Type and Related Specific Allocation

The following table summarizes collateral-dependent gross loans held for investment by collateral type and the related specific allocation as follows:

	Collateral Type
	Real Estate		Business Assets		Energy Reserves		Other Assets		Total		Specific Allocation
	(Dollars in thousands)
As of June 30, 2023
Real estate:
Commercial real estate owner occupied	$	2,129	$	—	$	—	$	—	$	2,129	$	863
Commercial real estate non-owner occupied		664		—		—		—		664		270
Construction and development < 60 months		—		—		—		—		—		—
Construction residential real estate < 60 months		376		—		—		—		376		45
Residential real estate first lien		371		—		—		—		371		118
Residential real estate all other		41		—		—		—		41		19
Agriculture		3,436		672		—		3,068		7,176		2,694
Commercial non-real estate		—		4,879		—		—		4,879		1,747
Consumer non-real estate		—		—		—		93		93		56
Oil and gas		—		—		—		—		—		—
Total collateral-dependent loans held for investment	$	7,017	$	5,551	$	—	$	3,161	$	15,729	$	5,812
	Collateral Type
	Real Estate		Business Assets		Energy Reserves		Other Assets		Total		Specific Allocation
	(Dollars in thousands)
As of December 31, 2022
Real estate:
Commercial real estate owner occupied	$	2,213	$	—	$	—	$	—	$	2,213	$	870
Commercial real estate non-owner occupied		1,263		—		—		—		1,263		333
Construction and development < 60 months		—		—		—		—		—		—
Construction residential real estate < 60 months		420		—		—		—		420		45
Residential real estate first lien		481		—		—		—		481		207
Residential real estate all other		9		—		—		—		9		9
Agriculture		3,447		701		—		3,592		7,740		3,114
Commercial non-real estate		—		5,924		—		4		5,928		1,938
Consumer non-real estate		—		—		—		117		117		81
Oil and gas		—		—		—		—		—		—
Total collateral-dependent loans held for investment	$	7,833	$	6,625	$	—	$	3,713	$	18,171	$	6,597

Transfers from Loans and Premises and Equipment to Other Real Estate Owned and Repossessed Assets

Transfers from loans and premises and equipment to other real estate owned and repossessed assets during the periods presented are summarized as follows:

	Six Months Ended June 30,
	2023		2022
	(Dollars in thousands)
Other real estate owned	$	667	$	4,065
Repossessed assets		946		503
Total	$	1,613	$	4,568