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

9 Months Ended

Sep. 30, 2023

Receivables [Abstract]

Summary of Loans Held for Investment by Portfolio Segment

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

	September 30, 2023		December 31, 2022
	(Dollars in thousands)
Real estate:
Commercial real estate owner occupied		960,868		908,494
Commercial real estate non-owner occupied		1,443,831		1,383,150
Construction and development < 60 months		575,652		475,236
Construction residential real estate < 60 months		274,311		303,305
Residential real estate first lien		1,216,508		1,117,899
Residential real estate all other		230,397		196,198
Agriculture		425,930		408,037
Commercial non-real estate		1,296,796		1,241,454
Consumer non-real estate		475,721		446,756
Oil and gas		572,608		463,034
Total (1)	$	7,472,622	$	6,943,563
(1) Excludes accrued interest receivable of $37.8 million at September 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:

	September 30, 2023		December 31, 2022
	(Dollars in thousands)
Other real estate owned and repossessed assets	$	42,782	$	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 September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(Dollars in thousands)
Rental income	$	2,911	$	2,437	$	8,379	$	7,750
Operating expense		2,690		2,381		8,038		7,120

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.

	September 30, 2023		December 31, 2022
	(Dollars in thousands)
Real estate:
Commercial real estate owner occupied	$	2,082	$	1,795
Commercial real estate non-owner occupied		674		667
Construction and development < 60 months		802		93
Construction residential real estate < 60 months		366		430
Residential real estate first lien		2,734		1,947
Residential real estate all other		833		55
Agriculture		2,305		2,734
Commercial non-real estate		6,465		7,066
Consumer non-real estate		332		192
Oil and gas		83		320
Total	$	16,676	$	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 September 30, 2023
Real estate:
Commercial real estate owner occupied	$	1,490	$	671	$	6,522	$	8,683	$	952,185	$	960,868	$	4,928
Commercial real estate non-owner occupied		—		40		1,198		1,238		1,442,593		1,443,831		524
Construction and development < 60 months		9,161		—		1,186		10,347		565,305		575,652		384
Construction residential real estate < 60 months		424		97		543		1,064		273,247		274,311		543
Residential real estate first lien		3,104		543		2,877		6,524		1,209,984		1,216,508		1,120
Residential real estate all other		647		252		861		1,760		228,637		230,397		100
Agriculture		3,413		380		3,925		7,718		418,212		425,930		3,166
Commercial non-real estate		3,439		1,226		5,589		10,254		1,286,542		1,296,796		1,323
Consumer non-real estate		2,322		635		462		3,419		472,302		475,721		353
Oil and gas		115		—		217		332		572,276		572,608		134
Total	$	24,115	$	3,844	$	23,380	$	51,339	$	7,421,283	$	7,472,622	$	12,575
	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 September 30, 2023
Commercial real estate owner occupied
Grade 1	$	99,990	$	155,460	$	120,444	$	87,838	$	82,081	$	139,298	$	23,622	$	708,733
Grade 2		29,812		57,975		37,289		23,581		21,509		30,107		34,361		234,634
Grade 3		142		3,582		4,304		652		1,899		1,075		2,437		14,091
Grade 4		27		159		200		850		665		1,020		150		3,071
Grade 5		—		—		—		—		339		—		—		339
Total commercial real estate owner occupied		129,971		217,176		162,237		112,921		106,493		171,500		60,570		960,868
Commercial real estate non-owner occupied
Grade 1	$	160,303	$	255,862	$	176,995	$	122,636	$	59,973	$	72,918	$	47,780	$	896,467
Grade 2		74,860		155,293		81,452		53,753		62,989		73,789		28,722		530,858
Grade 3		—		6,736		1,717		149		6,207		299		—		15,108
Grade 4		200		632		—		—		—		566		—		1,398
Total commercial real estate non-owner occupied		235,363		418,523		260,164		176,538		129,169		147,572		76,502		1,443,831
Construction and development < 60 months
Grade 1	$	91,548	$	123,068	$	73,070	$	8,484	$	6,842	$	5,403	$	61,474	$	369,889
Grade 2		59,837		50,514		33,168		6,629		13,572		2,381		34,350		200,451
Grade 3		3,308		893		102		97		—		7		—		4,407
Grade 4		—		903		—		—		—		2		—		905
Total construction and development < 60 months		154,693		175,378		106,340		15,210		20,414		7,793		95,824		575,652
Construction residential real estate < 60 months
Grade 1	$	136,871	$	36,431	$	1,441	$	102	$	2	$	37	$	37,179	$	212,063
Grade 2		44,707		9,530		32		22		—		382		549		55,222
Grade 3		5,730		387		—		—		—		—		—		6,117
Grade 4		366		543		—		—		—		—		—		909
Total construction residential real estate < 60 months		187,674		46,891		1,473		124		2		419		37,728		274,311
Residential real estate first lien
Grade 1	$	223,552	$	238,614	$	177,122	$	121,747	$	74,016	$	155,802	$	2,918	$	993,771
Grade 2		41,655		40,971		39,280		25,018		13,617		43,460		—		204,001
Grade 3		2,282		1,902		2,626		1,327		1,606		4,202		—		13,945
Grade 4		384		172		1,246		346		440		2,203		—		4,791
Total residential real estate first lien		267,873		281,659		220,274		148,438		89,679		205,667		2,918		1,216,508
Residential real estate all other
Grade 1	$	35,422	$	27,339	$	8,166	$	8,242	$	3,963	$	13,045	$	41,474	$	137,651
Grade 2		2,828		5,088		2,210		1,958		1,546		3,272		71,527		88,429
Grade 3		416		353		74		42		41		440		1,925		3,291
Grade 4		—		24		—		—		95		45		862		1,026
Total residential real estate all other		38,666		32,804		10,450		10,242		5,645		16,802		115,788		230,397
Agriculture
Grade 1	$	47,552	$	55,420	$	35,685	$	29,284	$	17,863	$	33,652	$	39,462	$	258,918
Grade 2		28,366		24,237		19,989		10,303		9,369		17,304		35,554		145,122
Grade 3		8,891		856		854		3,433		323		2,696		2,896		19,949
Grade 4		41		901		217		134		384		244		20		1,941
Total Agriculture		84,850		81,414		56,745		43,154		27,939		53,896		77,932		425,930
Commercial non-real estate
Grade 1	$	204,828	$	186,934	$	167,915	$	40,328	$	39,003	$	39,326	$	281,116	$	959,450
Grade 2		80,383		43,067		25,617		15,244		10,064		9,171		137,965		321,511
Grade 3		1,840		3,149		1,073		163		563		1,103		2,648		10,539
Grade 4		1,038		1,408		304		690		309		129		1,154		5,032
Grade 5		—		—		—		—		264		—		—		264
Total commercial non-real estate		288,089		234,558		194,909		56,425		50,203		49,729		422,883		1,296,796
Consumer non-real estate
Grade 1	$	175,483	$	123,675	$	64,280	$	22,331	$	10,804	$	3,518	$	24,688	$	424,779
Grade 2		15,347		16,509		7,792		2,502		809		1,614		1,764		46,337
Grade 3		562		1,198		957		325		285		155		12		3,494
Grade 4		123		402		384		103		85		12		2		1,111
Total consumer non-real estate		191,515		141,784		73,413		25,261		11,983		5,299		26,466		475,721
Oil and gas
Grade 1	$	157,820	$	26,772	$	52,090	$	9,850	$	1,630	$	16,141	$	170,256	$	434,559
Grade 2		41,447		7,180		1,999		414		306		217		83,009		134,572
Grade 3		134		1,922		413		2		13		167		743		3,394
Grade 4		—		83		—		—		—		—		—		83
Total oil and gas		199,401		35,957		54,502		10,266		1,949		16,525		254,008		572,608
Total loans held for investment	$	1,778,095	$	1,666,144	$	1,140,507	$	598,579	$	443,476	$	675,202	$	1,170,619	$	7,472,622

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 September 30, 2023
Commercial real estate owner occupied
Current-period gross charge-offs	$	174	$	189	$	25	$	112	$	147	$	158	$	—	$	805
Commercial real estate non-owner occupied
Current-period gross charge-offs		—		—		—		—		—		—		—		—
Construction and development < 60 months
Current-period gross charge-offs		—		—		—		—		—		—		—		—
Construction residential real estate < 60 months
Current-period gross charge-offs		—		—		—		—		—		—		—		—
Residential real estate first lien
Current-period gross charge-offs		—		—		71		11		—		18		—		100
Residential real estate all other
Current-period gross charge-offs		—		—		—		—		—		—		—		—
Agriculture
Current-period gross charge-offs		—		150		9		—		—		—		—		159
Commercial non-real estate
Current-period gross charge-offs		19		15		46		—		51		108		—		239
Consumer non-real estate
Current-period gross charge-offs		192		146		56		12		1		18		2		427
Oil and gas
Current-period gross charge-offs		—		—		—		—		—		—		—		—
Total current-period gross charge-offs	$	385	$	500	$	207	$	135	$	199	$	302	$	2	$	1,730

	Term Loans Amortized Cost Basis by Origination Year												Revolving Loans
(Dollars in thousands)	2023		2022		2021		2020		2019		Prior		Amortized Cost Basis		Total
Nine months ended September 30, 2023
Commercial real estate owner occupied
Current-period gross charge-offs	$	174	$	196	$	26	$	134	$	165	$	158	$	—	$	853
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		—		—		90		32		—		22		—		144
Residential real estate all other
Current-period gross charge-offs		—		4		19		—		1		4		—		28
Agriculture
Current-period gross charge-offs		—		154		9		317		14		2		—		496
Commercial non-real estate
Current-period gross charge-offs		61		116		109		20		51		160		—		517
Consumer non-real estate
Current-period gross charge-offs		221		408		203		41		38		35		19		965
Oil and gas
Current-period gross charge-offs		—		2		—		—		—		—		—		2
Total current-period gross charge-offs	$	456	$	882	$	456	$	546	$	269	$	384	$	19	$	3,012

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 September 30, 2023
Real estate:
Commercial real estate owner occupied	$	6,808	$	(805	)	$	3	$	(802	)	$	809		$	6,815
Commercial real estate non-owner occupied		33,432		—			—		—			1,182			34,614
Construction and development < 60 months		3,440		—			3		3			467			3,910
Construction residential real estate < 60 months		3,553		—			—		—			(9	)		3,544
Residential real estate first lien		4,755		(100	)		—		(100	)		109			4,764
Residential real estate all other		1,661		—			1		1			3			1,665
Agriculture		6,426		(159	)		—		(159	)		166			6,433
Commercial non-real estate		25,127		(239	)		243		4			(886	)		24,245
Consumer non-real estate		4,344		(427	)		24		(403	)		448			4,389
Oil and gas		7,374		—			—		—			23			7,397
Total	$	96,920	$	(1,730	)	$	274	$	(1,456	)	$	2,312		$	97,776

	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)
Nine Months Ended September 30, 2023
Real estate:
Commercial real estate owner occupied	$	6,416	$	(853	)	$	55	$	(798	)	$	1,197		$	6,815
Commercial real estate non-owner occupied		30,190		(3	)		—		(3	)		4,427			34,614
Construction and development < 60 months		3,778		(4	)		9		5			127			3,910
Construction residential real estate < 60 months		3,275		—			—		—			269			3,544
Residential real estate first lien		4,092		(144	)		13		(131	)		803			4,764
Residential real estate all other		1,418		(28	)		4		(24	)		271			1,665
Agriculture		6,217		(496	)		13		(483	)		699			6,433
Commercial non-real estate		25,106		(517	)		392		(125	)		(736	)		24,245
Consumer non-real estate		4,132		(965	)		116		(849	)		1,106			4,389
Oil and gas		8,104		(2	)		—		(2	)		(705	)		7,397
Total	$	92,728	$	(3,012	)	$	602	$	(2,410	)	$	7,458		$	97,776

	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)
Three Months Ended September 30, 2022
Real estate:
Commercial real estate owner occupied	$	6,928	$	—		$	—		$	426	$	426		$	(231	)	$	7,123
Commercial real estate non-owner occupied		16,315		—			—			—		—			7,371			23,686
Construction and development < 60 months		3,680		—			—			3		3			461			4,144
Construction residential real estate < 60 months		1,183		—			—			—		—			1,124			2,307
Residential real estate first lien		3,355		—			(11	)		15		4			(18	)		3,341
Residential real estate all other		1,480		—			(2	)		1		(1	)		84			1,563
Agriculture		7,956		—			(80	)		1		(79	)		629			8,506
Commercial non-real estate		25,370		(4	)		(187	)		26		(161	)		(251	)		24,954
Consumer non-real estate		4,050		(3	)		(171	)		59		(112	)		270			4,205
Oil and gas		16,618		—			—			—		—			(6,576	)		10,042
Total	$	86,935	$	(7	)	$	(451	)	$	531	$	80		$	2,863		$	89,871

	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)
Nine Months Ended September 30, 2022
Real estate:
Commercial real estate owner occupied	$	7,550	$	—	$	(20	)	$	504	$	484		$	(911	)	$	7,123
Commercial real estate non-owner occupied		16,807		—		—			—		—			6,879			23,686
Construction and development < 60 months		3,454		—		—			8		8			682			4,144
Construction residential real estate < 60 months		1,051		—		—			—		—			1,256			2,307
Residential real estate first lien		3,048		2		(60	)		28		(32	)		323			3,341
Residential real estate all other		1,567		—		(38	)		403		365			(369	)		1,563
Agriculture		8,392		—		(205	)		8		(197	)		311			8,506
Commercial non-real estate		25,565		44		(961	)		162		(799	)		144			24,954
Consumer non-real estate		3,694		25		(404	)		139		(265	)		751			4,205
Oil and gas		12,808		—		—			—		—			(2,766	)		10,042
Total	$	83,936	$	71	$	(1,688	)	$	1,252	$	(436	)	$	6,300		$	89,871

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 nine month period ended September 30, 2023. The credit-deteriorated loans purchased during the nine months ended September 30, 2022 were as follows:

	Loans acquired with deteriorated credit quality
	(Dollars in thousands)
For the period ended September 30, 2022
Purchase price of loans at acquisition	$	661
Allowance for credit losses at acquisition		71
Par value of acquired loans at acquisition	$	732

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 September 30, 2023
Real estate:
Commercial real estate owner occupied	$	—	$	—	$	—	$	—	$	—	$	—
Commercial real estate non-owner occupied		632		—		—		—		632		250
Construction and development < 60 months		—		—		—		—		—		—
Construction residential real estate < 60 months		366		—		—		—		366		45
Residential real estate first lien		214		—		—		—		214		65
Residential real estate all other		57		—		—		—		57		60
Agriculture		3,191		603		—		3,039		6,833		2,586
Commercial non-real estate		—		4,902		—		37		4,939		1,229
Consumer non-real estate		—		14		—		79		93		65
Oil and gas		—		—		—		—		—		—
Total collateral-dependent loans held for investment	$	4,460	$	5,519	$	—	$	3,155	$	13,134	$	4,300
	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:

	Nine Months Ended September 30,
	2023		2022
	(Dollars in thousands)
Other real estate owned	$	2,236	$	4,393
Repossessed assets		1,448		696
Total	$	3,684	$	5,089