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

9 Months Ended

Sep. 30, 2020

Receivables [Abstract]

Summary of Loans Held for Investment by Portfolio Segment

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

	September 30, 2020		December 31, 2019
	Amount		Amount
	(Dollars in thousands)
BancFirst
Real estate:
Commercial real estate owner occupied	$	648,972	$	621,188
Commercial real estate non-owner occupied		974,308		851,200
Construction and development < 60 months		229,116		287,138
Construction residential real estate < 60 months		205,543		189,480
Residential real estate first lien		853,654		834,849
Residential real estate all other		175,370		187,647
Farmland		251,410		246,988
Commercial and agricultural non-real estate		1,375,246		1,499,404
Consumer non-real estate		349,338		359,529
Other loans (2)		1,024,539		154,015
Pegasus Bank		524,597		430,705
Total (1)	$	6,612,093	$	5,662,143
(1) Excludes accrued interest receivable of $28.7 million at September 30, 2020 and $27.4 million at December 31, 2019, that is recorded in accrued interest receivable and other assets.
(2) Includes PPP loans held for investment of $830.3 million, net of unamortized processing fees of $22.5 million at September 30, 2020.

Summary of Troubled Debt Restructurings and Other Real Estate Owned and Repossessed Assets

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

	September 30,		December 31,
	2020		2019
	(Dollars in thousands)
Troubled debt restructurings	$	2,837	$	18,010
Other real estate owned and repossessed assets	$	4,939	$	6,073

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. Residential real estate refers to one-to-four family real estate.

	September 30, 2020
	(Dollars in thousands)
BancFirst
Real estate:
Commercial real estate owner occupied	$	2,447
Commercial real estate non-owner occupied		20,476
Construction and development < 60 months		115
Construction residential real estate < 60 months		—
Residential real estate first lien		4,131
Residential real estate all other		1,487
Farmland		10,517
Commercial and agricultural non-real estate		37,554
Consumer non-real estate		363
Other loans		5,295
Pegasus Bank		—
Total	$	82,385
	December 31, 2019
	(Dollars in thousands)
BancFirst
Real estate:
Non-residential real estate owner occupied	$	2,275
Non-residential real estate other		1,815
Residential real estate permanent mortgage		1,206
Residential real estate all other		3,060
Non-consumer non-real estate		2,915
Consumer non-real estate		264
Other loans		1,083
Acquired loans		4,496
Pegasus Bank		851
Total	$	17,965

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 our loans held for investment:

	Age Analysis of Past Due Loans
	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
	(Dollars in thousands)
As of September 30, 2020
BancFirst
Real estate:
Commercial real estate owner occupied	$	509	$	461	$	2,038	$	3,008	$	645,964	$	648,972	$	78
Commercial real estate non-owner occupied		248		38		35		321		973,987		974,308		35
Construction and development < 60 months		179		—		1,605		1,784		227,332		229,116		1,605
Construction residential real estate < 60 months		203		—		406		609		204,934		205,543		406
Residential real estate first lien		4,326		1,292		3,310		8,928		844,726		853,654		651
Residential real estate all other		1,177		65		942		2,184		173,186		175,370		217
Farmland		5,940		338		3,256		9,534		241,876		251,410		384
Commercial and agricultural non-real estate		5,436		10,661		23,273		39,370		1,335,876		1,375,246		2,681
Consumer non-real estate		1,996		519		527		3,042		346,296		349,338		288
Other loans		199		250		5,232		5,681		1,018,858		1,024,539		67
Pegasus Bank		—		—		—		—		524,597		524,597		—
Total	$	20,213	$	13,624	$	40,624	$	74,461	$	6,537,632	$	6,612,093	$	6,412
As of December 31, 2019
BancFirst
Real estate:
Non-residential real estate owner occupied	$	1,600	$	967	$	5,159	$	7,726	$	699,690	$	707,416	$	3,799
Non-residential real estate other		971		—		1,228		2,199		1,134,976		1,137,175		—
Residential real estate permanent mortgage		4,705		973		2,215		7,893		332,679		340,572		1,660
Residential real estate other		4,496		1,028		2,541		8,065		912,767		920,832		549
Non-consumer non-real estate		2,290		1,446		1,763		5,499		1,448,894		1,454,393		354
Consumer other		2,829		858		592		4,279		358,075		362,354		491
Other loans		1,670		8		4,613		6,291		147,724		154,015		4,426
Acquired loans		2,167		1,376		3,447		6,990		147,691		154,681		555
Pegasus Bank		—		—		851		851		429,854		430,705		—
Total	$	20,728	$	6,656	$	22,409	$	49,793	$	5,612,350	$	5,662,143	$	11,834

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

The following table summarizes our gross loans held for investment by year of origination and internally assigned credit grades:

	Term Loans Amortized Cost Basis by Origination Year
	2020	2019	2018	2017	2016	Prior	Revolving Loans Amortized Cost Basis	Total
	(Dollars in thousands)
As of September 30, 2020
BancFirst
Commercial real estate owner occupied
Grade 1	$119,516	$109,276	$77,708	$52,686	$39,161	$97,123	$11,040	$506,510
Grade 2	35,152	28,126	12,584	9,588	12,940	27,302	3,957	129,649
Grade 3	448	3,990	345	1,239	1,324	2,823	85	10,254
Grade 4	44	75	1,118	—	388	467	467	2,559
Total commercial real estate owner occupied loans	155,160	141,467	91,755	63,513	53,813	127,715	15,549	648,972
Commercial real estate non-owner occupied
Grade 1	203,748	170,966	93,283	81,087	86,160	97,595	12,388	745,227
Grade 2	43,767	51,241	26,932	10,397	8,930	51,047	3,917	196,231
Grade 3	1,126	3,087	7,107	555	41	296	70	12,282
Grade 4	20,477	91	—	—	—	—	—	20,568
Total commercial real estate non-owner occupied loans	269,118	225,385	127,322	92,039	95,131	148,938	16,375	974,308
Construction and development < 60 months
Grade 1	98,335	67,064	15,893	4,877	1,998	2,493	12,078	202,738
Grade 2	9,837	8,828	1,637	835	167	551	350	22,205
Grade 3	4,050	—	9	—	—	—	—	4,059
Grade 4	—	68	9	23	—	—	—	100
Grade 5	14	—	—	—	—	—	—	14
Total construction and development < 60 months	112,236	75,960	17,548	5,735	2,165	3,044	12,428	229,116
Construction residential real estate < 60 months
Grade 1	136,683	30,650	69	22	36	180	6,047	173,687
Grade 2	22,814	6,202	113	—	—	475	285	29,889
Grade 3	1,848	119	—	—	—	—	—	1,967
Total construction residential real estate < 60 months	161,345	36,971	182	22	36	655	6,332	205,543
Residential real estate first lien
Grade 1	193,583	152,017	87,058	68,286	52,044	151,406	—	704,394
Grade 2	21,833	24,877	22,230	12,256	12,252	34,614	—	128,062
Grade 3	2,623	1,986	1,511	1,991	1,902	5,816	—	15,829
Grade 4	581	843	589	291	1,363	1,651	—	5,318
Grade 5	—	—	—	—	51	—	—	51
Total residential real estate first lien	218,620	179,723	111,388	82,824	67,612	193,487	—	853,654
Residential real estate all other
Grade 1	17,918	15,800	11,956	7,509	5,819	12,591	31,491	103,084
Grade 2	2,735	2,010	1,535	1,914	465	2,593	56,292	67,544
Grade 3	358	486	355	121	223	299	922	2,764
Grade 4	183	257	570	65	75	702	56	1,908
Grade 5	—	70	—	—	—	—	—	70
Total residential real estate all other	21,194	18,623	14,416	9,609	6,582	16,185	88,761	175,370
Farmland
Grade 1	37,586	29,261	21,463	14,672	14,438	32,080	7,156	156,656
Grade 2	12,109	31,102	6,920	7,212	5,097	9,858	6,620	78,918
Grade 3	1,801	313	1,498	1,057	580	810	1,934	7,993
Grade 4	450	14	4,594	304	374	378	1,729	7,843
Total farmland	51,946	60,690	34,475	23,245	20,489	43,126	17,439	251,410
Commercial and agricultural non-real estate
Grade 1	246,924	205,433	137,219	83,013	51,528	42,830	281,100	1,048,047
Grade 2	78,784	37,525	27,662	7,598	6,626	25,172	71,701	255,068
Grade 3	10,273	5,326	1,605	1,305	363	384	16,684	35,940
Grade 4	25,556	2,036	1,865	2,312	1,362	302	2,758	36,191
Total commercial and agricultural non-real estate	361,537	250,320	168,351	94,228	59,879	68,688	372,243	1,375,246
Consumer non-real estate
Grade 1	129,050	110,557	50,270	17,947	6,330	2,605	6,432	323,191
Grade 2	9,299	7,265	4,171	1,092	648	334	281	23,090
Grade 3	389	895	569	272	95	74	16	2,310
Grade 4	70	300	169	94	40	73	1	747
Total consumer non-real estate	138,808	119,017	55,179	19,405	7,113	3,086	6,730	349,338

Other loans
Grade 1	883,501	30,094	27,022	21,115	18,894	14,807	21,178	1,016,611
Grade 2	—	—	17	2,963	1,163	1,978	753	6,874
Grade 3	—	—	12	—	—	66	—	78
Grade 4	—	—	—	13	28	69	866	976
Total other loans	883,501	30,094	27,051	24,091	20,085	16,920	22,797	1,024,539
Pegasus Bank
Grade 1	77,749	71,121	38,632	29,364	13,934	42,795	85,867	359,462
Grade 2	19,119	32,094	4,321	20,939	3,942	7,285	76,104	163,804
Grade 3	—	—	—	—	—	1,331	—	1,331
Total Pegasus Bank	96,868	103,215	42,953	50,303	17,876	51,411	161,971	524,597
Total loans held for investment	$2,470,333	$1,241,465	$690,620	$465,014	$350,781	$673,255	$720,625	$6,612,093

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		Impact of CECL adoption			Initial allowance on loans purchased with credit deterioration		Charge- offs			Recoveries		Net charge-offs			Provision for credit losses on loans			Balance at end of period
	(Dollars in thousands)
Three Months Ended September 30, 2020
BancFirst
Real estate:
Commercial real estate owner occupied	$	6,630	$	—		$	—	$	(24	)	$	1	$	(23	)	$	1,287		$	7,894
Commercial real estate non-owner occupied		9,483		—			—		(87	)		—		(87	)		5,508			14,904
Construction and development < 60 months		1,755		—			—		—			3		3			(169	)		1,589
Construction residential real estate < 60 months		2,259		—			—		(368	)		—		(368	)		769			2,660
Residential real estate first lien		8,553		—			—		(133	)		5		(128	)		1,839			10,264
Residential real estate all other		2,720		—			—		(84	)		1		(83	)		219			2,856
Farmland		2,511		—			—		(3	)		—		(3	)		1,902			4,410
Commercial and agricultural non-real estate		44,505		—			—		(594	)		13		(581	)		5,518			49,442
Consumer non-real estate		4,714		—			—		(195	)		43		(152	)		539			5,101
Other loans		2,513		—			—		(100	)		8		(92	)		800			3,221
Pegasus Bank		3,857		—			—		(600	)		—		(600	)		528			3,785
Total	$	89,500	$	—		$	—	$	(2,188	)	$	74	$	(2,114	)	$	18,740		$	106,126
Nine Months Ended September 30, 2020
BancFirst
Real estate:
Commercial real estate owner occupied	$	5,625	$	(2,806	)	$	432	$	(137	)	$	2	$	(135	)	$	4,778		$	7,894
Commercial real estate non-owner occupied		8,358		(5,507	)		—		(87	)		—		(87	)		12,140			14,904
Construction and development < 60 months		2,214		(1,056	)		—		(59	)		6		(53	)		484			1,589
Construction residential real estate < 60 months		1,933		(778	)		—		(397	)		—		(397	)		1,902			2,660
Residential real estate first lien		8,692		(3,831	)		7		(351	)		11		(340	)		5,736			10,264
Residential real estate all other		2,767		(1,408	)		—		(116	)		29		(87	)		1,584			2,856
Farmland		2,821		(1,408	)		1		(3	)		—		(3	)		2,999			4,410
Commercial and agricultural non-real estate		15,345		11,849			62		(968	)		96		(872	)		23,058			49,442
Consumer non-real estate		3,252		(622	)		—		(751	)		157		(594	)		3,065			5,101
Other loans		2,632		(116	)		—		(100	)		10		(90	)		795			3,221
Pegasus Bank		599		2,488			—		(841	)		424		(417	)		1,115			3,785
Total	$	54,238	$	(3,195	)	$	502	$	(3,810	)	$	735	$	(3,075	)	$	57,656		$	106,126

	Allowance for Credit Losses
	Balance at beginning of period		Charge- offs			Recoveries		Net charge-offs			Provision for credit losses on loans		Balance at end of period
	(Dollars in thousands)
Three Months Ended September 30, 2019
BancFirst
Real estate:
Non-residential real estate owner occupied	$	6,887	$	(2	)	$	1	$	(1	)	$	72	$	6,958
Non-residential real estate other		11,287		(35	)		33		(2	)		478		11,763
Residential real estate permanent mortgage		3,325		(63	)		2		(61	)		97		3,361
Residential real estate all other		11,721		(29	)		2		(27	)		507		12,201
Non-consumer non-real estate		15,232		(244	)		49		(195	)		347		15,384
Consumer non-real estate		3,234		(287	)		66		(221	)		261		3,274
Other loans		2,449		—			9		9			189		2,647
Acquired loans		973		(1,517	)		53		(1,464	)		767		276
Pegasus Bank		—		—			24		24			40		64
Total	$	55,108	$	(2,177	)	$	239	$	(1,938	)	$	2,758	$	55,928
Nine Months Ended September 30, 2019
BancFirst
Real estate:
Non-residential real estate owner occupied	$	6,328	$	(11	)	$	2	$	(9	)	$	639	$	6,958
Non-residential real estate other		11,027		(57	)		34		(23	)		759		11,763
Residential real estate permanent mortgage		3,261		(130	)		11		(119	)		219		3,361
Residential real estate all other		10,673		(224	)		29		(195	)		1,723		12,201
Non-consumer non-real estate		13,151		(401	)		201		(200	)		2,433		15,384
Consumer non-real estate		3,065		(569	)		175		(394	)		603		3,274
Other loans		2,423		—			87		87			137		2,647
Acquired loans		1,461		(1,713	)		206		(1,507	)		322		276
Pegasus Bank		—		—			24		24			40		64
Total	$	51,389	$	(3,105	)	$	769	$	(2,336	)	$	6,875	$	55,928

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 purchased credit deteriorated loans for the period are as follows:

	Loans acquired with deteriorated credit quality
	(Dollars in thousands)
For the period ended September 30, 2020
Purchase price of acquired loans	$	860
Allowance for credit losses of acquired loans		460
Par value of acquired loans	$	1,320

Collateral-Dependent Gross Loans Held for Investment by Collateral Type

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. The following table summarizes collateral-dependent gross loans held for investment by collateral type as follows:

	Collateral Type
	Real Estate		Business Assets		Energy Reserves		Other Assets
	(Dollars in thousands)
As of September 30, 2020
BancFirst
Real estate:
Commercial real estate owner occupied	$	1,508	$	—	$	—	$	—
Commercial real estate non-owner occupied		20,477		—		—		—
Construction and development < 60 months		14		—		—		—
Construction residential real estate < 60 months		—		—		—		—
Residential real estate first lien		1,279		—		—		—
Residential real estate all other		759		—		—		—
Farmland		3,814		—		—		—
Commercial and agricultural non-real estate		—		2,759		28,256		4,856
Consumer non-real estate		—		—		—		141
Other loans		—		12		—		—
Pegasus Bank		1,257		—		—		—
Total collateral-dependent loans held for investment	$	29,108	$	2,771	$	28,256	$	4,997

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,
	2020		2019
	(Dollars in thousands)
Other real estate owned	$	3,458	$	2,972
Repossessed assets		965		946
Total	$	4,423	$	3,918