Loans and Allowance for Loan Losses ("ALLL")

3 Months Ended

Mar. 31, 2022

Loans and Allowance for Loan Losses ("ALLL") [Abstract]

Loans and Allowance for Loan Losses ("ALLL")

Note 4: Loans and Allowance for Credit Losses (“ACL”)

Loan Portfolio Segments

Categories of loans at March 31, 2022 and December 31, 2021 include:

Accrued interest of $

10

 million at March 31, 2022 and December 31, 2021 presented in “other assets” on the Consolidated

Balance Sheets is excluded from the amortized cost basis disclosed in the above table.

The Company aggregates the loan portfolio by similar credit risk characteristics. The loan segments are described in additional

detail below:

●

Commercial

 - The category includes loans to commercial customers for use in property, plant, and equipment purchases

and expansions. Loan terms typically require principal and interest payments that decrease the outstanding loan balance.

Repayment is primarily from the cash flow of a borrower’s principal business operation. Credit risk is driven by

creditworthiness of a borrower and the economic conditions that impact the cash flow stability from business operations.

The category also includes the remaining PPP loans outstanding. These loans were established by the Coronavirus Aid,

Relief, and Economic Security Act which authorized forgivable loans to small businesses to pay their employees during

the COVID-19 pandemic. The loans are

100

 percent guaranteed by the Small Business Administration (“SBA”) and

repayment is primarily dependent on the borrower’s cash flow or SBA repayment approval.

●

Commercial Lines of Credit

– The category includes lines of credit to commercial customers for working capital needs.

The loan terms typically require interest-only payments, mature in one year, and require the full balance paid-off at

maturity. Lines of credit allow the borrower to drawdown and repay the line of credit based on the customer’s cash flow

needs. Repayment is primarily from the operating cash flow of the business. Credit risk is driven by creditworthiness of

a borrower and the economic conditions that impact the cash flow stability from business operations.

●

Energy

 - The category includes loans to oil and natural gas customers for use in financing working capital needs,

exploration and production activities, and acquisitions. The loans are repaid primarily from the conversion of crude oil

and natural gas to cash. Credit risk is driven by creditworthiness of a borrower and the economic conditions that impact

the cash flow stability from business operations. Energy loans are typically collateralized with the underlying oil and gas

reserves.

●

Commercial Real Estate

 - The category includes loans that typically involve larger principal amounts and repayment of

these loans is generally dependent on the successful operations of the property securing the loan or the business

conducted on the property securing the loan. These are viewed primarily as cash flow loans and secondarily as loans

secured by real estate. Credit risk may be impacted by the creditworthiness of a borrower, property values and the local

economies in the borrower’s market areas.

●

Construction and Land Development

 - The category includes loans that are usually based upon estimates of costs and

estimated value of the completed project and include independent appraisal reviews and a financial analysis of the

developers and property owners. Sources of repayment include permanent loans, sales of developed property or an

interim loan commitment from the Company until permanent financing is obtained. These loans are higher risk than

other real estate loans due to their ultimate repayment being sensitive to interest rate changes, general economic

conditions and the availability of long-term financing. Credit risk may be impacted by the creditworthiness of a

borrower, property values and the local economies in the borrower’s market areas.

●

Residential Real Estate

- The category includes loans that are generally secured by owner-occupied 1-4 family

residences. Repayment of these loans is primarily dependent on the personal income and credit rating of the borrowers.

Credit risk in these loans can be impacted by economic conditions within or outside the borrower’s market areas that

might impact either property values or a borrower’s personal income. 

●

Multifamily Real Estate -

The category includes loans that are generally secured by multifamily properties. Repayment

of these loans is primarily dependent on occupancy rates and the personal income of the tenants. Credit risk in these

loans can be impacted by economic conditions within or outside the borrower’s market areas that might impact either

property values or the tenants’ personal income. 

●

Consumer

- The category includes revolving lines of credit and various term loans such as automobile loans and loans

for other personal purposes. Repayment is primarily dependent on the personal income and credit rating of the

borrowers. Credit risk is driven by consumer economic factors (such as unemployment and general economic conditions

in the borrower’s market area) and the creditworthiness of a borrower.

Allowance for Credit Losses

The Company established a CECL committee that meets at least quarterly to oversee the Allowance for Credit Loss methodology.

The committee estimates the ACL using relevant available information, from internal and external sources, relating to past events,

current conditions, and reasonable and supportable forecasts. The ACL represents the Company’s current estimate of lifetime credit

losses inherent in the loan portfolio at the balance sheet date. The ACL is adjusted for expected prepayments when appropriate and

excludes expected extensions, renewals, and modifications. 

The ACL is the sum of three components: (i) asset specific / individual loan reserves; (ii) quantitative (formulaic or pooled)

reserves; and (iii) qualitative (judgmental) reserves. 

Asset Specific -

 When unique qualities cause a loan’s exposure to loss to be inconsistent with the pool segments, the loan is

individually evaluated. Individual reserves are calculated for loans that are risk-rated substandard and on non-accrual and loans that are

risk-rated doubtful or loss that are greater than a defined dollar threshold. In addition, troubled debt restructurings (“TDRs”) are also

individually evaluated. Reserves on asset specific loans may be based on collateral, for collateral-dependent loans, or on quantitative and

qualitative factors, including expected cash flow, market sentiment, and guarantor support.

Quantitative

- The Company used the cohort method, which identifies and captures the balance of a pool of loans with similar

risk characteristics as of a particular time to form a cohort. For example, the outstanding commercial loans and commercial lines of

credit loan segments as of quarter-end are considered cohorts. The cohort is then tracked for losses over the remaining life of loans or

until the pool is exhausted. The Company used a lookback period of approximately six-years to establish the cohort population. By using

the historical data timeframe, the Company can establish a historical loss factor for each of its loan segments and adjust the losses with

qualitative and forecast factors.

Qualitative

 – The Company uses qualitative factors to adjust the historical loss factors for current conditions. The Company

primarily uses the following qualitative factors:

◾

The nature and volume of changes in risk ratings;

◾

The volume and severity of past due loans;

◾

The volume of nonaccrual loans;

◾

The nature and volume of the loan portfolio, including the existence, growth, and effect of any concentrations of credit;

◾

Changes in the Institute of Supply Management’s Purchasing Manager Indices (“PMI”) for services and manufacturing;

◾

Changes in collateral values; 

◾

Changes in lending policies, procedures, and quality of loan reviews;

◾

Changes in lending staff; and

◾

Changes in competition, legal and regulatory environments

In addition to the current condition, qualitative adjustments, the Company uses the Federal Reserve’s unemployment forecast to

adjust the ACL based on forward looking guidance. The Federal Reserve’s unemployment forecast extends three-years and is eventually

reverted to the mean of six percent by year 10. 

Drivers of Quarterly Change in the ACL

The ACL declined by $

3

 million between January 1, 2022 and March 31, 2022 and was driven by:

-

A $

3

 million decline in the required reserve for asset specific loans. The change included a commercial real estate loan with an

improved collateral valuation that resulted in a $

1

 million reduction in the required reserve, a $

628

 thousand decline related to

a commercial real estate loan charged down and two energy loans that paid down their outstanding balance, resulting in a $

1

million decrease to the required reserve. 

-

A $

2

 million increase in the required reserve because of changes in loan balances that included a $

97

 million increase in

commercial real estate loans and required a $

1.6

 million increase to the ACL.

-

A $

1

 million reduction in the ACL due to improved credit quality metrics including improved risk ratings and lower

nonaccruals, driven by the energy portfolio that decreased the required ACL by $

830

 thousand. 

-

$

1

 million in net charge-offs. Charge-offs included $

1

 million related to a medical practice, $

1

 million related to an energy

loan impacted by low prices in 2020 and 2021, and $

750

 thousand related to a commercial real estate project. Recoveries were

driven by $

2

 million related to an energy loan charged off in 2020.

-

The unemployment forecast provided by the Federal Reserve in March 2022 was consistent with the previously presented

forecast. As a result, no forward-looking adjustment was made during the first quarter of 2022.

Credit Quality Indicators

Internal Credit Risk Ratings

The Company uses a weighted average risk rating factor to adjust the historical loss factors for current events. Risk ratings

incorporate the criteria utilized by regulatory authorities to describe criticized assets, but separate various levels of risk concentrated

within the regulatory “Pass” category. Risk ratings are established for loans at origination and are monitored on an ongoing basis. The

rating assigned to a loan reflects the risks posed by the borrower’s expected performance and the transaction’s structure. Performance

metrics used to determine a risk rating include, but are not limited to, cash flow adequacy, liquidity, and collateral. A description of the

loan risk ratings follows:

Loan Grades

●

Pass (risk rating 1-4)

 - The category includes loans that are considered satisfactory. The category includes borrowers

that generally maintain good liquidity and financial condition or the credit is currently protected with sales trends

remaining flat or declining. Most ratios compare favorably with industry norms and Company policies. Debt is

programmed and timely repayment is expected.

●

Special Mention (risk rating 5)

 - The category includes borrowers that generally exhibit adverse trends in operations or

an imbalanced position in their balance sheet that has not reached a point where repayment is jeopardized. Credits are

currently protected but, if left uncorrected, the potential weaknesses may result in deterioration of the repayment

prospects for the credit or in the Company’s credit or lien position at a future date. These credits are not adversely

classified and do not expose the Company to enough risk to warrant adverse classification.

●

Substandard (risk rating 6)

 - The category includes borrowers that generally exhibit well-defined weakness(es) that

jeopardize repayment. Credits are inadequately protected by the current worth and paying capacity of the obligor or of

the collateral pledged. A distinct possibility exists that the Company will sustain some loss if deficiencies are not

corrected. Loss potential, while existing in the aggregate amount of substandard assets, does not have to exist in

individual assets classified substandard. Substandard loans include both performing and nonperforming loans and are

broken out in the table below.

●

Doubtful (risk rating 7)

- The category includes borrowers that exhibit weaknesses inherent in a substandard credit and

characteristics that these weaknesses make collection or liquidation in full highly questionable or improbable based on

existing facts, conditions and values. Because of reasonably specific pending factors, which may work to the advantage

and strengthening of the assets, classification as a loss is deferred until its more exact status may be determined.

●

Loss (risk rating 8)

- Credits which are considered uncollectible or of such little value that their continuance as a

bankable asset is not warranted.

The following tables present the credit risk profile of the Company’s loan portfolio based on internal rating categories and loan segments:

Loan Portfolio Aging Analysis

The following tables present the Company’s loan portfolio aging analysis as of March 31, 2022:

Non-accrual Loan Analysis

Non-accrual loans are loans for which the Company does not record interest income. The accrual of interest on loans is discontinued at the time the loan is 90 days past due

unless the credit is well secured and in process of collection. Past due status is based on contractual terms of the loan. In all cases, loans are placed on non-accrual or charged off at

an earlier date, if collection of principal or interest is considered doubtful. Loans are returned to accrual status when all the principal and interest amounts contractually due are

brought current and future payments are reasonably assured. The following table presents the Company’s non-accrual loans by loan segments:

Interest income recognized on nonaccrual loans was $

1

 thousand for the three-month period ended March 31, 2022.

Allowance for Credit Losses

The following table presents the activity in the allowance for credit losses and allowance for credit losses on off-balance sheet credit exposures by portfolio segment for the

three-month period ended March 31, 2022:

Collateral Dependent Loans:

Collateral dependent loans are loans for which the repayment is expected to be provided substantially through the operation or

sale of the collateral and the borrower is experiencing financial difficulty. The following table presents the amortized cost balance of

loans considered collateral dependent by loan segment and collateral type as of March 31, 2022:

Troubled Debt Restructurings (“TDR”)

TDRs are those extended to borrowers who are experiencing financial difficulty and who have been granted a concession,

excluding loan modifications as a result of the COVID-19 pandemic. The modification of terms typically includes the extension of

maturity, reduction or deferment of monthly payment, or reduction of the stated interest rate. 

For the three-month periods ended March 31, 2022 and 2021,

no

 loans were restructured under the TDR guidance. The

outstanding balance of TDRs was $

38

 million and $

40

 million as of March 31, 2022 and December 31, 2021, respectively. 

Disclosures under Previously Applicable GAAP

The following disclosures are presented under previously applicable GAAP. The description of the general characteristics of the

loan rating categories is as described above. The following table presents the credit risk profile of the Company’s loan portfolio based on

an internal rating category and portfolio segment as of December 31, 2021:

The following table presents the Company’s loan portfolio aging analysis of the recorded investment in loans as of December 31,

2021:

The following table presents the Company’s loans on non-accrual as of December 31, 2021:

The following table presents the allowance for loan losses by portfolio segment and disaggregated based on the Company’s

impairment methodology:

A loan is considered impaired when based on current information and events, it is probable the Company will be unable to collect

all amounts due from the borrower in accordance with the contractual terms of the loan. Impaired loans include nonperforming loans but

also include loans modified in TDRs where concessions have been granted to borrowers experiencing financial difficulties. The intent of

concessions is to maximize collection. The following table presents loans individually evaluated for impairment:

Total interest income recognized during the three-month period ended March 31, 2021 for impaired loans was $

642

 thousand.

The three-month average balance of impaired loans for the period ended March 31, 2021 was $

112

 million. 

The following table presents the activity in the allowance for loan losses by portfolio segment for the three-month period ended

March 31, 2021:

Allowance for Credit Losses (“ACL”) on Off-Balance Sheet Credit Exposures

The Company estimates expected credit losses for off-balance sheet credit exposures unless the obligation is unconditionally

cancellable by the Company. The ACL on off-balance sheet credit exposures is adjusted as a provision for credit loss expense. The

estimate is calculated for each loan segment and includes consideration of the likelihood that funding will occur and an estimate of the

expected credit losses on commitments expected to be funded over its estimated life. For each pool of contractual obligations expected

to be funded, the Company uses the reserve rate established for the related loan pools. The $

5

 million allowance for credit losses on off

balance sheet credit exposures at March 31, 2022 is included in “interest payable and other liabilities” on the balance sheet. 

The following categories of off-balance sheet credit exposures have been identified:

Loan commitments – include revolving lines of credit, non-revolving lines of credit, and loans approved that are not yet funded.

Risks inherent to revolving lines of credit often are related to the susceptibility of an individual or business experiencing

unpredictable cash flow or financial troubles, thus leading to payment default. The primary risk associated with non-revolving

lines of credit is the diversion of funds for other expenditures.

Letters of credit – are primarily established to provide assurance to the beneficiary that the applicant will perform certain

obligations arising out of a separate transaction between the beneficiary and applicant. If the obligation is not met, it gives the

beneficiary the right to draw on the letter of credit.

March 31, 2022

December 31, 2021

(Dollars in thousands)

Commercial

$

802,774

$

843,024

Commercial lines of credit

678,127

617,398

Energy

271,309

278,579

Commercial real estate

1,375,655

1,278,479

Construction and land development

563,538

574,852

Residential real estate

365,719

360,046

Multifamily real estate

243,107

240,230

Consumer

49,339

63,605

Loans, net of unearned fees

4,349,568

4,256,213

Less: allowance for credit losses

(1)

55,231

58,375

Loans, net

$

4,294,337

$

4,197,838

(1)

 As of December 31, 2021, this line represents the allowance for loan losses. See further discussion in "Note 1: Nature of Operations

and Summary of Significant Accounting Policies.”

As of March 31, 2022

Amortized Cost Basis by Origination Year and Internal Risk Rating

Amortized Cost Basis

2022

2021

2020

2019

2018

2017 and

Prior

Revolving

loans

Revolving

loans

converted to

term loans

Total

(Dollars in thousands)

Commercial

Pass

$

85,347

$

372,703

$

133,962

$

62,737

$

62,941

$

29,629

$

-

$

37,196

$

784,515

Special mention

-

-

1,568

1,127

324

49

-

3,522

6,590

Substandard - accrual

1,500

210

-

2,415

782

51

-

1,947

6,905

Substandard - non-

accrual

-

1,572

13

24

481

760

-

1,914

4,764

Doubtful

-

-

-

-

-

-

-

-

-

Total

$

86,847

$

374,485

$

135,543

$

66,303

$

64,528

$

30,489

$

-

$

44,579

$

802,774

Commercial lines of credit

Pass

$

-

$

-

$

-

$

-

$

-

$

-

$

649,230

$

-

$

649,230

Special mention

-

-

-

-

-

-

15,504

-

15,504

Substandard - accrual

-

-

-

-

-

-

2,431

-

2,431

Substandard - non-

accrual

-

-

-

-

-

-

10,962

-

10,962

Doubtful

-

-

-

-

-

-

-

-

-

Total

$

-

$

-

$

-

$

-

$

-

$

-

$

678,127

$

-

$

678,127

Energy

Pass

$

-

$

1,382

$

264

$

63

$

-

$

-

$

230,193

$

221

$

232,123

Special mention

-

-

-

1,494

-

-

21,493

-

22,987

Substandard - accrual

-

-

-

-

13

-

7,392

-

7,405

Substandard - non-

accrual

-

-

-

-

-

-

6,343

-

6,343

Doubtful

-

-

-

-

-

-

2,451

-

2,451

Total

$

-

$

1,382

$

264

$

1,557

$

13

$

-

$

267,872

$

221

$

271,309

As of March 31, 2022

Amortized Cost Basis by Origination Year and Internal Risk Rating

Amortized Cost Basis

2022

2021

2020

2019

2018

2017 and

Prior

Revolving

loans

Revolving

loans

converted to

term loans

Total

(Dollars in thousands)

Commercial real estate

Pass

$

74,272

$

319,575

$

158,034

$

121,203

$

82,028

$

97,987

$

330,590

$

82,459

$

1,266,148

Special mention

-

27,210

-

-

7,536

761

-

48,709

84,216

Substandard - accrual

10,826

655

-

695

-

3,801

-

992

16,969

Substandard - non-

accrual

-

3,750

303

-

83

1,135

-

3,051

8,322

Doubtful

-

-

-

-

-

-

-

-

-

Total

$

85,098

$

351,190

$

158,337

$

121,898

$

89,647

$

103,684

$

330,590

$

135,211

$

1,375,655

Construction and land development

Pass

$

86,020

$

228,922

$

141,357

$

73,650

$

20,346

$

4,611

$

8,632

$

-

$

563,538

Special mention

-

-

-

-

-

-

-

-

-

Substandard - accrual

-

-

-

-

-

-

-

-

-

Substandard - non-

accrual

-

-

-

-

-

-

-

-

-

Doubtful

-

-

-

-

-

-

-

-

-

Total

$

86,020

$

228,922

$

141,357

$

73,650

$

20,346

$

4,611

$

8,632

$

-

$

563,538

Residential real estate

Pass

$

12,954

$

77,243

$

126,735

$

48,600

$

53,487

$

38,565

$

1,208

$

-

$

358,792

Special mention

-

217

-

-

-

-

-

-

217

Substandard - accrual

-

3,326

3,183

-

-

-

-

-

6,509

Substandard - non-

accrual

-

-

-

-

-

-

-

201

201

Doubtful

-

-

-

-

-

-

-

-

-

Total

$

12,954

$

80,786

$

129,918

$

48,600

$

53,487

$

38,565

$

1,208

$

201

$

365,719

As of March 31, 2022

Amortized Cost Basis by Origination Year and Internal Risk Rating

Amortized Cost Basis

2022

2021

2020

2019

2018

2017 and

Prior

Revolving

loans

Revolving

loans

converted to

term loans

Total

(Dollars in thousands)

Multifamily real estate

Pass

$

25,829

$

46,511

$

6,733

$

12,134

$

3,238

$

1,961

$

121,985

$

24,676

$

243,067

Special mention

-

-

-

-

-

-

-

40

40

Substandard - accrual

-

-

-

-

-

-

-

-

-

Substandard - non-

accrual

-

-

-

-

-

-

-

-

-

Doubtful

-

-

-

-

-

-

-

-

-

Total

$

25,829

$

46,511

$

6,733

$

12,134

$

3,238

$

1,961

$

121,985

$

24,716

$

243,107

Consumer

Pass

$

485

$

2,750

$

1,988

$

248

$

118

$

144

$

43,606

$

-

$

49,339

Special mention

-

-

-

-

-

-

-

-

-

Substandard - accrual

-

-

-

-

-

-

-

-

-

Substandard - non-

accrual

-

-

-

-

-

-

-

-

-

Doubtful

-

-

-

-

-

-

-

-

-

Total

$

485

$

2,750

$

1,988

$

248

$

118

$

144

$

43,606

$

-

$

49,339

Total

Pass

$

284,907

$

1,049,086

$

569,073

$

318,635

$

222,158

$

172,897

$

1,385,444

$

144,552

$

4,146,752

Special mention

-

27,427

1,568

2,621

7,860

810

36,997

52,271

129,554

Substandard - accrual

12,326

4,191

3,183

3,110

795

3,852

9,823

2,939

40,219

Substandard - non-

accrual

-

5,322

316

24

564

1,895

17,305

5,166

30,592

Doubtful

-

-

-

-

-

-

2,451

-

2,451

Total

$

297,233

$

1,086,026

$

574,140

$

324,390

$

231,377

$

179,454

$

1,452,020

$

204,928

$

4,349,568

As of March 31, 2022

Amortized Cost Basis by Origination Year and Past Due Status

Amortized Cost Basis

2022

2021

2020

2019

2018

2017 and

Prior

Revolving

loans

Revolving

loans

converted to

term loans

Total

(Dollars in thousands)

Commercial

30-59 days

$

-

$

-

$

3

$

5

$

4

$

-

$

-

$

-

$

12

60-89 days

-

-

-

10

-

98

-

-

108

Greater than 90 days

-

-

-

-

468

662

-

-

1,130

Total past due

-

-

3

15

472

760

-

-

1,250

Current

86,847

374,485

135,540

66,288

64,056

29,729

-

44,579

801,524

Total

$

86,847

$

374,485

$

135,543

$

66,303

$

64,528

$

30,489

$

-

$

44,579

$

802,774

Greater than 90 days

and accruing

$

-

$

-

$

-

$

-

$

-

$

-

$

-

$

-

$

-

Commercial lines of credit

30-59 days

$

-

$

-

$

-

$

-

$

-

$

-

$

11,910

$

-

$

11,910

60-89 days

-

-

-

-

-

-

300

-

300

Greater than 90 days

-

-

-

-

-

-

-

-

-

Total past due

-

-

-

-

-

-

12,210

-

12,210

Current

-

-

-

-

-

-

665,917

-

665,917

Total

$

-

$

-

$

-

$

-

$

-

$

-

$

678,127

$

-

$

678,127

Greater than 90 days

and accruing

$

-

$

-

$

-

$

-

$

-

$

-

$

-

$

-

$

-

Energy

30-59 days

$

-

$

-

$

-

$

-

$

-

$

-

$

2,114

$

-

$

2,114

60-89 days

-

-

-

-

-

-

-

-

-

Greater than 90 days

-

-

-

1,494

-

-

8,097

-

9,591

Total past due

-

-

-

1,494

-

-

10,211

-

11,705

Current

-

1,382

264

63

13

-

257,661

221

259,604

Total

$

-

$

1,382

$

264

$

1,557

$

13

$

-

$

267,872

$

221

$

271,309

Greater than 90 days

and accruing

$

-

$

-

$

-

$

1,494

$

-

$

-

$

-

$

-

$

1,494

As of March 31, 2022

Amortized Cost Basis by Origination Year and Past Due Status

Amortized Cost Basis

2022

2021

2020

2019

2018

2017 and

Prior

Revolving

loans

Revolving

loans

converted to

term loans

Total

(Dollars in thousands)

Commercial real estate

30-59 days

$

-

$

-

$

-

$

-

$

-

$

-

$

-

$

-

$

-

60-89 days

-

277

-

-

83

-

-

-

360

Greater than 90 days

-

-

-

-

-

-

-

-

-

Total past due

-

277

-

-

83

-

-

-

360

Current

85,098

350,913

158,337

121,898

89,564

103,684

330,590

135,211

1,375,295

Total

$

85,098

$

351,190

$

158,337

$

121,898

$

89,647

$

103,684

$

330,590

$

135,211

$

1,375,655

Greater than 90 days

and accruing

$

-

$

-

$

-

$

-

$

-

$

-

$

-

$

-

$

-

Construction and land development

30-59 days

$

-

$

553

$

-

$

-

$

-

$

-

$

-

$

-

$

553

60-89 days

-

-

-

-

-

-

-

-

-

Greater than 90 days

-

-

-

-

-

-

-

-

-

Total past due

-

553

-

-

-

-

-

-

553

Current

86,020

228,369

141,357

73,650

20,346

4,611

8,632

-

562,985

Total

$

86,020

$

228,922

$

141,357

$

73,650

$

20,346

$

4,611

$

8,632

$

-

$

563,538

Greater than 90 days

and accruing

$

-

$

-

$

-

$

-

$

-

$

-

$

-

$

-

$

-

Residential real estate

30-59 days

$

-

$

-

$

-

$

-

$

-

$

-

$

-

$

-

$

-

60-89 days

-

217

-

-

-

-

-

-

217

Greater than 90 days

-

-

-

-

-

-

-

-

-

Total past due

-

217

-

-

-

-

-

-

217

Current

12,954

80,569

129,918

48,600

53,487

38,565

1,208

201

365,502

Total

$

12,954

$

80,786

$

129,918

$

48,600

$

53,487

$

38,565

$

1,208

$

201

$

365,719

As of March 31, 2022

Amortized Cost Basis by Origination Year and Past Due Status

Amortized Cost Basis

2022

2021

2020

2019

2018

2017 and

Prior

Revolving

loans

Revolving

loans

converted to

term loans

Total

(Dollars in thousands)

Multifamily real estate

30-59 days

$

-

$

192

$

-

$

-

$

-

$

-

$

-

$

-

$

192

60-89 days

-

150

-

-

-

-

-

-

150

Greater than 90 days

-

-

-

-

-

-

-

40

40

Total past due

-

342

-

-

-

-

-

40

382

Current

25,829

46,169

6,733

12,134

3,238

1,961

121,985

24,676

242,725

Total

$

25,829

$

46,511

$

6,733

$

12,134

$

3,238

$

1,961

$

121,985

$

24,716

$

243,107

Greater than 90 days

and accruing

$

-

$

-

$

-

$

-

$

-

$

-

$

-

$

40

$

40

Consumer

30-59 days

$

-

$

-

$

-

$

-

$

-

$

-

$

-

$

-

$

-

60-89 days

-

-

-

-

-

-

-

-

-

Greater than 90 days

-

-

-

-

-

-

-

-

-

Total past due

-

-

-

-

-

-

-

-

-

Current

485

2,750

1,988

248

118

144

43,606

-

49,339

Total

$

485

$

2,750

$

1,988

$

248

$

118

$

144

$

43,606

$

-

$

49,339

Greater than 90 days

and accruing

$

-

$

-

$

-

$

-

$

-

$

-

$

-

$

-

$

-

Total

30-59 days

$

-

$

745

$

3

$

5

$

4

$

-

$

14,024

$

-

$

14,781

60-89 days

-

644

-

10

83

98

300

-

1,135

Greater than 90 days

-

-

-

1,494

468

662

8,097

40

10,761

Total past due

-

1,389

3

1,509

555

760

22,421

40

26,677

Current

297,233

1,084,637

574,137

322,881

230,822

178,694

1,429,599

204,888

4,322,891

Total

$

297,233

$

1,086,026

$

574,140

$

324,390

$

231,377

$

179,454

$

1,452,020

$

204,928

$

4,349,568

Greater than 90 days

and accruing

$

-

$

-

$

-

$

1,494

$

-

$

-

$

-

$

40

$

1,534

As of March 31, 2022

Amortized Cost Basis by Origination Year and On Nonaccrual

Amortized Cost Basis

2022

2021

2020

2019

2018

2017 and

Prior

Revolving

loans

Revolving

loans

converted

to term

loans

Total

Nonaccrual

Loans

Nonaccrual

Loans with

no related

Allowance

(Dollars in thousands)

Commercial

$

-

$

1,572

$

13

$

24

$

482

$

760

$

-

$

1,914

$

4,765

$

3,257

Commercial lines of credit

-

-

-

-

-

-

10,987

-

10,987

10,987

Energy

-

-

-

-

-

-

8,795

-

8,795

698

Commercial real estate

-

3,750

303

-

83

1,136

-

3,051

8,323

8,241

Construction and land

development

-

-

-

-

-

-

-

-

-

-

Residential real estate

-

-

-

-

-

-

-

201

201

201

Multifamily real estate

-

-

-

-

-

-

-

-

-

-

Consumer

-

-

-

-

-

-

-

-

-

-

Total

$

-

$

5,322

$

316

$

24

$

565

$

1,896

$

19,782

$

5,166

$

33,071

$

23,384

For the Three Months Ended March 31, 2022

Commercial

(1)

Commercial

Lines of

Credit

(1)

Energy

Commercial

Real Estate

Construction

and Land

Development

Residential

Real

Estate

(2)

Multifamily

Real

Estate

(2)

Consumer

Total

(Dollars in thousands)

Allowance for Credit Losses:

Beginning balance, prior to

adoption of ASU 2016-13

$

20,352

$

-

$

9,229

$

19,119

$

3,749

$

5,598

$

-

$

328

$

58,375

Impact of ASU 2016-13

adoption

(10,213)

8,866

(39)

(186)

(83)

(2,552)

2,465

(5)

(1,747)

Charge-offs

(209)

(1,221)

(1,067)

(1,102)

-

-

-

(13)

(3,612)

Recoveries

755

21

1,754

-

-

-

-

1

2,531

Provision (credit)

(704)

1,695

(2,370)

797

12

43

(123)

334

(316)

Ending balance

$

9,981

$

9,361

$

7,507

$

18,628

$

3,678

$

3,089

$

2,342

$

645

$

55,231

Allowance for Credit Losses on Off-Balance Sheet Credit Exposures:

Beginning balance, prior to

adoption of ASU 2016-13

$

-

$

-

$

-

$

-

$

-

$

-

$

-

$

-

$

-

Impact of ASU 2016-13

adoption

107

44

265

711

3,914

5

137

1

5,184

Provision (credit)

(41)

109

(7)

42

(400)

(1)

(21)

10

(309)

Ending balance

$

66

$

153

$

258

$

753

$

3,514

$

4

$

116

$

11

$

4,875

(1)

 Prior to the adoption of ASU 2016-13, the Commercial and Commercial lines of credit were consolidated under the Commercial segment.

(2)

 Prior to the adoption of ASU 2016-13, the Residential real estate and Multifamily real estate segments were consolidated under the Residential and Multifamily Real Estate

segment.

As of March 31, 2022

Loan Segment and Collateral Description

Amortized Cost of

Collateral Dependent

Loans

Related Allowance for

Credit Losses

Amortized Cost of

Collateral Dependent

Loans with no related

Allowance

(Dollars in thousands)

Commercial

All business assets

$

4,040

$

130

$

3,257

Commercial lines of credit

All business assets

10,987

-

10,987

Energy

Oil and natural gas properties

8,795

790

698

$

23,822

$

920

$

14,942

As of December 31, 2021

Pass

Special

Mention

Substandard

Performing

Substandard

Nonperforming

Doubtful

Loss

Total

(Dollars in thousands)

Commercial

$

1,356,883

$

16,201

$

23,739

$

4,858

$

-

$

-

$

1,401,681

Energy

184,269

73,196

5,246

13,595

2,554

-

278,860

Commercial real

estate

1,172,323

86,768

11,782

10,222

-

-

1,281,095

Construction and

land development

578,758

-

-

-

-

-

578,758

Residential and

multifamily real

estate

593,847

257

6,508

204

-

-

600,816

PPP

64,805

-

-

-

-

-

64,805

Consumer

63,605

-

-

-

-

-

63,605

$

4,014,490

$

176,422

$

47,275

$

28,879

$

2,554

$

-

$

4,269,620

As of December 31, 2021

30-59 Days

Past Due

60-89 Days

Past Due

90 Days or

More

Total Past

Due

Current

Total Loans

Receivable

Loans >= 90

Days and

Accruing

(Dollars in thousands)

Commercial

$

183

$

499

$

1,037

$

1,719

$

1,399,962

$

1,401,681

$

90

Energy

-

-

4,644

4,644

274,216

278,860

-

Commercial real estate

85

992

-

1,077

1,280,018

1,281,095

-

Construction and land

development

966

117

-

1,083

577,675

578,758

-

Residential and multifamily

real estate

437

151

-

588

600,228

600,816

-

PPP

-

-

-

-

64,805

64,805

-

Consumer

-

99

-

99

63,506

63,605

-

$

1,671

$

1,858

$

5,681

$

9,210

$

4,260,410

$

4,269,620

$

90

December 31, 2021

(Dollars in thousands)

Commercial

$

4,858

Energy

16,148

Commercial real estate

10,222

Construction and land development

-

Residential and multifamily real estate

204

PPP

-

Consumer

-

Total non-accrual loans

$

31,432

As of December 31, 2021

Commercial

Energy

Commercial

Real Estate

Construction

and Land

Development

Residential

and

Multifamily

Real Estate

PPP

Consumer

Total

(Dollars in thousands)

Period end allowance for loan losses allocated to:

Individually

evaluated for

impairment

$

333

$

2,100

$

3,164

$

-

$

-

$

-

$

-

$

5,597

Collectively

evaluated for

impairment

20,019

7,129

15,955

3,749

5,598

-

328

52,778

Ending balance

$

20,352

$

9,229

$

19,119

$

3,749

$

5,598

$

-

$

328

$

58,375

Allocated to loans:

Individually

evaluated for

impairment

$

5,739

$

16,204

$

31,597

$

-

$

3,387

$

-

$

-

$

56,927

Collectively

evaluated for

impairment

1,395,942

262,656

1,249,498

578,758

597,429

64,805

63,605

4,212,693

Ending balance

$

1,401,681

$

278,860

$

1,281,095

$

578,758

$

600,816

$

64,805

$

63,605

$

4,269,620

Three Months Ended March 31, 2021

Commercial

Energy

Commercial

Real Estate

Construction

and Land

Development

Residential

and

Multifamily

Real Estate

PPP

Consumer

Total

(Dollars in thousands)

Allowance for loan losses:

Beginning

balance

$

24,693

$

18,341

$

22,354

$

3,612

$

5,842

$

-

$

453

$

75,295

Provision

7,015

1,951

(1,745)

225

214

-

(160)

7,500

Charge-offs

(8,266)

-

-

-

-

-

-

(8,266)

Recoveries

22

-

-

-

-

-

-

22

Ending balance

$

23,464

$

20,292

$

20,609

$

3,837

$

6,056

$

-

$

293

$

74,551

As of December 31, 2021

Recorded Balance

Unpaid Principal Balance

Specific Allowance

(Dollars in thousands)

 Loans without a specific valuation 

Commercial

$

4,659

$

4,740

$

-

 Energy 

3,509

7,322

-

Commercial real estate

1,729

1,729

-

 Construction and land development 

-

-

-

Residential and multifamily real estate

3,387

3,387

-

 PPP 

-

-

-

Consumer

-

-

-

 Loans with a specific valuation 

Commercial

1,080

1,080

333

 Energy 

12,695

17,977

2,100

Commercial real estate

29,868

30,854

3,164

 Construction and land development 

-

-

-

Residential and multifamily real estate

-

-

-

 PPP 

-

-

-

Consumer

-

-

-

 Total 

Commercial

5,739

5,820

333

 Energy 

16,204

25,299

2,100

Commercial real estate

31,597

32,583

3,164

 Construction and land development 

-

-

-

Residential and multifamily real estate

3,387

3,387

-

 PPP 

-

-

-

Consumer

-

-

-

56,927

67,089

5,597