Loans Held for Investment and Allowance for Loan Losses

6 Months Ended

Jun. 30, 2022

Receivables [Abstract]

Loans Held for Investment and Allowance for Credit Losses

Note 3 – Loans Held-for-Investment and Allowance for Credit Losses

For the periods ended June 30, 2022 and 2021, and December 31, 2021, the following tables outline the Company’s loan portfolio by the ten portfolio segments where applicable.

Loans held-for-investment by portfolio segment are as follows (dollars in thousands):

	June 30,						December 31,
	2022			2021			2021
Commercial:
C&I*	$	839,928		$	983,103		$	837,075
Municipal		200,577			179,356			177,905
Total Commercial		1,040,505			1,162,459			1,014,980
Agricultural		90,420			95,212			98,089
Real Estate:
Construction & Development		928,644			550,928			749,793
Farm		250,028			185,288			217,220
Non-Owner Occupied CRE		636,432			673,608			623,434
Owner Occupied CRE		909,899			820,055			821,653
Residential		1,412,125			1,328,474			1,334,419
Total Real Estate		4,137,128			3,558,353			3,746,519
Consumer:
Auto		468,147			383,764			405,416
Non-Auto		142,382			104,814			123,968
Total Consumer		610,529			488,578			529,384
Total Loans		5,878,582			5,304,602			5,388,972
Less: Allowance for credit losses		(71,932	)		(62,138	)		(63,465	)
Loans, net	$	5,806,650		$	5,242,464		$	5,325,507

* All disclosures for the C&I loan segment include PPP loan balances, net of deferred fees and costs, as disclosed on the face of the consolidated balance sheet.

Outstanding loan balances at June 30, 2022 and 2021, and December 31, 2021, are net of unearned income, including net deferred loan fees.

Our subsidiary bank has established a line of credit with the Federal Home Loan Bank of Dallas (“FHLB”) to provide liquidity and meet pledging requirements for those customers eligible to have securities pledged to secure certain uninsured deposits. At June 30, 2022, this available line of credit was $2,087,115,000. At June 30, 2022, $3,690,957,000 in loans held by our bank subsidiary were subject to blanket liens as security for this line of credit. At June 30, 2022, there was no balance outstanding under this line of credit.

The Company’s nonaccrual loans, loans still accruing and past due 90 days or more and restructured loans are as follows (dollars in thousands):

	June 30,				December 31,
	2022		2021		2021
Nonaccrual loans	$	25,475	$	29,786	$	31,652
Loans still accruing and past due 90 days or more		22		—		8
Troubled debt restructured loans still accruing*		20		23		21
Total	$	25,517	$	29,809	$	31,681

* Troubled debt restructured loans of $2,242,000, $7,305,000 and $6,721,000, for which interest collection is doubtful are included in nonaccrual loans as of June 30, 2022 and 2021, and December 31, 2021, respectively.

The Company had $25,517,000, $30,114,000 and $34,158,000 in nonaccrual, past due 90 days or more and still accruing, restructured loans, and foreclosed assets at June 30, 2022 and 2021, and December 31, 2021, respectively. Nonaccrual loans at June 30, 2022 and 2021, and December 31, 2021, consisted of the following (dollars in thousands):

	June 30,				December 31,
	2022		2021		2021
Commercial:
C&I	$	6,695	$	3,587	$	5,370
Municipal		—		—		—
Total Commercial		6,695		3,587		5,370
Agricultural		482		1,055		4,920
Real Estate:
Construction & Development		990		1,520		708
Farm		97		1,791		1,173
Non-Owner Occupied CRE		2,477		6,584		2,671
Owner Occupied CRE		6,823		8,976		7,897
Residential		7,492		5,901		8,360
Total Real Estate		17,879		24,772		20,809
Consumer:
Auto		389		329		514
Non-Auto		30		43		39
Total Consumer		419		372		553
Total	$	25,475	$	29,786	$	31,652

No significant additional funds are committed to be advanced in connection with nonaccrual loans as of June 30, 2022.

Summary information on the allowance for credit losses for the three and six-months ended June 30, 2022 and 2021, are outlined by portfolio segment in the following tables (dollars in thousands):

Three-Months Ended June 30, 2022	C&I			Municipal			Agricultural			Construction & Development		Farm
Beginning balance	$	15,737		$	1,418		$	1,911		$	17,887	$	873
Provision for loan losses		2,521			(66	)		(832	)		3,198		133
Recoveries		402			—			92			—		—
Charge-offs		(71	)		—			(9	)		—		—
Ending balance	$	18,589		$	1,352		$	1,162		$	21,085	$	1,006

Three-Months Ended June 30, 2022 (continued)	Non-Owner Occupied CRE			Owner Occupied CRE			Residential			Auto			Non-Auto			Total
Beginning balance	$	8,499		$	11,536		$	7,829		$	869		$	354		$	66,913
Provision for loan losses		(576	)		(809	)		466			64			4			4,103
Recoveries		487			13			12			102			83			1,191
Charge-offs		—			—			(3	)		(123	)		(69	)		(275	)
Ending balance	$	8,410		$	10,740		$	8,304		$	912		$	372		$	71,932

Six-Months Ended June 30, 2022	C&I			Municipal		Agricultural			Construction & Development			Farm
Beginning balance	$	12,280		$	348	$	1,597		$	17,627		$	663
Provision for loan losses		5,976			1,004		(543	)		3,558			343
Recoveries		558			—		117			—			—
Charge-offs		(225	)		—		(9	)		(100	)		—
Ending balance	$	18,589		$	1,352	$	1,162		$	21,085		$	1,006

Six-Months Ended June 30, 2022 (continued)	Non-Owner Occupied CRE			Owner Occupied CRE			Residential			Auto			Non-Auto			Total
Beginning balance	$	10,722		$	10,828		$	8,133		$	896		$	371		$	63,465
Provision for loan losses		(2,854	)		(20	)		303			44			39			7,850
Recoveries		542			20			17			168			129			1,551
Charge-offs		—			(88	)		(149	)		(196	)		(167	)		(934	)
Ending balance	$	8,410		$	10,740		$	8,304		$	912		$	372		$	71,932

Three-Months Ended June 30, 2021	C&I			Municipal			Agricultural			Construction & Development		Farm
Beginning balance	$	12,323		$	2,191		$	1,985		$	13,246	$	1,223
Provision for loan losses		(2,327	)		(1,603	)		(667	)		2,386		(617	)
Recoveries		308			—			15			—		1
Charge-offs		(118	)		—			(21	)		—		—
Ending balance	$	10,186		$	588		$	1,312		$	15,632	$	607

Three-Months Ended June 30, 2021 (continued)	Non-Owner Occupied CRE		Owner Occupied CRE		Residential			Auto			Non- Auto			Total
Beginning balance	$	9,492	$	9,878	$	11,189		$	1,068		$	379		$	62,974
Provision for loan losses		901		517		26			257			88			(1,039	)
Recoveries		39		4		64			103			61			595
Charge-offs		—		—		(45	)		(162	)		(46	)		(392	)
Ending balance	$	10,432	$	10,399	$	11,234		$	1,266		$	482		$	62,138

Six-Months Ended June 30, 2021	C&I			Municipal			Agricultural			Construction & Development		Farm
Beginning balance	$	13,609		$	1,552		$	1,255		$	13,512	$	1,876
Provision for loan losses		(3,566	)		(964	)		54			2,118		(1,279	)
Recoveries		531			—			24			2		10
Charge-offs		(388	)		—			(21	)		—		—
Ending balance	$	10,186		$	588		$	1,312		$	15,632	$	607

Six-Months Ended June 30, 2021 (continued)	Non-Owner Occupied CRE			Owner Occupied CRE			Residential			Auto			Non- Auto			Total
Beginning balance	$	8,391		$	12,347		$	12,601		$	1,020		$	371		$	66,534
Provision for loan losses		1,953			(1,950	)		(1,358	)		398			126			(4,468	)
Recoveries		94			10			83			176			108			1,038
Charge-offs		(6	)		(8	)		(92	)		(328	)		(123	)		(966	)
Ending balance	$	10,432		$	10,399		$	11,234		$	1,266		$	482		$	62,138

Additionally, the Company records a reserve for unfunded commitments in other liabilities which totaled $8,718,000, $6,751,000 and $6,436,000 at June 30, 2022 and 2021, and December 31, 2021, respectively. The provision for loan losses of $4,103,000 for the three-months ended June 30, 2022

is combined with the provision for unfunded commitments of $1,247,000 and reported in the aggregate of $5,350,000 under the provision for credit losses in the consolidated statement of earnings for the three-months ended June 30, 2022. The provision for loan losses of $7,850,000 for the six-months ended June 30, 2022 above is combined with the provision for unfunded commitments of $2,282,000 and reported in the aggregate of $10,132,000 under the provision for credit losses in the consolidated statement of earnings for the six-months ended June 30, 2022.

The $1,039,000 reversal of the provision for loan losses for the three-months ended June 30, 2021 above is combined with the reversal of the provision for unfunded commitments of $167,000 and reported in the aggregate of a reversal of $1,206,000 under the provision for credit losses for the three-months ended June 30, 2021. The $4,468,000 reversal of the provision for loan losses for the six-months ended June 30, 2021 above is combined with the provision for unfunded commitments of $1,265,000 and reported in the net aggregate reversal of $3,203,000 under the provision for credit losses for the six-months ended June 30, 2021.

The Company’s loans that are individually evaluated for credit losses (both collateral and non-collateral dependent) and their related allowances as of June 30, 2022 and 2021, and December 31, 2021, are summarized in the following tables by loan segment (dollars in thousands):

June 30, 2022	Collateral Dependent Loans Individually Evaluated for Credit Losses Without an Allowance		Collateral Dependent Loans Individually Evaluated for Credit Losses With an Allowance		Non-Collateral Dependent Loans Individually Evaluated for Credit Losses		Total Loans Individually Evaluated for Credit Losses		Related Allowance on Collateral Dependent Loans		Related Allowance on Non-Collateral Dependent Loans		Total Allowance for Credit Losses on Loans Individually Evaluated for Credit Losses
Commercial:
C&I	$	1,224	$	5,471	$	25,674	$	32,369	$	2,794	$	6,797	$	9,591
Municipal		—		—		84		84		—		—		—
Total Commercial		1,224		5,471		25,758		32,453		2,794		6,797		9,591
Agricultural		178		304		270		752		146		214		360
Real Estate:
Construction & Development		441		549		9,622		10,612		34		352		386
Farm		—		97		1,565		1,662		3		43		46
Non-Owner Occupied CRE		2,391		86		32,225		34,702		7		2,836		2,843
Owner Occupied CRE		5,727		1,096		30,616		37,439		58		2,527		2,585
Residential		4,307		3,185		25,662		33,154		355		1,297		1,652
Total Real Estate		12,866		5,013		99,690		117,569		457		7,055		7,512
Consumer:
Auto		—		389		1,002		1,391		1		2		3
Non-Auto		—		30		473		503		—		1		1
Total Consumer		—		419		1,475		1,894		1		3		4
Total	$	14,268	$	11,207	$	127,193	$	152,668	$	3,398	$	14,069	$	17,467

June 30, 2021	Collateral Dependent Loans Individually Evaluated for Credit Losses Without an Allowance		Collateral Dependent Loans Individually Evaluated for Credit Losses With an Allowance		Non-Collateral Dependent Loans Individually Evaluated for Credit Losses		Total Loans Individually Evaluated for Credit Losses		Related Allowance on Collateral Dependent Loans		Related Allowance on Non-Collateral Dependent Loans		Total Allowance for Credit Losses on Loans Individually Evaluated for Credit Losses
Commercial:
C&I	$	1,091	$	2,496	$	20,838	$	24,425	$	723	$	3,865	$	4,588
Municipal		—		—		885		885		—		275		275
Total Commercial		1,091		2,496		21,723		25,310		723		4,140		4,863
Agricultural		328		727		5,195		6,250		171		1,084		1,255
Real Estate:
Construction & Development		1,282		238		9,201		10,721		24		1,075		1,099
Farm		1,697		94		2,745		4,536		—		9		9
Non-Owner Occupied CRE		6,444		140		33,707		40,291		15		4,185		4,200
Owner Occupied CRE		5,605		3,371		42,832		51,808		544		2,600		3,144
Residential		3,762		2,139		28,110		34,011		191		2,418		2,609
Total Real Estate		18,790		5,982		116,595		141,367		774		10,287		11,061
Consumer:
Auto		—		329		1,342		1,671		1		4		5
Non-Auto		—		43		353		396		—		2		2
Total Consumer		—		372		1,695		2,067		1		6		7
Total	$	20,209	$	9,577	$	145,208	$	174,994	$	1,669	$	15,517	$	17,186

December 31, 2021	Collateral Dependent Loans Individually Evaluated for Credit Losses Without an Allowance		Collateral Dependent Loans Individually Evaluated for Credit Losses With an Allowance		Non-Collateral Dependent Loans Individually Evaluated for Credit Losses		Total Loans Individually Evaluated for Credit Losses		Related Allowance on Collateral Dependent Loans		Related Allowance on Non-Collateral Dependent Loans		Total Allowance for Credit Losses on Loans Individually Evaluated for Credit Losses
Commercial:
C&I	$	749	$	4,621	$	19,021	$	24,391	$	2,533	$	4,094	$	6,627
Municipal		—		—		109		109		—		—		—
Total Commercial		749		4,621		19,130		24,500		2,533		4,094		6,627
Agricultural		3,026		1,894		478		5,398		1,086		359		1,445
Real Estate:
Construction & Development		102		606		4,765		5,473		90		135		225
Farm		997		176		1,969		3,142		—		2		2
Non-Owner Occupied CRE		2,543		128		31,797		34,468		15		4,044		4,059
Owner Occupied CRE		6,548		1,349		40,607		48,504		152		3,329		3,481
Residential		5,990		2,370		29,210		37,570		307		1,719		2,026
Total Real Estate		16,180		4,629		108,348		129,157		564		9,229		9,793
Consumer:
Auto		—		514		1,161		1,675		1		3		4
Non-Auto		—		39		416		455		—		1		1
Total Consumer		—		553		1,577		2,130		1		4		5
Total	$	19,955	$	11,697	$	129,533	$	161,185	$	4,184	$	13,686	$	17,870

The Company’s allowance for loans that are individually evaluated for credit losses and collectively evaluated for credit losses as of June 30, 2022 and 2021, and December 31, 2021, are summarized in the following table by loan segment (dollars in thousands). Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories.

June 30, 2022	C&I		Municipal		Agricultural		Construction & Development		Farm
Loans individually evaluated for credit losses	$	9,591	$	—	$	360	$	386	$	46
Loans collectively evaluated for credit losses		8,998		1,352		802		20,699		960
Total	$	18,589	$	1,352	$	1,162	$	21,085	$	1,006

June 30, 2022 (continued)	Non-Owner Occupied CRE		Owner Occupied CRE		Residential		Auto		Non-Auto		Total
Loans individually evaluated for credit losses	$	2,843	$	2,585	$	1,652	$	3	$	1	$	17,467
Loans collectively evaluated for credit losses		5,567		8,155		6,652		909		371		54,465
Total	$	8,410	$	10,740	$	8,304	$	912	$	372	$	71,932

June 30, 2021	C&I		Municipal		Agricultural		Construction & Development		Farm
Loans individually evaluated for credit losses	$	4,588	$	275	$	1,255	$	1,099	$	9
Loans collectively evaluated for credit losses		5,598		313		57		14,533		598
Total	$	10,186	$	588	$	1,312	$	15,632	$	607

June 30, 2021 (continued)	Non-Owner Occupied CRE		Owner Occupied CRE		Residential		Auto		Non-Auto		Total
Loans individually evaluated for credit losses	$	4,200	$	3,144	$	2,609	$	5	$	2	$	17,186
Loans collectively evaluated for credit losses		6,232		7,255		8,625		1,261		480		44,952
Total	$	10,432	$	10,399	$	11,234	$	1,266	$	482	$	62,138

December 31, 2021	C&I		Municipal		Agricultural		Construction & Development		Farm
Loans individually evaluated for credit losses	$	6,627	$	—	$	1,445	$	225	$	2
Loans collectively evaluated for credit losses		5,653		348		152		17,402		661
Total	$	12,280	$	348	$	1,597	$	17,627	$	663

December 31, 2021 (continued)	Non-Owner Occupied CRE		Owner Occupied CRE		Residential		Auto		Non-Auto		Total
Loans individually evaluated for credit losses	$	4,059	$	3,481	$	2,026	$	4	$	1	$	17,870
Loans collectively evaluated for credit losses		6,663		7,347		6,107		892		370		45,595
Total	$	10,722	$	10,828	$	8,133	$	896	$	371	$	63,465

The Company’s recorded investment in loans as of June 30, 2022 and 2021, and December 31, 2021, related to the balance in the allowance for credit losses follows below (dollars in thousands):

June 30, 2022	C&I		Municipal		Agricultural		Construction & Development		Farm
Loans individually evaluated for credit losses	$	32,369	$	84	$	752	$	10,612	$	1,662
Loans collectively evaluated for credit losses		807,559		200,493		89,668		918,032		248,366
Total	$	839,928	$	200,577	$	90,420	$	928,644	$	250,028

June 30, 2022 (continued)	Non-Owner Occupied CRE		Owner Occupied CRE		Residential		Auto		Non-Auto		Total
Loans individually evaluated for credit losses	$	34,702	$	37,439	$	33,154	$	1,391	$	503	$	152,668
Loans collectively evaluated for credit losses		601,730		872,460		1,378,971		466,756		141,879		5,725,914
Total	$	636,432	$	909,899	$	1,412,125	$	468,147	$	142,382	$	5,878,582

June 30, 2021	C&I		Municipal		Agricultural		Construction & Development		Farm
Loans individually evaluated for credit losses	$	24,425	$	885	$	6,250	$	10,721	$	4,536
Loans collectively evaluated for credit losses		958,678		178,471		88,962		540,207		180,752
Total	$	983,103	$	179,356	$	95,212	$	550,928	$	185,288

June 30, 2021 (continued)	Non-Owner Occupied CRE		Owner Occupied CRE		Residential		Auto		Non-Auto		Total
Loans individually evaluated for credit losses	$	40,291	$	51,808	$	34,011	$	1,671	$	396	$	174,994
Loans collectively evaluated for credit losses		633,317		768,247		1,294,463		382,093		104,418		5,129,608
Total	$	673,608	$	820,055	$	1,328,474	$	383,764	$	104,814	$	5,304,602

December 31, 2021	C&I		Municipal		Agricultural		Construction & Development		Farm
Loans individually evaluated for credit losses	$	24,391	$	109	$	5,398	$	5,473	$	3,142
Loans collectively evaluated for credit losses		812,684		177,796		92,691		744,320		214,078
Total	$	837,075	$	177,905	$	98,089	$	749,793	$	217,220

December 31, 2021 (continued)	Non-Owner Occupied CRE		Owner Occupied CRE		Residential		Auto		Non-Auto		Total
Loans individually evaluated for credit losses	$	34,468	$	48,504	$	37,570	$	1,675	$	455	$	161,185
Loans collectively evaluated for credit losses		588,966		773,149		1,296,849		403,741		123,513		5,227,787
Total	$	623,434	$	821,653	$	1,334,419	$	405,416	$	123,968	$	5,388,972

From a credit risk standpoint, the Company rates its loans in one of five categories: (i) pass, (ii) special mention, (iii) substandard, (iv) doubtful or (v) loss (which are charged-off).

The ratings of loans reflect a judgment about the risks of default and loss associated with the loan. The Company reviews the ratings on our credits as part of our ongoing monitoring of the credit quality of our loan portfolio. Ratings are adjusted to reflect the degree of risk and loss that are felt to be inherent in each credit as of each reporting period. Our methodology is structured so that specific allocations are increased in accordance with deterioration in credit quality (and a corresponding increase in risk and loss) or decreased in accordance with improvement in credit quality (and a corresponding decrease in risk and loss).

Credits rated special mention show clear signs of financial weaknesses or deterioration in credit worthiness, however, such concerns are not so pronounced that the Company generally expects to experience significant loss within the short-term. Such credits typically maintain the ability to perform within standard credit terms and credit exposure is not as prominent as credits rated more harshly.

Credits rated substandard are those in which the normal repayment of principal and interest may be, or has been, jeopardized by reason of adverse trends or developments of a financial, managerial, economic or political nature, or important weaknesses exist in collateral. A protracted workout on these credits is a distinct possibility. Prompt corrective action is therefore required to strengthen the Company’s position, and/or to reduce exposure and to assure that adequate remedial measures are taken by the borrower. Credit exposure becomes more likely in such credits and a serious evaluation of the secondary support to the credit is performed.

Credits rated doubtful are those in which full collection of principal appears highly questionable, and which some degree of loss is anticipated, even though the ultimate amount of loss may not yet be certain and/or other factors exist which could affect collection of debt. Based upon available information, positive action by the Company is required to avert or minimize loss. Credits rated doubtful are generally also placed on nonaccrual.

The following summarizes the Company’s internal ratings of its loans held-for-investment, including the year of origination, by portfolio segments, at June 30, 2022 (dollars in millions):

June 30,	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Total
C&I
Risk rating:
Pass	$	342	$	317	$	79	$	28	$	20	$	22	$	—	$	808
Special mention		4		1		—		2		—		—		—		7
Substandard		11		5		3		3		3		—		—		25
Doubtful		—		—		—		—		—		—		—		—
Total	$	357	$	323	$	82	$	33	$	23	$	22	$	—	$	840

June 30,	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Total
Municipal
Risk rating:
Pass	$	49	$	21	$	14	$	5	$	21	$	91	$	—	$	201
Special mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—
Total	$	49	$	21	$	14	$	5	$	21	$	91	$	—	$	201

June 30,	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Total
Agricultural
Risk rating:
Pass	$	39	$	41	$	4	$	3	$	1	$	1	$	—	$	89
Special mention		—		—		—		—		—		—		—		—
Substandard		1		—		—		—		—		—		—		1
Doubtful		—		—		—		—		—		—		—		—
Total	$	40	$	41	$	4	$	3	$	1	$	1	$	—	$	90

June 30,	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Total
Construction & Development
Risk rating:
Pass	$	330	$	440	$	104	$	22	$	11	$	11	$	—	$	918
Special mention		—		4		—		—		—		—		—		4
Substandard		2		5		—		—		—		—		—		7
Doubtful		—		—		—		—		—		—		—		—
Total	$	332	$	449	$	104	$	22	$	11	$	11	$	—	$	929

June 30,	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Total
Farm
Risk rating:
Pass	$	63	$	104	$	35	$	13	$	8	$	26	$	—	$	249
Special mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		1		—		1
Doubtful		—		—		—		—		—		—		—		—
Total	$	63	$	104	$	35	$	13	$	8	$	27	$	—	$	250

June 30,	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Total
Non-Owner Occupied CRE
Risk rating:
Pass	$	130	$	203	$	109	$	52	$	24	$	83	$	—	$	601
Special mention		—		—		1		11		—		7		—		19
Substandard		6		—		1		2		1		6		—		16
Doubtful		—		—		—		—		—		—		—		—
Total	$	136	$	203	$	111	$	65	$	25	$	96	$	—	$	636

June 30,	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Total
Owner Occupied CRE
Risk rating:
Pass	$	240	$	218	$	122	$	88	$	71	$	133	$	—	$	872
Special mention		—		2		2		1		—		1		—		6
Substandard		1		4		2		3		11		11		—		32
Doubtful		—		—		—		—		—		—		—		—
Total	$	241	$	224	$	126	$	92	$	82	$	145	$	—	$	910

June 30,	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Total
Residential
Risk rating:
Pass	$	277	$	399	$	188	$	94	$	70	$	239	$	112	$	1,379
Special mention		1		2		2		1		—		4		—		10
Substandard		2		3		2		2		2		8		4		23
Doubtful		—		—		—		—		—		—		—		—
Total	$	280	$	404	$	192	$	97	$	72	$	251	$	116	$	1,412

June 30,	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Total
Auto
Risk rating:
Pass	$	168	$	171	$	77	$	36	$	11	$	4	$	—	$	467
Special mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		1		—		—		—		1
Doubtful		—		—		—		—		—		—		—		—
Total	$	168	$	171	$	77	$	37	$	11	$	4	$	—	$	468

June 30,	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Total
Non-Auto
Risk rating:
Pass	$	54	$	56	$	15	$	5	$	2	$	2	$	7	$	141
Special mention		1		—		—		—		—		—		—		1
Substandard		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—
Total	$	55	$	56	$	15	$	5	$	2	$	2	$	7	$	142

June 30,	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Total
Total Loans
Risk rating:
Pass	$	1,692	$	1,970	$	747	$	346	$	239	$	612	$	119	$	5,725
Special mention		6		9		5		15		—		12		—		47
Substandard		23		17		8		11		17		26		4		106
Doubtful		—		—		—		—		—		—		—		—
Total	$	1,721	$	1,996	$	760	$	372	$	256	$	650	$	123	$	5,878

The following summarizes the Company’s internal ratings of its loans held-for-investment, including the year of origination, by portfolio segments, at June 30, 2021 (dollars in millions):

June 30,	2021		2020		2019		2018		2017		Prior		Revolving Loans Amortized Cost Basis		Total
C&I
Risk rating:
Pass	$	485	$	316	$	71	$	46	$	22	$	19	$	—	$	959
Special mention		4		2		1		1		1		—		—		9
Substandard		4		6		2		3		—		—		—		15
Doubtful		—		—		—		—		—		—		—		—
Total	$	493	$	324	$	74	$	50	$	23	$	19	$	—	$	983

June 30,	2021		2020		2019		2018		2017		Prior		Revolving Loans Amortized Cost Basis		Total
Municipal
Risk rating:
Pass	$	23	$	23	$	8	$	22	$	18	$	84	$	—	$	178
Special mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		1		—		1
Doubtful		—		—		—		—		—		—		—		—
Total	$	23	$	23	$	8	$	22	$	18	$	85	$	—	$	179

June 30,	2021		2020		2019		2018		2017		Prior		Revolving Loans Amortized Cost Basis		Total
Agricultural
Risk rating:
Pass	$	30	$	34	$	15	$	7	$	3	$	1	$	—	$	90
Special mention		—		—		—		—		—		—		—		—
Substandard		—		5		—		—		1		—		—		6
Doubtful		—		—		—		—		—		—		—		—
Total	$	30	$	39	$	15	$	7	$	4	$	1	$	—	$	96

June 30,	2021		2020		2019		2018		2017		Prior		Revolving Loans Amortized Cost Basis		Total
Construction & Development
Risk rating:
Pass	$	220	$	237	$	39	$	18	$	9	$	17	$	—	$	540
Special mention		1		2		—		—		—		—		—		3
Substandard		2		2		4		—		—		—		—		8
Doubtful		—		—		—		—		—		—		—		—
Total	$	223	$	241	$	43	$	18	$	9	$	17	$	—	$	551

June 30,	2021		2020		2019		2018		2017		Prior		Revolving Loans Amortized Cost Basis		Total
Farm
Risk rating:
Pass	$	59	$	53	$	17	$	12	$	9	$	31	$	—	$	181
Special mention		—		—		—		—		—		—		—		—
Substandard		—		2		—		1		—		1		—		4
Doubtful		—		—		—		—		—		—		—		—
Total	$	59	$	55	$	17	$	13	$	9	$	32	$	—	$	185

June 30,	2021		2020		2019		2018		2017		Prior		Revolving Loans Amortized Cost Basis		Total
Non-Owner Occupied CRE
Risk rating:
Pass	$	101	$	171	$	104	$	80	$	40	$	138	$	—	$	634
Special mention		—		1		13		1		7		3		—		25
Substandard		2		—		3		—		3		7		—		15
Doubtful		—		—		—		—		—		—		—		—
Total	$	103	$	172	$	120	$	81	$	50	$	148	$	—	$	674

June 30,	2021		2020		2019		2018		2017		Prior		Revolving Loans Amortized Cost Basis		Total
Owner Occupied CRE
Risk rating:
Pass	$	137	$	178	$	129	$	103	$	64	$	157	$	—	$	768
Special mention		1		2		1		1		4		1		—		10
Substandard		8		3		5		14		2		10		—		42
Doubtful		—		—		—		—		—		—		—		—
Total	$	146	$	183	$	135	$	118	$	70	$	168	$	—	$	820

June 30,	2021		2020		2019		2018		2017		Prior		Revolving Loans Amortized Cost Basis		Total
Residential
Risk rating:
Pass	$	266	$	316	$	145	$	105	$	84	$	282	$	96	$	1,294
Special mention		—		3		1		1		1		3		—		9
Substandard		2		5		3		2		2		10		1		25
Doubtful		—		—		—		—		—		—		—		—
Total	$	268	$	324	$	149	$	108	$	87	$	295	$	97	$	1,328

June 30,	2021		2020		2019		2018		2017		Prior		Revolving Loans Amortized Cost Basis		Total
Auto
Risk rating:
Pass	$	118	$	140	$	76	$	26	$	13	$	9	$	—	$	382
Special mention		—		—		—		—		—		—		—		—
Substandard		—		1		1		—		—		—		—		2
Doubtful		—		—		—		—		—		—		—		—
Total	$	118	$	141	$	77	$	26	$	13	$	9	$	—	$	384

June 30,	2021		2020		2019		2018		2017		Prior		Revolving Loans Amortized Cost Basis		Total
Non-Auto
Risk rating:
Pass	$	40	$	33	$	14	$	5	$	2	$	5	$	6	$	105
Special mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—
Total	$	40	$	33	$	14	$	5	$	2	$	5	$	6	$	105

June 30,	2021		2020		2019		2018		2017		Prior		Revolving Loans Amortized Cost Basis		Total
Total Loans
Risk rating:
Pass	$	1,479	$	1,501	$	618	$	424	$	264	$	743	$	102	$	5,131
Special mention		6		10		16		4		13		7		—		56
Substandard		18		24		18		20		8		29		1		118
Doubtful		—		—		—		—		—		—		—		—
Total	$	1,503	$	1,535	$	652	$	448	$	285	$	779	$	103	$	5,305

The following summarizes the Company’s internal ratings of its loans held-for-investment, including the year of origination, by portfolio segments, at December 31, 2021 (dollars in millions):

December 31,	2021		2020		2019		2018		2017		Prior		Revolving Loans Amortized Cost Basis		Total
C&I
Risk rating:
Pass	$	526	$	178	$	52	$	29	$	17	$	11	$	—	$	813
Special mention		4		1		4		—		—		—		—		9
Substandard		7		4		1		3		—		—		—		15
Doubtful		—		—		—		—		—		—		—		—
Total	$	537	$	183	$	57	$	32	$	17	$	11	$	—	$	837

December 31,	2021		2020		2019		2018		2017		Prior		Revolving Loans Amortized Cost Basis		Total
Municipal
Risk rating:
Pass	$	39	$	15	$	6	$	22	$	17	$	79	$	—	$	178
Special mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—
Total	$	39	$	15	$	6	$	22	$	17	$	79	$	—	$	178

December 31,	2021		2020		2019		2018		2017		Prior		Revolving Loans Amortized Cost Basis		Total
Agricultural
Risk rating:
Pass	$	69	$	8	$	6	$	6	$	3	$	1	$	—	$	93
Special mention		—		—		—		—		—		—		—		—
Substandard		4		1		—		—		—		—		—		5
Doubtful		—		—		—		—		—		—		—		—
Total	$	73	$	9	$	6	$	6	$	3	$	1	$	—	$	98

December 31,	2021		2020		2019		2018		2017		Prior		Revolving Loans Amortized Cost Basis		Total
Construction & Development
Risk rating:
Pass	$	557	$	134	$	24	$	14	$	7	$	8	$	—	$	744
Special mention		2		—		—		—		—		—		—		2
Substandard		2		2		—		—		—		—		—		4
Doubtful		—		—		—		—		—		—		—		—
Total	$	561	$	136	$	24	$	14	$	7	$	8	$	—	$	750

December 31,	2021		2020		2019		2018		2017		Prior		Revolving Loans Amortized Cost Basis		Total
Farm
Risk rating:
Pass	$	117	$	42	$	15	$	10	$	7	$	23	$	—	$	214
Special mention		—		—		—		—		—		—		—		—
Substandard		1		1		—		1		—		—		—		3
Doubtful		—		—		—		—		—		—		—		—
Total	$	118	$	43	$	15	$	11	$	7	$	23	$	—	$	217

December 31,	2021		2020		2019		2018		2017		Prior		Revolving Loans Amortized Cost Basis		Total
Non-Owner Occupied CRE
Risk rating:
Pass	$	214	$	128	$	77	$	56	$	31	$	84	$	—	$	590
Special mention		—		1		12		—		7		3		—		23
Substandard		—		1		3		1		3		3		—		11
Doubtful		—		—		—		—		—		—		—		—
Total	$	214	$	130	$	92	$	57	$	41	$	90	$	—	$	624

December 31,	2021		2020		2019		2018		2017		Prior		Revolving Loans Amortized Cost Basis		Total
Owner Occupied CRE
Risk rating:
Pass	$	250	$	143	$	114	$	90	$	59	$	117	$	—	$	773
Special mention		2		2		1		—		1		1		—		7
Substandard		8		2		3		13		5		11		—		42
Doubtful		—		—		—		—		—		—		—		—
Total	$	260	$	147	$	118	$	103	$	65	$	129	$	—	$	822

December 31,	2021		2020		2019		2018		2017		Prior		Revolving Loans Amortized Cost Basis		Total
Residential
Risk rating:
Pass	$	477	$	230	$	115	$	84	$	68	$	222	$	100	$	1,296
Special mention		3		4		—		1		1		3		1		13
Substandard		3		3		3		2		2		10		2		25
Doubtful		—		—		—		—		—		—		—		—
Total	$	483	$	237	$	118	$	87	$	71	$	235	$	103	$	1,334

December 31,	2021		2020		2019		2018		2017		Prior		Revolving Loans Amortized Cost Basis		Total
Auto
Risk rating:
Pass	$	218	$	105	$	54	$	17	$	7	$	2	$	—	$	403
Special mention		1		—		—		—		—		—		—		1
Substandard		—		—		1		—		—		—		—		1
Doubtful		—		—		—		—		—		—		—		—
Total	$	219	$	105	$	55	$	17	$	7	$	2	$	—	$	405

December 31,	2021		2020		2019		2018		2017		Prior		Revolving Loans Amortized Cost Basis		Total
Non-Auto
Risk rating:
Pass	$	81	$	22	$	8	$	4	$	1	$	1	$	7	$	124
Special mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—
Total	$	81	$	22	$	8	$	4	$	1	$	1	$	7	$	124

December 31,	2021		2020		2019		2018		2017		Prior		Revolving Loans Amortized Cost Basis		Total
Total Loans
Risk rating:
Pass	$	2,548	$	1,005	$	471	$	332	$	217	$	548	$	107	$	5,228
Special mention		12		8		17		1		9		7		1		55
Substandard		25		14		11		20		10		24		2		106
Doubtful		—		—		—		—		—		—		—		—
Total	$	2,585	$	1,027	$	499	$	353	$	236	$	579	$	110	$	5,389

At June 30, 2022 and 2021, and December 31, 2021, the Company’s past due loans are as follows (dollars in thousands):

June 30, 2022	15-59 Days Past Due*		60-89 Days Past Due		Greater Than 90 Days		Total Past Due		Current		Total Loans		90 Days Past Due Still Accruing
Commercial:
C&I	$	3,240	$	2,704	$	1,470	$	7,414	$	832,514	$	839,928	$	—
Municipal		—		—		—		—		200,577		200,577		—
Total Commercial		3,240		2,704		1,470		7,414		1,033,091		1,040,505		—
Agricultural		432		30		27		489		89,931		90,420		—
Real Estate:
Construction & Development		2,841		734		—		3,575		925,069		928,644		—
Farm		1,005		—		—		1,005		249,023		250,028		—
Non-Owner Occupied CRE		569		—		107		676		635,756		636,432		—
Owner Occupied CRE		4,061		495		1,292		5,848		904,051		909,899		—
Residential		5,387		92		596		6,075		1,406,050		1,412,125		2
Total Real Estate		13,863		1,321		1,995		17,179		4,119,949		4,137,128		2
Consumer:
Auto		292		104		30		426		467,721		468,147		14
Non-Auto		161		—		7		168		142,214		142,382		6
Total Consumer		453		104		37		594		609,935		610,529		20
Total	$	17,988	$	4,159	$	3,529	$	25,676	$	5,852,906	$	5,878,582	$	22

June 30, 2021	15-59 Days Past Due*		60-89 Days Past Due		Greater Than 90 Days		Total Past Due		Current		Total Loans		90 Days Past Due Still Accruing
Commercial:
C&I	$	3,432	$	707	$	230	$	4,369	$	978,734	$	983,103	$	—
Municipal		1,656		—		—		1,656		177,700		179,356		—
Total Commercial		5,088		707		230		6,025		1,156,434		1,162,459		—
Agricultural		193		10		35		238		94,974		95,212		—
Real Estate:
Construction & Development		1,973		—		162		2,135		548,793		550,928		—
Farm		1,138		—		—		1,138		184,150		185,288		—
Non-Owner Occupied CRE		896		161		—		1,057		672,551		673,608		—
Owner Occupied CRE		97		821		—		918		819,137		820,055		—
Residential		5,946		373		100		6,419		1,322,055		1,328,474		—
Total Real Estate		10,050		1,355		262		11,667		3,546,686		3,558,353		—
Consumer:
Auto		330		55		25		410		383,354		383,764		—
Non-Auto		44		11		—		55		104,759		104,814		—
Total Consumer		374		66		25		465		488,113		488,578		—
Total	$	15,705	$	2,138	$	552	$	18,395	$	5,286,207	$	5,304,602	$	—

December 31, 2021	15-59 Days Past Due*		60-89 Days Past Due		Greater Than 90 Days		Total Past Due		Current		Total Loans		90 Days Past Due Still Accruing
Commercial:
C&I	$	3,638	$	34	$	222	$	3,894	$	833,181	$	837,075	$	5
Municipal		63		—		—		63		177,842		177,905		—
Total Commercial		3,701		34		222		3,957		1,011,023		1,014,980		5
Agricultural		181		—		—		181		97,908		98,089		—
Real Estate:
Construction & Development		2,953		39		—		2,992		746,801		749,793		—
Farm		600		215		—		815		216,405		217,220		—
Non-Owner Occupied CRE		235		—		—		235		623,199		623,434		—
Owner Occupied CRE		813		—		280		1,093		820,560		821,653		—
Residential		4,984		327		410		5,721		1,328,698		1,334,419		—
Total Real Estate		9,585		581		690		10,856		3,735,663		3,746,519		—
Consumer:
Auto		393		26		—		419		404,997		405,416		—
Non-Auto		145		24		3		172		123,796		123,968		3
Total Consumer		538		50		3		591		528,793		529,384		3
Total	$	14,005	$	665	$	915	$	15,585	$	5,373,387	$	5,388,972	$	8

* The Company monitors commercial, agricultural and real estate loans after such loans are 15 days past due. Consumer loans are monitored after such loans are 30 days past due.

The restructuring of a loan is considered a “troubled debt restructuring” if both the borrower is experiencing financial difficulties and the creditor has granted a concession. Concessions may include interest rate reductions or below market interest rates, principal forgiveness, restructuring amortization schedules, reductions in collateral and other actions intended to minimize potential losses.

There were no loans that were modified and considered troubled debt restructurings for the three and six-months ended June 30, 2022. The Company’s loans that were modified and considered troubled debt restructurings for the three and six-months ended June 30, 2021 are as follows (dollars in thousands):

	Three-Months Ended June 30, 2021						Six-Months Ended June 30, 2021
			Pre- Modification		Post- Modification				Pre- Modification		Post- Modification
			Recorded		Recorded				Recorded		Recorded
	Number		Investment		Investment		Number		Investment		Investment
Commercial:
C&I		2	$	212	$	212		4	$	361	$	361
Municipal		—		—		—		—		—		—
Total Commercial		2		212		212		4		361		361
Agricultural		1		68		68		1		68		68
Real Estate:
Construction & Development		1		200		200		1		200		200
Farm		—		—		—		—		—		—
Non-Owner Occupied CRE		—		—		—		—		—		—
Owner Occupied CRE		2		548		548		3		1,047		1,047
Residential		1		245		245		3		443		443
Total Real Estate		4		993		993		7		1,690		1,690
Consumer:
Auto		1		31		31		1		31		31
Non-Auto		—		—		—		—		—		—
Total Consumer		1		31		31		1		31		31
Total		8	$	1,304	$	1,304		13	$	2,150	$	2,150

The balances below provide information as to how the loans were modified as troubled debt restructured loans for the three and six-months ended June 30, 2021 (in thousands):

	Three-Months Ended June 30, 2021						Six-Months Ended June 30, 2021
	Adjusted				Combined		Adjusted				Combined
	Interest		Maturity		Rate and		Interest		Maturity		Rate and
	Rate		Extended		Maturity		Rate		Extended		Maturity
Commercial:
C&I	$	—	$	212	$	—	$	—	$	212	$	149
Municipal		—		—		—		—		—		—
Total Commercial		—		212		—		—		212		149
Agricultural		—		68		—		—		68		—
Real Estate:
Construction & Development		—		200		—		—		200		—
Farm		—		—		—		—		—		—
Non-Owner Occupied CRE		—		—		—		—		—		—
Owner Occupied CRE		—		—		548		—		—		1,047
Residential		—		245		—		—		245		198
Total Real Estate		—		445		548		—		445		1,245
Consumer:
Auto		—		—		31		—		—		31
Non-Auto		—		—		—		—		—		—
Total Consumer		—		—		31		—		—		31
Total	$	—	$	725	$	579	$	—	$	725	$	1,425

During the three and six-months ended June 30, 2022 and 2021, no loans were modified as a troubled debt restructured loan within the previous 12 months and for which there was a payment default and still outstanding, respectively. A default for purposes of this disclosure is a troubled debt restructured loan in which the borrower is 90 days past due or more or results in the foreclosure and repossession of the applicable collateral.

As of June 30, 2022, the Company has no commitments to lend additional funds to loan customers whose terms have been modified in troubled debt restructurings.