Loans Held for Investment and Allowance for Loan Losses

9 Months Ended

Sep. 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 September 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):

	September 30,						December 31,
	2022			2021			2021
Commercial:
C&I*	$	871,335		$	819,597		$	837,075
Municipal		214,852			165,847			177,905
Total Commercial		1,086,187			985,444			1,014,980
Agricultural		76,937			98,947			98,089
Real Estate:
Construction & Development		938,051			656,530			749,793
Farm		268,139			203,064			217,220
Non-Owner Occupied CRE		717,738			674,958			623,434
Owner Occupied CRE		945,665			824,231			821,653
Residential		1,536,180			1,328,798			1,334,419
Total Real Estate		4,405,773			3,687,581			3,746,519
Consumer:
Auto		538,798			394,072			405,416
Non-Auto		147,793			120,450			123,968
Total Consumer		686,591			514,522			529,384
Total Loans		6,255,488			5,286,494			5,388,972
Less: Allowance for credit losses		(74,108	)		(63,370	)		(63,465	)
Loans, net	$	6,181,380		$	5,223,124		$	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 September 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 September 30, 2022, this available line of credit was $2,258,125,000. At September 30, 2022, $3,901,376,000 in loans held by our bank subsidiary were subject to blanket liens as security for this line of credit. At September 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):

	September 30,				December 31,
	2022		2021		2021
Nonaccrual loans	$	24,585	$	25,210	$	31,652
Loans still accruing and past due 90 days or more		15		23		8
Troubled debt restructured loans still accruing*		19		22		21
Total	$	24,619	$	25,255	$	31,681

* Troubled debt restructured loans of $1,951,000, $4,732,000 and $6,721,000, for which interest collection is doubtful are included in nonaccrual loans as of September 30, 2022 and 2021, and December 31, 2021, respectively.

The Company had $24,619,000, $25,283,000 and $34,158,000 in nonaccrual, past due 90 days or more and still accruing, restructured loans, and foreclosed assets at September 30, 2022 and 2021, and December 31, 2021, respectively. Nonaccrual loans at September 30, 2022 and 2021, and December 31, 2021, consisted of the following (dollars in thousands):

	September 30,				December 31,
	2022		2021		2021
Commercial:
C&I	$	5,966	$	3,430	$	5,370
Municipal		—		—		—
Total Commercial		5,966		3,430		5,370
Agricultural		338		949		4,920
Real Estate:
Construction & Development		1,696		1,455		708
Farm		91		965		1,173
Non-Owner Occupied CRE		2,406		2,776		2,671
Owner Occupied CRE		6,703		6,551		7,897
Residential		6,762		8,399		8,360
Total Real Estate		17,658		20,146		20,809
Consumer:
Auto		596		589		514
Non-Auto		27		96		39
Total Consumer		623		685		553
Total	$	24,585	$	25,210	$	31,652

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

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

Three-Months Ended September 30, 2022	C&I			Municipal			Agricultural			Construction & Development		Farm
Beginning balance	$	18,589		$	1,352		$	1,162		$	21,085	$	1,006
Provision for loan losses		(2,378	)		(33	)		(187	)		4,614		149
Recoveries		266			—			18			—		—
Charge-offs		(38	)		—			—			—		—
Ending balance	$	16,439		$	1,319		$	993		$	25,699	$	1,155

Three-Months Ended September 30, 2022 (continued)	Non-Owner Occupied CRE			Owner Occupied CRE			Residential		Auto			Non-Auto			Total
Beginning balance	$	8,410		$	10,740		$	8,304	$	912		$	372		$	71,932
Provision for loan losses		(498	)		(1,303	)		557		72			67			1,060
Recoveries		283			649			93		47			53			1,409
Charge-offs		—			—			—		(119	)		(136	)		(293	)
Ending balance	$	8,195		$	10,086		$	8,954	$	912		$	356		$	74,108

Nine-Months Ended September 30, 2022	C&I			Municipal		Agricultural			Construction & Development			Farm
Beginning balance	$	12,280		$	348	$	1,597		$	17,627		$	663
Provision for loan losses		3,598			971		(730	)		8,172			492
Recoveries		824			—		135			—			—
Charge-offs		(263	)		—		(9	)		(100	)		—
Ending balance	$	16,439		$	1,319	$	993		$	25,699		$	1,155

Nine-Months Ended September 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		(3,352	)		(1,323	)		860			116			106			8,910
Recoveries		825			669			110			215			182			2,960
Charge-offs		—			(88	)		(149	)		(315	)		(303	)		(1,227	)
Ending balance	$	8,195		$	10,086		$	8,954		$	912		$	356		$	74,108

Three-Months Ended September 30, 2021	C&I			Municipal			Agricultural			Construction & Development		Farm
Beginning balance	$	10,186		$	588		$	1,312		$	15,632	$	607
Provision for loan losses		(31	)		(273	)		1,022			1,230		(21	)
Recoveries		1,140			—			5			—		—
Charge-offs		(902	)		—			(50	)		—		—
Ending balance	$	10,393		$	315		$	2,289		$	16,862	$	586

Three-Months Ended September 30, 2021 (continued)	Non-Owner Occupied CRE			Owner Occupied CRE			Residential			Auto			Non- Auto			Total
Beginning balance	$	10,432		$	10,399		$	11,234		$	1,266		$	482		$	62,138
Provision for loan losses		(344	)		(94	)		(1,184	)		(259	)		(46	)		—
Recoveries		556			806			7			129			64			2,707
Charge-offs		—			(222	)		—			(176	)		(125	)		(1,475	)
Ending balance	$	10,644		$	10,889		$	10,057		$	960		$	375		$	63,370

Nine-Months Ended September 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		(3,597	)		(1,237	)		1,076			3,348		(1,300	)
Recoveries		1,671			—			29			2		10
Charge-offs		(1,290	)		—			(71	)		—		—
Ending balance	$	10,393		$	315		$	2,289		$	16,862	$	586

Nine-Months Ended September 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		1,609			(2,044	)		(2,542	)		139			80			(4,468	)
Recoveries		650			816			90			305			172			3,745
Charge-offs		(6	)		(230	)		(92	)		(504	)		(248	)		(2,441	)
Ending balance	$	10,644		$	10,889		$	10,057		$	960		$	375		$	63,370

Additionally, the Company records a reserve for unfunded commitments in other liabilities which totaled $10,879,000, $6,751,000 and $6,436,000 at September 30, 2022 and 2021, and December 31, 2021, respectively. The provision for loan losses of $1,060,000 for the three-months ended

September 30, 2022 is combined with the provision for unfunded commitments of $2,161,000 and reported in the aggregate of $3,221,000 under the provision for credit losses in the consolidated statement of earnings for the three-months ended September 30, 2022. The provision for loan losses of $8,910,000 for the nine-months ended September 30, 2022 above is combined with the provision for unfunded commitments of $4,443,000 and reported in the aggregate of $13,353,000 under the provision for credit losses in the consolidated statement of earnings for the nine-months ended September 30, 2022.

There was no provision for loan losses or unfunded commitments for the three-months ended September 30, 2021. The $4,468,000 reversal of the provision for loan losses for the nine-months ended September 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 nine-months ended September 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 September 30, 2022 and 2021, and December 31, 2021, are summarized in the following tables by loan segment (dollars in thousands):

September 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	$	334	$	5,632	$	20,844	$	26,810	$	4,094	$	4,345	$	8,439
Municipal		—		—		71		71		—		—		—
Total Commercial		334		5,632		20,915		26,881		4,094		4,345		8,439
Agricultural		116		222		412		750		103		247		350
Real Estate:
Construction & Development		919		777		5,461		7,157		207		384		591
Farm		—		91		1,616		1,707		2		39		41
Non-Owner Occupied CRE		2,230		176		32,959		35,365		12		2,317		2,329
Owner Occupied CRE		5,700		1,003		30,136		36,839		103		1,958		2,061
Residential		4,129		2,633		26,076		32,838		293		1,347		1,640
Total Real Estate		12,978		4,680		96,248		113,906		617		6,045		6,662
Consumer:
Auto		—		596		1,096		1,692		1		2		3
Non-Auto		—		27		461		488		—		1		1
Total Consumer		—		623		1,557		2,180		1		3		4
Total	$	13,428	$	11,157	$	119,132	$	143,717	$	4,815	$	10,640	$	15,455

September 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	$	1,311	$	2,119	$	18,713	$	22,143	$	610	$	3,296	$	3,906
Municipal		—		—		121		121		—		—		—
Total Commercial		1,311		2,119		18,834		22,264		610		3,296		3,906
Agricultural		328		621		6,944		7,893		184		1,965		2,149
Real Estate:
Construction & Development		1,225		230		4,872		6,327		6		158		164
Farm		878		87		2,140		3,105		—		6		6
Non-Owner Occupied CRE		2,629		147		33,382		36,158		16		3,959		3,975
Owner Occupied CRE		5,886		665		42,781		49,332		99		3,382		3,481
Residential		3,634		4,765		30,090		38,489		641		2,022		2,663
Total Real Estate		14,252		5,894		113,265		133,411		762		9,527		10,289
Consumer:
Auto		—		589		1,181		1,770		2		2		4
Non-Auto		—		96		337		433		—		2		2
Total Consumer		—		685		1,518		2,203		2		4		6
Total	$	15,891	$	9,319	$	140,561	$	165,771	$	1,558	$	14,792	$	16,350

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 September 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.

September 30, 2022	C&I		Municipal		Agricultural		Construction & Development		Farm
Loans individually evaluated for credit losses	$	8,439	$	—	$	350	$	591	$	41
Loans collectively evaluated for credit losses		8,000		1,319		643		25,108		1,114
Total	$	16,439	$	1,319	$	993	$	25,699	$	1,155

September 30, 2022 (continued)	Non-Owner Occupied CRE		Owner Occupied CRE		Residential		Auto		Non-Auto		Total
Loans individually evaluated for credit losses	$	2,329	$	2,061	$	1,640	$	3	$	1	$	15,455
Loans collectively evaluated for credit losses		5,866		8,025		7,314		909		355		58,653
Total	$	8,195	$	10,086	$	8,954	$	912	$	356	$	74,108

September 30, 2021	C&I		Municipal		Agricultural		Construction & Development		Farm
Loans individually evaluated for credit losses	$	3,906	$	—	$	2,149	$	164	$	6
Loans collectively evaluated for credit losses		6,487		315		140		16,698		580
Total	$	10,393	$	315	$	2,289	$	16,862	$	586

September 30, 2021 (continued)	Non-Owner Occupied CRE		Owner Occupied CRE		Residential		Auto		Non-Auto		Total
Loans individually evaluated for credit losses	$	3,975	$	3,481	$	2,663	$	4	$	2	$	16,350
Loans collectively evaluated for credit losses		6,669		7,408		7,394		956		373		47,020
Total	$	10,644	$	10,889	$	10,057	$	960	$	375	$	63,370

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 September 30, 2022 and 2021, and December 31, 2021, related to the balance in the allowance for credit losses follows below (dollars in thousands):

September 30, 2022	C&I		Municipal		Agricultural		Construction & Development		Farm
Loans individually evaluated for credit losses	$	26,810	$	71	$	750	$	7,157	$	1,707
Loans collectively evaluated for credit losses		844,525		214,781		76,187		930,894		266,432
Total	$	871,335	$	214,852	$	76,937	$	938,051	$	268,139

September 30, 2022 (continued)	Non-Owner Occupied CRE		Owner Occupied CRE		Residential		Auto		Non-Auto		Total
Loans individually evaluated for credit losses	$	35,365	$	36,839	$	32,838	$	1,692	$	488	$	143,717
Loans collectively evaluated for credit losses		682,373		908,826		1,503,342		537,106		147,305		6,111,771
Total	$	717,738	$	945,665	$	1,536,180	$	538,798	$	147,793	$	6,255,488

September 30, 2021	C&I		Municipal		Agricultural		Construction & Development		Farm
Loans individually evaluated for credit losses	$	22,143	$	121	$	7,893	$	6,327	$	3,105
Loans collectively evaluated for credit losses		797,454		165,726		91,054		650,203		199,959
Total	$	819,597	$	165,847	$	98,947	$	656,530	$	203,064

September 30, 2021 (continued)	Non-Owner Occupied CRE		Owner Occupied CRE		Residential		Auto		Non-Auto		Total
Loans individually evaluated for credit losses	$	36,158	$	49,332	$	38,489	$	1,770	$	433	$	165,771
Loans collectively evaluated for credit losses		638,800		774,899		1,290,309		392,302		120,017		5,120,723
Total	$	674,958	$	824,231	$	1,328,798	$	394,072	$	120,450	$	5,286,494

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 September 30, 2022 (dollars in millions):

September 30,	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Total
C&I
Risk rating:
Pass	$	495	$	226	$	65	$	24	$	18	$	16	$	—	$	844
Special mention		1		—		—		1		—		—		—		2
Substandard		11		7		3		1		3		—		—		25
Doubtful		—		—		—		—		—		—		—		—
Total	$	507	$	233	$	68	$	26	$	21	$	16	$	—	$	871

September 30,	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Total
Municipal
Risk rating:
Pass	$	67	$	21	$	16	$	5	$	20	$	86	$	—	$	215
Special mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—
Total	$	67	$	21	$	16	$	5	$	20	$	86	$	—	$	215

September 30,	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Total
Agricultural
Risk rating:
Pass	$	46	$	21	$	4	$	3	$	1	$	1	$	—	$	76
Special mention		—		—		—		—		—		—		—		—
Substandard		—		1		—		—		—		—		—		1
Doubtful		—		—		—		—		—		—		—		—
Total	$	46	$	22	$	4	$	3	$	1	$	1	$	—	$	77

September 30,	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Total
Construction & Development
Risk rating:
Pass	$	504	$	317	$	78	$	15	$	8	$	9	$	—	$	931
Special mention		—		2		—		—		—		—		—		2
Substandard		4		1		—		—		—		—		—		5
Doubtful		—		—		—		—		—		—		—		—
Total	$	508	$	320	$	78	$	15	$	8	$	9	$	—	$	938

September 30,	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Total
Farm
Risk rating:
Pass	$	101	$	89	$	33	$	12	$	8	$	23	$	—	$	266
Special mention		—		—		—		—		—		—		—		—
Substandard		1		—		—		—		—		1		—		2
Doubtful		—		—		—		—		—		—		—		—
Total	$	102	$	89	$	33	$	12	$	8	$	24	$	—	$	268

September 30,	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Total
Non-Owner Occupied CRE
Risk rating:
Pass	$	223	$	200	$	108	$	51	$	22	$	79	$	—	$	683
Special mention		—		1		—		11		—		7		—		19
Substandard		5		1		1		2		1		6		—		16
Doubtful		—		—		—		—		—		—		—		—
Total	$	228	$	202	$	109	$	64	$	23	$	92	$	—	$	718

September 30,	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Total
Owner Occupied CRE
Risk rating:
Pass	$	280	$	223	$	134	$	81	$	67	$	124	$	—	$	909
Special mention		—		1		2		4		—		1		—		8
Substandard		1		2		1		3		11		11		—		29
Doubtful		—		—		—		—				—		—		—
Total	$	281	$	226	$	137	$	88	$	78	$	136	$	—	$	946

September 30,	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Total
Residential
Risk rating:
Pass	$	433	$	382	$	183	$	87	$	68	$	224	$	126	$	1,503
Special mention		—		2		3		—		—		3		—		8
Substandard		4		3		3		2		1		9		3		25
Doubtful		—		—		—		—		—		—				—
Total	$	437	$	387	$	189	$	89	$	69	$	236	$	129	$	1,536

September 30,	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Total
Auto
Risk rating:
Pass	$	284	$	149	$	64	$	29	$	8	$	3	$	—	$	537
Special mention		—		—		—		—		—		—		—		—
Substandard		—		—		1		1		—		—		—		2
Doubtful		—				—		—		—		—		—		—
Total	$	284	$	149	$	65	$	30	$	8	$	3	$	—	$	539

September 30,	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Total
Non-Auto
Risk rating:
Pass	$	73	$	48	$	13	$	4	$	2	$	1	$	7	$	148
Special mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—
Total	$	73	$	48	$	13	$	4	$	2	$	1	$	7	$	148

September 30,	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Total
Total Loans
Risk rating:
Pass	$	2,506	$	1,676	$	698	$	311	$	222	$	566	$	133	$	6,112
Special mention		1		6		5		16		—		11		—		39
Substandard		26		15		9		9		16		27		3		105
Doubtful		—		—		—		—		—		—		—		—
Total	$	2,533	$	1,697	$	712	$	336	$	238	$	604	$	136	$	6,256

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

September 30,	2021		2020		2019		2018		2017		Prior		Revolving Loans Amortized Cost Basis		Total
C&I
Risk rating:
Pass	$	485	$	185	$	62	$	35	$	19	$	12	$	—	$	798
Special mention		2		1		1		1		1		—		—		6
Substandard		5		6		2		2		1		—		—		16
Doubtful		—		—		—		—		—		—		—		—
Total	$	492	$	192	$	65	$	38	$	21	$	12	$	—	$	820

September 30,	2021		2020		2019		2018		2017		Prior		Revolving Loans Amortized Cost Basis		Total
Municipal
Risk rating:
Pass	$	22	$	17	$	6	$	22	$	17	$	82	$	—	$	166
Special mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—
Total	$	22	$	17	$	6	$	22	$	17	$	82	$	—	$	166

September 30,	2021		2020		2019		2018		2017		Prior		Revolving Loans Amortized Cost Basis		Total
Agricultural
Risk rating:
Pass	$	51	$	19	$	11	$	6	$	3	$	1	$	—	$	91
Special mention		—		1		—		—		—		—		—		1
Substandard		6		1		—		—		—		—		—		7
Doubtful		—		—		—		—		—		—		—		—
Total	$	57	$	21	$	11	$	6	$	3	$	1	$	—	$	99

September 30,	2021		2020		2019		2018		2017		Prior		Revolving Loans Amortized Cost Basis		Total
Construction & Development
Risk rating:
Pass	$	383	$	195	$	37	$	18	$	8	$	8	$	—	$	649
Special mention		3		—		—		—		—		—		—		3
Substandard		2		1		1		—		—		—		—		4
Doubtful		—		—		—		—		—		—		—		—
Total	$	388	$	196	$	38	$	18	$	8	$	8	$	—	$	656

September 30,	2021		2020		2019		2018		2017		Prior		Revolving Loans Amortized Cost Basis		Total
Farm
Risk rating:
Pass	$	94	$	46	$	16	$	11	$	8	$	25	$	—	$	200
Special mention		—		—		—		—		—		—		—		—
Substandard		—		1		—		1		—		1		—		3
Doubtful		—		—		—		—		—		—		—		—
Total	$	94	$	47	$	16	$	12	$	8	$	26	$	—	$	203

September 30,	2021		2020		2019		2018		2017		Prior		Revolving Loans Amortized Cost Basis		Total
Non-Owner Occupied CRE
Risk rating:
Pass	$	158	$	156	$	98	$	75	$	35	$	117	$	—	$	639
Special mention		—		1		13		—		7		3		—		24
Substandard		1		—		3		1		3		4		—		12
Doubtful		—		—		—		—		—		—		—		—
Total	$	159	$	157	$	114	$	76	$	45	$	124	$	—	$	675

September 30,	2021		2020		2019		2018		2017		Prior		Revolving Loans Amortized Cost Basis		Total
Owner Occupied CRE
Risk rating:
Pass	$	193	$	166	$	125	$	99	$	59	$	133	$	—	$	775
Special mention		3		—		1		—		1		1		—		6
Substandard		9		3		4		14		3		10		—		43
Doubtful		—		—		—		—		—		—		—		—
Total	$	205	$	169	$	130	$	113	$	63	$	144	$	—	$	824

September 30,	2021		2020		2019		2018		2017		Prior		Revolving Loans Amortized Cost Basis		Total
Residential
Risk rating:
Pass	$	374	$	279	$	126	$	94	$	76	$	245	$	96	$	1,290
Special mention		4		4		—		1		1		3		—		13
Substandard		4		3		3		2		2		10		2		26
Doubtful		—		—		—		—		—		—		—		—
Total	$	382	$	286	$	129	$	97	$	79	$	258	$	98	$	1,329

September 30,	2021		2020		2019		2018		2017		Prior		Revolving Loans Amortized Cost Basis		Total
Auto
Risk rating:
Pass	$	174	$	121	$	64	$	21	$	9	$	3	$	—	$	392
Special mention		—		—		—		—		—		—		—		—
Substandard		—		1		1		—		—		—		—		2
Doubtful		—		—		—		—		—		—		—		—
Total	$	174	$	122	$	65	$	21	$	9	$	3	$	—	$	394

September 30,	2021		2020		2019		2018		2017		Prior		Revolving Loans Amortized Cost Basis		Total
Non-Auto
Risk rating:
Pass	$	65	$	27	$	11	$	4	$	2	$	5	$	6	$	120
Special mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—
Total	$	65	$	27	$	11	$	4	$	2	$	5	$	6	$	120

September 30,	2021		2020		2019		2018		2017		Prior		Revolving Loans Amortized Cost Basis		Total
Total Loans
Risk rating:
Pass	$	1,999	$	1,211	$	556	$	385	$	236	$	631	$	102	$	5,120
Special mention		12		7		15		2		10		7		—		53
Substandard		27		16		14		20		9		25		2		113
Doubtful		—		—		—		—		—		—		—		—
Total	$	2,038	$	1,234	$	585	$	407	$	255	$	663	$	104	$	5,286

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

September 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	$	5,422	$	73	$	1,515	$	7,010	$	864,325	$	871,335	$	—
Municipal		—		—		—		—		214,852		214,852		—
Total Commercial		5,422		73		1,515		7,010		1,079,177		1,086,187		—
Agricultural		290		93		—		383		76,554		76,937		—
Real Estate:
Construction & Development		2,958		600		—		3,558		934,493		938,051		—
Farm		822		150		—		972		267,167		268,139		—
Non-Owner Occupied CRE		536		—		—		536		717,202		717,738		—
Owner Occupied CRE		1,138		37		—		1,175		944,490		945,665		—
Residential		4,834		252		15		5,101		1,531,079		1,536,180		15
Total Real Estate		10,288		1,039		15		11,342		4,394,431		4,405,773		15
Consumer:
Auto		267		76		33		376		538,422		538,798		—
Non-Auto		66		10		—		76		147,717		147,793		—
Total Consumer		333		86		33		452		686,139		686,591		—
Total	$	16,333	$	1,291	$	1,563	$	19,187	$	6,236,301	$	6,255,488	$	15

September 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	$	4,136	$	516	$	666	$	5,318	$	814,279	$	819,597	$	23
Municipal		—		—		—		—		165,847		165,847		—
Total Commercial		4,136		516		666		5,318		980,126		985,444		23
Agricultural		115		1,074		100		1,289		97,658		98,947		—
Real Estate:
Construction & Development		4,676		—		114		4,790		651,740		656,530		—
Farm		1,182		13		—		1,195		201,869		203,064		—
Non-Owner Occupied CRE		800		—		—		800		674,158		674,958		—
Owner Occupied CRE		260		315		1,537		2,112		822,119		824,231		—
Residential		7,807		475		415		8,697		1,320,101		1,328,798		—
Total Real Estate		14,725		803		2,066		17,594		3,669,987		3,687,581		—
Consumer:
Auto		323		43		7		373		393,699		394,072		—
Non-Auto		59		3		—		62		120,388		120,450		—
Total Consumer		382		46		7		435		514,087		514,522		—
Total	$	19,358	$	2,439	$	2,839	$	24,636	$	5,261,858	$	5,286,494	$	23

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.

The Company's loans that were modified and considered troubled debt restructurings are as follows (dollars in thousands):

	Three-Months Ended September 30, 2022						Nine-Months Ended September 30, 2022
			Pre- Modification		Post- Modification				Pre- Modification		Post- Modification
			Recorded		Recorded				Recorded		Recorded
	Number		Investment		Investment		Number		Investment		Investment
Commercial:
C&I		1	$	205	$	205		1	$	205	$	205
Municipal		—		—		—		—		—		—
Total Commercial		1		205		205		1		205		205
Agricultural		—		—		—		—		—		—
Real Estate:
Construction & Development		—		—		—		—		—		—
Farm		—		—		—		—		—		—
Non-Owner Occupied CRE		—		—		—		—		—		—
Owner Occupied CRE		—		—		—		—		—		—
Residential		1		130		130		1		130		130
Total Real Estate		1		130		130		1		130		130
Consumer:
Auto		—		—		—
Non-Auto		—		—		—
Total Consumer		—		—		—		—		—		—
Total		2	$	335	$	335		2	$	335	$	335

	Three-Months Ended September 30, 2021						Nine-Months Ended September 30, 2021
			Pre- Modification		Post- Modification				Pre- Modification		Post- Modification
			Recorded		Recorded				Recorded		Recorded
	Number		Investment		Investment		Number		Investment		Investment
Commercial:
C&I		—	$	—	$	—		4	$	361	$	361
Municipal		—		—		—		—		—		—
Total Commercial		—		—		—		4		361		361
Agricultural		—		—		—		1		68		68
Real Estate:
Construction & Development		—		—		—		1		200		200
Farm		—		—		—		—		—		—
Non-Owner Occupied CRE		—		—		—		—		—		—
Owner Occupied CRE		—		—		—		3		1,047		1,047
Residential		2		77		77		5		519		519
Total Real Estate		2		77		77		9		1,766		1,766
Consumer:
Auto		1		19		19		2		51		51
Non-Auto		1		9		9		1		9		9
Total Consumer		2		28		28		3		60		60
Total		4	$	105	$	105		17	$	2,255	$	2,255

The balances below provide information as to how the loans were modified as troubled debt restructured loans (dollars in thousands):

	Three-Months Ended September 30, 2022						Nine-Months Ended September 30, 2022
	Adjusted				Combined		Adjusted				Combined
	Interest		Maturity		Rate and		Interest		Maturity		Rate and
	Rate		Extended		Maturity		Rate		Extended		Maturity
Commercial:
C&I	$	—	$	—	$	205	$	—	$	—	$	205
Municipal		—		—		—		—		—		—
Total Commercial		—		—		205		—		—		205
Agricultural		—		—		—		—		—		—
Real Estate:
Construction & Development		—		—		—		—		—		—
Farm		—		—		—		—		—		—
Non-Owner Occupied CRE		—		—		—		—		—		—
Owner Occupied CRE		—		—		—		—		—		—
Residential		—		—		130		—		—		130
Total Real Estate		—		—		130		—		—		130
Consumer:
Auto		—		—		—		—		—		—
Non-Auto		—		—		—		—		—		—
Total Consumer		—		—		—		—		—		—
Total	$	—	$	—	$	335	$	—	$	—	$	335

	Three-Months Ended September 30, 2021						Nine-Months Ended September 30, 2021
	Adjusted				Combined		Adjusted				Combined
	Interest		Maturity		Rate and		Interest		Maturity		Rate and
	Rate		Extended		Maturity		Rate		Extended		Maturity
Commercial:
C&I	$	—	$	—	$	—	$	—	$	212	$	149
Municipal		—		—		—		—		—		—
Total Commercial		—		—		—		—		212		149
Agricultural		—		—		—		—		68		—
Real Estate:
Construction & Development		—		—		—		—		200		—
Farm		—		—		—		—		—		—
Non-Owner Occupied CRE		—		—		—		—		—		—
Owner Occupied CRE		—		—		—		—		—		1,047
Residential		—		18		59		—		263		256
Total Real Estate		—		18		59		—		463		1,303
Consumer:
Auto		—		—		19		—		—		51
Non-Auto		—		—		9		—		—		9
Total Consumer		—		—		28		—		—		60
Total	$	—	$	18	$	87	$	—	$	743	$	1,512

During the three and nine-months ended September 30, 2022, 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. During the three and nine-months ended September 30, 2021, one loan was modified as a troubled debt restructured loan within the previous 12 months and for which there was a payment default. 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.