Loans Held for Investment and Allowance for Loan Losses

3 Months Ended

Mar. 31, 2023

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 March 31, 2023 and 2022, and December 31, 2022, 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):

	March 31,						December 31,
	2023			2022			2022
Commercial:
C&I*	$	954,686		$	838,049		$	917,317
Municipal		221,379			191,799			221,090
Total Commercial		1,176,065			1,029,848			1,138,407
Agricultural		77,017			82,883			76,947
Real Estate:
Construction & Development		921,190			806,211			959,426
Farm		307,706			225,942			306,322
Non-Owner Occupied CRE		737,117			636,160			732,089
Owner Occupied CRE		1,043,018			881,181			954,400
Residential		1,628,841			1,352,162			1,575,758
Total Real Estate		4,637,872			3,901,656			4,527,995
Consumer:
Auto		537,410			419,818			550,635
Non-Auto		147,851			131,964			147,884
Total Consumer		685,261			551,782			698,519
Total Loans		6,576,215			5,566,169			6,441,868
Less: Allowance for credit losses		(80,818	)		(66,913	)		(75,834	)
Loans, net	$	6,495,397		$	5,499,256		$	6,366,034

* 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 March 31, 2023 and 2022, and December 31, 2022, are net of unearned income, including net deferred loan fees.

At March 31, 2023, $4,230,606,000 in loans held by our bank subsidiary were subject to blanket liens as security for a line of credit with the Federal Home Loan Bank of Dallas ("FHLB"). At March 31, 2023, this available line of credit was $2,396,844,000. At March 31, 2023, there was no balance outstanding under this line of credit.

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

	March 31,				December 31,
	2023		2022		2022
Nonaccrual loans	$	24,171	$	28,743	$	24,325
Loans still accruing and past due 90 days or more		22		11		—
Total nonperforming loans (1)	$	24,193	$	28,754	$	24,325

(1) With the adoption of ASU 2022-02, effective January 1, 2023, troubled debt restructuring ("TDR") accounting has been eliminated.

The Company had $24,389,000, $28,754,000 and $24,325,000 in nonaccrual, past due 90 days or more and still accruing, and foreclosed assets at March 31, 2023 and 2022, and December 31, 2022, respectively. Nonaccrual loans at March 31, 2023 and 2022, and December 31, 2022, consisted of the following (dollars in thousands):

	March 31,				December 31,
	2023		2022		2022
Commercial:
C&I	$	5,343	$	4,711	$	5,057
Municipal		—		—		—
Total Commercial		5,343		4,711		5,057
Agricultural		161		4,338		324
Real Estate:
Construction & Development		773		594		1,567
Farm		452		1,209		85
Non-Owner Occupied CRE		2,907		2,574		2,321
Owner Occupied CRE		6,823		7,288		7,092
Residential		7,232		7,587		7,419
Total Real Estate		18,187		19,252		18,484
Consumer:
Auto		398		402		429
Non-Auto		82		40		31
Total Consumer		480		442		460
Total	$	24,171	$	28,743	$	24,325

No significant additional funds are committed to be advanced in connection with nonaccrual loans as of March 31, 2023.

Summary information on the allowance for credit losses for the three-months ended March 31, 2023 and 2022, are outlined by portfolio segment in the following tables (dollars in thousands):

Three-Months Ended March 31, 2023	C&I			Municipal		Agricultural			Construction & Development		Farm
Beginning balance	$	16,129		$	1,026	$	1,041		$	26,443	$	1,957
Provision for loan losses		(64	)		41		(28	)		2,084		(20	)
Recoveries		52			—		201			100		—
Charge-offs		(34	)		—		—			—		—
Ending balance	$	16,083		$	1,067	$	1,214		$	28,627	$	1,937

Three-Months Ended March 31, 2023 (continued)	Non-Owner Occupied CRE			Owner Occupied CRE		Residential		Auto			Non-Auto			Total
Beginning balance	$	9,075		$	9,928	$	9,075	$	845		$	315		$	75,834
Provision for loan losses		(49	)		2,013		624		70			36			4,707
Recoveries		25			7		3		132			45			565
Charge-offs		—			—		—		(190	)		(64	)		(288	)
Ending balance	$	9,051		$	11,948	$	9,702	$	857		$	332		$	80,818

Three-Months Ended March 31, 2022	C&I			Municipal		Agricultural		Construction & Development			Farm
Beginning balance	$	12,280		$	348	$	1,597	$	17,627		$	663
Provision for loan losses		3,455			1,070		289		360			210
Recoveries		156			—		25		—			—
Charge-offs		(154	)		—		—		(100	)		—
Ending balance	$	15,737		$	1,418	$	1,911	$	17,887		$	873

Three-Months Ended March 31, 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		(2,278	)		789			(163	)		(20	)		35			3,747
Recoveries		55			7			5			66			46			360
Charge-offs		—			(88	)		(146	)		(73	)		(98	)		(659	)
Ending balance	$	8,499		$	11,536		$	7,829		$	869		$	354		$	66,913

Additionally, the Company records a reserve for unfunded commitments in other liabilities which totaled $10,397,000, $7,471,000 and $12,323,000 at March 31, 2023 and 2022, and December 31, 2022, respectively. The provision for loan losses of $4,707,000 for the three-months ended March 31, 2023 is combined with the reversal of the provision for unfunded commitments of $1,926,000 and reported in the net aggregate of $2,781,000 under the provision for credit losses in the consolidated statement of earnings for the three-months ended March 31, 2023. The $3,747,000 provision for loan losses for the three-months ended March 31, 2022 above is combined with the provision for unfunded commitments of $1,035,000 and reported in the aggregate of $4,782,000 under the provision for credit losses for the three-months ended March 31, 2022.

The Company’s loans that are individually evaluated for credit losses (both collateral and non-collateral dependent) and their related allowances as of March 31, 2023 and 2022, and December 31, 2022, are summarized in the following tables by loan segment (dollars in thousands):

March 31, 2023	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	$	—	$	5,343	$	20,141	$	25,484	$	3,582	$	3,941	$	7,523
Municipal		—		—		907		907		—		—		—
Total Commercial		—		5,343		21,048		26,391		3,582		3,941		7,523
Agricultural		—		161		912		1,073		86		485		571
Real Estate:
Construction & Development		397		376		18,813		19,586		57		2,340		2,397
Farm		452		—		1,232		1,684		—		—		—
Non-Owner Occupied CRE		2,136		771		28,557		31,464		152		1,929		2,081
Owner Occupied CRE		4,111		2,712		31,978		38,801		297		2,308		2,605
Residential		4,771		2,461		28,463		35,695		259		1,404		1,663
Total Real Estate		11,867		6,320		109,043		127,230		765		7,981		8,746
Consumer:
Auto		—		398		1,250		1,648		1		2		3
Non-Auto		—		82		632		714		—		2		2
Total Consumer		—		480		1,882		2,362		1		4		5
Total	$	11,867	$	12,304	$	132,885	$	157,056	$	4,434	$	12,411	$	16,845

March 31, 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	$	95	$	4,616	$	20,620	$	25,331	$	2,525	$	5,268	$	7,793
Municipal		—		—		96		96		—		—		—
Total Commercial		95		4,616		20,716		25,427		2,525		5,268		7,793
Agricultural		2,349		1,989		411		4,749		946		276		1,222
Real Estate:
Construction & Development		—		594		9,632		10,226		44		1,446		1,490
Farm		1,209		—		1,214		2,423		—		—		—
Non-Owner Occupied CRE		2,463		111		32,705		35,279		10		3,006		3,016
Owner Occupied CRE		6,187		1,101		29,608		36,896		96		3,149		3,245
Residential		4,954		2,633		27,689		35,276		306		1,668		1,974
Total Real Estate		14,813		4,439		100,848		120,100		456		9,269		9,725
Consumer:
Auto		—		402		1,092		1,494		1		2		3
Non-Auto		—		40		350		390		—		1		1
Total Consumer		—		442		1,442		1,884		1		3		4
Total	$	17,257	$	11,486	$	123,417	$	152,160	$	3,928	$	14,816	$	18,744

December 31, 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	$	—	$	5,057	$	24,325	$	29,382	$	3,513	$	4,885	$	8,398
Municipal		—		—		58		58		—		—		—
Total Commercial		—		5,057		24,383		29,440		3,513		4,885		8,398
Agricultural		116		209		354		679		122		276		398
Real Estate:
Construction & Development		577		990		4,873		6,440		193		112		305
Farm		—		85		1,578		1,663		2		34		36
Non-Owner Occupied CRE		2,062		259		36,037		38,358		16		2,341		2,357
Owner Occupied CRE		4,363		2,728		29,115		36,206		91		1,509		1,600
Residential		5,132		2,287		28,564		35,983		229		1,215		1,444
Total Real Estate		12,134		6,349		100,167		118,650		531		5,211		5,742
Consumer:
Auto		—		429		931		1,360		1		1		2
Non-Auto		—		31		538		569		—		1		1
Total Consumer		—		460		1,469		1,929		1		2		3
Total	$	12,250	$	12,075	$	126,373	$	150,698	$	4,167	$	10,374	$	14,541

The Company’s allowance for loans that are individually evaluated for credit losses and collectively evaluated for credit losses as of March 31, 2023 and 2022, and December 31, 2022, 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.

March 31, 2023	C&I		Municipal		Agricultural		Construction & Development		Farm
Loans individually evaluated for credit losses	$	7,523	$	—	$	571	$	2,397	$	—
Loans collectively evaluated for credit losses		8,560		1,067		643		26,230		1,937
Total	$	16,083	$	1,067	$	1,214	$	28,627	$	1,937

March 31, 2023 (continued)	Non-Owner Occupied CRE		Owner Occupied CRE		Residential		Auto		Non-Auto		Total
Loans individually evaluated for credit losses	$	2,081	$	2,605	$	1,663	$	3	$	2	$	16,845
Loans collectively evaluated for credit losses		6,970		9,343		8,039		854		330		63,973
Total	$	9,051	$	11,948	$	9,702	$	857	$	332	$	80,818

March 31, 2022	C&I		Municipal		Agricultural		Construction & Development		Farm
Loans individually evaluated for credit losses	$	7,793	$	—	$	1,222	$	1,490	$	—
Loans collectively evaluated for credit losses		7,944		1,418		689		16,397		873
Total	$	15,737	$	1,418	$	1,911	$	17,887	$	873

March 31, 2022 (continued)	Non-Owner Occupied CRE		Owner Occupied CRE		Residential		Auto		Non-Auto		Total
Loans individually evaluated for credit losses	$	3,016	$	3,245	$	1,974	$	3	$	1	$	18,744
Loans collectively evaluated for credit losses		5,483		8,291		5,855		866		353		48,169
Total	$	8,499	$	11,536	$	7,829	$	869	$	354	$	66,913

December 31, 2022	C&I		Municipal		Agricultural		Construction & Development		Farm
Loans individually evaluated for credit losses	$	8,398	$	—	$	398	$	305	$	36
Loans collectively evaluated for credit losses		7,731		1,026		643		26,138		1,921
Total	$	16,129	$	1,026	$	1,041	$	26,443	$	1,957

December 31, 2022 (continued)	Non-Owner Occupied CRE		Owner Occupied CRE		Residential		Auto		Non-Auto		Total
Loans individually evaluated for credit losses	$	2,357	$	1,600	$	1,444	$	2	$	1	$	14,541
Loans collectively evaluated for credit losses		6,718		8,328		7,631		843		314		61,293
Total	$	9,075	$	9,928	$	9,075	$	845	$	315	$	75,834

The Company’s recorded investment in loans as of March 31, 2023 and 2022, and December 31, 2022, related to the balance in the allowance for credit losses follows below (dollars in thousands):

March 31, 2023	C&I		Municipal		Agricultural		Construction & Development		Farm
Loans individually evaluated for credit losses	$	25,484	$	907	$	1,073	$	19,586	$	1,684
Loans collectively evaluated for credit losses		929,202		220,472		75,944		901,604		306,022
Total	$	954,686	$	221,379	$	77,017	$	921,190	$	307,706

March 31, 2023 (continued)	Non-Owner Occupied CRE		Owner Occupied CRE		Residential		Auto		Non-Auto		Total
Loans individually evaluated for credit losses	$	31,464	$	38,801	$	35,695	$	1,648	$	714	$	157,056
Loans collectively evaluated for credit losses		705,653		1,004,217		1,593,146		535,762		147,137		6,419,159
Total	$	737,117	$	1,043,018	$	1,628,841	$	537,410	$	147,851	$	6,576,215

March 31, 2022	C&I		Municipal		Agricultural		Construction & Development		Farm
Loans individually evaluated for credit losses	$	25,331	$	96	$	4,749	$	10,226	$	2,423
Loans collectively evaluated for credit losses		812,718		191,703		78,134		795,985		223,519
Total	$	838,049	$	191,799	$	82,883	$	806,211	$	225,942

March 31, 2022 (continued)	Non-Owner Occupied CRE		Owner Occupied CRE		Residential		Auto		Non-Auto		Total
Loans individually evaluated for credit losses	$	35,279	$	36,896	$	35,276	$	1,494	$	390	$	152,160
Loans collectively evaluated for credit losses		600,881		844,285		1,316,886		418,324		131,574		5,414,009
Total	$	636,160	$	881,181	$	1,352,162	$	419,818	$	131,964	$	5,566,169

December 31, 2022	C&I		Municipal		Agricultural		Construction & Development		Farm
Loans individually evaluated for credit losses	$	29,382	$	58	$	679	$	6,440	$	1,663
Loans collectively evaluated for credit losses		887,935		221,032		76,268		952,986		304,659
Total	$	917,317	$	221,090	$	76,947	$	959,426	$	306,322

December 31, 2022 (continued)	Non-Owner Occupied CRE		Owner Occupied CRE		Residential		Auto		Non-Auto		Total
Loans individually evaluated for credit losses	$	38,358	$	36,206	$	35,983	$	1,360	$	569	$	150,698
Loans collectively evaluated for credit losses		693,731		918,194		1,539,775		549,275		147,315		6,291,170
Total	$	732,089	$	954,400	$	1,575,758	$	550,635	$	147,884	$	6,441,868

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 March 31, 2023 (dollars in millions):

March 31,	2023		2022		2021		2020		2019		Prior		Revolving Loans Amortized Cost Basis		Total
C&I
Risk rating:
Pass	$	155	$	548	$	132	$	48	$	19	$	28	$	—	$	930
Special mention		1		3		1		2		1		—		—		8
Substandard		1		6		4		2		1		3		—		17
Doubtful		—		—		—		—		—		—		—		—
Total	$	157	$	557	$	137	$	52	$	21	$	31	$	—	$	955
Year-to-Date Gross Charge-Offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

March 31,	2023		2022		2021		2020		2019		Prior		Revolving Loans Amortized Cost Basis		Total
Municipal
Risk rating:
Pass	$	3	$	82	$	19	$	15	$	2	$	99	$	—	$	220
Special mention		—		—		—		—		1		—		—		1
Substandard		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—
Total	$	3	$	82	$	19	$	15	$	3	$	99	$	—	$	221
Year-to-Date Gross Charge-Offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

March 31,	2023		2022		2021		2020		2019		Prior		Revolving Loans Amortized Cost Basis		Total
Agricultural
Risk rating:
Pass	$	16	$	51	$	5	$	2	$	1	$	1	$	—	$	76
Special mention		—		1		—		—		—		—		—		1
Substandard		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—
Total	$	16	$	52	$	5	$	2	$	1	$	1	$	—	$	77
Year-to-Date Gross Charge-Offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

March 31,	2023		2022		2021		2020		2019		Prior		Revolving Loans Amortized Cost Basis		Total
Construction & Development
Risk rating:
Pass	$	111	$	586	$	124	$	56	$	12	$	13	$	—	$	902
Special mention		3		9		—		—		—		—		—		12
Substandard		2		4		1		—		—		—		—		7
Doubtful		—		—		—		—		—		—		—		—
Total	$	116	$	599	$	125	$	56	$	12	$	13	$	—	$	921
Year-to-Date Gross Charge-Offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

March 31,	2023		2022		2021		2020		2019		Prior		Revolving Loans Amortized Cost Basis		Total
Farm
Risk rating:
Pass	$	12	$	142	$	82	$	31	$	11	$	28	$	—	$	306
Special mention		—		—		—		—		—		—		—		—
Substandard		—		2		—		—		—		—		—		2
Doubtful		—		—		—		—		—		—		—		—
Total	$	12	$	144	$	82	$	31	$	11	$	28	$	—	$	308
Year-to-Date Gross Charge-Offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

March 31,	2023		2022		2021		2020		2019		Prior		Revolving Loans Amortized Cost Basis		Total
Non-Owner Occupied CRE
Risk rating:
Pass	$	36	$	244	$	192	$	96	$	47	$	91	$	—	$	706
Special mention		—		—		1		—		11		6		—		18
Substandard		—		2		2		1		2		6		—		13
Doubtful		—		—		—		—		—		—		—		—
Total	$	36	$	246	$	195	$	97	$	60	$	103	$	—	$	737
Year-to-Date Gross Charge-Offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

March 31,	2023		2022		2021		2020		2019		Prior		Revolving Loans Amortized Cost Basis		Total
Owner Occupied CRE
Risk rating:
Pass	$	73	$	316	$	247	$	124	$	74	$	170	$	—	$	1,004
Special mention		—		3		1		2		6		1		—		13
Substandard		1		3		2		1		3		16		—		26
Doubtful		—		—		—		—		—		—		—		—
Total	$	74	$	322	$	250	$	127	$	83	$	187	$	—	$	1,043
Year-to-Date Gross Charge-Offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

March 31,	2023		2022		2021		2020		2019		Prior		Revolving Loans Amortized Cost Basis		Total
Residential
Risk rating:
Pass	$	95	$	479	$	355	$	181	$	78	$	268	$	137	$	1,593
Special mention		—		1		3		2		—		4		1		11
Substandard		1		5		2		3		2		9		3		25
Doubtful		—		—		—		—		—		—		—		—
Total	$	96	$	485	$	360	$	186	$	80	$	281	$	141	$	1,629
Year-to-Date Gross Charge-Offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

March 31,	2023		2022		2021		2020		2019		Prior		Revolving Loans Amortized Cost Basis		Total
Auto
Risk rating:
Pass	$	51	$	296	$	116	$	46	$	20	$	6	$	—	$	535
Special mention		—		—		—		—		—		—		—		—
Substandard		—		1		—		1		—		—		—		2
Doubtful		—		—		—		—		—		—		—		—
Total	$	51	$	297	$	116	$	47	$	20	$	6	$	—	$	537
Year-to-Date Gross Charge-Offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

March 31,	2023		2022		2021		2020		2019		Prior		Revolving Loans Amortized Cost Basis		Total
Non-Auto
Risk rating:
Pass	$	21	$	74	$	34	$	7	$	2	$	2	$	7	$	147
Special mention		—		—		—		—		—		—		—		—
Substandard		—		—		1		—		—		—		—		1
Doubtful		—		—		—		—		—		—		—		—
Total	$	21	$	74	$	35	$	7	$	2	$	2	$	7	$	148
Year-to-Date Gross Charge-Offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

March 31,	2023		2022		2021		2020		2019		Prior		Revolving Loans Amortized Cost Basis		Total
Total Loans
Risk rating:
Pass	$	573	$	2,818	$	1,306	$	606	$	266	$	706	$	144	$	6,419
Special mention		4		17		6		6		19		11		1		64
Substandard		5		23		12		8		8		34		3		93
Doubtful		—		—		—		—		—		—		—		—
Total	$	582	$	2,858	$	1,324	$	620	$	293	$	751	$	148	$	6,576
Year-to-Date Gross Charge-Offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

The following summarizes the Company’s internal ratings of its loans held-for-investment, including the year of origination, by portfolio segments, at March 31, 2022 (dollars in millions):

March 31,	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Total
C&I
Risk rating:
Pass	$	163	$	438	$	121	$	42	$	24	$	26	$	—	$	814
Special mention		—		4		—		3		—		—		—		7
Substandard		3		7		3		2		2		—		—		17
Doubtful		—		—		—		—		—		—		—		—
Total	$	166	$	449	$	124	$	47	$	26	$	26	$	—	$	838

March 31,	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Total
Municipal
Risk rating:
Pass	$	25	$	33	$	15	$	5	$	21	$	93	$	—	$	192
Special mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—
Total	$	25	$	33	$	15	$	5	$	21	$	93	$	—	$	192

March 31,	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Total
Agricultural
Risk rating:
Pass	$	20	$	47	$	6	$	4	$	1	$	1	$	—	$	79
Special mention		—		—		—		—		—		—		—		—
Substandard		—		4		—		—		—		—		—		4
Doubtful		—		—		—		—		—		—		—		—
Total	$	20	$	51	$	6	$	4	$	1	$	1	$	—	$	83

March 31,	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Total
Construction & Development
Risk rating:
Pass	$	118	$	524	$	106	$	21	$	13	$	13	$	—	$	795
Special mention		—		2		—		—		—		—		—		2
Substandard		1		6		1		1		—		—		—		9
Doubtful		—		—		—		—		—		—		—		—
Total	$	119	$	532	$	107	$	22	$	13	$	13	$	—	$	806

March 31,	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Total
Farm
Risk rating:
Pass	$	25	$	110	$	39	$	13	$	8	$	28	$	—	$	223
Special mention		—		—		—		—		—		—		—		—
Substandard		—		—		1		—		1		1		—		3
Doubtful		—		—		—		—		—		—		—		—
Total	$	25	$	110	$	40	$	13	$	9	$	29	$	—	$	226

March 31,	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Total
Non-Owner Occupied CRE
Risk rating:
Pass	$	52	$	211	$	123	$	62	$	52	$	101	$	—	$	601
Special mention		—		—		1		11		1		8		—		21
Substandard		—		—		5		3		1		5		—		14
Doubtful		—		—				—		—		—		—		—
Total	$	52	$	211	$	129	$	76	$	54	$	114	$	—	$	636

March 31,	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Total
Owner Occupied CRE
Risk rating:
Pass	$	100	$	258	$	136	$	97	$	88	$	166	$	—	$	845
Special mention		—		1		2		1		—		1		—		5
Substandard		2		4		2		3		9		11		—		31
Doubtful		—		—		—		—		—		—		—		—
Total	$	102	$	263	$	140	$	101	$	97	$	178	$	—	$	881

March 31,	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Total
Residential
Risk rating:
Pass	$	107	$	441	$	208	$	106	$	78	$	266	$	109	$	1,315
Special mention		—		3		4		—		1		4		1		13
Substandard		1		4		3		2		2		11		1		24
Doubtful		—		—		—		—		—		—		—		—
Total	$	108	$	448	$	215	$	108	$	81	$	281	$	111	$	1,352

March 31,	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Total
Auto
Risk rating:
Pass	$	68	$	197	$	89	$	44	$	14	$	6	$	—	$	418
Special mention		—		—		—		—		—		—		—		—
Substandard		—		—		1		1		—		—		—		2
Doubtful		—		—		—		—		—		—		—		—
Total	$	68	$	197	$	90	$	45	$	14	$	6	$	—	$	420

March 31,	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Total
Non-Auto
Risk rating:
Pass	$	26	$	68	$	19	$	6	$	3	$	2	$	7	$	131
Special mention		—		—		—		—		—		—		—		—
Substandard		—		1		—		—		—		—		—		1
Doubtful		—		—		—		—		—		—		—		—
Total	$	26	$	69	$	19	$	6	$	3	$	2	$	7	$	132

March 31,	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Total
Total Loans
Risk rating:
Pass	$	704	$	2,327	$	862	$	400	$	302	$	702	$	116	$	5,413
Special mention		—		10		7		15		2		13		1		48
Substandard		7		26		16		12		15		28		1		105
Doubtful		—		—		—		—		—		—		—		—
Total	$	711	$	2,363	$	885	$	427	$	319	$	743	$	118	$	5,566

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, 2022 (dollars in millions):

December 31,	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Total
C&I
Risk rating:
Pass	$	627	$	157	$	52	$	22	$	16	$	13	$	—	$	887
Special mention		4		1		2		1		—		—		—		8
Substandard		13		5		2		1		1		—		—		22
Doubtful		—		—		—		—		—		—		—		—
Total	$	644	$	163	$	56	$	24	$	17	$	13	$	—	$	917

December 31,	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Total
Municipal
Risk rating:
Pass	$	79	$	19	$	15	$	4	$	20	$	84	$	—	$	221
Special mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—
Total	$	79	$	19	$	15	$	4	$	20	$	84	$	—	$	221

December 31,	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Total
Agricultural
Risk rating:
Pass	$	60	$	9	$	3	$	2	$	1	$	1	$	—	$	76
Special mention		—		—		—		—		—		—		—		—
Substandard		—		1		—		—		—		—		—		1
Doubtful		—		—		—		—		—		—		—		—
Total	$	60	$	10	$	3	$	2	$	1	$	1	$	—	$	77

December 31,	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Total
Construction & Development
Risk rating:
Pass	$	638	$	218	$	70	$	13	$	8	$	7	$	—	$	954
Special mention		1		—		—		—		—		—		—		1
Substandard		4		1		—		—		—		—		—		5
Doubtful		—		—		—		—		—		—		—		—
Total	$	643	$	219	$	70	$	13	$	8	$	7	$	—	$	960

December 31,	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Total
Farm
Risk rating:
Pass	$	147	$	85	$	32	$	11	$	8	$	21	$	—	$	304
Special mention		—		—		—		—		—		—		—		—
Substandard		1		—		—		—		—		1		—		2
Doubtful		—		—		—		—		—		—		—		—
Total	$	148	$	85	$	32	$	11	$	8	$	22	$	—	$	306

December 31,	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Total
Non-Owner Occupied CRE
Risk rating:
Pass	$	258	$	191	$	100	$	49	$	21	$	75	$	—	$	694
Special mention		—		1		1		11		—		7		—		20
Substandard		8		1		1		2		1		5		—		18
Doubtful		—		—		—		—		—		—		—		—
Total	$	266	$	193	$	102	$	62	$	22	$	87	$	—	$	732

December 31,	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Total
Owner Occupied CRE
Risk rating:
Pass	$	316	$	224	$	128	$	74	$	63	$	113	$	—	$	918
Special mention		1		—		1		8		—		1		—		11
Substandard		1		2		1		2		9		10		—		25
Doubtful		—		—		—		—		—		—		—		—
Total	$	318	$	226	$	130	$	84	$	72	$	124	$	—	$	954

December 31,	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Total
Residential
Risk rating:
Pass	$	513	$	355	$	173	$	82	$	64	$	214	$	139	$	1,540
Special mention		1		3		2		—		—		3		1		10
Substandard		6		3		2		2		1		9		3		26
Doubtful		—		—		—		—		—		—		—		—
Total	$	520	$	361	$	177	$	84	$	65	$	226	$	143	$	1,576

December 31,	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Total
Auto
Risk rating:
Pass	$	331	$	131	$	55	$	25	$	6	$	2	$	—	$	550
Special mention		—		—		—		—		—		—		—		—
Substandard		—		—		1		—		—		—		—		1
Doubtful		—		—		—		—		—		—		—		—
Total	$	331	$	131	$	56	$	25	$	6	$	2	$	—	$	551

December 31,	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Total
Non-Auto
Risk rating:
Pass	$	85	$	41	$	9	$	3	$	1	$	1	$	7	$	147
Special mention		—		—		—		—		—		—		—		—
Substandard		—		1		—		—		—		—		—		1
Doubtful		—		—		—		—		—		—		—		—
Total	$	85	$	42	$	9	$	3	$	1	$	1	$	7	$	148

December 31,	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Total
Total Loans
Risk rating:
Pass	$	3,054	$	1,430	$	637	$	285	$	208	$	531	$	146	$	6,291
Special mention		7		5		6		20		—		11		1		50
Substandard		33		14		7		7		12		25		3		101
Doubtful		—		—		—		—		—		—		—		—
Total	$	3,094	$	1,449	$	650	$	312	$	220	$	567	$	150	$	6,442

At March 31, 2023 and 2022, and December 31, 2022, the Company’s past due loans are as follows (dollars in thousands):

March 31, 2023	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	$	3,952	$	292	$	1,825	$	6,069	$	948,617	$	954,686	$	14
Municipal		209		—		—		209		221,170		221,379		—
Total Commercial		4,161		292		1,825		6,278		1,169,787		1,176,065		14
Agricultural		816		25		24		865		76,152		77,017		—
Real Estate:
Construction & Development		7,058		332		—		7,390		913,800		921,190		—
Farm		264		—		372		636		307,070		307,706		—
Non-Owner Occupied CRE		3,183		—		695		3,878		733,239		737,117		—
Owner Occupied CRE		3,886		—		—		3,886		1,039,132		1,043,018		—
Residential		7,484		744		767		8,995		1,619,846		1,628,841
Total Real Estate		21,875		1,076		1,834		24,785		4,613,087		4,637,872		—
Consumer:
Auto		683		41		9		733		536,677		537,410		8
Non-Auto		136		—		—		136		147,715		147,851		—
Total Consumer		819		41		9		869		684,392		685,261		8
Total	$	27,671	$	1,434	$	3,692	$	32,797	$	6,543,418	$	6,576,215	$	22

March 31, 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	$	8,971	$	36	$	1,658	$	10,665	$	827,384	$	838,049	$	—
Municipal		153		—		—		153		191,646		191,799		—
Total Commercial		9,124		36		1,658		10,818		1,019,030		1,029,848		—
Agricultural		4,846		—		—		4,846		78,037		82,883		—
Real Estate:
Construction & Development		3,562		—		37		3,599		802,612		806,211		—
Farm		7		—		445		452		225,490		225,942		—
Non-Owner Occupied CRE		5,066		108		—		5,174		630,986		636,160		—
Owner Occupied CRE		2,789		1,028		525		4,342		876,839		881,181		—
Residential		6,757		224		250		7,231		1,344,931		1,352,162		—
Total Real Estate		18,181		1,360		1,257		20,798		3,880,858		3,901,656		—
Consumer:
Auto		302		49		20		371		419,447		419,818		8
Non-Auto		125		—		3		128		131,836		131,964		3
Total Consumer		427		49		23		499		551,283		551,782		11
Total	$	32,578	$	1,445	$	2,938	$	36,961	$	5,529,208	$	5,566,169	$	11

December 31, 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	$	3,924	$	297	$	1,646	$	5,867	$	911,450	$	917,317	$	—
Municipal		76		783		—		859		220,231		221,090		—
Total Commercial		4,000		1,080		1,646		6,726		1,131,681		1,138,407		—
Agricultural		243		—		—		243		76,704		76,947		—
Real Estate:
Construction & Development		3,751		—		175		3,926		955,500		959,426		—
Farm		668		—		—		668		305,654		306,322		—
Non-Owner Occupied CRE		1,444		160		—		1,604		730,485		732,089		—
Owner Occupied CRE		1,151		—		—		1,151		953,249		954,400		—
Residential		8,720		707		266		9,693		1,566,065		1,575,758		—
Total Real Estate		15,734		867		441		17,042		4,510,953		4,527,995		—
Consumer:
Auto		779		30		—		809		549,826		550,635		—
Non-Auto		50		—		—		50		147,834		147,884		—
Total Consumer		829		30		—		859		697,660		698,519		—
Total	$	20,806	$	1,977	$	2,087	$	24,870	$	6,416,998	$	6,441,868	$	—

* 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.

Modifications of receivables to debtors experiencing financial difficulty

On January 1, 2023, the Company adopted the accounting guidance in ASU 2022-02, which eliminates the recognition and measurement of a TDR. Due to the removal of the TDR designation, the Company evaluates all loan restructurings according to the accounting guidance for loan modifications to determine if the restructuring results in a new loan or a continuation of the existing loan. Loan modifications to borrowers experiencing financial difficulty that result in a direct change in the timing or amount of contractual cash flows include situations where there is principal forgiveness, term extensions, interest rate reduction, and combinations of the listed modifications. Therefore, the disclosures related to loan restructurings are only for modifications that directly affect cash flows.

An assessment of whether a borrower is experiencing financial difficulty is made on the date of a modification. Because the effect of most modifications made to borrowers experiencing financial difficulty is already included in the allowance for credit losses due to the measurement methodologies used to estimate the allowance, a change to the allowance for credit losses is generally not recorded upon modification. During the three-months ended March 31, 2023, loan modifications made to borrowers experiencing financial difficulty was insignificant.