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Loans
 12 Months Ended
Dec. 31, 2025
Receivables [Abstract]  
Financing Receivables Loans
Year-end loans, including leases net of unearned discounts, consisted of the following:
20252024
Commercial and industrial$6,306,980 $6,109,532 
Energy:
Production767,724 903,654 
Service252,295 203,629 
Other74,650 21,612 
Total energy1,094,669 1,128,895 
Commercial real estate:
Owner occupied3,987,913 3,622,201 
Non-owner occupied3,773,028 3,543,019 
Construction and land2,549,869 2,803,303 
Total commercial real estate10,310,810 9,968,523 
Consumer real estate:
Home equity lines of credit1,068,393 911,239 
Home equity loans1,035,971 914,738 
Home improvement loans874,148 852,536 
1-4 family mortgage loans594,825 259,456 
Other145,331 165,420 
Total consumer real estate3,718,668 3,103,389 
Total real estate14,029,478 13,071,912 
Consumer and other460,685 444,474 
Total loans$21,891,812 $20,754,813 
Concentrations of Credit. Most of our lending activity occurs within the State of Texas, including the four largest metropolitan areas of Austin, Dallas/Ft. Worth, Houston and San Antonio, as well as other markets. The majority of our loan portfolio consists of commercial and industrial and commercial real estate loans. As of December 31, 2025, the largest industry concentrations were related to the energy industry, which totaled 5.0% of total loans and the automobile dealerships industry, which totaled 4.8% of total loans. Unfunded commitments to extend credit and standby letters of credit issued to customers in the energy industry totaled $1.3 billion and $66.4 million, respectively, as of December 31, 2025, while unfunded commitments to extend credit and standby letters of credit issued to customers in the automobile dealership industry totaled $570.5 million and $20.0 million, respectively, as of December 31, 2025.
Foreign Loans. We have U.S. dollar denominated loans and commitments to borrowers in Mexico. The outstanding balance of these loans and the unfunded amounts available under these commitments were not significant at December 31, 2025 or 2024.
Overdrafts. Deposit account overdrafts reported as loans totaled $13.8 million and $14.6 million at December 31, 2025 and 2024.
Related Party Loans. In the ordinary course of business, we have granted loans to certain directors, executive officers and their affiliates (collectively referred to as “related parties”). Activity in related party loans during 2025 is presented in the following table. Other changes were primarily related to changes in related-party status.
Beginning balance$295,836 
Principal additions424,819 
Principal payments(404,535)
Other changes— 
Ending balance$316,120 
Accrued Interest Receivable. Accrued interest receivable on loans totaled $90.6 million and $86.8 million at December 31, 2025 and 2024, respectively and is included in accrued interest receivable and other assets in the accompany consolidated balance sheets.
Non-Accrual and Past Due Loans. Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. Loans are placed on non-accrual status when, in management’s opinion, the borrower may be unable to meet payment obligations as they become due, as well as when required by regulatory provisions. In determining whether or not a borrower may be unable to meet payment obligations for each class of loans, we consider the borrower’s debt service capacity through the analysis of current financial information, if available, and/or current information with regards to our collateral position. Regulatory provisions would typically require the placement of a loan on non-accrual status if (i) principal or interest has been in default for a period of 90 days or more unless the loan is both well secured and in the process of collection or (ii) full payment of principal and interest is not expected. Loans may be placed on non-accrual status regardless of whether or not such loans are considered past due. When interest accrual is discontinued, all unpaid accrued interest is reversed. Interest income on non-accrual loans is recognized only to the extent that cash payments are received in excess of principal due. A loan may be returned to accrual status when all the principal and interest amounts contractually due are brought current and future principal and interest amounts contractually due are reasonably assured, which is typically evidenced by a sustained period (at least six months) of repayment performance by the borrower.
Year-end non-accrual loans, segregated by class of loans, were as follows:
December 31, 2025December 31, 2024
Total Non-AccrualNon-Accrual with No Credit Loss AllowanceTotal Non-AccrualNon-Accrual with No Credit Loss Allowance
Commercial and industrial$50,659 $26,693 $46,004 $8,800 
Energy3,023 1,304 4,079 1,377 
Commercial real estate:
Owner occupied7,581 4,782 17,643 16,395 
Non-owner occupied465 465 2,144 2,144 
Construction and land1,874 202 2,133 121 
Consumer real estate6,615 4,486 6,511 4,048 
Consumer and other265 184 352 — 
Total$70,482 $38,116 $78,866 $32,885 
The following tables present non-accrual loans as of December 31, 2025 and December 31, 2024 by class and year of origination.
December 31, 2025
20252024202320222021PriorRevolving LoansRevolving Loans Converted to TermTotal
Commercial and industrial$27,340 $1,306 $8,115 $4,612 $1,307 $1,099 $4,656 $2,224 $50,659 
Energy— — — — — 1,304 1,719 — 3,023 
Commercial real estate:
Owner occupied3,054 — 876 152 — 3,499 — — 7,581 
Non-owner occupied— — — — — — — 465 465 
Construction and land— — — — 1,029 107 — 738 1,874 
Consumer real estate— — — — — 2,267 683 3,665 6,615 
Consumer and other— 184 — — — — 81 — 265 
Total$30,394 $1,490 $8,991 $4,764 $2,336 $8,276 $7,139 $7,092 $70,482 
December 31, 2024
20242023202220212020PriorRevolving LoansRevolving Loans Converted to TermTotal
Commercial and industrial$20,819 $2,915 $4,053 $1,592 $335 $2,144 $1,186 $12,960 $46,004 
Energy— — — — 56 1,321 2,702 — 4,079 
Commercial real estate:
Owner occupied7,856 2,671 3,233 1,529 1,248 1,106 — — 17,643 
Non-owner occupied— — — — — 278 — 1,866 2,144 
Construction and land— — — 1,224 — 121 — 788 2,133 
Consumer real estate— 47 — — 92 2,202 587 3,583 6,511 
Consumer and other— 352 — — — — — — 352 
Total$28,675 $5,985 $7,286 $4,345 $1,731 $7,172 $4,475 $19,197 $78,866 
In the tables above, loans reported as 2025 originations as of December 31, 2025 and loans reported as 2024 originations as of December 31, 2024 were, for the most part, first originated in various years prior to 2025 and 2024, respectively, but were renewed in the respective year. Had non-accrual loans performed in accordance with their original contract terms, we would have recognized additional interest income, net of tax, of approximately $4.4 million in 2025, $5.7 million in 2024 and $4.0 million in 2023.
An age analysis of past due loans (including both accruing and non-accruing loans), segregated by class of loans, as of December 31, 2025 is presented in the following table.
Loans
30-89 Days
Past Due		Loans
90 or More
Days
Past Due		Total Past
Due Loans		Current
Loans		Total LoansAccruing
Loans 90 or
More Days
Past Due
Commercial and industrial$32,776 $20,635 $53,411 $6,253,569 $6,306,980 $4,273 
Energy19,480 3,023 22,503 1,072,166 1,094,669 — 
Commercial real estate:
Owner occupied17,351 3,465 20,816 3,967,097 3,987,913 3,465 
Non-owner occupied49,305 6,755 56,060 3,716,968 3,773,028 6,290 
Construction and land7,955 3,218 11,173 2,538,696 2,549,869 1,451 
Consumer real estate26,281 12,184 38,465 3,680,203 3,718,668 5,680 
Consumer and other5,024 777 5,801 454,884 460,685 512 
Total$158,172 $50,057 $208,229 $21,683,583 $21,891,812 $21,671 
Modifications to Borrowers Experiencing Financial Difficulty. From time to time, we may modify certain loans to borrowers who are experiencing financial difficulty. In some cases, these modifications may result in new loans. Loan modifications to borrowers experiencing financial difficulty may be in the form of a principal forgiveness, an interest rate reduction, an other-than-insignificant payment delay, a term extension, or a combination thereof, among other things. The period-end balance of loan modifications, segregated by type of modification, to borrowers experiencing financial difficulty during 2025 and 2024 are set forth in the table below, regardless of whether such modifications resulted in a new loan. There were no commitments to lend additional funds to these borrowers at December 31, 2025.
Payment
Delay		Percent of
Total Class
of Loans		Combination: Payment Delay and Term ExtensionPercent of
Total Class
of Loans		Interest Rate ReductionPercent of
Total Class
of Loans
December 31, 2025
Commercial and industrial$2,186 — %$— — %$— — %
Commercial real estate:
Construction and land1,672 0.1 — — — — 
$3,858 — $— — $— — 
December 31, 2024
Commercial and industrial$6,126 0.1 %$45,835 0.8 %$— — %
Commercial real estate:
Owner occupied— — — — 31,302 0.9 
Construction and land2,012 0.1 — — — — 
$8,138 — $45,835 0.2 $31,302 0.2 
During 2024, we modified the interest rate on one loan from a variable rate of prime plus a spread of 0.50% (8.50% as of the modification date) to a variable rate of prime minus a spread of 1.50% (6.50% after modification) with a floor of 6.00%. The financial effects of the other loan modifications made to borrowers experiencing financial difficulty during 2025 and 2024 were not significant. The loan modifications reported in the table above did not significantly impact our determination of the allowance for credit losses on loans during 2025 or 2024.
Information as of or for the years ended December 31, 2025, 2024, and 2023 related to loans modified (by type of modification) in the preceding twelve months, respectively, whereby the borrower was experiencing financial difficulty at the time of modification is set forth in the following table.
Payment
Delay		Combination: Payment Delay and Term Extension
2025
Past due in excess of 90 days or on non-accrual status at period-end:
Commercial and industrial$3,286 $— 
Commercial real estate:
Construction and land1,672 — 
$4,958 $— 
Charge-offs during the period:
Commercial and industrial$1,108 $— 
2024
Past due in excess of 90 days or on non-accrual status at period-end:
Commercial and industrial$1,693 $— 
Commercial real estate:
Construction and land2,012 — 
$3,705 $— 
2023
Past due in excess of 90 days or on non-accrual status at period-end:
Commercial and industrial$— $13,813 
Commercial real estate:
Owner occupied— 2,000 
Non-owner occupied— 17,438 
$— $33,251 
Credit Quality Indicators. As part of the on-going monitoring of the credit quality of our loan portfolio, management tracks certain credit quality indicators including trends related to (i) the weighted-average risk grade of commercial loans, (ii) the level of classified commercial loans, (iii) the delinquency status of consumer loans (iv) non-performing loans (see details above) and (vi) the general economic conditions in the State of Texas.
We utilize a risk grading matrix to assign a risk grade to each of our commercial loans. Loans are graded on a scale of 1 to 14. A description of the general characteristics of the 14 risk grades is as follows:
•Grades 1, 2 and 3 - These grades include loans to very high credit quality borrowers of investment or near investment grade. These borrowers are generally publicly traded (grades 1 and 2), have significant capital strength, moderate leverage, stable earnings and growth, and readily available financing alternatives. Smaller entities, regardless of strength, would generally not fit in these grades.
•Grades 4 and 5 - These grades include loans to borrowers of solid credit quality with moderate risk. Borrowers in these grades are differentiated from higher grades on the basis of size (capital and/or revenue), leverage, asset quality and the stability of the industry or market area.
•Grades 6, 7 and 8 - These grades include “pass grade” loans to borrowers of acceptable credit quality and risk. Such borrowers are differentiated from Grades 4 and 5 in terms of size, secondary sources of repayment or they are of lesser stature in other key credit metrics in that they may be over-leveraged, undercapitalized, inconsistent in performance or in an industry or an economic area that is known to have a higher level of risk, volatility, or susceptibility to weaknesses in the economy.
•Grade 9 - This grade includes loans on management’s “watch list” and is intended to be utilized on a temporary basis for pass grade borrowers where a significant risk-modifying action is anticipated in the near term.
•Grade 10 - This grade is for “Other Assets Especially Mentioned” in accordance with regulatory guidelines. This grade is intended to be temporary and includes loans to borrowers whose credit quality has clearly deteriorated and are at risk of further decline unless active measures are taken to correct the situation.
•Grade 11 - This grade includes “Substandard” loans, in accordance with regulatory guidelines, for which the accrual of interest has not been stopped. By definition under regulatory guidelines, a “Substandard” loan has defined weaknesses which make payment default or principal exposure likely, but not yet certain. Such loans are apt to be dependent upon collateral liquidation, a secondary source of repayment or an event outside of the normal course of business.
•Grade 12 - This grade includes “Substandard” loans, in accordance with regulatory guidelines, for which the accrual of interest has been stopped. This grade includes loans where interest is more than 120 days past due and not fully secured and loans where a specific valuation allowance may be necessary, but generally does not exceed 30% of the principal balance.
•Grade 13 - This grade includes “Doubtful” loans in accordance with regulatory guidelines. Such loans are placed on non-accrual status and may be dependent upon collateral having a value that is difficult to determine or upon some near-term event which lacks certainty. Additionally, these loans generally have a specific valuation allowance in excess of 30% of the principal balance.
•Grade 14 - This grade includes “Loss” loans in accordance with regulatory guidelines. Such loans are to be charged-off or charged-down when payment is acknowledged to be uncertain or when the timing or value of payments cannot be determined. “Loss” is not intended to imply that the loan or some portion of it will never be paid, nor does it in any way imply that there has been a forgiveness of debt.
In monitoring credit quality trends in the context of assessing the appropriate level of the allowance for credit losses on loans, we monitor portfolio credit quality by the weighted-average risk grade of each class of commercial loan. Individual relationship managers, under the oversight of credit administration, review updated financial information for all pass grade loans to reassess the risk grade on at least an annual basis. When a loan has a risk grade of 9, it is still considered a pass grade loan; however, it is considered to be on management’s “watch list,” where a significant risk-modifying action is anticipated in the near term. When a loan has a risk grade of 10 or higher, a special assets officer monitors the loan on an on-going basis.
The following tables present weighted-average risk grades for all commercial loans, by class and year of origination/renewal as of December 31, 2025 and 2024.
December 31, 2025
20252024202320222021PriorRevolving LoansRevolving Loans Converted to TermTotal
Commercial and industrial
Risk grades 1-8$1,857,538 $598,673 $279,758 $265,556 $161,471 $382,492 $2,082,732 $34,926 $5,663,146 
Risk grade 935,708 47,166 5,203 6,428 26,412 21,017 212,653 29,945 384,532 
Risk grade 104,431 672 7,448 41,612 1,462 22,613 8,640 7,304 94,182 
Risk grade 1114,429 20,197 25,813 6,892 2,504 11,212 20,569 12,845 114,461 
Risk grade 1216,661 1,144 7,233 2,876 1,295 1,080 2,103 1,649 34,041 
Risk grade 1310,679 162 882 1,736 12 19 2,553 575 16,618 
$1,939,446 $668,014 $326,337 $325,100 $193,156 $438,433 $2,329,250 $87,244 $6,306,980 
W/A risk grade5.78 7.14 7.57 7.38 7.48 5.81 6.44 8.70 6.44 
Energy
Risk grades 1-8$300,098 $74,168 $9,810 $32,876 $12,325 $1,507 $577,004 $2,391 $1,010,179 
Risk grade 91,255 32,875 588 — — 117 384 173 35,392 
Risk grade 1015,945 — — 586 1,903 — 19,966 2,413 40,813 
Risk grade 11194 35 1,326 2,885 — 371 — 451 5,262 
Risk grade 12— — — — — 1,304 1,019 — 2,323 
Risk grade 13— — — — — — 700 — 700 
$317,492 $107,078 $11,724 $36,347 $14,228 $3,299 $599,073 $5,428 $1,094,669 
W/A risk grade6.31 7.21 7.66 7.73 4.73 9.95 5.76 8.90 6.16 
Commercial real estate:
Owner occupied
Risk grades 1-8$733,205 $405,663 $450,751 $653,155 $439,490 $738,686 $34,385 $152,670 $3,608,005 
Risk grade 9522 9,316 35,558 65,764 19,923 30,820 800 429 163,132 
Risk grade 101,982 6,808 6,491 40,262 3,739 4,835 — — 64,117 
Risk grade 1137,541 7,240 12,299 51,009 8,553 23,671 — 4,765 145,078 
Risk grade 122,454 — 876 152 — 3,377 — — 6,859 
Risk grade 13600 — — — — 122 — — 722 
$776,304 $429,027 $505,975 $810,342 $471,705 $801,511 $35,185 $157,864 $3,987,913 
W/A risk grade7.01 7.08 7.27 7.39 7.26 7.08 6.12 4.93 7.08 
Non-owner occupied
Risk grades 1-8$945,564 $556,733 $469,410 $547,975 $362,889 $477,299 $112,076 $22,377 $3,494,323 
Risk grade 9254 27,956 17,276 11,010 14,053 5,011 — — 75,560 
Risk grade 1016,264 1,649 23,443 55,159 40,716 6,375 — — 143,606 
Risk grade 111,276 7,849 12,740 30,678 1,749 841 3,941 — 59,074 
Risk grade 12— — — — — — — 465 465 
Risk grade 13— — — — — — — — — 
$963,358 $594,187 $522,869 $644,822 $419,407 $489,526 $116,017 $22,842 $3,773,028 
W/A risk grade7.12 7.10 7.47 7.58 7.47 6.59 6.00 6.30 7.18 
Construction and land
Risk grades 1-8$662,991 $778,634 $419,516 $220,261 $55,984 $10,175 $159,332 $12,520 $2,319,413 
Risk grade 936,894 4,282 15,217 36,542 32,621 — 1,940 — 127,496 
Risk grade 1020,619 — — 54,131 — — 13,650 — 88,400 
Risk grade 11525 600 10,926 — — 540 — 95 12,686 
Risk grade 12— — — — 807 107 — 447 1,361 
Risk grade 13— — — — 222 — — 291 513 
$721,029 $783,516 $445,659 $310,934 $89,634 $10,822 $174,922 $13,353 $2,549,869 
W/A risk grade7.51 7.66 7.82 8.44 8.24 7.03 8.00 7.28 7.78 
December 31, 2025
20252024202320222021PriorRevolving LoansRevolving Loans Converted to TermTotal
Total commercial real estate$2,460,691 $1,806,730 $1,474,503 $1,766,098 $980,746 $1,301,859 $326,124 $194,059 $10,310,810 
W/A risk grade7.19 7.34 7.51 7.65 7.44 6.89 7.09 5.25 7.29 
December 31, 2024
20242023202220212020PriorRevolving LoansRevolving Loans Converted to TermTotal
Commercial and industrial
Risk grades 1-8$1,553,200 $513,073 $385,824 $257,280 $298,912 $253,018 $2,242,193 $50,257 $5,553,757 
Risk grade 915,552 24,059 58,521 25,818 3,796 9,959 109,594 15,147 262,446 
Risk grade 104,992 9,269 42,146 2,112 918 12,290 15,332 1,876 88,935 
Risk grade 1135,583 18,057 17,673 2,987 4,675 2,092 44,926 32,397 158,390 
Risk grade 1213,107 2,443 2,574 1,564 324 2,144 1,179 9,404 32,739 
Risk grade 137,712 472 1,479 28 11 — 7 3,556 13,265 
$1,630,146 $567,373 $508,217 $289,789 $308,636 $279,503 $2,413,231 $112,637 $6,109,532 
W/A risk grade6.73 7.12 7.52 7.13 5.58 6.11 6.30 9.12 6.64 
Energy
Risk grades 1-8$387,904 $22,510 $35,357 $16,150 $1,516 $2,648 $639,362 $5,872 $1,111,319 
Risk grade 9— 1,677 662 2,011 — 398 5,035 1,400 11,183 
Risk grade 10— — 52 — — — — — 52 
Risk grade 11188 — 2,038 — 36 — — — 2,262 
Risk grade 12— — — — 56 1,321 2 — 1,379 
Risk grade 13— — — — — — 2,700 — 2,700 
$388,092 $24,187 $38,109 $18,161 $1,608 $4,367 $647,099 $7,272 $1,128,895 
W/A risk grade6.16 7.14 7.53 4.75 6.47 8.97 5.05 7.31 5.58 
Commercial real estate:
Owner occupied
Risk grades 1-8$495,854 $403,667 $745,329 $518,686 $305,226 $639,916 $81,070 $48,343 $3,238,091 
Risk grade 95,806 13,424 21,117 26,752 10,002 32,656 385 3,718 113,860 
Risk grade 10— 13,966 64,063 7,172 7,084 8,576 — — 100,861 
Risk grade 113,890 4,604 51,489 22,452 12,812 56,500 — — 151,747 
Risk grade 127,856 2,671 3,233 1,529 1,126 1,105 — — 17,520 
Risk grade 13— — — — 122 — — — 122 
$513,406 $438,332 $885,231 $576,591 $336,372 $738,753 $81,455 $52,061 $3,622,201 
W/A risk grade6.97 7.26 7.42 7.34 7.20 7.34 5.06 6.48 7.22 
Non-owner occupied
Risk grades 1-8$673,970 $775,970 $626,079 $457,185 $350,269 $320,897 $90,014 $43,101 $3,337,485 
Risk grade 92,096 453 33,872 45,234 1,195 3,006 4,100 — 89,956 
Risk grade 10570 17,629 — 48,340 3,463 2,170 — — 72,172 
Risk grade 111,874 535 12,283 1,142 215 25,212 — — 41,261 
Risk grade 12— — — — — 279 — 1,866 2,145 
Risk grade 13— — — — — — — — — 
$678,510 $794,587 $672,234 $551,901 $355,142 $351,564 $94,114 $44,967 $3,543,019 
W/A risk grade7.12 7.30 7.30 7.72 6.92 6.83 6.11 7.08 7.21 
December 31, 2024
20242023202220212020PriorRevolving LoansRevolving Loans Converted to TermTotal
Construction and land
Risk grades 1-8$873,072 $710,449 $507,225 $90,946 $15,547 $5,193 $185,339 $159 $2,387,930 
Risk grade 947,900 13,814 67,020 35,116 — — 15,759 — 179,609 
Risk grade 10107,666 — 48,001 76,794 — — — — 232,461 
Risk grade 11— 600 — — — 570 — — 1,170 
Risk grade 12— — — 1,002 — 121 — 507 1,630 
Risk grade 13— — — 222 — — — 281 503 
$1,028,638 $724,863 $622,246 $204,080 $15,547 $5,884 $201,098 $947 $2,803,303 
W/A risk grade7.78 7.40 7.97 8.60 7.25 6.47 6.72 11.46 7.70 
Total commercial real estate$2,220,554 $1,957,782 $2,179,711 $1,332,572 $707,061 $1,096,201 $376,667 $97,975 $9,968,523 
W/A risk grade7.39 7.33 7.54 7.69 7.06 7.17 6.21 6.80 7.35 
At December 31, 2025 and 2024, the weighted-average risk grades for “pass grade” (risk grades 1-8) loans were 6.06 and 6.30, respectively, for commercial and industrial; 5.86 and 5.51, respectively, for energy; 6.77 and 6.87, respectively, for commercial real estate - owner occupied; 6.96 and 7.05, respectively, for commercial real estate - non-owner occupied; and 7.61 and 7.38, respectively, for commercial real estate - construction and land. Furthermore, in the tables above, there are loans reported as 2025 originations as of December 31, 2025 and 2024 originations as of December 31, 2024 that have risk grades of 11 or higher. These loans were, for the most part, first originated in various years prior to 2025 and 2024, respectively, but were renewed in the respective year.
Information about the payment status of consumer loans, segregated by portfolio segment and year of origination, as of December 31, 2025 and December 31, 2024 was as follows:
December 31, 2025
20252024202320222021PriorRevolving LoansRevolving Loans Converted to TermTotal
Consumer real estate:
Past due 30-89 days$194 $2,895 $4,780 $1,339 $1,620 $3,170 $12,018 $265 $26,281 
Past due 90 or more days— 279 1,020 1,192 445 2,910 2,673 3,665 12,184 
Total past due194 3,174 5,800 2,531 2,065 6,080 14,691 3,930 38,465 
Current loans743,365 629,299 457,158 335,325 216,126 249,090 1,040,863 8,977 3,680,203 
Total$743,559 $632,473 $462,958 $337,856 $218,191 $255,170 $1,055,554 $12,907 $3,718,668 
Consumer and other:
Past due 30-89 days$2,819 $96 $262 $48 $28 $32 $1,191 $548 $5,024 
Past due 90 or more days219 35 5 — — — 140 378 777 
Total past due3,038 131 267 48 28 32 1,331 926 5,801 
Current loans65,706 17,907 9,561 4,798 1,748 1,843 331,438 21,883 454,884 
Total$68,744 $18,038 $9,828 $4,846 $1,776 $1,875 $332,769 $22,809 $460,685 
December 31, 2024
20242023202220212020PriorRevolving LoansRevolving Loans Converted to TermTotal
Consumer real estate:
Past due 30-89 days$632 $1,030 $1,897 $965 $645 $1,944 $9,790 $112 $17,015 
Past due 90 or more days— 292 972 1,165 213 3,255 2,452 3,679 12,028 
Total past due632 1,322 2,869 2,130 858 5,199 12,242 3,791 29,043 
Current loans699,196 544,811 387,344 248,225 146,972 152,517 886,848 8,433 3,074,346 
Total$699,828 $546,133 $390,213 $250,355 $147,830 $157,716 $899,090 $12,224 $3,103,389 
Consumer and other:
Past due 30-89 days$3,378 $772 $249 $22 $66 $23 $1,734 $449 $6,693 
Past due 90 or more days243 — — — — 3 395 181 822 
Total past due3,621 772 249 22 66 26 2,129 630 7,515 
Current loans54,440 27,705 9,276 3,006 1,906 1,124 315,038 24,464 436,959 
Total$58,061 $28,477 $9,525 $3,028 $1,972 $1,150 $317,167 $25,094 $444,474 
Revolving loans, by class, that converted to term during 2025 and 2024 were as follows:
20252024
Commercial and industrial$44,820 $71,275 
Energy1,531 2,393 
Commercial real estate:
Owner occupied107,953 816 
Non-owner occupied367 8,172 
Construction and land6,994 947 
Consumer real estate3,243 3,425 
Consumer and other9,235 11,158 
Total$174,143 $98,186 
In assessing the general economic conditions in the State of Texas, management monitors and tracks the Texas Leading Index (“TLI”), which is produced by the Federal Reserve Bank of Dallas. The TLI is a single summary statistic that is designed to signal the likelihood of the Texas economy’s transition from expansion to recession and vice versa. Management believes this index provides a reliable indication of the direction of overall credit quality. The TLI is a composite of the following eight leading indicators: (i) Texas Value of the Dollar, (ii) U.S. Leading Index, (iii) real oil prices (iv) well permits, (v) initial claims for unemployment insurance, (vi) Texas Stock Index, (vii) Help-Wanted Index and (viii) average weekly hours worked in manufacturing. The TLI totaled 125.7 at December 31, 2025 and 125.9 at December 31, 2024. A lower TLI value implies less favorable economic conditions.
Allowance For Credit Losses - Loans. The allowance for credit losses on loans is a contra-asset valuation account, calculated in accordance with ASC 326, that is deducted from the amortized cost basis of loans to present the net amount expected to be collected. The amount of the allowance represents management's best estimate of current expected credit losses on loans considering available information, from internal and external sources, relevant to assessing collectibility over the loans' contractual terms, adjusted for expected prepayments when appropriate. The contractual term excludes expected extensions, renewals and modifications unless (i) management has a reasonable expectation that a loan to an individual borrower that is experiencing financial difficulty will be modified or (ii) such extension or renewal options are not unconditionally cancellable by us and, in such cases, the borrower is likely to meet applicable conditions and likely to request extension or renewal. Relevant available information includes historical credit loss experience; current conditions; and reasonable and supportable forecasts. While historical credit loss experience provides the basis for the estimation of expected credit losses, adjustments to historical loss information may be made for differences in current portfolio-specific risk characteristics, environmental conditions, or other relevant factors. The allowance for credit losses is measured on a collective basis for portfolios of loans when similar risk characteristics exist. Loans that do not share risk characteristics are evaluated for expected credit losses on an individual basis and excluded from the collective evaluation. Expected
credit losses for collateral dependent loans, including loans where the borrower is experiencing financial difficulty but foreclosure is not probable, are based on the fair value of the collateral at the reporting date, adjusted for selling costs as appropriate.
Credit loss expense related to loans reflects the totality of actions taken on all loans for a particular period including any necessary increases or decreases in the allowance related to changes in credit loss expectations associated with specific loans or pools of loans. Portions of the allowance may be allocated for specific credits; however, the entire allowance is available for any credit that, in management’s judgment, should be charged off. While management utilizes its best judgment and information available, the ultimate appropriateness of the allowance is dependent upon a variety of factors beyond our control, including the performance of our loan portfolio, the economy, changes in interest rates and the view of the regulatory authorities toward loan classifications.
In calculating the allowance for credit losses, most loans are segmented into pools based upon similar characteristics and risk profiles. Common characteristics and risk profiles include the type/purpose of loan, underlying collateral, geographical similarity, and historical/expected credit loss patterns. In developing these loan pools for the purposes of modeling expected credit losses, we also analyzed the degree of correlation in how loans within each portfolio respond when subjected to varying economic conditions and scenarios as well as other portfolio stress factors. For modeling purposes, our loan pools include (i) commercial and industrial non-revolving, (ii) commercial and industrial revolving, (iii) energy, (iv) commercial real estate - owner occupied, (v) commercial real estate - non-owner occupied, (vi) commercial real estate - construction and land, (vii) consumer real estate and (viii) consumer and other. We periodically reassess each pool to ensure the loans within the pool continue to share similar characteristics and risk profiles and to determine whether further segmentation is necessary.
For each loan pool, we measure expected credit losses over the life of each loan utilizing a combination of models which measure (i) probability of default (“PD”), which is the likelihood that loan will stop performing/default, (ii) probability of attrition (“PA”), which is the likelihood that a loan will pay-off prior to maturity, (iii) loss given default (“LGD”), which is the expected loss rate for loans in default and (iv) exposure at default (“EAD”), which is the estimated outstanding principal balance of the loans upon default, including the expected funding of unfunded commitments outstanding as of the measurement date. For commercial loan portfolios, the PD is calculated using a transition matrix to determine the likelihood of a customer’s risk grade migrating from one specified range of risk grades to a different specified range. Expected credit losses are calculated as the product of PD (adjusted for attrition), LGD and EAD. This methodology builds on default probabilities already incorporated into our risk grading process by utilizing pool-specific historical loss rates to calculate expected credit losses. These pool-specific historical loss rates may be adjusted for current macroeconomic assumptions, as further discussed below, and other factors such as differences in underwriting standards, portfolio mix, or when historical asset terms do not reflect the contractual terms of the financial assets being evaluated as of the measurement date. Each time we measure expected credit losses, we assess the relevancy of historical loss information and consider any necessary adjustments to address any differences in asset-specific characteristics. Due to their short-term nature, expected credit losses for overdrafts included in consumer and other loans are based solely upon a weighting of recent historical charge-offs over a period of three years.
The measurement of expected credit losses is impacted by loan/borrower attributes and certain macroeconomic variables. Significant loan/borrower attributes utilized in our modeling processes include, among other things, (i) origination date, (ii) maturity date, (iii) payment type, (iv) collateral type and amount, (v) current risk grade, (vi) current unpaid balance and commitment utilization rate, (vii) payment status/delinquency history and (viii) expected recoveries of previously charged-off amounts. Significant macroeconomic variables utilized in our modeling processes include, among other things, (i) Gross State Product for Texas and U.S. Gross Domestic Product, (ii) selected market interest rates including U.S. Treasury rates, bank prime rate, 30-year fixed mortgage rate, BBB corporate bond rate, among others, (iii) unemployment rates, (iv) commercial and residential property prices in Texas and the U.S. as a whole, (v) West Texas Intermediate crude oil price and (vi) total stock market index.
PD and PA were estimated by analyzing internally-sourced data related to historical performance of each loan pool over a complete economic cycle. PD and PA are adjusted to reflect the current impact of certain macroeconomic variables as well as their expected changes over a reasonable and supportable forecast period. We have determined that we are reasonably able to forecast the macroeconomic variables used in our modeling processes with an acceptable degree of confidence for a total of two years with the last twelve months of the forecast
period encompassing a reversion process whereby the forecasted macroeconomic variables are reverted to their historical mean utilizing a rational, systematic basis. The macroeconomic variables utilized as inputs in our modeling processes were subjected to a variety of analysis procedures and were selected primarily based on statistical relevancy and correlation to our historical credit losses. By reverting these modeling inputs to their historical mean and considering loan/borrower specific attributes, our models are intended to yield a measurement of expected credit losses that reflects our average historical loss rates for periods subsequent to the twelve-month reversion period. The LGD is based on historical recovery averages for each loan pool, adjusted to reflect the current impact of certain macroeconomic variables as well as their expected changes over a two-year forecast period, with the final twelve months of the forecast period encompassing a reversion process, which management considers to be both reasonable and supportable. This same forecast/reversion period is used for all macroeconomic variables used in all of our models. EAD is estimated using a linear regression model that estimates the average percentage of the loan balance that remains at the time of a default event.
Management qualitatively adjusts model results for risk factors that are not considered within our modeling processes but are nonetheless relevant in assessing the expected credit losses within our loan pools. These qualitative factor (“Q-Factor”) and other qualitative adjustments may increase or decrease management's estimate of expected credit losses by a calculated percentage or amount based upon the estimated level of risk. The various risks that may be considered in making Q-Factor and other qualitative adjustments include, among other things, the impact of (i) changes in lending policies and procedures, including changes in underwriting standards and practices for collections, write-offs, and recoveries, (ii) actual and expected changes in international, national, regional, and local economic and business conditions and developments that affect the collectibility of the loan pools, (iii) changes in the nature and volume of the loan pools and in the terms of the underlying loans, (iv) changes in the experience, ability, and depth of our lending management and staff, (v) changes in volume and severity of past due financial assets, the volume of non-accrual assets, and the volume and severity of adversely classified or graded assets, (vi) changes in the quality of our credit review function, (vii) changes in the value of the underlying collateral for loans that are non-collateral dependent, (viii) the existence, growth, and effect of any concentrations of credit and (ix) other factors such as the regulatory, legal and technological environments; competition; and events such as natural disasters or health pandemics.
In some cases, management may determine that an individual loan exhibits unique risk characteristics which differentiate the loan from other loans within our loan pools. In such cases, the loans are evaluated for expected credit losses on an individual basis and excluded from the collective evaluation. Specific allocations of the allowance for credit losses are determined by analyzing the borrower’s ability to repay amounts owed, collateral deficiencies, the relative risk grade of the loan and economic conditions affecting the borrower’s industry, among other things. A loan is considered to be collateral dependent when, based upon management's assessment, the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of the collateral. In such cases, expected credit losses are based on the fair value of the collateral at the measurement date, adjusted for estimated selling costs if satisfaction of the loan depends on the sale of the collateral. We reevaluate the fair value of collateral supporting collateral dependent loans on a quarterly basis. The fair value of real estate collateral supporting collateral dependent loans is evaluated by our internal appraisal services using a methodology that is consistent with the Uniform Standards of Professional Appraisal Practice. The fair value of collateral supporting collateral dependent construction loans is based on an “as is” valuation.
During the first quarter of 2024, we updated our non-owner-occupied commercial real estate loan models as well as our consumer and other loan models. Our prior non-owner-occupied commercial real estate loan models were legacy models developed for stress-testing purposes by a third-party using external market data. The updated non-owner-occupied commercial real estate loan models are now based on internal historical loan data and risk grade information and the modeling processes are now consistent with those used with our other commercial loan models. Our prior consumer and other loan models relied upon certain components that did not use loan level attributes and were less sensitive to macroeconomic variables. The updated consumer and other loan models are now based on internal historical loan data and utilize more loan-level attributes and the modeling processes are now consistent with those used with our consumer real estate loan models. The overall approximate impact of the model updates during the first quarter was a $7.2 million increase ($6.2 million related to non-owner-occupied commercial real estate loans and $923 thousand related to consumer and other loans) in modeled expected credit losses on loans; however, the impact of this increase was largely offset by reductions in qualitative adjustments as some of the risks to which those qualitative adjustments related are now considered and incorporated in the updated models.
The following table presents details of the allowance for credit losses on loans, by loan portfolio segment, as of December 31, 2025 and 2024, calculated in accordance with the CECL methodology described above.
Commercial
and
Industrial		EnergyCommercial
Real Estate		Consumer
Real Estate		Consumer
and Other		Total
December 31, 2025
Modeled expected credit losses$56,114 $7,215 $17,018 $24,390 $5,315 $110,052 
Q-Factor and other qualitative adjustments25,706 3,648 116,857 610 5,350 152,171 
Specific allocations16,619 700 1,235 637 81 19,272 
Total$98,439 $11,563 $135,110 $25,637 $10,746 $281,495 
December 31, 2024
Modeled expected credit losses$51,669 $3,969 $17,549 $17,720 $7,019 $97,926 
Q-Factor and other qualitative adjustments22,635 3,323 125,031 620 3,095 154,704 
Specific allocations13,265 2,700 625 766 165 17,521 
Total$87,569 $9,992 $143,205 $19,106 $10,279 $270,151 
The following table details activity in the allowance for credit losses on loans, by portfolio segment, for 2025, 2024 and 2023. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories.
Commercial
and
Industrial		EnergyCommercial
Real Estate		Consumer
Real Estate		Consumer
and Other		Total
2025
Beginning balance$87,569 $9,992 $143,205 $19,106 $10,279 $270,151 
Credit loss expense (benefit)19,936 504 (3,486)10,777 16,887 44,618 
Charge-offs(12,794)— (4,639)(5,551)(27,931)(50,915)
Recoveries3,728 1,067 30 1,305 11,511 17,641 
Net (charge-offs) recoveries(9,066)1,067 (4,609)(4,246)(16,420)(33,274)
Ending balance$98,439 $11,563 $135,110 $25,637 $10,746 $281,495 
2024
Beginning balance$74,006 $17,814 $130,598 $13,538 $10,040 $245,996 
Credit loss expense (benefit)24,494 (8,977)16,479 9,753 23,083 64,832 
Charge-offs(14,828)(79)(3,919)(4,940)(33,344)(57,110)
Recoveries3,897 1,234 47 755 10,500 16,433 
Net (charge-offs) recoveries(10,931)1,155 (3,872)(4,185)(22,844)(40,677)
Ending balance$87,569 $9,992 $143,205 $19,106 $10,279 $270,151 
2023
Beginning balance$104,237 $18,062 $90,301 $8,004 $7,017 $227,621 
Credit loss expense (benefit)(16,709)(1,067)40,889 6,736 23,012 52,861 
Charge-offs(18,315)(518)(955)(2,883)(31,260)(53,931)
Recoveries4,793 1,337 363 1,681 11,271 19,445 
Net (charge-offs) recoveries(13,522)819 (592)(1,202)(19,989)(34,486)
Ending balance$74,006 $17,814 $130,598 $13,538 $10,040 $245,996 
Generally, a commercial loan, or a portion thereof, is charged-off immediately when it is determined, through the analysis of any available current financial information with regards to the borrower, that the borrower is incapable of servicing unsecured debt, there is little or no prospect for near term improvement and no realistic strengthening action of significance is pending or, in the case of secured debt, when it is determined, through analysis of current information with regards to our collateral position, that amounts due from the borrower are in excess of the calculated current fair value of the collateral. Notwithstanding the foregoing, generally, commercial loans that become past due 180 cumulative days are charged-off. Generally, a consumer loan, or a portion thereof, is charged-
off in accordance with regulatory guidelines which provide that such loans be charged-off when we become aware of the loss, such as from a triggering event that may include new information about a borrower’s intent/ability to repay the loan, bankruptcy, fraud or death, among other things, but in any event the charge-off must be taken within specified delinquency time frames. Such delinquency time frames state that closed-end retail loans (loans with pre-defined maturity dates, such as real estate mortgages, home equity loans and consumer installment loans) that become past due 120 cumulative days and open-end retail loans (loans that roll-over at the end of each term, such as home equity lines of credit) that become past due 180 cumulative days should be classified as a loss and charged-off.
The following table presents year-to-date gross charge-offs, by class and year of origination, as of December 31, 2025.
20252024202320222021PriorRevolving LoansRevolving Loans Converted to TermTotal
Commercial and industrial$166 $1,201 $1,881 $292 $1,435 $116 $3,969 $3,734 $12,794 
Energy— — — — — — — — — 
Commercial real estate:
Owner occupied— — — — — 3 — — 3 
Non-owner occupied— — — — 4,636 — — — 4,636 
Construction and land— — — — — — — — — 
Consumer real estate— 132 649 1,171 472 462 2,665 — 5,551 
Consumer and other19,710 4,139 611 230 1 13 2,292 935 27,931 
Total$19,876 $5,472 $3,141 $1,693 $6,544 $594 $8,926 $4,669 $50,915 
In the table above, $19.7 million of the consumer and other loan charge-offs reported as 2025 originations and $3.8 million of the total reported as 2024 originations were related to deposit overdrafts.
The following table presents loans that were evaluated for expected credit losses on an individual basis and the related specific allocations, by class, as of December 31, 2025 and December 31, 2024.
December 31, 2025December 31, 2024
Loan
Balance		Specific AllocationsLoan
Balance		Specific Allocations
Commercial and industrial$48,456 $16,619 $45,009 $13,265 
Energy3,023 700 4,078 2,700 
Commercial real estate:
Owner occupied7,069 722 16,932 122 
Non-owner occupied466 — 1,865 — 
Construction and land1,672 513 2,012 503 
Consumer real estate6,140 637 6,039 766 
Consumer and other81 81 352 165 
Total$66,907 $19,272 $76,287 $17,521