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Loans | 3 Months Ended
--- | ---
Mar. 31, 2022
Receivables [Abstract] |
Loans | Loans Loans were as follows:
| March 31, 2022 |  | December 31, 2021
Commercial and industrial | $ | 5,584,117 |  |  | $ | 5,364,954 |
Energy: |  |  |
Production | 820,107 |  |  | 878,436 |
Service | 113,708 |  |  | 105,901 |
Other | 102,764 |  |  | 93,455 |
Total energy | 1,036,579 |  |  | 1,077,792 |
Paycheck Protection Program | 207,669 |  |  | 428,882 |
Commercial real estate: |  |  |
Commercial mortgages | 5,918,011 |  |  | 5,867,062 |
Construction | 1,421,878 |  |  | 1,304,271 |
Land | 458,510 |  |  | 405,277 |
Total commercial real estate | 7,798,399 |  |  | 7,576,610 |
Consumer real estate: |  |  |
Home equity loans | 321,842 |  |  | 324,157 |
Home equity lines of credit | 544,822 |  |  | 519,098 |
Other | 566,961 |  |  | 567,535 |
Total consumer real estate | 1,433,625 |  |  | 1,410,790 |
Total real estate | 9,232,024 |  |  | 8,987,400 |
Consumer and other | 482,148 |  |  | 477,369 |
Total loans | $ | 16,542,537 |  |  | $ | 16,336,397 |
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 March 31, 2022, there were no concentrations of loans related to any single industry in excess of 10% of total loans. The largest industry concentration was related to the energy industry, which totaled 6.3% of total loans (also 6.3% excluding PPP loans). Unfunded commitments to extend credit and standby letters of credit issued to customers in the energy industry totaled $862.2 million and $76.0 million, respectively, as of March 31, 2022. 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 March 31, 2022 or December 31, 2021. 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”). Such loans totaled $346.5 million at March 31, 2022 and $350.5 million at December 31, 2021. Accrued Interest Receivable. Accrued interest receivable on loans totaled $39.5 million and $40.0 million at March 31, 2022 and December 31, 2021, 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. Non-accrual loans, segregated by class of loans, were as follows:
| March 31, 2022 |  | December 31, 2021
| Total Non-Accrual |  | Non-Accrual with No Credit Loss Allowance |  | Total Non-Accrual |  | Non-Accrual with No Credit Loss Allowance
Commercial and industrial | $ | 16,693 |  |  | $ | 6,135 |  |  | $ | 22,582 |  |  | $ | 4,701 |
Energy | 12,271 |  |  | 6,912 |  |  | 14,433 |  |  | 8,533 |
Paycheck Protection Program | — |  |  | — |  |  | — |  |  | — |
Commercial real estate: |  |  |  |  |  |  |
Buildings, land and other | 19,003 |  |  | 17,005 |  |  | 15,297 |  |  | 13,817 |
Construction | 583 |  |  | 583 |  |  | 948 |  |  | — |
Consumer real estate | 416 |  |  | 114 |  |  | 440 |  |  | 138 |
Consumer and other | — |  |  | — |  |  | 13 |  |  | 13 |
Total | $ | 48,966 |  |  | $ | 30,749 |  |  | $ | 53,713 |  |  | $ | 27,202 |
The following table presents non-accrual loans as of March 31, 2022 by class and year of origination.
| 2021 |  | 2020 |  | 2019 |  | 2018 |  | 2017 |  | Prior |  | Revolving Loans |  | Revolving Loans Converted to Term |  | Total
Commercial and industrial | $ | — |  |  | $ | 478 |  |  | $ | 4,101 |  |  | $ | 3,910 |  |  | $ | 1,552 |  |  | $ | 1,033 |  |  | $ | 2,038 |  |  | $ | 3,581 |  |  | $ | 16,693 |
Energy | — |  |  | — |  |  | — |  |  | 5,039 |  |  | 1,137 |  |  | — |  |  | 5,997 |  |  | 98 |  |  | 12,271 |
Paycheck Protection Program | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Commercial real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Buildings, land and other | — |  |  | 8,407 |  |  | 296 |  |  | 1,199 |  |  | 394 |  |  | 2,932 |  |  | — |  |  | 5,775 |  |  | 19,003 |
Construction | — |  |  | — |  |  | 583 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 583 |
Consumer real estate | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 390 |  |  | — |  |  | 26 |  |  | 416 |
Consumer and other | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Total | $ | — |  |  | $ | 8,885 |  |  | $ | 4,980 |  |  | $ | 10,148 |  |  | $ | 3,083 |  |  | $ | 4,355 |  |  | $ | 8,035 |  |  | $ | 9,480 |  |  | $ | 48,966 |
Had non-accrual loans performed in accordance with their original contract terms, we would have recognized additional interest income, net of tax, of approximately $407 thousand for the three months ended March 31, 2022, and approximately $453 thousand for the three months ended March 31, 2021. An age analysis of past due loans (including both accruing and non-accruing loans), segregated by class of loans, as of March 31, 2022 was as follows:
| Loans 30-89 Days Past Due |  | Loans 90 or More Days Past Due |  | Total Past Due Loans |  | Current Loans |  | Total Loans |  | Accruing Loans 90 or More Days Past Due
Commercial and industrial | $ | 13,016 |  |  | $ | 8,042 |  |  | $ | 21,058 |  |  | $ | 5,563,059 |  |  | $ | 5,584,117 |  |  | $ | 4,166 |
Energy | — |  |  | 6,382 |  |  | 6,382 |  |  | 1,030,197 |  |  | 1,036,579 |  |  | 287 |
Paycheck Protection Program | 671 |  |  | 8,377 |  |  | 9,048 |  |  | 198,621 |  |  | 207,669 |  |  | 8,377 |
Commercial real estate: |  |  |  |  |  |  |  |  |  |  |
Buildings, land and other | 21,542 |  |  | 11,546 |  |  | 33,088 |  |  | 6,343,433 |  |  | 6,376,521 |  |  | 1,046 |
Construction | 1,988 |  |  | — |  |  | 1,988 |  |  | 1,419,890 |  |  | 1,421,878 |  |  | — |
Consumer real estate | 4,210 |  |  | 2,409 |  |  | 6,619 |  |  | 1,427,006 |  |  | 1,433,625 |  |  | 2,103 |
Consumer and other | 6,393 |  |  | 593 |  |  | 6,986 |  |  | 475,162 |  |  | 482,148 |  |  | 593 |
Total | $ | 47,820 |  |  | $ | 37,349 |  |  | $ | 85,169 |  |  | $ | 16,457,368 |  |  | $ | 16,542,537 |  |  | $ | 16,572 |
Troubled Debt Restructurings. There were no loans modified as troubled debt restructurings during the three months ended March 31, 2022 and 2021. Loan modifications are typically related to extending amortization periods, converting loans to interest only for a limited period of time, deferral of interest payments, waiver of certain covenants, consolidating notes and/or reducing collateral or interest rates. Modifications have not generally had a significant impact on our determination of the allowance for credit losses on loans. Information as of or for the three months ended March 31, 2022 and 2021 related to loans restructured during the last twelve months is set forth in the following table.
| March 31, 2022 |  | March 31, 2021
Restructured loans past due in excess of 90 days at period-end: |  |  |
Number of loans | 2 |  |  | 2 |
Dollar amount of loans | $ | 572 |  |  | $ | 1,392 |
Charge-offs of restructured loans: |  |  |
Recognized on previously restructured loans | 723 |  |  | 1,433 |
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 set forth in our 2021 Form 10-K. 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 March 31, 2022. Paycheck Protection Program (“PPP”) loans are excluded as such loans are fully guaranteed by the Small Business Administration (“SBA”).
| 2022 |  | 2021 |  | 2020 |  | 2019 |  | 2018 |  | Prior |  | Revolving Loans |  | Revolving Loans Converted to Term |  | Total |  | W/A Risk Grade
Commercial and industrial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Risk grades 1-8 | $ | 836,152 |  |  | $ | 894,663 |  |  | $ | 592,780 |  |  | $ | 305,667 |  |  | $ | 160,622 |  |  | $ | 243,869 |  |  | $ | 2,255,878 |  |  | $ | 44,778 |  |  | $ | 5,334,409 |  |  | 6.18 |
Risk grade 9 | 4,702 |  |  | 34,513 |  |  | 6,562 |  |  | 11,434 |  |  | 21,841 |  |  | 8,319 |  |  | 54,008 |  |  | 4,721 |  |  | 146,100 |  |  | 9.00 |
Risk grade 10 | 3,500 |  |  | 22,084 |  |  | 6,527 |  |  | 1,039 |  |  | 4,007 |  |  | 578 |  |  | 13,899 |  |  | 1,198 |  |  | 52,832 |  |  | 10.00 |
Risk grade 11 | — |  |  | 1,926 |  |  | 6,672 |  |  | 9,679 |  |  | 1,697 |  |  | 2,200 |  |  | 5,958 |  |  | 5,951 |  |  | 34,083 |  |  | 11.00 |
Risk grade 12 | — |  |  | 478 |  |  | 2,644 |  |  | 3,510 |  |  | 1,488 |  |  | 619 |  |  | 941 |  |  | 2,015 |  |  | 11,695 |  |  | 12.00 |
Risk grade 13 | — |  |  | — |  |  | 1,457 |  |  | 400 |  |  | 64 |  |  | 414 |  |  | 1,097 |  |  | 1,566 |  |  | 4,998 |  |  | 13.00 |
| $ | 844,354 |  |  | $ | 953,664 |  |  | $ | 616,642 |  |  | $ | 331,729 |  |  | $ | 189,719 |  |  | $ | 255,999 |  |  | $ | 2,331,781 |  |  | $ | 60,229 |  |  | $ | 5,584,117 |  |  | 6.34 |
W/A risk grade | 6.16 |  |  | 6.87 |  |  | 6.17 |  |  | 6.75 |  |  | 7.00 |  |  | 5.80 |  |  | 6.14 |  |  | 7.82 |  |  | 6.34 |  |  |
Energy |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Risk grades 1-8 | $ | 279,051 |  |  | $ | 125,435 |  |  | $ | 7,519 |  |  | $ | 8,444 |  |  | $ | 4,068 |  |  | $ | 5,665 |  |  | $ | 509,657 |  |  | $ | 59,424 |  |  | $ | 999,263 |  |  | 5.71 |
Risk grade 9 | 1,425 |  |  | 103 |  |  | 508 |  |  | 1,407 |  |  | 96 |  |  | — |  |  | 5,668 |  |  | 43 |  |  | 9,250 |  |  | 9.00 |
Risk grade 10 | — |  |  | — |  |  | 90 |  |  | 580 |  |  | 351 |  |  | — |  |  | — |  |  | 515 |  |  | 1,536 |  |  | 10.00 |
Risk grade 11 | 9,097 |  |  | 265 |  |  | 512 |  |  | 3,256 |  |  | 951 |  |  | 178 |  |  | — |  |  | — |  |  | 14,259 |  |  | 11.00 |
Risk grade 12 | — |  |  | — |  |  | — |  |  | 3,708 |  |  | 58 |  |  | — |  |  | 3,215 |  |  | 98 |  |  | 7,079 |  |  | 12.00 |
Risk grade 13 | — |  |  | — |  |  | — |  |  | 1,331 |  |  | 1,079 |  |  | — |  |  | 2,782 |  |  | — |  |  | 5,192 |  |  | 13.00 |
| $ | 289,573 |  |  | $ | 125,803 |  |  | $ | 8,629 |  |  | $ | 18,726 |  |  | $ | 6,603 |  |  | $ | 5,843 |  |  | $ | 521,322 |  |  | $ | 60,080 |  |  | $ | 1,036,579 |  |  | 5.89 |
W/A risk grade | 6.36 |  |  | 5.77 |  |  | 7.73 |  |  | 9.34 |  |  | 9.24 |  |  | 7.16 |  |  | 5.41 |  |  | 6.31 |  |  | 5.89 |  |  |
| 2022 |  | 2021 |  | 2020 |  | 2019 |  | 2018 |  | Prior |  | Revolving Loans |  | Revolving Loans Converted to Term |  | Total |  | W/A Risk Grade
Commercial real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Buildings, land, other |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Risk grades 1-8 | $ | 607,883 |  |  | $ | 1,554,611 |  |  | $ | 1,113,230 |  |  | $ | 809,206 |  |  | $ | 498,477 |  |  | $ | 1,057,840 |  |  | $ | 72,704 |  |  | $ | 96,924 |  |  | $ | 5,810,875 |  |  | 6.89 |
Risk grade 9 | 6,163 |  |  | 20,766 |  |  | 108,943 |  |  | 53,448 |  |  | 23,459 |  |  | 45,034 |  |  | 5,516 |  |  | 2,618 |  |  | 265,947 |  |  | 9.00 |
Risk grade 10 | 46,125 |  |  | 22,716 |  |  | 7,310 |  |  | 66,821 |  |  | 24,539 |  |  | 57,602 |  |  | — |  |  | — |  |  | 225,113 |  |  | 10.00 |
Risk grade 11 | — |  |  | 260 |  |  | 1,293 |  |  | 7,328 |  |  | 6,788 |  |  | 36,699 |  |  | 3,215 |  |  | — |  |  | 55,583 |  |  | 11.00 |
Risk grade 12 | — |  |  | 8,081 |  |  | 296 |  |  | 1,199 |  |  | 394 |  |  | 2,932 |  |  | — |  |  | 5,775 |  |  | 18,677 |  |  | 12.00 |
Risk grade 13 | — |  |  | 326 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 326 |  |  | 13.00 |
| $ | 660,171 |  |  | $ | 1,606,760 |  |  | $ | 1,231,072 |  |  | $ | 938,002 |  |  | $ | 553,657 |  |  | $ | 1,200,107 |  |  | $ | 81,435 |  |  | $ | 105,317 |  |  | $ | 6,376,521 |  |  | 7.14 |
W/A risk grade | 7.08 |  |  | 7.22 |  |  | 7.04 |  |  | 7.32 |  |  | 7.27 |  |  | 6.97 |  |  | 7.06 |  |  | 6.99 |  |  | 7.14 |  |  |
Construction |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Risk grades 1-8 | $ | 202,413 |  |  | $ | 634,897 |  |  | $ | 195,127 |  |  | $ | 141,510 |  |  | $ | 636 |  |  | $ | 1,842 |  |  | $ | 207,182 |  |  | $ | 3,666 |  |  | $ | 1,387,273 |  |  | 6.96 |
Risk grade 9 | 171 |  |  | 28,069 |  |  | 5,359 |  |  | — |  |  | — |  |  | 423 |  |  | — |  |  | — |  |  | 34,022 |  |  | 9.00 |
Risk grade 10 | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 10.00 |
Risk grade 11 | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 11.00 |
Risk grade 12 | — |  |  | — |  |  | 583 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 583 |  |  | 12.00 |
Risk grade 13 | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 13.00 |
| $ | 202,584 |  |  | $ | 662,966 |  |  | $ | 201,069 |  |  | $ | 141,510 |  |  | $ | 636 |  |  | $ | 2,265 |  |  | $ | 207,182 |  |  | $ | 3,666 |  |  | $ | 1,421,878 |  |  | 7.01 |
W/A risk grade | 6.83 |  |  | 7.28 |  |  | 6.38 |  |  | 7.98 |  |  | 6.22 |  |  | 7.17 |  |  | 6.28 |  |  | 8.00 |  |  | 7.01 |  |  |
Total commercial real estate | $ | 862,755 |  |  | $ | 2,269,726 |  |  | $ | 1,432,141 |  |  | $ | 1,079,512 |  |  | $ | 554,293 |  |  | $ | 1,202,372 |  |  | $ | 288,617 |  |  | $ | 108,983 |  |  | $ | 7,798,399 |  |  | 7.11 |
W/A risk grade | 7.02 |  |  | 7.24 |  |  | 6.95 |  |  | 7.41 |  |  | 7.27 |  |  | 6.97 |  |  | 6.50 |  |  | 7.03 |  |  | 7.11 |  |  |
In the table above, certain energy loans are reported as 2022 originations and have risk grades of 11 or higher. These loans were, for the most part, first originated in various years prior to 2022 but were renewed in the current year. The following tables present weighted average risk grades for all commercial loans by class as of December 31, 2021. Refer to our 2021 Form 10-K for details of these loans by year of origination/renewal.
| Commercial and Industrial |  | Energy |  | Commercial Real Estate - Buildings, Land and Other |  | Commercial Real Estate - Construction |  | Total Commercial Real Estate
| W/A Risk Grade |  | Loans |  | W/A Risk Grade |  | Loans |  | W/A Risk Grade |  | Loans |  | W/A Risk Grade |  | Loans |  | W/A Risk Grade |  | Loans
Risk grades 1-8 | 6.01 |  |  | $ | 5,063,847 |  |  | 5.78 |  |  | $ | 1,008,370 |  |  | 6.91 |  |  | $ | 5,574,922 |  |  | 6.99 |  |  | $ | 1,262,200 |  |  | 6.92 |  |  | $ | 6,837,122 |
Risk grade 9 | 9.00 |  |  | 187,870 |  |  | 9.00 |  |  | 36,622 |  |  | 9.00 |  |  | 321,533 |  |  | 9.00 |  |  | 41,123 |  |  | 9.00 |  |  | 362,656 |
Risk grade 10 | 10.00 |  |  | 59,137 |  |  | 10.00 |  |  | 1,773 |  |  | 10.00 |  |  | 269,447 |  |  | 10.00 |  |  | — |  |  | 10.00 |  |  | 269,447 |
Risk grade 11 | 11.00 |  |  | 31,518 |  |  | 11.00 |  |  | 16,594 |  |  | 11.00 |  |  | 91,140 |  |  | 11.00 |  |  | — |  |  | 11.00 |  |  | 91,140 |
Risk grade 12 | 12.00 |  |  | 12,535 |  |  | 12.00 |  |  | 8,953 |  |  | 12.00 |  |  | 15,097 |  |  | 12.00 |  |  | 748 |  |  | 12.00 |  |  | 15,845 |
Risk grade 13 | 13.00 |  |  | 10,047 |  |  | 13.00 |  |  | 5,480 |  |  | 13.00 |  |  | 200 |  |  | 13.00 |  |  | 200 |  |  | 13.00 |  |  | 400 |
Total | 6.22 |  |  | $ | 5,364,954 |  |  | 6.06 |  |  | $ | 1,077,792 |  |  | 7.22 |  |  | $ | 6,272,339 |  |  | 7.06 |  |  | $ | 1,304,271 |  |  | 7.19 |  |  | $ | 7,576,610 |
Information about the payment status of consumer loans, segregated by portfolio segment and year of origination, as of March 31, 2022 was as follows:
| 2022 |  | 2021 |  | 2020 |  | 2019 |  | 2018 |  | Prior |  | Revolving Loans |  | Revolving Loans Converted to Term |  | Total
Consumer real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Past due 30-89 days | $ | — |  |  | $ | 303 |  |  | $ | 55 |  |  | $ | 465 |  |  | $ | 309 |  |  | $ | 1,587 |  |  | $ | 60 |  |  | $ | 1,431 |  |  | $ | 4,210 |
Past due 90 or more days | — |  |  | — |  |  | 4 |  |  | — |  |  | 297 |  |  | 854 |  |  | 1,004 |  |  | 250 |  |  | 2,409 |
Total past due | — |  |  | 303 |  |  | 59 |  |  | 465 |  |  | 606 |  |  | 2,441 |  |  | 1,064 |  |  | 1,681 |  |  | 6,619 |
Current loans | 51,321 |  |  | 322,814 |  |  | 225,921 |  |  | 86,664 |  |  | 48,481 |  |  | 149,677 |  |  | 533,182 |  |  | 8,946 |  |  | 1,427,006 |
Total | $ | 51,321 |  |  | $ | 323,117 |  |  | $ | 225,980 |  |  | $ | 87,129 |  |  | $ | 49,087 |  |  | $ | 152,118 |  |  | $ | 534,246 |  |  | $ | 10,627 |  |  | $ | 1,433,625 |
Consumer and other: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Past due 30-89 days | $ | 1,470 |  |  | $ | 385 |  |  | $ | 53 |  |  | $ | 69 |  |  | $ | 54 |  |  | $ | 24 |  |  | $ | 2,344 |  |  | $ | 1,994 |  |  | $ | 6,393 |
Past due 90 or more days | — |  |  | 499 |  |  | — |  |  | 23 |  |  | — |  |  | 13 |  |  | — |  |  | 58 |  |  | 593 |
Total past due | 1,470 |  |  | 884 |  |  | 53 |  |  | 92 |  |  | 54 |  |  | 37 |  |  | 2,344 |  |  | 2,052 |  |  | 6,986 |
Current loans | 21,692 |  |  | 34,798 |  |  | 13,127 |  |  | 4,936 |  |  | 2,207 |  |  | 2,520 |  |  | 371,266 |  |  | 24,616 |  |  | 475,162 |
Total | $ | 23,162 |  |  | $ | 35,682 |  |  | $ | 13,180 |  |  | $ | 5,028 |  |  | $ | 2,261 |  |  | $ | 2,557 |  |  | $ | 373,610 |  |  | $ | 26,668 |  |  | $ | 482,148 |
Revolving loans that converted to term during the three months ended March 31, 2022 and 2021 were as follows:
|  |  | Three Months Ended March 31,
|  |  |  |  | 2021 |  | 2020
Commercial and industrial |  |  |  |  | $ | 5,763 |  |  | $ | 11,843 |
Energy |  |  |  |  | — |  |  | 5,928 |
Commercial real estate: |  |  |  |  |  |  |
Buildings, land and other |  |  |  |  | 47 |  |  | 23,303 |
Construction |  |  |  |  | 3,666 |  |  | — |
Consumer real estate |  |  |  |  | 858 |  |  | 793 |
Consumer and other |  |  |  |  | 4,222 |  |  | 3,861 |
Total |  |  |  |  | $ | 14,556 |  |  | $ | 45,728 |
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, the components of which are more fully described in our 2021 Form 10-K, totaled 141.2 at March 31, 2022 and 135.9 at December 31, 2021. A higher TLI value implies more 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. 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. Our allowance methodology is more fully described in our 2021 Form 10-K. The following table presents details of the allowance for credit losses on loans segregated by loan portfolio segment as of March 31, 2022 and December 31, 2021. No allowance for credit losses has been recognized for PPP loans as such loans are fully guaranteed by the SBA.
March 31, 2022 | Commercial and Industrial |  | Energy |  | Commercial Real Estate |  | Consumer Real Estate |  | Consumer and Other |  | Total
Modeled expected credit losses | $ | 46,635 |  |  | $ | 5,971 |  |  | $ | 17,110 |  |  | $ | 6,260 |  |  | $ | 7,634 |  |  | $ | 83,610 |
Q-Factor and other qualitative adjustments | 33,916 |  |  | 4,260 |  |  | 111,518 |  |  | 63 |  |  | 1,440 |  |  | 151,197 |
Specific allocations | 6,475 |  |  | 5,191 |  |  | 326 |  |  | 36 |  |  | — |  |  | 12,028 |
Total | $ | 87,026 |  |  | $ | 15,422 |  |  | $ | 128,954 |  |  | $ | 6,359 |  |  | $ | 9,074 |  |  | $ | 246,835 |
December 31, 2021 |  |  |  |  |  |  |  |  |  |  |
Modeled expected credit losses | $ | 46,946 |  |  | $ | 6,363 |  |  | $ | 16,676 |  |  | $ | 6,484 |  |  | $ | 6,397 |  |  | $ | 82,866 |
Q-Factor and other qualitative adjustments | 14,609 |  |  | 5,374 |  |  | 127,860 |  |  | 65 |  |  | 1,440 |  |  | 149,348 |
Specific allocations | 10,536 |  |  | 5,480 |  |  | 400 |  |  | 36 |  |  | — |  |  | 16,452 |
Total | $ | 72,091 |  |  | $ | 17,217 |  |  | $ | 144,936 |  |  | $ | 6,585 |  |  | $ | 7,837 |  |  | $ | 248,666 |
The following table details activity in the allowance for credit losses on loans by portfolio segment for the three months ended March 31, 2022 and 2021. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories. No allowance for credit losses has been recognized for PPP loans as such loans are fully guaranteed by the SBA.
| Commercial and Industrial |  | Energy |  | Commercial Real Estate |  | Consumer Real Estate |  | Consumer and Other |  | Total
Three months ended: |  |  |  |  |  |  |  |  |  |  |
March 31, 2022 |  |  |  |  |  |  |  |  |  |  |
Beginning balance | $ | 72,091 |  |  | $ | 17,217 |  |  | $ | 144,936 |  |  | $ | 6,585 |  |  | $ | 7,837 |  |  | $ | 248,666 |
Credit loss expense (benefit) | 17,561 |  |  | (2,044) |  |  | (15,609) |  |  | (26) |  |  | 4,582 |  |  | 4,464 |
Charge-offs | (3,455) |  |  | (371) |  |  | (702) |  |  | (231) |  |  | (5,771) |  |  | (10,530) |
Recoveries | 829 |  |  | 620 |  |  | 329 |  |  | 31 |  |  | 2,426 |  |  | 4,235 |
Net charge-offs | (2,626) |  |  | 249 |  |  | (373) |  |  | (200) |  |  | (3,345) |  |  | (6,295) |
Ending balance | $ | 87,026 |  |  | $ | 15,422 |  |  | $ | 128,954 |  |  | $ | 6,359 |  |  | $ | 9,074 |  |  | $ | 246,835 |
March 31, 2021 |  |  |  |  |  |  |  |  |  |  |
Beginning balance | $ | 73,843 |  |  | $ | 39,553 |  |  | $ | 134,892 |  |  | $ | 7,926 |  |  | $ | 6,963 |  |  | $ | 263,177 |
Credit loss expense (benefit) | (1,965) |  |  | (5,801) |  |  | 8,922 |  |  | (2,722) |  |  | 1,566 |  |  | — |
Charge-offs | (2,189) |  |  | (1,433) |  |  | — |  |  | (284) |  |  | (4,060) |  |  | (7,966) |
Recoveries | 1,203 |  |  | 1,153 |  |  | 626 |  |  | 716 |  |  | 2,349 |  |  | 6,047 |
Net charge-offs | (986) |  |  | (280) |  |  | 626 |  |  | 432 |  |  | (1,711) |  |  | (1,919) |
Ending balance | $ | 70,892 |  |  | $ | 33,472 |  |  | $ | 144,440 |  |  | $ | 5,636 |  |  | $ | 6,818 |  |  | $ | 261,258 |
The following table presents loans that were evaluated for expected credit losses on an individual basis and the related specific allocations, by loan portfolio segment as of March 31, 2022 and December 31, 2021.
| March 31, 2022 |  | December 31, 2021
Loan Balance |  | Specific Allocations |  | Loan Balance |  | Specific Allocations
Commercial and industrial | $ | 21,529 |  |  | $ | 6,475 |  |  | $ | 24,523 |  |  | $ | 10,536 |
Energy | 11,931 |  |  | 5,191 |  |  | 16,393 |  |  | 5,480 |
Paycheck Protection Program | — |  |  | — |  |  | — |  |  | — |
Commercial real estate: |  |  |  |  |  |  |
Buildings, land and other | 28,806 |  |  | 326 |  |  | 24,670 |  |  | 200 |
Construction | — |  |  | — |  |  | 948 |  |  | 200 |
Consumer real estate | 302 |  |  | 36 |  |  | 303 |  |  | 36 |
Consumer and other | — |  |  | — |  |  | — |  |  | — |
Total | $ | 62,568 |  |  | $ | 12,028 |  |  | $ | 66,837 |  |  | $ | 16,452 |

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- Definition The entire disclosure for claims held for amounts due a entity, excluding financing receivables. Examples include, but are not limited to, trade accounts receivables, notes receivables, loans receivables. Includes disclosure for allowance for credit losses. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -SubTopic 10 -URI http://asc.fasb.org/subtopic&trid=2196772 + Details
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