Concentrations of Credit. Most of the Company’s lending activity occurs within the states of Texas and Oklahoma. Commercial real estate loans, 1-4 family residential loans and construction, land development and other land loans made up 81.7% and 81.3% of the Company’s total loan portfolio, excluding Warehouse Purchase Program loans, at September 30, 2025, and December 31, 2024, respectively. As of September 30, 2025, and December 31, 2024, excluding Warehouse Purchase Program loans, there were no concentrations of loans related to any single industry in excess of 10% of total loans.

Related Party Loans. As of September 30, 2025, and December 31, 2024, loans outstanding to directors, officers and their affiliates totaled $100 thousand and $266 thousand, respectively. All transactions between the Company and such related parties are conducted in the ordinary course of business and made on the same terms and conditions as similar transactions with unaffiliated persons.

Nonperforming Assets and Nonaccrual and Past Due Loans. The Company has several procedures in place to assist it in maintaining the overall quality of its loan portfolio. The Company has established underwriting guidelines to be followed by its officers, including requiring appraisals on loans collateralized by real estate. The Company also monitors its delinquency levels for any negative or adverse trends. Nevertheless, the Company’s loan portfolio could become subject to increasing pressures from deteriorating borrower credit due to general economic conditions.

The Company generally places a loan on nonaccrual status and ceases accruing interest when the payment of principal or interest is delinquent for 90 days, or earlier in some cases; unless the loan is in the process of collection and the underlying collateral fully supports the carrying value of the loan. 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.

With respect to potential problem loans, an evaluation of the borrower’s overall financial condition is made, together with an appraisal for loans collateralized by real estate, to determine the need, if any, for possible write-downs or appropriate additions to the allowance for credit losses.

An aging analysis of past due loans, segregated by category of loan, is presented below:


	September 30, 2025
	Loans Past Due and Still Accruing
	30-89 Days		90 or More Days		Total Past Due Loans		Nonaccrual Loans		Current Loans		Total Loans
	(Dollars in thousands)
Construction, land development and other land loans	$	11,658	$	—	$	11,658	$	151	$	2,853,471	$	2,865,280
Warehouse Purchase Program loans		—		—		—		—		1,278,178		1,278,178
Agriculture and agriculture real estate (includes farmland)		1,604		—		1,604		17,079		1,000,906		1,019,589
1-4 family (includes home equity) (1)		45,737		248		45,985		49,832		8,214,822		8,310,639
Commercial real estate (includes multi-family residential)		5,894		—		5,894		5,314		5,785,729		5,796,937
Commercial and industrial		6,572		—		6,572		32,133		2,352,414		2,391,119
Consumer and other		210		20		230		1,020		364,777		366,027
Total	$	71,675	$	268	$	71,943	$	105,529	$	21,850,297	$	22,027,769


	December 31, 2024
	Loans Past Due and Still Accruing
	30-89 Days		90 or More Days		Total Past Due Loans		Nonaccrual Loans		Current Loans		Total Loans
	(Dollars in thousands)
Construction, land development and other land loans	$	21,464	$	267	$	21,731	$	2,079	$	2,835,471	$	2,859,281
Warehouse Purchase Program loans		—		—		—		—		1,080,903		1,080,903
Agriculture and agriculture real estate (includes farmland)		4,554		575		5,129		2,634		1,025,783		1,033,546
1-4 family (includes home equity) (1)		49,391		—		49,391		42,048		8,396,150		8,487,589
Commercial real estate (includes multi-family residential)		15,692		—		15,692		18,455		5,766,838		5,800,985
Commercial and industrial		26,852		1,347		28,199		8,348		2,471,541		2,508,088
Consumer and other		478		—		478		83		378,256		378,817
Total	$	118,431	$	2,189	$	120,620	$	73,647	$	21,954,942	$	22,149,209

(1)

Includes $11.3 million and $10.7 million of residential mortgage loans held for sale at September 30, 2025, and December 31, 2024, respectively.

The Company had $119.6 million in nonperforming assets at September 30, 2025, compared with $81.5 million at December 31, 2024. Nonperforming assets were 0.54% of total loans and other real estate at September 30, 2025, and 0.37% of total loans and other real estate at December 31, 2024. The Company had $105.5 million in nonaccrual loans at September 30, 2025, compared with $73.6 million at December 31, 2024.

Acquired Loans. Acquired loans were preliminarily recorded at fair value based on a discounted cash flow valuation methodology that considers, among other things, interest rates, projected default rates, loss given default, and recovery rates. Projected default rates, loss given default, and recovery rates for purchased credit deteriorated (“PCD”) loans primarily impact the related allowance, as opposed to the fair value mark. During the valuation process, the Company identified PCD and Non-PCD loans in the acquired loan portfolios. Loans acquired with evidence of credit quality deterioration since origination as of the acquisition date were accounted for as PCD. PCD loan identification considers the following factors: payment history and past due status, debt service coverage, loan grading, collateral values and other factors that may indicate deterioration of credit quality as of the acquisition date when compared to the origination date. Non-PCD loan identification considers the following factors: account types, remaining terms, annual interest rates or coupons, current market rates, interest types, past delinquencies, timing of principal and interest payments, loan to value ratios, loss exposures and remaining balances. Accretion of purchased discounts on PCD and Non-PCD loans will be recognized based on payment structure and the contractual maturity of individual loans.

PCD Loans. The recorded investment in PCD loans included in the consolidated balance sheet and the related outstanding balance as of the dates indicated are presented in the table below. The outstanding balance represents the total amount owed as of September 30, 2025, and December 31, 2024.

Income recognition on PCD loans is subject to the timing and amount of future cash flows. PCD loans for which the Company is accruing interest income are not considered nonperforming or impaired. The PCD discount reflected above as of September 30, 2025, represents the amount of discount available to be recognized as income.

Non-PCD Loans. The recorded investment in Non-PCD loans included in the consolidated balance sheet and the related outstanding balance as of the dates indicated are presented in the table below. The outstanding balance represents the total amount owed as of September 30, 2025, and December 31, 2024.

Credit Quality Indicators. As part of the ongoing monitoring of the credit quality of the Company’s loan portfolio and methodology for calculating the allowance for credit losses, management assigns and tracks loan grades to be used as credit quality indicators. The following is a general description of the loan grades used:

Grade 1—Credits in this category have risk potential that is virtually nonexistent. These loans may be secured by insured certificates of deposit, insured savings accounts, U.S. Government securities and highly rated municipal bonds.

Grade 2—Credits in this category are of the highest quality. These borrowers represent top rated companies and individuals with unquestionable financial standing with excellent global cash flow coverage, net worth, liquidity and collateral coverage.

Grade 3—Credits in this category are not immune from risk but are well protected by the collateral and paying capacity of the borrower. These loans may exhibit a minor unfavorable credit factor, but the overall credit is sufficiently strong to minimize the possibility of loss.

Grade 4—Credits in this category are considered to be of acceptable credit quality with moderately greater risk than Grade 3 and receiving closer monitoring. Loans in this category have sources of repayment that remain sufficient to preclude a larger than normal probability of default and secondary sources are likewise currently of sufficient quantity, quality, and liquidity to protect the Company against loss of principal and interest. These borrowers have specific risk factors, but the overall strength of the credit is acceptable based on other mitigating credit and/or collateral factors and can repay the debt in the normal course of business.

Grade 5—Credits in this category constitute an undue and unwarranted credit risk; however, the factors do not rise to a level of substandard. These credits have potential weaknesses and/or declining trends that, if not corrected, could expose the Company to risk at a future date. These loans are monitored on the Company’s internally-generated watch list and evaluated on a quarterly basis.

Grade 6—Credits in this category are considered “substandard” but “non-impaired” loans in accordance with regulatory guidelines. Loans in this category have well-defined weakness that, if not corrected, could make default of principal and interest possible. Loans in this category are still accruing interest and may be dependent upon secondary sources of repayment and/or collateral liquidation.

Grade 7—Credits in this category are deemed “substandard” and “impaired” pursuant to regulatory guidelines. As such, the Company has determined that it is probable that less than 100% of the contractual principal and interest will be collected. These loans are individually evaluated for a specific reserve and will typically have the accrual of interest stopped.

Grade 8—Credits in this category include “doubtful” loans in accordance with regulatory guidance. Such loans are no longer accruing interest and factors indicate a loss is imminent. These loans are also deemed “impaired.” While a specific reserve may be in place while the loan and collateral are being evaluated, these loans are typically charged down to an amount the Company estimates is collectible.

Grade 9—Credits in this category are deemed a “loss” in accordance with regulatory guidelines and have been charged off or charged down. The Company may continue collection efforts and may have partial recovery in the future.

The following tables present loans by risk grade, by category of loan and year of origination/renewal at September 30, 2025.


	Term Loans
	Amortized Cost Basis by Origination Year
	2025		2024		2023		2022		2021		Prior		Revolving Loans		Revolving Loans Converted to Term Loans		Total
	(Dollars in thousands)

Construction, Land Development and Other Land Loans
Grade 1	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Grade 2		—		—		488		—		—		12		—		—		500
Grade 3		589,779		459,421		298,232		312,702		149,865		53,801		116,613		8,974		1,989,387
Grade 4		58,453		117,445		230,542		252,189		69,034		17,181		46,564		—		791,408
Grade 5		129		—		13		—		342		5,105		869		—		6,458
Grade 6		7,110		521		—		—		143		451		—		—		8,225
Grade 7		—		—		—		79		—		8		—		—		87
Grade 8		—		—		—		—		—		—		—		—		—
Grade 9		—		—		—		—		—		—		—		—		—
PCD Loans		11,713		11,398		7,205		22,007		5,194		3,115		8,583		—		69,215
Total	$	667,184	$	588,785	$	536,480	$	586,977	$	224,578	$	79,673	$	172,629	$	8,974	$	2,865,280

Current-period gross write-offs	$	—	$	82	$	92	$	—	$	73	$	—	$	—	$	—	$	247

Agriculture and Agriculture Real Estate (includes Farmland)
Grade 1	$	3,398	$	537	$	232	$	6	$	2	$	—	$	9,439	$	—	$	13,614
Grade 2		—		—		6		45		—		536		—		—		587
Grade 3		112,360		93,723		65,661		154,868		77,795		106,524		158,894		—		769,825
Grade 4		46,947		30,227		13,992		26,236		25,918		14,788		40,170		—		198,278
Grade 5		1,158		1,700		44		232		568		1,314		—		—		5,016
Grade 6		—		6		—		—		—		157		—		—		163
Grade 7		—		1,398		—		1,513		—		428		250		—		3,589
Grade 8		—		—		—		—		—		—		—		—		—
Grade 9		—		—		—		—		—		—		—		—		—
PCD Loans		352		13,833		17		2,319		1,395		5,066		5,535		—		28,517
Total	$	164,215	$	141,424	$	79,952	$	185,219	$	105,678	$	128,813	$	214,288	$	—	$	1,019,589

Current-period gross write-offs	$	—	$	29	$	5	$	—	$	8	$	5	$	—	$	—	$	47

1-4 Family (includes Home Equity) (1)
Grade 1	$	—	$	—	$	69	$	135	$	—	$	106	$	—	$	—	$	310
Grade 2		—		—		501		315		137		1,875		—		—		2,828
Grade 3		343,512		536,660		1,501,860		2,049,649		1,753,079		1,792,583		93,287		5,611		8,076,241
Grade 4		14,681		10,799		17,914		20,904		26,707		63,043		5,360		341		159,749
Grade 5		131		3,520		1,191		2,209		2,545		1,767		76		—		11,439
Grade 6		—		558		478		492		198		2,613		—		—		4,339
Grade 7		—		394		5,319		16,875		8,316		18,644		—		95		49,643
Grade 8		—		—		—		—		—		—		—		—		—
Grade 9		—		—		—		—		—		—		—		—		—
PCD Loans		47		29		1,124		2,789		278		1,823		—		—		6,090
Total	$	358,371	$	551,960	$	1,528,456	$	2,093,368	$	1,791,260	$	1,882,454	$	98,723	$	6,047	$	8,310,639

Current-period gross write-offs	$	—	$	—	$	952	$	824	$	76	$	35	$	442	$	—	$	2,329


	Term Loans
	Amortized Cost Basis by Origination Year
	2025		2024		2023		2022		2021		Prior		Revolving Loans		Revolving Loans Converted to Term Loans		Total
	(Dollars in thousands)

Commercial Real Estate (includes Multi-Family Residential)
Grade 1	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Grade 2		385		—		—		460		—		614		6,075		—		7,534
Grade 3		302,100		318,680		372,272		779,374		669,278		1,028,034		65,940		321		3,535,999
Grade 4		123,320		51,041		96,359		539,158		256,554		598,462		11,010		—		1,675,904
Grade 5		3,488		26,989		1,007		8,651		14,172		181,698		3,343		—		239,348
Grade 6		4,705		27,965		4,913		16,648		1,639		74,275		—		—		130,145
Grade 7		—		1,023		—		1,250		699		793		—		—		3,765
Grade 8		—		—		—		—		—		—		—		—		—
Grade 9		—		—		—		—		—		—		—		—		—
PCD Loans		24,926		32,882		15,675		48,861		42,060		39,838		—		—		204,242
Total	$	458,924	$	458,580	$	490,226	$	1,394,402	$	984,402	$	1,923,714	$	86,368	$	321	$	5,796,937

Current-period gross write-offs	$	—	$	74	$	342	$	194	$	941	$	—	$	50	$	—	$	1,601

Commercial and Industrial
Grade 1	$	30,044	$	18,740	$	3,319	$	884	$	1,933	$	660	$	44,881	$	—	$	100,461
Grade 2		278		1,100		483		6,513		—		1,537		10,423		—		20,334
Grade 3		253,094		242,026		153,490		121,642		68,176		201,749		876,103		642		1,916,922
Grade 4		26,305		25,688		25,340		24,109		5,302		19,371		75,851		746		202,712
Grade 5		133		1,073		140		17,459		424		—		11,716		—		30,945
Grade 6		1,945		1,283		5,345		2,989		420		205		39,483		—		51,670
Grade 7		95		3,680		3,735		217		60		2,367		20,828		—		30,982
Grade 8		—		—		—		—		—		—		—		—		—
Grade 9		—		—		—		—		—		—		—		—		—
PCD Loans		13,770		1,162		667		4,789		752		1,752		14,129		72		37,093
Total	$	325,664	$	294,752	$	192,519	$	178,602	$	77,067	$	227,641	$	1,093,414	$	1,460	$	2,391,119

Current-period gross write-offs	$	—	$	664	$	3,253	$	422	$	202	$	85	$	1,756	$	—	$	6,382

Consumer and Other
Grade 1	$	22,431	$	8,376	$	2,952	$	948	$	791	$	175	$	1,526	$	—	$	37,199
Grade 2		10,101		99,717		10,407		13,707		—		1,719		5,230		—		140,881
Grade 3		38,389		18,198		16,359		25,632		14,893		10,037		36,378		1		159,887
Grade 4		104		534		34		39		830		16,077		8,152		—		25,770
Grade 5		—		—		1,097		—		—		—		162		—		1,259
Grade 6		—		—		—		—		—		—		—		—		—
Grade 7		—		—		27		—		—		—		989		—		1,016
Grade 8		—		—		—		—		—		—		—		—		—
Grade 9		—		—		—		—		—		—		—		—		—
PCD Loans		—		—		—		—		9		4		2		—		15
Total	$	71,025	$	126,825	$	30,876	$	40,326	$	16,523	$	28,012	$	52,439	$	1	$	366,027

Current-period gross write-offs	$	4,652	$	58	$	81	$	54	$	6	$	118	$	98	$	5	$	5,072


	Term Loans
	Amortized Cost Basis by Origination Year
	2025		2024		2023		2022		2021		Prior		Revolving Loans		Revolving Loans Converted to Term Loans		Total
	(Dollars in thousands)

Warehouse Purchase Program
Grade 1	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Grade 2		—		—		—		—		—		—		—		—		—
Grade 3		1,278,178		—		—		—		—		—		—		—		1,278,178
Grade 4		—		—		—		—		—		—		—		—		—
Grade 5		—		—		—		—		—		—		—		—		—
Grade 6		—		—		—		—		—		—		—		—		—
Grade 7		—		—		—		—		—		—		—		—		—
Grade 8		—		—		—		—		—		—		—		—		—
Grade 9		—		—		—		—		—		—		—		—		—
PCD Loans		—		—		—		—		—		—		—		—		—
Total	$	1,278,178	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	1,278,178

Current-period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Total
Grade 1	$	55,873	$	27,653	$	6,572	$	1,973	$	2,726	$	941	$	55,846	$	—	$	151,584
Grade 2		10,764		100,817		11,885		21,040		137		6,293		21,728		—		172,664
Grade 3		2,917,412		1,668,708		2,407,874		3,443,867		2,733,086		3,192,728		1,347,215		15,549		17,726,439
Grade 4		269,810		235,734		384,181		862,635		384,345		728,922		187,107		1,087		3,053,821
Grade 5		5,039		33,282		3,492		28,551		18,051		189,884		16,166		—		294,465
Grade 6		13,760		30,333		10,736		20,129		2,400		77,701		39,483		—		194,542
Grade 7		95		6,495		9,081		19,934		9,075		22,240		22,067		95		89,082
Grade 8		—		—		—		—		—		—		—		—		—
Grade 9		—		—		—		—		—		—		—		—		—
PCD Loans		50,808		59,304		24,688		80,765		49,688		51,598		28,249		72		345,172
Total	$	3,323,561	$	2,162,326	$	2,858,509	$	4,478,894	$	3,199,508	$	4,270,307	$	1,717,861	$	16,803	$	22,027,769

Current-period gross write-offs	$	4,652	$	907	$	4,725	$	1,494	$	1,306	$	243	$	2,346	$	5	$	15,678

(1)

Includes $11.3 million of residential mortgage loans held for sale at September 30, 2025.

Allowance for Credit Losses on Loans. The allowance for credit losses is adjusted through charges to earnings in the form of a provision for credit losses. Management has established an allowance for credit losses which it believes is adequate to cover expected losses in the Company’s loan portfolio as of September 30, 2025. The amount of the allowance for credit losses on loans is affected by the following: (1) charge-offs of loans that occur when loans are deemed uncollectible and decrease the allowance, (2) recoveries on loans previously charged off that increase the allowance, (3) provisions for credit losses charged to earnings that increase the allowance, and (4) provision releases returned to earnings that decrease the allowance. Based on an evaluation of the loan portfolio and consideration of the factors listed below, management presents a quarterly review of the allowance for credit losses to the Bank’s Board of Directors, indicating any change in the allowance since the last review and any recommendations as to adjustments in the allowance. Although management believes it uses the best information available to make determinations with respect to the allowance for credit losses, future adjustments may be necessary if economic conditions or borrower performance differ from the assumptions used in making the initial determinations.

The Company’s allowance for credit losses on loans consists of two components: (1) a specific valuation allowance based on expected losses on specifically identified loans and (2) a general valuation allowance based on historical lifetime loan loss experience, current economic conditions, reasonable and supportable forecasted economic conditions and other qualitative risk factors both internal and external to the Company.

In setting the specific valuation allowance, the Company follows a loan review program to evaluate the credit risk in the total loan portfolio and assigns risk grades to each loan. Through this loan review process, the Company maintains an internal list of impaired loans, which along with the delinquency list of loans, helps management assess the overall quality of the loan portfolio and the adequacy of the allowance for credit losses. All loans that have been identified as impaired are reviewed on a quarterly basis in order to determine whether a specific reserve is required. For certain impaired loans, the Company allocates a specific loan loss reserve primarily based on the value of the collateral securing the impaired loan in accordance with CECL. The specific reserves are determined on an individual loan basis. Loans for which specific reserves are provided are excluded from the general valuation allowance described below.

In connection with this review of the loan portfolio, the Company considers risk elements attributable to particular loan types or categories in assessing the quality of individual loans. Some of the risk elements include:

In addition, for each category, the Company considers secondary sources of income and the financial strength and credit history of the borrower and any guarantors.

In determining the amount of the general valuation allowance, management considers factors such as historical lifetime loan loss experience, concentration risk of specific loan types, the volume, growth and composition of the Company’s loan portfolio, current economic conditions and reasonable and supportable forecasted economic conditions that may affect borrower ability to pay and the value of collateral, the evaluation of the Company’s loan portfolio through its internal loan review process, other qualitative risk factors both internal and external to the Company and other relevant factors in accordance with CECL. Historical lifetime loan loss experience is determined by utilizing an open-pool (“cumulative loss rate”) methodology. Adjustments to the historical lifetime loan loss experience are made for differences in current loan pool risk characteristics such as portfolio concentrations, delinquency, non-accrual, and watch list levels, as well as changes in current and forecasted economic conditions such as unemployment rates, property and collateral values, and other indices relating to economic activity. The utilization of reasonable and supportable forecasts includes an immediate reversion to lifetime historical loss rates. Based on a review of these factors for each loan type, the Company applies an estimated percentage to the outstanding balance of each loan type, excluding any loan that has a specific reserve. Allocation of a portion of the allowance to one category of loans does not preclude its availability to cover expected losses in other categories.

The following table details activity in the allowance for credit losses on loans by category of loan for the three and nine months ended September 30, 2025 and 2024.


	Construction, Land Development and Other Land Loans			Agriculture and Agriculture Real Estate (includes Farmland)			1-4 Family (includes Home Equity)			Commercial Real Estate (includes Multi-Family Residential)			Commercial and Industrial			Consumer and Other			Total
	(Dollars in thousands)
Allowance for credit losses on loans:
Three Months Ended
Balance June 30, 2025	$	77,818		$	26,848		$	82,105		$	89,121		$	62,256		$	7,936		$	346,084
Provision for credit losses on loans		(520	)		(3,083	)		(700	)		(4,892	)		8,216			979			—
Charge-offs		(166	)		(10	)		(861	)		(1,102	)		(3,804	)		(1,569	)		(7,512	)
Recoveries		132			50			8			87			463			314			1,054
Net (charge-offs) recoveries		(34	)		40			(853	)		(1,015	)		(3,341	)		(1,255	)		(6,458	)
Balance September 30, 2025	$	77,264		$	23,805		$	80,552		$	83,214		$	67,131		$	7,660		$	339,626

Nine Months Ended
Balance December 31, 2024	$	77,984		$	27,693		$	80,735		$	92,147		$	65,500		$	7,746		$	351,805
Provision for credit losses on loans		(845	)		(3,942	)		2,063			(7,685	)		6,346			4,063			—
Charge-offs		(247	)		(47	)		(2,329	)		(1,601	)		(6,382	)		(5,072	)		(15,678	)
Recoveries		372			101			83			353			1,667			923			3,499
Net (charge-offs) recoveries		125			54			(2,246	)		(1,248	)		(4,715	)		(4,149	)		(12,179	)
Balance September 30, 2025	$	77,264		$	23,805		$	80,552		$	83,214		$	67,131		$	7,660		$	339,626

Allowance for credit losses on loans:
Three Months Ended
Balance June 30, 2024	$	76,776		$	29,479		$	80,689		$	95,728		$	70,112		$	7,068		$	359,852
Provision for credit losses on loans		(633	)		(450	)		1,442			(921	)		(2,216	)		2,778			—
Charge-offs		(378	)		(109	)		(442	)		(297	)		(3,746	)		(1,568	)		(6,540	)
Recoveries		—			225			33			39			437			351			1,085
Net (charge-offs) recoveries		(378	)		116			(409	)		(258	)		(3,309	)		(1,217	)		(5,455	)
Balance September 30, 2024	$	75,765		$	29,145		$	81,722		$	94,549		$	64,587		$	8,629		$	354,397

Nine Months Ended
Balance December 31, 2023	$	87,775		$	11,380		$	77,652		$	88,664		$	59,832		$	7,059		$	332,362
Initial allowance on loans purchased with credit deterioration		942			14,309			344			4,306			6,176			1			26,078
Provision for credit losses		(12,467	)		3,577			5,017			1,439			4,948			5,409			7,923
Charge-offs		(486	)		(631	)		(1,336	)		(808	)		(8,283	)		(4,715	)		(16,259	)
Recoveries		1			510			45			948			1,914			875			4,293
Net (charge-offs) recoveries		(485	)		(121	)		(1,291	)		140			(6,369	)		(3,840	)		(11,966	)
Balance September 30, 2024	$	75,765		$	29,145		$	81,722		$	94,549		$	64,587		$	8,629		$	354,397

The allowance for credit losses on loans as of September 30, 2025, totaled $339.6 million or 1.54% of total loans, including acquired loans with discounts, a decrease of $12.2 million or 3.5% compared to the allowance for credit losses on loans totaling $351.8 million or 1.59% of total loans, including acquired loans with discounts, as of December 31, 2024.

There was no provision for credit losses for the three and nine months ended September 30, 2025, compared with no provision for credit losses for the three months ended September 30, 2024 and a $9.1 million provision for credit losses for the nine months ended September 30, 2024, related to the merger of Lone Star State Bancshares, Inc. (“Lone Star”) into Bancshares and the merger of Lone Star State Bank of West Texas (“Lone Star Bank”) into the Bank, both effective on April 1, 2024 (collectively, the “Lone Star Merger”). As a result of the loans acquired in the Lone Star Merger, the second quarter of 2024 included a $7.9 million provision for credit losses on loans and a $1.2 million provision for credit losses on off-balance sheet credit exposures.

Net charge-offs were $6.5 million for the three months ended September 30, 2025, compared with net charge-offs of $5.5 million for the three months ended September 30, 2024. For the three months ended September 30, 2025, $4.5 million of reserves on resolved PCD loans without any related charge-offs were released to the general reserve.

Net charge-offs were $12.2 million for the nine months ended September 30, 2025, compared with $12.0 million for the nine months ended September 30, 2024. For the nine months ended September 30, 2025, $15.0 million of reserves on resolved PCD loans without any related charge-offs were released to the general reserve.

Allowance for Credit Losses on Off-Balance Sheet Credit Exposures. The allowance for credit losses on off-balance sheet credit exposures estimates expected credit losses over the contractual period in which there is exposure to credit risk via a contractual obligation to extend credit, except when an obligation is unconditionally cancellable by the Company. The allowance is adjusted by provisions for credit losses charged to earnings that increase the allowance, or by provision releases returned to earnings that decrease the allowance. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on the commitments expected to fund. The estimate of commitments expected to fund is affected by historical analysis of utilization rates. The expected credit loss rates applied to the commitments expected to fund are affected by the general valuation allowance utilized for outstanding balances with the same underlying assumptions and drivers. As of September 30, 2025, and December 31, 2024, the Company had $37.6 million in allowance for credit losses on off-balance sheet credit exposures. The allowance for credit losses on off-balance sheet credit exposures is a separate line item on the Company’s consolidated balance sheet. As of September 30, 2025, the Company had $1.42 billion in commitments expected to fund.

Loan Modifications Made to Borrowers Experiencing Financial Difficulty. The Company evaluates all restructurings, including restructurings for borrowers experiencing financial difficulty, to determine whether they result in a new loan or a continuation of an existing loan. In accordance with CECL, the Company only establishes a specific reserve for modifications to borrowers experiencing financial difficulty when the loan is identified as impaired. The effect of most modifications of loans made to borrowers experiencing financial difficulty is already included in the allowance for credit losses because of the measurement methodologies used to estimate the allowance. The Company adjusts the terms of loans for certain borrowers when it believes such changes will help its customers manage their loan obligations and increase the collectability of the loans.

Modifications of loans made to borrowers experiencing financial difficulty may include but are not limited to changes in committed loan amount, interest rate, amortization, note maturity, borrower, guarantor, collateral, forbearance, forgiveness of principal or interest, and other actions intended to minimize economic loss and to avoid foreclosure or repossession of collateral. The approval of modifications of loans for borrowers experiencing financial difficulty is handled on a case-by-case basis.

The following table displays the amortized cost of loans that were both experiencing financial difficulty and modified during the three and nine months ended September 30, 2025, and 2024 presented by category of loan and type of modification.


	Term Extension		Interest Rate Reduction		Total		Percent of Total Class of Loans
	(Dollars in thousands)
Three Months Ended September 30, 2025
Commercial real estate (includes multi-family residential)	$	—	$	—	$	—		0.0	%
Agriculture and agriculture real estate (includes farmland)		—		—		—		0.0	%
Total	$	—	$	—	$	—		0.0	%

Nine Months Ended September 30, 2025
Commercial real estate (includes multi-family residential)	$	618	$	22,972	$	23,590		0.4	%
Agriculture and agriculture real estate (includes farmland)		134		—		134		0.0	%
Total	$	752	$	22,972	$	23,724		0.4	%


	Term Extension		Interest Rate Reduction		Total		Percent of Total Class of Loans
	(Dollars in thousands)
Three Months Ended September 30, 2024
Commercial and industrial	$	7,163	$	—	$	7,163		0.3	%
Agriculture and agriculture real estate (includes farmland)		950		—		950		0.1	%
Total	$	8,113	$	—	$	8,113		0.2	%

Nine Months Ended September 30, 2024
Commercial and industrial	$	2,768	$	—	$	2,768		0.1	%
Construction, land development and other land loans	$	7,163	$	—	$	7,163		0.3	%
Agriculture and agriculture real estate (includes farmland)		12,600		—		12,600		1.2	%
Total	$	22,531	$	—	$	22,531		0.4	%

The financial effects of the modifications of loans made to borrowers experiencing financial difficulty were not significant during the three and nine months ended September 30, 2025, and 2024. Furthermore, such modifications did not significantly impact the Company’s determination of the allowance for credit losses during those periods.

The Company did not have any loans made to borrowers experiencing financial difficulty that were modified during the three and nine months ended September 30, 2025, that subsequently defaulted and were modified in the twelve months prior to default. Payment default is defined as movement to nonperforming status, foreclosure or charge-off, whichever occurs first.