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Loans and Allowance for Loan Losses
 3 Months Ended
Mar. 31, 2013
Loans and Allowance for Loan Losses [Abstract]  
LOANS AND ALLOWANCE FOR LOAN LOSSES

(4) LOANS AND ALLOWANCE FOR LOAN LOSSES

The following is a schedule of loans outstanding by category:

 

                                                 
    March 31, 2013     December 31, 2012     March 31, 2012  
    Amount     Percent     Amount     Percent     Amount     Percent  
    (Dollars in thousands)  

Commercial and industrial

   $ 518,438       16.10 %    $ 559,274       17.25 %    $ 526,028       17.25 % 

Oil & gas production & equipment

     154,392       4.79       154,380       4.76       129,710       4.25  

Agriculture

     96,094       2.98       93,274       2.88       90,659       2.97  

State and political subdivisions:

                                                

Taxable

     9,272       0.29       9,412       0.29       7,332       0.24  

Tax-exempt

     13,034       0.41       13,194       0.41       15,810       0.52  

Real estate:

                                                

Construction

     231,770       7.20       226,102       6.97       200,609       6.58  

Farmland

     124,347       3.86       125,033       3.86       107,751       3.53  

One to four family residences

     680,129       21.12       669,230       20.64       660,725       21.67  

Multifamily residential properties

     47,506       1.48       50,721       1.56       40,164       1.32  

Commercial

     1,084,864       33.69       1,068,445       32.95       1,004,596       32.94  

Consumer

     240,600       7.47       253,002       7.80       244,171       8.01  

Other (not classified above)

     19,521       0.61       20,360       0.63       21,821       0.72  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total loans

   $ 3,219,967       100.00 %    $ 3,242,427       100.00 %    $ 3,049,376       100.00 % 
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Loans held for sale (included above)

   $ 10,287             $ 13,661             $ 15,585          
   

 

 

            

 

 

            

 

 

          

The Company’s loans are mostly to customers within Oklahoma and over 60% of the loans are secured by real estate. Credit risk on loans is managed through limits on amounts loaned to individual borrowers, underwriting standards and loan monitoring procedures. The amounts and types of collateral obtained, if any, to secure loans are based upon the Company’s underwriting standards and management’s credit evaluation. Collateral varies, but may include real estate, equipment, accounts receivable, inventory, livestock and securities. The Company’s interest in collateral is secured through filing mortgages and liens, and in some cases, by possession of the collateral.

Accounting policies related to appraisals, nonaccruals and charge-offs are disclosed in Footnote (1) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2012.

Nonperforming and Restructured Assets

Nonaccrual loans, accruing loans past due 90 days or more, and restructured loans are shown in the table below. Had nonaccrual loans performed in accordance with their original contract terms, the Company would have recognized additional interest income of approximately $301,000 for the three months ended March 31, 2013 and approximately $338,000 for the three months ended March 31, 2012.

At March 31, 2013, troubled debt restructurings were primarily due to the principal deferral restructuring from a customer whose loan was evaluated by management and determined to be well collateralized. Additionally, none of the concessions granted involved a principal reduction or a change from the current market rate of interest. Collateral value will be monitored periodically to evaluate possible impairment. The Company charges interest on principal balances outstanding during deferral periods. As a result, the current and future financial effects of the recorded balance of loans considered to be restructured were not considered to be material.

 

The following table is a summary of nonperforming and restructured assets:

 

                         
    March 31,     December 31,     March 31,  
    2013     2012     2012  
    (Dollars in thousands)  

Past due 90 days or more and still accruing

   $ 542     $ 537     $ 1,150  

Nonaccrual

     20,933       20,549       20,721  

Restructured

     17,792       17,866       18,483  
   

 

 

    

 

 

    

 

 

  

Total nonperforming and restructured loans

     39,267       38,952       40,354  

Other real estate owned and repossessed assets

     9,424       9,566       12,408  
   

 

 

    

 

 

    

 

 

  

Total nonperforming and restructured assets

   $ 48,691     $ 48,518     $ 52,762  
   

 

 

    

 

 

    

 

 

  

Nonperforming and restructured loans to total loans

     1.22 %      1.20 %      1.32 % 
   

 

 

    

 

 

    

 

 

  

Nonperforming and restructured assets to total assets

     0.84 %      0.81 %      0.92 % 
   

 

 

    

 

 

    

 

 

  

Loans are segregated into classes based upon the nature of the collateral and the borrower. These classes are used to estimate the credit risk component in the allowance for loan losses.

The following table is a summary of amounts included in nonaccrual loans, segregated by class of loans. Residential real estate refers to one-to-four family real estate.

 

                 
    March 31,
2013		     March 31,
2012		  
    (Dollars in thousands)  

Non-residential real estate

   $ 9,666     $ 9,768  

Residential real estate

     4,335       4,754  

Non-consumer non-real estate

     1,449       1,425  

Consumer non-real estate

     187       143  

Other loans

     3,052       1,464  

Acquired loans

     2,244       3,167  
   

 

 

    

 

 

  

Total

   $ 20,933     $ 20,721  
   

 

 

    

 

 

  

The following table presents an age analysis of past due loans, segregated by class of loans:

 

                                                 
    Age Analysis of Past Due Receivables  
    30-89
Days  Past
Due		     90 Days
and
Greater		     Total Past
Due Loans		     Current
Loans		     Total
Loans		     Accruing
Loans
90 Days  or
More Past
Due		  
    (Dollars in thousands)  

As of March 31, 2013

        

Non-residential real estate

   $ 3,293     $ 1,945     $ 5,238     $ 1,238,804     $ 1,244,042     $ 18  

Residential real estate

     4,438       868       5,306       768,487       773,793       268  

Non-consumer non-real estate

     2,100       214       2,314       748,287       750,601       74  

Consumer non-real estate

     1,994       184       2,178       209,142       211,320       126  

Other loans

     2,152       1,406       3,558       140,468       144,026       —    

Acquired loans

     1,993       328       2,321       93,864       96,185       56  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total

   $ 15,970     $ 4,945     $ 20,915     $ 3,199,052     $ 3,219,967     $ 542  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

As of March 31, 2012

        

Non-residential real estate

   $ 3,924     $ 849     $ 4,773     $ 1,097,141     $ 1,101,914     $ 192  

Residential real estate

     3,218       1,915       5,133       690,937       696,070       436  

Non-consumer non-real estate

     1,311       633       1,944       723,144       725,088       132  

Consumer non-real estate

     1,767       220       1,987       198,221       200,208       195  

Other loans

     1,414       1,352       2,766       160,722       163,488       59  

Acquired loans

     2,707       934       3,641       158,967       162,608       136  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total

   $ 14,341     $ 5,903     $ 20,244     $ 3,029,132     $ 3,049,376     $ 1,150  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

Impaired Loans

Loans are considered impaired when, based on current information and events, it is probable the Company will be unable to collect the full amount of scheduled principal and interest payments in accordance with the original contractual terms of the loan agreement. If a loan is impaired, a specific valuation allowance may be allocated, if necessary, so that the loan is reported net at the present value of future cash flows using the loan’s existing rate or the fair value of collateral if repayment is expected solely from the collateral.

The following table presents impaired loans, segregated by class of loans. No material amount of interest income was recognized on impaired loans subsequent to their classification as impaired.

 

                                 
    Impaired Loans  
    Unpaid
Principal
Balance		     Recorded
Investment
with  Allowance		     Related
Allowance		     Average
Recorded
Investment		  
    (Dollars in thousands)  

As of March 31, 2013

        

Non-residential real estate

   $ 27,949     $ 26,417     $ 2,185     $ 26,814  

Residential real estate

     6,079       5,472       1,337       4,847  

Non-consumer non-real estate

     1,899       1,565       452       2,249  

Consumer non-real estate

     441       421       96       408  

Other loans

     3,736       3,094       267       2,648  

Acquired loans

     10,311       8,261       41       8,893  
   

 

 

    

 

 

    

 

 

    

 

 

  

Total

   $ 50,415     $ 45,230     $ 4,378     $ 45,859  
   

 

 

    

 

 

    

 

 

    

 

 

  

As of March 31, 2012

                                

Non-residential real estate

   $ 28,420     $ 27,558     $ 2,235     $ 22,887  

Residential real estate

     6,185       5,695       1,432       5,557  

Non-consumer non-real estate

     2,062       1,748       605       1,664  

Consumer non-real estate

     567       477       65       452  

Other loans

     1,880       1,524       320       2,666  

Acquired loans

     16,850       14,173       275       15,780  
   

 

 

    

 

 

    

 

 

    

 

 

  

Total

   $ 55,964     $ 51,175     $ 4,932     $ 49,006  
   

 

 

    

 

 

    

 

 

    

 

 

  

Credit Risk Monitoring and Loan Grading

The Company employs several means to monitor the risk in the loan portfolio including volume and severity of loan delinquencies, nonaccrual loans, internal grading of loans, historical loan loss experience, and economic conditions.

Loans are subject to an internal risk grading system which indicates the risk and acceptability of that loan. The loan grades used by the Company are for internal risk identification purposes and do not directly correlate to regulatory classification categories or any financial reporting definitions.

The general characteristics of the risk grades are disclosed in Footnote (5) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2012.

 

The following table presents internal loan grading by class of loans:

 

                                                 
    Internal Loan Grading  
    Grade  
    1     2     3     4     5     Total  
    (Dollars in thousands)  

As of March 31, 2013

                                                

Non-residential real estate

   $ 1,043,069     $ 165,295     $ 25,994     $ 9,684     $ —       $ 1,244,042  

Residential real estate

     670,352       84,644       14,140       4,657       —         773,793  

Non-consumer non-real estate

     647,162       97,110       4,800       1,529       —         750,601  

Consumer non-real estate

     198,107       10,912       1,923       374       4       211,320  

Other loans

     139,696       2,304       1,103       923       —         144,026  

Acquired loans

     74,939       14,936       4,009       2,301       —         96,185  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total

   $ 2,773,325     $ 375,201     $ 51,969     $ 19,468     $ 4     $ 3,219,967  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

As of March 31, 2012

                                                

Non-residential real estate.

   $ 951,016     $ 112,408     $ 28,721     $ 9,769     $ —       $ 1,101,914  

Residential real estate

     591,818       83,250       15,579       5,423       —         696,070  

Non-consumer non-real estate

     636,582       79,548       7,480       1,478       —         725,088  

Consumer non-real estate

     187,999       9,690       2,132       387       —         200,208  

Other loans

     158,729       2,775       1,725       259       —         163,488  

Acquired loans

     119,165       31,319       8,901       3,223       —         162,608  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total

   $ 2,645,309     $ 318,990     $ 64,538     $ 20,539     $ —       $ 3,049,376  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

The allowance for loan losses methodology is disclosed in Footnote (5) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2012.

The following table details activity in the ALLL by class of loans for the period presented. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories.

 

                                                         
    ALLL  
    Non-
Residential
Real Estate		     Residential
Real  Estate		     Non-
Consumer
Non-Real
Estate		     Consumer
Non-Real
Estate		     Other
Loans		     Acquired
Loans		     Total  
    (Dollars in thousands)  

Three Months Ended March 31, 2013

                                                        

Allowance for loan losses:

                                                        

Balance at December 31, 2012

   $ 14,969     $ 9,815     $ 9,385     $ 2,451     $ 1,885     $ 220     $ 38,725  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Charge-offs

     (18 )      (151 )      (36 )      (140 )      (139 )      (49 )      (533 ) 

Recoveries

     19       13       31       76       —         33       172  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net charge-offs

     1       (138 )      (5 )      (64 )      (139 )      (16 )      (361 ) 
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Provisions charged to operations

     361       244       (398 )      (3 )      76       20       300  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Balance at March 31, 2013

   $ 15,331     $ 9,921     $ 8,982     $ 2,384     $ 1,822     $ 224     $ 38,664  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Allowance for loan losses-ending balances:

                                                        

Individually evaluated for impairment

   $ 2,694     $ 2,123     $ 1,211     $ 290     $ 199     $ —       $ 6,517  

Collectively evaluated for impairment

     12,637       7,798       7,771       2,094       1,623       224       32,147  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Balance at March 31, 2013

   $ 15,331     $ 9,921     $ 8,982     $ 2,384     $ 1,822     $ 224     $ 38,664  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Loans-Ending balances:

                                                        

Individually evaluated for impairment

   $ 35,678     $ 18,797     $ 6,329     $ 2,301     $ 246     $ —       $ 63,351  

Collectively evaluated for impairment

     1,208,364       754,996       744,272       209,019       143,780       89,875       3,150,306  

Loans acquired with deteriorated credit quality

     —         —         —         —         —         6,310       6,310  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Balance at March 31, 2013

   $ 1,244,042     $ 773,793     $ 750,601     $ 211,320     $ 144,026     $ 96,185     $ 3,219,967  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Three Months Ended March 31, 2012

                                                        

Allowance for loan losses:

                                                        

Balance at December 31, 2011

   $ 13,948     $ 9,764     $ 9,156     $ 2,315     $ 1,886     $ 587     $ 37,656  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Charge-offs

     (121 )      (36 )      (17 )      (114 )      (180 )      (64 )      (532 ) 

Recoveries

     37       96       98       84       19       2       336  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net charge-offs

     (84 )      60       81       (30 )      (161 )      (62 )      (196 ) 
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Provisions charged to operations

     245       (62 )      (39 )      (2 )      125       (94 )      173  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Balance at March 31, 2012

   $ 14,109     $ 9,762     $ 9,198     $ 2,283     $ 1,850     $ 431     $ 37,633  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Allowance for loan losses-ending balances:

                                                        

Individually evaluated for impairment

   $ 3,085     $ 2,692     $ 1,741     $ 300     $ 183     $ —       $ 8,001  

Collectively evaluated for impairment

     11,024       7,070       7,457       1,983       1,667       431       29,632  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Balance at March 31, 2012

   $ 14,109     $ 9,762     $ 9,198     $ 2,283     $ 1,850     $ 431     $ 37,633  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Loans-Ending balances:

                                                        

Individually evaluated for impairment

   $ 38,489     $ 21,002     $ 8,958     $ 2,519     $ 147     $ —       $ 71,115  

Collectively evaluated for impairment

     1,063,425       675,068       716,130       197,689       163,341       150,484       2,966,137  

Loans acquired with deteriorated credit quality

     —         —         —         —         —         12,124       12,124  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Balance at March 31, 2012

   $ 1,101,914     $ 696,070     $ 725,088     $ 200,208     $ 163,488     $ 162,608     $ 3,049,376  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Transfers from Loans

Transfers from loans to other real estate owned and repossessed assets are non-cash transactions, and are not included in the statements of cash flow.

Transfers from loans to other real estate owned and repossessed assets during the periods presented are summarized as follows:

 

                 
    Three Months Ended
March  31,		  
    2013     2012  
    (Dollars in thousands)  

Other real estate owned

   $ 436     $ 659  

Repossessed assets

     209       180  
   

 

 

    

 

 

  

Total

   $ 645     $ 839