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Loans Held for Investment and Allowance for Credit Losses on Loans | 6 Months Ended
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Jun. 30, 2021
Receivables [Abstract] |
Loans Held for Investment and Allowance for Credit Losses on Loans |
(4) | LOANS HELD FOR INVESTMENT AND ALLOWANCE FOR CREDIT LOSSES ON LOANS
Loans held for investment are summarized by portfolio segment as follows:
| June 30, 2021 |  |  | December 31, 2020 |
| Amount |  |  | Amount |
| (Dollars in thousands) |
BancFirst |  |  |  |  |  |  |
Real estate: |  |  |  |  |  |  |
Commercial real estate owner occupied | $ | 661,530 |  |  | $ | 641,987 |
Commercial real estate non-owner occupied |  | 989,560 |  |  |  | 971,158 |
Construction and development < 60 months |  | 297,205 |  |  |  | 229,615 |
Construction residential real estate < 60 months |  | 208,210 |  |  |  | 206,195 |
Residential real estate first lien |  | 865,557 |  |  |  | 853,316 |
Residential real estate all other |  | 163,290 |  |  |  | 168,081 |
Farmland |  | 269,008 |  |  |  | 252,958 |
Commercial and agricultural non-real estate |  | 1,105,777 |  |  |  | 1,159,810 |
Consumer non-real estate |  | 371,557 |  |  |  | 355,405 |
Oil and gas |  | 130,459 |  |  |  | 179,355 |
Other loans (2) |  | 543,034 |  |  |  | 822,078 |
Pegasus Bank |  | 586,043 |  |  |  | 554,548 |
Total (1) | $ | 6,191,230 |  |  | $ | 6,394,506 |
(1) Excludes accrued interest receivable of $22.9 million at June 30, 2021 and $26.0 million at December 31, 2020, that is recorded in accrued interest receivable and other assets. |
(2) Includes PPP loans held for investment of $368.6 million, net of unamortized processing fees of $16.6 million at June 30, 2021 and $652.7 million, net of unamortized processing fees of $14.5 million at December 31, 2020. |
Other loans. Other loans consist of loans approved by the Small Business Administration (“SBA”), which include loans funded through the Paycheck Protection Program (“PPP”). Since PPP loans are fully guaranteed by the SBA, there is no expected credit loss related to these loans. In April 2020, the Company began originating loans to qualified small businesses under the PPP administered by the SBA. T he Company had processing fees, which were recognized as interest income related to the PPP loans totaling $11.9 million and $3.7 million during the three months ended June 30, 2021 and 2020, respectively and $21.7 million and $3.7 million during the six months ended June 30, 2021 and 2020, respectively. BancFirst’s loans are mostly to customers within Oklahoma and approximately 56% of the loans are secured by real estate. Credit risk on loans is managed through limits on amounts loaned to individual and related 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. Pegasus Bank’s loans are mostly to customers within Texas and approximately $297 million or 51% of the loans are secured by real estate at June 30, 2021. Pegasus Bank’s commercial and agricultural non-real estate loans were approximately $268 million at June 30, 2021 and approximately $262 million at December 31, 2020. BancFirst and Pegasus Bank’s commercial and agricultural non-real estate and oil and gas loan categories include upstream and midstream energy loans, and loans to companies that provide ancillary services to the energy industry, such as transportation, wellsite preparation contractors and equipment manufacturers. Energy loans are summarized as follows:
| June 30, 2021 |  |  | December 31, 2020 |
| Amount |  |  | Amount |
| (Dollars in thousands) |
BancFirst energy loans |  |  |  |  |  |  |
Upstream | $ | 141,651 |  |  | $ | 190,788 |
Midstream |  | 37,134 |  |  |  | 49,734 |
Ancillary services |  | 74,919 |  |  |  | 59,410 |
Pegasus Bank energy loans |  |  |  |  |  |  |
Upstream |  | 127,736 |  |  |  | 107,103 |
Midstream |  | 8,797 |  |  |  | 11,047 |
Ancillary services |  | 14,049 |  |  |  | 12,503 |
Total | $ | 404,286 |  |  | $ | 430,585 |
Accounting policies related to appraisals, and charge-offs are disclosed in Note (1) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. Troubled Debt Restructurings, Other Real Estate Owned and Repossessed Assets and Held for Sale Assets The following is a summary of troubled debt restructurings and other real estate owned and repossessed assets:
|  | June 30, |  |  | December 31, |
|  | 2021 |  |  | 2020 |
|  | (Dollars in thousands) |
Troubled debt restructurings |  | $ | 7,485 |  |  | $ | 7,784 |
Other real estate owned and repossessed assets |  | $ | 40,183 |  |  | $ | 32,480 |
The Company charges interest on principal balances outstanding on troubled debt restructurings during deferral periods. The current and future financial effects of the recorded balance of loans considered to be troubled debt restructurings were not considered to be material. During the first half of 2021, the Company completed the move to its new corporate headquarters and transferred approximately $2.4 million from premises and equipment to other real estate owned related to its previous headquarters. In addition, other real estate owned of approximately $2.5 million was purchased from the First National Bank and Trust Company of Vinita, Oklahoma. During the first half of 2021, the Company sold property held in other real estate owned for a total loss of $105,000, compared to a total gain of $2.3 million in the first half of 2020. Nonaccrual loans Had nonaccrual loans performed in accordance with their original contractual terms, the Company would have recognized additional interest income of approximately $1.2 million for the six months ended June 30, 2021 and approximately $983,000 for the six months ended June 30, 2020. Nonaccrual loans guaranteed by government agencies totaled approximately $3.5 million at June 30, 2021 and approximately $7.8 million at December 31, 2020. The following table is a summary of amounts included in nonaccrual loans, segregated by portfolio segment.
|  | June 30, 2021 |  |  | December 31, 2020 |
|  | (Dollars in thousands) |
BancFirst |  |  |  |  |  |  |  |
Real estate: |  |  |  |  |  |  |  |
Commercial real estate owner occupied |  | $ | 2,572 |  |  | $ | 1,404 |
Commercial real estate non-owner occupied |  |  | 422 |  |  |  | 4,719 |
Construction and development < 60 months |  |  | 88 |  |  |  | 95 |
Construction residential real estate < 60 months |  |  | — |  |  |  | — |
Residential real estate first lien |  |  | 3,518 |  |  |  | 3,615 |
Residential real estate all other |  |  | 1,188 |  |  |  | 1,362 |
Farmland |  |  | 6,354 |  |  |  | 7,901 |
Commercial and agricultural non-real estate |  |  | 13,185 |  |  |  | 12,782 |
Consumer non-real estate |  |  | 188 |  |  |  | 268 |
Oil and gas |  |  | — |  |  |  | — |
Other loans |  |  | 2,287 |  |  |  | 5,399 |
Pegasus Bank |  |  | — |  |  |  | — |
Total |  | $ | 29,802 |  |  | $ | 37,545 |
Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. The following table presents an age analysis of our loans held for investment:
|  | Age Analysis of Past Due Loans |
|  | 30-59 Days Past Due |  |  | 60-89 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 June 30, 2021 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
BancFirst |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial real estate owner occupied |  | $ | 604 |  |  | $ | — |  |  | $ | 1,012 |  |  | $ | 1,616 |  |  | $ | 659,914 |  |  | $ | 661,530 |  |  | $ | 80 |
Commercial real estate non-owner occupied |  |  | 205 |  |  |  | — |  |  |  | 112 |  |  |  | 317 |  |  |  | 989,243 |  |  |  | 989,560 |  |  |  | 37 |
Construction and development < 60 months |  |  | 53 |  |  |  | 1,605 |  |  |  | 137 |  |  |  | 1,795 |  |  |  | 295,410 |  |  |  | 297,205 |  |  |  | 137 |
Construction residential real estate < 60 months |  |  | 103 |  |  |  | — |  |  |  | — |  |  |  | 103 |  |  |  | 208,107 |  |  |  | 208,210 |  |  |  | — |
Residential real estate first lien |  |  | 3,639 |  |  |  | 447 |  |  |  | 3,989 |  |  |  | 8,075 |  |  |  | 857,482 |  |  |  | 865,557 |  |  |  | 2,070 |
Residential real estate all other |  |  | 1,195 |  |  |  | 40 |  |  |  | 1,536 |  |  |  | 2,771 |  |  |  | 160,519 |  |  |  | 163,290 |  |  |  | 458 |
Farmland |  |  | 1,036 |  |  |  | 989 |  |  |  | 4,327 |  |  |  | 6,352 |  |  |  | 262,656 |  |  |  | 269,008 |  |  |  | 157 |
Commercial and agricultural non-real estate |  |  | 3,780 |  |  |  | 2,821 |  |  |  | 8,393 |  |  |  | 14,994 |  |  |  | 1,090,783 |  |  |  | 1,105,777 |  |  |  | 638 |
Consumer non-real estate |  |  | 1,620 |  |  |  | 353 |  |  |  | 221 |  |  |  | 2,194 |  |  |  | 369,363 |  |  |  | 371,557 |  |  |  | 190 |
Oil and gas |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 130,459 |  |  |  | 130,459 |  |  |  | — |
Other loans |  |  | 1,472 |  |  |  | 478 |  |  |  | 2,102 |  |  |  | 4,052 |  |  |  | 538,982 |  |  |  | 543,034 |  |  |  | 619 |
Pegasus Bank |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 586,043 |  |  |  | 586,043 |  |  |  | — |
Total |  | $ | 13,707 |  |  | $ | 6,733 |  |  | $ | 21,829 |  |  | $ | 42,269 |  |  | $ | 6,148,961 |  |  | $ | 6,191,230 |  |  | $ | 4,386 |
As of December 31, 2020 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
BancFirst |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial real estate owner occupied |  | $ | 1,096 |  |  | $ | 108 |  |  | $ | 1,164 |  |  | $ | 2,368 |  |  | $ | 639,619 |  |  | $ | 641,987 |  |  | $ | — |
Commercial real estate non-owner occupied |  |  | 323 |  |  |  | — |  |  |  | 34 |  |  |  | 357 |  |  |  | 970,801 |  |  |  | 971,158 |  |  |  | 35 |
Construction and development < 60 months |  |  | 511 |  |  |  | 86 |  |  |  | — |  |  |  | 597 |  |  |  | 229,018 |  |  |  | 229,615 |  |  |  | — |
Construction residential real estate < 60 months |  |  | 1,106 |  |  |  | — |  |  |  | 282 |  |  |  | 1,388 |  |  |  | 204,807 |  |  |  | 206,195 |  |  |  | 282 |
Residential real estate first lien |  |  | 5,428 |  |  |  | 1,463 |  |  |  | 2,978 |  |  |  | 9,869 |  |  |  | 843,447 |  |  |  | 853,316 |  |  |  | 945 |
Residential real estate all other |  |  | 520 |  |  |  | 55 |  |  |  | 1,606 |  |  |  | 2,181 |  |  |  | 165,900 |  |  |  | 168,081 |  |  |  | 384 |
Farmland |  |  | 1,297 |  |  |  | 344 |  |  |  | 6,223 |  |  |  | 7,864 |  |  |  | 245,094 |  |  |  | 252,958 |  |  |  | 135 |
Commercial and agricultural non-real estate |  |  | 2,788 |  |  |  | 1,794 |  |  |  | 4,345 |  |  |  | 8,927 |  |  |  | 1,150,883 |  |  |  | 1,159,810 |  |  |  | 465 |
Consumer non-real estate |  |  | 2,154 |  |  |  | 501 |  |  |  | 534 |  |  |  | 3,189 |  |  |  | 352,216 |  |  |  | 355,405 |  |  |  | 386 |
Oil and gas |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 179,355 |  |  |  | 179,355 |  |  |  | — |
Other loans |  |  | 951 |  |  |  | 1,223 |  |  |  | 6,618 |  |  |  | 8,792 |  |  |  | 813,286 |  |  |  | 822,078 |  |  |  | 2,170 |
Pegasus Bank |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 554,548 |  |  |  | 554,548 |  |  |  | — |
Total |  | $ | 16,174 |  |  | $ | 5,574 |  |  | $ | 23,784 |  |  | $ | 45,532 |  |  | $ | 6,348,974 |  |  | $ | 6,394,506 |  |  | $ | 4,802 |
Due to the impacts of the COVID-19 pandemic, the Company had approximately $61.8 million in modified loans as of June 30, 2021 and $81.7 million in modified loans as of December 31, 2020, most of which were secured by commercial real estate. These modifications were undertaken in response to Section 4013 of the CARES Act and the regulatory intent outlined in the Interagency Statement on Loan Modifications by Financial Institutions Working with Customers Affected by the Coronavirus and to provide businesses financial flexibility until the economy has time to recover to a more normal level of activity. However, these modifications, which typically involve payment modifications and forbearance, also have the effect of delaying recognition of loans that may ultimately be permanently impaired. The timing and extent of such consequences are difficult to ascertain at this time and are dependent on the duration of the COVID-19 pandemic, the level and success of the government’s economic stimulus, and further regulatory guidance. These modified loans are included in Current Loans in the table above. Credit Quality Indicators The Company considers credit quality indicators to monitor the credit risk in the loan portfolio including volume and severity of loan delinquencies, nonaccrual loans, internal grading of loans, historical credit loss experience and economic conditions. An internal risk grading system is used to indicate the credit risk of loans. 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 and the table summarizing our gross loans held for investment by year of origination and internally assigned credit grades as of December 31, 2020, are disclosed in Note (5) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. The Company’s revolving loans that are converted to term loans are not material and therefore have not been presented. The following table summarizes our gross loans held for investment by year of origination and internally assigned credit grades as of June 30, 2021:
|  | Term Loans Amortized Cost Basis by Origination Year |  |  |  |
|  | 2021 |  | 2020 |  | 2019 |  | 2018 |  | 2017 |  | Prior |  | Revolving Loans Amortized Cost Basis |  | Total
|  | (Dollars in thousands)
As of June 30, 2021 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
BancFirst |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial real estate owner occupied |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Grade 1 |  | $66,327 |  | $135,671 |  | $83,146 |  | $53,559 |  | $36,961 |  | $112,760 |  | $11,507 |  | $499,931
Grade 2 |  | 17,354 |  | 38,028 |  | 30,351 |  | 10,695 |  | 9,710 |  | 40,707 |  | 4,904 |  | 151,749
Grade 3 |  | 3 |  | 3,905 |  | 27 |  | 266 |  | 476 |  | 2,621 |  | — |  | 7,298
Grade 4 |  | 349 |  | — |  | 921 |  | 539 |  | — |  | 436 |  | 307 |  | 2,552
Total commercial real estate owner occupied loans |  | 84,033 |  | 177,604 |  | 114,445 |  | 65,059 |  | 47,147 |  | 156,524 |  | 16,718 |  | 661,530
Commercial real estate non-owner occupied |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Grade 1 |  | 95,260 |  | 227,302 |  | 147,192 |  | 62,169 |  | 61,402 |  | 137,491 |  | 18,024 |  | 748,840
Grade 2 |  | 16,345 |  | 59,541 |  | 44,838 |  | 37,862 |  | 19,357 |  | 43,884 |  | 4,657 |  | 226,484
Grade 3 |  | 7,453 |  | — |  | 3,412 |  | 214 |  | 1,607 |  | 865 |  | — |  | 13,551
Grade 4 |  | — |  | — |  | 50 |  | 37 |  | — |  | 598 |  | — |  | 685
Total commercial real estate non-owner occupied loans |  | 119,058 |  | 286,843 |  | 195,492 |  | 100,282 |  | 82,366 |  | 182,838 |  | 22,681 |  | 989,560
Construction and development < 60 months |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Grade 1 |  | 91,143 |  | 63,018 |  | 66,976 |  | 11,381 |  | 2,547 |  | 3,210 |  | 10,454 |  | 248,729
Grade 2 |  | 12,579 |  | 12,938 |  | 12,391 |  | 2,187 |  | 1,811 |  | 773 |  | 2,128 |  | 44,807
Grade 3 |  | 1,753 |  | 1,690 |  | 130 |  | 7 |  | — |  | — |  | — |  | 3,580
Grade 4 |  | — |  | — |  | 61 |  | 8 |  | 20 |  | — |  | — |  | 89
Total construction and development < 60 months |  | 105,475 |  | 77,646 |  | 79,558 |  | 13,583 |  | 4,378 |  | 3,983 |  | 12,582 |  | 297,205
Construction residential real estate < 60 months |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Grade 1 |  | 101,482 |  | 69,169 |  | 52 |  | — |  | 20 |  | 30 |  | 7,264 |  | 178,017
Grade 2 |  | 14,182 |  | 14,919 |  | — |  | 109 |  | — |  | 437 |  | — |  | 29,647
Grade 3 |  | 546 |  | — |  | — |  | — |  | — |  | — |  | — |  | 546
Total construction residential real estate < 60 months |  | 116,210 |  | 84,088 |  | 52 |  | 109 |  | 20 |  | 467 |  | 7,264 |  | 208,210
Residential real estate first lien |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Grade 1 |  | 134,782 |  | 188,553 |  | 109,336 |  | 69,907 |  | 54,107 |  | 154,974 |  | — |  | 711,659
Grade 2 |  | 22,669 |  | 25,098 |  | 16,385 |  | 19,237 |  | 10,187 |  | 42,381 |  | — |  | 135,957
Grade 3 |  | 1,102 |  | 1,809 |  | 2,526 |  | 901 |  | 1,360 |  | 4,832 |  | — |  | 12,530
Grade 4 |  | 49 |  | 511 |  | 442 |  | 1,149 |  | 934 |  | 2,326 |  | — |  | 5,411
Total residential real estate first lien |  | 158,602 |  | 215,971 |  | 128,689 |  | 91,194 |  | 66,588 |  | 204,513 |  | — |  | 865,557
Residential real estate all other |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Grade 1 |  | 9,847 |  | 16,428 |  | 11,139 |  | 8,009 |  | 5,157 |  | 15,276 |  | 28,321 |  | 94,177
Grade 2 |  | 746 |  | 3,263 |  | 1,743 |  | 1,325 |  | 1,137 |  | 2,367 |  | 53,510 |  | 64,091
Grade 3 |  | 272 |  | 140 |  | 410 |  | 248 |  | 718 |  | 376 |  | 1,042 |  | 3,206
Grade 4 |  | 14 |  | 211 |  | — |  | 579 |  | 15 |  | 652 |  | 345 |  | 1,816
Total residential real estate all other |  | 10,879 |  | 20,042 |  | 13,292 |  | 10,161 |  | 7,027 |  | 18,671 |  | 83,218 |  | 163,290
Farmland |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Grade 1 |  | 26,621 |  | 46,638 |  | 25,418 |  | 18,375 |  | 13,983 |  | 35,431 |  | 7,521 |  | 173,987
Grade 2 |  | 8,767 |  | 9,048 |  | 26,148 |  | 5,702 |  | 5,457 |  | 13,424 |  | 10,709 |  | 79,255
Grade 3 |  | 2,786 |  | 2,068 |  | 1,676 |  | 300 |  | 742 |  | 1,213 |  | 1,842 |  | 10,627
Grade 4 |  | — |  | 1,195 |  | — |  | 3,187 |  | 296 |  | 183 |  | 278 |  | 5,139
Total farmland |  | 38,174 |  | 58,949 |  | 53,242 |  | 27,564 |  | 20,478 |  | 50,251 |  | 20,350 |  | 269,008
Commercial and agricultural non-real estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Grade 1 |  | 190,653 |  | 135,726 |  | 105,770 |  | 64,491 |  | 54,567 |  | 54,870 |  | 220,348 |  | 826,425
Grade 2 |  | 38,938 |  | 47,478 |  | 29,481 |  | 11,780 |  | 3,885 |  | 18,985 |  | 68,353 |  | 218,900
Grade 3 |  | 4,900 |  | 5,500 |  | 1,706 |  | 12,010 |  | 1,858 |  | 639 |  | 21,708 |  | 48,321
Grade 4 |  | 262 |  | 1,783 |  | 1,555 |  | 599 |  | 811 |  | 1,299 |  | 5,822 |  | 12,131
Total commercial and agricultural non-real estate |  | 234,753 |  | 190,487 |  | 138,512 |  | 88,880 |  | 61,121 |  | 75,793 |  | 316,231 |  | 1,105,777
Consumer non-real estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Grade 1 |  | 110,171 |  | 116,215 |  | 64,985 |  | 27,641 |  | 9,497 |  | 4,018 |  | 7,084 |  | 339,611
Grade 2 |  | 9,362 |  | 9,659 |  | 4,641 |  | 2,833 |  | 1,099 |  | 1,653 |  | 287 |  | 29,534
Grade 3 |  | 229 |  | 405 |  | 787 |  | 290 |  | 154 |  | 147 |  | 3 |  | 2,015
Grade 4 |  | 14 |  | 67 |  | 180 |  | 58 |  | 19 |  | 55 |  | 4 |  | 397
Total consumer non-real estate |  | 119,776 |  | 126,346 |  | 70,593 |  | 30,822 |  | 10,769 |  | 5,873 |  | 7,378 |  | 371,557
Oil and gas |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Grade 1 |  | 53,326 |  | 115 |  | 59 |  | 66 |  | — |  | 3,444 |  | 33,676 |  | 90,686
Grade 2 |  | 10,051 |  | 3,347 |  | 69 |  | — |  | — |  | — |  | 9,419 |  | 22,886
Grade 3 |  | 16,887 |  | — |  | — |  | — |  | — |  | — |  | — |  | 16,887
Total oil and gas |  | 80,264 |  | 3,462 |  | 128 |  | 66 |  | — |  | 3,444 |  | 43,095 |  | 130,459
Other loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Grade 1 |  | 379,715 |  | 34,608 |  | 29,464 |  | 24,034 |  | 18,060 |  | 25,568 |  | 23,298 |  | 534,747
Grade 2 |  | — |  | — |  | 250 |  | 17 |  | 2,638 |  | 2,434 |  | 820 |  | 6,159
Grade 3 |  | — |  | 11 |  | 225 |  | 10 |  | 1 |  | 99 |  | 199 |  | 545
Grade 4 |  | — |  | 137 |  | — |  | — |  | 294 |  | 140 |  | 1,012 |  | 1,583
Total other loans |  | 379,715 |  | 34,756 |  | 29,939 |  | 24,061 |  | 20,993 |  | 28,241 |  | 25,329 |  | 543,034
Pegasus Bank |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Grade 1 |  | 64,138 |  | 87,556 |  | 58,223 |  | 7,261 |  | 16,202 |  | 52,432 |  | 153,260 |  | 439,072
Grade 2 |  | 27,016 |  | 14,313 |  | 18,116 |  | 10,578 |  | 21,378 |  | 6,717 |  | 48,741 |  | 146,859
Grade 3 |  | — |  | 112 |  | — |  | — |  | — |  | — |  | — |  | 112
Total Pegasus Bank |  | 91,154 |  | 101,981 |  | 76,339 |  | 17,839 |  | 37,580 |  | 59,149 |  | 202,001 |  | 586,043
Total loans held for investment |  | $1,538,093 |  | $1,378,175 |  | $900,281 |  | $469,620 |  | $358,467 |  | $789,747 |  | $756,847 |  | $6,191,230
Allowance for Credit Losses Methodology On January 1, 2020, the Company adopted ASC 326, which replaces the incurred loss methodology for determining its provision for credit losses and allowance for credit losses with an expected loss methodology that is referred to as the CECL model. Upon adoption, the allowance for credit losses was decreased by $3.2 million, with no impact to the consolidated statement of income. The allowance for credit losses is measured on a collective (pool) basis when similar risk characteristics exist by identifying by portfolio segments, the applicable weighted average life and measuring the allowance for credit losses using the vintage loss analysis adjusted for qualitative factors. The weighted average lives of the Company’s loans segments are disclosed in Note (1) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. The decrease in the allowance for credit loss during the second quarter of 2021 was primarily driven by a reversal of provision during the quarter based on sustained improvements in the economy, both nationally and in Oklahoma, which reduced the amount of expected credit loss within the loan portfolio. This reduction was partially offset by additional allowance for credit loss required by newly acquired loans purchased with credit deterioration. The following table details activity in the allowance for credit losses on 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.
|  | Allowance for Credit Losses |
|  | Balance at beginning of period |  |  | Initial allowance on loans purchased with credit deterioration |  |  | Charge- offs |  |  | Recoveries |  |  | Net charge-offs |  |  | (Benefit from) /Provision for credit losses on loans |  |  | Balance at end of period |
|  | (Dollars in thousands) |
Three Months Ended June 30, 2021 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
BancFirst |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial real estate owner occupied |  | $ | 6,595 |  |  | $ | 987 |  |  | $ | — |  |  | $ | 1 |  |  | $ | 1 |  |  | $ | (828 | ) |  | $ | 6,755 |
Commercial real estate non-owner occupied |  |  | 16,955 |  |  |  | 633 |  |  |  | (758 | ) |  |  | — |  |  |  | (758 | ) |  |  | (2,340 | ) |  |  | 14,490 |
Construction and development < 60 months |  |  | 2,743 |  |  |  | 173 |  |  |  | — |  |  |  | 2 |  |  |  | 2 |  |  |  | (25 | ) |  |  | 2,893 |
Construction residential real estate < 60 months |  |  | 983 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (94 | ) |  |  | 889 |
Residential real estate first lien |  |  | 2,592 |  |  |  | 117 |  |  |  | (9 | ) |  |  | 12 |  |  |  | 3 |  |  |  | 93 |  |  |  | 2,805 |
Residential real estate all other |  |  | 1,873 |  |  |  | — |  |  |  | (30 | ) |  |  | 1 |  |  |  | (29 | ) |  |  | 97 |  |  |  | 1,941 |
Farmland |  |  | 3,077 |  |  |  | 643 |  |  |  | — |  |  |  | 1 |  |  |  | 1 |  |  |  | (6 | ) |  |  | 3,715 |
Commercial and agricultural non-real estate |  |  | 32,685 |  |  |  | 4,711 |  |  |  | (3,433 | ) |  |  | 125 |  |  |  | (3,308 | ) |  |  | (2,473 | ) |  |  | 31,615 |
Consumer non-real estate |  |  | 3,256 |  |  |  | 8 |  |  |  | (209 | ) |  |  | 86 |  |  |  | (123 | ) |  |  | 174 |  |  |  | 3,315 |
Oil and gas |  |  | 12,131 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (4,314 | ) |  |  | 7,817 |
Other loans |  |  | 3,190 |  |  |  | — |  |  |  | (9 | ) |  |  | — |  |  |  | (9 | ) |  |  | (43 | ) |  |  | 3,138 |
Pegasus Bank |  |  | 4,780 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (190 | ) |  |  | 4,590 |
Total |  | $ | 90,860 |  |  | $ | 7,272 |  |  | $ | (4,448 | ) |  | $ | 228 |  |  | $ | (4,220 | ) |  | $ | (9,949 | ) |  | $ | 83,963 |
Six Months Ended June 30, 2021 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
BancFirst |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial real estate owner occupied |  | $ | 7,035 |  |  | $ | 987 |  |  | $ | — |  |  | $ | 1 |  |  | $ | 1 |  |  | $ | (1,268 | ) |  | $ | 6,755 |
Commercial real estate non-owner occupied |  |  | 11,842 |  |  |  | 633 |  |  |  | (796 | ) |  |  | — |  |  |  | (796 | ) |  |  | 2,811 |  |  |  | 14,490 |
Construction and development < 60 months |  |  | 2,560 |  |  |  | 173 |  |  |  | — |  |  |  | 5 |  |  |  | 5 |  |  |  | 155 |  |  |  | 2,893 |
Construction residential real estate < 60 months |  |  | 627 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 262 |  |  |  | 889 |
Residential real estate first lien |  |  | 2,570 |  |  |  | 117 |  |  |  | (52 | ) |  |  | 27 |  |  |  | (25 | ) |  |  | 143 |  |  |  | 2,805 |
Residential real estate all other |  |  | 2,230 |  |  |  | — |  |  |  | (46 | ) |  |  | 4 |  |  |  | (42 | ) |  |  | (247 | ) |  |  | 1,941 |
Farmland |  |  | 3,136 |  |  |  | 643 |  |  |  | — |  |  |  | 1 |  |  |  | 1 |  |  |  | (65 | ) |  |  | 3,715 |
Commercial and agricultural non-real estate |  |  | 32,400 |  |  |  | 4,711 |  |  |  | (3,537 | ) |  |  | 151 |  |  |  | (3,386 | ) |  |  | (2,110 | ) |  |  | 31,615 |
Consumer non-real estate |  |  | 3,377 |  |  |  | 8 |  |  |  | (622 | ) |  |  | 198 |  |  |  | (424 | ) |  |  | 354 |  |  |  | 3,315 |
Oil and gas |  |  | 17,851 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (10,034 | ) |  |  | 7,817 |
Other loans |  |  | 3,182 |  |  |  | — |  |  |  | (61 | ) |  |  | — |  |  |  | (61 | ) |  |  | 17 |  |  |  | 3,138 |
Pegasus Bank |  |  | 4,556 |  |  |  | — |  |  |  | — |  |  |  | 1 |  |  |  | 1 |  |  |  | 33 |  |  |  | 4,590 |
Total |  | $ | 91,366 |  |  | $ | 7,272 |  |  | $ | (5,114 | ) |  | $ | 388 |  |  | $ | (4,726 | ) |  | $ | (9,949 | ) |  | $ | 83,963 |
|  | Allowance for Credit Losses |
|  | Balance at beginning of period |  |  | Impact of CECL adoption |  |  | Initial allowance on loans purchased with credit deterioration |  |  | Charge- offs |  |  | Recoveries |  |  | Net charge-offs |  |  | Provision for /(benefit from) credit losses on loans |  |  | Balance at end of period |
|  | (Dollars in thousands) |
Three Months Ended June 30, 2020 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
BancFirst |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial real estate owner occupied |  | $ | 4,544 |  |  | $ | — |  |  | $ | — |  |  | $ | (113 | ) |  | $ | 1 |  |  | $ | (112 | ) |  | $ | 2,198 |  |  | $ | 6,630 |
Commercial real estate non-owner occupied |  |  | 5,935 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 3,548 |  |  |  | 9,483 |
Construction and development < 60 months |  |  | 1,136 |  |  |  | — |  |  |  | — |  |  |  | (56 | ) |  |  | 3 |  |  |  | (53 | ) |  |  | 672 |  |  |  | 1,755 |
Construction residential real estate < 60 months |  |  | 1,618 |  |  |  | — |  |  |  | — |  |  |  | (28 | ) |  |  | — |  |  |  | (28 | ) |  |  | 669 |  |  |  | 2,259 |
Residential real estate first lien |  |  | 6,192 |  |  |  | — |  |  |  | — |  |  |  | (66 | ) |  |  | 4 |  |  |  | (62 | ) |  |  | 2,423 |  |  |  | 8,553 |
Residential real estate all other |  |  | 2,292 |  |  |  | — |  |  |  | — |  |  |  | (7 | ) |  |  | 1 |  |  |  | (6 | ) |  |  | 434 |  |  |  | 2,720 |
Farmland |  |  | 1,788 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 723 |  |  |  | 2,511 |
Commercial and agricultural non-real estate |  |  | 33,993 |  |  |  | — |  |  |  | — |  |  |  | (287 | ) |  |  | 66 |  |  |  | (221 | ) |  |  | 264 |  |  |  | 34,036 |
Consumer non-real estate |  |  | 3,385 |  |  |  | — |  |  |  | — |  |  |  | (235 | ) |  |  | 57 |  |  |  | (178 | ) |  |  | 1,507 |  |  |  | 4,714 |
Oil and gas |  |  | 3,283 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 7,186 |  |  |  | 10,469 |
Other loans |  |  | 2,751 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (238 | ) |  |  | 2,513 |
Pegasus Bank |  |  | 3,163 |  |  |  | — |  |  |  | — |  |  |  | 330 |  |  |  | 417 |  |  |  | 747 |  |  |  | (53 | ) |  |  | 3,857 |
Total |  | $ | 70,080 |  |  | $ | — |  |  | $ | — |  |  | $ | (462 | ) |  | $ | 549 |  |  | $ | 87 |  |  | $ | 19,333 |  |  | $ | 89,500 |
Six Months Ended June 30, 2020 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
BancFirst |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial real estate owner occupied |  | $ | 5,625 |  |  | $ | (2,806 | ) |  | $ | 432 |  |  | $ | (113 | ) |  | $ | 1 |  |  | $ | (112 | ) |  | $ | 3,491 |  |  | $ | 6,630 |
Commercial real estate non-owner occupied |  |  | 8,358 |  |  |  | (5,507 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 6,632 |  |  |  | 9,483 |
Construction and development < 60 months |  |  | 2,214 |  |  |  | (1,056 | ) |  |  | — |  |  |  | (59 | ) |  |  | 3 |  |  |  | (56 | ) |  |  | 653 |  |  |  | 1,755 |
Construction residential real estate < 60 months |  |  | 1,933 |  |  |  | (778 | ) |  |  | — |  |  |  | (29 | ) |  |  | — |  |  |  | (29 | ) |  |  | 1,133 |  |  |  | 2,259 |
Residential real estate first lien |  |  | 8,692 |  |  |  | (3,831 | ) |  |  | 7 |  |  |  | (218 | ) |  |  | 6 |  |  |  | (212 | ) |  |  | 3,897 |  |  |  | 8,553 |
Residential real estate all other |  |  | 2,767 |  |  |  | (1,408 | ) |  |  | — |  |  |  | (32 | ) |  |  | 28 |  |  |  | (4 | ) |  |  | 1,365 |  |  |  | 2,720 |
Farmland |  |  | 2,821 |  |  |  | (1,408 | ) |  |  | 1 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 1,097 |  |  |  | 2,511 |
Commercial and agricultural non-real estate |  |  | 13,462 |  |  |  | 13,195 |  |  |  | 62 |  |  |  | (374 | ) |  |  | 83 |  |  |  | (291 | ) |  |  | 7,608 |  |  |  | 34,036 |
Consumer non-real estate |  |  | 3,252 |  |  |  | (622 | ) |  |  | — |  |  |  | (556 | ) |  |  | 114 |  |  |  | (442 | ) |  |  | 2,526 |  |  |  | 4,714 |
Oil and gas |  |  | 1,883 |  |  |  | (1,346 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 9,932 |  |  |  | 10,469 |
Other loans |  |  | 2,632 |  |  |  | (116 | ) |  |  | — |  |  |  | — |  |  |  | 2 |  |  |  | 2 |  |  |  | (5 | ) |  |  | 2,513 |
Pegasus Bank |  |  | 599 |  |  |  | 2,488 |  |  |  | — |  |  |  | (241 | ) |  |  | 424 |  |  |  | 183 |  |  |  | 587 |  |  |  | 3,857 |
Total |  | $ | 54,238 |  |  | $ | (3,195 | ) |  | $ | 502 |  |  | $ | (1,622 | ) |  | $ | 661 |  |  | $ | (961 | ) |  | $ | 38,916 |  |  | $ | 89,500 |
Purchased Credit Deteriorated Loans The Company has previously purchased loans, for which there was, at acquisition, evidence of more than insignificant deterioration of credit quality since origination. The credit-deteriorated loans purchased during the six-month periods ended June 30, 2021 and June 30, 2020 were as follows:
|  | Loans acquired with deteriorated credit quality |
|  | (Dollars in thousands) |
For the period ended June 30, 2021 |  |  |  |
Purchase price of loans at acquisition |  | $ | 26,779 |
Allowance for credit losses at acquisition |  |  | 7,272 |
Par value of acquired loans at acquisition |  | $ | 34,051 |
For the period ended June 30, 2020 |  |  |  |
Purchase price of loans at acquisition |  | $ | 1,761 |
Allowance for credit losses at acquisition |  |  | 502 |
Par value of acquired loans at acquisition |  | $ | 2,263 |
Collateral Dependent Loans A loan is considered collateral-dependent when the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of the collateral. During the six months ended June 30, 2021 and 2020, no material amount of interest income was recognized on collateral-dependent loans subsequent to their classification as collateral-dependent. The following table summarizes collateral-dependent gross loans held for investment by collateral type and the related specific allocation as follows:
|  | Collateral Type |  |  |  |  |  |  |  |  |
|  | Real Estate |  |  | Business Assets |  |  | Energy Reserves |  |  | Other Assets |  |  | Total |  |  | Specific Allocation |
|  | (Dollars in thousands) |  |  |  |  |  |  |  |  |
As of June 30, 2021 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
BancFirst |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial real estate owner occupied |  | $ | 645 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 645 |  |  | $ | 176 |
Commercial real estate non-owner occupied |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Construction and development < 60 months |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Construction residential real estate < 60 months |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Residential real estate first lien |  |  | 806 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 806 |  |  |  | 158 |
Residential real estate all other |  |  | 650 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 650 |  |  |  | 568 |
Farmland |  |  | 3,215 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 3,215 |  |  |  | 1,123 |
Commercial and agricultural non-real estate |  |  | — |  |  |  | 5,211 |  |  |  | — |  |  |  | 5,188 |  |  |  | 10,399 |  |  |  | 778 |
Consumer non-real estate |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 22 |  |  |  | 22 |  |  |  | 4 |
Oil and gas |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Other loans |  |  | — |  |  |  | 15 |  |  |  | — |  |  |  | — |  |  |  | 15 |  |  |  | 15 |
Pegasus Bank |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Total collateral-dependent loans held for investment |  | $ | 5,316 |  |  | $ | 5,226 |  |  | $ | — |  |  | $ | 5,210 |  |  | $ | 15,752 |  |  | $ | 2,822 |
|  | Collateral Type |  |  |  |  |  |  |  |  |
|  | Real Estate |  |  | Business Assets |  |  | Energy Reserves |  |  | Other Assets |  |  | Total |  |  | Specific Allocation |
|  | (Dollars in thousands) |  |  |  |  |  |  |  |  |
As of December 31, 2020 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
BancFirst |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial real estate owner occupied |  | $ | 848 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 848 |  |  | $ | 226 |
Commercial real estate non-owner occupied |  |  | 4,719 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 4,719 |  |  |  | 1,000 |
Construction and development < 60 months |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Construction residential real estate < 60 months |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Residential real estate first lien |  |  | 860 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 860 |  |  |  | 151 |
Residential real estate all other |  |  | 866 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 866 |  |  |  | 616 |
Farmland |  |  | 3,258 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 3,258 |  |  |  | 1,114 |
Commercial and agricultural non-real estate |  |  | — |  |  |  | 8,460 |  |  |  | — |  |  |  | 413 |  |  |  | 8,873 |  |  |  | 2,813 |
Consumer non-real estate |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 109 |  |  |  | 109 |  |  |  | 58 |
Oil and gas |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Other loans |  |  | — |  |  |  | 13 |  |  |  | — |  |  |  | — |  |  |  | 13 |  |  |  | 12 |
Pegasus Bank |  |  | 1,257 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 1,257 |  |  |  | 222 |
Total collateral-dependent loans held for investment |  | $ | 11,808 |  |  | $ | 8,473 |  |  | $ | — |  |  | $ | 522 |  |  | $ | 20,803 |  |  | $ | 6,212 |
Non-Cash Transfers from Loans and Premises and Equipment Transfers from loans and premises and equipment 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 and premises and equipment to other real estate owned and repossessed assets during the periods presented are summarized as follows:
|  | Six Months Ended June 30, |
|  | 2021 |  |  | 2020 |
|  | (Dollars in thousands) |
Other real estate owned |  | $ | 9,438 |  |  | $ | 2,876 |
Repossessed assets |  |  | 427 |  |  |  | 722 |
Total |  | $ | 9,865 |  |  | $ | 3,598 |

X
- 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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- References No definition available. + Details
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