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Loans Held for Investment and Allowance for Credit Losses on Loans | 3 Months Ended
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Mar. 31, 2023
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 Certain loan segments were reclassified during the quarter. Each loan segment is made up of loan categories possessing similar risk characteristics. The Company’s re-alignment of the segments primarily consisted of reclassifying farmland and agriculture related loans that were previously included in consumer-related and commercial-related loans to the agriculture category. Management believes this accurately represents the risk profile of each loan segment. The prior period amounts have been revised to conform to the current period presentation. These reclassifications did not have a significant impact on the allowance for credit losses. Loans held for investment are summarized by portfolio segment as follows:
| March 31, 2023 |  |  | December 31, 2022 |
| (Dollars in thousands) |
Real estate: |  |  |  |  |
Commercial real estate owner occupied |  | 920,104 |  |  |  | 908,494 |
Commercial real estate non-owner occupied |  | 1,396,400 |  |  |  | 1,383,150 |
Construction and development < 60 months |  | 534,847 |  |  |  | 475,236 |
Construction residential real estate < 60 months |  | 304,766 |  |  |  | 303,305 |
Residential real estate first lien |  | 1,147,800 |  |  |  | 1,117,899 |
Residential real estate all other |  | 206,402 |  |  |  | 196,198 |
Agriculture |  | 422,488 |  |  |  | 408,037 |
Commercial non-real estate |  | 1,262,737 |  |  |  | 1,241,454 |
Consumer non-real estate |  | 441,497 |  |  |  | 446,756 |
Oil and gas |  | 481,567 |  |  |  | 463,034 |
Total (1) | $ | 7,118,608 |  |  | $ | 6,943,563 |
(1) Excludes accrued interest receivable of $30.9 million at March 31, 2023 and $30.6 million at December 31, 2022, that is recorded in accrued interest receivable and other assets. |
The Company's loans are currently 83% held by BancFirst and 17% held by Pegasus and Worthington. In addition, approximately 69% of the Company's 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. The Company's portfolio segment descriptions and the weighted average remaining life of portfolio segments are disclosed in Note (5) to the Company's Annual Report on Form 10-K for the year ended December 31, 2022. Loan Modifications, Other Real Estate Owned and Repossessed Assets and Held for Sale Assets The following is a summary of other real estate owned and repossessed assets:
|  | March 31, 2023 |  |  | December 31, 2022 |
|  | (Dollars in thousands) |
Other real estate owned and repossessed assets |  | $ | 38,874 |  |  | $ | 36,936 |
As of both March 31, 2023 and December 31, 2022, other real estate owned included a commercial real estate property recorded at approximately $30.1 million and $29.4 million, respectively. Rental income for this property is included in other noninterest income on the consolidated statements of comprehensive income. Operating expense for this property is included in net expense from other real estate owned in other noninterest expense on the consolidated statements of comprehensive income. This property had the following rental income and operating expenses for the periods presented.
|  | For the Three Months Ended March 31, |
|  | 2023 |  |  | 2022 |
|  | (Dollars in thousands) |
Rental income |  | $ | 2,690 |  |  | $ | 2,670 |
Operating expense |  |  | 2,381 |  |  |  | 2,439 |
During the three months ended March 31, 2023, the Company sold property held in other real estate owned for a total gain of $98,000, compared to a total gain of $726,000 in the three months ended March 31, 2022. The Company charges interest on principal balances outstanding on modified loans during deferral periods. The current and future financial effects of the recorded balance of loans considered to be modified during the period were not considered to be material. Nonaccrual loans The Company did no t recognize any interest income on nonaccrual loans for either the three months ended March 31, 2023 or 2022. In addition, there were no nonaccrual loans for which there is no related allowance for credit losses at both March 31, 2023 and December 31, 2022. Had nonaccrual loans performed in accordance with their original contractual terms, the Company would have recognized additional interest income of approximately $358,000 for the three months ended March 31, 2023 and approximately $376,000 for the three months ended March 31, 2022. Nonaccrual loans guaranteed by government agencies totaled approximately $6.4 million at March 31, 2023 and approximately $4.7 million at December 31, 2022. The following table is a summary of amounts included in nonaccrual loans, segregated by portfolio segment.
|  | March 31, 2023 |  |  | December 31, 2022 |
|  | (Dollars in thousands) |
Real estate: |  |  |  |  |  |
Commercial real estate owner occupied |  | $ | 4,408 |  |  | $ | 1,795 |
Commercial real estate non-owner occupied |  |  | 707 |  |  |  | 667 |
Construction and development < 60 months |  |  | 114 |  |  |  | 93 |
Construction residential real estate < 60 months |  |  | 388 |  |  |  | 430 |
Residential real estate first lien |  |  | 2,646 |  |  |  | 1,947 |
Residential real estate all other |  |  | 748 |  |  |  | 55 |
Agriculture |  |  | 2,688 |  |  |  | 2,734 |
Commercial non-real estate |  |  | 5,695 |  |  |  | 7,066 |
Consumer non-real estate |  |  | 255 |  |  |  | 192 |
Oil and gas |  |  | — |  |  |  | 320 |
Total |  | $ | 17,649 |  |  | $ | 15,299 |
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 the Company's 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 March 31, 2023 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial real estate owner occupied |  | $ | 3,454 |  |  | $ | 41 |  |  | $ | 7,051 |  |  | $ | 10,546 |  |  | $ | 909,558 |  |  | $ | 920,104 |  |  | $ | 4,358 |
Commercial real estate non-owner occupied |  |  | 6,257 |  |  |  | 1,079 |  |  |  | 242 |  |  |  | 7,578 |  |  |  | 1,388,822 |  |  |  | 1,396,400 |  |  |  | 201 |
Construction and development < 60 months |  |  | 1,206 |  |  |  | 783 |  |  |  | 217 |  |  |  | 2,206 |  |  |  | 532,641 |  |  |  | 534,847 |  |  |  | 103 |
Construction residential real estate < 60 months |  |  | 1,175 |  |  |  | — |  |  |  | 824 |  |  |  | 1,999 |  |  |  | 302,767 |  |  |  | 304,766 |  |  |  | 824 |
Residential real estate first lien |  |  | 4,505 |  |  |  | 996 |  |  |  | 1,452 |  |  |  | 6,953 |  |  |  | 1,140,847 |  |  |  | 1,147,800 |  |  |  | 690 |
Residential real estate all other |  |  | 789 |  |  |  | 860 |  |  |  | 130 |  |  |  | 1,779 |  |  |  | 204,623 |  |  |  | 206,402 |  |  |  | 113 |
Agriculture |  |  | 4,372 |  |  |  | 596 |  |  |  | 1,350 |  |  |  | 6,318 |  |  |  | 416,170 |  |  |  | 422,488 |  |  |  | 22 |
Commercial non-real estate |  |  | 2,709 |  |  |  | 2,264 |  |  |  | 3,802 |  |  |  | 8,775 |  |  |  | 1,253,962 |  |  |  | 1,262,737 |  |  |  | 415 |
Consumer non-real estate |  |  | 2,668 |  |  |  | 724 |  |  |  | 616 |  |  |  | 4,008 |  |  |  | 437,489 |  |  |  | 441,497 |  |  |  | 449 |
Oil and gas |  |  | 175 |  |  |  | 202 |  |  |  | 83 |  |  |  | 460 |  |  |  | 481,107 |  |  |  | 481,567 |  |  |  | 83 |
Total |  | $ | 27,310 |  |  | $ | 7,545 |  |  | $ | 15,767 |  |  | $ | 50,622 |  |  | $ | 7,067,986 |  |  | $ | 7,118,608 |  |  | $ | 7,258 |
As of December 31, 2022 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial real estate owner occupied |  | $ | 1,314 |  |  | $ | 1,524 |  |  | $ | 4,580 |  |  | $ | 7,418 |  |  | $ | 901,076 |  |  | $ | 908,494 |  |  | $ | 4,580 |
Commercial real estate non-owner occupied |  |  | 6,237 |  |  |  | — |  |  |  | 42 |  |  |  | 6,279 |  |  |  | 1,376,871 |  |  |  | 1,383,150 |  |  |  | 43 |
Construction and development < 60 months |  |  | 535 |  |  |  | 40 |  |  |  | 114 |  |  |  | 689 |  |  |  | 474,547 |  |  |  | 475,236 |  |  |  | 81 |
Construction residential real estate < 60 months |  |  | 1,320 |  |  |  | 282 |  |  |  | 148 |  |  |  | 1,750 |  |  |  | 301,555 |  |  |  | 303,305 |  |  |  | — |
Residential real estate first lien |  |  | 3,415 |  |  |  | 1,076 |  |  |  | 844 |  |  |  | 5,335 |  |  |  | 1,112,564 |  |  |  | 1,117,899 |  |  |  | 349 |
Residential real estate all other |  |  | 265 |  |  |  | 37 |  |  |  | 185 |  |  |  | 487 |  |  |  | 195,711 |  |  |  | 196,198 |  |  |  | 166 |
Agriculture |  |  | 2,357 |  |  |  | 34 |  |  |  | 2,265 |  |  |  | 4,656 |  |  |  | 403,381 |  |  |  | 408,037 |  |  |  | 1,054 |
Commercial non-real estate |  |  | 2,490 |  |  |  | 2,142 |  |  |  | 2,772 |  |  |  | 7,404 |  |  |  | 1,234,050 |  |  |  | 1,241,454 |  |  |  | 345 |
Consumer non-real estate |  |  | 2,591 |  |  |  | 648 |  |  |  | 585 |  |  |  | 3,824 |  |  |  | 442,932 |  |  |  | 446,756 |  |  |  | 467 |
Oil and gas |  |  | 654 |  |  |  | — |  |  |  | — |  |  |  | 654 |  |  |  | 462,380 |  |  |  | 463,034 |  |  |  | — |
Total |  | $ | 21,178 |  |  | $ | 5,783 |  |  | $ | 11,535 |  |  | $ | 38,496 |  |  | $ | 6,905,067 |  |  | $ | 6,943,563 |  |  | $ | 7,085 |
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. These indicators are reviewed and updated regularly throughout the year. 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 the Company’s gross loans held for investment by year of origination and internally assigned credit grades as of December 31, 2022, are disclosed in Note (5) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. The Company’s revolving loans that are converted to term loans are not material and therefore have not been presented. The following table summarizes the Company’s gross loans held for investment by year of origination and internally assigned credit grades along with the gross charge-offs by year of origination:
|  | Term Loans Amortized Cost Basis by Origination Year |  |  | Revolving Loans |  |  |  |
(Dollars in thousands) |  | 2023 |  |  | 2022 |  |  | 2021 |  |  | 2020 |  |  | 2019 |  |  | Prior |  |  | Amortized Cost Basis |  |  | Total |
As of March 31, 2023 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial real estate owner occupied |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Grade 1 |  | $ | 26,840 |  |  | $ | 171,896 |  |  | $ | 136,273 |  |  | $ | 98,471 |  |  | $ | 87,267 |  |  | $ | 158,659 |  |  | $ | 50,504 |  |  | $ | 729,910 |
Grade 2 |  |  | 15,333 |  |  |  | 37,268 |  |  |  | 33,356 |  |  |  | 25,810 |  |  |  | 20,013 |  |  |  | 32,197 |  |  |  | 19,018 |  |  |  | 182,995 |
Grade 3 |  |  | 18 |  |  |  | 6 |  |  |  | 1,694 |  |  |  | 75 |  |  |  | 1,277 |  |  |  | 1,469 |  |  |  | 62 |  |  |  | 4,601 |
Grade 4 |  |  | — |  |  |  | 252 |  |  |  | 250 |  |  |  | 311 |  |  |  | 798 |  |  |  | 648 |  |  |  | — |  |  |  | 2,259 |
Grade 5 |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 339 |  |  |  | — |  |  |  | — |  |  |  | 339 |
Total commercial real estate owner occupied |  |  | 42,191 |  |  |  | 209,422 |  |  |  | 171,573 |  |  |  | 124,667 |  |  |  | 109,694 |  |  |  | 192,973 |  |  |  | 69,584 |  |  |  | 920,104 |
Current-period gross charge-offs |  |  | — |  |  |  | 7 |  |  |  | 1 |  |  |  | 22 |  |  |  | 18 |  |  |  | — |  |  |  | — |  |  |  | 48 |
Commercial real estate non-owner occupied |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Grade 1 |  | $ | 40,007 |  |  | $ | 333,790 |  |  | $ | 239,906 |  |  | $ | 164,977 |  |  | $ | 106,365 |  |  | $ | 86,491 |  |  | $ | 44,389 |  |  | $ | 1,015,925 |
Grade 2 |  |  | 13,477 |  |  |  | 122,684 |  |  |  | 48,822 |  |  |  | 28,644 |  |  |  | 36,980 |  |  |  | 79,557 |  |  |  | 31,249 |  |  |  | 361,413 |
Grade 3 |  |  | — |  |  |  | 6,996 |  |  |  | — |  |  |  | 152 |  |  |  | 9,864 |  |  |  | 1,343 |  |  |  | — |  |  |  | 18,355 |
Grade 4 |  |  | 45 |  |  |  | 620 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 42 |  |  |  | — |  |  |  | 707 |
Total commercial real estate non-owner occupied |  |  | 53,529 |  |  |  | 464,090 |  |  |  | 288,728 |  |  |  | 193,773 |  |  |  | 153,209 |  |  |  | 167,433 |  |  |  | 75,638 |  |  |  | 1,396,400 |
Current-period gross charge-offs |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 3 |  |  |  | — |  |  |  | 3 |
Construction and development < 60 months |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Grade 1 |  | $ | 44,459 |  |  | $ | 152,820 |  |  | $ | 80,373 |  |  | $ | 39,720 |  |  | $ | 5,063 |  |  | $ | 6,975 |  |  | $ | 51,743 |  |  | $ | 381,153 |
Grade 2 |  |  | 3,757 |  |  |  | 50,735 |  |  |  | 16,826 |  |  |  | 7,203 |  |  |  | 14,085 |  |  |  | 2,372 |  |  |  | 54,929 |  |  |  | 149,907 |
Grade 3 |  |  | 2,525 |  |  |  | 886 |  |  |  | — |  |  |  | 99 |  |  |  | — |  |  |  | 7 |  |  |  | 156 |  |  |  | 3,673 |
Grade 4 |  |  | — |  |  |  | 81 |  |  |  | — |  |  |  | 33 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 114 |
Total construction and development < 60 months |  |  | 50,741 |  |  |  | 204,522 |  |  |  | 97,199 |  |  |  | 47,055 |  |  |  | 19,148 |  |  |  | 9,354 |  |  |  | 106,828 |  |  |  | 534,847 |
Current-period gross charge-offs |  |  | — |  |  |  | 2 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 2 |
Construction residential real estate < 60 months |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Grade 1 |  | $ | 59,006 |  |  | $ | 156,832 |  |  | $ | 4,707 |  |  | $ | 258 |  |  | $ | 13 |  |  | $ | 39 |  |  | $ | 35,474 |  |  | $ | 256,329 |
Grade 2 |  |  | 8,841 |  |  |  | 35,304 |  |  |  | 43 |  |  |  | 46 |  |  |  | — |  |  |  | 394 |  |  |  | 2,156 |  |  |  | 46,784 |
Grade 3 |  |  | — |  |  |  | 1,265 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 1,265 |
Grade 4 |  |  | 388 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 388 |
Total construction residential real estate < 60 months |  |  | 68,235 |  |  |  | 193,401 |  |  |  | 4,750 |  |  |  | 304 |  |  |  | 13 |  |  |  | 433 |  |  |  | 37,630 |  |  |  | 304,766 |
Residential real estate first lien |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Grade 1 |  | $ | 77,619 |  |  | $ | 281,309 |  |  | $ | 197,623 |  |  | $ | 135,722 |  |  | $ | 82,252 |  |  | $ | 180,597 |  |  | $ | 5,693 |  |  | $ | 960,815 |
Grade 2 |  |  | 8,715 |  |  |  | 43,684 |  |  |  | 35,764 |  |  |  | 25,194 |  |  |  | 13,434 |  |  |  | 46,291 |  |  |  | — |  |  |  | 173,082 |
Grade 3 |  |  | 428 |  |  |  | 1,910 |  |  |  | 1,254 |  |  |  | 905 |  |  |  | 1,587 |  |  |  | 3,937 |  |  |  | — |  |  |  | 10,021 |
Grade 4 |  |  | 66 |  |  |  | 110 |  |  |  | 1,155 |  |  |  | 369 |  |  |  | 245 |  |  |  | 1,937 |  |  |  | — |  |  |  | 3,882 |
Total residential real estate first lien |  |  | 86,828 |  |  |  | 327,013 |  |  |  | 235,796 |  |  |  | 162,190 |  |  |  | 97,518 |  |  |  | 232,762 |  |  |  | 5,693 |  |  |  | 1,147,800 |
Current-period gross charge-offs |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 2 |  |  |  | — |  |  |  | 2 |
Residential real estate all other |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Grade 1 |  | $ | 8,382 |  |  | $ | 30,718 |  |  | $ | 9,868 |  |  | $ | 9,884 |  |  | $ | 5,061 |  |  | $ | 14,304 |  |  | $ | 41,871 |  |  | $ | 120,088 |
Grade 2 |  |  | 987 |  |  |  | 5,712 |  |  |  | 2,002 |  |  |  | 1,729 |  |  |  | 1,500 |  |  |  | 3,624 |  |  |  | 66,883 |  |  |  | 82,437 |
Grade 3 |  |  | 172 |  |  |  | 224 |  |  |  | 139 |  |  |  | 48 |  |  |  | 122 |  |  |  | 1,113 |  |  |  | 1,242 |  |  |  | 3,060 |
Grade 4 |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 27 |  |  |  | — |  |  |  | 18 |  |  |  | 772 |  |  |  | 817 |
Total residential real estate all other |  |  | 9,541 |  |  |  | 36,654 |  |  |  | 12,009 |  |  |  | 11,688 |  |  |  | 6,683 |  |  |  | 19,059 |  |  |  | 110,768 |  |  |  | 206,402 |
Current-period gross charge-offs |  |  | — |  |  |  | 2 |  |  |  | 19 |  |  |  | — |  |  |  | 1 |  |  |  | 4 |  |  |  | — |  |  |  | 26 |
Agriculture |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Grade 1 |  | $ | 16,685 |  |  | $ | 69,811 |  |  | $ | 42,014 |  |  | $ | 34,467 |  |  | $ | 20,604 |  |  | $ | 39,693 |  |  | $ | 49,791 |  |  | $ | 273,065 |
Grade 2 |  |  | 10,701 |  |  |  | 24,320 |  |  |  | 21,468 |  |  |  | 9,205 |  |  |  | 10,223 |  |  |  | 19,584 |  |  |  | 32,697 |  |  |  | 128,198 |
Grade 3 |  |  | 592 |  |  |  | 6,337 |  |  |  | 977 |  |  |  | 3,356 |  |  |  | 112 |  |  |  | 3,290 |  |  |  | 4,896 |  |  |  | 19,560 |
Grade 4 |  |  | 59 |  |  |  | 646 |  |  |  | 98 |  |  |  | 477 |  |  |  | 50 |  |  |  | 305 |  |  |  | 30 |  |  |  | 1,665 |
Total Agriculture |  |  | 28,037 |  |  |  | 101,114 |  |  |  | 64,557 |  |  |  | 47,505 |  |  |  | 30,989 |  |  |  | 62,872 |  |  |  | 87,414 |  |  |  | 422,488 |
Current-period gross charge-offs |  |  | — |  |  |  | 4 |  |  |  | — |  |  |  | 16 |  |  |  | 13 |  |  |  | 2 |  |  |  | — |  |  |  | 35 |
Commercial non-real estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Grade 1 |  | $ | 108,823 |  |  | $ | 212,982 |  |  | $ | 189,496 |  |  | $ | 58,782 |  |  | $ | 45,803 |  |  | $ | 47,346 |  |  | $ | 305,503 |  |  | $ | 968,735 |
Grade 2 |  |  | 22,343 |  |  |  | 73,851 |  |  |  | 42,567 |  |  |  | 15,526 |  |  |  | 12,546 |  |  |  | 21,578 |  |  |  | 94,656 |  |  |  | 283,067 |
Grade 3 |  |  | 952 |  |  |  | 2,000 |  |  |  | 392 |  |  |  | 308 |  |  |  | 675 |  |  |  | 1,773 |  |  |  | 2,035 |  |  |  | 8,135 |
Grade 4 |  |  | 20 |  |  |  | 308 |  |  |  | 351 |  |  |  | 741 |  |  |  | 608 |  |  |  | 305 |  |  |  | 203 |  |  |  | 2,536 |
Grade 5 |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 264 |  |  |  | — |  |  |  | — |  |  |  | 264 |
Total commercial non-real estate |  |  | 132,138 |  |  |  | 289,141 |  |  |  | 232,806 |  |  |  | 75,357 |  |  |  | 59,896 |  |  |  | 71,002 |  |  |  | 402,397 |  |  |  | 1,262,737 |
Current-period gross charge-offs |  |  | — |  |  |  | 67 |  |  |  | 62 |  |  |  | — |  |  |  | — |  |  |  | 47 |  |  |  | — |  |  |  | 176 |
Consumer non-real estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Grade 1 |  | $ | 56,874 |  |  | $ | 174,237 |  |  | $ | 89,897 |  |  | $ | 33,413 |  |  | $ | 17,326 |  |  | $ | 6,763 |  |  | $ | 19,788 |  |  | $ | 398,298 |
Grade 2 |  |  | 3,455 |  |  |  | 19,044 |  |  |  | 9,375 |  |  |  | 3,409 |  |  |  | 1,301 |  |  |  | 1,961 |  |  |  | 1,156 |  |  |  | 39,701 |
Grade 3 |  |  | 101 |  |  |  | 831 |  |  |  | 738 |  |  |  | 372 |  |  |  | 152 |  |  |  | 149 |  |  |  | 170 |  |  |  | 2,513 |
Grade 4 |  |  | — |  |  |  | 339 |  |  |  | 382 |  |  |  | 44 |  |  |  | 160 |  |  |  | 60 |  |  |  | — |  |  |  | 985 |
Total consumer non-real estate |  |  | 60,430 |  |  |  | 194,451 |  |  |  | 100,392 |  |  |  | 37,238 |  |  |  | 18,939 |  |  |  | 8,933 |  |  |  | 21,114 |  |  |  | 441,497 |
Current-period gross charge-offs |  |  | — |  |  |  | 76 |  |  |  | 32 |  |  |  | 15 |  |  |  | 9 |  |  |  | 6 |  |  |  | 2 |  |  |  | 140 |
Oil and gas |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Grade 1 |  | $ | 81,777 |  |  | $ | 21,451 |  |  | $ | 110,461 |  |  | $ | 12,661 |  |  | $ | 3,861 |  |  | $ | 2,469 |  |  | $ | 167,211 |  |  | $ | 399,891 |
Grade 2 |  |  | 1,080 |  |  |  | 5,968 |  |  |  | 3,504 |  |  |  | 729 |  |  |  | 21,421 |  |  |  | 15,971 |  |  |  | 29,233 |  |  |  | 77,906 |
Grade 3 |  |  | — |  |  |  | 2,080 |  |  |  | 247 |  |  |  | 4 |  |  |  | — |  |  |  | — |  |  |  | 1,439 |  |  |  | 3,770 |
Total oil and gas |  |  | 82,857 |  |  |  | 29,499 |  |  |  | 114,212 |  |  |  | 13,394 |  |  |  | 25,282 |  |  |  | 18,440 |  |  |  | 197,883 |  |  |  | 481,567 |
Total loans held for investment |  | $ | 614,527 |  |  | $ | 2,049,307 |  |  | $ | 1,322,022 |  |  | $ | 713,171 |  |  | $ | 521,371 |  |  | $ | 783,261 |  |  | $ | 1,114,949 |  |  | $ | 7,118,608 |
Total current-period gross charge-offs |  | $ | — |  |  | $ | 158 |  |  | $ | 114 |  |  | $ | 53 |  |  | $ | 41 |  |  | $ | 64 |  |  | $ | 2 |  |  | $ | 432 |
Allowance for Credit Losses Methodology The Company determines its provision for credit losses and allowance for credit losses using the current expected credit loss methodology that is referred to as the CECL model. The allowance for credit losses is measured on a collective (pool) basis when similar risk characteristics exist. 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 |  |  | 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 March 31, 2023 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial real estate owner occupied |  | $ | 6,416 |  |  | $ | (48 | ) |  | $ | 49 |  |  | $ | 1 |  |  | $ | 130 |  |  | $ | 6,547 |
Commercial real estate non-owner occupied |  |  | 30,190 |  |  |  | (3 | ) |  |  | — |  |  |  | (3 | ) |  |  | 1,933 |  |  |  | 32,120 |
Construction and development < 60 months |  |  | 3,778 |  |  |  | (2 | ) |  |  | 3 |  |  |  | 1 |  |  |  | (171 | ) |  |  | 3,608 |
Construction residential real estate < 60 months |  |  | 3,275 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (49 | ) |  |  | 3,226 |
Residential real estate first lien |  |  | 4,092 |  |  |  | (2 | ) |  |  | 3 |  |  |  | 1 |  |  |  | 361 |  |  |  | 4,454 |
Residential real estate all other |  |  | 1,418 |  |  |  | (26 | ) |  |  | 2 |  |  |  | (24 | ) |  |  | 50 |  |  |  | 1,444 |
Agriculture |  |  | 6,217 |  |  |  | (35 | ) |  |  | 6 |  |  |  | (29 | ) |  |  | 80 |  |  |  | 6,268 |
Commercial non-real estate |  |  | 25,106 |  |  |  | (176 | ) |  |  | 22 |  |  |  | (154 | ) |  |  | 127 |  |  |  | 25,079 |
Consumer non-real estate |  |  | 4,132 |  |  |  | (140 | ) |  |  | 57 |  |  |  | (83 | ) |  |  | 183 |  |  |  | 4,232 |
Oil and gas |  |  | 8,104 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (322 | ) |  |  | 7,782 |
Total |  | $ | 92,728 |  |  | $ | (432 | ) |  | $ | 142 |  |  | $ | (290 | ) |  | $ | 2,322 |  |  | $ | 94,760 |
|  | Allowance for Credit Losses |
|  | Balance at beginning of period |  |  | 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 March 31, 2022 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial real estate owner occupied |  | $ | 7,550 |  |  | $ | — |  |  | $ | (16 | ) |  | $ | 48 |  |  | $ | 32 |  |  | $ | 680 |  |  | $ | 8,262 |
Commercial real estate non-owner occupied |  |  | 16,807 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (459 | ) |  |  | 16,348 |
Construction and development < 60 months |  |  | 3,454 |  |  |  | — |  |  |  | — |  |  |  | 3 |  |  |  | 3 |  |  |  | (185 | ) |  |  | 3,272 |
Construction residential real estate < 60 months |  |  | 1,051 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 52 |  |  |  | 1,103 |
Residential real estate first lien |  |  | 3,048 |  |  |  | 2 |  |  |  | (44 | ) |  |  | 7 |  |  |  | (37 | ) |  |  | 381 |  |  |  | 3,394 |
Residential real estate all other |  |  | 1,567 |  |  |  | — |  |  |  | — |  |  |  | 402 |  |  |  | 402 |  |  |  | (409 | ) |  |  | 1,560 |
Agriculture |  |  | 8,392 |  |  |  | — |  |  |  | (125 | ) |  |  | 3 |  |  |  | (122 | ) |  |  | (252 | ) |  |  | 8,018 |
Commercial non-real estate |  |  | 25,565 |  |  |  | 48 |  |  |  | (57 | ) |  |  | 110 |  |  |  | 53 |  |  |  | (503 | ) |  |  | 25,163 |
Consumer non-real estate |  |  | 3,694 |  |  |  | 28 |  |  |  | (80 | ) |  |  | 38 |  |  |  | (42 | ) |  |  | 50 |  |  |  | 3,730 |
Oil and gas |  |  | 12,808 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 3,581 |  |  |  | 16,389 |
Total |  | $ | 83,936 |  |  | $ | 78 |  |  | $ | (322 | ) |  | $ | 611 |  |  | $ | 289 |  |  | $ | 2,936 |  |  | $ | 87,239 |
Purchased Credit Deteriorated Loans The Company has purchased loans, for which there was, at acquisition, evidence of more than insignificant deterioration of credit quality since origination. The Company did not purchase credit-deteriorated loans during the three month period ended March 31, 2023. The credit-deteriorated loans purchased during the three months ended March 31, 2022 were as follows:
|  | Loans acquired with deteriorated credit quality |
|  | (Dollars in thousands) |
For the period ended March 31, 2022 |  |  |
Purchase price of loans at acquisition |  | $ | 661 |
Allowance for credit losses at acquisition |  |  | 78 |
Par value of acquired loans at acquisition |  | $ | 739 |
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 three months ended March 31, 2023 and 2022, 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 March 31, 2023 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial real estate owner occupied |  | $ | 2,154 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 2,154 |  |  | $ | 863 |
Commercial real estate non-owner occupied |  |  | 1,248 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 1,248 |  |  |  | 333 |
Construction and development < 60 months |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Construction residential real estate < 60 months |  |  | 388 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 388 |  |  |  | 45 |
Residential real estate first lien |  |  | 387 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 387 |  |  |  | 118 |
Residential real estate all other |  |  | 8 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 8 |  |  |  | 9 |
Agriculture |  |  | 3,439 |  |  |  | 689 |  |  |  | — |  |  |  | 3,447 |  |  |  | 7,575 |  |  |  | 3,027 |
Commercial non-real estate |  |  | — |  |  |  | 5,190 |  |  |  | — |  |  |  | — |  |  |  | 5,190 |  |  |  | 1,823 |
Consumer non-real estate |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 183 |  |  |  | 183 |  |  |  | 95 |
Oil and gas |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Total collateral-dependent loans held for investment |  | $ | 7,624 |  |  | $ | 5,879 |  |  | $ | — |  |  | $ | 3,630 |  |  | $ | 17,133 |  |  | $ | 6,313 |
|  | Collateral Type |  |  |  |  |  |  |
|  | Real Estate |  |  | Business Assets |  |  | Energy Reserves |  |  | Other Assets |  |  | Total |  |  | Specific Allocation |
|  | (Dollars in thousands) |  |  |  |  |  |  |
As of December 31, 2022 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial real estate owner occupied |  | $ | 2,213 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 2,213 |  |  | $ | 870 |
Commercial real estate non-owner occupied |  |  | 1,263 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 1,263 |  |  |  | 333 |
Construction and development < 60 months |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Construction residential real estate < 60 months |  |  | 420 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 420 |  |  |  | 45 |
Residential real estate first lien |  |  | 481 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 481 |  |  |  | 207 |
Residential real estate all other |  |  | 9 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 9 |  |  |  | 9 |
Agriculture |  |  | 3,447 |  |  |  | 701 |  |  |  | — |  |  |  | 3,592 |  |  |  | 7,740 |  |  |  | 3,114 |
Commercial non-real estate |  |  | — |  |  |  | 5,924 |  |  |  | — |  |  |  | 4 |  |  |  | 5,928 |  |  |  | 1,938 |
Consumer non-real estate |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 117 |  |  |  | 117 |  |  |  | 81 |
Oil and gas |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Total collateral-dependent loans held for investment |  | $ | 7,833 |  |  | $ | 6,625 |  |  | $ | — |  |  | $ | 3,713 |  |  | $ | 18,171 |  |  | $ | 6,597 |
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 consolidated 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:
|  | Three Months Ended March 31, |
|  | 2023 |  |  | 2022 |
|  | (Dollars in thousands) |
Other real estate owned |  | $ | 565 |  |  | $ | 2,153 |
Repossessed assets |  |  | 395 |  |  |  | 277 |
Total |  | $ | 960 |  |  | $ | 2,430 |

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 https://asc.fasb.org/subtopic&trid=2196772 + Details
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X
- References No definition available. + Details
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