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LOANS AND ALLOWANCE FOR CREDIT LOSSES
 12 Months Ended
Dec. 31, 2025
Receivables [Abstract]  
LOANS AND ALLOWANCE FOR CREDIT LOSSES LOANS AND ALLOWANCE FOR CREDIT LOSSES
The loan portfolio balances, net of unearned income and fees, consist of various types of loans primarily all made to borrowers located within Texas and segregated by class of loan were as follows:
December 31,
20252024
(In thousands)
Commercial and industrial$1,476,559 $1,362,260 
Real estate:
Commercial real estate (including multi-family residential)3,766,294 3,868,218 
Commercial real estate construction and land development720,779 845,494 
1-4 family residential (including home equity)1,136,227 1,115,484 
Residential construction124,653 157,977 
Consumer and other76,079 90,421 
Total loans7,300,591 7,439,854 
Allowance for credit losses on loans(83,629)(81,058)
Loans, net$7,216,962 $7,358,796 
Loan Origination/Risk Management
The Company has certain lending policies and procedures in place that are designed to maximize loan income within an acceptable level of risk. The Company maintains an independent loan review department that reviews and validates the credit risk program on a periodic basis. In addition, an independent third-party loan review is performed on a quarterly basis. In connection with the reviews 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:
Commercial and Industrial Loans—The Company makes commercial and industrial loans in its market area that are underwritten on the basis of the borrower’s ability to service the debt from income. The portfolio includes loans to commercial customers for use in financing working capital needs, equipment purchases and expansions. The loans in this category are repaid primarily from the cash flow of a borrower’s principal business operation. Credit risk in these loans is driven by creditworthiness of a borrower and the economic conditions that impact the cash flow stability from business operations. The Company generally takes as collateral a lien on any available real estate, equipment or other assets owned by the borrower and typically obtains a personal guaranty of the borrower or principal.
Commercial Real Estate—The Company makes loans collateralized by owner-occupied, nonowner-occupied and multi-family real estate to finance the purchase or ownership of real estate.
The Company’s nonowner-occupied and multi-family commercial real estate lending typically involves higher loan principal amounts, and the repayment of these loans is generally dependent on sufficient income from the properties securing the loans to cover operating expenses and debt service. The Company generally requires the borrower to have had an existing relationship with the Company and have a proven record of success. In addition, these loans are generally guaranteed by individual owners of the borrower and have typically lower loan to value ratios.
Loans secured by owner-occupied properties represented 47.7% of the outstanding principal balance of the Company’s commercial real estate loans at December 31, 2025. The Company is dependent on the cash flows of the business occupying the property and its owners and requires these loans generally to be secured by property with adequate margins and guaranteed by the
individual owners. The Company’s owner-occupied commercial real estate loans collateralized by first liens on real estate typically have fixed interest rates and amortize over a 10-to-20 year period.
Commercial real estate loans are viewed primarily as cash flow loans and secondarily as loans secured by real estate. Credit risk in these loans may be impacted by the creditworthiness of a borrower, property values and the local economies in the Company’s metropolitan area.
Construction and Land Development Loans—The Company makes loans to finance the construction of nonresidential and residential properties. Construction loans generally are collateralized by first liens on real estate and generally have floating interest rates. Construction and land development real estate loans are usually based upon estimates of costs and estimated value of the completed project and include independent appraisal reviews and a financial analysis of the developers and property owners. The Company generally conducts periodic inspections, either directly or through an agent, prior to approval of periodic draws on these loans. Underwriting guidelines similar to those described above are also used in the Company’s construction lending activities. The Company may be required to fund additional amounts to complete a project and may have to hold the property for an indeterminate period of time. Sources of repayment of these loans may include permanent loans, sales of developed property or an interim loan commitment from the Company until permanent financing is obtained. These loans are considered to be higher risk than other real estate loans due to their ultimate repayment being sensitive to interest rate changes, general economic conditions and the availability of long-term financing. Credit risk in these loans may be impacted by the creditworthiness of a borrower, property values and the local economies in the Company’s metropolitan area.
1-4 Residential Real Estate Loans—The Company’s lending activities also include the origination of 1-4 family residential mortgage loans (including home equity loans) collateralized by owner-occupied residential properties located in the Company’s market areas. The Company offers a variety of mortgage loan portfolio products which have a term of 5 to 7 years and generally amortize over 10 to 30 years. Loans collateralized by 1-4 family residential real estate generally have been originated in amounts of no more than 90% of appraised value. Repayment of these loans is primarily dependent on the personal income and credit rating of the borrowers. Credit risk in these loans can be impacted by economic conditions within the Company’s metropolitan area that might impact either property values or a borrower’s personal income. Risk is mitigated by the fact that the loans are of smaller individual amounts and spread over a larger number of borrowers.
Consumer and Other Loans—The Company makes a variety of loans to individuals for personal and household purposes including secured and unsecured installment and term loans. Consumer loans are underwritten based on the individual borrower’s income, current debt level, past credit history and the value of any available collateral. Repayment for these loans will come from a borrower’s income source that are typically independent of the loan purpose. The terms of these loans typically range from 12 to 60 months and vary based upon the nature of collateral and size of loan. Credit risk is driven by consumer economic factors, such as, unemployment and general economic conditions in the Company metropolitan area and the creditworthiness of a borrower.
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.
Concentrations of Credit
A majority of the Company’s lending activity occurs in and around our market. The Company’s loans are primarily loans secured by real estate, including commercial and residential construction, owner-occupied and nonowner-occupied and multi-family commercial real estate, raw land and other real estate based loans.
Related Party Loans
Related party loans activity for the year ended December 31, 2025 was as follows (in thousands):
Beginning balance on January 1$106,234 
New loans and additions52,127 
Repayments(43,687)
Ending balance on December 31$114,674 
The related party loans outstanding at December 31, 2025 and 2024 are net of cash collateralized loans of $12.6 million and $22.0 million, respectively.
Nonaccrual and Past Due Loans
An aging analysis of the recorded investment in past due loans, segregated by class of loans, is included below. The Company defines recorded investment as the outstanding loan balances including net deferred loan fees and excluding accrued interest receivable of $27.6 million and $30.4 million as of December 31, 2025 and 2024, respectively, due to immateriality.
December 31, 2025
Loans Past Due and Still AccruingNonaccrual
Loans		Current
Loans		Total
Loans
30-89
Days		90 or More
Days		Total Past
Due Loans
(In thousands)
Commercial and industrial$6,789 $— $6,789 $7,616 $1,462,154 $1,476,559 
Real estate:
Commercial real estate (including multi-family residential)8,790 — 8,790 29,271 3,728,233 3,766,294 
Commercial real estate construction and land development2,129 — 2,129 1,838 716,812 720,779 
1-4 family residential (including home equity)9,285 — 9,285 13,333 1,113,609 1,136,227 
Residential construction— — — 448 124,205 124,653 
Consumer and other35 — 35 42 76,002 76,079 
Total loans$27,028 $— $27,028 $52,548 $7,221,015 $7,300,591 
December 31, 2024
Loans Past Due and Still AccruingNonaccrual
Loans		Current
Loans		Total
Loans
30-89
Days		90 or More
Days		Total Past
Due Loans
(In thousands)
Commercial and industrial$6,814 $— $6,814 $8,500 $1,346,946 $1,362,260 
Real estate:
Commercial real estate (including multi-family residential)15,128 — 15,128 16,459 3,836,631 3,868,218 
Commercial real estate construction and land development1,614 — 1,614 3,061 840,819 845,494 
1-4 family residential (including home equity)10,684 — 10,684 9,056 1,095,744 1,115,484 
Residential construction478 — 478 — 157,499 157,977 
Consumer and other37 — 37 136 90,248 90,421 
Total loans$34,755 $— $34,755 $37,212 $7,367,887 $7,439,854 
If interest on nonaccrual loans had been accrued under the original loan terms, approximately $2.5 million and $1.7 million would have been recorded as income for the years ended December 31, 2025 and 2024, respectively.
Credit Quality Indicators
The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt. The Company utilizes a risk rating matrix to assign a risk rating to each of its loans. Risk ratings are updated on an ongoing basis and are subject to change by continuous loan monitoring processes including lending management monitoring, executive
management and board committee oversight, and independent credit review. 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 certain risk ratings to be used as credit quality indicators including trends related to (1) the weighted-average risk grade of loans, (2) the level of classified loans, (3) the delinquency status of loans, (4) nonperforming loans and (5) the general economic conditions in our market. On an annual basis, individual bankers, under the oversight of credit administration, review updated financial information for pass grade commercial loans over a defined threshold to reassess the risk grade. When a loan reaches a set of internally designated criteria, including Substandard or higher, a special assets officer will be involved in the monitoring of the loan on an on-going basis.
The following is a general description of the risk ratings used by the Company:
Pass—Credits in this category contain an acceptable amount of risk.
Special Mention—Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in the deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.
Substandard—Loans classified as substandard have well-defined weaknesses on a continuing basis and are inadequately protected by the current net worth and paying capacity of the borrower, declining collateral values, or a continuing downturn in their industry which is reducing their profits to below zero and having a significantly negative impact on their cash flow. These loans so classified are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.
Doubtful—Loans classified as doubtful have all the weaknesses inherent in those classified as substandard with the added characteristic that the weaknesses make collection or liquidation in full based on currently existing facts, conditions and values, highly questionable and improbable.
Loss—Loans classified as loss are to be charged-off or charged-down when payment is acknowledged to be uncertain or when the timing or value of payments cannot be determined. “Loss” is not intended to imply that the loan or some portion of it will never be paid, nor does it in any way imply that there has been a forgiveness of debt.
The following table presents risk ratings by category and the gross charge-offs by primary loan type and year of origination or renewal. Generally, current period renewals of credit are re-underwritten at the point of renewal and considered current period originations for purposes of the table below. The following summarizes the amortized cost basis of loans by year of origination/renewal and credit quality indicator by class of loan as of December 31, 2025 and 2024:
December 31, 2025December 31, 2024
Term Loans Amortized Cost Basis by Origination YearRevolving LoansRevolving Loans
Converted to Term Loans		TotalTotal
20252024202320222021Prior
(In thousands)
Commercial and industrial
Pass$341,957 $176,253 $132,921 $97,544 $67,133 $16,667 $560,236 $45,930 $1,438,641 $1,321,977 
Special Mention21 1,298 1,459 149 625 545 712 19 4,828 6,266 
Substandard1,491 1,656 2,448 7,886 445 9,813 4,915 4,436 33,090 34,017 
Doubtful— — — — — — — — — — 
Total commercial and industrial loans$343,469 $179,207 $136,828 $105,579 $68,203 $27,025 $565,863 $50,385 $1,476,559 $1,362,260 
Current period gross charge-offs$— $1,108 $252 $577 $57 $70 $— $1,106 $3,170 
Commercial real estate (including multi-family residential)
Pass$666,669 $274,149 $331,691 $1,133,697 $605,637 $426,785 $117,971 $23,665 $3,580,264 $3,671,749 
Special Mention15,986 148 9,620 27,453 6,573 16,482 298 — 76,560 99,165 
Substandard12,939 12,919 10,317 23,889 32,027 16,749 145 485 109,470 97,304 
Doubtful— — — — — — — — — — 
Total commercial real estate (including multi-family residential) $695,594 $287,216 $351,628 $1,185,039 $644,237 $460,016 $118,414 $24,150 $3,766,294 $3,868,218 
Current period gross charge-offs$— $— $116 $— $363 $111 $— $— $590 
Commercial real estate construction and land development
Pass$308,092 $158,585 $55,588 $91,579 $38,571 $4,878 $40,824 $5,618 $703,735 $828,418 
Special Mention9,785 — 798 810 530 628 — — 12,551 8,911 
Substandard898 937 1,738 342 327 77 — 174 4,493 8,165 
Doubtful— — — — — — — — — — 
Total commercial real estate construction and land development$318,775 $159,522 $58,124 $92,731 $39,428 $5,583 $40,824 $5,792 $720,779 $845,494 
Current period gross charge-offs$— $— $— $309 $— $— $24 $129 $462 
December 31, 2025December 31, 2024
Term Loans Amortized Cost Basis by Origination YearRevolving LoansRevolving Loans
Converted to Term Loans		TotalTotal
20252024202320222021 Prior
(In thousands)
1-4 family residential (including home equity)
Pass$148,638 $142,890 $151,362 $247,872 $169,704 $142,464 $75,383 $17,276 $1,095,589 $1,073,277 
Special Mention533 793 3,158 2,591 1,612 480 2,088 150 11,405 10,326 
Substandard1,257 417 1,517 7,145 6,425 7,720 3,720 1,032 29,233 31,881 
Doubtful— — — — — — — — — — 
Total 1-4 family residential (including home equity)$150,428 $144,100 $156,037 $257,608 $177,741 $150,664 $81,191 $18,458 $1,136,227 $1,115,484 
Current period gross charge-offs$— $273 $32 $— $68 $— $— $— $373 
Residential construction
Pass$72,186 $22,320 $29,322 $— $— $— $— $— $123,828 $151,742 
Special Mention— — — — 377 — — — 377 321 
Substandard154 294 — — — — — — 448 5,914 
Doubtful— — — — — — — — — — 
Total residential construction$72,340 $22,614 $29,322 $— $377 $— $— $— $124,653 $157,977 
Current period gross charge-offs$— $— $— $— $— $— $— $— $— 
Consumer and other
Pass$40,295 $7,957 $5,568 $3,374 $2,425 $111 $14,812 $1,437 $75,979 $90,143 
Special Mention— — — — 6 — — — 6 16 
Substandard7 25 21 29 — — — 12 94 262 
Doubtful— — — — — — — — — — 
Total consumer and other$40,302 $7,982 $5,589 $3,403 $2,431 $111 $14,812 $1,449 $76,079 $90,421 
Current period gross charge-offs$57 $10 $19 $59 $— $— $— $— $145 
Total loans
Pass$1,577,837 $782,154 $706,452 $1,574,066 $883,470 $590,905 $809,226 $93,926 $7,018,036 $7,137,306 
Special Mention26,325 2,239 15,035 31,003 9,723 18,135 3,098 169 105,727 125,005 
Substandard16,746 16,248 16,041 39,291 39,224 34,359 8,780 6,139 176,828 177,543 
Doubtful— — — — — — — — — — 
Total loans$1,620,908 $800,641 $737,528 $1,644,360 $932,417 $643,399 $821,104 $100,234 $7,300,591 $7,439,854 
Total current period gross charge-offs$57 $1,391 $419 $945 $488 $181 $24 $1,235 $4,740 
The following table presents the activity in the allowance for credit losses on loans by portfolio type for the years ended December 31, 2025, 2024 and 2023:
Commercial
and Industrial		 Commercial Real Estate
(including Multi-Family
Residential)		 Commercial Real Estate
Construction and Land
Development		 1-4 Family Residential
(including
Home Equity)		 Residential
Construction		 Consumer
and Other		 Total
(In thousands)
Allowance for credit losses on loans:
Balance December 31, 2024$28,847 $29,833 $16,383 $3,320 $1,565 $1,110 $81,058 
Provision for (reversal of) credit losses on loans6,799 2,616 (2,701)267 (343)(304)6,334 
Charge-offs(3,170)(590)(462)(373)— (145)(4,740)
Recoveries706 14 — — — 257 977 
Net charge-offs(2,464)(576)(462)(373)— 112 (3,763)
   Balance December 31, 2025$33,182 $31,873 $13,220 $3,214 $1,222 $918 $83,629 
Allowance for credit losses on loans:
Balance December 31, 2023$31,979 $38,187 $13,627 $4,785 $2,623 $483 $91,684 
Provision for (reversal of) credit losses on loans2,719 (7,698)2,756 (1,469)(1,058)786 (3,964)
Charge-offs(7,300)(786)— (2)— (171)(8,259)
Recoveries1,449 130 — 6 — 12 1,597 
Net charge-offs(5,851)(656)— 4 — (159)(6,662)
   Balance December 31, 2024$28,847 $29,833 $16,383 $3,320 $1,565 $1,110 $81,058 
Allowance for credit losses on loans:
Balance December 31, 2022$41,236 $32,970 $14,121 $2,709 $1,796 $348 $93,180 
Provision for (reversal of) credit losses on loans120 5,201 (494)3,592 827 379 9,625 
Charge-offs(10,600)— — (1,525)— (291)(12,416)
Recoveries1,223 16 — 9 — 47 1,295 
Net charge-offs(9,377)16 — (1,516)— (244)(11,121)
   Balance December 31, 2023$31,979 $38,187 $13,627 $4,785 $2,623 $483 $91,684 
Collateral Dependent Loans

Collateral dependent loans are secured by real estate assets, accounts receivable, inventory and equipment. For a collateral dependent loan, the Company’s evaluation process includes a valuation by appraisal or other collateral analysis adjusted for selling costs, when appropriate. This valuation is compared to the remaining outstanding principal balance of the loan and any loss is included in the allowance for credit losses on loans as a specific allocation. The allowance for credit losses on collateral dependent loans was $7.0 million and $2.0 million as of December 31, 2025 and 2024, respectively.
The following tables present the amortized cost basis of collateral dependent loans, which are individually evaluated to determine expected credit losses as of December 31, 2025 and 2024:
December 31, 2025
Real EstateBusiness AssetsOtherTotal
(In thousands)
Commercial and industrial$— $4,390 $— $4,390 
Real estate:
Commercial real estate (including multi-family residential)28,194 — — 28,194 
Commercial real estate construction and land development1,838 — — 1,838 
1-4 family residential (including home equity)10,944 — — 10,944 
Residential construction448 — — 448 
Consumer and other— — — — 
Total$41,424 $4,390 $— $45,814 
December 31, 2024
Real EstateBusiness AssetsOtherTotal
(In thousands)
Commercial and industrial$— $13,654 $— $13,654 
Real estate:
Commercial real estate (including multi-family residential)3,552— — 3,552 
Commercial real estate construction and land development577 — — 577 
1-4 family residential (including home equity)13,412 — — 13,412 
Residential construction— — — — 
Consumer and other— — 56 56 
Total$17,541 $13,654 $56 $31,251 
Nonaccrual Loans
The following table presents additional information regarding nonaccrual loans. No interest income was recognized on nonaccrual loans for the years ended December 31, 2025 and 2024, respectively.
December 31, 2025
Nonaccrual Loans with No Related Allowance Nonaccrual Loans with Related Allowance Total Nonaccrual Loans
(In thousands)
Commercial and industrial$2,291 $5,325 $7,616 
Real estate:
Commercial real estate (including multi-family residential)15,489 13,782 29,271 
Commercial real estate construction and land development1,838 — 1,838 
1-4 family residential (including home equity)8,170 5,163 13,333 
Residential construction448 — 448 
Consumer and other— 42 42 
Total loans$28,236 $24,312 $52,548 
December 31, 2024
Nonaccrual Loans with No Related AllowanceNonaccrual Loans with Related AllowanceTotal Nonaccrual Loans
(In thousands)
Commercial and industrial$4,835 $3,665 $8,500 
Real estate:
Commercial real estate (including multi-family residential)11,711 4,748 16,459 
Commercial real estate construction and land development633 2,428 3,061 
1-4 family residential (including home equity)6,834 2,222 9,056 
Residential construction— — — 
Consumer and other80 56 136 
Total loans$24,093 $13,119 $37,212 
Loan Modifications
Loan modifications are reported if concessions have been granted to borrowers that are experiencing financial difficulty. The percentage of loans modified comprised less than 1% of their respective classes of loan portfolios at December 31, 2025. The following table presents information regarding the period-end balance of loans that were modified to borrowers experiencing financial difficulty during the years ended December 31, 2025 and 2024. As of December 31, 2025, the Company had $335 thousand of commitments to lend additional funds to these borrowers.
Year Ended December 31, 2025
Interest Rate ReductionTerm ExtensionPayment DelayPrincipal ForgivenessCombination Term Extension and Payment DelayCombination Term Extension and Interest Rate ReductionTotal
(In thousands)
Commercial and industrial$— $2,652 $— $— $— $283 $2,935 
Real estate:
Commercial real estate (including multi-family residential)
———————
Commercial real estate construction and land development
—174————174
1-4 family residential (including home equity)
———————
Residential construction———————
Consumer and other———————
Total$— $2,826 $— $— $— $283 $3,109 
Year Ended December 31, 2024
Interest Rate ReductionTerm ExtensionPayment DelayPrincipal ForgivenessCombination Term Extension and Payment DelayCombination Term Extension and Interest Rate ReductionTotal
(In thousands)
Commercial and industrial$— $1,091 $780 $— $— $1,389 $3,260 
Real estate:
Commercial real estate (including multi-family residential)
——3,040——1,4674,507
Commercial real estate construction and land development
—1,1031,428——2,4584,989
1-4 family residential (including home equity)
—1,080385——4991,964
Residential construction—412————412
Consumer and other———————
Total$— $3,686 $5,633 $— $— $5,813 $15,132 

The following table summarizes, by loan portfolio, the financial effect of the Company’s loan modifications for the years ended December 31, 2025 and 2024:
Year Ended December 31, 2025Year Ended December 31, 2024
Weighted-Average Term ExtensionWeighted-Average Interest Rate ReductionWeighted-Average Term ExtensionWeighted-Average Interest Rate Reduction
(Months)(Months)
Commercial and industrial15— %6— %
Real estate:
Commercial real estate (including multi-family residential)
—— %—— %
Commercial real estate construction and land development
12— %17— %
1-4 family residential (including home equity)
—— %—— %
Residential construction— %6— %
Consumer and other—— %—— %
The following table summarizes loans that had a payment default, determined as 90 or more days past due, that were modified due to the borrowers experiencing financial difficulty during the twelve-month periods indicated:
December 31, 2025December 31, 2024
Term ExtensionPayment DelayCombinationTerm ExtensionPayment DelayCombination
(In thousands)
Commercial and industrial$402 $— $— $— $— $260 
Real estate:
Commercial real estate (including multi-family residential)
——————
Commercial real estate construction and land development
——————
1-4 family residential (including home equity)
————385—
Residential construction——————
Consumer and other——————
Total$402 $— $— $— $385 $260