v3.26.1
LOANS AND ALLOWANCE FOR CREDIT LOSSES
 3 Months Ended
Mar. 31, 2026
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 made to borrowers located within Texas, and segregated by class of loan were as follows:
March 31, 2026December 31, 2025
(In thousands)
Commercial and industrial$1,563,421 $1,476,559 
Real estate:
Commercial real estate (including multi-family residential)3,844,629 3,766,294 
Commercial real estate construction and land development821,723 720,779 
1-4 family residential (including home equity)1,167,436 1,136,227 
Residential construction102,609 124,653 
Consumer and other88,134 76,079 
Total loans7,587,952 7,300,591 
Allowance for credit losses on loans(85,431)(83,629)
Loans, net$7,502,521 $7,216,962 
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 $28.4 million and $27.6 million as of March 31, 2026 and December 31, 2025, respectively, due to immateriality.
March 31, 2026
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$4,224 $— $4,224 $10,488 $1,548,709 $1,563,421 
Real estate:
Commercial real estate (including
     multi-family residential)
11,423 — 11,423 32,939 3,800,267 3,844,629 
Commercial real estate construction
    and land development
793 — 793 905 820,025 821,723 
1-4 family residential (including
    home equity)
8,689 — 8,689 15,920 1,142,827 1,167,436 
Residential construction980 — 980 292 101,337 102,609 
Consumer and other229 — 229 46 87,859 88,134 
Total loans$26,338 $— $26,338 $60,590 $7,501,024 $7,587,952 
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 development
2,129 — 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 
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 March 31, 2026 and December 31, 2025:
March 31, 2026December 31, 2025
Term Loans Amortized Cost Basis by Origination YearRevolving
Loans		Revolving Loans
Converted to Term Loans		TotalTotal
20262025202420232022Prior
(In thousands)
Commercial and industrial
Pass$95,859 $346,524 $141,096 $117,445 $86,892 $76,134 $622,711 $34,231 $1,520,892 $1,438,641 
Special Mention— — 1,167 1,411 48 152 11 7,183 9,972 4,828 
Substandard— 1,314 1,708 1,629 7,706 10,166 2,589 7,445 32,557 33,090 
Doubtful— — — — — — — — — — 
Total commercial and industrial
    loans
$95,859 $347,838 $143,971 $120,485 $94,646 $86,452 $625,311 $48,859 $1,563,421 $1,476,559 
Current period gross charge-offs$— $28 $141 $50 $— $210 $56 $268 $753 
Commercial real estate
    (including multi-family residential)
Pass$276,520 $628,474 $268,451 $298,813 $1,096,248 $943,669 $123,891 $27,338 $3,663,404 $3,580,264 
Special Mention— 5,796 121 9,045 24,500 19,782 297 — 59,541 76,560 
Substandard10,608 13,463 13,690 11,292 24,622 47,383 145 481 121,684 109,470 
Doubtful— — — — — — — — — — 
Total commercial real estate
    (including multi-family
    residential) loans
$287,128 $647,733 $282,262 $319,150 $1,145,370 $1,010,834 $124,333 $27,819 $3,844,629 $3,766,294 
Current period gross charge-offs$— $— $— $— $851 $— $— $— $851 
Commercial real estate construction and land development
Pass$63,531 $377,523 $151,255 $50,730 $61,818 $39,813 $58,408 $4,007 $807,085 $703,735 
Special Mention— 9,642 — 551 793 693 — — 11,679 12,551 
Substandard— 76 566 1,093 312 740 — 172 2,959 4,493 
Doubtful— — — — — — — — — — 
Total commercial real estate construction and land development$63,531 $387,241 $151,821 $52,374 $62,923 $41,246 $58,408 $4,179 $821,723 $720,779 
Current period gross charge-offs$— $— $— $— $— $— $— $— $— 
March 31, 2026December 31, 2025
Term Loans Amortized Cost Basis by Origination YearRevolving LoansRevolving Loans
Converted to Term Loans
20262025202420232022PriorTotalTotal
(In thousands)
1-4 family residential (including
    home equity)
Pass$33,271 $157,791 $143,934 $170,019 $237,472 $291,605 $77,011 $16,959 $1,128,062 $1,095,589 
Special Mention227 — 360 1,373 1,731 997 157 150 4,995 11,405 
Substandard— 1,512 575 2,195 8,781 14,669 3,662 2,985 34,379 29,233 
Doubtful— — — — — — — — — — 
Total 1-4 family residential
    (including home equity)
$33,498 $159,303 $144,869 $173,587 $247,984 $307,271 $80,830 $20,094 $1,167,436 $1,136,227 
Current period gross charge-offs$— $— $— $2 $— $— $— $— $2 
Residential construction
Pass$4,503 $78,472 $14,629 $3,356 $— $— $— $— $100,960 $123,828 
Special Mention— 980 — — — 377 — — 1,357 377 
Substandard— — 292 — — — — — 292 448 
Doubtful— — — — — — — — — — 
Total residential construction$4,503 $79,452 $14,921 $3,356 $— $377 $— $— $102,609 $124,653 
Current period gross charge-offs$— $— $— $— $— $— $— $— $— 
Consumer and other
Pass
$28,203 $28,548 $6,247 $4,802 $2,988 $1,307 $14,752 $1,183 $88,030 $75,979 
Special Mention— — — — — 4 — — 4 6 
Substandard— 27 34 16 23 — — — 100 94 
Doubtful— — — — — — — — — — 
Total consumer and other$28,203 $28,575 $6,281 $4,818 $3,011 $1,311 $14,752 $1,183 $88,134 $76,079 
Current period gross charge-offs$— $— $— $5 $— $— $5 $— $10 
Total loans
Pass$501,887 $1,617,332 $725,612 $645,165 $1,485,418 $1,352,528 $896,773 $83,718 $7,308,433 $7,018,036 
Special Mention227 16,418 1,648 12,380 27,072 22,005 465 7,333 87,548 105,727 
Substandard10,608 16,392 16,865 16,225 41,444 72,958 6,396 11,083 191,971 176,828 
Doubtful— — — — — — — — — — 
Total loans$512,722 $1,650,142 $744,125 $673,770 $1,553,934 $1,447,491 $903,634 $102,134 $7,587,952 $7,300,591 
Current period gross charge-offs$— $28 $141 $57 $851 $210 $61 $268 $1,616 
The following table presents the activity in the allowance for credit losses on loans by portfolio type for the three months ended March 31, 2026 and 2025:
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)
Three Months Ended
Balance December 31, 2025$33,182 $31,873 $13,220 $3,214 $1,222 $918 $83,629 
Provision for (reversal of) credit losses on loans
(259)1,353 1,999 57 (222)232 3,160 
Charge-offs(753)(851)— (2)— (10)(1,616)
Recoveries240 — — 16 — 2 258 
Net charge-offs(513)(851)— 14 — (8)(1,358)
Balance March 31, 2026$32,410 $32,375 $15,219 $3,285 $1,000 $1,142 $85,431 
Three Months Ended
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 loans
1,166 4,175 (2,423)271 (169)(169)2,851 
Charge-offs(45)— (310)(224)— (3)(582)
Recoveries416 — — — — 3 419 
Net charge-offs371 — (310)(224)— — (163)
Balance March 31, 2025$30,384 $34,008 $13,650 $3,367 $1,396 $941 $83,746 
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 $6.4 million and $7.0 million, as of March 31, 2026 and December 31, 2025, respectively.
The following tables present the amortized cost basis of collateral dependent loans, which are individually evaluated to determine expected credit losses as of March 31, 2026 and December 31, 2025:
March 31, 2026
Real EstateBusiness AssetsOtherTotal
(In thousands)
Commercial and industrial$— $5,066 $— $5,066 
Real estate:
Commercial real estate (including multi-family residential)31,883 — — 31,883 
Commercial real estate construction and land development905 — — 905 
1-4 family residential (including home equity)13,567 — — 13,567 
Residential construction292 — — 292 
  Total$46,647 $5,066 $— $51,713 
December 31, 2025
Real EstateBusiness AssetsOtherTotal
(In thousands)
Commercial and industrial$— $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 
    Total$41,424 $4,390 $— $45,814 
Nonaccrual Loans
The following tables present additional information regarding nonaccrual loans. No interest income was recognized on nonaccrual loans as of March 31, 2026 and December 31, 2025:
March 31, 2026
Nonaccrual Loans with No Related AllowanceNonaccrual Loans with Related AllowanceTotal Nonaccrual Loans
(In thousands)
Commercial and industrial$3,144 $7,344 $10,488 
Real estate:
Commercial real estate (including multi-family residential)16,868 16,071 32,939 
Commercial real estate construction and land development905 — 905 
1-4 family residential (including home equity)9,426 6,494 15,920 
Residential construction292 — 292 
Consumer and other— 46 46 
Total$30,635 $29,955 $60,590 
December 31, 2025
Nonaccrual Loans with No Related AllowanceNonaccrual Loans with Related AllowanceTotal 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$28,236 $24,312 $52,548 
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 March 31, 2026. The following table presents information regarding the period end balance of loans that were modified to borrowers experiencing financial difficulty during the three months ended March 31, 2026 and 2025. As of March 31, 2026, the Company had no commitments to lend additional funds to these borrowers.
The following tables present information regarding loans that were modified due to the borrowers experiencing financial difficulty during the three months ended March 31, 2026 and 2025:
Three Months Ended March 31, 2026
Interest Rate ReductionTerm ExtensionPayment DelayPrincipal ForgivenessCombination Term Extension and Payment DelayCombination Term Extension and Interest Rate ReductionTotal
(In thousands)
Real estate:
Commercial real estate (including multi-family residential)
$— $10,842 $— $— $— $— $10,842 
1-4 family residential (including home equity)
—2271,642———1,869
Total$— $11,069 $1,642 $— $— $— $12,711 
Three Months Ended March 31, 2025
Interest Rate ReductionTerm ExtensionPayment DelayPrincipal ForgivenessCombination Term Extension and Payment DelayCombination Term Extension and Interest Rate ReductionTotal
(In thousands)
Commercial and industrial$— $1,586 $— $— $— $— $1,586 
Real estate:
Commercial real estate (including multi-family residential)
—904————904
Commercial real estate construction and land development
—49——1,428—1,477
Total$— $2,539 $— $— $1,428 $— $3,967 
The following tables present, by loan portfolio, the financial effect of the Company’s loan modifications for the periods indicated:
Three Months Ended March 31, 2026Three Months Ended March 31, 2025
Weighted-Average Term ExtensionWeighted-Average Interest Rate ReductionWeighted-Average Term ExtensionWeighted-Average Interest Rate Reduction
(months)(months)
Commercial and industrial——%15—%
Real estate:
Commercial real estate (including multi-family residential)
6—%12—%
Commercial real estate construction and land development
——%3—%
1-4 family residential (including home equity)
6— %—— %
The following table presents modified 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 periods indicated:
Twelve Months Ended March 31, 2026Twelve Months Ended March 31, 2025
Term ExtensionPayment DelayCombinationTerm ExtensionPayment DelayCombination
(In thousands)
Commercial and industrial$375 $— $— $— $— $— 
Real estate:
Commercial real estate (including multi-family residential)
154——904——
Commercial real estate construction and land development
172——290——
1-4 family residential (including home equity)
—1,641—1,077——
Total$701 $1,641 $— $2,271 $— $—