Annual report pursuant to Section 13 and 15(d)

Loans

v3.22.0.1
Loans
12 Months Ended
Dec. 31, 2021
Receivables [Abstract]  
Loans

NOTE 5. LOANS

Loans consisted of the following at December 31, 2021 and 2020:

 

 

 

December 31, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquired Loans(1)

 

 

Organic Loans

 

 

Total Loans

 

 

 

(Dollars in thousands)

 

Commercial and industrial loans (2)

 

$

28,924

 

 

$

435,773

 

 

$

464,697

 

Real estate:

 

 

 

 

 

 

 

 

 

 

 

 

1-4 single family residential

 

 

58,869

 

 

 

303,286

 

 

 

362,155

 

Construction, land and development

 

 

31,430

 

 

 

369,522

 

 

 

400,952

 

Commercial real estate (including multifamily)

 

 

210,805

 

 

 

820,086

 

 

 

1,030,891

 

Consumer loans and leases

 

 

1,263

 

 

 

5,044

 

 

 

6,307

 

Municipal and other loans

 

 

4,508

 

 

 

52,591

 

 

 

57,099

 

Total loans held in portfolio (3)

 

$

335,799

 

 

$

1,986,302

 

 

$

2,322,101

 

 

    

 

 

 

December 31, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquired Loans(1)

 

 

Organic Loans

 

 

Total Loans

 

 

 

(Dollars in thousands)

 

Commercial and industrial loans (2)

 

$

53,857

 

 

$

521,129

 

 

$

574,986

 

Real estate:

 

 

 

 

 

 

 

 

 

 

 

 

1-4 single family residential

 

 

93,840

 

 

 

270,299

 

 

 

364,139

 

Construction, land and development

 

 

131,734

 

 

 

283,754

 

 

 

415,488

 

Commercial real estate (including multifamily)

 

 

333,489

 

 

 

623,254

 

 

 

956,743

 

Consumer loans and leases

 

 

3,088

 

 

 

8,650

 

 

 

11,738

 

Municipal and other loans

 

 

6,103

 

 

 

59,335

 

 

 

65,438

 

Total loans held in portfolio (3)

 

$

622,111

 

 

$

1,766,421

 

 

$

2,388,532

 

(1)

Acquired loans in 2021 and 2020 include loans acquired in the Comanche, Beeville, Citizens, and Simmons acquisitions. All loans originated after acquisition close date are included in organic loans.

(2)

Balance includes $53.7 million and $70.8 million of the unguaranteed portion of SBA loans as of December 31, 2021 and 2020, respectively. Balance also includes $43.9 and $277.8 million of PPP loans outstanding as of December 31, 2021 and 2020, respectively.

(3)

Balance includes $(8.1) and $(8.2) million of deferred fees, cost, premium and discount as of December 31, 2021 and 2020, respectively.

 

 

 

 

At December 31, 2021 and 2020, the Company had pledged loans as collateral for FHLB advances of $993.4 million and $927.3 million, respectively. Additionally, at December 31, 2020, the Company had pledged loans as collateral associated with the Board of Governors of the Federal Reserve System’s (“Federal Reserve”) Paycheck Protection Program Liquidity Facility (“PPPLF”) of $149.8 million. At December 31, 2021, all borrowings under the PPPLF had been repaid and no loans were pledged as collateral. There were no consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings were in process as of December 31, 2021 and 2020.

 

In April 2020, we began originating loans to qualified small businesses under the PPP administered by the SBA under the provisions of the CARES Act.   Total PPP loans at December 31, 2021 and 2020 were $43.9 million and $277.8 million, respectively, and are included in the commercial and industrial segment of our loan portfolio. These loans are fully guaranteed by the SBA, carry a contractual term of two to five years and an interest rate of 1.00%. In conjunction with originating PPP loans, the Company recorded deferred origination costs and deferred origination fees. At December 31, 2021, $979 thousand of unamortized origination fees net of costs remain to be recognized over the 3.3 year remaining weighted average life of the loans or at the date of forgiveness if earlier. During the year ended December 31, 2021, $8.0 million of origination fees net of costs have been recognized due to PPP loan forgiveness by the SBA and normal amortization.  During the year ended December 31, 2020, $7.1 million of origination fees net of costs were recognized due to PPP loan forgiveness by the SBA and normal amortization. In conjunction with the PPP, we also participated in the PPPLF which extended loans to banks who are loaning money to small businesses under the PPP. As of December 31, 2021, the Company had no borrowings under the PPPLF.  The maturity date of a borrowing under the PPPLF was equal the maturity date of the PPP loan pledged to

secure the borrowing and would be accelerated (i) if the underlying PPP loan goes into default and is sold to the SBA to realize on the SBA guarantee or (ii) to the extent that any PPP loan forgiveness reimbursement is received from the SBA. Borrowings under the PPPLF were included in long-term liabilities on the consolidated balance sheet and beared interest at a rate of 0.35%. Additionally, a bank may exclude all PPP loans pledged as collateral to the PPPLF from its average total consolidated assets for the purposes of calculating its leverage ratio, while PPP loans that are not pledged as collateral to the PPPLF will be included.

The Company originates and sells loans secured by the SBA. The Company retains the unguaranteed portion of the loan and servicing on the loans sold and receives a fee based upon the principal balance outstanding. During the years ended December 31, 2021, 2020 and 2019, the Company sold approximately $10.1 million, $21.1 million and $47.8 million, respectively, in SBA loans to third parties. The loan sales resulted in realized gains of $967 thousand, $1.8 million and $4.0 million for the years ended December 31, 2021, 2020 and 2019, respectively.

Loans serviced for others are not included in the accompanying balance sheets. The unpaid principal balances of loans serviced for others were $154.3 million and $193.3 million at December 31, 2021 and 2020, respectively. SBA loan servicing fees were $1.2 million, $1.2 million and $929 thousand for the years ended December 31, 2021, 2020 and 2019, respectively.

During the year ended December 31, 2020, we began originating loans to qualified mid-sized businesses under the Main Street Lending Program administered by the Federal Reserve Bank of Boston special purpose vehicle. Under the terms of the program 95 percent of the loan balance is purchased by the Federal Reserve Bank of Boston special purpose vehicle one day following origination. During the year ended December 31, 2021, the Company sold approximately $10.5 million of loans to the Federal Reserve Bank of Boston special purpose vehicle.  The loan sales resulted in realized gains of $99 thousand for the year ended December 31, 2021. During the year ended December 31, 2020, the Company sold approximately $400.3 million of loans to the Federal Reserve Bank of Boston special purpose vehicle. The loan sales resulted in gains of $3.6 million for the year ended December 31, 2020. At December 31, 2021 the unpaid principal balance of loans serviced for others related to the Main Street Lending Program was $333.1 million.   

In the ordinary course of business, the Company makes loans to executive officers and directors. Loans to these related parties, including companies in which they are principal owners, are as follows:

 

 

 

For the Years Ended December 31,

 

 

 

2021

 

 

2020

 

 

2019

 

 

 

(Dollars in thousands)

 

Principal outstanding, beginning of year

 

$

7,581

 

 

$

6,005

 

 

$

107

 

Additions (reductions) of affiliations

 

 

 

 

 

 

 

 

3,402

 

New loans made in current year

 

 

1,052

 

 

 

4,867

 

 

 

4,512

 

Repayments

 

 

(3,225

)

 

 

(3,291

)

 

 

(2,016

)

Principal outstanding, end of year

 

$

5,408

 

 

$

7,581

 

 

$

6,005

 

 

Total unfunded commitments to related parties were $1.2 million and $861 thousand at December 31, 2021 and 2020, respectively.