What happened?
Banks are slowly disclosing more about the role of oil and gas loans in their portfolio. This week, First Financial Bankshares (NASDAQ:FFIN) and National Bank Holdings Corp. (NYSE:NBHC) reported earnings, providing yet another data point for how low oil prices are affecting the banking industry.

Does it matter?
Definitely. First Financial Bankshares is based in Abilene, Texas. National Bank Holdings is geographically diverse, but owns the Hillcrest Bank brand, which operates out of Texas. And like many Texan banks, these two have some sizable oil and gas exposure.

First Financial Bankshares noted that its loans to the oil and gas industry totaled to about 2.9% of its gross loans. Though it didn't break out specific figures in its earnings release, First Financial Bankshares did point to the fact that its nonperforming asset ratio rose to 0.89% from 0.69%, sequentially. Classified loans grew from $112.1 million in September to $149.4 million in December.

Classified loans don't ordinarily jump 33% in a single quarter without some macro event -- oil is very likely the main culprit here. Oil and gas credits made up about 44% of its charge-offs in the fourth quarter.

National Bank Holdings provided more information about its oil and gas loans and its impact to the bank. The company disclosed that its energy-related loans stood at 5.7% of total loans and about 3.4% of its earning assets, or just over 28% of its Tier 1 capital.

Notably, National Bank Holdings maintains relatively light allowances for loan losses, building a reserve equal to 2.65% of its energy loans against a portfolio that is 80.5% midstream and E&P companies. This is light compared to energy banking specialists Cullen/Frost Bankers and BOK Financial, which reported building allowances for loan losses equal to 2.89% and 3.11% of their energy-related loans, respectively. 

What eventually comes of energy loan exposure is something that will only be discovered with time, but analysts are broadly expecting banks to build allowances equal to 5% of their energy loans when they report fourth-quarter earnings. Lighter allowances may signal that a bank may need to play catch-up as time goes on and credit quality deteriorates, weighing on future earnings.

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