HOMB filing — read by section

Item 1. Financial Statements

Item 1: Financial Statements 
 
 Home BancShares, Inc. 
 Consolidated Balance Sheets 
 
 (In thousands, except share data) June 30, 2023 December 31, 2022 
 (Unaudited) 
 Assets 
 Cash and due from banks $ 275,656 $ 263,893 
 Interest-bearing deposits with other banks 335,535 460,897 
 Cash and cash equivalents 611,191 724,790 
 Fed funds sold 1,550 — 
 Investment securities — available-for-sale, net of allowance for credit losses of $ 2,524 and $ 842 at June 30, 2023 and December 31, 2023, respectively (amortized cost of $ 4,033,776 and $ 4,445,620 at June 30, 2023 and December 31, 2022, respectively) 
 3,645,013 4,041,590 
 Investment securities — held-to-maturity, net of allowance for credit losses of $ 2,005 at both June 30, 2023 and December 31, 2022 
 1,285,150 1,287,705 
 Total investment securities 4,930,163 5,329,295 
 Loans receivable 14,180,972 14,409,480 
 Allowance for credit losses ( 285,683 ) ( 289,669 ) 
 Loans receivable, net 13,895,289 14,119,811 
 Bank premises and equipment, net 397,315 405,073 
 Foreclosed assets held for sale 725 546 
 Cash value of life insurance 213,090 213,693 
 Accrued interest receivable 101,066 103,199 
 Deferred tax asset, net 206,430 209,321 
 Goodwill 1,398,253 1,398,253 
 Core deposit intangibles 53,500 58,455 
 Other assets 317,857 321,152 
 Total assets $ 22,126,429 $ 22,883,588 
 Liabilities and Stockholders’ Equity 
 Deposits: 
 Demand and non-interest-bearing $ 4,598,593 $ 5,164,997 
 Savings and interest-bearing transaction accounts 11,169,940 11,730,552 
 Time deposits 1,228,358 1,043,234 
 Total deposits 16,996,891 17,938,783 
 Securities sold under agreements to repurchase 160,349 131,146 
 FHLB and other borrowed funds 701,550 650,000 
 Accrued interest payable and other liabilities 173,426 196,877 
 Subordinated debentures 440,129 440,420 
 Total liabilities 18,472,345 19,357,226 
 Stockholders’ equity: 
 Common stock, par value $ 0.01 ; shares authorized 300,000,000 in 2023 and 2022; shares issued and 
 outstanding 202,572,867 in 2023 and 203,433,690 in 2022 
 2,026 2,034 
 Capital surplus 2,366,560 2,386,699 
 Retained earnings 1,578,176 1,443,087 
 Accumulated other comprehensive loss ( 292,678 ) ( 305,458 ) 
 Total stockholders’ equity 3,654,084 3,526,362 
 Total liabilities and stockholders’ equity $ 22,126,429 $ 22,883,588 

 See Condensed Notes to Consolidated Financial Statements. 
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 Home BancShares, Inc. 
 Consolidated Statements of Income 
 
 Three Months Ended
June 30, Six Months Ended
June 30, 
 (In thousands, except per share data) 2023 2022 2023 2022 
 (Unaudited) 
 Interest income: 
 Loans $ 243,152 $ 181,779 $ 480,149 $ 311,221 
 Investment securities 
 Taxable 34,751 20,941 70,039 30,021 
 Tax-exempt 7,932 7,725 15,895 12,432 
 Deposits – other banks 3,729 6,565 8,414 8,238 
 Federal funds sold 68 3 74 4 
 Total interest income 289,632 217,013 574,571 361,916 
 Interest expense: 
 Interest on deposits 70,147 10,729 129,309 15,623 
 Federal funds purchased 2 2 2 2 
 FHLB and other borrowed funds 6,596 1,896 12,786 3,771 
 Securities sold under agreements to repurchase 1,121 187 1,989 295 
 Subordinated debentures 4,123 5,441 8,247 12,319 
 Total interest expense 81,989 18,255 152,333 32,010 
 Net interest income 207,643 198,758 422,238 329,906 
 
 Provision for credit losses on loans 2,300 45,170 3,500 45,170 
 Provision for credit losses on unfunded commitments — 11,410 — 11,410 
 Provision for credit losses on investment securities 1,683 2,005 1,683 2,005 
 Total credit loss expense 3,983 58,585 5,183 58,585 
 Net interest income after credit loss expense 203,660 140,173 417,055 271,321 
 Non-interest income: 
 Service charges on deposit accounts 9,231 10,084 19,073 16,224 
 Other service charges and fees 11,763 12,541 23,638 20,274 
 Trust fees 4,052 4,320 8,916 4,894 
 Mortgage lending income 2,650 5,996 5,221 9,912 
 Insurance commissions 518 658 1,044 1,138 
 Increase in cash value of life insurance 1,211 1,140 2,315 1,632 
 Dividends from FHLB, FRB, FNBB & other 2,922 3,945 5,716 4,643 
 Gain on sale of SBA loans — — 139 95 
 Gain on sale of branches, equipment and other assets, net 917 2 924 18 
 Gain on OREO, net 319 9 319 487 
 
 Fair value adjustment for marketable securities 783 ( 1,801 ) ( 10,625 ) 324 
 Other income 15,143 7,687 26,993 15,609 
 Total non-interest income 49,509 44,581 83,673 75,250 
 Non-interest expense: 
 Salaries and employee benefits 64,534 65,795 129,024 109,346 
 Occupancy and equipment 14,923 14,256 29,875 23,400 
 Data processing expense 9,151 10,094 18,119 17,133 
 Merger and acquisition expenses — 48,731 — 49,594 
 Other operating expenses 27,674 26,606 53,908 42,905 
 Total non-interest expense 116,282 165,482 230,926 242,378 
 Income before income taxes 136,887 19,272 269,802 104,193 
 Income tax expense 31,616 3,294 61,569 23,323 
 Net income $ 105,271 $ 15,978 $ 208,233 $ 80,870 
 Basic earnings per share $ 0.52 $ 0.08 $ 1.03 $ 0.44 
 Diluted earnings per share $ 0.52 $ 0.08 $ 1.02 $ 0.44 

 See Condensed Notes to Consolidated Financial Statements. 
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 Home BancShares, Inc. 
 Consolidated Statements of Comprehensive Income (Loss) 
 
 Three Months Ended
June 30, Six Months Ended
June 30, 
 (In thousands) 2023 2022 2023 2022 
 (Unaudited) 
 Net income $ 105,271 $ 15,978 $ 208,233 $ 80,870 
 Net unrealized (loss) gain on available-for-sale securities ( 48,042 ) ( 146,888 ) 16,926 ( 302,603 ) 
 Other comprehensive (loss) gain before tax effect ( 48,042 ) ( 146,888 ) 16,926 ( 302,603 ) 
 Tax effect on other comprehensive (loss) income 11,665 35,540 ( 4,146 ) 76,236 
 Other comprehensive (loss) income ( 36,377 ) ( 111,348 ) 12,780 ( 226,367 ) 
 Comprehensive income (loss) $ 68,894 $ ( 95,370 ) $ 221,013 $ ( 145,497 ) 

 See Condensed Notes to Consolidated Financial Statements. 
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 Home BancShares, Inc. 
 Consolidated Statements of Stockholders’ Equity 
 
 Three and Six Months Ended June 30, 2023 
 (In thousands, except share data) Common 
 Stock 
 Capital 
 Surplus 
 Retained 
 Earnings 
 Accumulated 
 Other 
 Comprehensive (Loss) Income 
 Total 
 Balances at January 1, 2023 $ 2,034 $ 2,386,699 $ 1,443,087 $ ( 305,458 ) $ 3,526,362 
 Comprehensive income: 
 Net income — — 102,962 — 102,962 
 Other comprehensive income — — — 49,157 49,157 
 Net issuance of 66,451 shares of common stock from exercise of stock options 
 1 85 — — 86 
 Repurchase of 590,000 shares of common stock 
 ( 6 ) ( 13,534 ) — — ( 13,540 ) 
 Share-based compensation net issuance of 258,000 shares of restricted common stock 
 3 2,504 — — 2,507 
 Cash dividends – Common Stock, $ 0.18 per share 
 — — ( 36,649 ) — ( 36,649 ) 
 Balances at March 31, 2023 (unaudited) $ 2,032 $ 2,375,754 $ 1,509,400 $ ( 256,301 ) $ 3,630,885 
 Comprehensive income: 
 Net income — — 105,271 — 105,271 
 Other comprehensive loss — — — ( 36,377 ) ( 36,377 ) 
 Net issuance of 15,575 shares of common stock from exercise of stock options 
 — 275 — — 275 
 
 Repurchase of 560,849 shares of common stock 
 ( 5 ) ( 11,804 ) — — ( 11,809 ) 
 Share-based compensation net forfeiture of 50,000 shares of restricted common stock 
 ( 1 ) 2,335 — — 2,334 
 Cash dividends – Common Stock, $ 0.18 per share 
 — — ( 36,495 ) — ( 36,495 ) 
 Balances at June 30, 2023 (unaudited) $ 2,026 $ 2,366,560 $ 1,578,176 $ ( 292,678 ) $ 3,654,084 

 See Condensed Notes to Consolidated Financial Statements. 
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 Home BancShares, Inc. 
 Consolidated Statements of Stockholders’ Equity 
 
 For the Three and Six Months Ended June 30, 2022 
 (In thousands, except share data) Common 
 Stock 
 Capital 
 Surplus 
 Retained 
 Earnings 
 Accumulated 
 Other 
 Comprehensive 
 Income (Loss) 
 Total 
 Balances at January 1, 2022 $ 1,637 $ 1,487,373 $ 1,266,249 $ 10,462 $ 2,765,721 
 Comprehensive income: 
 Net income — — 64,892 — 64,892 
 Other comprehensive loss — — — ( 115,019 ) ( 115,019 ) 
 Net issuance of 15,909 shares of common stock from exercise of stock options 
 1 129 — — 130 
 Repurchase of 180,000 shares of common stock 
 ( 2 ) ( 4,087 ) — — ( 4,089 ) 
 Share-based compensation net issuance of 222,717 shares of restricted common stock 
 2 2,109 — — 2,111 
 Cash dividends – Common Stock, $ 0.165 per share 
 — — ( 27,043 ) — ( 27,043 ) 
 Balances at March 31, 2022 (unaudited) $ 1,638 $ 1,485,524 $ 1,304,098 $ ( 104,557 ) $ 2,686,703 
 Comprehensive income: 
 Net Income — — 15,978 — 15,978 
 Other comprehensive loss — — — ( 111,348 ) ( 111,348 ) 
 Net issuance of 1,500 shares of common stock from exercise of stock options 
 — 26 — — 26 
 Issuance of 42,425,352 shares of common stock including approximately $ 2.5 million in certain stock award settlements and stock issuance costs - Happy Bancshares Acquisition 
 424 960,866 — — 961,290 
 Repurchase of 1,032,732 shares of common stock 
 ( 10 ) ( 22,482 ) — — ( 22,492 ) 
 Share-based compensation net issuance of 138,499 shares of restricted common stock 
 1 2,337 — — 2,338 
 Cash dividends – Common Stock, $ 0.165 per share 
 — — ( 33,930 ) — ( 33,930 ) 
 Balances at June 30, 2022 (unaudited) $ 2,053 $ 2,426,271 $ 1,286,146 $ ( 215,905 ) $ 3,498,565 

 See Condensed Notes to Consolidated Financial Statements. 
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 Home BancShares, Inc. 
 Consolidated Statements of Cash Flows 
 Six Months Ended June 30, 
 (In thousands) 2023 2022 
 (Unaudited) 
 Operating Activities 
 Net income $ 208,233 $ 80,870 
 Adjustments to reconcile net income to net cash provided by operating activities: 
 
 Depreciation & amortization 14,776 15,480 
 Decrease (increase) in value of equity securities 10,625 ( 324 ) 
 Amortization of securities, net 8,219 12,874 
 Accretion of purchased loans ( 5,832 ) ( 8,266 ) 
 Share-based compensation 4,841 4,449 
 Gain on assets ( 1,382 ) ( 600 ) 
 Provision for credit losses - loans 3,500 45,170 
 Provision for credit losses - unfunded commitments — 11,410 
 Provision for credit losses - investment securities 1,683 2,005 
 Deferred income tax effect ( 1,255 ) ( 18,645 ) 
 Increase in cash value of life insurance ( 2,315 ) ( 1,632 ) 
 Originations of mortgage loans held for sale ( 212,931 ) ( 308,850 ) 
 Proceeds from sales of mortgage loans held for sale 166,921 243,823 
 Changes in assets and liabilities: 
 Accrued interest receivable 2,133 ( 1,548 ) 
 Other assets ( 8,709 ) ( 1,067 ) 
 Accrued interest payable and other liabilities ( 23,451 ) 27,466 
 Net cash provided by operating activities 165,056 102,615 
 Investing Activities 
 Net increase in federal funds sold ( 1,550 ) — 
 Net decrease (increase) in loans, excluding purchased loans 270,329 ( 126,794 ) 
 Purchases of investment securities – available-for-sale ( 3,933 ) ( 655,393 ) 
 Purchases of investment securities - held-to-maturity — ( 501,882 ) 
 Proceeds from maturities of investment securities – available-for-sale 407,431 333,315 
 Proceeds from maturities of investment securities – held-to-maturity 2,658 250,020 
 
 Purchases of equity securities — ( 29,975 ) 
 Proceeds from sales of equity securities 1,522 13,778 
 Purchase of other investments ( 134 ) ( 27,867 ) 
 Proceeds from foreclosed assets held for sale 477 1,874 
 Proceeds from sale of SBA loans 2,337 2,859 
 Purchases of premises and equipment, net ( 1,430 ) ( 6,596 ) 
 Return of investment on cash value of life insurance 2,909 — 
 Purchase of marine loan portfolio — ( 242,617 ) 
 Net cash received - market acquisition — 858,898 
 Net cash provided by (used in) investing activities 680,616 ( 130,380 ) 
 Financing Activities 
 Net decrease in deposits ( 941,892 ) ( 535,708 ) 
 Net increase (decrease) in securities sold under agreements to repurchase 29,203 ( 22,313 ) 
 
 Net increase (decrease) in FHLB and other borrowed funds 51,550 ( 78,330 ) 
 Retirement of subordinated debentures — ( 300,000 ) 
 Proceeds from issuance of subordinated debentures — 296,444 
 Redemption of trust preferred securities — ( 78,869 ) 
 Proceeds from exercise of stock options 361 156 
 Repurchase of common stock ( 25,349 ) ( 26,581 ) 
 
 Dividends paid on common stock ( 73,144 ) ( 60,973 ) 
 Net cash used in financing activities ( 959,271 ) ( 806,174 ) 
 Net change in cash and cash equivalents ( 113,599 ) ( 833,939 ) 
 Cash and cash equivalents – beginning of year 724,790 3,650,315 
 Cash and cash equivalents – end of period $ 611,191 $ 2,816,376 

 See Condensed Notes to Consolidated Financial Statements. 
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 Home BancShares, Inc. 
 Condensed Notes to Consolidated Financial Statements 
 (Unaudited) 
 
 1. Nature of Operations and Summary of Significant Accounting Policies 
 Nature of Operations 
 Home BancShares, Inc. (the “Company” or “HBI”) is a bank holding company headquartered in Conway, Arkansas. The Company is primarily engaged in providing a full range of banking services to individual and corporate customers through its wholly-owned community bank subsidiary – Centennial Bank (sometimes referred to as “Centennial” or the “Bank”). The Bank has branch locations in Arkansas, Florida, South Alabama, Texas and New York City. The Company is subject to competition from other financial institutions. The Company also is subject to the regulation of certain federal and state agencies and undergoes periodic examinations by those regulatory authorities. 
 A summary of the significant accounting policies of the Company follows: 
 Operating Segments 
 Operating segments are components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The Bank is the only significant subsidiary upon which management makes decisions regarding how to allocate resources and assess performance. Each of the branches of the Bank provide a group of similar banking services, including such products and services as commercial, real estate and consumer loans, time deposits, checking and savings accounts. The individual bank branches have similar operating and economic characteristics. While the chief decision maker monitors the revenue streams of the various products, services and branch locations, operations are managed, and financial performance is evaluated on a company-wide basis. Accordingly, all of the banking services and branch locations are considered by management to be aggregated into one reportable operating segment. 
 Use of Estimates 
 The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. 
 Material estimates that are particularly susceptible to significant change relate to the determination of the allowance for credit losses, the valuation of investment securities, the valuation of foreclosed assets and the valuations of assets acquired, and liabilities assumed in business combinations. In connection with the determination of the allowance for credit losses and the valuation of foreclosed assets, management obtains independent appraisals for significant properties. 
 Principles of Consolidation 
 The consolidated financial statements include the accounts of HBI and its subsidiaries. Significant intercompany accounts and transactions have been eliminated in consolidation. 
 Reclassifications 
 Various items within the accompanying consolidated financial statements for previous years have been reclassified to provide more comparative information. These reclassifications had no effect on net earnings or stockholders’ equity. 
 Interim financial information 
 The accompanying unaudited consolidated financial statements have been prepared in condensed format, and therefore do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. 
 
 
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 The information furnished in these interim statements reflects all adjustments which are, in the opinion of management, necessary for a fair statement of the results for each respective period presented. Such adjustments are of a normal recurring nature. The results of operations in the interim statements are not necessarily indicative of the results that may be expected for any other quarter or for the full year. The interim financial information should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s 2022 Form 10-K, filed with the Securities and Exchange Commission. 
 Loans Receivable and Allowance for Credit Losses 
 Loans receivable that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at their outstanding principal balance adjusted for any charge-offs, deferred fees or costs on originated loans. Interest income on loans is accrued over the term of the loans based on the principal balance outstanding. Loan origination fees and direct origination costs are capitalized and recognized as adjustments to yield on the related loans. 
 The allowance for credit losses on loans receivable is a valuation account that is deducted from the loans’ amortized cost basis to present the net amount expected to be collected on the loans. Loans are charged off against the allowance when management believes the uncollectability of a loan balance is confirmed and expected recoveries do not exceed the aggregate of amounts previously charged-off and expected to be charged-off. 
 Management estimates the allowance balance using relevant available information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. Historical credit loss experience provides the basis for the estimation of expected credit losses. Adjustments to historical loss information are made for differences in current loan-specific risk characteristics such as differences in underwriting standards, portfolio mix, delinquency level, or term as well as for changes in environmental conditions, such as changes in the national unemployment rate, gross domestic product, national retail sales index, housing price indices and rental vacancy rate index. 
 The allowance for credit losses is measured based on call report segment as these types of loans exhibit similar risk characteristics. The identified loan segments are as follows: 
 • 1-4 family construction 
 • All other construction 
 • 1-4 family revolving home equity lines of credit (“HELOC”) & junior liens 
 • 1-4 family senior liens 
 • Multifamily 
 • Owner occupied commercial real estate 
 • Non-owner occupied commercial real estate 
 • Commercial & industrial, agricultural, non-depository financial institutions, purchase/carry securities, other 
 • Consumer auto 
 • Other consumer 
 • Other consumer - SPF 
 Loans that do not share risk characteristics are evaluated on an individual basis. For these loans, excluding assisted living loans which are evaluated using a market price valuation methodology, where the Company has determined that foreclosure of the collateral is probable, or where the borrower is experiencing financial difficulty and the Company expects repayment of the loan to be provided substantially through the operation or sale of the collateral, the allowance for credit losses is measured based on the difference between the fair value of the collateral, net of estimated costs to sell, and the amortized cost basis of the loan as of the measurement date. When repayment is expected to be from the operation of the collateral, expected credit losses are calculated as the amount by which the amortized cost basis of the loan exceeds the present value of expected cash flows from the operation of the collateral. The allowance for credit losses may be zero if the fair value of the collateral at the measurement date exceeds the amortized cost basis of the loan, net of estimated costs to sell. For loans that are not considered to be collateral dependent, an allowance is recorded based on the loss rate for the respective pool within the collective evaluation if a specific reserve is not recorded. 
 
 
 
 
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 Expected credit losses are estimated over the contractual term of the loans, adjusted for expected prepayments when appropriate. The contractual term excludes expected extensions, renewals, and modifications unless either of the following applies: 
 • Management has a reasonable expectation at the reporting date that restructured loans made to borrowers experiencing financial difficulty will be executed with an individual borrower. 
 • The extension or renewal options are included in the original or modified contract at the reporting date and are not unconditionally cancellable by the Company. 
 Management qualitatively adjusts model results for risk factors that are not considered within our modeling processes but are nonetheless relevant in assessing the expected credit losses within our loan pools. These qualitative factors ("Q-Factors") and other qualitative adjustments may increase or decrease management's estimate of expected credit losses by a calculated percentage or amount based upon the estimated level of risk. The various risks that may be considered in making Q-Factor and other qualitative adjustments include, among other things, the impact of (i) changes in lending policies, procedures and strategies; (ii) changes in nature and volume of the portfolio; (iii) staff experience; (iv) changes in volume and trends in classified loans, delinquencies and nonaccruals; (v) concentration risk; (vi) trends in underlying collateral values; (vii) external factors such as competition, legal and regulatory environment; (viii) changes in the quality of the loan review system; and (ix) economic conditions. 
 Loans are placed on non-accrual status when management believes that the borrower’s financial condition, after giving consideration to economic and business conditions and collection efforts, is such that collection of interest is doubtful, or generally when loans are 90 days or more past due. Loans are charged against the allowance for credit losses when management believes that the collectability of the principal is unlikely. Accrued interest related to non-accrual loans is generally charged against the allowance for credit losses when accrued in prior years and reversed from interest income if accrued in the current year. Interest income on non-accrual loans may be recognized to the extent cash payments are received, although the majority of payments received are usually applied to principal. Non-accrual loans are generally returned to accrual status when principal and interest payments are less than 90 days past due, the customer has made required payments for at least six months, and we reasonably expect to collect all principal and interest. 
 Acquisition Accounting and Acquired Loans 
 The Company accounts for its acquisitions under FASB Accounting Standards Codification ("ASC") Topic 805, Business Combinations , which requires the use of the purchase method of accounting. All identifiable assets acquired, including loans, are recorded at fair value. In accordance with FASB ASC 326, the Company records both a discount or premium and an allowance for credit losses on acquired loans. All purchased loans are recorded at fair value in accordance with the fair value methodology prescribed in FASB ASC Topic 820, Fair Value Measurements . The fair value estimates associated with the loans include estimates related to expected prepayments and the amount and timing of undiscounted expected principal, interest and other cash flows. 
 Purchased loans that have experienced more than insignificant credit deterioration since origination are purchase credit deteriorated (“PCD”) loans. An allowance for credit losses is determined using the same methodology as other loans. The Company develops separate PCD models for each loan segment with PCD loans not individually analyzed for credit losses. These models utilize a peer group benchmark in order to determine the probability of default and loss given default to be used in the calculation. The sum of the loan’s purchase price and allowance for credit losses becomes its initial amortized cost basis. The difference between the initial amortized cost basis and the par value of the loan is a non-credit discount or premium, which is amortized into interest income over the life of the loan. Subsequent changes to the allowance for credit losses are recorded through the provision for credit losses. 
 For further discussion of the Company’s acquisitions, see Note 2 to the Condensed Notes to Consolidated Financial Statements. 
 Allowance for Credit Losses on Off-Balance Sheet Credit Exposures 
 The Company estimates expected credit losses over the contractual period in which the Company is exposed to credit risk via a contractual obligation to extend credit unless that obligation is unconditionally cancellable by the Company. The allowance for credit losses on off-balance sheet credit exposures is adjusted as a provision for credit loss expense. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over its estimated life. 
 
 
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 Revenue Recognition 
 ASC Topic 606, Revenue from Contracts with Customers ("ASC Topic 606"), establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity's contracts to provide goods or services to customers. The core principle requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that it expects to be entitled to receive in exchange for those goods or services recognized as performance obligations are satisfied. The majority of our revenue-generating transactions are not subject to ASC Topic 606, including revenue generated from financial instruments, such as our loans, letters of credit, investment securities and mortgage lending income, as these activities are subject to other GAAP discussed elsewhere within our disclosures. Descriptions of our significant revenue-generating activities that are within the scope of ASC Topic 606, which are presented in our income statements as components of non-interest income are as follows: 
 • Service charges on deposit accounts – These represent general service fees for monthly account maintenance and activity or transaction-based fees and consist of transaction-based revenue, time-based revenue (service period), item-based revenue or some other individual attribute-based revenue. Revenue is recognized when our performance obligation is completed which is generally monthly for account maintenance services or when a transaction has been completed (such as a wire transfer). Payment for such performance obligations are generally received at the time the performance obligations are satisfied. 
 • Other service charges and fees – These represent credit card interchange fees and Centennial Commercial Finance Group (“Centennial CFG”) loan fees. The interchange fees are recorded in the period the performance obligation is satisfied which is generally the cash basis based on agreed upon contracts. The Centennial CFG loan fees are based on loan or other negotiated agreements with customers and are accounted for under ASC Topic 310. 
 • Trust fees - The Company enters into contracts with its customers to manage assets for investment, and/or transact on their accounts. The Company generally satisfies its performance obligations as services are rendered. The management fees are percentage based, flat, percentage of income or a fixed percentage calculated upon the average balance of assets depending upon account type. Fees are collected on a monthly or annual basis. 
 Earnings per Share 
 Basic earnings per share is computed based on the weighted-average number of shares outstanding during each year. Diluted earnings per share is computed using the weighted-average shares and all potential dilutive shares outstanding during the period. The following table sets forth the computation of basic and diluted earnings per share (“EPS”) for the following periods: 
 
 Three Months Ended
June 30, Six Months Ended
June 30, 
 2023 2022 2023 2022 
 (In thousands) 
 Net income $ 105,271 $ 15,978 $ 208,233 $ 80,870 
 Average shares outstanding 202,793 205,683 203,122 184,851 
 Effect of common stock options 130 332 152 372 
 Average diluted shares outstanding 202,923 206,015 203,274 185,223 
 Basic earnings per share $ 0.52 $ 0.08 $ 1.03 $ 0.44 
 Diluted earnings per share $ 0.52 $ 0.08 $ 1.02 $ 0.44 

 
 The impact of anti-dilutive shares to the diluted earnings per share calculation was considered immaterial for the periods ended June 30, 2023 and 2022. 
 
 2. Business Combinations 
 Acquisition of Happy Bancshares, Inc. 
 On April 1, 2022, the Company completed the acquisition of Happy Bancshares, Inc. (“Happy”), and merged Happy State Bank into Centennial Bank. The Company issued approximately 42.4 million shares of its common stock valued at approximately $ 958.8 million as of April 1, 2022. In addition, the holders of certain Happy stock-based awards received approximately $ 3.7 million in cash in cancellation of such awards, for a total transaction value of approximately $ 962.5 million. The acquisition added new markets for expansion and brought complementary businesses together to drive synergies and growth. 
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 Including the effects of purchase accounting adjustments, as of the acquisition date, Happy had approximately $ 6.69 billion in total assets, $ 3.65 billion in loans and $ 5.86 billion in customer deposits. Happy formerly operated its banking business from 62 locations in Texas. 
 The Company has determined that the acquisition of the net assets of Happy constitutes a business combination as defined by the ASC Topic 805, Business Combinations. Accordingly, the assets acquired and liabilities assumed are presented at their fair values as required. Fair values were determined based on the requirements of ASC Topic 820, Fair Value Measurements . In many cases, the determination of these fair values required management to make estimates about discount rates, future expected cash flows, market conditions and other future events that are highly subjective in nature. The following schedule is a breakdown of the assets acquired and liabilities assumed as of the acquisition date: 
 
 
 
 Happy Bancshares, Inc. 
 Acquired
from Happy Fair Value Adjustments As Recorded
by HBI 
 (Dollars in thousands) 
 Assets 
 Cash and due from banks $ 112,999 $ ( 446 ) $ 112,553 
 Interest-bearing deposits with other banks 746,031 — 746,031 
 Cash and cash equivalents 859,030 ( 446 ) 858,584 
 Investment securities - available-for-sale, net of allowance for credit losses 1,773,540 8,485 1,782,025 
 
 Total investment securities 1,773,540 8,485 1,782,025 
 Loans receivable 3,657,009 ( 4,389 ) 3,652,620 
 Allowance for credit losses ( 42,224 ) 25,408 ( 16,816 ) 
 Loans receivable, net 3,614,785 21,019 3,635,804 
 Bank premises and equipment, net 153,642 ( 12,270 ) 141,372 
 Foreclosed assets held for sale 193 ( 77 ) 116 
 Cash value of life insurance 105,049 3 105,052 
 Accrued interest receivable 31,575 — 31,575 
 Deferred tax asset, net 32,908 ( 1,092 ) 31,816 
 Goodwill 130,428 ( 130,428 ) — 
 Core deposit and other intangibles 10,672 31,591 42,263 
 Other assets 43,330 15,567 58,897 
 Total assets acquired $ 6,755,152 $ ( 67,648 ) $ 6,687,504 
 Liabilities 
 Deposits 
 Demand and non-interest-bearing $ 1,932,756 $ 67 $ 1,932,823 
 Savings and interest-bearing transaction accounts 3,519,652 — 3,519,652 
 Time deposits 401,899 903 402,802 
 Total deposits 5,854,307 970 5,855,277 
 
 FHLB and other borrowed funds 74,212 4,118 78,330 
 Accrued interest payable and other liabilities 50,889 ( 1,892 ) 48,997 
 Subordinated debentures 159,965 7,625 167,590 
 Total liabilities assumed $ 6,139,373 $ 10,821 $ 6,150,194 
 Equity 
 Total equity assumed 615,779 ( 615,779 ) — 
 Total liabilities and equity assumed $ 6,755,152 $ ( 604,958 ) $ 6,150,194 
 Net assets acquired 537,310 
 Purchase price 962,538 
 Goodwill $ 425,228 

 
 
 
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 The following is a description of the methods used to determine the fair values of significant assets and liabilities presented above: 
 Cash and due from banks, interest-bearing deposits with other banks and federal funds sold – The carrying amount of these assets was deemed a reasonable estimate of fair value based on the short-term nature of these assets. 
 Investment securities – Investment securities were acquired from Happy with an approximately $ 8.5 million adjustment to fair value based upon quoted market prices. Otherwise, the book value was deemed to approximate fair value. 
 Loans – Fair values for loans were based on a discounted cash flow methodology that considered factors including the type of loan and related collateral, classification status, fixed or variable interest rate, term of loan, whether or not the loan was amortizing and current discount rates. The discount rates used for loans are based on current market rates for new originations of comparable loans and include adjustments for liquidity concerns. The discount rate does not include a factor for credit losses as that has been included in the estimated cash flows. Loans were grouped together according to similar characteristics and were treated in the aggregate when applying various valuation techniques. See Note 5 to the Condensed Notes to Consolidated Financial Statements, for additional information related to purchased financial assets with credit deterioration. 
 Bank premises and equipment – Bank premises and equipment were acquired from Happy with a $ 12.3 million adjustment to fair value. This represents the difference between current appraisals completed in connection with the acquisition and book value acquired. 
 Foreclosed assets held for sale – These assets are presented at the estimated fair values that management expects to receive when the properties are sold, net of related costs of disposal. 
 Cash value of life insurance – Bank owned life insurance is carried at its current cash surrender value, which is the most reasonable estimate of fair value. 
 Accrued interest receivable – The carrying amount of these assets was deemed a reasonable estimate of the fair value. 
 Core deposit intangible and other intangibles – This core deposit intangible asset represents the value of the relationships that Happy had with its deposit customers. The fair value of this intangible asset was estimated based on a discounted cash flow methodology that gave appropriate consideration to expected customer attrition rates, cost of the deposit base, and the net maintenance cost attributable to customer deposits. 
 Deposits – The fair values used for the demand and savings deposits that comprise the transaction accounts acquired, by definition, equal the amount payable on demand at the acquisition date. The $ 903,000 fair value adjustment applied for time deposits was because the weighted-average interest rate of Happy’s certificates of deposits were estimated to be below the current market rates. 
 FHLB borrowed funds – The fair value of FHLB borrowed funds is estimated based on borrowing rates currently available to the Company for borrowings with similar terms and maturities. 
 Accrued interest payable and other liabilities – The fair value adjustment results from certain liabilities whose value was estimated to be more or less than book value, such as certain accounts payable and other miscellaneous liabilities. The carrying amount of accrued interest and the remainder of other liabilities was deemed to be a reasonable estimate of fair value. 
 Subordinated debentures – The fair value of subordinated debentures is estimated based on borrowing rates currently available to the Company for borrowings with similar terms and maturities. 
 
 
 
 
 
 
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 The unaudited pro-forma combined consolidated financial information presents how the combined financial information of HBI and Happy might have appeared had the businesses actually been combined. The following schedule represents the unaudited pro-forma combined financial information as of the three and six month periods ended June 30, 2022, assuming the acquisition was completed as of January 1, 2021: 
 
 Three Months Ended June 30, 2022 Six Months Ended June 30, 2022 
 (In thousands, except per share data) 
 Total interest income $ 217,013 $ 419,318 
 Total non-interest income 44,581 88,151 
 Net income available to all shareholders 96,923 182,557 
 
 Basic earnings per common share $ 0.47 $ 0.89 
 Diluted earnings per common share 0.47 0.88 

 
 The unaudited pro-forma consolidated financial information is presented for illustrative purposes only and does not indicate the financial results of the combined company had the companies actually been combined at the beginning of the period presented and had the impact of possible significant revenue enhancements and expense efficiencies from in-market cost savings, among other factors, been considered and, accordingly, does not attempt to predict or suggest future results. The pro-forma financial information also does not necessarily reflect what the historical results of the combined company would have been had the companies been combined during this period. 
 Purchased loans and leases that reflect a more-than-insignificant deterioration of credit from origination are considered PCD. For PCD loans, the initial estimate of expected credit losses is recognized in the allowance for credit losses on the date of acquisition using the same methodology as other loans and leases held-for-investment. The following table provides a summary of loans purchased as part of the Happy acquisition with credit deterioration at acquisition: 
 
 April 1, 2022 
 (In thousands) 
 Purchased Loans with Credit Deterioration: 
 Par value $ 165,028 
 Allowance for credit losses at acquisition ( 16,816 ) 
 Premium on acquired loans 684 
 Purchase price $ 148,896 

 
 
 3. Investment Securities 
 The following table summarizes the amortized cost and fair value of securities that are classified as available-for-sale and held-to-maturity: 
 
 June 30, 2023 
 Available-for-Sale 
 Amortized 
 Cost 
 Allowance for Credit Losses Net Carrying Amount Gross 
 Unrealized 
 Gains 
 Gross 
 Unrealized 
 (Losses) 
 Estimated 
 Fair Value 
 
 (In thousands) 
 U.S. government-sponsored enterprises $ 395,789 $ — $ 395,789 $ 2,631 $ ( 21,434 ) $ 376,986 
 U.S. government-sponsored mortgage-backed securities 1,803,021 — 1,803,021 321 ( 208,793 ) 1,594,549 
 Private mortgage-backed securities 194,955 — 194,955 — ( 18,600 ) 176,355 
 Non-government-sponsored asset backed securities 427,068 — 427,068 299 ( 11,575 ) 415,792 
 State and political subdivisions 1,003,162 — 1,003,162 974 ( 97,615 ) 906,521 
 Other securities 209,781 ( 2,524 ) 207,257 95 ( 32,542 ) 174,810 
 Total $ 4,033,776 $ ( 2,524 ) $ 4,031,252 $ 4,320 $ ( 390,559 ) $ 3,645,013 

 
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 June 30, 2023 
 Held-to-Maturity 
 Amortized 
 Cost 
 Allowance for Credit Losses Net Carrying Amount Gross 
 Unrealized 
 Gains 
 Gross 
 Unrealized 
 (Losses) 
 Estimated 
 Fair Value 
 
 (In thousands) 
 U.S. government-sponsored enterprises $ 43,149 $ — $ 43,149 $ — $ ( 3,207 ) $ 39,942 
 U.S. government-sponsored mortgage-backed securities 132,787 — 132,787 139 ( 4,052 ) 128,874 
 State and political subdivisions 1,111,219 ( 2,005 ) 1,109,214 155 ( 122,417 ) 986,952 
 
 Total $ 1,287,155 $ ( 2,005 ) $ 1,285,150 $ 294 $ ( 129,676 ) $ 1,155,768 

 
 December 31, 2022 
 Available-for-Sale 
 Amortized 
 Cost 
 Allowance for Credit Losses Net Carrying Amount Gross 
 Unrealized 
 Gains 
 Gross 
 Unrealized 
 (Losses) 
 Estimated 
 Fair Value 
 
 (In thousands) 
 U.S. government-sponsored enterprises $ 682,316 $ — $ 682,316 $ 2,713 $ ( 23,209 ) $ 661,820 
 U.S. government-sponsored mortgage-backed securities 1,900,796 — 1,900,796 71 ( 215,405 ) 1,685,462 
 Private mortgage-backed securities 197,435 — 197,435 — ( 18,302 ) 179,133 
 Non-government-sponsored asset backed securities 428,933 428,933 95 ( 14,654 ) 414,374 
 State and political subdivisions 1,021,188 ( 842 ) 1,020,346 1,649 ( 115,698 ) 906,297 
 Other securities 214,952 — 214,952 251 ( 20,699 ) 194,504 
 Total $ 4,445,620 $ ( 842 ) $ 4,444,778 $ 4,779 $ ( 407,967 ) $ 4,041,590 

 
 December 31, 2022 
 Held-to-Maturity 
 Amortized
Cost Allowance for Credit Losses Net Carrying Amount Gross
Unrealized
Gains Gross
Unrealized
(Losses) Estimated
Fair Value 
 (In thousands) 
 U.S. government-sponsored enterprises $ 43,017 $ — $ 43,017 $ — $ ( 3,349 ) $ 39,668 
 U.S. government-sponsored mortgage-backed securities 135,000 — 135,000 131 ( 3,756 ) 131,375 
 State and political subdivisions 1,111,693 ( 2,005 ) 1,109,688 65 ( 154,650 ) 955,103 
 
 Total $ 1,289,710 $ ( 2,005 ) $ 1,287,705 $ 196 $ ( 161,755 ) $ 1,126,146 

 The Company's available-for-sale portfolio includes investments in Pacific Western Bank with a par value of $ 7.5 million and Western Alliance Bancorporation with a par value of $ 12.0 million, as of June 30, 2023. These investments are included within the other securities classification. 
 Assets, principally investment securities, having a carrying value of approximately $ 3.62 billion and $ 2.35 billion at June 30, 2023 and December 31, 2022, respectively, were pledged to secure public deposits, as collateral for repurchase agreements, and for other purposes required or permitted by law. Investment securities pledged as collateral for repurchase agreements totaled approximately $ 160.3 million and $ 131.1 million at June 30, 2023 and December 31, 2022, respectively. 
 
 
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 The amortized cost and estimated fair value of securities classified as available-for-sale and held-to-maturity at June 30, 2023, by contractual maturity, are shown below. Expected maturities could differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity date are shown separately. 
 
 Available-for-Sale Held-to-Maturity 
 Amortized 
 Cost 
 Estimated 
 Fair Value 
 Amortized 
 Cost 
 Estimated 
 Fair Value 
 
 (In thousands) 
 Due in one year or less $ 8,547 $ 8,533 $ — $ — 
 Due after one year through five years 213,038 196,889 17,615 16,453 
 Due after five years through ten years 425,471 374,104 265,650 238,289 
 Due after ten years 961,676 878,791 871,103 772,152 
 U.S. government-sponsored mortgage-backed securities 1,803,021 1,594,549 132,787 128,874 
 Private mortgage-backed securities 194,955 176,355 — — 
 Non-government-sponsored asset backed securities 427,068 415,792 — — 
 Total $ 4,033,776 $ 3,645,013 $ 1,287,155 $ 1,155,768 

 During the three and six months ended June 30, 2023 and 2022, no available-for-sale securities were sold. 
 The following table shows gross unrealized losses and estimated fair value of investment securities classified as available-for-sale and held-to-maturity, aggregated by investment category and length of time that individual investment securities have been in a continuous loss position as of June 30, 2023 and December 31, 2022. 
 
 June 30, 2023 
 Less Than 12 Months 12 Months or More Total 
 Fair 
 Value 
 Unrealized 
 Losses 
 Fair 
 Value 
 Unrealized 
 Losses 
 Fair 
 Value 
 Unrealized 
 Losses 
 
 (In thousands) 
 Available-for-sale: 
 U.S. government-sponsored enterprises $ 18,910 $ ( 591 ) $ 167,498 $ ( 20,843 ) $ 186,408 $ ( 21,434 ) 
 U.S. government-sponsored mortgage-backed securities 189,162 ( 6,196 ) 1,372,134 ( 202,597 ) 1,561,296 ( 208,793 ) 
 Private mortgage-backed securities 42,459 ( 3,238 ) 133,896 ( 15,362 ) 176,355 ( 18,600 ) 
 Non-government-sponsored asset backed securities 83,047 ( 1,941 ) 168,290 ( 9,634 ) 251,337 ( 11,575 ) 
 State and political subdivisions 69,436 ( 1,604 ) 750,524 ( 96,011 ) 819,960 ( 97,615 ) 
 Other securities 24,016 ( 3,139 ) 139,864 ( 29,403 ) 163,880 ( 32,542 ) 
 Total $ 427,030 $ ( 16,709 ) $ 2,732,206 $ ( 373,850 ) $ 3,159,236 $ ( 390,559 ) 
 Held-to-maturity: 
 U.S. government-sponsored enterprises $ 14,304 $ ( 696 ) $ 25,638 $ ( 2,511 ) $ 39,942 $ ( 3,207 ) 
 U.S. government-sponsored mortgage-backed securities 116,703 ( 4,052 ) — — 116,703 ( 4,052 ) 
 
 
 State and political subdivisions 24,335 ( 718 ) 951,807 ( 121,699 ) 976,142 ( 122,417 ) 
 Total $ 155,342 $ ( 5,466 ) $ 977,445 $ ( 124,210 ) $ 1,132,787 $ ( 129,676 ) 

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 December 31, 2022 
 Less Than 12 Months 12 Months or More Total 
 Fair 
 Value 
 Unrealized 
 Losses 
 Fair 
 Value 
 Unrealized 
 Losses 
 Fair 
 Value 
 Unrealized 
 Losses 
 
 (In thousands) 
 Available-for-sale: 
 U.S. government-sponsored enterprises $ 315,531 $ ( 3,056 ) $ 128,527 $ ( 20,153 ) $ 444,058 $ ( 23,209 ) 
 U.S. government-sponsored mortgage-backed securities 850,268 ( 46,505 ) 807,566 ( 168,900 ) 1,657,834 ( 215,405 ) 
 Private mortgage-backed securities 179,133 ( 18,302 ) — — 179,133 ( 18,302 ) 
 Non-government-sponsored asset backed securities 285,724 ( 9,726 ) 39,133 ( 4,928 ) 324,857 ( 14,654 ) 
 State and political subdivisions 485,817 ( 50,484 ) 338,638 ( 65,214 ) 824,455 ( 115,698 ) 
 Other securities 138,976 ( 15,314 ) 34,423 ( 5,385 ) 173,399 ( 20,699 ) 
 Total $ 2,255,449 $ ( 143,387 ) $ 1,348,287 $ ( 264,580 ) $ 3,603,736 $ ( 407,967 ) 
 Held to maturity: 
 U.S. government-sponsored enterprises $ 39,668 $ ( 3,349 ) $ — $ — $ 39,668 $ ( 3,349 ) 
 U.S. government-sponsored mortgage-backed securities 106,840 ( 3,756 ) — — 106,840 ( 3,756 ) 
 
 
 State and political subdivisions 955,563 ( 154,650 ) — — 955,563 ( 154,650 ) 
 Total $ 1,102,071 $ ( 161,755 ) $ — $ — $ 1,102,071 $ ( 161,755 ) 

 
 Debt securities available-for-sale ("AFS") are reported at fair value with unrealized holding gains and losses reported as a separate component of stockholders’ equity and other comprehensive income (loss), net of taxes. Securities that are held as available-for-sale are used as a part of our asset/liability management strategy. Securities that may be sold in response to interest rate changes, changes in prepayment risk, the need to increase regulatory capital, and other similar factors are classified as available-for-sale. The Company evaluates all securities quarterly to determine if any securities in a loss position require a provision for credit losses in accordance with ASC 326, Measurement of Credit Losses on Financial Instruments ("ASC 326"). The Company first assesses whether it intends to sell or is more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through income. For securities that do not meet these criteria, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, the Company considers the extent to which fair value is less than amortized cost, and changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income. The Company has made the election to exclude accrued interest receivable on AFS securities from the estimate of credit losses and report accrued interest separately on the consolidated balance sheets. Changes in the allowance for credit losses are recorded as provision for (or reversal of) credit loss expense. Losses are charged against the allowance when management believes the uncollectability of a security is confirmed or when either of the criteria regarding intent or requirement to sell is met. 
 Debt securities held-to-maturity ("HTM"), which include any security for which we have the positive intent and ability to hold until maturity, are reported at historical cost adjusted for amortization of premiums and accretion of discounts. Premiums and discounts are amortized/accreted to the call date to interest income using the constant effective yield method over the estimated life of the security. The Company evaluates all securities quarterly to determine if any securities in a loss position require a provision for credit losses in accordance with ASC 326. The Company measures expected credit losses on HTM securities on a collective basis by major security type, with each type sharing similar risk characteristics. The estimate of expected credit losses considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts. The Company has made the election to exclude accrued interest receivable on HTM securities from the estimate of credit losses and report accrued interest separately on the consolidated balance sheets. Changes in the allowance for credit losses are recorded as provision for (or reversal of) credit loss expense. Losses are charged against the allowance when management believes the uncollectability of a security is confirmed. 
 
 
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 During the period ended June 30, 2023, one of the Company’s AFS subordinated debt investment securities was downgraded below investment grade. As result, the Company wrote down the value of the investment to its unrealized loss position, which required a $ 1.7 million provision. In addition, the Company reallocated the existing $ 842,000 allowance for credit losses on AFS investments to certain securities in the subordinated debt portfolio due to credit concerns across the banking sector. These investments are classified within the other securities category of the AFS portfolio. The $ 2.0 million allowance for credit losses for the held-to-maturity portfolio was considered adequate. No additional provision for credit losses was considered necessary for the HTM portfolio. 
 
 Available-for-Sale Investment Securities 
 June 30, 2023 December 31, 2022 
 Allowance for credit losses: (In thousands) 
 Beginning balance $ 842 $ 842 
 Provision for credit loss 1,682 — 
 Balance, June 30 
 $ 2,524 $ 842 
 Provision for credit loss — 
 Balance, December 31, 2022 
 $ 842 

 
 
 Held-to-Maturity Investment Securities 
 June 30, 2023 December 31, 2022 
 
 Allowance for credit losses: (In thousands) 
 Beginning balance $ 2,005 $ — 
 Provision for credit loss — 2,005 
 
 
 Balance, June 30 
 $ 2,005 $ 2,005 
 Provision for credit loss — 
 Balance, December 31, 2022 
 $ 2,005 

 
 
 For the six months ended June 30, 2023, the Company had available-for-sale investment securities with approximately $ 390.6 million in unrealized losses, of which $ 373.9 million had been in continuous loss positions for more than twelve months. With the exception of the subordinated debt investment securities for which one security was downgraded during the quarter resulting in the Company recording a provision for credit losses and credit concerns requiring reallocating the existing allowance for credit losses to certain securities within the other securities category of the portfolio, the Company’s assessments indicated that the cause of the market depreciation was primarily due to the change in interest rates and not the issuer’s financial condition or downgrades by rating agencies. In addition, approximately 30.8 % of the principal balance from the Company’s investment portfolio will mature or are expected to pay down within five years or less . As a result, the Company has the ability and intent to hold such securities until maturity. 
 As of June 30, 2023, the Company's available-for-sale securities portfolio consisted of 1,606 investment securities, 1,366 of which were in an unrealized loss position. As noted in the table above, the total amount of the unrealized loss was $ 390.6 million. The U.S. government-sponsored enterprises portfolio contained unrealized losses of $ 21.4 million on 62 securities. The U.S. government-sponsored mortgage-backed securities portfolio contained $ 208.8 million of unrealized losses on 688 securities, and the private mortgage-backed securities portfolio contained $ 18.6 million of unrealized losses on 32 securities. The non-government-sponsored asset backed securities portfolio contained $ 11.6 million of unrealized losses on 35 securities. The state and political subdivisions portfolio contained $ 97.6 million of unrealized losses on 487 securities. In addition, the other securities portfolio contained $ 32.5 million of unrealized losses on 62 securities. With the exception of the investments for which an allowance for credit losses has been established, the unrealized losses on the Company's investments were primarily a result of interest rate changes, and the Company expects to recover the amortized cost basis over the term of the securities. Because the decline in market value was attributable to changes in interest rates and not credit quality, and because the Company does not intend to sell the investments and it is not more likely than not that the Company will be required to sell the investments before recovery of their amortized cost basis, which may be maturity, the Company has determined that an additional provision for credit losses is not necessary as of June 30, 2023. 
 
 
 20 

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 As of June 30, 2023, the Company's held-to-maturity securities portfolio consisted of 506 investment securities, 497 of which were in an unrealized loss position. As noted in the table above, the total amount of the unrealized loss was $ 129.7 million. The U.S. government-sponsored enterprises portfolio contained unrealized losses of $ 3.2 million on 5 securities. The U.S. government-sponsored mortgage-backed securities portfolio contained unrealized losses of $ 4.1 million on 18 securities. The state and political subdivisions portfolio contained $ 122.4 million of unrealized losses on 474 securities. The unrealized losses on the Company's investments were a result of interest rate changes. The Company expects to recover the amortized cost basis over the term of the securities. Because the decline in market value was attributable to changes in interest rates and not credit quality, the Company has determined that an additional provision for credit losses was not necessary as of June 30, 2023. 
 The following table summarizes bond ratings for the Company’s held-to-maturity portfolio, based upon amortized cost, issued by state and political subdivisions and other securities as of June 30, 2023: 
 
 State and political subdivisions U.S. government-sponsored enterprises U.S. government-sponsored mortgage-backed securities Total 
 (In thousands) 
 Aaa/AAA $ 234,350 $ 43,149 $ — $ 277,499 
 Aa/AA 847,711 — — 847,711 
 A 27,630 — — 27,630 
 
 Not rated 1,528 — — 1,528 
 Agency Backed — — 132,787 132,787 
 Total $ 1,111,219 $ 43,149 $ 132,787 $ 1,287,155 

 Income earned on securities for the three and six months ended June 30, 2023 and 2022, is as follows: 
 
 Three Months Ended
June 30, For the Six Months Ended
June 30, 
 2023 2022 2023 2022 
 (In thousands) 
 Taxable 
 Available-for-sale $ 27,254 $ 14,493 $ 55,052 $ 23,238 
 Held-to-maturity 7,497 6,448 14,987 6,783 
 Non-taxable 
 Available-for-sale 4,798 4,751 9,623 9,459 
 Held-to-maturity 3,134 2,974 6,272 2,973 
 Total $ 42,683 $ 28,666 $ 85,934 $ 42,453 

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 Table of Contents 

 4. Loans Receivable 
 The various categories of loans receivable are summarized as follows: 
 
 June 30, 2023 December 31, 2022 
 (In thousands) 
 Real estate: 
 Commercial real estate loans 
 Non-farm/non-residential $ 5,480,738 $ 5,632,063 
 Construction/land development 2,201,514 2,135,266 
 Agricultural 340,067 346,811 
 Residential real estate loans 
 Residential 1-4 family 1,790,218 1,748,551 
 Multifamily residential 455,754 578,052 
 Total real estate 10,268,291 10,440,743 
 Consumer 1,156,273 1,149,896 
 Commercial and industrial 2,288,646 2,349,263 
 Agricultural 297,743 285,235 
 Other 170,019 184,343 
 Total loans receivable 14,180,972 14,409,480 
 Allowance for credit losses ( 285,683 ) ( 289,669 ) 
 Loans receivable, net $ 13,895,289 $ 14,119,811 

 During the three months ended June 30, 2023, the Company did no t sell any guaranteed portions of certain SBA loans. During the six months ended June 30, 2023, the Company sold $ 2.2 million of the guaranteed portions of certain SBA loans, which resulted in a gain of approximately $ 139,000 . During the three months ended June 30, 2022, the Company did no t sell any guaranteed portions of certain SBA loans. During the six months ended June 30, 2022, the Company sold $ 2.8 million guaranteed portions of certain SBA loans, which resulted in a gain of $ 95,000 . 
 Mortgage loans held for sale of approximately $ 125.9 million and $ 79.9 million at June 30, 2023 and December 31, 2022, respectively, are included in residential 1-4 family loans. Mortgage loans held for sale are carried at the lower of cost or fair value, determined using an aggregate basis. Gains and losses resulting from sales of mortgage loans are recognized when the respective loans are sold to investors. Gains and losses are determined by the difference between the selling price and the carrying amount of the loans sold, net of discounts collected or paid. The Company obtains forward commitments to sell mortgage loans to reduce market risk on mortgage loans in the process of origination and mortgage loans held for sale. The forward commitments acquired by the Company for mortgage loans in process of origination are considered mandatory forward commitments. Because these commitments are structured on a mandatory basis, the Company is required to substitute another loan or to buy back the commitment if the original loan does not fund. These commitments are derivative instruments and their fair values at June 30, 2023 and December 31, 2022 were not material. 
 Purchased loans that have experienced more than insignificant credit deterioration since origination are PCD loans. An allowance for credit losses is determined using the same methodology as other loans. The Company develops separate PCD models for each loan segment with PCD loans not individually analyzed for credit losses. The initial allowance for credit losses determined on a collective basis is allocated to individual loans. The sum of the loan’s purchase price and allowance for credit losses becomes its initial amortized cost basis. The difference between the initial amortized cost basis and the par value of the loan is a non-credit discount or premium which is amortized into interest income over the life of the loan. Subsequent changes to the allowance for credit losses are recorded through the provision for credit losses. The Company held approximately $ 132.6 million and $ 142.5 million in PCD loans, as of June 30, 2023 and December 31, 2022, respectively. This balance, as of June 30, 2023, consisted of $ 132.2 million resulting from the acquisition of Happy and $ 396,000 from the acquisition of LH-Finance. 
 A description of our accounting policies for loans and impaired loans (which includes loans individually analyzed for credit losses for which a specific reserve has been recorded, non-accrual loans, loans past due 90 days or more and restructured loans made to borrowers experiencing financial difficulty) are set forth in our 2022 Form 10-K filed with the SEC on February 24, 2023. 
 22 

 
 Table of Contents 

 5. Allowance for Credit Losses, Credit Quality and Other 
 The Company uses the discounted cash flow method to estimate expected losses for all of the Company’s loan pools. These pools are as follows: construction & land development; other commercial real estate; residential real estate; commercial & industrial; and consumer & other. The loan portfolio pools were selected in order to generally align with the loan categories specified in the quarterly call reports required to be filed with the Federal Financial Institutions Examination Council. For each of these loan pools, the Company generates cash flow projections at the instrument level wherein payment expectations are adjusted for estimated prepayment speed, curtailments, time to recovery, probability of default, and loss given default. The modeling of expected prepayment speeds, curtailment rates, and time to recovery are based on historical internal data. The Company uses regression analysis of historical internal and peer data to determine suitable loss drivers to utilize when modeling lifetime probability of default and loss given default. This analysis also determines how expected probability of default and loss given default will react to forecasted levels of the loss drivers. 
 
 Management qualitatively adjusts model results for risk factors ("Q-Factors") that are not considered within our modeling processes but are nonetheless relevant in assessing the expected credit losses within our loan pools. These Q-Factors and other qualitative adjustments may increase or decrease management's estimate of expected credit losses by a calculated percentage or amount based upon the estimated level of risk. The various risks that may be considered in making Q-Factor and other qualitative adjustments include, among other things, the impact of (i) changes in lending policies, procedures and strategies; (ii) changes in nature and volume of the portfolio; (iii) staff experience; (iv) changes in volume and trends in classified loans, delinquencies and nonaccruals; (v) concentration risk; (vi) trends in underlying collateral values; (vii) external factors such as competition, legal and regulatory environment; (viii) changes in the quality of the loan review system; and (ix) economic conditions. 
 Each year management evaluates the performance of the selected models used in the CECL calculation through backtesting. Based on the results of the testing, management determines if the various models produced accurate results compared to the actual losses incurred for the current economic environment. Management then determines if changes to the input assumptions and economic factors would produce a stronger overall calculation that is more responsive to changes in economic conditions. The Company continues to use regression analysis to determine suitable loss drivers to utilize when modeling lifetime probability of default and loss given default for the changes in the economic factors for the loss driver segments. The identified loss drivers by segment are included below as of both June 30, 2023 and December 31, 2022. 
 
 
 Loss Driver Segment Call Report Segment(s) Modeled Economic Factors 
 1-4 Family Construction 1a1 National Unemployment (%) & Housing Price Index (%) 
 All Other Construction 1a2 National Unemployment (%) & Gross Domestic Product (%) 
 1-4 Family Revolving HELOC & Junior Liens 1c1 National Unemployment (%) & Housing Price Index – CoreLogic (%) 
 1-4 Family Revolving HELOC & Junior Liens 1c2b National Unemployment (%) & Gross Domestic Product (%) 
 1-4 Family Senior Liens 1c2a National Unemployment (%) & Gross Domestic Product (%) 
 Multifamily 1d Rental Vacancy Rate (%) & Housing Price Index – Case-Schiller (%) 
 Owner Occupied CRE 1e1 National Unemployment (%) & Gross Domestic Product (%) 
 Non-Owner Occupied CRE 1e2,1b,8 National Unemployment (%) & Gross Domestic Product (%) 
 Commercial & Industrial, Agricultural, Non-Depository Financial Institutions, Purchase/Carry Securities, Other 4a, 3, 9a, 9b1, 9b2, 10, Other National Unemployment (%) & National Retail Sales (%) 
 Consumer Auto 6c National Unemployment (%) & National Retail Sales (%) 
 Other Consumer 6b, 6d National Unemployment (%) & National Retail Sales (%) 
 Other Consumer - SPF 6d National Unemployment (%) 

 For all DCF models, management has determined that four quarters represents a reasonable and supportable forecast period and reverts to a historical loss rate over four quarters on a straight-line basis. Management leverages economic projections from a reputable and independent third party to inform its loss driver forecasts over the four-quarter forecast period. Other internal and external indicators of economic forecasts are also considered by management when developing the forecast metrics. 
 The combination of adjustments for credit expectations (default and loss) and time expectations (prepayment, curtailment, and time to recovery) produces an expected cash flow stream at the instrument level. Instrument effective yield is calculated, net of the impacts of prepayment assumptions, and the instrument expected cash flows are then discounted at that effective yield to produce an instrument-level net present value of expected cash flows (“NPV”). An allowance for credit loss is established for the difference between the instrument’s NPV and amortized cost basis. 
 
 
 
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 Construction/Land Development and Other Commercial Real Estate Loans. We originate non-farm and non-residential loans (primarily secured by commercial real estate), construction/land development loans, and agricultural loans, which are generally secured by real estate located in our market areas. Our commercial mortgage loans are generally collateralized by first liens on real estate and amortized (where defined) over a 15 to 30 year period with balloon payments due at the end of one to five years . These loans are generally underwritten by assessing cash flow (debt service coverage), primary and secondary source of repayment, the financial strength of any guarantor, the strength of the tenant (if any), the borrower’s liquidity and leverage, management experience, ownership structure, economic conditions and industry specific trends and collateral. Generally, we will loan up to 85 % of the value of improved property, 65 % of the value of raw land and 75 % of the value of land to be acquired and developed. A first lien on the property and assignment of lease is required if the collateral is rental property, with second lien positions considered on a case-by-case basis. 
 Residential Real Estate Loans. We originate one to four family, residential mortgage loans generally secured by property located in our primary market areas. Residential real estate loans generally have a loan-to-value ratio of up to 90 %. These loans are underwritten by giving consideration to many factors including the borrower’s ability to pay, stability of employment or source of income, debt-to-income ratio, credit history and loan-to-value ratio. 
 Commercial and Industrial Loans. Commercial and industrial loans are made for a variety of business purposes, including working capital, inventory, equipment and capital expansion. The terms for commercial loans are generally one to seven years Commercial loan applications must be supported by current financial information on the borrower and, where appropriate, by adequate collateral. Commercial loans are generally underwritten by addressing cash flow (debt service coverage), primary and secondary sources of repayment, the financial strength of any guarantor, the borrower’s liquidity and leverage, management experience, ownership structure, economic conditions and industry specific trends and collateral. The loan to value ratio depends on the type of collateral. Generally, accounts receivable are financed at between 50 % and 80 % of accounts receivable less than 60 days past due. Inventory financing will range between 50 % and 80 % (with no work in process) depending on the borrower and nature of inventory. We require a first lien position for those loans. 
 Consumer & Other Loans. Our consumer & other loans are primarily composed of loans to finance USCG registered high-end sail and power boats. The performance of consumer & other loans will be affected by the local and regional economies as well as the rates of personal bankruptcies, job loss, divorce and other individual-specific characteristics. 
 Off-Balance Sheet Credit Exposures. The Company estimates expected credit losses over the contractual period in which the Company is exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by the Company. The allowance for credit loss on off-balance sheet credit exposures is adjusted as a provision for credit loss expense. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over its estimated life. The Company uses the DCF method to estimate expected losses for all of the Company’s off-balance sheet credit exposures through the use of the existing DCF models for the Company’s loan portfolio pools. The off-balance sheet credit exposures exhibit similar risk characteristics as loans currently in the Company’s loan portfolio. 
 For the three and six months ended June 30, 2023, the Company recorded $ 2.3 million and $ 3.5 million in provision for credit losses on loans, respectively. However, the Company determined that no additional provision was necessary for unfunded commitments as the current level of the reserve was considered adequate. 
 During the year ended December 31, 2022, the Company completed the acquisition of Happy. As a result, the Company recorded $ 4.4 million in net loan discounts and a $ 16.8 million increase in the allowance for credit losses related to PCD loans. In addition, the Company recorded a $ 45.2 million provision for credit losses on acquired loans for the CECL "double count" and an $ 11.4 million provision for credit losses on acquired unfunded commitments. In addition, the Company recorded a $ 5.0 million provision for credit losses on loans due to increased loan growth. However, the Company determined that no additional provision was necessary for unfunded commitments as the current level of the reserve was considered adequate. 
 
 
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 The following table presents the activity in the allowance for credit losses for the three and six months ended June 30, 2023: 
 
 Three Months Ended June 30, 2023 
 Construction/
Land
Development Other
Commercial
Real Estate Residential
Real Estate Commercial
& Industrial Consumer
& Other Total 
 (In thousands) 
 Allowance for credit losses: 
 Beginning balance $ 31,172 $ 86,978 $ 51,433 $ 92,396 $ 25,190 $ 287,169 
 
 Loans charged off — — ( 30 ) ( 3,826 ) ( 870 ) ( 4,726 ) 
 Recoveries of loans previously charged off 
 63 473 13 147 244 940 
 Net loans recovered (charged off) 
 63 473 ( 17 ) ( 3,679 ) ( 626 ) ( 3,786 ) 
 
 Provision for credit losses 1,040 ( 2,293 ) 316 1,757 1,480 2,300 
 Balance, June 30 
 $ 32,275 $ 85,158 $ 51,732 $ 90,474 $ 26,044 $ 285,683 

 
 Six Months Ended June 30, 2023 
 Construction/ 
 Land 
 Development 
 Other 
 Commercial 
 Real Estate 
 Residential 
 Real Estate 
 Commercial 
 & Industrial 
 Consumer 
 & Other 
 Total 
 (In thousands) 
 Allowance for credit losses: 
 Beginning balance $ 32,243 $ 93,848 $ 50,963 $ 89,354 $ 23,261 $ 289,669 
 
 Loans charged off ( 25 ) ( 73 ) ( 89 ) ( 6,832 ) ( 1,995 ) ( 9,014 ) 
 Recoveries of loans previously charged off 
 70 492 139 256 571 1,528 
 Net loans recovered (charged off) 
 45 419 50 ( 6,576 ) ( 1,424 ) ( 7,486 ) 
 
 Provision for credit losses ( 13 ) ( 9,109 ) 719 7,696 4,207 3,500 
 Balance, June 30 $ 32,275 $ 85,158 $ 51,732 $ 90,474 $ 26,044 $ 285,683 

 The following table presents the activity in the allowance for credit losses for the three and six months ended June 30, 2022 and the year ended December 31, 2022: 
 
 Three Months Ended June 30, 2022 
 Construction/ 
 Land 
 Development 
 Other 
 Commercial 
 Real Estate 
 Residential 
 Real Estate 
 Commercial 
 & Industrial 
 Consumer 
 & Other 
 Total 
 (In thousands) 
 Allowance for credit losses: 
 Beginning balance $ 26,349 $ 95,876 $ 37,111 $ 52,492 $ 22,940 $ 234,768 
 Allowance for credit losses on PCD loans 950 9,283 980 5,596 7 16,816 
 Loans charged off — — ( 39 ) — ( 3,226 ) ( 3,265 ) 
 Recoveries of loans previously charged off 
 302 52 23 221 180 778 
 Net loans recovered (charged off) 
 302 52 ( 16 ) 221 ( 3,046 ) ( 2,487 ) 
 Provision for credit losses - acquired loans 7,205 18,711 7,380 11,303 571 45,170 
 Provision for credit losses 1,883 ( 8,727 ) 5,691 ( 1,303 ) 2,456 — 
 Balance, June 30, $ 36,689 $ 115,195 $ 51,146 $ 68,309 $ 22,928 $ 294,267 

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 Six Months Ended June 30, 2022 and Year Ended December 31, 2022 
 
 Construction/
Land
Development Other
Commercial
Real Estate Residential
Real Estate Commercial 
 & Industrial 
 Consumer
& Other Total 
 (In thousands) 
 Allowance for credit losses: 
 Beginning balance $ 28,415 $ 87,218 $ 48,458 $ 53,062 $ 19,561 $ 236,714 
 Allowance for credit losses on PCD loans 950 9,283 980 5,596 7 16,816 
 Loans charged off — — ( 289 ) ( 1,416 ) ( 3,870 ) ( 5,575 ) 
 Recoveries of loans previously charged off 
 317 78 49 330 368 1,142 
 Net loans recovered (charged off) 
 317 78 ( 240 ) ( 1,086 ) ( 3,502 ) ( 4,433 ) 
 Provision for credit loss - acquired loans 7,205 18,711 7,380 11,303 571 45,170 
 Provision for credit loss - loans ( 198 ) ( 95 ) ( 5,432 ) ( 566 ) 6,291 — 
 Balance, June 30 
 36,689 — 115,195 — 51,146 — 68,309 — 22,928 294,267 
 Loans charged off ( 1 ) — ( 157 ) ( 8,357 ) ( 3,177 ) ( 11,692 ) 
 Recoveries of loans previously charged off 
 88 889 70 450 597 2,094 
 Net loans recovered (charged off) 
 87 889 ( 87 ) ( 7,907 ) ( 2,580 ) ( 9,598 ) 
 Provision for credit loss - loans ( 4,533 ) ( 22,236 ) ( 96 ) 28,952 2,913 5,000 
 Balance, December 31 
 $ 32,243 $ 93,848 $ 50,963 $ 89,354 $ 23,261 $ 289,669 

 
 
 The following table presents the amortized cost basis of loans on nonaccrual status and loans past due over 90 days still accruing as of June 30, 2023 and December 31, 2022: 
 
 June 30, 2023 
 Nonaccrual Nonaccrual
with Reserve Loans Past Due
Over 90 Days
Still Accruing 
 (In thousands) 
 Real estate: 
 Commercial real estate loans 
 Non-farm/non-residential $ 12,498 $ 8,383 $ 3,041 
 Construction/land development 3,877 — 371 
 Agricultural 450 — — 
 Residential real estate loans 
 Residential 1-4 family 17,827 — 1,164 
 
 Total real estate 34,652 8,383 4,576 
 Consumer 4,448 — 70 
 Commercial and industrial 10,132 — 5,226 
 Agricultural & other 395 — 997 
 Total $ 49,627 $ 8,383 $ 10,869 

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 December 31, 2022 
 Nonaccrual Nonaccrual
with Reserve Loans Past Due
Over 90 Days
Still Accruing 
 (In thousands) 
 Real estate: 
 Commercial real estate loans 
 Non-farm/non-residential $ 12,219 $ 8,383 $ 1,844 
 Construction/land development 1,977 — 31 
 Agricultural 278 — — 
 Residential real estate loans 
 Residential 1-4 family 18,083 — 1,374 
 Multifamily residential — — — 
 Total real estate 32,557 8,383 3,249 
 Consumer 2,842 — 35 
 Commercial and industrial 14,920 — 6,300 
 Agricultural & other 692 — 261 
 Total $ 51,011 $ 8,383 $ 9,845 

 
 
 The Company had $ 49.6 million and $ 51.0 million in nonaccrual loans for the periods ended June 30, 2023 and December 31, 2022, respectively. In addition, the Company had $ 10.9 million and $ 9.8 million in loans past due 90 days or more and still accruing for the periods ended June 30, 2023 and December 31, 2022, respectively. 
 The Company had $ 8.4 million in nonaccrual loans with a specific reserve as of both June 30, 2023 and December 31, 2022. The Company did not recognize any interest income on nonaccrual loans during the period ended June 30, 2023 or June 30, 2022. 
 The following table presents the amortized cost basis of impaired loans (which includes loans individually analyzed for credit losses for which a specific reserve has been recorded, non-accrual loans, loans past due 90 days or more and restructured loans made to borrowers experiencing financial difficulty) by class of loans as of June 30, 2023 and December 31, 2022: 
 
 June 30, 2023 
 Commercial
Real Estate Residential
Real Estate Other 
 (In thousands) 
 Real estate: 
 Commercial real estate loans 
 Non-farm/non-residential $ 116,996 $ — $ — 
 Construction/land development 4,247 — — 
 Agricultural 450 — — 
 Residential real estate loans 
 Residential 1-4 family — 19,797 — 
 Multifamily residential — 802 — 
 Total real estate 121,693 20,599 — 
 Consumer — — 4,529 
 Commercial and industrial — — 21,879 
 Agricultural & other — — 1,392 
 Total $ 121,693 $ 20,599 $ 27,800 

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 December 31, 2022 
 Commercial
Real Estate Residential
Real Estate Other 
 (In thousands) 
 Real estate: 
 Commercial real estate loans 
 Non-farm/non-residential $ 162,268 $ — $ — 
 Construction/land development 2,008 — — 
 Agricultural 278 — — 
 Residential real estate loans 
 Residential 1-4 family — 20,832 — 
 Multifamily residential — 969 — 
 Total real estate 164,554 21,801 — 
 Consumer — — 2,888 
 Commercial and industrial — — 30,334 
 Agricultural & other — — 1,527 
 Total $ 164,554 $ 21,801 $ 34,749 

 
 The Company had $ 170.1 million and $ 221.1 million in impaired loans for the periods ended June 30, 2023 and December 31, 2022, respectively. 
 
 Loans that do not share risk characteristics are evaluated on an individual basis. For these loans, excluding assisted living loans which are evaluated using a market price valuation methodology, where the Company has determined that foreclosure of the collateral is probable, or where the borrower is experiencing financial difficulty and the Company expects repayment of the financial asset to be provided substantially through the operation or sale of the collateral, the allowance for credit losses is measured based on the difference between the fair value of the collateral, net of estimated costs to sell, and the amortized cost basis of the loan as of the measurement date. When repayment is expected to be from the operation of the collateral, expected credit losses are calculated as the amount by which the amortized cost basis of the loan exceeds the present value of expected cash flows from the operation of the collateral. The allowance for credit losses may be zero if the fair value of the collateral at the measurement date exceeds the amortized cost basis of the loan, net of estimated costs to sell. 
 The following is an aging analysis for loans receivable as of June 30, 2023 and December 31, 2022: 
 
 June 30, 2023 
 Loans
Past Due
30-59 Days Loans
Past Due
60-89 Days Loans
Past Due
90 Days
or More Total
Past Due Current
Loans Total
Loans
Receivable Accruing
Loans
Past Due
90 Days
or More 
 (In thousands) 
 Real estate: 
 Commercial real estate loans 
 Non-farm/non-residential $ 33,045 $ 1,773 $ 15,539 $ 50,357 $ 5,430,381 $ 5,480,738 $ 3,041 
 Construction/land development 3,694 428 4,248 8,370 2,193,144 2,201,514 371 
 Agricultural 3,401 98 450 3,949 336,118 340,067 — 
 Residential real estate loans 
 Residential 1-4 family 2,312 2,968 18,991 24,271 1,765,947 1,790,218 1,164 
 Multifamily residential 289 — — 289 455,465 455,754 — 
 Total real estate 42,741 5,267 39,228 87,236 10,181,055 10,268,291 4,576 
 Consumer 2,249 242 4,518 7,009 1,149,264 1,156,273 70 
 Commercial and industrial 1,809 989 15,358 18,156 2,270,490 2,288,646 5,226 
 Agricultural & other 1,394 716 1,392 3,502 464,260 467,762 997 
 Total $ 48,193 $ 7,214 $ 60,496 $ 115,903 $ 14,065,069 $ 14,180,972 $ 10,869 

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 December 31, 2022 
 Loans
Past Due
30-59 Days Loans
Past Due
60-89 Days Loans
Past Due
90 Days
or More Total
Past Due Current
Loans Total
Loans
Receivable Accruing
Loans
Past Due
90 Days
or More 
 (In thousands) 
 Real estate: 
 Commercial real estate loans 
 Non-farm/non-residential $ 4,242 $ 2,117 $ 14,063 $ 20,422 $ 5,611,641 $ 5,632,063 $ 1,844 
 Construction/land development 4,042 1,892 2,008 7,942 2,127,324 2,135,266 31 
 Agricultural 1,469 193 278 1,940 344,871 346,811 — 
 Residential real estate loans 
 Residential 1-4 family 6,715 605 19,457 26,777 1,721,774 1,748,551 1,374 
 Multifamily residential — — — — 578,052 578,052 — 
 Total real estate 16,468 4,807 35,806 57,081 10,383,662 10,440,743 3,249 
 Consumer 950 539 2,877 4,366 1,145,530 1,149,896 35 
 Commercial and industrial 3,007 1,075 21,220 25,302 2,323,961 2,349,263 6,300 
 Agricultural and other 1,065 57 953 2,075 467,503 469,578 261 
 Total $ 21,490 $ 6,478 $ 60,856 $ 88,824 $ 14,320,656 $ 14,409,480 $ 9,845 

 
 Non-accruing loans at June 30, 2023 and December 31, 2022 were $ 49.6 million and $ 51.0 million, respectively. 
 Interest recognized on impaired loans during the three and six months ended June 30, 2023 was approximately $ 1.5 million and $ 3.0 million, respectively. Interest recognized on impaired loans during the three and six months ended June 30, 2022 was approximately $ 4.8 million and $ 9.5 million, respectively. The amount of interest recognized on impaired loans on the cash basis is not materially different than the accrual basis. 
 
 
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 Credit Quality Indicators. As part of the on-going monitoring of the credit quality of the Company’s loan portfolio, management tracks certain credit quality indicators including trends related to (i) the risk rating of loans, (ii) the level of classified loans, (iii) net charge-offs, (iv) non-performing loans and (v) the general economic conditions in Arkansas, Florida, Texas, Alabama and New York. 
 The Company utilizes a risk rating matrix to assign a risk rating to each of its loans. Loans are rated on a scale from 1 to 8. Descriptions of the general characteristics of the 8 risk ratings are as follows: 
 • Risk rating 1 – Excellent. Loans in this category are to persons or entities of unquestionable financial strength, a highly liquid financial position, with collateral that is liquid and well margined. These borrowers have performed without question on past obligations, and the Bank expects their performance to continue. Internally generated cash flow covers current maturities of long-term debt by a substantial margin. Loans secured by bank certificates of deposit and savings accounts, with appropriate holds placed on the accounts, are to be rated in this category. 
 • Risk rating 2 – Good. These are loans to persons or entities with strong financial condition and above-average liquidity that have previously satisfactorily handled their obligations with the Bank. Collateral securing the Bank’s debt is margined in accordance with policy guidelines. Internally generated cash flow covers current maturities of long-term debt more than adequately. Unsecured loans to individuals supported by strong financial statements and on which repayment is satisfactory may be included in this classification. 
 • Risk rating 3 – Satisfactory. Loans to persons or entities with an average financial condition, adequate collateral margins, adequate cash flow to service long-term debt, and net worth comprised mainly of fixed assets are included in this category. These entities are minimally profitable now, with projections indicating continued profitability into the foreseeable future. Closely held corporations or businesses where a majority of the profits are withdrawn by the owners or paid in dividends are included in this rating category. Overall, these loans are basically sound. 
 • Risk rating 4 – Watch. Borrowers who have marginal cash flow, marginal profitability or have experienced an unprofitable year and a declining financial condition characterize these loans. The borrower has in the past satisfactorily handled debts with the Bank, but in recent months has either been late, delinquent in making payments, or made sporadic payments. While the Bank continues to be adequately secured, margins have decreased or are decreasing, despite the borrower’s continued satisfactory condition. Other characteristics of borrowers in this class include inadequate credit information, weakness of financial statement and repayment capacity, but with collateral that appears to limit exposure. 
 • Risk rating 5 – Other Loans Especially Mentioned (“OLEM”) . A loan criticized as OLEM has potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or in the institution’s credit position at some future date. OLEM assets are not adversely classified and do not expose the institution to sufficient risk to warrant adverse classification. 
 • Risk rating 6 – Substandard. A loan classified as substandard is inadequately protected by the sound worth and paying capacity of the borrower or the collateral pledged. Loss potential, while existing in the aggregate amount of substandard loans, does not have to exist in individual assets. 
 • Risk rating 7 – Doubtful. A loan classified as doubtful has all the weaknesses inherent in a loan classified as substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. These are poor quality loans in which neither the collateral, if any, nor the financial condition of the borrower presently ensure collectability in full in a reasonable period of time; in fact, there is permanent impairment in the collateral securing the loan. 
 • Risk rating 8 – Loss. Assets classified as loss are considered uncollectible and of such little value that the continuance as bankable assets is not warranted. This classification does not mean that the asset has absolutely no recovery or salvage value, but rather, it is not practical or desirable to defer writing off this basically worthless asset, even though partial recovery may occur in the future. This classification is based upon current facts, not probabilities. Assets classified as loss should be charged-off in the period in which they became uncollectible. 
 The Company’s classified loans include loans in risk ratings 6, 7 and 8. Loans may be classified, but not considered collateral dependent, due to one of the following reasons: (1) The Company has established minimum dollar amount thresholds for credit loss testing. All loans over $ 2.0 million that are rated 5 – 8 are individually assessed for credit losses on a quarterly basis. Loans rated 5 – 8 that fall under the threshold amount are not individually tested for credit losses and therefore are not included in collateral dependent loans; (2) of the loans that are above the threshold amount and tested for credit losses after testing, some are considered to not be collateral dependent and are not included in collateral dependent loans. 
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 Based on the most recent analysis performed, the risk category of loans by class of loans as of June 30, 2023 and December 31, 2022 is as follows: 
 
 June 30, 2023 
 Term Loans Amortized Cost Basis by Origination Year 
 2023 2022 2021 2020 2019 Prior Revolving Loans Amortized Cost Basis Total 
 (In thousands) 
 Real estate: 
 Commercial real estate loans 
 Non-farm/non-residential 
 Risk rating 1 $ — $ — $ — $ — $ 235 $ 124 $ 86 $ 445 
 Risk rating 2 — — — — 115 3,802 433,317 437,234 
 Risk rating 3 132,851 594,503 580,572 248,782 258,385 1,086,319 86,816 2,988,228 
 Risk rating 4 50,038 474,793 262,339 223,265 154,954 591,501 750 1,757,640 
 Risk rating 5 — 7,994 604 — 13,824 88,738 678 111,838 
 Risk rating 6 — 265 324 16,692 26,545 140,189 — 184,015 
 Risk rating 7 445 107 — — — 786 — 1,338 
 Risk rating 8 — — — — — — — — 
 Total non-farm/non-residential 183,334 1,077,662 843,839 488,739 454,058 1,911,459 521,647 5,480,738 
 Construction/land development 
 Risk rating 1 $ — $ — $ 11 $ — $ — $ — $ — $ 11 
 Risk rating 2 287 29 — — — 198 — 514 
 Risk rating 3 162,454 482,318 185,422 73,163 25,262 48,425 58,742 1,035,786 
 Risk rating 4 23,857 402,340 449,623 48,304 31,713 26,587 158,853 1,141,277 
 Risk rating 5 — — 15,180 — 265 72 — 15,517 
 Risk rating 6 — 596 1,178 866 818 4,951 — 8,409 
 Risk rating 7 — — — — — — — — 
 Risk rating 8 — — — — — — — — 
 Total construction/land development 186,598 885,283 651,414 122,333 58,058 80,233 217,595 2,201,514 
 Agricultural 
 Risk rating 1 $ — $ 1,701 $ — $ — $ — $ — $ — $ 1,701 
 Risk rating 2 250 — 1,990 — — — — 2,240 
 Risk rating 3 30,642 47,412 36,182 30,426 15,880 37,157 5,635 203,334 
 Risk rating 4 110 23,237 24,481 19,130 8,237 42,173 4,606 121,974 
 Risk rating 5 — — — — 319 571 — 890 
 Risk rating 6 — — 2,966 1,441 4,777 744 — 9,928 
 Risk rating 7 — — — — — — — — 
 Risk rating 8 — — — — — — — — 
 Total agricultural 31,002 72,350 65,619 50,997 29,213 80,645 10,241 340,067 
 Total commercial real estate loans $ 400,934 $ 2,035,295 $ 1,560,872 $ 662,069 $ 541,329 $ 2,072,337 $ 749,483 $ 8,022,319 
 Residential real estate loans 
 Residential 1-4 family 
 Risk rating 1 $ — $ — $ — $ — $ — $ 148 $ 2 $ 150 
 Risk rating 2 69 — — — — 34 1 104 
 Risk rating 3 152,298 349,612 252,635 162,656 99,647 365,751 119,879 1,502,478 
 Risk rating 4 9,330 33,247 28,142 21,313 11,072 76,034 73,393 252,531 
 Risk rating 5 — 998 — 91 3,039 1,019 782 5,929 
 Risk rating 6 — 3,242 2,995 4,261 4,406 13,454 667 29,025 
 Risk rating 7 — — — — — — — — 
 Risk rating 8 — — — — — 1 — 1 
 Total residential 1-4 family 161,697 387,099 283,772 188,321 118,164 456,441 194,724 1,790,218 

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 Table of Contents 

 
 June 30, 2023 
 Term Loans Amortized Cost Basis by Origination Year 
 2023 2022 2021 2020 2019 Prior Revolving Loans Amortized Cost Basis Total 
 (In thousands) 
 Multifamily residential 
 Risk rating 1 $ — $ — $ — $ — $ — $ — $ — $ — 
 Risk rating 2 — — — — — — — — 
 Risk rating 3 2,544 39,761 61,254 44,787 32,173 63,093 6,229 249,841 
 Risk rating 4 2,868 45,808 40,989 42,007 8,200 20,440 1,372 161,684 
 Risk rating 5 — — — 31,473 — 10,839 — 42,312 
 Risk rating 6 — — — — 286 1,631 — 1,917 
 Risk rating 7 — — — — — — — — 
 Risk rating 8 — — — — — — — — 
 Total multifamily residential 5,412 85,569 102,243 118,267 40,659 96,003 7,601 455,754 
 Total real estate $ 568,043 $ 2,507,963 $ 1,946,887 $ 968,657 $ 700,152 $ 2,624,781 $ 951,808 $ 10,268,291 
 Consumer 
 Risk rating 1 $ 3,001 $ 3,912 $ 2,606 $ 893 $ 444 $ 1,307 $ 1,683 $ 13,846 
 Risk rating 2 — — — — 179 59 — 238 
 Risk rating 3 117,486 263,111 242,422 127,985 119,200 223,935 20,691 1,114,830 
 Risk rating 4 3,300 10,750 2,635 624 1,617 2,303 121 21,350 
 Risk rating 5 — 6 624 4 — 530 — 1,164 
 Risk rating 6 — 748 138 330 1,178 2,402 45 4,841 
 Risk rating 7 4 — — — — — — 4 
 Risk rating 8 — — — — — — — — 
 Total consumer 123,791 278,527 248,425 129,836 122,618 230,536 22,540 1,156,273 
 Commercial and industrial 
 Risk rating 1 $ 1,619 $ 1,344 $ 2,902 $ 254 $ 154 $ 21,263 $ 12,196 $ 39,732 
 Risk rating 2 68 1,393 243 16 164 218 442 2,544 
 Risk rating 3 143,086 292,100 101,879 60,517 66,143 183,107 234,246 1,081,078 
 Risk rating 4 51,917 142,374 90,618 64,463 51,064 84,688 625,527 1,110,651 
 Risk rating 5 — — 16,198 112 286 1,123 440 18,159 
 Risk rating 6 2,772 3,617 6,426 1,097 4,091 14,827 3,567 36,397 
 Risk rating 7 — — — — — 85 — 85 
 Risk rating 8 — — — — — — — — 
 Total commercial and industrial 199,462 440,828 218,266 126,459 121,902 305,311 876,418 2,288,646 
 Agricultural and other 
 Risk rating 1 $ 1 $ 162 $ 16 $ 115 $ — $ 91 $ 801 $ 1,186 
 Risk rating 2 560 147 2 — 2,338 100 682 3,829 
 Risk rating 3 55,430 50,603 33,303 27,826 3,694 47,076 129,693 347,625 
 Risk rating 4 21,993 6,158 10,105 1,445 1,215 3,799 55,238 99,953 
 Risk rating 5 — — — 134 — 593 15 742 
 Risk rating 6 775 — 267 147 10,639 1,159 1,440 14,427 
 Risk rating 7 — — — — — — — — 
 Risk rating 8 — — — — — — — — 
 Total agricultural and other 78,759 57,070 43,693 29,667 17,886 52,818 187,869 467,762 
 Total $ 970,055 $ 3,284,388 $ 2,457,271 $ 1,254,619 $ 962,558 $ 3,213,446 $ 2,038,635 $ 14,180,972 

 
 
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 Table of Contents 

 
 December 31, 2022 
 Term Loans Amortized Cost Basis by Origination Year 
 2022 2021 2020 2019 2018 Prior Revolving Loans Amortized Cost Basis Total 
 (In thousands) 
 Real estate: 
 Commercial real estate loans 
 Non-farm/non-residential 
 Risk rating 1 $ — $ — $ — $ 237 $ — $ 132 $ 85 $ 454 
 Risk rating 2 — — — 118 — 3,992 — 4,110 
 Risk rating 3 616,809 509,269 263,188 279,157 322,278 852,727 374,371 3,217,799 
 Risk rating 4 438,565 341,047 235,669 161,421 321,188 482,437 139,203 2,119,530 
 Risk rating 5 — 757 1,145 14,417 35,273 37,561 95 89,248 
 Risk rating 6 876 196 14,247 26,649 4,720 153,909 194 200,791 
 Risk rating 7 131 — — — — — — 131 
 Risk rating 8 — — — — — — — — 
 Total non-farm/non-residential 1,056,381 851,269 514,249 481,999 683,459 1,530,758 513,948 5,632,063 
 Construction/land development 
 Risk rating 1 $ — $ 11 $ — $ — $ — $ — $ — $ 11 
 Risk rating 2 682 — — — — 210 — 892 
 Risk rating 3 421,774 283,546 83,631 48,350 19,340 34,910 75,797 967,348 
 Risk rating 4 354,852 512,541 58,368 79,924 11,520 43,634 65,960 1,126,799 
 Risk rating 5 — — 30,987 310 — 1,140 — 32,437 
 Risk rating 6 612 — 574 751 3 5,839 — 7,779 
 Risk rating 7 — — — — — — — — 
 Risk rating 8 — — — — — — — — 
 Total construction/land development 777,920 796,098 173,560 129,335 30,863 85,733 141,757 2,135,266 
 Agricultural 
 Risk rating 1 $ 1,749 $ — $ — $ — $ — $ — $ — $ 1,749 
 Risk rating 2 — 2,048 — — — — — 2,048 
 Risk rating 3 61,725 43,356 32,895 16,475 10,326 37,892 5,996 208,665 
 Risk rating 4 18,870 25,252 20,532 8,706 3,154 42,886 4,755 124,155 
 Risk rating 5 — — — 326 — 603 — 929 
 Risk rating 6 — 1,630 1,623 4,972 — 1,040 — 9,265 
 Risk rating 7 — — — — — — — — 
 Risk rating 8 — — — — — — — — 
 Total agricultural 82,344 72,286 55,050 30,479 13,480 82,421 10,751 346,811 
 Total commercial real estate loans $ 1,916,645 $ 1,719,653 $ 742,859 $ 641,813 $ 727,802 $ 1,698,912 $ 666,456 $ 8,114,140 
 Residential real estate loans 
 Residential 1-4 family 
 Risk rating 1 $ — $ — $ — $ — $ — $ 115 $ 40 $ 155 
 Risk rating 2 — — — — — 48 2 50 
 Risk rating 3 360,510 255,775 176,955 112,053 98,093 314,492 110,881 1,428,759 
 Risk rating 4 37,471 35,875 61,418 11,871 15,577 61,034 65,674 288,920 
 Risk rating 5 — — — 3,049 226 328 — 3,603 
 Risk rating 6 849 2,423 3,564 3,521 2,536 12,662 1,508 27,063 
 Risk rating 7 — — — — — — — — 
 Risk rating 8 — — — — — 1 — 1 
 Total residential 1-4 family 398,830 294,073 241,937 130,494 116,432 388,680 178,105 1,748,551 

 
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 Table of Contents 

 
 December 31, 2022 
 Term Loans Amortized Cost Basis by Origination Year 
 2022 2021 2020 2019 2018 Prior Revolving Loans Amortized Cost Basis Total 
 (In thousands) 
 Multifamily residential 
 Risk rating 1 $ — $ — $ — $ — $ — $ — $ — $ — 
 Risk rating 2 — — — — — — — — 
 Risk rating 3 38,830 37,566 14,127 33,813 13,098 60,117 6,534 204,085 
 Risk rating 4 43,478 101,282 182,850 8,284 11,934 11,779 1,201 360,808 
 Risk rating 5 — — — — 3,142 7,897 — 11,039 
 Risk rating 6 — — — 302 — 1,818 — 2,120 
 Risk rating 7 — — — — — — — — 
 Risk rating 8 — — — — — — — — 
 Total multifamily residential 82,308 138,848 196,977 42,399 28,174 81,611 7,735 578,052 
 Total real estate $ 2,397,783 $ 2,152,574 $ 1,181,773 $ 814,706 $ 872,408 $ 2,169,203 $ 852,296 $ 10,440,743 
 Consumer 
 Risk rating 1 $ 5,332 $ 3,952 $ 1,134 $ 637 $ 552 $ 1,176 $ 1,467 $ 14,250 
 Risk rating 2 — — — 193 614 — — 807 
 Risk rating 3 284,828 276,044 146,256 132,763 118,244 135,266 16,093 1,109,494 
 Risk rating 4 15,306 2,293 422 1,216 459 907 69 20,672 
 Risk rating 5 — 633 19 — 8 810 — 1,470 
 Risk rating 6 215 156 270 970 24 1,386 101 3,122 
 Risk rating 7 — — — — — — — — 
 Risk rating 8 3 — 1 — — 77 — 81 
 Total consumer 305,684 283,078 148,102 135,779 119,901 139,622 17,730 1,149,896 
 Commercial and industrial 
 Risk rating 1 $ 3,450 $ 7,692 $ 268 $ 264 $ 16 $ 21,298 $ 8,832 $ 41,820 
 Risk rating 2 1,590 305 27 198 — 226 781 3,127 
 Risk rating 3 301,063 126,312 80,636 73,360 71,964 112,017 253,111 1,018,463 
 Risk rating 4 70,862 120,618 69,963 89,975 81,389 48,496 568,795 1,050,098 
 Risk rating 5 83,272 14,762 159 1,408 6,815 185 75,891 182,492 
 Risk rating 6 4,842 2,539 11,204 4,193 5,769 16,559 3,554 48,660 
 Risk rating 7 — — — — 4,316 202 85 4,603 
 Risk rating 8 — — — — — — — — 
 Total commercial and industrial 465,079 272,228 162,257 169,398 170,269 198,983 911,049 2,349,263 
 Agricultural and other 
 Risk rating 1 $ 297 $ 266 $ 115 $ — $ — $ 95 $ 722 $ 1,495 
 Risk rating 2 140 78 — 2,338 34 115 1,661 4,366 
 Risk rating 3 85,707 36,004 30,546 4,725 7,986 46,748 131,760 343,476 
 Risk rating 4 7,627 13,591 2,598 1,671 1,710 8,766 69,179 105,142 
 Risk rating 5 — 8 204 — — 593 745 1,550 
 Risk rating 6 — 58 157 11,137 304 949 944 13,549 
 Risk rating 7 — — — — — — — — 
 Risk rating 8 — — — — — — — — 
 Total agricultural and other 93,771 50,005 33,620 19,871 10,034 57,266 205,011 469,578 
 Total $ 3,262,317 $ 2,757,885 $ 1,525,752 $ 1,139,754 $ 1,172,612 $ 2,565,074 $ 1,986,086 $ 14,409,480 

 
 
 
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 The following table presents gross write-offs by origination date as of June 30, 2023. 
 
 
 June 30, 2023 
 Gross Loan Write-Offs by Origination Year 
 2023 2022 2021 2020 2019 Prior Revolving Loans Amortized Cost Basis Total 
 (In thousands) 
 Real estate 
 Commercial real estate loans 
 Non-farm/non-residential $ — $ — $ 1 $ — $ 14 $ 56 $ — $ 71 
 Construction/land development — 2 18 5 — — — 25 
 Agricultural — — — — 1 1 — 2 
 Residential real estate loans 
 Residential 1-4 family — 4 28 6 12 34 5 89 
 
 Total real estate — 6 47 11 27 91 5 187 
 Consumer — 31 29 21 3 248 23 355 
 Commercial and industrial — 145 1,056 791 16 4,658 166 6,832 
 Agricultural & other 1,629 * 1 5 1 — 3 1 1,640 
 Total $ 1,629 $ 183 $ 1,137 $ 824 $ 46 $ 5,000 $ 195 $ 9,014 

 *The 2023 write-off consists entirely of overdrafts. 
 35 

 Table of Contents 

 The Company considers the performance of the loan portfolio and its impact on the allowance for credit losses. The Company also evaluates credit quality based on the aging status of the loan, which was previously presented and by payment activity. The following tables present the amortized cost of performing and nonperforming loans as of June 30, 2023 and December 31, 2022. 
 
 June 30, 2023 
 Term Loans Amortized Cost Basis by Origination Year 
 2023 2022 2021 2020 2019 Prior Revolving Loans Amortized Cost Basis Total 
 (In thousands) 
 Real estate: 
 Commercial real estate loans 
 Non-farm/non-residential 
 Performing $ 183,334 $ 1,077,662 $ 843,839 $ 487,594 $ 444,097 $ 1,805,884 $ 521,332 $ 5,363,742 
 Non-performing — — — 1,145 9,961 105,575 315 116,996 
 Total non-farm/non-residential 
 183,334 1,077,662 843,839 488,739 454,058 1,911,459 521,647 5,480,738 
 Construction/land development 
 
 Performing $ 186,598 $ 884,432 $ 649,524 $ 121,467 $ 57,580 $ 80,071 $ 217,595 $ 2,197,267 
 Non-performing — 851 1,890 866 478 162 — 4,247 
 Total construction/ land development 
 186,598 885,283 651,414 122,333 58,058 80,233 217,595 2,201,514 
 Agricultural 
 Performing $ 31,002 $ 72,350 $ 65,524 $ 50,997 $ 29,158 $ 80,345 $ 10,241 $ 339,617 
 Non-performing — — 95 — 55 300 — 450 
 Total agricultural 31,002 72,350 65,619 50,997 29,213 80,645 10,241 340,067 
 Total commercial real estate loans 
 $ 400,934 $ 2,035,295 $ 1,560,872 $ 662,069 $ 541,329 $ 2,072,337 $ 749,483 $ 8,022,319 
 Residential real estate loans 
 Residential 1-4 family 
 Performing $ 161,697 $ 384,381 $ 282,025 $ 185,046 $ 114,665 $ 448,434 $ 194,173 $ 1,770,421 
 Non-performing — 2,718 1,747 3,275 3,499 8,007 551 19,797 
 Total residential 1-4 family 
 161,697 387,099 283,772 188,321 118,164 456,441 194,724 1,790,218 
 Multifamily residential 
 Performing $ 5,412 $ 85,569 $ 102,243 $ 118,267 $ 40,659 $ 95,201 $ 7,601 $ 454,952 
 Non-performing — — — — — 802 — 802 
 Total multifamily residential 
 5,412 85,569 102,243 118,267 40,659 96,003 7,601 455,754 
 Total real estate $ 568,043 $ 2,507,963 $ 1,946,887 $ 968,657 $ 700,152 $ 2,624,781 $ 951,808 $ 10,268,291 
 Consumer 
 Performing $ 123,791 $ 277,866 $ 248,307 $ 129,610 $ 121,466 $ 228,209 $ 22,495 $ 1,151,744 
 Non-performing — 661 118 226 1,152 2,327 45 4,529 
 Total consumer 123,791 278,527 248,425 129,836 122,618 230,536 22,540 1,156,273 
 Commercial and industrial 
 Performing $ 199,462 $ 437,302 $ 214,880 $ 125,629 $ 118,101 $ 298,150 $ 873,243 $ 2,266,767 
 Non-performing — 3,526 3,386 830 3,801 7,161 3,175 21,879 
 Total commercial and industrial 199,462 440,828 218,266 126,459 121,902 305,311 876,418 2,288,646 
 Agricultural and other 
 Performing $ 78,759 $ 57,070 $ 42,555 $ 29,667 $ 17,861 $ 52,815 $ 187,643 $ 466,370 
 Non-performing — — 1,138 — 25 3 226 1,392 
 Total agricultural and other 78,759 57,070 43,693 29,667 17,886 52,818 187,869 467,762 
 Total $ 970,055 $ 3,284,388 $ 2,457,271 $ 1,254,619 $ 962,558 $ 3,213,446 $ 2,038,635 $ 14,180,972 

 
 
 
 
 
 
 
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 December 31, 2022 
 
 Term Loans Amortized Cost Basis by Origination Year 
 2022 2021 2020 2019 2018 Prior Revolving Loans Amortized Cost Basis Total 
 (In thousands) 
 Real estate: 
 Commercial real estate loans 
 Non-farm/non-residential 
 Performing $ 1,056,381 $ 851,269 $ 509,258 $ 456,196 $ 679,187 $ 1,403,874 $ 513,630 $ 5,469,795 
 Non-performing — — 4,991 25,803 4,272 126,884 318 162,268 
 Total non-farm/non-residential 
 1,056,381 851,269 514,249 481,999 683,459 1,530,758 513,948 5,632,063 
 Construction/land development 
 
 Performing $ 777,309 $ 796,098 $ 172,987 $ 128,736 $ 30,860 $ 85,511 $ 141,757 $ 2,133,258 
 Non-performing 611 — 573 599 3 222 — 2,008 
 Total construction/land development 
 777,920 796,098 173,560 129,335 30,863 85,733 141,757 2,135,266 
 Agricultural 
 Performing $ 82,344 $ 72,286 $ 55,050 $ 30,479 $ 13,480 $ 82,143 $ 10,751 $ 346,533 
 Non-performing — — — — — 278 — 278 
 Total agricultural 82,344 72,286 55,050 30,479 13,480 82,421 10,751 346,811 
 Total commercial real estate loans 
 $ 1,916,645 $ 1,719,653 $ 742,859 $ 641,813 $ 727,802 $ 1,698,912 $ 666,456 $ 8,114,140 
 Residential real estate loans 
 Residential 1-4 family 
 Performing $ 397,464 $ 292,100 $ 239,047 $ 127,250 $ 114,337 $ 380,210 $ 177,311 $ 1,727,719 
 Non-performing 1,366 1,973 2,890 3,244 2,095 8,470 794 20,832 
 Total residential 1-4 family 
 398,830 294,073 241,937 130,494 116,432 388,680 178,105 1,748,551 
 Multifamily residential 
 Performing $ 82,308 $ 138,848 $ 196,977 $ 42,399 $ 28,174 $ 80,642 $ 7,735 $ 577,083 
 Non-performing — — — — — 969 — 969 
 Total multifamily residential 
 82,308 138,848 196,977 42,399 28,174 81,611 7,735 578,052 
 Total real estate $ 2,397,783 $ 2,152,574 $ 1,181,773 $ 814,706 $ 872,408 $ 2,169,203 $ 852,296 $ 10,440,743 
 Consumer 
 Performing $ 305,620 $ 282,944 $ 147,820 $ 134,831 $ 119,877 $ 138,288 $ 17,628 $ 1,147,008 
 Non-performing 64 134 282 948 24 1,334 102 2,888 
 Total consumer 305,684 283,078 148,102 135,779 119,901 139,622 17,730 1,149,896 
 Commercial and industrial 
 Performing $ 464,285 $ 267,719 $ 159,152 $ 165,733 $ 160,267 $ 194,162 $ 907,611 $ 2,318,929 
 Non-performing 794 4,509 3,105 3,665 10,002 4,821 3,438 30,334 
 Total commercial and industrial 465,079 272,228 162,257 169,398 170,269 198,983 911,049 2,349,263 
 Agricultural and other 
 Performing $ 93,771 $ 50,001 $ 33,416 $ 19,818 $ 10,034 $ 56,631 $ 204,380 $ 468,051 
 Non-performing — 4 204 53 — 635 631 1,527 
 Total agricultural and other 93,771 50,005 33,620 19,871 10,034 57,266 205,011 469,578 
 Total $ 3,262,317 $ 2,757,885 $ 1,525,752 $ 1,139,754 $ 1,172,612 $ 2,565,074 $ 1,986,086 $ 14,409,480 

 
 The Company had approximately $ 21.8 million or 120 total revolving loans convert to term loans for the six months ended June 30, 2023 compared to $ 13.8 million or 83 total revolving loans convert to term loans for the six months ended June 30, 2022. These loans were considered immaterial for vintage disclosure inclusion. 
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 The following table presents the amortized cost basis of modified loans by class and modification type at June 30, 2023. The percentage of modifications of loans that were modified to borrowers experiencing financial difficulty relative to the total period-end amortized cost basis of loans in each class of financing receivable is also presented below. 
 
 June 30, 2023 
 
 Combination of Modifications 
 Term Extension Interest Rate Reduction Principal Reduction Interest Only Interest Rate Reduction and Term Extension Principal Reduction and Interest Rate Reduction Term Extension and Interest Only Term Extension and Principal Reduction Post-
Modification
Outstanding
Balance Total Class of Loans Receivable 
 (In thousands) 
 Real estate: 
 Commercial real estate loans 
 Non-farm/non-residential $ 579 $ — $ — $ 1,624 $ 351 $ — $ 16,023 $ — $ 18,577 0.34 % 
 Construction/land development — — — 159 — — — — 159 0.01 
 Agricultural — — — — — — — — — — 
 Residential real estate loans — 
 Residential 1-4 family 403 505 99 66 227 — — 146 1,446 0.08 
 Multifamily residential — — — 802 — — — — 802 0.18 
 Total real estate 982 505 99 2,651 578 — 16,023 146 20,984 0.20 
 Consumer — — 1 10 — 6 — — 17 — 
 Commercial and industrial 116 60 60 1,793 74 1 — — 2,104 0.09 
 Agricultural & other — — — — — 2 — — 2 — 
 Total $ 1,098 $ 565 $ 160 $ 4,454 $ 652 $ 9 $ 16,023 $ 146 $ 23,107 0.16 % 

 
 During the six-months ended June 30, 2023, the Company restructured approximately $ 18.4 million in loans to 13 borrowers. The ending balance of these loans as of June 30, 2023, was $ 18.1 million. The Company considered the financial effect of these loan modifications to borrowers experiencing financial difficulty during the three-months ended June 30, 2023 immaterial for tabular disclosure inclusion. Three of the modified loans accounted for $ 17.2 million of the total post-modification outstanding balance. These three loans involved the loans being placed on interest only payments for 12 to 36 months while the interest rate was increased by 25 to 50 basis points. 
 The following table presents the amortized cost basis of loans that had a payment default during the three-months ended June 30, 2023 and were modified in the twelve months prior to that default to borrowers experiencing financial difficulty. 
 
 June 30, 2023 
 Term Extension Principal Reduction Interest Only Combination Interest Rate Reduction and Principal Reduction Combination Term Extension and Principal Reduction 
 (Dollars in thousands) 
 Real estate 
 Commercial real estate loans 
 Non-farm/non-residential $ — $ — $ — $ — $ — 
 Construction/land development — — — — — 
 Agricultural — — — — — 
 Residential real estate loans 
 Residential 1-4 family 129 99 — — 146 
 Total real estate 129 99 — — 146 
 Consumer — — — 6 — 
 Commercial and industrial 25 60 649 1 — 
 Agricultural & other — — — 2 — 
 Total $ 154 $ 159 $ 649 $ 9 $ 146 

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 The Company closely monitors the performance of the loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The Company has modified 21 loans over the past 12 months to borrowers experiencing financial difficulty. The pre-modification balance of the loans was $ 20.0 million, and the ending balance as of June 30, 2023 was $ 19.2 million. The $ 19.2 million balance consists of $ 1.1 million of non-accrual loans and $ 18.1 million of current loans, none of which were past due as of June 30, 2023. 
 Upon the Company's determination that a modified loan (or portion of a loan) has subsequently been deemed uncollectible, the loan (or a portion of the loan) is written off. Therefore, the amortized cost basis of the loan is reduced by the uncollectible amount and the allowance for credit losses on loans is adjusted by the same amount. The defaults impact the loss rate by applicable loan pool for the quarterly CECL calculation. For loans for which a specific reserve is not recorded, an allowance is recorded based on the loss rate for the respective pool within the collective evaluation if a specific reserve is not recorded. 
 The following is a presentation of total foreclosed assets as of June 30, 2023 and December 31, 2022: 
 
 June 30, 2023 December 31, 2022 
 (In thousands) 
 Commercial real estate loans 
 Non-farm/non-residential $ 118 $ 118 
 Construction/land development 47 47 
 Residential real estate loans 
 Residential 1-4 family 560 260 
 Multifamily residential — 121 
 Total foreclosed assets held for sale $ 725 $ 546 

 
 6. Goodwill and Core Deposits and Other Intangibles 
 Changes in the carrying amount and accumulated amortization of the Company’s goodwill and core deposits and other intangibles at June 30, 2023 and December 31, 2022, were as follows: 
 
 June 30, 2023 December 31, 2022 
 (In thousands) 
 Goodwill 
 Balance, beginning of period $ 1,398,253 $ 973,025 
 Acquisition of Happy Bancshares — 425,228 
 Balance, end of period $ 1,398,253 $ 1,398,253 

 
 June 30, 2023 December 31, 2022 
 (In thousands) 
 Core Deposit Intangibles 
 Balance, beginning of period $ 58,455 $ 25,045 
 Acquisition of Happy Bancshares — 42,263 
 Amortization expense ( 4,955 ) ( 3,898 ) 
 Balance, June 30 $ 53,500 63,410 
 Amortization expense ( 4,955 ) 
 Balance, end of year $ 58,455 

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 The carrying basis and accumulated amortization of core deposit intangibles at June 30, 2023 and December 31, 2022 were : 
 
 June 30, 2023 December 31, 2022 
 (In thousands) 
 Gross carrying basis $ 128,888 $ 128,888 
 Accumulated amortization ( 75,388 ) ( 70,433 ) 
 Net carrying amount $ 53,500 $ 58,455 

 Core deposit intangible amortization expense was approximately $ 2.5 million for both the three months ended June 30, 2023 and 2022. Core deposit intangible amortization expense was approximately $ 5.0 million and $ 3.9 million for the six months ended June 30, 2023 and 2022, respectively. The Company’s estimated amortization expense of core deposits intangibles for each of the years 2023 through 2027 is approximately: 2023 – $ 9.7 million; 2024 – $ 8.4 million; 2025 – $ 8.0 million; 2026– $ 7.8 million; 2027 – $ 6.6 million. 
 The carrying amount of the Company’s goodwill was $ 1.40 billion at both June 30, 2023 and December 31, 2022. Goodwill is tested annually for impairment during the fourth quarter or more often if events and circumstances indicate there may be an impairment. During the 2022 review, no impairment was found. If the implied fair value of goodwill is lower than its carrying amount, goodwill impairment is indicated, and goodwill is written down to its implied fair value. Subsequent increases in goodwill value are not recognized in the consolidated financial statements. 
 
 7. Other Assets 
 Other assets consist primarily of equity securities without a readily determinable fair value and other miscellaneous assets. As of June 30, 2023 and December 31, 2022, other assets were $ 317.9 million and $ 321.2 million, respectively. 
 The Company has equity securities without readily determinable fair values such as stock holdings in the Federal Home Loan Bank (“FHLB”) and the Federal Reserve Bank (“Federal Reserve”) which are outside the scope of ASC Topic 321, Investments – Equity Securities (“ASC Topic 321”). These equity securities without a readily determinable fair value were $ 136.3 million and $ 135.3 million at June 30, 2023 and December 31, 2022, and are accounted for at cost. 
 The Company has equity securities such as stock holdings in First National Bankers’ Bank and other miscellaneous holdings which are accounted for under ASC Topic 321. These equity securities without a readily determinable fair value were $ 91.1 million and $ 80.6 million at June 30, 2023 and December 31, 2022, respectively. There were no transactions during the period that would indicate a material change in fair value. 
 Included in other assets are marketable equity securities held at the holding company which are accounted for under ASC Topic 321. These marketable equity securities were $ 39.9 million and $ 52.0 million at June 30, 2023 and December 31, 2022, respectively. The June 30, 2023 balance consisted primarily of investments in Pacific Western Bank and PNC Financial Services Group, Inc. The fair value of these investments were $ 15.8 million and $ 18.7 million, respectively, at June 30, 2023. The Company recorded $ 10.6 million in expense for the fair value adjustment for these marketable securities during the six months ended June 30, 2023. 
 
 8. Deposits 
 The aggregate amount of time deposits with a minimum denomination of $250,000 was $ 456.4 million and $ 333.2 million at June 30, 2023 and December 31, 2022, respectively. The aggregate amount of time deposits with a minimum denomination of $100,000 was $ 790.4 million and $ 639.3 million at June 30, 2023 and December 31, 2022, respectively. Interest expense applicable to certificates in excess of $100,000 totaled $ 5.2 million and $ 661,000 for the three months ended June 30, 2023 and 2022, respectively. Interest expense applicable to certificates in excess of $100,000 totaled $ 8.2 million and $ 1.4 million for the six months ended June 30, 2023 and 2022, respectively. As of June 30, 2023 and December 31, 2022, brokered deposits were $ 466.4 million and $ 476.6 million, respectively. 
 Deposits totaling approximately $ 2.77 billion and $ 2.65 billion at June 30, 2023 and December 31, 2022, respectively, were public funds obtained primarily from state and political subdivisions in the United States. 
 
 
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 Table of Contents 

 9. Securities Sold Under Agreements to Repurchase 
 At June 30, 2023 and December 31, 2022, securities sold under agreements to repurchase totaled $ 160.3 million and $ 131.1 million, respectively. For the three-month periods ended June 30, 2023 and 2022, securities sold under agreements to repurchase daily weighted-average totaled $ 144.0 million and $ 123.1 million, respectively. For the six-month periods ended June 30, 2023 and 2022, securities sold under agreements to repurchase daily weighted-average totaled $ 139.5 million and $ 130.2 million, respectively. 
 The remaining contractual maturity of securities sold under agreements to repurchase in the consolidated balance sheets as of June 30, 2023 and December 31, 2022 is presented in the following table: 
 
 June 30, 2023 December 31, 2022 
 Overnight and 
 Continuous 
 Total Overnight and 
 Continuous 
 Total 
 (In thousands) 
 Securities sold under agreements to repurchase: 
 U.S. government-sponsored enterprises $ 9,943 $ 9,943 $ 5,322 $ 5,322 
 Mortgage-backed securities 8,284 8,284 5,153 5,153 
 State and political subdivisions 133,358 133,358 117,674 117,674 
 Other securities 8,764 8,764 2,997 2,997 
 Total borrowings $ 160,349 $ 160,349 $ 131,146 $ 131,146 

 
 
 10. FHLB and Other Borrowed Funds 
 The Company’s FHLB borrowed funds, which are secured by our loan portfolio, were $ 650.0 million at June 30, 2023 and $ 650.0 million at December 31, 2022. Other borrowed funds were $ 51.6 million as of June 30, 2023 and were classified as short-term advances. The Company had no other borrowed funds as of December 31, 2022. At both June 30, 2023 and December 31, 2022, $ 50.0 million and $ 600.0 million of the outstanding FHLB balances were classified as short-term and long-term advances. The FHLB advances mature from 2023 to 2037 with fixed interest rates ranging from 2.26 % to 4.84 %. Expected maturities could differ from contractual maturities because FHLB may have the right to call, or the Company may have the right to prepay certain obligations. 
 Additionally, the Company had $ 1.18 billion and $ 1.14 billion at June 30, 2023 and December 31, 2022, in letters of credit under a FHLB blanket borrowing line of credit, which are used to collateralize public deposits at June 30, 2023 and December 31, 2022, respectively. 
 The Company had access to approximately $ 1.43 billion in liquidity with the Federal Reserve Bank as of June 30, 2023. This consisted of $ 77.4 million available from the Discount Window and $ 1.35 billion available through the Bank Term Funding Program ("BTFP"). As of June 30, 2023, the primary and secondary credit rates available through the Discount Window were 5.25 % and 5.75 %, respectively, and the BTFP rate was 5.50 %. As of June 30, 2023, the Company had drawn $50.0 million from the BTFP in the ordinary course of business. This advance is included within other borrowed funds. 
 The parent company took out a $ 20.0 million line of credit for general corporate purposes during 2015. The balance on this line of credit at June 30, 2023 and December 31, 2022 was zero . 
 
 
 41 

 
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 11. Subordinated Debentures 
 Subordinated debentures at June 30, 2023 and December 31, 2022 consisted of the following components: 
 
 As of June 30, 2023 
 As of 
 December 31, 2022 
 
 (In thousands) 
 Subordinated debt securities 
 Subordinated notes, net of issuance costs, issued in 2020, due 2030, fixed rate of 5.50 % during the first five years and at a floating rate of 534.5 basis points above the then three-month SOFR rate, reset quarterly, thereafter, callable in 2025 without penalty 
 $ 142,747 $ 143,400 
 Subordinated notes, net of issuance costs, issued in 2022, due 2032, fixed rate of 3.125 % during the first five years and at a floating rate of 182 basis points above the then three-month SOFR rate, reset quarterly, thereafter, callable in 2027 without penalty 
 297,382 297,020 
 Total $ 440,129 $ 440,420 

 Subordinated Debt Securities . On April 1, 2022, the Company acquired $ 140.0 million in aggregate principal amount of 5.500 % Fixed-to-Floating Rate Subordinated Notes due 2030 (the “2030 Notes”) from Happy, and the Company recorded approximately $ 144.4 million which included fair value adjustments. The 2030 Notes are unsecured, subordinated debt obligations of the Company and will mature on July 31, 2030. From and including the date of issuance to, but excluding July 31, 2025 or the date of earlier redemption, the 2030 Notes will bear interest at an initial rate of 5.50 % per annum, payable in arrears on January 31 and July 31 of each year. From and including July 31, 2025 to, but excluding, the maturity date or earlier redemption, the 2030 Notes will bear interest at a floating rate equal to the Benchmark rate (which is expected to be 3-month Secured Overnight Funding Rate (SOFR)), each as defined in and subject to the provisions of the applicable supplemental indenture for the 2030 Notes, plus 5.345 %, payable quarterly in arrears on January 31, April 30, July 31, and October 31 of each year, commencing on October 31, 2025. 
 The Company may, beginning with the interest payment date of July 31, 2025, and on any interest payment date thereafter, redeem the 2030 Notes, in whole or in part, subject to prior approval of the Federal Reserve if then required, at a redemption price equal to 100 % of the principal amount of the 2030 Notes to be redeemed plus accrued and unpaid interest to but excluding the date of redemption. The Company may also redeem the 2030 Notes at any time, including prior to July 31, 2025, at the Company’s option, in whole but not in part, subject to prior approval of the Federal Reserve if then required, if certain events occur that could impact the Company’s ability to deduct interest payable on the 2030 Notes for U.S. federal income tax purposes or preclude the 2030 Notes from being recognized as Tier 2 capital for regulatory capital purposes, or if the Company is required to register as an investment company under the Investment Company Act of 1940, as amended. In each case, the redemption would be at a redemption price equal to 100 % of the principal amount of the 2030 Notes plus any accrued and unpaid interest to, but excluding, the redemption date. 
 On January 18, 2022, the Company completed an underwritten public offering of $ 300.0 million in aggregate principal amount of its 3.125 % Fixed-to-Floating Rate Subordinated Notes due 2032 (the “2032 Notes”) for net proceeds, after underwriting discounts and issuance costs of approximately $ 296.4 million. The 2032 Notes are unsecured, subordinated debt obligations of the Company and will mature on January 30, 2032. From and including the date of issuance to, but excluding January 30, 2027 or the date of earlier redemption, the 2032 Notes will bear interest at an initial rate of 3.125 % per annum, payable in arrears on January 30 and July 30 of each year. From and including January 30, 2027 to, but excluding, the maturity date or earlier redemption, the 2032 Notes will bear interest at a floating rate equal to the Benchmark rate (which is expected to be Three-Month Term SOFR), each as defined in and subject to the provisions of the applicable supplemental indenture for the 2032 Notes, plus 182 basis points, payable quarterly in arrears on January 30, April 30, July 30, and October 30 of each year, commencing on April 30, 2027. 
 The Company may, beginning with the interest payment date of January 30, 2027, and on any interest payment date thereafter, redeem the 2032 Notes, in whole or in part, subject to prior approval of the Federal Reserve if then required, at a redemption price equal to 100% of the principal amount of the 2032 Notes to be redeemed plus accrued and unpaid interest to but excluding the date of redemption. The Company may also redeem the 2032 Notes at any time, including prior to January 30, 2027, at the Company’s option, in whole but not in part, subject to prior approval of the Federal Reserve if then required, if certain events occur that could impact the Company’s ability to deduct interest payable on the 2032 Notes for U.S. federal income tax purposes or preclude the 2032 Notes from being recognized as Tier 2 capital for regulatory capital purposes, or if the Company is required to register as an investment company under the Investment Company Act of 1940, as amended. In each case, the redemption would be at a redemption price equal to 100% of the principal amount of the 2032 Notes plus any accrued and unpaid interest to, but excluding, the redemption date. 
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 12. Income Taxes 
 The following is a summary of the components of the provision for income taxes for the three and six months ended June 30, 2023 and 2022: 
 
 For the Three Months Ended June 30, For the Six Months Ended June 30, 
 2023 2022 2023 2022 
 (In thousands) 
 Current: 
 Federal $ 27,458 $ 19,242 $ 52,197 $ 33,207 
 State 5,590 5,077 10,627 8,761 
 Total current 33,048 24,319 62,824 41,968 
 Deferred: 
 Federal ( 1,190 ) ( 16,636 ) ( 1,043 ) ( 14,752 ) 
 State ( 242 ) ( 4,389 ) ( 212 ) ( 3,893 ) 
 Total deferred ( 1,432 ) ( 21,025 ) ( 1,255 ) ( 18,645 ) 
 Income tax expense $ 31,616 $ 3,294 $ 61,569 $ 23,323 

 The reconciliation between the statutory federal income tax rate and effective income tax rate is as follows for the three and six months ended June 30, 2023 and 2022: 
 
 Three Months Ended June 30, Six Months Ended June 30, 
 2023 2022 2023 2022 
 Statutory federal income tax rate 21.00 % 21.00 % 21.00 % 21.00 % 
 Effect of non-taxable interest income ( 0.70 ) ( 8.30 ) ( 0.74 ) ( 2.53 ) 
 Stock compensation 0.18 0.90 0.28 0.58 
 State income taxes, net of federal benefit 2.70 ( 4.38 ) 2.60 2.56 
 Executive officer compensation & other ( 0.08 ) 7.87 ( 0.32 ) 0.77 
 Effective income tax rate 23.10 % 17.09 % 22.82 % 22.38 % 

 
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 The types of temporary differences between the tax basis of assets and liabilities and their financial reporting amounts that give rise to deferred income tax assets and liabilities, and their approximate tax effects, are as follows: 
 
 June 30,
2023 December 31,
2022 
 (In thousands) 
 Deferred tax assets: 
 Allowance for credit losses $ 79,732 $ 80,232 
 Deferred compensation 6,210 7,817 
 Stock compensation 6,109 6,180 
 Non-accrual interest income 1,657 1,518 
 Real estate owned 103 103 
 Unrealized loss on investment securities, available-for-sale 97,206 98,587 
 Loan discounts 5,913 7,007 
 Tax basis premium/discount on acquisitions 324 1,222 
 Investments 28,867 28,523 
 
 Other 8,270 8,007 
 Gross deferred tax assets 234,391 239,196 
 Deferred tax liabilities: 
 Accelerated depreciation on premises and equipment 1,987 4,252 
 
 Core deposit intangibles 14,547 14,755 
 FHLB dividends 3,029 2,681 
 Other 8,398 8,187 
 Gross deferred tax liabilities 27,961 29,875 
 Net deferred tax assets $ 206,430 $ 209,321 

 The Company files income tax returns in the U.S. federal jurisdiction. The Company's income tax returns are open and subject to examinations from the 2019 tax year and forward. The Company's various state income tax returns are generally open from the 2019 and later tax return years based on individual state statute of limitations. 
 
 13. Common Stock, Compensation Plans and Other 
 Common Stock 
 The Company’s Restated Articles of Incorporation, as amended, authorize the issuance of up to 300,000,000 shares of common stock, par value $ 0.01 per share. 
 The Company also has the authority to issue up to 5,500,000 shares of preferred stock, par value $ 0.01 per share under the Company’s Restated Articles of Incorporation, as amended. 
 Stock Repurchases 
 During the six months ended June 30, 2023, the Company repurchased a total of 1,150,849 shares with a weighted-average stock price of $ 22.00 per share. Shares repurchased under the program as of June 30, 2023 since its inception total 21,910,715 shares. The remaining balance available for repurchase is 17,841,285 shares at June 30, 2023. 
 
 
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 Stock Compensation Plans 
 On January 21, 2022, the Company’s Board of Directors adopted, and on April 21, 2022, the Company's shareholders approved, the Home BancShares, Inc. 2022 Equity Incentive Plan (the “2022 Plan”). The 2022 Plan replaced the Company’s Amended and Restated 2006 Stock Option and Performance Incentive Plan (the “2006 Plan” and, together with the 2022 Plan, the “Plans”), which expired on February 27, 2022. The purpose of the Plans is to attract and retain highly qualified officers, directors, key employees, and other persons, and to motivate those persons to improve the Company’s business results. As of June 30, 2023, the maximum total number of shares of the Company’s common stock available for issuance under the 2022 Plan was 14,788,000 shares (representing 13,288,000 shares approved for issuance under the 2006 Plan plus 1,500,000 shares added upon adoption of the 2022 Plan). At June 30, 2023, the Company had 2,575,023 shares of common stock available for future grants and 5,442,539 shares of common stock reserved for issuance pursuant to the Plans. 
 
 The intrinsic value of the stock options outstanding and stock options vested at June 30, 2023 was $ 6.3 million and $ 6.1 million, respectively. The intrinsic value of stock options exercised during the six months ended June 30, 2023 was approximately $ 1.5 million. Total unrecognized compensation cost, net of income tax benefit, related to non-vested stock option awards, which are expected to be recognized over the vesting periods, was approximately $ 3.7 million as of June 30, 2023. 
 The table below summarizes the stock option transactions under the 2022 Plan at June 30, 2023 and December 31, 2022 and changes during the three-month period and year then ended: 
 
 For the Six Months Ended June 30, 2023 For the Year Ended 
 December 31, 2022 
 
 Shares (000) Weighted-
Average
Exercisable
Price Shares (000) Weighted-
Average
Exercisable
Price 
 Outstanding, beginning of year 2,971 $ 20.45 3,015 $ 20.06 
 Granted 25 22.63 183 21.13 
 Forfeited/Expired ( 5 ) 23.23 ( 96 ) 21.89 
 Exercised ( 123 ) 10.39 ( 131 ) 11.30 
 Outstanding, end of period 2,868 20.90 2,971 20.45 
 Exercisable, end of period 2,021 20.00 1,837 18.89 

 Stock-based compensation expense for stock-based compensation awards granted is based on the grant-date fair value. For stock option awards, the fair value is estimated at the date of grant using the Black-Scholes option-pricing model. This model requires the input of highly subjective assumptions, changes to which can materially affect the fair value estimate. Additionally, there may be other factors that would otherwise have a significant effect on the value of employee stock options granted but are not considered by the model. Accordingly, while management believes that the Black-Scholes option-pricing model provides a reasonable estimate of fair value, the model does not necessarily provide the best single measure of fair value for the Company's employee stock options. The weighted-average fair value of options granted during the six months ended June 30, 2023 was $ 5.37 per share. There were 25,000 options granted during the six months ended June 30, 2023. The fair value of each option granted is estimated on the date of grant using the Black-Scholes option-pricing model based on the weighted-average assumptions for expected dividend yield, expected stock price volatility, risk-free interest rate, and expected life of options granted. 
 The assumptions used in determining the fair value of the 2023 and 2022 stock option grants were as follows: 
 
 For the Six Months Ended June 30, 2023 
 For the Year Ended December 31, 2022 
 
 Expected dividend yield 2.98 % 3.14 % 
 Expected stock price volatility 27.97 % 31.18 % 
 Risk-free interest rate 3.37 % 2.82 % 
 Expected life of options 6.5 years 6.5 years 

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 The following is a summary of currently outstanding and exercisable options at June 30, 2023: 
 
 Options Outstanding Options Exercisable 
 Exercise Prices Options
Outstanding
Shares
(000) Weighted-
Average
Remaining
Contractual
Life (in years) Weighted-
Average
Exercise
Price Options
Exercisable
Shares (000) Weighted-
Average
Exercise
Price 
 $ 14.00 to $ 15.99 
 100 1.55 $ 14.71 100 $ 14.71 
 $ 16.00 to $ 17.99 
 190 1.45 16.94 190 16.94 
 $ 18.00 to $ 19.99 
 886 2.29 18.48 879 18.48 
 $ 20.00 to $ 21.99 
 270 5.24 20.88 193 20.99 
 $ 22.00 to $ 23.99 
 1,331 5.16 23.21 589 23.12 
 $ 24.00 to $ 25.99 
 91 4.90 25.59 70 25.96 
 2,868 2,021 

 
 The table below summarized the activity for the Company’s restricted stock issued and outstanding at June 30, 2023 and December 31, 2022 and changes during the period and year then ended: 
 
 As of 
 June 30, 2023 
 As of 
 December 31, 2022 
 
 (In thousands) 
 Beginning of year 1,381 1,231 
 Issued 261 409 
 Vested ( 152 ) ( 178 ) 
 Forfeited ( 53 ) ( 81 ) 
 End of period 1,437 1,381 
 Amount of expense for the six months and twelve months ended, respectively 
 $ 4,186 $ 7,646 

 Total unrecognized compensation cost, net of income tax benefit, related to non-vested restricted stock awards, which are expected to be recognized over the vesting periods, was approximately $ 15.1 million as of June 30, 2023. 
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 14. Non-Interest Expense 
 The table below shows the components of non-interest expense for the three and six months ended June 30, 2023 and 2022: 
 
 Three Months Ended June 30, Six Months Ended June 30, 
 2023 2022 2023 2022 
 (In thousands) 
 Salaries and employee benefits $ 64,534 $ 65,795 $ 129,024 $ 109,346 
 Occupancy and equipment 14,923 14,256 29,875 23,400 
 Data processing expense 9,151 10,094 18,119 17,133 
 Merger and acquisition expenses — 48,731 — 49,594 
 Other operating expenses: 
 Advertising 2,098 2,117 4,329 3,383 
 Amortization of intangibles 2,478 2,477 4,955 3,898 
 Electronic banking expense 3,675 3,352 7,005 5,890 
 Directors’ fees 538 375 998 779 
 Due from bank service charges 286 396 559 666 
 FDIC and state assessment 3,220 2,390 6,720 4,058 
 Insurance 927 973 1,816 1,743 
 Legal and accounting 1,436 1,061 2,524 1,858 
 Other professional fees 2,774 2,254 5,058 3,863 
 Operating supplies 763 995 1,501 1,749 
 Postage 586 556 1,087 862 
 Telephone 573 384 1,101 721 
 Other expense 8,320 9,276 16,255 13,435 
 Total other operating expenses 27,674 26,606 53,908 42,905 
 Total non-interest expense $ 116,282 $ 165,482 $ 230,926 $ 242,378 

 
 
 15. Leases 
 The Company leases land and office facilities under long-term, non-cancelable operating lease agreements. The leases expire at various dates through 2044 and do not include renewal options based on economic factors that would have implied that continuation of the lease was reasonably certain. Certain leases provide for increases in future minimum annual rental payments as defined in the lease agreements. The leases generally include real estate taxes and common area maintenance charges in the rental payments. Short-term leases are leases having a term of twelve months or less. The Company does not separate nonlease components from the associated lease component of our operating leases. As a result, the Company accounts for these components as a single component since (i) the timing and pattern of transfer of the nonlease components and the associated lease component are the same and (ii) the lease component, if accounted for separately, would be classified as an operating lease. The Company recognizes short term leases on a straight-line basis and does not record a related ROU asset and liability for such leases. In addition, equipment leases were determined to be immaterial and a related ROU asset and liability for such leases is not recorded. 
 As of June 30, 2023, the balances of the right-of-use asset and lease liability were $ 41.9 million and $ 44.8 million, respectively. As of December 31, 2022, the balances of the right-of-use asset and lease liability were $ 42.9 million and $ 46.0 million, respectively. The right-of-use asset is included in bank premises and equipment, net , and the lease liability is included in accrued interest payable and other liabilities . 
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 The minimum rental commitments under these noncancelable operating leases are as follows (in thousands) as of June 30, 2023 and December 31, 2022: 
 
 June 30, 2023 December 31, 2022 
 2023 $ 4,475 $ 8,332 
 2024 8,085 7,463 
 2025 7,325 6,739 
 2026 6,948 6,352 
 2027 6,381 5,821 
 Thereafter 24,634 24,591 
 Total future minimum lease payments $ 57,848 $ 59,298 
 Discount effect of cash flows ( 13,022 ) ( 13,344 ) 
 Present value of net future minimum lease payments $ 44,826 $ 45,954 

 Additional information (dollar amounts in thousands): 
 
 For the Three Months Ended Six Months Ended 
 Lease expense: June 30, 2023 June 30, 2022 June 30, 2023 June 30, 2022 
 Operating lease expense $ 1,923 $ 2,116 $ 3,878 $ 3,939 
 Short-term lease expense — — — 1 
 Variable lease expense 260 218 520 443 
 Total lease expense $ 2,183 $ 2,334 $ 4,398 $ 4,383 
 Other information: 
 Cash paid for amounts included in the measurement of lease liabilities 
 $ 1,987 $ 2,154 $ 4,010 $ 3,983 
 Weighted-average remaining lease term (in years) 
 8.69 9.33 8.77 9.42 
 Weighted-average discount rate 3.39 % 3.38 % 3.44 % 3.39 % 

 
 The Company currently leases three properties from three related parties. Total rent expense from the leases was $ 35,000 , or 1.59 % of total lease expense and $ 69,000 , or 1.57 % of total lease expense, for the three and six months ended June 30, 2023, respectively. 
 
 16. Significant Estimates and Concentrations of Credit Risks 
 Accounting principles generally accepted in the United States of America require disclosure of certain significant estimates and current vulnerabilities due to certain concentrations. Estimates related to the allowance for credit losses and certain concentrations of credit risk are reflected in Note 5, while deposit concentrations are reflected in Note 8. 
 The Company’s primary market areas are in Arkansas, Florida, Texas, South Alabama and New York. The Company primarily grants loans to customers located within these markets unless the borrower has an established relationship with the Company. 
 The diversity of the Company’s economic base tends to provide a stable lending environment. Although the Company has a loan portfolio that is diversified in both industry and geographic area, a substantial portion of its debtors’ ability to honor their contracts is dependent upon real estate values, tourism demand and the economic conditions prevailing in its market areas. 
 Although the Company has a diversified loan portfolio, at June 30, 2023 and December 31, 2022, commercial real estate loans represented 56.6 % and 56.3 % of total loans receivable, respectively, and 219.5 % and 230.1 % of total stockholders’ equity at June 30, 2023 and December 31, 2022, respectively. Residential real estate loans represented 15.8 % and 16.1 % of total loans receivable and 61.5 % and 66.0 % of total stockholders’ equity at June 30, 2023 and December 31, 2022, respectively. 
 Approximately 80.7 % of the Company’s total loans and 86.1 % of the Company’s real estate loans as of June 30, 2023, are to borrowers whose collateral is located in Alabama, Arkansas, Florida, Texas and New York, the states in which the Company has its branch locations. 
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 For the three and six months ended June 30, 2023, the Company recorded $ 2.3 million and $ 3.5 million in provision for credit losses on loans, respectively. However, the Company determined that no additional provision was necessary for unfunded commitments as the current level of the reserve was considered adequate. 
 Any future volatility in the economy could cause the values of assets and liabilities recorded in the financial statements to change rapidly, resulting in material future adjustments in asset values, the allowance for credit losses and capital that could negatively impact the Company’s ability to meet regulatory capital requirements and maintain sufficient liquidity. 
 
 17. Commitments and Contingencies 
 In the ordinary course of business, the Company makes various commitments and incurs certain contingent liabilities to fulfill the financing needs of its customers. These commitments and contingent liabilities include lines of credit and commitments to extend credit and issue standby letters of credit. The Company applies the same credit policies and standards as they do in the lending process when making these commitments. The collateral obtained is based on the assessed creditworthiness of the borrower. 
 At June 30, 2023 and December 31, 2022, commitments to extend credit of $ 4.93 billion and $ 4.83 billion, respectively, were outstanding. A percentage of these balances are participated out to other banks; therefore, the Company can call on the participating banks to fund future draws. Since some of these commitments are expected to expire without being drawn upon, the total commitment amount does not necessarily represent future cash requirements. 
 Outstanding standby letters of credit are contingent commitments issued by the Company, generally to guarantee the performance of a customer in third-party borrowing arrangements. The term of the guarantee is dependent upon the creditworthiness of the borrower, some of which are long-term. The amount of collateral obtained, if deemed necessary, is based on management’s credit evaluation of the counterparty. Collateral held varies but may include accounts receivable, inventory, property, plant and equipment, commercial real estate and residential real estate. Management uses the same credit policies in granting lines of credit as it does for on-balance-sheet instruments. The maximum amount of future payments the Company could be required to make under these guarantees at June 30, 2023 and December 31, 2022, was $ 186.8 million and $ 184.6 million, respectively. 
 The Company and/or its bank subsidiary have various unrelated legal proceedings, most of which involve loan foreclosure activity pending, which, in the aggregate, are not expected to have a material adverse effect on the financial position or results of operations or cash flows of the Company and its subsidiary. 
 
 18. Regulatory Matters 
 The Bank is subject to a legal limitation on dividends that can be paid to the parent company without prior approval of the applicable regulatory agencies. Arkansas bank regulators have specified that the maximum dividend limit state banks may pay to the parent company without prior approval is 75 % of the current year earnings plus 75 % of the retained net earnings of the preceding year. Since the Bank is also under supervision of the Federal Reserve, it is further limited if the total of all dividends declared in any calendar year by the Bank exceeds the Bank’s net profits to date for that year combined with its retained net profits for the preceding two years. During the six months ended June 30, 2023, the Company requested approximately $ 175.8 million in regular dividends from its banking subsidiary. 
 The Company’s banking subsidiary is subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s consolidated financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company must meet specific capital guidelines that involve quantitative measures of the Company’s assets, liabilities and certain off-balance-sheet items as calculated under regulatory accounting practices. The Company’s capital amounts and classifications are also subject to qualitative judgments by the regulators about components, risk weightings and other factors. Furthermore, the Company’s regulators could require adjustments to regulatory capital not reflected in the consolidated financial statements. 
 Quantitative measures established by regulation to ensure capital adequacy require the Company to maintain minimum amounts and ratios of total, Tier 1 common equity Tier 1 ("CET1") and Tier 1 capital (as defined in the regulations) to risk-weighted assets (as defined) and of Tier 1 capital (as defined) to average assets (as defined). Management believes that, as of June 30, 2023, the Company meets all capital adequacy requirements to which it is subject. 
 
 
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 On December 31, 2018, the federal banking agencies issued a joint final rule to revise their regulatory capital rules to permit bank holding companies and banks to phase-in, for regulatory capital purposes, the day-one impact of the new CECL accounting rule on retained earnings over a period of three years. As part of its response to the impact of COVID-19, on March 27, 2020, the federal banking regulatory agencies issued an interim final rule that provided the option to temporarily delay certain effects of CECL on regulatory capital for two years, followed by a three-year transition period. The interim final rule allows bank holding companies and banks to delay for two years 100 % of the day-one impact of adopting CECL and 25 % of the cumulative change in the reported allowance for credit losses since adopting CECL. The Company elected to adopt the interim final rule, which is reflected in the Company's risk-based capital ratios. 
 Basel III became effective for the Company and its bank subsidiary on January 1, 2015. Basel III amended the prompt corrective action rules to incorporate a CET1 requirement and to raise the capital requirements for certain capital categories. In order to be adequately capitalized for purposes of the prompt corrective action rules, a banking organization is required to have at least a 4.5 % CET1 risk-based capital ratio, a 4 % Tier 1 leverage capital ratio, a 6 % Tier 1 risk-based capital ratio and an 8 % total risk-based capital ratio. 
 The Federal Reserve Board’s risk-based capital guidelines include the definitions for (1) a well-capitalized institution, (2) an adequately-capitalized institution, and (3) an undercapitalized institution. Under Basel III, the criteria for a well-capitalized institution are: a 6.5 % CET1 risk-based capital ratio, a 5 % Tier 1 leverage capital ratio, an 8 % Tier 1 risk-based capital ratio, and a 10 % total risk-based capital ratio. As of June 30, 2023, the Bank met the capital standards for a well-capitalized institution. The Company’s CET1 risk-based capital ratio, Tier 1 leverage capital ratio, Tier 1 risk-based capital ratio, and total risk-based capital ratio were 13.63 %, 11.92 %, 13.63 %, and 17.28 %, respectively, as of June 30, 2023. 
 
 19. Additional Cash Flow Information 
 The following is a summary of the Company’s additional cash flow information during the six-month periods ended: 
 
 June 30, 
 2023 2022 
 (In thousands) 
 Interest paid $ 147,892 $ 27,605 
 Income taxes paid 71,925 38,553 
 Assets acquired by foreclosure 316 9 

 
 2 0. Financial Instruments 
 Fair value is the price that would be received for an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements must maximize the use of observable inputs and minimize the use of unobservable inputs. There is a hierarchy of three levels of inputs that may be used to measure fair values: 
 
 Level 1 Quoted prices in active markets for identical assets or liabilities 
 
 Level 2 Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities 
 
 Level 3 Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities 

 A financial instrument’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. Transfers of financial instruments between levels within the fair value hierarchy are recognized on the date management determines that the underlying circumstances or assumptions have changed. 
 Available-for-sale securities – the Company's available-for-sale securities are considered to be Level 2 securities. The Level 2 securities consist primarily of U.S. government-sponsored enterprises, mortgage-backed securities plus state and political subdivisions. For these securities, the Company obtains fair value measurements from an independent pricing service. The fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayment speeds, credit information and the bond’s terms and conditions, among other things. 
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 The Company reviews the prices supplied by the independent pricing service, as well as their underlying pricing methodologies, for reasonableness and to ensure such prices are aligned with traditional pricing matrices. In general, the Company does not purchase investment portfolio securities with complicated structures. Pricing for the Company’s investment securities is fairly generic and is easily obtained. The Company uses a third-party comparison pricing vendor in order to reflect consistency in the fair values of the investment securities sampled by the Company each quarter. 
 Held-to-maturity securities – the Company's held-to-maturity securities are considered to be Level 2 securities. The Level 2 securities consist primarily of U.S. government-sponsored enterprises, mortgage-backed securities plus state and political subdivisions. For these securities, the Company obtains fair value measurements from an independent pricing service. The fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayment speeds, credit information and the bond’s terms and conditions, among other things. 
 Collateral dependent individually evaluated loans - loans are carried at the net realizable value of the collateral or observable market price if the loan is collateral dependent. A portion of the allowance for credit losses is allocated to collateral dependent loans if the value of such loans is deemed to be less than the unpaid balance. If these allocations cause the allowance for credit losses to require an increase, such increase is reported as a component of the provision for credit losses. The fair value of loans with specific allocated losses was $ 96.7 million and $ 168.6 million as of June 30, 2023 and December 31, 2022, respectively. This valuation is considered Level 3, consisting of appraisals of underlying collateral. The Company reversed approximately $ 420,000 and $ 77,000 of accrued interest receivable when impaired loans were put on non-accrual status during the three months ended June 30, 2023 and 2022, respectively. The Company reversed approximately $ 656,000 and $ 149,000 of accrued interest receivable when impaired loans were put on non-accrual status during the six months ended June 30, 2023 and 2022, respectively. 
 Foreclosed assets held for sale – Foreclosed assets held for sale are held by the Company at fair value, less estimated costs to sell. At foreclosure, if the fair value, less estimated costs to sell, of the real estate acquired is less than the Company’s recorded investment in the related loan, a write-down is recognized through a charge to the allowance for credit losses. Additionally, valuations are periodically performed by management and any subsequent reduction in value is recognized by a charge to income. The fair value of foreclosed assets held for sale is estimated using Level 3 inputs based on appraisals of underlying collateral. As of June 30, 2023 and December 31, 2022, the fair value of foreclosed assets held for sale, less estimated costs to sell, was $ 725,000 and $ 546,000 , respectively. 
 No foreclosed assets held for sale were remeasured during the six months ended June 30, 2023. Regulatory guidelines require the Company to reevaluate the fair value of foreclosed assets held for sale on at least an annual basis. The Company’s policy is to comply with the regulatory guidelines. 
 The significant unobservable (Level 3) inputs used in the fair value measurement of collateral for collateral-dependent impaired loans and foreclosed assets primarily relate to customized discounting criteria applied to the customer’s reported amount of collateral. The amount of the collateral discount depends upon the condition and marketability of the underlying collateral. As the Company’s primary objective in the event of default would be to monetize the collateral to settle the outstanding balance of the loan, less marketable collateral would receive a larger discount. 
 
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 Fair Values of Financial Instruments 
 The following table presents the estimated fair values of the Company’s financial instruments. Fair value is the exchange price that would be received for an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date . 
 
 June 30, 2023 
 Carrying
Amount Fair Value Level 
 (In thousands) 
 Financial assets: 
 Cash and cash equivalents $ 611,191 $ 611,191 1 
 Federal funds sold 1,550 1,550 1 
 Investment securities - available for sale 3,645,013 3,645,013 2 
 Investment securities - held-to-maturity 1,285,150 1,155,768 2 
 Loans receivable, net of impaired loans and allowance 13,744,524 13,665,607 3 
 Accrued interest receivable 101,066 101,066 1 
 FHLB, FRB & FNBB Bank stock; other equity investments 
 227,480 227,480 3 
 Marketable equity securities 39,887 39,887 1 
 Financial liabilities: 
 Deposits: 
 Demand and non-interest bearing $ 4,598,593 $ 4,598,593 1 
 Savings and interest-bearing transaction accounts 11,169,940 11,169,940 1 
 Time deposits 1,228,358 1,202,652 3 
 Securities sold under agreements to repurchase 160,349 160,349 1 
 FHLB and other borrowed funds 701,550 674,604 2 
 Accrued interest payable 15,063 15,063 1 
 Subordinated debentures 440,129 381,283 3 

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 December 31, 2022 
 Carrying
Amount Fair Value Level 
 (In thousands) 
 Financial assets: 
 Cash and cash equivalents $ 724,790 $ 724,790 1 
 Investment securities - available for sale 4,041,590 4,041,590 2 
 Investment securities - held-to-maturity 1,287,705 1,126,146 2 
 Loans receivable, net of impaired loans and allowance 13,929,892 13,723,865 3 
 Accrued interest receivable 103,199 103,199 1 
 FHLB, FRB & FNBB Bank stock; other equity investments 
 215,952 215,952 3 
 Marketable equity securities 52,034 52,034 1 
 Financial liabilities: 
 Deposits: 
 Demand and non-interest bearing $ 5,164,997 $ 5,164,997 1 
 Savings and interest-bearing transaction accounts 11,730,552 11,730,552 1 
 Time deposits 1,043,234 1,014,348 3 
 Securities sold under agreements to repurchase 131,146 131,146 1 
 FHLB and other borrowed funds 650,000 595,886 2 
 Accrued interest payable 10,622 10,622 1 
 Subordinated debentures 440,420 411,686 3 

 
 
 
 21. Recent Accounting Pronouncements 
 In March 2020, the FASB issued ASU 2020-04 , Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting ( "ASU 2020-04") . ASU 2020-04 provides optional expedients and exceptions for accounting related to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. ASU 2020-04 applies only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform and do not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022, except for hedging relationships existing as of December 31, 2022, that an entity has elected certain optional expedients for and that are retained through the end of the hedging relationship. ASU 2020-04 was effective upon issuance and generally can be applied through December 31, 2022. To ensure the relief in Topic 848 covers the period of time during which a significant number of modifications may take place, ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848 ( ASU 2022-06) defers the sunset date of Topic 848 from December 31, 2022, to December 31, 2024, after which entities will no longer be permitted to apply the relief in Topic 848. 
 In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope ("ASU 2022-01"). The amendments in the update clarify that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. Specifically, certain provisions in Topic 848, if elected by an entity, apply to derivative instruments that use an interest rate for margining, discounting, or contract price alignment that is modified as a result of reference rate reform. Amendments in the update to the expedients and exceptions in Topic 848 capture the incremental consequences of the scope clarification and tailor the existing guidance to derivative instruments affected by the discounting transition. The amendments in this Update do not apply to contract modifications made after December 31, 2022, new hedging relationships entered into after December 31, 2022, and existing hedging relationships evaluated for effectiveness in periods after December 31, 2022, except for hedging relationships existing as of December 31, 2022, that apply certain optional expedients in which the accounting effects are recorded through the end of the hedging relationship. ASU 2020-04 was effective upon issuance and generally can be applied through December 31, 2022. To ensure the relief in Topic 848 covers the period of time during which a significant number of modifications may take place, ASU 2022-06 defers the sunset date of Topic 848 from December 31, 2022, to December 31, 2024, after which entities will no longer be permitted to apply the relief in Topic 848. 
 
 
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 In March 2022, the FASB issued ASU 2022-02, Financial Instruments—Credit Losses (Topic 326): Troubled Debt Restructurings ("TDR") and Vintage Disclosures ("ASU 2022-02") . The amendments eliminate the TDR recognition and measurement guidance and, instead, require that an entity evaluate (consistent with the accounting for other loan modifications) whether the modification represents a new loan or a continuation of an existing loan. The amendments also enhance existing disclosure requirements and introduce new requirements related to certain modifications of receivables made to borrowers experiencing financial difficulty. The amendments require that an entity disclose current-period gross write-offs by year of origination for financing receivables and net investment in leases. Gross write-off information must be included in the vintage disclosures required for public business entities, which requires that an entity disclose the amortized cost basis of financing receivables by credit quality indicator and class of financing receivable by year of origination. ASU 2022-02 is effective for entities that have adopted ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. These amendments should be applied prospectively. The Company adopted the guidance effective January 1, 2023 and elected to apply the amendments prospectively. The adoption did not have a significant impact on our financial position. 
 In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848. These amendments extend the period of time preparers can utilize the reference rate reform relief guidance in Topic 848. The objective of the guidance in Topic 848 is to provide relief during the temporary transition period, so the FASB included a sunset provision within Topic 848 based on expectations of when the London Interbank Offered Rate (LIBOR) would cease being published. In 2021, the UK Financial Conduct Authority (FCA) delayed the intended cessation date of certain tenors of USD LIBOR to June 30, 2023. To ensure the relief in Topic 848 covers the period of time during which a significant number of modifications may take place, the ASU defers the sunset date of Topic 848 from December 31, 2022, to December 31, 2024, after which entities will no longer be permitted to apply the relief in Topic 848. ASU 2022-06 was effective upon issuance. 
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 Report of Independent Registered Public Accounting Firm 
 Audit Committee, Board of Directors and Stockholders 
 Home BancShares, Inc. 
 Conway, Arkansas 
 Results of Review of Interim Consolidated Financial Statements 
 We have reviewed the condensed consolidated balance sheet of Home BancShares, Inc. (“the Company”) and subsidiaries as of June 30, 2023, and the related condensed consolidated statements of income, comprehensive income (loss), and stockholder’s equity for the three-month and six-month periods ended June 30, 2023 and 2022, and cash flows for the six-month periods ended June 30, 2023 and 2022, and the related notes (collectively referred to as the “interim financial information or statements”). Based on our reviews, we are not aware of any material modifications that should be made to the condensed financial statements referred to above for them to be in conformity with accounting principles generally accepted in the United States of America. 
 We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated balance sheet of the Company and subsidiaries as of December 31, 2022, and the related consolidated statements of income, comprehensive income (loss), stockholders’ equity, and cash flows for the year then ended (not presented herein), and in our report dated February 24, 2023, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 2022 is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived. 
 Basis for Review Results 
 These interim financial statements are the responsibility of the Company’s management. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. 
 We conducted our review in accordance with the standards of the PCAOB. A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. 
 /s/ FORVIS, LLP 
 
 
 Little Rock, Arkansas 
 August 4, 2023 
 
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Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.
HOME BANCSHARES INC 10-Q

Item 1. Financial Statements
