What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-11-01 compared with 2024-08-02 · 231 added, 206 removed, 1574 unchanged (22% of the section changed)

2 unchanged sentences

Consolidated Balance Sheets

(In thousands, except share data) June 30, 2024 December 31, 2023

(In thousands, except share data) September 30, 2024 December 31, 2023

Cash and due from banks $ 265,408 $ 226,363

2 unchanged sentences

Fed funds sold 6,425 5,100

Investment securities — available-for-sale, net of allowance for credit losses of $ 2,525 at both June 30, 2024 and December 31, 2023 (amortized cost of $ 3,691,868 and $ 3,840,927 at June 30, 2024 and December 31, 2023, respectively)

Investment securities — available-for-sale, net of allowance for credit losses of $ 2,195 and $ 2,525 at September 30, 2024 and December 31, 2023, respectively (amortized cost of $ 3,529,325 and $ 3,840,927 at September 30, 2024 and December 31, 2023, respectively)

3,270,620 3,507,841

Investment securities — held-to-maturity, net of allowance for credit losses of $ 2,005 at both June 30, 2024 and December 31, 2023

Investment securities — held-to-maturity, net of allowance for credit losses of $ 2,005 at both September 30, 2024 and December 31, 2023

1,277,090 1,281,982

36 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(In thousands, except per share data) 2024 2023 2024 2023

16 unchanged sentences

Provision for credit losses on loans 18,200 2,800 31,700 6,300

Recovery of credit losses on unfunded commitments — — ( 1,000 ) —

Provision for credit losses on investment securities — 1,683 — 1,683

Provision for (recovery of) credit losses on unfunded commitments 1,000 ( 1,500 ) — ( 1,500 )

(Recovery of) provision for credit losses on investment securities ( 330 ) — ( 330 ) 1,683

Total credit loss expense 18,870 1,300 31,370 6,483

29 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(In thousands) 2024 2023 2024 2023

8 unchanged sentences

Consolidated Statements of Stockholders’ Equity

Three and Six Months Ended June 30, 2024

Three and Nine Months Ended September 30, 2024

(In thousands, except share data) Common

27 unchanged sentences

Balances at June 30, 2024 (unaudited) $ 1,997 $ 2,295,893 $ 1,819,412 $ ( 261,799 ) $ 3,855,503

Comprehensive income:

Net Income — — 100,038 — 100,038

Other comprehensive loss — — — 66,937 66,937

Net issuance of 95,852 shares of common stock from exercise of stock options

1 698 — — 699

Repurchase of 1,000,000 shares of common stock

( 10 ) ( 26,922 ) — — ( 26,932 )

Share-based compensation net forfeiture of 36,833 shares of restricted stock

1 2,494 — — 2,495

Excise tax from repurchase of common stock — ( 63 ) — — ( 63 )

Cash dividends – Common Stock, $ 0.195 per share

— — ( 38,888 ) — ( 38,888 )

Balances at September 30, 2024 (unaudited) $ 1,989 $ 2,272,100 $ 1,880,562 $ ( 194,862 ) $ 3,959,789

See Condensed Notes to Consolidated Financial Statements.

1 unchanged sentence

Consolidated Statements of Stockholders’ Equity

For the Three and Six Months Ended June 30, 2023

For the Three and Nine Months Ended September 30, 2023

(In thousands, except share data) Common

19 unchanged sentences

( 5 ) ( 11,804 ) — — ( 11,809 )

Share-based compensation net issuance of 50,000 shares of restricted common stock

Share-based compensation net forfeiture of 50,000 shares of restricted common stock

( 1 ) 2,335 — — 2,334

2 unchanged sentences

Balances at June 30, 2023 (unaudited) $ 2,026 $ 2,366,560 $ 1,578,176 $ ( 292,678 ) $ 3,654,084

Comprehensive income:

Net Income — — 98,453 — 98,453

Other comprehensive loss — — — ( 57,852 ) ( 57,852 )

Net issuance of 11,538 shares of common stock from exercise of stock options

Repurchase of 260,000 shares of common stock

( 3 ) ( 5,655 ) — — ( 5,658 )

Share-based compensation net forfeiture of 1,000 shares of restricted stock

— 2,235 — — 2,235

Cash dividends – Common Stock, $ 0.18 per share

— — ( 36,458 ) — ( 36,458 )

Balances at September 30, 2023 (unaudited) $ 2,023 $ 2,363,210 $ 1,640,171 $ ( 350,530 ) $ 3,654,874

See Condensed Notes to Consolidated Financial Statements.

1 unchanged sentence

Consolidated Statements of Cash Flows

Six Months Ended June 30,

Nine Months Ended September 30,

(In thousands) 2024 2023

10 unchanged sentences

Recovery of credit losses - unfunded commitments — ( 1,500 )

Provision for credit losses - investment securities — 1,683

(Recovery of) provision for credit losses - investment securities ( 330 ) 1,683

Deferred income tax effect 686 861

8 unchanged sentences

Investing Activities

Net decrease (increase) in federal funds sold 5,100 ( 1,550 )

Net increase in federal funds sold ( 1,325 ) ( 3,925 )

Net (increase) decrease in loans ( 428,985 ) 181,505

11 unchanged sentences

Financing Activities

Net increase (decrease) in deposits 168,092 ( 941,892 )

Net (decrease) increase in securities sold under agreements to repurchase ( 4,089 ) 29,203

Net decrease in deposits ( 82,001 ) ( 1,420,038 )

Net increase in securities sold under agreements to repurchase 37,331 28,974

Decrease in FHLB and other borrowed funds ( 1,400,550 ) ( 1,065,000 )

3 unchanged sentences

Dividends paid on common stock ( 111,227 ) ( 109,602 )

Net cash provided by (used in) financing activities 35,043 ( 959,271 )

Net cash used in financing activities ( 239,114 ) ( 1,179,692 )

Net change in cash and cash equivalents 17,464 ( 236,711 )

85 unchanged sentences

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.

8 unchanged sentences

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 allowance for credit losses on off-balance sheet credit exposures is adjusted as a provision for or recovery of 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.

4 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

6 unchanged sentences

Diluted earnings per share $ 0.50 $ 0.49 $ 1.51 $ 1.51

The impact of anti-dilutive shares to the diluted earnings per share calculation was considered immaterial for the periods ended June 30, 2024 and 2023.

The impact of anti-dilutive shares to the diluted earnings per share calculation was considered immaterial for the periods ended September 30, 2024 and 2023.

Business Combinations

5 unchanged sentences

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, 2024

September 30, 2024

Available-for-Sale

8 unchanged sentences

Total $ 3,529,325 $ ( 2,195 ) $ 3,527,130 $ 5,299 $ ( 261,809 ) $ 3,270,620

June 30, 2024

September 30, 2024

Held-to-Maturity

25 unchanged sentences

Total $ 1,283,987 $ ( 2,005 ) $ 1,281,982 $ 562 $ ( 112,063 ) $ 1,170,481

Assets, principally investment securities, having a carrying value of approximately $ 3.03 billion and $ 3.57 billion at June 30, 2024 and December 31, 2023, 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 $ 138.0 million and $ 142.1 million at June 30, 2024 and December 31, 2023, respectively.

The amortized cost and estimated fair value of securities classified as available-for-sale and held-to-maturity at June 30, 2024, by contractual maturity, are shown below.

Assets, principally investment securities, having a carrying value of approximately $ 2.37 billion and $ 3.57 billion at September 30, 2024 and December 31, 2023, 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 $ 179.4 million and $ 142.1 million at September 30, 2024 and December 31, 2023, respectively.

The amortized cost and estimated fair value of securities classified as available-for-sale and held-to-maturity at September 30, 2024, 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.

10 unchanged sentences

Total $ 3,529,325 $ 3,270,620 $ 1,279,095 $ 1,194,455

During the three and six months ended June 30, 2024 and 2023, 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, 2024 and December 31, 2023.

June 30, 2024

During the three and nine months ended September 30, 2024 and 2023, no available-for-sale securities were sold.

September 30, 2024

Less Than 12 Months 12 Months or More Total

37 unchanged sentences

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 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.

11 unchanged sentences

Losses are charged against the allowance when management believes the uncollectability of a security is confirmed.

During the period ended June 30, 2024, the Company determined the $ 2.5 million allowance for credit losses on the available for sale portfolio and the $ 2.0 million allowance for credit losses on the held-to-maturity portfolio were adequate.

Therefore, no additional provision was considered necessary.

During the quarter ended September 30, 2024, the Company recovered $ 330,000 in AFS reserves due to an improvement in the unrealized loss position of one of the Company's subordinated debt investments.

For both the three and nine month periods ended September 30, 2024, the Company determined the $ 2.0 million allowance for credit losses on the held-to-maturity portfolio was adequate.

Therefore, no additional provision was considered necessary for the HTM portfolio.

Available-for-Sale Investment Securities

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Allowance for credit losses:

1 unchanged sentence

Beginning balance $ 2,525 $ 842

Provision for credit loss — 1,683

Balance, June 30

(Recovery of) provision for credit loss ( 330 ) 1,683

Balance, September 30

$ 2,195 $ 2,525

2 unchanged sentences

Held-to-Maturity Investment Securities

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Allowance for credit losses:

2 unchanged sentences

Provision for credit loss — —

Balance, June 30

Balance, September 30

$ 2,005 $ 2,005

1 unchanged sentence

Balance, December 31, 2023

For the six months ended June 30, 2024, the Company had available-for-sale investment securities with approximately $ 348.7 million in unrealized losses, of which $ 345.8 million had been in continuous loss positions for more than twelve months.

For the nine months ended September 30, 2024, the Company had available-for-sale investment securities with approximately $ 261.8 million in unrealized losses, of which $ 260.1 million had been in continuous loss positions for more than twelve months.

With the exception of the subordinated debt investment securities which were downgraded during 2023 resulting in the allowance, the Company’s assessments indicated 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.

1 unchanged sentence

As a result, the Company has the ability and intent to hold such securities until maturity.

As of June 30, 2024, the Company's available-for-sale securities portfolio consisted of 1,559 investment securities, 1,317 of which were in an unrealized loss position.

As of September 30, 2024, the Company's available-for-sale securities portfolio consisted of 1,550 investment securities, 1,256 of which were in an unrealized loss position.

As noted in the table above, the total amount of the unrealized loss was $ 261.8 million.

5 unchanged sentences

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.

The Company has determined that, as of June 30, 2024, an additional provision for credit losses is not necessary 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.

As of June 30, 2024, the Company's held-to-maturity securities portfolio consisted of 508 investment securities, 501 of which were in an unrealized loss position.

The Company has determined that, as of September 30, 2024, an additional provision for credit losses is not necessary 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.

As of September 30, 2024, the Company's held-to-maturity securities portfolio consisted of 510 investment securities, 488 of which were in an unrealized loss position.

As noted in the table above, the total amount of the unrealized loss was $ 83.6 million.

4 unchanged sentences

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, 2024.

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, 2024:

State and political subdivisions U.S.

8 unchanged sentences

Total $ 1,109,685 $ 43,490 $ 125,920 $ 1,279,095

Income earned on securities for the three months ended June 30, 2024 and 2023, is as follows:

Income earned on securities for the three months ended September 30, 2024 and 2023, is as follows:

Three Months Ended

June 30, For the Six Months Ended

September 30, For the Nine Months Ended

September 30,

2024 2023 2024 2023

7 unchanged sentences

The various categories of loans receivable are summarized as follows:

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

(In thousands)

14 unchanged sentences

Loans receivable, net $ 14,511,405 $ 14,136,494

During the three months ended June 30, 2024, the Company sold $ 576,469 of the guaranteed portions of certain SBA loans, which resulted in a gain of approximately $ 56,000 .

During the six months ended June 30, 2024, the Company sold $ 3.3 million of the guaranteed portions of certain SBA loans, which resulted in a gain of approximately $ 254,000 .

During the three months ended June 30, 2023, the Company did not sell any guaranteed portions of certain SBA loans.

During the six months ended June 30, 2023, the Company sold $ 2.2 million guaranteed portions of certain SBA loans, which resulted in a gain of approximately $ 139,000 .

Mortgage loans held for sale of approximately $ 89.3 million and $ 123.4 million at June 30, 2024 and December 31, 2023, respectively, are included in residential 1-4 family loans.

During the three months ended September 30, 2024, the Company sold $ 1.8 million of the guaranteed portions of certain SBA loans, which resulted in a gain of approximately $ 145,000 .

During the nine months ended September 30, 2024, the Company sold $ 5.1 million of the guaranteed portions of certain SBA loans, which resulted in a gain of approximately $ 399,000 .

During the three months ended September 30, 2023, the Company sold $ 1.0 million guaranteed portions of certain SBA loans, which resulted in a gain of approximately $ 97,000 .

During the nine months ended September 30, 2023, the Company sold $ 3.2 million guaranteed portions of certain SBA loans, which resulted in a gain of approximately $ 236,000 .

Mortgage loans held for sale of approximately $ 92.0 million and $ 123.4 million at September 30, 2024 and December 31, 2023, 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.

9 unchanged sentences

Upon failure to deliver, the Company is subject to fees based on market movement.

These commitments and IRLCs are derivative instruments and their fair values at June 30, 2024 and December 31, 2023 were not material.

These commitments and IRLCs are derivative instruments and their fair values at September 30, 2024 and December 31, 2023 were not material.

Purchased loans that have experienced more than insignificant credit deterioration since origination are PCD loans.

5 unchanged sentences

Subsequent changes to the allowance for credit losses are recorded through the provision for credit losses.

The Company held approximately $ 85.2 million and $ 130.7 million in PCD loans, as of June 30, 2024 and December 31, 2023, respectively.

The balance, as of June 30, 2024, results entirely from the acquisition of Happy.

The Company held approximately $ 79.6 million and $ 130.7 million in PCD loans, as of September 30, 2024 and December 31, 2023, respectively.

The balance, as of September 30, 2024, results entirely from the acquisition of Happy.

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 2023 Form 10-K filed with the SEC on February 26, 2024.

27 unchanged sentences

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.

Based on this analysis, management determined that changes to several of the economic factors for the loss driver segments, along with other model improvements and updates, were necessary, and updated models were implemented for the June 30, 2024 allowance for credit losses calculation.

The identified loss drivers by segment are included below as of both June 30, 2024 and December 31, 2023.

June 30, 2024

Based on this analysis, management determined that changes to several of the economic factors for the loss driver segments, along with other model improvements and updates, were necessary, and updated models were implemented beginning with the June 30, 2024 allowance for credit losses calculation.

The identified loss drivers by segment are included below as of both September 30, 2024 and December 31, 2023.

September 30, 2024

Loss Driver Segment Call Report Segment(s) Modeled Economic Factors

1 unchanged sentence

All Other Construction 1a2 National Unemployment (%) & Gross Domestic Product (%)

Farmland & Agriculture

National Unemployment (%)

Residential 1-4 Family

1c1, 1c2a, 1c2b

National Unemployment (%) & Housing Price Index

Farmland & Agriculture 1b, 3 National Unemployment (%)

Residential 1-4 Family 1c1, 1c2a, 1c2b National Unemployment (%) & Housing Price Index (%)

Multifamily 1d Rental Vacancy Rate (%) & Housing Price Index (%)

Non-Farm/ Non-Residential CRE

National Unemployment (%) & Gross Domestic Product (%)

Commercial & Industrial, Non-Depository Financial Institutions, Purchase/Carry Securities, Leases, Other

4a, 9a, 9b1, 9b2, 10, Other

National Unemployment (%) & National Retail Sales (%)

Non-Farm/ Non-Residential CRE 1e1, 1e2 National Unemployment (%) & Gross Domestic Product (%)

Commercial & Industrial, Non-Depository Financial Institutions, Purchase/Carry Securities, Leases, Other 4a, 9a, 9b1, 9b2, 10, Other National Unemployment (%) & National Retail Sales (%)

Consumer Auto 6c National Unemployment (%) & National Retail Sales (%)

1 unchanged sentence

Other Consumer - SPF 6d National Unemployment (%)

Obligations of States and Political Subdivisions

National Unemployment (%) & Gross Domestic Product (%)

Obligations of States and Political Subdivisions 8 National Unemployment (%) & Gross Domestic Product (%)

December 31, 2023

30 unchanged sentences

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.

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.

12 unchanged sentences

The off-balance sheet credit exposures exhibit similar risk characteristics as loans currently in the Company’s loan portfolio.

During the three and six months ended June 30, 2024, the Company recorded $ 8.0 million and $ 13.5 million in provision for credit losses on loans, respectively.

In addition, during the six months ended June 30, 2024, the Company recovered $ 1.0 million in provision for unfunded commitments.

During 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, and the Company determined that no additional provision was necessary for unfunded commitments as the current level of the reserve was considered adequate.

The following table presents the activity in the allowance for credit losses for the three and six months ended June 30, 2024:

Three Months Ended June 30, 2024

During the three and nine months ended September 30, 2024, the Company recorded $ 18.2 million and $ 31.7 million in provision for credit losses on loans, respectively.

$ 16.7 million of the provision for credit losses recorded during 2024 was used to establish a hurricane reserve for loans located in the Federal Emergency Management Agency ("FEMA") disaster areas impacted by Hurricane Helene, which made landfall during the third quarter of 2024.

In addition, during the three months ended September 30, 2024, the Company recorded $ 1.0 million in provision for unfunded commitments, which completely offset the $ 1.0 million recovery of credit losses on unfunded commitments that was recorded during the first quarter of 2024.

During the three and nine months ended September 30, 2023, the Company recorded $ 2.8 million and $ 6.3 million in provision for credit losses on loans, respectively.

For the three and nine months ended September 30, 2023, the Company recovered $ 1.5 million in credit losses on unfunded commitments.

The following table presents the activity in the allowance for credit losses for the three and nine months ended September 30, 2024:

Three Months Ended September 30, 2024

Construction/

13 unchanged sentences

Provision for credit losses 4,718 9,799 8,059 ( 8,434 ) 4,058 18,200

Balance, June 30 $ 58,673 $ 86,842 $ 51,354 $ 69,635 $ 29,352 $ 295,856

Six Months Ended June 30, 2024

Balance, September 30 $ 63,398 $ 96,675 $ 59,425 $ 60,603 $ 32,473 $ 312,574

Nine Months Ended September 30, 2024

Construction/

11 unchanged sentences

Provision for credit losses 29,506 19,145 3,676 ( 28,210 ) 7,583 31,700

Balance, June 30 $ 58,673 $ 86,842 $ 51,354 $ 69,635 $ 29,352 $ 295,856

Balance, September 30 $ 63,398 $ 96,675 $ 59,425 $ 60,603 $ 32,473 $ 312,574

During the second quarter of 2024, the Company implemented updated allowance for credit loss models as part of the annual model review and challenge process.

In light of the current commercial real estate ("CRE") environment, the allowance calculation called for a higher level of reserves for the CRE portfolio and a corresponding reduction in reserves for the commercial and industrial portfolio.

The following table presents the activity in the allowance for credit losses for the three and six months ended June 30, 2023 and the year ended December 31, 2023:

Three Months Ended June 30, 2023

The following table presents the activity in the allowance for credit losses for the three and nine months ended September 30, 2023 and the year ended December 31, 2023:

Three Months Ended September 30, 2023

Construction/

11 unchanged sentences

Provision for credit losses 484 ( 4,680 ) 3,233 2,059 1,704 2,800

Balance, June 30 $ 32,275 $ 85,158 $ 51,732 $ 90,474 $ 26,044 $ 285,683

Six Months Ended June 30, 2023 and Year Ended December 31, 2023

Balance, September 30 $ 32,642 $ 78,553 $ 54,884 $ 92,469 $ 27,014 $ 285,562

Nine Months Ended September 30, 2023 and Year Ended December 31, 2023

Construction/

12 unchanged sentences

Provision for credit loss - loans 471 ( 13,789 ) 3,952 9,755 5,911 6,300

Balance, June 30

Balance, September 30

32,642 78,553 54,884 92,469 27,014 285,562

7 unchanged sentences

$ 33,877 $ 78,635 $ 55,860 $ 92,810 $ 27,052 $ 288,234

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, 2024 and December 31, 2023:

June 30, 2024

The following table presents the amortized cost basis of loans on nonaccrual status and loans past due over 90 days still accruing as of September 30, 2024 and December 31, 2023:

September 30, 2024

Nonaccrual Nonaccrual

8 unchanged sentences

Residential 1-4 family 23,905 — 1,495

Multifamily residential 592 — —

Total real estate 78,723 42,025 2,861

14 unchanged sentences

Residential 1-4 family 20,351 — 84

Multifamily residential — — —

Total real estate 46,054 — 2,516

3 unchanged sentences

Total $ 59,971 $ 2,534 $ 4,130

The Company had $ 78.1 million and $ 60.0 million in nonaccrual loans for the periods ended June 30, 2024 and December 31, 2023, respectively.

In addition, the Company had $ 8.3 million and $ 4.1 million in loans past due 90 days or more and still accruing for the periods ended June 30, 2024 and December 31, 2023, respectively.

The Company had $ 2.3 million and $ 2.5 million in nonaccrual loans with a specific reserve as of June 30, 2024 and December 31, 2023, respectively.

Interest income recognized on the non-accrual loans for the periods ended June 30, 2024 and June 30, 2023 was considered immaterial.

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, 2024 and December 31, 2023:

June 30, 2024

The Company had $ 95.7 million and $ 60.0 million in nonaccrual loans for the periods ended September 30, 2024 and December 31, 2023, respectively.

In addition, the Company had $ 5.4 million and $ 4.1 million in loans past due 90 days or more and still accruing for the periods ended September 30, 2024 and December 31, 2023, respectively.

The Company had $ 46.5 million and $ 2.5 million in nonaccrual loans with a specific reserve as of September 30, 2024 and December 31, 2023, respectively.

Interest income recognized on the non-accrual loans for the periods ended September 30, 2024 and September 30, 2023 was considered immaterial.

September 30, 2024

Real Estate Residential

29 unchanged sentences

Total $ 52,594 $ 21,386 $ 20,913

The Company had $ 95.7 million and $ 94.9 million in impaired loans for the periods ended June 30, 2024 and December 31, 2023, respectively.

The Company had $ 134.1 million and $ 94.9 million in impaired loans for the periods ended September 30, 2024 and December 31, 2023, respectively.

Loans that do not share risk characteristics are evaluated on an individual basis.

1 unchanged sentence

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.

When repayment is expected to be from the sale of the collateral, expected credit losses are calculated as the amount by which the amortized cost basis of the loan exceeds the fair value of the underlying collateral less estimated costs to sell.

estimated costs to sell.

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, 2024 and December 31, 2023:

June 30, 2024

The following is an aging analysis for loans receivable as of September 30, 2024 and December 31, 2023:

September 30, 2024

30-59 Days Loans

35 unchanged sentences

Total $ 18,559 $ 5,947 $ 64,101 $ 88,607 $ 14,336,121 $ 14,424,728 $ 4,130

Non-accruing loans at June 30, 2024 and December 31, 2023 were $ 78.1 million and $ 60.0 million, respectively.

Interest recognized on impaired loans during the three and six months ended June 30, 2024 was approximately $ 368,000 and $ 737,000 , 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.

Non-accruing loans at September 30, 2024 and December 31, 2023 were $ 95.7 million and $ 60.0 million, respectively.

Interest recognized on impaired loans during the three and nine months ended September 30, 2024 was approximately $ 1.3 million and $ 3.7 million, respectively.

Interest recognized on impaired loans during the three and nine months ended September 30, 2023 was approximately $ 347,000 and $ 1.0 million, respectively.

The amount of interest recognized on impaired loans on the cash basis is not materially different than the accrual basis.

46 unchanged sentences

(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.

Based on the most recent analysis performed, the risk category of loans by class of loans as of June 30, 2024 and December 31, 2023 is as follows:

June 30, 2024

Based on the most recent analysis performed, the risk category of loans by class of loans as of September 30, 2024 and December 31, 2023 is as follows:

September 30, 2024

Term Loans Amortized Cost Basis by Origination Year

43 unchanged sentences

Total residential 1-4 family 187,704 256,902 422,537 261,251 156,691 449,644 197,623 1,932,352

June 30, 2024

September 30, 2024

Term Loans Amortized Cost Basis by Origination Year

133 unchanged sentences

Total $ 2,138,730 $ 3,341,500 $ 2,083,044 $ 1,132,926 $ 872,429 $ 2,908,528 $ 1,947,571 $ 14,424,728

The following table presents gross write-offs by origination date as of June 30, 2024 and December 31, 2023.

June 30, 2024

The following table presents gross write-offs by origination date as of September 30, 2024 and December 31, 2023.

September 30, 2024

Gross Loan Write-Offs by Origination Year

27 unchanged sentences

Agricultural & other 3,252 ** 1 1 2 64 3 164 3,487

1 1 2 64 3 164 3,487

Total $ 3,252 $ 490 $ 1,351 $ 1,072 $ 2,878 $ 6,357 $ 655 $ 16,055

2 unchanged sentences

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, 2024 and December 31, 2023.

June 30, 2024

The following tables present the amortized cost of performing and nonperforming loans as of September 30, 2024 and December 31, 2023.

September 30, 2024

Term Loans Amortized Cost Basis by Origination Year

85 unchanged sentences

Total $ 2,138,730 $ 3,341,500 $ 2,083,044 $ 1,132,926 $ 872,429 $ 2,908,528 $ 1,947,571 $ 14,424,728

The Company had approximately $ 27.3 million or 114 total revolving loans convert to term loans for the six months ended June 30, 2024 compared to $ 21.8 million or 120 total revolving loans convert to term loans for the six months ended June 30, 2023.

The Company had approximately $ 45.3 million or 180 total revolving loans convert to term loans for the nine months ended September 30, 2024 compared to $ 32.1 million or 182 total revolving loans convert to term loans for the nine months ended September 30, 2023.

These loans were considered immaterial for vintage disclosure inclusion.

The following table presents the amortized cost basis of modified loans to borrowers experiencing financial difficulty by class and modification type at June 30, 2024 and December 31, 2023.

The following table presents the amortized cost basis of modified loans to borrowers experiencing financial difficulty by class and modification type at September 30, 2024 and December 31, 2023.

The percentage of the amortized cost basis of loans that were modified to borrowers in financial distress as compared to the amortized cost basis of each class of financing receivable is also presented below.

June 30, 2024

September 30, 2024

Combination of Modifications

25 unchanged sentences

Total $ 3,225 $ 636 $ 149 $ 3,518 $ 938 $ 5 $ 16,023 $ 116 $ 24,610 0.17 %

During the six months ended June 30, 2024, the Company restructured approximately $ 1.0 million in loans to 8 borrowers.

The ending balance of these loans as of June 30, 2024, was $ 968,000 .

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 six months ended June 30, 2024 and June 30, 2023 as well as the unadvanced balances to these borrowers immaterial for tabular disclosure inclusion.

The following table presents the amortized cost basis of loans that had a payment default during the six months ended June 30, 2024 and were modified in the twelve months prior to that default to borrowers experiencing financial difficulty.

June 30, 2024

Term Extension Interest Rate Reduction Interest Only Combination Interest Rate Reduction and Term Extension

During the nine months ended September 30, 2024, the Company restructured approximately $ 1.2 million in loans to eight borrowers.

The ending balance of these loans as of September 30, 2024, was $ 1.1 million.

During the nine months ended September 30, 2023, the Company restructured approximately $ 19.4 million in loans to 18 borrowers.

The ending balance of these loans as of September 30, 2023, was $ 20.8 million.

The Company considered the financial effect of these loan modifications to borrowers experiencing financial difficulty during the nine months ended September 30, 2024 and September 30, 2023 as well as the unadvanced balances to these borrowers immaterial for tabular disclosure inclusion.

The following table presents the amortized cost basis of loans that had a payment default during the nine months ended September 30, 2024 and were modified in the twelve months prior to that default to borrowers experiencing financial difficulty.

September 30, 2024

Term Extension Interest Rate Reduction Combination Interest Rate Reduction and Term Extension

(Dollars in thousands)

9 unchanged sentences

The Company has modified 11 loans over the past 12 months to borrowers experiencing financial difficulty.

The pre-modification balance of the loans was $ 2.1 million, and the ending balance as of June 30, 2024 was $ 3.9 million.

The $ 3.9 million balance consists of $ 1.2 million of non-accrual loans and $ 2.7 million of current loans, of which $ 77,000 were 30-59 days past due.

The remaining balance of the loans was current as of June 30, 2024.

The pre-modification balance of the loans was $ 1.4 million, and the ending balance as of September 30, 2024 was $ 1.3 million.

The $ 1.3 million balance consists of $ 1.1 million of non-accrual loans and $ 193,000 of current loans, of which $ 92,000 were 60-89 days past due.

The remaining balance of the loans was current as of September 30, 2024.

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.

2 unchanged sentences

For individually analyzed loans which are not considered to be collateral dependent, an allowance is recorded based on the loss rate for the respective pool within the collective evaluation.

The following is a presentation of total foreclosed assets as of June 30, 2024 and December 31, 2023:

June 30, 2024 December 31, 2023

The following is a presentation of total foreclosed assets as of September 30, 2024 and December 31, 2023:

September 30, 2024 December 31, 2023

(In thousands)

6 unchanged sentences

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, 2024 and December 31, 2023, were as follows:

June 30, 2024 December 31, 2023

Changes in the carrying amount and accumulated amortization of the Company’s goodwill and core deposits and other intangibles at September 30, 2024 and December 31, 2023, were as follows:

September 30, 2024 December 31, 2023

(In thousands)

1 unchanged sentence

Balance, end of period $ 1,398,253 $ 1,398,253

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

(In thousands)

2 unchanged sentences

Amortization expense ( 6,375 ) ( 7,432 )

Balance, June 30 $ 44,490 53,500

Balance, September 30 $ 42,395 51,023

Amortization expense ( 2,253 )

Balance, end of year $ 48,770

The carrying basis and accumulated amortization of core deposit intangibles at June 30, 2024 and December 31, 2023 were :

June 30, 2024 December 31, 2023

The carrying basis and accumulated amortization of core deposit intangibles at September 30, 2024 and December 31, 2023 were :

September 30, 2024 December 31, 2023

(In thousands)

2 unchanged sentences

Net carrying amount $ 42,395 $ 48,770

Core deposit intangible amortization expense was approximately $ 2.1 million and $ 2.5 million for the three months ended June 30, 2024 and 2023, respectively.

Core deposit intangible amortization expense was approximately $ 4.3 million and $ 5.0 million for the six months ended June 30, 2024 and 2023, respectively.

Core deposit intangible amortization expense was approximately $ 2.1 million and $ 2.5 million for the three months ended September 30, 2024 and 2023, respectively.

Core deposit intangible amortization expense was approximately $ 6.4 million and $ 7.4 million for the nine months ended September 30, 2024 and 2023, respectively.

The Company’s estimated amortization expense of core deposits intangibles for each of the years 2024 through 2028 is approximately:

4 unchanged sentences

2028 – $ 4.2 million.

The carrying amount of the Company’s goodwill was $ 1.40 billion at both June 30, 2024 and December 31, 2023.

The carrying amount of the Company’s goodwill was $ 1.40 billion at both September 30, 2024 and December 31, 2023.

Goodwill is tested annually for impairment during the fourth quarter or more often if events and circumstances indicate there may be an impairment.

3 unchanged sentences

Other assets consist primarily of equity securities without a readily determinable fair value and other miscellaneous assets.

As of June 30, 2024 and December 31, 2023, other assets were $ 350.2 million and $ 323.6 million, respectively.

As of September 30, 2024 and December 31, 2023, other assets were $ 352.6 million and $ 323.6 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 $ 134.7 million and $ 133.4 million at June 30, 2024 and December 31, 2023, and are accounted for at cost.

These equity securities without a readily determinable fair value were $ 133.3 million and $ 133.4 million at September 30, 2024 and December 31, 2023, 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 $ 92.3 million and $ 90.3 million at June 30, 2024 and December 31, 2023, respectively.

These equity securities without a readily determinable fair value were $ 93.3 million and $ 90.3 million at September 30, 2024 and December 31, 2023, respectively.

There were no transactions during the period that would indicate a material change in fair value.

The aggregate amount of time deposits with a minimum denomination of $250,000 was $ 869.9 million and $ 836.7 million at June 30, 2024 and December 31, 2023, respectively.

The aggregate amount of time deposits with a minimum denomination of $100,000 was $ 1.13 billion and $ 1.09 billion at June 30, 2024 and December 31, 2023, respectively.

Interest expense applicable to certificates in excess of $100,000 totaled $ 12.2 million and $ 5.2 million for the three months ended June 30, 2024 and 2023, respectively.

Interest expense applicable to certificates in excess of $100,000 totaled $ 23.8 million and $ 8.2 million for the six months ended June 30, 2024 and 2023, respectively.

As of June 30, 2024 and December 31, 2023, brokered deposits were $ 407.3 million and $ 401.0 million, respectively.

Deposits totaling approximately $ 2.94 billion and $ 3.05 billion at June 30, 2024 and December 31, 2023, respectively, were public funds obtained primarily from state and political subdivisions in the United States.

The aggregate amount of time deposits with a minimum denomination of $250,000 was $ 923.9 million and $ 836.7 million at September 30, 2024 and December 31, 2023, respectively.

The aggregate amount of time deposits with a minimum denomination of $100,000 was $ 1.20 billion and $ 1.09 billion at September 30, 2024 and December 31, 2023, respectively.

Interest expense applicable to certificates in excess of $100,000 totaled $ 12.7 million and $ 7.5 million for the three months ended September 30, 2024 and 2023, respectively.

Interest expense applicable to certificates in excess of $100,000 totaled $ 36.5 million and $ 15.7 million for the nine months ended September 30, 2024 and 2023, respectively.

As of September 30, 2024 and December 31, 2023, brokered deposits were $ 421.3 million and $ 401.0 million, respectively.

Deposits totaling approximately $ 2.84 billion and $ 3.05 billion at September 30, 2024 and December 31, 2023, respectively, were public funds obtained primarily from state and political subdivisions in the United States.

Securities Sold Under Agreements to Repurchase

At June 30, 2024 and December 31, 2023, securities sold under agreements to repurchase totaled $ 138.0 million and $ 142.1 million, respectively.

For the three-month periods ended June 30, 2024 and 2023, securities sold under agreements to repurchase daily weighted-average totaled $ 159.9 million and $ 144.0 million, respectively.

For the six-month periods ended June 30, 2024 and 2023, securities sold under agreements to repurchase daily weighted-average totaled $ 166.0 million and $ 139.5 million, respectively.

The remaining contractual maturity of securities sold under agreements to repurchase in the consolidated balance sheets as of June 30, 2024 and December 31, 2023 is presented in the following table:

June 30, 2024 December 31, 2023

At September 30, 2024 and December 31, 2023, securities sold under agreements to repurchase totaled $ 179.4 million and $ 142.1 million, respectively.

For the three-month periods ended September 30, 2024 and 2023, securities sold under agreements to repurchase daily weighted-average totaled $ 157.2 million and $ 154.7 million, respectively.

For the nine-month periods ended September 30, 2024 and 2023, securities sold under agreements to repurchase daily weighted-average totaled $ 163.0 million and $ 144.6 million, respectively.

The remaining contractual maturity of securities sold under agreements to repurchase in the consolidated balance sheets as of September 30, 2024 and December 31, 2023 is presented in the following table:

September 30, 2024 December 31, 2023

Overnight and

2 unchanged sentences

Securities sold under agreements to repurchase:

government-sponsored enterprises $ 9,964 $ 9,964 $ — $ —

Mortgage-backed securities 51,314 51,314 — —

State and political subdivisions 21,808 21,808 — —

Other securities 96,330 96,330 142,085 142,085

1 unchanged sentence

FHLB and Other Borrowed Funds

The Company’s FHLB borrowed funds, which are secured by our loan portfolio, were $ 600.0 million at both June 30, 2024 and December 31, 2023.

At June 30, 2024 and December 31, 2023, the entire $ 600.0 million of the outstanding balances were classified as long-term advances.

The Company’s FHLB borrowed funds, which are secured by our loan portfolio, were $ 600.0 million at both September 30, 2024 and December 31, 2023.

At September 30, 2024 and December 31, 2023, the entire $ 600.0 million of the outstanding balances were classified as long-term advances.

The FHLB advances mature from 2025 to 2037 with fixed interest rates ranging from 3.37 % 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.

Other borrowed funds were $ 701.1 million as of June 30, 2024 and were classified as short-term advances.

Other borrowed funds were $ 700.8 million as of September 30, 2024 and were classified as short-term advances.

The Company had $ 701.3 million in other borrowed funds as of December 31, 2023.

As of both June 30, 2024 and December 31, 2023, the Company had drawn $ 700.0 million from the Bank Term Funding Program in the ordinary course of business, and these advances mature on January 16, 2025.

Additionally, the Company had $ 1.26 billion and $ 1.33 billion at June 30, 2024 and December 31, 2023, respectively, in letters of credit under a FHLB blanket borrowing line of credit, which are used to collateralize public deposits.

As of both September 30, 2024 and December 31, 2023, the Company had drawn $ 700.0 million from the Bank Term Funding Program in the ordinary course of business, and these advances mature on January 16, 2025.

Additionally, the Company had $ 1.24 billion and $ 1.33 billion at September 30, 2024 and December 31, 2023, respectively, in letters of credit under a FHLB blanket borrowing line of credit, which are used to collateralize public deposits.

Subordinated Debentures

Subordinated debentures at June 30, 2024 and December 31, 2023 consisted of the following components:

June 30, 2024 As of

Subordinated debentures at September 30, 2024 and December 31, 2023 consisted of the following components:

September 30, 2024

December 31, 2023

23 unchanged sentences

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.

The following is a summary of the components of the provision for income taxes for the three and six months ended June 30, 2024 and 2023:

For the Three Months Ended June 30, For the Six Months Ended June 30,

The following is a summary of the components of the provision for income taxes for the three and nine months ended September 30, 2024 and 2023:

For the Three Months Ended September 30, For the Nine Months Ended September 30,

2024 2023 2024 2023

7 unchanged sentences

Income tax expense $ 29,046 $ 30,835 $ 91,211 $ 92,404

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, 2024 and 2023:

Three Months Ended June 30, Six Months Ended June 30,

The reconciliation between the statutory federal income tax rate and effective income tax rate is as follows for the three and nine months ended September 30, 2024 and 2023:

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

6 unchanged sentences

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:

September 30,

2024 December 31,

27 unchanged sentences

Stock Repurchases

During the six months ended June 30, 2024, the Company repurchased a total of 2,426,028 shares with a weighted-average stock price of $ 23.31 per share.

Shares repurchased under the program as of June 30, 2024 since its inception total 25,411,743 shares.

The remaining balance available for repurchase is 14,340,257 shares at June 30, 2024.

During the nine months ended September 30, 2024, the Company repurchased a total of 3,426,028 shares with a weighted-average stock price of $ 24.36 per share.

Shares repurchased under the program as of September 30, 2024 since its inception total 26,411,743 shares.

The remaining balance available for repurchase is 13,340,257 shares at September 30, 2024.

Stock Compensation Plans

The Company has a stock option and performance incentive plan know as the Home BancShares, Inc.

The Company has a stock option and performance incentive plan known as the Home BancShares, Inc.

2022 Equity Incentive Plan (the “Plan”).

The purpose of the Plan 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, 2024, the maximum total number of shares of the Company’s common stock available for issuance under the Plan was 14,788,000 shares.

At June 30, 2024, the Company had 2,734,345 shares of common stock available for future grants and 4,768,113 shares of common stock reserved for issuance pursuant to the Plan.

The intrinsic value of the stock options outstanding was $ 4.0 million, which includes the intrinsic value of vested stock options of $ 3.6 million at June 30, 2024.

The intrinsic value of stock options exercised during the six months ended June 30, 2024 was approximately $ 4.9 million.

Total unrecognized compensation cost related to non-vested stock option awards, which are expected to be recognized over the vesting periods, was approximately $ 1.9 million as of June 30, 2024.

The table below summarizes the stock option transactions under the Plan at June 30, 2024 and December 31, 2023 and changes during the six-month period and year then ended:

For the Six Months Ended June 30, 2024 For the Year Ended

As of September 30, 2024, the maximum total number of shares of the Company’s common stock available for issuance under the Plan was 14,788,000 shares.

At September 30, 2024, the Company had 2,072,278 shares of common stock available for future grants and 3,863,313 shares of common stock reserved for issuance pursuant to the Plan.

The intrinsic value of the stock options outstanding was $ 8.4 million, which includes the intrinsic value of vested stock options of $ 6.2 million at September 30, 2024.

The intrinsic value of stock options exercised during the nine months ended September 30, 2024 was approximately $ 6.8 million.

Total unrecognized compensation cost related to non-vested stock option awards, which are expected to be recognized over the vesting periods, was approximately $ 1.7 million as of September 30, 2024.

The table below summarizes the stock option transactions under the Plan at September 30, 2024 and December 31, 2023 and changes during the nine-month period and year then ended:

For the Nine Months Ended September 30, 2024 For the Year Ended

December 31, 2023

12 unchanged sentences

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.

There were no options granted during the six months ended June 30, 2024.

There were no options granted during the nine months ended September 30, 2024.

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 2024 and 2023 stock option grants were as follows:

For the Six Months Ended June 30, 2024

For the Nine Months Ended September 30, 2024

For the Year Ended December 31, 2023

3 unchanged sentences

Expected life of options Not Applicable 6.5 years

The following is a summary of currently outstanding and exercisable options at June 30, 2024:

The following is a summary of currently outstanding and exercisable options at September 30, 2024:

Options Outstanding Options Exercisable

14 unchanged sentences

90 3.65 25.59 72 25.93

The table below summarized the activity for the Company’s restricted stock issued and outstanding at June 30, 2024 and December 31, 2023 and changes during the period and year then ended:

June 30, 2024

The table below summarized the activity for the Company’s restricted stock issued and outstanding at September 30, 2024 and December 31, 2023 and changes during the period and year then ended:

September 30, 2024

December 31, 2023

5 unchanged sentences

End of period 1,425 1,429

Amount of expense for the six months and twelve months ended, respectively

Amount of expense for the nine months and twelve months ended, respectively

$ 5,963 $ 8,016

Total unrecognized compensation cost related to non-vested restricted stock awards, which are expected to be recognized over the vesting periods, was approximately $ 17.8 million as of June 30, 2024.

Total unrecognized compensation cost related to non-vested restricted stock awards, which are expected to be recognized over the vesting periods, was approximately $ 16.5 million as of September 30, 2024.

Non-Interest Expense

The table below shows the components of non-interest expense for the three and six months ended June 30, 2024 and 2023:

Three Months Ended June 30, Six Months Ended June 30,

The table below shows the components of non-interest expense for the three and nine months ended September 30, 2024 and 2023:

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

28 unchanged sentences

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, 2024, the balances of the ROU asset and lease liability were $ 39.0 million and $ 41.7 million, respectively.

As of September 30, 2024, the balances of the ROU asset and lease liability were $ 43.0 million and $ 45.8 million, respectively.

As of December 31, 2023, the balances of the ROU asset and lease liability were $ 42.2 million and $ 45.0 million, respectively.

The ROU asset is included in bank premises and equipment, net , and the lease liability is included in accrued interest payable and other liabilities .

The minimum rental commitments under these noncancelable operating leases are as follows (in thousands) as of June 30, 2024 and December 31, 2023:

June 30, 2024 December 31, 2023

The minimum rental commitments under these noncancelable operating leases are as follows (in thousands) as of September 30, 2024 and December 31, 2023:

September 30, 2024 December 31, 2023

2024 $ 2,678 $ 9,373

9 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

Lease expense:

June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023

September 30, 2024 September 30, 2023 September 30, 2024 September 30, 2023

Operating lease expense $ 2,266 $ 2,059 $ 6,901 $ 5,937

9 unchanged sentences

The Company currently leases two properties from two related parties.

Total rent expense from the leases was $ 28,000 , or 1.18 % of total lease expense and $ 62,000 , or 1.19 % of total lease expense, for the three and six months ended June 30, 2024, respectively.

Total rent expense from the leases was $ 35,000 , or 1.37 % of total lease expense and $ 97,000 , or 1.25 % of total lease expense, for the three and nine months ended September 30, 2024, respectively.

Significant Estimates and Concentrations of Credit Risks

5 unchanged sentences

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, 2024 and December 31, 2023, commercial real estate loans represented 57.2 % and 56.7 % of total loans receivable, respectively, and 219.4 % and 215.5 % of total stockholders’ equity at June 30, 2024 and December 31, 2023, respectively.

Residential real estate loans represented 16.4 % and 15.8 % of total loans receivable and 62.7 % and 60.1 % of total stockholders’ equity at June 30, 2024 and December 31, 2023, respectively.

Approximately 79.6 % of the Company’s total loans and 83.8 % of the Company’s real estate loans as of June 30, 2024, 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.

Although the Company has a diversified loan portfolio, at September 30, 2024 and December 31, 2023, commercial real estate loans represented 57.8 % and 56.7 % of total loans receivable, respectively, and 216.5 % and 215.5 % of total stockholders’ equity at September 30, 2024 and December 31, 2023, respectively.

Residential real estate loans represented 16.3 % and 15.8 % of total loans receivable and 61.0 % and 60.1 % of total stockholders’ equity at September 30, 2024 and December 31, 2023, respectively.

Approximately 79.6 % of the Company’s total loans and 83.5 % of the Company’s real estate loans as of September 30, 2024, 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.

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.

4 unchanged sentences

The collateral obtained is based on the assessed creditworthiness of the borrower.

At June 30, 2024 and December 31, 2023, commitments to extend credit of $ 4.58 billion and $ 4.59 billion, respectively, were outstanding.

At September 30, 2024 and December 31, 2023, commitments to extend credit of $ 4.53 billion and $ 4.59 billion, respectively, were outstanding.

A percentage of these balances are participated out to other banks;

6 unchanged sentences

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, 2024 and December 31, 2023, was $ 152.2 million and $ 185.5 million, respectively.

The maximum amount of future payments the Company could be required to make under these guarantees at September 30, 2024 and December 31, 2023, was $ 154.4 million and $ 185.5 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.

3 unchanged sentences

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, 2024, the Company requested approximately $ 151.4 million in regular dividends from its banking subsidiary.

During the nine months ended September 30, 2024, the Company requested approximately $ 232.4 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.

4 unchanged sentences

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, 2024, the Company meets all capital adequacy requirements to which it is subject.

Management believes that, as of September 30, 2024, the Company meets all capital adequacy requirements to which it is subject.

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.

8 unchanged sentences

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, 2024, 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 14.38 %, 12.35 %, 14.38 %, and 17.99 %, respectively, as of June 30, 2024.

As of September 30, 2024, 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 14.65 %, 12.54 %, 14.65 %, and 18.28 %, respectively, as of September 30, 2024.

Additional Cash Flow Information

The following is a summary of the Company’s additional cash flow information during the six-month periods ended:

The following is a summary of the Company’s additional cash flow information during the nine-month periods ended:

September 30,

(In thousands)

33 unchanged sentences

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 $ 8.6 million and $ 10.5 million as of June 30, 2024 and December 31, 2023, respectively.

The fair value of loans with specific allocated losses was $ 74.3 million and $ 10.5 million as of September 30, 2024 and December 31, 2023, respectively.

This valuation is considered Level 3, consisting of appraisals of underlying collateral.

The Company reversed $ 172,000 and $ 420,000 of accrued interest receivable when impaired loans were put on non-accrual status during the three months ended June 30, 2024 and 2023, respectively.

The Company reversed $ 486,000 and $ 656,000 of accrued interest receivable when impaired loans were put on non-accrual status during the six months ended June 30, 2024 and 2023, respectively.

The Company reversed $ 470,000 and $ 1.3 million of accrued interest receivable when impaired loans were put on non-accrual status during the three months ended September 30, 2024 and 2023, respectively.

The Company reversed $ 956,000 and $ 1.9 million of accrued interest receivable when impaired loans were put on non-accrual status during the nine months ended September 30, 2024 and 2023, respectively.

Foreclosed assets held for sale – Foreclosed assets held for sale are held by the Company at fair value, less estimated costs to sell.

2 unchanged sentences

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, 2024 and December 31, 2023, the fair value of foreclosed assets held for sale, less estimated costs to sell, was $ 41.3 million and $ 30.5 million, respectively.

No foreclosed assets held for sale were remeasured during the six months ended June 30, 2024.

As of September 30, 2024 and December 31, 2023, the fair value of foreclosed assets held for sale, less estimated costs to sell, was $ 43.0 million and $ 30.5 million, respectively.

No foreclosed assets held for sale were remeasured during the nine months ended September 30, 2024.

Regulatory guidelines require the Company to reevaluate the fair value of foreclosed assets held for sale on at least an annual basis.

6 unchanged sentences

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, 2024

September 30, 2024

Amount Fair Value Level

2 unchanged sentences

Cash and cash equivalents $ 1,017,677 $ 1,017,677 1

Federal funds sold 6,425 6,425 1

Investment securities - available-for-sale

3,270,620 3,270,620 2

Investment securities - held-to-maturity 1,277,090 1,194,455 2

21 unchanged sentences

Investment securities - held-to-maturity 1,281,982 1,170,481 2

1,281,982 1,170,481 2

Loans receivable, net of impaired loans and allowance 14,048,002 14,071,775 3

65 unchanged sentences

We have reviewed the condensed consolidated balance sheet of Home BancShares Inc.

(the “Company”) and subsidiaries as of June 30, 2024, 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, 2024 and 2023, and cash flows for the six-month periods ended June 30, 2024 and 2023, and the related notes (collectively referred to as the “interim financial information or statements”).

(the “Company”) and subsidiaries as of September 30, 2024, and the related condensed consolidated statements of income, comprehensive income (loss), and stockholder’s equity for the three-month and nine-month periods ended September 30, 2024 and 2023, and cash flows for the nine-month periods ended September 30, 2024 and 2023, 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.

11 unchanged sentences

Little Rock, Arkansas

August 2, 2024

November 1, 2024

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements