6 unchanged sentences
on a consolidated basis.
−Removed: We are a bank holding company headquartered in Conway, Arkansas, offering a broad array of financial services through our wholly owned bank subsidiary, Centennial Bank (“Centennial”).
+Added: We are a bank holding company headquartered in Conway, Arkansas, offering a broad array of financial services through our wholly owned bank subsidiary, Centennial Bank (“Centennial” or the "Bank").
As of December 31, 2024, we had, on a consolidated basis, total assets of $22.49 billion, loans receivable, net, of $14.49 billion, total deposits of $17.15 billion, and stockholders’ equity of $3.96 billion.
We generate most of our revenue from interest on loans and investments, service charges, and mortgage banking income.
−Removed: Deposits and FHLB borrowed funds are our primary source of funding.
+Added: Deposits and Federal Home Loan Bank ("FHLB") borrowed funds are our primary source of funding.
Our largest expenses are interest on our funding sources, salaries and related employee benefits and occupancy and equipment.
33 unchanged sentences
The Company recorded $48.1 million in credit loss expense for the year ended December 31, 2024.
−Removed: This consisted of a $12.0 million provision for credit losses on loans, a $1.7 million provision for credit losses on investment securities and a reversal of $1.5 million provision for unfunded commitments.
−Removed: During the year ended December 31, 2023, the Company recorded $13.0 million in Federal Deposit Insurance Corporation ("FDIC") special assessment expense and $1.1 million loss for the decrease in fair value of marketable securities, which were partially offset by $3.5 million in recoveries on historic losses from loans charged off prior to acquisition and $3.1 million in bank owned life insurance ("BOLI") death benefits.
+Added: This consisted of a $48.4 million provision for credit losses on loans, which was partially offset by a $330,000 recovery of credit losses on available-for-sale investments due to an improvement in the unrealized loss position for one of our subordinated debt investments.
+Added: Of the $48.4 million provision for credit losses on loans recorded, $33.4 million as used to establish a hurricane reserve for loans located in the Federal Emergency Management Agency ("FEMA") disaster areas impacted by Hurricanes Helene and Milton, which made landfall during the third and fourth quarters of 2024.
+Added: The hurricane related reserve had a $0.13 impact to diluted earnings per share.
+Added: The remaining portion of the provision was related to loan growth.
+Added: For the year ended December 31, 2024, the Company recorded a $3.0 million increase in the fair value of marketable securities, a $2.1 million gain on sale of a building from our Texas market, $257,000 in bank owned life insurance ("BOLI") death benefits and $2.3 million in Federal Deposit Insurance Corporation ("FDIC") special assessment expense.
Total interest income increased by $124.7 million, or 10.6%, and non-interest expense decreased by $25.9 million, or 5.5%.
This was partially offset by a $102.9 million, or 29.6%, increase in interest expense and a $1.4 million, or 0.8%, decrease in non-interest income.
−Removed: The increase in interest income resulted from a $261.3 million, or 35.9%, increase in loan interest income and a $49.9 million, or 41.5%, increase in investment income, partially offset by a $14.1 million, or 48.4%, decrease in interest income on deposits at other banks.
−Removed: The decrease in non-interest expense was due to a $49.6 million, or 100.0%, decrease in merger and acquisition expense partially offset by a $20.5 million, or 20.7%, increase in other operating expenses, an $18.1 million, or 7.6%, increase in salaries and employee benefits, a $6.9 million, or 12.9%, increase in occupancy and equipment and a $1.4 million, or 4.0%, increase in data processing expense.
−Removed: Included within other operating expense was $13.0 million in FDIC special assessment expense which was levied in order to recover the losses to the Deposit Insurance Fund associated with protecting uninsured depositors following the closures of Silicon Valley Bank and Signature Bank.
−Removed: The increase in interest expense was primarily due to a $210.0 million, or 244.2%, increase in interest on deposits, a $19.7 million, or 178.3%, increase in interest on FHLB and other borrowed funds and a $3.4 million, or 236.6%, increase in interest on securities sold under agreements to repurchase, which were partially offset by a $4.1 million, or 19.9%, decrease in interest on subordinated debentures.
−Removed: The decrease in non-interest income was primarily due to a $9.8 million, or 20.3%, decrease in other income and a $6.9 million, or 39.2%, decrease in mortgage lending income, which were partially offset by a $5.0 million, or 39.2%, increase in trust fees, a $2.4 million, or 26.6%, increase in dividends from FHLB, FRB, FNBB & other, a $2.1 million, or 5.6%, increase in service charges on deposit accounts, and a $1.5 million, or 9,946.7%, increase in gain on branches, equipment and other assets, net.
+Added: The increase in interest income resulted from a $110.4 million, or 11.2%, increase in loan interest income and a $27.8 million, or 184.7%, increase in interest income on deposits at other banks, partially offset by a $13.4 million, or 7.9%, decrease in investment income.
+Added: The decrease in non-interest expense was due to a $15.9 million, or 6.2%, decrease in salaries and employee benefits, a $7.9 million, or 6.6%, decrease in other operating expenses and a $2.3 million, or 3.8%, decrease in occupancy and equipment expense.
+Added: The increase in interest expense was primarily due to an $80.7 million, or 27.3%, increase in interest on deposits, a $21.6 million, or 70.2%, increase in interest on FHLB and other borrowed funds and a $635,000, or 13.2%, increase in interest on securities sold under agreements to repurchase.
+Added: The decrease in non-interest income was primarily due to an $8.5 million, or 22.2%, decrease in other income, a $2.6 million, or 784.3% decrease, in the gain/loss on OREO and a $1.2 million, or 2.7% decrease, in other service charges and fees, which were partially offset by a $5.1 million, or 47.0%, increase in mortgage lending income and a $4.1 million, or 371.6%, increase in income from the fair value adjustment for marketable securities.
Our net interest margin on a fully taxable equivalent basis increased from 4.25% for the year ended December 31, 2023 to 4.27% for the year ended December 31, 2024.
−Removed: The yield on interest earning assets was 6.03% and 4.40% for the year ended December 31, 2023 and 2022, respectively, as average interest earning assets decreased from $20.15 billion to $19.57 billion.
−Removed: The decrease in average interest earning assets is primarily due to a $2.12 billion decrease in average interest-bearing balances due from banks, which was partially offset by a $1.37 billion increase in average loans receivable and a $171.0 million increase in average investment securities.
+Added: The yield on interest earning assets was 6.51% and 6.03% for the year ended December 31, 2024 and 2023, respectively, as average interest earning assets increased from $19.57 billion to $20.09 billion.
+Added: The increase in average interest earning assets is primarily due to a $499.7 million increase in average interest-bearing balances due from banks and a $360.3 million increase in average loans receivable, which were partially offset by a $341.8 million decrease in average investment securities.
For the years ended December 31, 2024 and 2023, we recognized $8.1 million and $10.6 million, respectively, in total net accretion for acquired loans and deposits.
−Removed: The reduction in accretion was dilutive to the net interest margin by approximately 3 basis points.
−Removed: The overall increase in the net interest margin was due to a decrease in average interest-bearing cash balances as well as an increase in interest income from higher yields on average interest-earning assets, partially offset by an increase in interest expense due to an increase in average interest-bearing liabilities at higher interest rates primarily as a result of the Happy Bancshares, Inc.
−Removed: acquisition and the increased interest rate environment.
+Added: The reduction in accretion was dilutive to the net interest margin by approximately 1 basis point.
+Added: We recognized $4.9 million in event income for the year ended December 31, 2024, compared to $3.0 million for the year ended December 31, 2023.
+Added: This increase was accretive to the net interest margin by 1 basis point.
+Added: During the year ended December 31, 2024, the Company held approximately $500 million in excess liquidity, which was dilutive to the net interest margin by 8 basis points.
+Added: The overall increase in the net interest margin was due to an increase in interest income from higher yields on average interest-earning assets and an increase in interest income due to changes in interest earning assets, partially offset by an increase in interest expense due to changes in interest-bearing liabilities and a change in interest rates paid on interest-bearing liabilities.
Our efficiency ratio was 42.74% for the year ended December 31, 2024, compared to 46.21% for the same period in 2023.
1 unchanged sentence
(See Table 29 for the non-GAAP tabular reconciliation.)
−Removed: Our return on average assets was 1.77% for the year ended December 31, 2023, compared to 1.35% for the same period in 2022, and our return on average assets, as adjusted (non-GAAP) was 1.79% or the year ended December 31, 2023, compared to 1.67% for the same period in 2022.
+Added: Our return on average assets was 1.77% for the both the years ended December 31, 2024 and 2023, and our return on average assets, as adjusted (non-GAAP), was 1.77% for the year ended December 31, 2024, compared to 1.79% for the same period in 2023.
Our return on average common equity was 10.43% for the year ended December 31, 2024, compared to 10.82% for the same period in 2023.
1 unchanged sentence
Our total assets as of December 31, 2024 decreased $165.9 million to $22.49 billion from the $22.66 billion reported as of December 31, 2023.
−Removed: The decrease in total assets is primarily due to a $539.5 million decrease in investment securities resulting from paydowns and maturities, which was partially offset by a $275.4 million increase in cash and cash equivalents during the year.
+Added: The decrease in total assets is primarily due to a $442.0 million decrease in investment securities resulting from paydowns and maturities and a $89.9 million decrease in cash and cash equivalents during the year.
Our loan portfolio balance increased $339.8 million to $14.76 billion as of December 31, 2024, from $14.42 billion as of December 31, 2023.
The increase in loans was due to $471.4 million in organic loan growth within our legacy footprint, which was partially offset by $131.7 million of organic loan decline from our Centennial Commercial Finance Group ("CFG") franchise during 2024.
−Removed: Total deposits decreased $1.15 billion to $16.79 billion as of December 31, 2023 compared to $17.94 billion as of December 31, 2022.
−Removed: The decrease in deposits was primarily due to the runoff of deposits during 2023 as a result of the rising interest rate environment.
+Added: Total deposits increased $358.6 million to $17.15 billion as of December 31, 2024 compared to $16.79 billion as of December 31, 2023.
Stockholders’ equity increased $170.0 million to $3.96 billion as of December 31, 2024, compared to $3.79 billion as of December 31, 2023.
−Removed: The increase in stockholders’ equity is primarily associated with the $392.9 million in net income and the $56.4 million increase in accumulated other comprehensive income, which were partially offset by the $145.9 million of shareholder dividends paid and the repurchase of $48.3 million of our common stock during 2023.
+Added: The increase in stockholders’ equity is primarily associated with the $402.2 million in net income, which was partially offset by the $150.0 million of shareholder dividends paid, the repurchase of $86.1 million of our common stock during 2024 and the $7.0 million decrease in accumulated other comprehensive income.
The improvement in stockholders’ equity was 4.5% for the year ended December 31, 2024 compared to December 31, 2023.
1 unchanged sentence
The allowance for credit losses as a percentage of non-performing loans decreased to 278.99% as of December 31, 2024, compared to 449.66% as of December 31, 2023.
−Removed: Non-performing loans from our Arkansas franchise were $15.4 million at December 31, 2023 compared to $8.4 million as of December 31, 2022.
−Removed: Non-performing loans from our Florida franchise were $9.3 million at December 31, 2023 compared to $20.5 million as of December 31, 2022.
−Removed: Non-performing loans from our Texas franchise were $33.5 million at December 31, 2023 compared to $22.2 million at December 31, 2022.
−Removed: Non-performing loans from our Alabama franchise were $413,000 at December 31, 2023 compared to $404,000 as of December 31, 2022.
−Removed: Non-performing loans from our Shore Premier Finance ("SPF") franchise were $2.8 million at December 31, 2023 compared to $2.3 million as of December 31, 2022.
−Removed: Non-performing loans from our Centennial CFG franchise were $2.7 million at December 31, 2023 compared to $7.1 million as of December 31, 2022.
As of December 31, 2024, our non-performing assets increased to $142.4 million, or 0.63%, of total assets from $95.4 million, or 0.42%, of total assets as of December 31, 2023.
−Removed: Non-performing assets from our Arkansas franchise were $15.5 million at December 31, 2023 compared to $8.5 million as of December 31, 2022.
−Removed: Non-performing assets from our Florida franchise were $17.3 million at December 31, 2023 compared to $20.8 million as of December 31, 2022.
−Removed: Non-performing assets from our Texas franchise were $33.8 million at December 31, 2023 compared to $22.4 million at December 31, 2022.
−Removed: Non-performing assets from our Alabama franchise were $413,000 at December 31, 2023 compared to $404,000 as of December 31, 2022.
−Removed: Non-performing assets from our SPF franchise were $2.8 million at December 31, 2023 compared to $2.3 million as of December 31, 2022.
−Removed: Non-performing assets from our CFG franchise were $25.6 million at December 31, 2023 compared to $7.1 million as of December 31, 2022.
−Removed: The $2.7 million balance of non-accrual loans for our Centennial CFG Capital Markets Group consists of two loans that are assessed for credit risk by the Federal Reserve under the Shared National Credit Program.
+Added: The table below shows the non-performing loans and non-performing assets by region as of December 31, 2024:
+Added: (in thousands) Texas Arkansas Centennial CFG Shore Premier Finance Florida Alabama Total
+Added: Non-accrual loans $ 23,494 $ 18,448 $ 7,390 $ 5,537 $ 38,778 $ 206 $ 93,853
+Added: Loans 90+ days past due 4,134 538 — — 362 — 5,034
+Added: Total non-performing loans $ 27,628 $ 18,986 $ 7,390 $ 5,537 $ 39,140 $ 206 $ 98,887
+Added: Foreclosed assets held for sale 13,924 757 22,775 — 5,951 — 43,407
+Added: Other non-performing assets 63 — — — — — 63
+Added: Total other non-performing assets $ 13,987 $ 757 $ 22,775 $ — $ 5,951 $ — $ 43,470
+Added: Total non-performing assets $ 41,615 $ 19,743 $ 30,165 $ 5,537 $ 45,091 $ 206 $ 142,357
+Added: The table below shows the non-performing loans and non-performing assets by region as of December 31, 2023:
+Added: (in thousands) Texas Arkansas Centennial CFG Shore Premier Finance Florida Alabama Total
+Added: Non-accrual loans $ 29,391 $ 15,319 $ 2,764 $ 2,768 $ 9,316 $ 413 $ 59,971
+Added: Loans 90+ days past due 4,092 38 — — — — 4,130
+Added: Total non-performing loans $ 33,483 $ 15,357 $ 2,764 $ 2,768 $ 9,316 $ 413 $ 64,101
+Added: Foreclosed assets held for sale 264 167 22,775 — 7,280 — 30,486
+Added: Other non-performing assets 63 — — — 722 — 785
+Added: Total other non-performing assets $ 327 $ 167 $ 22,775 $ — $ 8,002 $ — $ 31,271
+Added: Total non-performing assets $ 33,810 $ 15,524 $ 25,539 $ 2,768 $ 17,318 $ 413 $ 95,372
+Added: The $7.4 million balance of non-accrual loans for our Centennial CFG Capital Markets Group at December 31, 2024 consists of three loans that are assessed for credit risk by the Federal Reserve under the Shared National Credit Program.
The loans are not current on either principal or interest, and we have reversed any interest that had accrued subsequent to the non-accrual date designated by the Federal Reserve.
4 unchanged sentences
Results of Operations for the Years Ended December 31, 2023 and 2022
−Removed: Our net income decreased $13.8 million, or 4.3%, to $305.3 million for the year ended December 31, 2022, from $319.0 million for the same period in 2021.
+Added: Our net income increased $87.7 million, or 28.7%, to $392.9 million for the year ended December 31, 2023, from $305.3 million for the same period in 2022.
On a diluted earnings per share basis, our earnings were $1.94 per share for the year ended December 31, 2023 and $1.57 per share for the year ended December 31, 2022.
−Removed: As a result of the acquisition of Happy Bancshares, Inc.
−Removed: ("Happy"), which we completed on April 1, 2022, we incurred $49.6 million in merger expenses and recorded a $45.2 million provision for credit losses on acquired loans for the CECL "double count," an $11.4 million provision for credit losses on acquired unfunded commitments and a $2.0 million provision for credit losses on acquired held-to-maturity investment securities.
−Removed: The summation of these items reduced net income by $81.6 million ($108.2 million pre-tax) and earnings per share by $0.42 per share for the year ended December 31, 2022.
−Removed: Excluding the impact of the acquisition of Happy, the Company determined that an additional $5.0 million provision for credit losses on loans was necessary due to increased loan growth during the year.
−Removed: However, excluding the impact of the acquisition of Happy, the Company determined no additional provision for unfunded commitments or investment securities was necessary as of December 31, 2022.
−Removed: During the year ended December 31, 2022, the Company recorded $10.0 million in income from the settlement of a lawsuit brought by the Company, net of legal expense, $6.7 million in recoveries on historic losses from loans charged off prior to acquisition, and $1.4 million in special dividends from equity investments, which were partially offset by $2.1 million in trust preferred securities ("TRUPS") redemption fees, $1.3 million of loss for the decrease in fair value of marketable securities and $176,000 in hurricane expenses.
−Removed: Total interest income increased by $252.6 million, or 40.4%, and non-interest income increased by $37.5 million, or 27.3%.
−Removed: This was partially offset by a $177.1 million, or 59.3%, increase in non-interest expense and a $66.9 million, or 128.1%, increase in interest expense.
−Removed: These fluctuations are primarily due to the acquisition of Happy during the second quarter of 2022 and the rising rate environment.
−Removed: The increase in interest income resulted from a $156.4 million, or 27.3%, increase in loan interest income, a $70.6 million, or 142.0%, increase in investment income and a $25.6 million, or 728.2%, increase in interest income on deposits at other banks.
−Removed: The increase in non-interest income was primarily due to a $27.6 million, or 133.2%, increase in other income, a $14.8 million, or 66.6%, increase in service charges on deposit accounts, a $10.9 million, or 555.9%, increase in trust fees, an $8.1 million, or 22.3%, increase in other service charges and fees and a $1.8 million, or 85.5%, increase in the cash value of life insurance.
−Removed: These increases were partially offset by an $8.5 million, or 117.7%, decrease in income for the fair value adjustment for marketable securities resulting from a $1.3 million decrease in the fair value of marketable securities for the year ended December 31, 2022, compared to a $7.2 million increase for the year ended December 31, 2021, an $8.0 million, or 31.2%, decrease in mortgage lending income, a $5.6 million, or 38.0%, decrease in dividends from FHLB, FRB, FNBB and other, a $2.2 million, or 92.3%, decrease in the gain on sale of SBA loans and a $1.5 million, or 75.0%, decrease in gain on other real estate owned ("OREO").
−Removed: Included within other income was $15.0 million in income from the settlement of a lawsuit brought by the Company and $6.7 million in recoveries on historic losses from loans charged off prior to acquisition, and included within dividends from FHLB, FRB, FNBB and other were $1.4 million in special dividends.
−Removed: The increase in non-interest expense was due to a $68.1 million, or 39.9%, increase in salaries and employee benefits, $49.6 million in merger and acquisition expenses, a $33.8 million, or 52.1%, increase in other operating expenses, a $16.8 million, or 45.8%, increase in occupancy and equipment and a $10.7 million, or 43.9%, increase in data processing expense.
−Removed: Included within other operating expense were $5.0 million in legal expenses from a lawsuit brought by the Company, $2.1 million in TRUPS redemption fees and $176,000 in hurricane expenses.
−Removed: The increase in interest expense was primarily due to a $61.1 million, or 244.8%, increase in interest on deposits, a $3.5 million, or 45.7%, increase in interest on FHLB and other borrowed funds and a $1.4 million, or 7.5%, increase in interest on subordinated debentures as a result of the acquisition of $140.0 million of subordinated debt and $23.2 million in trust preferred securities from Happy during the second quarter of 2022.
−Removed: Income tax expense decreased by $8.4 million, or 8.6%, during 2022 due to the decrease in net income and the reduction in the marginal tax rate related to the Happy acquisition.
+Added: The Company recorded $12.1 million in credit loss expense for the year ended December 31, 2023.
+Added: This consisted of a $12.0 million provision for credit losses on loans, a $1.7 million provision for credit losses on investment securities and a reversal of a $1.5 million provision for unfunded commitments.
+Added: During the year ended December 31, 2023, the Company recorded $13.0 million in FDIC special assessment expense and a $1.1 million loss for the decrease in fair value of marketable securities, which were partially offset by $3.5 million in recoveries on historic losses from loans charged off prior to acquisition and $3.1 million in BOLI death benefits.
+Added: Total interest income increased by $297.3 million, or 33.9%, and non-interest expense decreased by $2.8 million, or 0.6%.
+Added: This was partially offset by a $229.0 million, or 192.3%, increase in interest expense and a $5.2 million, or 3.0%, decrease in non-interest income.
+Added: The increase in interest income resulted from a $261.3 million, or 35.9%, increase in loan interest income and a $49.9 million, or 41.5%, increase in investment income, partially offset by a $14.1 million, or 48.4%, decrease in interest income on deposits at other banks.
+Added: The decrease in non-interest expense was due to a $49.6 million, or 100.0%, decrease in merger and acquisition expense partially offset by a $20.5 million, or 20.7%, increase in other operating expenses, an $18.1 million, or 7.6%, increase in salaries and employee benefits, a $6.9 million, or 12.9%, increase in occupancy and equipment and a $1.4 million, or 4.0%, increase in data processing expense.
+Added: Included within other operating expense was $13.0 million in FDIC special assessment expense which was levied in order to recover the losses to the Deposit Insurance Fund associated with protecting uninsured depositors following the closures of Silicon Valley Bank and Signature Bank.
+Added: The increase in interest expense was primarily due to a $210.0 million, or 244.2%, increase in interest on deposits, a $19.7 million, or 178.3%, increase in interest on FHLB and other borrowed funds and a $3.4 million, or 236.6%, increase in interest on securities sold under agreements to repurchase, which were partially offset by a $4.1 million, or 19.9%, decrease in interest on subordinated debentures.
+Added: The decrease in non-interest income was primarily due to a $9.8 million, or 20.3%, decrease in other income and a $6.9 million, or 39.2%, decrease in mortgage lending income, which were partially offset by a $5.0 million, or 39.2%, increase in trust fees, a $2.4 million, or 26.6%, increase in dividends from FHLB, FRB, FNBB & other, a $2.1 million, or 5.6%, increase in service charges on deposit accounts, and a $1.5 million, or 9,946.7%, increase in gain on branches, equipment and other assets, net.
Our net interest margin on a fully taxable equivalent basis increased from 3.81% for the year ended December 31, 2022 to 4.25% for the year ended December 31, 2023.
−Removed: The yield on interest earning assets was 4.40% and 3.99% for the year ended December 31, 2022 and 2021, respectively, as average interest earning assets increased from $15.86 billion to $20.15 billion.
−Removed: The increase in average earning assets is primarily the result of a $2.57 billion increase in average loans receivable and a $1.87 billion increase in average investment securities, largely resulting from the acquisition of Happy, which were partially offset by a $151.9 million decrease in average interest-bearing balances due from banks.
+Added: The yield on interest earning assets was 6.03% and 4.40% for the year ended December 31, 2023 and 2022, respectively, as average interest earning assets decreased from $20.15 billion to $19.57 billion.
+Added: The decrease in average interest earning assets is primarily due to a $2.12 billion decrease in average interest-bearing balances due from banks, which was partially offset by a $1.37 billion increase in average loans receivable and a $171.0 million increase in average investment securities.
For the years ended December 31, 2023 and 2022, we recognized $10.6 million and $16.3 million, respectively, in total net accretion for acquired loans and deposits.
The reduction in accretion was dilutive to the net interest margin by approximately 3 basis points.
−Removed: During 2022, the Company experienced a $31.8 million reduction in interest income from PPP loans due to the forgiveness of the PPP loans and the acceleration of the deferred fees for the loans that were forgiven.
−Removed: This reduction in income was dilutive to the net interest margin by approximately 8 basis points.
−Removed: We recognized $3.8 million in event interest income for the year ended December 31, 2022 compared to $6.7 million in event income for the year ended December 31, 2021.
−Removed: This was dilutive to the net interest margin by approximately 2 basis points.
−Removed: The overall increase in the net interest margin was due to an increase in interest income due to an increase in both average earning assets at higher yields, which was partially offset by an increase in interest expense due to an increase in average interest-bearing liabilities at higher interest rates primarily as a result of the Happy acquisition and the current rising interest rate environment.
+Added: The overall increase in the net interest margin was due to a decrease in average interest-bearing cash balances as well as an increase in interest income from higher yields on average interest-earning assets, partially offset by an increase in interest expense due to an increase in average interest-bearing liabilities at higher interest rates primarily as a result of the Happy Bancshares, Inc.
+Added: acquisition and the increased interest rate environment.
Our efficiency ratio was 46.21% for the year ended December 31, 2023, compared to 49.53% for the same period in 2022.
4 unchanged sentences
Financial Condition as of and for the Years Ended December 31, 2023 and 2022
−Removed: Our total assets as of December 31, 2022 increased $4.83 billion to $22.88 billion from the $18.05 billion reported as of December 31, 2021.
−Removed: The increase in total assets is primarily due to the acquisition of $6.69 billion in total assets, net of purchase accounting adjustments, from Happy during the second quarter of 2022.
−Removed: Cash and cash equivalents decreased $2.93 billion, or 80.14%.
−Removed: Our loan portfolio balance increased $4.57 billion to $14.41 billion as of December 31, 2022, from $9.84 billion as of December 31, 2021.
−Removed: The increase in loans was due to the acquisition of $3.65 billion in loans, net of purchase accounting adjustments, from Happy in the second quarter of 2022 and $242.2 million in marine loans from LendingClub Bank during the first quarter of 2022, as well as $678.6 million in organic loan growth during 2022.
−Removed: Total deposits increased $3.68 billion to $17.94 billion as of December 31, 2022 compared to $14.26 billion as of December 31, 2021.
−Removed: The increase in deposits was primarily due to the acquisition of $5.86 billion in deposits, net of purchase accounting adjustments, from Happy in the second quarter of 2022, partially offset by $2.18 billion in deposit decline during the year.
+Added: Our total assets as of December 31, 2023 decreased $226.9 million to $22.66 billion from the $22.88 billion reported as of December 31, 2022.
+Added: The decrease in total assets is primarily due to a $539.5 million decrease in investment securities resulting from paydowns and maturities, which was partially offset by a $275.4 million increase in cash and cash equivalents during the year.
+Added: Our loan portfolio balance increased $15.2 million to $14.42 billion as of December 31, 2023, from $14.41 billion as of December 31, 2022.
+Added: The increase in loans was due to $340.4 million in organic loan growth within our legacy footprint, which was partially offset by $325.2 million of organic loan decline from our CFG franchise during 2023.
+Added: Total deposits decreased $1.15 billion to $16.79 billion as of December 31, 2023 compared to $17.94 billion as of December 31, 2022.
+Added: The decrease in deposits was primarily due to the runoff of deposits during 2023 as a result of the rising interest rate environment.
Stockholders’ equity increased $264.7 million to $3.79 billion as of December 31, 2023, compared to $3.53 billion as of December 31, 2022.
−Removed: The increase in stockholders’ equity is primarily associated with the $961.3 million in common stock issued to Happy shareholders for the acquisition of Happy on April 1, 2022 and $305.3 million in net income, which were partially offset by the $315.9 million decrease in accumulated other comprehensive income, $128.4 million of shareholder dividends paid and the repurchase of $70.9 million of our common stock during 2022.
−Removed: The improvement in stockholders’ equity was 27.5% for the year ended December 31, 2022 compared to December 31, 2021.
+Added: The increase in stockholders’ equity is primarily associated with the $392.9 million in net income and the $56.4 million increase in accumulated other comprehensive income, which were partially offset by the $145.9 million of shareholder dividends paid and the repurchase of $48.3 million of our common stock during 2023.
+Added: The improvement in stockholders’ equity was 7.5% for the year ended D ecember 31, 2023 compared to December 31, 2022.
As of December 31, 2023, our non-performing loans increased to $64.1 million, or 0.44%, of total loans from $60.9 million, or 0.42%, of total loans as of December 31, 2022.
−Removed: The allowance for credit losses as a percentage of non-performing loans increased to 475.99% as of December 31, 2022, compared to 471.61% as of December 31, 2021.
−Removed: Non-performing loans from our Arkansas franchise were $8.4 million at December 31, 2022 compared to $13.9 million as of December 31, 2021.
−Removed: Non-performing loans from our Florida franchise were $20.5 million at December 31, 2022 compared to $26.8 million as of December 31, 2021.
−Removed: Non-performing loans from our new Texas franchise were $22.2 million at December 31, 2022.
−Removed: Nonperforming loans from our Alabama franchise were $404,000 at December 31, 2022 compared to $470,000 as of December 31, 2021.
−Removed: Non-performing loans from our SPF franchise were $2.3 million at December 31, 2022 compared to $1.5 million as of December 31, 2021.
−Removed: Non-performing loans from our Centennial CFG franchise were $7.1 million at December 31, 2022 compared to $7.5 million as of December 31, 2021.
+Added: The allowance for credit losses as a percentage of non-performing loans decreased to 449.66% as of December 31, 2023, compared to 475.99% as of December 31, 2022.
As of December 31, 2023, our non-performing assets increased to $95.4 million, or 0.42%, of total assets from $61.5 million, or 0.27%, of total assets as of December 31, 2022.
−Removed: Non-performing assets from our Arkansas franchise were $8.5 million at December 31, 2022 compared to $14.4 million as of December 31, 2021.
−Removed: Non-performing assets from our Florida franchise were $20.8 million at December 31, 2022 compared to $27.9 million as of December 31, 2021.
−Removed: Non-performing assets from our new Texas franchise were $22.4 million at December 31, 2022.
−Removed: Non-performing assets from our Alabama franchise were $404,000 at December 31, 2022 compared to $470,000 as of December 31, 2021.
−Removed: Non-performing assets from our SPF franchise were $2.3 million at December 31, 2022 compared to $1.5 million as of December 31, 2021.
−Removed: Non-performing assets from our CFG franchise were $7.1 million at December 31, 2022 compared to $7.5 million as of December 31, 2021.
−Removed: The $7.1 million balance of non-accrual loans for our Centennial CFG market balance of non-accrual loans for our Centennial CFG market consists of two loans that are assessed for credit risk by the Federal Reserve under the Shared National Credit Program.
−Removed: Due to the condition of the two loans, partial charge-offs for a total of $5.4 million were taken on these loans during 2022.
+Added: The table below shows the non-performing loans and non-performing assets by region as of December 31, 2023:
+Added: (in thousands) Texas Arkansas Centennial CFG Shore Premier Finance Florida Alabama Total
+Added: Non-accrual loans $ 29,391 $ 15,319 $ 2,764 $ 2,768 $ 9,316 $ 413 $ 59,971
+Added: Loans 90+ days past due 4,092 38 — — — — 4,130
+Added: Total non-performing loans $ 33,483 $ 15,357 $ 2,764 $ 2,768 $ 9,316 $ 413 $ 64,101
+Added: Foreclosed assets held for sale 264 167 22,775 — 7,280 — 30,486
+Added: Other non-performing assets 63 — — — 722 — 785
+Added: Total other non-performing assets $ 327 $ 167 $ 22,775 $ — $ 8,002 $ — $ 31,271
+Added: Total non-performing assets $ 33,810 $ 15,524 $ 25,539 $ 2,768 $ 17,318 $ 413 $ 95,372
+Added: The table below shows the non-performing loans and non-performing assets by region as of December 31, 2022:
+Added: (in thousands) Texas Arkansas Centennial CFG Shore Premier Finance Florida Alabama Total
+Added: Non-accrual loans $ 12,835 $ 8,326 $ 7,078 $ 2,316 $ 20,052 $ 404 $ 51,011
+Added: Loans 90+ days past due 9,356 62 — — 427 — 9,845
+Added: Total non-performing loans $ 22,191 $ 8,388 $ 7,078 $ 2,316 $ 20,479 $ 404 $ 60,856
+Added: Foreclosed assets held for sale 166 120 — — 260 — 546
+Added: Other non-performing assets 74 — — — — — 74
+Added: Total other non-performing assets $ 240 $ 120 $ — $ — $ 260 $ — $ 620
+Added: Total non-performing assets $ 22,431 $ 8,508 $ 7,078 $ 2,316 $ 20,739 $ 404 $ 61,476
+Added: The $2.7 million balance of non-accrual loans for our Centennial CFG Capital Markets Group consists of two loans that are assessed for credit risk by the Federal Reserve under the Shared National Credit Program.
The loans are not current on either principal or interest, and we have reversed any interest that had accrued subsequent to the non-accrual date designated by the Federal Reserve.
Any interest payments that are received will be applied to the principal balance.
+Added: In addition, the $22.8 million balance of foreclosed assets held for sale for our Centennial CFG Property Finance Group consists of an office building located in California which was placed in foreclosed assets held for sale during the fourth quarter of 2023.
+Added: This represents the largest component of the Company's $30.5 million in foreclosed assets held for sale.
Critical Accounting Policies and Estimates
52 unchanged sentences
Loans Receivable and Allowance for Credit Losses .
−Removed: Except for loans acquired during our acquisitions, substantially all of our loans receivable are reported at their outstanding principal balance adjusted for any charge-offs, as it is management’s intent to hold them for the foreseeable future or until maturity or payoff, except for mortgage loans held for sale.
+Added: 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.
+Added: 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.
+Added: The Company uses the discount cash flow ("DCF") method to estimate expected losses for all of Company’s loan pools.
+Added: These pools are as follows:
+Added: construction & land development;
+Added: other commercial real estate;
+Added: residential real estate;
+Added: commercial & industrial;
+Added: and consumer & other.
+Added: 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.
+Added: 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.
+Added: The modeling of expected prepayment speeds, curtailment rates, and time to recovery are based on historical internal data.
+Added: 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.
+Added: This analysis also determines how expected probability of default and loss given default will react to forecasted levels of the loss drivers.
+Added: 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.
+Added: Management leverages economic projections from a reputable and independent third party to inform its loss driver forecasts over the four-quarter forecast period.
+Added: Other internal and external indicators of economic forecasts are also considered by management when developing the forecast metrics.
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.
−Removed: 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, rental vacancy rate, housing price indices and rental vacancy rate index.
+Added: 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, the Federal Housing Finance Agency ("FHFA") housing price index 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.
11 unchanged sentences
• Other consumer - SPF
−Removed: The allowance for credit losses for each segment is measured through the use of the discounted cash flow method ("DCF").
Loans evaluated individually that are considered to be collateral dependent are not included in the collective evaluation.
17 unchanged sentences
(viii) changes in the quality of the loan review system and (ix) economic conditions.
+Added: Loans considered to be collateral dependent, according to ASC 326, are loans for which, based on current information and events, it is probable that we will be unable to collect all amounts due according to the contractual terms of the loan agreement.
+Added: The aggregate amount of collateral shortfall on such loans is utilized in evaluating the adequacy of the allowance for credit losses and amount of provisions thereto.
+Added: Losses on collateral dependent loans are charged against the allowance for credit losses when in the process of collection, it appears likely that such losses will be realized.
+Added: The accrual of interest on collateral dependent loans is discontinued when, in management’s opinion the collection of interest is doubtful or generally when loans are 90 days or more past due.
+Added: When accrual of interest is discontinued, all unpaid accrued interest is reversed.
+Added: Interest income is subsequently recognized only to the extent cash payments are received in excess of principal due.
+Added: Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.
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.
4 unchanged sentences
Acquisition Accounting and Acquired Loans .
−Removed: We account for our acquisitions under ASC Topic 805, Business Combinations , which requires the use of the acquisition method of accounting.
−Removed: All identifiable assets acquired, including loans, and liabilities assumed are recorded at fair value.
−Removed: In accordance with ASC 326, the Company records both a discount and an allowance for credit losses on acquired loans.
+Added: 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.
+Added: All identifiable assets acquired, including loans, are recorded at fair value.
+Added: 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.
−Removed: The Company has purchased loans, some of which have experienced more than insignificant credit deterioration since origination.
−Removed: Purchase credit deteriorated (“PCD”) loans are recorded at the amount paid.
+Added: 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.
−Removed: The initial allowance for credit losses determined on a collective basis is allocated to individual loans.
+Added: The Company develops separate PCD models for each loan segment with PCD loans not individually analyzed for credit losses.
+Added: 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.
−Removed: The difference between the initial amortized cost basis and the par value of the loan is a noncredit discount or premium, which is amortized into interest income over the life of the loan.
−Removed: Subsequent changes to the allowance for credit losses are recorded through the provision for credit loss.
+Added: 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.
+Added: Subsequent changes to the allowance for credit losses are recorded through the provision for credit losses.
Allowance for Credit Losses on Off-Balance Sheet Credit Exposures :
33 unchanged sentences
Acquisition of Happy Bancshares, Inc.
−Removed: On April 1, 2022, the Company completed the acquisition of Happy Bancshares, Inc., and merged Happy State Bank into Centennial Bank.
+Added: On April 1, 2022, the Company completed the acquisition of Happy Bancshares, Inc.
+Added: ("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.
17 unchanged sentences
The Company recorded $48.1 million in credit loss expense for the year ended December 31, 2024.
−Removed: This consisted of a $12.0 million provision for credit losses on loans, a $1.7 million provision for credit losses on investment securities and a reversal of $1.5 million provision for unfunded commitments.
−Removed: During the year ended December 31, 2023, the Company recorded $13.0 million in FDIC special assessment expense and $1.1 million loss for the decrease in fair value of marketable securities, which were partially offset by $3.5 million in recoveries on historic losses from loans charged off prior to acquisition and $3.1 million in BOLI death benefits.
−Removed: Our net income decreased $13.8 million, or 4.3%, to $305.3 million for the year ended December 31, 2022, from $319.0 million for the same period in 2021.
+Added: This consisted of a $48.4 million provision for credit losses on loans, which was partially offset by a $330,000 recovery of credit losses on available-for-sale investments due to an improvement in the unrealized loss position for one of our subordinated debt investments.
+Added: Of the $48.4 million provision for credit losses on loans recorded, $33.4 million as used to establish a hurricane reserve for loans located in the FEMA disaster areas impacted by Hurricanes Helene and Milton, which made landfall during the third and fourth quarters of 2024.
+Added: The hurricane related reserve had a $0.13 impact to diluted earnings per share.
+Added: The remaining portion of the provision was related to loan growth.
+Added: For the year ended December 31, 2024, the Company recorded a $3.0 million increase in the fair value of marketable securities, a $2.1 million gain on sale of a building from our Texas market, $257,000 in BOLI death benefits and $2.3 million in FDIC special assessment expense.
+Added: Our net income increased $87.7 million, or 28.7%, to $392.9 million for the year ended December 31, 2023, from $305.3 million for the same period in 2022.
On a diluted earnings per share basis, our earnings were $1.94 per share for the year ended December 31, 2023 and $1.57 per share for the year ended December 31, 2022.
−Removed: As a result of the acquisition of Happy, which we completed on April 1, 2022, we incurred $49.6 million in merger expenses and recorded a $45.2 million provision for credit losses on acquired loans for the CECL "double count," an $11.4 million provision for credit losses on acquired unfunded commitments and a $2.0 million provision for credit losses on acquired held-to-maturity investment securities.
−Removed: The summation of these items reduced net income by $81.6 million ($108.2 million pre-tax) and earnings per share by $0.42 per share for the year ended December 31, 2022.
−Removed: Excluding the impact of the acquisition of Happy, the Company determined that an additional $5.0 million provision for credit losses on loans was necessary due to increased loan growth during the year.
−Removed: However, excluding the impact of the acquisition of Happy, the Company determined no additional provision for unfunded commitments or investment securities was necessary as of December 31, 2022.
−Removed: During the year ended December 31, 2022, the Company recorded $10.0 million in income from the settlement of a lawsuit brought by the Company, net of legal expense, $6.7 million in recoveries on historic losses from loans charged off prior to acquisition, and $1.4 million in special dividends from equity investments, which were partially offset by $2.1 million in TRUPS redemption fees, $1.3 million loss for the decrease in fair value of marketable securities and $176,000 in hurricane expenses.
+Added: The Company recorded $12.1 million in credit loss expense for the year ended December 31, 2023.
+Added: This consisted of a $12.0 million provision for credit losses on loans, a $1.7 million provision for credit losses on investment securities and a reversal of a $1.5 million provision for unfunded commitments.
+Added: During the year ended December 31, 2023, the Company recorded $13.0 million in FDIC special assessment expense and a $1.1 million loss for the decrease in fair value of marketable securities, which were partially offset by $3.5 million in recoveries on historic losses from loans charged off prior to acquisition and $3.1 million in BOLI death benefits.
Net Interest Income
4 unchanged sentences
The Federal Reserve Board sets various benchmark rates, including the Federal Funds rate, and thereby influences the general market rates of interest, including the deposit and loan rates offered by financial institutions.
−Removed: The Federal Reserve increased the target rate seven times during 2022.
−Removed: First, on March 16, 2022, the target rate was increased to 0.25% to 0.50%.
−Removed: Second, on May 4, 2022, the target rate was increased to 0.75% to 1.00%.
−Removed: Third, on June 15, 2022, the target rate was increased to 1.50% to 1.75%.
−Removed: Fourth, on July 27, 2022, the target rate was increased to 2.25% to 2.50%.
−Removed: Fifth, on September 21, 2022, the target rate was increased to 3.00% to 3.25%.
−Removed: Sixth, on November 2, 2022, the target rate was increased to 3.75% to 4.00%.
−Removed: Seventh, on December 14, 2022, the target rate was increased to 4.25% to 4.50%.
The Federal Reserve increased the target rate four times during 2023.
First, on February 1, 2023, the target rate was increased to 4.50% to 4.75%, second, on March 22, 2023, the target rate was increased to 4.75% to 5.00%, third, on May 3, 2023, the target rate was increased to 5.00% to 5.25% and fourth, on July 26, 2023, the target rate was increased to 5.25% to 5.50%.
+Added: The Federal Reserve reduced the target rate three times during 2024.
+Added: First, on September 18, 2024, the Federal Reserve reduced the target rate to 4.75% to 5.00%, second, on November 7, 2024, the target rate was reduced to 4.50% to 4.75% and third, on December 18, 2024, the target rate was reduced to 4.25% to 4.50%.
Our net interest margin on a fully taxable equivalent basis increased from 4.25% for the year ended December 31, 2023 to 4.27% for the year ended December 31, 2024.
−Removed: The yield on interest earning assets was 6.03% and 4.40% for the years ended December 31, 2023 and 2022, respectively, as average interest earning assets decreased from $20.15 billion to $19.57 billion.
−Removed: The decrease in average interest earning assets is primarily due to a $2.12 billion decrease in average interest-bearing balances due from banks, which was partially offset by a $1.37 billion increase in average loans receivable and a $171.0 million increase in average investment securities.
+Added: The yield on interest earning assets was 6.51% and 6.03% for the year ended December 31, 2024 and 2023, respectively, as average interest earning assets increased from $19.57 billion to $20.09 billion.
+Added: The increase in average interest earning assets is primarily due to a $499.7 million increase in average interest-bearing balances due from banks and a $360.3 million increase in average loans receivable, which were partially offset by a $341.8 million decrease in average investment securities.
For the years ended December 31, 2024 and 2023, we recognized $8.1 million and $10.6 million, respectively, in total net accretion for acquired loans and deposits.
−Removed: The reduction in accretion was dilutive to the net interest margin by approximately 3 basis points.
−Removed: The overall increase in the net interest margin was due to a decrease in average interest-bearing cash balances as well as an increase in interest income from higher yields on average interest-earning assets, partially offset by an increase in interest expense due to an increase in average interest-bearing liabilities at higher interest rates primarily as a result of the Happy acquisition and the current rising interest rate environment.
+Added: The reduction in accretion was dilutive to the net interest margin by approximately 1 basis point.
+Added: We recognized $4.9 million in event income for the year ended December 31, 2024, compared to $3.0 million for the year ended December 31, 2023.
+Added: This increase was accretive to the net interest margin by 1 basis point.
+Added: During the year ended December 31, 2024, the Company held approximately $500 million in excess liquidity, which was dilutive to the net interest margin by 8 basis points.
+Added: The overall increase in the net interest margin was due to an increase in interest income from higher yields on average interest-earning assets and an increase in interest income due to changes in interest earning assets, partially offset by an increase in interest expense due to changes in interest-bearing liabilities and a change in interest rates paid on interest-bearing liabilities.
Net interest income on a fully taxable equivalent basis increased $24.9 million, or 3.0%, to $857.3 million for the year ended December 31, 2024, from $832.5 million for the same period in 2023.
This increase in net interest income was the result of a $127.8 million increase in interest income, partially offset by a $102.9 million increase in interest expense on a fully taxable equivalent basis.
−Removed: The $294.1 million increase in interest income was primarily the result of the increasing interest rate environment and the higher level of average interest earning assets due to the acquisition of Happy during the second quarter of 2022.
+Added: The $127.8 million increase in interest income was primarily the result of the high interest rate environment.
The higher yield on earning assets resulted in an increase in interest income of approximately $88.5 million, and the change in earning assets resulted in an increase in interest income of approximately $39.3 million.
−Removed: The $229.0 million increase in interest expense is primarily the result of the increasing interest rate environment as well as the higher level of average interest bearing liabilities due to the acquisition of Happy during the second quarter of 2022.
+Added: The $102.9 million increase in interest expense was also primarily the result of the high interest rate environment.
The higher rates on interest bearing liabilities resulted in an increase in interest expense of approximately $68.9 million, and the change in interest bearing liabilities resulted in an increase in interest expense of approximately $34.0 million.
Our net interest margin on a fully taxable equivalent basis increased from 3.81% for the year ended December 31, 2022 to 4.25% for the year ended December 31, 2023.
−Removed: The yield on interest earning assets was 4.40% and 3.99% for the years ended December 31, 2022 and 2021, respectively, as average interest earning assets increased from $15.86 billion to $20.15 billion.
−Removed: The increase in average earning assets is primarily the result of a $2.57 billion increase in average loans receivable and a $1.87 billion increase in average investment securities, largely resulting from the acquisition of Happy, which were partially offset by a $151.9 million decrease in average interest-bearing balances due from banks.
+Added: The yield on interest earning assets was 6.03% and 4.40% for the year ended December 31, 2023 and 2022, respectively, as average interest earning assets decreased from $20.15 billion to $19.57 billion.
+Added: The decrease in average interest earning assets is primarily due to a $2.12 billion decrease in average interest-bearing balances due from banks, which was partially offset by a $1.37 billion increase in average loans receivable and a $171.0 million increase in average investment securities.
For the years ended December 31, 2023 and 2022, we recognized $10.6 million and $16.3 million, respectively, in total net accretion for acquired loans and deposits.
The reduction in accretion was dilutive to the net interest margin by approximately 3 basis points.
−Removed: During 2022, the Company experienced a $31.8 million reduction in interest income from PPP loans due to the forgiveness of the PPP loans and the acceleration of the deferred fees for the loans that were forgiven.
−Removed: This reduction in income was dilutive to the net interest margin by approximately 8 basis points.
−Removed: We recognized $3.8 million in event interest income for the year ended December 31, 2022 compared to $6.7 million in event income for the year ended December 31, 2021.
−Removed: This was dilutive to the net interest margin by approximately 2 basis points.
−Removed: The overall increase in the net interest margin was due to an increase in interest income due to an increase in both average earning assets at higher yields, which was partially offset by an increase in interest expense due to an increase in average interest-bearing liabilities at higher interest rates primarily as a result of the Happy acquisition, and the current rising interest rate environment.
+Added: The overall increase in the net interest margin was due to a decrease in average interest-bearing cash balances as well as an increase in interest income from higher yields on average interest-earning assets, partially offset by an increase in interest expense due to an increase in average interest-bearing liabilities at higher interest rates primarily as a result of the Happy Bancshares, Inc.
+Added: acquisition and the increased interest rate environment.
Net interest income on a fully taxable equivalent basis increased $65.1 million, or 8.5%, to $832.5 million for the year ended December 31, 2023, from $767.3 million for the same period in 2022.
This increase in net interest income was the result of a $294.1 million increase in interest income, partially offset by a $229.0 million increase in interest expense on a fully taxable equivalent basis.
−Removed: The $254.2 million increase in interest income was primarily the result of the higher level of average interest earnings assets due to the acquisition of Happy during the second quarter of 2022 and the increasing interest rate environment.
−Removed: The increase in earning assets resulted in an increase in interest income of approximately $185.5 million, and the higher yield on earning assets resulted in a decrease in interest income of approximately $68.7 million.
−Removed: The $66.9 million increase in interest expense was primarily the result of the higher level of average interest bearing liabilities due to the acquisition of Happy during the second quarter of 2022 and the increasing interest rate environment.
−Removed: The higher rates on interest bearing liabilities resulted in an increase in interest expense of approximately $52.8 million, and the increase in interest bearing liabilities resulted in an increase in interest expense of approximately $14.0 million.
+Added: The $294.1 million increase in interest income was primarily the result of the increasing interest rate environment and the higher level of average interest earning assets due to the acquisition of Happy during the second quarter of 2022.
+Added: The higher yield on earning assets resulted in an increase in interest income of approximately $248.5 million, and the change in earning assets resulted in an increase in interest income of approximately $45.6 million.
+Added: The $229.0 million increase in interest expense is primarily the result of the increasing interest rate environment as well as the higher level of average interest bearing liabilities due to the acquisition of Happy during the second quarter of 2022.
+Added: The higher rates on interest bearing liabilities resulted in an increase in interest expense of approximately $224.1 million, and the change in interest bearing liabilities resulted in an increase in interest expense of approximately $4.9 million.
Tables 2 and 3 reflect an analysis of net interest income on a fully taxable equivalent basis for the years ended December 31, 2024, 2023 and 2022, as well as changes in fully taxable equivalent net interest margin for the years 2024 compared to 2023 and 2023 compared to 2022.
87 unchanged sentences
Provision for Credit Losses
−Removed: The Company accounts for credit losses in accordance with ASC 326.
−Removed: The measurement of expected credit losses under the CECL methodology is applicable to financial assets measured at amortized cost, including loan receivables and held-to-maturity debt securities.
−Removed: It also applies to off-balance sheet credit exposures not accounted for as insurance (loan commitments, standby letters of credits, financial guarantees, and other similar instruments) and net investments in leases recognized by a lessor in accordance with Topic 842 on leases.
Credit Loss Expense :
−Removed: During the year ended December 31, 2023, the Company recorded a $12.0 million provision for credit losses on loans, a $1.7 million provision for credit losses on investment securities and a recovery of $1.5 million provision for unfunded commitments.
−Removed: Net charge-offs to average total loans decreased to 0.09% for the year ended December 31, 2023 from 0.11% for the year ended December 31, 2022.
+Added: During the year ended December 31, 2024, the Company recorded $48.1 million in credit loss expense.
+Added: This consisted of a $48.4 million provision for credit losses on loans, which was partially offset by a $330,000 recovery of credit losses on available-for-sale investments due to an improvement in the unrealized loss position for one of our subordinated debt investments.
+Added: Of the $48.4 million provision for credit losses on loans recorded, $33.4 million as used to establish a hurricane reserve for loans located in the FEMA disaster areas impacted by Hurricanes Helene and Milton, which made landfall during the third and fourth quarters of 2024.
+Added: The Company determined the $2.0 million allowance for credit losses on the held-to-maturity portfolio was adequate.
+Added: Therefore, no additional provision was considered necessary for the held-to-maturity portfolio.
+Added: Net charge-offs to average total loans increased to 0.41% for the year ended December 31, 2024 from 0.09% for the year ended December 31, 2023.
+Added: During the fourth quarter of 2024, the Company completed an asset quality cleanup project which was the main driver of the $47.4 million increase in net charge-offs for the year ended December 31, 2024 compared to December 31, 2023.
Non-performing loans to total loans increased from 0.44% as of December 31, 2023 to 0.67% as of December 31, 2024.
−Removed: 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.
−Removed: Historical credit loss experience provides the basis for the estimation of expected credit losses.
−Removed: 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.
−Removed: Acquired loans .
−Removed: In accordance with ASC 326, the Company records both a discount and an allowance for credit losses on acquired loans.
−Removed: This is commonly referred to as “double accounting" or "double count."
−Removed: The allowance for credit losses is measured based on call report segment as these types of loan exhibit similar risk characteristics.
−Removed: The identified loan segments are as follows:
−Removed: • 1-4 family construction
−Removed: • All other construction
−Removed: • 1-4 family revolving home equity lines of credit (“HELOC”) & junior liens
−Removed: • 1-4 family senior liens
−Removed: • Multifamily
−Removed: • Owner occupies commercial real estate
−Removed: • Non-owner occupied commercial real estate
−Removed: • Commercial & industrial, agricultural, non-depository financial institutions, purchase/carry securities, other
−Removed: • Consumer auto
−Removed: • Other consumer
−Removed: • Other consumer - SPF
−Removed: The allowance for credit losses for each segment is measured through the use of the discounted cash flow method.
−Removed: Loans evaluated individually that are considered to be collateral dependent are not included in the collective evaluation.
−Removed: For these loans, 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.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: Investments – Available-for-sale :
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income.
−Removed: 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.
−Removed: Changes in the allowance for credit losses are recorded as provision for (or reversal of) credit loss expense.
−Removed: 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.
−Removed: Investments – Held-to-Maturity.
−Removed: 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.
−Removed: The Company measures expected credit losses on HTM securities on a collective basis by major security type, with each type sharing similar risk characteristics.
−Removed: The estimate of expected credit losses considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts.
−Removed: 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.
−Removed: Changes in the allowance for credit losses are recorded as provision for (or reversal of) credit loss expense.
−Removed: Losses are charged against the allowance when management believes the uncollectability of a security is confirmed.
−Removed: During the year ended December 31, 2023, one of the Company’s AFS subordinated debt investment securities was downgraded below investment grade.
−Removed: As result, the Company wrote down the value of the investment to its unrealized loss position, which required a $1.7 million provision.
−Removed: The remaining $842,000 allowance for credit losses on AFS investments is associated with certain securities in the subordinated debt portfolio within the banking sector.
−Removed: These investments are classified within the other securities category of the AFS portfolio.
−Removed: The $2.0 million allowance for credit losses for the held-to-maturity portfolio was considered adequate.
−Removed: No additional provision for credit losses was considered necessary for the HTM portfolio.
Non-Interest Income
15 unchanged sentences
Gain on sale of SBA loans 617 278 183 339 121.9 95 51.9
−Removed: Gain (loss) on sale of branches, equipment and other assets, net 1,507 15 (105) 1,492 (9946.7) 120 114.3
−Removed: Gain on OREO, net 332 500 2,003 (168) (33.6) (1,503) (75.0)
−Removed: Gain on securities, net — — 219 — — (219) (100.0)
+Added: Gain on sale of branches, equipment and other assets, net 2,102 1,507 15 595 (39.5) 1,492 (9,946.7)
+Added: (Loss) gain on OREO, net (2,272) 332 500 (2,604) (784.3) (168) (33.6)
Fair value adjustment for marketable securities 2,971 (1,094) (1,272) 4,065 371.6 178 (14.0)
2 unchanged sentences
Non-interest income decreased $1.4 million, or 0.8%, to $168.6 million for the year ended December 31, 2024 from $169.9 million for the same period in 2023.
+Added: The primary factors that resulted in this decrease were the $8.5 million decrease in other income and $2.6 million decrease in gain on OREO, partially offset by the $5.1 million increase in mortgage lending income and $4.1 million increase in the fair value adjustment for marketable securities.
+Added: Other factors were changes related to service charges on deposit accounts, trust fees, and gain on sale of branches, equipment and other assets.
+Added: Additional details for the year ended December 31, 2024 on some of the more significant changes are as follows:
+Added: • The $1.2 million decrease in other service charges and fees is primarily due to decreases in Centennial CFG property finance loan fees and Mastercard income.
+Added: • The $825,000 increase in trust fees is primarily related to an increases in personal trust fees, employee trust fees, IRA fees and retirement fees.
+Added: • The $5.1 million increase in mortgage lending income is primarily related to an increase in volume of secondary market loans from the lower volume of loans during 2023.
+Added: • The $595,000 increase in gain on sale of branches, equipment and other assets, net, is primarily due to the sale of a building from our Texas region during 2024.
+Added: • The $2.6 million decrease in gain on OREO is primarily due to revaluation of two OREO properties during 2024.
+Added: • The $4.1 million increase in the fair value adjustment for marketable securities is due to the changes in the fair value of marketable securities held by the Company.
+Added: • The $8.5 million decrease in other income is primarily due to a $7.4 million reduction in income for equity method investments, a $2.9 million reduction in BOLI death benefit income and a $3.0 million decrease in recoveries on historic losses, partially offset by a $2.2 million increase in rental income from OREO and a $2.1 million increase in investment brokerage fee income.
+Added: Non-interest income decreased $5.2 million, or 3.0%, to $169.9 million for the year ended December 31, 2023 from $175.1 million for the same period in 2022.
The primary factors that resulted in this decrease were the $9.8 million decrease in other income and the $6.9 million decrease in mortgage lending income, partially offset by the $5.0 million increase in trust fees.
9 unchanged sentences
• The $9.8 million decrease in other income is primarily due to the $15.0 million in income in 2022 from the settlement of a lawsuit brought by the Company and a $6.0 million decrease in income for items previously charged-off, which were partially offset by $4.9 million increase in income from equity method investments, $3.1 million in BOLI death benefit income and a $2.8 million increase in rental income primarily related to the acquisition of Happy.
−Removed: Non-interest income increased $37.5 million, or 27.3%, to $175.1 million for the year ended December 31, 2022 from $137.6 million for the same period in 2021.
−Removed: The primary factors that resulted in this increase were the $27.6 million increase in other income, the $14.8 million increase in service charges on deposit accounts and the $10.9 million increase in trust fees.
−Removed: Other factors were changes related to other service charges and fees, mortgage lending income, cash value of life insurance, dividends from FHLB, FRB, FNBB & other, gain on sale of SBA loans, gain on OREO and fair value adjustment for marketable securities.
−Removed: Additional details for the year ended December 31, 2022 on some of the more significant changes are as follows:
−Removed: • The $14.8 million increase in service charges on deposit accounts is primarily due to an increase in overdraft and service charge fees related to the acquisition of Happy.
−Removed: • The $8.1 million increase in other service charges and fees is primarily due to an increase in interchange fees related to the acquisition of Happy.
−Removed: • The $10.9 million increase in trust fees is primarily related to an increase in trust fees resulting from the acquisition of Happy.
−Removed: • The $8.0 million decrease in mortgage lending income is primarily due to a decrease in volume of secondary market loans from the high volume of loans during 2021.
−Removed: The decrease in volume is due to the increase in interest rates.
−Removed: • The $1.8 million increase in cash value of life insurance is primarily related to the increase in bank owned life insurance resulting from the acquisition of Happy.
−Removed: • The $5.6 million decrease in dividends from FHLB, FRB, FNBB & other is primarily due to a decrease in special dividends from equity investments, partially offset by an increase in dividend income from marketable securities and an increase in FRB stock holdings related to the acquisition of Happy.
−Removed: • The $2.2 million decrease in gain on sale of SBA loans is primarily due to the decrease in the volume of SBA loan sales during 2022.
−Removed: • The $1.5 million decrease in gain on OREO resulted from a reduction in the level of sales of OREO during 2022.
−Removed: • The $8.5 million decrease in the fair value adjustment for marketable securities is due to a reduction in the fair value of marketable securities held by the Company.
−Removed: • The $27.6 million increase in other income is primarily due to $15.0 million in income from the settlement of a lawsuit brought by the Company and a $6.3 million adjustment for equity method investments.
−Removed: Other factors include a $2.1 million increase in additional income for items previously charged off, $2.5 million increase in rental income and a $2.0 million increase in investment brokerage fee income, partially offset by a $478,000 decrease in gain on life insurance.
Non-Interest Expense
27 unchanged sentences
Non-interest expense decreased $25.9 million, or 5.5%, to $446.9 million for the year ended December 31, 2024, from $472.9 million for the same period in 2023.
+Added: The primary factors that resulted in this decrease was the decrease in salaries and employee benefits expense and FDIC and state assessment expense, partially offset by the increases in legal and accounting fees and other expenses.
+Added: Other factors were changes related to occupancy and equipment expenses, advertising expenses, amortization of intangibles, electronic banking expense and other professional fees.
+Added: Additional details for the year ended December 31, 2024 on some of the more significant changes are as follows:
+Added: • The $15.9 million decrease in salaries and employee benefits expense is primarily due to the Company's project to reduce the size of its workforce and a decrease in deferred loan costs.
+Added: • The $2.3 million decrease in occupancy and equipment expense is primarily due to decreases in lease, utility, maintenance and other occupancy expenses.
+Added: • The $1.8 million decrease in advertising expense is primarily due to a decreased volume of advertising.
+Added: • The $1.2 million decrease in amortization of intangibles is primarily due to the core deposit intangible from the Company's 2013 acquisition of Liberty Bank being fully amortized in 2023.
+Added: • The $869,000 decrease in electronic banking expense is primarily due to a decrease in debit card processing fees and interchange network expenses.
+Added: • The $10.1 million decrease in FDIC and state assessment expense is primarily due to the $13.0 million FDIC special assessment levied during the fourth quarter of 2023 in order to recover the losses to the Deposit Insurance Fund associated with protecting uninsured depositors following the closures of Silicon Valley Bank and Signature Bank, partially offset by the remaining portion of the FDIC special assessment being incurred during the second quarter of 2024.
+Added: • The $3.7 million increase in legal and accounting expense is primarily due to ongoing legal matters.
+Added: • The $673,000 decrease in other professional fees is primarily due to cost saving measures following the acquisition of Happy.
+Added: • The $4.0 million increase in other expenses is primarily related to an increase in OREO expense and miscellaneous costs, partially offset by decreases in travel expenses, reimbursable loan fees and other losses.
+Added: Non-interest expense increased $2.8 million, or 0.6%, to $472.9 million for the year ended December 31, 2023, from $475.6 million for the same period in 2022.
The primary factors that resulted in this decrease was the decrease in merger expense, partially offset by increases in salaries and employee benefits expense and FDIC and state assessment expense.
15 unchanged sentences
• The $4.2 million decrease in legal and accounting expense is primarily due to expenses related to a lawsuit brought by the Company which were incurred in 2022.
−Removed: • The $5.1 million increase in other expenses is primarily related to the acquisition of Happy, partially offset by the reduction of $2.1 million in TRUPS redemption fees which were incurred in 2022.
−Removed: Non-interest expense increased $177.1 million, or 59.3%, to $475.6 million for the year ended December 31, 2022, from $298.5 million for the same period in 2021.
−Removed: The primary factors that resulted in this increase was the increase in salaries and employee benefits expense and merger expense.
−Removed: Other factors were changes related to occupancy and equipment expenses, data processing expenses, electronic banking expense, FDIC and state assessment expense, legal and accounting expenses, other professional fees and other expense.
−Removed: Additional details for the year ended December 31, 2022 on some of the more significant changes are as follows:
−Removed: • The $68.1 million increase in salaries and employee benefits expense is primarily due to the acquisition of Happy.
−Removed: • The $16.8 million increase in occupancy and equipment expense is primarily due to increases in depreciation on buildings, machinery and equipment;
−Removed: utility expenses;
−Removed: lease expense;
−Removed: equipment maintenance and repairs;
−Removed: janitorial expenses;
−Removed: property taxes and other occupancy expenses related to the acquisition of Happy.
−Removed: • The $10.7 million increase in data processing expense is primarily due to increases in telecommunication fees, computer software fees, licensing fees, mobile banking, internet banking and cash management expenses related to the acquisition of Happy.
−Removed: • The $47.7 million increase in merger and acquisition expense is due to costs associated with the acquisition of Happy.
−Removed: • The $3.1 million increase in advertising expense is primarily related to the acquisition of Happy.
−Removed: • The $3.2 million increase in amortization of intangibles is due to the acquisition of Happy.
−Removed: • The $3.8 million increase in electronic banking expenses is primarily due to the increased debit card processing fees and interchange network expense resulting from the acquisition of Happy.
−Removed: • The $3.0 million increase in FDIC and state assessment expense is primarily due to FDIC assessment reductions for 2021 and the acquisition of Happy during the second quarter of 2022.
−Removed: • The $5.7 million increase in legal and accounting expense is primarily due to expenses related to a lawsuit brought by the Company.
−Removed: • The $1.9 million increase in other professional fees is primarily related to the acquisition of Happy.
−Removed: • The $1.2 million increase in operating expense is primarily due to the acquisition of Happy.
−Removed: • The $9.8 million increase in other expenses is primarily related to the acquisition of Happy as well as $2.1 million in TRUPS redemption fees.
+Added: • The $5.1 million increase in other expenses is primarily related to the acquisition of Happy, partially offset by the reduction of $2.1 million in trust preferred securities redemption fees which were incurred in 2022.
+Added: During 2024, the Company lowered its marginal tax rate from 24.989% to 24.433%.
+Added: In an effort to more accurately reflect legislative and current state income apportionment, the state tax rate was lowered to 4.346%.
+Added: This lowered the blended rate to 24.433%.
During 2023, the Company increased its marginal tax rate from 24.6735% to 24.989%.
5 unchanged sentences
Apportionment changes related to the acquisition of Happy and statutory tax rate changes were the main drivers in the tax rate reduction.
−Removed: During 2021, the Company lowered its marginal tax rate from 26.135% to 25.740%.
−Removed: In an effort to more accurately reflect current state income apportionment and state tax rates, the state tax rate was lowered to 6.0%, lowering the blended rate to 25.74%.
−Removed: Florida and Arkansas were the main drivers in the tax rate reduction.
Income tax expense increased $1.1 million, or 1.0%, to $120.1 million for the year ended December 31, 2024, from $119.0 million for 2023.
−Removed: Income tax expense decreased $8.4 million, or 8.6%, to $89.3 million for the year ended December 31, 2022, from $97.8 million for 2021.
+Added: Income tax expense increased $29.6 million, or 33.2%, to $119.0 million for the year ended December 31, 2023, from $89.3 million for 2022.
The effective tax rates for the years ended December 31, 2024, 2023 and 2022 were 22.99%, 23.24% and 22.64%, respectively.
2 unchanged sentences
Our total assets as of December 31, 2024 decreased $165.9 million to $22.49 billion from the $22.66 billion reported as of December 31, 2023.
+Added: The decrease in total assets is primarily due to a $442.0 million decrease in investment securities resulting from paydowns and maturities and a $89.9 million decrease in cash and cash equivalents during the year.
+Added: Our loan portfolio balance increased $339.8 million to $14.76 billion as of December 31, 2024, from $14.42 billion as of December 31, 2023.
+Added: The increase in loans was due to $471.4 million in organic loan growth within our legacy footprint, which was partially offset by $131.7 million of organic loan decline from our CFG franchise during 2024.
+Added: Total deposits increased $358.6 million to $17.15 billion as of December 31, 2024 compared to $16.79 billion as of December 31, 2023.
+Added: Stockholders’ equity increased $170.0 million to $3.96 billion as of December 31, 2024, compared to $3.79 billion as of December 31, 2023.
+Added: The increase in stockholders’ equity is primarily associated with the $402.2 million in net income, which was partially offset by the $150.0 million of shareholder dividends paid, the repurchase of $86.1 million of our common stock during 2024 and the $7.0 million decrease in accumulated other comprehensive income.
+Added: The improvement in stockholders’ equity was 4.5% for the year ended December 31, 2024 compared to December 31, 2023.
+Added: Our total assets as of December 31, 2023 decreased $226.9 million to $22.66 billion from the $22.88 billion reported as of December 31, 2022.
The decrease in total assets is primarily due to a $539.5 million decrease in investment securities resulting from paydowns and maturities, which was partially offset by a $275.4 million increase in cash and cash equivalents during the year.
Our loan portfolio balance increased $15.2 million to $14.42 billion as of December 31, 2023, from $14.41 billion as of December 31, 2022.
−Removed: The increase in loans was due to $340.4 million in organic loan growth within our legacy footprint, which was partially offset by $325.2 million of organic loan decline from our Centennial CFG franchise during 2023.
+Added: The increase in loans was due to $340.4 million in organic loan growth within our legacy footprint, which was partially offset by $325.2 million of organic loan decline from our CFG franchise during 2023.
Total deposits decreased $1.15 billion to $16.79 billion as of December 31, 2023 compared to $17.94 billion as of December 31, 2022.
2 unchanged sentences
The increase in stockholders’ equity is primarily associated with the $392.9 million in net income and the $56.4 million increase in accumulated other comprehensive income, which were partially offset by the $145.9 million of shareholder dividends paid and the repurchase of $48.3 million of our common stock during 2023.
−Removed: The improvement in stockholders’ equity was 7.5% for the year ended December 31, 2023 compared to December 31, 2022.
−Removed: Our total assets as of December 31, 2022 increased $4.83 billion to $22.88 billion from the $18.05 billion reported as of December 31, 2021.
−Removed: The increase in total assets is primarily due to the acquisition of $6.69 billion in total assets, net of purchase accounting adjustments, from Happy during the second quarter of 2022.
−Removed: Cash and cash equivalents decreased $2.93 billion, or 80.14%.
−Removed: Our loan portfolio balance increased $4.57 billion to $14.41 billion as of December 31, 2022, from $9.84 billion as of December 31, 2021.
−Removed: The increase in loans was due to the acquisition of $3.65 billion in loans, net of purchase accounting adjustments, from Happy in the second quarter of 2022 and $242.2 million in marine loans from LendingClub Bank during the first quarter of 2022, as well as $678.6 million in organic loan growth during 2022.
−Removed: Total deposits increased $3.68 billion to $17.94 billion as of December 31, 2022 compared to $14.26 billion as of December 31, 2021.
−Removed: The increase in deposits was primarily due to the acquisition of $5.86 billion in deposits, net of purchase accounting adjustments, from Happy in the second quarter of 2022, partially offset by $2.18 billion in deposit decline during the year.
−Removed: Stockholders’ equity increased $760.6 million to $3.53 billion as of December 31, 2022, compared to $2.77 billion as of December 31, 2021.
−Removed: The increase in stockholders’ equity is primarily associated with the $961.3 million in common stock issued to Happy shareholders for the acquisition of Happy on April 1, 2022 and $305.3 million in net income, which were partially offset by the $315.9 million decrease in accumulated other comprehensive income, $128.4 million of shareholder dividends paid and the repurchase of $70.9 million of our common stock during 2022.
−Removed: The improvement in stockholders’ equity was 27.5% for the year ended December 31, 2022 compared to December 31, 2021.
+Added: The improvement in stockholders’ equity was 7.5% for the year ended D ecember 31, 2023 compared to December 31, 2022.
Loan Portfolio
3 unchanged sentences
The $339.8 million in organic loan growth included $471.4 million in organic loan growth for our legacy footprint, which was partially offset by $131.7 million of organic loan decline for Centennial CFG during 2024.
−Removed: During 2022, the Company experienced an increase of approximately $4.57 billion in loans.
−Removed: The increase in loans was primarily due to the acquisition of $3.65 billion in loans, net of purchase accounting adjustments, from Happy and $242.2 million in marine loans from LendingClub Bank during 2022, as well as $678.6 million in organic loan growth.
−Removed: The $678.6 million in organic loan growth included $352.7 million in loan growth for Centennial CFG and $483.6 million in loan growth within the remaining footprint, partially offset by a $157.7 million decline in PPP loans during 2022.
+Added: During 2023, the Company experienced $15.2 million in organic loan growth.
+Added: The $15.2 million in organic loan growth included $340.4 million in organic loan growth for our legacy footprint, which was partially offset by $325.2 million of organic loan decline for Centennial CFG during 2023.
The most significant components of the loan portfolio were commercial real estate, residential real estate, consumer and commercial and industrial loans.
2 unchanged sentences
Loans receivable were approximately $3.42 billion, $4.15 billion, $3.90 billion, $111.0 million, $1.36 billion and $1.82 billion as of December 31, 2024 in Arkansas, Florida, Texas, Alabama, SPF and Centennial CFG, respectively.
−Removed: As of December 31, 2023, we had $867.5 million of construction/land development loans which were collateralized by land.
−Removed: This consisted of $84.2 million for raw land and $783.3 million for land with commercial and/or residential lots.
+Added: As of December 31, 2024, we had $1.16 billion of construction/land development loans which were collateralized by land.
+Added: This consisted of $107.8 million for raw land and $1.05 billion for land with commercial and/or residential lots.
Table 8 presents our loans receivable balances by category as of December 31, 2024 and 2023.
22 unchanged sentences
As of December 31, 2024, commercial real estate loans totaled $8.50 billion, or 57.6% of loans receivable, as compared to $8.17 billion, or 56.7% of loans receivable, as of December 31, 2023.
−Removed: Commercial real estate loans originated in our Arkansas, Florida, Texas, Alabama, SPF and Centennial CFG markets were $2.07 billion, $2.41 billion, $2.23 billion, $47.5 million, zero and $1.41 billion at December 31, 2023, respectively.
+Added: Commercial real estate loans originated in our Arkansas, Florida, Texas, Alabama, SPF and Centennial CFG markets were $2.18 billion, $2.61 billion, $2.17 billion, $45.0 million, zero and $1.49 billion, respectively, at December 31, 2024.
+Added: Table 9 presents the composition of the funded and unfunded balances of our CRE portfolio by loan type, as of December 31, 2024 and December 31, 2023, and their respective percentages of our total CRE portfolio.
+Added: CRE Loan Concentrations
+Added: December 31, 2024
+Added: Funded Balance % of CRE Loans Unfunded Balance % of CRE Loans
+Added: (Dollars in thousands)
+Added: Non-Farm/Non-Residential:
+Added: Single Purpose Building $ 829,697 9.8 % $ 64,948 2.5 %
+Added: Office Building 1,070,459 12.6 107,769 4.2
+Added: Hotel 1,081,120 12.7 24,652 1.0
+Added: Industrial 385,072 4.5 29,517 1.1
+Added: Retail 507,405 6.0 12,579 0.5
+Added: Owner-Occupied (1)
+Added: 1,553,027 18.2 167,399 6.5
+Added: Construction/Land Development:
+Added: Construction Residential-Spec 433,964 5.1 330,119 12.8
+Added: Residential Land Development 537,686 6.3 86,200 3.4
+Added: Construction Commercial 337,727 4.0 360,340 14.0
+Added: Construction Multi Family 556,168 6.5 908,976 35.4
+Added: Commercial Land Development 512,284 6.0 99,165 3.9
+Added: Construction Residential-Presold 186,325 2.2 141,047 5.5
+Added: Construction Hotel 64,239 0.8 191,088 7.4
+Added: Raw Land 107,821 1.3 8,215 0.3
+Added: Agricultural (1)
+Added: 336,993 4.0 38,913 1.5
+Added: Total Commercial Real Estate (2)
+Added: $ 8,499,987 100.0 % $ 2,570,927 100.0 %
+Added: December 31, 2023
+Added: Funded Balance % of CRE Loans Unfunded Balance % of CRE Loans
+Added: (Dollars in thousands)
+Added: Non-Farm/Non-Residential:
+Added: Single Purpose Building $ 979,802 12.0 % $ 79,598 3.2 %
+Added: Office Building 1,023,917 12.5 89,464 3.6
+Added: Hotel 1,067,028 13.1 34,374 1.4
+Added: Industrial 401,125 4.9 37,342 1.5
+Added: Retail 579,886 7.1 19,744 0.8
+Added: Owner-Occupied (1)
+Added: 1,498,196 18.4 98,681 4.0
+Added: Construction/Land Development:
+Added: Construction Residential-Spec 408,023 5.0 427,563 17.2
+Added: Residential Land Development 475,615 5.8 88,856 3.6
+Added: Construction Commercial 492,421 6.0 388,486 15.7
+Added: Construction Multi Family 189,711 2.3 753,285 30.3
+Added: Commercial Land Development 327,194 4.0 51,303 2.1
+Added: Construction Residential-Presold 200,114 2.4 160,809 6.5
+Added: Construction Hotel 127,784 1.6 227,530 9.2
+Added: Raw Land 72,185 0.9 1,119 —
+Added: Agricultural (1)
+Added: 325,156 4.0 21,640 0.9
+Added: Total Commercial Real Estate (2)
+Added: $ 8,168,157 100.0 % $ 2,479,794 100.0 %
+Added: (1) Agriculture real estate loans and owner-occupied non-farm non-residential loans are not included within CRE for regulatory reporting purposes.
+Added: (2) Excludes multi-family residential loans of $496.5 million and $435.7 million as of December 31, 2024 and December 31, 2023, respectively, which are included in the residential real estate loans throughout the filing.
+Added: Multi-family residential loans are included in CRE for regulatory purposes.
+Added: Table 10 presents the composition of our CRE loan portfolio by the ten largest geographical locations of the collateral as of December 31, 2024 and December 31, 2023.
+Added: Geographical Locations of CRE Loans
+Added: Top 10 Geographical States for CRE Loan Collateral Concentrations
+Added: Florida Texas Arkansas New York Georgia Utah Alabama California Pennsylvania Tennessee All Other Areas Total
+Added: As of December 31, 2024
+Added: Non-Farm/Non-Residential:
+Added: Single Purpose Building $ 275,440 $ 212,649 $ 168,691 $ 49,278 $ 17,506 $ — $ 6,494 $ 429 $ — $ 1,586 $ 97,624 $ 829,697
+Added: Office Building 333,230 355,794 64,062 50,091 91,723 — 18,934 — 25,616 — 131,009 1,070,459
+Added: Hotel 541,001 263,647 99,830 4,943 24,319 — 18,575 16,419 — — 112,386 1,081,120
+Added: Industrial 44,392 91,344 40,908 57,556 — — 59,745 20,041 — — 71,086 385,072
+Added: Retail 148,053 252,087 56,885 4,158 — — 12,166 (100) — 435 33,721 507,405
+Added: Owner-Occupied (1)
+Added: 492,655 431,489 337,935 — 21,051 — 26,314 5,748 83,199 6,911 147,725 1,553,027
+Added: Construction/Land Development:
+Added: Construction Residential -
+Added: Spec 150,143 107,149 41,299 126,299 — — 82 — — — 8,992 433,964
+Added: Residential Land
+Added: Development 148,897 102,369 51,865 — 304 165,643 2,329 — — 2,466 63,813 537,686
+Added: Construction Commercial 84,027 111,199 62,549 15,159 — 12,451 1,182 (213) 876 9,194 41,303 337,727
+Added: Construction Multi Family 240,255 72,676 32,812 139,130 — — — 19,326 228 37,881 13,860 556,168
+Added: Commercial Land
+Added: Development 118,729 70,700 31,841 37,820 40,068 — 9,752 50,248 — 42,181 110,945 512,284
+Added: Construction Residential -
+Added: Presold 93,517 61,538 29,937 — — — 1,022 — — — 311 186,325
+Added: Construction Hotel 6,693 9,796 22,036 — 13,555 — 5,152 — — — 7,007 64,239
+Added: Raw Land 9,036 8,537 31,649 — — — 1,311 34,388 — — 22,900 107,821
+Added: Agricultural (1)
+Added: 32,589 176,084 106,684 — — — 3,736 — — — 17,900 336,993
+Added: Total Commercial Real Estate (2)
+Added: $ 2,718,657 $ 2,327,058 $ 1,178,983 $ 484,434 $ 208,526 $ 178,094 $ 166,794 $ 146,286 $ 109,919 $ 100,654 $ 880,582 $ 8,499,987
+Added: Top 10 Geographical States for CRE Loan Collateral Concentrations
+Added: Florida Texas Arkansas New York Utah Alabama Georgia California Pennsylvania Oklahoma All Other Areas Total
+Added: As of December 31, 2023
+Added: Non-Farm/Non-Residential:
+Added: Single Purpose Building $ 301,505 $ 330,203 $ 183,961 $ 52,945 $ — $ 11,810 $ 5,228 $ 1,396 $ 2,317 $ 5,200 $ 85,237 $ 979,802
+Added: Office Building 323,320 276,425 86,951 50,294 — 19,686 95,457 — 28,501 42,885 100,398 1,023,917
+Added: Hotel 518,592 223,750 106,975 59,910 — 19,374 23,760 — — 24,254 90,413 1,067,028
+Added: Industrial 41,138 64,060 39,517 93,323 — 71,465 — 24,796 — — 66,826 401,125
+Added: Retail 177,569 243,364 64,049 7,285 — 11,977 — 23,372 — 319 51,951 579,886
+Added: Owner-Occupied (1)
+Added: 476,507 429,440 309,584 — 9,376 15,654 23,991 4,617 86,874 18,993 123,160 1,498,196
+Added: Construction/Land Development:
+Added: Construction Residential -
+Added: Spec 124,019 103,483 35,461 88,670 — 2,763 497 40,624 — — 12,506 408,023
+Added: Residential Land
+Added: Development 93,644 123,284 47,952 — 189,435 2,868 226 — — — 18,206 475,615
+Added: Construction Commercial 115,757 226,684 31,964 — — 4,293 11,248 — — — 102,475 492,421
+Added: Construction Multi Family 44,179 26,082 48,485 53,711 — — — 8,376 189 — 8,689 189,711
+Added: Commercial Land
+Added: Development 71,670 35,647 33,294 81,004 — 5,764 — 19,029 — — 80,786 327,194
+Added: Construction Residential -
+Added: Presold 125,004 49,654 23,248 — — 1,184 — — — 125 899 200,114
+Added: Construction Hotel 70,781 50,346 3,208 — — (208) (130) — — — 3,787 127,784
+Added: Raw Land 8,283 15,334 23,649 — — 2,837 — 20,894 — — 1,188 72,185
+Added: Agricultural (1)
+Added: 23,637 182,495 99,243 — — 3,104 360 — — 1,227 15,090 325,156
+Added: Total Commercial Real Estate (2)
+Added: $ 2,515,605 $ 2,380,251 $ 1,137,541 $ 487,142 $ 198,811 $ 172,571 $ 160,637 $ 143,104 $ 117,881 $ 93,003 $ 761,611 $ 8,168,157
+Added: (1) Agriculture real estate loans and owner-occupied non-farm non-residential loans are not included within CRE for regulatory reporting purposes.
+Added: (2) Excludes multi-family residential loans of $496.5 million and $435.7 million as of December 31, 2024 and December 31, 2023, respectively, which are included in the residential real estate loans throughout the filing.
+Added: Multi-family residential loans are included in CRE for regulatory purposes.
+Added: Our loan policy states that in order to achieve a well-balanced, diversified credit portfolio, concentrations containing inappropriate or excessive risk are to be avoided.
+Added: It is the goal of the Company to maintain a prudent diversification of loans.
+Added: We define a concentration of credit as direct or indirect obligations according to the following guidelines:
+Added: (i) concentrations of 25% or more of total risk-based capital by individual borrower, small, interrelated group of individuals, single repayment source or individual project;
+Added: (ii) concentrations of 100% or more of total risk-based capital by industry or product line.
+Added: As of December 31, 2024, we have not met the threshold for the concentration limits.
+Added: In addition, the Bank's board of directors monitors the CRE loan portfolio for concentrations related to geography, industry, and collateral type and determines applicable guidelines.
+Added: The Chief Lending Officer also reviews the portfolio periodically to determine if any concentrations exist and makes recommendations with respect to setting internal guidelines.
+Added: The Company also monitors key risk indicators ("KRIs") on a quarterly basis for the overall loan portfolio as well as specific KRIs for the CRE portfolio.
+Added: The KRIs are tied to the Bank's appetite for credit risk which is reflected in the Bank's credit policy and underwriting criteria.
+Added: The KRIs related to underwriting include loan downgrades by loan review, loan downgrades to classified levels and loan policy exceptions (loan to value, debt coverage ratio and credit score).
+Added: The KRIs related to CRE loans include concentrations of construction and land loans, concentrations of total CRE loans, CRE loans in excess of loan to value guidelines and total real estate loans in excess of loan to value guidelines.
+Added: The results of the KRI analysis are presented to the Bank's Asset Quality Committee on a quarterly basis.
+Added: Any exceptions to established limits and thresholds are monitored and addressed in a timely manner as required by the Asset Quality Committee.
+Added: The Company has a CRE strategy and contingency plan which outlines the principles required to adequately manage our CRE exposures.
+Added: It discusses the inherent risks within CRE lending, as well as the risks unique to specific lending activities and property taxes.
+Added: In addition, the plan outlines internal limits related to CRE lending, reasoning for operating outside those limits, and provides for a contingency plan to reduce the CRE exposures under adverse economic conditions or other situations where it is deemed necessary to do so.
+Added: The responsibility for monitoring the Company’s CRE strategy and contingency plan, and subsequent reporting to management and the Bank’s board of directors, lies with the Chief Lending Officer and the Asset Quality Committee.
+Added: Within the CRE strategy and contingency plan, we established four adverse economic triggers to measure on an ongoing basis to attempt to determine when a change in CRE strategy might be warranted, at least from an external economic perspective.
+Added: If one or a combination of these triggers have exceeded board approved thresholds, the Bank’s Executive Risk Committee will determine which action or combination of actions to take based on the specific situation.
+Added: The required actions are likely to focus on tightening/loosening of underwriting criteria, potential capital raises or loan distribution actions such as selling or participating loans.
+Added: However, other action steps may be considered necessary depending upon the specific situation.
+Added: As of December 31, 2024, none of the triggers exceeded our internal guidelines, and we have not recommended any additional changes to our underwriting standards because the Company considers the current standards to be adequate in addressing the risks to our CRE portfolio.
Residential Real Estate Loans .
4 unchanged sentences
As of December 31, 2024, residential real estate loans totaled $2.45 billion, or 16.6%, of loans receivable, compared to $2.28 billion, or 15.8% of loans receivable, as of December 31, 2023.
−Removed: Residential real estate loans originated in our franchises in our Arkansas, Florida, Texas, Alabama, SPF and Centennial CFG markets were $511.2 million, $978.8 million, $611.4 million, $42.2 million, zero and $136.4 million at December 31, 2023, respectively.
+Added: Residential real estate loans originated in our franchises in our Arkansas, Florida, Texas, Alabama, SPF and Centennial CFG markets were $587.4 million, $1.03 billion, $649.8 million, $35.8 million, zero and $147.4 million, respectively, at December 31, 2024.
Consumer Loans .
1 unchanged sentence
As of December 31, 2024, consumer loans totaled $1.23 billion, or 8.4% of loans receivable, compared to $1.15 billion, or 8.0% of loans receivable, as of December 31, 2023.
−Removed: Consumer loans originated in our Arkansas, Florida, Texas, Alabama, SPF and Centennial CFG markets were $22.5 million, $8.2 million, $16.6 million, $513,000, $1.11 billion and zero at December 31, 2023, respectively.
+Added: Consumer loans originated in our Arkansas, Florida, Texas, Alabama, SPF and Centennial CFG markets were $21.7 million, $6.7 million, $10.5 million, $470,000, $1.19 billion and zero, respectively, at December 31, 2024.
Commercial and Industrial Loans .
8 unchanged sentences
As of December 31, 2024, commercial and industrial loans totaled $2.02 billion, or 13.7% of loans receivable, which compared to $2.32 billion, or 16.1% of loans receivable, as of December 31, 2023.
−Removed: Commercial and industrial loans originated in our Arkansas, Florida, Texas, Alabama, SPF and Centennial CFG markets were $478.9 million, $471.6 million, $817.5 million, $29.5 million, $140.7 million and $386.9 million at December 31, 2023, respectively.
+Added: Commercial and industrial loans originated in our Arkansas, Florida, Texas, Alabama, SPF and Centennial CFG markets were $443.1 million, $462.6 million, $770.6 million, $24.9 million, $162.5 million and $159.2 million, respectively, at December 31, 2024.
Agricultural Loans .
3 unchanged sentences
As of December 31, 2024, agricultural loans totaled $367.3 million, or 2.5% of loans receivable, compared to the $307.3 million, or 2.1% of loans receivable as of December 31, 2023.
−Removed: Agricultural loans originated in our Arkansas and Texas markets were $52.8 million and $254.6 million, respectively, and zero in our Florida, Alabama, SPF and Centennial CFG markets at December 31, 2023.
+Added: Agricultural loans originated in our Arkansas, Florida and Texas markets were $73.2 million, $60,000 and $294.0 million, respectively, and zero in our Alabama, SPF and Centennial CFG markets at December 31, 2024.
Table 11 presents the distribution of the maturity of our total loans as of December 31, 2024.
50 unchanged sentences
Subsequent changes to the allowance for credit losses are recorded through the provision for credit losses.
−Removed: T he Company held approximately $130.7 million and $142.5 million in PCD loans, as of December 31, 2023 and 2022, respectively.
+Added: The Company held approximately $76.3 million and $130.7 million in PCD loans, as of December 31, 2024 and 2023, respectively.
Table 12 sets forth information with respect to our non-performing assets as of December 31, 2024 and 2023.
20 unchanged sentences
If a loan is determined by management to be uncollectible, the portion of the loan determined to be uncollectible is then charged to the allowance for credit losses.
−Removed: Total non-performing loans were $64.1 million as of December 31, 2023, compared to $60.9 million as of December 31, 2022, for an increase of $3.2 million.
−Removed: The $3.2 million increase in non-performing loans is primarily the result of increases in non-performing loans in our Texas, Arkansas, SPF and Alabama markets of $11.3 million, $7.0 million, $452,000 and $9,000, respectively, which were partially offset by decreases in non-performing loans in our Florida and Centennial CFG markets of $11.2 million and $4.4 million, respectively.
−Removed: Non-performing loans at December 31, 2023, were $15.4 million, $9.3 million, $33.5 million, $413,000, $2.8 million and $2.7 million in the Arkansas, Florida, Texas, Alabama, SPF and Centennial CFG markets, respectively.
−Removed: The $2.7 million balance of non-accrual loans for our Centennial CFG Capital Markets Group consists of two loans that are assessed for credit risk by the Federal Reserve under the Shared National Credit Program.
+Added: As of December 31, 2024, our non-performing loans increased to $98.9 million, or 0.67%, of total loans from $64.1 million, or 0.44%, of total loans as of December 31, 2023.
+Added: The allowance for credit losses as a percentage of non-performing loans decreased to 278.99% as of December 31, 2024, compared to 449.66% as of December 31, 2023.
+Added: As of December 31, 2024, our non-performing assets increased to $142.4 million, or 0.63%, of total assets from $95.4 million, or 0.42%, of total assets as of December 31, 2023.
+Added: The table below shows the non-performing loans and non-performing assets by region as of December 31, 2024:
+Added: (in thousands) Texas Arkansas Centennial CFG Shore Premier Finance Florida Alabama Total
+Added: Non-accrual loans $ 23,494 $ 18,448 $ 7,390 $ 5,537 $ 38,778 $ 206 $ 93,853
+Added: Loans 90+ days past due 4,134 538 — — 362 — 5,034
+Added: Total non-performing loans $ 27,628 $ 18,986 $ 7,390 $ 5,537 $ 39,140 $ 206 $ 98,887
+Added: Foreclosed assets held for sale 13,924 757 22,775 — 5,951 — 43,407
+Added: Other non-performing assets 63 — — — — — 63
+Added: Total other non-performing assets $ 13,987 $ 757 $ 22,775 $ — $ 5,951 $ — $ 43,470
+Added: Total non-performing assets $ 41,615 $ 19,743 $ 30,165 $ 5,537 $ 45,091 $ 206 $ 142,357
+Added: The table below shows the non-performing loans and non-performing assets by region as of December 31, 2023:
+Added: (in thousands) Texas Arkansas Centennial CFG Shore Premier Finance Florida Alabama Total
+Added: Non-accrual loans $ 29,391 $ 15,319 $ 2,764 $ 2,768 $ 9,316 $ 413 $ 59,971
+Added: Loans 90+ days past due 4,092 38 — — — — 4,130
+Added: Total non-performing loans $ 33,483 $ 15,357 $ 2,764 $ 2,768 $ 9,316 $ 413 $ 64,101
+Added: Foreclosed assets held for sale 264 167 22,775 — 7,280 — 30,486
+Added: Other non-performing assets 63 — — — 722 — 785
+Added: Total other non-performing assets $ 327 $ 167 $ 22,775 $ — $ 8,002 $ — $ 31,271
+Added: Total non-performing assets $ 33,810 $ 15,524 $ 25,539 $ 2,768 $ 17,318 $ 413 $ 95,372
+Added: The $7.4 million balance of non-accrual loans for our Centennial CFG Capital Markets Group at December 31, 2024 consists of three loans that are assessed for credit risk by the Federal Reserve under the Shared National Credit Program.
The loans are not current on either principal or interest, and we have reversed any interest that had accrued subsequent to the non-accrual date designated by the Federal Reserve.
9 unchanged sentences
Our Florida market contains $1.3 million, our Arkansas market contains $1.9 million, our Texas market contains $100.5 million and our New York region contains $2.2 million of these restructured loans.
−Removed: A loan modification that might not otherwise be considered may be granted.
−Removed: These loans can involve loans remaining on non-accrual, moving to non-accrual, or continuing on an accrual status, depending on the individual facts and circumstances of the borrower.
−Removed: Generally, a non-accrual loan that is restructured remains on non-accrual for a period of nine months to demonstrate that the borrower can meet the restructured terms.
−Removed: However, performance prior to the restructuring, or significant events that coincide with the restructuring, are considered in assessing whether the borrower can pay under the new terms and may result in the loan being returned to an accrual status after a shorter performance period.
−Removed: If the borrower’s ability to meet the revised payment schedule is not reasonably assured, the loan will remain in a non-accrual status.
−Removed: The majority of the Bank’s restructured loans relate to real estate lending and generally involve reducing the interest rate, changing from a principal and interest payment to interest-only, lengthening the amortization period, or a combination of some or all of the three.
+Added: During the year ended December 31, 2024, the Company restructured approximately $108.4 million in loans to 13 borrowers.
+Added: The ending balance of these loans as of December 31, 2024, was $100.5 million.
+Added: Three of the modified loans pertained to one borrower relationship and accounted for $99.1 million of the total post-modification outstanding balance.
+Added: The modification involved three new loans being underwritten resulting in the interest rate decreasing by 12 basis points and one of the loans in the relationship being charged-off.
+Added: The charged-off amount was $26.1 million.
+Added: Five of the $122.7 million in restructured loans held by the Company were considered to be collateral dependent as of December 31, 2024.
+Added: The outstanding balance of these loans was $114.7 million, and the specific reserve was $2.9 million.
+Added: The majority of the Bank’s restructured loans involve reducing the interest rate, changing from a principal and interest payment to interest-only, lengthening the amortization period, or a combination of some or all of the three.
In addition, it is common for the Bank to seek additional collateral or guarantor support when modifying a loan.
1 unchanged sentence
As of December 31, 2024, 86.3% of all restructured loans were performing to the terms of the restructure.
−Removed: Total foreclosed assets held for sale were $30.5 million as of December 31, 2023, compared to $546,000 as of December 31, 2022 for a increase of $29.9 million.
−Removed: The foreclosed assets held for sale as of December 31, 2023 are comprised of approximately $167,000 of assets located in Arkansas, $7.3 million of assets located in Florida, zero located in Alabama, $22.8 million of assets in our Centennial CFG market and $264,000 located in Texas.
−Removed: The increase in total foreclosed assets held for sale was primarily due to the addition of two properties during 2023.
−Removed: The first is an office building located in Santa Monica, California with a carrying value of $22.8 million, and the second is an office building located in Miami, Florida with a carrying value of $7.0 million.
−Removed: These two properties account for $29.8 million of the balance of foreclosed assets held for sale at December 31, 2023.
+Added: Total foreclosed assets held for sale were $43.4 million as of December 31, 2024, compared to $30.5 million as of December 31, 2023 for a increase of $12.9 million.
+Added: The foreclosed assets held for sale as of December 31, 2024 are comprised of approximately $757,000 of assets located in Arkansas, $5.9 million of assets located in Florida, $14.0 million located in Texas, zero located in Alabama, zero for SPF and $22.8 million of assets in our Centennial CFG market.
+Added: The majority of the foreclosed assets held for sale is comprised of three properties.
+Added: The first is an office building located in Santa Monica, California with a carrying value of $22.8 million.
+Added: The second is an apartment complex which is under construction in Gunter, Texas with a carrying value of $12.1 million, and the third is an office building located in Miami, Florida with a carrying value of $5.5 million.
+Added: These three properties account for $40.4 million of the balance of foreclosed assets held for sale at December 31, 2024.
+Added: During the year ended December 31, 2024, the office building in Miami, Florida was written down by $1.5 million and the apartment complex in Gunter, Texas was written down by $1.0 million.
Table 13 shows the summary of foreclosed assets held for sale as of December 31, 2024 and 2023.
6 unchanged sentences
Residential 1-4 family 1,624 545
−Removed: Multifamily residential — 121
Total foreclosed assets held for sale $ 43,407 $ 30,486
1 unchanged sentence
As of December 31, 2024, average impaired loans were $139.6 million compared to $160.9 million as of December 31, 2023.
−Removed: The amortized cost balance for loans with a specific allocation decreased from $168.6 million to $10.5 million, and the specific allocation for impaired loans decreased by approximately $24.8 million for the period ended December 31, 2023 compared to the period ended December 31, 2022.
−Removed: As of December 31, 2023, our Arkansas, Florida, Texas, Alabama, SPF and Centennial CFG markets accounted for approximately $22.8 million, $26.8 million, $37.2 million, $413,000, $2.8 million and $4.9 million of the impaired loans, respectively.
+Added: The amortized cost balance for loans with a specific allocation increased from $10.5 million to $92.7 million, and the specific allocation for impaired loans increased by approximately $17.4 million for the period ended December 31, 2024 compared to the period ended December 31, 2023.
+Added: As of December 31, 2024, our Arkansas, Florida, Texas, Alabama, SPF and Centennial CFG markets accounted for approximately $24.6 million, $62.4 million, $157.6 million, $206,000, $13.5 million and $9.7 million, respectively, of the impaired loans.
Past Due and Non-Accrual Loans
9 unchanged sentences
Residential 1-4 family 22,539 20,351
+Added: Multifamily residential 13,083 —
Total real estate 75,751 46,054
20 unchanged sentences
Allowance for Credit Losses
−Removed: 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.
−Removed: 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.
−Removed: The Company uses the DCF method to estimate expected losses for all of Company’s loan pools.
−Removed: These pools are as follows:
−Removed: construction & land development;
−Removed: other commercial real estate;
−Removed: residential real estate;
−Removed: commercial & industrial;
−Removed: and consumer & other.
−Removed: 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.
−Removed: 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.
−Removed: The modeling of expected prepayment speeds, curtailment rates, and time to recovery are based on historical internal data.
−Removed: 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.
−Removed: This analysis also determines how expected probability of default and loss given default will react to forecasted levels of the loss drivers.
−Removed: 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.
−Removed: Management leverages economic projections from a reputable and independent third party to inform its loss driver forecasts over the four-quarter forecast period.
−Removed: Other internal and external indicators of economic forecasts are also considered by management when developing the forecast metrics.
−Removed: 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.
−Removed: Historical credit loss experience provides the basis for the estimation of expected credit losses.
−Removed: 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.
−Removed: The allowance for credit losses is measured based on call report segment as these types of loan exhibit similar risk characteristics.
−Removed: The identified loan segments are as follows:
−Removed: • 1-4 family construction
−Removed: • All other construction
−Removed: • 1-4 family revolving home equity lines of credit (“HELOC”) & junior liens
−Removed: • 1-4 family senior liens
−Removed: • Multifamily
−Removed: • Owner occupies commercial real estate
−Removed: • Non-owner occupied commercial real estate
−Removed: • Commercial & industrial, agricultural, non-depository financial institutions, purchase/carry securities, other
−Removed: • Consumer auto
−Removed: • Other consumer
−Removed: • Other consumer - SPF
−Removed: 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.
−Removed: 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”).
−Removed: An allowance for credit loss is established for the difference between the instrument’s NPV and amortized cost basis.
−Removed: The allowance for credit losses for each segment is measured through the use of the discounted cash flow method.
−Removed: Loans evaluated individually that are considered to be impaired are not included in the collective evaluation.
−Removed: For those loans that are classified as impaired, an allowance is established when the discounted cash flows, collateral value or observable market price of the impaired loan is lower than the carrying value of that loan.
−Removed: 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.
−Removed: Expected credit losses are estimated over the contractual term of the loans, adjusted for expected prepayments when appropriate.
−Removed: The contractual term excludes expected extensions, renewals, and modifications unless either of the following applies:
−Removed: • 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.
−Removed: • 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.
−Removed: 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.
−Removed: 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.
−Removed: 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;
−Removed: (ii) changes in nature and volume of the portfolio;
−Removed: (iii) staff experience;
−Removed: (iv) changes in volume and trends in classified loans, delinquencies and nonaccruals;
−Removed: (v) concentration risk;
−Removed: (vi) trends in underlying collateral values;
−Removed: (vii) external factors such as competition, legal and regulatory environment;
−Removed: (viii) changes in the quality of the loan review system and (ix) economic conditions.
−Removed: Loans considered to be collateral dependent, according to ASC 326, are loans for which, based on current information and events, it is probable that we will be unable to collect all amounts due according to the contractual terms of the loan agreement.
−Removed: The aggregate amount of collateral shortfall on such loans is utilized in evaluating the adequacy of the allowance for credit losses and amount of provisions thereto.
−Removed: Losses on collateral dependent loans are charged against the allowance for credit losses when in the process of collection, it appears likely that such losses will be realized.
−Removed: The accrual of interest on collateral dependent loans is discontinued when, in management’s opinion the collection of interest is doubtful or generally when loans are 90 days or more past due.
−Removed: When accrual of interest is discontinued, all unpaid accrued interest is reversed.
−Removed: Interest income is subsequently recognized only to the extent cash payments are received in excess of principal due.
−Removed: Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.
−Removed: 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.
−Removed: Loans are charged against the allowance for credit losses when management believes that the collectability of the principal is unlikely.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: Acquisition Accounting and Acquired Loans.
−Removed: We account for our acquisitions under FASB ASC Topic 805, Business Combinations, which requires the use of the acquisition method of accounting.
−Removed: All identifiable assets acquired, including loans, and liabilities assumed are recorded at fair value.
−Removed: In accordance with ASC 326, the Company records both a discount and an allowance for credit losses on acquired loans.
−Removed: All purchased loans are recorded at fair value in accordance with the fair value methodology prescribed in FASB ASC Topic 820, Fair Value Measurements.
−Removed: 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.
−Removed: Purchased loans that have experienced more than insignificant credit deterioration since origination are PCD loans.
−Removed: An allowance for credit losses is determined using the same methodology as other loans.
−Removed: For PCD loans not individually analyzed for impairment, the Company develops separate PCD models for each loan segment.
−Removed: The initial allowance for credit losses determined on a collective basis is allocated to individual loans.
−Removed: The sum of the loan’s purchase price and allowance for credit losses becomes its initial amortized cost basis.
−Removed: 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.
−Removed: Subsequent changes to the allowance for credit losses are recorded through the provision for credit losses.
−Removed: Allowance for Credit Losses on Off-Balance Sheet Credit Exposures.
−Removed: 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.
−Removed: The allowance for credit losses on off-balance sheet credit exposures is adjusted as a provision for credit loss expense.
−Removed: 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.
−Removed: Specific Allocations.
−Removed: As a general rule, if a specific allocation is warranted, it is the result of a credit loss analysis of a previously classified credit or relationship.
−Removed: Typically, when it becomes evident through the payment history or a financial statement review that a loan or relationship is no longer supported by the cash flows of the asset and/or borrower and has become collateral dependent, we will use appraisals or other collateral analysis to determine if a specific allocation is needed.
−Removed: The amount or likelihood of loss on this credit may not yet be evident, so a charge-off would not be prudent.
−Removed: However, if the analysis indicates that a specific allocation is needed, then a specific allocation will be determined for this loan.
−Removed: This analysis is performed each quarter in connection with the preparation of the analysis of the adequacy of the allowance for credit losses, and if necessary, adjustments are made to the specific allocation provided for a particular loan..
−Removed: For collateral dependent loans, we do not consider an appraisal outdated simply due to the passage of time.
−Removed: However, if an appraisal is older than 13 months and if market or other conditions have deteriorated and we believe that the current market value of the property is not within approximately 20% of the appraised value, we will consider the appraisal outdated and order either a new appraisal or an internal valuation report for the credit loss analysis.
−Removed: The recognition of any provision or related charge-off on a collateral dependent loan is either through annual credit analysis or, many times, when the relationship becomes delinquent.
−Removed: If the borrower is not current, we will update our credit and cash flow analysis to determine the borrower's repayment ability.
−Removed: If we determine this ability does not exist and it appears that the collection of the entire principal and interest is not likely, then the loan could be placed on non-accrual status.
−Removed: In any case, loans are classified as non-accrual no later than 105 days past due.
−Removed: If the loan requires a quarterly credit loss analysis, this analysis is completed in conjunction with the completion of the analysis of the adequacy of the allowance for credit losses.
−Removed: Any exposure identified through the credit loss analysis is shown as a specific reserve.
−Removed: If it is determined that a new appraisal or internal validation report is required, it is ordered and will be taken into consideration during completion of the next credit loss analysis.
−Removed: In estimating the net realizable value of the collateral, management may deem it appropriate to discount the appraisal based on the applicable circumstances.
−Removed: In such case, the amount charged off may result in loan principal outstanding being below fair value as presented in the appraisal.
−Removed: Between the receipt of the original appraisal and the updated appraisal, we monitor the loan's repayment history.
−Removed: If the loan is $3.0 million or greater or the total loan relationship is $5.0 million or greater, our policy requires an annual credit review.
−Removed: Our policy requires financial statements from the borrowers and guarantors at least annually.
−Removed: In addition, we calculate the global repayment ability of the borrower/guarantors at least annually.
−Removed: As a general rule, when it becomes evident that the full principal and accrued interest of a loan may not be collected, generally at 90 days past due, or by law at 105 days past due, we will reflect that loan as non-performing.
−Removed: It will remain non-performing until it performs in a manner that it is reasonable to expect that we will collect the full principal and accrued interest.
−Removed: When the amount or likelihood of a loss on a loan has been determined, a charge-off should be taken in the period it is determined.
−Removed: If a partial charge-off occurs, the quarterly impairment analysis will determine if the loan is still impaired, and thus continues to require a specific allocation.
−Removed: The Company had $94.9 million and $221.1 million in 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) at December 31, 2023 and 2022, respectively.
+Added: The allowance for credit losses on loans receivable decreased from $288.2 million as of December 31, 2023 to $275.9 million as of December 31, 2024.
+Added: The specific reserve for loans individually analyzed for credit losses was $23.8 million on $209.8 million of individually analyzed loans as of December 31, 2024, compared to a reserve of $6.4 million on $171.7 million of individually analyzed loans as of December 31, 2023.
+Added: The allowance for credit losses as a percentage of loans was 1.87% and 2.00% at December 31, 2024 and December 31, 2023, respectively.
Loans Collectively Evaluated for Credit Loss.
Loans receivable collectively evaluated for credit loss increased by approximately $301.7 million from $14.25 billion at December 31, 2023 to $14.55 billion at December 31, 2024.
−Removed: The percentage of the allowance for credit losses allocated to loans receivable collectively evaluated for credit loss to the total loans collectively evaluated for impairment increased from 1.82% at December 31, 2022 to 1.98% at December 31, 2023.
+Added: The percentage of the allowance for credit losses allocated to loans receivable collectively evaluated for credit loss to the total loans collectively evaluated for impairment decreased from 1.98% at December 31, 2023 to 1.73% at December 31, 2024.
Charge-offs and Recoveries.
−Removed: Total charge-offs decreased to $16.1 million for the year ended December 31, 2023, compared to $17.3 million for the year ended December 31, 2022.
+Added: Total charge-offs increased to $63.0 million for the year ended December 31, 2024, compared to $16.1 million for the year ended December 31, 2023.
Total recoveries decreased to $2.3 million for the year ended December 31, 2024, compared to $2.7 million for the same period in 2023.
Net loans charged off for the years ended December 31, 2024 and 2023 were $60.8 million and $13.4 million, respectively.
−Removed: For the years ended December 31, 2023 and 2022, approximately $2.2 million and $1.4 million, respectively, of the net charge-offs were from our Arkansas market.
−Removed: For the years ended December 31, 2023 and 2022, approximately $2.3 million and $4.5 million, respectively, of the net charge-offs were from our Florida market.
−Removed: For the years ended December 31, 2023 and 2022, approximately $4.0 million and $5.4 million, respectively, of the net charge-offs were from our Texas market.
−Removed: Approximately $36,000 and $55,000 related to net charge-offs for the years ended December 31, 2023 and 2022, respectively, on loans in our Alabama market.
−Removed: For the years ended December 31, 2023 and 2022, approximately $305,000 and $290,000 of the net charge-offs were from our SPF market.
−Removed: For the years ended December 31, 2023 and 2022, approximately $4.6 million and $2.3 million, respectively, of the net charge-offs were from our Centennial CFG market.
+Added: The increase in net charge-offs was due to the asset quality cleanup project the Company completed in the fourth quarter of 2024.
+Added: The charge-off detail by region for the year ended December 31, 2024 can be seen below.
+Added: (in thousands) Texas Arkansas Centennial CFG Shore Premier Finance Florida Alabama Total
+Added: Charge-off $ 51,251 $ 5,952 $ 2,195 $ 1,751 $ 1,836 $ 51 $ 63,036
+Added: Recovery 772 911 — 22 557 20 2,282
+Added: Net charge-offs $ 50,479 $ 5,041 $ 2,195 $ 1,729 $ 1,279 $ 31 $ 60,754
+Added: Percentage of total 83.1 % 8.3 % 3.6 % 2.8 % 2.1 % 0.1 % 100.0 %
+Added: The charge-off detail by region for the year ended December 31, 2023 can be seen below.
+Added: (in thousands) Texas Arkansas Centennial CFG Shore Premier Finance Florida Alabama Total
+Added: Charge-off $ 4,709 $ 3,026 $ 4,580 $ 370 $ 3,320 $ 50 $ 16,055
+Added: Recovery 698 839 — 65 1,054 14 2,670
+Added: Net charge-offs $ 4,011 $ 2,187 $ 4,580 $ 305 $ 2,266 $ 36 $ 13,385
+Added: Percentage of total 30.0 % 16.3 % 34.2 % 2.3 % 16.9 % 0.3 % 100.0 %
+Added: While the 2024 charge-offs and recoveries consisted of many relationships, there were seven individual relationships that consisted of charge-offs greater than $1.0 million.
+Added: The first was a $26.1 million charge-off for a commercial real estate loan in our Texas market.
+Added: The second was an $8.8 million charge-off for a commercial real estate loan in our Texas market.
+Added: The third was a $6.5 million charge-off for a residential real estate loan in our Texas market.
+Added: The fourth was a $3.0 million charge-off for a commercial and industrial loan in our Arkansas market.
+Added: The fifth was a $2.0 million charge-off for a commercial and industrial loan in our Texas market.
+Added: The sixth was a $2.0 million charge-off for a commercial and industrial loan in our Centennial CFG Market.
+Added: The seventh was a $1.1 million charge-off for commercial real estate loan in our Texas market.
+Added: As noted previously, the increase in charge-offs was primarily due to the asset quality cleanup project completed during the fourth quarter of 2024.
While the 2023 charge-offs and recoveries consisted of many relationships, there were two individual relationships that consisted of charge-offs greater than $1.0 million.
The first was a $3.1 million charge-off for a commercial and industrial loan in our Centennial CFG market, and the second was a $1.5 million charge-off for a commercial real estate loan in our Florida market.
−Removed: While the 2022 charge-offs and recoveries consisted of many relationships, there were three individual relationships consisting of charge-offs greater than $1.0 million.
−Removed: The first was a $4.0 million charge-off for a commercial and industrial loan in our Florida market.
−Removed: The second was a $3.6 million charge-off for a commercial and industrial loan in our Centennial CFG market, and the third was a $1.5 million charge-off for a commercial and industrial loan in our Centennial CFG market.
We have not charged off an amount less than what was determined to be the fair value of the collateral as presented in the appraisal, less estimated costs to sell (for collateral dependent loans), for any period presented.
6 unchanged sentences
Balance, beginning of year $ 288,234 $ 289,669
−Removed: Allowance for credit losses on acquired PCD loans — 16,816
Loans charged off
25 unchanged sentences
Provision for credit loss - loans 48,400 11,950
−Removed: Provision for credit loss - acquired loans — 45,170
Balance, end of year $ 275,880 $ 288,234
3 unchanged sentences
Net charge-offs to average loans receivable were 0.41% and 0.09% as of December 31, 2024 and 2023, respectively.
−Removed: The low level of charge-offs for the year emphasize the Company's strong asset quality, and additional disclosure of net charge-offs to average loans outstanding by loan category is not considered necessary.
+Added: Despite the uptick in net charge-offs for the year due to the asset quality cleanup project, the Company considers the level immaterial for additional disclosure of net charge-offs to average loans outstanding by loan category.
Table 17 presents the allocation of allowance for credit losses as of December 31, 2024 and 2023.
19 unchanged sentences
Our securities portfolio is the second largest component of earning assets and provides a significant source of revenue.
−Removed: Securities within the portfolio are classified as held-to-maturity, available-for-sale, or trading based on the intent and objective of the investment and the ability to hold to maturity.
+Added: Securities within the portfolio are classified as held-to-maturity ("HTM"), available-for-sale ("AFS"), or trading based on the intent and objective of the investment and the ability to hold to maturity.
Fair values of securities are based on quoted market prices where available.
3 unchanged sentences
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.
−Removed: We had $1.28 billion and $1.29 billion of held-to-maturity securities at December 31, 2023 and 2022, respectively.
+Added: We had $1.28 billion of held-to-maturity securities at both December 31, 2024 and 2023.
As of December 31, 2024, $1.11 billion, or 86.8%, were invested in obligations of state and political subdivisions, compared to $1.11 billion, or 86.5%, as of December 31, 2023.
15 unchanged sentences
Also, we had approximately $195.8 million, or 6.4%, invested in other securities as of December 31, 2024, compared to $185.6 million, or 5.3% of our available-for-sale securities as of December 31, 2023.
−Removed: 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.
−Removed: The Company first assesses whether it intends to sell or if it is more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis.
−Removed: 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.
−Removed: For securities that do not meet this criteria, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors.
−Removed: In making this assessment, the Company considers the extent to which fair value is less than amortized cost, changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors.
−Removed: 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.
−Removed: 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.
−Removed: Any impairment that has been recorded through an allowance for credit losses is recognized in other comprehensive income.
−Removed: Changes in the allowance for credit losses are recorded as provision for (or reversal of) credit loss expense.
−Removed: 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.
+Added: During the year ended December 31, 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.
During the year ended December 31, 2023, one of the Company’s AFS subordinated debt investment securities was downgraded below investment grade.
−Removed: As result, the Company wrote down the value of the investment to its unrealized loss position, which required a $1.7 million provision.
−Removed: The remaining $842,000 allowance for credit losses on AFS investments is associated with certain securities in the subordinated debt portfolio within the banking sector.
+Added: As result, the Company wrote down the value of the investment to its unrealized loss position, which required a $1.7 million provision, but the remaining $842,000 allowance for credit losses on AFS investments associated with certain securities in the subordinated debt portfolio within the banking sector was considered adequate.
+Added: At December 31, 2022, the Company determined the $842,000 allowance for credit losses on AFS investments associated with certain securities in the subordinated debt portfolio within the banking sector was considered adequate.
These investments are classified within the other securities category of the AFS portfolio.
−Removed: The $2.0 million allowance for credit losses for the held-to-maturity portfolio was considered adequate.
+Added: At both December 31, 2024 and 2023, 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.
+Added: During the year ended December 31, 2022, the Company recorded a $2.0 million provision for credit losses for the HTM portfolio as a result of the investment securities acquired as part of the Happy acquisition.
Table 18 presents the carrying value and fair value of available-for-sale and held-to-maturity investment securities as of December 31, 2024 and 2023.
147 unchanged sentences
Our deposits averaged $16.85 billion for the year ended December 31, 2024 and $17.05 billion for 2023.
−Removed: Total deposits decreased $1.15 billion, or 6.4%, to $16.79 billion as of December 31, 2023, from $17.94 billion as of December 31, 2022.
+Added: Total deposits increased $358.6 million, or 2.1%, to $17.15 billion as of December 31, 2024, from $16.79 billion as of December 31, 2023.
Uninsured deposits including related interest accrued and unpaid were $8.73 billion as of December 31, 2024 compared to $8.34 billion as of December 31, 2023.
15 unchanged sentences
(In thousands)
−Removed: Time Deposits $ — $ —
Insured Cash Sweep and Other Transaction Accounts $ 448,442 $ 401,004
5 unchanged sentences
The Federal Reserve Board sets various benchmark rates, including the Federal Funds rate, and thereby influences the general market rates of interest, including the deposit and loan rates offered by financial institutions.
−Removed: The Federal Reserve increased the target rate seven times during 2022.
−Removed: First, on March 16, 2022, the target rate was increased to 0.25% to 0.50%.
−Removed: Second, on May 4, 2022, the target rate was increased to 0.75% to 1.00%.
−Removed: Third, on June 15, 2022, the target rate was increased to 1.50% to 1.75%.
−Removed: Fourth, on July 27, 2022, the target rate was increased to 2.25% to 2.50%.
−Removed: Fifth, on September 21, 2022, the target rate was increased to 3.00% to 3.25%.
−Removed: Sixth, on November 2, 2022, the target rate was increased to 3.75% to 4.00%.
−Removed: Seventh, on December 14, 2022, the target rate was increased to 4.25% to 4.50%.
The Federal Reserve increased the target rate four times during 2023.
First, on February 1, 2023, the target rate was increased to 4.50% to 4.75%, second, on March 22, 2023, the target rate was increased to 4.75% to 5.00%, third, on May 3, 2023, the target rate was increased to 5.00% to 5.25% and fourth, on July 26, 2023, the target rate was increased to 5.25% to 5.50%.
+Added: The Federal Reserve reduced the target rate three times during 2024.
+Added: First, on September 18, 2024, the Federal Reserve reduced the target rate to 4.75% to 5.00%, second, on November 7, 2024, the target rate was reduced to 4.50% to 4.75% and third, on December 18, 2024, the target rate was reduced to 4.25% to 4.50%.
Table 21 reflects the classification of the average deposits and the average rate paid on each deposit category which is in excess of 10 percent of average total deposits, for the years ended December 31, 2024, 2023, and 2022.
31 unchanged sentences
FHLB and Other Borrowed Funds
−Removed: The Company’s FHLB borrowed funds, which are secured by our loan portfolio, were $600.0 million and $650.0 million at December 31, 2023 and 2022, respectively.
−Removed: At December 31, 2023, the entire $600.0 million balance was classified as long-term advances.
+Added: The Company’s FHLB borrowed funds, which are secured by our loan portfolio, were $600.0 million at both December 31, 2024 and 2023.
At December 31, 2024, $100.0 million and $500.0 million of the outstanding balance was classified as short-term and long-term advances, respectively.
+Added: At December 31, 2023, the entire $600.0 million balance was classified as long-term advances.
The FHLB advances mature from 2025 to 2037 with fixed interest rates ranging from 3.37% to 4.84% and are secured by loans and investments securities.
Expected maturities could differ from contractual maturities because the FHLB has have the right to call or the Company has the right to prepay certain obligations.
+Added: Other borrowed funds were $750,000 as of December 31, 2024 and were classified as short-term advances.
Other borrowed funds were $701.3 million as of December 31, 2023 and were classified as short-term advances.
−Removed: The Company had no other borrowed funds as of December 31, 2022.
−Removed: The Company had access to approximately $1.37 billion in liquidity with the Federal Reserve Bank as of December 31, 2023.
−Removed: This consisted of $89.8 million available from the Discount Window and $1.28 billion available through the Bank Term Funding Program ("BTFP").
−Removed: As of December 31, 2023, the primary and secondary credit rates available through the Discount Window were 5.50% and 6.00%, respectively, and the BTFP rate was 4.84%.
−Removed: As of December 31, 2023, the Company had drawn $700.0 million from the BTFP in the ordinary course of business.
−Removed: These advances are included within other borrowed funds and are secured by certain investment securities within our investment portfolio.
+Added: During the fourth quarter of 2024, the Company paid off its $700.0 million advance from the Federal Reserve's Bank Term Funding Program ("BTFP").
Additionally, the Company had $1.22 billion and $1.33 billion at December 31, 2024 and 2023, respectively, in letters of credit under a FHLB blanket borrowing line of credit, which are used to collateralize public deposits at December 31, 2024 and 2023, respectively.
Subordinated Debentures
−Removed: Subordinated debentures, which consist of subordinated debt securities and guaranteed payments on trust preferred securities, were $439.8 million and $440.4 million as of December 31, 2023 and 2022, respectively.
−Removed: On April 1, 2022, the Company acquired $23.2 million in trust preferred securities from Happy which were currently callable without penalty based on the terms of the specific agreements.
−Removed: During the second and third quarters of 2022, the Company redeemed, without penalty, the $23.2 million of the trust preferred securities acquired from Happy.
−Removed: In addition, during the second and third quarters, the Company also redeemed, without penalty, the $73.3 million of trust preferred securities held prior to the Happy acquisition.
−Removed: As a result, the Company no longer holds any trust preferred securities.
+Added: Subordinated debentures were $439.2 million and $439.8 million as of December 31, 2024 and 2023, respectively.
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..
14 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.
−Removed: On April 3, 2017, the Company completed an underwritten public offering of $300.0 million in aggregate principal amount of its 5.625% Fixed-to-Floating Rate Subordinated Notes due 2027 (the “Notes”) for net proceeds, after underwriting discounts and issuance costs, of approximately $297.0 million.
−Removed: The Notes were unsecured, subordinated debt obligations and would have matured on April 15, 2027.
−Removed: From and including the date of issuance to, but excluding April 15, 2022, the Notes bore interest at an initial rate of 5.625% per annum.
−Removed: From and including April 15, 2022 to, but excluding the maturity date or earlier redemption, the Notes were to bear interest at a floating rate equal to three-month LIBOR as calculated on each applicable date of determination plus a spread of 3.575%;
−Removed: provided, however, that in the event three-month LIBOR is less than zero, then three-month LIBOR would have been deemed to be zero.
−Removed: The Company, beginning with the interest payment date of April 15, 2022, and on any interest payment date thereafter, was permitted to redeem the 2027 Notes, in whole or in part, at a redemption price equal to 100% of the principal amount of the 2027 Notes to be redeemed plus accrued and unpaid interest to but excluding the date of redemption.
−Removed: On April 15, 2022, the Company completed the payoff of the 2027 Notes in aggregate principal amount of $300.0 million.
−Removed: Each 2027 Note was redeemed pursuant to the terms of the Subordinated Indenture, as supplemented by the First Supplemental Indenture, each dated as of April 3, 2017, between the Company and U.S.
−Removed: Bank Trust Company, National Association, the Trustee for the 2027 Notes, at the redemption price of 100% of its principal amount, plus accrued and unpaid interest to, but excluding, the redemption date.
Stockholders’ Equity
Stockholders’ equity increased $170.0 million to $3.96 billion as of December 31, 2024, compared to $3.79 billion as of December 31, 2023.
−Removed: The $264.7 million increase in stockholders' equity is primarily associated with the $392.9 million in net income for 2023 and $56.4 million in other comprehensive income, which was partially offset by the $145.9 million of shareholder dividends paid and the repurchase of $48.3 million of our common stock during 2023.
+Added: The increase in stockholders’ equity is primarily associated with the $402.2 million in net income, which was partially offset by the $150.0 million of shareholder dividends paid, the repurchase of $86.1 million of our common stock during 2024 and the $7.0 million decrease in accumulated other comprehensive income.
The improvement in stockholders’ equity was 4.5% for the year ended December 31, 2024 compared to December 31, 2023.
9 unchanged sentences
The remaining balance available for repurchase was 13,244,493 shares at December 31, 2024.
+Added: On January 17, 2025, the Board of Directors (the “Board”) of the Company authorized an increase in the shares of the Company’s common stock available for repurchase under its stock repurchase program, which was originally approved by the Board in January 2008 and most recently amended in January 2021, to renew the authorization to 20,000,000 shares.
+Added: As of January 17, 2025, a total of approximately 13,244,493 shares remained available for repurchase under the existing repurchase authorization, resulting in an increase of 6,755,507 shares of common stock available for repurchase.
Liquidity and Capital Adequacy Requirements
7 unchanged sentences
The $1.82 billion consisted of $600.0 million in outstanding FHLB advances and $1.22 billion used for pledging purposes.
−Removed: We also had access to approximately $1.37 billion in liquidity with the FRB as of December 31, 2023, of which $700.0 million has been drawn upon in the ordinary course of business, resulting in $674.3 million in net available liquidity with the FRB as of December 31, 2023.
−Removed: The $674.3 million consisted of $89.8 million available borrowing capacity from the Discount Window and $584.5 million available through the BTFP.
+Added: We also had access to approximately $194.0 million available borrowing capacity from the Discount Window.
As of December 31, 2024, the Company also had access to $55.0 million from First National Bankers’ Bank ("FNBB"), and $45.0 million from other various external sources.
18 unchanged sentences
This represents approximately 28.2% of total deposits.
−Removed: In addition, net available liquidity exceeded uninsured and uncollateralized deposits by $867.6 million.
+Added: In addition, net available liquidity exceeded uninsured and uncollateralized deposits by $1.03 billion.
(in thousands) As of December 31, 2024
20 unchanged sentences
Management believes that, as of December 31, 2024 and December 31, 2023, we met all regulatory capital adequacy requirements to which we were subject.
−Removed: On January 18, 2022, the Company completed an underwritten public offering of the 2032 Notes in aggregate principal amount of $300.0 million.
−Removed: The 2032 Notes are unsecured, subordinated debt obligations of the Company and will mature on January 30, 2032.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: 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 from Happy, and the Company recorded approximately $144.4 million which included fair value adjustments.
−Removed: The 2030 Notes are unsecured, subordinated debt obligations of the Company and will mature on July 31, 2030.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: On April 3, 2017, the Company completed an underwritten public offering of the 2027 Notes in aggregate principal amount of $300.0 million.
−Removed: The 2027 Notes were unsecured, subordinated debt obligations and would have matured on April 15, 2027.
−Removed: On April 15, 2022, the Company completed the payoff of the 2027 Notes in aggregate principal amount of $300.0 million.
−Removed: Each 2027 Note was redeemed pursuant to the terms of the Subordinated Indenture, as supplemented by the First Supplemental Indenture, each dated as of April 3, 2017, between the Company and U.S.
−Removed: Bank Trust Company, National Association, the Trustee for the 2027 Notes, at the redemption price of 100% of its principal amount, plus accrued and unpaid interest to, but excluding, the redemption date.
On December 21, 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.
12 unchanged sentences
Total common equity Tier 1 capital 2,787,116 2,609,823
−Removed: Qualifying trust preferred securities — —
Total Tier 1 capital 2,787,116 2,609,823
123 unchanged sentences
Initial provision for credit losses - acquisition — — 58,585
−Removed: Gain on securities — — (219)
+Added: Gain on sale of building (2,059) — —
Recoveries on historic losses — (3,461) (6,706)
−Removed: Branch write-off expense — — —
Special dividend from equity investment — — (1,434)
6 unchanged sentences
(688) 1,959 22,890
+Added: Deferred tax asset write-down 2,030 — —
Total adjustments after tax (B) (309) 5,540 70,678
7 unchanged sentences
C/D $ 2.01 $ 1.97 $ 1.93
−Removed: _____________________
(1) Blended statutory tax rate of 24.433% for 2024, 24.989% for 2023 and 24.6375% for 2022.
−Removed: We had $1.45 billion, $1.46 billion and $998.1 million total goodwill, core deposit intangibles and other intangible assets as of December 31, 2023, 2022 and 2021, respectively.
+Added: We had $1.44 billion, $1.45 billion and $1.46 billion total goodwill, core deposit intangibles and other intangible assets as of December 31, 2024, 2023 and 2022, respectively.
Because of our level of intangible assets and related amortization expenses, management believes tangible book value per share;
39 unchanged sentences
(A+C)/D 10.42 10.97 11.29
+Added: Return on average tangible common equity:
+Added: A/(D-E) 16.66 18.03 15.30
Return on average tangible equity excluding intangible amortization:
33 unchanged sentences
Special dividend from equity investment — — 1,434
−Removed: Gain on OREO, net 332 500 2,003
−Removed: Gain (loss) on branches, equipment and other assets, net 1,507 15 (105)
−Removed: Gain on securities, net — — 219
+Added: (Loss) gain on OREO, net (2,272) 332 500
+Added: Gain on branches, equipment and other assets, net 2,102 1,507 15
BOLI death benefits 257 3,117 —
8 unchanged sentences
Special lawsuit legal expense — — 5,000
−Removed: Total non-core non-interest expense (G) $ 12,983 $ 56,851 $ 1,886
+Added: Total non-interest expense adjustments (G) $ 2,260 $ 12,983 $ 56,851
Efficiency ratio (reported):
41 unchanged sentences
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.