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Item 7. Management’s Discussion and Analysis

Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 
 The following discussion and analysis presents our consolidated financial condition and results of operations for the years ended December 31, 2024, 2023 and 2022. This discussion should be read together with the “Summary Consolidated Financial Data,” our consolidated financial statements and the notes thereto, and other financial data included in this document. In addition to the historical information provided below, we have made certain estimates and forward-looking statements that involve risks and uncertainties. Our actual results could differ significantly from those anticipated in these estimates and in the forward-looking statements as a result of certain factors, including those discussed in the section of this document captioned “Risk Factors,” and elsewhere in this document. Unless the context requires otherwise, the terms “Company,” “HBI,” “us,” “we” and “our” refer to Home BancShares, Inc. on a consolidated basis. 
 
 General 
 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. 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. We measure our performance by calculating our net interest margin, return on average assets and return on average common equity. We also measure our performance by our efficiency ratio and efficiency ratio, as adjusted (non-GAAP). The efficiency ratio is calculated by dividing non-interest expense less amortization of core deposit intangibles by the sum of net interest income on a tax equivalent basis and non-interest income. The efficiency ratio, as adjusted, is a meaningful non-GAAP measure for management, as it excludes certain items and is calculated by dividing non-interest expense less amortization of core deposit intangibles by the sum of net interest income on a tax equivalent basis and non-interest income excluding certain items such as merger expenses, hurricane expenses and/or gains and losses. 
 Table 1: Key Financial Measures 
 
 As of or for the Years Ended December 31, 
 2024 2023 2022 
 (Dollars in thousands, except per share data) 
 Total assets $ 22,490,748 $ 22,656,658 $ 22,883,588 
 Loans receivable 14,764,500 14,424,728 14,409,480 
 Allowance for credit losses (275,880) (288,234) (289,669) 
 Total deposits 17,146,297 16,787,711 17,938,783 
 Total stockholders’ equity 3,961,025 3,791,075 3,526,362 
 Net income 402,241 392,929 305,262 
 Basic earnings per share $ 2.01 $ 1.94 $ 1.57 
 Diluted earnings per share 2.01 1.94 1.57 
 Book value per share 19.92 18.81 17.33 
 Tangible book value per share (non-GAAP) (1) 
 12.68 11.63 10.17 
 Net interest margin (2) 
 4.27 % 4.25 % 3.81 % 
 Efficiency ratio 42.74 46.21 49.53 
 Efficiency ratio, as adjusted (non-GAAP) (3) 
 42.65 45.24 44.55 
 Return on average assets 1.77 1.77 1.35 
 Return on average common equity 10.43 10.82 9.17 

 (1) See Table 27 for the non-GAAP tabular reconciliation. 
 (2) Fully taxable equivalent (assuming an income tax rate of 24.6735% for 2022, 24.989% for 2023 and 24.433% for 2024). 
 (3) See Table 31 for the non-GAAP tabular reconciliation. 
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 2024 Overview 
 Results of Operations for the Years Ended December 31, 2024 and 2023 
 Our net income increased $9.3 million, or 2.4%, to $402.2 million for the year ended December 31, 2024, from $392.9 million for the same period in 2023. On a diluted earnings per share basis, our earnings were $2.01 per share for the year ended December 31, 2024 and $1.94 per share for the year ended December 31, 2023. The Company recorded $48.1 million in credit loss expense for the year ended December 31, 2024. 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. 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. The hurricane related reserve had a $0.13 impact to diluted earnings per share. The remaining portion of the provision was related to loan growth. 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. 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. 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. 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. 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. 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. 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. The reduction in accretion was dilutive to the net interest margin by approximately 1 basis point. 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. This increase was accretive to the net interest margin by 1 basis point. 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. 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. For the year ended December 31, 2024, our efficiency ratio, as adjusted (non-GAAP), was 42.65%, compared to 45.24% reported for the year ended December 31, 2023. (See Table 29 for the non-GAAP tabular reconciliation.) 
 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. 
 
 
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 Financial Condition as of and for the Years Ended December 31, 2024 and 2023 
 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. 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. 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. 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. 
 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. 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. 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. 
 The table below shows the non-performing loans and non-performing assets by region as of December 31, 2024: 
 
 (in thousands) Texas Arkansas Centennial CFG Shore Premier Finance Florida Alabama Total 
 Non-accrual loans $ 23,494 $ 18,448 $ 7,390 $ 5,537 $ 38,778 $ 206 $ 93,853 
 Loans 90+ days past due 4,134 538 — — 362 — 5,034 
 Total non-performing loans $ 27,628 $ 18,986 $ 7,390 $ 5,537 $ 39,140 $ 206 $ 98,887 
 
 Foreclosed assets held for sale 13,924 757 22,775 — 5,951 — 43,407 
 Other non-performing assets 63 — — — — — 63 
 Total other non-performing assets $ 13,987 $ 757 $ 22,775 $ — $ 5,951 $ — $ 43,470 
 Total non-performing assets $ 41,615 $ 19,743 $ 30,165 $ 5,537 $ 45,091 $ 206 $ 142,357 

 The table below shows the non-performing loans and non-performing assets by region as of December 31, 2023: 
 
 (in thousands) Texas Arkansas Centennial CFG Shore Premier Finance Florida Alabama Total 
 Non-accrual loans $ 29,391 $ 15,319 $ 2,764 $ 2,768 $ 9,316 $ 413 $ 59,971 
 Loans 90+ days past due 4,092 38 — — — — 4,130 
 Total non-performing loans $ 33,483 $ 15,357 $ 2,764 $ 2,768 $ 9,316 $ 413 $ 64,101 
 
 Foreclosed assets held for sale 264 167 22,775 — 7,280 — 30,486 
 Other non-performing assets 63 — — — 722 — 785 
 Total other non-performing assets $ 327 $ 167 $ 22,775 $ — $ 8,002 $ — $ 31,271 
 Total non-performing assets $ 33,810 $ 15,524 $ 25,539 $ 2,768 $ 17,318 $ 413 $ 95,372 

 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. Any interest payments that are received will be applied to the principal balance. 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. This represents the largest component of the Company's $43.4 million in foreclosed assets held for sale. 
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 2023 Overview 
 Results of Operations for the Years Ended December 31, 2023 and 2022 
 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. The Company recorded $12.1 million in credit loss expense for the year ended December 31, 2023. 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. 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. 
 Total interest income increased by $297.3 million, or 33.9%, and non-interest expense decreased by $2.8 million, or 0.6%. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. For the year ended December 31, 2023, our efficiency ratio, as adjusted (non-GAAP), was 45.24%, compared to 44.55% reported for the year ended December 31, 2022. (See Table 29 for the non-GAAP tabular reconciliation.) 
 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. Our return on average common equity was 10.82% for the year ended December 31, 2023, compared to 9.17% for the same period in 2022. 
 
 
 
 
 
 
 
 
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 Financial Condition as of and for the Years Ended December 31, 2023 and 2022 
 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. 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. 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. 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. 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. 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. 
 The table below shows the non-performing loans and non-performing assets by region as of December 31, 2023: 
 
 (in thousands) Texas Arkansas Centennial CFG Shore Premier Finance Florida Alabama Total 
 Non-accrual loans $ 29,391 $ 15,319 $ 2,764 $ 2,768 $ 9,316 $ 413 $ 59,971 
 Loans 90+ days past due 4,092 38 — — — — 4,130 
 Total non-performing loans $ 33,483 $ 15,357 $ 2,764 $ 2,768 $ 9,316 $ 413 $ 64,101 
 
 Foreclosed assets held for sale 264 167 22,775 — 7,280 — 30,486 
 Other non-performing assets 63 — — — 722 — 785 
 Total other non-performing assets $ 327 $ 167 $ 22,775 $ — $ 8,002 $ — $ 31,271 
 Total non-performing assets $ 33,810 $ 15,524 $ 25,539 $ 2,768 $ 17,318 $ 413 $ 95,372 

 The table below shows the non-performing loans and non-performing assets by region as of December 31, 2022: 
 
 (in thousands) Texas Arkansas Centennial CFG Shore Premier Finance Florida Alabama Total 
 Non-accrual loans $ 12,835 $ 8,326 $ 7,078 $ 2,316 $ 20,052 $ 404 $ 51,011 
 Loans 90+ days past due 9,356 62 — — 427 — 9,845 
 Total non-performing loans $ 22,191 $ 8,388 $ 7,078 $ 2,316 $ 20,479 $ 404 $ 60,856 
 
 Foreclosed assets held for sale 166 120 — — 260 — 546 
 Other non-performing assets 74 — — — — — 74 
 Total other non-performing assets $ 240 $ 120 $ — $ — $ 260 $ — $ 620 
 Total non-performing assets $ 22,431 $ 8,508 $ 7,078 $ 2,316 $ 20,739 $ 404 $ 61,476 

 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. 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. This represents the largest component of the Company's $30.5 million in foreclosed assets held for sale. 
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 Critical Accounting Policies and Estimates 
 Overview . We prepare our consolidated financial statements based on the selection of certain accounting policies, generally accepted accounting principles and customary practices in the banking industry. These policies, in certain areas, require us to make significant estimates and assumptions. Our accounting policies are described in detail in the notes to our consolidated financial statements included as part of this document. 
 We consider a policy critical if (i) the accounting estimate requires assumptions about matters that are highly uncertain at the time of the accounting estimate; and (ii) different estimates that could reasonably have been used in the current period, or changes in the accounting estimate that are reasonably likely to occur from period to period, would have a material impact on our financial statements. Using these criteria, we believe that the accounting policies most critical to us are those associated with our lending practices, including the accounting for the allowance for credit losses, foreclosed assets, investments, intangible assets, income taxes and stock options. 
 Revenue Recognition . Accounting Standards Codification ("ASC") Topic 606, Revenue from Contracts with Customers ("ASC Topic 606"), establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity's contracts to provide goods or services to customers. The core principle requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that it expects to be entitled to receive in exchange for those goods or services recognized as performance obligations are satisfied. The majority of our revenue-generating transactions are not subject to ASC Topic 606, including revenue generated from financial instruments, such as our loans, letters of credit, investment securities and mortgage lending income, as these activities are subject to other GAAP discussed elsewhere within our disclosures. Descriptions of our revenue-generating activities that are within the scope of ASC Topic 606, which are presented in our income statements as components of non-interest income are as follows: 
 • Service charges on deposit accounts – These represent general service fees for monthly account maintenance and activity or transaction-based fees and consist of transaction-based revenue, time-based revenue (service period), item-based revenue or some other individual attribute-based revenue. Revenue is recognized when our performance obligation is completed, which is generally monthly for account maintenance services or when a transaction has been completed (such as a wire transfer). Payment for such performance obligations are generally received at the time the performance obligations are satisfied. 
 • Other service charges and fees – These represent credit card interchange fees and Centennial CFG loan fees. The interchange fees are recorded in the period the performance obligation is satisfied which is generally the cash basis based on agreed upon contracts. Centennial CFG loan fees are based on loan or other negotiated agreements with customers and are accounted for under ASC Topic 310. Interchange fees were $21.8 million and $22.6 million for the years ended December 31, 2024 and December 31, 2023, respectively. Centennial CFG loan fees were $9.5 million and $9.9 million for the years ended December 31, 2024 and December 31, 2023, respectively. 
 • Trust fees - The Company enters into contracts with its customers to manage assets for investment, and/or transact on their accounts. The Company generally satisfies its performance obligations as services are rendered. The management fees are percentage based, flat, percentage of income or a fixed percentage calculated upon the average balance of assets depending upon account type. Fees are collected on a monthly or annual basis. 
 Credit Losses . We account for credit losses in accordance with ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("ASC 326" or "CECL"). 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. 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. 
 
 
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 Investments – Available-for-sale . Securities available-for-sale ("AFS") are reported at fair value with unrealized holding gains and losses reported as a separate component of stockholders’ equity and other comprehensive income (loss), net of taxes. Securities that are held as available-for-sale are used as a part of our asset/liability management strategy. Securities that may be sold in response to interest rate changes, changes in prepayment risk, the need to increase regulatory capital, and other similar factors are classified as available-for-sale. The Company evaluates all securities quarterly to determine if any securities in a loss position require a provision for credit losses in accordance with ASC 326. The Company first assesses whether it intends to sell or is more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through income. For securities that do not meet this criteria, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, the Company considers the extent to which fair value is less than amortized cost, and changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income. The Company has made the election to exclude accrued interest receivable on AFS securities from the estimate of credit losses and report accrued interest separately on the consolidated balance sheets. Changes in the allowance for credit losses are recorded as provision for (or reversal of) credit loss expense. Losses are charged against the allowance when management believes the uncollectability of a security is confirmed or when either of the criteria regarding intent or requirement to sell is met. 
 Investments – Held-to-Maturity. Debt securities held-to-maturity ("HTM"), which include any security for which we have the positive intent and ability to hold until maturity, are reported at historical cost adjusted for amortization of premiums and accretion of discounts. Premiums and discounts are amortized/accreted to the call date to interest income using the constant effective yield method over the estimated life of the security. The Company evaluates all securities quarterly to determine if any securities in a loss position require a provision for credit losses in accordance with ASC 326. The Company measures expected credit losses on HTM securities on a collective basis by major security type, with each type sharing similar risk characteristics. The estimate of expected credit losses considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts. The Company has made the election to exclude accrued interest receivable on HTM securities from the estimate of credit losses and report accrued interest separately on the consolidated balance sheets. Changes in the allowance for credit losses are recorded as provision for (or reversal of) credit loss expense. Losses are charged against the allowance when management believes the uncollectability of a security is confirmed. 
 Loans Receivable and Allowance for Credit Losses . Loans receivable that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at their outstanding principal balance adjusted for any charge-offs, deferred fees or costs on originated loans. Interest income on loans is accrued over the term of the loans based on the principal balance outstanding. Loan origination fees and direct origination costs are capitalized and recognized as adjustments to yield on the related loans. 
 The allowance for credit losses on loans receivable is a valuation account that is deducted from the loans’ amortized cost basis to present the net amount expected to be collected on the loans. Loans are charged off against the allowance when management believes the uncollectability of a loan balance is confirmed and expected recoveries do not exceed the aggregate of amounts previously charged-off and expected to be charged-off. 
 The Company uses the discount cash flow ("DCF") method to estimate expected losses for all of Company’s loan pools. These pools are as follows: construction & land development; other commercial real estate; residential real estate; commercial & industrial; and consumer & other. The loan portfolio pools were selected in order to generally align with the loan categories specified in the quarterly call reports required to be filed with the Federal Financial Institutions Examination Council. For each of these loan pools, the Company generates cash flow projections at the instrument level wherein payment expectations are adjusted for estimated prepayment speed, curtailments, time to recovery, probability of default, and loss given default. The modeling of expected prepayment speeds, curtailment rates, and time to recovery are based on historical internal data. The Company uses regression analysis of historical internal and peer data to determine suitable loss drivers to utilize when modeling lifetime probability of default and loss given default. This analysis also determines how expected probability of default and loss given default will react to forecasted levels of the loss drivers. 
 For all DCF models, management has determined that four quarters represents a reasonable and supportable forecast period and reverts to a historical loss rate over four quarters on a straight-line basis. Management leverages economic projections from a reputable and independent third party to inform its loss driver forecasts over the four-quarter forecast period. Other internal and external indicators of economic forecasts are also considered by management when developing the forecast metrics. 
 
 
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 Management estimates the allowance balance using relevant available information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. Historical credit loss experience provides the basis for the estimation of expected credit losses. Adjustments to historical loss information are made for differences in current loan-specific risk characteristics such as differences in underwriting standards, portfolio mix, delinquency level, or term as well as for changes in environmental conditions, such as changes in the national unemployment rate, gross domestic product, national retail sales index, 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. The identified loan segments are as follows: 
 • 1-4 family construction 
 • All other construction 
 • 1-4 family revolving home equity lines of credit (“HELOC”) & junior liens 
 • 1-4 family senior liens 
 • Multifamily 
 • Owner occupies commercial real estate 
 • Non-owner occupied commercial real estate 
 • Commercial & industrial, agricultural, non-depository financial institutions, purchase/carry securities, other 
 • Consumer auto 
 • Other consumer 
 • Other consumer - SPF 
 Loans evaluated individually that are considered to be collateral dependent are not included in the collective evaluation. 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. When repayment is expected to be from the operation of the collateral, expected credit losses are calculated as the amount by which the amortized cost basis of the loan exceeds the present value of expected cash flows from the operation of the collateral. The allowance for credit losses may be zero if the fair value of the collateral at the measurement date exceeds the amortized cost basis of the loan, net of estimated costs to sell. For 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. 
 Expected credit losses are estimated over the contractual term of the loans, adjusted for expected prepayments when appropriate. The contractual term excludes expected extensions, renewals, and modifications unless either of the following applies: 
 • Management has a reasonable expectation at the reporting date that restructured loans made to borrowers experiencing financial difficulty will be executed with an individual borrower. 
 • The extension or renewal options are included in the original or modified contract at the reporting date and are not unconditionally cancellable by the Company. 
 Management qualitatively adjusts model results for risk factors that are not considered within our modeling processes but are nonetheless relevant in assessing the expected credit losses within our loan pools. These qualitative factors ("Q-Factors") and other qualitative adjustments may increase or decrease management's estimate of expected credit losses by a calculated percentage or amount based upon the estimated level of risk. The various risks that may be considered in making Q-Factor and other qualitative adjustments include, among other things, the impact of (i) changes in lending policies, procedures and strategies; (ii) changes in nature and volume of the portfolio; (iii) staff experience; (iv) changes in volume and trends in classified loans, delinquencies and nonaccruals; (v) concentration risk; (vi) trends in underlying collateral values; (vii) external factors such as competition, legal and regulatory environment; (viii) changes in the quality of the loan review system and (ix) economic conditions. 
 Loans 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. 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. 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. 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. When accrual of interest is discontinued, all unpaid accrued interest is reversed. Interest income is subsequently recognized only to the extent cash payments are received in excess of principal due. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. 
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 Loans are placed on non-accrual status when management believes that the borrower’s financial condition, after giving consideration to economic and business conditions and collection efforts, is such that collection of interest is doubtful, or generally when loans are 90 days or more past due. Loans are charged against the allowance for credit losses when management believes that the collectability of the principal is unlikely. Accrued interest related to non-accrual loans is generally charged against the allowance for credit losses when accrued in prior years and reversed from interest income if accrued in the current year. Interest income on non-accrual loans may be recognized to the extent cash payments are received, although the majority of payments received are usually applied to principal. Non-accrual loans are generally returned to accrual status when principal and interest payments are less than 90 days past due, the customer has made required payments for at least six months, and we reasonably expect to collect all principal and interest. 
 Acquisition Accounting and Acquired Loans . The Company accounts for its acquisitions under FASB Accounting Standards Codification ("ASC") Topic 805, Business Combinations , which requires the use of the purchase method of accounting. All identifiable assets acquired, including loans, are recorded at fair value. In accordance with FASB ASC 326, the Company records both a discount or premium and an allowance for credit losses on acquired loans. All purchased loans are recorded at fair value in accordance with the fair value methodology prescribed in FASB ASC Topic 820, Fair Value Measurements . The fair value estimates associated with the loans include estimates related to expected prepayments and the amount and timing of undiscounted expected principal, interest and other cash flows. 
 Purchased loans that have experienced more than insignificant credit deterioration since origination are purchase credit deteriorated (“PCD”) loans. An allowance for credit losses is determined using the same methodology as other loans. The Company develops separate PCD models for each loan segment with PCD loans not individually analyzed for credit losses. These models utilize a peer group benchmark in order to determine the probability of default and loss given default to be used in the calculation. The sum of the loan’s purchase price and allowance for credit losses becomes its initial amortized cost basis. The difference between the initial amortized cost basis and the par value of the loan is a non-credit discount or premium, which is amortized into interest income over the life of the loan. Subsequent changes to the allowance for credit losses are recorded through the provision for credit losses. 
 Allowance for Credit Losses on Off-Balance Sheet Credit Exposures : The Company estimates expected credit losses over the contractual period in which the Company is exposed to credit risk via a contractual obligation to extend credit unless that obligation is unconditionally cancellable by the Company. The allowance for credit losses on off-balance sheet credit exposures is adjusted as a provision for credit loss expense. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over its estimated life. 
 Foreclosed Assets Held for Sale . Real estate and personal properties acquired through or in lieu of loan foreclosure are to be sold and are initially recorded at fair value at the date of foreclosure, establishing a new cost basis. Valuations are periodically performed by management, and the real estate and personal properties are carried at fair value less costs to sell. Gains and losses from the sale of other real estate and personal properties are recorded in non-interest income, and expenses used to maintain the properties are included in non-interest expenses. 
 Intangible Assets . Intangible assets consist of goodwill and core deposit intangibles. Goodwill represents the excess purchase price over the fair value of net assets acquired in business acquisitions. The core deposit intangible represents the excess intangible value of acquired deposit customer relationships as determined by valuation specialists. The core deposit intangibles are being amortized over 48 months to 121 months on a straight-line basis. Goodwill is not amortized but rather is evaluated for impairment on at least an annual basis. We perform an annual impairment test of goodwill and core deposit intangibles as required by FASB ASC 350, Intangibles - Goodwill and Other , in the fourth quarter or more often if events and circumstances indicate there may be an impairment. 
 Income Taxes . We account for income taxes in accordance with income tax accounting guidance (ASC 740, Income Taxes ). The income tax accounting guidance results in two components of income tax expense: current and deferred. Current income tax expense reflects taxes to be paid or refunded for the current period by applying the provisions of the enacted tax law to the taxable income or excess of deductions over revenues. We determine deferred income taxes using the liability (or balance sheet) method. Under this method, the net deferred tax asset or liability is based on the tax effects of the differences between the book and tax basis of assets and liabilities, and enacted changes in tax rates and laws are recognized in the period in which they occur. 
 
 
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 Deferred income tax expense results from changes in deferred tax assets and liabilities between periods. Deferred tax assets are recognized if it is more likely than not, based on the technical merits, that the tax position will be realized or sustained upon examination. The term “more likely than not” means a likelihood of more than 50 percent; the terms “examined” and “upon examination” also include resolution of the related appeals or litigation processes, if any. A tax position that meets the more-likely-than-not recognition threshold is initially and subsequently measured as the largest amount of tax benefit that has a greater than 50 percent likelihood of being realized upon settlement with a taxing authority that has full knowledge of all relevant information. The determination of whether or not a tax position has met the more-likely-than-not recognition threshold considers the facts, circumstances and information available at the reporting date and is subject to the management’s judgment. Deferred tax assets are reduced by a valuation allowance if, based on the weight of evidence available, it is more likely than not that some portion or all of a deferred tax asset will not be realized. 
 Both we and our subsidiary file consolidated tax returns. Our subsidiary provides for income taxes on a separate return basis, and remits to us amounts determined to be currently payable. 
 Stock Compensation . In accordance with FASB ASC 718, Compensation - Stock Compensation , and FASB ASC 505-50, Equity-Based Payments to Non-Employees , the fair value of each option award is estimated on the date of grant. We recognize compensation expense for the grant-date fair value of the option award over the vesting period of the award. 
 
 Acquisitions 
 Acquisition of Happy Bancshares, Inc. 
 On April 1, 2022, the Company completed the acquisition of Happy Bancshares, Inc. ("Happy"), and merged Happy State Bank into Centennial Bank. The Company issued approximately 42.4 million shares of its common stock valued at approximately $958.8 million as of April 1, 2022. In addition, the holders of certain Happy stock-based awards received approximately $3.7 million in cash in cancellation of such awards, for a total transaction value of approximately $962.5 million. The acquisition added new markets for expansion and brought complementary businesses together to drive synergies and growth. 
 Including the effects of purchase accounting adjustments, as of the acquisition date, Happy had approximately $6.69 billion in total assets, $3.65 billion in loans and $5.86 billion in customer deposits. Happy formerly operated its banking business from 62 locations in Texas. 
 For further discussion of the acquisition, see Note 2 "Business Combinations" to the Condensed Notes to Consolidated Financial Statements. 
 Acquisition of Marine Portfolio 
 On February 4, 2022, the Company completed the purchase of the performing marine loan portfolio of Utah-based LendingClub Bank (“LendingClub”). Under the terms of the purchase agreement with LendingClub, the Company acquired yacht loans totaling approximately $242.2 million. This portfolio of loans is housed within the Company's Shore Premier Finance division, which is responsible for servicing the acquired loan portfolio and originating new loan production. 
 We will continue evaluating all types of potential bank acquisitions, which may include FDIC-assisted acquisitions as opportunities arise, to determine what is in the best interest of our Company. Our goal in making these decisions is to maximize the return to our investors. 
 Branches 
 As opportunities arise, we will continue to open new (commonly referred to as de novo ) branches in our current markets and in other attractive market areas. 
 As of December 31, 2024, we had 218 branch locations. There were 76 branches in Arkansas, 78 branches in Florida, 58 branches in Texas, five branches in Alabama and one branch in New York City. 
 
 
 
 
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 Results of Operations for the Years Ended December 31, 2024, 2023 and 2022 
 Our net income increased $9.3 million, or 2.4%, to $402.2 million for the year ended December 31, 2024, from $392.9 million for the same period in 2023. On a diluted earnings per share basis, our earnings were $2.01 per share for the year ended December 31, 2024 and $1.94 per share for the year ended December 31, 2023. The Company recorded $48.1 million in credit loss expense for the year ended December 31, 2024. 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. 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. The hurricane related reserve had a $0.13 impact to diluted earnings per share. The remaining portion of the provision was related to loan growth. 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. 
 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. The Company recorded $12.1 million in credit loss expense for the year ended December 31, 2023. 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. 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 
 Net interest income, our principal source of earnings, is the difference between the interest income generated by earning assets and the total interest cost of the deposits and borrowings obtained to fund those assets. Factors affecting the level of net interest income include the volume of earning assets and interest-bearing liabilities, yields earned on loans and investments and rates paid on deposits and other borrowings, the level of non-performing loans and the amount of non-interest-bearing liabilities supporting earning assets. Net interest income is analyzed in the discussion and tables below on a fully taxable equivalent basis. The adjustment to convert certain income to a fully taxable equivalent basis consists of dividing tax-exempt income by one minus the combined federal and state income tax rate (24.433% for the year ended December 31, 2024, 24.989% for the year ended December 31, 2023 and 24.6735% for year ended December 31, 2022). 
 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. 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%. The Federal Reserve reduced the target rate three times during 2024. 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. 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. 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. The reduction in accretion was dilutive to the net interest margin by approximately 1 basis point. 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. This increase was accretive to the net interest margin by 1 basis point. 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. 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. 
 
 
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 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 
 Table 2: Analysis of Net Interest Income 
 
 Years Ended December 31, 
 2024 2023 2022 
 (Dollars in thousands) 
 Interest income $ 1,299,777 $ 1,175,053 $ 877,766 
 Fully taxable equivalent adjustment 8,534 5,506 8,663 
 Interest income – fully taxable equivalent 1,308,311 1,180,559 886,429 
 Interest expense 451,003 348,108 119,090 
 Net interest income – fully taxable equivalent $ 857,308 $ 832,451 $ 767,339 
 Yield on earning assets – fully taxable equivalent 6.51 % 6.03 % 4.40 % 
 Cost of interest-bearing liabilities 3.08 2.52 0.87 
 Net interest spread – fully taxable equivalent 3.43 3.51 3.53 
 Net interest margin – fully taxable equivalent 4.27 4.25 3.81 

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 Table 3: Changes in Fully Taxable Equivalent Net Interest Margin 
 
 December 31, 
 2024 vs. 2023 2023 vs. 2022 
 (In thousands) 
 Increase in interest income due to change in earning assets $ 39,264 $ 45,599 
 Increase in interest income due to change in earning asset yields 88,488 248,531 
 Increase in interest expense due to change in interest-bearing liabilities (33,968) (4,945) 
 Increase in interest expense due to change in interest rates paid on interest-bearing liabilities (68,927) (224,073) 
 Increase in net interest income $ 24,857 $ 65,112 

 Table 4 shows, for each major category of earning assets and interest-bearing liabilities, the average amount outstanding, the interest income or expense on that amount and the average rate earned or expensed for the years ended December 31, 2024, 2023 and 2022. The table also shows the average rate earned on all earning assets, the average rate expensed on all interest-bearing liabilities, the net interest spread and the net interest margin for the same periods. The analysis is presented on a fully taxable equivalent basis. Non-accrual loans were included in average loans for the purpose of calculating the rate earned on total loans. 
 Table 4: Average Balance Sheets and Net Interest Income Analysis 
 
 Years Ended December 31, 
 2024 2023 2022 
 Average
Balance Income /
Expense Yield /
Rate Average
Balance Income /
Expense Yield /
Rate Average
Balance Income /
Expense Yield /
Rate 
 (Dollars in thousands) 
 ASSETS 
 Earnings assets 
 Interest-bearing balances due from banks $ 819,445 $ 42,773 5.22 % $ 319,733 $ 15,023 4.70 % $ 2,444,541 $ 29,110 1.19 % 
 Federal funds sold 5,035 255 5.06 3,864 221 5.72 1,519 25 1.65 
 Investment securities – taxable 3,400,325 125,765 3.70 3,655,632 138,575 3.79 3,582,664 91,933 2.57 
 Investment securities – non-taxable 1,190,033 39,057 3.28 1,276,566 36,727 2.88 1,178,561 36,363 3.09 
 Loans receivable 14,675,001 1,100,461 7.50 14,314,732 990,013 6.92 12,940,998 728,998 5.63 
 Total interest-earning assets 20,089,839 1,308,311 6.51 19,570,527 1,180,559 6.03 20,148,283 886,429 4.40 
 Non-earning assets 2,664,541 2,647,383 2,405,057 
 Total assets $ 22,754,380 $ 22,217,910 $ 22,553,340 
 LIABILITIES AND SHAREHOLDERS' EQUITY 
 Liabilities 
 Interest-bearing liabilities 
 Savings and interest-bearing transaction accounts $ 11,078,003 $ 304,976 2.75 % $ 11,162,244 $ 258,586 2.32 % $ 11,520,781 $ 81,061 0.70 % 
 Time deposits 1,747,302 71,662 4.10 1,284,156 37,392 2.91 1,033,431 4,928 0.48 
 Total interest-bearing deposits 12,825,305 376,638 2.94 12,446,400 295,978 2.38 12,554,212 85,989 0.68 
 Federal funds purchased 20 1 5.00 44 3 6.82 220 2 0.91 
 Securities sold under agreement to repurchase 165,965 5,448 3.28 149,014 4,813 3.23 129,006 1,430 1.11 
 FHLB & other borrowed funds 1,197,662 52,455 4.38 753,152 30,825 4.09 473,839 11,076 2.34 
 Subordinated debentures 439,539 16,461 3.75 440,125 16,489 3.75 515,049 20,593 4.00 
 Total interest-bearing liabilities 14,628,491 451,003 3.08 13,788,735 348,108 2.52 13,672,326 119,090 0.87 
 Non-interest-bearing liabilities 
 Non-interest-bearing deposits 4,029,684 4,599,241 5,378,906 
 Other liabilities 238,528 198,634 171,390 
 Total liabilities 18,896,703 18,586,610 19,222,622 
 Stockholders’ equity 3,857,677 3,631,300 3,330,718 
 Total liabilities and stockholders’ equity $ 22,754,380 $ 22,217,910 $ 22,553,340 
 Net interest spread 3.43 % 3.51 % 3.53 % 
 Net interest income and margin $ 857,308 4.27 $ 832,451 4.25 $ 767,339 3.81 

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 Table 5 shows changes in interest income and interest expense resulting from changes in volume and changes in interest rates for the year ended December 31, 2024 compared to 2023 and 2023 compared to 2022 on a fully taxable equivalent basis. The changes in interest rate and volume have been allocated to changes in average volume and changes in average rates, in proportion to the relationship of absolute dollar amounts of the changes in rates and volume. 
 Table 5: Volume/Rate Analysis 
 
 Years Ended December 31, 
 2024 over 2023 2023 over 2022 
 Volume Yield /
Rate Total Volume Yield /
Rate Total 
 (In thousands) 
 Increase (decrease) in: 
 Interest income: 
 Interest-bearing balances due from banks $ 25,911 $ 1,839 $ 27,750 $ (42,285) $ 28,198 $ (14,087) 
 Federal funds sold 61 (27) 34 75 121 196 
 Investment securities – taxable (9,504) (3,306) (12,810) 1,909 44,733 46,642 
 Investment securities – non-taxable (2,603) 4,933 2,330 2,911 (2,547) 364 
 Loans receivable 25,399 85,049 110,448 82,989 178,026 261,015 
 Total interest income 39,264 88,488 127,752 45,599 248,531 294,130 
 Interest expense: 
 Interest-bearing transaction and savings deposits (1,966) 48,356 46,390 (2,600) 180,125 177,525 
 Time deposits 16,069 18,201 34,270 1,473 30,991 32,464 
 Federal funds purchased (1) (1) (2) (3) 4 1 
 Securities sold under agreement to repurchase 555 80 635 254 3,129 3,383 
 FHLB & other borrowed funds 19,333 2,297 21,630 8,685 11,064 19,749 
 Subordinated debentures (22) (6) (28) (2,864) (1,240) (4,104) 
 Total interest expense 33,968 68,927 102,895 4,945 224,073 229,018 
 Increase in net interest income $ 5,296 $ 19,561 $ 24,857 $ 40,654 $ 24,458 $ 65,112 

 Provision for Credit Losses 
 Credit Loss Expense : During the year ended December 31, 2024, the Company recorded $48.1 million in credit loss expense. 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. 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. The Company determined the $2.0 million allowance for credit losses on the held-to-maturity portfolio was adequate. Therefore, no additional provision was considered necessary for the held-to-maturity portfolio. 
 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. 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. 
 Non-Interest Income 
 Total non-interest income was $168.6 million in 2024, compared to $169.9 million in 2023 and $175.1 million in 2022. Our recurring non-interest income includes service charges on deposit accounts, other service charges and fees, trust fees, mortgage lending, insurance commissions, increase in cash value of life insurance, fair value adjustment for marketable securities and dividends. 
 
 
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 Table 6 measures the various components of our non-interest income for the years ended December 31, 2024, 2023, and 2022, respectively, as well as changes for the years 2024 compared to 2023 and 2023 compared to 2022. 
 Table 6: Non-Interest Income 
 
 Years Ended December 31, 2024 Change
from 2023 2023 Change
from 2022 
 2024 2023 2022 
 (Dollars in thousands) 
 Service charges on deposit accounts $ 39,223 $ 39,207 $ 37,114 $ 16 — % $ 2,093 5.6 % 
 Other service charges and fees 43,009 44,188 44,588 (1,179) (2.7) (400) (0.9) 
 Trust fees 18,717 17,892 12,855 825 4.6 5,037 39.2 
 Mortgage lending income 15,789 10,738 17,657 5,051 47.0 (6,919) (39.2) 
 Insurance commissions 2,151 2,086 2,192 65 3.1 (106) (4.8) 
 Increase in cash value of life insurance 4,850 4,655 3,800 195 4.2 855 22.5 
 Dividends from FHLB, FRB, FNBB & other 11,462 11,642 9,198 (180) (1.5) 2,444 26.6 
 Gain on sale of SBA loans 617 278 183 339 121.9 95 51.9 
 Gain on sale of branches, equipment and other assets, net 2,102 1,507 15 595 (39.5) 1,492 (9,946.7) 
 (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) 
 Other income 29,955 38,503 48,281 (8,548) (22.2) (9,778) (20.3) 
 Total non-interest income $ 168,574 $ 169,934 $ 175,111 $ (1,360) (0.8) % $ (5,177) (3.0) % 

 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. 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. Other factors were changes related to service charges on deposit accounts, trust fees, and gain on sale of branches, equipment and other assets. 
 Additional details for the year ended December 31, 2024 on some of the more significant changes are as follows: 
 • 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. 
 • 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. 
 • 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. 
 • 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. 
 • The $2.6 million decrease in gain on OREO is primarily due to revaluation of two OREO properties during 2024. 
 • 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. 
 • 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. 
 
 
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 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. Other factors were changes related to service charges on deposit accounts, cash value of life insurance, dividends from FHLB, FRB, FNBB & other and gain on sale of branches, equipment and other assets. 
 Additional details for the year ended December 31, 2023 on some of the more significant changes are as follows: 
 • The $2.1 million increase in service charges on deposit accounts is primarily related to an increase in overdraft fees and service charge fees related to the acquisition of Happy. 
 
 
 • The $5.0 million increase in trust fees is primarily related to an increase in trust fees resulting from the acquisition of Happy. 
 • The $6.9 million decrease in mortgage lending income is primarily related to a decrease in volume of secondary market loans from the high volume of loans during 2022. The decrease in volume is due to the increase in interest rates. 
 • The $855,000 increase in cash value of life insurance is primarily related to the increase in bank owned life insurance resulting from the acquisition of Happy. 
 • The $2.4 million increase in dividends from FHLB, FRB, FNBB & other is primarily due to an increase in dividend income from FHLB and FRB stock holdings related to the acquisition of Happy and an increase in dividends on marketable securities, partially offset by a lower volume of dividends from equity investments. 
 • The $1.5 million increase in gain on sale of branches, equipment and other assets, net, is primarily due to the sales of buildings in Texas and Florida in 2023. 
 • 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. 
 
 
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 Non-Interest Expense 
 Non-interest expense consists of salaries and employee benefits, occupancy and equipment, data processing, and other expenses such as advertising, merger and acquisition expenses, amortization of intangibles, electronic banking expense, FDIC and state assessment, insurance, legal and accounting fees and other professional fees. 
 Table 7 below sets forth a summary of non-interest expense for the years ended December 31, 2024, 2023, and 2022, as well as changes for the years ended 2024 compared to 2023 and 2023 compared to 2022. 
 Table 7: Non-Interest Expense 
 
 Years Ended December 31, 2024 Change
from 2023 2023 Change
from 2022 
 2024 2023 2022 
 (Dollars in thousands) 
 Salaries and employee benefits $ 241,022 $ 256,966 $ 238,885 $ (15,944) (6.2) % $ 18,081 7.6 % 
 Occupancy and equipment 58,031 60,303 53,417 (2,272) (3.8) 6,886 12.9 
 Data processing expense 36,494 36,329 34,942 165 0.5 1,387 4.0 
 Merger expense — — 49,594 — — (49,594) (100.0) 
 Other operating expenses: 
 Advertising 7,097 8,850 7,974 (1,753) (19.8) 876 11.0 
 Amortization of intangibles 8,443 9,685 8,853 (1,242) (12.8) 832 9.4 
 Electronic banking expense 13,444 14,313 13,632 (869) (6.1) 681 5.0 
 Directors' fees 1,639 1,814 1,491 (175) (9.6) 323 21.7 
 Due from bank service charges 1,131 1,115 1,255 16 1.4 (140) (11.2) 
 FDIC and state assessment 15,388 25,530 8,428 (10,142) (39.7) 17,102 202.9 
 Hurricane expense — — 176 — — (176) (100.0) 
 Insurance 3,634 3,567 3,705 67 1.9 (138) (3.7) 
 Legal and accounting 8,961 5,230 9,401 3,731 71.3 (4,171) (44.4) 
 Other professional fees 8,142 8,815 8,881 (673) (7.6) (66) (0.7) 
 Operating supplies 2,680 3,138 3,120 (458) (14.6) 18 0.6 
 Postage 2,060 2,081 2,078 (21) (1.0) 3 0.1 
 Telephone 1,807 2,160 1,890 (353) (16.3) 270 14.3 
 Other expense 36,963 32,967 27,905 3,996 12.1 5,062 18.1 
 Total non-interest expense $ 446,936 $ 472,863 $ 475,627 $ (25,927) (5.5) % $ (2,764) (0.6) % 

 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. 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. Other factors were changes related to occupancy and equipment expenses, advertising expenses, amortization of intangibles, electronic banking expense and other professional fees. 
 Additional details for the year ended December 31, 2024 on some of the more significant changes are as follows: 
 • 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. 
 • The $2.3 million decrease in occupancy and equipment expense is primarily due to decreases in lease, utility, maintenance and other occupancy expenses. 
 • The $1.8 million decrease in advertising expense is primarily due to a decreased volume of advertising. 
 • 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. 
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 • The $869,000 decrease in electronic banking expense is primarily due to a decrease in debit card processing fees and interchange network expenses. 
 • 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. 
 • The $3.7 million increase in legal and accounting expense is primarily due to ongoing legal matters. 
 • The $673,000 decrease in other professional fees is primarily due to cost saving measures following the acquisition of Happy. 
 • 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. 
 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. Other factors were changes related to occupancy and equipment expenses, data processing expenses, advertising expenses, amortization of intangibles, legal and accounting expenses and other expense. 
 Additional details for the year ended December 31, 2023 on some of the more significant changes are as follows: 
 • The $18.1 million increase in salaries and employee benefits expense is primarily due to the acquisition of Happy. 
 • The $6.9 million increase in occupancy and equipment expense is primarily due to increases in depreciation on buildings, machinery and equipment; utility expenses; lease expense; equipment maintenance and repairs; janitorial expenses; property taxes and other occupancy expenses related to the acquisition of Happy. 
 • The $1.4 million increase in data processing expense is primarily due to increases in telecommunication fees, depreciation of equipment and software, software licensing subscriptions, core processing expenses and computer expenses related to the acquisition of Happy. 
 • The $49.6 million decrease in merger and acquisition expense is due to costs associated with the acquisition of Happy. 
 • The $876,000 increase in advertising expense is primarily related to the acquisition of Happy. 
 • The $832,000 increase in amortization of intangibles is due to the acquisition of Happy. 
 • The $17.1 million increase in FDIC and state assessment expense is primarily due to the FDIC special assessment during the fourth quarter of 2023 and the acquisition of Happy during the second quarter of 2022. The $13.0 million FDIC special assessment 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. 
 • 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. 
 • 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. 
 Income Taxes 
 During 2024, the Company lowered its marginal tax rate from 24.989% to 24.433%. In an effort to more accurately reflect legislative and current state income apportionment, the state tax rate was lowered to 4.346%. This lowered the blended rate to 24.433%. 
 During 2023, the Company increased its marginal tax rate from 24.6735% to 24.989%. In an effort to more accurately reflect legislative and current state income apportionment, the state tax rate was increased to 5.049%. This raised the blended rate to 24.989%. 
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 During 2022, the Company lowered its marginal tax rate from 25.740% to 24.6735%. In an effort to more accurately reflect current state income apportionment and state tax rates, the state tax rate was lowered to 4.65%. This lowered the blended rate to 24.6735%. Apportionment changes related to the acquisition of Happy and statutory tax rate changes 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. 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. The Company’s marginal tax rate was 24.433%, 24.989% and 24.6735% for years ended December 31, 2024, 2023 and 2022, respectively. 
 
 Financial Condition as of and for the Years Ended December 31, 2024 and 2023 
 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. 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 CFG franchise during 2024. 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. 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. 
 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. 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. 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. 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. The improvement in stockholders’ equity was 7.5% for the year ended D ecember 31, 2023 compared to December 31, 2022. 
 
 Loan Portfolio 
 Our loan portfolio averaged $14.68 billion and $14.31 billion during the years ended December 31, 2024 and 2023, respectively. Loans receivable were $14.76 billion as of December 31, 2024 compared to $14.42 billion as of December 31, 2023, an increase of $339.8 million, or 2.4%. 
 During 2024, the Company experienced $339.8 million in organic loan growth. 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. 
 During 2023, the Company experienced $15.2 million in organic loan growth. 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. These loans are generally secured by residential or commercial real estate or business or personal property. Although these loans are primarily originated within our franchises in Arkansas, Florida, Texas, South Alabama and Centennial CFG, the property securing these loans may not physically be located within our market areas of Arkansas, Florida, Texas, Alabama and New York. 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. 
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 As of December 31, 2024, we had $1.16 billion of construction/land development loans which were collateralized by land. 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. 
 Table 8: Loans Receivable 
 
 As of December 31, 
 2024 2023 
 (In thousands) 
 Real estate: 
 Commercial real estate loans: 
 Non-farm/non-residential $ 5,426,780 $ 5,549,954 
 Construction/land development 2,736,214 2,293,047 
 Agricultural 336,993 325,156 
 Residential real estate loans: 
 Residential 1-4 family 1,956,489 1,844,260 
 Multifamily residential 496,484 435,736 
 Total real estate 10,952,960 10,448,153 
 Consumer 1,234,361 1,153,690 
 Commercial and industrial 2,022,775 2,324,991 
 Agricultural 367,251 307,327 
 Other 187,153 190,567 
 Total loans receivable $ 14,764,500 $ 14,424,728 

 Commercial Real Estate Loans . We originate non-farm and non-residential loans (primarily secured by commercial real estate), construction/land development loans, and agricultural loans, which are generally secured by real estate located in our market areas. Our commercial mortgage loans are generally collateralized by first liens on real estate and amortized (where defined) over a 15 to 30-year period with balloon payments due at the end of one to five years. These loans are generally underwritten by assessing cash flow (debt service coverage), primary and secondary source of repayment, the financial strength of any guarantor, the strength of the tenant (if any), the borrower’s liquidity and leverage, management experience, ownership structure, economic conditions and industry specific trends and collateral. Generally, we will loan up to 85% of the value of improved property, 65% of the value of raw land and 75% of the value of land to be acquired and developed. A first lien on the property and assignment of lease is required if the collateral is rental property, with second lien positions considered on a case-by-case basis. 
 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. 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. 
 
 
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 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. 
 Table 9: CRE Loan Concentrations 
 December 31, 2024 
 Funded Balance % of CRE Loans Unfunded Balance % of CRE Loans 
 (Dollars in thousands) 
 Non-Farm/Non-Residential: 
 Single Purpose Building $ 829,697 9.8 % $ 64,948 2.5 % 
 Office Building 1,070,459 12.6 107,769 4.2 
 Hotel 1,081,120 12.7 24,652 1.0 
 Industrial 385,072 4.5 29,517 1.1 
 Retail 507,405 6.0 12,579 0.5 
 Owner-Occupied (1) 
 1,553,027 18.2 167,399 6.5 
 Construction/Land Development: 
 Construction Residential-Spec 433,964 5.1 330,119 12.8 
 Residential Land Development 537,686 6.3 86,200 3.4 
 Construction Commercial 337,727 4.0 360,340 14.0 
 Construction Multi Family 556,168 6.5 908,976 35.4 
 Commercial Land Development 512,284 6.0 99,165 3.9 
 Construction Residential-Presold 186,325 2.2 141,047 5.5 
 Construction Hotel 64,239 0.8 191,088 7.4 
 Raw Land 107,821 1.3 8,215 0.3 
 Agricultural (1) 
 336,993 4.0 38,913 1.5 
 Total Commercial Real Estate (2) 
 $ 8,499,987 100.0 % $ 2,570,927 100.0 % 

 
 December 31, 2023 
 Funded Balance % of CRE Loans Unfunded Balance % of CRE Loans 
 (Dollars in thousands) 
 Non-Farm/Non-Residential: 
 Single Purpose Building $ 979,802 12.0 % $ 79,598 3.2 % 
 Office Building 1,023,917 12.5 89,464 3.6 
 Hotel 1,067,028 13.1 34,374 1.4 
 Industrial 401,125 4.9 37,342 1.5 
 Retail 579,886 7.1 19,744 0.8 
 Owner-Occupied (1) 
 1,498,196 18.4 98,681 4.0 
 Construction/Land Development: 
 Construction Residential-Spec 408,023 5.0 427,563 17.2 
 Residential Land Development 475,615 5.8 88,856 3.6 
 Construction Commercial 492,421 6.0 388,486 15.7 
 Construction Multi Family 189,711 2.3 753,285 30.3 
 Commercial Land Development 327,194 4.0 51,303 2.1 
 Construction Residential-Presold 200,114 2.4 160,809 6.5 
 Construction Hotel 127,784 1.6 227,530 9.2 
 Raw Land 72,185 0.9 1,119 — 
 Agricultural (1) 
 325,156 4.0 21,640 0.9 
 Total Commercial Real Estate (2) 
 $ 8,168,157 100.0 % $ 2,479,794 100.0 % 

 (1) Agriculture real estate loans and owner-occupied non-farm non-residential loans are not included within CRE for regulatory reporting purposes. 
 (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. Multi-family residential loans are included in CRE for regulatory purposes. 
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 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. 
 Table 10: Geographical Locations of CRE Loans 
 
 Top 10 Geographical States for CRE Loan Collateral Concentrations 
 Florida Texas Arkansas New York Georgia Utah Alabama California Pennsylvania Tennessee All Other Areas Total 
 As of December 31, 2024 
 Non-Farm/Non-Residential: 
 Single Purpose Building $ 275,440 $ 212,649 $ 168,691 $ 49,278 $ 17,506 $ — $ 6,494 $ 429 $ — $ 1,586 $ 97,624 $ 829,697 
 Office Building 333,230 355,794 64,062 50,091 91,723 — 18,934 — 25,616 — 131,009 1,070,459 
 Hotel 541,001 263,647 99,830 4,943 24,319 — 18,575 16,419 — — 112,386 1,081,120 
 Industrial 44,392 91,344 40,908 57,556 — — 59,745 20,041 — — 71,086 385,072 
 Retail 148,053 252,087 56,885 4,158 — — 12,166 (100) — 435 33,721 507,405 
 Owner-Occupied (1) 
 492,655 431,489 337,935 — 21,051 — 26,314 5,748 83,199 6,911 147,725 1,553,027 
 Construction/Land Development: 
 Construction Residential - 
 Spec 150,143 107,149 41,299 126,299 — — 82 — — — 8,992 433,964 
 Residential Land 
 Development 148,897 102,369 51,865 — 304 165,643 2,329 — — 2,466 63,813 537,686 
 Construction Commercial 84,027 111,199 62,549 15,159 — 12,451 1,182 (213) 876 9,194 41,303 337,727 
 Construction Multi Family 240,255 72,676 32,812 139,130 — — — 19,326 228 37,881 13,860 556,168 
 Commercial Land 
 Development 118,729 70,700 31,841 37,820 40,068 — 9,752 50,248 — 42,181 110,945 512,284 
 Construction Residential - 
 Presold 93,517 61,538 29,937 — — — 1,022 — — — 311 186,325 
 Construction Hotel 6,693 9,796 22,036 — 13,555 — 5,152 — — — 7,007 64,239 
 Raw Land 9,036 8,537 31,649 — — — 1,311 34,388 — — 22,900 107,821 
 Agricultural (1) 
 32,589 176,084 106,684 — — — 3,736 — — — 17,900 336,993 
 Total Commercial Real Estate (2) 
 $ 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 

 
 Top 10 Geographical States for CRE Loan Collateral Concentrations 
 Florida Texas Arkansas New York Utah Alabama Georgia California Pennsylvania Oklahoma All Other Areas Total 
 As of December 31, 2023 
 Non-Farm/Non-Residential: 
 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 
 Office Building 323,320 276,425 86,951 50,294 — 19,686 95,457 — 28,501 42,885 100,398 1,023,917 
 Hotel 518,592 223,750 106,975 59,910 — 19,374 23,760 — — 24,254 90,413 1,067,028 
 Industrial 41,138 64,060 39,517 93,323 — 71,465 — 24,796 — — 66,826 401,125 
 Retail 177,569 243,364 64,049 7,285 — 11,977 — 23,372 — 319 51,951 579,886 
 Owner-Occupied (1) 
 476,507 429,440 309,584 — 9,376 15,654 23,991 4,617 86,874 18,993 123,160 1,498,196 
 Construction/Land Development: 
 Construction Residential - 
 Spec 124,019 103,483 35,461 88,670 — 2,763 497 40,624 — — 12,506 408,023 
 Residential Land 
 Development 93,644 123,284 47,952 — 189,435 2,868 226 — — — 18,206 475,615 
 Construction Commercial 115,757 226,684 31,964 — — 4,293 11,248 — — — 102,475 492,421 
 Construction Multi Family 44,179 26,082 48,485 53,711 — — — 8,376 189 — 8,689 189,711 
 Commercial Land 
 Development 71,670 35,647 33,294 81,004 — 5,764 — 19,029 — — 80,786 327,194 
 Construction Residential - 
 Presold 125,004 49,654 23,248 — — 1,184 — — — 125 899 200,114 
 Construction Hotel 70,781 50,346 3,208 — — (208) (130) — — — 3,787 127,784 
 Raw Land 8,283 15,334 23,649 — — 2,837 — 20,894 — — 1,188 72,185 
 Agricultural (1) 
 23,637 182,495 99,243 — — 3,104 360 — — 1,227 15,090 325,156 
 Total Commercial Real Estate (2) 
 $ 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 

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 (1) Agriculture real estate loans and owner-occupied non-farm non-residential loans are not included within CRE for regulatory reporting purposes. 
 (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. Multi-family residential loans are included in CRE for regulatory purposes. 
 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. It is the goal of the Company to maintain a prudent diversification of loans. We define a concentration of credit as direct or indirect obligations according to the following guidelines: (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; (ii) concentrations of 100% or more of total risk-based capital by industry or product line. As of December 31, 2024, we have not met the threshold for the concentration limits. 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. The Chief Lending Officer also reviews the portfolio periodically to determine if any concentrations exist and makes recommendations with respect to setting internal guidelines. 
 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. The KRIs are tied to the Bank's appetite for credit risk which is reflected in the Bank's credit policy and underwriting criteria. 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). 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. The results of the KRI analysis are presented to the Bank's Asset Quality Committee on a quarterly basis. Any exceptions to established limits and thresholds are monitored and addressed in a timely manner as required by the Asset Quality Committee. 
 The Company has a CRE strategy and contingency plan which outlines the principles required to adequately manage our CRE exposures. It discusses the inherent risks within CRE lending, as well as the risks unique to specific lending activities and property taxes. 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. 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. 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. 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. 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. However, other action steps may be considered necessary depending upon the specific situation. 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 . We originate one to four family, residential mortgage loans generally secured by property located in our primary market areas. Approximately 57.1% and 36.2% of our residential mortgage loans consist of owner occupied 1-4 family properties and non-owner occupied 1-4 family properties (rental), respectively, as of December 31, 2024, with the remaining 6.7% relating to condos and mobile homes. Residential real estate loans generally have a loan-to-value ratio of up to 90%. These loans are underwritten by giving consideration to many factors including the borrower’s ability to pay, stability of employment or source of income, debt-to-income ratio, credit history and loan-to-value ratio. 
 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. 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 . Our consumer loans are composed of secured and unsecured loans originated by our bank, the primary portion of which consists of loans to finance USCG registered high-end sail and power boats within our SPF division The performance of consumer loans will be affected by the local and regional economies as well as the rates of personal bankruptcies, job loss, divorce and other individual-specific characteristics. 
 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. 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. 
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 Commercial and Industrial Loans . Commercial and industrial loans are made for a variety of business purposes, including working capital, inventory, equipment and capital expansion. The terms for commercial loans are generally one to seven years. Commercial loan applications must be supported by current financial information on the borrower and, where appropriate, by adequate collateral. Commercial loans are generally underwritten by addressing cash flow (debt service coverage), primary and secondary sources of repayment, the financial strength of any guarantor, the borrower’s liquidity and leverage, management experience, ownership structure, economic conditions and industry specific trends and collateral. The loan to value ratio depends on the type of collateral. Generally speaking, accounts receivable are financed at between 50% and 80% of accounts receivable less than 60 days past due. Inventory financing will range between 50% and 80% (with no work in process) depending on the borrower and nature of inventory. We require a first lien position for those loans. 
 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. 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 . Agricultural loans include loans for financing agricultural production, including loans to businesses or individuals engaged in the production of timber, poultry, livestock or crops and are not categorized as part of real estate loans. Our agricultural loans are generally secured by farm machinery, livestock, crops, vehicles or other agricultural-related collateral. A portion of our portfolio of agricultural loans is comprised of loans to individuals which would normally be characterized as consumer loans except for the fact that the individual borrowers are primarily engaged in the production of timber, poultry, livestock or crops. 
 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. 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. The table also presents the portion of our loans that have fixed interest rates and interest rates that fluctuate over the life of the loans based on changes in the interest rate environment. 
 The loans acquired during our acquisitions accrete interest income through accretion of the difference between the carrying amount of the loans and the expected cash flows. Increases in the credit quality or cash flows of loans (reflected as an adjustment to yield and accreted into income over the weighted-average life of the loans). 
 Table 11: Maturity Distribution of Loan Portfolio and Interest Rate Detail of Loans Due After One Year 
 
 Maturity Distribution of Loan Portfolio 
 One Year
or Less Over One
Year
Through
Five Years Over Five
Years
Through
Fifteen Years Over Fifteen Years Total Loans Receivable 
 (In thousands) 
 Real estate: 
 Commercial real estate loans 
 Non-farm/non-residential $ 1,564,907 $ 2,629,878 $ 977,997 $ 253,998 $ 5,426,780 
 Construction/land development 1,111,342 1,298,697 163,642 162,533 2,736,214 
 Agricultural 106,062 125,415 76,297 29,219 336,993 
 Residential real estate loans 
 Residential 1-4 family 252,604 323,039 276,269 1,104,577 1,956,489 
 Multifamily residential 149,542 263,242 54,712 28,988 496,484 
 Total real estate 3,184,457 4,640,271 1,548,917 1,579,315 10,952,960 
 Consumer 13,710 27,073 319,717 873,861 1,234,361 
 Commercial and industrial 763,035 880,786 361,712 17,242 2,022,775 
 Agricultural 300,658 53,330 12,531 732 367,251 
 Other 40,289 122,221 8,885 15,758 187,153 
 Total loans receivable $ 4,302,149 $ 5,723,681 $ 2,251,762 $ 2,486,908 $ 14,764,500 

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 Loans Due After One Year 
 Predetermined Interest Rates Floating or Adjustable Interest Rates Total 
 (In thousands) 
 Real estate: 
 Commercial real estate loans 
 Non-farm/non-residential $ 1,485,980 $ 2,375,893 $ 3,861,873 
 Construction/land development 240,681 1,384,191 1,624,872 
 Agricultural 101,104 129,827 230,931 
 Residential real estate loans 
 Residential 1-4 family 592,366 1,111,519 1,703,885 
 Multifamily residential 185,213 161,729 346,942 
 Total real estate 2,605,344 5,163,159 7,768,503 
 Consumer 1,181,176 39,475 1,220,651 
 Commercial and industrial 334,923 924,817 1,259,740 
 Agricultural 31,489 35,104 66,593 
 Other 92,577 54,287 146,864 
 Total loans receivable $ 4,245,509 $ 6,216,842 $ 10,462,351 

 Non-Performing Assets 
 We classify our problem loans into three categories: past due loans, special mention loans and classified loans (accruing and non-accruing). 
 When management determines that a loan is no longer performing, and that collection of interest appears doubtful, the loan is placed on non-accrual status. Generally, loans that are 90 days past due are placed on non-accrual status unless they are adequately secured and there is reasonable assurance of full collection of both principal and interest. Our management closely monitors all loans that are contractually 90 days past due, treated as “special mention” or otherwise classified or on non-accrual status. 
 Purchased loans that have experienced more than insignificant credit deterioration since origination are PCD loans. An allowance for credit losses is determined using the same methodology as other loans. For PCD loans not individually analyzed for impairment, the Company develops separate PCD models for each loan segment. The initial allowance for credit losses determined on a collective basis is allocated to individual loans. The sum of the loan’s purchase price and allowance for credit losses becomes its initial amortized cost basis. The difference between the initial amortized cost basis and the par value of the loan is a non-credit discount or premium, which is amortized into interest income over the life of the loan. Subsequent changes to the allowance for credit losses are recorded through the provision for credit losses. The Company held approximately $76.3 million and $130.7 million in PCD loans, as of December 31, 2024 and 2023, respectively. 
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 Table 12 sets forth information with respect to our non-performing assets as of December 31, 2024 and 2023. As of these dates, all non-performing restructured loans are included in non-accrual loans. 
 Table 12: Non-performing Assets 
 
 As of December 31, 
 2024 2023 
 (Dollars in thousands) 
 Non-accrual loans $ 93,853 $ 59,971 
 Loans past due 90 days or more (principal or interest payments) 5,034 4,130 
 Total non-performing loans 98,887 64,101 
 Other non-performing assets 
 Foreclosed assets held for sale, net 43,407 30,486 
 Other non-performing assets 63 785 
 Total other non-performing assets 43,470 31,271 
 Total non-performing assets $ 142,357 $ 95,372 
 Allowance for credit losses to non-accrual loans 293.95 % 480.62 % 
 Allowance for credit losses to non-performing loans 278.99 449.66 
 Non-accrual loans to total loans 0.64 0.42 
 Non-performing loans to total loans 0.67 0.44 
 Non-performing assets to total assets 0.63 0.42 

 Our non-performing loans are comprised of non-accrual loans and accruing loans that are contractually past due 90 days. Our bank subsidiary recognizes income principally on the accrual basis of accounting. When loans are classified as non-accrual, the accrued interest is charged off and no further interest is accrued, unless the credit characteristics of the loan improve. 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. 
 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. 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. 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. 
 The table below shows the non-performing loans and non-performing assets by region as of December 31, 2024: 
 
 (in thousands) Texas Arkansas Centennial CFG Shore Premier Finance Florida Alabama Total 
 Non-accrual loans $ 23,494 $ 18,448 $ 7,390 $ 5,537 $ 38,778 $ 206 $ 93,853 
 Loans 90+ days past due 4,134 538 — — 362 — 5,034 
 Total non-performing loans $ 27,628 $ 18,986 $ 7,390 $ 5,537 $ 39,140 $ 206 $ 98,887 
 
 Foreclosed assets held for sale 13,924 757 22,775 — 5,951 — 43,407 
 Other non-performing assets 63 — — — — — 63 
 Total other non-performing assets $ 13,987 $ 757 $ 22,775 $ — $ 5,951 $ — $ 43,470 
 Total non-performing assets $ 41,615 $ 19,743 $ 30,165 $ 5,537 $ 45,091 $ 206 $ 142,357 

 
 
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 The table below shows the non-performing loans and non-performing assets by region as of December 31, 2023: 
 
 (in thousands) Texas Arkansas Centennial CFG Shore Premier Finance Florida Alabama Total 
 Non-accrual loans $ 29,391 $ 15,319 $ 2,764 $ 2,768 $ 9,316 $ 413 $ 59,971 
 Loans 90+ days past due 4,092 38 — — — — 4,130 
 Total non-performing loans $ 33,483 $ 15,357 $ 2,764 $ 2,768 $ 9,316 $ 413 $ 64,101 
 
 Foreclosed assets held for sale 264 167 22,775 — 7,280 — 30,486 
 Other non-performing assets 63 — — — 722 — 785 
 Total other non-performing assets $ 327 $ 167 $ 22,775 $ — $ 8,002 $ — $ 31,271 
 Total non-performing assets $ 33,810 $ 15,524 $ 25,539 $ 2,768 $ 17,318 $ 413 $ 95,372 

 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. Any interest payments that are received will be applied to the principal balance. 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. This represents the largest component of the Company's $43.4 million in foreclosed assets held for sale. 
 Debt restructuring generally occurs when a borrower is experiencing, or is expected to experience, financial difficulties in the near term. As a result, we will work with the borrower to prevent further difficulties, and ultimately to improve the likelihood of recovery on the loan. In those circumstances it may be beneficial to restructure the terms of a loan and work with the borrower for the benefit of both parties, versus forcing the property into foreclosure and having to dispose of it in an unfavorable and depressed real estate market. When we have modified the terms of a loan, we usually either reduce the monthly payment and/or interest rate for generally about three to twelve months. For our restructured loans that accrue interest at the time the loan is restructured, it would be a rare exception to have charged-off any portion of the loan. As of December 31, 2024, we had $105.9 million of restructured loans that are in compliance with the modified terms and are not reported as past due or non-accrual. 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. 
 During the year ended December 31, 2024, the Company restructured approximately $108.4 million in loans to 13 borrowers. The ending balance of these loans as of December 31, 2024, was $100.5 million. Three of the modified loans pertained to one borrower relationship and accounted for $99.1 million of the total post-modification outstanding balance. 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. The charged-off amount was $26.1 million. Five of the $122.7 million in restructured loans held by the Company were considered to be collateral dependent as of December 31, 2024. The outstanding balance of these loans was $114.7 million, and the specific reserve was $2.9 million. 
 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. At December 31, 2024, the amount of restructured loans was $122.7 million. As of December 31, 2024, 86.3% of all restructured loans were performing to the terms of the restructure. 
 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. 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. The majority of the foreclosed assets held for sale is comprised of three properties. The first is an office building located in Santa Monica, California with a carrying value of $22.8 million. 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. These three properties account for $40.4 million of the balance of foreclosed assets held for sale at December 31, 2024. 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. 
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 Table 13 shows the summary of foreclosed assets held for sale as of December 31, 2024 and 2023. 
 Table 13: Total Foreclosed Assets Held for Sale 
 
 December 31 
 2024 2023 
 (In thousands) 
 Commercial real estate loans 
 Non-farm/non-residential $ 28,392 $ 29,894 
 Construction/land development 13,391 47 
 
 Residential real estate loans 
 Residential 1-4 family 1,624 545 
 
 Total foreclosed assets held for sale $ 43,407 $ 30,486 

 The Company had $268.0 million and $94.9 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) as of December 31, 2024 and December 31, 2023, respectively. As of December 31, 2024, average impaired loans were $139.6 million compared to $160.9 million as of December 31, 2023. 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. 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 
 Table 14 shows the summary non-accrual loans as of December 31, 2024 and 2023: 
 Table 14: Total Non-Accrual Loans 
 
 As of December 31, 
 2024 2023 
 (In thousands) 
 Real estate: 
 Commercial real estate loans 
 Non-farm/non-residential $ 35,868 $ 13,178 
 Construction/land development 3,702 12,094 
 Agricultural 559 431 
 Residential real estate loans 
 Residential 1-4 family 22,539 20,351 
 Multifamily residential 13,083 — 
 Total real estate 75,751 46,054 
 Consumer 6,178 3,423 
 Commercial and industrial 10,931 9,982 
 Agricultural & other 993 512 
 
 Total non-accrual loans $ 93,853 $ 59,971 

 If the non-accrual loans had been accruing interest in accordance with the original terms of their respective agreements, interest income of approximately $7.4 million for the year ended December 31, 2024, $5.4 million in 2023, and $4.0 million in 2022 would have been recorded. Interest income recognized on the non-accrual loans for the years ended December 31, 2024, 2023 and 2022 was considered immaterial. 
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 Table 15 shows the summary of accruing past due loans 90 days or more as of December 31, 2024 and 2023: 
 Table 15: Total Loans Accruing Past Due 90 Days or More 
 
 As of December 31, 
 2024 2023 
 (In thousands) 
 Real estate: 
 Commercial real estate loans 
 Non-farm/non-residential $ 304 $ 2,177 
 Construction/land development 600 255 
 
 Residential real estate loans 
 Residential 1-4 family 1,835 84 
 
 Total real estate 2,739 2,516 
 Consumer 32 79 
 Commercial and industrial 2,263 1,535 
 
 Total loans accruing past due 90 days or more $ 5,034 $ 4,130 
 

 Our total loans accruing past due 90 days or more and non-accrual loans to total loans was 0.67% and 0.44% as of December 31, 2024 and 2023, respectively. 
 Allowance for Credit Losses 
 Overview . 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. 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. 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. 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. 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. The increase in net charge-offs was due to the asset quality cleanup project the Company completed in the fourth quarter of 2024. 
 The charge-off detail by region for the year ended December 31, 2024 can be seen below. 
 
 (in thousands) Texas Arkansas Centennial CFG Shore Premier Finance Florida Alabama Total 
 Charge-off $ 51,251 $ 5,952 $ 2,195 $ 1,751 $ 1,836 $ 51 $ 63,036 
 Recovery 772 911 — 22 557 20 2,282 
 Net charge-offs $ 50,479 $ 5,041 $ 2,195 $ 1,729 $ 1,279 $ 31 $ 60,754 
 Percentage of total 83.1 % 8.3 % 3.6 % 2.8 % 2.1 % 0.1 % 100.0 % 

 
 
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 The charge-off detail by region for the year ended December 31, 2023 can be seen below. 
 
 (in thousands) Texas Arkansas Centennial CFG Shore Premier Finance Florida Alabama Total 
 Charge-off $ 4,709 $ 3,026 $ 4,580 $ 370 $ 3,320 $ 50 $ 16,055 
 Recovery 698 839 — 65 1,054 14 2,670 
 Net charge-offs $ 4,011 $ 2,187 $ 4,580 $ 305 $ 2,266 $ 36 $ 13,385 
 Percentage of total 30.0 % 16.3 % 34.2 % 2.3 % 16.9 % 0.3 % 100.0 % 

 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. The first was a $26.1 million charge-off for a commercial real estate loan in our Texas market. The second was an $8.8 million charge-off for a commercial real estate loan in our Texas market. The third was a $6.5 million charge-off for a residential real estate loan in our Texas market. The fourth was a $3.0 million charge-off for a commercial and industrial loan in our Arkansas market. The fifth was a $2.0 million charge-off for a commercial and industrial loan in our Texas market. The sixth was a $2.0 million charge-off for a commercial and industrial loan in our Centennial CFG Market. The seventh was a $1.1 million charge-off for commercial real estate loan in our Texas market. 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. 
 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. Loans partially charged-off are placed on non-accrual status until it is proven that the borrower's repayment ability with respect to the remaining principal balance can be reasonably assured. This is usually established over a period of 6-12 months of timely payment performance. 
 
 
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 Table 16 shows the allowance for credit losses, charge-offs and recoveries for loans as of and for the years ended December 31, 2024 and 2023. 
 Table 16: Analysis of Allowance for Credit Losses 
 
 As of December 31, 
 2024 2023 
 (Dollars in thousands) 
 Balance, beginning of year $ 288,234 $ 289,669 
 
 Loans charged off 
 Real estate: 
 Commercial real estate loans: 
 Non-farm/non-residential 38,132 2,328 
 Construction/land development 1,437 263 
 Agricultural — 7 
 Residential real estate loans: 
 Residential 1-4 family 567 269 
 Multifamily residential 6,500 — 
 Total real estate 46,636 2,867 
 Consumer 2,214 543 
 Commercial and industrial 11,089 9,157 
 
 Other 3,097 3,488 
 Total loans charged off 63,036 16,055 
 Recoveries of loans previously charged off 
 Real estate: 
 Commercial real estate loans: 
 Non-farm/non-residential 59 533 
 Construction/land development 221 113 
 
 Residential real estate loans: 
 Residential 1-4 family 180 321 
 Multifamily residential — 8 
 Total real estate 460 975 
 Consumer 105 101 
 Commercial and industrial 628 583 
 
 Other 1,089 1,011 
 Total recoveries 2,282 2,670 
 Net loans charged off (recovered) 60,754 13,385 
 Provision for credit loss - loans 48,400 11,950 
 
 Balance, end of year $ 275,880 $ 288,234 
 Net charge-offs (recoveries) to average loans receivable 0.41 % 0.09 % 
 Allowance for credit losses to total loans 1.87 2.00 
 Allowance for credit losses to net charge-offs (recoveries) 454.09 2,153.41 

 Net charge-offs to average loans receivable were 0.41% and 0.09% as of December 31, 2024 and 2023, respectively. 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. 
 
 
 
 
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 Table 17 presents the allocation of allowance for credit losses as of December 31, 2024 and 2023. 
 Table 17: Allocation of Allowance for Credit Losses 
 
 December 31, 2024 
 2024 2023 
 Allowance
Amount % of 
 loans (1) 
 Allowance
Amount % of 
 loans (1) 
 
 (Dollars in thousands) 
 Real estate: 
 Commercial real estate loans: 
 Non-farm/non- residential $ 88,141 36.7 % $ 77,194 38.5 % 
 Construction/land development 52,271 18.5 33,877 15.9 
 Agricultural residential real estate loans: 3,174 2.3 1,441 2.3 
 Residential real estate loans: 
 Residential 1-4 family 40,347 13.2 51,313 12.8 
 Multifamily residential 10,488 3.4 4,547 3.0 
 Total real estate 194,421 74.1 168,372 72.5 
 Consumer 27,589 8.4 24,728 8.0 
 Commercial and industrial 48,330 13.7 91,551 16.1 
 Agricultural 1,291 2.5 1,259 2.1 
 Other 4,249 1.3 2,324 1.3 
 Total $ 275,880 100.0 % $ 288,234 100.0 % 

 (1) Percentage of loans in each category to total loans receivable. 
 Investment Securities 
 Our securities portfolio is the second largest component of earning assets and provides a significant source of revenue. 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. If quoted market prices are not available, estimated fair values are based on quoted market prices of comparable securities. The estimated effective duration of our securities portfolio was 4.8 years as of December 31, 2024. 
 Securities held-to-maturity, which include any security for which we have the positive intent and ability to hold until maturity, are reported at historical cost adjusted for amortization of premiums and accretion of discounts. Premiums and discounts are amortized/accreted to the call date to interest income using the constant effective yield method over the estimated life of the security. 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. As of December 31, 2024, $43.6 million, or 3.4%, were invested in obligations of U.S. Government-sponsored enterprises, compared to $43.3 million, or 3.4%, as of December 31, 2023. As of December 31, 2024, $124.2 million, or 9.7%, were invested in U.S. Government-sponsored mortgage-backed securities, compared to $130.3 million, or 10.2%, as of December 31, 2023. 
 Securities available-for-sale are reported at fair value with unrealized holding gains and losses reported as a separate component of stockholders’ equity as other comprehensive income. Securities that are held as available-for-sale are used as a part of our asset/liability management strategy. Securities that may be sold in response to interest rate changes, changes in prepayment risk, the need to increase regulatory capital, and other similar factors are classified as available-for-sale. Available-for-sale securities were $3.07 billion and $3.51 billion as of December 31, 2024 and 2023, respectively. 
 
 
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 As of December 31, 2024, $1.32 billion, or 43.1%, of our available-for-sale securities were invested in U.S. government-sponsored mortgage-backed securities, compared to $1.52 billion, or 43.3%, of our available-for-sale securities as of December 31, 2023. To reduce our income tax burden, $870.4 million, or 28.3%, of our available-for-sale securities portfolio as of December 31, 2024, were primarily invested in tax-exempt obligations of state and political subdivisions, compared to $916.3 million, or 26.1%, of our available-for-sale securities as of December 31, 2023. We had $284.8 million, or 9.3%, invested in obligations of U.S. Government-sponsored enterprises as of December 31, 2024, compared to $346.6 million, or 9.9%, of our available-for-sale securities as of December 31, 2023. We had $225.6 million, or 7.3%, invested in non-government-sponsored asset backed securities as of December 31, 2024, compared to $363.5 million, or 10.4%, of our available-for-sale securities as of December 31, 2023. As of December 31, 2024, $171.4 million, or 5.6%, of our available-for-sale securities were invested in private mortgage-backed securities, compared to $175.4 million, or 5.0%, of our available-for-sale securities as of December 31, 2023. 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. 
 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. 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. 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. 
 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. 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. 
 Table 18: Investment Securities 
 
 December 31, 2024 
 Amortized
Cost Allowance for Credit Losses Net Carrying Amount Gross
Unrealized
Gains Gross 
Unrealized 
Losses Fair Value 
 (In thousands) 
 Available-for-sale 
 U.S. government-sponsored enterprises $ 297,698 $ — $ 297,698 $ 1,164 $ (14,072) $ 284,790 
 U.S. government-sponsored mortgage-backed securities 1,527,463 — 1,527,463 760 (203,539) 1,324,684 
 Private mortgage-backed securities 184,643 — 184,643 — (13,249) 171,394 
 Non-government-sponsored asset backed securities 228,751 — 228,751 331 (3,434) 225,648 
 State and political subdivisions 956,055 — 956,055 335 (86,029) 870,361 
 Other securities 215,662 (2,195) 213,467 576 (18,281) 195,762 
 Total $ 3,410,272 $ (2,195) $ 3,408,077 $ 3,166 $ (338,604) $ 3,072,639 

 
 December 31, 2024 
 Amortized
Cost Allowance for Credit Losses Net Carrying Amount Gross
Unrealized
Gains Gross 
Unrealized 
Losses Fair Value 
 (In thousands) 
 Held-to-maturity 
 U.S. government-sponsored enterprises $ 43,560 $ — $ 43,560 $ — $ (3,021) $ 40,539 
 U.S. government-sponsored mortgage-backed securities 124,169 — 124,169 — (6,695) 117,474 
 State and political subdivisions 1,109,480 (2,005) 1,107,475 39 (122,587) 984,927 
 
 Total $ 1,277,209 $ (2,005) $ 1,275,204 $ 39 $ (132,303) $ 1,142,940 

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 December 31, 2023 
 Amortized
Cost Allowance for Credit Losses Net Carrying Amount Gross
Unrealized
Gains Gross 
Unrealized 
Losses Fair Value 
 (In thousands) 
 Available-for-sale 
 U.S. government-sponsored enterprises $ 361,494 $ — $ 361,494 $ 2,247 $ (17,093) $ 346,648 
 U.S. government-sponsored mortgage-backed securities 1,711,668 — 1,711,668 310 (191,557) 1,520,421 
 Private mortgage-backed securities 191,522 — 191,522 — (16,117) 175,405 
 Non-government-sponsored asset backed securities 370,203 — 370,203 821 (7,551) 363,473 
 State and political subdivisions 990,318 — 990,318 1,938 (75,931) 916,325 
 Other securities 215,722 (2,525) 213,197 402 (28,030) 185,569 
 Total $ 3,840,927 $ (2,525) $ 3,838,402 $ 5,718 $ (336,279) $ 3,507,841 

 
 December 31, 2023 
 Amortized
Cost Allowance for Credit Losses Net Carrying Amount Gross
Unrealized
Gains Gross 
Unrealized 
Losses Fair Value 
 (In thousands) 
 Held-to-maturity 
 U.S. government-sponsored enterprises $ 43,285 $ — $ 43,285 $ — $ (2,607) $ 40,678 
 U.S. government-sponsored mortgage-backed securities 130,278 — 130,278 106 (4,362) 126,022 
 State and political subdivisions 1,110,424 (2,005) 1,108,419 456 (105,094) 1,003,781 
 
 Total $ 1,283,987 $ (2,005) $ 1,281,982 $ 562 $ (112,063) $ 1,170,481 

 Table 19 reflects the amortized cost and estimated fair value of available-for-sale and held-to-maturity securities as of December 31, 2024 and 2023, by contractual maturity as well as the weighted-average yields (for tax-exempt obligations on a fully taxable equivalent basis) of those securities by contractual maturity. Expected maturities could differ from contractual maturities because borrowers may have the right to call or prepay obligations, with or without call or prepayment penalties. 
 Table 19: Maturity and Yield Distribution of Investment Securities 
 
 December 31, 2024 
 1 Year 
or Less 1 Year 
Through 
5 Years 5 Years 
Through 
10 Years Over 
10 Years Monthly 
Amortizing 
Securities Total 
Amortized 
Cost Total
Fair
Value 
 (Dollars in thousands) 
 Available-for-sale 
 U.S. government-sponsored enterprises $ 9,034 $ 167,797 $ 50,608 $ 70,259 $ — $ 297,698 $ 284,790 
 U.S. government-sponsored mortgage-backed securities — — — — 1,527,463 1,527,463 1,324,684 
 Private mortgage-backed securities — — — — 184,643 184,643 171,394 
 Non-government-sponsored asset backed securities — — — — 228,751 228,751 225,648 
 State and political subdivisions 5,687 51,211 167,514 731,643 — 956,055 870,361 
 Other securities 3,011 55,940 146,321 10,390 — 215,662 195,762 
 Total $ 17,732 $ 274,948 $ 364,443 $ 812,292 $ 1,940,857 $ 3,410,272 $ 3,072,639 
 Percentage of total amortized cost 0.5 % 8.1 % 10.7 % 23.8 % 56.9 % 100.0 % 

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 December 31, 2024 
 1 Year 
or Less 1 Year 
Through 
5 Years 5 Years 
Through 
10 Years Over 
10 Years Monthly 
Amortizing 
Securities Total 
Amortized 
Cost Total
Fair
Value 
 (Dollars in thousands) 
 Held-to-maturity 
 U.S. government-sponsored enterprises $ — $ 14,455 $ 29,105 $ — $ — $ 43,560 $ 40,539 
 U.S. government-sponsored mortgage-backed securities — — — — 124,169 124,169 117,474 
 State and political subdivisions — 41,372 336,948 731,160 — 1,109,480 984,927 
 
 Total $ — $ 55,827 $ 366,053 $ 731,160 $ 124,169 $ 1,277,209 $ 1,142,940 
 Percentage of total amortized cost — % 4.4 % 28.7 % 57.2 % 9.8 % 100.1 % 

 
 December 31, 2024 
 1 Year 
or Less 1 Year 
Through 
5 Years 5 Years 
Through 
10 Years Over 
10 Years Monthly 
Amortizing 
Securities Tax Equivalent Yield 
 (Dollars in thousands) 
 Available-for-sale 
 U.S. government-sponsored enterprises 0.76 % 2.40 % 4.10 % 5.87 % — % 3.49 % 
 U.S. government-sponsored mortgage-backed securities — — — — 2.70 2.70 
 Private mortgage-backed securities — — — — 3.81 3.81 
 Non-government-sponsored asset backed securities — — — — 5.02 5.02 
 State and political subdivisions 3.34 3.03 3.74 2.88 — 3.04 
 Other securities — 4.18 4.32 4.97 — 4.31 
 Held-to-maturity 
 U.S. government-sponsored enterprises — % 2.42 % 3.34 % — % — % 3.03 % 
 U.S. government-sponsored mortgage-backed securities — — — — 4.30 4.30 
 State and political subdivisions — 3.19 3.38 3.72 — 3.60 
 

 
 December 31, 2023 
 1 Year 
or Less 1 Year 
Through 
5 Years 5 Years 
Through 
10 Years Over 
10 Years Monthly 
Amortizing 
Securities Total 
Amortized 
Cost Total
Fair
Value 
 (Dollars in thousands) 
 Available-for-sale 
 U.S. government-sponsored enterprises $ 16,787 $ 131,363 $ 117,199 $ 96,145 $ — $ 361,494 $ 346,648 
 U.S. government-sponsored mortgage-backed securities — — — — 1,711,668 1,711,668 1,520,421 
 Private mortgage-backed securities — — — — 191,522 191,522 175,405 
 Non-government-sponsored asset backed securities — — — — 370,203 370,203 363,473 
 State and political subdivisions 2,540 41,095 130,784 815,899 — 990,318 916,325 
 Other securities — 52,328 153,020 10,374 — 215,722 185,569 
 Total $ 19,327 $ 224,786 $ 401,003 $ 922,418 $ 2,273,393 $ 3,840,927 $ 3,507,841 
 Percentage of total amortized cost 0.5 % 5.9 % 10.4 % 24.0 % 59.2 % 100.0 % 

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 December 31, 2023 
 1 Year 
or Less 1 Year 
Through 
5 Years 5 Years 
Through 
10 Years Over 
10 Years Monthly 
Amortizing 
Securities Total 
Amortized 
Cost Total
Fair
Value 
 (Dollars in thousands) 
 Held-to-maturity 
 U.S. government-sponsored enterprises $ — $ 9,510 $ 33,775 $ — $ — $ 43,285 $ 40,678 
 U.S. government-sponsored mortgage-backed securities — — — — 130,278 130,278 126,022 
 State and political subdivisions — 17,988 272,169 820,267 — 1,110,424 1,003,781 
 Other securities — — — — — — — 
 Total $ — $ 27,498 $ 305,944 $ 820,267 $ 130,278 $ 1,283,987 $ 1,170,481 
 Percentage of total amortized cost — % 2.1 % 23.8 % 63.9 % 10.2 % 100.0 % 

 
 December 31, 2023 
 1 Year 
or Less 1 Year 
Through 
5 Years 5 Years 
Through 
10 Years Over 
10 Years Monthly 
Amortizing 
Securities Tax Equivalent Yield 
 (Dollars in thousands) 
 Available-for-sale 
 U.S. government-sponsored enterprises 1.79 % 2.53 % 3.65 % 6.04 % — % 3.79 % 
 U.S. government-sponsored mortgage-backed securities — — — — 2.63 2.63 
 Private mortgage-backed securities — — — — 3.87 3.87 
 Non-government-sponsored asset backed securities — — — — 6.41 6.41 
 State and political subdivisions 3.88 3.00 3.14 2.83 — 2.88 
 Other securities — 3.99 4.19 4.75 — 4.17 
 Held-to-maturity 
 U.S. government-sponsored enterprises — % 2.45 % 3.20 % — % — % 3.04 % 
 U.S. government-sponsored mortgage-backed securities — — — — 4.22 4.22 
 State and political subdivisions — 3.04 3.22 3.51 — 3.43 
 

 The weighted average tax-equivalent yield is calculated by multiplying the carried book value by the tax-equivalent yield for each security and is then grouped by investment type and maturity. Tax-exempt obligations have been computed on a tax-equivalent basis. Taxable-equivalent adjustments are the result of increasing income from tax-free investments by an amount equal to the taxes that would be paid if the income were fully taxable, thus making tax-exempt yields comparable to taxable asset yields. Taxable equivalent adjustments were based upon 24.433% and 24.989% income tax rates for 2024 and 2023, respectively. In 2024, $31.0 million of interest income on debt securities was excluded from Federal taxation, and $13.1 million was excluded from state taxation. In 2023, $31.6 million of interest income on debt securities was excluded from Federal taxation, and $18.9 million was excluded from state taxation. 
 Deposits 
 Our deposits averaged $16.85 billion for the year ended December 31, 2024 and $17.05 billion for 2023. 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. Deposits are our primary source of funds. We offer a variety of products designed to attract and retain deposit customers. Those products consist of checking accounts, regular savings deposits, NOW accounts, money market accounts and certificates of deposit. Deposits are gathered from individuals, partnerships and corporations in our market areas. In addition, we obtain deposits from state and local entities and, to a lesser extent, U.S. Government and other depository institutions. 
 
 
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 Our policy also permits the acceptance of brokered deposits. From time to time, when appropriate in order to fund strong loan demand, we accept brokered time deposits, generally in denominations of less than $250,000, from a regional brokerage firm, and other national brokerage networks. We also participate in the One-Way Buy Insured Cash Sweep (“ICS”) service and similar services, which provide for one-way buy transactions among banks for the purpose of purchasing cost-effective floating-rate funding without collateralization or stock purchase requirements. Management believes these sources represent a reliable and cost-efficient alternative funding source for the Company. However, to the extent that our condition or reputation deteriorates, or to the extent that there are significant changes in market interest rates which we do not elect to match, we may experience an outflow of brokered deposits. In that event we would be required to obtain alternate sources for funding. 
 Table 20 reflects the classification of the brokered deposits as of December 31, 2024 and 2023. 
 Table 20: Brokered Deposits 
 
 December 31, 2024 December 31, 2023 
 (In thousands) 
 
 
 Insured Cash Sweep and Other Transaction Accounts $ 448,442 $ 401,004 
 Total Brokered Deposits $ 448,442 $ 401,004 

 The interest rates paid are competitively priced for each particular deposit product and structured to meet our funding requirements. We will continue to manage interest expense through deposit pricing. We may allow higher rate deposits to run off during periods of limited loan demand. We believe that additional funds can be attracted, and deposit growth can be realized through deposit pricing if we experience increased loan demand or other liquidity needs. 
 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. 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%. The Federal Reserve reduced the target rate three times during 2024. 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. 
 Table 21: Average Deposit Balances and Rates 
 
 Years Ended December 31, 
 2024 2023 2022 
 Average
Amount Average
Rate Paid Average
Amount Average
Rate Paid Average
Amount Average
Rate Paid 
 (Dollars in thousands) 
 Non-interest-bearing transaction accounts $ 4,029,684 — % $ 4,599,241 — % $ 5,378,906 — % 
 Interest-bearing transaction accounts 9,953,784 2.97 9,905,696 2.51 10,146,537 0.77 
 Savings deposits 1,124,219 0.84 1,256,548 0.78 1,374,244 0.22 
 Time deposits: 
 $100,000 or more 1,150,737 4.28 822,977 3.17 631,276 0.53 
 Other time deposits 596,565 3.75 461,179 2.46 402,155 0.39 
 Total $ 16,854,989 2.23 % $ 17,045,641 1.74 % $ 17,933,118 0.48 % 

 
 
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 Table 22 presents our maturities of time deposits as of December 31, 2024 and December 31, 2023. 
 Table 22: Maturities of Time Deposits 
 
 As of December 31, 
 2024 2023 
 Insured Uninsured Total Insured Uninsured Total 
 (Dollars in thousands) 
 Maturing 
 Three months or less $ 409,282 $ 320,051 $ 729,333 $ 264,879 $ 176,234 $ 441,113 
 Over three months to six months 228,355 144,427 372,782 229,569 159,854 389,423 
 Over six months to 12 months 242,719 338,004 580,723 299,251 203,958 503,209 
 Over 12 months 75,289 34,205 109,494 96,218 221,900 318,118 
 Total $ 955,645 $ 836,687 $ 1,792,332 $ 889,917 $ 761,946 $ 1,651,863 

 Securities Sold Under Agreements to Repurchase 
 We enter into short-term purchases of securities under agreements to resell (resale agreements) and sales of securities under agreements to repurchase (repurchase agreements) of substantially identical securities. The amounts advanced under resale agreements and the amounts borrowed under repurchase agreements are carried on the balance sheet at the amount advanced. Interest incurred on repurchase agreements is reported as interest expense. Securities sold under agreements to repurchase increased $20.3 million, or 14.3%, from $142.1 million as of December 31, 2023 to $162.4 million as of December 31, 2024. 
 FHLB and Other Borrowed Funds 
 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. 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. 
 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. 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 
 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.. The 2030 Notes are unsecured, subordinated debt obligations of the Company and will mature on July 31, 2030. From and including the date of issuance to, but excluding July 31, 2025 or the date of earlier redemption, the 2030 Notes will bear interest at an initial rate of 5.50% per annum, payable in arrears on January 31 and July 31 of each year. From and including July 31, 2025 to, but excluding, the maturity date or earlier redemption, the 2030 Notes will bear interest at a floating rate equal to the Benchmark rate (which is expected to be 3-month Secured Overnight Funding Rate (SOFR)), each as defined in and subject to the provisions of the applicable supplemental indenture for the 2030 Notes, plus 5.345%, payable quarterly in arrears on January 31, April 30, July 31, and October 31 of each year, commencing on October 31, 2025. 
 
 
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 The Company may, beginning with the interest payment date of July 31, 2025, and on any interest payment date thereafter, redeem the 2030 Notes, in whole or in part, subject to prior approval of the Federal Reserve if then required, at a redemption price equal to 100% of the principal amount of the 2030 Notes to be redeemed plus accrued and unpaid interest to but excluding the date of redemption. The Company may also redeem the 2030 Notes at any time, including prior to July 31, 2025, at the Company’s option, in whole but not in part, subject to prior approval of the Federal Reserve if then required, if certain events occur that could impact the Company’s ability to deduct interest payable on the 2030 Notes for U.S. federal income tax purposes or preclude the 2030 Notes from being recognized as Tier 2 capital for regulatory capital purposes, or if the Company is required to register as an investment company under the Investment Company Act of 1940, as amended. In each case, the redemption would be at a redemption price equal to 100% of the principal amount of the 2030 Notes plus any accrued and unpaid interest to, but excluding, the redemption date. 
 On January 18, 2022, the Company completed an underwritten public offering of $300.0 million in aggregate principal amount of its 3.125% Fixed-to-Floating Rate Subordinated Notes due 2032 (the “2032 Notes”) for net proceeds, after underwriting discounts and issuance costs of approximately $296.4 million. The 2032 Notes are unsecured, subordinated debt obligations of the Company and will mature on January 30, 2032. From and including the date of issuance to, but excluding January 30, 2027 or the date of earlier redemption, the 2032 Notes will bear interest at an initial rate of 3.125% per annum, payable in arrears on January 30 and July 30 of each year. From and including January 30, 2027 to, but excluding, the maturity date or earlier redemption, the 2032 Notes will bear interest at a floating rate equal to the Benchmark rate (which is expected to be Three-Month Term SOFR)), each as defined in and subject to the provisions of the applicable supplemental indenture for the 2032 Notes, plus 182 basis points, payable quarterly in arrears on January 30, April 30, July 30, and October 30 of each year, commencing on April 30, 2027. 
 The Company may, beginning with the interest payment date of January 30, 2027 , and on any interest payment date thereafter, redeem the 2032 Notes, in whole or in part, subject to prior approval of the Federal Reserve if then required, at a redemption price equal to 100% of the principal amount of the 2032 Notes to be redeemed plus accrued and unpaid interest to but excluding the date of redemption. The Company may also redeem the 2032 Notes at any time, including prior to January 30, 2027 , at the Company’s option, in whole but not in part, subject to prior approval of the Federal Reserve if then required, if certain events occur that could impact the Company’s ability to deduct interest payable on the 2032 Notes for U.S. federal income tax purposes or preclude the 2032 Notes from being recognized as Tier 2 capital for regulatory capital purposes, or if the Company is required to register as an investment company under the Investment Company Act of 1940, as amended. In each case, the redemption would be at a redemption price equal to 100% of the principal amount of the 2032 Notes plus any accrued and unpaid interest to, but excluding, the redemption date. 
 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. 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. As of December 31, 2024 and 2023, our equity to asset ratio was 17.61% and 16.73%, respectively. Book value per common share was $19.92 at December 31, 2024 compared to $18.81 at December 31, 2023. 
 Common Stock Cash Dividends. We declared cash dividends on our common stock of $0.75, $0.72 and $0.66 per share for the years ended December 31, 2024, 2023 and 2022, respectively. The common stock dividend payout ratio for the year ended December 31, 2024, 2023 and 2022 was 37.29%, 37.13% and 42.07% respectively. 
 Stock Repurchase Program. During 2024, the Company repurchased a total of 3,521,792 shares with a weighted-average stock price of $24.41 per share. The 2024 earnings were used to fund the repurchases during the year. Shares repurchased under the program as of December 31, 2024 total 26,507,507 shares. The remaining balance available for repurchase was 13,244,493 shares at December 31, 2024. 
 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. 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 
 Parent Company Liquidity . The primary sources for payment of our operating expenses and dividends are current cash on hand ($550.3 million as of December 31, 2024), dividends received from our bank subsidiary and a $20.0 million unfunded line of credit with another financial institution. 
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 Bank Liquidity . At December 31, 2024, we held $2.45 billion in assets that could be used for liquidity purposes, which we refer to as net available internal liquidity. This balance consisted of $1.61 billion in unpledged investment securities which could be used for additional secured borrowing capacity, $597.9 million in cash on deposit with the Federal Reserve Bank ("FRB") and $246.9 million in other liquid cash accounts. 
 Consistent with our practice of maintaining access to significant external liquidity, we had $3.42 billion in net available sources of borrowed funds, which we refer to as net available external liquidity, as of December 31, 2024. This included $4.94 billion in total borrowing capacity with the Federal Home Loan Bank ("FHLB"), of which $1.82 billion has been drawn upon in the ordinary course of business, resulting in $3.12 billion in net available liquidity with the FHLB as of December 31, 2024. The $1.82 billion consisted of $600.0 million in outstanding FHLB advances and $1.22 billion used for pledging purposes. 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. 
 Overall, we had $5.87 billion net available liquidity as of December 31, 2024, which consisted of $2.45 billion of net available internal liquidity and $3.42 billion in net available external liquidity. Details on our available liquidity as of December 31, 2024 is available below. 
 
 (in thousands) Total Available Amount Used Net Availability 
 Internal Sources 
 Unpledged investment securities (market value) $ 1,605,022 $ — $ 1,605,022 
 Cash at FRB 597,863 — 597,863 
 Other liquid cash accounts 246,887 — 246,887 
 Total Internal Liquidity 2,449,772 — 2,449,772 
 External Sources 
 FHLB 4,941,732 1,818,255 3,123,477 
 FRB Discount Window 193,996 — 193,996 
 BTFP (par value) — — — 
 FNBB 55,000 — 55,000 
 Other 45,000 — 45,000 
 Total External Liquidity 5,235,728 1,818,255 3,417,473 
 Total Available Liquidity $ 7,685,500 $ 1,818,255 $ 5,867,245 

 We have continued to limit our exposure to uninsured deposits and have been actively monitoring this exposure in light of the current banking environment. As of December 31, 2024, we held approximately $8.73 billion in uninsured deposits of which $840.3 million were intercompany subsidiary deposit balances and $3.05 billion were collateralized deposits, for a net position of $4.84 billion. This represents approximately 28.2% of total deposits. In addition, net available liquidity exceeded uninsured and uncollateralized deposits by $1.03 billion. 
 
 
 
 (in thousands) As of December 31, 2024 
 
 Uninsured Deposits $ 8,725,035 
 Intercompany Subsidiary and Affiliate Balances 840,317 
 Collateralized Deposits 3,047,755 
 Net Uninsured Position $ 4,836,963 
 
 Total Available Liquidity $ 5,867,245 
 Net Uninsured Position 4,836,963 
 Net Available Liquidity in Excess of Uninsured Deposits $ 1,030,282 

 Risk-Based Capital . We, as well as our bank subsidiary, are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and other discretionary actions by regulators that, if enforced, could have a direct material effect on our financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, we must meet specific capital guidelines that involve quantitative measures of our assets, liabilities and certain off-balance-sheet items as calculated under regulatory accounting practices. Our capital amounts and classifications are also subject to qualitative judgments by the regulators as to components, risk weightings and other factors. 
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 In July 2013, the Federal Reserve Board and the other federal bank regulatory agencies issued a final rule to revise their risk-based and leverage capital requirements and their method for calculating risk-weighted assets to make them consistent with the agreements that were reached by the Basel Committee on Banking Supervision in “Basel III: A Global Regulatory Framework for More Resilient Banks and Banking Systems” and certain provisions of the Dodd-Frank Act (“Basel III”). Basel III applies to all depository institutions, bank holding companies with total consolidated assets of $500 million or more, and savings and loan holding companies. Basel III became effective for the Company and its bank subsidiary on January 1, 2015. Basel III limits a banking organization’s capital distributions and certain discretionary bonus payments if the banking organization does not hold a “capital conservation buffer” of 2.5% of common equity Tier 1 capital to risk-weighted assets, which is in addition to the amount necessary to meet its minimum risk-based capital requirements. 
 Basel III amended the prompt corrective action rules to incorporate a common equity Tier 1 ("CET1") capital requirement and to raise the capital requirements for certain capital categories. In order to be adequately capitalized for purposes of the prompt corrective action rules, a banking organization is required to have at least a 4.5% CET1 risk-based capital ratio, a 4% Tier 1 leverage ratio, a 6% Tier 1 risk-based capital ratio and an 8% total risk-based capital ratio. 
 Quantitative measures established by regulation to ensure capital adequacy require us to maintain minimum amounts and ratios (set forth in the table below) of total and Tier 1 capital to risk-weighted assets, and of Tier 1 capital to average assets. Management believes that, as of December 31, 2024 and December 31, 2023, we met all regulatory capital adequacy requirements to which we were subject. 
 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. As part of its response to the impact of COVID-19, on March 27, 2020, the federal banking regulatory agencies issued an interim final rule that provided the option to temporarily delay certain effects of CECL on regulatory capital for two years, followed by a three-year transition period. The interim final rule allows bank holding companies and banks to delay for two years 100% of the day-one impact of adopting CECL and 25% of the cumulative change in the reported allowance for credit losses since adopting CECL. The Company has elected to adopt the interim final rule, which is reflected in the risk-based capital ratios presented below. 
 
 
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 Table 23 presents our risk-based capital ratios as of December 31, 2024 and 2023. 
 Table 23: Risk-Based Capital 
 
 December 31, 2024 December 31, 2023 
 (Dollars in thousands) 
 Tier 1 capital 
 Stockholders’ equity $ 3,961,025 $ 3,791,075 
 ASC 326 transitional period adjustment 8,123 16,246 
 Goodwill and core deposit intangibles, net (1,438,140) (1,446,573) 
 Unrealized loss (gain) on available-for-sale securities 256,108 249,075 
 Total common equity Tier 1 capital 2,787,116 2,609,823 
 
 Total Tier 1 capital 2,787,116 2,609,823 
 Tier 2 capital 
 Allowance for credit losses 275,880 288,234 
 ASC 326 transitional period adjustment (8,123) (16,246) 
 Disallowed allowance for credit losses (limited to 1.25% of risk weighted assets) (36,105) (40,509) 
 Qualifying allowance for credit losses 231,652 231,479 
 Qualifying subordinated notes 439,246 439,834 
 Total Tier 2 capital 670,898 671,313 
 Total risk-based capital $ 3,458,014 $ 3,281,136 
 Average total assets for leverage ratio $ 21,365,045 $ 20,981,774 
 Risk weighted assets $ 18,447,826 $ 18,440,964 
 Ratios at end of period 
 Common equity Tier 1 capital 15.11 % 14.15 % 
 Leverage ratio 13.05 12.44 
 Tier 1 risk-based capital 15.11 14.15 
 Total risk-based capital 18.74 17.79 
 Minimum guidelines – Basel III 
 Common equity Tier 1 capital 7.00 % 7.00 % 
 Leverage ratio 4.00 4.00 
 Tier 1 risk-based capital 8.50 8.50 
 Total risk-based capital 10.50 10.50 
 Well-capitalized guidelines 
 Common equity Tier 1 capital 6.50 % 6.50 % 
 Leverage ratio 5.00 5.00 
 Tier 1 risk-based capital 8.00 8.00 
 Total risk-based capital 10.00 10.00 

 
 
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 As of the most recent notification from regulatory agencies, our bank subsidiary was “well-capitalized” under the regulatory framework for prompt corrective action. To be categorized as “well-capitalized”, we, as well as our banking subsidiary, must maintain minimum CET1 capital, leverage, Tier 1 risk-based capital, and total risk-based capital ratios as set forth in the table. There are no conditions or events since that notification that we believe have changed the bank subsidiary’s category. 
 Table 24 presents actual capital amounts and ratios as of December 31, 2024 and 2023, for our bank subsidiary and us. 
 Table 24: Capital and Ratios 
 
 Actual Minimum Capital
Requirement –
Basel III Minimum To Be
Well-Capitalized
Under Prompt
Corrective Action
Provision 
 Amount Ratio Amount Ratio Amount Ratio 
 (Dollars in thousands) 
 As of December 31, 2024 
 Common equity Tier 1 capital ratios: 
 Home BancShares $ 2,787,116 15.11 % $ 1,291,348 7.00 % N/A N/A 
 Centennial Bank 2,604,830 14.17 1,286,790 7.00 1,194,876 6.50 
 Leverage ratios: 
 Home BancShares $ 2,787,116 13.05 % $ 854,602 4.00 % N/A N/A 
 Centennial Bank 2,604,830 12.23 851,948 4.00 1,064,935 5.00 
 Tier 1 capital ratios: 
 Home BancShares $ 2,787,116 15.11 % $ 1,568,065 8.50 % N/A N/A 
 Centennial Bank 2,604,830 14.17 1,562,530 8.50 1,470,617 8.00 
 Total risk-based capital ratios: 
 Home BancShares $ 3,458,014 18.74 % $ 1,937,022 10.50 % N/A N/A 
 Centennial Bank 2,835,636 15.43 1,929,629 10.50 1,837,742 10.00 
 As of December 31, 2023 
 Common equity Tier 1 capital ratios: 
 Home BancShares $ 2,609,823 14.15 % $ 1,290,867 7.00 % N/A N/A 
 Centennial Bank 2,495,303 13.60 1,284,347 7.00 1,192,608 6.50 
 Leverage ratios: 
 Home BancShares $ 2,609,823 12.44 % $ 839,271 4.00 % N/A N/A 
 Centennial Bank 2,495,303 11.92 837,350 4.00 1,046,688 5.00 
 Tier 1 capital ratios: 
 Home BancShares $ 2,609,823 14.15 % $ 1,567,482 8.50 % N/A N/A 
 Centennial Bank 2,495,303 13.60 1,559,564 8.50 1,467,825 8.00 
 Total risk-based capital ratios: 
 Home BancShares $ 3,281,136 17.79 % $ 1,936,301 10.50 % N/A N/A 
 Centennial Bank 2,725,909 14.85 1,927,410 10.50 1,835,629 10.00 

 Cash Commitments and Resources 
 In the normal course of business, we enter into a number of financial commitments. Examples of these commitments include but are not limited to operating lease obligations, FHLB advances & other borrowings, lines of credit, subordinated debentures, unfunded loan commitments and letters of credit. 
 Commitments to extend credit and letters of credit are legally binding, conditional agreements generally having certain expiration or termination dates. These commitments generally require customers to maintain certain credit standards and are established based on management’s credit assessment of the customer. The commitments may expire without being drawn upon. Therefore, the total commitment does not necessarily represent future requirements. 
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 Standby letters of credit are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. Those guarantees are primarily issued to support public and private borrowing arrangements, including commercial paper, bond financing and similar transactions. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loans to customers. The Company had total outstanding letters of credit amounting to $153.9 million and $185.5 million at December 31, 2024 and 2023, respectively, with the majority of maturities ranging from currently due to four years. 
 Table 25 presents the anticipated funding requirements of our most significant financial commitments, excluding interest, as of December 31, 2024. 
 Table 25: Funding Requirements of Financial Commitments 
 
 Payments Due by Period 
 Less than
One Year One-Three
Years Three-Five
Years Greater than
Five Years Total 
 (In thousands) 
 Operating lease obligations $ 10,262 $ 18,004 $ 12,139 $ 16,346 $ 56,751 
 FHLB advances & other borrowings by contractual maturity 100,750 100,000 — 400,000 600,750 
 Subordinated debentures — — — 439,246 439,246 
 Loan commitments 1,833,557 2,078,658 281,702 275,812 4,469,729 
 Letters of credit 153,660 228 — — 153,888 

 Non-GAAP Financial Measurements 
 Our accounting and reporting policies conform to generally accepted accounting principles in the United States (“GAAP”) and the prevailing practices in the banking industry. However, this report contains financial information determined by methods other than in accordance with GAAP, including earnings, as adjusted; diluted earnings per common share, as adjusted; tangible book value per share; return on average assets, excluding intangible amortization; return on average assets, as adjusted; return on average common equity, as adjusted; return on average tangible equity excluding intangible amortization; return on average tangible equity, as adjusted; tangible equity to tangible assets; and efficiency ratio, as adjusted. 
 We believe these non-GAAP measures and ratios, when taken together with the corresponding GAAP measures and ratios, provide meaningful supplemental information regarding our performance. We believe investors benefit from referring to these non-GAAP measures and ratios in assessing our operating results and related trends, and when planning and forecasting future periods. However, these non-GAAP measures and ratios should be considered in addition to, and not as a substitute for or preferable to, ratios prepared in accordance with GAAP. 
 The tables below present non-GAAP reconciliations of earnings, as adjusted, and diluted earnings per share, as adjusted, as well as the non-GAAP computations of tangible book value per share; return on average assets, excluding intangible amortization; return on average assets, as adjusted; return on average common equity, as adjusted; return on average tangible equity excluding intangible amortization; return on average tangible equity, as adjusted; tangible equity to tangible assets; and efficiency ratio, as adjusted. The items used in these calculations are included in financial results presented in accordance with GAAP. 
 Earnings, as adjusted, and diluted earnings per common share, as adjusted, are meaningful non-GAAP financial measures for management, as they exclude certain items such as merger expenses and/or certain gains and losses. Management believes the exclusion of these items in expressing earnings provides a meaningful foundation for period-to-period and company-to-company comparisons, which management believes will aid both investors and analysts in analyzing our financial measures and predicting future performance. These non-GAAP financial measures are also used by management to assess the performance of our business, because management does not consider these items to be relevant to ongoing financial performance. 
 
 
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 In Table 26 below, we have provided a reconciliation of the non-GAAP calculation of the financial measure for the periods indicated. 
 Table 26: Earnings, As Adjusted 
 
 Years Ended December 31, 
 2024 2023 2022 
 (In thousands, except per share data) 
 GAAP net income available to common shareholders (A) $ 402,241 $ 392,929 $ 305,262 
 Adjustments: 
 FDIC special assessment 2,260 12,983 — 
 BOLI death benefit (257) (3,117) — 
 Fair value adjustment for marketable securities (2,971) 1,094 1,272 
 Initial provision for credit losses - acquisition — — 58,585 
 Gain on sale of building (2,059) — — 
 Recoveries on historic losses — (3,461) (6,706) 
 
 Special dividend from equity investment — — (1,434) 
 Merger expenses — — 49,594 
 Hurricane expenses — — 176 
 TRUPS redemption fees — — 2,081 
 Special lawsuit settlement, net of expense — — (10,000) 
 
 Total adjustments (3,027) 7,499 93,568 
 Tax-effect of adjustments (1) 
 (688) 1,959 22,890 
 Deferred tax asset write-down 2,030 — — 
 Total adjustments after tax (B) (309) 5,540 70,678 
 Earnings, as adjusted (C) $ 401,932 $ 398,469 $ 375,940 
 Average diluted shares outstanding (D) 200,069 202,773 195,019 
 GAAP diluted earnings per share: A/D $ 2.01 $ 1.94 $ 1.57 
 Adjustments after-tax: B/D — 0.03 0.36 
 Diluted earnings per common share excluding adjustments: C/D $ 2.01 $ 1.97 $ 1.93 

 (1) Blended statutory tax rate of 24.433% for 2024, 24.989% for 2023 and 24.6375% for 2022. 
 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; return on average assets, excluding intangible amortization; return on average assets, as adjusted; return on average common equity, as adjusted; return on average tangible equity excluding intangible amortization; return on average tangible equity, as adjusted and tangible equity to tangible assets are useful in evaluating our Company. These calculations, which are similar to the GAAP calculation of diluted earnings per common share, book value, return on average assets, return on average equity, and equity to assets, are presented in Tables 27 through 30, respectively. 
 Table 27: Tangible Book Value Per Share 
 
 Years Ended December 31, 
 2024 2023 
 (In thousands, except per share data) 
 Book value per share: A/B $ 19.92 $ 18.81 
 Tangible book value per share: (A-C-D)/B 12.68 11.63 
 (A) Total equity $ 3,961,025 $ 3,791,075 
 (B) Shares outstanding 198,882 201,526 
 (C) Goodwill 1,398,253 1,398,253 
 (D) Core deposit intangible 40,327 48,770 

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 Table 28: Return on Average Assets Excluding Intangible Amortization 
 
 Years Ended December 31, 
 2024 2023 2022 
 (Dollars in thousands) 
 Return on average assets: A/D 1.77 % 1.77 % 1.35 % 
 Return on average assets excluding intangible amortization: (A+B)/(D-E) 1.92 1.93 1.47 
 Return on average assets, as adjusted: (A+C)/D 1.77 1.79 1.67 
 (A) Net income $ 402,241 $ 392,929 $ 305,262 
 (B) Intangible amortization after-tax 6,345 7,288 6,624 
 (C) Adjustments after-tax (309) 5,540 70,678 
 (D) Average assets 22,754,380 22,217,910 22,553,340 
 (E) Average goodwill, core deposits and other intangible assets 1,442,713 1,451,705 1,335,216 

 Table 29: Return on Average Tangible Equity Excluding Intangible Amortization 
 
 Years Ended December 31, 
 2024 2023 2022 
 (Dollars in thousands) 
 Return on average equity: A/D 10.43 % 10.82 % 9.17 % 
 Return on average common equity, as adjusted: (A+C)/D 10.42 10.97 11.29 
 Return on average tangible common equity: A/(D-E) 16.66 18.03 15.30 
 Return on average tangible equity excluding intangible amortization: B/(D-E) 16.92 18.36 15.63 
 Return on average tangible common equity, as adjusted: (A+C)/(D-E) 16.64 18.28 18.84 
 (A) Net income $ 402,241 $ 392,929 $ 305,262 
 (B) Earnings excluding intangible amortization 408,586 400,217 311,886 
 (C) Adjustments after-tax (309) 5,540 70,678 
 (D) Average equity 3,857,677 3,631,300 3,330,718 
 (E) Average goodwill, core deposits and other intangible assets 1,442,713 1,451,705 1,335,216 

 Table 30: Tangible Equity to Tangible Assets 
 
 Years Ended December 31, 
 2024 2023 
 (Dollars in thousands) 
 Equity to assets: B/A 17.61 % 16.73 % 
 Tangible equity to tangible assets: (B-C-D)/(A-C-D) 11.98 11.05 
 (A) Total assets $ 22,490,748 $ 22,656,658 
 (B) Total equity 3,961,025 3,791,075 
 (C) Goodwill 1,398,253 1,398,253 
 (D) Core deposit intangible 40,327 48,770 

 
 
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 The efficiency ratio is a standard measure used in the banking industry and is calculated by dividing non-interest expense less amortization of core deposit intangibles by the sum of net interest income on a tax equivalent basis and non-interest income. The efficiency ratio, as adjusted, is a meaningful non-GAAP measure for management, as it excludes certain items and is calculated by dividing non-interest expense less amortization of core deposit intangibles by the sum of net interest income on a tax equivalent basis and non-interest income excluding items such as merger expenses and/or certain other gains and losses. In Table 31 below, we have provided a reconciliation of the non-GAAP calculation of the financial measure for the periods indicated. 
 Table 31: Efficiency Ratio, As Adjusted 
 
 Years Ended December 31, 
 2024 2023 2022 
 (Dollars in thousands) 
 Net interest income (A) $ 848,774 $ 826,945 $ 758,676 
 Non-interest income (B) 168,574 169,934 175,111 
 Non-interest expense (C) 446,936 472,863 475,627 
 FTE Adjustment (D) 8,534 5,506 8,663 
 Amortization of intangibles (E) 8,443 9,685 8,853 
 Adjustments: 
 Non-interest income: 
 Fair value adjustment for marketable securities $ 2,971 $ (1,094) $ (1,272) 
 Special dividend from equity investment — — 1,434 
 (Loss) gain on OREO, net (2,272) 332 500 
 Gain on branches, equipment and other assets, net 2,102 1,507 15 
 
 BOLI death benefits 257 3,117 — 
 Special lawsuit settlement — — 15,000 
 Recoveries on historic losses — 3,461 6,706 
 Total non-interest income adjustments (F) $ 3,058 $ 7,323 $ 22,383 
 Non-interest expense: 
 FDIC special assessment $ 2,260 $ 12,983 $ — 
 TRUPS redemption fees — — 2,081 
 Merger expenses — — 49,594 
 Hurricane expense — — 176 
 Special lawsuit legal expense — — 5,000 
 
 Total non-interest expense adjustments (G) $ 2,260 $ 12,983 $ 56,851 
 Efficiency ratio (reported): ((C-E)/(A+B+D)) 42.74 % 46.21 % 49.53 % 
 Efficiency ratio, as adjusted (non-GAAP): ((C-E-G)/(A+B+D-F)) 42.65 45.24 44.55 

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 Table 32 presents selected unaudited quarterly financial information for 2024 and 2023. 
 Table 32: Quarterly Results 
 
 2024 Quarters 
 First Second Third Fourth Total 
 (In thousands, except per share data) 
 Income statement data: 
 Total interest income $ 316,915 $ 327,303 $ 332,845 $ 322,714 $ 1,299,777 
 Total interest expense 112,325 115,481 117,625 105,572 $ 451,003 
 Net interest income 204,590 211,822 215,220 217,142 848,774 
 Provision for credit losses 4,500 8,000 18,870 16,700 48,070 
 Net interest income after provision for credit losses 200,090 203,822 196,350 200,442 800,704 
 Total non-interest income 41,799 42,774 42,779 41,222 168,574 
 Total non-interest expense 111,496 113,185 110,045 112,210 446,936 
 Income before income taxes 130,393 133,411 129,084 129,454 522,342 
 Income tax expense 30,284 31,881 29,046 28,890 120,101 
 Net income $ 100,109 $ 101,530 $ 100,038 $ 100,564 $ 402,241 
 Per share data: 
 Basic earnings per common share $ 0.50 $ 0.51 $ 0.50 $ 0.51 $ 2.01 
 Diluted earnings per common share 0.50 0.51 0.50 0.51 2.01 

 
 2023 Quarters 
 First Second Third Fourth Total 
 (In thousands, except per share data) 
 Income statement data: 
 Total interest income $ 284,939 $ 289,632 $ 294,262 $ 306,220 $ 1,175,053 
 Total interest expense 70,344 81,989 92,325 103,450 348,108 
 Net interest income 214,595 207,643 201,937 202,770 826,945 
 Provision for credit losses 1,200 3,983 1,300 5,650 12,133 
 Net interest income after provision for credit losses 213,395 203,660 200,637 197,120 814,812 
 Total non-interest income 34,164 49,509 43,413 42,848 169,934 
 Total non-interest expense 114,644 116,282 114,762 127,175 472,863 
 Income before income taxes 132,915 136,887 129,288 112,793 511,883 
 Income tax expense 29,953 31,616 30,835 26,550 118,954 
 Net income $ 102,962 $ 105,271 $ 98,453 $ 86,243 $ 392,929 
 Per share data: 
 Basic earnings per common share $ 0.51 $ 0.52 $ 0.49 $ 0.43 $ 1.94 
 Diluted earnings per common share 0.51 0.52 0.49 0.43 1.94 

 
 Recent Accounting Pronouncements 
 See Note 25 to the Notes to Consolidated Financial Statements for a discussion of certain recent accounting pronouncements. 
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HOME BANCSHARES INC 10-K

Item 7. Management’s Discussion and Analysis
