What changed in this filing

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Item 1A. Risk Factors

2026-02-27 compared with 2025-02-27 · 51 added, 30 removed, 292 unchanged (22% of the section changed)

68 unchanged sentences

For example, increases in interest rates can have a negative impact on our results of operations by reducing loan demand and the ability of borrowers to repay their current obligations, while decreases in interest rates may affect loan prepayments.

In response to inflation and its affects on U.S.

In response to inflation and its effects on U.S.

business and consumers, the Federal Reserve Board implemented a series of eleven interest rate increases beginning in March 2022.

However, in response to recent slowing inflation, the Federal Reserve Board reduced interest rates three times in 2024.

However, in response to recent slowing inflation, beginning in September 2024, the Federal Reserve Board reduced interest rates six times through December 2025.

Future economic developments and the Federal Reserve Board’s policies in response, however, cannot be predicted with certainty.

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Further, our stock price may be negatively impacted by failures of other financial institutions and their effects on consumer and investor confidence, and we may experience increased deposit insurance premiums, increased regulatory scrutiny and other adverse effects on our business, profitability or financial condition as a result of these failures.

The impacts of national or international pandemics could materially and adversely affect our business, financial condition and results of operations.

Our operations and those of our customers and third-party service providers may be adversely affected by the widespread outbreak of contagious disease, such as the COVID-19 virus.

The COVID-19 pandemic disrupted U.S.

and global supply chains and altered business and economic conditions throughout the U.S.

and globally.

Its economic impacts lowered equity market valuations;

created significant volatility and disruption in financial markets;

contributed to a decrease in the rates and yields on U.S.

The impacts of public health crises, including national or international pandemics, could materially and adversely affect our business, financial condition and results of operations.

Our operations and those of our customers and third-party service providers may be adversely affected by the widespread outbreak of contagious disease and other public health emergencies.

Such events can disrupt U.S.

and global supply chains and alter business and economic conditions;

lower equity market valuations;

create significant volatility and disruption in financial markets;

influence interest-rate and yields on U.S.

Treasury securities;

resulted in ratings downgrades, credit deterioration, and defaults in many industries;

increased demands on capital and liquidity;

increased unemployment levels and decreased consumer confidence.

The pandemic also caused us to recognize credit losses in our loan portfolios and increases in our allowance for credit losses.

The extent to which any future outbreaks of the COVID-19 virus or other contagious diseases may impact general economic and business conditions is highly uncertain and unpredictable.

result in ratings downgrades, credit deterioration, and defaults in many industries;

increase demands on capital and liquidity;

elevate unemployment levels;

and weaken consumer confidence.

Public health crises may also result in credit losses in our loan portfolios and require increases in our allowance for credit losses.

The extent to which any future outbreaks of contagious disease or other public health emergencies may impact general economic and business conditions is highly uncertain and unpredictable.

As part of these uncertainties, we could be subject to a number of risks, any of which could have a material, adverse effect on our business, financial condition, liquidity, results of operations, and ability to execute our growth strategy.

5 unchanged sentences

or a downgrade in our credit ratings.

We could also face an increased risk of governmental and regulatory scrutiny as a result of the effects of a pandemic on market and economic conditions and actions governmental authorities take in response to those conditions.

We could also face an increased risk of governmental and regulatory scrutiny as a result of the effects of a public health crises on market and economic conditions and actions governmental authorities take in response to those conditions.

Any such occurrence could have a significant adverse impact on our business, financial condition, liquidity or results of operations.

5 unchanged sentences

In determining the size of the allowance, we analyze our loan portfolio based on our historical loss experience, volume and classification of loans, volume and trends in delinquencies and non-accruals, national and local economic conditions, and other pertinent information.

During the fourth quarter of 2024, we completed a company-wide asset quality cleanup project, which resulted in net charge-offs for the quarter of $53.4 million and a reduction in our allowance for credit losses of $36.7 million from $312.6 million, or 2.11% of total loans, at September 30, 2024.

The reduction resulting from charge-offs was partially offset by a $16.7 million provision for credit losses during the fourth quarter related to Hurricanes Helene and Milton.

However, no additional provision for credit losses on loans was recorded for the quarter ended December 31, 2024, as the current level of reserves was considered adequate for the loan portfolio.

If our assumptions are incorrect, our current allowance may be insufficient to absorb future loan losses, and we may determine that increased loan loss reserves may be needed to respond to different economic conditions or adverse developments in our loan portfolio.

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The loss of key employees may materially and adversely affect us.

Our success depends significantly on our Chairman, Chief Executive Officer and President, John W.

Our success depends significantly on our Chairman and Chief Executive Officer, John W.

Allison, and our executive officers, especially Brian S.

Stephen Tipton and Kevin D.

Hester plus Centennial Bank Chairman, Tracy M.

French, as well as other key Centennial Bank personnel.

Stephen Tipton, Kevin D.

Hester and Donna J.

Townsell, as well as other key Centennial Bank personnel.

Centennial Bank, in particular, relies heavily on its management team’s relationships in its local communities to generate business.

11 unchanged sentences

Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income.

Changes in the allowance for credit losses are recorded as provision for (or reversal of) credit loss expense.

Changes in the allowance for credit losses are recorded as provision for (or recovery 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.

7 unchanged sentences

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.

Changes in the allowance for credit losses are recorded as provision for (or recovery of) credit loss expense.

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

43 unchanged sentences

We have acquired 23 banks since we started our first subsidiary bank in 1999, including a total of 18 banks since 2010.

We will continue to consider future strategic acquisitions, with a primary focus on Texas, Arkansas, Florida, Alabama and other nearby markets.

We currently anticipate completing our proposed acquisition of Mountain Commerce Bancorp, Inc., headquartered in Knoxville, Tennessee, during the second quarter of 2026.

We will continue to consider future strategic acquisitions, with a primary focus on Tennessee, Texas, Arkansas, Florida, Alabama and other nearby markets.

In most cases, our acquisition of a bank includes the acquisition of all or a substantial portion of the target bank’s assets and liabilities, including all or a substantial portion of its loan portfolio, although we have in the past acquired and may in the future acquire specific lending divisions or loan portfolios.

24 unchanged sentences

The banking business in our primary market areas is very competitive, and the level of competition facing us may increase further, which may limit our asset growth and financial results.

We continually encounter technological change, and we may have fewer resources than many of our competitors to continue to invest in technological improvements and innovations.

We continually encounter technological change, and we may not be able to keep pace with rapid technological change in the financial services industry.

The financial services industry continues to undergo rapid technological changes, including the development and use of artificial intelligence ("AI").

17 unchanged sentences

We may incur losses as a result of unforeseen or catastrophic events, including extreme weather events or other natural disasters.

As illustrated by the impacts of Hurricanes Helene and Milton this past year, our markets in Alabama and Florida, like other coastal areas, are susceptible to hurricanes and tropical storms.

Our markets in Alabama and Florida, like other coastal areas, are susceptible to hurricanes and tropical storms.

Such weather events can disrupt our operations, result in damage to our properties and negatively affect the local economies in which we operate.

24 unchanged sentences

Repeated incidences of fraud or compliance failures would adversely impact the performance of our loan portfolio.

Risks Related to the Proposed Acquisition of Mountain Commerce Bancorp, Inc.

We may fail to realize all of the anticipated benefits of the merger.

The success of the merger of MCBI with and into us will depend, in part, on our ability to successfully combine our and MCBI’s organizations.

If we are not able to achieve this objective, the anticipated benefits of the merger may not be realized fully or at all or may take longer than expected to be realized.

We and MCBI have operated and, until the completion of the merger, will continue to operate, independently.

It is possible that the integration process or other factors could result in the loss or departure of key employees, the disruption of the ongoing business of MCBI or inconsistencies in standards, controls, procedures and policies.

It is also possible that clients, customers, depositors and counterparties of MCBI could choose to discontinue their relationships with the combined company post-merger because they prefer doing business with MCBI or for any other reason, which would adversely affect the future performance of the combined company.

These transition matters could have an adverse effect on each of us and MCBI during the pre-merger period and for an undetermined time after the completion of the merger.

The completion of the merger is subject to the consent and approval of various governmental authorities, which may impose conditions that could have an adverse effect on the combined company following the merger.

Before the merger may be completed, we and MCBI must obtain approval of the merger from the Federal Reserve Board, Arkansas State Bank Department, FDIC, and Tennessee Department of Financial Institutions.

These governmental authorities may impose conditions on its granting of such approval.

Although we and MCBI do not currently expect that any such material conditions or changes would be imposed, there can be no assurance that they will not be, and such conditions or changes could have the effect of delaying completion of the merger or imposing additional costs or limiting the revenues of the combined company following the merger, any of which might have an adverse effect on the combined company following the merger.

In addition, if there is an adverse development in either company’s regulatory standing, we may be required to withdraw our application for approval of the proposed merger and, if possible, resubmit it after the applicable supervisory concerns have been resolved.

Finally, we and MCBI have each agreed to use its commercially reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable under applicable law to consummate the merger.

Such actions may entail costs and may adversely affect us, MCBI, or the combined company following the merger.

The combined company expects to incur substantial expenses related to the merger.

The combined company expects to incur substantial expenses in connection with completing the merger and combining the business, operations, networks, systems, technologies, policies and procedures of the two companies.

Although we and MCBI have assumed that a certain level of transaction and combination expenses would be incurred, there are a number of factors beyond their control that could affect the total amount or the timing of their combination expenses.

Many of the expenses that will be incurred, by their nature, are difficult to estimate accurately at the present time.

Due to these factors, the transaction and combination expenses associated with the merger could, particularly in the near term, exceed the savings that the combined company expects to achieve from the elimination of duplicative expenses and the realization of economies of scale and cost savings related to the combination of the businesses following the completion of the merger.

In addition, many of these expenses will be incurred regardless of whether the merger is completed.

As a result of these expenses, both we and MCBI expect to take charges against our respective earnings before and after the completion of the merger.

The charges taken in connection with the merger are expected to be significant, although the aggregate amount and timing of such charges are uncertain at present.

Risks Related to Owning Our Stock

The rights of our common shareholders are subordinate to the holders of any debt securities that we may issue from time to time and may be subordinate to the holders of any series of preferred stock that may issue in the future.

We currently have outstanding $300.0 million of 3.125% fixed-to-floating rate subordinated notes, which mature in 2032, and $140.0 million of subordinated notes, which mature in 2030 and carry a fixed rate of 5.500% for the first five years.

Thereafter, the notes bear interest at 3-month Secured Overnight Funding Rate (SOFR) plus 5.345%, resetting quarterly.

We currently have outstanding $300.0 million of 3.125% fixed-to-floating rate subordinated notes, which mature in 2032 and carry a fixed rate for the first five years.

Thereafter, the notes bear interest at 3-month Secured Overnight Funding Rate (SOFR) plus 182 basis points, resetting quarterly.

Because these subordinated notes are senior to our shares of common stock, in the event of our bankruptcy, dissolution or liquidation, the holders of any such subordinated notes then outstanding must be satisfied before any distributions can be made to the holders of our common stock.

14 unchanged sentences

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

What changed 10-K

Item 1A. Risk Factors