What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2025-03-03 compared with 2024-03-01 · 258 added, 592 removed, 1311 unchanged (39% of the section changed)

15 unchanged sentences

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 29, 2024, expressed an unqualified opinion thereon.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 3, 2025, expressed an unqualified opinion thereon.

Basis for Opinion

12 unchanged sentences

(1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Allowance for Loan Losses

The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.

Allowance for Credit Losses on Loans

The Company’s loan portfolio and the associated allowance for credit losses (“allowance”) were $12.61 billion and $164.5 million as of December 31, 2024, respectively.

16 unchanged sentences

Analyzed the total qualitative factor adjustment applied to each loan pool, in comparison to changes in the Company’s quantitatively driven expected credit losses and loan pools and evaluated the appropriateness and level of the total qualitative factor adjustment applied in the overall allowance.

/s/ FORVIS, LLP

/s/ Forvis Mazars, LLP

We have served as the Company’s auditor since 2014.

Tampa, Florida

February 29, 2024

March 3, 2025

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders

To the Stockholders and Board of Directors

ServisFirst Bancshares, Inc.

Opinion on Internal Control Over Financial Reporting

Opinion on the Internal Control over Financial Reporting

We have audited ServisFirst Bancshares, Inc.

3 unchanged sentences

(2013) issued by COSO.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements of the Company as of December 31, 2023 and 2022, and for each of the three years in the period ended December 31, 2023, and our report dated February 29, 2024, expressed an unqualified opinion on those consolidated financial statements.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements of the Company as of December 31, 2024 and 2023, and for each of the three years in the period ended December 31, 2024, and our report dated March 3, 2025, expressed an unqualified opinion on those financial statements.

Basis for Opinion

8 unchanged sentences

We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

Definitions and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of reliable financial statements for external purposes in accordance with generally accepted accounting principles.

4 unchanged sentences

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.

/s/ FORVIS, LLP

/s/ Forvis Mazars, LLP

Tampa, Florida

February 29, 2024

March 3, 2025

SERVISFIRST BANCSHARES, INC.

5 unchanged sentences

Cash and due from banks

$ 123,430 $ 106,317

Interest-bearing balances due from depository institutions

1,907,083 708,221

Federal funds sold

100,575 1,515

Cash and cash equivalents

2,131,088 816,053

Available-for-sale debt securities, at fair value

900,183 644,815

Held-to-maturity debt securities (fair value of $ 639,496 and $ 907,191 , respectively)

982,664 1,034,121

Restricted equity securities

Mortgage loans held for sale

11,658,829 11,687,968

Less allowance for credit losses

( 153,317 ) ( 146,297 )

11,505,512 11,541,671

Premises and equipment, net

59,324 59,850

Accrued interest and dividends receivable

59,181 48,422

Deferred tax asset, net

62,918 60,448

Other real estate owned and repossessed assets

Bank owned life insurance contracts

292,759 287,752

13,615 13,615

106,129 79,417

$ 16,129,668 $ 14,595,753

LIABILITIES AND STOCKHOLDERS' EQUITY

Non-interest-bearing demand

$ 2,643,101 $ 3,321,347

Interest-bearing

10,630,410 8,225,458

Total deposits

13,273,511 11,546,805

Federal funds purchased

1,256,724 1,618,798

Other borrowings

64,735 64,726

Accrued interest and dividends payable

27,545 18,615

Other liabilities

66,748 48,913

Total liabilities

14,689,263 13,297,857

Stockholders' equity:

6 unchanged sentences

Additional paid-in capital

232,605 229,693

Retained earnings

1,254,841 1,109,902

Accumulated other comprehensive loss

( 47,595 ) ( 42,253 )

Total stockholders' equity attributable to ServisFirst Bancshares, Inc.

1,439,905 1,297,396

Noncontrolling interest

Total stockholders' equity

1,440,405 1,297,896

Total liabilities and stockholders' equity

$ 16,129,668 $ 14,595,753

See Notes to Consolidated Financial Statements.

21 unchanged sentences

Credit card income

Securities (losses) gains

Increase in cash surrender value life insurance

Securities losses

Bank-owned life insurance income

Other operating income

21 unchanged sentences

Year Ended December 31,

$ 206,853 $ 251,504 $ 207,734

Other comprehensive loss, net of tax:

Unrealized net holding losses arising during period from securities available for sale, net of tax of $( 1,593 ), $( 19,336 ), and $( 2,705 ) for 2023, 2022, and 2021, respectively

( 4,754 ) ( 59,768 ) ( 10,181 )

Amortization of net unrealized (losses) on securities transferred from available-for-sale to held-to-maturity, net of tax of $( 197 ), $( 375 ), and $( 319 ) for 2023, 2022, and 2021 respectively

( 588 ) ( 1,414 ) ( 1,196 )

Reclassification adjustment for securities transferred from available-for-sale to held-to-maturity net of tax of $ 1,480 for 2021

Reclassification adjustment for net losses (gains) on call and sale of securities, net of tax of $ 1,295 and $( 130 ), for 2022 and 2021, respectively

- 4,873 ( 490 )

Other comprehensive loss, net of tax

( 5,342 ) ( 56,309 ) ( 6,162 )

Other comprehensive income (loss), net of tax:

Unrealized net holding gains (losses) arising during period from securities available for sale, net of $ 7,347 , $( 1,593 ), and $( 20,982 ) for the twelve months ended December 31, 2024, 2023, and 2022, respectively

Amortization of net unrealized gains on securities transferred from available-for-sale to held-to-maturity, net of tax of $( 155 ), $( 197 ), and $( 375 ) for the twelve months ended December 31, 2024, 2023, and 2022, respectively

Reclassification adjustment for net losses on call and sale of securities, net of tax of $ 1,295 for 2022

Other comprehensive income (loss), net of tax

Comprehensive income

$ 201,511 $ 195,195 $ 201,572

See Notes to Consolidated Financial Statements.

3 unchanged sentences

(In thousands, except share amounts)

Year Ended December 31,

Years Ended December 31, 2024, 2023 and 2022

Common Shares

6 unchanged sentences

Balance, January 1, 2022

53,943,751 $ - $ 54 $ 223,856 $ 748,224 $ 20,218 $ 500 $ 992,852

Common dividends paid, $ 0.69 per share

- - - ( 32,520 ) - - ( 32,520 )

Common dividends declared, $ 0.28 per share

- - - ( 12,472 ) - - ( 12,472 )

Preferred dividends paid

- - - ( 62 ) - - ( 62 )

Dividends on nonvested restricted stock recognized as compensation expense

- - - - 104 - - 104

Issue restricted shares pursuant to stock incentives, net of forfeitures

57,570 - - - - - - -

Issue shares of common stock upon exercise of stock options

225,739 - - 3,534 - - - 3,534

13,798 shares of common stock withheld in net settlement upon exercise of stock options

( 2,848 ) - - - ( 2,848 )

Stock-based compensation expense

- - 1,855 - - - 1,855

Other comprehensive loss, net of tax

- - - - ( 6,162 ) - ( 6,162 )

- - - 207,734 - - 207,734

Balance, December 31, 2022

54,227,060 $ - $ 54 $ 226,397 $ 911,008 $ 14,056 $ 500 $ 1,152,015

Common dividends paid, $ 0.84 per share

- - - ( 37,470 ) - - ( 37,470 )

Common dividends declared, $ 0.30 per share

- - - ( 15,211 ) - - ( 15,211 )

Preferred dividends paid

- - - ( 62 ) - - ( 62 )

Dividends on nonvested restricted stock recognized as compensation expense

- - - - 133 - - 133

Issue restricted shares pursuant to stock incentives, net of forfeitures

42,765 - - - - - - -

Issue shares of common stock upon exercise of stock options

56,702 - - 1,232 - - - 1,232

29,028 shares of common stock withheld in net settlement upon exercise of stock options

( 1,143 ) - - - ( 1,143 )

Stock-based compensation expense

- - 3,207 - - - 3,207

Other comprehensive loss, net of tax

- - - - ( 56,309 ) - ( 56,309 )

- - - 251,504 - - 251,504

Balance, December 31, 2023

54,326,527 $ - $ 54 $ 229,693 $ 1,109,902 $ ( 42,253 ) $ 500 $ 1,297,896

Impact of adoption ASU 2023-02, net of tax

Adjusted balance, January 1, 2024

Common dividends paid, $ 0.90 per share

- - - ( 45,711 ) - - ( 45,711 )

Common dividends declared, $ 0.34 per share

- - - ( 16,338 ) - - ( 16,338 )

Preferred dividends paid

- - - ( 62 ) - - ( 62 )

Dividends on nonvested restricted stock recognized as compensation expense

- - - - 197 - - 197

Issue restricted shares pursuant to stock incentives, net of forfeitures

51,881 - - - - - - -

Issue shares of common stock upon exercise of stock options

83,172 - - 1,287 - - - 1,287

24,785 shares of common stock withheld in net settlement upon exercise of stock options

( 1,975 ) - - - ( 1,975 )

Stock-based compensation expense

- - 3,600 - - - 3,600

Other comprehensive loss, net of tax

- - - - ( 5,342 ) - ( 5,342 )

- - - 206,853 - - 206,853

Other comprehensive income, net of tax

Balance, December 31, 2024

54,461,580 $ - $ 54 $ 232,605 $ 1,254,841 $ ( 47,595 ) $ 500 $ 1,440,405

See Notes to Consolidated Financial Statements.

6 unchanged sentences

Adjustments to reconcile net income to net cash provided by operations

Deferred tax benefit

Deferred tax expense (benefit)

Provision for credit losses

2 unchanged sentences

Amortization of investments in tax credit partnerships

Net amortization of debt securities available-for-sale

Net (accretion) amortization of debt securities

Increase in accrued interest and dividends receivable

4 unchanged sentences

Gain on sale of mortgage loans held for sale

Loss (gain) on sale of securities available for sale

Net loss (gain) on sale of other real estate owned and repossessed assets

Gain on sale of securities available for sale

Net (gain) loss on sale of other real estate owned and repossessed assets

Write down of other real estate owned and repossessed assets

Operating losses of tax credit partnerships

Increase in cash surrender value of life insurance contracts

11 unchanged sentences

Return of capital from tax credit partnerships and SBIC

Decrease (increase) in loans

Net (increase) decrease in loans

Purchases of premises and equipment

Purchase of bank owned life insurance contracts

Proceeds from death benefit of bank owned life insurance contracts

3 unchanged sentences

FINANCING ACTIVITIES

Net (decrease) increase in non-interest-bearing deposits

Net decrease in non-interest-bearing deposits

Net increase in interest-bearing deposits

Net (decrease) increase in federal funds purchased

Net increase (decrease) in federal funds purchased

FHLB advances

9 unchanged sentences

SUPPLEMENTAL DISCLOSURE

Cash paid/(received) for:

Cash paid for:

Income tax refund

2 unchanged sentences

Internally financed sale of other real estate owned

Debt securities available for sale transferred to held to maturity

Dividends on nonvested restricted stock reclassified as compensation expense

9 unchanged sentences

The Bank is headquartered in Birmingham, Alabama, and has provided a full range of banking services to individual and corporate customers throughout the Birmingham market since opening for business in May 2005.

The Bank has since expanded into the Huntsville, Montgomery, Dothan and Mobile, Alabama;

Pensacola, Sarasota, Tallahassee, and Tampa Bay, Florida;

Atlanta, Georgia;

Charleston, South Carolina;

Charlotte and Asheville, North Carolina;

Nashville, Tennessee;

and Virginia Beach, Virginia markets.

The Bank has since expanded into Florida, Georgia, North Carolina, South Carolina, Tennessee, and Virginia.

The Bank owns all of the stock of SF Intermediate Holding Company, Inc., which, in turn, owns all of the stock of SF TN Realty Holdings, Inc., which, in turn, owns all of the common stock of the Company’s real estate investment trusts, SF Realty 1, Inc., SF FLA Realty, Inc., SF GA Realty, Inc.

5 unchanged sentences

These reclassifications had no effect on the Company’s results of operations, financial position, or net cash flow.

Operating Segments

The Company operates as a single reportable segment, with a majority of its revenues derived from the business of banking.

Management, which serves as the Chief Operating Decision Maker (“CODM”), regularly reviews consolidated financial performance and allocates resources on a Bank-wide basis.

As a result, the Company’s financial statements reflect one reportable segment.

Basis of Presentation and Accounting Estimates

2 unchanged sentences

These estimates and assumptions affect the amounts reported in the financial statements and the disclosures provided, and future results could differ.

The allowance for credit losses, valuation of deferred tax assets and the fair value of financial instruments are particularly subject to change.

The allowance for credit losses and the fair value of financial instruments are particularly subject to change.

All numbers are in thousands except share and per share data.

12 unchanged sentences

Transfers of debt securities into the held-to-maturity category from available-for-sale category are made at fair value at the date of transfer.

The unrealized holding gain or loss at the date of transfer is retained in other comprehensive income and in the carrying value of the held-to-maturity securities.

The unrealized holding gain or loss at the date of transfer is retained in accumulated other comprehensive income (loss) and in the carrying value of the held-to-maturity securities.

Such amounts are amortized over the remaining life of the security.

28 unchanged sentences

The concessions granted most frequently involve reductions or delays in required payments of principal and interest for a specified time, the rescheduling of payments in accordance with a bankruptcy plan or the charge-off of a portion of the loan.

Allowance for Credit Losses ( “ ACL ” ) and Impairment of Debt Securities

ACL – Debt Securities Held to Maturity

5 unchanged sentences

Management monitors the held-to-maturity portfolio to determine whether an ACL would need to be recorded.

As of December 31, 2023 and 2022, the Company had $ 982.7 million and $ 1.03 billion, respectively, of held-to-maturity securities and no related ACL recorded for either year.

As of December 31, 2024 and 2023, the Company had $ 714.9 million and $ 982.7 million, respectively, of held-to-maturity securities and no related ACL recorded, respectively.

Impairment of Debt Securities Available for Sale

4 unchanged sentences

If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the debt security are compared to the amortized cost basis of the debt 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 by which the fair value is less than the amortized cost basis.

If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an ACL is recorded for the credit loss, limited by the amount by which the fair value is less than the amortized cost basis.

Any impairment that has not been recorded through allowance for credit losses is recognized in other comprehensive income, net of tax.

5 unchanged sentences

The allowance is increased by a provision for credit losses, which is charged to expense, and reduced by charge-offs, net of recoveries.

In addition, various regulatory agencies, as an integral part of their examination process, periodically review the allowance for credit losses.

In addition, various regulatory agencies, as an integral part of their examination process, periodically review the ACL.

Such agencies may require the Company to recognize adjustments to the allowance based on their judgments about information available to them at the time of their examination.

7 unchanged sentences

lending policy, changes in nature and volume of loans, staff experience, changes in volume and trends of problem loans, concentration risk, trends in underlying collateral values, external factors, quality of loan review system and other economic conditions.

Credit losses for loans that no longer share similar risk characteristics with the collectively evaluated pools are excluded from the collective evaluation and estimated on an individual basis.

Individual evaluations are performed for nonaccrual loans, loans rated substandard, and modified loans classified as troubled debt restructurings.

Loans that no longer share similar risk characteristics with the collectively evaluated pools are excluded from the collective evaluation and credit losses are estimated on an individual basis.

Individual evaluations are performed for nonaccrual loans, loans rated substandard, and modified loans.

Specific allowances were estimated based on one of several methods, including the estimated fair value of the underlying collateral, observable market value of similar debt or the present value of expected cash flows.

The Company measures expected credit losses over the contractual term of a loan, adjusted for estimated prepayments.

The contractual term excludes expected extensions, renewals and modifications.

The contractual term excludes expected extensions, renewals and modifications unless there is a reasonable expectation that a troubled debt restructuring will be executed.

Credit losses are estimated on the amortized cost basis of loans, which includes the principal balance outstanding, purchase discounts and premiums and deferred loan fees and costs.

16 unchanged sentences

Expenditures for repairs and maintenance are charged to expense as incurred.

Assets which are disposed of are removed from the accounts and the resulting gains or losses are recorded in operations.

Assets that are disposed of are removed from the accounts and the resulting gains or losses are recorded in operations.

Depreciation is calculated on a straight-line basis over the estimated useful lives of the related assets ( 3 to 39.5 years).

27 unchanged sentences

The derivative instrument must be shown to meet specific requirements under this accounting standard.

The Company designates the derivative on the date the derivative contract is entered into as a hedge of ( 1 ) the fair value of a recognized asset or liability or of an unrecognized firm commitment (a “fair-value” hedge) or ( 2 ) the variability of cash flows to be received generally in a forecasted transaction related to a recognized asset or liability (a “cash-flow” hedge).

The Company designates the derivative on the date the derivative contract is entered into as a hedge of the (1) fair value of a recognized asset or liability or of an unrecognized firm commitment (a “fair-value” hedge) or (2) a forecasted transaction of the variability of cash flows to be received or paid related to a recognized asset or liability (a “cash-flow” hedge).

Changes in the fair value of a derivative that is highly effective as a fair-value hedge, and that is designated and qualifies as a fair-value hedge, along with the loss or gain on the hedged asset or liability that is attributable to the hedged risk (including losses or gains on firm commitments), are recorded in current-period earnings.

3 unchanged sentences

The Company also formally assesses, both at the hedge’s inception and on an ongoing basis, as necessary, whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in fair values or cash flows of hedged items.

When it is determined that a derivative is not highly effective as a hedge or that it has ceased to be a highly effective hedge, the Company discontinues hedge accounting prospectively.

When it is determined that a derivative is not highly effective as a hedge or that it has ceased to be a highly effective hedge, the Company discontinues hedge accounting prospectively, as discussed below.

The Company discontinues hedge accounting prospectively when:

1 unchanged sentence

(2) the derivative expires or is sold, terminated, or exercised;

( 3 ) the derivative is re-designated as a hedge instrument, because it is unlikely that a forecasted transaction will occur;

(3) the derivative is dedesignated as a hedge instrument, because it is unlikely that a forecasted transaction will occur;

(4) a hedged firm commitment no longer meets the definition of a firm commitment;

20 unchanged sentences

A valuation allowance, if needed, reduces deferred tax assets to the amount expected to be realized.

The Company follows the provisions of ASC 740 - 10, Income Taxes.

ASC 740 - 10 establishes a single model to address accounting for uncertain tax positions and prescribes a minimum recognition threshold a tax position is required to meet before being recognized in the financial statements.

The Company follows the provisions of ASC Topic 740-10, Income Taxes (“ASC 740-10”) establishes a single model to address accounting for uncertain tax positions and prescribes a minimum recognition threshold a tax position is required to meet before being recognized in the financial statements.

There is a two-step process in the evaluation of a tax position.

5 unchanged sentences

At December 31, 2024, the Company had a stock-based compensation plan for grants of equity compensation to key employees and directors.

The plan has been accounted for under the provisions of ASC 718 - 10, Compensation – Stock Compensation with respect to employee stock options, restricted stock and performance-based stock units (“PSUs”).

The plan has been accounted for under the provisions of ASC Topic 718-10, Compensation – Stock Compensation with respect to employee stock options, restricted stock and performance-based stock units (“PSUs”).

Specifically, awards are accounted for using the fair value-based method of accounting.

6 unchanged sentences

A Monte Carlo simulation is used to estimate the fair value of the PSUs as of the valuation date.

Compensation expense for PSUs is recognized regardless of the extent to which the market condition is satisfied.

Compensation expense is recognized regardless of the extent to which the market condition is satisfied.

Earnings per Common Share

14 unchanged sentences

Accumulated comprehensive (loss) income, which is recognized as a separate component of equity, includes unrealized gains and losses on available-for-sale debt securities and amortization of unrealized gains and losses on debt securities transferred from available-for-sale to held-to-maturity at the time of transfer.

Amounts reported as accumulated comprehensive income are shown net of taxes.

Amounts reported as accumulated comprehensive income (loss) are shown net of taxes.

Advertising costs are expensed as incurred.

2 unchanged sentences

Recent Accounting Pronouncements

In March 2020, the FASB issued ASU 2020 - 04, Reference Rate Reform (Topic 848 ):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting .

The update provides temporary optional guidance to ease the potential burden in accounting for reference rate reform.

The guidance provides optional expedients and exceptions for applying generally accepted accounting principles to contract modifications and hedging relationships, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued.

The guidance is intended to help stakeholders during the global market-wide reference rate transition period.

Therefore, it will be effective for a limited time, starting March 12, 2020 through December 31, 2024 as recently amended by the FASB .

The Company has identified a replacement reference rate established by the American Financial Exchange.

This rate is based on an active market of daily fund trading among participant banks.

The Company is applying the guidance provided by this ASU in transitioning to the new reference rate.

In August 2021, the FASB issued ASU 2021 - 06, Presentation of Financial Statements (Topic 205 ), Financial Services — Depository and Lending (Topic 942 ), and Financial Services — Investment Companies (Topic 946 ):

Amendments to SEC Paragraphs Pursuant to SEC Final Rule Releases No.

33 - 10786, Amendments to Financial Disclosures about Acquired and Disposed Businesses, and No.

33 - 10835, Update of Statistical Disclosures for Bank and Savings and Loan Registrants .

This ASU amends and adds various SEC paragraphs to the codification pursuant to the issuance of SEC Final Rule Releases No.

33 - 10786 and No.

33 - 10835 issued to improve disclosure rules.

The ASU was effective upon issuance.

The adoption of this disclosure guidance did not have a material impact on the Company's consolidated financial statements.

In July 2021, the FASB issued ASU 2021 - 05, Leases (Topic 842 ) :

Lessors-Certain Leases with Variable Lease Payments , which amends guidance so that lessors are no longer required to record a selling loss at lease commencement for a lease with any variable lease payments that do not depend on an index or rate.

A lessor would classify such leases as an operating lease rather than a sales-type or direct financing lease.

The adoption of ASU 2021 - 05 as of January 1, 2022 did not have a material impact on the Company’s consolidated financial statements.

In March 2022, the FASB issued ASU 2022 - 02, Financial Instruments — Credit Losses (Topic 326 ):

Troubled Debt Restructurings and Vintage Disclosure.

For public business entities, the amendments require disclosure of current-period gross write-offs by year of origination for financing receivables and net investment in leases within the scope of Subtopic 326 - 20.

Gross write-off information must be included in the vintage disclosures required for public business entities in accordance with paragraph 326 - 20 - 50 - 6, which requires that an entity disclose the amortized cost basis of financing receivables by credit quality indicator and class of financing receivable by year of origination.

The Company adopted ASU 2022 - 02 effective January 1, 2023 on a prospective basis.

Adoption of ASU 2022 - 02 did not have a material impact on the Company’s consolidated financial statements other than providing the new required disclosures.

In June 2022, the FASB issued ASU 2022 - 03, Fair Value Measurement (Topic 820 ):

Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions .

The update clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value.

This update is effective for public business entities for fiscal years, including interim periods within those fiscal years, beginning after December 15, 2023.

Early adoption is permitted.

The Company is assessing the impact of adopting the update on its financial statements and disclosures.

In March 2023, the Financial Accounting Standards Board issued ASU 2023 - 02, Investments-Equity Method and Joint Ventures (Topic 323 ):

In March 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2023-02, Investments-Equity Method and Joint Ventures (Topic 323):

Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method.

These amendments allow entities to elect to account for qualifying tax equity investments using the proportional amortization method, regardless of the program giving rise to the related income tax credits.

The ASU responds to stakeholder feedback that the proportional amortization method provides investors and other allocators of capital with a better understanding of the returns from investments that are made primarily for the purpose of receiving income tax credits and other income tax benefits.

ASU 2023 - 02 is effective for public entities for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years.

Early adoption is permitted for all entities in any interim period.

The Company is assessing its tax credit investments for whether they qualify for proportional amortization treatment and plans to adopt the amendments soon after.

The Company does not currently believe the amendments will have a material impact on its consolidated financial statements.

These amendments expanded the permitted use of the proportional amortization method, which was previously only available to low-income housing tax credit investments, to other tax equity investments if certain conditions are met.

Under the proportional amortization method, the initial cost of an investment is amortized in proportion to the income tax benefits received and both the amortization of the investment and the income tax benefits received are recognized as a component of income tax expense.

ASU 2023-02 was adopted on a modified retrospective basis of transition or, for certain changes, a prospective basis, which resulted in a reduction to retained earnings as of January 1, 2024, of $2.3 million.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting — Improvements to Reportable Segment Disclosures.

This amendment is intended to improve disclosures about a public entity’s reportable segments and addresses requests from investors and other decision makers for additional, more detailed information about a reportable segment’s expenses.

The amendment applies to all public entities that are required to report segment information in accordance with Topic 280.

All public entities will be required to report segment information in accordance with the new guidance starting in annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 31, 2024.

Early adoption is permitted.

The amendments are to be applied retrospectively to all periods presented and segment expense categories should be based on the categories identified at adoption.

The Company does not currently expect adoption of the amendment to have a material impact on its consolidated financial statements.

The amendment applies to all public entities that are required to report segment information in accordance with Topic 280.The amendments are to be applied retrospectively to all periods presented and segment expense categories should be based on the categories identified at adoption.

The Company adopted ASU 2023-07 effective December 31, 2024.

Adoption of ASU 2023-07 did not have a material impact on the Company's consolidated financial statements.

See Note 23 – Business Segment Information for disclosures required by ASU 2023-07.

In December 2023, the FASB issued ASU No.

4 unchanged sentences

The Company is currently evaluating the impact the amendments will have the consolidated financial statements and related disclosures.

In November 2024, the FASB issued 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40) .

The amendments improve the disclosures about a public business entity’s expenses and address requests from investors for more detailed information about the types of expenses (including purchases of inventory, employee compensation, depreciation, amortization, and depletion) in commonly presented expense captions (such as cost of sales and research and development).

The amendments are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027.

We are currently evaluating the impact these changes may have on our consolidated financial statements.

DEBT SECURITIES

The amortized cost and fair values of available-for-sale and held-to-maturity debt securities at December 31, 2024 and 2023 are summarized as follows:

(In Thousands)

December 31, 2024

(In Thousands)

Debt Securities Available-for-Sale

Treasury Securities

$ 340,556 $ 251 $ - $ 340,807

Mortgage-backed securities

241,458 6 ( 25,979 ) 215,485

State and municipal securities

11,400 1 ( 1,178 ) 10,223

Corporate debt

375,676 - ( 42,009 ) 333,667

$ 969,090 $ 258 $ ( 69,166 ) $ 900,183

Debt Securities Held-to-Maturity

Treasury Securities

$ 508,985 $ - $ ( 24,718 ) $ 484,267

Mortgage-backed securities

465,615 3 ( 50,025 ) 415,593

State and municipal securities

8,063 - ( 732 ) 7,331

$ 982,664 $ 3 $ ( 75,475 ) $ 907,191

December 31, 2023

1 unchanged sentence

Treasury Securities

$ 3,002 $ - $ ( 33 ) $ 2,969

Government Agency Securities

Mortgage-backed securities

282,480 5 ( 32,782 ) 249,703

State and municipal securities

15,205 1 ( 1,597 ) 13,609

Corporate debt

406,680 - ( 28,155 ) 378,525

$ 707,376 $ 6 $ ( 62,567 ) $ 644,815

Debt Securities Held-to-Maturity

Treasury Securities

$ 507,151 $ - $ ( 36,197 ) $ 470,954

Mortgage-backed securities

518,929 7 ( 60,960 ) 457,976

State and municipal securities

8,041 - ( 1,018 ) 7,023

$ 1,034,121 $ 7 $ ( 98,175 ) $ 935,953

All mortgage-backed debt securities are issued by government sponsored enterprises such as Federal National Mortgage Association, Government National Mortgage Association, Federal Home Loan Bank, and Federal Home Loan Mortgage Corporation.

The carrying value of debt securities pledged to secure public funds on deposits and for other purposes as required by law as of December 31, 2023 and 2022 was $ 1.49 billion and $ 789.3 million, respectively.

All mortgage-backed debt securities are issued by government sponsored enterprises (“GSEs”) such as Federal National Mortgage Association, Government National Mortgage Association, Federal Home Loan Bank, and Federal Home Loan Mortgage Corporation.

The carrying value of debt securities pledged to secure public funds on deposits and for other purposes as required by law as of December 31, 2024 and 2023 was $ 1.43 billion and $ 1.49 billion, respectively.

Restricted equity securities is comprised entirely of a restricted investment in Federal Home Loan Bank of Atlanta stock for membership requirement.

10 unchanged sentences

Due within one year

$ 350,400 $ 350,396 $ 24,712 $ 24,432

Due from one to five years

70,016 67,334 58,554 57,092

Due from five to ten years

304,216 264,892 338,630 311,100

Due after ten years

3,000 2,076 3,000 2,488

Mortgage-backed securities

241,458 215,485 282,480 249,703

$ 969,090 $ 900,183 $ 707,376 $ 644,815

Debt securities held-to-maturity

Due within one year

$ 260,047 $ 257,835 $ 250 $ 250

Due from one to five years

203,481 185,741 386,465 366,095

Due from five to ten years

53,521 48,022 128,477 111,632

Due after ten years

Mortgage-backed securities

465,615 415,593 518,929 457,976

$ 982,664 $ 907,191 $ 1,034,121 $ 935,953

The following table identifies the Company’s investment securities that have been in a continuous unrealized loss position for less than 12 months and those that have been in a continuous unrealized loss position for 12 or more months, as of December 31, 2024 and 2023:

4 unchanged sentences

Debt Securities available-for-sale

Treasury Securities

Government Agency Securities

Mortgage-backed securities

$ ( 6 ) $ 704 $ ( 25,973 ) $ 214,393 $ ( 25,979 ) $ 215,097

State and municipal securities

- - ( 1,178 ) 9,777 ( 1,178 ) 9,777

Corporate debt

( 794 ) 15,141 ( 41,214 ) 311,666 ( 42,009 ) 326,807

$ ( 801 ) $ 15,845 $ ( 68,365 ) $ 535,836 $ ( 69,166 ) $ 551,681

Debt Securities held-to-maturity

Treasury Securities

$ - $ - $ ( 24,718 ) $ 484,267 $ ( 24,718 ) $ 484,267

Mortgage-backed securities

( 1 ) 430 ( 50,024 ) 411,585 ( 50,025 ) 412,015

State and municipal securities

- - ( 732 ) 7,081 ( 732 ) 7,081

$ ( 1 ) $ 430 $ ( 75,474 ) $ 902,933 $ ( 75,475 ) $ 903,363

December 31, 2023

Debt Securities available-for-sale

Treasury Securities

$ ( 33 ) $ 2,969 $ - $ - $ ( 33 ) $ 2,969

Government Agency Securities

Mortgage-backed securities

$ ( 3,473 ) $ 60,234 $ ( 29,309 ) $ 189,109 $ ( 32,782 ) $ 249,343

State and municipal securities

( 186 ) 5,283 ( 1,411 ) 7,880 ( 1,597 ) 13,163

Corporate debt

( 18,566 ) 304,254 ( 9,589 ) 63,411 ( 28,155 ) 367,666

$ ( 22,258 ) $ 372,749 $ ( 40,309 ) $ 260,400 $ ( 62,567 ) $ 633,149

Treasury Securities

$ ( 12,662 ) $ 295,383 $ ( 23,537 ) $ 175,570 $ ( 36,197 ) $ 470,953

Mortgage-backed securities

( 31,367 ) 278,746 ( 29,592 ) 174,842 ( 60,960 ) 453,588

State and municipal securities

( 544 ) 4,443 ( 474 ) 2,330 ( 1,018 ) 6,773

$ ( 44,573 ) $ 578,572 $ ( 53,603 ) $ 352,742 $ ( 98,175 ) $ 931,314

At December 31, 2024 and 2023, no allowance for credit losses has been recognized on available-for-sale debt securities in an unrealized loss position as the Company does not believe any of the debt securities are credit impaired.

17 unchanged sentences

Sale and call proceeds

$ - $ 75,036 $ 6,272

Gross realized gains

$ - $ - $ 620

Gross realized losses

- ( 6,168 ) -

Net realized (loss) gain

$ - $ ( 6,168 ) $ 620

The loan portfolio is classified based on the underlying collateral utilized to secure each loan for financial reporting purposes.

4 unchanged sentences

Repayment is dependent upon the completion and eventual sale, refinance or operation of the related real estate project.

Owner-occupied commercial real estate mortgage – Includes loans secured by nonfarm nonresidential properties for which the primary source of repayment is the cash flow from the ongoing operations conducted by the party that owns the property.

Owner-occupied commercial real estate mortgage – Includes loans secured by nonresidential properties for which the primary source of repayment is the cash flow from the ongoing operations conducted by the party that owns the property.

1-4 family real estate mortgage – Includes loans secured by residential properties, including home equity lines of credit.

Repayment is primarily dependent on the personal cash flow of the borrower.

Other real estate mortgage – Includes loans secured by nonowner-occupied properties, including office buildings, industrial buildings, warehouses, retail buildings, multifamily residential properties and farmland.

Non-owner occupied commercial real estate mortgage – Includes loans secured by nonowner-occupied properties, including office buildings, industrial buildings, warehouses, retail buildings, and multifamily residential properties.

Repayment is primarily dependent on income generated from the underlying collateral.

4 unchanged sentences

Commercial, financial and agricultural

$ 2,823,986 $ 3,145,317

Real estate - construction

1,519,619 1,532,388

Real estate - mortgage:

Owner-occupied commercial

2,257,163 2,199,280

1-4 family mortgage

1,249,938 1,146,831

Other mortgage

3,744,346 3,597,750

Total real estate - mortgage

7,251,447 6,943,861

63,777 66,402

11,658,829 11,687,968

Non-owner occupied commercial

Real estate mortgage

Allowance for credit losses

( 153,317 ) ( 146,297 )

$ 11,505,512 $ 11,541,671

Changes in the ACL during the years ended December 31, 2024, 2023 and 2022 are as follows:

2 unchanged sentences

Balance, beginning of year

$ 146,297 $ 116,660 $ 87,942

Loans charged off

( 14,581 ) ( 10,137 ) ( 4,114 )

2,886 2,167 1,315

Provision for credit losses

18,715 37,607 31,517

Balance, end of year

$ 153,317 $ 146,297 $ 116,660

GAAP requires a CECL methodology for estimating all expected losses over the life of a financial asset.

GAAP requires a current expected credit losses (“CECL”) methodology for estimating all expected losses over the life of a financial asset.

Under the CECL methodology, the ACL is measured on a collective basis for pools of loans with similar risk characteristics.

2 unchanged sentences

The estimated loan losses for all loan segments are adjusted for changes in qualitative factors not inherently considered in the quantitative analyses.

The Company uses the discounted cash flow (“DCF”) method to estimate ACL for all loan pools except for commercial and industrial (“C&I”) revolving lines of credit and credit cards.

For all loan pools utilizing the DCF method, the Company utilizes and forecasts national unemployment rate and gross domestic product (“GDP”) as loss drivers.

The Company uses the DCF method to estimate ACL for all loan pools except for commercial and industrial (“C&I”) revolving lines of credit and credit cards.

For all loan pools utilizing the DCF method, the Company utilizes and forecasts national unemployment rate as a loss driver.

The Company also utilizes and forecasts gross domestic product (“GDP”) growth as a second loss driver for its agricultural and consumer loan pools.

Consistent forecasts of the loss drivers are used across the loan segments.

1 unchanged sentence

The Company leveraged economic projections from reputable and independent sources to inform its loss driver forecasts.

At December 31, 2023, the Company expects the national unemployment rate to fall during the forecast period with a rising national GDP growth rate, with both economic indicators showing improvement when compared to the forecast at December 31, 2022.

At December 31, 2024, the Company expects the national unemployment rate to rise during the forecast period with a declining national GDP growth rate, with both economic indicators showing improvement when compared to the forecast at December 31, 2023.

The Company uses a loss-rate method to estimate expected credit losses for its C&I revolving lines of credit and a remaining life methodology on credit card pools.

12 unchanged sentences

The Company considers factors that are relevant within the qualitative framework, which include the following:

Inherent risks in the loan portfolio will differ based on type of loan.

19 unchanged sentences

Real estate -

(In Thousands)

Twelve Months Ended December 31, 2023

Year Ended December 31, 2024

Allowance for credit losses:

Balance at December 31, 2022

$ 42,830 $ 42,889 $ 58,652 $ 1,926 $ 146,297

( 13,229 ) ( 108 ) ( 171 ) ( 1,073 ) ( 14,581 )

2,796 3 2 85 2,886

19,720 1,874 ( 3,355 ) 476 18,715

Balance at January 1, 2024

Provision for credit losses on loans

Balance at December 31, 2024

$ 52,117 $ 44,658 $ 55,128 $ 1,414 $ 153,317

Twelve Months Ended December 31, 2022

Year Ended December 31, 2023

Allowance for credit losses:

Balance at December 31, 2021

$ 41,869 $ 26,994 $ 45,829 $ 1,968 $ 116,660

( 9,256 ) - ( 221 ) ( 660 ) ( 10,137 )

2,012 - - 155 2,167

8,205 15,895 13,044 463 37,607

Balance at January 1, 2023

Balance at December 31, 2023

$ 42,830 $ 42,889 $ 58,652 $ 1,926 $ 146,297

Twelve Months Ended December 31, 2021

Year Ended December 31, 2022

Allowance for credit losses:

Balance at December 31, 2020

$ 36,370 $ 16,057 $ 33,722 $ 1,793 $ 87,942

( 3,453 ) ( 14 ) ( 279 ) ( 368 ) ( 4,114 )

1,135 52 85 43 1,315

7,817 10,899 12,301 500 31,517

Balance at January 1, 2022

Balance at December 31, 2022

$ 41,869 $ 26,994 $ 45,829 $ 1,968 $ 116,660

Allocation of a part of the ACL to one loan type does not preclude its ability to absorb losses in other loan types.

We maintain an ACL for credit losses on unfunded commercial lending commitments and letters of credit to provide for the risk of loss inherent in these arrangements.

1 unchanged sentence

The ACL on unfunded loan commitments is classified as a liability account on the Consolidated Balance Sheets within other liabilities, while the corresponding provision for these credit losses is recorded as a component of other expense.

The allowance for credit losses on unfunded commitments was $ 575,000 at both December 31, 2023 and 2022.

The provision expense for unfunded commitments was zero for the year ended December 31, 2023 and was reduced by $ 725,000 for the year ended December 31, 2022 compared to December 31, 2021.

The allowance for credit losses on unfunded commitments was $ 608,000 and $ 575,000 at December 31, 2024 and 2023, respectively.

The provision expense for unfunded commitments was $ 32,000 for the year ended December 31, 2024 and was $ 0 for the year ended December 31, 2023.

The credit quality of the loan portfolio is determined no less frequently than quarterly using categories similar to the standard asset classification system used by the federal banking agencies.

12 unchanged sentences

Commercial, financial, and agricultural

$ 341,335 $ 455,281 $ 354,034 $ 162,543 $ 100,032 $ 151,527 $ 1,161,324 $ 491 $ 2,726,567

Special Mention

4,275 1,982 5,105 5,765 1,320 3,549 21,769 7 43,772

Substandard - Accruing

1,410 - 2,830 368 9,501 27,962 4,360 - 46,431

Substandard -Non-accrual

- 2 767 206 - 3,336 2,905 - 7,216

Total Commercial, financial and agricultural

$ 347,020 $ 457,265 $ 362,736 $ 168,882 $ 110,853 $ 186,374 $ 1,190,358 $ 498 $ 2,823,986

Current-period gross writeoffs

$ 1,213 $ 4,690 $ 2,531 $ 779 $ 4 $ 2,014 $ 1,998 $ - $ 13,229

Current-period gross write-offs

Real estate - construction

$ 216,745 $ 874,903 $ 283,012 $ 49,668 $ 4,866 $ 16,558 $ 72,156 $ - $ 1,517,908

Special Mention

589 - - - - - - - 589

Substandard - Accruing

- 33 - - - 978 - - 1,011

Substandard -Non-accrual

- - - - - - - 111 111

Total Real estate - construction

$ 217,334 $ 874,936 $ 283,012 $ 49,668 $ 4,866 $ 17,536 $ 72,156 $ 111 $ 1,519,619

Current-period gross write-offs

$ - $ - $ 19 $ - $ - $ - $ - $ 89 $ 108

Owner-occupied commercial

$ 148,915 $ 478,364 $ 517,667 $ 300,978 $ 181,864 $ 512,752 $ 64,170 $ 844 $ 2,205,554

Special Mention

5,369 1,411 7,705 8,317 8,530 7,539 - - 38,871

Substandard - Accruing

1,358 - - - - 4,292 - - 5,650

Substandard -Non-accrual

- - - - 2,329 4,759 - - 7,088

Total Owner-occupied commercial

$ 155,642 $ 479,775 $ 525,372 $ 309,295 $ 190,394 $ 524,583 $ 64,170 $ 844 $ 2,257,163

Current-period gross write-offs

$ - $ - $ - $ - $ 117 $ - $ - $ - $ 117

1-4 family mortgage

$ 166,927 $ 376,964 $ 228,183 $ 75,104 $ 40,697 $ 61,046 $ 286,066 $ - $ 1,234,987

Special Mention

574 721 2,504 1,009 3,865 439 727 - 9,839

Substandard - Accruing

- - - - - 425 261 - 686

Substandard -Non-accrual

155 380 741 572 877 901 800 - 4,426

Total 1-4 family mortgage

$ 167,656 $ 378,065 $ 231,428 $ 76,685 $ 45,439 $ 62,811 $ 287,854 $ - $ 1,249,938

Current-period gross write-offs

$ - $ 40 $ - $ - $ - $ 14 $ - $ - $ 54

Other mortgage

$ 162,418 $ 1,119,609 $ 1,106,055 $ 448,781 $ 249,059 $ 540,325 $ 100,516 $ 247 $ 3,727,010

Non-owner occupied commercial

Special Mention

- - - - - - 850 - 850

Substandard - Accruing

- 4,975 - - - 11,005 - - 15,980

Substandard -Non-accrual

- - - - 130 376 - - 506

Total Other mortgage

$ 162,418 $ 1,124,584 $ 1,106,055 $ 448,781 $ 249,189 $ 551,706 $ 101,366 $ 247 $ 3,744,346

Total Non-owner occupied commercial

Current-period gross write-offs

$ - $ - $ - $ - $ - $ - $ - $ - $ -

$ 22,227 $ 3,890 $ 4,542 $ 1,794 $ 1,295 $ 2,687 $ 27,342 $ - $ 63,777

Special Mention

- - - - - - - - -

Substandard - Accruing

- - - - - - - - -

Substandard -Non-accrual

- - - - - - - - -

Total Consumer

$ 22,227 $ 3,890 $ 4,542 $ 1,794 $ 1,295 $ 2,687 $ 27,342 $ - $ 63,777

Current-period gross write-offs

$ - $ - $ - $ - $ 4 $ 49 $ 1,020 $ - $ 1,073

$ 1,058,567 $ 3,309,011 $ 2,493,493 $ 1,038,868 $ 577,813 $ 1,284,895 $ 1,711,574 $ 1,582 $ 11,475,803

Special Mention

10,807 4,114 15,314 15,091 13,715 11,527 23,346 7 93,921

Substandard - Accruing

2,768 5,009 2,830 368 9,501 44,662 4,621 - 69,758

Substandard -Non-accrual

155 382 1,508 778 3,336 9,372 3,705 111 19,347

$ 1,072,297 $ 3,318,515 $ 2,513,145 $ 1,055,105 $ 604,365 $ 1,350,456 $ 1,743,246 $ 1,700 $ 11,658,829

Current-period gross write-offs

$ 1,213 $ 4,730 $ 2,550 $ 779 $ 125 $ 2,077 $ 3,018 $ 89 $ 14,581

December 31, 2023

Revolving Loans

Revolving lines of credit converted to term loans

(In Thousands)

Commercial, financial, and agricultural

$ 691,817 $ 502,648 $ 223,096 $ 144,587 $ 78,477 $ 134,893 $ 1,267,333 $ 3,042,851

Special Mention

6,906 3,737 1,101 1,748 570 898 29,516 44,476

200 - 379 9,501 16,329 16,595 14,986 57,990

- - - - - - - -

Total Commercial, financial

- - - - - - - -

and agricultural

$ 698,923 $ 506,385 $ 224,576 $ 155,836 $ 95,376 $ 152,386 $ 1,311,835 $ 3,145,317

Substandard - Accruing

Substandard -Non-accrual

Total Commercial, financial and agricultural

Current-period gross write-offs

Real estate - construction

$ 618,578 $ 638,126 $ 156,834 $ 15,197 $ 12,063 $ 14,847 $ 72,172 $ 1,527,817

Special Mention

2,500 - - - - 873 - 3,373

- - - - 1,198 - - 1,198

- - - - - - - -

Substandard - Accruing

Substandard -Non-accrual

Total Real estate - construction

$ 621,078 $ 638,126 $ 156,834 $ 15,197 $ 13,261 $ 15,720 $ 72,172 $ 1,532,388

Current-period gross write-offs

Owner-occupied commercial

$ 424,321 $ 496,298 $ 352,375 $ 199,987 $ 157,204 $ 477,926 $ 64,152 $ 2,172,263

Special Mention

2,362 - - 2,723 4,682 6,917 1,687 18,371

- - - 73 - 8,573 - 8,646

- - - - - - - -

Substandard - Accruing

Substandard -Non-accrual

Total Owner-occupied commercial

$ 426,683 $ 496,298 $ 352,375 $ 202,783 $ 161,886 $ 493,416 $ 65,839 $ 2,199,280

Current-period gross write-offs

1-4 family mortgage

$ 388,778 $ 273,515 $ 93,272 $ 52,209 $ 28,999 $ 57,512 $ 243,302 $ 1,137,587

Special Mention

315 445 816 375 294 881 2,854 5,980

- 279 404 648 346 1,224 363 3,264

- - - - - - - -

Substandard - Accruing

Substandard -Non-accrual

Total 1-4 family mortgage

$ 389,093 $ 274,239 $ 94,492 $ 53,232 $ 29,639 $ 59,617 $ 246,519 $ 1,146,831

Other mortgage

$ 1,027,747 $ 976,208 $ 517,392 $ 380,104 $ 130,228 $ 470,699 $ 75,669 $ 3,578,047

Current-period gross write-offs

Non-owner occupied commercial

Special Mention

231 - - - - 7,161 - 7,392

- - - 130 4,569 7,612 - 12,311

- - - - - - - -

Total Other mortgage

$ 1,027,978 $ 976,208 $ 517,392 $ 380,234 $ 134,797 $ 485,472 $ 75,669 $ 3,597,750

$ 21,132 $ 5,845 $ 4,203 $ 1,759 $ 440 $ 2,988 $ 30,021 $ 66,388

Substandard - Accruing

Substandard -Non-accrual

Total Non-owner occupied commercial

Current-period gross write-offs

Special Mention

- - - - - 14 - 14

- - - - - - - -

Substandard - Accruing

Substandard -Non-accrual

Total Consumer

$ 21,132 $ 5,845 $ 4,203 $ 1,759 $ 440 $ 3,002 $ 30,021 $ 66,402

$ 3,172,373 $ 2,892,640 $ 1,347,172 $ 793,843 $ 407,411 $ 1,158,865 $ 1,752,649 $ 11,524,953

Current-period gross write-offs

Special Mention

12,314 4,182 1,917 4,846 5,546 16,744 34,057 79,606

200 279 783 10,352 22,442 34,004 15,349 83,409

- - - - - - - -

$ 3,184,887 $ 2,897,101 $ 1,349,872 $ 809,041 $ 435,399 $ 1,209,613 $ 1,802,055 $ 11,687,968

Substandard - Accruing

Substandard -Non-accrual

Current-period gross write-offs

Nonperforming loans include nonaccrual loans and loans 90 or more days past due and still accruing.

4 unchanged sentences

Commercial, financial and agricultural

$ 2,816,599 $ 7,387 $ 2,823,986

Real estate - construction

1,519,508 111 1,519,619

Real estate - mortgage:

Owner-occupied commercial

2,250,074 7,089 2,257,163

1-4 family mortgage

1,243,603 6,335 1,249,938

Other mortgage

3,743,840 506 3,744,346

Non-owner occupied commercial

Total real estate - mortgage

7,237,517 13,930 7,251,447

63,672 105 63,777

$ 11,637,296 $ 21,533 $ 11,658,829

December 31, 2023

2 unchanged sentences

Commercial, financial and agricultural

$ 3,138,014 $ 7,303 $ 3,145,317

Real estate - construction

1,532,388 - 1,532,388

Real estate - mortgage:

Owner-occupied commercial

2,195,968 3,312 2,199,280

1-4 family mortgage

1,144,713 2,118 1,146,831

Other mortgage

3,592,732 5,018 3,597,750

Non-owner occupied commercial

Total real estate - mortgage

6,933,413 10,448 6,943,861

66,312 90 66,402

$ 11,670,127 $ 17,841 $ 11,687,968

Loans by past due status as of December 31, 2024 and 2023 are as follows:

3 unchanged sentences

Commercial, financial and agricultural

$ 3,418 $ 3,718 $ 170 $ 7,306 $ 7,217 $ 2,809,463 $ 2,823,986 $ 5,028

Real estate - construction

- 34 - 34 111 1,519,474 1,519,619 -

Real estate - mortgage:

Owner-occupied commercial

- - - - 7,089 2,250,074 2,257,163 7,089

1-4 family mortgage

540 4,920 1,909 7,369 4,426 1,238,143 1,249,938 1,224

Other mortgage

676 10,703 - 11,379 506 3,732,461 3,744,346 506

Non-owner occupied commercial

Total real estate -mortgage

1,216 15,623 1,909 18,748 12,021 7,220,678 7,251,447 8,819

58 31 105 194 - 63,583 63,777 -

$ 4,692 $ 19,406 $ 2,184 $ 26,282 $ 19,349 $ 11,613,198 $ 11,658,829 $ 13,847

December 31, 2023

2 unchanged sentences

Commercial, financial and agricultural

$ 1,075 $ 409 $ 195 $ 1,679 $ 7,108 $ 3,136,530 3,145,317 $ 3,238

Real estate - construction

- 711 - 711 - 1,531,677 1,532,388 -

Real estate - mortgage:

Owner-occupied commercial

83 452 - 535 3,312 2,195,433 2,199,280 57

1-4 family mortgage

405 580 594 1,579 1,524 1,143,728 1,146,831 491

Other mortgage

231 - 4,512 4,743 506 3,592,501 3,597,750 -

Non-owner occupied commercial

Total real estate -mortgage

719 1,032 5,106 6,857 5,342 6,931,662 6,943,861 548

174 128 90 392 - 66,010 66,402 621

$ 1,968 $ 2,280 $ 5,391 $ 9,639 $ 12,450 $ 11,665,879 11,687,968 $ 4,407

There was no interest earned on nonaccrual loans for the years ended December 31, 2024 and 2023.

5 unchanged sentences

Commercial, financial and agricultural

$ 20,266 $ 7,240 $ 2,126 $ 24,016 $ 53,648 $ 16,189

Real estate - construction

145 - - 978 1,123 1

Real estate - mortgage:

Owner-occupied commercial

12,038 - - 698 12,736 475

1-4 family mortgage

15,694 - - - 15,694 1,058

Other mortgage

5,862 - - - 5,862 603

Non-owner occupied commercial

Total real estate - mortgage

33,594 - - 698 34,292 2,136

$ 54,005 $ 7,240 $ 2,126 $ 25,692 $ 89,063 $ 18,326

December 31, 2023

1 unchanged sentence

Commercial, financial and agricultural

$ 20,061 $ 12,092 $ 837 $ 24,998 $ 57,988 $ 9,910

Real estate - construction

- - - 1,198 1,198 7

Real estate - mortgage:

Owner-occupied commercial

8,573 - - 74 8,647 154

1-4 family mortgage

3,260 - - - 3,260 316

Other mortgage

12,311 - - - 12,311 -

Non-owner occupied commercial

Total real estate - mortgage

24,144 - - 74 24,218 470

$ 44,205 $ 12,092 $ 837 $ 26,270 $ 83,404 $ 10,387

On March 22, 2020, an Interagency Statement was issued by banking regulators that encouraged financial institutions to work prudently with borrowers who are or may be unable to meet their contractual payment obligations due to the effects of COVID- 19.

Additionally, Section 4013 of the CARES Act further provided that a qualified loan modification is exempt by law from classification as a Troubled Debt Restructuring (“TDR”) as defined by GAAP, from the period beginning March 1, 2020 until the earlier of December 31, 2020 or the date that is 60 days after the date on which the national emergency concerning the COVID- 19 outbreak declared by the President of the United States under the National Emergencies Act terminated.

The Interagency Statement was subsequently revised in April 2020 to clarify the interaction of the original guidance with Section 4013 of the CARES Act, as well as setting forth the banking regulators’ views on consumer protection considerations.

On December 27, 2020, President Trump signed into law the Consolidated Appropriations Act 2021, which extended the period established by Section 4013 of the CARES Act to the earlier of January 1, 2022 or the date that is 60 days after the date on which the national COVID- 19 emergency terminated.

In accordance with such guidance, the Bank offered short-term modifications made in response to COVID- 19 to borrowers who were current and otherwise not past due.

These included short-term ( 180 days or less) modifications in the form of payment deferrals, fee waivers, extensions of repayment terms, or other delays in payment that are insignificant.

The Bank adopted ASU 2022 - 02, Financial Instruments - Credit Losses (Topic 326 ) Troubled Debt Restructurings and Vintage Disclosures effective January 1, 2023.

The amendments in ASU 2022 - 02 eliminated the recognition and measure of TDRs and enhanced disclosures for loan modifications to borrowers experiencing financial difficulty.

The table below details the amortized cost basis at the end of the reporting period for loans made to borrowers experiencing financial difficulty that were modified during the year ended December 31, 2023:

Year Ended December 31, 2024

3 unchanged sentences

Commercial, financial and agricultural

$ 28,363 $ - $ 28,363 0.24 %

Owner-occupied commercial

3,021 - 3,021 0.03 %

Other mortgage

10,932 303 11,234 0.10 %

$ 42,315 $ 303 $ 42,618 0.37 %

The following table summarizes the financial impacts of loan modifications made to borrowers experiencing financial difficulty during the twelve months ended December 31, 2023:

Twelve Months Ended December 31, 2023

1-4 family mortgage

Year Ended December 31, 2023

Payment Deferral

Percentage of

(In Thousands)

Commercial, financial and agricultural

Owner-occupied commercial

Non-owner occupied commercial

The following table summarizes the financial impacts of loan modifications made to borrowers experiencing financial difficulty during the year ended December 31, 2024:

Year Ended December 31, 2024

Total Payment

1 unchanged sentence

(In Thousands)

Commercial, financial and agricultural 1 to 65 -

Commercial, financial and agricultural

Real estate - construction

Owner-occupied commercial

Other mortgage

TDRs at December 31, 2022 totaled $ 2.5 million.

The following tables present loans modified in a TDR during the period presented by portfolio segment and the financial impact of those modifications.

The table includes modifications made to new TDRs, as well as renewals of existing TDRs.

1-4 family mortgage

Non-owner occupied commercial

Year Ended December 31, 2023

Total Payment

Term Extensions

(In Thousands)

Troubled Debt Restructurings

Commercial, financial and agricultural

3 $ 444 $ 444

Real estate - construction

Real estate - mortgage:

Owner-occupied commercial

1-4 family mortgage

Other mortgage

Total real estate - mortgage

3 $ 444 $ 444

There were no loans that were modified in the previous twelve months (i.e., the twelve months prior to default) that defaulted during the years ended December 31, 2023.

Non-owner occupied commercial

There were no loans that were modified in the previous twelve months (i.e., the twelve months prior to default) that defaulted during the years ended December 31, 2024 and December 31, 2023, respectively.

For purposes of this disclosure, default is defined as 90 days past due and still accruing or placement on nonaccrual status.

5 unchanged sentences

Balance, beginning of year

$ 52,608 $ 51,180

67,106 103,513

( 79,883 ) ( 102,085 )

Balance, end of year

$ 39,831 $ 52,608

FORECLOSED PROPERTIES

39 unchanged sentences

The Company utilizes special purpose entities (“SPEs”) that constitute investments in limited partnerships that undertake certain development projects to achieve federal and state tax credits.

These SPEs are typically structured as VIEs and are thus subject to consolidation by the reporting enterprise that has both power over governance and absorbs the majority of the economic risks and rewards of the VIE.

To determine whether it must consolidate a VIE, the Company analyzes the design of the VIE to identify the sources of variability within the VIE, including an assessment of the nature of risks created by the assets and other contractual obligations of the VIE, and determines whether it will absorb a majority of that variability and, if so, whether it has power to direct the activities that most significantly impact the economic performance of the entity.

The Company has invested in limited partnerships as a funding investor.

The partnerships are single purpose entities that lend money to real estate investors for the purpose of acquiring and operating, or rehabbing, commercial property.

The investments qualify for New Market Tax Credits under Internal Revenue Code Section 45D, as amended, or Historic Rehabilitation Tax Credits under Code Section 47, as amended, or Low-Income Housing Tax Credits under Code Section 42, as amended.

For each of the partnerships, the Company acts strictly in a limited partner capacity.

The Company has determined that it is not the primary beneficiary of these partnerships because it does not have the power to direct the activities of the entity that most significantly impact the entities’ economic performance and therefore the partnerships are not consolidated in our financial statements.

The amount of recorded investment in these partnerships as of December 31, 2023 and 2022 was $ 42.8 million and $ 46.3 million, respectively.

During 2023, the Company invested in two Federal Historic Tax Credit partnerships and six Low-Income Housing Tax Credit partnerships with recorded investment in each totaling $ 754,000 and $ 7.8 million, respectively, at December 31, 2023.

Additionally, the Company funded an existing investment obligation of $ 2.4 million for one Federal Historic Tax Credit partnership.

There was no recorded investment included in loans of the Company at either December 31, 2023 or 2022 .

The remaining amounts are included in other assets.

These SPEs are typically structured as VIEs and are thus subject to consolidation by the reporting enterprise that absorbs the majority of the economic risks and rewards of the VIE.

To determine whether it must consolidate a VIE, the Company analyzes the design of the VIE to identify the sources of variability within the VIE, including an assessment of the nature of risks created by the assets and other contractual obligations of the VIE, and determines whether it will both absorb a majority of that variability and has the power to direct the activities that most significantly impact the economic performance of the entity.

See Note 17, Commitments and Contingencies, for additional disclosures related to the Company’s VIEs.

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

4 unchanged sentences

Time deposits, over $250,000

Brokered time deposits

The scheduled maturities of time deposits at December 31, 2024 were as follows:

2 unchanged sentences

FEDERAL FUNDS PURCHASED

At December 31, 2023, the Company had $ 1.26 billion in federal funds purchased from its correspondent banks that are clients of its correspondent banking unit, compared to $ 1.35 billion (excludes the Company’s federal funds purchases reported in the next paragraph) at December 31, 2022.

At December 31, 2024, the Company had $ 1.91 billion in federal funds purchased from its correspondent banks that are clients of its correspondent banking unit, compared to $ 1.26 billion at December 31, 2023.

Rates paid on these funds were between 4.42 % and 4.50 % as of December 31, 2024 and 5.40 % and 5.50 % as of December 31, 2023.

At December 31, 2024, the Company had available lines of credit totaling approximately $ 537.0 million with various financial institutions for borrowing on a short-term basis, compared to $ 880.0 million at December 31, 2023.

The Company had no outstanding borrowings from these lines at December 31, 2023, compared to $ 265.0 million outstanding borrowings from these lines at December 31, 2022.

The Company had $ 80.0 million outstanding borrowings from these lines at December 31, 2024, compared to no outstanding borrowings from these lines at December 31, 2023.

OTHER BORROWINGS

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are all consolidated into the Company.

The Company periodically enters into derivative contracts to manage exposures to movements in interest rates.

The Company purchased an interest rate cap in May of 2020 to limit exposures to increases in interest rates.

The interest rate cap was not designated as a hedging instrument but rather as a stand-alone derivative.

The interest rate cap had an original term of 3 three years, a notional amount of $ 300 million and was tied to the one -month LIBOR rate with a strike rate of 0.50 %.

The fair value of the interest rate cap was carried on the Consolidated Balance Sheets in other assets and the change in fair value is recognized in noninterest income each quarter.

The interest rate cap had a fair value of $ 4.2 million and remaining term of 0.3 years at December 31, 2022, and expired on May 4, 2023.

The Bank has entered into agreements with secondary market investors to deliver loans on a “best efforts delivery” basis.

When a rate is committed to a borrower, it is based on the best price that day and locked with our investor for our customer for a 30 -day period.

In the event the loan is not delivered to the investor, the Bank has no risk or exposure with the investor.

The interest rate lock commitments to customers related to loans that are originated for later sale are classified as derivatives.

The fair values of our agreements with investors and rate lock commitments to customers as of December 31, 2023 and 2022 were not material.

The Company has entered into forward loan sale commitments with secondary market investors to deliver loans on a “best efforts delivery” basis, which do not meet the definition of a derivative instrument.

When a rate is committed to a borrower, it is based on the best price that day and locked with the investor for the customer’s loan for a 30-day period.

In the event the loan is not delivered to the investor, the Company has no risk or exposure with the investor.

The interest rate lock commitments related to loans that are originated for later sale are classified as derivatives.

The fair values of the Company’s agreements with investors and rate lock commitments to customers as of December 31, 2024 and 2023 were not material.

EMPLOYEE AND DIRECTOR BENEFITS

4 unchanged sentences

The 2009 Plan originally permitted the grant of up to 2,550,000 shares of common stock.

However, upon stockholder approval during 2014, the Plan was amended in order to allow the Company to grant stock options for up to 5,550,000 shares of common stock.

With stockholder approval during 2014, the Plan was amended in order to allow the Company to grant up to 5,550,000 shares of common stock.

The Plan authorizes the grant of stock appreciation rights, restricted stock, incentive stock options, non-qualified stock options, non-stock share equivalents, performance shares or performance units and other equity-based awards.

4 unchanged sentences

This model requires the input of highly subjective assumptions, changes to which can materially affect the fair value estimate.

The Black-Scholes-Merton model is based on the weighted-average assumptions for expected dividend yield, expected stock price volatility, risk-free interest rate and expected life of options granted.

The fair value of each option granted is estimated on the date of grant using the Black-Scholes-Merton model based on the weighted-average assumptions for expected dividend yield, expected stock price volatility, risk-free interest rate and expected life of options granted.

There were no grants of stock options during the years ended December 31, 2024 and 2023.

6 unchanged sentences

Outstanding at beginning of year

280,000 $ 19.43 3.0 $ 14,088

( 112,200 ) 11.84 0.7 6,148

( 2,000 ) 34.64 5.1 64

Outstanding at end of year

165,800 24.35 2.9 7,211

Exercisable at December 31, 2024:

143,300 $ 21.84 2.2 $ 6,419

Year Ended December 31, 2023:

Outstanding at beginning of year

353,250 $ 19.28 3.8 $ 23,525

( 70,500 ) 17.96 2.2 3,592

( 2,750 ) 37.94 5.4 85

Outstanding at end of year

280,000 19.43 3.0 14,088

Exercisable at December 31, 2023:

220,500 $ 14.37 2.0 $ 12,279

Year Ended December 31, 2022:

Outstanding at beginning of year

641,450 $ 18.15 4.6 $ 16,985

( 278,200 ) 12.58 2.8 20,131

( 10,000 ) 38.38 5.2 466

Outstanding at end of year

353,250 19.28 3.8 23,525

Exercisable at December 31, 2022:

264,000 $ 12.89 2.8 $ 19,353

Exercisable options at December 31, 2024 were as follows:

14 unchanged sentences

43.00 - 44.00

43.00 - 44.00 1,500 43.80 4.5 34

143,300 $ 21.84 2.2 $ 6,419

As of December 31, 2023, there was $ 52,000 of total unrecognized compensation cost related to non-vested stock options.

As of December 31, 2023, non-vested stock options had a weighted average remaining time to vest of 8 months.

As of December 31, 2024, there were no non-vested stock options.

Restricted Stock and Performance Shares

4 unchanged sentences

As of December 31, 2024, non-vested restricted stock had a weighted average remaining time to vest of 2.1 years.

The Company periodically grants PSUs that give plan participants the opportunity to earn between 0 % and 150 % of the number of PSUs granted based on achieving certain performance metrics.

The number of stock units earned upon vesting of PSUs is determined by reference to the Company’s total stockholder return relative to a peer group of other publicly traded banks and bank holding companies during the performance period.

The Company periodically grants PSUs that give plan participants the opportunity to earn stock between 0 % and 150 % of the number of PSUs granted based on achieving certain performance metrics.

The number of stock earned upon vesting of PSUs is determined by reference to the Company’s total shareholder return relative to a peer group of other publicly traded banks and bank holding companies during the performance period.

The performance period is generally three years starting on the grant date.

1 unchanged sentence

As of December 31, 2024, there was $ 900,000 of total unrecognized compensation cost related to non-vested PSUs.

As of December 31, 2023, non-vested performance stock had a weighted average remaining time to vest of 1.0 year.

As of December 31, 2024, non-vested performance stock had a weighted average remaining time to vest of 1.3 years.

The following table summarizes restricted stock and PSU activity:

4 unchanged sentences

Non-vested at beginning of year

141,580 $ 56.39 23,852 $ 54.16

64,880 58.45 8,092 70.29

( 35,163 ) 49.85 - -

( 12,999 ) 63.78 - -

Non-vested at end of year

158,298 58.08 31,944 58.25

Year Ended December 31, 2023:

Non-vested at beginning of year

126,975 $ 42.74 12,437 $ 37.05

53,974 83.24 11,415 72.81

( 28,160 ) 43.27 - -

( 11,209 ) 58.82 - -

Non-vested at end of year

141,580 56.39 23,852 54.16

Year Ended December 31, 2022:

Non-vested at beginning of year

84,307 $ 34.93 - $ -

69,295 48.92 12,437 37.05

( 14,274 ) 29.33 - -

( 12,353 ) 39.60 - -

Non-vested at end of year

126,975 42.74 12,437 37.05

Retirement Plans

12 unchanged sentences

Management believes, as of December 31, 2024, that the Bank meets all capital adequacy requirements to which it is subject.

As of December 31, 2023, the most recent notification from the FDIC categorized ServisFirst Bank as well capitalized under the regulatory framework for prompt corrective action.

As of December 31, 2024, the most recent notification from the FDIC categorized the Bank as well capitalized under the regulatory framework for prompt corrective action.

To remain categorized as well capitalized, the Bank will have to maintain minimum CET1, total risk-based, Tier 1 risk-based, and Tier 1 leverage ratios as disclosed in the table below.

29 unchanged sentences

Gain (loss) on sale of ORE

(Loss) gain on sale of fixed assets

Death benefit of bank owned life insurance contracts(1)

Loss on sale of fixed assets

Merchant services fees

9 unchanged sentences

Other operational losses

Core processing deconverison expense

Core processing deconversion expense

Privilege tax expense

Total other operating expenses

For the years ended December 31, 2024 and 2023, death benefit amounts were included in Bank-owned life insurance income.

The components of income tax expense are as follows:

39 unchanged sentences

Excess tax benefit from stock compensation

Federal tax credits

Federal tax credits, net of related amortization

Effective income tax and rate

55 unchanged sentences

Because these instruments have fixed maturity dates, and because many of them expire without being drawn upon, they do not generally present any significant liquidity risk to the Company.

The Company invests in certain affordable housing projects throughout its market area as a means of supporting local communities.

The Company receives tax credits related to these investments, for which it typically acts as a limited partner and therefore does not exert control over the operating or financial policies of the partnerships.

The Company typically provides financing during the construction and development of the properties.

Tax credits are subject to recapture by taxing authorities based on compliance features required to be met at the project level.

The Company’s maximum potential exposure to losses relative to investments in VIEs is generally limited to the sum of the outstanding balance, future funding commitments and any related loans to the entity, exclusive of any potential tax recapture associated with the investments.

Loans to these entities are underwritten in substantially the same manner as the Company’s other loans and are generally secured.

The Company invests as a limited partner in certain projects through the New Market Tax Credit program, which is a Federal financial program aimed to stimulate business and real estate investment in underserved communities via a federal tax credit.

The Company has investments in and future funding commitments related to private equity and certain other equity method investments.

The risk exposure relating to such commitments is generally limited to the amount of investments and future funding commitments made.

The following table summarizes certain tax credit and certain equity investments.

Balance Sheet Location

(In Thousands)

Investments in affordable housing projects and other qualified tax credits:

Carrying amount

Amount of future funding commitments including in carrying amount

Other liabilities

Lending exposures

SBIC and certain other equity method investments:

Carrying amount

Amount of future funding commitments not included in carrying amount

The following table presents a summary of tax credits and amortization expense associated with those investments accounted for using the proportional amortization method for the period indicated.

Income Statement Location

(In Thousands)

Income tax credits and other income tax benefits

Income tax expense

Amortization expense

Income tax expense

CONCENTRATIONS OF CREDIT

15 unchanged sentences

Weighted average common shares outstanding

Dilutive effects of assumed exercise of stock options and vesting of performance shares

Weighted average common and dilutive potential common shares outstanding

Dilutive effects of assumed exercise of stock options

and vesting of performance shares

Weighted average common and dilutive potential

common shares outstanding

Net income available to common stockholders

5 unchanged sentences

FAIR VALUE MEASUREMENT

Measurement of fair value under U.S.

GAAP establishes a hierarchy that prioritizes observable and unobservable inputs used to measure fair value, as of the measurement date, into three broad levels, which are described below:

Measurement of fair value under GAAP establishes a hierarchy that prioritizes observable and unobservable inputs used to measure fair value, as of the measurement date, into three broad levels, which are described below:

Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities.

50 unchanged sentences

OREO is classified within Level 3 of the hierarchy.

There were three residential real estate loan foreclosures for $ 360,000 classified as OREO as of December 31, 2023, compared to two residential real estate loan foreclosures for $ 248,000 as of December 31, 2022.

There were three residential real estate loans $ 292,000 that were in the process of being foreclosed as of December 31, 2023.

There were no residential real estate loan that was in the process of being foreclosed as of December 31, 2022.

There were three residential real estate loan foreclosures for $ 852,400 classified as OREO as of December 31, 2024, compared to three residential real estate loan foreclosures for $ 360,000 as of December 31, 2023.

There was one residential real estate loan for $ 82,000 that was in the process of being foreclosed as of December 31, 2024.

There were three residential real estate loans for $ 292,000 that were in the process of being foreclosed as of December 31, 2023.

The following table presents the Company’s financial assets and financial liabilities carried at fair value on a recurring basis as of December 31, 2024 and 2023.

8 unchanged sentences

Inputs (Level 3)

(In Thousands)

Assets Measured on a Recurring Basis:

(In Thousands)

Available-for-sale debt securities:

Treasury securities

$ 340,807 $ - $ - $ 340,807

Mortgage-backed securities

- 215,485 - 215,485

State and municipal securities

- 10,223 - 10,223

Corporate debt

- 326,808 6,860 333,668

Total available-for-sale debt securities

340,807 552,516 6,860 900,183

Total assets at fair value

$ 340,807 $ 552,516 $ 6,860 $ 900,183

Fair Value Measurements at December 31, 2023 Using

6 unchanged sentences

Inputs (Level 3)

(In Thousands)

Assets Measured on a Recurring Basis:

(In Thousands)

Available-for-sale debt securities:

Treasury securities

$ 2,969 $ - $ - $ 2,969

Government agency securities

Mortgage-backed securities

- 249,703 - 249,703

State and municipal securities

- 13,609 - 13,609

Corporate debt

- 367,665 10,860 378,525

Total available-for-sale debt securities

2,969 630,986 10,860 644,815

Interest rate cap derivative

- 4,201 - 4,201

Total assets at fair value

$ 2,969 $ 635,187 $ 10,860 $ 649,016

The carrying amount and estimated fair value of the Company’s financial instruments measured on a nonrecurring basis were as follows:

7 unchanged sentences

Inputs (Level 3)

(In Thousands)

Assets Measured on a Nonrecurring Basis:

(In Thousands)

Loans individually evaluated

$ - $ - $ 70,735 $ 70,735

Other real estate owned and repossessed assets

Total assets at fair value

$ - $ - $ 71,730 $ 71,730

Fair Value Measurements at December 31, 2023 Using

6 unchanged sentences

Inputs (Level 3)

(In Thousands)

Assets Measured on a Nonrecurring Basis:

(In Thousands)

Loans individually evaluated

$ - $ - $ 73,017 $ 73,017

Other real estate owned and repossessed assets

Total assets at fair value

$ - $ - $ 73,265 $ 73,265

There were no liabilities measured at fair value on a non-recurring basis as of December 31, 2024 and 2023.

1 unchanged sentence

The nature of the remaining assets and liabilities is such that transfers in and out of any level are expected to be rare.

For the year ended December 31, 2023, there was one transfer from Level 3 to Level 2.

For the year ended December 31, 2024, there was two transfers from Level 3 to Level 2 for $ 5,531 .

The table below includes a rollforward of the balance sheet amounts for the years ended December 31, 2024 and 2023 (including the change in fair value) for financial instruments classified by the Company within Level 3 of the valuation hierarchy measured at fair value on a recurring basis including changes in fair value due in part to observable factors that are part of the valuation methodology:

4 unchanged sentences

Fair value, beginning of period

$ 10,860 $ 16,992

Transfers into Level 3

2 unchanged sentences

Transfers out of Level 3

( 4,160 ) ( 10,187 )

Fair value, end of period

$ 6,860 $ 10,860

The fair value of a financial instrument is the current amount that would be exchanged in a sale between willing parties, other than in a forced liquidation.

4 unchanged sentences

Accordingly, the fair value estimates may not be realized in an immediate settlement of the instrument.

GAAP excludes certain financial instruments and all nonfinancial instruments from its fair value disclosure requirements.

Current GAAP excludes certain financial instruments and all nonfinancial instruments from its fair value disclosure requirements.

Accordingly, the aggregate fair value amounts presented may not necessarily represent the underlying fair value of the Company.

Carrying Amount

December 31, 2024

Carrying / Notional Amount

Estimated Fair Value

Quoted Market Prices in an Active Market (Level 1)

Models with Significant Observable Market Parameters (Level 2)

Models with Significant Unobservable Market Parameters (Level 3)

(In Thousands)

Financial Assets:

Level 1 Inputs:

Cash and cash equivalents

$ 2,030,513 $ 2,030,513 $ 814,538 $ 814,538

Held to maturity U.S.

Treasury securities

508,985 484,267 507,151 470,954

Level 2 Inputs:

Federal funds sold

100,575 100,575 1,515 1,515

Held to maturity debt securities

473,429 422,674 526,720 464,749

Mortgage loans held for sale

5,071 5,071 1,607 1,604

Restricted equity securities

10,226 10,226 7,734 7,734

Level 3 Inputs:

Held to maturity debt securities

250 250 250 250

11,505,512 11,032,819 11,541,671 11,265,517

Financial Liabilities:

Level 2 Inputs:

$ 13,273,511 $ 13,266,640 $ 11,546,805 $ 11,529,647

Federal funds purchased

1,256,724 1,256,724 1,618,798 1,618,798

Other borrowings

64,735 58,083 64,726 57,101

December 31, 2023

Carrying / Notional Amount

Estimated Fair Value

Quoted Market Prices in an Active Market (Level 1)

Models with Significant Observable Market Parameters (Level 2)

Models with Significant Unobservable Market Parameters (Level 3)

(In Thousands)

Financial Assets:

Cash and cash equivalents

Held to maturity U.S.

Treasury securities

Federal funds sold

Held to maturity debt securities

Mortgage loans held for sale

Restricted equity securities

Held to maturity debt securities

Financial Liabilities:

Federal funds purchased

Other borrowings

PARENT COMPANY FINANCIAL INFORMATION

5 unchanged sentences

Cash and due from banks

$ 20,014 $ 19,292

Investment in subsidiary

1,501,777 1,357,058

$ 1,522,348 $ 1,377,333

LIABILITIES AND STOCKHOLDERS' EQUITY

Other borrowings

$ 64,735 $ 64,726

Other liabilities

17,708 15,211

Total liabilities

82,443 79,937

Stockholders' equity:

3 unchanged sentences

200,000,000 shares authorized:

54,461,580 shares issued and outstanding at December 31, 2023;

and 54,326,527 shares issued and outstanding at December 31, 2022 54 54

54,569,427 shares

issued and outstanding at December 31, 2024;

and 54,461,580 shares issued and

outstanding at December 31, 2023

at December 31, 2021

Additional paid-in capital

232,605 229,693

Retained earnings

1,254,841 1,109,902

Accumulated other comprehensive loss

( 47,595 ) ( 42,253 )

Total stockholders' equity

1,439,905 1,297,396

Total liabilities and stockholders' equity

$ 1,522,348 $ 1,377,333

CONDENSED STATEMENTS OF INCOME

5 unchanged sentences

Equity in undistributed earnings of subsidiary

Dividends on preferred stock

Net income available to common stockholders

3 unchanged sentences

Operating activities

$ 206,791 $ 251,442 $ 207,672

Adjustments to reconcile net income to net cash provided by operating activities:

2,227 ( 290 ) ( 93 )

Equity in undistributed earnings of subsidiary

( 147,076 ) ( 197,221 ) ( 164,387 )

Net cash (used in) provided by operating activities

61,945 53,931 43,192

Net cash provided by operating activities

Investing activities

( 300 ) 750 ( 120 )

Net cash used in investing activities

( 300 ) 750 ( 120 )

Financing activities

Proceeds from issuance of subordinated notes

Redemption of subordinated notes

Dividends paid on common stock

( 60,923 ) ( 49,942 ) ( 43,204 )

Net cash used in financing activities

( 60,923 ) ( 49,942 ) ( 43,204 )

Net change in cash and cash equivalents

722 4,739 ( 132 )

Cash and cash equivalents at beginning of year

19,292 14,553 14,685

Cash and cash equivalents at end of year

$ 20,014 $ 19,292 $ 14,553

SEGMENT REPORTING

The Bank’s revenue is primarily derived from the business of banking.

The Bank’s financial performance is monitored on consolidated basis by senior management, which is considered to be the Bank’s CODM.

Senior Management includes the following officers of the Company:

Chairman of the Board and Chief Executive Officer;

Executive Vice President, Chief Financial Officer;

Executive Vice President, Chief Operating Officer.

All of the Bank’s financial results are similar and considered by management to be aggregated into one reportable operating segment.

While the Company has assigned certain management responsibilities by region and business line, the Bank’s CODM evaluates financial performance on a Bank-wide basis.

The majority of the Bank’s revenue is from the business of banking, and the Bank’s regions have similar economic characteristics, products, services and customers.

Accordingly, all of the Bank’s operations are considered by management to be aggregated in one reportable operating segment.

Financial performance is reported to the CODM monthly, and the primary measure of performance is net income, net interest income, non-interest income, and key operating expenses.

The allocation of resources throughout the Bank is based on consolidated profitability.

The presentation of financial performance to the CODM is consistent with amounts and financial statement line items shown in the Bank’s consolidated balance sheets and consolidated statements of income.

Additionally, the Bank’s significant expenses are adequately segmented by category and amount in the consolidated statements of income to include all significant items when considering both qualitative and quantitative factors.

Significant expenses of the Company include salaries and employee benefits, equipment and occupancy expense, third-party processing and other services, and professional services.

Because we report on a single segment basis, our segment information may not be directly comparable to financial institutions that present multiple reportable segments.

Should future organizational changes in our management structure or business model necessitate more detailed segment disclosures, we will revise our segment reporting accordingly.

As of the date of these consolidated financial statements, no such changes have occurred, and management continues to evaluate performance on a consolidated entity basis.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

1 unchanged sentence

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 8. Financial Statements and Supplementary Data