What changed in this filing

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Item 1. Financial Statements

2021-11-05 compared with 2021-08-06 · 275 added, 210 removed, 1392 unchanged (26% of the section changed)

2 unchanged sentences

Consolidated Balance Sheets

June 30, 2021 and December 31, 2020

June 30, December 31,

September 30, 2021 and December 31, 2020

September 30, December 31,

(In thousands, except share data) 2021 2020

4 unchanged sentences

Investment securities:

Held-to-maturity, net of allowance for credit losses of $ 1,132 and $ 2,915 at June 30, 2021 and December 31, 2020, respectively

Held-to-maturity, net of allowance for credit losses of $ 1,279 and $ 2,915 at September 30, 2021 and December 31, 2020, respectively

1,516,797 333,031

Available-for-sale, net of allowance for credit losses of $ 0 and $ 312 at June 30, 2021 and December 31, 2020, respectively (amortized cost of $ 6,543,022 and $ 3,397,043 at June 30, 2021 and December 31, 2020, respectively)

Available-for-sale, net of allowance for credit losses of $ 0 and $ 312 at September 30, 2021 and December 31, 2020, respectively (amortized cost of $ 6,852,465 and $ 3,397,043 at September 30, 2021 and December 31, 2020, respectively)

6,822,203 3,473,598

27 unchanged sentences

Series D, $ 0.01 par value, $ 1,000 liquidation value per share;

767 shares issued and outstanding at June 30, 2021 and December 31, 2020

767 shares issued and outstanding at September 30, 2021 and December 31, 2020

Common stock, Class A, $ 0.01 par value;

175,000,000 shares authorized at June 30, 2021 and December 31, 2020;

108,386,669 and 108,077,662 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively

175,000,000 shares authorized at September 30, 2021 and December 31, 2020;

106,603,231 and 108,077,662 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively

Surplus 1,974,561 2,014,076

Undivided profits 1,065,566 901,006

Accumulated other comprehensive income 12,073 59,726

Accumulated other comprehensive (loss) income ( 11,429 ) 59,726

Total stockholders’ equity 3,030,531 2,976,656

3 unchanged sentences

Consolidated Statements of Income

Three and Six Months Ended June 30, 2021 and 2020

Three Months Ended June 30, Six Months Ended

Three and Nine Months Ended September 30, 2021 and 2020

Three Months Ended September 30, Nine Months Ended

September 30,

(In thousands, except per share data) 2021 2020 2021 2020

46 unchanged sentences

Consolidated Statements of Comprehensive Income (Loss)

Three and Six Months Ended June 30, 2021 and 2020

Three and Nine Months Ended September 30, 2021 and 2020

Three Months Ended

June 30, Six Months Ended June 30,

September 30, Nine Months Ended September 30,

(In thousands) 2021 2020 2021 2020

4 unchanged sentences

Reclassification adjustment for realized gains included in net income 5,248 22,305 15,846 54,790

Realized loss on available-for-sale securities interest rate hedges ( 13,722 ) — ( 13,722 ) —

Amortization of securities transferred from available for sale to held to maturity 1,106 — 1,106 —

Other comprehensive income (loss), before tax effect ( 31,818 ) ( 17,330 ) ( 96,331 ) 27,913

5 unchanged sentences

Consolidated Statements of Cash Flows

Six Months Ended June 30, 2021 and 2020

(In thousands) June 30, 2021 June 30, 2020

Nine Months Ended September 30, 2021 and 2020

(In thousands) September 30, 2021 September 30, 2020

OPERATING ACTIVITIES

35 unchanged sentences

Purchases of held-to-maturity securities ( 694,734 ) ( 16,997 )

Purchase of bank owned life insurance ( 160,000 ) —

Purchases of bank owned life insurance ( 160,000 ) —

Proceeds from bank owned life insurance death benefits 3,814 1,425

18 unchanged sentences

Consolidated Statements of Stockholders’ Equity

Three Months Ended June 30, 2021 and 2020

Three Months Ended September 30, 2021 and 2020

(In thousands, except share data) Preferred Stock Common

3 unchanged sentences

Profits Total

Three Months Ended June 30, 2021

Balance, March 31, 2021 (Unaudited) $ 767 $ 1,083 $ 2,017,188 $ ( 37,176 ) $ 948,913 $ 2,930,775

Three Months Ended September 30, 2021

Balance, June 30, 2021 (Unaudited) $ 767 $ 1,084 $ 2,021,128 $ 12,073 $ 1,004,314 $ 3,039,366

Comprehensive income — — — ( 23,502 ) 80,574 57,072

1 unchanged sentence

— — 4,848 — — 4,848

Stock repurchases – 1,806,205 shares

— ( 18 ) ( 51,415 ) — — ( 51,433 )

Dividends on preferred stock — — — — ( 13 ) ( 13 )

1 unchanged sentence

— — — — ( 19,309 ) ( 19,309 )

Balance, September 30, 2021 (Unaudited) $ 767 $ 1,066 $ 1,974,561 $ ( 11,429 ) $ 1,065,566 $ 3,030,531

Three Months Ended September 30, 2020

Balance, June 30, 2020 (Unaudited) $ 767 $ 1,090 $ 2,029,383 $ 54,310 $ 819,153 $ 2,904,703

Three Months Ended June 30, 2020

Balance, March 31, 2020 (Unaudited) $ 767 $ 1,090 $ 2,026,420 $ 38,230 $ 778,893 $ 2,845,400

Comprehensive income — — — ( 12,801 ) 65,898 53,097

4 unchanged sentences

— — — — ( 18,535 ) ( 18,535 )

Balance, June 30, 2020 (Unaudited) $ 767 $ 1,090 $ 2,029,383 $ 54,310 $ 819,153 $ 2,904,703

Balance, September 30, 2020 (Unaudited) $ 767 $ 1,090 $ 2,032,372 $ 41,509 $ 866,503 $ 2,942,241

See Condensed Notes to Consolidated Financial Statements.

1 unchanged sentence

Consolidated Statements of Stockholders’ Equity

Six Months Ended June 30, 2021 and 2020

Nine Months Ended September 30, 2021 and 2020

(In thousands, except share data) Preferred Stock Common

3 unchanged sentences

Profits Total

Six Months Ended June 30, 2021

Nine Months Ended September 30, 2021

Balance, December 31, 2020 $ 767 $ 1,081 $ 2,014,076 $ 59,726 $ 901,006 $ 2,976,656

10 unchanged sentences

— — — — ( 58,319 ) ( 58,319 )

Balance, June 30, 2021 (Unaudited) $ 767 $ 1,084 $ 2,021,128 $ 12,073 $ 1,004,314 $ 3,039,366

Six Months Ended June 30, 2020

Balance, September 30, 2021 (Unaudited) $ 767 $ 1,066 $ 1,974,561 $ ( 11,429 ) $ 1,065,566 $ 3,030,531

Nine Months Ended September 30, 2020

Balance, December 31, 2019 $ 767 $ 1,136 $ 2,117,282 $ 20,891 $ 848,848 $ 2,988,924

10 unchanged sentences

— — — — ( 56,141 ) ( 56,141 )

Balance, June 30, 2020 (Unaudited) $ 767 $ 1,090 $ 2,029,383 $ 54,310 $ 819,153 $ 2,904,703

Balance, September 30, 2020 (Unaudited) $ 767 $ 1,090 $ 2,032,372 $ 41,509 $ 866,503 $ 2,942,241

See Condensed Notes to Consolidated Financial Statements.

8 unchanged sentences

checking, savings and time deposits;

and specialized products and services (such as credit cards, trust and fiduciary services, investments, agricultural finance lending, equipment lending, insurance and Small Business Administration (“SBA”) lending) from approximately 198 financial centers as of June 30, 2021, located throughout market areas in Arkansas, Kansas, Missouri, Oklahoma, Tennessee and Texas.

and specialized products and services (such as credit cards, trust and fiduciary services, investments, agricultural finance lending, equipment lending, insurance and Small Business Administration (“SBA”) lending) from approximately 185 financial centers as of September 30, 2021, located throughout market areas in Arkansas, Kansas, Missouri, Oklahoma, Tennessee and Texas.

Basis of Presentation

11 unchanged sentences

Management obtains independent appraisals for significant properties in connection with the determination of the allowance for credit losses and the valuation of foreclosed assets.

During the second quarter of 2021, certain debit and credit card transaction fees were reclassified from non-interest expense to non-interest income.

These transaction fees, as well as additional c ertain prior year amounts, have been reclassified to conform to the current year financial statement presentation.

During the second and third quarters of 2021, certain debit and credit card transaction fees were reclassified from non-interest expense to non-interest income.

These transaction fees, as well as additional certain prior year amounts, have been reclassified to conform to the current year financial statement presentation.

These changes and reclassifications did not impact previously reported net income or comprehensive income.

83 unchanged sentences

Presently, the Company is not aware of any other changes to the Accounting Standards Codification that will have a material impact on its present or future financial position or results of operations.

PROPOSED ACQUISITIONS

ACQUISITIONS (Subsequent Event)

Landmark Community Bank

On June 4, 2021, the Company and the Bank entered into an Agreement and Plan of Merger (“Landmark Agreement”) with Landmark Community Bank (“Landmark”), headquartered in Collierville, Tennessee, pursuant to which, upon the terms and subject to the conditions of the Landmark Agreement, Landmark will merge with and into the Bank, with the Bank continuing as the surviving entity.

According to the terms of the Landmark Agreement, upon consummation of the merger, holders of Landmark’s common stock and common stock equivalents will receive, in the aggregate, 4,500,000 shares of the Company’s common stock and $ 7,000,000 , all subject to certain conditions and potential adjustments under the Landmark agreement.

Landmark conducts banking business from 8 branches located in the Memphis and Nashville, Tennessee, metropolitan areas.

As of June 30, 2021, Landmark had approximately $ 986.7 million in assets, $ 783.1 million in loans and $ 823.1 million in deposits.

Completion of the Landmark transaction is expected during the fourth quarter of 2021 and is subject to certain closing conditions, including approval by the shareholders of Landmark and customary regulatory approvals.

The merger was completed on October 8, 2021, at which time Landmark was merged with and into the Bank, with the Bank continuing as the surviving entity.

Pursuant to the terms of the Landmark Agreement, holders of Landmark’s common stock and common stock equivalents received, in the aggregate, 4,499,872 shares of the Company’s common stock and $ 6,451,727.43 in cash.

Prior to the acquisition, Landmark conducted banking business from 8 branches located in the Memphis and Nashville, Tennessee, metropolitan areas.

As of September 30, 2021, Landmark had approximately $ 978.8 million in assets, $ 784.4 million in loans and $ 813.3 million in deposits.

The purchase price allocation and certain fair value measurements remain preliminary due to the timing of the merger.

Due to the recent closing, management remains in the early stages of reviewing the estimated fair values and evaluating the assumed tax positions of this merger.

The Company expects to finalize its analysis of the acquired assets and assumed liabilities in this transaction within one year of the merger.

Triumph Bancshares, Inc.

On June 4, 2021, the Company entered into an Agreement and Plan of Merger (“Triumph Agreement”) with Triumph Bancshares, Inc.

(“Triumph”), the parent company of Triumph Bank, headquartered in Memphis, Tennessee, pursuant to which, upon the terms and subject to the conditions of the Triumph Agreement, Triumph will merge with and into the Company, with the Company continuing as the surviving corporation.

According to the terms of the Triumph Agreement, upon consummation of the merger, holders of Triumph’s common stock and common stock equivalents will receive, in the aggregate, 4,164,839 shares of the Company’s common stock and $ 2,645,937.83 , all subject to certain conditions and potential adjustments under the Triumph Agreement.

Triumph conducts banking business from 6 branches located in the Memphis and Nashville, Tennessee, metropolitan areas.

As of June 30, 2021, Triumph had approximately $ 886.7 million in assets, $ 715.8 million in loans and $ 712.8 million in deposits.

Completion of the Triumph transaction is expected during the fourth quarter of 2021 and is subject to certain closing conditions, including approval by the shareholders of Triumph and customary regulatory approvals.

(“Triumph”), the parent company of Triumph Bank, headquartered in Memphis, Tennessee.

The merger was completed on October 8, 2021, at which time Triumph was merged with and into the Company, with the Company continuing as the surviving corporation.

Pursuant to the terms of the Triumph Agreement, holders of Triumph’s common stock and common stock equivalents received, in the aggregate, 4,164,712 shares of the Company’s common stock and $ 1,693,402.93 in cash.

Prior to the acquisition, Triumph conducted banking business from 6 branches located in the Memphis and Nashville, Tennessee, metropolitan areas.

As of September 30, 2021, Triumph had approximately $ 855.3 million in assets, $ 708.0 million in loans and $ 724.0 million in deposits.

The purchase price allocation and certain fair value measurements remain preliminary due to the timing of the merger.

Due to the recent closing, management remains in the early stages of reviewing the estimated fair values and evaluating the assumed tax positions of this merger.

The Company expects to finalize its analysis of the acquired assets and assumed liabilities in this transaction within one year of the merger.

INVESTMENT SECURITIES

9 unchanged sentences

Premiums on callable securities are amortized to their earliest call date.

During the third quarter of 2021, the Company transferred, at fair value, $ 500.8 million of securities from the available-for-sale portfolio to the held-to-maturity portfolio.

The related net unrealized gains of $ 1.1 million remained in accumulated other comprehensive income (loss) and will be amortized over the remaining life of the securities.

No gains or losses on these securities were recognized at the time of transfer.

The amortized cost, fair value and allowance for credit losses of investment securities that are classified as HTM are as follows:

4 unchanged sentences

Held-to-maturity

June 30, 2021

September 30, 2021

Government agencies $ 232,549 $ — $ 232,549 $ — $ ( 5,179 ) $ 227,370

11 unchanged sentences

Mortgage-backed securities (“MBS”) are commercial MBS, secured by commercial properties, and residential MBS, generally secured by single-family residential properties.

As of June 30, 2021, HTM MBS consists of $ 6.1 million and $ 54.5 million of commercial MBS and residential MBS, respectively.

As of September 30, 2021, HTM MBS consists of $ 5.4 million and $ 52.5 million of commercial MBS and residential MBS, respectively.

As of December 31, 2020, HTM MBS consists of $ 7.7 million and $ 14.7 million of commercial MBS and residential MBS, respectively.

6 unchanged sentences

Available-for-sale

June 30, 2021

September 30, 2021

Treasury $ 300 $ — $ — $ — $ 300

4 unchanged sentences

Total AFS $ 6,838,743 $ — $ 40,581 $ ( 57,121 ) $ 6,822,203

(In thousands) Amortized

Cost Allowance

for Credit Losses Gross Unrealized

Gains Gross Unrealized

(Losses) Estimated Fair

December 31, 2020

4 unchanged sentences

Total AFS $ 3,397,043 $ ( 312 ) $ 79,663 $ ( 2,796 ) $ 3,473,598

As of June 30, 2021, AFS MBS consists of $ 1.34 billion and $ 2.65 billion of commercial MBS and residential MBS, respectively.

As of September 30, 2021, AFS MBS consists of $ 1.56 billion and $ 2.86 billion of commercial MBS and residential MBS, respectively.

As of December 31, 2020, AFS MBS consists of $ 406.1 million and $ 988.8 million of commercial MBS and residential MBS, respectively.

Accrued interest receivable on HTM and AFS securities at June 30, 2021 was $ 4.2 million and $ 21.8 million, respectively, and is included in interest receivable on the consolidated balance sheets.

Accrued interest receivable on HTM and AFS securities at September 30, 2021 was $ 8.3 million and $ 20.9 million, respectively, and is included in interest receivable on the consolidated balance sheets.

The Company has made the election to exclude all accrued interest receivable from securities from the estimate of credit losses.

The following table summarizes the Company’s AFS investments in an unrealized loss position for which an allowance for credit loss has not been recorded as of June 30, 2021, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position:

The following table summarizes the Company’s AFS investments in an unrealized loss position for which an allowance for credit loss has not been recorded as of September 30, 2021, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position:

Less Than 12 Months 12 Months or More Total

8 unchanged sentences

Total AFS $ 3,659,613 $ ( 51,166 ) $ 181,287 $ ( 5,955 ) $ 3,840,900 $ ( 57,121 )

As of June 30, 2021, the Company’s investment portfolio included $ 6.6 billion of AFS securities, of which $ 3.2 billion, or 48.6 %, were in an unrealized loss position that were not deemed to have credit losses.

As of September 30, 2021, the Company’s investment portfolio included $ 6.8 billion of AFS securities, of which $ 3.8 billion, or 56.3 %, were in an unrealized loss position that were not deemed to have credit losses.

A portion of the unrealized losses were related to the Company’s MBS, which are issued and guaranteed by U.S.

3 unchanged sentences

Management believes the declines in fair value for the securities are temporary.

Management does not have the intent to sell the securities, and management believes it is more likely than not the Company will not have to sell the securities before recovery of their amortized cost basis.

Management does not have the intent to

sell the securities, and management believes it is more likely than not the Company will not have to sell the securities before recovery of their amortized cost basis.

Allowance for Credit Losses

5 unchanged sentences

Regarding securities issued by state and political subdivisions and other HTM securities, management considers (i) issuer bond ratings, (ii) historical loss rates for given bond ratings, (iii) whether issuers continue to make timely principal and interest payments under the contractual terms of the securities, (iv) internal forecasts, and (v) whether or not such securities provide insurance or other credit enhancement or are pre-refunded by the issuers.

The following table details activity in the allowance for credit losses by investment security type for the three and six months ended June 30, 2021 on the Company’s HTM and AFS securities portfolios.

The following table details activity in the allowance for credit losses by investment security type for the three and nine months ended September 30, 2021 on the Company’s HTM and AFS securities portfolios.

(In thousands) State and Political Subdivisions Other

Securities Total

Three Months Ended June 30, 2021

Three Months Ended September 30, 2021

Held-to-maturity

Beginning balance, April 1, 2021 $ 1,042 $ 576 $ 1,618

Beginning balance, July 1, 2021 $ 871 $ 261 $ 1,132

Provision for credit loss expense 325 ( 325 ) —

Ending balance, June 30, 2021 $ 871 $ 261 $ 1,132

Recoveries — 147 147

Ending balance, September 30, 2021 $ 1,196 $ 83 $ 1,279

Available-for-sale

Beginning balance, April 1, 2021 $ 64 $ 2,390 $ 2,454

Beginning balance, July 1, 2021 $ — $ — $ —

Net decrease in allowance on previously impaired securities — — —

Ending balance, June 30, 2021 $ — $ — $ —

Six Months Ended June 30, 2021

Ending balance, September 30, 2021 $ — $ — $ —

Nine Months Ended September 30, 2021

Held-to-maturity

2 unchanged sentences

Securities charged-off — ( 600 ) ( 600 )

Ending balance, June 30, 2021 $ 871 $ 261 $ 1,132

Recoveries — 147 147

Ending balance, September 30, 2021 $ 1,196 $ 83 $ 1,279

Available-for-sale

2 unchanged sentences

Net decrease in allowance on previously impaired securities ( 217 ) ( 84 ) ( 301 )

Ending balance, June 30, 2021 $ — $ — $ —

Activity in the allowance for credit losses by investment security type for the three and six months ended June 30, 2020 on the Company’s HTM and AFS securities portfolio was as follows:

Ending balance, September 30, 2021 $ — $ — $ —

Activity in the allowance for credit losses by investment security type for the three and nine months ended September 30, 2020 on the Company’s HTM and AFS securities portfolio was as follows:

(In thousands) State and Political Subdivisions Other

Securities Total

Three Months Ended June 30, 2020

Three Months Ended September 30, 2020

Held-to-maturity

Beginning balance, April 1, 2020 $ 97 $ 312 $ 409

Beginning balance, July 1, 2020 $ 95 $ 212 $ 307

Provision for credit loss expense ( 22 ) 88 66

Ending balance, June 30, 2020 $ 95 $ 212 $ 307

Ending balance, September 30, 2020 $ 73 $ 300 $ 373

Available-for-sale

Beginning balance, April 1, 2020 $ 95 $ 174 $ 269

Beginning balance, July 1, 2020 $ 371 $ 238 $ 609

Credit losses on securities not previously recorded 1,137 23 1,160

Reduction due to sales $ ( 294 ) $ — $ ( 294 )

Net decrease in allowance on previously impaired securities ( 66 ) ( 201 ) ( 267 )

Ending balance, June 30, 2020 $ 371 $ 238 $ 609

(In thousands) State and Political Subdivisions Other

Securities Total

Six Months Ended June 30, 2020

Ending balance, September 30, 2020 $ 1,148 $ 60 $ 1,208

Nine Months Ended September 30, 2020

Held-to-maturity

2 unchanged sentences

Provision for credit loss expense 15 ( 11 ) 4

Ending balance, June 30, 2020 $ 95 $ 212 $ 307

Ending balance, September 30, 2020 $ 73 $ 300 $ 373

Available-for-sale

4 unchanged sentences

Net increase in allowance on previously impaired securities ( 111 ) ( 18 ) ( 129 )

Ending balance, June 30, 2020 $ 371 $ 238 $ 609

Based upon the Company’s analysis of the underlying risk characteristics of its AFS portfolio, including credit ratings and other qualitative factors, as previously discussed, the provision for credit losses related to AFS securities was reduced by $ 2,454,000 and $ 312,000 during the three and six months ended June 30, 2021, respectively.

During the three and six months ended June 30, 2020, the provision for credit losses was $ 340,000 and $ 236,000 , respectively, related to AFS securities.

The following table summarizes bond ratings for the Company’s HTM portfolio, based upon amortized cost, issued by state and political subdivisions and other securities as of June 30, 2021:

Ending balance, September 30, 2020 $ 1,148 $ 60 $ 1,208

Based upon the Company’s analysis of the underlying risk characteristics of its AFS portfolio, including credit ratings and other qualitative factors, as previously discussed, there was no provision for credit losses related to AFS securities recorded in the third quarter of 2021 and it was reduced by $ 312,000 during the nine months ended September 30, 2021.

During the three and nine months ended September 30, 2020, the provision for credit losses was $ 599,000 and $ 835,000 , respectively, related to AFS securities.

The following table summarizes bond ratings for the Company’s HTM portfolio, based upon amortized cost, issued by state and political subdivisions and other securities as of September 30, 2021:

State and Political Subdivisions

3 unchanged sentences

A 45,229 82,432 — 127,661 —

Baa/BBB 1,049 10,302 — 11,351 —

Not Rated 6,322 15,642 — 21,964 17,310

2 unchanged sentences

Pre-refunded securities, if any, have been defeased by the issuer and are fully secured by cash and/or U.S.

Treasury securities held in escrow for payment to holders when the underlying call dates of the securities are reached.

securities held in escrow for payment to holders when the underlying call dates of the securities are reached.

Securities with other credit enhancement or insurance continue to make timely principal and interest payments under the contractual terms of the securities.

Accordingly, no allowance for credit losses has been recorded for these securities as there is no current expectation of credit losses related to these securities.

Income earned on securities for the three and six months ended June 30, 2021 and 2020, is as follows:

Income earned on securities for the three and nine months ended September 30, 2021 and 2020, is as follows:

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(In thousands) 2021 2020 2021 2020

4 unchanged sentences

Total $ 30,717 $ 14,910 $ 79,418 $ 47,326

The amortized cost and estimated fair value by maturity of securities as of June 30, 2021 are shown in the following table.

The amortized cost and estimated fair value by maturity of securities as of September 30, 2021 are shown in the following table.

Securities are classified according to their contractual maturities without consideration of principal amortization, potential prepayments or call options.

10 unchanged sentences

Total $ 1,518,076 $ 1,487,916 $ 6,838,743 $ 6,822,203

The carrying value, which approximates the fair value, of securities pledged as collateral, to secure public deposits and for other purposes, amounted to $ 3.89 billion at June 30, 2021 and $ 2.01 billion at December 31, 2020.

There were approximately $ 5.2 million of gross realized gains and $ 26,000 of gross realized losses from the sale of securities during the three months ended June 30, 2021, and approximately $ 10.6 million of gross realized gains and $ 39,000 of gross realized losses from the sale of securities during the six months ended June 30, 2021.

The Company sold approximately $ 249.5 million of investment securities during the six months ended June 30, 2021.

There were approximately $ 391,000 of gross realized gains and $ 1,000 of gross realized losses from the sale of securities during the three months ended June 30, 2020, and approximately $ 32.5 million of gross realized gains and $ 2,600 of gross realized losses from the sale of securities during the six months ended June 30, 2020.

The carrying value, which approximates the fair value, of securities pledged as collateral, to secure public deposits and for other purposes, amounted to $ 3.69 billion at September 30, 2021 and $ 2.01 billion at December 31, 2020.

There were approximately $ 5.3 million of gross realized gains and $ 24,500 of gross realized losses from the sale of securities during the three months ended September 30, 2021, and approximately $ 15.9 million of gross realized gains and $ 63,600 of gross realized losses from the sale of securities during the nine months ended September 30, 2021.

The Company sold approximately $ 342.6 million of investment securities during the nine months ended September 30, 2021.

There were approximately $ 22.3 of gross realized gains and $ 1,700 of gross realized losses from the sale of securities during the three months ended September 30, 2020, and approximately $ 54.8 million of gross realized gains and $ 4,400 of gross realized losses from the sale of securities during the nine months ended September 30, 2020.

During the first half of 2020, the Company sold approximately $ 1.7 billion of investment securities to create additional liquidity.

The income tax expense/benefit related to security gains/losses was 26.135 % of the gross amounts in 2021 and 2020.

The Company has entered into various fair value hedging transactions to mitigate the impact of changing interest rates on the fair value of AFS securities.

Derivative Instruments for disclosure of the gains and losses recognized on derivative instruments and the cumulative fair value hedging adjustments to the carrying amount of the hedged securities.

OTHER LIABILITIES HELD FOR SALE

4 unchanged sentences

Pursuant to the terms of the Citizens Equity Agreement, CEFCU assumed certain deposit liabilities and acquired certain loans, as well as cash, personal property and other fixed assets associated with the Illinois Branches.

The Company recognized a gain on sale of $ 5.3 million related to the Illinois Branches in the six month period ended June 30, 2021.

As of June 30, 2021, there were no outstanding other liabilities held for sale.

The loan and deposit balances of the Illinois Branches were $ 354,000 and $ 137.9 million, respectively.

The Company recognized a gain on sale of $ 5.3 million related to the Illinois Branches in the nine month period ended September 30, 2021.

As of September 30, 2021, there were no outstanding other liabilities held for sale.

LOANS AND ALLOWANCE FOR CREDIT LOSSES

At June 30, 2021, the Company’s loan portfolio was $ 11.39 billion, compared to $ 12.90 billion at December 31, 2020.

At September 30, 2021, the Company’s loan portfolio was $ 10.83 billion, compared to $ 12.90 billion at December 31, 2020.

The various categories of loans are summarized as follows:

June 30, December 31,

September 30, December 31,

(In thousands) 2021 2020

12 unchanged sentences

The above table presents total loans at amortized cost.

The difference between amortized cost and unpaid principal balance is primarily premiums and discounts associated with acquisition date fair value adjustments on acquired loans as well as net deferred origination fees totaling $ 43.7 million and $ 57.3 million at June 30, 2021 and December 31, 2020, respectively.

Accrued interest on loans, which is excluded from the amortized cost of loans held for investment, totaled $ 41.9 million and $ 54.4 million at June 30, 2021 and December 31, 2020, respectively, and is included in interest receivable on the consolidated balance sheets.

The difference between amortized cost and unpaid principal balance is primarily premiums and discounts associated with acquisition date fair value adjustments on acquired loans as well as net deferred origination fees totaling $ 29.4 million and $ 57.3 million at September 30, 2021 and December 31, 2020, respectively.

Accrued interest on loans, which is excluded from the amortized cost of loans held for investment, totaled $ 39.2 million and $ 54.4 million at September 30, 2021 and December 31, 2020, respectively, and is included in interest receivable on the consolidated balance sheets.

Loan Origination/Risk Management – The Company seeks to manage its credit risk by diversifying its loan portfolio, determining that borrowers have adequate sources of cash flow for loan repayment without liquidation of collateral;

2 unchanged sentences

The loan portfolio is diversified by borrower, purpose and industry.

The Company seeks to use diversification within the loan portfolio to reduce its credit risk, thereby minimizing the adverse impact on the portfolio if weaknesses develop in either the economy or a particular segment of borrowers.

The Company seeks to use diversification within the loan portfolio to reduce its credit risk, thereby minimizing the adverse impact on the portfolio if weaknesses develop in either the

economy or a particular segment of borrowers.

Collateral requirements are based on credit assessments of borrowers and may be used to recover the debt in case of default.

24 unchanged sentences

PPP loans have a zero percent risk-weight for regulatory capital ratios.

As of June 30, 2021 and December 31, 2020, the total outstanding balance of PPP loans was $ 441.4 million and $ 904.7 million, respectively.

As of September 30, 2021 and December 31, 2020, the total outstanding balance of PPP loans was $ 212.1 million and $ 904.7 million, respectively.

Nonaccrual and Past Due Loans – Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due.

5 unchanged sentences

The amortized cost basis of nonaccrual loans segregated by category of loans are as follows:

June 30, December 31,

September 30, December 31,

(In thousands) 2021 2020

10 unchanged sentences

Total $ 59,054 $ 122,879

As of June 30, 2021 and December 31, 2020, nonaccrual loans for which there was no related allowance for credit losses had an amortized cost of $ 15.7 million and $ 16.8 million, respectively.

As of September 30, 2021 and December 31, 2020, nonaccrual loans for which there was no related allowance for credit losses had an amortized cost of $ 20.2 million and $ 16.8 million, respectively.

These loans are individually assessed and do not hold an allowance due to being adequately collateralized under the collateral-dependent valuation method.

5 unchanged sentences

Loans 90 Days

June 30, 2021

September 30, 2021

Credit cards $ 751 $ 253 $ 1,004 $ 174,880 $ 175,884 $ 154

10 unchanged sentences

Total $ 15,646 $ 27,820 $ 43,466 $ 10,781,761 $ 10,825,227 $ 334

(In thousands) Gross

Past Due 90 Days

Past Due Total

Past Due Current Total

Loans 90 Days

December 31, 2020

21 unchanged sentences

In response to the concerns related to the expiration of the applicable period for which the election to not apply the guidance on accounting for TDRs to loan modifications, the CARES Act was amended in late fourth quarter of 2020 to extend COVID-19 relief related to loan modifications to the earlier of (i) January 1, 2022 or (ii) 60 days after the President terminates the COVID-19 national emergency declaration.

As of June 30, 2021, the Company had 43 COVID-19 loan modifications outstanding in the amount of $ 134.5 million.

As of September 30, 2021, the Company had 35 COVID-19 loan modifications outstanding in the amount of $ 82.0 million.

Deferred interest on these loan modifications will be collected at the end of the note or once regular payments are resumed.

4 unchanged sentences

(Dollars in thousands) Number Balance Number Balance Number Balance

June 30, 2021

September 30, 2021

Single-family residential 28 $ 2,994 12 $ 1,141 40 $ 4,135

11 unchanged sentences

Total 32 $ 3,138 22 $ 4,375 54 $ 7,513

The following table presents loans that were restructured as TDRs during the three and six month periods ended June 30, 2021 and 2020.

(Dollars in thousands) Number of loans Balance Prior to TDR Balance at June 30, Change in Maturity Date Change in Rate Financial Impact on Date of Restructure

Three and Six Months Ended June 30, 2021

The following table presents loans that were restructured as TDRs during the nine month periods ended September 30, 2021 and 2020.

There were no loans restructured as TDRs during the three month periods ended September 30, 2021 and 2020.

(Dollars in thousands) Number of loans Balance Prior to TDR Balance at September 30, Change in Maturity Date Change in Rate Financial Impact on Date of Restructure

Nine Months Ended Sept 30, 2021

Other commercial 1 $ 784 $ 778 $ — $ 778 $ —

Total real estate 1 $ 784 $ 778 $ — $ 778 $ —

Three and Six Months Ended June 30, 2020

Nine Months Ended Sept 30, 2020

Single-family residential 5 $ 1,948 $ 1,896 $ 1,896 $ — $ —

Total real estate 5 $ 1,948 $ 1,896 $ 1,896 $ — $ —

During the three and six months ended June 30, 2021, the Company modified one loan with a recorded investment of $ 784,000 prior to modification which was deemed a TDR.

During the nine months ended September 30, 2021, the Company modified one loan with a recorded investment of $ 784,000 prior to modification which was deemed a TDR.

The restructured loan was modified by deferring amortized principal payments and requiring interest only payments for a period of up to 12 months.

1 unchanged sentence

Also, there was no immediate financial impact from the restructuring of this loan, as it was not considered necessary to charge-off interest or principal on the date of restructure.

During the three and six months ended June 30, 2020, the Company modified one loan with a recorded investment of $ 147,000 prior to modification which was deemed troubled debt restructuring.

During the nine months ended September 30, 2020, the Company modified five loans with a recorded investment of $ 1.9 million prior to modification which was deemed troubled debt restructuring.

The restructured loan was modified by deferring amortized principal payments, changing the maturity date and requiring interest only payments for a period of up to 12 months.

A specific reserve of $ 7,200 was determined necessary for this loan.

reserve of $ 16,600 was determined necessary for this loan.

Also, there was no immediate financial impact from the restructuring of this loan, as it was not considered necessary to charge-off interest or principal on the date of restructure.

Additionally, there were no loans considered TDRs for which a payment default occurred during the six months ended June 30, 2021 or 2020.

Additionally, there were no loans considered TDRs for which a payment default occurred during the nine months ended September 30, 2021.

There was one commercial loan considered a TDR for which a payment default occurred during the nine months ended September 30, 2020.

The Company defines a payment default as a payment received more than 90 days after its due date.

There were no TDRs with pre-modification loan balances for which Other Real Estate Owned (“OREO”) was received in full or partial satisfaction of the loans during the three and six month periods ended June 30, 2021 or 2020.

At June 30, 2021 and December 31, 2020, the Company had $ 3,364,000 and $ 7,182,000 , respectively, of consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings are in process.

At June 30, 2021 and December 31, 2020, the Company had $ 1,752,000 and $ 3,172,000 , respectively, of OREO secured by residential real estate properties.

There were no TDRs with pre-modification loan balances for which Other Real Estate Owned (“OREO”) was received in full or partial satisfaction of the loans during the three and nine month periods ended September 30, 2021 or 2020.

At September 30, 2021 and December 31, 2020, the Company had $ 2.9 million and $ 7.2 million, respectively, of consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings are in process.

At September 30, 2021 and December 31, 2020, the Company had $ 1.6 million and $ 3.2 million, respectively, of OREO secured by residential real estate properties.

Credit Quality Indicators – As part of the on-going monitoring of the credit quality of the Company’s loan portfolio, management tracks certain credit quality indicators including trends related to (i) the weighted-average risk rating of commercial and real estate loans, (ii) the level of classified commercial and real estate loans, (iii) net charge-offs, (iv) non-performing loans (see details above) and (v) the general economic conditions of the Company’s local markets.

31 unchanged sentences

• Doubtful - A loan classified Doubtful has all the weaknesses inherent in a substandard loan except that the weaknesses make collection or liquidation in full (on the basis of currently existing facts, conditions, and values) highly questionable and improbable.

Doubtful borrowers are usually in default, lack adequate liquidity or capital, and lack the resources necessary to remain an operating entity.

Doubtful borrowers are usually in default, lack adequate liquidity or capital, and lack the resources necessary to

remain an operating entity.

The possibility of loss is extremely high, but because of specific pending events that may strengthen the asset, its classification as loss is deferred.

25 unchanged sentences

Implementation of the expanded risk rating scale did not have a material impact on the results of the allowance for credit losses calculation.

The following tables present a summary of loans by credit quality indicator, other than pass or current, as of June 30, 2021 and December 31, 2020 segregated by class of loans.

The following table presents a summary of loans by credit quality indicator, as of September 30, 2021, segregated by class of loans.

Term Loans Amortized Cost Basis by Origination Year

(In thousands) 2021 (YTD) 2020 2019 2018 2017 2016 and Prior Lines of Credit (“LOC”) Amortized Cost Basis LOC Converted to Term Loans Amortized Cost Basis Total

June 30, 2021

Consumer - credit cards

Current — — — — — — 174,880 — 174,880

30-89 days past due — — — — — — 751 — 751

2 unchanged sentences

Consumer - other

Current 105,415 26,334 15,158 8,396 7,051 5,138 13,985 — 181,477

30-89 days past due 197 148 113 142 184 129 12 — 925

2 unchanged sentences

Real estate - C&D

Pass 47,644 94,278 33,487 19,254 12,848 10,030 982,776 21,429 1,221,746

Special mention — — 279 — — — — — 279

3 unchanged sentences

Real estate - SF residential

Current 223,243 245,410 152,838 229,241 179,874 318,019 169,693 9,683 1,528,001

30-89 days past due — 217 1,124 704 1,279 2,215 1,007 — 6,546

2 unchanged sentences

Real estate - other commercial

Pass 712,198 825,416 361,642 305,381 484,230 549,452 1,410,186 217,398 4,865,903

Special mention 32,752 57,067 2,833 7,666 34,164 8,723 91,572 7,194 241,971

2 unchanged sentences

Total real estate - other commercial 777,951 907,772 370,647 322,847 551,524 580,805 1,552,093 245,263 5,308,902

Pass 419,739 212,161 91,328 66,078 30,687 44,298 852,103 46,186 1,762,580

Special mention — 2,438 569 210 252 384 106 11,016 14,975

3 unchanged sentences

Commercial - agriculture

Pass 27,000 22,841 11,726 4,599 2,688 655 144,909 1,447 215,865

Special mention — — — 9 — — — — 9

2 unchanged sentences

Total commercial - agriculture 27,192 22,911 11,825 4,862 2,756 664 145,008 1,517 216,735

Current 58 4,789 1,287 24,108 5,483 6,111 307,025 — 348,861

30-89 days past due — — — — — 7 — — 7

2 unchanged sentences

Total $ 1,607,033 $ 1,535,869 $ 681,439 $ 678,561 $ 794,502 $ 971,256 $ 4,213,000 $ 343,567 $ 10,825,227

The following table presents a summary of loans by credit quality indicator, as of December 31, 2020, segregated by class of loans.

Term Loans Amortized Cost Basis by Origination Year

(In thousands) 2020 2019 2018 2017 2016 2015 and Prior Lines of Credit (“LOC”) Amortized Cost Basis LOC Converted to Term Loans Amortized Cost Basis Total

December 31, 2020

Consumer - credit cards

Current — — — — — — 187,881 — 187,881

30-89 days past due — — — — — — 708 — 708

2 unchanged sentences

Consumer - other

Current 69,334 44,215 27,525 21,995 19,023 2,530 14,684 — 199,306

30-89 days past due 234 441 327 658 689 84 338 — 2,771

2 unchanged sentences

Real estate - C&D

Pass 165,990 35,989 31,279 15,960 9,233 4,807 1,272,870 23,251 1,559,379

Special mention 2,728 344 259 2,107 19 — 9,613 — 15,070

3 unchanged sentences

Real estate - SF residential

Current 473,340 209,810 297,308 235,429 183,229 236,395 196,505 10,592 1,842,608

30-89 days past due 6,300 2,258 2,593 2,610 2,058 6,050 1,781 76 23,726

2 unchanged sentences

Real estate - other commercial

Pass 1,563,245 525,750 375,303 518,534 372,679 284,098 1,445,428 181,949 5,266,986

Special mention 100,085 4,346 10,738 19,943 26,245 10,608 63,305 23,435 258,705

2 unchanged sentences

Total real estate - other commercial 1,730,067 539,514 410,421 552,544 402,668 305,864 1,560,915 244,870 5,746,863

Pass 1,168,085 154,740 110,383 65,757 35,198 45,568 803,751 56,648 2,440,130

Special mention 5,707 342 465 972 54 — 12,318 22,546 42,404

3 unchanged sentences

Commercial - agriculture

Pass 36,128 19,144 10,014 4,671 1,916 340 101,238 1,560 175,011

Special mention — 79 13 299 — 6 34 — 431

2 unchanged sentences

Total commercial - agriculture 36,214 19,324 10,091 5,017 1,928 356 101,340 1,635 175,905

Current 125 4,260 27,256 6,489 2,628 6,065 488,676 — 535,499

30-89 days past due 59 — — — 33 — — — 92

90+ days past due — — — — — — — — —

Total other 184 4,260 27,256 6,489 2,661 6,065 488,676 — 535,591

Total $ 3,682,340 $ 1,019,712 $ 922,657 $ 913,379 $ 658,250 $ 612,237 $ 4,725,168 $ 367,154 $ 12,900,897

25 unchanged sentences

If the loan is not collateral dependent, the measurement of loss is based on the difference between the expected and contractual future cash flows of the loan.

Loans for which the repayment is expected to be provided substantially through the operation or sale of collateral and where the borrower is experiencing financial difficulty had an amortized cost of $ 74.8 million as of June 30, 2021, as further detailed in the table below.

Loans for which the repayment is expected to be provided substantially through the operation or sale of collateral and where the borrower is experiencing financial difficulty had an amortized cost of $ 42.1 million as of September 30, 2021, as further detailed in the table below.

The collateral securing these loans consist of commercial real estate properties, residential properties, other business assets, and secured energy production assets.

5 unchanged sentences

Total $ 38,774 $ — $ 3,317 $ 42,091

The following table details activity in the allowance for credit losses by portfolio segment for the three and six months ended June 30, 2021.

The following table details activity in the allowance for credit losses by portfolio segment for the three and nine months ended September 30, 2021.

Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories.

3 unchanged sentences

Allowance for credit losses:

Three Months Ended June 30, 2021

Beginning balance, April 1, 2021 $ 34,633 $ 195,826 $ 2,172 $ 2,485 $ 235,116

Three Months Ended September 30, 2021

Beginning balance, July 1, 2021 $ 29,793 $ 188,388 $ 5,442 $ 3,616 $ 227,239

Provision for credit loss expense ( 11,853 ) ( 7,668 ) ( 247 ) ( 122 ) ( 19,890 )

2 unchanged sentences

Net charge-offs ( 469 ) ( 3,873 ) ( 444 ) ( 55 ) ( 4,841 )

Ending balance, June 30, 2021 $ 29,793 $ 188,388 $ 5,442 $ 3,616 $ 227,239

Six Months Ended June 30, 2021

Ending balance, September 30, 2021 $ 17,471 $ 176,847 $ 4,751 $ 3,439 $ 202,508

Nine Months Ended September 30, 2021

Beginning balance, January 1, 2021 $ 42,093 $ 182,868 $ 7,472 $ 5,617 $ 238,050

3 unchanged sentences

Net charge-offs 831 ( 4,073 ) ( 1,958 ) ( 441 ) ( 5,641 )

Ending balance, June 30, 2021 $ 29,793 $ 188,388 $ 5,442 $ 3,616 $ 227,239

Activity in the allowance for credit losses for the three and six months ended June 30, 2020 was as follows:

Ending balance, September 30, 2021 $ 17,471 $ 176,847 $ 4,751 $ 3,439 $ 202,508

Activity in the allowance for credit losses for the three and nine months ended September 30, 2020 was as follows:

(In thousands) Commercial Real

2 unchanged sentences

Allowance for credit losses:

Three Months Ended June 30, 2020

Beginning balance, April 1, 2020 $ 76,327 $ 141,022 $ 7,817 $ 18,029 $ 243,195

Three Months Ended September 30, 2020

Beginning balance, July 1, 2020 $ 59,138 $ 149,471 $ 10,979 $ 12,055 $ 231,643

Provision for credit losses ( 6,499 ) 33,479 ( 1,823 ) ( 2,844 ) 22,313

2 unchanged sentences

Net (charge-offs) recoveries ( 3,391 ) ( 1,033 ) ( 556 ) ( 725 ) ( 5,705 )

Ending balance, June 30, 2020 $ 59,138 $ 149,471 $ 10,979 $ 12,055 $ 231,643

Six Months Ended June 30, 2020

Ending balance, September 30, 2020 $ 49,248 $ 181,917 $ 8,600 $ 8,486 $ 248,251

Nine Months Ended September 30, 2020

Beginning balance, January 1, 2020 - prior to adoption of CECL $ 22,863 $ 39,161 $ 4,051 $ 2,169 $ 68,244

4 unchanged sentences

Net charge-offs ( 39,156 ) ( 2,899 ) ( 2,553 ) ( 1,952 ) ( 46,560 )

Ending balance, June 30, 2020 $ 59,138 $ 149,471 $ 10,979 $ 12,055 $ 231,643

As of June 30, 2021, the Company’s allowance for credit losses was considered sufficient based upon expected loan level cash flows that were supported by economic forecasts.

Provision expense was recaptured for the three and six months ended June 30, 2021 based upon improved asset credit quality metrics combined with improved Moody’s economic modeling scenarios.

Four energy credits within the commercial segment were charged off during the second quarter of 2020 for a total of $ 32.6 million, of which $ 27.1 million was specifically reserved in the prior quarter.

Additionally, during the second quarter of 2020, the change in the provision for credit losses was related to updated credit loss forecasts using multiple Moody’s economic scenarios.

The updates were to reflect the possibility of a longer, more prolonged recovery to the economies that affect the loan portfolio.

Ending balance, September 30, 2020 $ 49,248 $ 181,917 $ 8,600 $ 8,486 $ 248,251

As of September 30, 2021, the Company’s allowance for credit losses was considered sufficient based upon expected loan level cash flows that were supported by economic forecasts.

Provision expense was recaptured for the three and nine months ended September 30, 2021 based upon improved asset credit quality metrics combined with improved Moody’s economic modeling scenarios.

The provision for credit losses for the nine months ended September 30, 2020 was primarily related to concern over the economic stresses related to COVID-19 as well as specific provisions for two energy credits that were previously identified as problem loans that were impacted by the sharp decline in commodity pricing.

Four energy credits within the Commercial segment were charged off during the second quarter of 2020 for a total of $ 32.6 million.

Reserve for Unfunded Commitments

1 unchanged sentence

This reserve is maintained at a level management believes to be sufficient to absorb losses arising from unfunded loan commitments.

The reserve for unfunded commitments as of June 30, 2021 and December 31, 2020 was $ 22.4 million.

The reserve for unfunded commitments as of September 30, 2021 and December 31, 2020 was $ 22.4 million.

The adequacy of the reserve for unfunded commitments is determined quarterly based on methodology similar to the methodology for determining the allowance for credit losses.

No adjustment was made to the reserve for unfunded commitments during the three and six months ended June 30, 2021 as it was considered sufficient to cover any loss expectations.

For the three and six month periods ended June 30, 2020, net adjustments to the reserve for unfunded commitments resulted in a benefit of $ 5.0 million and $ 8.0 million, respectively, and was included in the provision for credit losses in the statement of income.

No adjustment was made to the reserve for unfunded commitments during the three and nine months ended September 30, 2021 as it was considered sufficient to cover any loss expectations.

For the nine month period ended September 30, 2020, net adjustments to the reserve for unfunded commitments resulted in a benefit $ 8.0 million and was included in the provision for credit losses in the statement of income.

Provision for Credit Losses

Provision for credit losses is determined by the Company as the amount to be added to the allowance for credit loss accounts for various types of financial instruments including loans, securities and off-balance-sheet credit exposure after net charge-offs have been deducted to bring the allowance to a level which, in management’s best estimate, is necessary to absorb expected credit losses over the lives of the respective financial instruments.

The components of the provision for credit losses for the three and six month periods ended June 30, 2021 and 2020 were as follows:

The components of the provision for credit losses for the three and nine month periods ended September 30, 2021 and 2020 were as follows:

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(In thousands) 2021 2020 2021 2020

16 unchanged sentences

The Company’s leases are classified as operating leases with a term, including expected renewal or termination options, greater than one year, and are related to certain office facilities and office equipment.

The following table presents information as of June 30, 2021 and December 31, 2020 related to the Company’s right-of-use lease assets, included in premises and equipment, and lease liabilities, included in accrued interest and other liabilities.

June 30, December 31,

The following table presents information as of September 30, 2021 and December 31, 2020 related to the Company’s right-of-use lease assets, included in premises and equipment, and lease liabilities, included in accrued interest and other liabilities.

September 30, December 31,

(Dollars in thousands) 2021 2020

3 unchanged sentences

Weighted average discount rate 2.43 % 3.09 %

Operating lease cost for the three and six month periods ended June 30, 2021 was $ 2.9 million and $ 5.7 million, respectively, as compared to $ 3.4 million and $ 6.6 million for the same periods in 2020.

Operating lease cost for the three and nine month periods ended September 30, 2021 was $ 2.8 million and $ 8.5 million, respectively, as compared to $ 3.5 million and $ 10.1 million for the same periods in 2020.

PREMISES AND EQUIPMENT

Premises and equipment are stated at cost less accumulated depreciation and amortization.

Total premises and equipment, net at June 30, 2021 and December 31, 2020 were as follows:

June 30, December 31,

Total premises and equipment, net at September 30, 2021 and December 31, 2020 were as follows:

September 30, December 31,

(In thousands) 2021 2020

12 unchanged sentences

Subsequent increases in goodwill value are not recognized in the financial statements.

Goodwill totaled $ 1.1 billion at June 30, 2021 and December 31, 2020.

Goodwill impairment was neither indicated nor recorded during the six months ended June 30, 2021 or the year ended December 31, 2020.

Goodwill totaled $ 1.1 billion at September 30, 2021 and December 31, 2020.

Goodwill impairment was neither indicated nor recorded during the nine months ended September 30, 2021 or the year ended December 31, 2020.

During the first quarter of 2020, the Company’s share price began to decline as the markets in the United States responded to the global COVID-19 pandemic.

1 unchanged sentence

While the goodwill impairment analyses indicated no impairment during 2020, the Company’s assessment depended on several assumptions which were dependent on market and economic conditions, and future changes in those conditions could impact the Company’s assessment in the future.

Due to the improved market and economic conditions, and the related effects on the Company’s share price, the Company did not perform an interim goodwill impairment assessment during the first quarter of 2021.

The Company will complete an interim goodwill impairment analysis if the stock price falls below the book value per share for a full quarter.

During the second quarter of 2021, the Company performed an annual goodwill impairment analysis and concluded no impairment existed.

1 unchanged sentence

Other intangible assets represent the value of other acquired relationships, including relationships with trust and wealth management customers, and are being amortized over various periods ranging from 10 years to 15 years.

Changes in the carrying amount and accumulated amortization of the Company’s core deposit premiums and other intangible assets at June 30, 2021 and December 31, 2020 were as follows:

June 30, December 31,

Changes in the carrying amount and accumulated amortization of the Company’s core deposit premiums and other intangible assets at September 30, 2021 and December 31, 2020 were as follows:

September 30, December 31,

(In thousands) 2021 2020

13 unchanged sentences

(1) Adjustments recorded for the premiums on certain deposit liabilities associated with the sale of banking operations.

The carrying basis and accumulated amortization of the Company’s other intangible assets at June 30, 2021 and December 31, 2020 were as follows:

June 30, December 31,

The carrying basis and accumulated amortization of the Company’s other intangible assets at September 30, 2021 and December 31, 2020 were as follows:

September 30, December 31,

(In thousands) 2021 2020

8 unchanged sentences

Total other intangible assets, net $ 100,428 $ 111,110

The Company’s estimated remaining amortization expense on other intangible assets as of June 30, 2021 is as follows:

The Company’s estimated remaining amortization expense on other intangible assets as of September 30, 2021 is as follows:

(In thousands) Year Amortization

3 unchanged sentences

TIME DEPOSITS

Time deposits included approximately $ 2.10 billion and $ 2.03 billion of certificates of deposit of $100,000 or more, at June 30, 2021, and December 31, 2020, respectively.

Of this total approximately $ 1.00 billion and $ 889.8 million of certificates of deposit were over $250,000 at June 30, 2021 and December 31, 2020, respectively.

Time deposits included approximately $ 1.76 billion and $ 2.03 billion of certificates of deposit of $100,000 or more, at September 30, 2021, and December 31, 2020, respectively.

Of this total, approximately $ 819.1 million and $ 889.8 million of certificates of deposit were over $250,000 at September 30, 2021 and December 31, 2020, respectively.

The provision for income taxes is comprised of the following components for the periods indicated below:

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(In thousands) 2021 2020 2021 2020

3 unchanged sentences

The tax effects of temporary differences between the tax basis of assets and liabilities and their financial reporting amounts that give rise to deferred income tax assets and liabilities, and their approximate tax effects, are as follows:

June 30, December 31,

September 30, December 31,

(In thousands) 2021 2020

8 unchanged sentences

Right-of-use lease liability 9,992 7,835

Unrealized loss on AFS securities 3,631 —

Allowance for unfunded commitments 5,444 5,583

11 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(In thousands) 2021 2020 2021 2020

33 unchanged sentences

Securities pledged as collateral under repurchase agreements are maintained with the Company’s safekeeping agents.

The gross amount of recognized liabilities for repurchase agreements was $ 172.2 million and $ 248.9 million at June 30, 2021 and December 31, 2020, respectively.

The remaining contractual maturity of the securities sold under agreements to repurchase in the consolidated balance sheets as of June 30, 2021 and December 31, 2020 is presented in the following tables.

The gross amount of recognized liabilities for repurchase agreements was $ 202.3 million and $ 248.9 million at September 30, 2021 and December 31, 2020, respectively.

The remaining contractual maturity of the securities sold under agreements to repurchase in the consolidated balance sheets as of September 30, 2021 and December 31, 2020 is presented in the following tables.

Remaining Contractual Maturity of the Agreements

2 unchanged sentences

90 Days Total

June 30, 2021

September 30, 2021

Repurchase agreements:

4 unchanged sentences

OTHER BORROWINGS AND SUBORDINATED NOTES AND DEBENTURES

Debt at June 30, 2021 and December 31, 2020 consisted of the following components:

June 30, December 31,

Debt at September 30, 2021 and December 31, 2020 consisted of the following components:

September 30, December 31,

(In thousands) 2021 2020

27 unchanged sentences

The Notes qualify for Tier 2 capital treatment.

The Company had total FHLB advances of $ 1.31 billion at June 30, 2021, of which $ 1.30 billion are FHLB Owns the Option (“FOTO”) advances.

The terms of the Company’s Notes and trust preferred securities utilize the three month LIBOR rate to determine the interest rate and expense due each quarter.

The Company is currently reviewing all applicable documents and working with the debt holders and all relevant parties to determine the alternate interest rate index to be utilized, or other impacts, when LIBOR is discontinued.

The Company had total FHLB advances of $ 1.31 billion at September 30, 2021, of which $ 1.30 billion are FHLB Owns the Option (“FOTO”) advances.

FOTO advances are a low cost, fixed-rate source of funding in return for granting to FHLB the flexibility to choose a termination date earlier than the maturity date.

1 unchanged sentence

If FHLB exercises its option to terminate the FOTO advance at one of the specified option exercise dates, there is no termination or prepayment fee, and replacement funding will be available at then-prevailing market rates, subject to FHLB’s credit and collateral requirements.

The Company’s FOTO advances outstanding at June 30, 2021 have original maturity dates of ten years to fifteen years with lockout periods that have expired.

The Company’s FOTO advances outstanding at September 30, 2021 have original maturity dates of ten years to fifteen years with lockout periods that have expired.

The Company expects the FHLB’s option to terminate the FOTO advances prior to stated maturity dates will not be exercised due to the current low interest rate environment.

The possibility of the FHLB exercising the options is continually analyzed by the Company along with the market expected rate outcome.

At June 30, 2021, the FHLB advances outstanding were secured by mortgage loans and investment securities totaling approximately $ 4.9 billion and the Company had approximately $ 3.5 billion of additional advances available from the FHLB.

The trust preferred securities are tax-advantaged issues that qualify for inclusion as Tier 2 capital at June 30, 2021.

At September 30, 2021, the FHLB advances outstanding were secured by mortgage loans and investment securities totaling approximately $ 4.4 billion and the Company had approximately $ 3.0 billion of additional advances available from the FHLB.

The trust preferred securities are tax-advantaged issues that qualify for inclusion as Tier 2 capital at September 30, 2021.

Distributions on these securities are included in interest expense on long-term debt.

5 unchanged sentences

The Company’s long-term debt primarily includes subordinated debt and long-term FHLB advances with an original maturity of greater than one year.

Aggregate annual maturities of long-term debt at June 30, 2021, are as follows:

Aggregate annual maturities of long-term debt at September 30, 2021, are as follows:

Year (In thousands)

9 unchanged sentences

The settlement is not expected to have a material adverse effect on the Company’s business, consolidated results of operations, financial condition, or cash flows.

On January 14, 2020, Susanne Pace filed a putative class action complaint against Landmark Bank, formerly a wholly-owned subsidiary of The Landrum Company, to which Simmons Bank is a successor by merger in connection with the Company’s acquisition of The Landrum Company which closed in October 2019 in the Circuit Court of Boone County, Missouri.

On January 14, 2020, Susanne Pace filed a putative class action complaint in the Circuit Court of Boone County, Missouri against Landmark Bank, formerly a wholly-owned subsidiary of The Landrum Company, to which Simmons Bank is a successor by merger in connection with the Company’s acquisition of The Landrum Company, which closed in October 2019.

The complaint alleges that Landmark Bank improperly charged overdraft fees where a transaction was initially authorized on sufficient funds but later settled negative due to intervening transactions.

2 unchanged sentences

Plaintiff seeks unspecified actual, statutory, and punitive damages as well as costs, attorneys’ fees, prejudgment interest, an injunction, and other relief as the Court deems proper for herself and the putative class.

Simmons Bank denies the allegations and is vigorously defending the matter.

Simmons Bank denies the allegations but has reached a settlement in principle with the plaintiff to resolve this matter, subject to the preparation and execution of a mutually acceptable settlement agreement and release, as well as the court’s approval.

The settlement is not expected to have a material adverse effect on the Company’s business, consolidated results of operations, financial condition, or cash flows.

On June 29, 2020, Shunda Wilkins, Diann Graham, and David Watson filed a putative class action complaint against Simmons Bank in the United States District Court for the Eastern District of Arkansas.

4 unchanged sentences

Simmons Bank denies the allegations and is vigorously defending the matter.

On May 13, 2021, Susanne Pace filed a second putative class action complaint against Landmark Bank, to which Simmons Bank is a successor by merger, in the circuit court of Boone County, Missouri, which has been removed to the United States District Court for the Western District of Missouri, Central Division.

On May 13, 2021, Susanne Pace filed a second putative class action complaint in the circuit court of Boone County, Missouri against Landmark Bank, to which Simmons Bank is a successor by merger, which has been removed to the United States District Court for the Western District of Missouri, Central Division.

The complaint alleges that Landmark Bank improperly charged multiple insufficient funds or overdraft fees when a merchant or other originator resubmits a rejected payment request.

13 unchanged sentences

The Program was originally approved on October 17, 2019 and first amended in March 2020;

and as of June 30, 2021, the Company has repurchased approximately $ 126.5 million of its common stock under the Program.

and as of September 30, 2021, the Company has repurchased approximately $ 178.0 million of its common stock under the Program.

Under the Program, the Company may repurchase shares of its common stock through open market and privately negotiated transactions or otherwise.

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The Company anticipates funding for this Program to come from available sources of liquidity, including cash on hand and future cash flow.

During the six month period ended June 30, 2021, the Company repurchased 130,916 shares at an average price of $ 23.53 per share under the Program.

No shares were repurchased during the second quarter of 2021 under the Program.

During the three and nine month periods ended September 30, 2021, the Company repurchased 1,806,205 shares at an average price of $ 28.48 per share and 1,937,121 shares at an average price of $ 28.14 per share, respectively, under the Program.

Market conditions and the Company’s capital needs will drive decisions regarding additional, future stock repurchases.

The Company repurchased 4,922,336 shares at an average price of $ 18.96 per share under the Program during the six months ended June 30, 2020.

The Company repurchased 4,922,336 shares at an average price of $ 18.96 per share under the Program during the nine months ended September 30, 2020.

No shares were repurchased during the three months ended September 30, 2020.

UNDIVIDED PROFITS

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The approval of the Commissioner of the Arkansas State Bank Department is required if the total of all dividends declared by an Arkansas state bank in any calendar year exceeds seventy-five percent ( 75 %) of the total of its net profits, as defined, for that year combined with seventy-five percent ( 75 %) of its retained net profits of the preceding year.

At June 30, 2021, Simmons Bank had approximately $ 99.3 million available for payment of dividends to the Company, without prior regulatory approval.

At September 30, 2021, Simmons Bank had approximately $ 47.0 million available for payment of dividends to the Company, without prior regulatory approval.

The risk-based capital guidelines of the Federal Reserve Board and the Arkansas State Bank Department include the definitions for (1) a well-capitalized institution, (2) an adequately-capitalized institution, and (3) an undercapitalized institution.

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Failure to meet this capital conservation buffer would result in additional limits on dividends, other distributions and discretionary bonuses.

As of June 30, 2021, the Company and Simmons Bank met all capital adequacy requirements, including the capital conservation buffer, under the Basel III Capital Rules.

The Company’s CET1 ratio was 14.20 % at June 30, 2021.

As of September 30, 2021, the Company and Simmons Bank met all capital adequacy requirements, including the capital conservation buffer, under the Basel III Capital Rules.

The Company’s CET1 ratio was 14.27 % at September 30, 2021.

STOCK-BASED COMPENSATION

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Pursuant to the plans, shares are reserved for future issuance by the Company upon exercise of stock options or awards of restricted stock, restricted stock units, or performance stock units granted to directors, officers and other key employees.

The table below summarizes the transactions under the Company’s active stock-based compensation plans for the six months ended June 30, 2021:

The table below summarizes the transactions under the Company’s active stock-based compensation plans for the nine months ended September 30, 2021:

Stock Options

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Forfeited/expired — — — — ( 77 ) 25.78

Balance, June 30, 2021 475 $ 22.47 2 $ 22.20 1,144 $ 26.02

Exercisable, June 30, 2021 475 $ 22.47

The following table summarizes information about stock options under the plans outstanding at June 30, 2021:

Balance, September 30, 2021 475 $ 22.47 2 $ 22.20 1,150 $ 26.14

Exercisable, September 30, 2021 475 $ 22.47

The following table summarizes information about stock options under the plans outstanding at September 30, 2021:

Options Outstanding Options Exercisable

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$ 9.46 — $ 24.07 475 3.80 $ 22.47 475 $ 22.47

The table below summarizes the Company’s performance stock unit activity for the six months ended June 30, 2021:

The table below summarizes the Company’s performance stock unit activity for the nine months ended September 30, 2021:

(In thousands) Performance Stock Units

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Non-vested, June 30, 2021 257

Stock-based compensation expense was $ 7.6 million for both of the six month periods ended June 30, 2021 and 2020.

Stock-based compensation expense was $ 12.6 million and $ 10.8 million during the nine month periods ended September 30, 2021 and 2020, respectively.

Stock-based compensation expense is recognized ratably over the requisite service period for all stock-based awards.

There was no unrecognized stock-based compensation expense related to stock options at June 30, 2021.

Unrecognized stock-based compensation expense related to non-vested stock awards and stock units was $ 19.6 million at June 30, 2021.

There was no unrecognized stock-based compensation expense related to stock options at September 30, 2021.

Unrecognized stock-based compensation expense related to non-vested stock awards and stock units was $ 15.6 million at September 30, 2021.

At such date, the weighted-average period over which this unrecognized expense is expected to be recognized was 1.7 years.

The intrinsic value of stock options outstanding and stock options exercisable at June 30, 2021 was $ 3.3 million.

Aggregate intrinsic value represents the difference between the Company’s closing stock price on the last trading day of the period, which was $ 29.34 as of June 30, 2021, and the exercise price multiplied by the number of options outstanding.

The total intrinsic value of stock options exercised during the six months ended June 30, 2021 and 2020, was $ 1.3 million and $ 6,000 , respectively.

The intrinsic value of stock options outstanding and stock options exercisable at September 30, 2021 was $ 3.4 million.

Aggregate intrinsic value represents the difference between the Company’s closing stock price on the last trading day of the period, which was $ 29.56 as of September 30, 2021, and the exercise price multiplied by the number of options outstanding.

The total intrinsic value of stock options exercised during the nine months ended September 30, 2021 and 2020, was $ 1.3 million and $ 5,000 , respectively.

The fair value of the Company’s employee stock options granted is estimated on the date of grant using the Black-Scholes option-pricing model.

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

There were no stock options granted during the six months ended June 30, 2021 and 2020.

There were no stock options granted during the nine months ended September 30, 2021 and 2020.

EARNINGS PER SHARE (“EPS”)

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Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(In thousands, except per share data) 2021 2020 2021 2020

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Diluted earnings per share $ 0.74 $ 0.60 $ 2.05 $ 1.83

There were no stock options excluded from the earnings per share calculation for the three and six months ended June 30, 2021 due to the average market price exceeding the related stock option exercise price.

There were approximately 653,718 stock options excluded from the earnings per share calculation for the three and six months ended June 30, 2020 due to the related stock option exercise price exceeding the average market price.

There were no stock options excluded from the earnings per share calculation for the three and nine months ended September 30, 2021 due to the average market price exceeding the related stock option exercise price.

There were approximately 653,718 stock options excluded from the earnings per share calculation for the three and nine months ended September 30, 2020 due to the related stock option exercise price exceeding the average market price.

ADDITIONAL CASH FLOW INFORMATION

The following is a summary of the Company’s additional cash flow information:

Six Months Ended

Nine Months Ended

September 30,

(In thousands) 2021 2020

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Transfers of premises to foreclosed assets and other real estate owned

Transfers of premises to premises held for sale — 1,072

Transfers of other real estate owned to premises held for sale — 3,504

Transfers of premises held for sale to other real estate owned 4,368 —

Transfers of premises held for sale to premises 5,610 —

Transfers of loans to other assets held for sale

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OTHER INCOME AND OTHER OPERATING EXPENSES

Other income for the three and six months ended June 30, 2021 was $ 8.1 million and $ 18.4 million, respectively.

Other income for the three and nine months ended September 30, 2021 was $ 6.2 million and $ 24.6 million, respectively.

Other income for the same periods in 2020 was $ 5.4 million and $ 28.0 million, respectively.

During the six month periods in 2021 and 2020, the Company recognized gains on sale of $ 5.9 million and $ 8.1 million, respectively, related to the sale of banking operations and bank branches.

During the nine month periods in 2021 and 2020, the Company recognized gains on sale of $ 5.3 million and $ 8.1 million, respectively, related to the sale of banking operations and bank branches.

Other operating expenses consisted of the following:

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(In thousands) 2021 2020 2021 2020

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_________________________

(1) During the second quarter of 2021, certain debit and credit card transaction fees were reclassified from non-interest expense to non-interest income.

(1) During the second and third quarters of 2021, certain debit and credit card transaction fees were reclassified from non-interest expense to non-interest income.

Prior periods have been adjusted to reflect this reclassification.

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Collateral held varies, but may include accounts receivable, inventory, property, plant and equipment, commercial real estate and residential real estate.

At June 30, 2021, the Company had outstanding commitments to extend credit aggregating approximately $ 682.8 million and $ 2.45 billion for credit card commitments and other loan commitments, respectively.

At September 30, 2021, the Company had outstanding commitments to extend credit aggregating approximately $ 684.6 million and $ 2.59 billion for credit card commitments and other loan commitments, respectively.

At December 31, 2020, the Company had outstanding commitments to extend credit aggregating approximately $ 671.5 million and $ 2.36 billion for credit card commitments and other loan commitments, respectively.

As of June 30, 2021, the Company had outstanding commitments to originate fixed rate-rate mortgage loans of approximately $ 122.0 million.

As of September 30, 2021, the Company had outstanding commitments to originate fixed rate-rate mortgage loans of approximately $ 96.6 million.

At December 31, 2020, the Company had outstanding commitments to originate fixed-rate mortgage loans of approximately $ 214.0 million.

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The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loans to customers.

The Company had total outstanding letters of credit amounting to $ 41.9 million and $ 49.0 million at June 30, 2021, and December 31, 2020, respectively, with terms ranging from 9 months to 15 years.

At June 30, 2021 and December 31, 2020, the Company had no deferred revenue under standby letter of credit agreements.

The Company had total outstanding letters of credit amounting to $ 38.8 million and $ 49.0 million at September 30, 2021, and December 31, 2020, respectively, with terms ranging from 9 months to 15 years.

At September 30, 2021 and December 31, 2020, the Company had no deferred revenue under standby letter of credit agreements.

The Company has purchased letters of credit from the FHLB as security for certain public deposits.

The amount of the letters of credit was $ 97.6 million and $ 1.5 billion at June 30, 2021 and December 31, 2020, respectively, and they expire in less than one year from issuance.

The amount of the letters of credit was $ 69.0 million and $ 1.5 billion at September 30, 2021 and December 31, 2020, respectively, and they expire in less than one year from issuance.

FAIR VALUE MEASUREMENTS

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Where assumptions are made using significant unobservable inputs, such loans held for sale are classified as Level 3.

At June 30, 2021 and December 31, 2020, the aggregate fair value of mortgage loans held for sale exceeded their cost.

At September 30, 2021 and December 31, 2020, the aggregate fair value of mortgage loans held for sale exceeded their cost.

Derivative instruments – The Company’s derivative instruments are reported at fair value utilizing Level 2 inputs.

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See Note 4, Other Liabilities Held for Sale.

The following table sets forth the Company’s financial assets by level within the fair value hierarchy that were measured at fair value on a recurring basis as of June 30, 2021 and December 31, 2020.

The following table sets forth the Company’s financial assets by level within the fair value hierarchy that were measured at fair value on a recurring basis as of September 30, 2021 and December 31, 2020.

Fair Value Measurements Using

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Unobservable Inputs

June 30, 2021

September 30, 2021

Available-for-sale securities

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As the Company’s primary objective in the event of default would be to liquidate the collateral to settle the outstanding balance of the loan, collateral that is less marketable would receive a larger discount.

The following table sets forth the Company’s financial assets by level within the fair value hierarchy that were measured at fair value on a nonrecurring basis as of June 30, 2021 and December 31, 2020.

The following table sets forth the Company’s financial assets by level within the fair value hierarchy that were measured at fair value on a nonrecurring basis as of September 30, 2021 and December 31, 2020.

Fair Value Measurements Using

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Unobservable Inputs

June 30, 2021

September 30, 2021

Individually assessed loans (1) (2) (collateral-dependent)

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(1) These amounts represent the resulting carrying amounts on the consolidated balance sheets for collateral-dependent loans and foreclosed assets and other real estate owned for which fair value re-measurements took place during the period.

(2) Identified reserves of $ 8,340,000 and $ 13,725,000 were related to collateral-dependent loans for which fair value re-measurements took place during the periods ended June 30, 2021 and December 31, 2020, respectively.

(2) Identified reserves of $ 2,129,000 and $ 13,725,000 were related to collateral-dependent loans for which fair value re-measurements took place during the periods ended September 30, 2021 and December 31, 2020, respectively.

ASC Topic 825, Financial Instruments , requires disclosure in annual and interim financial statements of the fair value of financial assets and financial liabilities, including those financial assets and financial liabilities that are not measured and reported at fair value on a recurring basis or nonrecurring basis.

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(In thousands) Amount Level 1 Level 2 Level 3 Total

June 30, 2021

September 30, 2021

Financial assets:

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The Company has set a maximum outstanding notional contract amount at 10 % of the Company’s assets.

Fair Value Hedges

For derivative instruments that are designated and qualify as a fair value hedge, the gain or loss on the derivative instrument as well as the offsetting loss or gain on the hedged asset or liability attributable to the hedged risk are recognized in current earnings.

The gain or loss on the derivative instrument is presented on the same income statement line item as the earnings effect of the hedged item.

During the third quarter of 2021, the Company began utilizing interest rate swaps designated as fair value hedges to mitigate the effect of changing interest rates on the fair values of fixed rate callable AFS securities.

The hedging strategy converts the fixed interest rates to variable interest rates based on federal funds rates.

The following table summarizes the fair value hedges recorded in the accompanying consolidated balance sheets.

September 30, 2021 December 31, 2020

(In thousands) Balance Sheet Location Weighted Average Pay Rate Receive Rate Notional Fair Value Notional Fair Value

Derivative assets Other assets 1.21 % Federal Funds $ 1,001,715 $ 13,948 $ — $ —

Customer Risk Management Interest Rate Swaps

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The following table summarizes the fair values of loan derivative contracts recorded in the accompanying consolidated balance sheets.

June 30, 2021 December 31, 2020

September 30, 2021 December 31, 2020

(In thousands) Notional Fair Value Notional Fair Value

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The interest rate swap mark to market only impacts the Company if the swap is in a liability position to the counterparty and the customer defaults on payments to the counterparty.

The notional amount of these contingent agreements is $ 31.8 million as of June 30, 2021.

The notional amount of these contingent agreements is $ 31.4 million as of September 30, 2021.

Energy Hedging

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These risks are mitigated by customer credit underwriting policies and establishing a predetermined hedge line for each borrower and by monitoring the exchange margin.

The outstanding notional value as of June 30, 2021 for energy hedging Customer Sell to Company swaps were $ 18.1 million and the corresponding Company Sell to Dealer swaps were $ 18.1 million and the corresponding net fair value of the derivative asset and derivative liability was $ 346,800 .

The outstanding notional value as of September 30, 2021 for energy hedging Customer Sell to Company swaps were $ 18.2 million and the corresponding Company Sell to Dealer swaps were $ 18.2 million and the corresponding net fair value of the derivative asset and derivative liability was $ 265,000 .

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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Results of Review of Interim Financial Statements

We have reviewed the condensed consolidated balance sheet of Simmons First National Corporation and subsidiaries (“the Company”) as of June 30, 2021, and the related condensed consolidated statements of income, comprehensive income (loss) and stockholders’ equity for the three-month and six-month periods ended June 30, 2021 and 2020, and cash flows for the six-month periods ended June 30, 2021 and 2020, and the related notes (collectively referred to as the “interim financial information or statements”).

We have reviewed the condensed consolidated balance sheet of Simmons First National Corporation and subsidiaries (“the Company”) as of September 30, 2021, and the related condensed consolidated statements of income, comprehensive income (loss) and stockholders’ equity for the three-month and nine-month periods ended September 30, 2021 and 2020, and cash flows for the nine-month periods ended September 30, 2021 and 2020, and the related notes (collectively referred to as the “interim financial information or statements”).

Based on our reviews, we are not aware of any material modifications that should be made to the condensed consolidated financial statements referred to above for them to be in conformity with accounting principles generally accepted in the United States of America.

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Little Rock, Arkansas

August 6, 2021

November 5, 2021

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

What changed 10-Q

Item 1. Financial Statements