What changed in this filing

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Item 1. Financial Statements

2022-08-05 compared with 2022-05-06 · 346 added, 190 removed, 1433 unchanged (27% of the section changed)

2 unchanged sentences

Consolidated Balance Sheets

March 31, 2022 and December 31, 2021

March 31, December 31,

June 30, 2022 and December 31, 2021

June 30, December 31,

(In thousands, except share data) 2022 2021

4 unchanged sentences

Investment securities:

Held-to-maturity, net of allowance for credit losses of $ 1,377 and $ 1,279 at March 31, 2022 and December 31, 2021, respectively

Held-to-maturity, net of allowance for credit losses of $ 1,381 and $ 1,279 at June 30, 2022 and December 31, 2021, respectively

3,819,682 1,529,221

Available-for-sale, at estimated fair value (amortized cost of $ 7,070,582 and $ 7,130,861 at March 31, 2022 and December 31, 2021, respectively)

Available-for-sale, at estimated fair value (amortized cost of $ 4,730,178 and $ 7,130,861 at June 30, 2022 and December 31, 2021, respectively)

4,341,647 7,113,545

1 unchanged sentence

Mortgage loans held for sale 14,437 36,356

Other assets held for sale — 100

Other loans held for sale 16,375 100

Loans 15,110,344 12,012,503

21 unchanged sentences

Common stock, Class A, $ 0.01 par value;

175,000,000 shares authorized at March 31, 2022 and December 31, 2021;

112,505,555 and 112,715,444 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively

350,000,000 and 175,000,000 shares authorized at June 30, 2022 and December 31, 2021, respectively;

128,787,764 and 112,715,444 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively

Surplus 2,569,060 2,164,989

6 unchanged sentences

Consolidated Statements of Income

Three Months Ended March 31, 2022 and 2021

Three Months Ended

Three and Six Months Ended June 30, 2022 and 2021

Three Months Ended June 30, Six Months Ended

(In thousands, except per share data) 2022 2021 2022 2021

(Unaudited) (Unaudited)

INTEREST INCOME

42 unchanged sentences

Consolidated Statements of Comprehensive Income (Loss)

Three Months Ended March 31, 2022 and 2021

Three Months Ended March 31,

Three and Six Months Ended June 30, 2022 and 2021

Three Months Ended

June 30, Six Months Ended June 30,

(In thousands) 2022 2021 2022 2021

(Unaudited) (Unaudited)

NET INCOME $ 27,454 $ 74,924 $ 92,549 $ 142,344

OTHER COMPREHENSIVE INCOME (LOSS)

Unrealized holding losses arising during the period on available-for-sale securities ( 465,708 ) ( 125,717 )

Unrealized holding gains (losses) arising during the period on available-for-sale securities 21,333 71,801 ( 444,375 ) ( 53,916 )

Reclassification adjustment for realized (loss) gains included in net income ( 150 ) 5,127 ( 204 ) 10,598

Realized loss on available-for-sale securities interest rate hedges ( 22,832 ) — ( 60,031 ) —

Amortization of net unrealized gains on securities transferred from available-for-sale to held-to-maturity ( 84 ) —

Net unrealized losses on securities transferred from available for sale to held to maturity during the period ( 206,682 ) — ( 206,682 ) —

Accretion of net unrealized losses on securities transferred from available-for-sale to held-to-maturity 4,785 — 4,701 —

Other comprehensive income (loss), before tax effect ( 167,152 ) 66,674 ( 595,523 ) ( 64,514 )

Tax effect of other comprehensive loss ( 111,955 ) ( 34,286 )

Tax effect of other comprehensive income (loss) ( 43,685 ) 17,425 ( 155,640 ) ( 16,861 )

TOTAL OTHER COMPREHENSIVE INCOME (LOSS) ( 123,467 ) 49,249 ( 439,883 ) ( 47,653 )

3 unchanged sentences

Consolidated Statements of Cash Flows

Three Months Ended March 31, 2022 and 2021

(In thousands) March 31, 2022 March 31, 2021

Six Months Ended June 30, 2022 and 2021

(In thousands) June 30, 2022 June 30, 2021

OPERATING ACTIVITIES

10 unchanged sentences

Gain on sale of mortgage loans held for sale ( 4,333 ) ( 20,006 )

Gain on sale of loans ( 228 ) —

Gain on sale of branches — ( 5,300 )

14 unchanged sentences

Purchases of premises and equipment, net ( 17,000 ) ( 5,829 )

Proceeds from sale of premises held for sale — 1,572

Proceeds from sale of foreclosed assets held for sale 1,623 8,338

Proceeds from sale of premises and equipment — 5,156

Proceeds from sale of foreclosed assets and other real estate owned 2,819 10,988

Proceeds from sale of available-for-sale securities — 249,454

3 unchanged sentences

Purchases of held-to-maturity securities ( 329,660 ) ( 606,187 )

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

Proceeds from bank owned life insurance death benefits — 3,032

Disposition of assets and liabilities held for sale — ( 134,166 )

Purchase of Spirit of Texas Bancshares, Inc.

Net cash used in investing activities ( 353,188 ) ( 2,462,960 )

5 unchanged sentences

Net change in federal funds purchased and securities sold under agreements to repurchase ( 30,302 ) ( 111,896 )

Net shares (cancelled) issued under stock compensation plans ( 3,575 ) 1,172

Net shares issued (cancelled) under stock compensation plans ( 3,905 ) 1,373

Shares issued under employee stock purchase plan 1,151 1,170

1 unchanged sentence

Net cash (used in) provided by financing activities ( 510,475 ) 1,153,622

INCREASE IN CASH AND CASH EQUIVALENTS 36,364 433,311

DECREASE IN CASH AND CASH EQUIVALENTS ( 685,806 ) ( 1,133,028 )

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 1,650,653 3,472,152

3 unchanged sentences

Consolidated Statements of Stockholders’ Equity

Three Months Ended March 31, 2022 and 2021

Three Months Ended June 30, 2022 and 2021

(In thousands, except share data) Preferred Stock Common

3 unchanged sentences

Profits Total

Three Months Ended March 31, 2022

Three Months Ended June 30, 2022

Balance, March 31, 2022 (Unaudited) $ — $ 1,125 $ 2,150,453 $ ( 326,961 ) $ 1,136,990 $ 2,961,607

Comprehensive (loss) income — — — ( 123,467 ) 27,454 ( 96,013 )

Stock-based compensation plans, net – 42,459 shares

— — 3,893 — — 3,893

Stock issued for Spirit acquisition - 18,275,074 shares

— 183 464,735 — — 464,918

Stock repurchases – 2,035,324 shares

— ( 20 ) ( 50,021 ) — — ( 50,041 )

Dividends on common stock – $ 0.19 per share

— — — — ( 24,469 ) ( 24,469 )

Balance, June 30, 2022 (Unaudited) $ — $ 1,288 $ 2,569,060 $ ( 450,428 ) $ 1,139,975 $ 3,259,895

Three Months Ended June 30, 2021

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

Comprehensive income — — — 49,249 74,924 124,173

Stock-based compensation plans, net – 40,937 shares

— 1 3,940 — — 3,941

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

Dividends on common stock – $ 0.18 per share

— — — — ( 19,510 ) ( 19,510 )

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

See Condensed Notes to Consolidated Financial Statements.

Simmons First National Corporation

Consolidated Statements of Stockholders’ Equity

Six Months Ended June 30, 2022 and 2021

(In thousands, except share data) Preferred Stock Common

Stock Surplus Accumulated

Comprehensive

(Loss) Income Undivided

Profits Total

Six Months Ended June 30, 2022

Balance, December 31, 2021 $ — $ 1,127 $ 2,164,989 $ ( 10,545 ) $ 1,093,270 $ 3,248,841

4 unchanged sentences

— 2 4,257 — — 4,259

Stock issued for Spirit acquisition - 18,275,074 shares

— 183 464,735 — — 464,918

Stock repurchases – 2,549,049 shares

2 unchanged sentences

— — — — ( 45,844 ) ( 45,844 )

Balance, March 31, 2022 (Unaudited) $ — $ 1,125 $ 2,150,453 $ ( 326,961 ) $ 1,136,990 $ 2,961,607

Three Months Ended March 31, 2021

Balance, June 30, 2022 (Unaudited) $ — $ 1,288 $ 2,569,060 $ ( 450,428 ) $ 1,139,975 $ 3,259,895

Six Months Ended June 30, 2021

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

Comprehensive income — — — ( 96,902 ) 67,420 ( 29,482 )

Comprehensive (loss) income — — — ( 47,653 ) 142,344 94,691

Stock issued for employee stock purchase plan – 60,697 shares

7 unchanged sentences

— — — — ( 39,010 ) ( 39,010 )

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

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

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 197 financial centers as of March 31, 2022, 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 233 financial centers as of June 30, 2022, located throughout market areas in Arkansas, Kansas, Missouri, Oklahoma, Tennessee and Texas.

Basis of Presentation

62 unchanged sentences

The Company is currently evaluating the impact this standard will have on the Company’s results of operations, financial position and disclosures.

There have been no other significant changes to the Company’s accounting policies as previously reported (disclosed) in the 2021 Form 10-K.

There have been no other significant changes to the Company’s accounting policies from the 2021 Form 10-K.

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.

Spirit of Texas Bancshares, Inc.

On April 8, 2022, the Company completed its merger with Spirit of Texas Bancshares, Inc.

(“Spirit”) pursuant to the terms of the Agreement and Plan of Merger dated as of November 19, 2021 (“Spirit Agreement”), at which time Spirit merged with and into the Company, with the Company continuing as the surviving corporation.

The Company issued 18,275,074 shares of its common stock valued at approximately $ 464.9 million as of April 8, 2022, plus $ 1,393,508.90 in cash, in exchange for all outstanding shares of Spirit capital stock (and common stock equivalents) to effect the merger.

Prior to the acquisition, Spirit, headquartered in Conroe, Texas, conducted banking business through its subsidiary bank, Spirit of Texas Bank SSB, from 35 branches located primarily in the Texas Triangle - consisting of Dallas-Fort Worth, Houston, San Antonio and Austin metropolitan areas - with additional locations in the Bryan-College Station, Corpus Christi and Tyler metropolitan areas, along with offices in North Central and South Texas.

Including the effects of the acquisition method accounting adjustments, the Company acquired approximately $ 3.12 billion in assets, including approximately $ 2.29 billion in loans (inclusive of loan discounts), and approximately $ 2.72 billion in deposits.

Goodwill of $ 163.9 million was recorded as a result of the transaction.

The merger strengthened the Company’s position in the Texas market and brought forth additional opportunities in the Company’s current footprint, which gave rise to the goodwill recorded.

The goodwill will not be deductible for tax purposes.

A summary, at fair value, of the assets acquired and liabilities assumed in the Spirit acquisition, as of the acquisition date, is as follows:

(In thousands) Acquired from Spirit Fair Value Adjustments Fair Value

Assets Acquired

Cash and due from banks $ 277,790 $ — $ 277,790

Investment securities 362,088 ( 13,401 ) 348,687

Loans acquired 2,314,085 ( 23,839 ) 2,290,246

Allowance for credit losses on loans ( 17,005 ) 12,962 ( 4,043 )

Premises and equipment 84,135 ( 17,918 ) 66,217

Bank owned life insurance 36,890 — 36,890

Goodwill 77,681 ( 77,681 ) —

Core deposit and other intangible assets 6,245 32,386 38,631

Other assets 58,403 3,895 62,298

Total assets acquired $ 3,200,312 $ ( 83,596 ) $ 3,116,716

(In thousands) Acquired from Spirit Fair Value Adjustments Fair Value

Liabilities Assumed

Non-interest bearing transaction accounts $ 825,228 $ ( 165 ) $ 825,063

Interest bearing transaction accounts and savings deposits 1,383,663 — 1,383,663

Time deposits 509,209 1,081 510,290

Total deposits 2,718,100 916 2,719,016

Other borrowings 37,547 503 38,050

Subordinated debentures 36,491 879 37,370

Accrued interest and other liabilities 23,667 ( 3,823 ) 19,844

Total liabilities assumed 2,815,805 ( 1,525 ) 2,814,280

Equity 384,507 ( 384,507 ) —

Total equity assumed 384,507 ( 384,507 ) —

Total liabilities and equity assumed $ 3,200,312 $ ( 386,032 ) $ 2,814,280

Net assets acquired 302,436

Purchase price 466,311

Goodwill $ 163,875

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

Management will continue to review the estimated fair values and evaluate the assumed tax positions.

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

Therefore, adjustments to the estimated amounts and carrying values may occur.

The Company’s operating results include the operating results of the acquired assets and assumed liabilities of Spirit subsequent to the acquisition date.

Landmark Community Bank

19 unchanged sentences

Total assets acquired $ 966,006 $ 2,816 $ 968,822

(In thousands) Acquired from Landmark Fair Value Adjustments Fair Value

Liabilities Assumed

44 unchanged sentences

Total deposits 718,640 1,094 719,734

Securities sold under agreement to repurchase 2,854 — 2,854

Other borrowings 30,700 — 30,700

Subordinated debentures 30,700 — 30,700

Accrued interest and other liabilities 2,882 455 3,337

15 unchanged sentences

Otherwise, the carrying amount of these assets was deemed to be a reasonable estimate of fair value.

Loans acquired – Fair values for loans were based on a discounted cash flow methodology that considered factors including the type of loan and related collateral, classification status, fixed or variable interest rate, term of loan and whether or not the loan was

amortizing, and current discount rates.

The discount rates used for loans are based on current market rates for new originations of comparable loans and include adjustments for liquidity concerns.

19 unchanged sentences

The carrying amount of accrued interest and the remainder of other liabilities was deemed to be a reasonable estimate of fair value.

Spirit of Texas Bancshares, Inc.

(Subsequent Event)

On November 19, 2021, the Company announced that it had entered into an Agreement and Plan of Merger (“Spirit Agreement”) with Spirit of Texas Bancshares, Inc.

(“Spirit”), headquartered in Conroe, Texas, to acquire Spirit, including its wholly-owned bank subsidiary, Spirit of Texas Bank SSB.

The merger was completed on April 8, 2022, at which time Spirit was merged with and into the Company, with the Company continuing as the surviving corporation.

Pursuant to the terms of the Spirit Agreement, holders of Spirit’s common stock and common stock equivalents received, in the aggregate, 18,275,074 shares of the Company’s common stock and $ 1,393,508.24 in cash.

Prior to the acquisition, Spirit conducted banking business from 35 branches located primarily in the Texas Triangle - consisting of Dallas-Fort Worth, Houston, San Antonio and Austin metropolitan areas - with additional locations in the Bryan-College Station, Corpus Christi and Tyler metropolitan areas, along with offices in North Central and South Texas.

As of March 31, 2022, Spirit had approximately $ 3.22 billion in assets, $ 2.38 billion in loans and $ 2.74 billion 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

Held-to-maturity (“HTM”) securities, which include any security for which the Company has the positive intent and ability to hold until maturity, are carried at historical cost adjusted for amortization of premiums and accretion of discounts.

Held-to-maturity securities (“HTM”), which include any security for which the Company has both the positive intent and ability to hold until maturity, are carried at historical cost adjusted for amortization of premiums and accretion of discounts.

Premiums and discounts are amortized and accreted, respectively, to interest income using the constant effective yield method over the security’s estimated life.

1 unchanged sentence

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

Available-for-sale (“AFS”) securities, which include any security for which the Company has no immediate plan to sell but which may be sold in the future, are carried at fair value.

Available-for-sale securities (“AFS”), which include any security for which the Company has no immediate plan to sell but which may be sold in the future, are carried at fair value.

Realized gains and losses, based on specifically identified amortized cost of the individual security, are included in other income.

3 unchanged sentences

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

During the quarter ended September 30, 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 remaining net unrealized gains of $ 918,000 in accumulated other comprehensive income (loss) will be amortized over the remaining life of the securities.

During the quarters ended June 30, 2022 and September 30, 2021, the Company transferred, at fair value, $ 1.99 billion and $ 500.8 million, respectively, of securities from the available-for-sale portfolio to the held-to-maturity portfolio.

The related remaining net unrealized losses of $ 151.9 million and net unrealized gains of $ 791,000 , respectively, in accumulated other comprehensive income (loss) will be amortized over the remaining life of the securities.

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

5 unchanged sentences

Held-to-maturity

March 31, 2022

June 30, 2022

Government agencies $ 446,789 $ — $ 446,789 $ — $ ( 67,286 ) $ 379,503

14 unchanged sentences

government agencies or corporations.

As of March 31, 2022, HTM MBS consists of $ 4.4 million and $ 108.1 million of commercial MBS and residential MBS, respectively.

As of June 30, 2022, HTM MBS consists of $ 152.2 million and $ 1.09 billion of commercial MBS and residential MBS, respectively.

As of December 31, 2021, HTM MBS consists of $ 4.9 million and $ 65.5 million of commercial MBS and residential MBS, respectively.

6 unchanged sentences

Available-for-sale

March 31, 2022

June 30, 2022

Treasury $ 1,447 $ — $ — $ ( 6 ) $ 1,441

11 unchanged sentences

Total AFS $ 7,130,861 $ — $ 44,005 $ ( 61,321 ) $ 7,113,545

As of March 31, 2022, AFS MBS consists of $ 1.46 billion and $ 2.70 billion of commercial MBS and residential MBS, respectively.

As of June 30, 2022, AFS MBS consists of $ 1.31 billion and $ 1.66 billion of commercial MBS and residential MBS, respectively.

As of December 31, 2021, AFS MBS consists of $ 1.53 billion and $ 2.92 billion of commercial MBS and residential MBS, respectively.

Accrued interest receivable on HTM and AFS securities at March 31, 2022 was $ 7.9 million and $ 23.1 million, respectively, and is included in interest receivable on the consolidated balance sheets.

Accrued interest receivable on HTM and AFS securities at June 30, 2022 was $ 15.4 million and $ 20.5 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 March 31, 2022, 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 June 30, 2022, 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

3 unchanged sentences

Available-for-sale

Treasury $ 1,441 $ ( 6 ) $ — $ — $ 1,441 $ ( 6 )

Government agencies 110,444 ( 3,226 ) 50,341 ( 1,308 ) 160,785 ( 4,534 )

3 unchanged sentences

Total AFS $ 3,104,616 $ ( 255,386 ) $ 1,095,158 $ ( 134,651 ) $ 4,199,774 $ ( 390,037 )

As of March 31, 2022, the Company’s investment portfolio included $ 6.64 billion of AFS securities, of which $ 5.69 billion, or 85.7 %, were in an unrealized loss position that were not deemed to have credit losses.

As of June 30, 2022, the Company’s investment portfolio included $ 4.34 billion of AFS securities, of which $ 4.20 billion, or 96.7 %, 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.

1 unchanged sentence

Furthermore, the decline in fair value for each of the above AFS securities is attributable to the rates for those investments yielding less than current market rates.

Management does not believe any of the securities are impaired due to reasons of credit

Management does not believe any of the securities are impaired due to reasons of credit quality.

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

7 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 months ended March 31, 2022 and 2021 on the Company’s HTM and AFS securities portfolio.

The following table details activity in the allowance for credit losses by investment security type for the three and six months ended June 30, 2022 on the Company’s HTM securities portfolio.

(In thousands) State and Political Subdivisions Other

Securities Total

Three Months Ended March 31, 2022

Three Months Ended June 30, 2022

Held-to-maturity

Beginning balance, April 1, 2022 $ 1,285 $ 92 $ 1,377

Provision for credit loss expense — — —

Net increase (decrease) in allowance on previously impaired securities ( 1,183 ) 1,183 —

Recoveries 1 3 4

Ending balance, June 30, 2022 $ 103 $ 1,278 $ 1,381

Six Months Ended June 30, 2022

Held-to-maturity

Beginning balance, January 1, 2022 $ 1,197 $ 82 $ 1,279

Provision for credit loss expense — — —

Securities charged-off — — —

Net increase (decrease) in allowance on previously impaired securities ( 1,183 ) 1,183 —

Recoveries 89 13 102

Ending balance, March 31, 2022 $ 1,285 $ 92 $ 1,377

Three Months Ended March 31, 2021

Ending balance, June 30, 2022 $ 103 $ 1,278 $ 1,381

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 portfolio was as follows:

(In thousands) State and Political Subdivisions Other

Securities Total

Three Months Ended June 30, 2021

Held-to-maturity

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

Provision for credit loss expense ( 171 ) ( 315 ) ( 486 )

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

Available-for-sale

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

Net decrease in allowance on previously impaired securities ( 64 ) ( 2,390 ) ( 2,454 )

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

Six Months Ended June 30, 2021

Held-to-maturity

Beginning balance, January 1, 2021 $ 2,307 $ 608 $ 2,915

1 unchanged sentence

Securities charged-off — ( 600 ) ( 600 )

Ending balance, March 31, 2021 $ 1,042 $ 576 $ 1,618

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

Available-for-sale

Beginning balance, January 1, 2021 $ 217 $ 95 $ 312

Credit losses on securities not previously recorded 61 2,237 2,298

Reduction due to sales — ( 11 ) ( 11 )

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

Ending balance, March 31, 2021 $ 64 $ 2,390 $ 2,454

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 first quarter of 2022.

During the three months ended March 31, 2021, the provision for credit losses related to AFS securities was $ 2.1 million.

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 March 31, 2022:

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

During the three and six months ended June 30, 2021, the provision for credit losses was reduced by $ 2,454,000 and $ 312,000 , 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, 2022:

State and Political Subdivisions

11 unchanged sentences

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 months ended March 31, 2022 and 2021, is as follows:

Income earned on securities for the three and six months ended June 30, 2022 and 2021, is as follows:

Three Months Ended

June 30, Six Months Ended

(In thousands) 2022 2021 2022 2021

4 unchanged sentences

Total $ 37,848 $ 27,128 $ 71,560 $ 48,701

The amortized cost and estimated fair value by maturity of securities as of March 31, 2022 are shown in the following table.

The amortized cost and estimated fair value by maturity of securities as of June 30, 2022 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 $ 3,821,063 $ 3,278,962 $ 4,730,178 $ 4,341,647

The carrying value, which approximates the fair value, of securities pledged as collateral, to secure public deposits and for other purposes, amounted to $ 3.66 billion at March 31, 2022 and $ 3.88 billion at December 31, 2021.

There were approximately $ 37,000 of gross realized gains and $ 91,000 of gross realized losses from the sale and calls of securities during the three months ended March 31, 2022.

There were approximately $ 5.5 million of gross realized gains and $ 13,000 of gross realized losses from the sale of securities during the three months ended March 31, 2021.

The carrying value, which approximates the fair value, of securities pledged as collateral, to secure public deposits and for other purposes, amounted to $ 4.16 billion at June 30, 2022 and $ 3.88 billion at December 31, 2021.

There were no gross realized gains and approximately $ 150,000 of gross realized losses from the sale and calls of securities during the three months ended June 30, 2022, and approximately $ 37,000 of gross realized gains and $ 240,000 of gross realized losses from the sale and call of securities during the six months ended June 30, 2022.

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 income tax expense/benefit related to security gains/losses was 26.135 % of the gross amounts in 2022 and 2021.

1 unchanged sentence

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

OTHER ASSETS AND OTHER LIABILITIES HELD FOR SALE

Spirit Acquisition

In connection with the Spirit acquisition, the Company acquired a portfolio of loans which were identified as held for sale by the acquired bank prior to the completion of the acquisition.

These loans were valued at $ 31.3 million, net of fair value discounts, at the date of acquisition.

As of June 30, 2022, the remaining balance of loans held for sale, net of fair value discounts, was $ 16.4 million.

As of June 30, 2022, there were no outstanding other liabilities held for sale.

Illinois Branch Sale

4 unchanged sentences

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 three month period ended March 31, 2021.

As of March 31, 2022, there were no outstanding other liabilities held for sale.

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.

LOANS AND ALLOWANCE FOR CREDIT LOSSES

At March 31, 2022, the Company’s loan portfolio was $ 12.03 billion, compared to $ 12.01 billion at December 31, 2021.

At June 30, 2022, the Company’s loan portfolio was $ 15.11 billion, compared to $ 12.01 billion at December 31, 2021.

The various categories of loans are summarized as follows:

March 31, December 31,

June 30, December 31,

(In thousands) 2022 2021

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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 $ 16.7 million and $ 21.5 million at March 31, 2022 and December 31, 2021, respectively.

Accrued interest on loans, which is excluded from the amortized cost of loans held for investment, totaled $ 38.4 million and $ 39.8 million at March 31, 2022 and December 31, 2021, 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 $ 31.8 million and $ 21.5 million at June 30, 2022 and December 31, 2021, respectively.

Accrued interest on loans, which is excluded from the amortized cost of loans held for investment, totaled $ 46.5 million and $ 39.8 million at June 30, 2022 and December 31, 2021, 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;

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

As of March 31, 2022 and December 31, 2021, the total outstanding balance of PPP loans was $ 61.9 million and $ 116.7 million, respectively.

As of June 30, 2022 and December 31, 2021, the total outstanding balance of PPP loans was $ 19.5 million and $ 116.7 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.

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

March 31, December 31,

June 30, December 31,

(In thousands) 2022 2021

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Total $ 62,670 $ 68,204

As of March 31, 2022 and December 31, 2021, nonaccrual loans for which there was no related allowance for credit losses had an amortized cost of $ 9.3 million and $ 14.5 million, respectively.

As of June 30, 2022 and December 31, 2021, nonaccrual loans for which there was no related allowance for credit losses had an amortized cost of $ 11.8 million and $ 14.5 million, respectively.

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

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Loans 90 Days

March 31, 2022

June 30, 2022

Credit cards $ 823 $ 282 $ 1,105 $ 188,579 $ 189,684 $ 180

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(Dollars in thousands) Number Balance Number Balance Number Balance

March 31, 2022

June 30, 2022

Single-family residential 24 $ 1,902 13 $ 1,122 37 $ 3,024

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Total 31 $ 4,289 18 $ 2,650 49 $ 6,939

There were no loans restructured as TDRs during the three month periods ended March 31, 2022 and 2021.

Additionally, there were no loans considered TDRs for which a payment default occurred during the three months ended March 31, 2022 and 2021.

The following table presents loans that were restructured as TDRs during the three and six month periods ended June 30, 2022 and 2021.

(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, 2022

Other commercial 1 $ 13 $ 13 $ — $ 13 $ —

Total real estate 1 $ 13 $ 13 $ — $ 13 $ —

Three and Six Months Ended June 30, 2021

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

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

During the three and six months ended June 30, 2022, the Company modified one loan with a recorded investment of $ 13,000 prior to modification, which was deemed a TDR.

The restructured loan was modified by reducing the interest rate on the loan.

No specific reserve was recorded with respect to this TDR.

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, 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.

A specific reserve of approximately $ 5,100 was recorded with respect to this TDR.

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, 2022 or 2021.

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 month periods ended March 31, 2022 or 2021.

At March 31, 2022 and December 31, 2021, the Company had $ 1,143,000 and $ 1,806,000 , respectively, of consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings are in process.

At March 31, 2022 and December 31, 2021, the Company had $ 647,000 and $ 831,000 , 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 six month periods ended June 30, 2022 or 2021.

At June 30, 2022 and December 31, 2021, the Company had $ 2,420,000 and $ 1,806,000 , respectively, of consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings are in process.

At June 30, 2022 and December 31, 2021, the Company had $ 524,000 and $ 831,000 , 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.

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Borrowers may be experiencing adverse operating trends or an ill-proportioned balance sheet.

Non-financial characteristics of a Special Mention

rating may include management problems, pending litigation, a non-existent or ineffective loan agreement or other material structural weakness, and/or other significant deviation from prudent lending practices.

Non-financial characteristics of a Special Mention rating may include management problems, pending litigation, a non-existent or ineffective loan agreement or other material structural weakness, and/or other significant deviation from prudent lending practices.

• Substandard - A Substandard loan is inadequately protected by the current sound worth and paying capacity of the borrower or of the collateral pledged, if any.

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• Doubtful and loss - Includes loans with an expanded risk rating of 15 and 16.

The following table presents a summary of loans by credit quality indicator, as of March 31, 2022, segregated by class of loans.

The following table presents a summary of loans by credit quality indicator, as of June 30, 2022, segregated by class of loans.

Term Loans Amortized Cost Basis by Origination Year

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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 $ 100.0 million and $ 47.1 million as of March 31, 2022 and December 31, 2021, respectively, 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 $ 97.5 million and $ 47.1 million as of June 30, 2022 and December 31, 2021, respectively, as further detailed in the table below.

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

(In thousands) Real Estate Collateral Other Collateral Total

March 31, 2022

June 30, 2022

Construction and development $ 2,682 $ — $ 2,682

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Total $ 37,176 $ 9,913 $ 47,089

The following table details activity in the allowance for credit losses by portfolio segment for the three months ended March 31, 2022.

The following table details activity in the allowance for credit losses by portfolio segment for the three and six months ended June 30, 2022.

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

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Allowance for credit losses:

Three Months Ended March 31, 2022

Three Months Ended June 30, 2022

Beginning balance, April 1, 2022 $ 9,177 $ 161,389 $ 2,894 $ 5,464 $ 178,924

Acquisition adjustment for PCD loans 854 3,187 — 2 4,043

Provision for credit loss expense 22,853 1,629 4,470 1,454 30,406

Charge-offs ( 688 ) ( 124 ) ( 1,004 ) ( 518 ) ( 2,334 )

Recoveries 621 400 249 302 1,572

Net charge-offs ( 67 ) 276 ( 755 ) ( 216 ) ( 762 )

Ending balance, June 30, 2022 $ 32,817 $ 166,481 $ 6,609 $ 6,704 $ 212,611

Six Months Ended June 30, 2022

Beginning balance, January 1, 2022 $ 17,458 $ 179,270 $ 3,987 $ 4,617 $ 205,332

Acquisition adjustment for PCD loans 854 3,187 — 2 4,043

Provision for credit loss expense 20,334 ( 16,193 ) 4,023 2,328 10,492

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Net charge-offs ( 5,829 ) 217 ( 1,401 ) ( 243 ) ( 7,256 )

Ending balance, March 31, 2022 $ 9,177 $ 161,389 $ 2,894 $ 5,464 $ 178,924

Activity in the allowance for credit losses for the three months ended March 31, 2021 was as follows:

Ending balance, June 30, 2022 $ 32,817 $ 166,481 $ 6,609 $ 6,704 $ 212,611

Activity in the allowance for credit losses for the three and six months ended June 30, 2021 was as follows:

(In thousands) Commercial Real

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Allowance for credit losses:

Three Months Ended March 31, 2021

Beginning balance, January 1, 2020 - prior to adoption of CECL $ 42,093 $ 182,868 $ 7,472 $ 5,617 $ 238,050

Three Months Ended June 30, 2021

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

Provision for credit losses ( 6,678 ) ( 8,522 ) 4,072 1,117 ( 10,011 )

Charge-offs ( 309 ) ( 439 ) ( 1,046 ) ( 411 ) ( 2,205 )

Recoveries 2,147 1,523 244 425 4,339

Net (charge-offs) recoveries 1,838 1,084 ( 802 ) 14 2,134

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

Six Months Ended June 30, 2021

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

Provision for credit loss expense ( 13,599 ) 5,720 ( 515 ) ( 1,617 ) ( 10,011 )

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Recoveries 2,467 1,926 534 729 5,656

Net charge-offs ( 539 ) ( 1,284 ) ( 713 ) ( 398 ) ( 2,934 )

Ending balance, March 31, 2021 $ 34,614 $ 195,826 $ 2,172 $ 2,504 $ 235,116

As of March 31, 2022, 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 months ended March 31, 2022 based upon improved asset credit quality metrics combined with improved Moody’s economic modeling scenarios.

Net (charge-offs) recoveries 1,299 ( 200 ) ( 1,515 ) ( 384 ) ( 800 )

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

As of June 30, 2022, the Company’s allowance for credit losses was considered sufficient based upon expected loan level cash flows that were supported by economic forecasts.

The provision for credit losses for the three and six months ended June 30, 2022 was primarily due to the Day 2 provision expense related to the Spirit acquisition, partially offset by the provision recapture based upon improved asset credit quality metrics combined with improved Moody’s economic modeling scenarios.

Reserve for Unfunded Commitments

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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 March 31, 2022 and December 31, 2021 was $ 22.4 million.

The reserve for unfunded commitments was $ 25.9 million and $ 22.4 million as of June 30, 2022 and December 31, 2021, respectively.

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 months ended March 31, 2022 and 2021, as it was considered sufficient to cover any loss expectations.

For the three and six month periods ended June 30, 2022, an adjustment to the reserve for unfunded commitments resulted in an expense of $ 3.5 million associated with the Day 2 provision related to the Spirit acquisition 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 six months ended June 30, 2021 as it was considered sufficient to cover any loss expectations.

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 month periods ended March 31, 2022 and 2021 were as follows:

The components of the provision for credit losses for the three and six month periods ended June 30, 2022 and 2021 were as follows:

Three Months Ended

June 30, Six Months Ended

(In thousands) 2022 2021 2022 2021

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For PCD loans, the initial estimate of expected credit losses is recognized in the allowance for credit loss on the date of acquisition using the same methodology as discussed in the Allowance for Credit Losses section included above.

The following table provides a summary of loans purchased as part of the Landmark acquisition with credit deterioration at acquisition:

The following table provides a summary of loans purchased during the fourth quarter of 2021 as part of the Landmark acquisition with credit deterioration at acquisition:

(In thousands) Commercial Real

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Fair value of PCD loans $ 10,536 $ 51,126 $ — $ 64 $ 61,726

The following table provides a summary of loans purchased as part of the Triumph acquisition with credit deterioration at acquisition:

The following table provides a summary of loans purchased during the fourth quarter of 2021 as part of the Triumph acquisition with credit deterioration at acquisition:

(In thousands) Commercial Real

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Fair value of PCD loans $ 37,188 $ 71,396 $ — $ 14 $ 108,598

The following table provides a summary of loans purchased during the second quarter of 2022 as part of the Spirit acquisition with credit deterioration at acquisition:

(In thousands) Commercial Real

Estate Credit

and Other Total

Unpaid principal balance $ 8,258 $ 66,534 $ — $ 59 $ 74,851

PCD allowance for credit loss at acquisition ( 854 ) ( 3,187 ) — ( 2 ) ( 4,043 )

Non-credit related discount ( 378 ) ( 998 ) — ( 1 ) ( 1,377 )

Fair value of PCD loans $ 7,026 $ 62,349 $ — $ 56 $ 69,431

RIGHT-OF-USE LEASE ASSETS AND LEASE LIABILITIES

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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 March 31, 2022 and December 31, 2021 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.

March 31, December 31,

The following table presents information as of June 30, 2022 and December 31, 2021 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,

(Dollars in thousands) 2022 2021

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Weighted average discount rate 2.02 % 2.00 %

Operating lease cost, classified in occupancy expense, for the three month periods ended March 31, 2022 and 2021 was $ 3.2 million and $ 2.8 million, respectively.

Operating lease cost for the three and six month periods ended June 30, 2022 was $ 3.7 million and $ 6.9 million, respectively, as compared to $ 2.9 million and $ 5.7 million for the same periods in 2021.

PREMISES AND EQUIPMENT

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

Total premises and equipment, net at March 31, 2022 and December 31, 2021 were as follows:

March 31, December 31,

Total premises and equipment, net at June 30, 2022 and December 31, 2021 were as follows:

June 30, December 31,

(In thousands) 2022 2021

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

Goodwill totaled $ 1.1 billion at March 31, 2022 and December 31, 2021.

Goodwill increased $ 1.0 million during the quarter ended March 31, 2022 due to the continued assessment of the fair value and assumed tax position of the Landmark and Triumph acquisitions.

Goodwill totaled $ 1.31 billion and $ 1.15 billion at June 30, 2022 and December 31, 2021, respectively.

Goodwill increased $ 164.5 million during the six months ended June 30, 2022 primarily due to the Spirit acquisition, along with adjustments related to the continued assessment of the fair value and assumed tax position of the Landmark and Triumph acquisitions.

Goodwill impairment was neither indicated nor recorded during the six months ended June 30, 2022 or the year ended December 31, 2021.

During the second quarter of 2022, the Company performed an annual goodwill impairment analysis and concluded no impairment existed.

Also during the second quarter of 2022, the Company’s share price began to decline as markets in the United States responded to record inflation and other economic pressures.

As a result of the effect on share price, the Company performed an interim goodwill impairment assessment and concluded no impairment existed during the period.

Core deposit premiums represent the value of the relationships that acquired banks had with their deposit customers and are amortized over periods ranging from 10 years to 15 years and are periodically evaluated, at least annually, as to the recoverability of their carrying value.

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 March 31, 2022 and December 31, 2021 were as follows:

March 31, December 31,

Changes in the carrying amount and accumulated amortization of the Company’s core deposit premiums and other intangible assets at June 30, 2022 and December 31, 2021 were as follows:

June 30, December 31,

(In thousands) 2022 2021

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Balance, beginning of year 12,373 13,747

Acquisitions (3)

Amortization ( 686 ) ( 1,374 )

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_________________________

(1) A core deposit premium of $ 36.5 million was recorded during 2022 as part of the Spirit acquisition.

Core deposit premiums of $ 5.1 million and $ 4.2 million were recorded during 2021 as part of the Triumph and Landmark acquisitions, respectively.

See Note 2, Acquisitions, for additional information on acquisitions completed in 2021.

See Note 2, Acquisitions, for additional information on acquisitions.

(2) 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 March 31, 2022 and December 31, 2021 were as follows:

March 31, December 31,

(3) The Company recorded $ 2.1 million during 2022 related to servicing assets acquired as part of the Spirit acquisition.

See Note 2, Acquisitions, for additional information on acquisitions.

The carrying basis and accumulated amortization of the Company’s other intangible assets at June 30, 2022 and December 31, 2021 were as follows:

June 30, December 31,

(In thousands) 2022 2021

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Total other intangible assets, net $ 137,285 $ 106,235

The Company’s estimated remaining amortization expense on other intangible assets as of March 31, 2022 is as follows:

The Company’s estimated remaining amortization expense on other intangible assets as of June 30, 2022 is as follows:

(In thousands) Year Amortization

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TIME DEPOSITS

Time deposits included approximately $ 541.5 million and $ 784.9 million of certificates of deposit over $250,000 at March 31, 2022 and December 31, 2021, respectively.

Brokered time deposits were $ 890.9 million and $ 466.0 million at March 31, 2022 and December 31, 2021, respectively.

Time deposits included approximately $ 1.01 billion and $ 784.9 million of certificates of deposit over $250,000 at June 30, 2022 and December 31, 2021, respectively.

Brokered time deposits were $ 1.35 billion and $ 466.0 million at June 30, 2022 and December 31, 2021, 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

(In thousands) 2022 2021 2022 2021

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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:

March 31, December 31,

June 30, December 31,

(In thousands) 2022 2021

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Right-of-use lease asset ( 12,605 ) ( 11,871 )

Unrealized gain on AFS securities — —

Unrealized gain on swaps — ( 2,767 )

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Three Months Ended

June 30, Six Months Ended

(In thousands) 2022 2021 2022 2021

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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 $ 178.8 million and $ 170.4 million at March 31, 2022 and December 31, 2021, respectively.

The remaining contractual maturity of the securities sold under agreements to repurchase in the consolidated balance sheets as of March 31, 2022 and December 31, 2021 is presented in the following tables.

The gross amount of recognized liabilities for repurchase agreements was $ 146.1 million and $ 170.4 million at June 30, 2022 and December 31, 2021, respectively.

The remaining contractual maturity of the securities sold under agreements to repurchase in the consolidated balance sheets as of June 30, 2022 and December 31, 2021 is presented in the following tables.

Remaining Contractual Maturity of the Agreements

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90 Days Total

March 31, 2022

June 30, 2022

Repurchase agreements:

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OTHER BORROWINGS AND SUBORDINATED NOTES AND DEBENTURES

Debt at March 31, 2022 and December 31, 2021 consisted of the following components:

March 31, December 31,

Debt at June 30, 2022 and December 31, 2021 consisted of the following components:

June 30, December 31,

(In thousands) 2022 2021

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330,000 330,000

Subordinated notes payable, net of premium adjustments, due 7/31/2030, fixed-to-floating rate (fixed rate of 6.00 % through 7/30/2025, floating rate of 5.92 % above the three month SOFR rate, reset quarterly)

Trust preferred securities, due 9/15/2037, floating rate of 1.37 % above the three month LIBOR rate, reset quarterly

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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 March 31, 2022 and December 31, 2021, of which $ 1.30 billion are FHLB Owns the Option (“FOTO”) advances.

The Company assumed subordinated debt in an aggregate principal amount, net of premium adjustments, of $ 37.4 million in connection with the Spirit acquisition in April 2022 (the “Spirit Notes”).

The Spirit Notes will mature on July 24, 2030, and initially bear interest at a fixed annual rate of 6.00 %, payable quarterly, in arrears, to, but excluding, July 31, 2025.

From and including July 31, 2025, to, but excluding, the maturity date or earlier redemption date, the interest rate will reset quarterly to an interest rate per annum equal to a benchmark rate, which is expected to be the then-current three-month Secured Overnight Financing Rate, as published by the Federal Reserve Bank of New York (provided, that in the event the benchmark rate is less than zero, the benchmark rate will be deemed to be zero) plus 592 basis points, payable quarterly, in arrears.

The Company had total FHLB advances of $ 1.03 billion and $ 1.31 billion at June 30, 2022 and December 31, 2021, respectively, which are primarily 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.

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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 March 31, 2022 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 Company’s FOTO advances outstanding at June 30, 2022 have original maturity dates of ten years to fifteen years with lockout periods that have expired and, as a result, are considered and monitored by the Company as short-term advances.

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

At March 31, 2022, the FHLB advances outstanding were secured by mortgage loans and investment securities totaling approximately $ 5.0 billion and the Company had approximately $ 3.6 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 March 31, 2022.

At June 30, 2022, the FHLB advances outstanding were secured by mortgage loans and investment securities totaling approximately $ 4.9 billion and the Company had approximately $ 3.7 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, 2022.

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

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The Company’s obligations under the junior subordinated securities and other relevant trust agreements, in the aggregate, constitute a full and unconditional guarantee by the Company of each respective trust’s obligations under the trust securities issued by each respective trust.

The Company has received approval from the Federal Reserve to redeem the five issuances of trust preferred securities and expects to complete the redemptions during the third quarter of 2022.

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 March 31, 2022, are as follows:

Aggregate annual maturities of long-term debt at June 30, 2022, are as follows:

Year (In thousands)

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Plaintiffs seek unspecified damages, costs, attorneys’ fees, pre- and post-judgment interest, and other relief as the Court deems proper for themselves and the putative class.

Simmons Bank denies the allegations but has entered into a settlement agreement and release with the plaintiffs on behalf of themselves and the proposed class to resolve this matter, subject to 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.

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The complaint alleges that Simmons Bank improperly charges multiple insufficient funds or overdraft fees when a merchant resubmits a rejected payment request.

complaint asserts claims for breach of contract and unjust enrichment.

The complaint asserts claims for breach of contract and unjust enrichment.

Plaintiffs seek to represent a proposed class of all Simmons Bank checking account customers who were charged multiple insufficient funds or overdraft fees on resubmitted payment requests.

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On February 27, 2009, at a special meeting, the Company’s shareholders approved an amendment to the Articles of Incorporation to establish 40,040,000 authorized shares of preferred stock, $ 0.01 par value.

As of March 31, 2022, the aggregate liquidation preference of all shares of preferred stock cannot exceed $ 80,000,000 .

As of June 30, 2022, the aggregate liquidation preference of all shares of preferred stock cannot exceed $ 80,000,000 .

On October 29, 2019, the Company filed Amended and Restated Articles of Incorporation (“October Amended Articles”) with the Arkansas Secretary of State.

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On November 30, 2021, the Company redeemed all of the Series D Preferred Stock, including accrued and unpaid dividends.

On April 27,2022, shareholder of the Company approved an increase in the number of authorized shares of its Class A common stock from 175,000,000 to 350,000,000 .

On April 27, 2022, shareholders of the Company approved an increase in the number of authorized shares of its Class A common stock from 175,000,000 to 350,000,000 .

Effective July 23, 2021, the Company’s Board of Directors approved an amendment to the Company’s stock repurchase program originally established in October 2019 (“2019 Program”) that increased the amount of the Company’s Class A common stock that may be repurchased under the 2019 Program from a maximum of $ 180 million to a maximum of $ 276.5 million and extended the term of the 2019 Program from October 31, 2021, to October 31, 2022 (unless terminated sooner).

During the three month period ended March 31, 2022, the Company repurchased 513,725 shares at an average price of $ 31.25 per share under the 2019 Program.

The Company repurchased 130,916 shares at an average price of $ 23.53 per share under the 2019 Program during the three months ended March 31, 2021.

During January 2022, the Company substantially exhausted the remaining capacity under the 2019 Program.

During January 2022, the Company substantially exhausted the repurchase capacity under the 2019 Program.

As a result, the Company’s Board of Directors authorized a new stock repurchase program in January 2022 (the “2022 Program”) under which the Company may repurchase up to $ 175.0 million of its Class A common stock currently issued and outstanding.

The 2022 Program will terminate on January 31, 2024 (unless terminated sooner).

During the six month period ended June 30, 2022, the Company repurchased 513,725 shares at an average price of $ 31.25 per share under the 2019 Program and 2,035,324 shares at an average price of $ 24.59 per share under the 2022 Program, respectively.

The 2022 Program repurchases were all completed during the three months ended June 30, 2022.

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

The Company repurchased 130,916 shares at an average price of $ 23.53 per share under the 2019 Program during the six months ended June 30, 2021.

No shares were repurchased during the three months ended June 30, 2021.

Under the 2022 Program, which replaced the 2019 Program, the Company may repurchase shares of its common stock through open market and privately negotiated transactions or otherwise.

1 unchanged sentence

The 2022 Program does not obligate the Company to repurchase any common stock and may be modified, discontinued, or suspended at any time without prior notice.

The Company anticipates funding for this 2022 Program to come from available sources of liquidity, including cash

on hand and future cash flow.

As of March 31, 2022, the Company had not repurchased any shares under the 2022 Program.

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

The Company anticipates funding for this 2022 Program to come from available sources of liquidity, including cash on hand and future cash flow.

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 March 31, 2022, Simmons Bank had approximately $ 176.5 million available for payment of dividends to the Company, without prior regulatory approval.

At June 30, 2022, Simmons Bank had approximately $ 232.5 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 March 31, 2022, 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 13.52 % at March 31, 2022.

As of June 30, 2022, 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 12.10 % at June 30, 2022.

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 three months ended March 31, 2022:

The table below summarizes the transactions under the Company’s active stock-based compensation plans for the six months ended June 30, 2022:

Stock Options

10 unchanged sentences

Forfeited/expired — — — — ( 50 ) 25.21

Balance, March 31, 2022 472 $ 22.50 — $ — 1,194 $ 23.03

Exercisable, March 31, 2022 472 $ 22.50

The following table summarizes information about stock options under the plans outstanding at March 31, 2022:

Balance, June 30, 2022 471 $ 22.54 — $ — 1,358 $ 26.67

Exercisable, June 30, 2022 471 $ 22.54

The following table summarizes information about stock options under the plans outstanding at June 30, 2022:

Options Outstanding Options Exercisable

10 unchanged sentences

$ 10.65 — $ 24.07 471 3.07 $ 22.54 471 $ 22.54

The table below summarizes the Company’s performance stock unit activity for the three months ended March 31, 2022:

The table below summarizes the Company’s performance stock unit activity for the six months ended June 30, 2022:

(In thousands) Performance Stock Units

2 unchanged sentences

Forfeited ( 10 )

Non-vested, March 31, 2022 350

Stock-based compensation expense was $ 3.9 million during both three month periods ended March 31, 2022 and 2021.

Non-vested, June 30, 2022 353

Stock-based compensation expense was $ 8.2 million and $ 7.6 million during the six month periods ended June 30, 2022 and 2021, 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 March 31, 2022.

Unrecognized stock-based compensation expense related to non-vested stock awards and stock units was $ 18.2 million at March 31, 2022.

There was no unrecognized stock-based compensation expense related to stock options at June 30, 2022.

Unrecognized stock-based compensation expense related to non-vested stock awards and stock units was $ 24.1 million at June 30, 2022.

At such date, the weighted-average period over which this unrecognized expense is expected to be recognized was 1.8 years.

The intrinsic value of stock options outstanding and stock options exercisable at March 31, 2022 was $ 1.8 million.

Aggregate intrinsic value represents the difference between the Company’s closing stock price on the last trading day of the period, which was $ 26.22 as of March 31, 2022, and the exercise price multiplied by the number of options outstanding.

There was no intrinsic value of stock options exercised during the three months ended March 31, 2022, while the total intrinsic value of stock options exercised during the three months ended March 31, 2021, was $ 1.2 million.

The intrinsic value of stock options outstanding and stock options exercisable at June 30, 2022 was $ 61,000 .

Aggregate intrinsic value represents the difference between the Company’s closing stock price on the last trading day of the period, which was $ 21.26 as of June 30, 2022, and the exercise price multiplied by the number of options outstanding.

There was no intrinsic value of stock options exercised during the six months ended June 30, 2022, while the total intrinsic value of stock options exercised during the six months ended June 30, 2021 was $ 1.3 million.

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 three months ended March 31, 2022 and 2021.

There were no stock options granted during the six months ended June 30, 2022 and 2021.

EARNINGS PER SHARE (“EPS”)

3 unchanged sentences

Three Months Ended

June 30, Six Months Ended

(In thousands, except per share data) 2022 2021 2022 2021

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Diluted earnings per share $ 0.21 $ 0.69 $ 0.77 $ 1.31

There were no stock options excluded from the earnings per share calculation for the three months ended March 31, 2022 and 2021 due to the average market price exceeding the related stock option exercise price.

There were 6,610 stock options excluded from the three months ended June 30, 2022 earnings per share calculation due to the related stock option exercise price exceeding the average market price of the Company’s stock during the period.

There were no stock options excluded from the earnings per share calculation for the six months ended June 30, 2022 due to the related exercise price exceeding the average market price.

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 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:

Three Months Ended

Six Months Ended

(In thousands) 2022 2021

2 unchanged sentences

Transfers of loans to foreclosed assets held for sale 581 3,289

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

Transfers of assets held for sale to other assets 100 —

OTHER INCOME AND OTHER OPERATING EXPENSES

Other income for the three months ended March 31, 2022 and 2021 was $ 7.3 million and $ 10.5 million, respectively.

During the three month period ended March 31, 2021, the Company recognized a gain on sale of $ 5.3 million related to the sale of banking operations and bank branches.

Other income for the three and six months ended June 30, 2022 was $ 6.8 million and $ 14.1 million, respectively.

Other income for the same periods in 2021 was $ 8.4 million and $ 18.9 million, respectively.

During the six month period ended June 30, 2021, the Company recognized a gain on sale of $ 5.9 million 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

(In thousands) 2022 2021 2022 2021

3 unchanged sentences

Credit card expense (1)

3,037 2,530 5,743 4,861

Marketing 8,754 4,740 14,894 7,893

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_________________________

(1) During 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 March 31, 2022, the Company had outstanding commitments to extend credit aggregating approximately $ 689.4 million and $ 3.78 billion for credit card commitments and other loan commitments, respectively.

At June 30, 2022, the Company had outstanding commitments to extend credit aggregating approximately $ 691.6 million and $ 4.94 billion for credit card commitments and other loan commitments, respectively.

At December 31, 2021, the Company had outstanding commitments to extend credit aggregating approximately $ 685.3 million and $ 3.41 billion for credit card commitments and other loan commitments, respectively.

As of March 31, 2022, the Company had outstanding commitments to originate fixed rate-rate mortgage loans of approximately $ 96.7 million.

As of June 30, 2022, the Company had outstanding commitments to originate fixed rate-rate mortgage loans of approximately $ 59.1 million.

At December 31, 2021, the Company had outstanding commitments to originate fixed-rate mortgage loans of approximately $ 108.5 million.

2 unchanged sentences

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 $ 39.4 million and $ 37.7 million at March 31, 2022, and December 31, 2021, respectively, with terms ranging from 9 months to 15 years.

At March 31, 2022 and December 31, 2021, the Company had no deferred revenue under standby letter of credit agreements.

The Company had total outstanding letters of credit amounting to $ 41.3 million and $ 37.7 million at June 30, 2022, and December 31, 2021, respectively, with terms ranging from 9 months to 15 years.

At June 30, 2022 and December 31, 2021, 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 $ 59.3 million and $ 59.1 million at March 31, 2022 and December 31, 2021, respectively, and they expire in less than one year from issuance.

The amount of the letters of credit was $ 142.8 million and $ 59.1 million at June 30, 2022 and December 31, 2021, 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 March 31, 2022 and December 31, 2021, the aggregate fair value of mortgage loans held for sale exceeded their cost.

At June 30, 2022 and December 31, 2021, 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.

The Company obtains fair value measurements from dealer quotes.

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 March 31, 2022 and December 31, 2021.

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, 2022 and December 31, 2021.

Fair Value Measurements Using

6 unchanged sentences

Unobservable Inputs

March 31, 2022

June 30, 2022

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 March 31, 2022 and December 31, 2021.

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, 2022 and December 31, 2021.

Fair Value Measurements Using

6 unchanged sentences

Unobservable Inputs

March 31, 2022

June 30, 2022

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 $ 10,664,000 and $ 4,214,000 were related to collateral-dependent loans for which fair value re-measurements took place during the periods ended March 31, 2022 and December 31, 2021, respectively.

(2) Identified reserves of $ 10,641,000 and $ 4,214,000 were related to collateral-dependent loans for which fair value re-measurements took place during the periods ended June 30, 2022 and December 31, 2021, 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 certain cases where Level 1 or Level 2 inputs are not available, securities are classified within Level 3 of the hierarchy.

Loans – The fair value of loans is estimated by discounting the future cash flows, using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities.

Loans and other loans held for sale – The fair value of loans is estimated by discounting the future cash flows, using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities.

Additional factors considered include the type of loan and related collateral, variable or fixed rate, classification status, remaining term, interest rate, historical delinquencies, loan to value ratios, current market rates and remaining loan balance.

22 unchanged sentences

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

March 31, 2022

June 30, 2022

Financial assets:

6 unchanged sentences

82,332 — 82,332 — 82,332

11,849,669 — — 11,897,022 11,897,022

Loans and other loans held for sale, net 14,914,108 — — 14,772,593 14,772,593

Financial liabilities:

22 unchanged sentences

72,990 — 72,990 — 72,990

11,807,171 — — 11,922,735 11,922,735

Loans and other loans held for sale, net 11,807,171 — — 11,922,735 11,922,735

Financial liabilities:

31 unchanged sentences

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 gain or loss on the hedged asset or liability attributable to the hedged risk are recognized in current earnings.

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.

2 unchanged sentences

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

March 31, 2022 December 31, 2021

June 30, 2022 December 31, 2021

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

2 unchanged sentences

Carrying Amount of Hedged Assets Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of Hedged Assets

Line Item on the Balance Sheet (In thousands) March 31, 2022 December 31, 2021 March 31, 2022 December 31, 2021

Line Item on the Balance Sheet (In thousands) June 30, 2022 December 31, 2021 June 30, 2022 December 31, 2021

Investment securities - Available-for-sale $ 821,820 $ 1,063,173 $ 69,744 $ 10,524

7 unchanged sentences

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

March 31, 2022 December 31, 2021

June 30, 2022 December 31, 2021

(In thousands) Notional Fair Value Notional Fair Value

4 unchanged sentences

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 $ 36.9 million as of March 31, 2022.

The notional amount of these contingent agreements is $ 31.5 million as of June 30, 2022.

Energy Hedging

5 unchanged sentences

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 March 31, 2022 for energy hedging Customer Sell to Company swaps were $ 13.1 million and the corresponding Company Sell to Dealer swaps were $ 13.1 million and the corresponding net fair value of the derivative asset and derivative liability was $ 150,000 .

The outstanding notional value as of June 30, 2022 for energy hedging Customer Sell to Company swaps were $ 9.6 million and the corresponding Company Sell to Dealer swaps were $ 9.6 million and the corresponding net fair value of the derivative asset and derivative liability was $ 116,000 .

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

3 unchanged sentences

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 March 31, 2022, and the related condensed consolidated statements of income, comprehensive income (loss), stockholders’ equity and cash flows for the three-month periods ended March 31, 2022 and 2021, 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 June 30, 2022, 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, 2022 and 2021, and cash flows for the six-month periods ended June 30, 2022 and 2021, 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.

9 unchanged sentences

Accordingly, we do not express such an opinion.

/s/ FORVIS, LLP

(formerly BKD, LLP)

Little Rock, Arkansas

August 5, 2022

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