What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-05-05 compared with 2022-11-04 · 282 added, 518 removed, 1260 unchanged (39% of the section changed)

2 unchanged sentences

Consolidated Balance Sheets

September 30, 2022 and December 31, 2021

September 30, December 31,

March 31, 2023 and December 31, 2022

March 31, December 31,

(In thousands, except share data) 2023 2022

4 unchanged sentences

Investment securities:

Held-to-maturity, net of allowance for credit losses of $ 1,384 and $ 1,279 at September 30, 2022 and December 31, 2021, respectively

Held-to-maturity, net of allowance for credit losses of $ 1,888 and $ 1,388 at March 31, 2023 and December 31, 2022, respectively

3,765,483 3,759,706

Available-for-sale, at estimated fair value (amortized cost of $ 4,484,131 and $ 7,130,861 at September 30, 2022 and December 31, 2021, respectively)

Available-for-sale, net of allowance for credit losses of $ 5,800 at March 31, 2023 (amortized cost of $ 4,186,431 and $ 4,331,413 at March 31, 2023 and December 31, 2022, respectively)

3,755,956 3,852,854

1 unchanged sentence

Mortgage loans held for sale 4,244 3,486

Other loans held for sale 2,292 100

Loans 16,555,098 16,142,124

21 unchanged sentences

Common stock, Class A, $ 0.01 par value;

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

126,943,467 and 112,715,444 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively

350,000,000 shares authorized at March 31, 2023 and December 31, 2022;

127,282,192 and 127,046,654 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively

Surplus 2,533,589 2,530,066

6 unchanged sentences

Consolidated Statements of Income

Three and Nine Months Ended September 30, 2022 and 2021

Three Months Ended September 30, Nine Months Ended

September 30,

Three Months Ended March 31, 2023 and 2022

Three Months Ended March 31,

(In thousands, except per share data) 2023 2022

(Unaudited) (Unaudited)

INTEREST INCOME

3 unchanged sentences

Mortgage loans held for sale 82 190

Other loans held for sale 998 — 3,061 —

TOTAL INTEREST INCOME 279,137 161,727

15 unchanged sentences

Other service charges and fees 2,282 1,637

Gain (loss) on sale of securities, net ( 22 ) 5,248 ( 226 ) 15,846

Loss on sale of securities, net — ( 54 )

Other income 11,256 7,266

12 unchanged sentences

NET INCOME $ 45,589 $ 65,095

Preferred stock dividends — 13 — 39

NET INCOME AVAILABLE TO COMMON STOCKHOLDERS $ 80,603 $ 80,561 $ 173,152 $ 222,879

BASIC EARNINGS PER SHARE $ 0.36 $ 0.58

3 unchanged sentences

Consolidated Statements of Comprehensive Income (Loss)

Three and Nine Months Ended September 30, 2022 and 2021

Three Months Ended March 31, 2023 and 2022

Three Months Ended

September 30, Nine Months Ended September 30,

(In thousands) 2023 2022

(Unaudited) (Unaudited)

NET INCOME $ 45,589 $ 65,095

OTHER COMPREHENSIVE INCOME (LOSS)

Unrealized holding losses arising during the period on available-for-sale securities ( 195,540 ) ( 41,398 ) ( 639,915 ) ( 95,313 )

Reclassification adjustment for realized (losses) gains included in net income ( 22 ) 5,248 ( 226 ) 15,846

Realized losses on available-for-sale securities interest rate hedges ( 41,412 ) ( 13,722 ) ( 101,443 ) ( 13,722 )

Net unrealized gains (losses) on securities transferred from available for sale to held to maturity during the period — 1,106 ( 206,682 ) 1,106

Accretion of net unrealized losses on securities transferred from available-for-sale to held-to-maturity 4,700 — 9,401 —

Other comprehensive loss, before tax effect ( 158,806 ) ( 31,818 ) ( 754,329 ) ( 96,331 )

Tax effect of other comprehensive loss ( 41,504 ) ( 8,316 ) ( 197,144 ) ( 25,176 )

Unrealized holding gains (losses) arising during the period on available-for-sale securities 69,963 ( 465,708 )

Reclassification adjustment for realized losses included in net income — ( 54 )

Realized gains (losses) on available-for-sale securities interest rate hedges 13,545 ( 37,199 )

Amortization of net unrealized losses on securities transferred from available-for-sale to held-to-maturity ( 7,048 ) ( 84 )

Other comprehensive income (loss), before tax effect 63,466 ( 428,371 )

Tax effect of other comprehensive income (loss) 16,587 ( 111,955 )

TOTAL OTHER COMPREHENSIVE INCOME (LOSS) 46,879 ( 316,416 )

3 unchanged sentences

Consolidated Statements of Cash Flows

Nine Months Ended September 30, 2022 and 2021

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

Three Months Ended March 31, 2023 and 2022

(In thousands) March 31, 2023 March 31, 2022

OPERATING ACTIVITIES

3 unchanged sentences

Provision for credit losses 24,216 ( 19,914 )

(Gain) loss on sale of investments 226 ( 15,846 )

Net accretion of investment securities and assets ( 32,531 ) ( 36,929 )

Loss on sale of investments — 54

Net amortization (accretion) of investment securities and assets 2,245 ( 13,176 )

Net amortization on borrowings 38 111

Stock-based compensation expense 4,861 3,941

Gain on sale of premises and equipment, net of impairment — ( 591 )

Gain on sale of foreclosed assets and other real estate owned ( 424 ) ( 76 )

Loss (gain) on sale of foreclosed assets and other real estate owned 8 ( 235 )

Gain on sale of mortgage loans held for sale ( 1,423 ) ( 2,931 )

Gain on sale of loans ( 282 ) —

Gain on sale of branches — ( 5,316 )

Deferred income taxes ( 179 ) 9,107

Income from bank owned life insurance ( 3,334 ) ( 2,706 )

Loss from early retirement of TruPS 365 —

Originations of mortgage loans held for sale ( 50,269 ) ( 189,361 )

11 unchanged sentences

Purchases of premises and equipment, net ( 10,490 ) ( 7,156 )

Proceeds from sale of premises and equipment — 5,621

Proceeds from sale of foreclosed assets and other real estate owned 289 1,623

Proceeds from sale of available-for-sale securities — 342,577

Proceeds from maturities of available-for-sale securities 155,361 194,961

2 unchanged sentences

Purchases of held-to-maturity securities ( 31,704 ) ( 44,638 )

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

Proceeds from bank owned life insurance death benefits 1,483 —

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

Purchase of Spirit of Texas Bancshares, Inc.

Net cash used in investing activities ( 280,667 ) ( 20,876 )

1 unchanged sentence

Net change in deposits ( 95,950 ) 25,874

Repayments of TruPS ( 56,189 ) —

Dividends paid on preferred stock — ( 39 )

Dividends paid on common stock ( 25,455 ) ( 21,375 )

4 unchanged sentences

Repurchases of common stock — ( 16,055 )

Net cash (used in) provided by financing activities ( 605,251 ) 879,626

DECREASE IN CASH AND CASH EQUIVALENTS ( 971,243 ) ( 1,690,739 )

Net cash provided by (used in) financing activities 24,249 ( 3,285 )

(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS ( 157,671 ) 36,364

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 682,122 1,650,653

3 unchanged sentences

Consolidated Statements of Stockholders’ Equity

Three Months Ended September 30, 2022 and 2021

(In thousands, except share data) Preferred Stock Common

Stock Surplus Accumulated

Comprehensive

(Loss) Income Undivided

Profits Total

Three Months Ended September 30, 2022

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

Comprehensive (loss) income — — — ( 117,302 ) 80,603 ( 36,699 )

Stock-based compensation plans, net – 39,416 shares

— — 3,111 — — 3,111

Stock repurchases – 1,883,713 shares

— ( 19 ) ( 45,018 ) — — ( 45,037 )

Dividends on common stock – $ 0.19 per share

— — — — ( 24,119 ) ( 24,119 )

Balance, September 30, 2022 (Unaudited) $ — $ 1,269 $ 2,527,153 $ ( 567,730 ) $ 1,196,459 $ 3,157,151

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

Stock-based compensation plans, net – 22,767 shares

— — 4,848 — — 4,848

Stock repurchases – 1,806,205 shares

— ( 18 ) ( 51,415 ) — — ( 51,433 )

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

Dividends on common stock – $ 0.18 per share

— — — — ( 19,309 ) ( 19,309 )

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

See Condensed Notes to Consolidated Financial Statements.

Simmons First National Corporation

Consolidated Statements of Stockholders’ Equity

Nine Months Ended September 30, 2022 and 2021

(In thousands, except share data) Preferred Stock Common

Three Months Ended March 31, 2023 and 2022

(In thousands, except share data) Common

Stock Surplus Accumulated

2 unchanged sentences

Profits Total

Nine Months Ended September 30, 2022

Three Months Ended March 31, 2023

Balance, December 31, 2022 $ 1,270 $ 2,530,066 $ ( 517,560 ) $ 1,255,586 $ 3,269,362

Comprehensive (loss) income — — — ( 557,185 ) 173,152 ( 384,033 )

Comprehensive income — — 46,879 45,589 92,468

Stock issued for employee stock purchase plan – 42,510 shares

2 unchanged sentences

3 2,690 — — 2,693

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

— 183 464,735 — — 464,918

Stock repurchases – 4,432,762 shares

— ( 44 ) ( 111,089 ) — — ( 111,133 )

Dividends on common stock – $ 0.20 per share

— — — ( 25,455 ) ( 25,455 )

Balance, September 30, 2022 (Unaudited) $ — $ 1,269 $ 2,527,153 $ ( 567,730 ) $ 1,196,459 $ 3,157,151

Nine Months Ended September 30, 2021

Balance, March 31, 2023 (Unaudited) $ 1,273 $ 2,533,589 $ ( 470,681 ) $ 1,275,720 $ 3,339,901

Three Months Ended March 31, 2022

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

6 unchanged sentences

( 5 ) ( 16,050 ) — — ( 16,055 )

Dividends on preferred stock — — — — ( 39 ) ( 39 )

Dividends on common stock – $ 0.19 per share

— — — ( 21,375 ) ( 21,375 )

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

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

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 230 financial centers as of September 30, 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 approximately 231 financial centers as of March 31, 2023, located throughout market areas in Arkansas, Kansas, Missouri, Oklahoma, Tennessee and Texas.

Basis of Presentation

12 unchanged sentences

Recently Adopted Accounting Standards

Reference Rate Reform – In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No.

Investment-Income Taxes - In March 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No.

2023-02, Investments-Equity Method and Joint Ventures (Topic 323):

Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method (“ASU 2023-02”), that introduced the option to apply the proportional amortization method to account for investments made primarily for the purpose of receiving income tax credits and other income tax benefits when certain requirements are met.

The proportional amortization method results in the cost of the investment being amortized in proportion to the income tax credits and other income tax benefits received, with the amortization of the investment and the income tax credits being presented net in the income statement as a component of income tax expense (benefit).

ASU 2023-02 is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 31, 2023, with early adoption permitted.

The Company elected to early adopt ASU 2023-02 and apply the proportional amortization method for all income tax credits during the first quarter 2023 by utilizing the modified retrospective method.

The adoption of ASU 2023-02 did not have a material impact on the Company’s results of operations, financial position or disclosures.

Credit Losses on Financial Instruments - In March 2022, the FASB issued ASU No.

2022-02, Financial Instruments - Credit Losses (Topic 326):

Troubled Debt Restructurings and Vintage Disclosures (“ASU 2022-02”), which eliminates the accounting guidance on troubled debt restructurings (“TDRs”) for creditors in ASC 310-40 and amends the guidance on “vintage disclosures” to require disclosure of current-period gross write-offs by year of origination.

The ASU also updates the requirements related to accounting for credit losses under ASC 326 and adds enhanced disclosures for creditors with respect to loan refinancings and restructurings made to borrowers experiencing financial difficulty.

ASU 2022-02 was effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022, with early adoption permitted.

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

As a result, comparative disclosures to prior periods will not be available until such time as both periods disclosed are subject to the new guidance.

The adoption of ASU 2022-02 did not have a material impact on the Company’s results of operations or financial position.

See Note 5, Loans and Allowance for Credit Losses, for additional information.

Fair Value Hedging - In March 2022, the FASB issued ASU No.

2022-01, Derivatives and Hedging (Topic 815):

Fair Value Hedging - Portfolio Layer Method (“ASU 2022-01”), which clarifies the guidance on fair value hedge accounting of interest rate risk for portfolios of financial assets.

This ASU amends the guidance in ASU 2017-12 that, among other things, established the “last-of-layer” method for making the fair value hedge accounting for these portfolios more accessible.

ASU 2022-01 renames that method the “portfolio layer” method and expands the scope of this guidance to allow entities to apply the portfolio layer method to portfolios of all financial assets, including both prepayable and nonprepayable financial assets.

This scope expansion is consistent with the FASB’s efforts to simplify hedge accounting and allows entities to apply the same method to similar hedging strategies.

ASU 2022-01 was effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022, with early adoption permitted.

The adoption of 2022-01 did not have a material impact on the Company’s results of operations, financial position or disclosures.

Reference Rate Reform – In March 2020, the FASB issued ASU No.

2020-04, Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”), which provides relief for companies preparing for discontinuation of interest rates such as the London Interbank Offered Rate (“LIBOR”).

Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”), which provides relief for companies preparing for discontinuation of interest rates such as LIBOR.

LIBOR is a benchmark interest rate referenced in a variety of agreements that are used by numerous entities.

On March 5, 2021, the U.K.

Financial Conduct Authority (“FCA”) announced that the majority of LIBOR rates will no longer be published after December 31, 2021, although a number of key settings will continue until June 2023, to support the rundown of legacy contracts only.

As a result, LIBOR should be discontinued as a reference rate.

Financial Conduct Authority (“FCA”) announced that the majority of LIBOR rates will no longer be published after December 31, 2021.

Effective January 1, 2022, the ICE Benchmark Administration Limited, the administrator of the LIBOR, ceased the publication of one-week and two-month USD LIBOR and will cease the publications of the remaining tenors of USD LIBOR (one, three, six and 12-month) immediately after June 30, 2023.

Other interest rates used globally could also be discontinued for similar reasons.

ASU 2020-04 provides optional expedients and exceptions to contracts, hedging relationships and other transactions affected by reference rate reform.

The main provisions for

contract modifications include optional relief by allowing the modification as a continuation of the existing contract without additional analysis and other optional expedients regarding embedded features.

The main provisions for contract modifications include optional relief by allowing the modification as a continuation of the existing contract without additional analysis and other optional expedients regarding embedded features.

Optional expedients for hedge accounting permits changes to critical terms of hedging relationships and to the designated benchmark interest rate in a fair value hedge and also provides relief for assessing hedge effectiveness for cash flow hedges.

3 unchanged sentences

During 2021, the Company did not offer LIBOR-indexed rates on loans which it originated, although it did participate in some shared credit agreements originated by other banks subject to the Company’s determination that the LIBOR replacement language in the loan documents met the Company’s standards.

Pursuant to the Joint Regulatory Statement on LIBOR transition issued in October 2021, the Company, as of January 1, 2022, is not entering into any new LIBOR-based credit agreements and is not extending, renewing, or modifying any prior LIBOR credit agreements without requiring conversion of the agreements to other interest rates.

Pursuant to the Joint Regulatory Statement on LIBOR transition issued in October 2021, the Company’s policy, as of January 1, 2022, is not

to enter into any new LIBOR-based credit agreements and not extend, renew, or modify prior LIBOR credit agreements without requiring conversion of the agreements to other interest rates.

The adoption of ASU 2020-04 has not had a material impact on the Company’s financial position or results of operations.

1 unchanged sentence

2021-01, Reference Rate Reform (Topic 848):

Scope (“ASU 2021-01”), which clarifies that certain optional expedients and exceptions in Accounting Standard Codification (“ASC”) 848 for contract modifications and hedge accounting apply to derivatives that are affected by the changes in the interest rates used for margining, discounting, or contract price alignment for derivative instruments that are being implemented as part of the market-wide transition to new reference rates (commonly referred to as the “discounting transition”).

Scope (“ASU 2021-01”), which clarifies that certain optional expedients and exceptions in ASC 848 for contract modifications and hedge accounting apply to derivatives that are affected by the changes in the interest rates used for margining, discounting, or contract price alignment for derivative instruments that are being implemented as part of the market-wide transition to new reference rates (commonly referred to as the “discounting transition”).

ASU 2021-01 also amends the expedients and exceptions in ASC 848 to capture the incremental consequences of the scope clarification and to tailor the existing guidance to derivative instruments affected by the discounting transition.

1 unchanged sentence

ASU 2021-01 did not have a material impact on the Company’s financial position or results of operations.

In December 2022, the FASB issued ASU No.

2022-06, Reference Rate Reform (Topic 848):

Deferral of the Sunset Date of Topic 848 (“ASU 2022-06”).

ASU 2022-06 defers the sunset date of Topic 848 from December 31, 2022 to December 31, 2024, after which entities will no longer be permitted to apply the relief in Topic 848.

Leases - In July 2021, the FASB issued ASU No.

3 unchanged sentences

i) the lease would have been classified as a sales-type lease or a direct financing lease under the previous lease classification criteria and ii) sales-type or direct financing lease classification would result in a Day 1 loss.

ASU 2021-05 is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2021, with early adoption permitted.

The adoption of ASU No.

2021-05 did not have a material impact on the Company’s results of operations, financial position or disclosures.

Recently Issued Accounting Standards

Fair Value Hedging - In March 2022, the FASB issued ASU No.

2022-01, Derivatives and Hedging (Topic 815):

Fair Value Hedging - Portfolio Layer Method (“ASU 2022-01”), which clarifies the guidance on fair value hedge accounting of interest rate risk for portfolios of financial assets.

This ASU amends the guidance in ASU 2017-12 that, among other things, established the “last-of-layer” method for making the fair value hedge accounting for these portfolios more accessible.

This scope expansion is consistent with the FASB’s efforts to simplify hedge accounting and allows entities to apply the same method to similar hedging strategies.

ASU 2022-01 is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022, with early adoption permitted.

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

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

Troubled Debt Restructurings and Vintage Disclosures (“ASU 2022-02”), which eliminates the accounting guidance on troubled debt restructurings (TDRs) for creditors in ASC 310-40 and amends the guidance on “vintage disclosures” to require disclosure of current-period gross write-offs by year of origination.

ASU 2022-02 is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022, with early adoption permitted.

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

ASU 2021-05 was effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2021, with early adoption permitted.

The adoption of ASU 2021-05 did not have a material impact on the Company’s results of operations, financial position or disclosures.

In the first quarter of 2023, the Company refined the current expected credit losses calculation process by improving systems, models, processes, methodology, and assumptions used within the calculation.

After multiple parallel runs during the first quarter 2023 with the former process, it was determined that the changes did not and are not expected to result in material differences of results.

There have been no other significant changes to the Company’s accounting policies disclosed in Note 1, Summary of Significant Accounting Policies, of the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

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.

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.

20 unchanged sentences

Total assets acquired $ 3,200,312 $ ( 93,724 ) $ 3,106,588

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

Liabilities Assumed

13 unchanged sentences

Goodwill $ 174,146

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.

During 2023, the Company finalized its analysis of the loans acquired along with other acquired assets and assumed liabilities related to the Spirit acquisition.

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

On October 8, 2021, the Company completed its acquisition of Landmark Community Bank (“Landmark”) pursuant to the terms of the Agreement and Plan of Merger dated as of June 4, 2021 (“Landmark Agreement”), at which time Landmark merged with and into Simmons Bank, with Simmons Bank continuing as the surviving entity.

The Company issued 4,499,872 shares of its common stock valued at approximately $ 138.2 million as of October 8, 2021, plus $ 6,451,727.43 in cash, in exchange for all outstanding shares of Landmark capital stock (and common stock equivalents) to effect the merger.

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

Including the effects of the acquisition method accounting adjustments, the Company acquired approximately $ 968.8 million in assets, including approximately $ 789.5 million in loans (inclusive of loan discounts), and approximately $ 802.7 million in deposits.

Goodwill of $ 31.4 million was recorded as a result of the transaction.

The merger strengthened the Company’s market share 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 Landmark acquisition, as of the acquisition date, is as follows:

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

Assets Acquired

Cash and due from banks $ 27,591 $ — $ 27,591

Due from banks - time 100 — 100

Investment securities 114,793 ( 125 ) 114,668

Loans acquired 785,551 3,953 789,504

Allowance for credit losses on loans ( 5,980 ) 3,621 ( 2,359 )

Premises and equipment 9,540 ( 4,099 ) 5,441

Bank owned life insurance 21,287 — 21,287

Core deposit intangible 88 4,071 4,159

Other assets 13,036 ( 4,605 ) 8,431

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

Liabilities Assumed

Noninterest bearing transaction accounts $ 110,393 $ — $ 110,393

Interest bearing transaction accounts and savings deposits 425,777 — 425,777

Time deposits 266,835 ( 334 ) 266,501

Total deposits 803,005 ( 334 ) 802,671

Other borrowings 47,023 — 47,023

Accrued interest and other liabilities 8,459 ( 3,122 ) 5,337

Total liabilities assumed 858,487 ( 3,456 ) 855,031

Equity 107,519 ( 107,519 ) —

Total equity assumed 107,519 ( 107,519 ) —

Total liabilities and equity assumed $ 966,006 $ ( 110,975 ) $ 855,031

Net assets acquired 113,791

Purchase price 145,195

Goodwill $ 31,404

During 2022, the Company finalized its analysis of the loans acquired along with other acquired assets and assumed liabilities related to Landmark.

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

Triumph Bancshares, Inc.

On October 8, 2021, the Company completed its merger with Triumph Bancshares, Inc.

(“Triumph”) pursuant to the terms of the Agreement and Plan of Merger dated as of June 4, 2021 (“Triumph Agreement”), at which time Triumph merged with and into the Company, with the Company continuing as the surviving corporation.

The Company issued 4,164,712 shares of its common stock valued at approximately $ 127.9 million as of October 8, 2021, plus $ 1,693,402.93 in cash, in exchange for all outstanding shares of Triumph capital stock (and common stock equivalents) to effect the merger.

Prior to the acquisition, Triumph, headquartered in Memphis, Tennessee, conducted banking business through its subsidiary bank, Triumph Bank, from 6 branches located in the Memphis and Nashville, Tennessee, metropolitan areas.

Including the effects of the acquisition method accounting adjustments, the Company acquired approximately $ 847.2 million in assets, including approximately $ 698.8 million in loans (inclusive of loan discounts), and approximately $ 719.7 million in deposits.

Goodwill of $ 39.9 million was recorded as a result of the transaction.

The merger strengthened the Company’s market share 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 Triumph acquisition, as of the acquisition date, is as follows:

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

Assets Acquired

Cash and due from banks $ 7,484 $ — $ 7,484

Due from banks - time 495 — 495

Investment securities 130,571 ( 1,116 ) 129,455

Loans acquired 702,460 ( 3,674 ) 698,786

Allowance for credit losses on loans ( 12,617 ) 1,525 ( 11,092 )

Premises and equipment 2,774 484 3,258

Goodwill 1,550 ( 1,550 ) —

Core deposit intangible — 5,136 5,136

Other assets 12,806 897 13,703

Total assets acquired $ 845,523 $ 1,702 $ 847,225

Liabilities Assumed

Noninterest bearing transaction accounts $ 115,729 $ — $ 115,729

Interest bearing transaction accounts and savings deposits 383,434 — 383,434

Time deposits 219,477 1,094 220,571

Total deposits 718,640 1,094 719,734

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

Other borrowings 30,700 — 30,700

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

Total liabilities assumed 755,076 1,549 756,625

Equity 90,446 ( 90,446 ) —

Total equity assumed 90,446 ( 90,446 ) —

Total liabilities and equity assumed $ 845,522 $ ( 88,897 ) $ 756,625

Net assets acquired 90,600

Purchase price 130,544

Goodwill $ 39,944

During 2022, the Company finalized its analysis of the loans acquired along with other acquired assets and assumed liabilities related to Triumph.

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

The following is a description of the methods used to determine the fair values of significant assets and liabilities presented in the acquisitions above.

Cash and due from banks and time deposits due from banks – The carrying amount of these assets is a reasonable estimate of fair value based on the short-term nature of these assets.

Summary of Unaudited Pro forma Information

The unaudited pro forma information below for the years ended December 31, 2022 and 2021 gives effect to the Spirit acquisition as if the acquisition had occurred on January 1, 2021.

Pro forma earnings for the year ended December 31, 2022 were adjusted to exclude $ 18.7 million of acquisition-related costs, net of tax, incurred by the Company during 2022.

The pro forma financial information is not necessarily indicative of the results of operations if the acquisition had been effective as of this date.

(In thousands, except per share data) 2022 2021

$ 912,631 $ 927,061

Net income $ 264,522 $ 307,752

Diluted earnings per share $ 2.04 $ 2.40

_________________________

(1) Net interest income plus non-interest income.

As previously discussed, the Company’s acquisition of Spirit was completed on April 8, 2022, at which time Spirit was fully integrated into the Company’s operations.

As a result, it is impracticable for the Company to provide certain post-closing information, such as revenue and earnings, as it relates to the Spirit acquisition.

The following is a description of the methods used to determine the fair values of significant assets and liabilities presented in the acquisition above.

Cash and due from banks – The carrying amount of these assets is a reasonable estimate of fair value based on the short-term nature of these assets.

Investment securities – Investment securities were acquired with an adjustment to fair value based upon quoted market prices if material.

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The Company performed a fair value analysis of the estimated weighted average interest rate of the certificates of deposits compared to the current market rates and recorded a fair value adjustment for the difference when material.

Securities sold under agreement to repurchase – The carrying amount of securities sold under agreement to repurchase is a reasonable estimate of fair value based on the short-term nature of these liabilities.

Other borrowings – The fair value of other borrowings is estimated based on borrowing rates currently available to the Company for borrowings with similar terms and maturities.

15 unchanged sentences

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 $ 148.3 million and net unrealized gains of $ 738,000 , respectively, in accumulated other comprehensive income (loss) will be amortized over the remaining life of the securities.

As of March 31, 2023, the related remaining combined net unrealized losses of $ 141.0 million 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

September 30, 2022

March 31, 2023

Government agencies $ 451,052 $ — $ 451,052 $ — $ ( 92,267 ) $ 358,785

14 unchanged sentences

government agencies or corporations.

As of September 30, 2022, HTM MBS consists of $ 150.0 million and $ 1.06 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.

As of March 31, 2023, HTM MBS consists of $ 146.5 million and $ 1.05 billion of commercial MBS and residential MBS, respectively.

As of December 31, 2022, HTM MBS consists of $ 149.2 million and $ 1.04 billion of commercial MBS and residential MBS, respectively.

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

5 unchanged sentences

Available-for-sale

September 30, 2022

March 31, 2023

Treasury $ 2,264 $ — $ — $ ( 44 ) $ 2,220

11 unchanged sentences

Total AFS $ 4,331,413 $ — $ 373 $ ( 478,932 ) $ 3,852,854

As of September 30, 2022, AFS MBS consists of $ 1.17 billion and $ 1.50 billion of commercial MBS and residential MBS, respectively.

As of March 31, 2023, AFS MBS consists of $ 985.7 million and $ 1.45 billion of commercial MBS and residential MBS, respectively.

As of December 31, 2022, AFS MBS consists of $ 1.07 billion and $ 1.47 billion of commercial MBS and residential MBS, respectively.

Accrued interest receivable on HTM and AFS securities at September 30, 2022 was $ 17.7 million and $ 16.2 million, respectively, and is included in interest receivable on the consolidated balance sheets.

Accrued interest receivable on HTM and AFS securities at March 31, 2023 was $ 17.4 million and $ 16.7 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 September 30, 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 March 31, 2023, 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

9 unchanged sentences

Total AFS $ 661,971 $ ( 20,920 ) $ 3,020,877 $ ( 398,337 ) $ 3,682,848 $ ( 419,257 )

As of September 30, 2022, the Company’s investment portfolio included $ 3.94 billion of AFS securities, of which $ 3.88 billion, or 98.5 %, were in an unrealized loss position that were not deemed to have credit losses.

As of March 31, 2023, the Company’s investment portfolio included $ 3.76 billion of AFS securities, of which $ 3.68 billion, or 98.1 %, 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.

10 unchanged sentences

Accordingly, no allowance for credit losses has been recorded for these securities.

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 nine months ended September 30, 2022 on the Company’s HTM securities portfolio.

Regarding securities issued by state and political subdivisions and other HTM securities, the adequacy of the reserve for credit loss is determined quarterly based on methodology similar to the methodology for determining the loan allowance for credit losses.

The methodology considers, but is not limited to:

(i) issuer bond ratings, (ii) issuer geography, (iii) whether issuers continue to make timely principal and interest payments under the contractual terms of the securities, (iv) probability-weighted multiple scenario forecasts, and (v) the issuers’ size.

The following table details activity in the allowance for credit losses by investment security type for the three months ended March 31, 2023 on the Company’s HTM and AFS securities portfolios.

(In thousands) State and Political Subdivisions Other

Securities Total

Three Months Ended September 30, 2022

Three Months Ended March 31, 2023

Held-to-maturity

Beginning balance, July 1, 2022 $ 103 $ 1,278 $ 1,381

Beginning balance, January 1, 2023 $ 110 $ 1,278 $ 1,388

Provision for credit loss expense 252 248 500

Net increase (decrease) in allowance on previously impaired securities 3 ( 3 ) —

Recoveries 1 2 3

Ending balance, September 30, 2022 $ 107 $ 1,277 $ 1,384

Nine Months Ended September 30, 2022

Held-to-maturity

Ending balance, March 31, 2023 $ 362 $ 1,526 $ 1,888

Available-for-sale

Beginning balance, January 1, 2023 $ — $ — $ —

Provision for credit loss expense — 12,800 12,800

Net increase (decrease) in allowance on previously impaired securities ( 1,180 ) 1,180 —

Recoveries 90 15 105

Ending balance, September 30, 2022 $ 107 $ 1,277 $ 1,384

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 portfolio was as follows:

Securities charged-off — ( 7,000 ) ( 7,000 )

Ending balance, March 31, 2023 $ — $ 5,800 $ 5,800

Activity in the allowance for credit losses by investment security type for the three months ended March 31, 2022 on the Company’s HTM securities portfolio was as follows:

(In thousands) State and Political Subdivisions Other

Securities Total

Three Months Ended September 30, 2021

Held-to-maturity

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

Provision for credit loss expense 325 ( 325 ) —

Recoveries — 147 147

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

Nine Months Ended September 30, 2021

Three Months Ended March 31, 2022

Held-to-maturity

1 unchanged sentence

Provision for credit loss expense — — —

Securities charged-off — ( 600 ) ( 600 )

Recoveries 88 10 98

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

Available-for-sale

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

Reduction due to sales — ( 11 ) ( 11 )

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

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

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 for the three and nine months ended September 30, 2022.

There was no provision for credit losses related to AFS securities recorded in the three month period ended September 30, 2021 and it was reduced by $ 312,000 during the nine months ended September 30, 2021.

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, 2022:

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

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 recorded for the three months ended March 31, 2023 was $ 12.8 million, while no provision for credit losses related to AFS securities was recorded during the three months ended March 31, 2022.

During the three months ended March 31, 2023, the Company charged-off $ 7.0 million directly related to one corporate bond which was deemed uncollectible in the period.

The remaining allowance for credit loss on the AFS portfolio of $ 5.8 million at March 31, 2023 is related to outstanding exposure for two nonperforming corporate bonds.

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, 2023:

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 and nine months ended September 30, 2022 and 2021, is as follows:

Income earned on securities for the three months ended March 31, 2023 and 2022, is as follows:

Three Months Ended

September 30, Nine Months Ended

September 30,

(In thousands) 2023 2022

4 unchanged sentences

Total $ 48,774 $ 33,712

The amortized cost and estimated fair value by maturity of securities as of September 30, 2022 are shown in the following table.

The amortized cost and estimated fair value by maturity of securities as of March 31, 2023 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 $ 3,767,371 $ 3,148,976 $ 4,186,431 $ 3,755,956

The carrying value, which approximates the fair value, of securities pledged as collateral, to secure public deposits and for other purposes, amounted to $ 3.93 billion at September 30, 2022 and $ 3.88 billion at December 31, 2021.

There were approximately $ 8,000 of gross realized gains and $ 30,000 of gross realized losses from the sale and calls of securities during the three months ended September 30, 2022, and approximately $ 45,000 of gross realized gains and $ 271,000 of gross realized losses from the sale and call of securities during the nine months ended September 30, 2022.

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 carrying value, which approximates the fair value, of securities pledged as collateral, to secure public deposits and for other purposes, amounted to $ 3.82 billion at March 31, 2023 and $ 3.96 billion at December 31, 2022.

There were no gross realized gains and no gross realized losses recorded from the call of securities during the three months ended March 31, 2023, as they were recognized at book value of the security.

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.

The income tax expense/benefit related to security gains/losses was 26.135 % of the gross amounts in 2023 and 2022.

3 unchanged sentences

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 $ 35.2 million, net of fair value discounts, at the date of acquisition.

As of September 30, 2022, the remaining balance of loans held for sale, net of fair value discounts, was $ 2.3 million.

The decrease in the remaining balance as compared to June 30, 2022, is due to continued paydowns and the sale of a portion of loans within the acquired portfolio.

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

Illinois Branch Sale

On November 30, 2020, the Company’s subsidiary bank, Simmons Bank, entered into a Branch Purchase and Assumption Agreement (the “Citizens Equity Agreement”) with Citizens Equity First Credit Union (“CEFCU”).

On March 12, 2021, CEFCU completed its purchase of certain assets and assumption of certain liabilities (“Illinois Branch Sale”) associated with four Simmons Bank locations in the Metro East area of Southern Illinois, near St.

Louis (collectively, the “Illinois Branches”).

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 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.

In connection with the acquisition of Spirit, 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 $ 35.2 million, net of fair value discounts, at the date of acquisition with no remaining balance as of March 31, 2023.

As of March 31, 2023, there were no outstanding other liabilities held for sale.

LOANS AND ALLOWANCE FOR CREDIT LOSSES

At September 30, 2022, the Company’s loan portfolio was $ 15.61 billion, compared to $ 12.01 billion at December 31, 2021.

At March 31, 2023, the Company’s loan portfolio was $ 16.56 billion, compared to $ 16.14 billion at December 31, 2022.

The various categories of loans are summarized as follows:

September 30, December 31,

March 31, December 31,

(In thousands) 2023 2022

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 $ 29.1 million and $ 21.5 million at September 30, 2022 and December 31, 2021, respectively.

Accrued interest on loans, which is excluded from the amortized cost of loans held for investment, totaled $ 52.7 million and $ 39.8 million at September 30, 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 $ 19.2 million and $ 26.4 million at March 31, 2023 and December 31, 2022, respectively.

Accrued interest on loans, which is excluded from the amortized cost of loans held for investment, totaled $ 64.7 million and $ 65.4 million at March 31, 2023 and December 31, 2022, 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 September 30, 2022 and December 31, 2021, the total outstanding balance of PPP loans was $ 12.1 million and $ 116.7 million, respectively.

As of March 31, 2023 and December 31, 2022, the total outstanding balance of PPP loans was $ 7.8 million and $ 8.9 million, respectively.

Other – The other loan portfolio includes mortgage warehouse loans, representing warehouse lines of credit to mortgage originators for the disbursement of newly originated 1-4 family residential loans.

7 unchanged sentences

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

September 30, December 31,

March 31, December 31,

(In thousands) 2023 2022

10 unchanged sentences

Total $ 63,218 $ 58,434

As of September 30, 2022 and December 31, 2021, nonaccrual loans for which there was no related allowance for credit losses had an amortized cost of $ 13.7 million and $ 14.5 million, respectively.

As of March 31, 2023 and December 31, 2022, nonaccrual loans for which there was no related allowance for credit losses had an amortized cost of $ 14.3 million and $ 16.9 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

September 30, 2022

March 31, 2023

Credit cards $ 1,695 $ 385 $ 2,080 $ 186,510 $ 188,590 $ 301

28 unchanged sentences

Total $ 38,416 $ 26,886 $ 65,302 $ 16,076,822 $ 16,142,124 $ 507

When the Company restructures a loan to a borrower that is experiencing financial difficulty and grants a concession that it would not otherwise consider, a “troubled debt restructuring” (“TDR”) results and the Company classifies the loan as a TDR.

The Company grants various types of concessions, primarily interest rate reduction and/or payment modifications or extensions, with an occasional forgiveness of principal.

Once an obligation has been restructured because of such credit problems, it continues to be considered a TDR until paid in full;

or, if an obligation yields a market interest rate and no longer has any concession regarding payment amount or amortization, then it is not considered a TDR at the beginning of the calendar year after the year in which the improvement takes place.

The Company returns TDRs to accrual status only if (1) all contractual amounts due can reasonably be expected to be repaid within a prudent period and (2) repayment has been in accordance with the contract for a sustained period, typically at least six months.

TDRs are individually evaluated for expected credit losses.

The Company assesses the exposure for each modification, either by the fair value of the underlying collateral or the present value of expected cash flows, and determines if a specific allowance for credit losses is needed.

The following table presents a summary of TDRs segregated by class of loans.

Accruing TDR Loans Nonaccrual TDR Loans Total TDR Loans

(Dollars in thousands) Number Balance Number Balance Number Balance

September 30, 2022

Single-family residential 24 $ 1,868 12 $ 1,676 36 $ 3,544

Other commercial 1 1 — — 1 1

Total real estate 25 1,869 12 1,676 37 3,545

Commercial — — 3 1,351 3 1,351

Total commercial — — 3 1,351 3 1,351

Total 25 $ 1,869 15 $ 3,027 40 $ 4,896

Loan Modifications to Borrowers Experiencing Financial Difficulty

The Company has internal loan modification programs for borrowers experiencing financial difficulties.

Modifications to borrowers experiencing financial difficulties may include interest rate reductions, principal or interest forgiveness and/or term extensions.

The Company primarily uses interest rate reduction and/or payment modifications or extensions, with an occasional forgiveness of principal.

There were no loans modified for borrowers experiencing financial difficulties during the three month period ending March 31, 2023.

There were no loans to borrowers experiencing financial difficulty that had a payment default during the three months ended March 31, 2023 and were modified in the twelve months prior to that default.

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

At March 31, 2023 and December 31, 2022, the Company had $ 3,248,000 and $ 3,009,000 , respectively, of consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings are in process.

At March 31, 2023 and December 31, 2022, the Company had $ 873,000 and $ 853,000 , respectively, of OREO secured by residential real estate properties.

Troubled Debt Restructurings (Prior to the adoption of ASU 2022-02)

When the Company restructured a loan to a borrower that was experiencing financial difficulty and granted a concession that it would not otherwise consider, a “troubled debt restructuring” (“TDR”) resulted and the Company classified the loan as a TDR.

The Company granted various types of concessions, primarily interest rate reduction and/or payment modifications or extensions, with an occasional forgiveness of principal.

Once an obligation was restructured because of such credit problems, it continued to be considered a TDR until paid in full;

or, if an obligation yielded a market interest rate and no longer has any concession regarding payment amount or amortization, then it was not considered a TDR at the beginning of the calendar year after the year in which the improvement had taken place.

The Company returned TDRs to accrual status only if (1) all contractual amounts due were reasonably expected to be repaid within a prudent period and (2) repayment was in accordance with the contract for a sustained period, typically at least six months.

TDRs were individually evaluated for expected credit losses.

The Company assessed the exposure for each modification, either by the fair value of the underlying collateral or the present value of expected cash flows, and determined if a specific allowance for credit losses was needed.

The following table presents a summary of TDRs segregated by class of loans as of December 31, 2022.

Accruing TDR Loans Nonaccrual TDR Loans Total TDR Loans

(Dollars in thousands) Number Balance Number Balance Number Balance

December 31, 2021

Single-family residential 24 $ 1,849 12 $ 1,589 36 $ 3,438

4 unchanged sentences

Total 24 $ 1,849 13 $ 1,622 37 $ 3,471

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

There were no loans restructured as TDRs during the three months ended September 30, 2021.

(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

Three Months Ended September 30, 2022

Other commercial 3 $ 747 $ 727 $ — $ 727 $ —

Total real estate 3 $ 747 $ 727 $ — $ 727 $ —

Nine Months Ended September 30, 2022

Other commercial 4 $ 760 $ 740 $ — $ 740 $ —

Total real estate 4 $ 760 $ 740 $ — $ 740 $ —

Nine Months Ended September 30, 2021

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

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

During the three months ended September 30, 2022, the Company modified three loans with a recorded investment of $ 747,000 prior to modification, which were deemed TDRs.

The restructured loans were modified by reducing the interest rate on the loan.

No specific reserve was recorded with respect to these TDRs.

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

During the nine months ended September 30, 2022, the Company modified four loans with a recorded investment of $ 760,000 prior to modification, which were deemed TDRs.

The restructured loans were modified by reducing the interest rate on the loan.

No specific reserve was recorded with respect to these TDRs.

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

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.

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 nine months ended September 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 and nine month periods ended September 30, 2022 or 2021.

At September 30, 2022 and December 31, 2021, the Company had $ 3,389,000 and $ 1,806,000 , respectively, of consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings are in process.

At September 30, 2022 and December 31, 2021, the Company had $ 524,000 and $ 831,000 , respectively, of OREO secured by residential real estate properties.

There were no loans restructured as TDRs during the three months ended March 31, 2022.

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

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 period ended March 31, 2022.

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.

64 unchanged sentences

• 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 September 30, 2022, segregated by class of loans.

The following table presents a summary of loans by credit quality indicator, as of March 31, 2023, segregated by class of loans.

Term Loans Amortized Cost Basis by Origination Year

5 unchanged sentences

Total consumer - credit cards — — — — — — 188,590 — 188,590

Current-period consumer - credit cards gross charge-offs — — — — — — 1,076 — 1,076

Consumer - other

3 unchanged sentences

Total consumer - other 28,226 58,677 22,272 7,986 3,270 3,523 18,863 — 142,817

Current-period consumer - other gross charge-offs — 247 75 22 9 69 3 — 425

Real estate - C&D

4 unchanged sentences

Total real estate - C&D 33,762 215,934 60,762 45,997 18,201 31,099 2,371,367 — 2,777,122

Current-period real estate - C&D gross charge-offs — 1,154 — — — — — — 1,154

Real estate - SF residential

3 unchanged sentences

Total real estate - SF residential 98,604 683,925 401,059 255,002 148,687 666,974 334,849 731 2,589,831

Current-period real estate - SF residential gross charge-offs — — — — — 50 — — 50

Real estate - other commercial

4 unchanged sentences

Total real estate - other commercial 147,560 1,806,116 1,489,527 629,744 302,460 828,078 2,317,479 — 7,520,964

Current-period real estate - other commercial gross charge-offs — — — — — — — — —

Term Loans Amortized Cost Basis by Origination Year

(In thousands) 2023 (YTD) 2022 2021 2020 2019 2018 and Prior Lines of Credit (“LOC”) Amortized Cost Basis LOC Converted to Term Loans Amortized Cost Basis Total

Pass 127,523 508,776 271,243 128,686 64,237 83,378 1,430,642 363 2,614,848

3 unchanged sentences

Total commercial 127,539 527,835 277,156 129,729 65,689 90,032 1,451,388 363 2,669,731

Current-period commercial - gross charge-offs — 165 69 47 91 33 5 — 410

Commercial - agriculture

4 unchanged sentences

Total commercial - agriculture 19,168 41,555 21,466 9,017 3,895 1,373 124,070 97 220,641

Current-period commercial - agriculture gross charge-offs — — — — — 3 — — 3

Current 20,160 151,015 29,183 7,750 4,435 44,220 188,636 — 445,399

2 unchanged sentences

Total other 20,160 151,015 29,183 7,750 4,435 44,223 188,636 — 445,402

Current-period other - gross charge-offs — — — — — — 31 — 31

Total $ 475,019 $ 3,485,057 $ 2,301,425 $ 1,085,225 $ 546,637 $ 1,665,302 $ 6,995,242 $ 1,191 $ 16,555,098

46 unchanged sentences

Allowance for Credit Losses

Allowance for Credit Losses – The allowance for credit losses is a reserve established through a provision for credit losses charged to expense, which represents management’s best estimate of lifetime expected losses based on reasonable and supportable forecasts, historical loss experience, and other qualitative considerations.

Allowance for Credit Losses – The allowance for credit losses is a reserve established through a provision for credit losses charged to expense, which represents management’s best estimate of lifetime expected losses based on reasonable and supportable forecasts, quantitative factors, and other qualitative considerations.

The allowance, in the judgment of management, is necessary to reserve for expected loan losses and risks inherent in the loan portfolio.

The Company’s allowance for credit loss methodology includes reserve factors calculated to estimate current expected credit losses to amortized cost balances over the remaining contractual life of the portfolio, adjusted for the effective interest rate used to discount prepayments, in accordance with ASC Topic 326-20, Financial Instruments - Credit Losses .

Accordingly, the methodology is based on the Company’s reasonable and supportable economic forecasts, historical loss experience, and other qualitative adjustments.

The Company’s allowance for credit loss methodology includes reserve factors calculated to estimate current expected credit losses to amortized cost balances over the remaining contractual life of the portfolio, adjusted for prepayments, in accordance with ASC Topic 326-20, Financial Instruments - Credit Losses .

Accordingly, the methodology is comprised of two components:

individual assessments on loans with unique risk characteristics and collective assessments for loans that share similar risk characteristics.

Loans with similar risk characteristics such as loan type, collateral type, and internal risk ratings are aggregated for collective assessment.

The Company uses statistically-based models that leverage assumptions about current and future economic conditions throughout the contractual life of the loan.

Expected credit losses are estimated by either lifetime loss rates or expected loss cash flows based on three key parameters:

probability-of-default (“PD”), exposure-at-default (“EAD”), and loss-given-default (“LGD”).

Future economic conditions are incorporated to the extent that they are reasonable and supportable.

Beyond the reasonable and supportable periods, the economic variables revert to a historical equilibrium at a pace dependent on the state of the economy reflected within the economic scenarios.

To determine the best estimate of credit losses as of March 31, 2023, the Company utilized a probability-weighted, multiple-scenario approach consisting of Baseline, Upside (S1), and Downside (S3) scenarios published by Moody’s Analytics in March 2023 that was updated to reflect the U.S.

economic outlook.

The Company also includes qualitative adjustments to the allowance based on factors and considerations that have not otherwise been fully accounted for.

These factors may include but are not limited to portfolio trends and considerations, other economic considerations, policy actions, concentration risk, or imprecision risk.

Loans with similar risk characteristics such as loan type, collateral type, and internal risk ratings are aggregated into homogeneous segments for assessment.

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For contractual periods that extend beyond the one-year forecast period, the estimates revert to average historical loss experiences over a one-year period on a straight-line basis.

The Company also includes qualitative adjustments to the allowance based on factors and considerations that have not otherwise been fully accounted for.

Qualitative adjustments include, but are not limited to:

• Changes in asset quality - Adjustments related to trending credit quality metrics including delinquency, non-performing loans, charge-offs, and risk ratings that may not be fully accounted for in the reserve factor.

• Changes in the nature and volume of the portfolio - Adjustments related to current changes in the loan portfolio that are not fully represented or accounted for in the reserve factors.

• Changes in lending and loan monitoring policies and procedures - Adjustments related to current changes in lending and loan monitoring procedures as well as review of specific internal policy compliance metrics.

• Changes in the experience, ability, and depth of lending management and other relevant staff - Adjustments to measure increasing or decreasing credit risk related to lending and loan monitoring management.

• Changes in the value of underlying collateral of collateralized loans - Adjustments related to improving or deterioration of the value of underlying collateral that are not fully captured in the reserve factors.

• Changes in and the existence and effect of any concentrations of credit - Adjustments related to credit risk of specific industries that are not fully captured in the reserve factors.

• Changes in regional and local economic and business conditions and developments - Adjustments related to expected and current economic conditions at a regional or local-level that are not fully captured within the Company’s reasonable and supportable forecast.

• Data imprecisions due to limited historical loss data - Adjustments related to limited historical loss data that is representative of the collective loan portfolio.

Loans that do not share similar risk characteristics are evaluated on an individual basis.

These evaluations are typically performed on loans with a deteriorated internal risk rating or are classified as a troubled debt restructuring.

The allowance for credit loss is determined based on several methods including estimating the fair value of the underlying collateral or the present value of expected cash flows.

Loans that have unique risk characteristics are evaluated on an individual basis.

These evaluations are typically performed on loans with a deteriorated internal risk rating.

For a collateral-dependent loan, the Company’s evaluation process includes a valuation by appraisal or other collateral analysis adjusted for selling costs, when appropriate.

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If a loss is determined to be probable, the loss is included in the allowance for credit losses as a specific allocation.

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 $ 77.1 million and $ 47.1 million as of September 30, 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 $ 101.4 million and $ 70.9 million as of March 31, 2023 and December 31, 2022, 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

September 30, 2022

March 31, 2023

Construction and development $ 11,226 $ — $ 11,226

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Total $ 67,606 $ 3,320 $ 70,926

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

The following table details activity in the allowance for credit losses by portfolio segment for the three months ended March 31, 2023.

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 September 30, 2022

Beginning balance, July 1, 2022 $ 32,817 $ 166,481 $ 6,609 $ 6,704 $ 212,611

Acquisition adjustment for PCD loans 1,057 — — — 1,057

Provision for credit loss expense ( 613 ) ( 17,243 ) 1,119 840 ( 15,897 )

Charge-offs ( 1,873 ) ( 130 ) ( 903 ) ( 506 ) ( 3,412 )

Recoveries 720 1,982 250 278 3,230

Net (charge-offs) recoveries ( 1,153 ) 1,852 ( 653 ) ( 228 ) ( 182 )

Ending balance, September 30, 2022 $ 32,108 $ 151,090 $ 7,075 $ 7,316 $ 197,589

Nine Months Ended September 30, 2022

Three Months Ended March 31, 2023

Beginning balance, January 1, 2023 $ 34,406 $ 150,795 $ 5,140 $ 6,614 $ 196,955

Acquisition adjustment for PCD loans 1,911 3,187 — 2 5,100

Provision for credit loss expense ( 4,804 ) 14,021 2,148 ( 449 ) 10,916

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Net (charge-offs) recoveries 654 ( 910 ) ( 842 ) ( 216 ) ( 1,314 )

Ending balance, September 30, 2022 $ 32,108 $ 151,090 $ 7,075 $ 7,316 $ 197,589

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

Ending balance, March 31, 2023 $ 30,256 $ 163,906 $ 6,446 $ 5,949 $ 206,557

Activity in the allowance for credit losses for the three months ended March 31, 2022 was as follows:

(In thousands) Commercial Real

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Allowance for credit losses:

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 )

Charge-offs ( 932 ) ( 5,941 ) ( 711 ) ( 463 ) ( 8,047 )

Recoveries 463 2,068 267 408 3,206

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

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

Nine Months Ended September 30, 2021

Three Months Ended March 31, 2022

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

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Recoveries 557 426 274 387 1,644

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

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

As of September 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 recapture for the three months ended September 30, 2022 was primarily due to a release of $ 16.0 million driven by a reduction to certain industry specific qualitative factors related to overall improvement from pandemic related stresses to these industries.

The provision recapture for the nine months ended September 30, 2022 was primarily due to the qualitative factor reduction previously noted coupled with the improved asset credit quality metrics combined with improved Moody’s economic modeling scenarios, which more than offset the Day 2 provision expense related to the Spirit acquisition.

Net charge-offs ( 5,762 ) ( 59 ) ( 646 ) ( 27 ) ( 6,494 )

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

As of March 31, 2023, the Company’s allowance for credit losses was considered sufficient based upon expected losses that were supported by scenario-weighted economic forecasts.

The provision expense for the three months ended March 31, 2023 was primarily due to the loan growth experienced during the quarter, as well as the impact of updated economic assumptions.

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 was $ 41.9 million and $ 22.4 million as of September 30, 2022 and December 31, 2021, respectively.

The reserve for unfunded commitments as of March 31, 2023 and December 31, 2022 was $ 41.9 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.

For the three month period ended September 30, 2022, an adjustment to the reserve for unfunded commitments resulted in an expense of $ 16.0 million due to the overall increase in unfunded commitments, primarily made up of commercial construction loans, which receive a higher reserve allocation than other loans.

For the nine month period ended September 30, 2022, an adjustment to the reserve for unfunded commitments resulted in an expense of $ 19.5 million, made up of the increase previously discussed combined with the Day 2 provision related to the Spirit acquisition.

These adjustments were 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.

No adjustment was made to the reserve for unfunded commitments during the three month periods ended March 31, 2023, and 2022, 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 and nine month periods ended September 30, 2022 and 2021 were as follows:

The components of the provision for credit losses for the three month periods ended March 31, 2023 and 2022 were as follows:

Three Months Ended

September 30, Nine Months Ended

September 30,

(In thousands) 2023 2022

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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 during the fourth quarter of 2021 as part of the Landmark acquisition with credit deterioration at acquisition:

(In thousands) Commercial Real

Estate Credit

and Other Total

Unpaid principal balance $ 11,046 $ 55,549 $ — $ 67 $ 66,662

PCD allowance for credit loss at acquisition ( 350 ) ( 2,008 ) — ( 1 ) ( 2,359 )

Non-credit related discount ( 160 ) ( 2,415 ) — ( 2 ) ( 2,577 )

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

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

Estate Credit

and Other Total

Unpaid principal balance $ 40,466 $ 80,803 $ — $ 15 $ 121,284

PCD allowance for credit loss at acquisition ( 2,999 ) ( 8,093 ) — — ( 11,092 )

Non-credit related discount ( 279 ) ( 1,314 ) — ( 1 ) ( 1,594 )

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:

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

(In thousands) Commercial Real

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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 September 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.

September 30, December 31,

The following table presents information as of March 31, 2023 and December 31, 2022 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,

(Dollars in thousands) 2023 2022

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Weighted average discount rate 3.19 % 2.41 %

Operating lease cost for the three and nine month periods ended September 30, 2022 was $ 3.6 million and $ 10.5 million, respectively, as compared to $ 2.8 million and $ 8.5 million for the same periods in 2021.

Operating lease cost for the three month periods ended March 31, 2023 and 2022 was $ 3.9 million and $ 3.2 million, respectively.

PREMISES AND EQUIPMENT

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

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

September 30, December 31,

Total premises and equipment, net at March 31, 2023 and December 31, 2022 were as follows:

March 31, December 31,

(In thousands) 2023 2022

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

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

Goodwill increased $ 163.0 million during the nine months ended September 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 nine months ended September 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 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 interim goodwill impairment assessments during the second and third quarters and concluded no impairment existed during the periods.

Goodwill totaled $ 1.32 billion at March 31, 2023 and December 31, 2022.

Goodwill impairment was neither indicated nor recorded during the three months ended March 31, 2023 or the year ended December 31, 2022.

During March of 2023, the Company’s share price began to decline as markets in the United States (“US”) responded to the sudden collapse of two US banks.

As a result of the decrease in the Company’s market capitalization, the Company performed an interim goodwill impairment qualitative assessment and concluded that it is more likely-than-not that the fair value of goodwill continues to exceed its carrying value and therefore, goodwill is not impaired.

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 8 to 15 years.

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

September 30, December 31,

Changes in the carrying amount and accumulated amortization of the Company’s core deposit premiums and other intangible assets at March 31, 2023 and December 31, 2022 were as follows:

March 31, December 31,

(In thousands) 2023 2022

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Acquisitions (1)

Disposition of intangible asset (2)

Amortization ( 3,689 ) ( 14,346 )

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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.

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

(2) 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 September 30, 2022 and December 31, 2021 were as follows:

September 30, December 31,

The carrying basis and accumulated amortization of the Company’s other intangible assets at March 31, 2023 and December 31, 2022 were as follows:

March 31, December 31,

(In thousands) 2023 2022

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Total other intangible assets, net $ 124,854 $ 128,951

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

The Company’s estimated remaining amortization expense on other intangible assets as of March 31, 2023 is as follows:

(In thousands) Year Amortization

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TIME DEPOSITS

Time deposits included approximately $ 1.25 billion and $ 784.9 million of certificates of deposit over $250,000 at September 30, 2022 and December 31, 2021, respectively.

Brokered time deposits were $ 1.82 billion and $ 466.0 million at September 30, 2022 and December 31, 2021, respectively.

Time deposits included approximately $ 1.46 billion and $ 1.08 billion of certificates of deposit over $250,000 at March 31, 2023 and December 31, 2022, respectively.

Brokered time deposits were $ 2.95 billion and $ 2.75 billion at March 31, 2023 and December 31, 2022, respectively.

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

Three Months Ended

September 30, Nine Months Ended

September 30,

(In thousands) 2023 2022

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:

September 30, December 31,

March 31, December 31,

(In thousands) 2023 2022

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Three Months Ended

September 30, Nine Months Ended

September 30,

(In thousands) 2023 2022

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net operating losses to reduce its tax liability.

The Company has engaged in two tax-free reorganization transactions in which acquired net operating losses are limited pursuant to Section 382.

The Company has engaged in four tax-free reorganization transactions in which acquired net operating losses are limited pursuant to Section 382.

In total, approximately $ 47.0 million of federal net operating losses subject to the IRC Section 382 annual limitation are expected to be utilized by the Company.

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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 $ 159.5 million and $ 170.4 million at September 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 September 30, 2022 and December 31, 2021 is presented in the following tables.

The gross amount of recognized liabilities for repurchase agreements was $ 142.9 million and $ 152.4 million at March 31, 2023 and December 31, 2022, respectively.

The remaining contractual maturity of the securities sold under agreements to repurchase in the consolidated balance sheets as of March 31, 2023 and December 31, 2022 is presented in the following tables.

Remaining Contractual Maturity of the Agreements

2 unchanged sentences

90 Days Total

September 30, 2022

March 31, 2023

Repurchase agreements:

4 unchanged sentences

OTHER BORROWINGS AND SUBORDINATED NOTES AND DEBENTURES

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

September 30, December 31,

Debt at March 31, 2023 and December 31, 2022 consisted of the following components:

March 31, December 31,

(In thousands) 2023 2022

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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

Trust preferred securities, due 6/6/2037, floating rate of 1.57 % above the three month LIBOR rate, reset quarterly, callable without penalty

Trust preferred securities, due 12/15/2035, floating rate of 1.45 % above the three month LIBOR rate, reset quarterly, callable without penalty

Trust preferred securities, net of discount, due 6/15/2037, floating rate of 1.85 % above the three month LIBOR rate, reset quarterly, callable without penalty

Trust preferred securities, net of discount, due 12/15/2036, floating rate of 1.85 % above the three month LIBOR rate, reset quarterly, callable without penalty

37,256 37,285

Unamortized debt issuance costs ( 1,229 ) ( 1,296 )

14 unchanged sentences

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 $ 934.1 million and $ 1.31 billion at September 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 and therefore are classified as short-term advances by the Company.

At September 30, 2022, the FHLB advances outstanding were secured by mortgage loans and investment securities totaling approximately $ 6.0 billion and the Company had approximately $ 5.0 billion of additional advances available from the FHLB.

During the third quarter of 2022, the Company redeemed the five issuances of trust preferred securities which had an outstanding aggregate principal amount of $ 56.2 million.

The Company recorded a loss of $ 365,000 related to the early retirement of debt, which represented the unamortized purchase discounts associated with the previously acquired trust preferred securities.

Each of the trusts was a statutory business trust organized for the sole purpose of issuing trust securities and investing the proceeds thereof in junior subordinated debentures of the Company, the sole asset of each trust.

The preferred securities of each trust represented preferred beneficial interests in the assets of the respective trusts and were subject to mandatory redemption upon payment of the junior subordinated debentures held by the trust.

The common securities of each trust were wholly-owned by the Company.

The trust preferred securities were tax-advantaged issues that qualified for inclusion as Tier 2 capital.

The Company had total FHLB advances of $ 1.00 billion and $ 838.5 million at March 31, 2023 and December 31, 2022, respectively, which are primarily fixed rate, fixed term advances, which are due less than one year from origination and therefore are classified as short-term advances by the Company.

At March 31, 2023, the FHLB advances outstanding were secured by mortgage loans and investment securities totaling approximately $ 6.9 billion and the Company had approximately $ 5.6 billion of additional advances available from the FHLB.

The Company’s long-term debt primarily includes subordinated debt and other notes payable.

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

Aggregate annual maturities of long-term debt at March 31, 2023, are as follows:

Year (In thousands)

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In the ordinary course of its operations, the Company and its subsidiaries are parties to various legal proceedings incidental to the conduct of our business, including proceedings based on breach of contract claims, lender liability claims, and other ordinary-course claims, some of which seek substantial relief or damages.

On May 22, 2019, Danny Walkingstick and Whitnye Fort filed a putative class action complaint against Simmons Bank in the United States District Court for the Western District of Missouri.

The operative complaint alleges that Simmons Bank improperly charges overdraft fees on transactions that did not actually overdraw customers’ accounts by utilizing the checking account’s “available balance” to assess overdraft fees instead of the “ledger balance.” Plaintiffs’ claims include breach of contract and unjust enrichment, and they seek to represent a proposed class of all Simmons Bank checking account customers who were assessed an overdraft fee on a transaction that purportedly did not overdraw the account.

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 final 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 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.

The complaint asserts a claim for breach of contract, which incorporates the implied duty of good faith and fair dealing.

Plaintiff seeks to represent a proposed class of all Landmark Bank checking account customers from Missouri who were allegedly charged overdraft fees on transactions that did not overdraw their checking account.

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 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 final 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 February 9, 2023, the district court denied plaintiffs’ motion for class certification, granted Simmons Bank’s motion for summary judgment in part, and granted Simmons Bank’s motion to exclude testimony of plaintiffs’ expert.

The lawsuit remains pending.

We establish reserves for legal proceedings when potential losses become probable and can be reasonably estimated.

While the ultimate resolution (including amounts thereof) of any legal proceedings, including the matters described above, cannot be determined at this time, based on information presently available and after consultation with legal counsel, management believes that the ultimate outcome in such proceedings, either individually or in the aggregate, will not have a material adverse effect on our business, consolidated results of operations, financial condition, or cash flows.

It is possible, however, that future developments could result in an unfavorable outcome for or resolution of any of these proceedings, which may be material to our results of operations for a given fiscal period.

While the ultimate resolution (including amounts thereof) of any legal proceedings, including the matter described above, cannot be determined at this time, based on information presently available and after consultation with legal counsel, management believes that the ultimate outcome in such proceedings, either individually or in the aggregate, will not have a material adverse effect on our business, consolidated results of operations, financial condition, or cash flows.

It is possible, however, that future developments could result in an unfavorable outcome for or resolution of any of these proceedings, which may be material to the Company’s results of operations for a given fiscal period.

CAPITAL STOCK

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

On April 27, 2022, the Company’s shareholders approved amendments to the Company’s Articles of Incorporation to remove an $ 80.0 million cap on the aggregate liquidation preference associated with the preferred stock and increase the number of authorized shares of the Company’s Class A common stock from 175,000,000 to 350,000,000 .

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

The October Amended Articles classified and designated Series D Preferred Stock, Par Value $ 0.01 Per Share, out of the Company’s authorized preferred stock.

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

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).

The October Amended Articles classified and designated Series D Preferred Stock, Par Value $ 0.01 Per Share (“Series D Preferred Stock”), out of the Company’s authorized preferred stock.

On April 27, 2022, the Company’s shareholders approved an amendment to the Company’s Articles of Incorporation to remove the classification and designation for the Series D Preferred Stock.

As of March 31, 2023, there were no shares of preferred stock issued or outstanding.

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 $ 180.0 million to a maximum of $ 276.5 million and extended the term of the 2019 Program from October 31, 2021, to October 31, 2022.

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

1 unchanged sentence

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

During the three month period ended September 30, 2022, the Company repurchased 1,883,713 shares at an average price of $ 23.91 per share under the 2022 Program.

During the nine month period ended September 30, 2022, the Company repurchased 513,725 shares at an average price of $ 31.25 per share under the 2019 Program and 3,919,037 shares at an average price of $ 24.26 per share under the 2022 Program, respectively.

The 2022 Program repurchases were all completed during the second and third quarters of 2022.

No shares were repurchased during the three month period ended March 31, 2023.

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

During the three and nine month periods ended September 30, 2021, the Company repurchased 1,806,205 shares at an average pri ce of $ 28.48 per share and 1,937,121 shares at an average price of $ 28.14 per share, respectively, under the 2019 Program.

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.

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.

The timing, pricing, and amount of any repurchases under the 2022 Program will be determined by the Company’s management at its discretion based on a variety of factors, including, but not limited to, trading volume and market price of the Company’s common stock, corporate considerations, the Company’s working capital and investment requirements, general market and economic conditions, and legal requirements.

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 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.

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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 September 30, 2022, Simmons Bank had approximately $ 175.1 million available for payment of dividends to the Company, without prior regulatory approval.

At March 31, 2023, Simmons Bank had approximately $ 330.1 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 September 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 11.73 % at September 30, 2022.

As of March 31, 2023, 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 11.87 % at March 31, 2023.

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 nine months ended September 30, 2022:

The table below summarizes the transactions under the Company’s active stock-based compensation plans for the three months ended March 31, 2023:

Stock Options

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Forfeited/expired — — — — ( 91 ) 24.79

Balance, September 30, 2022 471 $ 22.54 — $ — 1,305 $ 26.66

Exercisable, September 30, 2022 471 $ 22.54

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

Balance, March 31, 2023 469 $ 22.58 — $ — 1,443 $ 25.01

Exercisable, March 31, 2023 469 $ 22.58

The following table summarizes information about stock options under the plans outstanding at March 31, 2023:

Options Outstanding Options Exercisable

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$ 20.29 — $ 24.07 469 2.20 $ 22.58 469 $ 22.58

$ 10.65 — $ 24.07 471 2.82 $ 22.54 471 $ 22.54

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

The table below summarizes the Company’s performance stock unit activity for the three months ended March 31, 2023:

(In thousands) Performance Stock Units

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Forfeited ( 44 )

Non-vested,September 30, 2022 355

Stock-based compensation expense was $ 11.5 million and $ 12.6 million during the nine month periods ended September 30, 2022 and 2021, respectively.

Non-vested, March 31, 2023 538

Stock-based compensation expense was $ 4.9 million and $ 3.9 million during the three month periods ended March 31, 2023 and 2022, 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 September 30, 2022.

Unrecognized stock-based compensation expense related to non-vested stock awards and stock units was $ 20.5 million at September 30, 2022.

There was no unrecognized stock-based compensation expense related to stock options at March 31, 2023.

Unrecognized stock-based compensation expense related to non-vested stock awards and stock units was $ 23.9 million at March 31, 2023.

At such date, the weighted-average period over which this unrecognized expense is expected to be recognized was 1.9 years.

The intrinsic value of stock options outstanding and stock options exercisable at September 30, 2022 was $ 86,000 .

Aggregate intrinsic value represents the difference between the Company’s closing stock price on the last trading day of the period, which was $ 21.79 as of September 30, 2022, and the exercise price multiplied by the number of options outstanding.

intrinsic value of stock options exercised during the nine months ended September 30, 2022, while the total intrinsic value of stock options exercised during the nine months ended September 30, 2021 was $ 1.3 million.

There was no intrinsic value of stock options outstanding and stock options exercisable at March 31, 2023.

Aggregate intrinsic value represents the difference between the Company’s closing stock price on the last trading day of the period, which was $ 17.49 as of March 31, 2023, and the exercise price multiplied by the number of options outstanding.

Total intrinsic value of stock options exercised during the three months ended March 31, 2023 was $ 6,000 , while there was no intrinsic value of stock options exercised during the three months ended March 31, 2022.

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 nine months ended September 30, 2022 and 2021.

There were no stock options granted during the three months ended March 31, 2023 and 2022.

EARNINGS PER SHARE (“EPS”)

Basic EPS is computed by dividing reported net income available to common stockholders by weighted average number of common shares outstanding during each period.

Basic EPS is computed by dividing reported net income available to common stockholders by the weighted average number of common shares outstanding during each period.

Diluted EPS is computed by dividing reported net income available to common stockholders by the weighted average common shares and all potential dilutive common shares outstanding during the period.

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Three Months Ended

September 30, Nine Months Ended

September 30,

(In thousands, except per share data) 2023 2022

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Diluted earnings per share $ 0.36 $ 0.58

There were 99,837 stock options excluded from the three months ended September 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 nine months ended September 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 nine months ended September 30, 2021 due to the related stock option exercise price exceeding the average market price.

There were 422,180 stock options excluded from the three months ended March 31, 2023 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 three months ended March 31, 2022 due to the average market price of the Company’s stock exceeding the related stock option exercise price.

ADDITIONAL CASH FLOW INFORMATION

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

Nine Months Ended

September 30,

Three Months Ended

(In thousands) 2023 2022

Interest paid $ 95,048 $ 12,901

Income taxes (refunded) paid 14,674 46,693

Income taxes paid (refunded) 207 ( 363 )

Transfers of loans to foreclosed assets held for sale 131 474

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

Transfers of assets held for sale to other assets — 100

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

Transfers of available-for-sale to held-to-maturity securities 1,992,542 500,809

OTHER INCOME AND OTHER OPERATING EXPENSES

Other income for the three and nine months ended September 30, 2022 was $ 6.7 million and $ 20.8 million, respectively.

Other income for the same periods in 2021 was $ 6.4 million and $ 25.3 million, respectively.

During the nine month period ended September 30, 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 months ended March 31, 2023 and 2022 was $ 11.3 million and $ 7.3 million, respectively.

Included in other income in the first quarter 2023 was a $ 4.0 million legal reserve recapture associated with previously disclosed legal matters.

Other operating expenses consisted of the following:

Three Months Ended

September 30, Nine Months Ended

September 30,

(In thousands) 2023 2022

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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 September 30, 2022, the Company had outstanding commitments to extend credit aggregating approximately $ 696.7 million and $ 5.62 billion for credit card commitments and other loan commitments, respectively.

At March 31, 2023, the Company had outstanding commitments to extend credit aggregating approximately $ 711.9 million and $ 5.01 billion for credit card commitments and other loan commitments, respectively.

At December 31, 2022, the Company had outstanding commitments to extend credit aggregating approximately $ 696.7 million and $ 5.64 billion for credit card commitments and other loan commitments, respectively.

As of September 30, 2022, the Company had outstanding commitments to originate fixed rate-rate mortgage loans of approximately $ 37.2 million.

As of March 31, 2023, the Company had outstanding commitments to originate fixed-rate mortgage loans of approximately $ 35.4 million.

At December 31, 2022, the Company had outstanding commitments to originate fixed-rate mortgage loans of approximately $ 21.1 million.

The commitments extend over varying periods of time with the majority being disbursed within a thirty-day period.

Standby letters of credit are conditional commitments issued by the Company to guarantee the performance of a customer to a third party.

Those guarantees are primarily issued to support public and private borrowing arrangements, including commercial

paper, bond financing, and similar transactions.

Those guarantees are primarily issued to support public and private borrowing arrangements, including commercial paper, bond financing and similar transactions.

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

The Company had total outstanding letters of credit amounting to $ 50.6 million and $ 37.7 million at September 30, 2022, and December 31, 2021, respectively, with terms ranging from 9 months to 15 years.

At September 30, 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 $ 46.7 million and $ 44.4 million at March 31, 2023, and December 31, 2022, respectively, with terms ranging from 9 months to 15 years.

At March 31, 2023 and December 31, 2022, 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 $ 113.8 million and $ 59.1 million at September 30, 2022 and December 31, 2021, respectively, and they expire in less than one year from issuance.

The amount of the letters of credit was $ 285.6 million and $ 265.7 million at March 31, 2023 and December 31, 2022, 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 September 30, 2022 and December 31, 2021, the aggregate fair value of mortgage loans held for sale exceeded their cost.

At March 31, 2023 and December 31, 2022, 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 September 30, 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 March 31, 2023 and December 31, 2022.

Fair Value Measurements Using

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Unobservable Inputs

September 30, 2022

March 31, 2023

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 assets by level within the fair value hierarchy that were measured at fair value on a nonrecurring basis as of September 30, 2022 and December 31, 2021.

The following table sets forth the Company’s assets by level within the fair value hierarchy that were measured at fair value on a nonrecurring basis as of March 31, 2023 and December 31, 2022.

Fair Value Measurements Using

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Unobservable Inputs

September 30, 2022

March 31, 2023

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

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Foreclosed assets and other real estate owned (1)

2,897 — — 2,897

December 31, 2022

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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 $ 10,783,000 and $ 4,214,000 were related to collateral-dependent loans for which fair value re-measurements took place during the periods ended September 30, 2022 and December 31, 2021, respectively.

(2) Identified reserves of $ 10,770,000 and $ 5,214,000 were related to collateral-dependent loans for which fair value re-measurements took place during the periods ended March 31, 2023 and December 31, 2022, 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 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.

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.

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.

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

September 30, 2022

March 31, 2023

Financial assets:

6 unchanged sentences

98,775 — 98,775 — 98,775

Loans and other loans held for sale, net 15,411,838 — — 14,967,078 14,967,078

Loans, net 16,348,541 — — 15,756,867 15,756,867

Financial liabilities:

21 unchanged sentences

102,892 — 102,892 — 102,892

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

Loans, net 15,945,169 — — 15,573,555 15,573,555

Financial liabilities:

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

The two year forward start date for these swaps will be effective beginning in the third quarter of 2023 and involve the payment of fixed interest rates with a weighted average of 1.21 % in exchange for 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, 2022 December 31, 2021

March 31, 2023 December 31, 2022

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

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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) September 30, 2022 December 31, 2021 September 30, 2022 December 31, 2021

Line Item on the Balance Sheet (In thousands) March 31, 2023 December 31, 2022 March 31, 2023 December 31, 2022

Investment securities - Available-for-sale $ 956,241 $ 944,115 $ 93,105 $ 106,321

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

September 30, 2022 December 31, 2021

March 31, 2023 December 31, 2022

(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 $ 15.6 million as of September 30, 2022.

The notional amount of these contingent agreements is $ 11.3 million as of March 31, 2023.

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 September 30, 2022 for energy hedging Customer Sell to Company swaps were $ 6.4 million and the corresponding Company Sell to Dealer swaps were $ 6.4 million and the corresponding net fair value of the derivative asset and derivative liability was $ 82,400 .

The outstanding notional value as of March 31, 2023 for energy hedging Customer Sell to Company swaps were $ 782,100 and the corresponding Company Sell to Dealer swaps were $ 782,100 and the corresponding net fair value of the derivative asset and derivative liability was $ 23,800 .

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders, Board of Directors and Audit Committee

To the Shareholders, Board of Directors and Audit Committee

Simmons First National Corporation

1 unchanged sentence

Results of Review of Interim Financial Statements

We have reviewed the consolidated balance sheet of Simmons First National Corporation and subsidiaries (“the Company”) as of September 30, 2022, 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, 2022 and 2021, and cash flows for the nine-month periods ended September 30, 2022 and 2021, and the related notes (collectively referred to as the “interim financial information or statements”).

We have reviewed the consolidated balance sheet of Simmons First National Corporation and subsidiaries (“the Company”) as of March 31, 2023, and the related consolidated statements of income, comprehensive income (loss), stockholders’ equity and cash flows for the three-month periods ended March 31, 2023 and 2022, 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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Basis for Review Results

These financial statements are the responsibility of the Company’s management.

These interim financial statements are the responsibility of the Company’s management.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

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We conducted our review in accordance with the standards of the PCAOB.

A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters.

A review of interim financial information (statements) consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters.

It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole.

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/s/ FORVIS, LLP

(formerly BKD, LLP)

Little Rock, Arkansas

November 4, 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