What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-05-07 compared with 2023-11-06 · 214 added, 396 removed, 1288 unchanged (32% of the section changed)

2 unchanged sentences

Consolidated Balance Sheets

September 30, 2023 and December 31, 2022

September 30, December 31,

March 31, 2024 and December 31, 2023

March 31, December 31,

(In thousands, except share data) 2024 2023

4 unchanged sentences

Investment securities:

Held-to-maturity, net of allowance for credit losses of $ 3,214 and $ 1,388 at September 30, 2023 and December 31, 2022, respectively

Held-to-maturity, net of allowance for credit losses of $ 3,214 at March 31, 2024 and December 31, 2023

3,707,258 3,726,288

Available-for-sale, net of allowance for credit losses of $ 1,196 at September 30, 2023 (amortized cost of $ 3,890,910 and $ 4,331,413 at September 30, 2023 and December 31, 2022, respectively)

Available-for-sale, (amortized cost of $ 3,394,971 and $ 3,509,709 at March 31, 2024 and December 31, 2023, respectively)

3,027,558 3,152,153

24 unchanged sentences

Common stock, Class A, $ 0.01 par value;

350,000,000 shares authorized at September 30, 2023 and December 31, 2022;

125,133,281 and 127,046,654 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively

350,000,000 shares authorized at March 31, 2024 and December 31, 2023;

125,419,618 and 125,184,119 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively

Surplus 2,503,673 2,499,930

6 unchanged sentences

Consolidated Statements of Income

Three and Nine Months Ended September 30, 2023 and 2022

Three Months Ended March 31, 2024 and 2023

Three Months Ended

September 30, Nine Months Ended

September 30,

(In thousands, except per share data) 2024 2023

(Unaudited) (Unaudited)

INTEREST INCOME

3 unchanged sentences

Mortgage loans held for sale 148 82

Other loans held for sale — 998 — 3,061

TOTAL INTEREST INCOME 322,649 279,137

15 unchanged sentences

Other service charges and fees 2,199 2,282

Loss on sale of securities, net — ( 22 ) ( 391 ) ( 226 )

Other income 7,172 11,256

17 unchanged sentences

Consolidated Statements of Comprehensive Income (Loss)

Three and Nine Months Ended September 30, 2023 and 2022

Three Months Ended March 31, 2024 and 2023

Three Months Ended

September 30, Nine Months Ended

September 30,

(In thousands) 2024 2023

(Unaudited) (Unaudited)

NET INCOME $ 38,871 $ 45,589

OTHER COMPREHENSIVE INCOME (LOSS)

Unrealized holding losses arising during the period on available-for-sale securities ( 131,603 ) ( 204,940 ) ( 96,104 ) ( 658,717 )

Reclassification adjustment for realized losses included in net income — ( 22 ) ( 391 ) ( 226 )

Realized losses on available-for-sale securities interest rate hedges ( 24,657 ) ( 41,412 ) ( 39,618 ) ( 101,443 )

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

Unrealized holding (losses) gains arising during the period on available-for-sale securities ( 26,149 ) 69,963

Realized (losses) gains on available-for-sale securities interest rate hedges ( 15,375 ) 13,545

Amortization of net unrealized losses on securities transferred from available-for-sale to held-to-maturity ( 5,845 ) ( 7,048 )

Other comprehensive loss, before tax effect ( 100,713 ) ( 158,806 ) ( 36,309 ) ( 754,329 )

Tax effect of other comprehensive loss ( 26,321 ) ( 41,504 ) ( 9,489 ) ( 197,144 )

Other comprehensive income (loss), before tax effect ( 4,929 ) 63,466

Tax effect of other comprehensive income (loss) ( 1,288 ) 16,587

TOTAL OTHER COMPREHENSIVE INCOME (LOSS) ( 3,641 ) 46,879

COMPREHENSIVE INCOME (LOSS) $ ( 27,145 ) $ ( 36,699 ) $ 124,330 $ ( 384,033 )

COMPREHENSIVE INCOME $ 35,230 $ 92,468

See Condensed Notes to Consolidated Financial Statements.

1 unchanged sentence

Consolidated Statements of Cash Flows

Nine Months Ended September 30, 2023 and 2022

(In thousands) September 30, 2023 September 30, 2022

Three Months Ended March 31, 2024 and 2023

(In thousands) March 31, 2024 March 31, 2023

OPERATING ACTIVITIES

Net income $ 38,871 $ 45,589

Adjustments to reconcile net income to net cash (used in) provided by operating activities:

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

Depreciation and amortization 11,531 12,012

Provision for credit losses 10,206 24,216

Loss on sale of investments 391 226

Net amortization (accretion) of investment securities and assets 10,647 ( 32,531 )

Net amortization of investment securities and assets 4,676 2,245

Net amortization on borrowings 38 38

Stock-based compensation expense 4,413 4,861

Gain on sale of foreclosed assets and other real estate owned ( 193 ) ( 424 )

Loss on sale of foreclosed assets and other real estate owned 5 8

Gain on sale of mortgage loans held for sale ( 1,746 ) ( 1,423 )

Gain on sale of loans — ( 282 )

Deferred income taxes 379 ( 179 )

Income from bank owned life insurance ( 4,165 ) ( 3,334 )

Loss from early retirement of TruPS — 365

Originations of mortgage loans held for sale ( 60,656 ) ( 50,269 )

9 unchanged sentences

Proceeds from sale of loans 211 237

Net change in due from banks - time 695 592

Purchases of premises and equipment, net ( 9,848 ) ( 10,490 )

5 unchanged sentences

Proceeds from bank owned life insurance death benefits 1,376 1,483

Purchase of Spirit of Texas Bancshares, Inc.

Net cash used in investing activities ( 39,703 ) ( 280,667 )

1 unchanged sentence

Net change in deposits 108,026 ( 95,950 )

Repayments of TruPS — ( 56,189 )

Dividends paid on common stock ( 26,337 ) ( 25,455 )

3 unchanged sentences

Shares issued under employee stock purchase plan 970 833

Repurchases of common stock ( 39,999 ) ( 111,133 )

Net cash used in financing activities ( 31,630 ) ( 605,251 )

Net cash (used in) provided by financing activities ( 28,680 ) 24,249

DECREASE IN CASH AND CASH EQUIVALENTS ( 10,789 ) ( 157,671 )

4 unchanged sentences

Consolidated Statements of Stockholders’ Equity

Three Months Ended September 30, 2023 and 2022

(In thousands, except share data) Common

Stock Surplus Accumulated

Comprehensive

(Loss) Income Undivided

Profits Total

Three Months Ended September 30, 2023

Balance, June 30, 2023 (Unaudited) $ 1,262 $ 2,516,398 $ ( 469,988 ) $ 1,308,654 $ 3,356,326

Comprehensive (loss) income — — ( 74,392 ) 47,247 ( 27,145 )

Stock-based compensation plans, net – 37,536 shares

1 1,441 — — 1,442

Stock repurchases – 1,128,962 shares

( 12 ) ( 19,965 ) — — ( 19,977 )

Dividends on common stock – $ 0.20 per share

— — — ( 25,091 ) ( 25,091 )

Balance, September 30, 2023 (Unaudited) $ 1,251 $ 2,497,874 $ ( 544,380 ) $ 1,330,810 $ 3,285,555

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

See Condensed Notes to Consolidated Financial Statements.

Simmons First National Corporation

Consolidated Statements of Stockholders’ Equity

Nine Months Ended September 30, 2023 and 2022

Three Months Ended March 31, 2024 and 2023

(In thousands, except share data) Common

1 unchanged sentence

Comprehensive

(Loss) Income Undivided

Income (Loss) Undivided

Profits Total

Nine Months Ended September 30, 2023

Three Months Ended March 31, 2024

Balance, December 31, 2023 $ 1,252 $ 2,499,930 $ ( 404,375 ) $ 1,329,681 $ 3,426,488

Comprehensive (loss) income — — ( 26,820 ) 151,150 124,330

Comprehensive income (loss) — — ( 3,641 ) 38,871 35,230

Stock issued for employee stock purchase plan – 53,161 shares

2 unchanged sentences

2 2,773 — — 2,775

Stock repurchases – 2,257,049 shares

( 23 ) ( 39,976 ) — — ( 39,999 )

Dividends on common stock – $ 0.21 per share

— — — ( 26,337 ) ( 26,337 )

Balance, September 30, 2023 (Unaudited) $ 1,251 $ 2,497,874 $ ( 544,380 ) $ 1,330,810 $ 3,285,555

Nine Months Ended September 30, 2022

Balance, March 31, 2024 (Unaudited) $ 1,254 $ 2,503,673 $ ( 408,016 ) $ 1,342,215 $ 3,439,126

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

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

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 232 financial centers as of September 30, 2023, 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 233 financial centers as of March 31, 2024, located throughout market areas in Arkansas, Kansas, Missouri, Oklahoma, Tennessee and Texas.

Basis of Presentation

17 unchanged sentences

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.

ASU 2023-02 was 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 of 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.

1 unchanged sentence

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.

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

The ASU also updated the requirements related to accounting for credit losses under ASC 326 and added 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.

2 unchanged sentences

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.

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

This ASU amended 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 renamed that method the “portfolio layer” method and expanded the scope of the guidance to allow entities to apply the portfolio layer method to portfolios of all financial assets, including both prepayable and nonprepayable financial assets.

The scope expansion is consistent with the FASB’s efforts to simplify hedge accounting and allowed 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.

2 unchanged sentences

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 LIBOR.

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

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

3 unchanged sentences

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.

ASU 2020-04 provided 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.

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.

Companies are able to apply ASU 2020-04 immediately;

however, the guidance will only be available for a limited time (generally through December 31, 2022).

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

Companies were able to apply ASU 2020-04 immediately;

however, the guidance was only available for a limited time (generally through December 31, 2022).

The Company formed a LIBOR Transition Team in 2020, has created standard LIBOR replacement language for new and modified loan notes, and is monitoring the remaining loans with LIBOR rates monthly to ensure progress in updating these loans with acceptable LIBOR replacement language or converting them to other interest rates.

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’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.

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 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.

ASU 2021-01 was effective upon issuance and generally can be applied through December 31, 2022.

Scope (“ASU 2021-01”), which clarified 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 amended 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.

ASU 2021-01 was effective upon issuance and generally could be applied through December 31, 2022.

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

2 unchanged sentences

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.

2021-05, Leases (Topic 842):

Lessors-Certain Leases with Variable Lease Payments (“ASU 2021-05”), that amends lease classification requirements for lessors.

In accordance with ASU 2021-05, lessors should classify and account for a lease that have variable lease payments that do not depend on a reference index rate as an operating lease if both of the following criteria are met:

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 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.

ASU 2022-06 deferred 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.

Recently Issued Accounting Standards

Stock Compensation - In March 2024, the FASB issued ASU No.

2024-01, Compensation-Stock Compensation (Topic 718):

Scope Application of Profits Interest and Similar Awards (“ASU 2024-01”), in response to feedback received by the FASB requesting guidance on how entities should determine the appropriate guidance to apply when accounting for the issuance of profits interest units and similar types of awards.

ASU 2024-01 adds an example with four fact patterns to ASC 718-10 to assist preparers of financial statements in determining whether profits interest and similar awards should be accounted for within the scope of the guidance.

ASU 2024-01 only addresses the scope determination and does not amend the recognition, classification or measurement guidance.

ASU 2024-01 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2024, with early adoption permitted for interim or annual financial statements that have not yet been issued or made available for issuance.

Entities may choose to adopt 2024-01 on a prospective or retrospective basis.

The adoption of ASU 2024-01 is not expected to have a material impact on the Company’s operations, financial position or disclosures.

Income Taxes - In December 2023, the FASB issued ASU No.

2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures (“ASU 2023-09”), primarily focused on income tax disclosures regarding effective tax rates and cash income taxes paid.

ASU 2023-09 requires public business entities, on an annual basis, to disclose specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than 5 percent of the amount computed by multiplying pretax income by the applicable statutory income tax rate).

ASU 2023-09 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2024, with early adoption permitted.

The Company will complete an evaluation of the impact this standard will have on its results of operations, financial position or disclosures.

Segment Reporting - In November 2023, the FASB issued ASU No.

2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which expands reportable segment disclosure requirements through enhanced disclosures about significant segment expenses.

The amendments in this update introduce a new requirement to disclose significant segment expenses regularly provided to the chief operating decision maker, extend certain annual disclosures to interim periods, clarify that single reportable segment entities must apply Topic 280 in its entirety, permit more than one measure of segment profit or loss to be reported under certain conditions and require disclosure of the title and position of the chief operating decision maker.

ASU 2023-07 is effective for public business entities for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

The adoption of ASU 2023-07 is not expected to have a material impact on the Company’s operations, financial position or disclosures.

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, 2023.

39 unchanged sentences

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

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.

35 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 AFS portfolio to the HTM portfolio.

As of September 30, 2023, the related remaining combined net unrealized losses of $ 131.2 million in accumulated other comprehensive income (loss) will be amortized over the remaining life of the securities.

As of March 31, 2024, the related remaining combined net unrealized losses of $ 121.9 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, 2023

March 31, 2024

Government agencies $ 453,805 $ — $ 453,805 $ — $ ( 94,887 ) $ 358,918

14 unchanged sentences

government agencies or corporations.

As of September 30, 2023, HTM MBS consists of $ 143.1 million and $ 1.04 billion of commercial MBS and residential MBS, respectively.

As of March 31, 2024, HTM MBS consists of $ 140.6 million and $ 1.00 billion of commercial MBS and residential MBS, respectively.

As of December 31, 2023, HTM MBS consists of $ 141.6 million and $ 1.02 billion of commercial MBS and residential MBS, respectively.

6 unchanged sentences

Available-for-sale

September 30, 2023

March 31, 2024

Treasury $ 1,990 $ — $ — $ ( 26 ) $ 1,964

11 unchanged sentences

Total AFS $ 3,509,709 $ — $ 230 $ ( 357,786 ) $ 3,152,153

As of September 30, 2023, AFS MBS consists of $ 859.9 million and $ 1.30 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, 2023 was $ 17.5 million and $ 18.6 million, respectively, and is included in interest receivable on the consolidated balance sheets.

As of March 31, 2024, AFS MBS consists of $ 665.1 million and $ 1.18 billion of commercial MBS and residential MBS, respectively.

As of December 31, 2023, AFS MBS consists of $ 710.1 million and $ 1.23 billion of commercial MBS and residential MBS, respectively.

Accrued interest receivable on HTM and AFS securities at March 31, 2024 was $ 25.6 million and $ 17.4 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, 2023, 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, 2024, 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 $ 43,033 $ ( 579 ) $ 2,930,580 $ ( 367,066 ) $ 2,973,613 $ ( 367,645 )

As of September 30, 2023, the Company’s investment portfolio included $ 3.36 billion of AFS securities, of which $ 3.33 billion, or 99.1 %, were in an unrealized loss position that were not deemed to have credit losses.

As of March 31, 2024, the Company’s investment portfolio included $ 3.03 billion of AFS securities, of which $ 2.97 billion, or 98.2 %, 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.

13 unchanged sentences

(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 and nine months ended September 30, 2023 on the Company’s HTM and AFS securities portfolios.

The following table details activity in the allowance for credit losses by investment security type for the three months ended March 31, 2024 on the Company’s HTM securities portfolio.

(In thousands) State and Political Subdivisions Other

Securities Total

Three Months Ended September 30, 2023

Held-to-maturity

Beginning balance, July 1, 2023 $ 934 $ 2,280 $ 3,214

Provision for credit loss expense — — —

Net increase (decrease) in allowance on previously impaired securities 586 ( 586 ) —

Ending balance, September 30, 2023 $ 1,520 $ 1,694 $ 3,214

Available-for-sale

Beginning balance, July 1, 2023 $ — $ 2,396 $ 2,396

Provision for credit loss expense — — —

Net decrease in allowance on previously impaired securities — ( 1,200 ) ( 1,200 )

Ending balance, September 30, 2023 $ — $ 1,196 $ 1,196

Nine Months Ended September 30, 2023

Three Months Ended March 31, 2024

Held-to-maturity

2 unchanged sentences

Net increase (decrease) in allowance on previously impaired securities 246 ( 246 ) —

Ending balance, September 30, 2023 $ 1,520 $ 1,694 $ 3,214

Available-for-sale

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

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

Reduction due to sales — ( 2,078 ) ( 2,078 )

Net decrease in allowance on previously impaired securities — ( 2,526 ) ( 2,526 )

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

Ending balance, September 30, 2023 $ — $ 1,196 $ 1,196

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 was as follows:

Ending balance, March 31, 2024 $ 2,252 $ 962 $ 3,214

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 portfolio was as follows:

(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

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 nine months ended September 30, 2023 was $ 10.3 million, while the provision for credit losses related to AFS securities was reduced by $ 1.2 million during the three months ended September 30, 2023.

During the nine months ended September 30, 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 $ 1.2 million at September 30, 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 September 30, 2023:

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

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

Based upon the Company’s analysis of the underlying risk characteristics of its HTM and AFS portfolios, including credit ratings and other qualitative factors, as previously discussed, there was no provision for credit losses related to the Company’s securities portfolios recorded for the three months ended March 31, 2024.

During the three months ended March 31, 2023, the provision for credit losses related to AFS securities was $ 12.8 million.

Additionally, 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 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, 2024:

State and Political Subdivisions

9 unchanged sentences

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

Income earned on securities for the three and nine months ended September 30, 2023 and 2022, is as follows:

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

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

Income earned on securities for the three months ended March 31, 2024 and 2023, is as follows:

Three Months Ended

September 30, Nine Months Ended

September 30,

(In thousands) 2024 2023

4 unchanged sentences

Total $ 58,001 $ 48,774

The amortized cost and estimated fair value by maturity of securities as of September 30, 2023 are shown in the following table.

The amortized cost and estimated fair value by maturity of securities as of March 31, 2024 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 $ 3,710,472 $ 3,049,282 $ 3,394,971 $ 3,027,558

The carrying value, which approximates the fair value, of securities pledged as collateral, to secure public deposits and for other purposes, amounted to $ 3.38 billion at September 30, 2023 and $ 3.96 billion at December 31, 2022.

There were no gross realized gains and no gross realized losses from the call or sale of securities during the three months ended September 30, 2023.

There were no gross realized gains and $ 391,000 of gross realized losses recorded from the sale of securities during the nine months ended September 30, 2023.

There were approximately $ 8,000 of gross realized gains and $ 30,000 of gross realized losses from the sale and call 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.

The carrying value, which approximates the fair value, of securities pledged as collateral, to secure public deposits and for other purposes, amounted to $ 2.91 billion at March 31, 2024 and $ 3.32 billion at December 31, 2023.

There were no gross realized gains and no gross realized losses from the call or sale of securities during the three months ended March 31, 2024 and 2023, as they were recognized at book value of the security.

The income tax expense/benefit related to security gains/losses was 26.135 % of the gross amounts in 2024 and 2023.

1 unchanged sentence

See Note 22, Derivative Instruments, for disclosure of the gains and losses recognized on derivative instruments and the cumulative fair value hedging adjustments to the carrying amount of the hedged securities.

OTHER ASSETS AND OTHER LIABILITIES HELD FOR SALE

Spirit Acquisition

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 September 30, 2023.

As of September 30, 2023, there were no outstanding other liabilities held for sale.

LOANS AND ALLOWANCE FOR CREDIT LOSSES

At September 30, 2023, the Company’s loan portfolio was $ 16.77 billion, compared to $ 16.14 billion at December 31, 2022.

At March 31, 2024, the Company’s loan portfolio was $ 17.00 billion, compared to $ 16.85 billion at December 31, 2023.

The various categories of loans are summarized as follows:

September 30, December 31,

March 31, December 31,

(In thousands) 2024 2023

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 deferred origination costs and fees totaling $ 7.7 million and $ 26.4 million at September 30, 2023 and December 31, 2022, respectively.

Accrued interest on loans, which is excluded from the amortized cost of loans held for investment, totaled $ 74.3 million and $ 65.4 million at September 30, 2023 and December 31, 2022, 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 deferred origination costs and fees totaling $ 3.9 million and $ 6.7 million at March 31, 2024 and December 31, 2023, respectively.

Accrued interest on loans, which is excluded from the amortized cost of loans held for investment, totaled $ 79.8 million and $ 77.1 million at March 31, 2024 and December 31, 2023, 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;

17 unchanged sentences

thereby making predictions for one market based on the other difficult.

Additionally, submarkets within CRE – such as office, industrial,

apartment, retail and hotel – also experience different cycles, providing an opportunity to lower the overall risk through diversification across types of CRE loans.

Additionally, submarkets within CRE – such as office, industrial, apartment, retail and hotel – also experience different cycles, providing an opportunity to lower the overall risk through diversification across types of CRE loans.

Management realizes that local demand and supply conditions will also mean that different geographic areas will experience cycles of different amplitude and duration.

9 unchanged sentences

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

As of September 30, 2023 and December 31, 2022, the total outstanding balance of PPP loans was $ 5.6 million and $ 8.9 million, respectively.

As of March 31, 2024 and December 31, 2023, the total outstanding balance of PPP loans was $ 4.2 million and $ 4.8 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) 2024 2023

10 unchanged sentences

Total $ 105,788 $ 83,325

As of September 30, 2023 and December 31, 2022, nonaccrual loans for which there was no related allowance for credit losses had an amortized cost of $ 9.2 million and $ 16.9 million, respectively.

As of March 31, 2024 and December 31, 2023, nonaccrual loans for which there was no related allowance for credit losses had an amortized cost of $ 4.8 million and $ 3.2 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, 2023

March 31, 2024

Credit cards $ 1,697 $ 666 $ 2,363 $ 180,379 $ 182,742 $ 558

10 unchanged sentences

Total $ 48,720 $ 46,475 $ 95,195 $ 16,906,565 $ 17,001,760 $ 1,527

(In thousands) Gross

Past Due 90 Days

Past Due Total

Past Due Current Total

Loans 90 Days

December 31, 2023

15 unchanged sentences

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

The following table presents a summary of the amortized cost basis of loan modifications granted to borrowers experiencing financial difficulty, segregated by class of loans and type of loan modification, for the three and nine month periods ended September 30, 2023.

(Dollars in thousands) Term Extension of Loans

Three months ended September 30, 2023

Other commercial $ 30,617 0.40 %

Total real estate 30,617

Commercial 85 — %

Total commercial 85

Total $ 30,702

Nine months ended September 30, 2023

Other commercial $ 30,617 0.40 %

Total real estate 30,617

Commercial 736 0.03 %

Total commercial 736

Total $ 31,353

The financial effects of the modified loans made to borrowers experiencing financial difficulty in the commercial portfolio were not significant during the three and nine month periods ended September 30, 2023 and did not significantly impact the Company’s determination of the allowance for credit losses on loans during the periods.

During the three and nine months ended September 30, 2023, the Company modified one loan related to the other CRE portfolio, whereby the borrower was experiencing financial difficulty at the time of modification.

The modification allowed for two months of interest only payments with the remaining balance due at maturity.

Upon modification, a charge-off of $ 9.6 million was recorded in relation to this modified loan during the third quarter of 2023.

As a result of the other CRE loan modified during the three and nine months ended September 30, 2023 being collateral-dependent, the impact to the Company’s allowance for credit losses on loans was the difference between the fair value of the underlying collateral, adjusted for selling costs, and the remaining outstanding principal balance of the loan.

There were no loan modifications granted to borrowers experiencing financial difficulty during the three month periods ended March 31, 2024 and 2023.

The Company closely monitors the performance of loans that are modified to borrowers experiencing financial difficulty.

Loans modified during the three and nine month periods ended September 30, 2023 were all current at September 30, 2023, with no loans in past due status.

Additionally, there were no modified loans for which a payment default occurred during the three and nine month periods ended September 30, 2023 and were modified within twelve months prior to default.

There was one commercial loan to a borrower experiencing financial difficulty with a period-end amortized cost basis of $ 23,000 that was modified during the previous twelve months and which subsequently defaulted during the three months ended March 31, 2024.

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 default.

In relation to loans modified to borrowers experiencing financial difficulty, the Company defines a payment default as a payment received more than 90 days after its due date.

At September 30, 2023 and December 31, 2022, the Company had $ 1.4 million and $ 3.0 million, respectively, of consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings are in process.

At September 30, 2023 and December 31, 2022, the Company had $ 312,000 and $ 853,000 , respectively, of Other Real Estate Owned (“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

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

Other commercial — — — — — —

Total real estate 24 1,849 12 1,589 36 3,438

Commercial — — 1 33 1 33

Total commercial — — 1 33 1 33

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.

(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 $ —

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.

Additionally, there were no loans considered TDRs for which a payment default occurred during the nine months ended September 30, 2022.

There were no TDRs with pre-modification loan balances for which OREO was received in full or partial satisfaction of the loans during the three and nine month period ended September 30, 2022.

At March 31, 2024 and December 31, 2023, the Company had $ 3.3 million and $ 2.5 million, respectively, of consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings are in process.

At March 31, 2024 and December 31, 2023, the Company had $ 230,000 and $ 506,000 , respectively, of Other Real Estate Owned (“OREO”) secured by residential real estate properties.

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

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, 2023, segregated by class of loans.

The following table presents a summary of loans by credit quality indicator, as of March 31, 2024, segregated by class of loans.

Term Loans Amortized Cost Basis by Origination Year

61 unchanged sentences

Total consumer - credit cards — — — — — — 191,204 — 191,204

Current-period consumer - credit cards gross charge-offs — — — — — — 5,303 — 5,303

Consumer - other

3 unchanged sentences

Total consumer - other 55,526 36,750 12,288 3,891 1,473 1,122 16,412 — 127,462

Current-period consumer - other gross charge-offs 220 826 493 79 29 128 449 — 2,224

Real estate - C&D

4 unchanged sentences

Total real estate - C&D 138,749 144,955 59,413 45,027 10,278 14,275 2,731,019 504 3,144,220

Current-period real estate - C&D gross charge-offs — 1,148 — — — 8 349 — 1,505

Real estate - SF residential

3 unchanged sentences

Total real estate - SF residential 377,861 628,437 358,066 242,072 123,277 517,899 393,379 565 2,641,556

Current-period real estate - SF residential gross charge-offs — 111 12 73 — 677 232 — 1,105

Real estate - other commercial

4 unchanged sentences

Total real estate - other commercial 807,568 1,669,758 1,252,454 646,087 178,887 438,587 2,559,069 — 7,552,410

Current-period real estate - other commercial gross charge-offs — — — 7 2 35 9,731 — 9,775

Term Loans Amortized Cost Basis by Origination Year

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

Pass 440,872 354,016 200,941 67,320 27,374 42,953 1,271,826 — 2,405,302

3 unchanged sentences

Total commercial 443,027 380,007 207,529 70,621 29,194 47,234 1,312,564 — 2,490,176

Current-period commercial - gross charge-offs 463 2,081 778 197 244 815 1,351 — 5,929

Commercial - agriculture

4 unchanged sentences

Total commercial - agriculture 40,561 30,845 15,079 6,384 2,097 303 137,441 — 232,710

Current-period commercial - agriculture gross charge-offs — 7 — — — 26 — — 33

Current 45,234 144,732 28,413 2,543 3,255 36,719 205,033 — 465,929

2 unchanged sentences

Total other 45,234 144,732 28,413 2,543 3,255 36,722 205,033 — 465,932

Current-period other - gross charge-offs — — — — — — 298 — 298

Total $ 1,908,526 $ 3,035,484 $ 1,933,242 $ 1,016,625 $ 348,461 $ 1,056,142 $ 7,546,121 $ 1,069 $ 16,845,670

11 unchanged sentences

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 September 30, 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 September 2023 that was updated to reflect the U.S.

To determine the best estimate of credit losses as of March 31, 2024, 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 2024 that was updated to reflect the U.S.

economic outlook.

4 unchanged sentences

The estimates are determined based on economic forecasts over the reasonable and supportable forecast period based on projected performance of economic variables that have a statistical relationship with the historical loss experience of the segments.

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.

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

3 unchanged sentences

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

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 $ 129.5 million and $ 70.9 million as of September 30, 2023 and December 31, 2022, 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 $ 148.0 million and $ 144.6 million as of March 31, 2024 and December 31, 2023, 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, 2023

March 31, 2024

Construction and development $ 13,579 $ — $ 13,579

9 unchanged sentences

Total $ 123,925 $ 20,679 $ 144,604

The following table details activity in the allowance for credit losses by portfolio segment for the three and nine months ended September 30, 2023.

The following table details activity in the allowance for credit losses by portfolio segment for the three months ended March 31, 2024.

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

3 unchanged sentences

Allowance for credit losses:

Three Months Ended September 30, 2023

Beginning balance, July 1, 2023 $ 30,985 $ 165,813 $ 6,330 $ 6,838 $ 209,966

Provision for credit loss expense 4,095 16,528 704 ( 1,105 ) 20,222

Charge-offs ( 1,219 ) ( 9,723 ) ( 1,318 ) ( 633 ) ( 12,893 )

Recoveries 245 429 234 344 1,252

Net (charge-offs) recoveries ( 974 ) ( 9,294 ) ( 1,084 ) ( 289 ) ( 11,641 )

Ending balance, September 30, 2023 $ 34,106 $ 173,047 $ 5,950 $ 5,444 $ 218,547

Nine Months Ended September 30, 2023

Three Months Ended March 31, 2024

Beginning balance, January 1, 2024 $ 36,470 $ 177,177 $ 5,868 $ 5,716 $ 225,231

3 unchanged sentences

Net charge-offs ( 4,151 ) ( 2,122 ) ( 1,398 ) ( 399 ) ( 8,070 )

Ending balance, September 30, 2023 $ 34,106 $ 173,047 $ 5,950 $ 5,444 $ 218,547

Activity in the allowance for credit losses for the three and nine months ended September 30, 2022 was as follows:

Ending balance, March 31, 2024 $ 35,191 $ 180,414 $ 5,768 $ 5,994 $ 227,367

Activity in the allowance for credit losses for the three months ended March 31, 2023 was as follows:

(In thousands) Commercial Real

1 unchanged sentence

and Other Total

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

2 unchanged sentences

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

As of September 30, 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 and nine months ended September 30, 2023 was primarily due to the loan growth experienced during the periods, as well as the impact of updated economic assumptions.

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

As of March 31, 2024, 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, 2024 was primarily due to the loan growth experienced during the periods, as well as the impact of updated economic assumptions.

Reserve for Unfunded Commitments

1 unchanged sentence

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

The reserve for unfunded commitments was $ 25.6 million and $ 41.9 million as of September 30, 2023 and December 31, 2022, respectively.

The reserve for unfunded commitments was $ 25.6 million and $ 25.6 million as of March 31, 2024 and December 31, 2023, respectively.

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

During the three and nine month periods ended September 30, 2023, $ 11.3 million and $ 16.3 million, respectively, was released from the reserve for unfunded commitments primarily due to a decline in unfunded commitments resulting from customers utilizing lines of credit during the periods.

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 month periods ended March 31, 2024, and 2023, 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, 2023 and 2022 were as follows:

The components of the provision for credit losses for the three month periods ended March 31, 2024 and 2023 were as follows:

Three Months Ended

September 30, Nine Months Ended

September 30,

(In thousands) 2024 2023

1 unchanged sentence

Loans $ 10,206 $ 10,916

Unfunded commitments ( 11,300 ) 16,000 ( 16,300 ) 19,453

Securities - HTM — 500

23 unchanged sentences

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

The following table presents information as of September 30, 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.

September 30, December 31,

The following table presents information as of March 31, 2024 and December 31, 2023 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) 2024 2023

3 unchanged sentences

Weighted average discount rate 3.57 % 3.52 %

Operating lease cost for the three and nine month periods ended September 30, 2023 was $ 4.2 million and $ 11.7 million, respectively, as compared to $ 3.6 million and $ 10.5 million for the same periods in 2022.

Operating lease cost for the three month period ended March 31, 2024 was $ 4.0 million as compared to $ 3.9 million for the same period in 2023.

PREMISES AND EQUIPMENT

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

Total premises and equipment, net at September 30, 2023 and December 31, 2022 were as follows:

September 30, December 31,

Total premises and equipment, net at March 31, 2024 and December 31, 2023 were as follows:

March 31, December 31,

(In thousands) 2024 2023

12 unchanged sentences

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

Goodwill totaled $ 1.32 billion at September 30, 2023 and December 31, 2022.

Goodwill impairment was neither indicated nor recorded during the nine months ended September 30, 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 during the first quarter of 2023 and concluded that it was more likely-than-not that the fair value of goodwill continued to exceed its carrying value and therefore, goodwill was not impaired.

During the second quarter of 2023, the Company performed the annual goodwill impairment analysis 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.

During the third quarter of 2023, the Company once again performed an interim goodwill impairment assessment and concluded no impairment existed.

While the goodwill impairment analysis indicated no impairment at September 30, 2023, the Company’s assessment depends on several assumptions which are dependent on market and economic conditions, and future changes in those conditions could impact the Company’s assessment in the future.

Goodwill totaled $ 1.32 billion at March 31, 2024 and December 31, 2023.

Goodwill impairment was neither indicated no r recorded during the three months ended March 31, 2024 or the year ended December 31, 2023.

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 years 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, 2023 and December 31, 2022 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, 2024 and December 31, 2023 were as follows:

March 31, December 31,

(In thousands) 2024 2023

1 unchanged sentence

Balance, beginning of year $ 101,344 $ 116,016

Acquisitions (1)

Amortization ( 3,442 ) ( 14,672 )

2 unchanged sentences

Balance, beginning of year 11,301 12,935

Acquisitions (2)

Amortization ( 408 ) ( 1,634 )

1 unchanged sentence

Total other intangible assets, net $ 108,795 $ 112,645

_________________________

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

See Note 2, Acquisitions, for additional information.

(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.

The carrying basis and accumulated amortization of the Company’s other intangible assets at September 30, 2023 and December 31, 2022 were as follows:

September 30, December 31,

The carrying basis and accumulated amortization of the Company’s other intangible assets at March 31, 2024 and December 31, 2023 were as follows:

March 31, December 31,

(In thousands) 2024 2023

8 unchanged sentences

Total other intangible assets, net $ 108,795 $ 112,645

The Company’s estimated remaining amortization expense on other intangible assets as of September 30, 2023 is as follows:

The Company’s estimated remaining amortization expense on other intangible assets as of March 31, 2024 is as follows:

(In thousands) Year Amortization

3 unchanged sentences

TIME DEPOSITS

Time deposits included approximately $ 1.67 billion and $ 1.08 billion of certificates of deposit over $250,000 at September 30, 2023 and December 31, 2022, respectively.

Brokered time deposits were $ 3.26 billion and $ 2.75 billion at September 30, 2023 and December 31, 2022, respectively.

Time deposits included approximately $ 1.76 billion and $ 1.73 billion of certificates of deposit over $250,000 at March 31, 2024 and December 31, 2023, respectively.

Brokered time deposits were $ 3.02 billion and $ 2.90 billion at March 31, 2024 and December 31, 2023, 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) 2024 2023

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) 2024 2023

22 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

(In thousands) 2024 2023

19 unchanged sentences

net operating losses to reduce its tax liability.

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

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

In total, approximately $ 37.9 million of federal net operating losses subject to the IRC Section 382 annual limitation are expected to be utilized by the Company.

11 unchanged sentences

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

The gross amount of recognized liabilities for repurchase agreements was $ 74.1 million and $ 152.4 million at September 30, 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 September 30, 2023 and December 31, 2022 is presented in the following tables.

The gross amount of recognized liabilities for repurchase agreements was $ 58.4 million and $ 67.6 million at March 31, 2024 and December 31, 2023, respectively.

The remaining contractual maturity of the securities sold under agreements to repurchase in the consolidated balance sheets as of March 31, 2024 and December 31, 2023 is presented in the following tables.

Remaining Contractual Maturity of the Agreements

2 unchanged sentences

90 Days Total

September 30, 2023

March 31, 2024

Repurchase agreements:

4 unchanged sentences

OTHER BORROWINGS AND SUBORDINATED NOTES AND DEBENTURES

Debt at September 30, 2023 and December 31, 2022 consisted of the following components:

September 30, December 31,

Debt at March 31, 2024 and December 31, 2023 consisted of the following components:

March 31, December 31,

(In thousands) 2024 2023

26 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 SOFR rate, as published by the Federal Reserve Bank of New York (provided, that in the event the benchmark rate is less than zero, the benchmark rate will be deemed to be zero) plus 592 basis points, payable quarterly, in arrears.

The Company had total FHLB advances of $ 1.33 billion and $ 838.5 million at September 30, 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 September 30, 2023, the FHLB advances outstanding were secured by mortgage loans and investment securities totaling approximately $ 7.05 billion and the Company had approximately $ 5.37 billion of additional advances available from the FHLB.

The Company had total FHLB advances of $ 853.2 million and $ 953.2 million at March 31, 2024 and December 31, 2023, 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, 2024, the FHLB advances outstanding were secured by mortgage loans and investment securities totaling approximately $ 7.02 billion and the Company had approximately $ 5.33 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, 2023, are as follows:

Aggregate annual maturities of long-term debt at March 31, 2024, are as follows:

Year (In thousands)

4 unchanged sentences

In the ordinary course of its operations, the Company and its subsidiaries are parties to various legal proceedings incidental to the conduct of its 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 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.

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

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

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

Plaintiffs sought unspecified damages, costs, attorney’s fees, pre-judgment interest, an injunction, and other relief as the Court deems proper for themselves and the purported class.

Simmons Bank denied the allegations and has vigorously defended 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.

On July 14, 2023, the district court denied plaintiffs’ motion to reconsider the court’s February 9, 2023 ruling, and ruled in favor of Simmons Bank on the outstanding issues.

The Company establishes 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 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 the Company’s business, consolidated results of operations, financial condition, or cash flows.

While the ultimate resolution (including amounts thereof) of any legal proceedings 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 the Company’s 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.

6 unchanged sentences

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 September 30, 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.

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

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

During the three and nine month periods ended September 30, 2023, the Company repurchased 1,128,962 shares at an average price of $ 17.69 per share and 2,257,049 shares at an average price of $ 17.72 per share, respectively, under the 2022 Program.

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

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.

The 2022 Program repurchases during the nine months ended September 30, 2022 were all completed during the second and third quarters of 2022.

As of March 31, 2024, there were no shares of preferred stock issued or outstanding.

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

Because the 2022 Program was set to terminate on January 31, 2024, the Company’s Board of Directors authorized a new stock repurchase program in January 2024 (“2024 Program”) under which the Company may repurchase up to $ 175.0 million of its Class A common stock currently issued and outstanding.

The 2024 Program will be executed in accordance with Rule 10b-18 under the Exchange Act and will terminate on January 31, 2026 (unless terminated sooner).

No shares were repurchased during the three month periods ended March 31, 2024 and 2023.

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

Under the 2024 Program, which replaced the 2022 Program, the Company may repurchase shares of its common stock through open market and privately negotiated transactions or otherwise.

5 unchanged sentences

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, 2023, Simmons Bank had approximately $ 238.0 million available for payment of dividends to the Company, without prior regulatory approval.

At March 31, 2024, Simmons Bank had approximately $ 16.6 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.

4 unchanged sentences

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

As of September 30, 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 12.02 % at September 30, 2023.

As of March 31, 2024, 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 11.95 % at March 31, 2024.

STOCK-BASED COMPENSATION

The Company’s Board of Directors has adopted various stock-based compensation plans, including the 2023 Stock and Incentive Plan that was approved by shareholders and became effective April 18, 2023.

The Company’s Board of Directors has adopted various stock-based compensation plans.

The plans provide for the grant of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock awards, restricted stock units, performance stock units and stock awards.

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, performance stock units or stock awards 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, 2023:

The table below summarizes the transactions under the Company’s active stock-based compensation plans for the three months ended March 31, 2024:

Stock Options

10 unchanged sentences

Forfeited/expired ( 37 ) 22.52 — — ( 129 ) 26.36

Balance, September 30, 2023 469 $ 22.58 — $ — 1,328 $ 24.51

Exercisable, September 30, 2023 469 $ 22.58

The following table summarizes information about stock options under the plans outstanding at September 30, 2023:

Balance, March 31, 2024 410 $ 22.57 — $ — 1,629 $ 21.45

Exercisable, March 31, 2024 410 $ 22.57

The following table summarizes information about stock options under the plans outstanding at March 31, 2024:

Options Outstanding Options Exercisable

9 unchanged sentences

$ 20.29 — $ 24.07 410 1.32 $ 22.57 410 $ 22.57

The table below summarizes the Company’s performance stock unit activity for the nine months ended September 30, 2023:

The table below summarizes the Company’s performance stock unit activity for the three months ended March 31, 2024:

(In thousands) Performance Stock Units

2 unchanged sentences

Forfeited ( 104 )

Non-vested, September 30, 2023 511

Stock-based compensation expense was $ 9.6 million and $ 11.5 million during the nine month periods ended September 30, 2023 and 2022, respectively.

Non-vested, March 31, 2024 534

Stock-based compensation expense was $ 4.4 million and $ 4.9 million during the three month periods ended March 31, 2024 and 2023, 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, 2023.

Unrecognized stock-based compensation expense related to non-vested stock awards and stock units was $ 18.5 million at September 30, 2023.

There was no unrecognized stock-based compensation expense related to stock options at March 31, 2024.

Unrecognized stock-based compensation expense related to non-vested stock awards and stock units was $ 21.7 million at March 31, 2024.

At such date, the weighted-average period over which this unrecognized expense is expected to be recognized was 2.0 years.

There was no intrinsic value of stock options outstanding and stock options exercisable at September 30, 2023.

Aggregate intrinsic value represents the difference between the Company’s closing stock price on the last trading day of the period, which was $ 16.96 as of September 30, 2023, and the exercise price multiplied by the number of options outstanding.

Total intrinsic value of stock options exercised during the nine months ended September 30, 2023 was $ 6,000 , while there was no intrinsic value of stock options exercised during the nine months ended September 30, 2022.

There was no intrinsic value of stock options outstanding and stock options exercisable at March 31, 2024.

Aggregate intrinsic value represents the difference between the Company’s closing stock price on the last trading day of the period, which was $ 19.46 as of March 31, 2024, and the exercise price multiplied by the number of options outstanding.

There was no intrinsic value of stock options exercised during the three months ended March 31, 2024 and there was $ 6,000 of intrinsic value of stock options exercised during the same period of 2023.

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, 2023 and 2022.

There were no stock options granted during the three months ended March 31, 2024 and 2023.

EARNINGS PER SHARE (“EPS”)

3 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

(In thousands, except per share data) 2024 2023

5 unchanged sentences

Diluted earnings per share $ 0.31 $ 0.36

There were 469,280 stock options excluded from the three and nine months ended September 30, 2023 earnings per share calculations due to the related stock option exercise price exceeding the average market price of the Company’s stock during the periods.

There were 99,837 stock options excluded from the earnings per share calculation for the three months ended September 30, 2022 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 average market price of the Company’s stock exceeding the related stock option exercise price during the period.

There were 410,490 stock options excluded from the three months ended March 31, 2024 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 422,180 stock options excluded from the earnings per share calculation for the three months ended March 31, 2023 due to the related stock option exercise price exceeding the average market price of the Company’s stock during the period.

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) 2024 2023

2 unchanged sentences

Transfers of loans to foreclosed assets held for sale 661 131

Transfers of assets held for sale to other assets — 100

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

OTHER INCOME AND OTHER OPERATING EXPENSES

Other income for the three and nine months ended September 30, 2023 was $ 7.4 million and $ 28.5 million, respectively.

Other income for the same periods in 2022 was $ 6.7 million and $ 20.8 million, respectively.

Included in other income during the nine month period ended September 30, 2023 was a $ 4.0 million legal reserve recapture associated with previously disclosed legal matters.

Additionally, other income increased on a year-over-year basis, primarily as a result of fair value adjustments associated with certain equity investments and death benefits from bank owned life insurance.

Other income for the three months ended March 31, 2024 and 2023 was $ 7.2 million and $ 11.3 million, respectively.

Included in other income during the first quarter of 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) 2024 2023

23 unchanged sentences

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

At September 30, 2023, the Company had outstanding commitments to extend credit aggregating approximately $ 744.3 million and $ 4.32 billion for credit card commitments and other loan commitments, respectively.

At March 31, 2024, the Company had outstanding commitments to extend credit aggregating approximately $ 751.7 million and $ 4.14 billion for credit card commitments and other loan commitments, respectively.

At December 31, 2023, the Company had outstanding commitments to extend credit aggregating approximately $ 738.2 million and $ 4.17 billion for credit card commitments and other loan commitments, respectively.

As of September 30, 2023, the Company had outstanding commitments to originate fixed-rate mortgage loans of approximately $ 24.6 million.

As of March 31, 2024, the Company had outstanding commitments to originate fixed-rate mortgage loans of approximately $ 30.2 million.

At December 31, 2023, the Company had outstanding commitments to originate fixed-rate mortgage loans of approximately $ 16.6 million.

3 unchanged sentences

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

The Company had total outstanding letters of credit amounting to $ 55.5 million and $ 44.4 million at September 30, 2023, and December 31, 2022, respectively, with terms ranging from 9 months to 15 years.

At September 30, 2023 and December 31, 2022, the Company had no deferred revenue under standby letter of credit agreements.

The Company had total outstanding letters of credit amounting to $ 55.7 million and $ 54.2 million at March 31, 2024, and December 31, 2023, respectively, with terms ranging from 9 months to 15 years.

At March 31, 2024 and December 31, 2023, 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 $ 339.5 million and $ 265.7 million at September 30, 2023 and December 31, 2022, respectively, and they expire in less than one year from issuance.

The amount of the letters of credit was $ 837.6 million and $ 580.8 million at March 31, 2024 and December 31, 2023, respectively, and they expire in less than one year from issuance.

FAIR VALUE MEASUREMENTS

36 unchanged sentences

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

At September 30, 2023 and December 31, 2022, the aggregate fair value of mortgage loans held for sale exceeded their cost.

At March 31, 2024 and December 31, 2023, 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, 2023 and December 31, 2022.

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, 2024 and December 31, 2023.

Fair Value Measurements Using

6 unchanged sentences

Unobservable Inputs

September 30, 2023

March 31, 2024

Available-for-sale securities

35 unchanged sentences

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, 2023 and December 31, 2022.

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, 2024 and December 31, 2023.

Fair Value Measurements Using

6 unchanged sentences

Unobservable Inputs

September 30, 2023

March 31, 2024

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

9 unchanged sentences

(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 $ 16.4 million and $ 5.2 million were related to collateral-dependent loans for which fair value re-measurements took place during the periods ended September 30, 2023 and December 31, 2022, respectively.

(2) Identified reserves of $ 21.8 million and $ 18.7 million were related to collateral-dependent loans for which fair value re-measurements took place during the periods ended March 31, 2024 and December 31, 2023, 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.

33 unchanged sentences

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

September 30, 2023

March 31, 2024

Financial assets:

61 unchanged sentences

Derivative credit exposure is monitored on an ongoing basis for each customer transaction and aggregate exposure to each counterparty is tracked.

The Company has set a maximum outstanding notional contract amount at 25 % of the Company’s assets.

Fair Value Hedges

4 unchanged sentences

The two year forward start date for these swaps occurred during late third quarter of 2023 and involves the payment of fixed interest rates with a weighted average of 1.21 % in exchange for variable interest rates based on federal funds rates.

For the three month period ended March 31, 2024, the net amount included in interest income on investment securities in the consolidated statements of income related to fair value hedges was $ 12.4 million.

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

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

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

2 unchanged sentences

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

Line Item on the Balance Sheet (In thousands) September 30, 2023 December 31, 2022 September 30, 2023 December 31, 2022

Line Item on the Balance Sheet (In thousands) March 31, 2024 December 31, 2023 March 31, 2024 December 31, 2023

Investment securities - Available-for-sale $ 923,257 $ 940,010 $ 119,411 $ 104,408

7 unchanged sentences

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

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

(In thousands) Notional Fair Value Notional Fair Value

4 unchanged sentences

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

The notional amount of these contingent agreements is $ 19.9 million as of September 30, 2023.

The notional amount of these contingent agreements is $ 19.4 million as of March 31, 2024.

Energy Hedging

5 unchanged sentences

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

During the second quarter of 2023, the Company’s remaining energy hedge swap contracts expired and there were no outstanding notional values related to these contracts as of September 30, 2023.

During the second quarter of 2023, the Company’s remaining energy hedge swap contracts expired and there were no outstanding notional values related to these contracts as of March 31, 2024.

Currently, the Company generally does not intend to offer hedging services to any remaining energy related customers.

4 unchanged sentences

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, 2023, and the related consolidated statements of income, comprehensive income (loss) and stockholders’ equity for the three-month and nine-month periods ended September 30, 2023 and 2022, and cash flows for the nine-month periods ended September 30, 2023 and 2022, 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, 2024, and the related consolidated statements of income, comprehensive income (loss), stockholders’ equity and cash flows for the three-month periods ended March 31, 2024 and 2023, 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.

11 unchanged sentences

Little Rock, Arkansas

November 6, 2023

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