Quantitative and Qualitative Disclosures About Market Risk
−Removed: The Company has leveraged its investment in its subsidiary bank and depends upon the dividends paid to it, as the sole shareholder of the subsidiary bank, as a principal source of funds for dividends to shareholders, stock repurchases and debt service requirements.
−Removed: At March 31, 2024, undivided profits of Simmons Bank were approximately $515.4 million, of which approximately $16.6 million was available for the payment of dividends to the Company without regulatory approval.
+Added: The Company has leveraged its investment in Simmons Bank and depends upon the dividends paid to it, as the sole shareholder of Simmons Bank, as a principal source of funds for dividends to shareholders, stock repurchases and debt service requirements.
+Added: At June 30, 2024, undivided profits of Simmons Bank were approximately $528.0 million, of which approximately $2.2 million was available for the payment of dividends to the Company without regulatory approval.
In addition to dividends, other sources of liquidity for the Company are the sale of equity securities and the borrowing of funds.
Subsidiary Bank
−Removed: Generally speaking, the Company’s subsidiary bank relies upon net inflows of cash from financing activities, supplemented by net inflows of cash from operating activities, to provide cash used in investing activities.
+Added: Generally speaking, Simmons Bank relies upon net inflows of cash from financing activities, supplemented by net inflows of cash from operating activities, to provide cash used in investing activities.
Typical of most banking companies, significant financing activities include:
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and the issuance of long-term debt.
−Removed: The subsidiary bank’s primary investing activities include loan originations and purchases of investment securities, offset by loan payoffs and investment cash flows and maturities.
+Added: Simmons Bank’s primary investing activities include loan originations and purchases of investment securities, offset by loan payoffs and investment cash flows and maturities.
Liquidity represents an institution’s ability to provide funds to satisfy demands from depositors and borrowers by either converting assets into cash or accessing new or existing sources of incremental funds.
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Federal funds are available on a daily basis and are used to meet the normal fluctuations of a dynamic balance sheet.
−Removed: As of March 31, 2024, the Bank had approximately $435.0 million in federal funds lines of credit from upstream correspondent banks that can be accessed, if and when needed.
+Added: As of June 30, 2024, Simmons Bank had approximately $435.0 million in federal funds lines of credit from upstream correspondent banks that can be accessed, if and when needed.
In order to ensure availability of these upstream funds we test these borrowing lines at least annually.
Historical monitoring of these funds has made it possible for us to project seasonal fluctuations and structure our funding requirements on a month-to-month basis.
−Removed: Second, Simmons Bank has lines of credit available with the Federal Home Loan Bank.
+Added: Second, Simmons Bank has lines of credit available with the FHLB.
While we use portions of those lines to match off longer-term mortgage loans, we also use those lines to meet liquidity needs.
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Actual results will differ from simulated results due to the timing, magnitude and frequency of interest rate changes and changes in market conditions and management strategies, among other factors.
−Removed: As of March 31, 2024, the model simulations projected that 100 and 200 basis point increases in interest rates would result in a negative variance in net interest income of 3.72% and 7.64%, respectively, relative to the base case over the next 12 months.
+Added: As of June 30, 2024, the model simulations projected that 100 and 200 basis point increases in interest rates would result in a negative variance in net interest income of 3.00% and 6.21%, respectively, relative to the base case over the next 12 months.
Interest rate decreases of 100 and 200 basis points would result in positive variances in net interest income of 1.55% and 4.57%, respectively, relative to the base case over the next 12 months.
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Since these correlations are based on competitive and market conditions, we anticipate that our future results will likely be different from the foregoing estimates, and such differences could be material.
−Removed: The table below presents our sensitivity to net interest income at March 31, 2024:
+Added: The table below presents our sensitivity to net interest income at June 30, 2024:
Net Interest Income Sensitivity
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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.