What changed in this filing

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Item 1. Business

2025-02-27 compared with 2024-02-27 · 41 added, 88 removed, 317 unchanged (29% of the section changed)

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and Simmons First Insurance Services of TN, LLC are wholly-owned subsidiaries of Simmons Bank and are insurance agencies that offer various lines of personal and corporate insurance coverage to individual and commercial customers.

Community and Commercial Banking Strategy

Historically, the Company utilized separately chartered community bank subsidiaries to provide full-service banking products and services across our footprint.

During 2014, we consolidated all separately chartered banks into Simmons Bank in order to more effectively meet the increased regulatory burden facing banks, reduce certain operating costs, and more efficiently perform operational duties.

To both effectively compete for and service the needs of different types of customers, Simmons Bank now operates using two main groups, a community banking group (which generally focuses on small-to-mid-size customer relationships) and a commercial banking group (which generally focuses on larger, more complex customers with intricate or unique banking needs).

Both of these groups are supported by Simmons Bank’s retail, private banking, trust and various operations divisions.

Community Banking, Commercial Banking and Wealth Strategy

To both effectively compete for and service the needs of different types of customers, Simmons Bank now operates using three main groups:

a community banking group (which generally focuses on retail, small-to-mid-size customer relationships plus mortgage lending), a commercial banking group (which generally focuses on larger, more complex customers with intricate or unique banking needs) and a wealth group (which generally focuses on serving investment and trust needs of consumers and businesses).

Each of these groups is supported by Simmons Bank’s various operations divisions.

Growth Strategy

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The following summary provides additional details concerning our more recent acquisition activity.

In 2013, we completed the acquisition of Metropolitan National Bank (“Metropolitan” or “MNB”) from Rogers Bancshares, Inc.

The purchase was completed through an auction of the MNB stock by the U.

Bankruptcy Court as a part of the Chapter 11 proceeding of RBI.

MNB, which was headquartered in Little Rock, Arkansas, served central and northwest Arkansas and had total assets of $950 million.

Upon completion of the acquisition, MNB and our Rogers, Arkansas chartered bank, Simmons First Bank of Northwest Arkansas were merged into Simmons Bank.

As an in-market acquisition, MNB had significant branch overlap with our existing branch footprint.

We completed the systems conversion for MNB on March 21, 2014, and simultaneously closed 27 branch locations that had overlapping footprints with other locations.

On August 31, 2014, we completed the acquisition of Delta Trust & Banking Corporation (“Delta Trust”), including its wholly-owned bank subsidiary, Delta Trust & Bank.

Also headquartered in Little Rock, Arkansas, Delta Trust had total assets of $420 million.

The acquisition further expanded Simmons Bank's presence in south, central and northwest Arkansas and allowed us the opportunity to provide services that had not previously been offered with the addition of Delta Trust's insurance agency and securities brokerage service.

We merged Delta Trust & Bank into Simmons Bank and completed the systems conversion on October 24, 2014.

At that time, we also closed 4 branch locations with overlapping footprints.

In February 2015, we completed the acquisition of Liberty Bancshares, Inc.

(“Liberty”), including its wholly-owned bank subsidiary, Liberty Bank.

Liberty was headquartered in Springfield, Missouri, served southwest Missouri and had total assets of $1.1 billion.

The acquisition enhanced Simmons Bank’s presence not only in southwest Missouri, but also in the St.

Louis and Kansas City metropolitan areas.

The acquisition also allowed us the opportunity to provide services that we had not previously offered in these areas such as trust and securities brokerage services.

In addition, Liberty’s expertise in SBA lending enhanced our commercial offerings throughout our geographies.

We merged Liberty Bank into Simmons Bank and completed the systems conversion in April 2015.

Also in February 2015, we completed the acquisition of Community First Bancshares, Inc.

(“Community First”), including its wholly-owned bank subsidiary, First State Bank.

Community First was headquartered in Union City, Tennessee, served customers throughout Tennessee, and had total assets of $1.9 billion.

The acquisition expanded our footprint into Tennessee and allowed us the opportunity to provide additional services to customers in this area and expand our community banking strategy.

In addition, Community First’s expertise in SBA and consumer lending benefited our customers across each region.

We merged First State Bank into Simmons Bank and completed the systems conversion in September 2015.

In October 2015, we completed the acquisition of Ozark Trust & Investment Corporation (“Ozark Trust”), including its wholly-owned non-deposit trust company, Trust Company of the Ozarks.

Headquartered in Springfield, Missouri, Ozark Trust had over $1 billion in assets under management and provided a wide range of financial services for its clients including investment management, trust services, IRA rollover or transfers, successor trustee services and personal representative and custodial services.

As our first acquisition of a fee-only financial firm, Ozark Trust provided a new wealth management capability that could be leveraged across the Company’s entire geographic footprint.

In September 2016, we completed the acquisition of Citizens National Bank (“Citizens”), headquartered in Athens, Tennessee.

Citizens had total assets of $585 million and strengthened our position in east Tennessee by nine branches.

The acquisition expanded our footprint in east Tennessee and allowed us the opportunity to provide additional services to customers in this area and expand our community banking strategy.

We merged Citizens into Simmons Bank and completed the systems conversion in October 2016.

In May 2017, we completed the acquisition of Hardeman County Investment Company, Inc.

(“Hardeman”), headquartered in Jackson, Tennessee, including its wholly-owned bank subsidiary, First South Bank.

We acquired approximately $463 million in assets and strengthened our position in the western Tennessee market.

We merged First South Bank into Simmons Bank and completed the systems conversion in September 2017.

As part of the systems conversion, we consolidated or closed three existing Simmons Bank and two First South Bank branches due to overlapping footprint.

In October 2017, we completed the acquisition of First Texas BHC, Inc.

(“First Texas”), headquartered in Fort Worth, Texas, including its wholly-owned bank subsidiary, Southwest Bank.

Southwest Bank had total assets of $2.4 billion.

This acquisition allowed us to enter the Texas banking markets, and it also strengthened our specialty product offerings in the areas of SBA lending and trust services.

The systems conversion was completed in February 2018, at which time Southwest Bank was merged into Simmons Bank.

Also in October 2017, we completed the acquisition of Southwest Bancorp, Inc.

(“OKSB”), including its wholly-owned bank subsidiary, Bank SNB.

Headquartered in Stillwater, Oklahoma, OKSB provided us with $2.7 billion in assets, allowed us additional entry into the Oklahoma, Texas and Colorado banking markets, and strengthened our Kansas franchise and our product offerings in the healthcare and real estate industries.

The systems conversion was completed in May 2018, at which time Bank SNB was merged into Simmons Bank.

In April 2019, we completed the acquisition of Reliance Bancshares, Inc.

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Merger and Acquisition Strategy

Merger and acquisition activities have been an important part of the Company’s growth strategy.

While we continue to consider strategic merger and acquisition opportunities if and as they arise, and while we continue to believe that current market and industry conditions will continue to cause various financial institutions to seek merger partners in the near-to-intermediate future, in the near term, we are also enhancing our focus on ensuring that we capitalize on organic growth opportunities in many of the markets that we have had the fortune to enter through previous mergers and acquisitions.

Through our “Better Bank” initiative, we have also focused on evaluating and, where appropriate, enhancing our people, processes and systems so that we are able to more effectively and efficiently compete as an organization of the size and scale that we now have achieved.

Merger and acquisition activities have been an important part of the Company’s historical growth strategy.

While we will continue to consider strategic merger and acquisition opportunities if and as they arise, and while we continue to believe that current market and industry conditions will continue to cause various financial institutions to seek merger partners in the near-to-intermediate future, in the near term, we are continuing our enhanced focus on ensuring that we capitalize on organic growth opportunities in many of the markets that we have had the fortune to enter through previous mergers and acquisitions.

We also continue to focus on evaluating and, where appropriate, enhancing our people, processes and systems so that we are able to more effectively and efficiently compete as an organization of the size and scale that we now have achieved.

To the extent that a strategic merger and acquisition opportunity becomes of interest, we believe our community banking philosophy, access to capital and successful merger and acquisition history would position us as a purchaser of choice for a community and regional bank seeking a strong partner.

As consolidations continue to unfold in the banking industry, the management of risk is an important consideration in how the Company evaluates and consummates these transactions.

The senior management teams of both the Company and Simmons Bank have extensive experience in acquiring banks, branches and deposits and post-acquisition integration of operations.

We believe this experience positions us to successfully acquire and integrate banks to the extent a compelling strategic opportunity presents itself.

The process of merging or acquiring banking organizations is extremely complex;

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The business, legal, operational, organizational, accounting and tax issues all must be addressed if the merger or acquisition is to be successful.

Throughout the process, valuation is an important aspect of the decision-making process, from initial target analysis through integration of the entities.

Merger and acquisition strategies are vitally important in order to derive the maximum benefit out of a potential deal.

Strategic considerations that can cause an acquirer or a target institution to explore or support a merger or acquisition transaction include, among other things:

• Potentially retaining the target institution’s senior management and providing them with an appealing level of autonomy post-integration.

• Encouraging acquired banks, their boards and their associates to maintain their community involvement, while empowering the banks to offer a broader array of financial products and services.

We believe this approach leads to enhanced profitability of the combined franchise after the acquisition.

• Taking advantage of future opportunities that can be exploited when the two companies are combined.

Companies need to position themselves to take advantage of emerging trends in the marketplace.

• Strengthening the bench.

One company may have a major weakness (such as poor distribution or service delivery) whereas the other company has some significant strength.

By combining the two companies, each company fills in strategic gaps that are essential for long-term survival.

• Acquiring human resources and intellectual capital can help improve innovative thinking and development within the Company.

• Acquiring a regional or multi-state bank can provide the Company with access to emerging/established markets and/or increased products and services.

• Providing additional scale and market share within our existing footprint.

The senior management teams of both the Company and Simmons Bank have extensive experience in acquiring banks, branches and deposits and post-acquisition integration of operations.

We believe this experience positions us to successfully acquire and integrate banks to the extent a compelling strategic opportunity presents itself.

Loan Risk Assessment

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Because our business depends on our ability to attract, develop, and retain highly qualified, skilled lending, operations, information technology, and other associates, as well as managers who are experienced and effective at leading their respective departments, we have implemented wide-ranging programs focused on identifying and recruiting new talent, as well as enhancing the skills, qualifications, and satisfaction of our current associate base.

In recruiting, we employ a variety of strategies, including, among other things, the use of in-house recruiters, search firms, and employment agencies, designed to attract qualified and diverse candidates.

In recruiting, we employ a variety of strategies, including, among other things, the use of in-house recruiters, search firms, and employment agencies, designed to attract qualified candidates.

Among other opportunities, we offer student internships and a banker trainee program that provides recent graduates with the opportunity to gain insight into several Company departments.

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and Build Loyalty - to be reflected in everything we do, including how we interact with each other, how we interact with our customers, and how we interact with our vendors and business partners.

Our sixth Culture Cornerstone, Build Loyalty, was added in 2022 to provide a compelling and pervasive customer-first operational approach that is designed to produce exceptional internal and external customer experiences.

In 2023, we continued our focus on our Culture Cornerstone of High Performance by implementing extensive new training and programming to support leaders and associates.

We are also committed to promoting our associates’ well-being.

Our wellness program, “Ultimate You,” assists associates in improving their level of physical, financial, and mental fitness through offerings such as discounted gym memberships, financial literacy training, channels for counseling, and health-focused challenges and contests.

Finally, our inclusion program, “We Are Simmons,” celebrates and supports the unique perspectives, experiences, and backgrounds of our associates.

We believe these differences help us better serve our customers and make us stronger as a whole.

In connection with this program, we have introduced Employee Resource Groups for veterans, women, African Americans, and LGBTQIA+ associates.

We have implemented extensive training and programming to support leaders and associates to emphasize and reinforce our culture cornerstones and ensure a pervasive, shared value system.

Finally, we are also committed to promoting our associates’ well-being.

Our wellness program, “Ultimate You,” assists associates in improving their level of physical, financial, and mental fitness through offerings such as financial literacy training, channels for counseling and health-focused challenges and contests.

As of December 31, 2024, the Company and its subsidiaries had approximately 2,946 full time equivalent associates.

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SUPERVISION AND REGULATION

The Company and its subsidiaries are extensively regulated under both federal and state laws.

The following description summarizes certain aspects of that regulation that are material to the Company and its subsidiary bank, Simmons Bank, and is not a complete description of all applicable laws or regulations, or all aspects of those regulations, that affect us.

To the extent that any specific statutory or regulatory provision or proposal is described in this Annual Report on Form 10-K, such description is qualified in its entirety by reference to the statutory or regulatory provision or proposal.

Proposals to change the laws, regulations, and policies governing the banking industry are frequently raised at both the state and federal levels.

These laws and regulations, and changes thereto, impose compliance costs and create obligations and, in some cases, reporting obligations, and compliance with these laws, regulations, and obligations may require us to use significant resources.

The likelihood and timing of any changes in laws and regulations and the supervisory environment, and the impact such changes may have on us, are difficult to predict and assess.

The Company, as a bank holding company, is subject to both federal and state regulation.

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From time to time, the FRB examines the financial condition of the Company and its subsidiaries.

For the Company to maintain financial holding company status, each of the Company’s bank subsidiaries must be “well-capitalized” and “well-managed” as defined by the FRB.

Bank holding companies are not permitted to engage in unsafe and unsound banking practices.

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The approval of the Arkansas Bank Commissioner is, for instance, 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.

Under the foregoing dividend restrictions, and while maintaining its “well capitalized” status, at December 31, 2023, Simmons Bank had approximately $54.4 million available for payment of dividends to the Company, without prior regulatory approval.

Under the foregoing dividend restrictions, and while maintaining its “well capitalized” status, at December 31, 2024, Simmons Bank had paid to the Company all available dividends.

While past dividends are not necessarily indicative of amounts that may be paid or available to be paid in future periods, net profits of Simmons Bank and cash balances at the Company are projected to be sufficient to pay quarterly dividends on the Company’s common stock at current levels and interest and principal on the Company’s debt as well as meet other liquidity needs.

In 2019, final rules were adopted that, among other things, eliminated a prior approval requirement in the Basel III Capital Rules (discussed below) for a bank holding company to repurchase shares of its common stock, provided that the bank holding company is well capitalized both before and after the proposed repurchase, well-managed, and not the subject of any unresolved supervisory issues.

However, a bank holding company’s repurchases of shares of its common stock may, in certain circumstances, be subject to approval or notice requirements under other regulations, policies, or supervisory expectations of the bank holding company’s regulators, may be discouraged by regulators in the form of supervisory feedback on the bank holding company’s regulatory capital levels or plan, and must comply with all applicable state and federal corporate and securities laws and regulations.

A bank holding company’s repurchases of shares of its common stock or redemption of its debt securities may, in certain circumstances, be subject to approval or notice requirements under other regulations, policies, or supervisory expectations of the bank holding company’s regulators, may be discouraged by regulators in the form of supervisory feedback on the bank holding company’s regulatory capital levels or plan, and must comply with all applicable state and federal corporate and securities laws and regulations.

Subsidiary Bank

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Potential Enforcement Action for Bank Holding Companies and Banks

Enforcement proceedings seeking civil or criminal sanctions may be instituted against any bank, any financial or bank holding company, any director, officer, employee or agent of the bank or holding company, which is believed by the federal banking agencies to be violating any administrative pronouncement or engaged in unsafe and unsound practices.

Enforcement proceedings seeking civil or criminal sanctions may be instituted against any bank, any financial or bank holding company, any director, officer, employee or agent of the bank or holding company, which is believed by the federal banking agencies to be violating any applicable banking law, regulation or administrative pronouncement or engaged in unsafe and unsound practices.

In more serious cases, enforcement actions may include the issuance of directives to increase capital;

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Implementation of the final rule did not have a material impact on our subsidiary bank.

In July 2024, the FDIC proposed significant revisions to the brokered deposit regulations, including significant expansions to the definition of “deposit broker,” and significantly narrowing the primary purpose exception to “deposit broker” status.

The comment period on those proposed rules has closed.

In January 2025, the Acting Chairman of the FDIC issued a statement indicating that the FDIC may focus on withdrawing those proposed rules during 2025.

These proposed rules may also be subject to the presidential memorandum entitled “Regulatory Freeze Pending Review,” which directs federal agencies to (1) not propose or issue any rules until they are reviewed and approved by a department or agency head appointed by the President, (2) immediately withdraw any unpublished rules to allow for the review by a department or agency head as described above, and (3) consider postponing for 60 days from the date of the executive order the effective date for any rules that have been published in the Federal Register, or any rules that have been issued but have not taken effect, to allow for review of any questions of fact, law, or policy.

The Company continues to monitor the status of those proposed rules and FDIC action and statements with respect thereto.

FDIC Deposit Insurance and Assessments

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The special assessment was based on estimated uninsured deposits as of December 31, 2022 (excluding the first $5.0 billion) and will be assessed at a quarterly rate of 3.36 basis points, over eight quarterly assessment periods, beginning in the first quarter of 2024.

As a result of this final rule, we accrued $10.5 million related to this assessment in the fourth quarter of 2023.

This amount represents our current expectation of the full amount of the assessment based on our total uninsured deposits as of December 31, 2022.

As a result of this final rule, we accrued $12.4 million related to this assessment.

Under the final rule, the estimated loss pursuant to the systemic risk determination will be periodically adjusted, and the FDIC has retained the ability to cease collection early, extend the special assessment collection period and impose a final shortfall special assessment on a one-time basis.

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In October 2023, the federal prudential regulatory agencies adopted substantial revisions to the regulations implementing the CRA.

The legality of these CRA regulations is being challenged and a preliminary injunction against enforcing new rules implementing the modified CRA regulations has been granted.

In addition, the updated CRA regulations may be impacted by the presidential memorandum entitled “Regulatory Freeze Pending Review” described above.

The Company continues to assess the impact of the adopted changes to the CRA regulations.

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The Company and the Bank continue to monitor legislative, regulatory and supervisory developments related thereto.

Mortgage Banking Regulation

In connection with making mortgage loans, we are subject to rules and regulations that, among other things, establish standards for loan origination and servicing, prohibit discrimination, provide for inspections and appraisals of property, require credit reports on prospective borrowers, in some cases restrict certain loan features and fix maximum interest rates and fees, require the disclosure of certain basic information to mortgagors concerning credit and settlement costs, limit payment for settlement services to the reasonable value of the services rendered and require the maintenance and disclosure of information regarding the disposition of mortgage applications based on race, gender, geographical distribution and income level, and establish requirements for servicing mortgage loans including loan mitigation.

We are also subject to rules and regulations that require the collection and reporting of significant amounts of information with respect to mortgage loans and borrowers.

Our mortgage origination activities are subject to Regulation Z, which implements the Truth in Lending Act.

Certain provisions of Regulation Z require creditors to make a reasonable and good faith determination based on verified and documented information that a consumer applying for a mortgage loan has a reasonable ability to repay the loan according to its terms.

Federal Home Loan Bank of Dallas

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In anticipation of becoming subject to these requirements, the Company and Simmons Bank had begun the necessary preparations, including undertaking a gap analysis, implementing enhancements to the audit and compliance departments, and investing in various information technology systems.

Notwithstanding that federal banking agencies will not take action with respect to these enhanced prudential standards, the Company and its subsidiary bank will continue to review their capital planning and risk management practices in connection with the regular supervisory processes of the FRB.

Notwithstanding that federal banking agencies will not take action with respect to these enhanced prudential standards, the Company and its subsidiary bank continue to review their capital planning and risk management practices in connection with the regular supervisory processes of the FRB.

Additionally, the Dodd-Frank Act established the CFPB and granted it supervisory authority over banks with total assets of more than $10 billion.

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Pending Legislation

Because of concerns relating to, among other things, competitiveness and the safety and soundness of the banking industry, Congress and state legislatures often consider a number of wide-ranging proposals for altering the structure, regulation, and competitive relationships of the nation’s financial institutions and of those chartered in a particular state legislature’s jurisdiction.

We cannot predict whether or in what form any proposals will be adopted or the extent to which our business may be affected.

Because of concerns relating to, among other things, competitiveness and the safety and soundness of the banking industry, governmental administrations, as well as Congress and state legislatures, often consider a number of wide-ranging proposals for altering the structure, regulation, and competitive relationships of the nation’s financial institutions and of those chartered in a particular state legislature’s jurisdiction.

We cannot predict the timing of any proposals or whether or in what form any proposals will be adopted or the extent to which our business, including our financial condition and results of operations, may be affected.

For example, in February 2025, the CFPB staff was instructed to stop all rulemaking, public communications, litigation, examination and certain other activities.

This and other events make future regulations increasingly uncertain.

Effect of Governmental Monetary Policies

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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.

What changed 10-K

Item 1. Business