What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-11-06 compared with 2025-08-05 · 245 added, 175 removed, 601 unchanged (41% of the section changed)

1 unchanged sentence

As permitted by SEC rules, management presents a sequential quarterly analysis of the Company’s performance as we believe that comparing current quarter results to those of the immediately preceding fiscal quarter is more useful in identifying current business trends and provides a more relevant analysis of our business results.

Accordingly, we have compared our results of operations for the three months ended June 30, 2025 to our results of operations for the three months ended March 31, 2025, as applicable, throughout this Management's Discussion and Analysis of Financial Condition and Results of Operations.

For additional information regarding the Company’s results for the three months ended March 31, 2025, please refer to our first quarter Form 10-Q filed with the SEC on May 8, 2025.

During the first half of 2025, we demonstrated continued improvement in profitability fundamentals.

Increases in loans and customer deposits combined with solid loan yields and a decrease in deposit costs for three consecutive quarters have driven a healthy increase in our net interest margin and positive trends in total revenue.

While we continue to operate against a backdrop of uncertainty concerning the macroeconomic environment and the timing of future interest rate moves, we continue our focus on organic growth in our very attractive footprint and are encouraged by our positive momentum heading into the last half of 2025:

• Total deposits as of June 30, 2025 were $21.82 billion, compared to $21.89 billion as of December 31, 2024.

Uninsured, non-collateralized deposits as of June 30, 2025 were approximately $4.59 billion, or 21% of total deposits.

• Capital levels were steady during the quarter, with all regulatory capital ratios remaining significantly above “well-capitalized” guidelines as of June 30, 2025 (see Table 11 in the Risk-Based Capital section below).

As of June 30, 2025, our ratio of common equity to total assets was 13.30%, the ratio of tangible common equity to tangible assets was 8.46% and our Tier 1 leverage ratio was 9.96%.

• Significant liquidity position with a loan to deposit ratio of 78% as of both June 30, 2025 and December 31, 2024.

Additional liquidity sources available to us as of June 30, 2025 totaled $10.72 billion and our uninsured, non-collateralized deposit coverage ratio was 2.3x.

Our net income for the three months ended June 30, 2025 was $54.8 million, or $0.43 diluted earnings per share, compared to net income of $32.4 million, or $0.26 diluted earnings per share, for the three months ended March 31, 2025.

Included in the results were certain items related to our branch right sizing initiative and early retirement program costs (for the three months ended June 30, 2025).

Excluding these certain items and the tax effect, adjusted earnings for the three months ended June 30, 2025 were $56.1 million, or $0.44 adjusted diluted earnings per share, compared to $33.1 million, or $0.26 adjusted diluted earnings per share, for the three months ended March 31, 2025.

Our net income for the six months ended June 30, 2025 was $87.2 million, or $0.69 diluted earnings per share, compared to net income of $79.6 million, or $0.63 diluted earnings per share, for the six months ended June 30, 2024.

Included in the results were certain items related to our branch right sizing initiative, early retirement program costs, a FDIC special assessment (for the six months ended June 30, 2024) and termination of vendor and software services (for the six months ended June 30, 2024).

Excluding these certain items and the tax effect, adjusted earnings for the six months ended June 30, 2025 were $89.2 million, or $0.71 adjusted diluted earnings per share, compared to $82.2 million, or $0.65 adjusted diluted earnings per share, for the six months ended June 30, 2024.

During the year, we increased the loss provision on two specific credit relationships that we have been watching for some time due to unfavorable events that occurred for both during the six months ended June 30, 2025.

Accordingly, we have compared our results of operations for the three months ended September 30, 2025 to our results of operations for the three months ended June 30, 2025, as applicable, throughout this Management's Discussion and Analysis of Financial Condition and Results of Operations.

For additional information regarding the Company’s results for the three months ended June 30, 2025, please refer to our second quarter Form 10-Q filed with the SEC on August 5, 2025.

The third quarter of 2025 was transformative for our Company.

We successfully raised $326.9 million of equity capital to reposition our balance sheet.

We effectively addressed a negative arbitrage between long-term bond yields and shorter-term funding costs which freed up capital for future growth.

We reclassified approximately $3.6 billion in held-to-maturity (“HTM”) securities to available-for-sale (“AFS”) securities and sold approximately $3.2 billion in amortized cost basis of AFS securities (including certain of those previously classified as HTM).

The sale of investment securities resulted in a realized, after-tax loss of $625.6 million (based on actual tax rate of 21.946%).

Proceeds from the sale of the investment securities were primarily used to deleverage the balance sheet through the pay-down of higher rate, non-relationship wholesale and public fund deposits, as well as higher rate other borrowings primarily consisting of FHLB advances.

While the one-time loss on the sale of the bonds was significant, the financial strength of our company coupled with the positive sentiment from investors allowed us that opportunity.

We followed the balance sheet repositioning by issuing $325.0 million in aggregate principal amount of 6.25% Fixed-to-Floating Rate Subordinated Notes (“2025 Notes”), which qualify as Tier 2 regulatory capital of the Company.

The proceeds of this issuance were used to redeem $330.0 million of our 5.00% Fixed-to-Floating Rate Subordinated Notes (“2018 Notes”), which qualified as Tier 2 regulatory capital but were subject to amortizing regulatory capital treatment as they approached maturity, effective October 1, 2025.

While we continue to operate against a backdrop of uncertainty concerning the macroeconomic environment and the timing of future interest rate moves, we continue our focus on organic growth in our current footprint and are encouraged by our positive momentum through the nine months ended September 30, 2025:

• Total deposits as of September 30, 2025 were $19.84 billion, compared to $21.89 billion as of December 31, 2024.

Uninsured, non-collateralized deposits as of September 30, 2025 were approximately $4.46 billion, or 22% of total deposits.

• Capital levels remained strong over the period following the balance sheet repositioning, with all regulatory capital ratios remaining significantly above “well-capitalized” guidelines as of September 30, 2025 (see Table 13 in the Risk-Based Capital section below).

As of September 30, 2025, our ratio of common equity to total assets was 13.85%, the ratio of tangible common equity to tangible assets was 8.53% and our Tier 1 leverage ratio was 9.56%.

• The loan to deposit ratio was 87% and 78% as of September 30, 2025 and December 31, 2024, respectively.

Additional liquidity sources available to us as of September 30, 2025 totaled $9.53 billion and our uninsured, non-collateralized deposit coverage ratio was 2.1x.

Our net loss for the three months ended September 30, 2025 was $562.8 million, or $(4.00) diluted earnings per share, compared to net income of $54.8 million, or $0.43 diluted earnings per share, for the three months ended June 30, 2025.

Included in the results were certain items related to our branch right sizing initiative, early retirement program costs, loss on extinguishment of debt (for the three months ended September 30, 2025) and loss on sale of securities (for the three months ended September 30, 2025).

Excluding these certain items and the tax effect, adjusted earnings for the three months ended September 30, 2025 were $64.9 million, or $0.46 adjusted diluted earnings per share, compared to $56.1 million, or $0.44 adjusted diluted earnings per share, for the three months ended June 30, 2025.

Our net loss for the nine months ended September 30, 2025 was $475.6 million, or $(3.63) diluted earnings per share, compared to net income of $104.4 million, or $0.83 diluted earnings per share, for the nine months ended September 30, 2024.

Included in the results were certain items related to our branch right sizing initiative, early retirement program costs, loss on sale of securities, a FDIC special assessment (for the nine months ended September 30, 2024), termination of vendor and software services (for the nine months ended September 30, 2024) and loss on extinguishment of debt (for the nine months ended September 30, 2025).

Excluding these certain items and the tax effect, adjusted earnings for the nine months ended September 30, 2025 were $154.1 million, or $1.18 adjusted diluted earnings per share, compared to $128.3 million, or $1.02 adjusted diluted earnings per share, for the nine months ended September 30, 2024.

Otherwise, we believe the asset quality in our portfolio remains sound and reflects our conservative credit culture, as well as our focus on maintaining disciplined pricing and conservative underwriting standards given the current economic environment.

Total nonperforming loans as of June 30, 2025, December 31, 2024, and June 30, 2024 were $157.2 million, $110.8 million, and $103.4 million, respectively.

Nonperforming assets as a percent of total assets were 0.62% at June 30, 2025, compared to 0.45% at December 31, 2024 and 0.39% at June 30, 2024.

As of June 30, 2025, stockholders’ equity was $3.55 billion, book value per share was $28.17 and tangible book value per share was $16.97.

Total loans were $17.11 billion at June 30, 2025, compared to $17.01 billion at December 31, 2024.

Our unfunded commitments were $3.95 billion and $3.74 billion as of June 30, 2025 and December 31, 2024, respectively.

Our commercial loan pipeline totaled $1.63 billion as of June 30, 2025, compared to $1.26 billion at December 31, 2024.

Total nonperforming loans as of September 30, 2025, December 31, 2024, and September 30, 2024 were $153.9 million, $110.8 million, and $101.7 million, respectively.

Nonperforming assets as a percent of total assets were 0.66% at September 30, 2025, compared to 0.45% at December 31, 2024 and 0.38% at September 30, 2024.

As of September 30, 2025, stockholders’ equity was $3.35 billion, book value per share was $23.18 and tangible book value per share was $13.45.

Total loans were $17.19 billion at September 30, 2025, compared to $17.01 billion at December 31, 2024.

Our unfunded commitments were $3.95 billion and $3.74 billion as of September 30, 2025 and December 31, 2024, respectively.

Our commercial loan pipeline totaled $1.61 billion as of September 30, 2025, compared to $1.26 billion at December 31, 2024.

In our discussion and analysis of our financial condition and results of operation in this Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” we provide certain financial information determined by methods other than in accordance with accounting principles generally accepted in the United States (“US GAAP”).

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See the GAAP Reconciliation of Non-GAAP Financial Measures section below for additional discussion and reconciliations of non-GAAP measures.

Simmons First National Corporation is a Mid-South based financial holding company that, as of June 30, 2025, has approximately $26.7 billion in consolidated assets and, through its subsidiaries, conducts financial operations in Arkansas, Kansas, Missouri, Oklahoma, Tennessee and Texas.

Simmons First National Corporation is a Mid-South based financial holding company that, as of September 30, 2025, has approximately $24.2 billion in consolidated assets and, through its subsidiaries, conducts financial operations in Arkansas, Kansas, Missouri, Oklahoma, Tennessee and Texas.

CRITICAL ACCOUNTING ESTIMATES

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Impairment losses on recorded goodwill, if any, will be recorded as operating expenses.

To quantitatively test goodwill for impairment, a present value of discounted cash flows calculation is completed and relies on several assumptions that have a level of subjectivity and judgement.

To quantitatively test goodwill for impairment, a present value of discounted cash flows calculation is completed and relies on several assumptions that have a level of subjectivity and judgment.

These assumptions are dependent on market and economic conditions.

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Results are compared to book value;

no impairment was indicated as of June 30, 2025.

Judgement is inherent in assessing goodwill for impairment.

no impairment was indicated as of September 30, 2025.

Judgment is inherent in assessing goodwill for impairment.

The various assumptions used in assessing goodwill for impairment involve uncertainties that are beyond our control and could cause actual results to differ materially from those projected.

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In the last several years, on average, approximately 44% of our loan portfolio and approximately 92% of our time deposits have repriced in one year or less.

As of June 30, 2025, our interest rate sensitivity shows that approximately 53% of our loans and 97% of our time deposits will reprice in the next year.

As of September 30, 2025, our interest rate sensitivity shows that approximately 55% of our loans and 96% of our time deposits will reprice in the next year.

Net Interest Income - Sequential Quarter Analysis

For the three month period ended June 30, 2025, net interest income on a fully taxable equivalent basis was $178.2 million, an increase of $8.4 million, or 5.0%, compared to the three months ended March 31, 2025.

The increase in net interest income was primarily the result of a $7.2 million increase in fully tax equivalent interest income, coupled with a $1.2 million decrease in interest expense.

The increase in interest income on a fully taxable equivalent basis primarily resulted from a $7.6 million increase in interest income on loans.

The increase in interest income provided by loans reflects an increase attributable to loan volume of $1.9 million, coupled with a $5.7 million increase in interest income related to loan yield.

The loan yield for the second quarter of 2025 was 6.26% compared to 6.20% from the preceding sequential quarter, representing a 6 basis point increase, driven by disciplined pricing of new originations, as well as positive fixed-rate loan repricing.

The $1.2 million decrease in interest expense is primarily due to a $5.3 million decrease in interest expense on time deposits, partially offset by a $2.8 million increase in interest expense related to a greater reliance on wholesale borrowing sources during the quarter.

For the three month period ended September 30, 2025, net interest income on a fully taxable equivalent basis was $190.5 million, an increase of $12.2 million, or 6.9%, compared to the three months ended June 30, 2025.

The increase in net interest income was the result of a $4.2 million decrease in fully tax equivalent interest income, more than offset by a $16.4 million decrease in interest expense.

Several factors contributed to the decrease in net interest income on a fully taxable equivalent basis over the comparative period.

During the third quarter of 2025, we completed a balance sheet repositioning that included the transfer of approximately $3.6 billion investment securities classified as HTM to the AFS investment securities portfolio, with a subsequent sale of approximately $3.2 billion in amortized cost basis of low-yielding AFS securities (including certain of those previously classified as HTM).

The pay-down of higher rate funding was completed throughout the third quarter of 2025, and thus the benefits (including interest expense savings) are only partially reflected in the results for the quarter.

The decrease in interest income on a fully taxable equivalent basis primarily resulted from a $12.1 million decrease in interest income on investment securities, which reflects a $19.0 million decrease due to the decline in our investment portfolio average balances, which decreased by $2.05 billion or 34.0%.

The decrease was partially offset by an increase of $6.9 million in interest income on investment securities due to yield increases over the period of 61 basis points and 26 basis points for our taxable and non-taxable investment security portfolios, respectively.

These changes, including a $3.9 million increase in interest income related to interest bearing balances due from banks, were primarily due to the balance sheet repositioning previously discussed.

A $3.8 million increase in interest income on loans reflects a decrease attributable to loan volume of $1.1 million, more than offset by a $4.9 million increase in interest income related to loan yield.

The loan yield for the third quarter of 2025 was 6.31% compared to 6.26% from the preceding sequential quarter, representing a 5 basis point increase, driven by disciplined pricing of new originations, as well as positive fixed-rate loan repricing.

The $16.4 million decrease in interest expense is primarily due to an $8.2 million decrease in interest expense on time deposits and a $7.7 million decrease in interest expense related to other borrowings during the quarter.

Of the $8.2 million decrease in interest expense on time deposits, $1.4 million was due to the 14 basis point decrease in average rates on time deposits and $6.8 million was due to the decrease in time deposit volume over the period.

These changes were primarily due to a reduction of higher rate, non-relationship wholesale and public fund deposits, as well as higher rate other borrowings, as part of the balance sheet repositioning.

Net Interest Income - Year-over-Year Analysis

Net interest income on a fully taxable equivalent basis for the six month period ended June 30, 2025 increased $29.3 million, or 9.2%, over the same period in 2024.

Net interest income on a fully taxable equivalent basis for the nine month period ended September 30, 2025 increased $55.6 million, or 11.5%, over the same period in 2024.

The increase in net interest income on a fully taxable equivalent basis was the result of a $52.5 million decrease in fully tax equivalent interest income, more than offset by a $108.2 million decrease in interest expense.

The decrease in interest income during the six month period ended June 30, 2025 primarily resulted from decreases in interest income on loans and investments.

The decrease in interest income on loans was largely attributable to a 9 basis point decline in loan yield that resulted in a decrease of $8.8 million.

Loan volume was relatively flat over the comparative periods.

The decrease of $19.0 million in interest income on investment securities is primarily related to an $11.0 million decrease in interest income on taxable investment securities due to the decline in our taxable investment portfolio average balances which decreased by $587.0 million or 14.3%, as our portfolio experienced pay downs, maturities and a strategic sale of $251.5 million of lower-yielding available-for-sale (“AFS”) securities to pay off higher rate wholesale fundings consisting of Federal Home Loan Bank (“FHLB”) advances during the third quarter of 2024.

The decrease in interest income during the nine month period ended September 30, 2025 primarily resulted from decreases in interest income on loans and investments.

The decrease in interest income on loans was largely attributable to a 10 basis point decline in loan yield that resulted in a decrease of $13.8 million, while the incremental decrease in loan volume over the comparative periods led to a decrease of $4.2 million.

The decrease of $37.4 million in interest income on investment securities is primarily related to a $33.6 million decrease in interest income on investment securities due to the decline in our investment portfolio average balances, which decreased by $1.24 billion or 18.6%, primarily related to the balance sheet repositioning previously discussed, coupled with pay downs, maturities and a strategic sale of $251.5 million of lower-yielding AFS securities to pay off higher rate wholesale fundings consisting of Federal Home Loan Bank (“FHLB”) advances during the third quarter of 2024.

A yield decrease in the taxable investment portfolio over the period of 18 basis points led to a decrease of $5.5 million in interest income on taxable investment securities.

The $108.2 million decrease in interest expense is mainly due to the decrease in our deposit account rates over the period.

Interest expense decreased $40.2 million due to the decrease in rate of 49 basis points on interest-bearing deposit accounts and $7.9 million due to the decrease in deposit volume over the period.

Interest expense decreased $64.1 million due to the decrease in rate of 55 basis points on interest-bearing deposit accounts.

A $23.3 million decrease in interest income was related to the decrease in time deposit volume over the period.

Further, a decrease of $22.5 million in interest expense was related to reductions in the amounts outstanding under and rates on wholesale borrowings sources over the comparative period.

The decline in wholesale borrowings volume, including brokered time deposits, is largely due to the balance sheet repositioning.

We continually monitor and look for opportunities to fairly reprice our deposits while remaining competitive in this current challenging rate environment.

Net Interest Margin

Our net interest margin on a fully tax equivalent basis was 3.06% and 3.01% for the three and six month periods ended June 30, 2025, as compared to 2.95% and 2.68% for the three months ended March 31, 2025 and the six months ended June 30, 2024, respectively.

Net interest margin experienced an 11 basis point increase for the three months ended June 30, 2025 compared to the preceding sequential quarter, while net interest margin increased 33 basis points during the six months ended June 30, 2025 compared to the six months ended June 30, 2024.

The increase on a linked quarter basis was primarily due to fixed-rate asset repricing, coupled with decreased deposit costs from lower rates on time deposits and a favorable funding mix shift.

The increase when compared to the same period in the prior year was driven by the decrease in deposits costs and aided by the strategic sale of lower-yielding AFS investment securities during the third quarter of 2024, as well as the reduced rate and use of wholesale funding.

Our net interest margin on a fully tax equivalent basis was 3.50% and 3.17% for the three and nine month periods ended September 30, 2025, as compared to 3.06% and 2.70% for the three months ended June 30, 2025 and the nine months ended September 30, 2024, respectively.

Net interest margin experienced a 44 basis point increase for the three months ended September 30, 2025 compared to the preceding sequential quarter, while net interest margin increased 47 basis points during the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024.

The increase on a linked quarter basis was primarily due to the balance sheet repositioning during the period.

The increase when compared to the same period in the prior year was driven by the balance sheet repositioning, as well as reduced deposit costs and use of wholesale funding over the comparative periods.

Net Interest Income Tables

Tables 1 and 2 reflect an analysis of net interest income on a fully taxable equivalent basis for the three months ended June 30, 2025 and March 31, 2025 and the six months ended June 30, 2025 and 2024, respectively.

Tables 1 and 2 reflect an analysis of net interest income on a fully taxable equivalent basis for the three months ended September 30, 2025 and June 30, 2025 and the nine months ended September 30, 2025 and 2024, respectively.

Analysis of Net Interest Margin

(FTE = Fully Taxable Equivalent using an effective tax rate of 26.135%)

Three Months Ended Six Months Ended

June 30, March 31, June 30, June 30,

Three Months Ended Nine Months Ended

September 30, June 30, September 30, September 30,

(In thousands) 2025 2025 2025 2024

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Changes in Fully Taxable Equivalent Net Interest Margin

Three Months Ended Six Months Ended

(In thousands) June 30, 2025 compared to March 31, 2025 June 30, 2025 compared to June 30, 2024

Increase (decrease) due to change in earning assets $ 919 $ (11,527)

Three Months Ended Nine Months Ended

(In thousands) September 30, 2025 compared to June 30, 2025 September 30, 2025 compared to September 30, 2024

Decrease due to change in earning assets $ (16,041) $ (32,868)

Increase (decrease) due to change in earning asset yields 11,830 (19,681)

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Increase in net interest income $ 12,226 $ 55,635

Table 3 shows, for each major category of earning assets and interest bearing liabilities, the average (computed on a daily basis) amount outstanding, the interest earned or expensed on such amount and the average rate earned or expensed for the three months ended June 30, 2025 and March 31, 2025 and the six months ended June 30, 2025 and 2024, respectively.

Table 3 shows, for each major category of earning assets and interest bearing liabilities, the average (computed on a daily basis) amount outstanding, the interest earned or expensed on such amount and the average rate earned or expensed for the three months ended September 30, 2025 and June 30, 2025 and the nine months ended September 30, 2025 and 2024, respectively.

The table also shows the average rate earned on all earning assets, the average rate expensed on all interest bearing liabilities, the net interest spread and the net interest margin for the same periods.

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Three Months Ended

June 30, 2025 March 31, 2025

September 30, 2025 June 30, 2025

Average Income/ Yield/ Average Income/ Yield/

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Mortgage loans held for sale 13,776 229 6.60 13,063 221 6.79

Assets held in trading accounts 11,305 99 3.47 — — —

Loans - including fees 16,976,231 270,092 6.31 17,046,802 266,250 6.26

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Net interest margin – FTE $ 190,472 3.50 $ 178,246 3.06

Six Months Ended

June 30, 2025 June 30, 2024

Nine Months Ended

September 30, 2025 September 30, 2024

Average Income/ Yield/ Average Income/ Yield/

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Mortgage loans held for sale 11,681 572 6.55 10,607 551 6.94

Assets held in trading accounts 3,809 99 3.47 — — —

Loans - including fees 16,981,233 794,967 6.26 17,070,656 813,031 6.36

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Net interest margin – FTE $ 538,554 3.17 $ 482,919 2.70

Table 4 shows changes in interest income and interest expense resulting from changes in both volume and interest rates for the three months ended June 30, 2025 as compared to the three months ended March 31, 2025 and the six months ended June 30, 2025 and 2024, respectively.

Table 4 shows changes in interest income and interest expense resulting from changes in both volume and interest rates for the three months ended September 30, 2025 as compared to the three months ended June 30, 2025 and the nine months ended September 30, 2025 and 2024, respectively.

The changes in interest rate and volume have been allocated to changes in average volume and changes in average rates in proportion to the relationship of absolute dollar amounts of the changes in rates and volume.

Volume/Rate Analysis

Three Months Ended Six Months Ended

June 30, 2025 compared to March 31, 2025 June 30, 2025 compared to June 30, 2024

Three Months Ended Nine Months Ended

September 30, 2025 compared to June 30, 2025 September 30, 2025 compared to September 30, 2024

(In thousands, on a fully taxable equivalent basis) Volume Yield/

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Mortgage loans held for sale 12 (4) 8 54 (33) 21

Assets held in trading accounts 99 — 99 99 — 99

Loans - including fees (1,106) 4,948 3,842 (4,242) (13,822) (18,064)

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Total (14,802) (1,635) (16,437) (34,538) (73,646) (108,184)

Increase in net interest income $ 1,251 $ 7,159 $ 8,410 $ 375 $ 28,898 $ 29,273

Increase (decrease) in net interest income $ (1,239) $ 13,465 $ 12,226 $ 1,670 $ 53,965 $ 55,635

PROVISION FOR CREDIT LOSSES

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It is management’s practice to review the allowance on a monthly basis and, after considering the factors previously noted, to determine the level of provision made to the allowance.

The provision for credit losses for the three months ended June 30, 2025 was $11.9 million as compared to $26.8 million for the three months ended March 31, 2025.

The provision expense for the three months ended March 31, 2025 reflected a provision expense of $15.6 million related to two specific credit relationships which migrated to nonperforming during the period, while provision expense for both periods reflected loan growth in the quarters, as well as the impact of updated economic assumptions.

For the six months ended June 30, 2025, our provision for credit losses was $38.7 million as compared to $21.3 million for the same period ended June 30, 2024.

The provision expense for the six months ended June 30, 2025 reflected a provision expense of $15.6 million related to two specific credit relationships previously discussed, as well as the impact of updated economic assumptions reflecting increased uncertainty.

Provision expense for the same period ended June 30, 2024 reflected loan growth in the quarter, as well as the impact of updated economic assumptions.

NONINTEREST INCOME

The provision for credit losses for the three months ended September 30, 2025 was $12.0 million as compared to $11.9 million for the three months ended June 30, 2025.

Provision expense for both periods was related to loans and reflected loan growth in the quarters, as well as the impact of updated economic assumptions.

Provision expense for the three months ended September 30, 2025 also included a recapture of $3.2 million of provision related to HTM investment securities connected to the balance sheet repositioning during the period.

For the nine months ended September 30, 2025, our provision for credit losses was $50.7 million as compared to $33.5 million for the same period ended September 30, 2024.

The provision expense for the nine months ended September 30, 2025 reflected a provision expense of $15.6 million related to two specific credit relationships which migrated to nonperforming during the period, while provision expense for both periods reflected loan growth in the periods, as well as the impact of updated economic assumptions.

NONINTEREST INCOME (LOSS)

Noninterest income is principally derived from recurring fee income, which includes service charges, wealth management fees and debit and credit card fees.

Noninterest income also includes income on the sale of mortgage loans, income from the increase in cash surrender values of bank owned life insurance and gains (losses) from sales of securities.

For the three month period ended June 30, 2025, total noninterest income was $42.4 million, a decrease of approximately $3.8 million or 8.2%, compared to the three month period ended March 31, 2025.

The decrease for the three month period ended June 30, 2025 as compared to the preceding sequential quarter is primarily related to a $1.4 million Small Business Investment Company (“SBIC”) valuation adjustment recorded during the period, coupled with lower swap fee income due to a large swap transaction and associated fees recorded in the prior comparative period, all of which are included in “Other income” in the table below.

Noninterest income for the six months ended June 30, 2025 increased by approximately $2.0 million or 2.3% as compared to the six months ended June 30, 2024.

While the individual line items were all relatively flat as compared to the same period in 2024, the increase was primarily due to a $1.5 million increase in wealth management fees related to strong performance and more favorable market conditions during the six months ended June 30, 2025.

Table 5 shows noninterest income for the three month periods ended June 30, 2025 and March 31, 2025 and the six months ended June 30, 2025 and 2024, respectively, as well as changes between periods.

Noninterest Income

Three Months Ended Six Months Ended

June 30, March 31, Change June 30, June 30, Change

For the three month period ended September 30, 2025, we generated a noninterest loss of $756.2 million, a decrease of approximately $798.5 million, compared to noninterest income for the three month period ended June 30, 2025.

The decrease for the three month period ended September 30, 2025 as compared to the preceding sequential quarter is primarily related to a pre-tax loss on the sale of securities of $801.5 million.

During the period, we sold approximately $3.2 billion in amortized cost basis of low yielding investment securities, as part of a balance sheet repositioning to deleverage the balance sheet through the pay-down of higher rate, non-relationship wholesale and public fund deposits, as well as higher rate other borrowings primarily consisting of FHLB advances.

During the three month period ended September 30, 2025, we also recognized a $570,000 loss on early extinguishment of debt.

Adjusting for these certain items, adjusted noninterest income for the three month period ended September 30, 2025 increased $3.5 million, or 8.3%, from the prior sequential quarter.

The increase in adjusted noninterest income on a sequential quarter basis was primarily due to a $1.4 million Small Business Investment Company (“SBIC”) negative valuation adjustment recorded during the prior sequential quarter, which is included in “Other income” in the table below.

Noninterest income (loss) for the nine months ended September 30, 2025 decreased by approximately $771.3 million as compared to the nine months ended September 30, 2024.

The decrease, as compared to the same period in 2024, was primarily due to losses on sale of securities of $801.5 million discussed above and $28.4 million, recognized during each respective period.

Adjusting for these certain items, adjusted noninterest income for the nine month period ended September 30, 2025 increased $2.4 million, or 1.8%, from the prior comparative period.

Table 5 shows noninterest income for the three month periods ended September 30, 2025 and June 30, 2025 and the nine months ended September 30, 2025 and 2024, respectively, as well as changes between periods.

Noninterest Income (Loss)

Three Months Ended Nine Months Ended

September 30, June 30, Change September 30, September 30, Change

(Dollars in thousands) 2025 2025 $ % 2025 2024 $ %

5 unchanged sentences

Other service charges and fees 1,474 1,321 153 11.6 4,128 4,227 (99) (2.3)

Loss on sale of securities, net (801,492) — (801,492) * (801,492) (28,393) (773,099) *

Other income 6,141 4,837 1,304 27.0 18,985 21,928 (2,943) (13.4)

Total noninterest income $ 42,354 $ 46,155 $ (3,801) (8.2)% $ 88,509 $ 86,483 $ 2,026 2.3%

Recurring fee income (total service charges, wealth management fees, debit and credit card fees) was $31.9 million and $32.0 million for the three month periods ended June 30, 2025 and March 31, 2025, respectively, and was $64.0 million and $60.9 million for the six month periods ended June 30, 2025 and 2024, respectively.

Total noninterest income (loss) $ (756,187) $ 42,354 $ (798,541) * $ (667,678) $ 103,613 $ (771,291) *

_________________________

*Not meaningful

Recurring fee income (total service charges, wealth management fees, debit and credit card fees) was $33.0 million and $31.9 million for the three month periods ended September 30, 2025 and June 30, 2025, respectively, and was $96.9 million and $92.4 million for the nine month periods ended September 30, 2025 and 2024, respectively.

The increase over both comparative periods is primarily related to the increases in wealth management fees due to fee growth and market performance and in service charges on deposit accounts due to growth in consumer accounts and performance related to commercial treasury management.

NONINTEREST EXPENSE

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We also regularly monitor staffing levels at each subsidiary to ensure productivity and overhead are in line with existing workload requirements.

Noninterest expense was $138.6 million for the three month period ended June 30, 2025, as compared to noninterest expense of $144.6 million for the three month period ended March 31, 2025, representing a decrease of $6.0 million, or 4.1%, as compared to the preceding quarter.

Adjusted noninterest expense, which excludes branch right sizing and early retirement program costs (for the three months ended June 30, 2025), for the three months ended June 30, 2025 was $136.8 million, a decrease of $6.8 million as compared to the three months ended March 31, 2025.

Noninterest expense for the six months ended June 30, 2025 increased by approximately $3.9 million or 1.4% as compared to the six months ended June 30, 2024.

Adjusted noninterest expense, which excludes branch right sizing, early retirement program costs, FDIC special assessment (for the six months ended June 30, 2024) and termination of vendor and software services (for the six months ended June 30, 2024), increased $4.7 million, or 1.7%, as compared to the six months ended June 30, 2024.

Other noninterest expense decreased $4.2 million during the three month period ended June 30, 2025 as compared to the preceding sequential quarter and increased $1.5 million during the six month period ended June 30, 2025 when compared to the same period in the prior year.

The decrease during the three month period ended June 30, 2025 as compared to the preceding sequential quarter is primarily due to a $4.3 million charge related to a commercial customer deposit fraud event that was identified during the comparative period.

The increase during the six month period ended June 30, 2025 as compared to the same period in the prior year was also related to the previously mentioned fraud event, offset by a focus on disciplined expense management over the period.

Salaries and employee benefits expense decreased $962,000 during the three month period ended June 30, 2025 as compared to the preceding sequential quarter and increased $5.3 million during the six month period ended June 30, 2025 when compared to the same period in the prior year.

The decrease as compared to the preceding sequential quarter is primarily due to higher payroll taxes typically incurred during the first quarter, which was partially offset by early retirement program costs of $1.6 million recorded during the period.

The increase as compared to the same period in the prior year is primarily due to employee merit increases over the comparative periods.

Deposit insurance expense for the three and six months ended June 30, 2025 as compared to the three months ended March 31, 2025 and six months ended June 30, 2024 decreased by $474,000 and $2.5 million, respectively.

While the variance in deposit insurance expense on a sequential quarter basis is relatively flat, the decrease on a year over year basis for the six months ended June 30, 2025 is significantly attributable to the additional FDIC special assessments totaling $1.8 million during the six months ended June 30, 2024, which were levied to support the Deposit Insurance Fund following the failure of certain banks in 2023.

Table 6 below shows noninterest expense for the three month periods ended June 30, 2025 and March 31, 2025 and the six months ended June 30, 2025 and 2024, respectively, as well as changes between periods.

Noninterest expense was $142.0 million for the three month period ended September 30, 2025, as compared to noninterest expense of $138.6 million for the three month period ended June 30, 2025, representing an increase of $3.4 million, or 2.5%, as compared to the preceding quarter.

Adjusted noninterest expense, which excludes branch right sizing and early retirement program costs, for the three months ended September 30, 2025 was $139.7 million, an increase of $2.9 million as compared to the three months ended June 30, 2025.

Noninterest expense for the nine months ended September 30, 2025 increased by approximately $8.8 million or 2.1% as compared to the nine months ended September 30, 2024.

Adjusted noninterest expense, which excludes branch right sizing, early retirement program costs, FDIC special assessment (for the nine months ended September 30, 2024) and termination of vendor and software services (for the nine months ended September 30, 2024), increased $7.7 million, or 1.9%, as compared to the nine months ended September 30, 2024.

Salaries and employee benefits expense increased $2.4 million during the three month period ended September 30, 2025 as compared to the preceding sequential quarter and increased $12.4 million during the nine month period ended September 30, 2025 when compared to the same period in the prior year.

The increase as compared to the preceding sequential quarter is primarily due to salary and employee benefits accrual adjustments given the Company’s financial performance through the third quarter of 2025.

The increase as compared to the same period in the prior year is primarily due to employee merit increases over the comparative periods, coupled with the previously mentioned performance accrual adjustments.

Deposit insurance expense for the three and nine months ended September 30, 2025 as compared to the three months ended June 30, 2025 and nine months ended September 30, 2024 increased by $258,000 and decreased by $2.9 million, respectively.

While the variance in deposit insurance expense on a sequential quarter basis is relatively flat, the decrease on a year over year basis for the nine months ended September 30, 2025 is significantly attributable to the additional FDIC special assessments totaling $1.8 million during the nine months ended September 30, 2024, which were levied to support the Deposit Insurance Fund following the failure of certain banks in 2023.

Table 6 below shows noninterest expense for the three month periods ended September 30, 2025 and June 30, 2025 and the nine months ended September 30, 2025 and 2024, respectively, as well as changes between periods.

Noninterest Expense

Three Months Ended Six Months Ended

June 30, March 31, Change June 30, June 30, Change

Three Months Ended Nine Months Ended

September 30, June 30, Change September 30, September 30, Change

(Dollars in thousands) 2025 2025 $ % 2025 2024 $ %

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Total noninterest expense $ 142,032 $ 138,589 $ 3,443 2.5% $ 425,201 $ 416,426 $ 8,775 2.1%

_________________________

*Not meaningful

INVESTMENTS AND SECURITIES

Our securities portfolio is the second largest component of earning assets and provides a significant source of revenue.

Securities within the portfolio are classified as either held-to-maturity (“HTM”) or AFS.

Securities within the portfolio are classified as held-to-maturity (“HTM”), AFS or trading.

Our philosophy regarding investments is conservative based on investment type and maturity.

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Our general policy is not to invest in derivative type investments or high-risk securities, except for collateralized MBS for which collection of principal and interest is not subordinated to significant superior rights held by others.

HTM and AFS investment securities were $3.59 billion and $2.41 billion, respectively, at June 30, 2025, compared to the HTM amount of $3.64 billion and AFS amount of $2.53 billion at December 31, 2024.

As of September 30, 2025, AFS investment securities and assets held in trading accounts were $3.32 billion and $12.7 million, respectively.

As of December 31, 2024, AFS and HTM investment securities were $2.53 billion and $3.64 billion, respectively.

We continue to look for opportunities to maximize the value of the investment portfolio.

During the quarters ended June 30, 2022 and September 30, 2021, we transferred, at fair value, $1.99 billion and $500.8 million, respectively, of securities from the AFS portfolio to the HTM portfolio.

The related remaining combined net unrealized losses of $99.4 million in accumulated other comprehensive income (loss) as of June 30, 2025 will be amortized over the remaining life of the securities.

During the third quarter of 2025, the Company and its subsidiaries initiated and completed steps taken to reposition the Company’s consolidated balance sheet and reclassified approximately $3.6 billion in HTM investment securities to AFS investment securities.

Subsequently, the Company sold approximately $3.2 billion in amortized cost basis of AFS securities (including certain of those previously classified as HTM).

The sale of investment securities resulted in a realized, after-tax loss of $625.6 million (based on actual tax rate of 21.946%).

The AFS securities sold were low-yield bonds and, by removing these bonds from our balance sheet, we reduced our level of high-cost wholesale funding and increased our ability to generate higher earnings and growth.

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.

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

As of June 30, 2025, management had the ability and intent to hold the securities classified as HTM until they mature, at which time we expected to receive full value for the securities.

During the balance sheet repositioning that occurred during the third quarter of 2025, these securities were transferred out of the HTM portfolio to the AFS portfolio at fair value.

The previous related remaining combined net unrealized losses in accumulated other comprehensive income (loss), which losses were $99.4 million, were either recognized as part of the securities transfer and subsequent sale of certain securities or will be amortized into income over the remaining life of the security.

As of September 30, 2025, we had the ability to hold the securities classified as AFS for a period of time sufficient for a recovery of amortized cost and we believed the accounting standard of “more likely than not” has not been met regarding whether we would be required to sell any of the AFS securities before recovery of amortized cost.

As of September 30, 2025, the unrealized losses were largely due to increases in market interest rates over the yields available at the time the underlying securities were purchased.

The fair value is expected to recover as the bonds approach their maturity date or repricing date or if market yields for such investments decline.

Accordingly, as of September 30, 2025, we believed the declines in fair value are temporary and we did not believe any of the securities are impaired due to reasons of credit quality.

The contractual terms of those investments do not permit the issuer to settle the securities at a price less than the amortized cost bases of the investments.

We expect the cash flows from principal maturities of securities to provide flexibility to fund future loan growth or reduce wholesale funding.

Furthermore, as of June 30, 2025, we had the ability to hold the securities classified as AFS for a period of time sufficient for a recovery of amortized cost and we believed the accounting standard of “more likely than not” has not been met regarding whether we would be required to sell any of the AFS securities before recovery of amortized cost.

As of June 30, 2025, the unrealized losses were largely due to increases in market interest rates over the yields available at the time the underlying securities were purchased.

The fair value is expected to recover as the bonds approach their maturity date or repricing date or if market yields for such investments decline.

Accordingly, as of June 30, 2025, we believed the declines in fair value are temporary and we did not believe any of the securities are impaired due to reasons of credit quality.

During July 2025, we initiated and completed steps taken to reposition our consolidated balance sheet and reclassified approximately $3.6 billion in HTM investment securities to AFS investment securities.

Subsequently, we sold approximately $3.2 billion in amortized cost basis of AFS securities (including certain of those previously classified as HTM).

The sale of investment securities resulted in an estimated, realized after-tax loss of approximately $604.0 million (based on an estimated tax rate of 24.3%), which will be recorded during the third quarter of 2025.

Maturity Distribution of Investment Securities

Table 7 reflects the amortized cost and estimated fair value of securities at September 30, 2025, by contractual maturity and the weighted average yields (for tax-exempt obligations on a fully taxable equivalent basis, assuming a 26.135% tax rate) of such securities and is presented due to the reclassification and sale of certain securities during the quarter.

Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations, with or without call or prepayment penalties.

September 30, 2025

1 year 5 years Total

1 year through through Over No fixed Amortized Par Fair

(In thousands) or less 5 years 10 years 10 years maturity Cost Value Value

Available-for-Sale

Government agencies $ 50 $ 28,118 $ 2,859 $ 18,025 $ — $ 49,052 $ 48,354 $ 48,355

Mortgage-backed securities — — — — 2,446,711 2,446,711 2,422,050 2,249,593

State and political subdivisions 4,835 12,746 22,603 1,005,507 — 1,045,691 1,074,697 845,371

Other securities 6,004 63,761 112,547 — 208 182,520 182,515 175,958

Total $ 10,889 $ 104,625 $ 138,009 $ 1,023,532 $ 2,446,919 $ 3,723,974 $ 3,727,616 $ 3,319,277

Percentage of total 0.3 % 2.8 % 3.7 % 27.5 % 65.7 % 100.0 %

Weighted average yield 1.6 % 5.1 % 3.7 % 2.8 % 3.1 % 3.1 %

During the third quarter of 2021, we began utilizing interest rate swaps designated as fair value hedges to mitigate the effect of changing interest rates on the fair values of $1.00 billion of fixed rate callable municipal securities held in the AFS portfolio.

1 unchanged sentence

Securities within these swap agreements have maturity dates varying between 2028 and 2029.

For the six months ended June 30, 2025, the net amount included in interest income on investment securities in the consolidated statements of income related to these swap agreements was $16.0 million.

For the nine months ended September 30, 2025, the net amount included in interest income on investment securities in the consolidated statements of income related to these swap agreements was $24.2 million.

LOAN PORTFOLIO

Our loan portfolio averaged $16.98 billion and $17.00 billion during the first six months of 2025 and 2024, respectively.

As of June 30, 2025, total loans were $17.11 billion, an increase of $105.2 million from December 31, 2024.

The increase in the loan balance during the first six months of 2025 when compared to December 31, 2024 is primarily due to growth in the commercial real estate, agricultural and mortgage warehouse portfolios over the comparative period, while we continued to focus on maintaining prudent underwriting standards and pricing discipline.

Our loan portfolio averaged $16.98 billion and $17.07 billion during the first nine months of 2025 and 2024, respectively.

As of September 30, 2025, total loans were $17.19 billion, an increase of $182.9 million from December 31, 2024.

The increase in the loan balance during the first nine months of 2025 when compared to December 31, 2024 is primarily due to growth in the real estate - construction and development, agricultural and mortgage warehouse portfolios over the comparative period, while we continued to focus on maintaining prudent underwriting standards and pricing discipline.

The most significant components of the loan portfolio were loans to businesses (commercial loans, commercial real estate loans and agricultural loans) and individuals (consumer loans, credit card loans and single-family residential real estate loans).

7 unchanged sentences

Loan Portfolio

June 30, December 31,

September 30, December 31,

(In thousands) 2025 2024

12 unchanged sentences

Consumer loans consist of credit card loans and other consumer loans.

Consumer loans were $300.0 million at June 30, 2025, or 1.8% of total loans, compared to $309.0 million, or 1.8% of total loans at December 31, 2024.

The decrease in consumer loans from December 31, 2024, to June 30, 2025, was primarily due to loan payoffs and pay downs within both the credit card and other consumer portfolios during the period.

Consumer loans were $285.4 million at September 30, 2025, or 1.7% of total loans, compared to $309.0 million, or 1.8% of total loans at December 31, 2024.

The decrease in consumer loans from December 31, 2024, to September 30, 2025, was primarily due to loan payoffs and pay downs within both the credit card and other consumer portfolios during the period.

Real estate loans consist of construction and development loans (“C&D”) loans, single-family residential loans and commercial real estate (“CRE”) loans.

Real estate loans were $13.37 billion at June 30, 2025, or 78.1% of total loans, compared to $13.39 billion, or 78.7%, of total loans at December 31, 2024, a decrease of $19.8 million, or 0.1%.

Our C&D loans were relatively flat over the comparative period with a decrease of $4.7 million, or 0.2%, while single family residential loans decreased by $64.2 million, or 2.4%, and CRE loans increased by $49.1 million, or 0.6%.

The changes among our real estate portfolio reflected our focus on maintaining conservative underwriting standards and structure guidelines while emphasizing prudent pricing discipline during the first six months of 2025.

Real estate loans were $13.37 billion at September 30, 2025, or 77.8% of total loans, compared to $13.39 billion, or 78.7%, of total loans at December 31, 2024, a decrease of $23.2 million, or 0.2%.

Our C&D loans increased by $85.6 million, or 3.1%, while single family residential loans decreased by $72.1 million, or 2.7%, and CRE loans decreased by $36.7 million, or 0.5%.

We expect to continue to manage our C&D and CRE portfolio concentration by developing deeper relationships with our customers.

Commercial loans consist of non-real estate loans related to business and agricultural loans.

Total commercial loans were $2.77 billion at June 30, 2025, or 16.2% of total loans, compared to $2.70 billion, or 15.8% of total loans at December 31, 2024, an increase of $78.3 million, or 2.9%.

Total commercial loans were $2.75 billion at September 30, 2025, or 16.0% of total loans, compared to $2.70 billion, or 15.8% of total loans at December 31, 2024, an increase of $55.2 million, or 2.0%.

The increase in commercial loans was largely related to the increase in agricultural loans of $92.0 million, or 35.2%, primarily due to seasonality of the portfolio, which normally peaks in the third quarter.

Other loans mainly consist of mortgage warehouse lending and municipal loans.

Mortgage volume experienced an increase in demand during the first six months of 2025 as compared to December 31, 2024, leading to an increase of $55.7 million in other loans.

Our commercial loan pipeline consisting of all commercial loan opportunities was $1.63 billion at June 30, 2025 compared to $1.26 billion at December 31, 2024.

Loans approved and ready to close at the end of the quarter totaled $564.3 million.

Mortgage volume experienced an increase in demand during the first nine months of 2025 as compared to December 31, 2024, leading to an increase of $174.5 million in other loans.

Our commercial loan pipeline consisting of all commercial loan opportunities was $1.61 billion at September 30, 2025 compared to $1.26 billion at December 31, 2024.

Commercial loans approved and ready to close at the end of the quarter totaled $489.9 million.

Our commercial loan pipeline consisting of all commercial loan opportunities was $2.21 billion at October 31, 2025, while commercial loans approved and ready to close at the end of October 2025 totaled $785.7 million with a weighted average rate (not including fees) of 7.00%.

ASSET QUALITY

8 unchanged sentences

The credit card recovery group pursues account holders until it is determined, on a case-by-case basis, to be uncollectible.

Total nonperforming assets increased $45.5 million from December 31, 2024 to June 30, 2025.

Nonaccrual loans increased by $46.3 million from December 31, 2024 and foreclosed assets held for sale and other real estate owned decreased $476,000 as compared to December 31, 2024.

Total nonperforming assets increased $39.5 million from December 31, 2024 to September 30, 2025.

Nonaccrual loans increased by $43.4 million from December 31, 2024 and foreclosed assets held for sale and other real estate owned decreased $2.9 million as compared to December 31, 2024.

The increase in nonaccrual loans was primarily due to two specific credit relationships being placed on nonaccrual status during the period.

9 unchanged sentences

We primarily use interest rate reduction and/or payment modifications or extensions, with an occasional forgiveness of principal.

There were five loan modifications granted to borrowers experiencing financial difficulty during the six month period ended June 30, 2025.

Such modifications included interest rate reductions and had a total period-end amortized cost basis of $528,000 at June 30, 2025.

The allowance for credit losses as a percent of total loans was 1.48% as of June 30, 2025.

There were eleven loan modifications granted to borrowers experiencing financial difficulty during the nine month period ended September 30, 2025.

Such modifications included interest rate reductions and/or term extensions and had a total period-end amortized cost basis of $849,000 at September 30, 2025.

The allowance for credit losses as a percent of total loans was 1.50% as of September 30, 2025.

Nonperforming loans equaled 0.90% of total loans.

1 unchanged sentence

The allowance for credit losses was 168% of nonperforming loans.

Our annualized net charge-offs to average total loans ratio for the first six months of 2025 was 0.24%.

Annualized net credit card charge-offs to average total credit card loans were 2.85% for the first six months of 2025, compared to 2.93% during the full year 2024, and 182 basis points better than the most recently published industry average charge-off ratio as reported by the Federal Reserve for all banks.

Our annualized net charge-offs to average total loans ratio for the first nine months of 2025 was 0.24%.

Annualized net credit card charge-offs to average total credit card loans were 3.11% for the first nine months of 2025, compared to 2.93% during the full year 2024, and 120 basis points better than the most recently published industry average charge-off ratio as reported by the Federal Reserve for all banks.

Table 9 presents information concerning nonperforming assets, including nonaccrual loans at amortized cost and foreclosed assets held for sale.

Nonperforming Assets

June 30, December 31, June 30,

September 30, December 31, September 30,

(Dollars in thousands) 2025 2024 2024

12 unchanged sentences

_______________________________________

(1) Includes nonaccrual FDMs of approximately $27.9 million and $597,000 at June 30, 2025 and December 31, 2024, respectively.

The interest income on nonaccrual loans is not considered material for the three and six month periods ended June 30, 2025 and 2024.

(1) Includes nonaccrual FDMs of approximately $28.2 million and $597,000 at September 30, 2025 and December 31, 2024, respectively.

The interest income on nonaccrual loans is not considered material for the three and nine month periods ended September 30, 2025 and 2024.

ALLOWANCE FOR CREDIT LOSSES

30 unchanged sentences

Provision for credit losses 53,922 33,453

Balance, June 30, $ 253,537 $ 230,389

Balance, September 30, $ 258,006 $ 233,223

Loans charged off:

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Provision for Credit Losses

The amount of provision added to or released from the allowance during the three and six months ended June 30, 2025 and 2024, and for the year ended December 31, 2024, was based on management’s judgment, with consideration given to the composition and asset quality of the portfolio, historical loan loss experience, and assessment of current and expected economic forecasts and conditions.

The amount of provision added to or released from the allowance during the three and nine months ended September 30, 2025 and 2024, and for the year ended December 31, 2024, was based on management’s judgment, with consideration given to the composition and asset quality of the portfolio, historical loan loss experience, and assessment of current and expected economic forecasts and conditions.

It is management’s practice to review the allowance on a monthly basis, and after considering the factors previously noted, to determine the level of provision made to the allowance.

Allowance for Credit Losses Allocation

As of June 30, 2025, the allowance for credit losses reflected an increase of approximately $18.5 million from December 31, 2024, while total loans increased by $105.2 million over the same six month period.

As of September 30, 2025, the allowance for credit losses reflected an increase of approximately $23.0 million from December 31, 2024, while total loans increased by $182.9 million over the same nine month period.

The allocation in each category within the allowance generally reflects the overall changes in the loan portfolio mix.

The increase in the allowance for credit losses during the first six months of 2025 was primarily due to a provision expense of $15.6 million related to two specific credit relationships which migrated to nonperforming during the period, as well as the impact of updated economic forecasts.

Our allowance for credit losses at June 30, 2025 was considered appropriate given the current economic environment and other related factors.

The increase in the allowance for credit losses during the first nine months of 2025 was primarily due to a provision expense of $15.6 million related to two specific credit relationships which migrated to nonperforming during the period, as well as the impact of updated economic forecasts.

Our allowance for credit losses at September 30, 2025 was considered appropriate given the current economic environment and other related factors.

The following table sets forth the sum of the amounts of the allowance for credit losses attributable to individual loans within each category, or loan categories in general.

3 unchanged sentences

Allocation of Allowance for Credit Losses

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

(Dollars in thousands) Allowance

7 unchanged sentences

(1) Percentage of loans in each category to total loans.

Deposits are our primary source of funding for earning assets and are primarily developed through our network of 223 financial centers as of June 30, 2025.

Deposits are our primary source of funding for earning assets and are primarily developed through our network of 223 financial centers as of September 30, 2025.

We offer a variety of products designed to attract and retain customers with a continuing focus on developing core deposits.

Our core deposits consist of all deposits excluding time deposits of $250,000 or more and brokered deposits.

As of June 30, 2025, core deposits comprised 78.3% of our total deposits.

As of September 30, 2025, core deposits comprised 84.5% of our total deposits.

We continually monitor the funding requirements along with competitive interest rates in the markets we serve.

6 unchanged sentences

We are continually monitoring and looking for opportunities to fairly reprice our deposits while remaining competitive in this current challenging rate environment.

Our total deposits as of June 30, 2025, were $21.82 billion, compared to $21.89 billion as of December 31, 2024.

Noninterest bearing transaction accounts, interest bearing transaction accounts and savings accounts totaled $15.65 billion at June 30, 2025, compared to $15.44 billion at December 31, 2024, an increase of $202.5 million.

Total time deposits decreased $263.2 million to $6.18 billion at June 30, 2025, from $6.44 billion at December 31, 2024.

We had $3.24 billion and $3.30 billion of brokered deposits at June 30, 2025, and December 31, 2024, respectively.

Our total deposits as of September 30, 2025, were $19.84 billion, compared to $21.89 billion as of December 31, 2024.

Noninterest bearing transaction accounts, interest bearing transaction accounts and savings accounts totaled $15.31 billion at September 30, 2025, compared to $15.44 billion at December 31, 2024, a decrease of $132.4 million.

Total time deposits decreased $1.92 billion to $4.53 billion at September 30, 2025, from $6.44 billion at December 31, 2024.

We had $1.84 billion and $3.30 billion of brokered deposits at September 30, 2025, and December 31, 2024, respectively.

The decrease in time deposits and brokered deposits over the comparative period is largely due to the balance sheet repositioning during the third quarter of 2025, including the pay-down of higher rate, non-relationship wholesale and public fund deposits.

We are continuing to refine our product offerings to give customers flexibility of choice while maintaining the ability to adjust interest rates timely in the current rate environment.

Table 12 reflects the classification of the average deposits and the average rate paid on each deposit category which is in excess of 10 percent of average total deposits for the nine months ended September 30, 2025 and the year ended December 31, 2024.

Average Deposit Balances and Rates

September 30, 2025 December 31, 2024

(In thousands) Average Amount Average Rate Paid Average Amount Average Rate Paid

Noninterest bearing transaction accounts $ 4,367,882 — % $ 4,576,022 — %

Interest bearing transaction and savings deposits

11,146,423 2.45 % 10,974,529 2.81 %

Time deposits 5,695,173 3.96 % 6,411,888 4.55 %

Total $ 21,209,478 2.35 % $ 21,962,439 2.73 %

OTHER BORROWINGS AND SUBORDINATED NOTES AND DEBENTURES

Our total debt was $1.00 billion and $1.11 billion at June 30, 2025 and December 31, 2024, respectively.

The outstanding balance for June 30, 2025 includes $617.8 million in FHLB advances;

Our total debt was $667.8 million and $1.11 billion at September 30, 2025 and December 31, 2024, respectively.

The outstanding balance for September 30, 2025 includes $2.7 million in FHLB advances;

$649.0 million in subordinated notes and unamortized debt issuance costs;

and $16.1 million of other long-term debt.

FHLB advances outstanding at June 30, 2025 are whole loan advances, which are due less than one year from origination and therefore are classified as short-term advances.

In March 2018, we issued $330.0 million in aggregate principal amount of 5.00% Fixed-to-Floating Rate Subordinated Notes (“Notes”) at a public offering price equal to 100% of the aggregate principal amount of the Notes.

The decrease in total debt over the comparative period is due to the pay down of higher cost wholesale funding, primarily FHLB advances, as part of the balance sheet repositioning during the period.

In March 2018, we issued $330.0 million in aggregate principal amount of 2018 Notes at a public offering price equal to 100% of the aggregate principal amount of the 2018 Notes.

We incurred $3.6 million in debt issuance costs related to the offering.

The Notes will mature on April 1, 2028 and are subordinated in right of payment to the payment of our other existing and future senior indebtedness, including all our general creditors.

The 2018 Notes were to mature on April 1, 2028;

during the third quarter of 2025, the Company issued a notice of redemption to redeem the 2018 Notes, which were redeemed in full on October 1, 2025.

The related remaining $565,000 of unamortized debt issuance costs were written off during the quarter ended September 30, 2025.

We assumed Fixed-to-Floating Rate Subordinated Notes in an aggregate principal amount, net of premium adjustments, of $37.4 million in connection with the Spirit acquisition in April 2022 (“Spirit Notes”).

During the second quarter of 2025, we issued a notice of redemption to redeem the Spirit Notes in an aggregate principal amount of $37.0 million.

The Spirit Notes were redeemed in full on July 31, 2025.

In September 2025, we issued $325.0 million in aggregate principal amount of 2025 Notes at a public offering price equal to 100% of the aggregate principal amount of the 2025 Notes.

The Company incurred $3.9 million in debt issuance costs related to the offering.

Additionally, during the third quarter of 2025, the Company began utilizing interest rate swaps designated as fair value hedges to mitigate the risk of changes in the fair value of the aggregate principal amount of the 2025 Notes due to changes in market interest rates.

The 2025 Notes will mature on October 1, 2035 and are subordinated in right of payment to the payment of our other existing and future senior indebtedness, including all our general creditors.

The 2025 Notes are obligations of the Company only and are not obligations of, and are not guaranteed by, any of its subsidiaries.

Subject to the redemption described below, the Spirit Notes would mature on July 31, 2030, and initially bear interest at a fixed annual rate of 6.00%, payable quarterly, in arrears, to, but excluding, July 31, 2025.

From and including July 31, 2025, to, but excluding, the maturity date or earlier redemption date, the interest rate will reset quarterly to an interest rate per annum equal to a benchmark rate, which is expected to be the then-current three-month Secured Overnight Financing Rate (“SOFR”), 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.

During the quarter ended June 30, 2025, we issued a notice of redemption to redeem the Spirit Notes, which were redeemed in full on July 31, 2025.

For information about the regulatory capital treatment of the Notes and the Spirit Notes, see the section “ Capital—Risk-Based Capital .”

At June 30, 2025, total capital was $3.55 billion.

For information about the regulatory capital treatment of the 2018 Notes, 2025 Notes and the Spirit Notes, see the section “ Capital—Risk-Based Capital .”

At September 30, 2025, total capital was $3.35 billion.

Capital represents shareholder ownership in the Company – the book value of assets in excess of liabilities.

At June 30, 2025, our common equity to asset ratio was 13.30% compared to 13.13% at year-end 2024.

At September 30, 2025, our common equity to asset ratio was 13.85% compared to 13.13% at year-end 2024.

Capital Stock

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

As of June 30, 2025 and December 31, 2024, there were no shares of preferred stock issued or outstanding.

As of September 30, 2025 and December 31, 2024, there were no shares of preferred stock issued or outstanding.

On May 17, 2024, we filed a shelf registration with the SEC.

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On July 23, 2025, we closed a public offering of 18,653,000 shares of our Class A common stock, at a price to the public of $18.50 per share, which includes 2,433,000 shares of our Class A common stock granted pursuant to the underwriters’ option to purchase additional shares at the public offering price, less underwriting discounts.

The proceeds from this public offering will help us offset the one-time estimated, realized after-tax loss of approximately $604.0 million (based on an estimated tax rate of 24.3%) incurred during the third quarter of 2025 from selling AFS securities discussed in the Investments and Securities section above.

The net proceeds of $327.4 million from this public offering helped offset the one-time, realized after-tax loss of $625.6 million (based on an actual tax rate of 21.946%) incurred during the third quarter of 2025 from selling AFS securities discussed in the Investments and Securities section above.

Stock Repurchase Program

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We anticipate funding for this 2024 Program to come from available sources of liquidity, including cash on hand and future cash flow.

No shares were repurchased during the three and six month periods ended June 30, 2025 and 2024.

No shares were repurchased during the three and nine month periods ended September 30, 2025 and 2024.

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

Cash Dividends

We declared cash dividends on our common stock of $0.425 per share for the first six months of 2025 compared to $0.42 per share for the first six months of 2024, an increase of $0.005, or 1%.

We declared cash dividends on our common stock of $0.6375 per share for the first nine months of 2025 compared to $0.63 per share for the first nine months of 2024, an increase of $0.0075, or 1%.

The timing and amount of future dividends are at the discretion of our Board of Directors and will depend upon our consolidated earnings, financial condition, liquidity and capital requirements, the amount of cash dividends paid to us by our subsidiaries, applicable government regulations and policies and other factors considered relevant by our Board of Directors.

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Quantitative measures established by regulation to ensure capital adequacy require us to maintain minimum amounts and ratios (set forth in the table below) of total, Tier 1 and common equity Tier 1 capital (as defined in the regulations) to risk-weighted assets (as defined) and of Tier 1 capital (as defined) to average assets (as defined).

Management believes that, as of June 30, 2025, we meet all capital adequacy requirements to which we are subject.

Management believes that, as of September 30, 2025, we met all capital adequacy requirements to which we are subject.

As of the most recent notification from regulatory agencies, Simmons Bank was well capitalized under the regulatory framework for prompt corrective action.

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There are no conditions or events since that notification that management believes have changed the institution’s categories.

The Company’s risk-based capital ratios at June 30, 2025 and December 31, 2024 are presented in Table 11 below:

The Company’s risk-based capital ratios at September 30, 2025 and December 31, 2024 are presented in Table 13 below:

Risk-Based Capital

June 30, December 31,

September 30, December 31,

(Dollars in thousands) 2025 2024

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The rules also raised the minimum ratio of Tier 1 capital to risk-weighted assets to 6.0% and require a minimum leverage ratio of 4.0%.

Qualifying subordinated debt of $168.4 million and $234.3 million is included as Tier 2 and total capital of the Company for periods ended June 30, 2025 and December 31, 2024, respectively.

Qualifying subordinated debt of $451.0 million and $234.3 million is included as Tier 2 and total capital of the Company for periods ended September 30, 2025 and December 31, 2024, respectively.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

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These forward-looking statements may be identified by reference to a future period(s) or by the use of forward-looking terminology, such as “anticipate,” “believe,” “budget,” “contemplate,” “continue,” “estimate,” “expect,” “foresee,” “intend,” “indicate,” “likely,” “target,” “plan,” “positions,” “prospects,” “project,” “predict,” or “potential,” by future conditional verbs such as “could,” “may,” “might,” “should,” “will,” or “would,” or by variations of such words or by similar expressions.

These forward-looking statements include, without limitation, those relating to the Company’s future growth, business strategies, product development, acquisitions and their expected benefits, revenue, expenses, assets, asset quality, profitability, earnings, accretion, dividends, customer service, lending capacity and lending activity, loan demand, deposit levels, investment in digital channels, critical accounting policies and estimates, net interest income, net interest margin, noninterest income, noninterest expense, the Company’s stock repurchase program, consumer behavior and liquidity, the Company’s ability to recruit and retain key employees, the adequacy of the allowance for credit losses, income tax deductions, credit quality, the level of credit losses from lending commitments, net interest revenue, interest rates and interest rate sensitivity (including, among other things, the impact of rising or declining interest rates), economic conditions, repricing of loans and time deposits, loan loss experience, liquidity, the Company’s expectations regarding actions by the regulatory agencies, capital resources, the expected expenses and cost savings associated with branch closures, market risk, plans for investments in (and cash flows from) securities and investment portfolio strategies, effect of pending and future litigation, staffing initiatives, estimated cost savings associated with the Company’s early retirement program, legal and regulatory limitations and compliance and competition.

These forward-looking statements include, without limitation, those relating to the Company’s future growth, business strategies, product development, acquisitions and their expected benefits, revenue, expenses, assets, asset quality, profitability, earnings, accretion, dividends, customer service, lending capacity and lending activity, loan demand, deposit levels, investment in digital channels, critical accounting policies and estimates, net interest income, net interest margin, noninterest income, noninterest expense, the Company’s stock repurchase program, consumer behavior and liquidity, the Company’s ability to recruit and retain key employees, the adequacy of the allowance for credit losses, income tax deductions, deferred tax assets, credit quality, the level of credit losses from lending commitments, net interest revenue, interest rates and interest rate sensitivity (including, among other things, the impact of rising or declining interest rates), economic conditions, repricing of loans and time deposits, loan loss experience, liquidity, the Company’s expectations regarding actions by the regulatory agencies, capital resources, the expected expenses and cost savings associated with branch closures, market risk, plans for investments in (and cash flows from) securities and investment portfolio strategies, effect of pending and future litigation, staffing initiatives, estimated cost savings associated with the Company’s early retirement program, legal and regulatory limitations and compliance and competition.

These forward-looking statements are based on various assumptions and involve inherent risks and uncertainties, and may not be realized due to a variety of factors, including, without limitation:

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changes in interest rates and related governmental policies;

changes in liquidity, and the availability of and costs associated with obtaining adequate and timely sources of liquidity;

the effects of a government shutdown, changes in liquidity, and the availability of and costs associated with obtaining adequate and timely sources of liquidity;

increased inflation;

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the costs of evaluating possible acquisitions and the risks inherent in integrating acquisitions;

possible adverse rulings, judgements, settlements, fines and other outcomes of pending or future litigation or government actions;

market disruptions, including pandemics or significant health hazards, severe weather conditions, natural disasters, terrorist activities, financial crises, political crises, war and other military conflicts (including the ongoing military conflicts between Russia and Ukraine and Israel and Iran) or other major events, or the prospect of these events;

possible adverse rulings, judgments, settlements, fines and other outcomes of pending or future litigation or government actions;

market disruptions, including pandemics or significant health hazards, severe weather conditions, natural disasters, terrorist activities, financial crises, political crises, war and other military conflicts (including the ongoing military conflicts between Russia and Ukraine) or other major events, or the prospect of these events;

changes in customer behaviors and preferences, including consumer spending, borrowing and saving habits;

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GAAP RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

The tables below present computations of adjusted earnings (net income excluding certain items {net branch right sizing costs, FDIC special assessment, termination of vendor and software services, early retirement program costs and tax effect}) (non-GAAP), and adjusted diluted earnings per share (non-GAAP) as well as a computation of tangible book value per share (non-GAAP), tangible common equity to tangible assets (non-GAAP), adjusted noninterest expense (non-GAAP), uninsured, non-collateralized deposits (non-GAAP) and the coverage ratio of uninsured, non-collateralized deposits (non-GAAP).

The tables below present computations of adjusted earnings (net income excluding certain items {net branch right sizing costs, FDIC special assessment, termination of vendor and software services, early retirement program costs, loss on early extinguishment of debt, loss on sale of securities and tax effect}) (non-GAAP), and adjusted diluted earnings per share (non-GAAP) as well as a computation of tangible book value per share (non-GAAP), tangible common equity to tangible assets (non-GAAP), adjusted noninterest income (non-GAAP), adjusted noninterest expense (non-GAAP), uninsured, non-collateralized deposits (non-GAAP) and the coverage ratio of uninsured, non-collateralized deposits (non-GAAP).

Adjusted items are included in financial results presented in accordance with generally accepted accounting principles (US GAAP).

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• Investor presentations of Company performance

We have $1.411 billion and $1.418 billion total goodwill and other intangible assets for the periods ended June 30, 2025 and December 31, 2024, respectively.

We have $1.408 billion and $1.418 billion total goodwill and other intangible assets for the periods ended September 30, 2025 and December 31, 2024, respectively.

Because our acquisition strategy has resulted in a high level of intangible assets, management believes useful calculations include tangible book value per share (non-GAAP) and tangible common equity to tangible assets (non-GAAP).

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Reconciliation of Adjusted Earnings (non-GAAP)

Three Months Ended Six Months Ended

June 30, March 31, June 30, June 30,

Three Months Ended Nine Months Ended

September 30, June 30, September 30, September 30,

(In thousands, except per share data) 2025 2025 2025 2024

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Certain items:

Loss on early extinguishment of debt 570 — 570 —

FDIC Special Assessment — — — 1,832

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Termination of vendor and software services — — — 602

Loss on sale of securities 801,492 — 801,492 28,393

Branch right sizing (net) 2,004 163 3,161 1,165

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Certain items:

Loss on early extinguishment of debt — — — —

FDIC Special Assessment — — — 0.02

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Termination of vendor and software services — — — —

Loss on sale of securities 5.70 — 6.11 0.23

Branch right sizing (net) 0.01 — 0.02 0.01

Tax effect (1)

(1.25) — (1.34) (0.07)

Certain items, net of tax 4.46 0.01 4.81 0.19

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_______________________________________

(1) Effective tax rate of 26.135%.

(1) Actual tax rate of 21.946% on 2025 loss on sale of securities.

Effective tax rate of 26.135% on all other items.

(2) See Note 15, Earnings Per Share (“EPS”), for number of shares used to determine EPS.

See Table 13 below for the reconciliation of adjusted noninterest expense for the periods presented.

Reconciliation of Adjusted Noninterest Expense (non-GAAP)

Three Months Ended Six Months Ended

June 30, March 31, June 30, June 30,

See Table 15 below for the reconciliation of adjusted noninterest income and adjusted noninterest expense for the periods presented.

Reconciliations of Adjusted Noninterest Income (non-GAAP) and Adjusted Noninterest Expense (non-GAAP)

Three Months Ended Nine Months Ended

September 30, June 30, September 30, September 30,

(In thousands) 2025 2025 2025 2024

Noninterest income $ (756,187) $ 42,354 $ (667,678) $ 103,613

Certain items:

Loss on early extinguishment of debt 570 — 570 —

Loss on sale of securities 801,492 — 801,492 28,393

Total certain items 802,062 — 802,062 28,393

Adjusted noninterest income (non-GAAP) $ 45,875 $ 42,354 $ 134,384 $ 132,006

Noninterest expense $ 142,032 $ 138,589 $ 425,201 $ 416,426

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Reconciliation of Tangible Book Value per Share (non-GAAP)

June 30, December 31,

September 30, December 31,

(In thousands, except per share data) 2025 2024

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Reconciliation of Tangible Common Equity and the Ratio of Tangible Common Equity to Tangible Assets (non-GAAP)

June 30, December 31,

September 30, December 31,

(Dollars in thousands) 2025 2024

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Reconciliation of Uninsured, Non-Collateralized Deposits and the Calculation of Uninsured, Non-Collateralized Deposit Coverage Ratio (non-GAAP)

June 30, December 31,

September 30, December 31,

(In thousands) 2025 2024

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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-Q

Item 2. Management’s Discussion and Analysis