What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-02-25 compared with 2025-02-27 · 159 added, 186 removed, 736 unchanged (32% of the section changed)

8 unchanged sentences

We consider accounting estimates to be critical to reported financial results if (i) the accounting estimate requires management to make assumptions about matters that are highly uncertain and (ii) different estimates that management reasonably could have used for the accounting estimate in the current period, or changes in the accounting estimate that are reasonably likely to occur from period to period, could have a material impact on our financial statements.

The accounting policies that we view as critical to us are those relating to estimates and judgments regarding (a) the determination of the adequacy of the allowance for credit losses, (b) acquisition accounting and valuation of loans, (c) the valuation of goodwill and the useful lives applied to intangible assets, (d) the valuation of stock-based compensation plans and (e) income taxes.

Allowance for Credit Losses

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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.

6 unchanged sentences

no impairment was indicated as of December 31, 2025.

Judgement is inherent in assessing goodwill for impairment.

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.

Stock-Based Compensation Plans

We have adopted various stock-based compensation plans.

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

Pursuant to the plans, shares are reserved for future issuance by the Company upon exercise of stock options or awarding of restricted stock, restricted stock units or performance stock units granted to directors, officers and other key employees.

We are subject to the federal income tax laws of the United States, and the tax laws of the states and other jurisdictions where we conduct business.

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2025 Overview

Our net income available to common shareholders for the year ended December 31, 2024 was $152.7 million, or $1.21 diluted earnings per share, compared to $175.1 million, or $1.38 diluted earnings per share, for the same period in 2023.

2025 was a transformative year for the Company.

We successfully raised $326.9 million of equity capital to help 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 $3.59 billion in held-to-maturity (“HTM”) securities to available-for-sale (“AFS”) securities and sold approximately $3.16 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 help 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.

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.

This redemption was effective October 1, 2025.

Our net loss for the year ended December 31, 2025 was $397.6 million, or $(2.95) diluted earnings per share, compared to net income of $152.7 million, or $1.21 diluted earnings per share, for the same period in 2024.

Included in 2025 results were $630.7 million of certain items, net of tax, that were primarily related to the loss on sale of securities, branch right sizing initiatives, loss on sale of an equipment finance business and early retirement program costs.

Included in 2024 results were $25.2 million of certain items, net of tax, that were primarily related to the loss on sale of securities, a FDIC special assessment and branch right sizing initiatives.

Included in 2023 results were $32.7 million of certain items, net of tax, that were primarily related to early retirement program costs, loss on sale of securities, a FDIC special assessment and branch right sizing initiatives.

Adjusting for these certain items, adjusted earnings for the year ended December 31, 2025 were $233.1 million, or $1.73 adjusted diluted earnings per share, compared to $177.9 million, or $1.41 adjusted diluted earnings per share, in 2024.

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

Throughout 2024, we delivered solid results that clearly reflect our driving principles centered on a strong risk management culture, profitability and organic growth.

While we continue to operate against a backdrop of uncertainty concerning the macroeconomic environment and the timing of lower interest rates, we are comforted by our strong capital and liquidity positions:

• Deposits were relatively stable over the year, which highlights the granularity of our deposit base, as well as the long-term relationships we have with many of our customers.

While completing steps related to the balance sheet restructure during the year, we continued to focus on organic growth and building momentum in our current footprint.

We are encouraged by our positive momentum, while maintaining solid capital and liquidity positions:

• Total deposits as of December 31, 2025 were $20.18 billion, compared to $21.89 billion as of December 31, 2024.

Uninsured deposits (excluding collateralized deposits and intercompany deposits) as of December 31, 2025 were approximately $4.55 billion, or 23% of total deposits.

• Capital levels were steady during the year, with all regulatory capital ratios remaining significantly above “well-capitalized” guidelines as of December 31, 2024 (see Table 18 in the Risk-Based Capital section below).

• Capital levels remained strong over the period, with all regulatory capital ratios remaining significantly above “well-capitalized” guidelines as of December 31, 2025 (see Table 18 in the Risk-Based Capital section below).

As of December 31, 2025, our ratio of common equity to total assets was 13.93%, the ratio of tangible common equity to tangible assets was 8.71% and our Tier 1 leverage ratio was 10.06%.

• Key credit quality metrics as of December 31, 2025 also remained solid, with our nonperforming loan coverage ratio at 199% and our allowance for credit losses as a percent of total loans ratio was 1.28%.

• We maintained a significant liquidity position with a loan to deposit ratio of 78% as of December 31, 2024, compared to 76% as of December 31, 2023.

• The loan to deposit ratio was 87% as of December 31, 2025, compared to 78% as of December 31, 2024.

Additional liquidity sources available to us as of December 31, 2025 totaled $9.32 billion, and our uninsured, non-collateralized deposit coverage ratio was 2.0x.

In 2024, Simmons Bank was recognized by U.S.

News & World Report as one of the “2024-2025 Best Companies to Work For in the South” and by Forbes as one of “America’s Best-In-State Banks 2024 in Tennessee” and one of “America’s Best-In-State Employers 2024 in Missouri”.

We believe credit trends throughout the industry are beginning to normalize after an extended period at historically low levels.

Our asset quality metrics remain strong and reflect our conservative credit culture, as well as our focus on maintaining disciplined pricing and conservative underwriting standards given the current economic environment.

During the year, we increased the provision for credit losses on two specific credit relationships that we have been watching for some time due to unfavorable events that occurred for both credits.

Subsequently, we charged off the uncollectible portion related to both credits during the year ended December 31, 2025.

Other than with respect to these two specific credit relationships, 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 December 31, 2025 were $112.7 million, as compared to $110.8 million at December 31, 2024.

Non-performing assets as a percent of total assets were 0.45%, compared to 0.33% at December 31, 2024 and 2023, respectively.

Non-performing assets as a percent of total assets were 0.51% and 0.45% at December 31, 2025 and 2024, respectively.

Stockholders’ equity as of December 31, 2025 was $3.42 billion, book value per share was $23.62 and tangible book value per common share was $13.91.

Total loans were $17.49 billion at December 31, 2025, an increase of $486.2 million, or 2.9%, from the same time in 2024.

Our unfunded commitments decreased to $4.03 billion at December 31, 2024, as compared to $4.17 billion at December 31, 2023.

Our commercial loan pipeline totaled $1.26 billion as of December 31, 2024, compared to $948.2 million at December 31, 2023.

We are continually monitoring the impact of various global and national events on our results of operations and financial condition, including inflationary pressures, changes in market interest rates, deposit competition and liquidity strains and changes in political leadership.

The timing and impact of such events on our results of operation and financial condition will depend on future developments, which are highly uncertain.

Our unfunded commitments increased to $3.87 billion at December 31, 2025, as compared to $3.74 billion at December 31, 2024.

Our commercial loan pipeline totaled $1.54 billion as of December 31, 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 7, “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 US GAAP.

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The FRB sets various benchmark interest rates which influence the general market rates of interest, including the deposit and loan rates offered by financial institutions.

Between December 2015 and December 2018, the FRB had been gradually raising benchmark interest rates.

The FRB target for the federal funds rate, which is the cost to banks of immediately available overnight funds, increased gradually from 0% - 0.50% in December 2015 to 2.25% - 2.50% over a three year period.

The federal funds rate was flat until the FRB began to lower the rate in August 2019 and ultimately reduced it to 1.50% - 1.75% in October 2019.

During March 2020, the Federal Open Market Committee (“FOMC”) of the FRB substantially reduced interest rates in response to the economic crisis brought on by the COVID-19 pandemic.

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From early 2022 through 2023, the federal funds rate range was increased on eleven occasions and ended 2023 with a range set at 5.25% - 5.50%.

During 2024, as inflation declined, the FOMC cut rates on three occasions to a period end range of 4.25% - 4.50%.

To date in 2025, rates have been held steady by the FOMC.

From 2024 through 2025, as inflation declined, the FOMC cut rates on six occasions to a period end range of 3.50% - 3.75%.

To date in 2026, rates have held steady by the FOMC.

Our loan portfolio is significantly affected by changes in the prime interest rate.

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Similarly to the reduction in the federal funds rate, the prime rate was cut to 3.25% in mid-March of 2020 in response to the COVID-19 pandemic and remained unchanged throughout 2021 and into early 2022.

Paralleling the federal funds rate, multiple increases by the Federal Reserve during 2022 and 2023 increased the prime rate to 8.50% as of the end of 2023 and a series of rate cuts during 2024 decreased the prime rate to 7.50% at the end of 2024.

To date in 2025, the prime interest rate has also been held steady.

Paralleling the federal funds rate, multiple increases by the Federal Reserve during 2022 and 2023 increased the prime rate to 8.50% as of the end of 2023 and a series of rate cuts during 2024 and 2025 decreased the prime rate to 6.75% at the end of 2025.

To date in 2026, the prime interest rate has also held steady.

Our practice is to limit exposure to interest rate movements by maintaining a significant portion of earning assets and interest bearing liabilities in short-term repricing.

In the last several years, on average, approximately 48% of our loan portfolio and approximately 94% of our time deposits have repriced in one year or less.

Our current interest rate sensitivity shows that approximately 49% of our loans and 97% of our time deposits will reprice in the next year, largely contributing to our liability-sensitive position at December 31, 2024.

For the year ended December 31, 2024, net interest income on a fully taxable equivalent basis was $654.3 million, a decrease of $21.3 million, or 3.2%, over the same period in 2023.

The decrease in net interest income was primarily the result of a $102.3 million increase in interest income, more than offset by a $123.6 million increase in interest expense.

The increase in interest income primarily resulted from a $94.1 million increase in interest income on loans, coupled with an increase of $9.7 million in interest income on investment securities.

Regarding the increase in interest income on loans during 2024, the increase in loan volume resulted in an increase of $27.9 million in interest income, while a 39 basis point increase in yield due to higher market interest rates resulted in a $66.2 million increase in interest income during the year ended December 31, 2024.

The loan yield for 2024 was 6.35%, compared to 5.96% for 2023.

The increase in our loan volume during 2024 was due to solid organic loan growth over the comparative period.

The increase in interest income on investment securities is primarily related to our taxable investment securities and reflects an increase of $36.7 million due to yield increases over the period of 87 basis points which were a result of higher market interest rates.

The increase in interest income on taxable investment securities due to yield increases was mitigated by a $26.5 million decrease due to the decline in our taxable investment portfolio average balances which decreased by $785.2 million, or 16.7%, 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 FHLB advances during the third quarter of 2024.

As of December 31, 2025, our current interest rate sensitivity shows that approximately 60% of our loans and 96% of our time deposits will reprice in the next year.

For the year ended December 31, 2025, net interest income on a fully taxable equivalent basis was $738.7 million, an increase of $84.5 million, or 12.9%, over the same period in 2024.

The increase in net interest income was primarily the result of a $74.5 million decrease in interest income, more than offset by a $159.0 million decrease in interest expense.

Several factors contributed to the increase 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 $3.59 billion of investment securities classified as HTM to the AFS investment securities portfolio, with a subsequent sale of approximately $3.16 billion in amortized cost basis of low-yielding AFS securities (including certain of those previously classified as HTM).

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.

The pay-down of higher rate funding was completed throughout the third quarter of 2025.

The decrease in interest income primarily resulted from a $61.2 million decrease in our investment portfolio average balances which decreased by $1.67 billion, or 25.6%, related to the balance sheet repositioning previously discussed.

The decrease was partially offset by an increase of $3.7 million in interest income on non-taxable investment securities due to a yield increase over the period of 14 basis points.

Interest income on loans decreased by $19.9 million largely attributable to a 10 basis point decline in yield that resulted in a $17.0 million decrease in interest income, while the incremental decline in loan volume resulted in a decrease of $2.9 million in interest income.

The loan yield for 2025 was 6.25%, compared to 6.35% in 2024.

Included in interest income is the additional yield accretion recognized as a result of updated estimates of the cash flows of our loans acquired.

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For the years ended December 31, 2025, 2024 and 2023, interest income included $3.8 million, $6.1 million and $8.8 million, respectively, for the yield accretion recognized on loans acquired.

The $123.6 million increase in interest expense is mostly due to the increase in our deposit account rates over the period, combined with the change in deposit mix as the market experiences a shift in consumer sentiment given the attractiveness of higher yielding time deposits in the current higher interest rate environment.

Interest expense increased $113.5 million due to the increase in rates of 68 basis points on interest-bearing deposit accounts and increased $13.8 million due to the increase in deposit volume over the period.

The increase in interest expense was partially offset by a decrease of $5.4 million related to a decreased reliance on other borrowings over the period.

The $159.0 million decrease in interest expense is mostly due to the decrease in our deposit account rates over the period.

Interest expense decreased $85.8 million due to the decline in rates of 57 basis points on interest-bearing deposit accounts and decreased $42.1 million related to the decrease in time deposit volume over the period.

Further, a decrease of $31.7 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.

Our net interest margin on a fully tax equivalent basis was 2.74% for the year ended December 31, 2024, down 4 basis points from 2023.

The marginal decrease in the net interest margin was primarily due to the rising deposit rate pressure from increased market competition and consumer migration toward higher rate deposits, mitigated by the increased yields on our earning assets average balances over the comparative periods.

Over the course of 2025, we anticipate moderating pressure on our margin due to several factors.

We saw moderate organic loan growth during 2024 and we are cautiously optimistic regarding further modest organic loan growth during 2025, subject to the underlying economy and growth opportunities, with continued focus on maintaining prudent underwriting standards and profitability discipline.

We sold $251.5 million of low yield AFS securities in the third quarter of 2024, and used sale proceeds to pay off higher rate wholesale fundings and we will continue to evaluate opportunities to optimize our balance sheet based on changing market conditions.

We also expect modest increases in noninterest income related to fee based services and noninterest expenses related to continuous improvement initiatives and utilizing cost savings to partially fund targeted investments in technology and talent.

Additionally, while our balance sheet is in a favorable position for the repricing of assets and liabilities, there is still much uncertainty as to decisions that will be made by the FOMC and the risks present in the economy.

Our net interest margin on a fully tax equivalent basis was 3.32% for the year ended December 31, 2025, up 58 basis points from 2024.

The increase in the net interest margin was primarily due to the balance sheet repositioning during the period.

Over the course of 2026, we anticipate continued expansion on our margin primarily related to the full period benefit of the balance sheet repositioning previously discussed.

We are cautiously optimistic regarding modest organic loan growth during 2026, subject to the underlying economy, with continued focus on soundness, profitability discipline and growth.

We also expect noninterest income to be stable and incremental increases in noninterest expenses as we continue to focus on improvement initiatives and utilizing cost savings to partially fund targeted investments in technology and talent.

Tables 1 and 2 reflect an analysis of net interest income on a fully taxable equivalent basis for the years ended December 31, 2025, 2024 and 2023, respectively, as well as changes in fully taxable equivalent net interest margin for the years 2025 versus 2024 and 2024 versus 2023.

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2024 2024 vs.

Increase (decrease) due to change in earning assets $ (2,912) $ 93,320

Increase due to change in earning asset yields 105,193 255,878

Decrease due to change in interest bearing liabilities (6,539) (48,716)

Decrease due to change in interest rates paid on interest bearing liabilities (117,026) (366,900)

Decrease in net interest income $ (21,284) $ (66,418)

Decrease due to change in earning assets $ (59,048) $ (2,912)

(Decrease) increase due to change in earning asset yields (15,486) 105,193

Increase (decrease) due to change in interest bearing liabilities 62,198 (6,539)

Increase (decrease) due to change in interest rates paid on interest bearing liabilities 96,791 (117,026)

Increase (decrease) in net interest income $ 84,455 $ (21,284)

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 each of the years in the three-year period ended December 31, 2025.

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12,704 799 6.29 10,634 731 6.87 8,064 557 6.91

Other loans held for sale — — — — — — 8,322 3,120 37.49

Assets held in trading accounts 6,009 217 3.61 — — — — — —

Loans - including fees 17,060,425 1,066,745 6.25 17,106,193 1,086,625 6.35 16,647,570 992,518 5.96

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Mortgage loans held for sale 134 (66) 68 177 (3) 174

Other loans held for sale — — — (791) (2,329) (3,120)

Assets held in trading accounts 217 — 217 — — —

Loans - including fees (2,900) (16,980) (19,880) 27,873 66,234 94,107

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During 2025, our provision for credit loss expense was $65.8 million, as compared to an expense of $46.8 million during 2024 and an expense of $42.0 million during 2023.

The provision for credit loss expense during 2024 was related to loans and reflected loan growth, as well as the impact of updated economic assumptions.

The provision for credit loss expense during 2025 and 2024 reflected loan growth, as well as the impact of updated economic assumptions.

Additionally, during 2025, a provision expense of $15.6 million was recorded related to two specific credit relationships which migrated to nonperforming during the year.

The provision for credit loss expense during 2023 was impacted by several factors throughout the year, including a $47.4 million expense related to loans and reflected loan growth, as well as the impact of updated economic assumptions, which was partially offset by a $16.3 million release from the reserve for unfunded commitments primarily due to a decline in unfunded commitments resulting from customers utilizing lines of credit during the year.

Additionally, provision expense related to AFS and HTM securities recorded during the twelve months ended December 31, 2023 was $9.1 million and $1.8 million, respectively, primarily due to decreases in the value of select corporate bonds in the investment securities portfolio.

The provision for credit loss expense during 2022 was impacted by several factors throughout the year, including a $33.8 million Day 2 provision expense required for loans and unfunded commitments related to the Spirit acquisition, and an expense of $16.0 million related to the overall increase in unfunded commitments during the year, primarily made up of commercial construction loans, which receive a higher reserve allocation than other loans.

These expenses were partially offset by a release of $16.0 million, which was driven by a reduction to certain industry specific qualitative factors for the restaurant, hospitality, student housing and office space industries due to the improvement from pandemic related stresses.

Further recapture during 2022 was driven by the planned exit of several large oil and gas relationships during the year, along with our improved asset credit quality metrics and improved Moody’s economic modeling scenarios.

Noninterest Income

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.

Total noninterest income was $147.2 million in 2024, compared to $155.6 million in 2023 and $170.1 million in 2022.

Noninterest income for 2024 decreased $8.4 million, or 5.4%, from 2023.

Included in both 2024 and 2023 results were $28.4 million and $20.6 million, respectively, of certain items related to the loss on the sale of securities during the period.

Adjusting for these certain items, adjusted noninterest income for the year ended December 31, 2024 decreased $611,000, or 0.3%, from the prior year.

We incurred a noninterest loss of $616.0 million in 2025, compared to noninterest income of $147.2 million in 2024.

Included in both 2025 and 2024 results were $801.5 million and $28.4 million, respectively, of certain items related to the loss on the sale of securities during the periods.

Additionally during 2025, we recognized a $570,000 loss on early extinguishment of debt.

Adjusting for these certain items, adjusted noninterest income for the year ended December 31, 2025 increased $10.5 million, or 6.0%, from the prior year.

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

During 2024, we sold approximately $251.5 million of investment securities resulting in a net loss of $28.4 million, while we realized a net loss of $20.6 million related to the sale of $247.9 million of investment securities during 2023.

The sale of securities during both 2024 and 2023 was primarily related to strategic decisions to sell low yield securities and use the proceeds to pay off higher rate wholesale fundings.

The larger loss on sale of securities recognized during 2024, coupled with a $4.0 million legal reserve recapture associated with litigation recognized in 2023, were partially offset with increases in bank owned life insurance income and several fee-based businesses during 2024.

These incremental increases as compared to the prior period were primarily made up of a $3.5 million increase related to bank owned life insurance due to a higher earnings credit rate as compared to the prior period, a $2.6 million increase related to wealth management fees due to market conditions and a $1.4 million increase in debit and credit card fees related to increased customer activity.

During 2025, we sold approximately $3.16 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 2024, we sold approximately $251.5 million of investment securities related to a strategic decision to sell low yield securities and use the proceeds to pay off higher rate wholesale fundings.

The increase in adjusted noninterest income (loss) during 2025 as compared to 2024, was primarily driven by $3.3 million in bank owned life insurance death benefits recognized during the period, which are included in other income in the table below.

Further contributing to the increase were several incremental fee-based business increases during 2025.

Table 5 shows noninterest income for the years ended December 31, 2025, 2024 and 2023, respectively, as well as changes in 2025 from 2024 and in 2024 from 2023.

Noninterest Income

Noninterest Income (Loss)

Years Ended December 31, 2025

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Other service charges and fees 5,631 5,653 6,595 (22) (0.4) (942) (14.3)

Gain (loss) on sale of securities, net (28,393) (20,609) (278) (7,784) 37.8 (20,331) *

Gain on insurance settlement — — 4,074 — — (4,074) *

Loss on sale of securities, net (801,492) (28,393) (20,609) (773,099) * (7,784) 37.8

Other income 31,350 27,493 35,398 3,857 14.0 (7,905) (22.3)

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*Not meaningful

Recurring fee income (total service charges, wealth management fees, debit and credit card fees) for 2024 was $124.8 million, an increase of $3.4 million, or 2.8%, when compared to the 2023 amounts and was primarily related to the increases discussed above.

Recurring fee income (total service charges, wealth management fees, debit and credit card fees) for 2025 was $130.1 million, an increase of $5.3 million, or 4.3%, when compared to the 2024 amounts and was primarily related to the incremental increases discussed above.

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 for 2024 was $557.5 million, as compared to noninterest expense for 2023 of $563.1 million, a decrease of $5.5 million, or 1.0%, compared to the prior period.

Adjusted noninterest expense, which excludes branch right sizing, FDIC special assessment, early retirement program costs, termination of vendor and software services (for 2024 only), and merger related costs (for 2023 only), for the year ended December 31, 2024 increased $12.4 million, or 2.3%, from the prior year.

Noninterest expense for 2025 was $565.1 million, as compared to noninterest expense for 2024 of $557.5 million, an increase of $7.5 million, or 1.3%, compared to the prior period.

Adjusted noninterest expense, which excludes branch right sizing, early retirement program costs, termination of vendor and software services, loss on sale of an equipment finance business (for 2025 only) and an FDIC special assessment (for 2024 only), for the year ended December 31, 2025 increased $7.0 million, or 1.3%, from the prior year.

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

Salaries and employee benefits expense decreased by $2.0 million as compared to 2023, while adjusted salaries and employee benefits expense, which excludes early retirement program costs, increased by $3.7 million as compared to 2023.

The increase in adjusted salaries and employee benefits expense reflects incentive compensation accrual adjustments during the periods, in addition to annual merit increases.

Early retirement program costs during 2024 and 2023 were $536,000 and $6.2 million, respectively.

Salaries and employee benefits expense increased by $13.7 million as compared to 2024.

The increase in salaries and employee benefits expense reflects annual merit increases, in addition to incentive compensation accrual adjustments given the Company’s financial performance during the period.

Deposit insurance expense decreased by $3.7 million as compared to 2024.

Excluding the FDIC special assessment of $1.8 million recorded during the year ended December 31, 2024 and $10.5 million recorded during the year ended December 31, 2023, both of which were levied to support the Deposit Insurance Fund following the failure of certain banks in 2023, adjusted deposit insurance expense increased by $2.6 million primarily due to an increased base assessment rate related to changes in the mix of deposits.

Excluding the FDIC special assessment of $1.8 million recorded during the year ended December 31, 2024, which was levied to support the Deposit Insurance Fund following the failure of certain banks in 2023, deposit insurance expense decreased by $1.9 million due to favorable changes in the mix of deposits, primarily related to the reduction of brokered deposits from the balance sheet restructuring during 2025.

Amortization of intangibles recorded for the years ended December 31, 2025, and 2024 was $12.8 million and $15.4 million, respectively.

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Salaries and employee benefits $ 297,859 $ 284,124 $ 286,117 $ 13,735 4.8 % $ (1,993) (0.7) %

Early retirement program 536 6,198 — (5,662) (91.4) 6,198 *

Occupancy expense, net 48,237 48,214 46,741 23 — 1,473 3.2

16 unchanged sentences

Total noninterest expense $ 565,063 $ 557,543 $ 563,061 $ 7,520 1.3 % $ (5,518) (1.0) %

_________________________

*Not meaningful

Due to our Better Bank Initiative and continuous efficiency improvements, offset by expected increases related to merit-based compensation adjustments and targeted investments during the upcoming period, we expect marginal growth in noninterest expense during 2025.

The provision for income taxes for 2024 was $18.6 million, compared to $25.5 million in 2023 and $50.1 million in 2022.

The provision for income taxes for 2025 was a benefit of $130.1 million, compared to an expense of $18.6 million in 2024 and $25.5 million in 2023.

The effective income tax rates for the years ended 2025, 2024 and 2023 were 24.7%, 10.9% and 12.7%, respectively.

The decrease in the provision for income taxes during 2024 as compared to 2023 and 2023 as compared to 2022 was primarily due to tax exempt income having a larger favorable impact on the rate and lower state taxes during the periods, both driven by the one time charges to income from the loss on sale of securities during each respective period, in addition to the FDIC special assessment largely recognized during 2023.

The change in the provision for income taxes during 2025 as compared to the prior periods was primarily due to the $801.5 million gross realized loss from the sale of securities during the twelve months ended December 31, 2025 related to the balance sheet repositioning during the year.

Loan Portfolio

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Consumer loans were $291.2 million at December 31, 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 was primarily due to loan payoffs and pay downs within the credit card portfolio during the year.

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

Real estate loans were $13.39 billion at December 31, 2024, or 78.7% of total loans, compared to $13.34 billion, or 79.2% of total loans at December 31, 2023, a modest increase of $53.3 million, or 0.4%.

Our C&D loans decreased by $355.0 million, or 11.3%, single family residential loans increased by $48.4 million, or 1.8%, and CRE loans increased by $359.9 million, or 4.8%.

The decrease in consumer loans was primarily due to loan payoffs and pay downs within both the credit card and other consumer portfolios during the year.

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

Real estate loans were $13.77 billion at December 31, 2025, or 78.7% of total loans, compared to $13.39 billion, or 78.7% of total loans at December 31, 2024, an increase of $379.7 million, or 2.8%.

Our C&D loans increased by $84.6 million, or 3.0%, single family residential loans decreased by $82.5 million, or 3.1%, and CRE loans increased by $377.6 million, or 4.8%.

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 period.

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Mortgage volume experienced an increase in demand during 2025 as compared to 2024, and was coupled with continued organic growth in our municipal loans during the period, leading to an increase of $131.0 million in other loans.

While loan growth was widespread throughout our geographic markets and was generally broad-based by loan type during the period, loan growth during the year reflected moderating demand and increased payoff activity, as we focus on maintaining disciplined pricing and conservative underwriting standards given the current uncertain economic environment.

Our commercial loan pipeline consisting of all commercial loan opportunities was $1.26 billion at December 31, 2024, compared to $948.2 million at December 31, 2023.

Our commercial loan pipeline consisting of all commercial loan opportunities was $1.54 billion at December 31, 2025, compared to $1.26 billion at December 31, 2024.

The pipeline includes $773.4 million in loans approved and ready to close at the end of the year.

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Nonaccrual loans increased by $1.6 million during 2025, in addition to an increase in foreclosed assets held for sale of $2.7 million.

While nonaccrual loans were relatively flat over the comparative period, two specific credit relationships were placed on nonaccrual status during 2025.

One relationship placed on nonaccrual status during 2025 totaled $26.7 million and was related to a downtown St.

Louis hotel that was originated pre-pandemic and had been on our classified list since April of 2021.

The other relationship totaled $22.6 million and was related to a fast-food operator and had been on our classified list since June of 2024 due to sector-related headwinds and global cash flow concerns with the borrower.

Subsequent to being placed on nonaccrual status, both relationships were charged off in December 2025.

Total non-performing assets increased $31.0 million from December 31, 2023 to December 31, 2024.

Nonaccrual loans increased by $26.8 million during 2024, in addition to an increase in foreclosed assets held for sale of $5.2 million.

The increase in nonaccrual loans was primarily spread within our real estate and commercial loan portfolios.

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The decrease in nonaccrual loans was primarily due to an overall improvement in economic conditions from pandemic related stresses.

Total non-performing assets decreased by $67.6 million from December 31, 2020 to December 31, 2021.

Nonaccrual loans decreased by $54.7 million during 2021, in addition to a decrease in foreclosed assets held for sale of $12.4 million.

The decrease in nonaccrual loans was primarily due to an overall improvement in economic conditions while the decrease in foreclosed assets held for sale and other real estate owned is primarily the result of the disposition of one commercial building in the St.

Louis area and the disposition of one piece of commercial land with net book values at the time of sale of $6.5 million and $2.8 million, respectively.

From time to time, certain borrowers experience declines in income and cash flow.

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The financial effects of the modified loans made to borrowers experiencing financial difficulty in the single family residential real estate portfolio were not significant during the year ended December 31, 2025 and did not significantly impact the Company’s determination of the allowance for credit losses on loans during the year.

During the year ended December 31, 2024, the Company modified one loan for a borrower experiencing financial difficulty related to the CRE portfolio, whereby the modification extended the term of the loan 1.5 years.

As a result of the CRE loan modified during the year ended December 31, 2024 being collateral-dependent, the impact to the Company’s allowance for credit losses on loans was the difference between the fair value of the underlying collateral, adjusted for selling costs, and the remaining outstanding principal balance of the loan.

We continue to maintain good asset quality compared to the industry, and strong asset quality remains a primary focus of our strategy.

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The allowance for credit losses was 199% of non-performing loans.

Our annualized net charge-offs to total loans for 2024 was 0.22%.

Our annualized net charge-offs to total loans for 2025 was 0.47%, a 25 basis point increase from December 31, 2024, primarily due to the charge-offs of two specific credit relationships previously discussed.

Excluding credit cards, the annualized net charge-offs to total loans for the same period was 0.49%.

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_________________________

(1) Includes nonaccrual financial difficulty modifications (formerly known as troubled debt restructurings) of approximately $597,000, $282,000, $1.6 million, $2.7 million and $4.4 million at December 31, 2024, 2023, 2022, 2021 and 2020, respectively.

(1) Includes nonaccrual financial difficulty modifications (formerly known as troubled debt restructurings) of approximately $853,000, $597,000, $282,000, $1.6 million and $2.7 million at December 31, 2025, 2024, 2023, 2022 and 2021, respectively.

The interest income on nonaccrual loans is not considered material for the years ended December 31, 2025, 2024 and 2023.

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Allowance for Credit Losses Allocation

As of December 31, 2024, the allowance for credit losses reflected an increase of approximately $9.8 million from December 31, 2023, while loans increased $160.3 million over the same period.

As of December 31, 2025, the allowance for credit losses reflected a decrease of approximately $10.6 million from December 31, 2024, while loans increased $486.2 million over the same 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 2024 was predominantly due to the loan growth experienced during the year, as well as refreshed economic forecasts.

The decrease in the allowance for credit losses during 2025 was predominantly due to the utilization of specific reserves related to a deep dive analysis of our nonperforming loans and the sale of a run-off portfolio consisting of small ticket equipment finance loans during the year.

Loan growth experienced during the year and refreshed economic forecasts partially offset these reductions.

Our allowance for credit losses at December 31, 2025 was considered appropriate given the current economic environment and other related factors.

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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 available-for-sale (“AFS”).

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

HTM securities, which include any security for which we have the positive intent and ability to hold until maturity, are carried at historical cost adjusted for amortization of premiums and accretion of discounts.

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Premiums on callable securities are amortized to their earliest call date.

Assets held in trading accounts, comprised of U.S.

Treasury securities, are purchased with the intent of selling in the near term.

Trading securities are carried at fair value with gains and losses included in other income.

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 mortgage-backed securities for which collection of principal and interest is not subordinated to significant superior rights held by others.

HTM and AFS investment securities were $3.64 billion and $2.53 billion, respectively, at December 31, 2024, compared to the HTM amount of $3.73 billion and AFS amount of $3.15 billion at December 31, 2023.

AFS investment securities and assets held in trading accounts were $3.27 billion and $11.7 million at December 31, 2025, respectively, compared to the HTM amount of $3.64 billion and AFS amount of $2.53 billion at December 31, 2024.

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

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Treasury securities.

Our investment portfolio as of December 31, 2024 also included $2.61 billion, or 42.2%, of tax-exempt obligations of state and political subdivisions.

Our investment portfolio as of December 31, 2025 also included $812.3 million, or 24.8%, of tax-exempt obligations of state and political subdivisions.

A portion of the state and political subdivision debt obligations are rated bonds, primarily issued in states in which we are located, and are evaluated on an ongoing basis.

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These mortgage-backed securities were issued by agencies of the U.S.

During the third quarter of 2025, we initiated and completed steps taken to reposition our consolidated balance sheet and reclassified approximately $3.59 billion in HTM investment securities to AFS investment securities.

Subsequently, we sold approximately $3.16 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%).

As a result of the balance sheet repositioning, we did not hold any investment securities classified as HTM as of December 31, 2025.

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.

As of December 31, 2024, the related remaining combined net unrealized losses of $108.1 million in accumulated other comprehensive income (loss) will be amortized over the remaining life of the securities.

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

Additionally, 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.

During the balance sheet repositioning that occurred during 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.

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.

These swap agreements consist of a two year forward start date and involve the payment of fixed interest rates with a weighted average of 1.21% in exchange for variable interest rates based on federal funds rates, which became effective during the late third quarter of 2023.

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Under this model, an estimate of expected credit losses that represents all contractual cash flows that is deemed uncollectible over the contractual life of the financial asset must be recorded.

There was no provision for credit losses related to the Company’s securities portfolios recorded for the year ended December 31, 2024.

We recorded a provision for credit losses related to AFS securities of $12.8 million for the year ended December 31, 2023 due to isolated corporate bonds within the portfolio.

During the same period, the provision for credit loss expense on AFS securities was reduced by $3.7 million related to previously impaired securities.

We also charged-off $7.0 million directly related to one corporate bond, which was deemed uncollectible in the period, while the remaining isolated bonds were sold or experienced price recovery on previous impairments prior to the end of the period.

Based upon our analysis of the underlying risk characteristics of the AFS portfolio, including credit ratings and other qualitative factors, no allowance for credit losses related to AFS securities was deemed necessary at December 31, 2024 and 2023.

Our allowance for credit losses related to HTM securities was $3.2 million for both periods ended December 31, 2024 and 2023.

An allowance for credit losses related to mortgage-backed securities and U.S.

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government, are highly rated by major rating agencies and have a long history of no credit losses.

We recaptured $3.2 million of the allowance for credit loss related to HTM securities during the year ended December 31, 2025 due to the balance sheet repositioning.

There was no provision for credit losses related to the Company’s securities portfolios recorded for the year ended December 31, 2024.

See Note 3, Investment Securities, in the accompanying Notes to Consolidated Financial Statements for additional information related to our allowance for credit losses on investment securities held.

We had no gross realized gains and $28.4 million of gross realized losses from the sale of securities during the year ended December 31, 2024, compared to no gross realized gains and $20.6 million of gross realized losses from the sale of securities during the year ended December 31, 2023.

We sold approximately $251.5 million of AFS investment securities as part of a strategic decision to sell low yielding securities to pay off higher rate wholesale fundings consisting of Federal Home Loan Bank (“FHLB”) advances during 2024, while we sold approximately $247.9 million of investment securities during 2023 related to a strategic decision to sell low yielding securities and use the proceeds to pay off higher rate wholesale fundings, including both brokered deposits and FHLB advances.

We have the ability and intent to hold the securities classified as HTM until they mature, at which time we expect to receive full value for the securities.

We had no gross realized gains and $801.5 million of gross realized losses from the sale of securities related to the balance sheet repositioning discussed above during the year ended December 31, 2025, compared to no gross realized gains and $28.4 million of gross realized losses from the sale of securities during the year ended December 31, 2024.

During 2024, we sold approximately $251.5 million of AFS investment securities as part of a strategic decision to sell low yielding securities to pay off higher rate wholesale fundings consisting of FHLB advances.

As of December 31, 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 December 31, 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 December 31, 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 December 31, 2024, we also have the ability to hold the securities classified as AFS for a period of time sufficient for a recovery of amortized cost, we do not have an immediate intent to sell the securities classified as AFS, and we believe 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.

During 2025, we will continue to evaluate targeted sales of AFS securities based on prevailing market conditions and our funding and liquidity positions.

The unrealized losses during 2024 are 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 December 31, 2024, we believe the declines in fair value detailed in the table below are temporary and we do not believe any of the securities are impaired due to reasons of credit quality.

Table 12 presents the amortized cost, fair value and allowance for credit losses on investment securities for each of the years indicated.

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Total HTM $ 3,639,850 $ (3,214) $ 3,636,636 $ 232 $ (686,917) $ 2,949,951

December 31, 2023

Government agencies $ 453,121 $ — $ 453,121 $ — $ (89,203) $ 363,918

Mortgage-backed securities 1,161,694 — 1,161,694 354 (107,834) 1,054,214

State and political subdivisions 1,858,680 (2,006) 1,856,674 284 (369,509) 1,487,449

Other securities 256,007 (1,208) 254,799 — (25,010) 229,789

Total HTM $ 3,729,502 $ (3,214) $ 3,726,288 $ 638 $ (591,556) $ 3,135,370

(In thousands) Amortized

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December 31, 2025

Treasury $ 999 $ — $ — $ (3) $ 996

Government agencies $ 47,786 $ — $ 6 $ (620) $ 47,172

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

Held-to-Maturity

Government agencies $ — $ 3,403 $ 105,920 $ 346,546 $ — $ 455,869 $ 480,246 $ 359,908

Mortgage-backed securities — — — — 1,070,032 1,070,032 1,115,755 936,498

State and political subdivisions 1,906 4,822 83,468 1,767,177 — 1,857,373 1,865,782 1,421,136

Other securities — 49,966 204,097 2,513 — 256,576 265,778 232,409

Total $ 1,906 $ 58,191 $ 393,485 $ 2,116,236 $ 1,070,032 $ 3,639,850 $ 3,727,561 $ 2,949,951

Percentage of total 0.1 % 1.6 % 10.8 % 58.1 % 29.4 % 100.0 %

Weighted average yield 4.0 % 2.3 % 2.3 % 2.6 % 2.2 % 2.5 %

Available-for-Sale

Treasury $ 999 $ — $ — $ — $ — $ 999 $ 1,000 $ 996

Government agencies $ 50 $ 28,084 $ 2,799 $ 16,853 $ — $ 47,786 $ 47,128 $ 47,172

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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 December 31, 2024, were $21.89 billion, a decrease of $359.2 million from December 31, 2023.

Noninterest bearing transaction accounts, interest bearing transaction accounts and savings accounts totaled $15.44 billion at December 31, 2024, compared to $15.80 billion at December 31, 2023, a decrease of $355.8 million.

Total time deposits were relatively flat over the period and totaled $6.44 billion at December 31, 2024 as compared to $6.45 billion at December 31, 2023.

Our total deposits as of December 31, 2025, were $20.18 billion, a decrease of $1.70 billion from December 31, 2024.

Noninterest bearing transaction accounts, interest bearing transaction accounts and savings accounts totaled $15.47 billion at December 31, 2025, compared to $15.44 billion at December 31, 2024, a modest increase of $28.8 million.

Total time deposits decreased $1.73 billion to $4.71 billion at December 31, 2025 as compared to $6.44 billion at December 31, 2024.

We had $1.89 billion and $3.30 billion of brokered deposits at December 31, 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.

Our uninsured deposits as of December 31, 2025 and 2024 were $4.55 billion and $4.63 billion, respectively.

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.

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 interest rate environment.

Table 14 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 three years ended December 31, 2025.

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Other Borrowings and Subordinated Debentures

Our total debt was $1.11 billion and $1.34 billion at December 31, 2024 and 2023, respectively.

Our total debt was $620.0 million and $1.11 billion at December 31, 2025 and 2024, respectively.

The outstanding balance for December 31, 2025 includes $286.6 million in FHLB advances;

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and $15.7 million of other long-term debt.

FHLB advances outstanding at December 31, 2024, which decreased as compared to December 31, 2023 due to a reduced reliance on wholesale funding, are primarily whole loan advances, which are due less than one year from origination and therefore are classified as short-term advances.

A summary of information related to our FHLB short-term advances, consisting of primarily whole loan advances, is presented in Table 16.

The decrease in total debt during 2025 was due to the pay down of higher cost wholesale funding, primarily FHLB advances, as part of the balance sheet repositioning during the year.

A summary of information related to our FHLB short-term advances is presented in Table 16.

Short-Term Borrowings

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Weighted-average interest rate for the year 4.38 % 5.31 % 5.20 %

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

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

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.

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, we 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 third quarter of 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.

The Spirit Notes will 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, 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.

Aggregate annual maturities of long-term debt at December 31, 2025 are presented in Table 17.

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Specific terms and prices are determined at the time of any offering under a separate prospectus supplement that we are required to file with the SEC at the time of the specific offering.

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

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

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

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

The 2024 Program will be executed in accordance with Rule 10b-18 under the Securities Exchange Act of 1934, as amended, and will terminate on January 31, 2026 (unless terminated sooner).

During 2024, no shares were repurchased under the 2024 Program.

During 2023, we repurchased 2,257,049 shares at an average price of $17.72 per share under the 2022 Program.

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

The 2024 Program was executed in accordance with Rule 10b-18 under the Securities Exchange Act of 1934, as amended, and was terminated in January 2026.

The Company’s Board of Directors authorized a new stock repurchase program in January 2026 (“2026 Program”) under which the Company may repurchase up to $175.0 million of its Class A common stock currently issued and outstanding.

The 2026 Program will be executed in accordance with Rule 10b-18 under the Securities Exchange Act of 1934, as amended, and is set to terminate on January 31, 2028 (unless terminated sooner).

Under the 2026 Program, we may repurchase shares of our common stock through open market and privately negotiated transactions or otherwise.

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We anticipate funding for the 2026 Program to come from available sources of liquidity, including cash on hand and future cash flow.

No shares were repurchased during 2025 or 2024.

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

Cash Dividends

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Regulatory Capital Changes

In December 2018, the Federal Reserve, Office of the Comptroller of the Currency and Federal Deposit Insurance Corporation (“FDIC”) (collectively, the “agencies”) issued a final rule revising regulatory capital rules in anticipation of the adoption of ASU 2016-13 that provided an option to phase in over a three year period on a straight line basis the day-one impact of the adoption on earnings and Tier 1 capital (the “CECL Transition Provision”).

In December 2018, the Federal Reserve, Office of the Comptroller of the Currency and FDIC (collectively, the “agencies”) issued a final rule revising regulatory capital rules in anticipation of the adoption of ASU 2016-13 that provided an option to phase in over a three year period on a straight line basis the day-one impact of the adoption on earnings and Tier 1 capital (the “CECL Transition Provision”).

In March 2020, in response to the COVID-19 pandemic, the agencies issued a new regulatory capital rule revising the CECL Transition Provision to delay the estimated impact on regulatory capital stemming from the implementation of ASU 2016-13.

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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%.

Prior to December 31, 2017, Tier 1 capital included common equity Tier 1 capital and certain additional Tier 1 items as provided under the Basel III Capital Rules.

Qualifying subordinated debt of $317.7 million is included as Tier 2 and total capital of the Company as of December 31, 2025.

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GAAP Reconciliation of Non-GAAP Financial Measures

The tables below present computations of adjusted earnings (net income excluding certain items {early retirement program costs, loss from early retirement of TruPS, gain on sale of intellectual property, gain on insurance settlement, donation to Simmons First Foundation, merger related costs, FDIC special assessment, loss on sale of securities, termination of vendor and software services, net branch right sizing costs, Day 2 CECL Provision and tax effect}) (non-GAAP) and adjusted diluted earnings per share (non-GAAP) as well as a computation of tangible book value per common share (non-GAAP), tangible common equity to tangible assets (non-GAAP), adjusted noninterest income (non-GAAP), adjusted noninterest expense (non-GAAP), adjusted salaries and employee benefits expense (non-GAAP), adjusted deposit insurance 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 {early retirement program costs, loss on early extinguishment of debt, loss on sale of equipment finance business, merger related costs, FDIC special assessment, loss on sale of securities, termination of vendor and software services, net branch right sizing costs and tax effect}) (non-GAAP) and adjusted diluted earnings per share (non-GAAP) as well as a computation of tangible book value per common 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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Additionally, similarly titled non-GAAP financial measures used by other companies may not be computed in the same or similar fashion.

During 2025, adjusted items primarily consisted of net branch right sizing costs of $3.2 million, mainly due to costs associated with branch closures across our footprint during the year and a $801.5 million loss on sale of securities due to the balance sheet repositioning during the year.

We also recorded an additional $1.9 million in early retirement program costs and $1.1 million related the loss on sale of an equipment finance business during the year.

The net after-tax impact of all adjusted items on net income was $630.7 million, or a $4.68 impact on diluted earnings per share.

During 2024, adjusted items primarily consisted of net branch right sizing costs of $2.7 million, mainly due to branch closures across our footprint during the year, and a $28.4 million loss on sale of securities due to the strategic sale of AFS securities during the year.

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The net after-tax impact of all adjusted items on net income was $32.7 million, or a $0.26 impact on diluted earnings per share.

During 2022, adjusted items primarily consisted of $33.8 million of Day 2 provision expense required for loans and unfunded commitments related to the Spirit acquisition, merger-related costs of $22.5 million, primarily related to the Spirit acquisition, and net branch right sizing costs of $3.6 million, mainly due to branch closures across our footprint during the year.

Additionally, we had a gain on insurance settlement of $4.1 million related to a weather event that caused severe damage to one of our branch locations.

The net after-tax impact of all adjusted items was $42.4 million, or $0.34 per diluted earnings per share.

See Table 19 below for the reconciliation of adjusted earnings, which exclude certain items for the periods presented.

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(In thousands, except per share data) 2025 2024 2023

Net income available to common stockholders $ 152,693 $ 175,057 $ 256,412

Net income (loss) available to common stockholders $ (397,553) $ 152,693 $ 175,057

Certain items:

Termination of vendor and software services 12 602 —

Loss from early retirement of TruPS — — 365

Gain on sale of intellectual property — — (750)

Gain on insurance settlement — — (4,074)

Loss on early extinguishment of debt 570 — —

Loss on sale of equipment finance business 1,118 — —

FDIC special assessment — 1,832 10,521

Donation to Simmons First Foundation — — 1,738

Merger related costs — — 1,420

2 unchanged sentences

Branch right sizing, net 3,246 2,746 5,467

Day 2 CECL Provision — — 33,779

Tax effect (1)

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Termination of vendor and software services — — —

Loss from early retirement of TruPS — — —

Gain on sale of intellectual property — — (0.01)

Gain on insurance settlement — — (0.03)

Loss on early extinguishment of debt 0.01 — —

Loss on sale of equipment finance business 0.01 — —

FDIC special assessment — 0.02 0.08

Donation to Simmons First Foundation — — 0.01

Merger related costs — — 0.01

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Branch right sizing, net 0.02 0.02 0.04

Day 2 CECL Provision — — 0.28

Tax effect (1)

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_________________________

(1) Effective tax rate of 26.135%.

See Table 20 below for the reconciliations of adjusted noninterest income, adjusted noninterest expense, adjusted salaries and employee benefits expense and adjusted deposit insurance expense for the periods presented.

Reconciliations of Adjusted Noninterest Income (non-GAAP), Adjusted Noninterest Expense (non-GAAP), Adjusted Salaries and Employee Benefits Expense (non-GAAP) and Adjusted Deposit Insurance Expense (non-GAAP)

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

Effective tax rate of 26.135% on all other items.

See Table 20 below for the reconciliations 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)

(In thousands) 2025 2024 2023

Noninterest income $ 147,171 $ 155,566 $ 170,066

Noninterest income (loss) $ (615,970) $ 147,171 $ 155,566

Certain items:

Gain on insurance settlement — — (4,074)

Loss from early retirement of TruPS — — 365

Gain on sale of intellectual property — — (750)

Loss on early extinguishment of debt 570 — —

Loss on sale of securities 801,492 28,393 20,609

Branch right sizing — — 153

Total certain items 802,062 28,393 20,609

4 unchanged sentences

Merger related costs — — (1,420)

Donation to Simmons First Foundation — — (1,738)

Loss on sale of equipment finance business (1,118) — —

Early retirement program (1,899) (536) (6,198)

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Adjusted noninterest expense (non-GAAP) $ 558,788 $ 551,827 $ 539,455

Salaries and employee benefits expense $ 284,124 $ 286,117 $ 286,982

Early retirement program costs (536) (6,198) —

Adjusted salaries and employee benefits expense (non-GAAP) $ 283,588 $ 279,921 $ 286,982

Deposit insurance expense $ 23,938 $ 29,986 $ 11,608

FDIC special assessment (1,832) (10,521) —

Adjusted deposit insurance expense (non-GAAP) $ 22,106 $ 19,465 $ 11,608

See Table 21 below for the reconciliation of tangible book value per common share.

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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 7. Management’s Discussion and Analysis