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Previous wording

We are a bank holding company headquartered in Conway, Arkansas, offering a broad array of financial services through our wholly-owned bank subsidiary, Centennial Bank (sometimes referred to as “Centennial” or the “Bank”). As of September 30, 2024, we had, on a consolidated basis, total assets of $22.82 billion, loans receivable, net of allowance for credit losses of $14.51 billion, total deposits of $16.71 billion, and stockholders’ equity of $3.96 billion.

Current wording

We are a bank holding company headquartered in Conway, Arkansas, offering a broad array of financial services through our wholly-owned bank subsidiary, Centennial Bank (sometimes referred to as “Centennial” or the “Bank”). As of March 31, 2025, we had, on a consolidated basis, total assets of $22.99 billion, loans receivable, net of allowance for credit losses of $14.67 billion, total deposits of $17.54 billion, and stockholders’ equity of $4.04 billion.

Previous wording

Total interest income increased by $38.6 million, or 13.1%, and non-interest expense decreased $4.7 million, or 4.1%. This was partially offset by a $25.3 million, or 27.4% increase in total interest expense and a $634,000, or 1.5%, decrease in non-interest income. These fluctuations are primarily due to the high interest rate environment. The increase in interest income resulted from a $32.5 million, or 13.0%, increase in loan interest income and a $9.8 million, or 419.6%, increase in interest income on deposits at other banks, which was partially offset by a $3.7 million, or 8.7%, decrease in investment interest income. The decrease in non-interest expense was due to a decrease of $5.7 million, or 8.8%, in salaries and employee benefits and a decrease of $917,000, or 5.9%, in occupancy and equipment expense, which was partially offset by an increase of $1.9 million, or 7.3%, in other operating expenses. The increase in interest expense was primarily due to a $19.1 million, or 24.3%, increase in interest on deposits and a $6.2 million, or 76.2%, increase in interest on FHLB and other borrowed funds. The decrease in non-interest income was primarily due to a $3.1 million, or 69.1%, decrease in the fair value adjustment for marketable securities which was partially offset by a $1.3 million, or 41.7%, increase in mortgage lending income and a $1.3 million, or 21.6%, increase in other income.

Current wording

Total interest expense decreased $14.4 million, or 12.9%, and non-interest income increased $3.6 million, or 8.7%. This was partially offset by a $4.4 million, or 1.4%, decrease in total interest income and a $1.4 million, or 1.3%, increase in non-interest expense. The decrease in interest expense was primarily due to an $8.4 million, or 58.7%, decrease in interest on FHLB and other borrowed funds and a $5.8 million, or 6.2%, decrease in interest on deposits. The increase in non-interest income was primarily due to a $4.1 million, or 55.0%, increase in other income. Included within other income was the $3.9 million in special income from equity investments. The decrease in interest income resulted from a $5.9 million, or 14.5%, decrease in investment interest income and a $3.9 million, or 37.1%, decrease in interest income on deposits at other banks, which was partially offset by a $5.5 million, or 2.1%, increase in loan interest income. The increase in non-interest expense was primarily due to an increase of $1.2 million, or 4.5%, in other operating expenses and a $945,000, or 1.6%, increase in salaries and employee benefits expense, partially offset by a $589,000, or 6.4%, decrease in data processing expense.

Previous wording

Our efficiency ratio was 41.42% for the three months ended September 30, 2024, compared to 45.53% for the same period in 2023. For the third quarter of 2024, our efficiency ratio, as adjusted (non-GAAP), was 41.66%, compared to 46.44% reported for the third quarter of 2023. (See Table 25 for the non-GAAP tabular reconciliation).

Current wording

Our efficiency ratio was 42.22% for the three months ended March 31, 2025, compared to 44.22% for the same period in 2024. For the first quarter of 2025, our efficiency ratio, as adjusted (non-GAAP), was 42.84%, compared to 44.43% reported for the first quarter of 2024. (See Table 29 for the non-GAAP tabular reconciliation).

Previous wording

Our annualized return on average assets was 1.74% for the three months ended September 30, 2024, compared to 1.78% for the same period in 2023. (See Table 22 for the related non-GAAP financial measures and tabular reconciliation). Our annualized return on average common equity was 10.23% and 10.65% for the three months ended September 30, 2024, and 2023, respectively. (See Table 23 for the related non-GAAP financial measures and tabular reconciliation).

Current wording

Our annualized return on average assets was 2.07% for the three months ended March 31, 2025, compared to 1.78% for the same period in 2024. (See Table 26 for the related non-GAAP financial measures and tabular reconciliation). Our annualized return on average common equity was 11.75% and 10.64% for the three months ended March 31, 2025, and 2024, respectively. (See Table 27 for the related non-GAAP financial measures and tabular reconciliation).

Previous wording

Our total assets as of September 30, 2024 increased $166.5 million to $22.82 billion from $22.66 billion reported as of December 31, 2023. Cash and cash equivalents increased $17.5 million for the nine months ended September 30, 2024. Our loan portfolio balance increased to $14.82 billion as of September 30, 2024 from $14.42 billion at December 31, 2023. The increase in loans was primarily due to $350.4 million of organic loan growth in our community banking footprint and $48.9 million of organic loan growth from our Centennial Commercial Finance Group ("Centennial CFG") franchise. These increases were partially offset by a $242.1 million decrease in investment securities resulting from paydowns and maturities during the first nine months of 2024. Total deposits decreased $82.0 million to $16.71 billion as of September 30, 2024 from $16.79 billion as of December 31, 2023. Stockholders’ equity increased $168.7 million to $3.96 billion as of September 30, 2024, compared to $3.79 billion as of December 31, 2023. The $168.7 million increase in stockholders’ equity is primarily associated with the $301.7 million in net income and $54.2 million in other comprehensive income for the nine months ended September 30, 2024, which was partially offset by the $111.2 million of shareholder dividends paid and stock repurchases of $83.6 million.

Current wording

Our total assets as of March 31, 2025 increased $501.5 million to $22.99 billion from $22.49 billion reported as of December 31, 2024. Cash and cash equivalents increased $385.4 million for the three months ended March 31, 2025. Our loan portfolio balance increased to $14.95 billion as of March 31, 2025 from $14.76 billion at December 31, 2024. The increase in loans was primarily due to $291.5 million of organic loan growth in our community banking footprint partially offset by a $103.9 million of organic loan decline from our Centennial Commercial Finance Group ("Centennial CFG") franchise. These increases were partially offset by a $74.6 million decrease in investment securities resulting from paydowns and maturities during the first three months of 2025. Total deposits increased $395.2 million to $17.54 billion as of March 31, 2025 from $17.15 billion as of December 31, 2024. Stockholders’ equity increased $81.5 million to $4.04 billion as of March 31, 2025, compared to $3.96 billion as of December 31, 2024. The $81.5 million increase in stockholders’ equity is primarily associated with the $115.2 million in net income and $31.6 million in other comprehensive income for the three months ended March 31, 2025, which was partially offset by the $38.8 million of shareholder dividends paid and stock repurchases of $29.7 million.

Previous wording

Expected credit losses are estimated over the contractual term of the loans, adjusted for expected prepayments when appropriate. The contractual term excludes expected extensions, renewals, and modifications unless either of the following applies:

Current wording

Expected credit losses are estimated over the contractual term of the loans, adjusted for expected prepayments and curtailments when appropriate. The contractual term excludes expected extensions, renewals, and modifications unless either of the following applies:

Previous wording

As of September 30, 2024, we had 218 branch locations. There were 76 branches in Arkansas, 78 branches in Florida, 58 branches in Texas, five branches in Alabama and one branch in New York City.

Current wording

As of March 31, 2025, we had 217 branch locations. There were 75 branches in Arkansas, 78 branches in Florida, 58 branches in Texas, five branches in Alabama and one branch in New York City.

Previous wording

Net interest income, our principal source of earnings, is the difference between the interest income generated by earning assets and the total interest cost of the deposits and borrowings obtained to fund those assets. Factors affecting the level of net interest income include the volume of earning assets and interest-bearing liabilities, yields earned on loans and investments, rates paid on deposits and other borrowings, the level of non-performing loans and the amount of non-interest-bearing liabilities supporting earning assets. Net interest income is analyzed in the discussion and tables below on a fully taxable equivalent basis. The adjustment to convert certain income to a fully taxable equivalent basis consists of dividing tax-exempt income by one minus the combined federal and state income tax rate (24.989% for 2024 and 24.6735% for 2023).

Current wording

Net interest income, our principal source of earnings, is the difference between the interest income generated by earning assets and the total interest cost of the deposits and borrowings obtained to fund those assets. Factors affecting the level of net interest income include the volume of earning assets and interest-bearing liabilities, yields earned on loans and investments, rates paid on deposits and other borrowings, the level of non-performing loans and the amount of non-interest-bearing liabilities supporting earning assets. Net interest income is analyzed in the discussion and tables below on a fully taxable equivalent basis. The adjustment to convert certain income to a fully taxable equivalent basis consists of dividing tax-exempt income by one minus the combined federal and state income tax rate (24.433% and 24.989% for 2025 and 2024, respectively).

Previous wording

The Federal Reserve Board sets various benchmark rates, including the Federal Funds rate, and thereby influences the general market rates of interest, including the deposit and loan rates offered by financial institutions. The Federal Reserve increased the target rate four times during 2023. First, on February 1, 2023, the target rate was increased to 4.50% to 4.75%, second, on March 22, 2023, the target rate was increased to 4.75% to 5.00%, third, on May 3, 2023, the target rate was increased to 5.00% to 5.25% and fourth, on July 26, 2023, the target rate was increased to 5.25% to 5.50%. On September 18, 2024, the Federal Reserve reduced the target rate to 4.75% to 5.00%.

Current wording

The Federal Reserve Board sets various benchmark rates, including the Federal Funds rate, and thereby influences the general market rates of interest, including the deposit and loan rates offered by financial institutions. The Federal Reserve reduced the target rate three times during 2024. First, on September 18, 2024, the target rate was reduced to 4.75% to 5.00%, second, on November 7, 2024, the target rate was reduced to 4.50% to 4.75% and third, on December 18, 2024, the target rate was reduced to 4.25% to 4.50%. As of March 31, 2025, the Federal Reserve has not changed the rates during 2025.

Previous wording

Our net interest margin increased from 4.19% for the three-month period ended September 30, 2023 to 4.28% for the three-month period ended September 30, 2024. The yield on interest earning assets was 6.60% and 6.09% for the three months ended September 30, 2024 and 2023, respectively, and average interest earning assets increased from $19.26 billion to $20.23 billion. The increase in average interest earning assets is primarily due to a $706.1 million increase in average interest-bearing balances due from banks and a $571.2 million increase in average loans receivable, partially offset by a $315.8 million decrease in average investment securities. During the third quarter of 2024, the Company held excess liquidity of approximately $500.0 million which was dilutive to the net interest margin by approximately 10 basis points. For the three months ended September 30, 2024 and 2023, we recognized $1.9 million and $2.4 million, respectively, in total net accretion for acquired loans and deposits. The reduction in accretion was dilutive to the net interest margin by two basis points. We recognized $573,000 in event income for the three-months ended September 30, 2024 compared to $521,000 for the three-months ended September 30, 2023. The remaining increase in the net interest margin was due to an increase in interest income resulting from an increase in average interest-bearing assets at higher interest rates primarily as a result of the high interest rate environment.

Current wording

Our net interest margin increased from 4.13% for the three-month period ended March 31, 2024 to 4.44% for the three-month period ended March 31, 2025. The yield on interest earning assets was 6.45% and 6.38% for the three months ended March 31, 2025 and 2024, respectively, and average interest earning assets decreased from $20.03 billion to $19.83 billion. The decrease in average interest earning assets is primarily due to a $189.5 million decrease in average interest-bearing balances due from banks and a $416.3 million decrease in average investment securities, partially offset by a $406.4 million increase in average loans receivable. During the first quarter of 2024, the Company held excess liquidity of approximately $500.0 million, primarily related to the BTFP advance, which was dilutive to the net interest margin by approximately 10 basis points. The Company paid off the advance in November 2024. For the three months ended March 31, 2025 and 2024, we recognized $1.4 million and $2.8 million, respectively, in total net accretion for acquired loans and deposits. The reduction in accretion was dilutive to the net interest margin by three basis points. We recognized $1.3 million in event income for the three-months ended March 31, 2025 compared to $1.1 million for the three-months ended March 31, 2024. The overall increase in the net interest margin was due to a decrease in interest expense resulting from a decrease in interest rates paid on interest-bearing liabilities and a decrease in the average balance of interest-bearing liabilities.

Previous wording

Net interest income on a fully taxable equivalent basis increased $14.6 million, or 7.2%, to $217.8 million for the three-month period ended September 30, 2024, from $203.2 million for the same period in 2023. This increase in net interest income for the three-month period ended September 30, 2024 was the result of a $39.9 million increase in interest income, which was partially offset by a $25.3 million increase in interest expense, on a fully taxable equivalent basis. The $39.9 million increase in interest income was primarily the result of the high interest rate environment. The higher yield on earning assets resulted in an increase in interest income of approximately $22.9 million, in addition to an increase of $17.0 million in interest income due to the change in average interest earning asset balances. The $25.3 million increase in interest expense is also primarily the result of the high interest rate environment. The higher rates on interest bearing liabilities resulted in an increase in interest expense of approximately $14.2 million, in addition to an increase in average interest bearing liabilities which increased interest expense by approximately $11.1 million.

Current wording

Net interest income on a fully taxable equivalent basis increased $11.7 million, or 5.7%, to $217.2 million for the three-month period ended March 31, 2025, from $205.5 million for the same period in 2024. This increase in net interest income for the three-month period ended March 31, 2025 was the result of a $14.4 million decrease in interest expense, which was partially offset by a $2.7 million decrease in interest income, on a fully taxable equivalent basis. The $14.4 million decrease in interest expense is primarily the result of the lower interest rate environment. The lower rates on interest bearing liabilities resulted in a decrease in interest expense of approximately $10.9 million, in addition to a decrease in average interest bearing liabilities which decreased interest expense by approximately $3.6 million. The $2.7 million decrease in interest income was also primarily the result of the lower interest rate environment. The lower yield on earning assets resulted in a decrease in interest income of approximately $4.3 million, which was partially offset by an increase of $1.6 million in interest income due to the change in average interest earning asset balances.

Previous wording

Tables 2 and 3 reflect an analysis of net interest income on a fully taxable equivalent basis for the three and nine months ended September 30, 2024 and 2023, as well as changes in the fully taxable equivalent net interest margin for the three and nine months ended September 30, 2024 compared to the same period in 2023.

Current wording

Tables 2 and 3 reflect an analysis of net interest income on a fully taxable equivalent basis for the three months ended March 31, 2025 and 2024, as well as changes in the fully taxable equivalent net interest margin for the three months ended March 31, 2025 compared to the same period in 2024.

Previous wording

Table 4 shows, for each major category of earning assets and interest-bearing liabilities, the average amount outstanding, the interest income or expense on that amount and the average rate earned or expensed for the three and nine months ended September 30, 2024 and 2023, 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. The analysis is presented on a fully taxable equivalent basis. Non-accrual loans were included in average loans for the purpose of calculating the rate earned on total loans.

Current wording

Table 4 shows, for each major category of earning assets and interest-bearing liabilities, the average amount outstanding, the interest income or expense on that amount and the average rate earned or expensed for the three months ended March 31, 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. The analysis is presented on a fully taxable equivalent basis. Non-accrual loans were included in average loans for the purpose of calculating the rate earned on total loans.

Previous wording

Table 5 shows changes in interest income and interest expense resulting from changes in volume and changes in interest rates for the three and nine months ended September 30, 2024 compared to the same period in 2023, on a fully taxable basis. 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.

Current wording

Table 5 shows changes in interest income and interest expense resulting from changes in volume and changes in interest rates for the three months ended March 31, 2025 compared to the same period in 2024, on a fully taxable basis. 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.

Previous wording

During the quarter ended September 30, 2024, the Company recovered $330,000 in AFS reserves due to an improvement in the unrealized loss position of one of the Company's subordinated debt investments. For both the three and nine month periods ended September 30, 2024, the Company determined the $2.0 million allowance for credit losses on the held-to-maturity portfolio was adequate. Therefore, no additional provision was considered necessary for the HTM portfolio.

Current wording

During the three months ended March 31, 2025, the Company determined the $2.2 million allowance for credit losses on the available for sale portfolio and the $2.0 million allowance for credit losses on the held-to-maturity portfolio was adequate. Therefore, no additional provision was considered necessary.

Previous wording

Net charge-offs to average total loans was 0.04% and 0.08% for the three months ended September 30, 2024 and 2023, respectively, and net charge-offs to average total loans was 0.07% and 0.10% for the nine months ended September 30, 2024 and 2023, respectively.

Current wording

Net (recoveries) charge-offs to average total loans was (0.11)% and 0.10% for the three months ended March 31, 2025 and 2024, respectively.

Previous wording

Total non-interest income was $42.8 million and $127.4 million for the three and nine months ended September 30, 2024, compared to $43.4 million and $127.1 million for the same period in 2023. Our recurring non-interest income includes service charges on deposit accounts, other service charges and fees, trust fees, mortgage lending income, insurance commissions, increase in cash value of life insurance, fair value adjustment for marketable securities and dividends.

Current wording

Total non-interest income was $45.4 million for the three months ended March 31, 2025, compared to $41.8 million for the same period in 2024. Our recurring non-interest income includes service charges on deposit accounts, other service charges and fees, trust fees, mortgage lending income, insurance commissions, increase in cash value of life insurance, fair value adjustment for marketable securities and dividends.

Previous wording

Table 6 measures the various components of our non-interest income for the three and nine months ended September 30, 2024 and 2023.

Current wording

Table 6 measures the various components of our non-interest income for the three months ended March 31, 2025 and 2024.

Previous wording

Non-interest income increased $266,000, or 0.2%, to $127.4 million for the nine months ended September 30, 2024 from $127.1 million for the same period in 2023. The primary factors that resulted in this increase were the increases in fair value adjustment for marketable securities, trust fees, mortgage lending income and the gain on sale of branches, equipment and other assets, net, which was partially offset by decreases in other service charges and fees and other income.

Current wording

Non-interest income increased $3.6 million, or 8.7%, to $45.4 million for the three months ended March 31, 2025 from $41.8 million for the same period in 2024. The primary factors that resulted in this increase were the increases in other service charges and fees, cash value of life insurance and other income, which was partially offset by the decrease in fair value adjustment for marketable securities.

Previous wording

•The $362,000 increase in other service charges and fees is primarily related to an increase in Centennial CFG property finance loan fees.

Current wording

•The $500,000 increase in other service charges and fees is primarily related to an increase in Centennial CFG property finance loan fees.

Previous wording

Non-interest expense primarily consists of salaries and employee benefits, occupancy and equipment, data processing, and other expenses such as advertising, amortization of intangibles, electronic banking expense, FDIC and state assessment, insurance, legal and accounting fees, other professional fees and other expenses.

Current wording

Non-interest expense consists of salaries and employee benefits, occupancy and equipment, data processing, and other expenses such as advertising, amortization of intangibles, electronic banking expense, FDIC and state assessment, insurance, legal and accounting fees, other professional fees and other expenses.

Previous wording

Table 7 below sets forth a summary of non-interest expense for the three and nine months ended September 30, 2024 and 2023.

Current wording

Table 7 below sets forth a summary of non-interest expense for the three months ended March 31, 2025 and 2024.

Previous wording

•The $5.7 million decrease in salaries and employee benefits expense is primarily due to the Company's project to reduce the size of its workforce and a decrease in deferred loan costs.

Current wording

•The $945,000 increase in salaries and employee benefits expense is primarily due to an increase in deferred loan costs.

Previous wording

•The $2.6 million increase in legal and accounting expense is primarily due to ongoing legal matters.

Current wording

•The $1.6 million increase in legal and accounting expense is primarily due to ongoing legal matters.

Previous wording

Income tax expense decreased $1.8 million, or 5.8%, to $29.0 million for the three-month period ended September 30, 2024, from $30.8 million for the same period in 2023. Income tax expense decreased $1.2 million, or 1.3%, to $91.2 million for the nine-month period ended September 30, 2024, from $92.4 million for the same period in 2023. The effective income tax rate was 22.50% and 23.22% for the three and nine months ended September 30, 2024, respectively, compared to 23.85% and 23.15% for the same periods in 2023, respectively. The marginal tax rate was 24.989% and 24.6735% for 2024 and 2023, respectively.

Current wording

Income tax expense increased $1.7 million, or 5.5%, to $31.9 million for the three-month period ended March 31, 2025, from $30.3 million for the same period in 2024. The effective income tax rate was 21.71% for the three months ended March 31, 2025, compared to 23.22% for the same period in 2024. The marginal tax rate was 24.433% and 24.989% for 2025 and 2024, respectively.

Previous wording

Our total assets as of September 30, 2024 increased $166.5 million to $22.82 billion from $22.66 billion reported as of December 31, 2023. Cash and cash equivalents increased $17.5 million for the nine months ended September 30, 2024. Our loan portfolio balance increased to $14.82 billion as of September 30, 2024 from $14.42 billion at December 31, 2023. The increase in loans was primarily due to $350.4 million of organic loan growth in our community banking footprint and $48.9 million of organic loan growth from our Centennial CFG franchise. These increases were partially offset by a $242.1 million decrease in investment securities resulting from paydowns and maturities during the first nine months of 2024. Total deposits decreased $82.0 million to $16.71 billion as of September 30, 2024 from $16.79 billion as of December 31, 2023. Stockholders’ equity increased $168.7 million to $3.96 billion as of September 30, 2024, compared to $3.79 billion as of December 31, 2023. The $168.7 million increase in stockholders’ equity is primarily associated with the $301.7 million in net income and $54.2 million in other comprehensive income for the nine months ended September 30, 2024, which was partially offset by the $111.2 million of shareholder dividends paid and stock repurchases of $83.6 million.

Current wording

Our total assets as of March 31, 2025 increased $501.5 million to $22.99 billion from $22.49 billion reported as of December 31, 2024. Cash and cash equivalents increased $385.4 million for the three months ended March 31, 2025. Our loan portfolio balance increased to $14.95 billion as of March 31, 2025 from $14.76 billion at December 31, 2024. The increase in loans was primarily due to $291.5 million of organic loan growth in our community banking footprint partially offset by a $103.9 million of organic loan decline from our Centennial CFG franchise. These increases were partially offset by a $74.6 million decrease in investment securities resulting from paydowns and maturities during the first three months of 2025. Total deposits increased $395.2 million to $17.54 billion as of March 31, 2025 from $17.15 billion as of December 31, 2024. Stockholders’ equity increased $81.5 million to $4.04 billion as of March 31, 2025, compared to $3.96 billion as of December 31, 2024. The $81.5 million increase in stockholders’ equity is primarily associated with the $115.2 million in net income and $31.6 million in other comprehensive income for the three months ended March 31, 2025, which was partially offset by the $38.8 million of shareholder dividends paid and stock repurchases of $29.7 million.

Previous wording

Our loan portfolio averaged $14.76 billion and $14.19 billion during the three months ended September 30, 2024 and 2023, respectively. Our loan portfolio averaged $14.63 billion and $14.31 billion during the nine months ended September 30, 2024 and 2023, respectively. Loans receivable were $14.82 billion and $14.42 billion as of September 30, 2024 and December 31, 2023, respectively.

Current wording

Our loan portfolio averaged $14.89 billion and $14.49 billion during the three months ended March 31, 2025 and 2024, respectively. Loans receivable were $14.95 billion and $14.76 billion as of March 31, 2025 and December 31, 2024, respectively.

Previous wording

From December 31, 2023 to September 30, 2024, the Company experienced an increase of approximately $399.3 million in loans. The increase in loans was primarily due to $350.4 million of organic loan growth in our community banking footprint and $48.9 million of organic loan growth from our Centennial CFG franchise.

Current wording

From December 31, 2024 to March 31, 2025, the Company experienced an increase of approximately $187.6 million in loans. The increase in loans was primarily due to $291.5 million of organic loan growth in our community banking footprint and $103.9 million of organic loan decline from our Centennial CFG franchise.

Previous wording

The most significant components of the loan portfolio were commercial real estate, residential real estate, consumer and commercial and industrial loans. These loans are generally secured by residential or commercial real estate or business or personal property. Although these loans are primarily originated within our franchises in Arkansas, Florida, Texas, Alabama and Centennial CFG, the property securing these loans may not physically be located within our market areas of Arkansas, Florida, Texas, Alabama and New York. Loans receivable were approximately $3.38 billion, $4.10 billion, $3.90 billion, $115.8 million, $1.32 billion and $2.00 billion as of September 30, 2024 in Arkansas, Florida, Texas, Alabama, SPF and Centennial CFG, respectively.

Current wording

The most significant components of the loan portfolio were commercial real estate, residential real estate, consumer and commercial and industrial loans. These loans are generally secured by residential or commercial real estate or business or personal property. Although these loans are primarily originated within our franchises in Arkansas, Florida, Texas, Alabama and Centennial CFG, the property securing these loans may not physically be located within our market areas of Arkansas, Florida, Texas, Alabama and New York. Loans receivable were approximately $3.58 billion, $4.27 billion, $3.92 billion, $115.7 million, $1.35 billion and $1.71 billion as of March 31, 2025 in Arkansas, Florida, Texas, Alabama, SPF and Centennial CFG, respectively.

Previous wording

Commercial Real Estate Loans. We originate non-farm and non-residential loans (primarily secured by commercial real estate), construction/land development loans, and agricultural loans, which are generally secured by real estate located in our market areas. Our commercial mortgage loans are generally collateralized by first liens on real estate and amortized (where defined) over a 15 to 30-year period with balloon payments due at the end of one to five years. These loans are generally underwritten by assessing cash flow (debt service coverage), primary and secondary source of repayment, the financial strength of any guarantor, the strength of the tenant (if any), the borrower’s liquidity and leverage, management experience, ownership structure, economic conditions and industry specific trends and collateral. Generally, we will loan up to 85% of the value of improved property, 65% of the value of raw land and 75% of the value of land to be acquired and developed. A first lien on the property and assignment of lease is required if the collateral is rental property, with second lien positions considered on a case-by-case basis.

Current wording

Commercial Real Estate Loans. We originate non-farm and non-residential loans (primarily secured by commercial real estate), construction/land development loans, and agricultural loans, which are generally secured by real estate located in our market areas. Our commercial mortgage loans are generally collateralized by first liens on real estate and amortized (where defined) over a 15 to 30-year period with balloon payments due at the end of one to five years. These loans are generally underwritten by assessing cash flow (debt service coverage), primary and secondary source of repayment, the financial strength of the borrower as well as any guarantors, the strength of the tenant (if any), the borrower’s liquidity and leverage, management experience, ownership structure, economic conditions and industry specific trends and collateral. Generally, we will loan up to 85% of the value of improved property, 65% of the value of raw land and 75% of the value of land to be acquired and developed. A first lien on the property and assignment of lease is required if the collateral is rental property, with second lien positions considered on a case-by-case basis.

Previous wording

As of September 30, 2024, we had approximately $1.13 billion of construction/land development loans which were collateralized by land. This consisted of approximately $104.8 million for raw land and approximately $1.02 billion for land with commercial and/or residential lots.

Current wording

As of March 31, 2025, we had approximately $1.20 billion of construction/land development loans which were collateralized by land. This consisted of approximately $85.5 million for raw land and approximately $1.11 billion for land with commercial and/or residential lots.

Previous wording

As of September 30, 2024, commercial real estate ("CRE") loans totaled $8.57 billion, or 57.8%, of loans receivable, as compared to $8.17 billion, or 56.7%, of loans receivable, as of December 31, 2023. CRE loans originated in our Arkansas, Florida, Texas, Alabama, SPF and Centennial CFG markets were $2.18 billion, $2.57 billion, $2.19 billion, $46.7 million, zero and $1.59 billion at September 30, 2024, respectively.

Current wording

As of March 31, 2025, commercial real estate ("CRE") loans totaled $8.66 billion, or 57.9%, of loans receivable, as compared to $8.50 billion, or 57.6%, of loans receivable, as of December 31, 2024. CRE loans originated in our Arkansas, Florida, Texas, Alabama, SPF and Centennial CFG markets were $2.30 billion, $2.70 billion, $2.20 billion, $48.0 million, zero and $1.41 billion at March 31, 2025, respectively.

Previous wording

(2) Excludes multi-family residential loans of $482.6 million and $435.7 million as of September 30, 2024 and December 31, 2023, respectively, which are included in the residential real estate loans throughout the filing. Multi-family residential loans are included in CRE for regulatory purposes.

Current wording

(2) Excludes multi-family residential loans of $576.1 million and $496.5 million as of March 31, 2025 and December 31, 2024, respectively, which are included in the residential real estate loans throughout the filing. Multi-family residential loans are included in CRE for regulatory purposes.

Previous wording

(2) Excludes multi-family residential loans of $482.6 million and $435.7 million as of September 30, 2024 and December 31, 2023, respectively, which are included in the residential real estate loans throughout the filing. Multi-family residential loans are included in CRE for regulatory purposes.

Current wording

(2) Excludes multi-family residential loans of $576.1 million and $496.5 million as of March 31, 2025 and December 31, 2024, respectively, which are included in the residential real estate loans throughout the filing. Multi-family residential loans are included in CRE for regulatory purposes.

Previous wording

The Company has a CRE strategy and contingency plan which outlines the principles required to adequately manage our CRE exposures. It discusses the inherent risks within CRE lending, as well as the risks unique to specific lending activities and property taxes. In addition, the plan outlines internal limits related to CRE lending, reasoning for operating outside those limits, and provides for a contingency plan to reduce the CRE exposures under adverse economic conditions or other situations where it is deemed necessary to do so. The responsibility for monitoring the CRE Strategy and Contingency Plan, and subsequent reporting to Management and the Board of Directors lies with the Chief Lending Officer and the Asset Quality Committee of the Board of Directors. Within the CRE Strategy and Contingency Plan, we established four adverse economic triggers to measure on an ongoing basis to attempt to determine when a change in CRE strategy might be warranted, at least from an external economic perspective. If one or a combination of these triggers have exceeded Board approved thresholds, the Executive Risk Committee will determine which action or combination of actions to take based on the specific situation. The required actions are likely to focus on tightening/loosening of underwriting criteria, potential capital raises or loan distribution actions such as selling or participating loans. However, other action steps may be considered necessary depending upon the specific situation. As of September 30, 2024, the leading economic indicator trigger exceeded our internal guidelines, but we have not recommended any additional changes to our underwriting standards because the Company considers the current standards to be adequate in addressing the risks to our CRE portfolio.

Current wording

The Company has a CRE strategy and contingency plan which outlines the principles required to adequately manage our CRE exposures. It discusses the inherent risks within CRE lending, as well as the risks unique to specific lending activities and property taxes. In addition, the plan outlines internal limits related to CRE lending, reasoning for operating outside those limits, and provides for a contingency plan to reduce the CRE exposures under adverse economic conditions or other situations where it is deemed necessary to do so. The responsibility for monitoring the CRE Strategy and Contingency Plan, and subsequent reporting to management and the Board of Directors lies with the Chief Lending Officer and the Asset Quality Committee of the Board of Directors. Within the CRE Strategy and Contingency Plan, we established four adverse economic triggers to measure on an ongoing basis to attempt to determine when a change in CRE strategy might be warranted, at least from an external economic perspective. If one or a combination of these triggers have exceeded Board approved thresholds, the Executive Risk Committee will determine which action or combination of actions, if any, to take based on the specific situation. If utilized, the required actions are likely to focus on tightening/loosening of underwriting criteria, potential capital raises or loan distribution actions such as selling or participating loans. However, other action steps may be considered necessary depending upon the specific situation. As of March 31, 2025, none of the triggers exceeded our internal guidelines, and we have not recommended any additional changes to our underwriting standards because the Company considers the current standards to be adequate in addressing the risks to our CRE portfolio.

Previous wording

Residential Real Estate Loans. We originate one to four family, residential mortgage loans generally secured by property located in our primary market areas. Approximately 55.8% and 37.5% of our residential mortgage loans consist of owner occupied 1-4 family properties and non-owner occupied 1-4 family properties (rental), respectively, as of September 30, 2024, with the remaining 6.7% relating to condominiums and mobile homes. Residential real estate loans generally have a loan-to-value ratio of up to 90%. These loans are underwritten by giving consideration to the borrower’s ability to pay, stability of employment or source of income, debt-to-income ratio, credit history and loan-to-value ratio.

Current wording

Residential Real Estate Loans. We originate one to four family, residential mortgage loans generally secured by property located in our primary market areas. Approximately 58.6% and 34.6% of our residential mortgage loans consist of owner occupied 1-4 family properties and non-owner occupied 1-4 family properties (rental), respectively, as of March 31, 2025, with the remaining 6.8% relating to condominiums and mobile homes. Residential real estate loans generally have a loan-to-value ratio of up to 90%. These loans are underwritten by giving consideration to the borrower’s ability to pay, stability of employment or source of income, debt-to-income ratio, credit history and loan-to-value ratio.

Previous wording

As of September 30, 2024, residential real estate loans totaled $2.42 billion, or 16.3%, of loans receivable, compared to $2.28 billion, or 15.8%, of loans receivable, as of December 31, 2023. Residential real estate loans originated in our Arkansas, Florida, Texas, Alabama, SPF and Centennial CFG markets were $572.2 million, $1.03 billion, $621.0 million, $37.9 million, zero and $149.8 million at September 30, 2024, respectively.

Current wording

As of March 31, 2025, residential real estate loans totaled $2.52 billion, or 16.9%, of loans receivable, compared to $2.45 billion, or 16.6%, of loans receivable, as of December 31, 2024. Residential real estate loans originated in our Arkansas, Florida, Texas, Alabama, SPF and Centennial CFG markets were $564.1 million, $1.05 billion, $648.3 million, $39.9 million, zero and $224.4 million at March 31, 2025, respectively.

Previous wording

As of September 30, 2024, consumer loans totaled $1.22 billion, or 8.2%, of loans receivable, compared to $1.15 billion, or 8.0%, of loans receivable, as of December 31, 2023. Consumer loans originated in our Arkansas, Florida, Texas, Alabama, SPF and Centennial CFG markets were $23.0 million, $7.0 million, $11.8 million, $454,000, $1.18 billion and zero at September 30, 2024, respectively.

Current wording

As of March 31, 2025, consumer loans totaled $1.23 billion, or 8.2%, of loans receivable, compared to $1.23 billion, or 8.4%, of loans receivable, as of December 31, 2024. Consumer loans originated in our Arkansas, Florida, Texas, Alabama, SPF and Centennial CFG markets were $20.1 million, $6.6 million, $9.6 million, $450,000, $1.19 billion and zero at March 31, 2025, respectively.

Previous wording

Commercial and Industrial Loans. Commercial and industrial loans are made for a variety of business purposes, including working capital, inventory, equipment and capital expansion. The terms for commercial loans are generally one to seven years. Commercial loan applications must be supported by current financial information of the borrower and, where appropriate, by adequate collateral. Commercial loans are generally underwritten by addressing cash flow (debt service coverage), primary and secondary sources of repayment, the financial strength of any guarantor, the borrower’s liquidity and leverage, management experience, ownership structure, economic conditions and industry specific trends and collateral. The loan to value ratio depends on the type of collateral. Generally, accounts receivable are financed at between 50% and 80% of accounts receivable less than 60 days past due. Inventory financing will range between 50% and 80% (with no work in process) depending on the borrower and nature of inventory. We require a first lien position for those loans.

Current wording

Commercial and Industrial Loans. Commercial and industrial loans are made for a variety of business purposes, including working capital, inventory, equipment and capital expansion. The terms for commercial loans are generally one to seven years. Commercial loan applications must be supported by current financial information of the borrower and, where appropriate, by adequate collateral. Commercial loans are generally underwritten by addressing cash flow (debt service coverage), primary and secondary sources of repayment, the financial strength of the borrower as well as any guarantors, the borrower’s liquidity and leverage, management experience, ownership structure, economic conditions and industry specific trends and collateral. The loan to value ratio depends on the type of collateral. Generally, accounts receivable are financed at between 50% and 80% of accounts receivable less than 60 days past due. Inventory financing will range between 50% and 80% (with no work in process) depending on the borrower and nature of inventory. We require a first lien position for those loans.

Previous wording

Purchased loans that have experienced more than insignificant credit deterioration since origination are PCD loans. An allowance for credit losses is determined using the same methodology as other loans. The Company develops separate PCD models for each loan segment with PCD loans not individually analyzed for credit losses. The sum of the loan’s purchase price and allowance for credit losses becomes its initial amortized cost basis. The difference between the initial amortized cost basis and the par value of the loan is a non-credit discount or premium, which is amortized into interest income over the life of the loan. Subsequent changes to the allowance for credit losses are recorded through the provision for credit losses. The Company held approximately $79.6 million and $130.7 million in PCD loans, as of September 30, 2024 and December 31, 2023, respectively.

Current wording

Purchased loans that have experienced more than insignificant credit deterioration since origination are PCD loans. An allowance for credit losses is determined using the same methodology as other loans. The Company develops separate PCD models for each loan segment with PCD loans not individually analyzed for credit losses. The sum of the loan’s purchase price and allowance for credit losses becomes its initial amortized cost basis. The difference between the initial amortized cost basis and the par value of the loan is a non-credit discount or premium, which is amortized into interest income over the life of the loan. Subsequent changes to the allowance for credit losses are recorded through the provision for credit losses. The Company held approximately $72.1 million and $76.3 million in PCD loans, as of March 31, 2025 and December 31, 2024, respectively.