SIMMONS FIRST NATIONAL CORP

Previous wording

As permitted by SEC rules, management presents a sequential quarterly analysis of the Company’s performance as we believe that comparing current quarter results to those of the immediately preceding fiscal quarter is more useful in identifying current business trends and provides a more relevant analysis of our business results. Accordingly, we have compared our results of operations for the three months ended September 30, 2024 to our results of operations for the three months ended June 30, 2024, as applicable, throughout this Management's Discussion and Analysis of Financial Condition and Results of Operations. For additional information regarding the Company’s results for the three months ended June 30, 2024, please refer to our second quarter Form 10-Q filed with the SEC on August 6, 2024.

Current wording

As permitted by SEC rules, management presents a sequential quarterly analysis of the Company’s performance as we believe that comparing current quarter results to those of the immediately preceding fiscal quarter is more useful in identifying current business trends and provides a more relevant analysis of our business results. Accordingly, we have compared our results of operations for the three months ended March 31, 2025 to our results of operations for the three months ended December 31, 2024 and March 31, 2024, as applicable, throughout this Management's Discussion and Analysis of Financial Condition and Results of Operations.

Previous wording

During the first nine months of 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:

Current wording

During the first three months of 2025, we demonstrated continued improvement in profitability fundamentals. Increases in loans and customer deposits combined with a decrease in wholesale funding have driven a healthy increase in our net interest margin and positive trends in total revenue. While we continue to operate against a backdrop of uncertainty concerning the macroeconomic environment and the timing of lower interest rates, we are comforted by our strong capital and liquidity positions:

Previous wording

•Total deposits as of September 30, 2024 were $21.94 billion, compared to $22.24 billion as of December 31, 2023. Uninsured non-collateralized deposits as of September 30, 2024 were approximately $4.66 billion, or 21% of total deposits.

Current wording

•Total deposits as of March 31, 2025 were $21.68 billion, compared to $21.89 billion as of December 31, 2024. Uninsured, non-collateralized deposits as of March 31, 2025 were approximately $4.54 billion, or 21% of total deposits.

Previous wording

•Capital levels were steady during the quarter, with all regulatory capital ratios remaining significantly above “well-capitalized” guidelines as of September 30, 2024 (see Table 11 in the Risk-Based Capital section below). As of September 30, 2024, our ratio of common equity to total assets was 12.94%, the ratio of tangible common equity to tangible assets was 8.15% and our Tier 1 leverage ratio was 9.57%.

Current wording

•Capital levels were steady during the quarter, with all regulatory capital ratios remaining significantly above “well-capitalized” guidelines as of March 31, 2025 (see Table 11 in the Risk-Based Capital section below). As of March 31, 2025, our ratio of common equity to total assets was 13.18%, the ratio of tangible common equity to tangible assets was 8.34% and our Tier 1 leverage ratio was 9.83%.

Previous wording

•Significant liquidity position with a loan to deposit ratio of 79% and 76% as of September 30, 2024 and December 31, 2023, respectively. Additional liquidity sources available to us as of September 30, 2024 totaled $11.17 billion and our uninsured, non-collateralized deposit coverage ratio was 2.4x.

Current wording

•Significant liquidity position with a loan to deposit ratio of 79% and 78% as of March 31, 2025 and December 31, 2024, respectively. Additional liquidity sources available to us as of March 31, 2025 totaled $10.41 billion and our uninsured, non-collateralized deposit coverage ratio was 2.3x.

Previous wording

Net income for the nine months ended September 30, 2024 was $104.4 million, or $0.83 diluted earnings per share, compared to net income of $151.2 million, or $1.19 diluted earnings per share, for the nine months ended September 30, 2023. Included in the results for the nine months ended September 30, 2024 were certain items related to a FDIC special assessment and termination of vendor and software services; results for the nine months ended September 30, 2023 included certain items related to acquisition costs. Also included in each comparative period end results were certain items related to branch right sizing initiatives, loss on sale of securities and early retirement program costs. Excluding these certain items and the tax effect, adjusted earnings for the nine months ended September 30, 2024 were $128.3 million, or $1.02 adjusted diluted earnings per share, compared to $157.5 million, or $1.24 adjusted diluted earnings per share, for the nine months ended September 30, 2023.

Current wording

Our net income for the three months ended March 31, 2025 was $32.4 million, or $0.26 diluted earnings per share, compared to net income of $48.3 million, or $0.38 diluted earnings per share, and $38.9 million, or $0.31 diluted earnings per share, for the three months ended December 31, 2024 and March 31, 2024, respectively. Included in the results were certain items related to our branch right sizing initiatives, early retirement program costs (for the three months ended March 31, 2024 and December 31, 2024) and a FDIC special assessment (for the three months ended March 31, 2024). Excluding these certain items and the tax effect, adjusted earnings for the three months ended March 31, 2025 were $33.1 million, or $0.26 adjusted diluted earnings per share, compared to $49.6 million, or $0.39 adjusted diluted earnings per share, and $40.4 million, or $0.32 adjusted diluted earnings per share, for the three months ended December 31, 2024 and March 31, 2024, respectively.

Previous wording

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. Total nonperforming loans as of September 30, 2024, December 31, 2023, and September 30, 2023 were $101.7 million, $84.5 million, and $81.9 million, respectively. Non-performing assets as a percent of total assets were 0.38% at September 30, 2024, compared to 0.33% at December 31, 2023 and 0.32% at September 30, 2023.

Current wording

During the quarter, we increased the loss provision on two specific credit relationships that we have been watching for some time due to unfavorable events that occurred for both during the three months ended March 31, 2025. Otherwise, we believe the asset quality in our portfolio remains sound and reflects our conservative credit culture, as well as our focus on maintaining disciplined pricing and conservative underwriting standards given the current economic environment. Total nonperforming loans as of March 31, 2025, December 31, 2024, and March 31, 2024 were $152.4 million, $110.8 million, and $107.3 million, respectively. Nonperforming assets as a percent of total assets were 0.61% at March 31, 2025, compared to 0.45% at December 31, 2024 and 0.41% at March 31, 2024.

Previous wording

As of September 30, 2024, stockholders’ equity was $3.53 billion, book value per share was $28.11 and tangible book value per share was $16.78.

Current wording

As of March 31, 2025, stockholders’ equity was $3.53 billion, book value per share was $28.04 and tangible book value per share was $16.81.

Previous wording

Total loans were $17.34 billion at September 30, 2024, compared to $16.85 billion at December 31, 2023. Our unfunded commitments were $3.96 billion and $4.17 billion as of September 30, 2024 and December 31, 2023, respectively. Our commercial loan pipeline totaled $1.24 billion as of September 30, 2024, compared to $948.2 million at December 31, 2023.

Current wording

Total loans were $17.09 billion at March 31, 2025, compared to $17.01 billion at December 31, 2024. Our unfunded commitments were $4.19 billion and $4.03 billion as of March 31, 2025 and December 31, 2024, respectively. Our commercial loan pipeline totaled $1.81 billion as of March 31, 2025, compared to $1.26 billion at December 31, 2024.

Previous wording

Simmons First National Corporation is a Mid-South based financial holding company that, as of September 30, 2024, has approximately $27.3 billion in consolidated assets and, through its subsidiaries, conducts financial operations in Arkansas, Kansas, Missouri, Oklahoma, Tennessee and Texas.

Current wording

Simmons First National Corporation is a Mid-South based financial holding company that, as of March 31, 2025, has approximately $26.8 billion in consolidated assets and, through its subsidiaries, conducts financial operations in Arkansas, Kansas, Missouri, Oklahoma, Tennessee and Texas.

Previous wording

We follow accounting and reporting policies that conform, in all material respects, to US GAAP and to general practices within the financial services industry. The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. While we base estimates on historical experience, current information and other factors deemed to be relevant, actual results could differ from those estimates.

Current wording

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. While we base estimates on historical experience, current information and other factors deemed to be relevant, actual results could differ from those estimates.

Previous wording

The allowance for credit losses is a reserve established through a provision for credit losses charged to expense, which represents management’s best estimate of lifetime expected losses based on reasonable and supportable forecasts, quantitative factors, and other qualitative considerations. The allowance, in the judgment of management, is necessary to reserve for expected credit losses and risks inherent in the loan portfolio. Our allowance for credit loss methodology includes reserve factors calculated to estimate current expected credit losses to amortized cost balances over the remaining contractual life of the portfolio, adjusted for prepayments, in accordance with ASC Topic 326-20, Financial Instruments - Credit Losses. For further information see the section Allowance for Credit Losses below.

Current wording

The allowance for credit losses is a reserve established through a provision for credit losses charged to expense, which represents management’s best estimate of lifetime expected losses based on reasonable and supportable forecasts, quantitative factors, and other qualitative considerations. The allowance, in the judgment of management, is necessary to reserve for expected credit losses and risks inherent in the loan portfolio. Our allowance for credit loss methodology includes reserve factors calculated to estimate current expected credit losses to amortized cost balances over the remaining contractual life of the portfolio, adjusted for prepayments, in accordance with Accounting Standards Codification (“ASC”) Topic 326-20, Financial Instruments - Credit Losses. Accordingly, the methodology is based on our reasonable and supportable economic forecasts, historical loss experience and other qualitative adjustments. For further information see the section Allowance for Credit Losses below.

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 that determine the level of net interest income include the volume of earning assets and interest bearing liabilities, yields earned and rates paid, the level of non-performing loans and the amount of noninterest 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 of 26.135%.

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 that determine the level of net interest income include the volume of earning assets and interest bearing liabilities, yields earned and rates paid, the level of nonperforming loans and the amount of noninterest 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 of 26.135%.

Previous wording

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 41% of our loan portfolio and approximately 89% of our time deposits have repriced in one year or less. As of September 30, 2024, our interest rate sensitivity shows that approximately 46% of our loans and 94% of our time deposits will reprice in the next year.

Current wording

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 44% of our loan portfolio and approximately 92% of our time deposits have repriced in one year or less. As of March 31, 2025, our interest rate sensitivity shows that approximately 51% of our loans and 97% of our time deposits will reprice in the next year.

Previous wording

For the three month period ended September 30, 2024, net interest income on a fully taxable equivalent basis was $164.1 million, an increase of $3.6 million, or 2.3%, compared to the three months ended June 30, 2024. The increase in net interest income was primarily the result of a $5.0 million increase in fully tax equivalent interest income, partially offset by a $1.3 million increase in interest expense.

Current wording

For the three month period ended March 31, 2025, net interest income on a fully taxable equivalent basis was $169.8 million, a decrease of $1.5 million, or 0.9%, compared to the three months ended December 31, 2024. The decrease in net interest income was primarily the result of an $18.2 million decrease in fully tax equivalent interest income, partially offset by a $16.6 million decrease in interest expense.

Previous wording

The increase in interest income on a fully taxable equivalent basis primarily resulted from a $6.9 million increase in interest income on loans, partially offset by a decrease of $1.9 million in interest income on investment securities. The increase in interest income provided by loans reflects an increase attributable to loan volume of $1.7 million, coupled with a $5.2 million increase in interest income related to loan yield. The loan yield for the third quarter of 2024 was 6.44% compared to 6.39% from the preceding sequential quarter, representing a 5 basis point increase. The decrease in interest income on investment securities was primarily related to a $2.0 million decrease attributable to volume related to our taxable investment portfolio, 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 three months ended September 30, 2024.

Current wording

The decrease in interest income on a fully taxable equivalent basis primarily resulted from a $15.0 million decrease in interest income on loans, coupled with a decrease of $2.9 million in interest income on investment securities. The decrease in interest income provided by loans reflects a decrease attributable to loan volume of $4.6 million, coupled with a $10.4 million decrease in interest income related to loan yield. The loan yield for the first quarter of 2025 was 6.20% compared to 6.32% from the preceding sequential quarter, representing a 12 basis point decrease. The decrease in interest income on investment securities was primarily related to a $2.0 million decrease in interest income on taxable investment securities due to yield decreases of 15 basis points, combined with an $862,000 decrease attributable to volume related to our taxable investment portfolio, as our portfolio experienced pay downs and maturities during the three months ended March 31, 2025. The decrease in earning asset yields on a linked quarter basis was primarily driven by interest rate cuts at the end of 2024.

Previous wording

Net interest income on a fully taxable equivalent basis for the nine month period ended September 30, 2024 decreased $30.5 million, or 5.9%, over the same period in 2023. The decrease in net interest income on a fully taxable equivalent basis was the result of a $99.9 million increase in fully tax equivalent interest income, more than offset by a $130.4 million increase in interest expense.

Current wording

Net interest income on a fully taxable equivalent basis for the three month period ended March 31, 2025 increased $11.5 million, or 7.3%, over the same period in 2024. The increase in net interest income on a fully taxable equivalent basis was the result of a $14.8 million decrease in fully tax equivalent interest income, more than offset by a $26.3 million decrease in interest expense.

Previous wording

The increase in interest income during the nine month period ended September 30, 2024 resulted from increases in interest income on loans and investments, primarily as a result of higher market interest rates. The increase in interest income on loans of $82.9 million reflects an increase attributable to loan volume of $21.2 million coupled with a 48 basis point rise in loan yield that resulted in a $61.7 million increase. The increase attributable to loan volume was due to solid organic loan growth over the comparative period. The increase of $18.4 million in interest income on investment securities is primarily related to an increase of $37.1 million in interest income on taxable investment securities due to yield increases over the period of 116 basis points. The increase in interest income on taxable investment securities due to yield increases was mitigated by an $18.4 million decrease due to the decline in our taxable investment portfolio average balances which decreased by $788.2 million or 16.4%, as our portfolio experienced pay downs, maturities, the strategic sale of lower-yielding AFS securities during the third quarter of 2024 as discussed above and a strategic sale of $241.1 million of lower-yielding AFS securities late in the fourth quarter of 2023, the proceeds of which we used to pay off higher-rate wholesale fundings in each period.

Current wording

The decrease in interest income during the three month period ended March 31, 2025 primarily resulted from decreases in interest income on loans and investments. The decrease in interest income on loans was largely attributable to a 4 basis point decline in loan yield that resulted in a decrease of $4.1 million. Loan volume was relatively flat over the comparative periods. The decrease of $10.7 million in interest income on investment securities is primarily related to a $5.9 million decrease in interest income on taxable investment securities due to the decline in our taxable investment portfolio average balances which decreased by $621.9 million or 14.9%, as our portfolio experienced pay downs, maturities and a strategic sale of $251.5 million of lower-yielding available-for-sale (“AFS”) securities to pay off higher rate wholesale fundings consisting of Federal Home Loan Bank (“FHLB”) advances during the third quarter of 2024. A yield decrease in the taxable investment portfolio over the period of 46 basis points led to a decrease of $4.7 million in interest income on taxable investment securities.

Previous wording

The $130.4 million increase in interest expense is mainly 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 $114.8 million due to the increase in rate of 92 basis points on interest-bearing deposit accounts and $13.3 million due to the increase in deposit volume over the period. Further, an increase of $2.9 million in interest expense was related to an increase in rates on our subordinated debentures during the same period. We continually monitor and look for opportunities to fairly reprice our deposits while remaining competitive in this current challenging rate environment.

Current wording

The $26.3 million decrease in interest expense is mainly due to the decrease in our deposit account rates over the period. Interest expense decreased $18.6 million due to the decrease in rate of 43 basis points on interest-bearing deposit accounts and $2.8 million due to the decrease in deposit volume over the period. Further, a decrease of $3.9 million in interest expense was related to reductions in the amounts outstanding under and rates on wholesale borrowings sources over the comparative period. We continually monitor and look for opportunities to fairly reprice our deposits while remaining competitive in this current challenging rate environment.

Previous wording

Our net interest margin on a fully tax equivalent basis was 2.74% and 2.70% for the three and nine month periods ended September 30, 2024, as compared to 2.69% and 2.82% for the three months ended June 30, 2024 and the nine months ended September 30, 2023, respectively. Net interest margin experienced a 5 basis point increase for the three months ended September 30, 2024 compared to the preceding sequential quarter, while net interest margin decreased 12 basis points during the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The increase as compared to the preceding sequential quarter was aided by the strategic sale of lower-yielding AFS investment securities during the three month period ended September 30, 2024. The decrease when compared to the same period in the prior year was primarily due to the rising deposit rate pressure from increased market competition and consumer migration toward higher rate deposits.

Current wording

Our net interest margin on a fully tax equivalent basis was 2.95% for the three month period ended March 31, 2025, as compared to 2.87% and 2.66% for the three months ended December 31, 2024 and the three months ended March 31, 2024, respectively. Net interest margin experienced an 8 basis point increase for the three months ended March 31, 2025 compared to the preceding sequential quarter, while net interest margin increased 29 basis points during the three months ended March 31, 2025 compared to the three months ended March 31, 2024. The increase over both comparative periods was primarily due to lower deposits costs, as well as the reduced rate and use of wholesale funding that more than offset a decline on the yield and volume of earning assets. The increase when compared to the same period in the prior year was also aided by the strategic sale of lower-yielding AFS investment securities during the third quarter of 2024.

Previous wording

Tables 1 and 2 reflect an analysis of net interest income on a fully taxable equivalent basis for the three months ended September 30, 2024 and June 30, 2024 and the nine months ended September 30, 2024 and 2023, respectively.

Current wording

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

Previous wording

Table 3 shows, for each major category of earning assets and interest bearing liabilities, the average (computed on a daily basis) amount outstanding, the interest earned or expensed on such amount and the average rate earned or expensed for the three months ended September 30, 2024 and June 30, 2024 and the 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. Nonaccrual loans were included in average loans for the purpose of calculating the rate earned on total loans.

Current wording

Table 3 shows, for each major category of earning assets and interest bearing liabilities, the average (computed on a daily basis) amount outstanding, the interest earned or expensed on such amount and the average rate earned or expensed for the three months ended March 31, 2025, December 31, 2024 and March 31, 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. Nonaccrual loans were included in average loans for the purpose of calculating the rate earned on total loans.

Previous wording

Table 4 shows changes in interest income and interest expense resulting from changes in both volume and interest rates for the three months ended September 30, 2024 as compared to the three months ended June 30, 2024 and the nine months ended September 30, 2024 and 2023, respectively. The changes in interest rate and volume have been allocated to changes in average volume and changes in average rates in proportion to the relationship of absolute dollar amounts of the changes in rates and volume.

Current wording

Table 4 shows changes in interest income and interest expense resulting from changes in both volume and interest rates for the three months ended March 31, 2025 as compared to the three months ended December 31, 2024 and March 31, 2024, respectively. The changes in interest rate and volume have been allocated to changes in average volume and changes in average rates in proportion to the relationship of absolute dollar amounts of the changes in rates and volume.

Previous wording

The provision for credit losses represents management’s determination of the amount necessary to be charged against the current period’s earnings in order to maintain the allowance for credit losses at a level considered appropriate in relation to the estimated lifetime risk inherent in the loan portfolio. The level of provision to the allowance is based on management’s judgment, with consideration given to the composition, maturity and other qualitative characteristics of the portfolio, assessment of current economic conditions, reasonable and supportable forecasts, past due and non-performing loans and historical net credit loss experience. It is management’s practice to review the allowance on a monthly basis and, after considering the factors previously noted, to determine the level of provision made to the allowance.

Current wording

The provision for credit losses represents management’s determination of the amount necessary to be charged against the current period’s earnings in order to maintain the allowance for credit losses at a level considered appropriate in relation to the estimated lifetime risk inherent in the loan portfolio. The level of provision to the allowance is based on management’s judgment, with consideration given to the composition, maturity and other qualitative characteristics of the portfolio, assessment of current economic conditions, reasonable and supportable forecasts, past due and nonperforming loans and historical net credit loss experience. It is management’s practice to review the allowance on a monthly basis and, after considering the factors previously noted, to determine the level of provision made to the allowance.

Previous wording

The provision for credit losses for the three months ended September 30, 2024 was $12.1 million as compared to $11.1 million for the three months ended June 30, 2024. Provision expense for both periods was related to loans and reflected loan growth in the quarters, as well as the impact of updated economic assumptions.

Current wording

The provision for credit losses for the three months ended March 31, 2025 was $26.8 million as compared to $13.3 million for the three months ended December 31, 2024. Provision expense for both periods was related to loans and reflected loan growth in the quarters, as well as the impact of updated economic assumptions.

Previous wording

For the nine months ended September 30, 2024, our provision for credit losses was $33.5 million as compared to $32.0 million for the same period ended September 30, 2023. Provision expense for the nine months ended September 30, 2024 was related to loans and reflected loan growth in the quarter, as well as the impact of updated economic assumptions. Provision expense for the same period ended September 30, 2023 consisted of a $36.2 million expense related to loans and was primarily due to the impacts described above, which was partially offset by the recapture of $16.3 million reflecting the continued decline in unfunded commitments over the period, and a $12.1 million expense related to securities which was primarily due to decreases in the value of corporate bonds in the investment securities portfolio.

Current wording

For the three months ended March 31, 2025, our provision for credit losses was $26.8 million as compared to $10.2 million for the same period ended March 31, 2024. The provision expense for the three months ended March 31, 2025 reflected a provision expense of $15.6 million related to two specific credit relationships which migrated to nonperforming during the period, as well as the impact of updated economic assumptions reflecting increased uncertainty. Provision expense for the same period ended March 31, 2024 was related to loans and reflected loan growth in the quarter, as well as the impact of updated economic assumptions.

Previous wording

Table 5 shows noninterest income for the three month periods ended September 30, 2024 and June 30, 2024 and the nine months ended September 30, 2024 and 2023, respectively, as well as changes between periods.

Current wording

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

Previous wording

Recurring fee income (total service charges, wealth management fees, debit and credit card fees) was $31.5 million and $31.0 million for the three month periods ended September 30, 2024 and June 30, 2024, respectively, and was $92.4 million and $90.7 million for the nine month periods ended September 30, 2024 and 2023, respectively.

Current wording

Recurring fee income (total service charges, wealth management fees, debit and credit card fees) was $32.0 million, $32.4 million and $29.9 million for the three month periods ended March 31, 2025, December 31, 2024 and March 31, 2024, respectively.

Previous wording

Noninterest expense was $137.2 million for the three month period ended September 30, 2024, as compared to noninterest expense of $139.4 million for the three month period ended June 30, 2024, representing a decrease of $2.2 million, or 1.6%, as compared to the preceding quarter. Adjusted noninterest expense, which excludes branch right sizing, early retirement program costs, termination of vendor and software services, and FDIC special assessment (for the three months ended June 30, 2024), for the three months ended September 30, 2024 was $136.8 million, a decrease of $1.0 million as compared to the three months ended June 30, 2024.

Current wording

Noninterest expense was $144.6 million for the three month period ended March 31, 2025, as compared to noninterest expense of $141.1 million for the three month period ended December 31, 2024, representing an increase of $3.5 million, or 2.5%, as compared to the preceding quarter. Adjusted noninterest expense, which excludes branch right sizing and early retirement program costs (for the three months ended December 31, 2024), for the three months ended March 31, 2025 was $143.6 million, an increase of $4.3 million as compared to the three months ended December 31, 2024.

Previous wording

Noninterest expense for the nine months ended September 30, 2024 increased by approximately $1.5 million or 0.4% as compared to the nine months ended September 30, 2023. Adjusted noninterest expense, which excludes branch right sizing, merger related costs (for the nine months ended September 30, 2023), FDIC special assessment (for the nine months ended September 30, 2024), termination of vendor and software services (for the nine months ended September 30, 2024) and early retirement program costs, increased $5.8 million, or 1.4%, as compared to the nine months ended September 30, 2023.

Current wording

Noninterest expense for the three months ended March 31, 2025 increased by approximately $4.7 million or 3.4% as compared to the three months ended March 31, 2024. Adjusted noninterest expense, which excludes branch right sizing, FDIC special assessment (for the three months ended March 31, 2024) and early retirement program costs (for the three months ended March 31, 2024), increased $5.7 million, or 4.1%, as compared to the three months ended March 31, 2024.

Previous wording

Deposit insurance expense for the three and nine months ended September 30, 2024 as compared to the three months ended June 30, 2024 and nine months ended September 30, 2023 decreased by $111,000 and increased by $3.6 million, respectively. While the variance in deposit insurance expense on a sequential quarter basis is relatively flat, the increase on a year over year basis for the nine months ended September 30, 2024 is significantly attributable to the additional FDIC special assessments totaling $1.8 million during the nine months ended September 30, 2024, which were levied to support the Deposit Insurance Fund following the failure of certain banks in 2023, coupled with base assessment rate increases related to changes in the mix of deposits.

Current wording

Deposit insurance expense for the three months ended March 31, 2025 as compared to the three months ended December 31, 2024 and three months ended March 31, 2024 decreased by $159,000 and $1.7 million, respectively. While the variance in deposit insurance expense on a sequential quarter basis is relatively flat, the decrease on a year over year basis for the three months ended March 31, 2025 is significantly attributable to the additional FDIC special assessments totaling $1.5 million during the three months ended March 31, 2024, which were levied to support the Deposit Insurance Fund following the failure of certain banks in 2023.

Previous wording

Table 6 below shows noninterest expense for the three month periods ended September 30, 2024 and June 30, 2024 and the nine months ended September 30, 2024 and 2023, respectively, as well as changes between periods.

Current wording

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

Previous wording

HTM and AFS investment securities were $3.66 billion and $2.69 billion, respectively, at September 30, 2024, compared to the HTM amount of $3.73 billion and AFS amount of $3.15 billion at December 31, 2023. We continue to look for opportunities to maximize the value of the investment portfolio.

Current wording

HTM and AFS investment securities were $3.62 billion and $2.49 billion, respectively, at March 31, 2025, compared to the HTM amount of $3.64 billion and AFS amount of $2.53 billion at December 31, 2024. We continue to look for opportunities to maximize the value of the investment portfolio.

Previous wording

During the quarters ended June 30, 2022 and September 30, 2021, we transferred, at fair value, $1.99 billion and $500.8 million, respectively, of securities from the AFS portfolio to the HTM portfolio. The related remaining combined net unrealized losses of $112.7 million in accumulated other comprehensive income (loss) as of September 30, 2024 will be amortized over the remaining life of the securities. No gains or losses on these securities were recognized at the time of transfer.

Current wording

During the quarters ended June 30, 2022 and September 30, 2021, we transferred, at fair value, $1.99 billion and $500.8 million, respectively, of securities from the AFS portfolio to the HTM portfolio. The related remaining combined net unrealized losses of $103.8 million in accumulated other comprehensive income (loss) as of March 31, 2025 will be amortized over the remaining life of the securities. No gains or losses on these securities were recognized at the time of transfer.

Previous wording

Furthermore, as of September 30, 2024, we 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. For the remainder of 2024, we will continue to evaluate targeted sales of AFS securities based on prevailing market conditions and our funding and liquidity positions. The unrealized losses 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 September 30, 2024, we believe the declines in fair value are temporary and we do not believe any of the securities are impaired due to reasons of credit quality.

Current wording

Furthermore, as of March 31, 2025, we 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. For the remainder of 2025, we may continue to evaluate targeted sales of AFS securities based on prevailing market conditions and our funding and liquidity positions. The unrealized losses 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 March 31, 2025, we believe the declines in fair value are temporary and we do not believe any of the securities are impaired due to reasons of credit quality.

Previous wording

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 rate of 1.21% in exchange for variable interest rates based on federal funds rates, which became effective during late third quarter of 2023. Securities within these swap agreements have maturity dates varying between 2028 and 2029. For the nine months ended September 30, 2024, the net amount included in interest income on investment securities in the consolidated statements of income related to these swap agreements was $33.8 million.

Current wording

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 rate of 1.21% in exchange for variable interest rates based on federal funds rates, which became effective during late third quarter of 2023. Securities within these swap agreements have maturity dates varying between 2028 and 2029. For the three months ended March 31, 2025, the net amount included in interest income on investment securities in the consolidated statements of income related to these swap agreements was $7.9 million.

Previous wording

Our loan portfolio averaged $17.07 billion and $16.60 billion during the first nine months of 2024 and 2023, respectively. As of September 30, 2024, total loans were $17.34 billion, an increase of $490.4 million from December 31, 2023. The increase in the average loan balance during the first nine months of 2024 when compared to the same period in 2023 is primarily due to the continued widespread organic loan growth throughout our geographic markets over the comparative period. The most significant components of the loan portfolio were loans to businesses (commercial loans, commercial real estate loans and agricultural loans) and individuals (consumer loans, credit card loans and single-family residential real estate loans).

Current wording

Our loan portfolio averaged $16.92 billion and $16.90 billion during the first three months of 2025 and 2024, respectively. As of March 31, 2025, total loans were $17.09 billion, an increase of $88.1 million from December 31, 2024. The increase in the loan balance during the first three months of 2025 when compared to December 31, 2024 is primarily due to growth in the commercial real estate and mortgage warehouse portfolios over the comparative period, while we continued to focus on maintaining prudent underwriting standards and pricing discipline. The most significant components of the loan portfolio were loans to businesses (commercial loans, commercial real estate loans and agricultural loans) and individuals (consumer loans, credit card loans and single-family residential real estate loans).

Previous wording

Consumer loans consist of credit card loans and other consumer loans. Consumer loans were $291.6 million at September 30, 2024, or 1.7% of total loans, compared to $318.7 million, or 1.9% of total loans at December 31, 2023. The decrease in consumer loans from December 31, 2023, to September 30, 2024, was primarily due to loan payoffs and pay downs within the credit card and other consumer portfolios during the period.

Current wording

Consumer loans consist of credit card loans and other consumer loans. Consumer loans were $276.9 million at March 31, 2025, or 1.6% of total loans, compared to $309.0 million, or 1.8% of total loans at December 31, 2024. The decrease in consumer loans from December 31, 2024, to March 31, 2025, was primarily due to loan payoffs and pay downs within the other consumer portfolio during the period.

Previous wording

Real estate loans consist of construction and development loans (“C&D”) loans, single-family residential loans and commercial real estate (“CRE”) loans. Real estate loans were $13.51 billion at September 30, 2024, or 78.0% of total loans, compared to $13.34 billion, or 79.2%, of total loans at December 31, 2023, an increase of $175.3 million, or 1.3%. Our C&D loans decreased by $347.8 million, or 11.1%, single family residential loans increased by $83.1 million, or 3.1%, and CRE loans increased by $440.0 million, or 5.8%. 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 first nine months of 2024. We expect to continue to manage our C&D and CRE portfolio concentration by developing deeper relationships with our customers.

Current wording

Real estate loans consist of construction and development loans (“C&D”) loans, single-family residential loans and commercial real estate (“CRE”) loans. Real estate loans were $13.48 billion at March 31, 2025, or 78.8% of total loans, compared to $13.39 billion, or 78.7%, of total loans at December 31, 2024, an increase of $85.5 million, or 0.6%. Our C&D loans decreased by $11.0 million, or 0.4%, single family residential loans decreased by $42.5 million, or 1.6%, and CRE loans increased by $139.0 million, or 1.8%. 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 first three months of 2025. We expect to continue to manage our C&D and CRE portfolio concentration by developing deeper relationships with our customers.

Previous wording

Commercial loans consist of non-real estate loans related to business and agricultural loans. Total commercial loans were $2.78 billion at September 30, 2024, or 16.0% of total loans, compared to $2.72 billion, or 16.2% of total loans at December 31, 2023, an increase of $58.8 million, or 2.2%. The increase in commercial loans was related to the increase in agricultural loans of $81.6 million, or 35.1%, primarily due to seasonality of the portfolio, which normally peaks in the third quarter.

Current wording

Commercial loans consist of non-real estate loans related to business and agricultural loans. Total commercial loans were $2.64 billion at March 31, 2025, or 15.4% of total loans, compared to $2.70 billion, or 15.8% of total loans at December 31, 2024, a decrease of $58.2 million, or 2.2% related to loan payoffs and pay downs during the period. Agricultural loans remained relatively flat with an increase of $3.3 million, or 1.3%.