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 June 30, 2025 to our results of operations for the three months ended March 31, 2025, as applicable, throughout this Management's Discussion and Analysis of Financial Condition and Results of Operations. For additional information regarding the Company’s results for the three months ended March 31, 2025, please refer to our first quarter Form 10-Q filed with the SEC on May 8, 2025.

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 September 30, 2025 to our results of operations for the three months ended June 30, 2025, as applicable, throughout this Management's Discussion and Analysis of Financial Condition and Results of Operations. For additional information regarding the Company’s results for the three months ended June 30, 2025, please refer to our second quarter Form 10-Q filed with the SEC on August 5, 2025.

Previous wording

During the first half of 2025, we demonstrated continued improvement in profitability fundamentals. Increases in loans and customer deposits combined with solid loan yields and a decrease in deposit costs for three consecutive quarters have driven a healthy increase in our net interest margin and positive trends in total revenue. While we continue to operate against a backdrop of uncertainty concerning the macroeconomic environment and the timing of future interest rate moves, we continue our focus on organic growth in our very attractive footprint and are encouraged by our positive momentum heading into the last half of 2025:

Current wording

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

Previous wording

•Total deposits as of June 30, 2025 were $21.82 billion, compared to $21.89 billion as of December 31, 2024. Uninsured, non-collateralized deposits as of June 30, 2025 were approximately $4.59 billion, or 21% of total deposits.

Current wording

•Total deposits as of September 30, 2025 were $19.84 billion, compared to $21.89 billion as of December 31, 2024. Uninsured, non-collateralized deposits as of September 30, 2025 were approximately $4.46 billion, or 22% of total deposits.

Previous wording

•Capital levels were steady during the quarter, with all regulatory capital ratios remaining significantly above “well-capitalized” guidelines as of June 30, 2025 (see Table 11 in the Risk-Based Capital section below). As of June 30, 2025, our ratio of common equity to total assets was 13.30%, the ratio of tangible common equity to tangible assets was 8.46% and our Tier 1 leverage ratio was 9.96%.

Current wording

•Capital levels remained strong over the period following the balance sheet repositioning, with all regulatory capital ratios remaining significantly above “well-capitalized” guidelines as of September 30, 2025 (see Table 13 in the Risk-Based Capital section below). As of September 30, 2025, our ratio of common equity to total assets was 13.85%, the ratio of tangible common equity to tangible assets was 8.53% and our Tier 1 leverage ratio was 9.56%.

Previous wording

•Significant liquidity position with a loan to deposit ratio of 78% as of both June 30, 2025 and December 31, 2024. Additional liquidity sources available to us as of June 30, 2025 totaled $10.72 billion and our uninsured, non-collateralized deposit coverage ratio was 2.3x.

Current wording

•The loan to deposit ratio was 87% and 78% as of September 30, 2025 and December 31, 2024, respectively. Additional liquidity sources available to us as of September 30, 2025 totaled $9.53 billion and our uninsured, non-collateralized deposit coverage ratio was 2.1x.

Previous wording

Our net income for the three months ended June 30, 2025 was $54.8 million, or $0.43 diluted earnings per share, compared to net income of $32.4 million, or $0.26 diluted earnings per share, for the three months ended March 31, 2025. Included in the results were certain items related to our branch right sizing initiative and early retirement program costs (for the three months ended June 30, 2025). Excluding these certain items and the tax effect, adjusted earnings for the three months ended June 30, 2025 were $56.1 million, or $0.44 adjusted diluted earnings per share, compared to $33.1 million, or $0.26 adjusted diluted earnings per share, for the three months ended March 31, 2025.

Current wording

Our net loss for the three months ended September 30, 2025 was $562.8 million, or $(4.00) diluted earnings per share, compared to net income of $54.8 million, or $0.43 diluted earnings per share, for the three months ended June 30, 2025. Included in the results were certain items related to our branch right sizing initiative, early retirement program costs, loss on extinguishment of debt (for the three months ended September 30, 2025) and loss on sale of securities (for the three months ended September 30, 2025). Excluding these certain items and the tax effect, adjusted earnings for the three months ended September 30, 2025 were $64.9 million, or $0.46 adjusted diluted earnings per share, compared to $56.1 million, or $0.44 adjusted diluted earnings per share, for the three months ended June 30, 2025.

Previous wording

Our net income for the six months ended June 30, 2025 was $87.2 million, or $0.69 diluted earnings per share, compared to net income of $79.6 million, or $0.63 diluted earnings per share, for the six months ended June 30, 2024. Included in the results were certain items related to our branch right sizing initiative, early retirement program costs, a FDIC special assessment (for the six months ended June 30, 2024) and termination of vendor and software services (for the six months ended June 30, 2024). Excluding these certain items and the tax effect, adjusted earnings for the six months ended June 30, 2025 were $89.2 million, or $0.71 adjusted diluted earnings per share, compared to $82.2 million, or $0.65 adjusted diluted earnings per share, for the six months ended June 30, 2024.

Current wording

Our net loss for the nine months ended September 30, 2025 was $475.6 million, or $(3.63) diluted earnings per share, compared to net income of $104.4 million, or $0.83 diluted earnings per share, for the nine months ended September 30, 2024. Included in the results were certain items related to our branch right sizing initiative, early retirement program costs, loss on sale of securities, a FDIC special assessment (for the nine months ended September 30, 2024), termination of vendor and software services (for the nine months ended September 30, 2024) and loss on extinguishment of debt (for the nine months ended September 30, 2025). Excluding these certain items and the tax effect, adjusted earnings for the nine months ended September 30, 2025 were $154.1 million, or $1.18 adjusted diluted earnings per share, compared to $128.3 million, or $1.02 adjusted diluted earnings per share, for the nine months ended September 30, 2024.

Previous wording

During the year, we increased the loss provision on two specific credit relationships that we have been watching for some time due to unfavorable events that occurred for both during the six months ended June 30, 2025. Otherwise, we believe the asset quality in our portfolio remains sound and reflects our conservative credit culture, as well as our focus on maintaining disciplined pricing and conservative underwriting standards given the current economic environment. Total nonperforming loans as of June 30, 2025, December 31, 2024, and June 30, 2024 were $157.2 million, $110.8 million, and $103.4 million, respectively. Nonperforming assets as a percent of total assets were 0.62% at June 30, 2025, compared to 0.45% at December 31, 2024 and 0.39% at June 30, 2024.

Current wording

During the year, we increased the loss provision on two specific credit relationships that we have been watching for some time due to unfavorable events that occurred for both during the nine months ended September 30, 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 September 30, 2025, December 31, 2024, and September 30, 2024 were $153.9 million, $110.8 million, and $101.7 million, respectively. Nonperforming assets as a percent of total assets were 0.66% at September 30, 2025, compared to 0.45% at December 31, 2024 and 0.38% at September 30, 2024.

Previous wording

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

Current wording

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

Previous wording

Total loans were $17.11 billion at June 30, 2025, compared to $17.01 billion at December 31, 2024. Our unfunded commitments were $3.95 billion and $3.74 billion as of June 30, 2025 and December 31, 2024, respectively. Our commercial loan pipeline totaled $1.63 billion as of June 30, 2025, compared to $1.26 billion at December 31, 2024.

Current wording

Total loans were $17.19 billion at September 30, 2025, compared to $17.01 billion at December 31, 2024. Our unfunded commitments were $3.95 billion and $3.74 billion as of September 30, 2025 and December 31, 2024, respectively. Our commercial loan pipeline totaled $1.61 billion as of September 30, 2025, compared to $1.26 billion at December 31, 2024.

Previous wording

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

Current wording

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

Previous wording

To quantitatively test goodwill for impairment, a present value of discounted cash flows calculation is completed and relies on several assumptions that have a level of subjectivity and judgement. These assumptions are dependent on market and economic conditions. Key inputs to estimate terminal fair value of the Company include projected forecasts, noninterest expense savings and a pricing multiple based on a group of peer banks with similar characteristics. These inputs are discounted by the cost of equity, which includes assumptions involving our beta; equity risk, size and company premiums; and the 20-year treasury rate. Assumptions used in calculating the cost of equity are obtained from market and third-party data. Results are compared to book value; no impairment was indicated as of June 30, 2025. Judgement is inherent in assessing goodwill for impairment. The various assumptions used in assessing goodwill for impairment involve uncertainties that are beyond our control and could cause actual results to differ materially from those projected.

Current wording

To quantitatively test goodwill for impairment, a present value of discounted cash flows calculation is completed and relies on several assumptions that have a level of subjectivity and judgment. These assumptions are dependent on market and economic conditions. Key inputs to estimate terminal fair value of the Company include projected forecasts, noninterest expense savings and a pricing multiple based on a group of peer banks with similar characteristics. These inputs are discounted by the cost of equity, which includes assumptions involving our beta; equity risk, size and company premiums; and the 20-year treasury rate. Assumptions used in calculating the cost of equity are obtained from market and third-party data. Results are compared to book value; no impairment was indicated as of September 30, 2025. Judgment is inherent in assessing goodwill for impairment. The various assumptions used in assessing goodwill for impairment involve uncertainties that are beyond our control and could cause actual results to differ materially from those projected.

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 44% of our loan portfolio and approximately 92% of our time deposits have repriced in one year or less. As of June 30, 2025, our interest rate sensitivity shows that approximately 53% of our loans and 97% of our time deposits will reprice in the next year.

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

Previous wording

For the three month period ended June 30, 2025, net interest income on a fully taxable equivalent basis was $178.2 million, an increase of $8.4 million, or 5.0%, compared to the three months ended March 31, 2025. The increase in net interest income was primarily the result of a $7.2 million increase in fully tax equivalent interest income, coupled with a $1.2 million decrease in interest expense.

Current wording

For the three month period ended September 30, 2025, net interest income on a fully taxable equivalent basis was $190.5 million, an increase of $12.2 million, or 6.9%, compared to the three months ended June 30, 2025. The increase in net interest income was the result of a $4.2 million decrease in fully tax equivalent interest income, more than offset by a $16.4 million decrease in interest expense.

Previous wording

The increase in interest income on a fully taxable equivalent basis primarily resulted from a $7.6 million increase in interest income on loans. The increase in interest income provided by loans reflects an increase attributable to loan volume of $1.9 million, coupled with a $5.7 million increase in interest income related to loan yield. The loan yield for the second quarter of 2025 was 6.26% compared to 6.20% from the preceding sequential quarter, representing a 6 basis point increase, driven by disciplined pricing of new originations, as well as positive fixed-rate loan repricing.

Current wording

The decrease in interest income on a fully taxable equivalent basis primarily resulted from a $12.1 million decrease in interest income on investment securities, which reflects a $19.0 million decrease due to the decline in our investment portfolio average balances, which decreased by $2.05 billion or 34.0%. The decrease was partially offset by an increase of $6.9 million in interest income on investment securities due to yield increases over the period of 61 basis points and 26 basis points for our taxable and non-taxable investment security portfolios, respectively. These changes, including a $3.9 million increase in interest income related to interest bearing balances due from banks, were primarily due to the balance sheet repositioning previously discussed. A $3.8 million increase in interest income on loans reflects a decrease attributable to loan volume of $1.1 million, more than offset by a $4.9 million increase in interest income related to loan yield. The loan yield for the third quarter of 2025 was 6.31% compared to 6.26% from the preceding sequential quarter, representing a 5 basis point increase, driven by disciplined pricing of new originations, as well as positive fixed-rate loan repricing.

Previous wording

The $1.2 million decrease in interest expense is primarily due to a $5.3 million decrease in interest expense on time deposits, partially offset by a $2.8 million increase in interest expense related to a greater reliance on wholesale borrowing sources during the quarter. Of the $5.3 million decrease in interest expense on time deposits, $1.9 million was due to the 18 basis point decrease in average rates on time deposits and $3.4 million was due to the decrease in time deposit volume over the period.

Current wording

The $16.4 million decrease in interest expense is primarily due to an $8.2 million decrease in interest expense on time deposits and a $7.7 million decrease in interest expense related to other borrowings during the quarter. Of the $8.2 million decrease in interest expense on time deposits, $1.4 million was due to the 14 basis point decrease in average rates on time deposits and $6.8 million was due to the decrease in time deposit volume over the period. These changes were primarily due to a reduction of higher rate, non-relationship wholesale and public fund deposits, as well as higher rate other borrowings, as part of the balance sheet repositioning.

Previous wording

Net interest income on a fully taxable equivalent basis for the six month period ended June 30, 2025 increased $29.3 million, or 9.2%, over the same period in 2024. The increase in net interest income on a fully taxable equivalent basis was the result of a $29.1 million decrease in fully tax equivalent interest income, more than offset by a $58.4 million decrease in interest expense.

Current wording

Net interest income on a fully taxable equivalent basis for the nine month period ended September 30, 2025 increased $55.6 million, or 11.5%, over the same period in 2024. The increase in net interest income on a fully taxable equivalent basis was the result of a $52.5 million decrease in fully tax equivalent interest income, more than offset by a $108.2 million decrease in interest expense.

Previous wording

The decrease in interest income during the six month period ended June 30, 2025 primarily resulted from decreases in interest income on loans and investments. The decrease in interest income on loans was largely attributable to a 9 basis point decline in loan yield that resulted in a decrease of $8.8 million. Loan volume was relatively flat over the comparative periods. The decrease of $19.0 million in interest income on investment securities is primarily related to an $11.0 million decrease in interest income on taxable investment securities due to the decline in our taxable investment portfolio average balances which decreased by $587.0 million or 14.3%, as our portfolio experienced pay downs, maturities and a strategic sale of $251.5 million of lower-yielding available-for-sale (“AFS”) securities to pay off higher rate wholesale fundings consisting of Federal Home Loan Bank (“FHLB”) advances during the third quarter of 2024. A yield decrease in the taxable investment portfolio over the period of 39 basis points led to a decrease of $7.7 million in interest income on taxable investment securities.

Current wording

The decrease in interest income during the nine month period ended September 30, 2025 primarily resulted from decreases in interest income on loans and investments. The decrease in interest income on loans was largely attributable to a 10 basis point decline in loan yield that resulted in a decrease of $13.8 million, while the incremental decrease in loan volume over the comparative periods led to a decrease of $4.2 million. The decrease of $37.4 million in interest income on investment securities is primarily related to a $33.6 million decrease in interest income on investment securities due to the decline in our investment portfolio average balances, which decreased by $1.24 billion or 18.6%, primarily related to the balance sheet repositioning previously discussed, coupled with pay downs, maturities and a strategic sale of $251.5 million of lower-yielding AFS securities to pay off higher rate wholesale fundings consisting of Federal Home Loan Bank (“FHLB”) advances during the third quarter of 2024. A yield decrease in the taxable investment portfolio over the period of 18 basis points led to a decrease of $5.5 million in interest income on taxable investment securities.

Previous wording

The $58.4 million decrease in interest expense is mainly due to the decrease in our deposit account rates over the period. Interest expense decreased $40.2 million due to the decrease in rate of 49 basis points on interest-bearing deposit accounts and $7.9 million due to the decrease in deposit volume over the period. Further, a decrease of $8.3 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.

Current wording

The $108.2 million decrease in interest expense is mainly due to the decrease in our deposit account rates over the period. Interest expense decreased $64.1 million due to the decrease in rate of 55 basis points on interest-bearing deposit accounts. A $23.3 million decrease in interest income was related to the decrease in time deposit volume over the period. Further, a decrease of $22.5 million in interest expense was related to reductions in the amounts outstanding under and rates on wholesale borrowings sources over the comparative period. The decline in wholesale borrowings volume, including brokered time deposits, is largely due to the balance sheet repositioning. We continually monitor and look for opportunities to fairly reprice our deposits while remaining competitive in this current challenging rate environment.

Previous wording

Our net interest margin on a fully tax equivalent basis was 3.06% and 3.01% for the three and six month periods ended June 30, 2025, as compared to 2.95% and 2.68% for the three months ended March 31, 2025 and the six months ended June 30, 2024, respectively. Net interest margin experienced an 11 basis point increase for the three months ended June 30, 2025 compared to the preceding sequential quarter, while net interest margin increased 33 basis points during the six months ended June 30, 2025 compared to the six months ended June 30, 2024. The increase on a linked quarter basis was primarily due to fixed-rate asset repricing, coupled with decreased deposit costs from lower rates on time deposits and a favorable funding mix shift. The increase when compared to the same period in the prior year was driven by the decrease in deposits costs and aided by the strategic sale of lower-yielding AFS investment securities during the third quarter of 2024, as well as the reduced rate and use of wholesale funding.

Current wording

Our net interest margin on a fully tax equivalent basis was 3.50% and 3.17% for the three and nine month periods ended September 30, 2025, as compared to 3.06% and 2.70% for the three months ended June 30, 2025 and the nine months ended September 30, 2024, respectively. Net interest margin experienced a 44 basis point increase for the three months ended September 30, 2025 compared to the preceding sequential quarter, while net interest margin increased 47 basis points during the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. The increase on a linked quarter basis was primarily due to the balance sheet repositioning during the period. The increase when compared to the same period in the prior year was driven by the balance sheet repositioning, as well as reduced deposit costs and use of wholesale funding over the comparative periods.

Previous wording

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

Current 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, 2025 and June 30, 2025 and the nine months ended September 30, 2025 and 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 June 30, 2025 and March 31, 2025 and the six months ended June 30, 2025 and 2024, respectively. The table also shows the average rate earned on all earning assets, the average rate expensed on all interest bearing liabilities, the net interest spread and the net interest margin for the same periods. 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 September 30, 2025 and June 30, 2025 and the nine months ended September 30, 2025 and 2024, respectively. The table also shows the average rate earned on all earning assets, the average rate expensed on all interest bearing liabilities, the net interest spread and the net interest margin for the same periods. 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 June 30, 2025 as compared to the three months ended March 31, 2025 and the six months ended June 30, 2025 and 2024, respectively. The changes in interest rate and volume have been allocated to changes in average volume and changes in average rates in proportion to the relationship of absolute dollar amounts of the changes in rates and volume.

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 September 30, 2025 as compared to the three months ended June 30, 2025 and the nine months ended September 30, 2025 and 2024, respectively. The changes in interest rate and volume have been allocated to changes in average volume and changes in average rates in proportion to the relationship of absolute dollar amounts of the changes in rates and volume.

Previous wording

The provision for credit losses for the three months ended June 30, 2025 was $11.9 million as compared to $26.8 million for the three months ended March 31, 2025. The provision expense for the three months ended March 31, 2025 reflected a provision expense of $15.6 million related to two specific credit relationships which migrated to nonperforming during the period, while provision expense for both periods reflected loan growth in the quarters, as well as the impact of updated economic assumptions.

Current wording

For the nine months ended September 30, 2025, our provision for credit losses was $50.7 million as compared to $33.5 million for the same period ended September 30, 2024. The provision expense for the nine months ended September 30, 2025 reflected a provision expense of $15.6 million related to two specific credit relationships which migrated to nonperforming during the period, while provision expense for both periods reflected loan growth in the periods, as well as the impact of updated economic assumptions.

Previous wording

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

Current wording

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

Previous wording

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

Current wording

Recurring fee income (total service charges, wealth management fees, debit and credit card fees) was $33.0 million and $31.9 million for the three month periods ended September 30, 2025 and June 30, 2025, respectively, and was $96.9 million and $92.4 million for the nine month periods ended September 30, 2025 and 2024, respectively. The increase over both comparative periods is primarily related to the increases in wealth management fees due to fee growth and market performance and in service charges on deposit accounts due to growth in consumer accounts and performance related to commercial treasury management.

Previous wording

Noninterest expense was $138.6 million for the three month period ended June 30, 2025, as compared to noninterest expense of $144.6 million for the three month period ended March 31, 2025, representing a decrease of $6.0 million, or 4.1%, as compared to the preceding quarter. Adjusted noninterest expense, which excludes branch right sizing and early retirement program costs (for the three months ended June 30, 2025), for the three months ended June 30, 2025 was $136.8 million, a decrease of $6.8 million as compared to the three months ended March 31, 2025.

Current wording

Noninterest expense was $142.0 million for the three month period ended September 30, 2025, as compared to noninterest expense of $138.6 million for the three month period ended June 30, 2025, representing an increase of $3.4 million, or 2.5%, as compared to the preceding quarter. Adjusted noninterest expense, which excludes branch right sizing and early retirement program costs, for the three months ended September 30, 2025 was $139.7 million, an increase of $2.9 million as compared to the three months ended June 30, 2025.

Previous wording

Noninterest expense for the six months ended June 30, 2025 increased by approximately $3.9 million or 1.4% as compared to the six months ended June 30, 2024. Adjusted noninterest expense, which excludes branch right sizing, early retirement program costs, FDIC special assessment (for the six months ended June 30, 2024) and termination of vendor and software services (for the six months ended June 30, 2024), increased $4.7 million, or 1.7%, as compared to the six months ended June 30, 2024.

Current wording

Noninterest expense for the nine months ended September 30, 2025 increased by approximately $8.8 million or 2.1% as compared to the nine months ended September 30, 2024. Adjusted noninterest expense, which excludes branch right sizing, early retirement program costs, FDIC special assessment (for the nine months ended September 30, 2024) and termination of vendor and software services (for the nine months ended September 30, 2024), increased $7.7 million, or 1.9%, as compared to the nine months ended September 30, 2024.

Previous wording

Salaries and employee benefits expense decreased $962,000 during the three month period ended June 30, 2025 as compared to the preceding sequential quarter and increased $5.3 million during the six month period ended June 30, 2025 when compared to the same period in the prior year. The decrease as compared to the preceding sequential quarter is primarily due to higher payroll taxes typically incurred during the first quarter, which was partially offset by early retirement program costs of $1.6 million recorded during the period. The increase as compared to the same period in the prior year is primarily due to employee merit increases over the comparative periods.

Current wording

Salaries and employee benefits expense increased $2.4 million during the three month period ended September 30, 2025 as compared to the preceding sequential quarter and increased $12.4 million during the nine month period ended September 30, 2025 when compared to the same period in the prior year. The increase as compared to the preceding sequential quarter is primarily due to salary and employee benefits accrual adjustments given the Company’s financial performance through the third quarter of 2025. The increase as compared to the same period in the prior year is primarily due to employee merit increases over the comparative periods, coupled with the previously mentioned performance accrual adjustments.

Previous wording

Deposit insurance expense for the three and six months ended June 30, 2025 as compared to the three months ended March 31, 2025 and six months ended June 30, 2024 decreased by $474,000 and $2.5 million, respectively. While the variance in deposit insurance expense on a sequential quarter basis is relatively flat, the decrease on a year over year basis for the six months ended June 30, 2025 is significantly attributable to the additional FDIC special assessments totaling $1.8 million during the six months ended June 30, 2024, which were levied to support the Deposit Insurance Fund following the failure of certain banks in 2023.

Current wording

Deposit insurance expense for the three and nine months ended September 30, 2025 as compared to the three months ended June 30, 2025 and nine months ended September 30, 2024 increased by $258,000 and decreased by $2.9 million, respectively. While the variance in deposit insurance expense on a sequential quarter basis is relatively flat, the decrease on a year over year basis for the nine months ended September 30, 2025 is significantly attributable to the additional FDIC special assessments totaling $1.8 million during the nine months ended September 30, 2024, which were levied to support the Deposit Insurance Fund following the failure of certain banks in 2023.

Previous wording

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

Current wording

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

Previous wording

Our securities portfolio is the second largest component of earning assets and provides a significant source of revenue. Securities within the portfolio are classified as either held-to-maturity (“HTM”) or AFS. Our philosophy regarding investments is conservative based on investment type and maturity. Investments in the portfolio primarily include U.S. Treasury securities, U.S. Government agencies, MBS and municipal securities. Our general policy is not to invest in derivative type investments or high-risk securities, except for collateralized MBS for which collection of principal and interest is not subordinated to significant superior rights held by others.

Current wording

Our securities portfolio is the second largest component of earning assets and provides a significant source of revenue. Securities within the portfolio are classified as held-to-maturity (“HTM”), AFS or trading. Our philosophy regarding investments is conservative based on investment type and maturity. Investments in the portfolio primarily include U.S. Treasury securities, U.S. Government agencies, MBS and municipal securities. Our general policy is not to invest in derivative type investments or high-risk securities, except for collateralized MBS for which collection of principal and interest is not subordinated to significant superior rights held by others.

Previous wording

HTM and AFS investment securities were $3.59 billion and $2.41 billion, respectively, at June 30, 2025, compared to the HTM amount of $3.64 billion and AFS amount of $2.53 billion at December 31, 2024. We continue to look for opportunities to maximize the value of the investment portfolio.

Current wording

As of September 30, 2025, AFS investment securities and assets held in trading accounts were $3.32 billion and $12.7 million, respectively. As of December 31, 2024, AFS and HTM investment securities were $2.53 billion and $3.64 billion, respectively. We continue to look for opportunities to maximize the value of the investment portfolio.

Previous wording

During July 2025, we initiated and completed steps taken to reposition our consolidated balance sheet and reclassified approximately $3.6 billion in HTM investment securities to AFS investment securities. Subsequently, we sold approximately $3.2 billion in amortized cost basis of AFS securities (including certain of those previously classified as HTM). The sale of investment securities resulted in an estimated, realized after-tax loss of approximately $604.0 million (based on an estimated tax rate of 24.3%), which will be recorded during the third quarter of 2025. The AFS securities sold were low-yield bonds and, by removing these bonds from our balance sheet, we reduced our level of high-cost wholesale funding and increased our ability to generate higher earnings and growth.

Current wording

During the third quarter of 2025, the Company and its subsidiaries initiated and completed steps taken to reposition the Company’s consolidated balance sheet and reclassified approximately $3.6 billion in HTM investment securities to AFS investment securities. Subsequently, the Company sold approximately $3.2 billion in amortized cost basis of AFS securities (including certain of those previously classified as HTM). The sale of investment securities resulted in a realized, after-tax loss of $625.6 million (based on actual tax rate of 21.946%). The AFS securities sold were low-yield bonds and, by removing these bonds from our balance sheet, we reduced our level of high-cost wholesale funding and increased our ability to generate higher earnings and growth.

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 $99.4 million in accumulated other comprehensive income (loss) as of June 30, 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.

Current wording

During the quarters ended June 30, 2022 and September 30, 2021, the Company transferred, at fair value, $1.99 billion and $500.8 million, respectively, of securities from the AFS portfolio to the HTM portfolio. No gains or losses on these securities were recognized at the time of transfer. During the balance sheet repositioning that occurred during the third quarter of 2025, these securities were transferred out of the HTM portfolio to the AFS portfolio at fair value. The previous related remaining combined net unrealized losses in accumulated other comprehensive income (loss), which losses were $99.4 million, were either recognized as part of the securities transfer and subsequent sale of certain securities or will be amortized into income over the remaining life of the security.

Previous wording

Furthermore, as of June 30, 2025, we had the ability to hold the securities classified as AFS for a period of time sufficient for a recovery of amortized cost and we believed the accounting standard of “more likely than not” has not been met regarding whether we would be required to sell any of the AFS securities before recovery of amortized cost. As of June 30, 2025, the unrealized losses were largely due to increases in market interest rates over the yields available at the time the underlying securities were purchased. The fair value is expected to recover as the bonds approach their maturity date or repricing date or if market yields for such investments decline. Accordingly, as of June 30, 2025, we believed the declines in fair value are temporary and we did not believe any of the securities are impaired due to reasons of credit quality.

Current wording

As of September 30, 2025, we had the ability to hold the securities classified as AFS for a period of time sufficient for a recovery of amortized cost and we believed the accounting standard of “more likely than not” has not been met regarding whether we would be required to sell any of the AFS securities before recovery of amortized cost. As of September 30, 2025, the unrealized losses were largely due to increases in market interest rates over the yields available at the time the underlying securities were purchased. The fair value is expected to recover as the bonds approach their maturity date or repricing date or if market yields for such investments decline. Accordingly, as of September 30, 2025, we believed the declines in fair value are temporary and we did not believe any of the securities are impaired due to reasons of credit quality. The contractual terms of those investments do not permit the issuer to settle the securities at a price less than the amortized cost bases of the investments. We expect the cash flows from principal maturities of securities to provide flexibility to fund future loan growth or reduce wholesale funding.

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

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

Previous wording

Our loan portfolio averaged $16.98 billion and $17.00 billion during the first six months of 2025 and 2024, respectively. As of June 30, 2025, total loans were $17.11 billion, an increase of $105.2 million from December 31, 2024. The increase in the loan balance during the first six months of 2025 when compared to December 31, 2024 is primarily due to growth in the commercial real estate, agricultural and mortgage warehouse portfolios over the comparative period, while we continued to focus on maintaining prudent underwriting standards and pricing discipline. 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 $16.98 billion and $17.07 billion during the first nine months of 2025 and 2024, respectively. As of September 30, 2025, total loans were $17.19 billion, an increase of $182.9 million from December 31, 2024. The increase in the loan balance during the first nine months of 2025 when compared to December 31, 2024 is primarily due to growth in the real estate - construction and development, agricultural and mortgage warehouse portfolios over the comparative period, while we continued to focus on maintaining prudent underwriting standards and pricing discipline. The most significant components of the loan portfolio were loans to businesses (commercial loans, commercial real estate loans and agricultural loans) and individuals (consumer loans, credit card loans and single-family residential real estate loans).

Previous wording

Consumer loans consist of credit card loans and other consumer loans. Consumer loans were $300.0 million at June 30, 2025, or 1.8% of total loans, compared to $309.0 million, or 1.8% of total loans at December 31, 2024. The decrease in consumer loans from December 31, 2024, to June 30, 2025, was primarily due to loan payoffs and pay downs within both the credit card and other consumer portfolios during the period.

Current wording

Consumer loans consist of credit card loans and other consumer loans. Consumer loans were $285.4 million at September 30, 2025, or 1.7% of total loans, compared to $309.0 million, or 1.8% of total loans at December 31, 2024. The decrease in consumer loans from December 31, 2024, to September 30, 2025, was primarily due to loan payoffs and pay downs within both the credit card and other consumer portfolios during the period.

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 $13.37 billion at June 30, 2025, or 78.1% of total loans, compared to $13.39 billion, or 78.7%, of total loans at December 31, 2024, a decrease of $19.8 million, or 0.1%. Our C&D loans were relatively flat over the comparative period with a decrease of $4.7 million, or 0.2%, while single family residential loans decreased by $64.2 million, or 2.4%, and CRE loans increased by $49.1 million, or 0.6%. The changes among our real estate portfolio reflected our focus on maintaining conservative underwriting standards and structure guidelines while emphasizing prudent pricing discipline during the first six months of 2025. 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 $13.37 billion at September 30, 2025, or 77.8% of total loans, compared to $13.39 billion, or 78.7%, of total loans at December 31, 2024, a decrease of $23.2 million, or 0.2%. Our C&D loans increased by $85.6 million, or 3.1%, while single family residential loans decreased by $72.1 million, or 2.7%, and CRE loans decreased by $36.7 million, or 0.5%. 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 2025. We expect to continue to manage our C&D and CRE portfolio concentration by developing deeper relationships with our customers.