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, 2026 to our results of operations for the three months ended March 31, 2026, 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, 2026, please refer to our first quarter Form 10-Q filed with the SEC on May 6, 2026.

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, 2026 to our results of operations for the three months ended June 30, 2026, 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, 2026, please refer to our second quarter Form 10-Q filed with the SEC on August 5, 2026.

Previous wording

Our net income for the three months ended June 30, 2026 was $66.7 million, or $0.46 diluted earnings per share, compared to net income of $68.5 million, or $0.47 diluted earnings per share, for the three months ended March 31, 2026. Included in the results were certain items related to our branch/real estate rightsizing costs, severance/early retirement program costs, a FDIC special assessment (for the three months ended March 31, 2026) and certain professional services (for the three months ended March 31, 2026). Excluding these certain items and the tax effect, adjusted earnings for the three months ended June 30, 2026 were $72.2 million, or $0.50 adjusted diluted earnings per share, compared to $68.6 million, or $0.47 adjusted diluted earnings per share, for the three months ended March 31, 2026.

Current wording

Our net income for the three months ended September 30, 2026 was $47.1 million, or $0.32 diluted earnings per share, compared to net income of $66.7 million, or $0.46 diluted earnings per share, for the three months ended June 30, 2026. Included in the results were certain items related to our branch/real estate rightsizing costs, severance/early retirement program costs, certain professional services (for the three months ended September 30, 2026) and accelerated prepaid expenses (for the three months ended September 30, 2026). Excluding these certain items and the tax effect, adjusted earnings for the three months ended September 30, 2026 were $79.0 million, or $0.54 adjusted diluted earnings per share, compared to $72.2 million, or $0.50 adjusted diluted earnings per share, for the three months ended June 30, 2026.

Previous wording

Our net income for the six months ended June 30, 2026 was $135.2 million, or $0.93 diluted earnings per share, compared to net income of $87.2 million, or $0.69 diluted earnings per share, for the six months ended June 30, 2025. Included in the results were certain items related to our branch/real estate rightsizing costs, severance/early retirement program costs, a FDIC special assessment (for the six months ended June 30, 2026) and certain professional services (for the six months ended June 30, 2026). Excluding these certain items and the tax effect, adjusted earnings for the six months ended June 30, 2026 were $140.7 million, or $0.97 adjusted diluted earnings per share, compared to $89.2 million, or $0.71 adjusted diluted earnings per share, for the six months ended June 30, 2025.

Current wording

Our net income for the nine months ended September 30, 2026 was $182.3 million, or $1.25 diluted earnings per share, compared to a net loss of $(475.6) million, or $(3.63) diluted earnings per share, for the nine months ended September 30, 2025. Included in the results were certain items related to our branch/real estate rightsizing costs, severance/early retirement program costs, a FDIC special assessment (for the nine months ended September 30, 2026), certain professional services (for the nine months ended September 30, 2026), accelerated prepaid expenses (for the nine months ended September 30, 2026), loss on sale of securities (for the nine months ended September 30, 2025) and loss on early 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, 2026 were $219.7 million, or $1.51 adjusted diluted earnings per share, compared to $154.1 million, or $1.18 adjusted diluted earnings per share, for the nine months ended September 30, 2025.

Previous wording

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, 2026, December 31, 2025, and June 30, 2025 were $166.0 million, $112.7 million, and $157.2 million, respectively. Nonperforming assets as a percent of total assets were 0.72% at June 30, 2026, compared to 0.51% at December 31, 2025 and 0.62% at June 30, 2025.

Current wording

We believe the asset quality in our portfolio remains relatively stable 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, 2026, December 31, 2025, and September 30, 2025 were $179.9 million, $112.7 million, and $153.9 million, respectively. Nonperforming assets as a percent of total assets were 0.78% at September 30, 2026, compared to 0.51% at December 31, 2025 and 0.66% at September 30, 2025.

Previous wording

As of June 30, 2026, stockholders’ equity was $3.48 billion, book value per share was $24.11 and tangible book value per share was $14.42.

Current wording

As of September 30, 2026, stockholders’ equity was $3.35 billion, book value per share was $23.18 and tangible book value per share was $13.52.

Previous wording

Total loans were $18.06 billion at June 30, 2026, compared to $17.49 billion at December 31, 2025. Our unfunded commitments were $4.38 billion and $3.87 billion as of June 30, 2026 and December 31, 2025, respectively. Our commercial loan pipeline totaled $1.43 billion as of June 30, 2026, compared to $1.54 billion at December 31, 2025.

Current wording

Total loans were $17.46 billion at September 30, 2026, compared to $17.49 billion at December 31, 2025. Our unfunded commitments were $4.36 billion and $3.87 billion as of September 30, 2026 and December 31, 2025, respectively. Our commercial loan pipeline totaled $1.26 billion as of September 30, 2026, compared to $1.54 billion at December 31, 2025.

Previous wording

Simmons First National Corporation is a Mid-South based financial holding company that, as of June 30, 2026, has approximately $24.8 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, 2026, has approximately $24.1 billion in consolidated assets and, through its subsidiaries, conducts financial operations in Arkansas, Kansas, Missouri, Oklahoma, Tennessee and Texas.

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 48% of our loan portfolio and approximately 94% of our time deposits have repriced in one year or less. As of June 30, 2026, our interest rate sensitivity shows that approximately 67% of our loans and 96% 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 48% of our loan portfolio and approximately 94% of our time deposits have repriced in one year or less. As of September 30, 2026, our interest rate sensitivity shows that approximately 69% 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, 2026, net interest income on a fully taxable equivalent basis was $203.7 million, an increase of $3.5 million, or 1.7%, compared to the three months ended March 31, 2026. The increase in net interest income was primarily the result of a $5.9 million increase in fully tax equivalent interest income, partially offset with a $2.4 million increase in interest expense.

Current wording

For the three month period ended September 30, 2026, net interest income on a fully taxable equivalent basis was $207.1 million, an increase of $3.4 million, or 1.7%, compared to the three months ended June 30, 2026. The increase in net interest income was primarily the result of a $1.5 million increase in fully tax equivalent interest income, coupled with a $2.0 million decrease in interest expense.

Previous wording

The increase in interest income on a fully taxable equivalent basis primarily resulted from a $7.0 million increase in interest income on loans, moderated by a decrease of $879,000 in interest income on investment securities. The increase in interest income provided by loans reflects a $2.5 million increase related to loan yield, coupled with a $4.6 million increase attributable to loan volume. While the loan yield for the second quarter of 2026 was 6.15% compared to 6.16% from the preceding sequential quarter, the increase during the three months ended June 30, 2026 was due to the additional day during the period. The decrease in interest income on investment securities was primarily related to a $839,000 decrease in interest income on taxable investment securities, which reflects a $1.2 million decrease due to the decline in our investment portfolio average balances related to planned maturities within the portfolio.

Current wording

The increase in interest income on a fully taxable equivalent basis primarily resulted from a $1.7 million increase in interest income on loans, moderated by a decrease of $785,000 in interest income on investment securities. The increase in interest income provided by loans reflects a $5.1 million increase related to loan yield, partially offset by a $3.4 million decrease attributable to loan volume. The loan yield for the third quarter of 2026 was 6.20% compared to 6.15% from the preceding sequential quarter, representing a 5 basis point increase. The decrease in loan volume during the three months ended September 30, 2026 was primarily due to higher levels of paydowns, early payoffs, and continued focus on profitability and relationship banking as we deleveraged the balance sheet through the run-off of certain lower yielding, low relationship credits. The decrease in interest income on investment securities was primarily related to a $744,000 decrease in interest income on taxable investment securities, which reflects a $1.6 million decrease due to the decline in our investment portfolio average balances related to planned maturities within the portfolio, partially offset by an increase of $810,000 in interest income on taxable investment securities related to yield increases over the period of 9 basis points.

Previous wording

The $2.4 million increase in interest expense is primarily due to a $4.1 million increase in interest expense on other borrowings, primarily related to utilization of short term FLHB advances rather than brokered deposits given favorable pricing during the period. Partially offsetting the increase in interest expense during the three months ended June 30, 2026 was a $2.1 million decrease in interest expense on deposits, primarily related to a $3.0 million increase in interest expense attributable to deposit volume over the period, which was moderated by the additional day during the period.

Current wording

The $2.0 million decrease in interest expense is primarily due to the $6.1 million decrease in interest expense on deposits, primarily driven by a $5.3 million decrease in interest expense attributable to time deposit volume over the period, largely related to the balance sheet deleveraging of higher rate deposits, seasonal decreases in public fund deposits and a reduction in the utilization of brokered deposits given pricing relative to FHLB advances. The decrease due to volume was partially offset by a $4.3 million increase in interest expense on other borrowings, primarily related to utilization of short term FLHB advances rather than brokered deposits given favorable pricing during the period.

Previous wording

Net interest income on a fully taxable equivalent basis for the six month period ended June 30, 2026 increased $55.8 million, or 16.0%, over the same period in 2025. The increase in net interest income on a fully taxable equivalent basis was the result of a $20.2 million decrease in fully taxable equivalent interest income, more than offset by a $75.9 million decrease in interest expense.

Current wording

Net interest income on a fully taxable equivalent basis for the nine month period ended September 30, 2026 increased $72.4 million, or 13.4%, over the same period in 2025. The increase in net interest income on a fully taxable equivalent basis was the result of a $25.2 million decrease in fully taxable equivalent interest income, more than offset by a $97.6 million decrease in interest expense.

Previous wording

The decrease in interest income on a fully taxable equivalent basis primarily resulted from a $38.4 million decrease in interest income on investment securities, which reflects a $55.8 million decrease in interest income on investment securities due to the decline in our investment portfolio average balances, which decreased by $2.93 billion or 48.1%. The decrease was partially offset by an increase of $17.4 million in interest income on investment securities due to yield increases over the period of 83 basis points and 43 basis points for our taxable and non-taxable investment security portfolios, respectively. These changes were primarily due to the balance sheet repositioning previously discussed, coupled with pay downs and maturities over the period. An $18.8 million increase in interest income on loans reflects an increase attributable to loan volume of $25.2 million, partially offset by a $6.4 million decrease in interest income related to loan yield due to a 7 basis point decline in loan yield over the comparative period.

Current wording

The decrease in interest income on a fully taxable equivalent basis primarily resulted from a $46.6 million decrease in interest income on investment securities, which reflects a $67.0 million decrease in interest income on investment securities due to the decline in our investment portfolio average balances, which decreased by $2.30 billion or 42.6%. The decrease was partially offset by an increase of $20.4 million in interest income on investment securities due to yield increases over the period of 69 basis points and 39 basis points for our taxable and non-taxable investment security portfolios, respectively. These changes were primarily due to the balance sheet repositioning previously discussed, coupled with pay downs and maturities over the period. A $25.8 million increase in interest income on loans reflects an increase attributable to loan volume of $37.2 million, partially offset by an $11.4 million decrease in interest income related to loan yield due to a 9 basis point decline in loan yield over the comparative period.

Previous wording

The $75.9 million decrease in interest expense is mainly due to the decrease in our deposit account rates over the period. Interest expense decreased $38.2 million due to the decrease in rate of 55 basis points on interest-bearing deposit accounts. A $26.2 million decrease in interest expense was related to the decrease in time deposit volume over the period. Further, a decrease of $10.7 million in interest expense was related to reductions in the amounts outstanding under and rates on wholesale borrowings sources over the comparative period. The decline in wholesale borrowings volume, including brokered time deposits, is largely due to the balance sheet repositioning. We continually monitor and look for opportunities to fairly reprice our deposits while remaining competitive in this current challenging rate environment.

Current wording

The $97.6 million decrease in interest expense is mainly due to the decrease in our deposit account rates over the period. Interest expense decreased $53.9 million due to the decrease in rate of 52 basis points on interest-bearing deposit accounts. A $38.1 million decrease in interest expense was related to the decrease in time deposit volume over the period, primarily related to the factors around the balance sheet deleveraging previously discussed. Further, a decrease of $3.4 million in interest expense was related to reductions in the amounts outstanding under wholesale borrowings sources over the comparative period, while a decrease of $3.3 million in interest expense was related to the reduction in subordinated debentures outstanding. 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 taxable equivalent basis was 3.84% for the three and six month periods ended June 30, 2026, as well as the three months ended March 31, 2026, 3.01% for the six months ended June 30, 2025. Net interest margin was consistent with the preceding sequential quarter, while net interest margin increased 83 basis points during the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The increase in net interest margin on a year over year comparative basis was primarily driven by the balance sheet repositioning, as well as reduced deposit costs and use of wholesale funding over the comparative periods.

Current wording

Our net interest margin on a fully tax equivalent basis was 3.92% and 3.86% for the three and nine month periods ended September 30, 2026, as compared to 3.84% and 3.17% for the three months ended June 30, 2026 and the nine months ended September 30, 2025, respectively. Net interest margin experienced an 8 basis point increase for the three months ended September 30, 2026 compared to the preceding sequential quarter, while net interest margin increased 69 basis points during the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. The increase in net interest margin on a linked quarter basis reflected an increase in loan yields, coupled with the deleveraging of the balance sheet driven by the run-off of certain lower yielding, low relationship credits and a corresponding reduction of higher cost funding. The increase in net interest margin on a year-over-year comparative basis was primarily driven by the balance sheet repositioning.

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, 2026 and March 31, 2026 and the six months ended June 30, 2026 and 2025, 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, 2026 and June 30, 2026 and the nine months ended September 30, 2026 and 2025, 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, 2026 and March 31, 2026 and the six months ended June 30, 2026 and 2025, 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, 2026 and June 30, 2026 and the nine months ended September 30, 2026 and 2025, 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 and six months ended June 30, 2026 as compared to the three months ended March 31, 2026 and the six months ended June 30, 2025, 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 and nine months ended September 30, 2026 as compared to the three months ended June 30, 2026 and the nine months ended September 30, 2025, 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, 2026 was $17.4 million as compared to $14.6 million for the three months ended March 31, 2026. Provision expense for each period 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 September 30, 2026 was $12.2 million as compared to $17.4 million for the three months ended June 30, 2026. Provision expense for each period was related to loans and reflected loan originations during the quarters, as well as the impact of updated economic assumptions.

Previous wording

For the six months ended June 30, 2026, our provision for credit losses was $32.1 million as compared to $38.7 million for the same period ended June 30, 2025. Provision expense for each period reflected loan growth in the period, as well as the impact of updated economic assumptions, while the provision expense for the six months ended June 30, 2025 also reflected a provision expense of $15.6 million related to two specific credit relationships which migrated to nonperforming during the period.

Current wording

For the nine months ended September 30, 2026, our provision for credit losses was $44.2 million as compared to $50.7 million for the same period ended September 30, 2025. Provision expense for each period reflected loan originations during the period, as well as the impact of updated economic assumptions, while the provision expense for the nine months ended September 30, 2025 also reflected a provision expense of $15.6 million related to two specific credit relationships which migrated to nonperforming during the period.

Previous wording

For the three month period ended June 30, 2026, total noninterest income was $47.9 million, an increase of approximately $3.7 million or 8.5%, compared to the three month period ended March 31, 2026. The increase for the three month period ended June 30, 2026 as compared to the preceding sequential quarter is largely due to a $2.1 million Small Business Investment Company (“SBIC”) negative valuation adjustment recorded during the three months ended March 31, 2026, coupled with $1.1 million in net positive SBIC valuation adjustments recorded during the three months ended June 30, 2026. These adjustments are included in “Other income” in the table below.

Current wording

For the three month period ended September 30, 2026, total noninterest income was $47.2 million, a decrease of approximately $748,000 or 1.6%, compared to the three month period ended June 30, 2026. The decrease for the three month period ended September 30, 2026 as compared to the preceding sequential quarter is largely due to a decrease in swap fee income related to the changes in the interest rate environment and lower loan production during the period, coupled with the $1.1 million in net positive SBIC valuation adjustments recorded during the three months ended June 30, 2026. These adjustments are included in “Other income” in the table below. These decreases more than offset the $1.3 million increase in service charges on deposit accounts related to transaction volume and $1.2 million increase in wealth management fees due to increased activity across the footprint and investments in talent acquisition.

Previous wording

Table 5 shows noninterest income for the three month periods ended June 30, 2026 and March 31, 2026 and the six months ended June 30, 2026 and 2025, respectively, as well as changes between periods.

Current wording

Table 5 shows noninterest income for the three month periods ended September 30, 2026 and June 30, 2026 and the nine months ended September 30, 2026 and 2025, respectively, as well as changes between periods.

Previous wording

Recurring fee income (total service charges, wealth management fees, debit and credit card fees) was $33.1 million and $33.3 million for the three month periods ended June 30, 2026 and March 31, 2026, respectively, and was $66.4 million and $64.0 million for the six month periods ended June 30, 2026 and 2025, respectively.

Current wording

Recurring fee income (total service charges, wealth management fees, debit and credit card fees) was $35.3 million and $33.1 million for the three month periods ended September 30, 2026 and June 30, 2026, respectively, and was $101.7 million and $96.9 million for the nine month periods ended September 30, 2026 and 2025, respectively.

Previous wording

Noninterest expense was $147.7 million for the three month period ended June 30, 2026, as compared to noninterest expense of $140.7 million for the three month period ended March 31, 2026, representing an increase of $7.1 million, or 5.0%, as compared to the preceding quarter. Adjusted noninterest expense, which excludes branch/real estate right sizing costs, severance/early retirement program costs, FDIC special assessment (for the three months ended March 31, 2026) and certain professional services (for the three months ended March 31, 2026), for the three months ended June 30, 2026 was $140.3 million, a decrease of $323,000 as compared to the three months ended March 31, 2026.

Current wording

Noninterest expense was $182.0 million for the three month period ended September 30, 2026, as compared to noninterest expense of $147.7 million for the three month period ended June 30, 2026, representing an increase of $34.3 million, or 23.2%, as compared to the preceding quarter. Adjusted noninterest expense, which excludes branch/real estate right sizing costs, severance/early retirement program costs, certain professional services (for the three months ended September 30, 2026) and accelerated prepaid expenses (for the three months ended September 30, 2026), for the three months ended September 30, 2026 was $138.9 million, a decrease of $1.4 million as compared to the three months ended June 30, 2026.

Previous wording

Noninterest expense for the six months ended June 30, 2026 increased by approximately $5.2 million or 1.9% as compared to the six months ended June 30, 2025. Adjusted noninterest expense, which excludes branch/real estate right sizing costs, severance/early retirement program costs, FDIC special assessment (for the six months ended June 30, 2026) and certain professional services (for the six months ended June 30, 2026), increased $545,000, or 0.2%, as compared to the six months ended June 30, 2025.

Current wording

Noninterest expense for the nine months ended September 30, 2026 increased by approximately $45.2 million or 10.6% as compared to the nine months ended September 30, 2025. Adjusted noninterest expense, which excludes branch/real estate rightsizing costs, severance/early retirement program costs, a FDIC special assessment (for the nine months ended September 30, 2026), certain professional services (for the nine months ended September 30, 2026), accelerated prepaid expenses (for the nine months ended September 30, 2026), loss on sale of securities (for the nine months ended September 30, 2025) and loss on early extinguishment of debt (for the nine months ended September 30, 2025), decreased $284,000, or 0.1%, as compared to the nine months ended September 30, 2025.

Previous wording

Occupancy expense for the three and six months ended June 30, 2026 as compared to the three months ended March 31, 2026 and six months ended June 30, 2025 increased by $2.5 million and $2.4 million, respectively. The variance for the three and six months ended June 30, 2026 as compared to the prior comparative periods is significantly attributable to a $3.3 million lease contract surrender fee related to branch/real estate right sizing costs recorded in the three months ended June 30, 2026.

Current wording

Occupancy expense for the three and nine months ended September 30, 2026 as compared to the three months ended June 30, 2026 and nine months ended September 30, 2025 decreased by $3.0 million and increased by $2.0 million, respectively. The variance for the three and nine months ended September 30, 2026 as compared to the prior comparative periods is significantly attributable to a $3.3 million lease contract surrender fee related to branch/real estate right sizing costs recorded in the three months ended June 30, 2026.

Previous wording

Other noninterest expense increased $2.2 million during the three month period ended June 30, 2026 as compared to the preceding sequential quarter and decreased $885,000 during the six month period ended June 30, 2026 when compared to the same period in the prior year. The increase on a sequential quarter basis for the three month period ended June 30, 2026 is primarily due to a $2.3 million loss on sale of property related to branch/real estate right sizing costs during the three month period ended June 30, 2026, while a $4.3 million charge related to a commercial customer deposit fraud event that was identified during the six month period ended June 30, 2025 resulted in a negative variance during the comparative periods.

Current wording

Other noninterest expense increased $12.9 million during the three month period ended September 30, 2026 as compared to the preceding sequential quarter and increased $13.3 million during the nine month period ended September 30, 2026 when compared to the same period in the prior year. While these increases were significantly attributable to the Initiatives, a $2.3 million loss on sale of property related to branch/real estate right sizing costs was recorded during the three month period ended June 30, 2026, whereas a $4.3 million charge was recorded during the nine months ended September 30, 2025 related to a commercial customer deposit fraud event that was identified in the period.

Previous wording

Table 6 below shows noninterest expense for the three month periods ended June 30, 2026 and March 31, 2026 and the six months ended June 30, 2026 and 2025, respectively, as well as changes between periods.

Current wording

Table 6 below shows noninterest expense for the three month periods ended September 30, 2026 and June 30, 2026 and the nine months ended September 30, 2026 and 2025, respectively, as well as changes between periods.

Previous wording

As of June 30, 2026, AFS investment securities and assets held in trading accounts were $3.08 billion and $14.5 million, respectively. As of December 31, 2025, AFS and assets held in trading accounts were $3.27 billion and $11.7 million, respectively. We continue to look for opportunities to maximize the value of the investment portfolio.

Current wording

As of September 30, 2026, AFS investment securities and assets held in trading accounts were $2.74 billion and $6.9 million, respectively. As of December 31, 2025, AFS and assets held in trading accounts were $3.27 billion and $11.7 million, respectively. We continue to look for opportunities to maximize the value of the investment portfolio.

Previous wording

As of June 30, 2026, 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, 2026, 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, 2026, 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.

Current wording

As of September 30, 2026, 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, 2026, 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, 2026, we believed the declines in fair value were temporary and we did not believe any of the securities were impaired due to reasons of credit quality. The contractual terms of those investments did 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, 2026, the net amount included in interest income on investment securities in the consolidated statements of income related to these swap agreements was $12.6 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, 2026, the net amount included in interest income on investment securities in the consolidated statements of income related to these swap agreements was $19.1 million.

Previous wording

Our loan portfolio averaged $17.81 billion and $16.98 billion during the first six months of 2026 and 2025, respectively. As of June 30, 2026, total loans were $18.06 billion, an increase of $570.2 million from December 31, 2025. The increase in the loan balance during the first six months of 2026 when compared to December 31, 2025 is primarily due to growth in the commercial real estate, commercial and industrial 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 $17.78 billion and $16.98 billion during the first nine months of 2026 and 2025, respectively. As of September 30, 2026, total loans were $17.46 billion, a decrease of $27.5 million from December 31, 2025. The decrease in the loan balance during the first nine months of 2026 when compared to December 31, 2025 is primarily due to higher levels of paydowns, early payoffs, and continued focus on profitability and relationship banking as we deleveraged the balance sheet through the run-off of certain lower yielding, low relationship credits. 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 $273.3 million at June 30, 2026, or 1.5% of total loans, compared to $291.2 million, or 1.7% of total loans at December 31, 2025. The decrease in consumer loans from December 31, 2025, to June 30, 2026, 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 $253.9 million at September 30, 2026, or 1.5% of total loans, compared to $291.2 million, or 1.7% of total loans at December 31, 2025. The decrease in consumer loans from December 31, 2025, to September 30, 2026, 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 $13.97 billion at June 30, 2026, or 77.3% of total loans, compared to $13.77 billion, or 78.7%, of total loans at December 31, 2025, an increase of $199.5 million, or 1.4%. Our C&D loans decreased by $296.2 million, or 10.3%, while single family residential loans decreased by $43.2 million, or 1.7%, and CRE loans increased by $538.8 million, or 6.5%. 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 six months of 2026. 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 $13.70 billion at September 30, 2026, or 78.4% of total loans, compared to $13.77 billion, or 78.7%, of total loans at December 31, 2025, a decrease of $74.1 million, or 0.5%. Our C&D loans decreased by $398.0 million, or 13.9%, single family residential loans also decreased by $102.0 million, or 3.9%, while our CRE loans increased by $426.0 million, or 5.1%. 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 2026. 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 $2.94 billion at June 30, 2026, or 16.3% of total loans, compared to $2.69 billion, or 15.4% of total loans at December 31, 2025, an increase of $254.5 million, or 9.5%. The increase in commercial loans was related to both the increase in commercial and industrial loans of $134.3 million, or 5.6% and increase in agricultural loans of $120.2 million, or 39.2%, 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 $2.79 billion at September 30, 2026, or 16.0% of total loans, compared to $2.69 billion, or 15.4% of total loans at December 31, 2025, an increase of $99.6 million, or 3.7%. The increase in commercial loans was related to the increase in agricultural loans of $141.0 million, or 46.0%, primarily due to seasonality of the portfolio, which normally peaks in the third quarter.

Previous wording

Other loans mainly consist of mortgage warehouse lending and municipal loans. Mortgage volume experienced an increase in demand during the first six months of 2026 as compared to December 31, 2025, leading to an increase of $134.2 million in other loans.

Current wording

Other loans mainly consist of mortgage warehouse lending and municipal loans. Mortgage volume experienced a market driven decline during the first nine months of 2026 as compared to December 31, 2025, leading to a decrease of $15.7 million in other loans.

Previous wording

Our commercial loan pipeline consisting of all commercial loan opportunities was $1.43 billion at June 30, 2026 compared to $1.54 billion at December 31, 2025. Commercial loans approved and ready to close at the end of the quarter totaled $373.9 million.

Current wording

Our commercial loan pipeline consisting of all commercial loan opportunities was $1.26 billion at September 30, 2026 compared to $1.54 billion at December 31, 2025. Commercial loans approved and ready to close at the end of the quarter totaled $454.8 million.

Previous wording

Total nonperforming assets increased $52.1 million from December 31, 2025 to June 30, 2026. Nonaccrual loans increased by $53.5 million from December 31, 2025 and foreclosed assets held for sale and other real estate owned decreased $929,000 as compared to December 31, 2025. The increase in nonaccrual loans was primarily due to a single real estate construction relationship totaling approximately $44.0 million.

Current wording

Total nonperforming assets increased $62.0 million from December 31, 2025 to September 30, 2026. Nonaccrual loans increased by $67.6 million from December 31, 2025 and foreclosed assets held for sale and other real estate owned decreased $4.9 million as compared to December 31, 2025. The increase in nonaccrual loans was primarily due to a single real estate construction relationship totaling approximately $39.7 million.

Previous wording

There were five loan modifications granted to borrowers experiencing financial difficulty during the six month period ended June 30, 2026. Such modifications included interest rate reductions and/or term extensions and had a total period-end amortized cost basis of $2.6 million at June 30, 2026.

Current wording

There were six loan modifications granted to borrowers experiencing financial difficulty during the nine month period ended September 30, 2026. Such modifications included interest rate reductions and/or term extensions and had a total period-end amortized cost basis of $2.7 million at September 30, 2026.

Previous wording

The allowance for credit losses as a percent of total loans was 1.32% as of June 30, 2026. Nonperforming loans equaled 0.92% of total loans. Nonperforming assets were 0.72% of total assets, a 21 basis point increase from December 31, 2025. The allowance for credit losses was 143% of nonperforming loans. Our annualized net charge-offs to average total loans ratio for the first six months of 2026 was 0.21%. Annualized net credit card charge-offs to average total credit card loans were 2.69% for the first six months of 2026, compared to 2.95% during the full year 2025, and 132 basis points better than the most recently published industry average charge-off ratio as reported by the Federal Reserve for all banks.

Current wording

The allowance for credit losses as a percent of total loans was 1.37% as of September 30, 2026. Nonperforming loans equaled 1.03% of total loans. Nonperforming assets were 0.78% of total assets, a 27 basis point increase from December 31, 2025. The allowance for credit losses was 133% of nonperforming loans. Our annualized net charge-offs to average total loans ratio for the first nine months of 2026 was 0.23%. Annualized net credit card charge-offs to average total credit card loans were 2.71% for the first nine months of 2026, compared to 2.95% during the full year 2025, and 121 basis points better than the most recently published industry average charge-off ratio as reported by the Federal Reserve for all banks.