Simmons First National Corporation (“Company”) is a Mid-South financial holding company headquartered in Pine Bluff, Arkansas, and the parent company of Simmons Bank, an Arkansas state-chartered bank that has been in operation since 1903 (“Simmons Bank” or the “Bank”). Simmons First Insurance Services, Inc. and Simmons First Insurance Services of TN, LLC are wholly-owned subsidiaries of Simmons Bank and are insurance agencies that offer various lines of personal and corporate insurance coverage to individual and commercial customers. The Company, through its subsidiaries, offers, among other things, consumer, real estate and commercial loans; checking, savings and time deposits; and specialized products and services (such as credit cards, trust and fiduciary services, investments, agricultural finance lending, equipment lending, insurance and Small Business Administration (“SBA”) lending) from approximately 232 financial centers as of September 30, 2023, located throughout market areas in Arkansas, Kansas, Missouri, Oklahoma, Tennessee and Texas.

The accompanying unaudited consolidated financial statements ~~of Simmons First National Corporation (the “Company”) and its subsidiaries~~ have been prepared based upon Securities and Exchange Commission (“SEC”) rules that permit reduced disclosures for interim periods. Certain information and footnote disclosures have been condensed or omitted in accordance with those rules and regulations. The accompanying consolidated balance sheet as of December 31, ~~2016,~~2022, was derived from audited financial statements. In the opinion of management, these financial statements reflect all adjustments that are necessary for a fair presentation of interim results of operations, including normal recurring accruals. Significant intercompany accounts and transactions have been eliminated in consolidation. The results for the interim periods are not necessarily indicative of results for the full year. For a more complete discussion of significant accounting policies and certain other information, this report should be read in conjunction with the consolidated financial statements and accompanying notes included in ~~our~~the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2016,~~2022, which was filed with the SEC on February ~~28, 2017.~~

27, 2023.

The preparation of financial statements, in accordance with accounting principles generally accepted in the United States (“US GAAP”), requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, income items and expenses and disclosure of contingent assets and liabilities. The estimates and assumptions used in the accompanying consolidated financial statements are based upon management’s evaluation of the relevant facts and circumstances as of the date of the consolidated financial statements and actual results may differ from these estimates. ~~Such~~

Material estimates ~~include, but~~that are ~~not limited~~particularly susceptible to ~~our~~significant change relate to the determination of the allowance for ~~loan losses.~~

~~Certain gains~~credit losses, the valuation of acquired loans, valuation of goodwill and ~~fees were reclassified within non-interest~~subsequent impairment analysis, stock-based compensation plans and income ~~categories~~taxes. Management obtains third party valuations to assist in valuing certain aspects of these material estimates, as appropriate, including independent appraisals for significant properties in connection with the determination of the allowance for credit losses and the fair value of acquired loans. Assumptions used in the ~~2016 statements~~goodwill impairment analysis involve internally projected forecasts, coupled with market and third-party data. These material estimates could change as a result of ~~income~~the uncertainty in current macroeconomic conditions and other factors that are beyond the Company’s control and could cause actual results to ~~conform to the 2017 presentation. These reclassifications were not material to the consolidated financial statements.~~

differ materially from those projected.

Other interest rates used globally could also be discontinued for similar reasons. ASU 2020-04 provides optional expedients and exceptions to contracts, hedging relationships and other transactions affected by reference rate reform. The main provisions for contract modifications include optional relief by allowing the modification as a continuation of the existing contract without additional analysis and other optional expedients regarding embedded features. Optional expedients for hedge accounting permits changes to critical terms of hedging relationships and to the designated benchmark interest rate in a fair value hedge and also provides relief for assessing hedge effectiveness for cash flow hedges. Companies are able to apply ASU 2020-04 immediately; however, the guidance ~~does~~will only be available for a limited time (generally through December 31, 2022). The Company formed a LIBOR Transition Team in 2020, has created standard LIBOR replacement language for new and modified loan notes, and is monitoring the remaining loans with LIBOR rates monthly to ensure progress in updating these loans with acceptable LIBOR replacement language or converting them to other interest rates. During 2021, the Company did not offer LIBOR-indexed rates on loans which it originated, although it did participate in some shared credit agreements originated by other banks subject to the Company’s determination that the LIBOR replacement language in the loan documents met the Company’s standards. Pursuant to the Joint Regulatory Statement on LIBOR transition issued in October 2021, the Company’s policy, as of January 1, 2022, is not

In the first quarter of 2023, the Company refined the current expected credit losses calculation process by improving systems, models, processes, methodology, and assumptions used within the calculation. After multiple parallel runs during the first quarter 2023 with the former process, it was determined that the changes did not ~~expect a~~and are not expected to result in material ~~impact, we are continuing to evaluate the impact~~differences of ~~the additional disclosures in our notes to the consolidated financial statements required by this guidance.~~

results.

There have been no other significant changes to the Company’s accounting policies ~~from~~disclosed in Note 1, Summary of Significant Accounting Policies, of the ~~2016~~Company’s Annual Report on Form ~~10-K.~~10-K for the year ended December 31, 2022. Presently, the Company is not aware of any other changes to the Accounting Standards Codification that will have a material impact on ~~the Company’s~~its present or future financial position or results of operations.

~~Acquisition Accounting, Loans Acquired~~

~~The Company accounts for its acquisitions under ASC Topic 805,~~~~Business Combinations~~, which requires the use of the acquisition method of accounting. All identifiable assets acquired, including loans, are recorded at fair value. No allowance for loan losses related to the loans acquired is recorded on the acquisition date as the fair value of the loans acquired incorporates assumptions regarding credit risk. Loans acquired are recorded at fair value in accordance with the fair value methodology prescribed in ASC Topic 820. The fair value estimates associated with the loans include estimates related to expected prepayments and the amount and timing of undiscounted expected principal, interest and other cash flows.

~~The Company evaluates loans acquired, other than purchased impaired loans, in accordance with the provisions of ASC Topic 310-20,~~~~Nonrefundable Fees and Other Costs~~. The fair value discount on these loans is accreted into interest income over the weighted average life of the loans using a constant yield method. The Company evaluates purchased impaired loans in accordance with the provisions of ASC Topic 310-30,~~Loans and Debt Securities Acquired with Deteriorated Credit Quality~~~~. Purchased loans are considered impaired if there is evidence of credit deterioration since origination and if it is probable that not all contractually required payments will be collected.~~

For impaired loans accounted for under ASC Topic 310-30, the Company continues to estimate cash flows expected to be collected on these loans. The Company evaluates at each balance sheet date whether the present value of the loans determined using the effective interest rates has decreased significantly and, if so, recognizes a provision for loan loss in the consolidated statement of income. For any significant increases in cash flows expected to be collected, the Company adjusts the amount of accretable yield recognized on a prospective basis over the remaining life of the loan.

On ~~May 15, 2017,~~April 8, 2022, the Company completed ~~the acquisition~~its merger with Spirit of ~~Hardeman County Investment Company,~~Texas Bancshares, Inc. (“~~Hardeman”~~Spirit”) pursuant to the terms of the Agreement and Plan of Merger dated as of November 18, 2021 (“Spirit Agreement”), ~~headquartered in Jackson, Tennessee, including its wholly-owned bank subsidiary, First South Bank.~~at which time Spirit merged with and into the Company, with the Company continuing as the surviving corporation. The Company issued ~~799,970~~18,275,074 shares of its common stock valued at approximately ~~$42.6~~$464.9 million as of ~~May 15, 2017,~~April 8, 2022, plus ~~$30.0 million~~$1,393,508.90 in cash, in exchange for all outstanding shares of ~~Hardeman~~Spirit capital stock (and common ~~stock.~~

stock equivalents) to effect the merger.

Prior to the acquisition, ~~Hardeman~~Spirit, headquartered in Conroe, Texas, conducted banking business through its subsidiary bank, Spirit of Texas Bank SSB, from 1035 branches located primarily in ~~western Tennessee.~~the Texas Triangle - consisting of Dallas-Fort Worth, Houston, San Antonio and Austin metropolitan areas - with additional locations in the Bryan-College Station, Corpus Christi and Tyler metropolitan areas, along with offices in North Central and South Texas. Including the effects of the acquisition method accounting adjustments, the Company acquired approximately ~~$462.9 million~~$3.11 billion in assets, including approximately ~~$251.6 million~~$2.29 billion in loans (inclusive of loan discounts), and approximately ~~$389.0 million~~$2.72 billion in deposits. The Company completed the systems conversion and merged Hardeman into Simmons Bank in September 2017. As part of the systems conversion, 5 existing Simmons and First South Bank branches were consolidated or closed.

Goodwill of ~~$29.4~~$174.1 million was recorded as a result of the transaction. The merger strengthened the Company’s position in the ~~western Tennessee~~Texas market and brought forth additional opportunities in the ~~Company will be able to achieve cost savings by integrating the two companies and combining accounting, data processing, and other administrative functions, all of~~Company’s current footprint, which gave rise to the goodwill recorded. The goodwill will not be deductible for tax purposes.

A summary, at fair value, of the assets acquired and liabilities assumed in the ~~Hardeman transaction,~~Spirit acquisition, as of the acquisition date, is as follows:

During 2023, the ~~timing of the acquisition. Management will continue to review the estimated fair values and evaluate the assumed tax positions. The~~ Company ~~expects to finalize~~finalized its analysis of the loans acquired along with other acquired assets and assumed liabilities ~~in this transaction over the next few months, within one year of the acquisition. Therefore, adjustments~~related to the ~~estimated amounts and carrying values may occur.~~

Spirit acquisition.

The Company’s operating results ~~for 2017~~ include the operating results of the acquired assets and assumed liabilities of ~~Hardeman~~Spirit subsequent to the acquisition date.

~~Citizens National Bank~~

~~On September 9, 2016,~~

The unaudited pro forma information below for the years ended December 31, 2022 and 2021 gives effect to the Spirit acquisition as if the acquisition had occurred on January 1, 2021. Pro forma earnings for the year ended December 31, 2022 were adjusted to exclude $18.7 million of acquisition-related costs, net of tax, incurred by the Company ~~completed~~during 2022. The pro forma financial information is not necessarily indicative of the results of operations if the acquisition ~~of Citizens National Bank (“Citizens”), headquartered in Athens, Tennessee. The Company issued 835,741 shares of its common stock valued at approximately $41.3 million~~had been effective as of ~~September 9, 2016,~~this date.

(1) Net interest income plus ~~$35.0 million in cash in exchange~~non-interest income.

As previously discussed, the Company’s acquisition of Spirit was completed on April 8, 2022, at which time Spirit was fully integrated into the Company’s operations. As a result, it is impracticable for ~~all outstanding shares of Citizens common stock.~~

~~Prior~~the Company to provide certain post-closing information, such as revenue and earnings, as it relates to the acquisition, Citizens conducted banking business from 9 branches located in east Tennessee. Including the effects of the acquisition method accounting adjustments, the Company acquired approximately $585.1 million in assets, including approximately $340.9 million in loans (inclusive of loan discounts) and approximately $509.9 million in deposits. The Company completed the systems conversion and merged Citizens into Simmons Bank in October 2016.

Spirit acquisition.

(In thousands) Acquired from
Citizens Fair Value
Adjustments Fair
Value

Assets Acquired
Cash and due from banks $ 131,467 $ (351 ) $ 131,116
Federal funds sold 10,000 -- 10,000
Investment securities 61,987 1 61,988
Loans acquired 350,361 (9,511 ) 340,850
Allowance for loan losses (4,313 ) 4,313 --
Foreclosed assets 4,960 (1,518 ) 3,442
Premises and equipment 6,746 1,339 8,085
Bank owned life insurance 6,632 -- 6,632
Core deposit intangible -- 5,075 5,075
Other intangibles -- 591 591
Other assets 17,364 6 17,370
Total assets acquired $ 585,204 $ (55 ) $ 585,149

Liabilities Assumed
Deposits:
Non-interest bearing transaction accounts $ 109,281 $ -- $ 109,281
Interest bearing transaction accounts and savings deposits 204,912 -- 204,912
Time deposits 195,664 -- 195,664
Total deposits 509,857 -- 509,857
Securities sold under agreement to repurchase 13,233 -- 13,233
FHLB borrowings 4,000 47 4,047
Accrued interest and other liabilities 3,558 1,530 5,088
Total liabilities assumed 530,648 1,577 532,225
Equity 54,556 (54,556 ) --
Total equity assumed 54,556 (54,556 ) --
Total liabilities and equity assumed $ 585,204 $ (52,979 ) $ 532,225
Net assets acquired 52,924
Purchase price 76,300
Goodwill $ 23,376

Held-to-maturity (“HTM”) securities, which include any security for which the Company has both the positive intent and ability to hold until maturity, are carried at historical cost adjusted for amortization of premiums and accretion of discounts. Premiums and discounts are amortized and accreted, respectively, to interest income using the constant effective yield method over the security’s estimated life. Prepayments are anticipated for mortgage-backed and SBA securities. Premiums on callable securities are amortized to their earliest call date.

Available-for-sale (“AFS”) securities, which include any security for which the Company has no immediate plan to sell but which may be sold in the future, are carried at fair value. Realized gains and losses, based on specifically identified amortized cost of the individual security, are included in other income. Unrealized gains and losses are recorded, net of related income tax effects, in stockholders’ equity, further discussed below. Premiums and discounts are amortized and accreted, respectively, to interest income using the constant effective yield method over the estimated life of the security. Prepayments are anticipated for mortgage-backed and SBA securities. Premiums on callable securities are amortized to their earliest call date.

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. As of September 30, 2023, the related remaining combined net unrealized losses of $131.2 million in accumulated other comprehensive income (loss) will be amortized over the remaining life of the securities. No gains or losses on these securities were recognized at the time of transfer.

Mortgage-backed securities (“MBS”) are commercial MBS, secured by commercial properties, and ~~the Federal Home Loan Bank, are carried at cost and are reported as other AFS~~residential MBS, generally secured by single-family residential properties. All mortgage-backed securities included in the table ~~above.~~

~~Certain~~above were issued by U.S. government agencies or corporations. As of September 30, 2023, HTM MBS consists of $143.1 million and $1.04 billion of commercial MBS and residential MBS, respectively. As of December 31, 2022, HTM MBS consists of $149.2 million and $1.04 billion of commercial MBS and residential MBS, respectively.

The amortized cost, fair value and allowance for credit losses of investment securities that are ~~valued at less than their historical cost. Total fair value~~classified as AFS are as follows:

As of ~~these investments~~September 30, 2023, AFS MBS consists of $859.9 million and $1.30 billion of commercial MBS and residential MBS, respectively. As of December 31, 2022, AFS MBS consists of $1.07 billion and $1.47 billion of commercial MBS and residential MBS, respectively.

Accrued interest receivable on HTM and AFS securities at September 30, ~~2017,~~2023 was ~~$1.2 billion, which~~$17.5 million and $18.6 million, respectively, and is ~~approximately 69.7%~~included in interest receivable on the consolidated balance sheets. The Company has made the election to exclude all accrued interest receivable from securities from the estimate of ~~the Company’s combined AFS and HTM investment portfolios.~~

credit losses.

The following table ~~shows the gross unrealized losses and fair value of~~summarizes the Company’s AFS investments ~~with~~in an unrealized ~~losses,~~loss position for which an allowance for credit loss has not been recorded as of September 30, 2023, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss ~~position at~~position:

As of September 30, ~~2017:~~

Less Than 12 Months 12 Months or More Total
(In thousands) Estimated
Fair
Value Gross
Unrealized
Losses Estimated
Fair
Value Gross
Unrealized
Losses Estimated
Fair
Value Gross
Unrealized
Losses
Held-to-Maturity
U.S. Government agencies $ 12,947 $ (53 ) $ 39,913 $ (87 ) $ 52,860 $ (140 )
Mortgage-backed securities 4,094 (42 ) 6,687 (149 ) 10,781 (191 )
State and political subdivisions 11,300 (41 ) 2,634 (14 ) 13,934 (55 )
Total HTM $ 28,341 $ (136 ) $ 49,234 $ (250 ) $ 77,575 $ (386 )

Available-for-Sale
U.S. Government agencies $ 66,254 $ (750 ) $ 82,211 $ (1,307 ) $ 148,465 $ (2,057 )
Mortgage-backed securities 626,560 (7,458 ) 273,883 (6,075 ) 900,443 (13,533 )
State and political subdivisions 1,813 (32 ) 76,781 (2,712 ) 78,594 (2,744 )
Other securities -- -- 100 -- 100 --
Total AFS $ 694,627 $ (8,240 ) $ 432,975 $ (10,094 ) $ 1,127,602 $ (18,334 )

~~These declines primarily resulted from~~2023, the Company’s investment portfolio included $3.36 billion of AFS securities, of which $3.33 billion, or 99.1%, were in an unrealized loss position that were not deemed to have credit losses. A portion of the unrealized losses were related to the Company’s MBS, which are issued and guaranteed by U.S. government-sponsored entities and agencies, and the Company’s state and political subdivision securities, specifically investments in insured fixed rate municipal bonds for ~~these~~which the issuers continue to make timely principal and interest payments under the contractual terms of the securities.

Furthermore, the decline in fair value for each of the above AFS securities is attributable to the rates for those investments yielding less than current market rates. Based on evaluation of available evidence, management believes the declines in fair value for these securities are temporary. Management does not have the intent to sell these securities and management believes it is more likely than not the Company will not have to sell these securities before recovery of their amortized cost basis less any current period credit losses.

Declines in the fair value of HTM and AFS securities below their cost that are deemed to be other than temporary are reflected in earnings as realized losses. In estimating other-than-temporary impairment losses, management considers, among other things, (i) the length of time and the extent to which the fair value has been less than cost, (ii) the financial condition and near-term prospects of the issuer, and (iii) the intent and ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value.

Management has the ability and intent to hold the securities classified as held to maturity until they mature, at which time the Company expects to receive full value for the securities. Furthermore, as of September 30, 2017, management also had the ability and intent to hold the securities classified as AFS for a period of time sufficient for a recovery of cost. The unrealized losses are largely due to increases in market interest rates over the yields available at the time the underlying securities were purchased. The fair value is expected to recover as the bonds approach their maturity date or repricing date or if market yields for such investments decline. Management does not believe any of the securities are impaired due to reasons of credit quality. Management believes the declines in fair value for the securities are temporary. Management does not have the immediate intent to sell the securities, and management believes the accounting standard of “more likely than not” has not been met regarding whether the Company would be required to sell any of the AFS securities before recovery of amortized cost.

All MBS held by the Company are issued by U.S. government-sponsored entities and agencies. These securities are either explicitly or implicitly guaranteed by the U.S. government, highly rated by major rating agencies and have a long history of no credit losses. Accordingly, no allowance for credit losses has been recorded for these securities.

Regarding securities issued by state and political subdivisions and other HTM securities, the adequacy of the reserve for credit loss is determined quarterly based on methodology similar to the methodology for determining the allowance for credit losses on loans. The methodology considers, but is not limited to: (i) issuer bond ratings, (ii) issuer geography, (iii) whether issuers continue to make timely principal and interest payments under the contractual terms of the securities, (iv) probability-weighted multiple scenario forecasts, and (v) the issuers’ size.

The following table details activity in the allowance for credit losses by investment security type for the three and nine months ended September 30, 2023 on the Company’s HTM and AFS securities portfolios.

Activity in the allowance for credit losses by investment security type for the three and nine months ended September 30, 2022 on the Company’s HTM securities portfolio was as follows:

Based upon the Company’s analysis of the underlying risk characteristics of its AFS portfolio, including credit ratings and other qualitative factors, as previously discussed, the provision for credit losses related to AFS securities recorded for the nine months ended September 30, 2023 was $10.3 million, while the provision for credit losses related to AFS securities was reduced by $1.2 million during the three months ended September 30, 2023. During the nine months ended September 30, 2023, the Company charged-off $7.0 million directly related to one corporate bond which was deemed uncollectible in the period. The remaining allowance for credit loss on the AFS portfolio of $1.2 million at September 30, 2023 is related to outstanding exposure for two nonperforming corporate bonds.

The following table summarizes bond ratings for the Company’s HTM portfolio, based upon amortized cost, issued by state and political subdivisions and other securities as of September 30, ~~2017, management believes the impairments detailed~~2023:

Historical loss rates associated with securities having similar grades as those in the ~~table above~~Company’s portfolio have generally not been significant. Pre-refunded securities, if any, have been defeased by the issuer and are ~~temporary. Should~~fully secured by cash and/or U.S. Treasury securities held in escrow for payment to holders when the ~~impairment of any of these securities become other than temporary, the cost basis~~underlying call dates of the ~~investment will be reduced and the resulting loss recognized in net income in the period the other-than-temporary impairment is identified.~~

securities are reached.

The amortized cost and estimated fair value by maturity of securities as of September 30, 2023 are shown in the following table. Securities are classified according to their contractual maturities without consideration of principal amortization, potential prepayments or call options. Accordingly, actual maturities may differ from contractual maturities.

There were ~~$3,000 of~~no gross realized gains and no gross realized losses from the call or sale of securities during the three months ended September 30, ~~2017 and $2.3 million of~~2023. There were no gross realized gains and ~~$5,000~~$391,000 of gross realized losses recorded from the sale of securities during the nine months ended September 30, ~~2017.~~2023. There were ~~$315,000~~approximately $8,000 of gross realized gains and no$30,000 of gross realized losses from the sale and call of securities during the three months ended September 30, ~~2016~~2022, and ~~$4.4 million~~approximately $45,000 of gross realized gains and no$271,000 of gross realized losses from the sale and call of securities during the nine months ended September 30, ~~2016.~~

2022. The ~~state~~income tax expense/benefit related to security gains/losses was 26.135% of the gross amounts in 2023 and ~~political subdivision debt obligations are predominately non-rated bonds representing small issuances, primarily in Arkansas, Missouri, Tennessee~~2022.

The Company has entered into various fair value hedging transactions to mitigate the impact of changing interest rates on the fair value of AFS securities. See Note 23, Derivative Instruments, for disclosure of the gains and ~~Texas issues, which are evaluated~~losses recognized on ~~an ongoing basis.~~

derivative instruments and the cumulative fair value hedging adjustments to the carrying amount of the hedged securities.

In connection with the acquisition of Spirit, the Company ~~through its bank subsidiary, Simmons Bank,~~ acquired ~~the stock~~a portfolio of ~~Heartland Bank at a public auction to satisfy certain indebtedness of its holding company, Rock Bancshares, Inc. The Company recorded $182.4 million of other assets~~loans which were identified as held for sale ~~and $177.0~~by the acquired bank prior to the completion of the acquisition. These loans were valued at $35.2 million, net of fair value discounts, at the date of acquisition with no remaining balance as of September 30, 2023.

As of September 30, 2023, there were no outstanding other liabilities held for ~~sale, at fair value as of the date of the transaction.~~

The Company is actively marketing and exploring a plan to sell the acquired assets and liabilities of Heartland Bank and expects to complete a sale within one year of acquisition. Heartland Bank remains a separate operating entity, and any sale will be conducted on terms that are mutually agreeable to both parties.

~~The following is a description of the methods used to determine the purchase price allocation for fair values of significant assets and liabilities presented in the Heartland Bank transaction.~~

~~Cash and due from banks, time deposits due from banks and federal funds sold~~~~– The carrying amount of these assets is a reasonable estimate of fair value based on the short-term nature of these assets.~~

~~Investment securities~~ ~~– The carrying amount of these assets was deemed to be a reasonable estimate of fair value, as there were no material differences to fair value based upon quoted market prices.~~

~~Loans acquired~~ – Fair values for loans were based on a discounted cash flow methodology that considered factors including the type of loan and related collateral, classification status, fixed or variable interest rate, term of loan and whether or not the loan was amortizing, and current discount rates. The discount rates used for loans are based on current market rates for new originations of comparable loans and include adjustments for liquidity concerns. The discount rate does not include a factor for credit losses as that has been included in the estimated cash flows. Loans were grouped together according to similar characteristics and were treated in the aggregate when applying various valuation techniques.

~~Premises and equipment~~ – Bank premises and equipment were acquired with an adjustment to fair value, which represents the difference between the Company’s current analysis of property and equipment values completed in connection with the acquisition and book value acquired.

~~Core deposit intangible~~ – This intangible asset represents the value of the relationships that Heartland Bank had with its deposit customers. The fair value of this intangible asset was estimated based on a discounted cash flow methodology that gave appropriate consideration to expected customer attrition rates, cost of the deposit base and the net maintenance cost attributable to customer deposits.

~~Deposits~~ – The fair values used for the demand and savings deposits that comprise the transaction accounts acquired, by definition equal the amount payable on demand at the acquisition date. The Company performed a fair value analysis of the estimated weighted average interest rate of the certificates of deposits compared to the current market rates and determined the difference was not material.

sale.

At September 30, ~~2017,~~2023, the Company’s loan portfolio was ~~$6.303~~$16.77 billion, compared to ~~$5.633~~$16.14 billion at December 31, ~~2016.~~2022. The various categories of loans are summarized as follows:

The above table presents total loans at amortized cost. The difference between amortized cost and unpaid principal balance is primarily premiums and discounts associated with acquisition date fair value adjustments on acquired loans as well as deferred origination costs and fees totaling $7.7 million and $26.4 million at September 30, 2023 and December 31, 2022, respectively.

Accrued interest on loans, which is excluded from the amortized cost of loans held for investment, totaled $74.3 million and $65.4 million at September 30, 2023 and December 31, 2022, respectively, and is included in interest receivable on the consolidated balance sheets.

apartment, retail and hotel – also experience different cycles, providing an opportunity to lower the overall risk through diversification across types of CRE loans. Management realizes that local demand and supply conditions will also mean that different geographic areas will experience cycles of different amplitude and ~~length.~~duration. The Company monitors these loans closely.

As of September 30, 2023 and December 31, 2022, nonaccrual loans for which there was no related allowance for credit losses had an amortized cost of $9.2 million and $16.9 million, respectively. These loans are individually assessed and do not hold an allowance due to being adequately collateralized under the collateral-dependent valuation method.

The Company has internal loan ~~is considered impaired when it is probable that the~~modification programs for borrowers experiencing financial difficulties. Modifications to borrowers experiencing financial difficulties may include interest rate reductions, principal or interest forgiveness and/or term extensions. The Company ~~will not receive all amounts due according to the contractual terms~~primarily uses interest rate reduction and/or payment modifications or extensions, with an occasional forgiveness of principal.

The following table presents a summary of the loans, including scheduled principal and interest payments. This includes loans that are delinquent 90 days or more, nonaccrual loans and certain other loans identified by management. Certain other loans identified by management consistamortized cost basis of ~~performing loans with specific allocations of the allowance for~~ loan ~~losses. Impaired loans are carried at the present value of estimated future cash flows using the loan’s existing rate, or the fair value of the collateral if the loan is collateral dependent.~~

Impairment is evaluated in total for smaller-balance loans of a similar nature and on an individual loan basis for other loans. Impaired loans, or portions thereof, are charged-off when deemed uncollectible.

~~Impaired loans, net of government guarantees and excluding loans acquired,~~modifications granted to borrowers experiencing financial difficulty, segregated by class of loans ~~are as follows:~~

(In thousands) Unpaid
Contractual
Principal
Balance Recorded Investment
With No
Allowance Recorded
Investment
With Allowance Total
Recorded
Investment Related
Allowance Average
Investment in Impaired
Loans Interest
Income
Recognized Average Investment in
Impaired
Loans Interest
Income Recognized
September 30, 2017 Three Months Ended
September 30, 2017 Nine Months Ended
September 30, 2017
Consumer:
Credit cards $ 273 $ 273 $ -- $ 273 $ -- $ 283 $ 12 $ 292 $ 23
Other consumer 4,022 3,880 -- 3,880 -- 3,314 23 2,711 53
Total consumer 4,295 4,153 -- 4,153 -- 3,597 35 3,003 76
Real estate:
Construction 2,652 1,496 907 2,403 220 2,582 17 2,828 56
Single family residential 13,782 12,450 584 13,034 53 12,878 85 12,772 251
Other commercial 19,065 7,260 10,983 18,243 2,052 19,306 121 19,313 380
Total real estate 35,499 21,206 12,474 33,680 2,325 34,766 223 34,913 687
Commercial:
Commercial 13,774 4,805 8,112 12,917 3,996 14,543 84 12,943 255
Agricultural 2,184 1,059 -- 1,059 -- 1,562 8 1,645 32
Total commercial 15,958 5,864 8,112 13,976 3,996 16,105 92 14,588 287
Total $ 55,752 $ 31,223 $ 20,586 $ 51,809 $ 6,321 $ 54,468 $ 350 $ 52,504 $ 1,050

December 31, 2016 Three Months Ended
September 30, 2016 Nine Months Ended
September 30, 2016
Consumer:
Credit cards $ 373 $ 373 $ -- $ 373 $ -- $ 439 $ -- $ 340 $ 10
Other consumer 1,836 1,797 3 1,800 1 1,324 14 882 32
Total consumer 2,209 2,170 3 2,173 1 1,763 14 1,222 42
Real estate:
Construction 4,275 1,038 2,374 3,412 156 4,474 44 4,692 170
Single family residential 12,970 10,630 1,753 12,383 162 10,897 119 8,762 317
Other commercial 20,993 6,891 7,315 14,206 99 18,981 178 15,113 547
Total real estate 38,238 18,559 11,442 30,001 417 34,352 341 28,567 1,034
Commercial:
Commercial 11,848 2,734 7,573 10,307 262 4,402 59 3,256 118
Agricultural 2,226 1,215 -- 1,215 -- 1,604 16 1,003 36
Total commercial 14,074 3,949 7,573 11,522 262 6,006 75 4,259 154
Total $ 54,521 $ 24,678 $ 19,018 $ 43,696 $ 680 $ 42,121 $ 430 $ 34,048 $ 1,230

Atand type of loan modification, for the three and nine month periods ended September 30, ~~2017,~~2023.

The financial effects of the modified loans made to borrowers experiencing financial difficulty in the commercial portfolio were not significant during the three and ~~December 31, 2016, impaired loans, net of government guarantees~~nine month periods ended September 30, 2023 and ~~excluding loans acquired, totaled $51.8 million and $43.7 million, respectively. Allocations~~did not significantly impact the Company’s determination of the allowance for ~~loan~~credit losses ~~relative to impaired~~on loans were $6.3 million and $680,000 at September 30, 2017 and December 31, 2016, respectively. Approximately $350,000 and $1.1 million of interest income was recognized on average impaired loans of $54.5 million and $52.5 million forduring the periods.

During the three and nine months ended September 30, ~~2017. Interest income recognized on impaired loans on~~2023, the Company modified one loan related to the other CRE portfolio, whereby the borrower was experiencing financial difficulty at the time of modification. The modification allowed for two months of interest only payments with the remaining balance due at maturity. Upon modification, a ~~cash basis~~charge-off of $9.6 million was recorded in relation to this modified loan during the third quarter of 2023. As a result of the other CRE loan modified during the three and nine months ended September 30, ~~2017~~2023 being collateral-dependent, the impact to the Company’s allowance for credit losses on loans was the difference between the fair value of the underlying collateral, adjusted for selling costs, and ~~2016 was not material.~~

~~Included~~the remaining outstanding principal balance of the loan.

The Company closely monitors the performance of loans that are modified to borrowers experiencing financial difficulty. Loans modified during the three and nine month periods ended September 30, 2023 were all current at September 30, 2023, with no loans in ~~certain impaired loan categories~~past due status. Additionally, there were no modified loans for which a payment default occurred during the three and nine month periods ended September 30, 2023 and were modified within twelve months prior to default. In relation to loans modified to borrowers experiencing financial difficulty, the Company defines a payment default as a payment received more than 90 days after its due date.

At September 30, 2023 and December 31, 2022, the Company had $1.4 million and $3.0 million, respectively, of consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings are ~~troubled debt restructurings~~in process. At September 30, 2023 and December 31, 2022, the Company had $312,000 and $853,000, respectively, of Other Real Estate Owned (“~~TDRs”~~OREO”). secured by residential real estate properties.

When the Company ~~restructures~~restructured a loan to a borrower that iswas experiencing financial difficulty and ~~grants~~granted a concession that it would not otherwise consider, a “troubled debt restructuring” ~~results~~(“TDR”) resulted, and the Company ~~classifies~~classified the loan as a TDR. The Company ~~grants~~granted various types of concessions, primarily interest rate reduction and/or payment modifications or extensions, with an occasional forgiveness of principal.

Once an obligation ~~has been~~was restructured because of such credit problems, it ~~continues~~continued to be considered a TDR until paid in full; or, if an obligation ~~yields~~yielded a market interest rate and no longer has any concession regarding payment amount or amortization, then it iswas not considered a TDR at the beginning of the calendar year after the year in which the improvement ~~takes~~had taken place. The Company ~~returns~~returned TDRs to accrual status only if (1) all contractual amounts due ~~can~~were reasonably be expected to be repaid within a prudent period and (2) repayment ~~has been~~was in accordance with the contract for a sustained period, typically at least six months.

TDRs were individually evaluated for expected credit losses. The Company assessed the exposure for each modification, either by the fair value of the underlying collateral or the present value of expected cash flows, and determined if a specific allowance for credit losses was needed.

The following table presents loans that were restructured as TDRs during the three and nine ~~months~~month periods ended September 30, ~~2017 and 2016, excluding loans acquired, segregated by class of loans.~~

2022.

During the three months ended September 30, ~~2017,~~2022, the Company modified one loan with a recorded investment of $608,000 prior to modification that was deemed troubled debt restructuring. The restructured loan was modified by changing the maturity date. Based on the fair value of the collateral, no specific reserve was determined necessary for this loan. Also, there was no immediate financial impact from the restructuring of the loan, as it was not considered necessary to charge-off interest or principal on the date of restructure.

~~During the nine months ended September 30, 2017, the Company modified 13~~three loans with a recorded investment of ~~$9.2 million~~$747,000 prior to modification, which ~~was~~were deemed ~~troubled debt restructuring.~~TDRs. The restructured loans were modified by ~~deferring amortized principal payments, changing~~reducing the ~~maturity date and requiring~~ interest ~~only payments for a period of 12 months. Based~~rate on the ~~fair value of the collateral, a~~loan. No specific reserve ~~of $33,000~~ was ~~determined necessary for~~recorded with respect to these ~~loans.~~TDRs. Also, there was no immediate financial impact from the restructuring of these loans, as it was not considered necessary to charge-off interest or principal on the date of restructure.

During the ~~three~~nine months ended September 30, ~~2016,~~2022, the Company modified 21four loans with a recorded investment of ~~$3.0 million and during the nine months ended September 30, 2016, the Company modified 67 loans with a total recorded investment of $13.4 million~~$760,000 prior to modification, which were deemed ~~troubled debt restructuring.~~TDRs. The restructured loans were modified by ~~changing various terms, including changing~~reducing the ~~maturity date, deferring amortized principal payments and requiring~~ interest ~~only payments for a period of 12 months. Based~~rate on the ~~fair value of the collateral, a~~loan.

No specific reserve ~~of $402,000~~ was ~~determined necessary for~~recorded with respect to these ~~loans.~~TDRs. Also, there was no immediate financial impact from the restructuring of these loans, as it was not considered necessary to charge-off interest or principal on the date of restructure.

~~There was one commercial real estate loan~~

Additionally, there were no loans considered TDRs for which a payment default occurred during the nine months ended September 30, 2017, and that had been modified as a TDR within 12 months or less of the payment default, excluding loans acquired. A charge off of approximately $440,000 was recorded for this loan during the third quarter 2017. 2022.

There was one consumer loan for which a payment default occurred during the nine months ended September 30, 2016, that had been modified as a TDR within 12 months or less of the payment default, excluding loans acquired. A charge off of $39,000 was recorded for this loan. We define a payment default as a payment received more than 90 days after its due date.

~~In addition to the TDRs that occurred during the period provided in the preceding tables, the Company had~~were no TDRs with pre-modification loan balances ~~of $117,000 and $166,500 at September 30, 2017 and 2016, respectively,~~ for which ~~other real estate owned (“OREO”)~~OREO was received in full or partial satisfaction of the ~~loans. The majority of such TDRs were in commercial real estate~~loans during the three and ~~residential real estate. At~~nine month period ended September 30, 2017 and December 31, 2016, the Company had $1,180,000 and $1,714,000, respectively, of consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings are in process. At September 30, 2017 and December 31, 2016, the Company had $5,275,000 and $5,094,000, respectively, of OREO secured by residential real estate properties.

2022.

The Company utilizes a risk rating matrix to assign a risk rate to each of its commercial and real estate loans. ~~Loans~~Risk ratings are ~~rated~~updated on ~~a scale of 1~~an ongoing basis and are subject to 8.change by continuous loan monitoring processes including lending management monitoring, executive management and board committee oversight, and independent credit review. A description of the general characteristics of the 8 risk ratings is as follows:

·

~~Risk Rate 1 – Pass (Excellent)~~ ~~– This category includes loans which are virtually free of credit risk. Borrowers in this category represent the highest credit quality and greatest financial strength.~~

·

~~Risk Rate 2 – Pass (Good)~~ - Loans under this category possess a nominal risk of default. This category includes borrowers with strong financial strength and superior financial ratios and trends. These loans are generally fully secured by cash or equivalents (other than those rated "excellent”).

·

~~Risk Rate 3 – Pass (Acceptable – Average)~~ - Loans in this category are considered to possess a normal level of risk. Borrowers in this category have satisfactory financial strength and adequate cash flow coverage to service debt requirements. If secured, the perfected collateral should be of acceptable quality and within established borrowing parameters.

·

~~Risk Rate 4 – Pass (Monitor)~~ - Loans in the Watch (Monitor) category exhibit an overall acceptable level of risk, but that risk may be increased by certain conditions, which represent "red flags". These "red flags" require a higher level of supervision or monitoring than the normal "Pass" rated credit. The borrower may be experiencing these conditions for the first time, or it may be recovering from weakness, which at one time justified a harsher rating. These conditions may include: weaknesses in financial trends; marginal cash flow; one-time negative operating results; non-compliance with policy or borrowing agreements; poor diversity in operations; lack of adequate monitoring information or lender supervision; questionable management ability/stability.

·

~~Risk Rate 5 – Special Mention~~ - A loan in this category has potential weaknesses that deserve management's close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or in the institution's credit position at some future date. Special Mention loans are not adversely classified (although they are "criticized") and do not expose an institution to sufficient risk to warrant adverse classification. Borrowers may be experiencing adverse operating trends, or an ill-proportioned balance sheet. Non-financial characteristics of a Special Mention rating may include management problems, pending litigation, a non-existent, or ineffective loan agreement or other material structural weakness, and/or other significant deviation from prudent lending practices.

The Company uses a dual risk rating scale that utilizes quantitative models and qualitative factors (“score cards”) to assist in determining the appropriate risk rating for its commercial loans. This dual risk rating methodology incorporates a “probability of default” analysis which utilizes quantified metrics such as loan terms and financial performance, as well as a “loss given default” analysis which utilizes collateral values and economics of the market, among other attributes. Model outputs are reviewed and analyzed to ensure the projected risk levels are commensurate with underwriting and credit leader expectations. The risk rating scale includes Probability of Default levels of 1 – 16 and Loss Given Default levels of A – I. The scale allows for more granular recognition of risk and diversification of grading among traditional Pass grades.

The following is a reconciliation between the expanded risk rating scale and the Company’s traditional risk rating segments utilized within the commercial loan classes presented in the credit quality indicator tables.

In addition to the allowance for credit losses, the Company has established a reserve for unfunded commitments, classified in other liabilities. This reserve is maintained at a level management believes to be sufficient to absorb losses arising from unfunded loan commitments. The reserve for unfunded commitments was $25.6 million and ~~2016~~$41.9 million as of September 30, 2023 and December 31, 2022, respectively. The adequacy of the reserve for unfunded commitments is ~~shown below:~~

Three Months Ended
September 30, Nine Months Ended
September 30,
(In thousands) 2017 2016 2017 2016

Impact on net interest income and pre-tax income $ 23 $ 65 $ 2,596 $ 1,240

Net impact, net of taxes $ 14 $ 40 $ 1,578 $ 754

determined quarterly based on methodology similar to the methodology for determining the allowance for credit losses. During the three and nine month periods ended September 30, 2023, $11.3 million and $16.3 million, respectively, was released from the reserve for unfunded commitments primarily due to a decline in unfunded commitments resulting from customers utilizing lines of credit during the periods. For the three month period ended September 30, 2022, an adjustment to the reserve for unfunded commitments resulted in an expense of $16.0 million due to the overall increase in unfunded commitments, primarily made up of commercial construction loans, which receive a higher reserve allocation than other loans. For the nine month period ended September 30, 2022 an adjustment to the reserve for unfunded commitments resulted in an expense of $19.5 million, made up of the increase previously discussed combined with the Day 2 provision related to the Spirit acquisition. These adjustments ~~will~~were included in the provision for credit losses in the statement of income.

Provision for credit losses is determined by the Company as the amount to be ~~recognized~~added to the allowance for credit loss accounts for various types of financial instruments including loans, securities and off-balance-sheet credit exposure after net charge-offs have been deducted to bring the allowance to a level which, in management’s best estimate, is necessary to absorb expected credit losses over the ~~remaining~~ lives of the ~~purchased credit impaired loans.~~ respective financial instruments.

The ~~accretable yield adjustments recorded in future periods will change as the Company continues to evaluate expected cash flows from the purchased credit impaired loans.~~

~~Changes in the carrying amount~~components of the ~~accretable yield~~provision for ~~all purchased impaired loans were as follows~~credit losses for the three and nine ~~months~~month periods ended September 30, ~~2017~~2023 and ~~2016.~~

2022 were as follows:

The following table provides a summary of loans purchased as part of the Spirit acquisition with credit deterioration at acquisition:

The Company’s leases are classified as operating leases with a term, including expected renewal or termination options, greater than one year, and are related to ~~have experienced impairment in the estimated credit quality or cash flows, the Company recorded a provision~~certain office facilities and ~~established an allowance for loan losses for loans acquired resulting in a total allowance on loans acquired~~office equipment. The following table presents information as of ~~$391,000 at~~ September 30, ~~2017~~2023 and ~~$954,000 at~~ December 31, ~~2016. There was no provision on loans acquired~~2022 related to the Company’s right-of-use lease assets, included in premises and equipment, and lease liabilities, included in accrued interest and other liabilities.

Operating lease cost for ~~the three months ended September 30, 2017. The provision on loans acquired for the nine months ended September 30, 2017 was $1.5 million. The provision on loans acquired during~~ the three and nine ~~months~~month periods ended September 30, ~~2016~~2023 was ~~$215,000~~$4.2 million and ~~$522,000.~~

$11.7 million, respectively, as compared to $3.6 million and $10.5 million for the same periods in 2022.

Premises and equipment are stated at cost less accumulated depreciation and amortization. Total premises and equipment, net at September 30, 2023 and December 31, 2022 were as follows:

Goodwill is tested annually, or more often than annually, if circumstances warrant, for impairment. If the implied fair value of goodwill is lower than its carrying amount, goodwill impairment is indicated, and goodwill is written down to its implied fair value. Subsequent increases in goodwill value are not recognized in the financial statements. Goodwill totaled ~~$375.7 million~~$1.32 billion at September 30, ~~2017~~2023 and ~~$348.5 million at~~ December 31, ~~2016.~~

The change in goodwill during 2017 primarily includes $29.4 million recorded as a result of the Company’s 2017 Hardeman acquisition, which is not deductible for tax purposes, partially offset by $4.1 million due to the sale of the Company’s property and casualty insurance lines of business. 2022.

Goodwill impairment was neither indicated nor recorded during the nine months ended September 30, ~~2017~~2023 or the year ended December 31, ~~2016.~~

2022. During March of 2023, the Company’s share price began to decline as markets in the United States (“US”) responded to the sudden collapse of two US banks. As a result of the decrease in the Company’s market capitalization, the Company performed an interim goodwill impairment qualitative assessment during the first quarter of 2023 and concluded that it was more likely-than-not that the fair value of goodwill continued to exceed its carrying value and therefore, goodwill was not impaired. During the second quarter of 2023, the Company performed the annual goodwill impairment analysis and concluded that it is more likely-than-not that the fair value of goodwill continues to exceed its carrying value and therefore, goodwill is not impaired. During the third quarter of 2023, the Company once again performed an interim goodwill impairment assessment and concluded no impairment existed. While the goodwill impairment analysis indicated no impairment at September 30, 2023, the Company’s assessment depends on several assumptions which are dependent on market and economic conditions, and future changes in those conditions could impact the Company’s assessment in the future.

Core deposit premiums represent the value of the relationships that acquired banks had with their deposit customers and are amortized over periods ranging from 10 years to 15 years and are periodically evaluated, at least annually, as to the recoverability of their carrying value. ~~Core deposit premiums~~Other intangible assets represent the value of $7.8 million were recorded during the second quarter of 2017 as part of the Hardeman acquisition. Core deposit premiums of $5.1 million were recorded in the fourth quarter of 2016 as part of the Citizens acquisition.

~~Intangible assets~~other acquired relationships, including relationships with trust and wealth management customers, and are being amortized over various periods ranging from 108 years to 15 years.

Changes in the carrying amount and accumulated amortization of the Company’s core deposit premiums and other intangible assets at September 30, 2023 and December 31, 2022 were as follows:

_________________________

(1) A core deposit premium of $36.5 million was recorded during 2022 as part of the Spirit acquisition. See Note 2, Acquisitions, for additional information.

(2) The Company recorded ~~$830,000 of intangible assets~~$2.1 million during ~~the second quarter of 2017~~2022 related to servicing assets acquired as part of the ~~insurance operations acquired in the Hardeman~~Spirit acquisition. See Note 2, Acquisitions, for additional information.

The Company recorded $591,000 of intangible assets during the fourth quarter of 2016 related to the trust operations acquired in the Citizens acquisition. Intangible assets decreased by $1.3 million due to the sale of insurance lines of business during the third quarter of 2017.

~~The Company’s goodwill and other intangibles (carrying~~carrying basis and accumulated ~~amortization)~~amortization of the Company’s other intangible assets at September 30, ~~2017~~2023 and December 31, ~~2016,~~2022 were as follows:

Time deposits ~~include~~included approximately ~~$635,765,000~~$1.67 billion and ~~$600,280,000~~$1.08 billion of certificates of deposit ~~of $100,000 or more at September 30, 2017, and December 31, 2016, respectively. Of this total approximately $255,168,000 and $193,596,000 of certificates of deposit were~~ over $250,000 at September 30, ~~2017~~2023 and December 31, ~~2016,~~2022, respectively.

Brokered time deposits were $3.26 billion and $2.75 billion at September 30, 2023 and December 31, 2022, respectively.

The provision for income taxes is comprised of the following ~~components:~~

components for the periods indicated below:

The tax effects of temporary differences ~~related~~between the tax basis of assets and liabilities and their financial reporting amounts that give rise to deferred ~~taxes shown on the balance sheets were:~~

income tax assets and liabilities, and their approximate tax effects, are as follows:

A reconciliation of income tax expense at the statutory rate to the ~~Company's~~Company’s actual income tax expense is shown for the ~~three and nine months ended September 30 is shown~~periods indicated below:

Three Months Ended
September 30, Nine Months Ended
September 30,
(In thousands) 2017 2016 2017 2016

Computed at the statutory rate (35%) $ 15,235 $ 11,974 $ 38,313 $ 36,418
Increase (decrease) in taxes resulting from:
State income taxes, net of federal tax benefit 342 21 1,117 1,390
Discrete items related to ASU 2016-09 5 -- (1,372 ) --
Tax exempt interest income (955 ) (1,072 ) (3,160 ) (3,120 )
Tax exempt earnings on BOLI (178 ) (146 ) (616 ) (665 )
Merger related expenses 187 131 559 131
Federal tax credits (397 ) (890 ) (1,190 ) (943 )
Other differences, net 439 764 1,778 998
Actual tax provision $ 14,678 $ 10,782 $ 35,429 $ 34,209

The amount of unrecognized tax benefits may increase or decrease in the future for various reasons including adding amounts for current tax year positions, expiration of open income tax returns due to the statutes of limitation, changes in management’s judgment about the level of uncertainty, status of examinations, litigation and legislative activity and the addition or elimination of uncertain tax positions.

Section 382 of the Internal Revenue Code imposes an annual limit on the ability of a corporation that undergoes an “ownership change” to use its U.S. net operating losses to reduce its tax liability. The Company ~~closed a stock acquisition~~has engaged in ~~a prior year that invoked the~~four tax-free reorganization transactions in which acquired net operating losses are limited pursuant to Section ~~382 annual limitation. Approximately $36.5~~382. In total, approximately $41.9 million of federal net operating losses subject to the IRC ~~Sec~~Section 382 annual limitation are expected to be utilized by the Company. ~~The~~All of the acquired net operating loss carryforwards ~~expire between 2028 and 2035.~~

are expected to be fully utilized by 2036.

The Company files income tax returns in the U.S. federal jurisdiction. The Company’s U.S. federal income tax returns are open and subject to examinations from the ~~2014~~2019 tax year and forward. The Company’s various state income tax returns are generally open from the ~~2014~~2019 and later tax return years based on individual state statute of limitations.

The Company utilizes securities sold under agreements to repurchase to facilitate the needs of ~~our~~its customers and to facilitate secured short-term funding needs. Securities sold under agreements to repurchase are stated at the amount of cash received in connection with the transaction. ~~We monitor~~The Company monitors collateral levels on a continuous basis. WeThe Company may be required to provide additional collateral based on the fair value of the underlying securities. Securities pledged as collateral under repurchase agreements are maintained with ~~our~~the Company’s safekeeping agents.

The gross amount of recognized liabilities for repurchase agreements was ~~$121.4~~$74.1 million and ~~$102.4~~$152.4 million at September 30, ~~2017~~2023 and December 31, ~~2016,~~2022, respectively. The remaining contractual maturity of the securities sold under agreements to repurchase in the consolidated balance sheets as of September 30, ~~2017~~2023 and December 31, ~~2016~~2022 is presented in the following ~~tables:~~

tables.

Remaining Contractual Maturity of the Agreements
(In thousands) Overnight and
Continuous Up to 30
Days 30-90 Days Greater than
90 Days Total
September 30, 2017
Repurchase agreements:
U.S. Government agencies $ 121,352 $ -- $ -- $ -- $ 121,352

December 31, 2016
Repurchase agreements:
U.S. Government agencies $ 101,647 $ -- $ -- $ 757 $ 102,404

Debt at September 30, ~~2017~~2023 and December 31, ~~2016~~2022 consisted of the following components:

(In thousands) September 30,
2017 December 31,
2016

Other Borrowings
FHLB advances, net of discount, due 2017 to 2033, 1.15% to 7.37% secured by residential real estate loans $ 477,982 $ 225,230
Notes payable, due 10/15/2020, 3.85%, fixed rate, unsecured 44,559 47,929
Total other borrowings 522,541 273,159

Subordinated Debentures
Trust preferred securities, due 12/30/2033, floating rate of 2.80% above the three month LIBOR rate, reset quarterly, callable without penalty 20,620 20,620
Trust preferred securities, net of discount, due 6/30/2035, floating rate of 1.75% above the three month LIBOR rate, reset quarterly, callable without penalty 9,301 9,225
Trust preferred securities, net of discount, due 9/15/2037, floating rate of 1.37% above the three month LIBOR rate, reset quarterly 10,246 10,130
Trust preferred securities, net of discount, due 12/3/2033, floating rate of 2.88% above the three month LIBOR rate, reset quarterly, callable without penalty 5,157 5,161
Trust preferred securities, net of discount, due 12/13/2034, floating rate of 2.00% above the three month LIBOR rate, reset quarterly, callable without penalty 5,137 5,105
Trust preferred securities, net of discount, due 6/6/2037, floating rate of 1.57% above the three month LIBOR rate, reset quarterly, callable without penalty 10,255 10,156
Trust preferred securities, net of discount, due 12/15/2035, floating rate of 1.45% above the three month LIBOR rate, reset quarterly, callable without penalty 6,702 --
Total subordinated debentures 67,418 60,397
Total other borrowings and subordinated debentures $ 589,959 $ 333,556


	September 30,		December 31,
(In thousands)	2023		2022
Other Borrowings
FHLB advances, net of discount, due 2023 to 2033, 4.56% to 5.61% secured by real estate loans	$	1,328,290	$	838,487
Other long-term debt	19,565		20,809
Total other borrowings	1,347,855		859,296

Subordinated Notes and Debentures
Subordinated notes payable, due 4/1/2028, fixed-to-floating rate (fixed rate of 5.00% through 3/31/2023, floating rate of 2.15% above the three month LIBOR rate, reset quarterly)(1)	330,000		330,000
Subordinated notes payable, net of premium adjustments, due 7/31/2030, fixed-to-floating rate (fixed rate of 6.00% through 7/30/2025, floating rate of 5.92% above the three month SOFR rate, reset quarterly)	37,199		37,285
Unamortized debt issuance costs	(1,096)		(1,296)
Total subordinated notes and debentures	366,103		365,989
Total other borrowings and subordinated debt	$	1,713,958	$	1,225,285

_________________________

(1) The Company ~~had $442.0~~transitioned from the three month LIBOR rate to the three month Secured Overnight Financing Rate (“SOFR”), plus a comparable spread adjustment of 26.161 basis points, beginning with interest accrued on the notes from and after October 1, 2023.

In March 2018, the Company issued $330.0 million in aggregate principal amount, of 5.00% Fixed-to-Floating Rate Subordinated Notes (“Notes”) at a public offering price equal to 100% of the aggregate principal amount of the Notes. The Company incurred $3.6 million in debt issuance costs related to the offering during March 2018. The Notes will mature on April 1, 2028 and initially bore interest at a fixed rate of 5.00% per annum, payable semi-annually in arrears. From and including April 1, 2023 to, but excluding, the maturity date or the date of earlier redemption, the interest rate resets quarterly to an annual interest rate equal to the “then-current three month LIBOR rate” plus 215 basis points, payable quarterly in arrears, and the Company transitioned from the “then-current three month LIBOR rate” to the “three month SOFR, plus a comparable spread adjustment of 26.161 basis points,” beginning with interest accrued on the Notes from and after October 1, 2023. The Notes will be subordinated in right of payment to the payment of the Company’s other existing and future senior indebtedness, including all of its general creditors. The Notes are obligations of the Company only and are not obligations of, and are not guaranteed by, any of its subsidiaries. The Company used a portion of the net proceeds from the sale of the Notes to repay certain outstanding indebtedness. The Notes qualify for Tier 2 capital treatment.

The Company assumed subordinated debt in an aggregate principal amount, net of premium adjustments, of $37.4 million in connection with the Spirit acquisition in April 2022 (the “Spirit Notes”). The Spirit Notes will mature on July 31, 2030, and initially bear interest at a fixed annual rate of 6.00%, payable quarterly, in arrears, to, but excluding, July 31, 2025. From and including July 31, 2025, to, but excluding, the maturity date or earlier redemption date, the interest rate will reset quarterly to an interest rate per annum equal to a benchmark rate, which is expected to be the then-current three-month SOFR rate, as published by the Federal ~~Home Loan~~Reserve Bank ~~(“FHLB”) advances with original maturities~~ of ~~one year or~~New York (provided, that in the event the benchmark rate is less ~~at September 30, 2017 and $180.0 million at December 31, 2016.~~

than zero, the benchmark rate will be deemed to be zero) plus 592 basis points, payable quarterly, in arrears.

The Company had total FHLB advances of ~~$478.0~~$1.33 billion and $838.5 million at September 30, ~~2017, with approximately $1.075 billion of additional~~2023 and December 31, 2022, respectively, which are primarily fixed rate, fixed term advances, ~~available~~which are due less than one year from origination and therefore are classified as short-term advances by the ~~FHLB. The~~Company. At September 30, 2023, the FHLB advances ~~are~~outstanding were secured by mortgage loans and investment securities totaling approximately ~~$2.014~~$7.05 billion ~~at September 30, 2017.~~

The trust preferred securities are tax-advantaged issues that qualify for Tier 1 capital treatment. Distributions on these securities are included in interest expense on long-term debt. Each of the trusts is a statutory business trust organized for the sole purpose of issuing trust securities and ~~investing the proceeds thereof in junior subordinated debentures of~~ the Company had approximately $5.37 billion of additional advances available from the sole asset of each trust. The preferred securities of each trust represent preferred beneficial interests in the assets of the respective trusts and are subject to mandatory redemption upon payment of the junior subordinated debentures held by the trust. The common securities of each trust are wholly-owned by the Company. Each trust’s ability to pay amounts due on the trust preferred securities is solely dependent upon the Company making payment on the related junior subordinated debentures. FHLB.

38

The Company’s ~~obligations under the junior~~long-term debt primarily includes subordinated ~~securities~~debt and other relevant trust agreements, in aggregate, constitute a full and unconditional guarantee by the Company of each respective trust’s obligations under the trust securities issued by each respective trust.

notes payable. Aggregate annual maturities of long-term debt at September 30, ~~2017, are:~~

2023, are as follows:

Year (In thousands)

2017 $ 1,851
2018 23,863
2019 7,586
2020 36,343
2021 2,251
Thereafter 76,065
Total $ 147,959


Year	(In thousands)
Remainder of 2023	$	441
2024	1,822
2025	1,822
2026	1,824
2027	1,920
Thereafter	381,128
Total	$	388,957

NOTE ~~12:~~13: CONTINGENT LIABILITIES

In the ordinary course of its operations, the Company and its subsidiaries are parties to various legal proceedings incidental to the conduct of its business, including proceedings based on breach of contract claims, lender liability claims, and other ordinary-course claims, some of which seek substantial relief or damages.

On June 29, 2020, Shunda Wilkins, Diann Graham, and David Watson filed a putative class action complaint against Simmons Bank in the United States District Court for the Eastern District of Arkansas. The complaint alleged that Simmons Bank improperly charges multiple insufficient funds or overdraft fees when a merchant resubmits a rejected payment request. The complaint asserted claims for breach of contract and unjust enrichment. Plaintiffs sought to represent a proposed class of all Simmons Bank checking account customers who were charged multiple insufficient funds or overdraft fees on resubmitted payment requests. Plaintiffs sought unspecified damages, costs, attorney’s fees, pre-judgment interest, an injunction, and other relief as the Court deems proper for themselves and the purported class. Simmons Bank denied the allegations and has vigorously defended the matter. On February 9, 2023, the district court denied plaintiffs’ motion for class certification, granted Simmons Bank’s motion for summary judgment in part, and granted Simmons Bank’s motion to exclude testimony of plaintiffs’ expert. On July 14, 2023, the district court denied plaintiffs’ motion to reconsider the court’s February 9, 2023 ruling, and ruled in favor of Simmons Bank on the outstanding issues.

The Company ~~and/or its subsidiaries have various unrelated~~establishes reserves for legal proceedings ~~which,~~when potential losses become probable and can be reasonably estimated. While the ultimate resolution (including amounts thereof) of any legal proceedings, including the matter described above, cannot be determined at this time, based on information presently available and after consultation with legal counsel, management believes that the ultimate outcome in such proceedings, either individually or in the aggregate, ~~are~~will not ~~expected to~~ have a material adverse effect on the Company’s business, consolidated results of operations, financial ~~position~~condition, or cash flows. It is possible, however, that future developments could result in an unfavorable outcome for or resolution of any of these proceedings, which may be material to the Company’s results of operations for a given fiscal period.

NOTE 14: CAPITAL STOCK

On February 27, 2009, at a special meeting, the Company’s shareholders approved an amendment to the Articles of Incorporation to establish 40,040,000 authorized shares of preferred stock, $0.01 par value. On April 27, 2022, the Company’s shareholders approved amendments to the Company’s Articles of Incorporation to remove an $80.0 million cap on the aggregate liquidation preference associated with the preferred stock and increase the number of authorized shares of the ~~Company and its subsidiaries.~~

~~NOTE 13: COMMON STOCK~~

~~On July 23, 2012, the Company approved a stock repurchase program which authorized the repurchase of up to 850,000 shares of~~Company’s Class A common stock ~~or approximately 5%~~from 175,000,000 to 350,000,000.

On October 29, 2019, the Company filed Amended and Restated Articles of Incorporation (“October Amended Articles”) with the Arkansas Secretary of State. The October Amended Articles classified and designated Series D Preferred Stock, Par Value $0.01 Per Share (“Series D Preferred Stock”), out of the Company’s authorized preferred stock. On November 30, 2021, the Company redeemed all of the Series D Preferred Stock, including accrued and unpaid dividends. On April 27, 2022, the Company’s shareholders approved an amendment to the Company’s Articles of Incorporation to remove the classification and designation for the Series D Preferred Stock. As of September 30, 2023, there were no shares ~~outstanding~~of preferred stock issued or outstanding.

39

Effective July 23, 2021, the Company’s Board of Directors approved an amendment to the Company’s stock repurchase program originally established in October 2019 (“2019 Program”) that increased the amount of the Company’s Class A common stock that may be repurchased under the 2019 Program from a maximum of $180.0 million to a maximum of $276.5 million and extended the term of the 2019 Program from October 31, 2021, to October 31, 2022.

During January 2022, the Company substantially exhausted the repurchase capacity under the 2019 Program. As a result, the Company’s Board of Directors authorized a new stock repurchase program in January 2022 (“2022 Program”) under which the Company may repurchase up to $175.0 million of its Class A common stock currently issued and outstanding. The 2022 Program will terminate on January 31, 2024 (unless terminated sooner).

During the three and nine month periods ended September 30, 2023, the Company repurchased 1,128,962 shares at ~~that time.~~an average price of $17.69 per share and 2,257,049 shares at an average price of $17.72 per share, respectively, under the 2022 Program. Market conditions and the Company’s capital needs will drive decisions regarding additional, future stock repurchases. During the three month period ended September 30, 2022, the Company repurchased 1,883,713 shares at an average price of $23.91 per share under the 2022 Program. During the nine month period ended September 30, 2022, the Company repurchased 513,725 shares at an average price of $31.25 per share under the 2019 Program and 3,919,037 shares at an average price of $24.26 per share under the 2022 Program. The 2022 Program repurchases during the nine months ended September 30, 2022 were all completed during the second and third quarters of 2022.

Under the 2022 Program, which replaced the 2019 Program, the Company may repurchase shares ~~are to be purchased from time to time at prevailing market prices,~~of its common stock through open market ~~or unsolicited~~and privately negotiated transactions ~~depending upon~~or otherwise. The timing, pricing, and amount of any repurchases under the 2022 Program will be determined by the Company’s management at its discretion based on a variety of factors, including, but not limited to, trading volume and market ~~conditions. Under~~price of the ~~repurchase program, there is no time limit for~~Company’s common stock, corporate considerations, the ~~stock repurchases, nor is there a minimum number of shares that~~Company’s working capital and investment requirements, general market and economic conditions, and legal requirements. The 2022 Program does not obligate the Company ~~intends~~ to ~~repurchase. The Company~~repurchase any common stock and may ~~discontinue purchases~~be modified, discontinued, or suspended at any time ~~that management determines additional purchases are not warranted.~~without prior notice. The Company ~~intends~~anticipates funding for this 2022 Program to ~~use the repurchased shares to satisfy stock option exercises, payment~~come from available sources of liquidity, including cash on hand and future ~~stock awards and dividends and general corporate purposes.~~

cash flow.

NOTE ~~14:~~15: UNDIVIDED PROFITS

~~The~~

Simmons Bank, the Company’s subsidiary bank, is subject to a legal ~~limitation~~limitations on dividends that can be paid to the parent company without prior approval of the applicable regulatory agencies. The approval of the Commissioner of the Arkansas State Bank Department is required if the total of all dividends declared by an Arkansas state bank in any calendar year exceeds seventy-five percent (75%) of the total of its net profits, as defined, for that year combined with seventy-five percent (75%) of its retained net profits of the preceding year. At September 30, ~~2017, the Company’s subsidiary bank~~2023, Simmons Bank had approximately ~~$1.8~~$238.0 million available for payment of dividends to the Company, without prior regulatory approval.

The risk-based capital guidelines of the Federal Reserve Board and the Arkansas State Bank Department include the definitions for (1) a well-capitalized institution, (2) an adequately-capitalized institution, and (3) an undercapitalized institution. ~~Under the Basel III Rules effective January 1, 2015, the~~The criteria for a well-capitalized institution are: a 5% ~~"Tier~~“Tier l leverage ~~capital"~~capital” ratio, an 8% ~~"Tier~~“Tier 1 risk-based ~~capital"~~capital” ratio, 10% ~~"total~~“total risk-based ~~capital"~~capital” ratio; and a ~~6.50%~~6.5% “common equity Tier 1 (CET1)” ratio.

The Company and Simmons Bank must hold a capital conservation buffer of 2.5% composed of CET1 capital above its minimum risk-based capital requirements. ~~The implementation of the~~Failure to meet this capital conservation buffer ~~began~~would result in additional limits on ~~January 1, 2016, at the 0.625% level~~dividends, other distributions and ~~will phase in over a four-year period (increasing by that amount on each subsequent January 1 until it reaches 2.5% on January 1, 2019).~~discretionary bonuses. As of September 30, ~~2017,~~2023, the Company and ~~its subsidiary bank~~Simmons Bank met all capital adequacy requirements, including the capital conservation buffer, under the Basel III Capital ~~Rules, and management believes the Company and subsidiary bank would meet all Capital Rules on a fully phased-in basis if such requirements were currently effective.~~Rules. The ~~Company's~~Company’s CET1 ratio was ~~11.97%~~12.02% at September 30, ~~2017.~~

2023.

40

NOTE ~~15: STOCK BASED~~16: STOCK-BASED COMPENSATION

The Company’s Board of Directors has adopted various ~~stock~~stock-based compensation ~~plans.~~plans, including the 2023 Stock and Incentive Plan that was approved by shareholders and became effective April 18, 2023. The plans provide for the grant of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock awards, restricted stock units, performance stock units and ~~bonus~~ stock awards. Pursuant to the plans, shares are reserved for future issuance by the Company upon ~~the~~ exercise of stock options or ~~awarding~~awards of ~~bonus shares~~restricted stock, restricted stock units, performance stock units or stock awards granted to directors, officers and other key employees.

The table below summarizes the transactions under the ~~Company's~~Company’s active ~~stock~~stock-based compensation plans for the nine months ended September 30, ~~2017:~~

2023:

Stock Options
Outstanding Stock Awards
Outstanding Stock Units
Outstanding
Number
of Shares
(000) Weighted
Average
Exercise
Price Number
of Shares
(000) Weighted
Average
Exercise
Price Number
of Shares
(000) Weighted
Average
Exercise
Price

Balance, January 1, 2017 473 $ 42.85 139 $ 40.96 113 $ 45.40
Granted -- -- -- -- 185 58.18
Stock Options Exercised (39 ) 32.16 -- -- -- --
Stock Awards/Units Vested -- -- (34 ) 36.45 (124 ) 52.71
Forfeited/Expired (3 ) 44.68 (12 ) 43.83 (13 ) 51.72

Balance, September 30, 2017 431 $ 43.82 93 $ 42.21 161 $ 53.97

Exercisable, September 30, 2017 325 $ 43.23


	Stock Options Outstanding			Non-vested Stock Awards Outstanding			Non-vested Stock Units Outstanding
(Shares in thousands)	Number of Shares	Weighted Average Exercise Price		Number of Shares	Weighted Average Grant-Date Fair Value		Number of Shares	Weighted Average Grant-Date Fair Value
Beginning balance, January 1, 2023	470	$	22.56	—	$	—	1,197	$	26.63
Granted	—	—		—	—		735	21.51
Stock options exercised	(1)	10.65		—	—		—	—
Stock awards/units vested (earned)	—	—		—	—		(427)	25.06
Forfeited/expired	—	—		—	—		(177)	24.87

Balance, September 30, 2023	469	$	22.58	—	$	—	1,328	$	24.51

Exercisable, September 30, 2023	469	$	22.58

The following table summarizes information about stock options under the plans outstanding at September 30, ~~2017:~~

2023:

Options Outstanding Options Exercisable
Range of
Exercise Prices

Number
of Shares

Weighted
Average
Remaining
Contractual
Life (Years)

Weighted
Average
Exercise
Price

Number
of Shares

Weighted
Average
Exercise
Price

$17.55 - $21.13 3,950 2.76 $ 19.38 3,950 $ 19.38
21.29 - 21.29 3,700 5.30 21.29 2,500 21.29
21.51 - 21.51 1,250 2.30 21.51 1,250 21.51
30.31 - 30.31 22,180 0.63 30.31 22,180 30.31
40.57 - 40.57 40,490 7.25 40.57 40,490 40.57
40.72 - 40.72 1,500 7.13 40.72 600 40.72
44.40 - 44.40 49,870 7.25 44.40 37,144 44.40
45.50 - 45.50 246,485 7.62 45.50 193,025 45.50
47.02 - 47.02 58,090 7.79 47.02 20,838 47.02
48.13 - 48.13 3,305 7.96 48.13 2,645 48.13
$17.55 - $48.13 430,820 7.12 $ 43.82 324,622 $ 43.23

~~Total stock-based compensation expense was $6,486,000 and $4,204,000 during~~


					Options Outstanding			Options Exercisable
Range of Exercise Prices					Number of Shares (In thousands)	Weighted Average Remaining Contractual Life (Years)	Weighted Average Exercise Price	Number of Shares (In thousands)	Weighted Average Exercise Price
$	20.29	—	$	20.29	47	1.14	$20.29	47	$20.29
22.20		—	22.20		51	1.48	22.20	51	22.20
22.75		—	22.75		293	1.60	22.75	293	22.75
23.51		—	23.51		71	2.02	23.51	71	23.51
24.07		—	24.07		7	1.96	24.07	7	24.07
$	20.29	—	$	24.07	469	1.61	$22.58	469	$22.58

The table below summarizes the Company’s performance stock unit activity for the nine months ended September 30, ~~2017~~2023:


(In thousands)						Performance Stock Units
Non-vested, January 1, 2023						352
Granted						302
Vested (earned)						(72)
Forfeited						(71)
Non-vested, September 30, 2023						511

41

Stock-based compensation expense was $9.6 million and ~~2016,~~$11.5 million during the nine month periods ended September 30, 2023 and 2022, respectively. Stock-based compensation expense is recognized ratably over the requisite service period for all stock-based awards. There was ~~$407,000 of~~no unrecognized stock-based compensation expense related to stock options at September 30, ~~2017.~~2023. Unrecognized stock-based compensation expense related to non-vested stock awards and stock units was ~~$15,423,000~~$18.5 million at September 30, ~~2017.~~2023. At such date, the weighted-average period over which this unrecognized expense is expected to be recognized was ~~2.0~~1.4 years.

~~The~~

There was no intrinsic value of stock options outstanding and stock options exercisable at September 30, ~~2017 was $6,066,000 and $4,761,000.~~2023. Aggregate intrinsic value represents the difference between the Company’s closing stock price on the last trading day of the period, which was ~~$57.90~~$16.96 as of September 30, ~~2017,~~2023, and the exercise price multiplied by the number of options ~~outstanding and exercisable at a price below that closing price. The total~~outstanding. Total intrinsic value of stock options exercised during the nine months ended September 30, ~~2017 and~~2023 was $6,000, while there was no intrinsic value of stock options exercised during the nine months ended September 30, ~~2016, was $1,012,000 and $1,063,000, respectively.~~

2022.

The fair value of the Company’s employee stock options granted is estimated on the date of grant using the Black-Scholes option-pricing model. This model requires the input of highly subjective assumptions, changes to which can materially affect the fair value estimate. There were no stock options granted during the nine months ended September 30, ~~2017.~~ 2023 and 2022.

NOTE 17: EARNINGS PER SHARE (“EPS”)

Basic EPS is computed by dividing reported net income available to common stockholders by the weighted average number of common shares outstanding during each period. Diluted EPS is computed by dividing reported net income available to common stockholders by the weighted average common shares and all potential dilutive common shares outstanding during the period.

The ~~weighted-average fair value~~computation of earnings per share is as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands, except per share data)	2023		2022		2023		2022
Net income available to common stockholders	$	47,247	$	80,603	$	151,150	$	173,152

Average common shares outstanding	125,914		127,884		126,730		122,935
Average potential dilutive common shares	370		452		370		452
Average diluted common shares	126,284		128,336		127,100		123,387

Basic earnings per share	$	0.38	$	0.63	$	1.19	$	1.41
Diluted earnings per share	$	0.37	$	0.63	$	1.19	$	1.40

There were 469,280 stock options ~~granted~~excluded from the three and nine months ended September 30, 2023 earnings per share calculations due to the related stock option exercise price exceeding the average market price of the Company’s stock during the periods. There were 99,837 stock options excluded from the earnings per share calculation for the three months ended September 30, 2022 due to the related stock option exercise price exceeding the average market price of the Company’s stock during the period. There were no stock options excluded from the earnings per share calculation for the nine months ended September 30, ~~2016 was $11.64 per share. The Company estimated expected~~2022 due to the average market price ~~volatility and expected term~~ of the ~~options based on historical data and other factors. The weighted-average assumptions used to determine~~Company’s stock exceeding the ~~fair value of options granted are detailed in~~related stock option exercise price during the ~~table below:~~

period.

	~~Nine Months Ended~~ ~~September 30, 2016~~

~~Expected dividend yield~~		~~1.96~~	%
~~Expected stock price volatility~~		~~27.34~~	%
~~Risk-free interest rate~~		~~2.01~~	%
~~Expected life of options (in years)~~		7

42

NOTE ~~16:~~18: ADDITIONAL CASH FLOW INFORMATION

The following is a summary of the Company’s additional cash flow ~~information~~information:


	Nine Months Ended September 30,
(In thousands)	2023		2022
Interest paid	$	375,536	$	66,744
Income taxes paid	21,915		14,674
Transfers of loans to foreclosed assets held for sale	2,596		632
Transfers of assets held for sale to other assets	—		100
Transfers of available-for-sale to held-to-maturity securities	—		1,992,542

NOTE 19: OTHER INCOME AND OTHER OPERATING EXPENSES

Other income for the three and nine months ended September 30, 2023 was $7.4 million and $28.5 million, respectively. Other income for the same periods in 2022 was $6.7 million and $20.8 million, respectively. Included in other income during the nine ~~months ended:~~

month period ended September 30, 2023 was a $4.0 million legal reserve recapture associated with previously disclosed legal matters. Additionally, other income increased on a year-over-year basis, primarily as a result of fair value adjustments associated with certain equity investments and death benefits from bank owned life insurance.

Nine Months Ended
September 30,
(In thousands) 2017 2016

Interest paid $ 21,531 $ 16,311
Income taxes paid 21,718 32,069
Transfers of loans to foreclosed assets and other real estate owned 5,311 3,846
Transfers of premises to foreclosed assets and other real estate owned 3,188 --
Transfers of premises and equipment to premises held for sale -- 7,200
Transfers of premises held for sale to foreclosed assets and other real estate owned -- 652

~~NOTE 17: OTHER OPERATING EXPENSES~~

Other operating expenses ~~consist~~consisted of the following:

From time to time, the Company and its subsidiaries have made loans, ~~and~~ other extensions of credit, and vendor contracts to directors, officers, their associates and members of their immediate families. ~~From time to time~~Additionally, some directors, officers and their associates and members of their immediate families have placed deposits with the Company’s subsidiary bank, Simmons Bank. Such loans and other extensions of credit, deposits and ~~deposits~~vendor contracts (which were not material) were made in the ordinary course of business, on substantially the same terms (including interest rates and collateral) as those prevailing at the time for comparable transactions with ~~other~~unrelated persons ~~not related to the lender and~~or through a competitive bid process. Further, in management’s opinion, these extensions of credit did not involve more than normal risk of collectability or present other unfavorable features.

The Company grants ~~agri-business,~~agribusiness, commercial and residential loans to customers primarily throughout Arkansas, Kansas, Missouri, Oklahoma, Tennessee and ~~Tennessee,~~Texas, along with credit card loans to customers throughout the United States. Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since a portion of the commitments may expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. Each ~~customer's~~customer’s creditworthiness is evaluated on a case-by-case basis. The amount of collateral obtained, if deemed necessary, is based on ~~management's~~management’s credit evaluation of the counterparty. Collateral held varies, but may include accounts receivable, inventory, property, plant and equipment, commercial real estate and residential real estate.

At September 30, ~~2017,~~2023, the Company had outstanding commitments to extend credit aggregating approximately ~~$568,655,000~~$744.3 million and ~~$1,628,358,000~~$4.32 billion for credit card commitments and other loan commitments, respectively. At December 31, ~~2016,~~2022, the Company had outstanding commitments to extend credit aggregating approximately ~~$562,527,000~~$696.7 million and ~~$1,220,137,000~~$5.64 billion for credit card commitments and other loan commitments, respectively.

As of September 30, 2023, the Company had outstanding commitments to originate fixed-rate mortgage loans of approximately $24.6 million. At December 31, 2022, the Company had outstanding commitments to originate fixed-rate mortgage loans of approximately $21.1 million. The commitments extend over varying periods of time with the majority being disbursed within a thirty-day period.

Standby letters of credit are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. Those guarantees are primarily issued to support public and private borrowing arrangements, including commercial paper, bond financing and similar transactions. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loans to customers. The Company had total outstanding letters of credit amounting to ~~$29,812,000~~$55.5 million and ~~$29,362,000~~$44.4 million at September 30, ~~2017,~~2023, and December 31, ~~2016,~~2022, respectively, with terms ranging from 9 months to 15 years. At September 30, ~~2017~~2023 and December 31, ~~2016,~~2022, the Company had no deferred revenue under standby letter of credit agreements.

The Company has purchased letters of credit from the FHLB as ~~part~~security for certain public deposits. The amount of the ~~acquisition~~letters of ~~Community First, the Company issued 30,852 shares of Senior Non-Cumulative Perpetual Preferred Stock, Series A (“Simmons Series A Preferred Stock”)~~credit was $339.5 million and $265.7 million at September 30, 2023 and December 31, 2022, respectively, and they expire in exchange for the outstanding shares of Community First Senior Non-Cumulative Perpetual Preferred Stock, Series C (“Community First Series C Preferred Stock”). The preferred stock was held by the United States Department of the Treasury (“Treasury”) as the Community First Series C Preferred Stock was issued when Community First entered into a Small Business Lending Fund Securities Purchase Agreement with the Treasury. The Simmons Series A Preferred Stock qualified as Tier 1 capital and paid quarterly dividends. The rate remained fixed at 1% through February 18, 2016, at which time it would convert to a fixed rate of 9%. On January 29, 2016, the Company redeemed all of the preferred stock, including accrued and unpaid dividends.

less than one year from issuance.

ASC Topic 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The guidance also establishes a fair value hierarchy that requires the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value. ASC Topic 820 describes three levels of inputs that may be used to measure fair value:

·

~~Level 1 Inputs~~ ~~– Quoted prices in active markets for identical assets or liabilities.~~

·

~~Level 2 Inputs~~ – Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities in active markets; quoted prices for similar assets or liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

·

~~Level 3 Inputs~~ ~~– Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.~~

In general, fair value is based upon quoted market prices, where available. If such quoted market prices are not available, fair value is based upon internally developed models that primarily use, as inputs, observable market-based parameters. Valuation adjustments may be made to ensure that financial instruments are recorded at fair value. These adjustments may include amounts to reflect counterparty credit quality and the Company’s creditworthiness, among other things, as well as unobservable parameters. Any such valuation adjustments are applied consistently over time. The Company’s valuation methodologies may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. While management believes the Company’s valuation methodologies are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date. Furthermore, the reported fair value amounts have not been comprehensively revalued since the presentation dates, and therefore, estimates of fair value after the balance sheet date may differ significantly from the amounts presented herein. A more detailed description of the valuation methodologies used for assets and liabilities measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth below.

Following is a description of the inputs and valuation methodologies used for assets measured at fair value on a recurring basis and recognized in the accompanying consolidated balance sheets, as well as the general classification of such assets pursuant to the valuation hierarchy.

The following table sets forth the Company’s financial assets by level within the fair value hierarchy that were measured at fair value on a recurring basis as of September 30, ~~2017~~2023 and December 31, ~~2016.~~

2022.

Fair Value Measurements Using
(In thousands) Fair Value Quoted Prices in
Active Markets for
Identical Assets
(Level 1) Significant Other
Observable Inputs
(Level 2) Significant
Unobservable Inputs
(Level 3)

September 30, 2017
ASSETS
Available-for-sale securities
U.S. Government agencies $ 208,220 $ -- $ 208,220 $ --
Mortgage-backed securities 959,698 -- 959,698 --
State and political subdivisions 84,822 -- 84,822 --
Other securities 64,680 -- 64,680 --
Assets held in trading accounts 49 -- 49 --

December 31, 2016
ASSETS
Available-for-sale securities
U.S. Treasury $ 300 $ 300 $ -- $ --
U.S. Government agencies 137,771 -- 137,771 --
Mortgage-backed securities 868,324 -- 868,324 --
States and political subdivisions 102,943 -- 102,943 --
Other securities 48,016 -- 48,016 --
Assets held in trading accounts 41 -- 41 --

Certain ~~financial~~ assets and liabilities are measured at fair value on a nonrecurring basis; that is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain ~~circumstances (for example, when there is evidence of impairment). Financial assets~~circumstances. Assets and liabilities measured at fair value on a nonrecurring basis include the following:

~~Impaired~~

The significant unobservable inputs (Level 3) used in the fair value measurement of collateral for collateral-dependent ~~impaired~~ loans and foreclosed assets primarily relate to the specialized discounting criteria applied to the borrower’s reported amount of collateral. The amount of the collateral discount depends upon the condition and marketability of the collateral, as well as other factors which may affect the collectability of the loan. Management’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset. It is reasonably possible that a change in the estimated fair value for instruments measured using Level 3 inputs could occur in the future. As the Company’s primary objective in the event of default would be to liquidate the collateral to settle the outstanding balance of the loan, collateral that is less marketable would receive a larger discount. ~~During the reported periods, collateral discounts ranged from 10% to 40% for commercial and residential real estate collateral.~~

~~Mortgage loans held for sale~~ – Mortgage loans held for sale are reported at fair value if, on an aggregate basis, the fair value of the loans is less than cost. In determining whether the fair value of loans held for sale is less than cost when quoted market prices are not available, the Company may consider outstanding investor commitments, discounted cash flow analyses with market assumptions or the fair value of the collateral if the loan is collateral dependent. Such loans are classified within either Level 2 or Level 3 of the fair value hierarchy. Where assumptions are made using significant unobservable inputs, such loans held for sale are classified as Level 3. At September 30, 2017 and December 31, 2016, the aggregate fair value of mortgage loans held for sale exceeded their cost. Accordingly, no mortgage loans held for sale were marked down and reported at fair value.

The following table sets forth the Company’s ~~financial~~ assets by level within the fair value hierarchy that were measured at fair value on a nonrecurring basis as of September 30, ~~2017~~2023 and December 31, ~~2016.~~

2022.

________________________

~~(1)~~

These amounts represent the resulting carrying amounts on the Consolidated Balance Sheets for impaired collateral dependent loans and foreclosed assets and other real estate owned for which fair value re-measurements took place during the period.

~~(2)~~

Specific allocations of $2,195,000 and $2,384,000 were related to the impaired collateral dependent loans for which fair value re-measurements took place during the periods ended September 30, 2017 and December 31, 2016, respectively.

The fair value of a financial instrument is the current amount that would be exchanged between willing parties, other than in a forced liquidation. Fair value is best determined based upon quoted market prices. However, in many instances, there are no quoted market prices for the Company’s various financial instruments. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Accordingly, the fair value estimates may not be realized in an immediate settlement of the instrument.

The Company utilizes derivative instruments to manage exposure to various types of interest rate risk for itself and its customers within policy guidelines. Transactions should only be entered into with an associated underlying exposure. All derivative instruments are carried at fair value.

Derivative contracts involve the risk of dealing with institutional derivative counterparties and their ability to meet contractual terms. Institutional counterparties must have an investment grade credit rating and be approved by the Company’s asset/liability management committee. In arranging these products for its customers, the Company ~~completed its mergers~~assumes additional credit risk from the customer and from the dealer counterparty with ~~Southwest Bancorp, Inc. (“OKSB”)~~whom the transaction is undertaken. Credit risk exists due to the default credit risk created in the exchange of the payments over a period of time. Credit exposure on interest rate swaps is limited to the net favorable value and ~~First Texas BHC, Inc. (“First Texas”) pursuant~~interest payments of all swaps with each counterparty. Access to collateral in the event of default is reasonably assured. Therefore, credit exposure may be reduced by the amount of collateral pledged by the counterparty.

The Company will seek to enter derivative structures that most effectively address the risk exposure and structural terms of the ~~Agreements~~underlying position being hedged. The term and Plan of Mergers, dated December 14, 2016 and January 23, 2017, respectively. The Company was the surviving corporation in both mergers, which are referred to individually as the “OKSB Merger” and the “First Texas Merger”, and collectively as the “mergers.” The mergers were described in the Joint Proxy Statement/Prospectus of the Company, OKSB and First Texas filed with the SEC on September 12, 2017. As a result of the mergers, the Company expanded its reach into three new banking markets and now has approximately $14.7 billion in assets and approximately $10.5 billion and $11.2 billion in loans and deposits, respectively.

In the OKSB Merger, each outstanding share of OKSB common stock was cancelled and converted into the right to receive 0.3903 shares of the Company’s common stock and $5.11 in cash. The Company issued 7,250,000 shares of its common stock and paid $95,000,000 in cash to effect the OKSB Merger. In the First Texas Merger, each outstanding share of First Texas common stock was cancelled and converted into the right to receive 0.8263 shares of the Company’s common stock and $6.60 in cash. The Company issued 6,500,000 shares of its common stock and paid $70,000,000 in cash to effect the First Texas Merger. Additionally, upon consummation of the mergers, the Company assumed subordinated debt issued by OKSB and First Texas in an aggregatenotional principal amount of ~~$76.7 million. The mergers were approved by stockholders~~a hedge transaction will not exceed the term or principal amount of the underlying exposure. In addition, the Company ~~on October 18, 2017 while~~will use hedge indices which are the ~~stockholders of OKSB and First Texas approved the mergers on October 19, 2017.~~

~~Due~~same as, or highly correlated to, the ~~timing~~index or rate on the underlying exposure. Derivative credit exposure is monitored on an ongoing basis for each customer transaction and aggregate exposure to each counterparty is tracked.

For derivative instruments that are designated and qualify as a fair value hedge, the gain or loss on the derivative instrument as well as the offsetting loss or gain on the hedged asset or liability attributable to the hedged risk are recognized in current earnings. The gain or loss on the derivative instrument is presented on the same income statement line item as the earnings effect of the ~~mergers~~hedged item. During the third quarter of 2021, the Company began utilizing interest rate swaps designated as fair value hedges to mitigate the effect of changing interest rates on the fair values of fixed rate callable AFS securities. The hedging strategy converts the fixed interest rates to variable interest rates based on federal funds rates. The two year forward start date for these swaps occurred during late third quarter of 2023 and involves the payment of fixed interest rates with a weighted average of 1.21% in exchange for variable interest rates based on federal funds rates.

The following table summarizes the fair value hedges recorded in the accompanying consolidated balance sheets.

The following amounts were recorded on the balance sheet related to carrying amounts and cumulative basis adjustments for fair value hedges.

The Company’s qualified loan customers have the opportunity to participate in its interest rate swap program for the purpose of managing interest rate risk on their variable rate loans with the Company. The Company enters into such agreements with customers, then offsetting agreements are executed between the Company and an approved dealer counterparty to minimize market risk from changes in interest rates. The counterparty contracts are identical to customer contracts in terms of notional amounts, interest rates, and maturity dates, except for a fixed pricing spread or fee paid to the Company by the dealer counterparty. These interest rate swaps carry varying degrees of credit, interest rate and market or liquidity risks. The fair value of these derivative instruments is recognized as either derivative assets or liabilities in the accompanying consolidated balance sheets. The Company has a limited number of ~~assets and liabilities assumed,~~swaps that are standalone without a similar agreement with the loan customer.

The following table summarizes the fair values of loan derivative contracts recorded in the accompanying consolidated balance sheets.

The Company has a limited number of Risk Participation Agreement swaps, that are associated with loan participations, where the Company is ~~continuing~~not the counterparty to ~~determine their preliminary fair values~~the interest rate swaps that are associated with the risk participation sold. The interest rate swap mark to market only impacts the Company if the swap is in a liability position to the counterparty and the ~~purchase price allocation.~~ customer defaults on payments to the counterparty. The notional amount of these contingent agreements is $19.9 million as of September 30, 2023.

The Company, ~~expects~~from time-to-time, has provided energy derivative services to ~~finalize the analysis of the acquired assets~~qualifying, high quality oil and liabilities over the next few months and within one year of the mergers. We will record the mergers using the acquisition method of accounting and will recognize the assets acquired and liabilities assumed at their fair values as of the date of acquisition. The results of the mergers will be included in our consolidated operating results beginning on the acquisition date.

On October 6, 2017, the Company entered into a Revolving Credit Agreement (the “Credit Agreement”) with U.S. Bank National Association and executed an unsecured Revolving Credit Note (the “Note”) pursuant to which the Company may borrow, prepay and re-borrow up to $75 milliongas borrowers for ~~purposes of financing distributions, financing certain acquisitions, and working capital~~hedging purposes. The ~~Credit Agreement contains customary representations, warranties,~~Company has served as an intermediary on energy derivative products between the Company’s borrowers and ~~covenants of the Company, including, among other things, covenants that impose various financial ratio requirements.~~dealers. The Company will ~~primarily use~~only enter into back-to-back trades, thus maintaining a balanced book between the ~~proceeds of~~dealer and the ~~revolving credit loans under the Credit Agreement to repay the subordinated debt assumed with the mergers as previously discussed.~~

borrower.

The ~~principal amounts borrowed under the Credit Agreement will bear interest at a variable rate equal~~energy hedging risk exposure to the ~~applicable one-month LIBOR rate plus 1.50%. The amount of interest accruing under the Note shall be computed on an actual day, 360-day year basis. The line of credit available~~Company’s customer would increase as energy prices for crude oil and natural gas rise. As prices decrease, exposure to the ~~Company under~~exchange would increase. These risks are mitigated by customer credit underwriting policies and establishing a predetermined hedge line for each borrower and by monitoring the ~~Credit Agreement expires on October 5, 2018, at which time all amounts borrowed, together with applicable interest, fees,~~exchange margin.

During the second quarter of 2023, the Company’s remaining energy hedge swap contracts expired and ~~other amounts owed by~~there were no outstanding notional values related to these contracts as of September 30, 2023. Currently, the Company ~~shall be due and payable.~~

generally does not intend to offer hedging services to any remaining energy related customers.

We have reviewed the ~~accompanying condensed~~ consolidated balance sheet of~~SIMMONS FIRST NATIONAL CORPORATION~~ Simmons First National Corporation and subsidiaries (“the Company”) as of September 30, ~~2017, and the related condensed consolidated statements of income and comprehensive income for the three and nine months ended September 30, 2017 and 2016~~2023, and the related consolidated statements of income, comprehensive income (loss) and stockholders’ equity for the three-month and nine-month periods ended September 30, 2023 and 2022, and cash flows for the ~~nine month~~nine-month periods ended September 30, ~~2017~~2023 and ~~2016. These interim financial statements are~~2022, and the ~~responsibility of~~related notes (collectively referred to as the ~~Company’s management.~~

~~We conducted our reviews in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim~~“interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

or statements”). Based on our reviews, we are not aware of any material modifications that should be made to the condensed consolidated financial statements referred to above for them to be in conformity with accounting principles generally accepted in the United States of America.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated balance sheet of the Company and subsidiaries as of December 31, ~~2016,~~2022, and the related consolidated statements of income, comprehensive income, ~~stockholders'~~stockholders’ equity and cash flows for the year then ended (not presented herein);, and in our report dated February ~~28, 2017,~~27, 2023, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, ~~2016,~~2022, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

	~~BKD, LLP~~

	~~/s/ BKD, LLP~~

These interim financial statements are the responsibility of the Company’s management. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our review in accordance with the standards of the PCAOB. A review of interim financial information (statements) consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

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, 2023 to our results of operations for the three months ended June 30, 2023, 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, 2023, please refer to our second quarter Form 10-Q filed with the SEC on August 4, 2023.

During the first nine months of 2023, significant turmoil within the financial services industry, which was fueled by the failure of certain regional banks that utilized specialized business models as well as continued inflationary pressures and recessionary fears, resulted in industry concerns around the level of uninsured, non-collaterlized deposits, liquidity, capital and operations. Despite these challenges, which have seemed to abate slightly in the third quarter of 2023, we remain resolute in serving our customers’ financial needs while diligently focusing on maintaining strong asset quality, capital and liquidity positions, and on strategies to improve our financial performance and maximize the value of our shareholders’ investment in the current rate environment. We believe that our liquidity is solid and that our capital is strong:

Our net income for the three months ended September 30, ~~2017~~2023 was ~~$28.9~~$47.2 million, ~~and~~or $0.37 diluted earnings per share, ~~were $0.89,~~ compared to net income of ~~$23.4~~$58.3 million, ~~and $0.76~~or $0.46 diluted earnings per share, for the ~~same~~three months ended June 30, 2023. Included in each comparative period ~~of 2016. Diluted~~end results were certain items related to our acquisitions, early retirement program costs and branch right sizing initiatives. Excluding these certain items and the tax effect, adjusted earnings for the three months ended September 30, 2023 were $48.8 million, or $0.39 adjusted diluted earnings per share, ~~increased by $0.13,~~compared to $61.1 million, or ~~17.1%.~~ $0.48 adjusted diluted earnings per share, for the three months ended June 30, 2023.

Net income for the nine months ended September 30, ~~2017,~~2023 was ~~$74.0~~$151.2 million, ~~and~~or $1.19 diluted earnings per share, ~~were $2.31,~~ compared to net income of ~~$69.8~~$173.2 million, ~~and $2.28~~or $1.40 diluted earnings per share for the ~~same period~~nine months ended September 30, 2022. Included in ~~2016. Year-to-date diluted earnings per share increased by $0.03, or 1.3%.~~

~~The first three quarters in both 2017 and 2016 included non-core~~the results for the nine months ended September 30, 2023 were certain items ~~that impacted net income. The 2017 non-core items were significant and mainly~~ related to ~~acquisitions~~acquisition costs, early retirement costs and ~~a gain on the sale of the Company’s property and casualty insurance lines of business further discussed below. The 2016 non-core items primarily related to~~ branch right sizing initiatives, ~~and acquisitions. Excluding all non-core items, core earnings~~while the results for the ~~three~~nine months ended September 30, ~~2017~~2022 included certain items related to acquisition costs, branch right sizing initiatives, the Day 2 CECL provision required for loans and unfunded commitments acquired in connection with the Spirit acquisition, loss from early retirement of TruPS, gain on sale of intellectual property and a donation to Simmons First Foundation. Excluding these certain items and the tax effect, adjusted earnings for the nine months ended September 30, 2023 were ~~$27.7~~$157.2 million, or ~~$0.86~~$1.24 adjusted diluted ~~core~~ earnings per share, compared to ~~$24.4~~$217.5 million, or ~~$0.79~~$1.76 adjusted diluted ~~core~~ earnings per share for the same period in 2016. Diluted core earnings per share increased by $0.07, or 8.9%. Year-to-date core earnings were $77.0 million, an increase of $4.4 million, or 6.0%, compared with the same period in 2016. Year-to-date diluted core earnings per share were $2.41, an increase of $0.04, or 1.7%. See Reconciliation of Non-GAAP Measures for additional discussion of non-GAAP measures.

~~On January 17, 2017, we merged Simmons First Finance Company, a wholly-owned subsidiary of~~ nine months ended September 30, 2022.

Our Better Bank Initiative, which is focused on programs designed to ~~reduce regulatory risks~~optimize operational processes and increase capacity to capitalize on organic growth opportunities, achieved continued success across multiple fronts. During the third quarter of 2023, we completed our early retirement program, which is expected to result in approximately $5.1 million in annual cost savings. Extensive progress was also completed on other identified opportunities related to ~~its operations relative to the size of its assets. At September 30, 2017, the loan balance of this portfolio was $33 million.~~

~~In February 2017, we executed the sale of 11 substandard loans, which were primarily loans acquired, with a net principal balance of $11 million. We recognized a loss of $676,000 on this sale.~~

~~During March 2017, we exited the indirect lending market as this is a low-margin unit~~process improvements and ~~we made a financial decision to reallocate our capital resources. At September 30, 2017, the loan balance of this portfolio was $192 million.~~

On May 15, 2017, we closed the transaction to acquire Hardeman County Investment Company, Inc. (“Hardeman”) including its wholly-owned bank subsidiary, First South Bank. The Company completed the systems conversion and merged First South Bank into Simmons Bank in September 2017.streamlining or upgrading systems. As a result, we were able to achieve all of ~~this acquisition, we recognized $7.9 million in pretax merger related expenses during~~ the ~~nine-month period ended September 30, 2017.~~

~~In June 2017, we executed a sale of thirty-five classified loans with a discounted principal balance of $13.8 million, which included $7.3~~original $15 million of ~~legacy loans and $6.5 million of loans acquired. The loans acquired portion~~annual cost savings we previously estimated by the end of the ~~sale resulted in a benefit of $1.4 million accretion income~~third quarter, one quarter sooner than anticipated.

Asset quality metrics remain strong and ~~$714,000 increase in provision expense for~~reflect our conservative credit culture, as well as our focus on maintaining disciplined pricing and conservative underwriting standards given the current economic environment. Total nonperforming loans ~~acquired, resulting in a net pretax benefit of approximately $700,000.~~

During August 2017, we were the successful bidder at public auction held to discharge certain indebtedness owed to Simmons Bank and became the sole shareholder of Heartland Bank in Little Rock, Arkansas. Heartland Bank remains a separately chartered state bank, and we are currently evaluating next steps with respect to the institution. See Note 4 for additional information related to assets and liabilities held for sale related to Heartland Bank as of September 30, ~~2017.~~

In2023, December 31, 2022, and September ~~2017, we completed the sale~~30, 2022 were $81.9 million, $58.9 million, and $57.8 million, respectively. Non-performing assets as a percent of our property and casualty insurance business lines and an after-tax gain of $1.8 million was recognized on the transaction. Tangible common equity was positively impacted by $7.2 million due to a reduction in intangibletotal assets ~~related to the sold business.~~

Additionally, we completed the conversion and integration of First South Bank in September. Subsequent to the third quarter 2017, we completed the acquisitions of Southwest Bancorp, Inc., including its wholly-owned bank subsidiary, Bank SNB, and First Texas BHC, Inc., including its wholly-owned bank subsidiary, Southwest Bank. The systems conversions are planned during the first half of 2018, at which time the subsidiary banks will be merged into Simmons Bank. See Note 22 for additional information related to these acquisitions.

Furthermore, we had record results in the third quarter. We continue to experience good loan demand although the rate of growth is lower than we experienced in the first two quarters of 2017. Our net interest income for the quarter increased by 15.8% from third quarter last year while our net interest margin decreased 17 basis points. Our efficiency ratio for the third quarter was 55.06%.

51

~~Total loans, including loans acquired,~~ were ~~$6.303 billion~~0.32% at September 30, ~~2017,~~2023, compared to ~~$5.633 billion~~0.23% at both periods ended December 31, ~~2016~~2022 and ~~$5.401 billion at~~ September 30, 2016. Total loans increased $78.0 million during the quarter primarily due to growth in our legacy portfolio partially offset by the repayment of loans acquired and loans in our liquidating portfolios.

2022.

Stockholders’ equity as of September 30, ~~2017~~2023 was ~~$1.257~~$3.29 billion, book value per share was ~~$39.03~~$26.26 and tangible book value per share was ~~$25.64. Our ratio~~$14.77. We repurchased 1,128,962 shares of ~~stockholders’ equity to total assets was 13.2% and~~our common stock under the ~~ratio~~2022 Program during the third quarter of ~~tangible stockholders’ equity to tangible assets was 9.1%~~2023.

Total loans were $16.77 billion at September 30, ~~2017.~~2023, compared to $16.14 billion at December 31, 2022. The increase in total loans during the nine month period was supported by diverse growth in terms of type and geographic market. Our unfunded commitments were $4.32 billion and $5.64 billion as of September 30, 2023 and December 31, 2022, respectively. While unfunded commitments are considered a key indicator of future loan growth, the rapid increase in interest rates, coupled with softer economic conditions, have resulted in lower activity in our commercial loan pipeline, which was $877.3 million as of September 30, 2023, compared to $1.12 billion at December 31, 2022.

Simmons First National Corporation is a ~~$14.7 billion Arkansas~~Mid-South based financial holding company ~~conducting~~that, as of September 30, 2023, has approximately $27.6 billion in consolidated assets and, through its subsidiaries, conducts financial operations ~~throughout~~in Arkansas, ~~Colorado,~~ Kansas, Missouri, Oklahoma, Tennessee and Texas.

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

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

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

Our evaluation of the allowance for ~~loan~~credit losses is inherently subjective as it requires material estimates. The actual amounts of ~~loan~~credit losses realized in the near term could differ from the amounts estimated in arriving at the allowance for ~~loan~~credit losses reported in the financial statements.

In the first quarter of 2023, we refined the estimation process by improving systems, models, processes, methodology, and assumptions used within the calculation. After multiple parallel runs with the former process, it was determined that the changes did not and are not expected to result in material differences of results.

To quantitatively test goodwill for impairment, a present value of discounted cash flows calculation is completed and ~~intangible assets~~relies on several assumptions that have ~~indefinite lives be reviewed~~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 and no impairment was indicated as of September 30, 2023. Judgement is inherent in assessing goodwill for impairment. The various assumptions used in assessing goodwill for impairment ~~annually or more frequently if certain conditions occur.~~ involve uncertainties that are beyond our control and could cause actual results to differ materially from those projected.

Impairment losses on recorded goodwill, if any, will be recorded as operating expenses.

~~Stock-based~~

We have adopted various stock-based compensation plans. The plans provide for the grant of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock awards, restricted stock units, ~~and~~ performance stock ~~units.~~units and stock awards. Pursuant to the plans, shares are reserved for future issuance by the Company upon exercise of stock options or awarding of ~~bonus shares~~restricted stock, restricted stock units, performance stock units or stock awards granted to directors, officers and other key employees.

We are subject to the federal income tax laws of the United States, and the tax laws of the states and other jurisdictions where we conduct business. Due to the complexity of these laws, taxpayers and the taxing authorities may subject these laws to different interpretations. Management must make conclusions and estimates about the application of these innately intricate laws, related regulations, and case law. When preparing the Company’s income tax returns, management attempts to make reasonable interpretations of the tax laws. Taxing authorities have the ability to challenge management’s analysis of the tax law or any reinterpretation management makes in its ongoing assessment of facts and the developing case law. Management assesses the reasonableness of its effective tax rate quarterly based on its current estimate of net income and the applicable taxes expected for the full year. On a quarterly basis, management also reviews circumstances and developments in tax law affecting the reasonableness of deferred tax assets and liabilities and reserves for contingent tax liabilities.

Net interest income, our principal source of earnings, is the difference between the interest income generated by earning assets and the total interest cost of the deposits and borrowings obtained to fund those assets. Factors that determine the level of net interest income include the volume of earning assets and interest bearing liabilities, yields earned and rates paid, the level of non-performing loans and the amount of ~~non-interest~~noninterest bearing liabilities supporting earning assets. Net interest income is analyzed in the discussion and tables below on a fully taxable equivalent basis. The adjustment to convert certain income to a fully taxable equivalent basis consists of dividing tax-exempt income by one minus the combined federal and state income tax rate of ~~39.225%~~26.135%.

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. ~~Historically,~~In the last several years, on average, approximately ~~70%~~42% of our loan portfolio and approximately 80% of our time deposits have repriced in one year or less. ~~Through acquisition~~As of September 30, 2023, our ~~loans acquired tended to have longer maturities. In addition, due to market pressures, the duration of our legacy loan portfolio has also extended over the past several years. Our current~~ interest rate sensitivity shows that approximately ~~36%~~41% of our loans and ~~72%~~95% of our time deposits will reprice in the next year.

54

Net Interest Income ~~Quarter-to-Date~~- Sequential Quarter Analysis

For the three month period ended September 30, ~~2017,~~2023, net interest income on a fully taxable equivalent basis was ~~$80.6~~$159.9 million, ~~an increase~~a decrease of ~~$10.5~~$9.4 million, or ~~15.0%~~5.5%, ~~over~~compared to the ~~same period in 2016.~~three months ended June 30, 2023. The ~~increase~~decrease in net interest income was primarily the result of a ~~$13.8~~$13.5 million increase in fully tax equivalent interest income, more than offset by a ~~$3.3~~$22.9 million increase in interest expense.

The increase in interest income primarily resulted from a ~~$12.4~~$11.6 million increase in interest income on loans, ~~consisting~~coupled with an increase of ~~legacy~~$2.3 million in interest income on investment securities. The majority of the increase in interest income provided by loans ~~and loans acquired.~~was due to yield increases during the quarter, as a 19 basis point increase in loan yield resulted in $10.8 million of interest income. The loan yield for the third quarter of 2023 was 6.08% compared to 5.89% from the preceding sequential quarter. The increase in ~~loan volume during 2017 generated $14.4 million of additional~~ interest income ~~while a 16 basis point decline in yield resulted in a $2.0 million decrease in interest income. The interest income increase from loan volume~~on investment securities was primarily due to a 25 basis point increase in our ~~legacy loan growth from the same period last year, the Hardeman acquisition during 2017 and the Citizens acquisition in September of 2016.~~

Included in interest income is the effect of yield accretion recognized as a result of updated estimates of the cash flows of our loans acquired, as discussed in Note 6, Loans Acquired, in the accompanying Notes to Consolidated Financial Statements included elsewhere in this report. Each quarter, we estimate the cash flows expected to be collected from the loans acquired, and adjustments may or may not be required. The cash flow estimate may increase or decrease based on payment histories and loss expectations of the loans. The resulting adjustment to interest income is spread on a level-yield basis over the remaining expected lives of the loans.

For the three months ended September 30, 2017 and 2016, interest income included $2.9 million and $4.9 million, respectively, for the yield accretion recognized on loans acquired. The accretable yield adjustments recorded in future periods will change as we continue to evaluate expected cash flows from the loans acquired.

taxable security portfolio. The increase in ~~interest expense~~both loan and investment yield was due to the ~~result of a $2.3~~continued rising rate environment.

56

The $22.9 million increase in interest expense ~~on deposits primarily from deposit volume from the recent acquisitions. Interest expense also increased $827,000~~is mostly due to the ~~$310.5 million~~ increase in ~~other borrowings. Increases~~deposit account rates and change in deposit ~~costs continue~~mix as consumers migrate toward higher rate deposits, principally certificates of deposit, in the current higher rate environment. Interest expense increased $20.2 million due to the increase in rate of 49 basis points on interest-bearing deposit accounts as pricing measures were implemented to defend the core deposit base. Interest expense increased $4.6 million due to the increase in deposit volume over the period. The increases due to deposit volume and yields were partially offset ~~gradual increases~~by the reduced reliance on other wholesale borrowings sources, primarily Federal Home Loan Bank advances during the third quarter of 2023, which led to a $2.2 million decrease in ~~rates on earning assets.~~

interest expense.

Net Interest Income ~~Year-to-Date~~- Year-over-Year Analysis

~~For~~

Net interest income on a fully taxable equivalent basis for the nine month period ended September 30, ~~2017,~~2023 decreased $28.8 million, or 5.3%, over the same period in 2022. The decrease in net interest income on a fully taxable equivalent basis was ~~$233.8 million, an increase of $23.2 million, or 11.0%, over the same period in 2016. The increase in net interest income was~~ the result of a ~~$28.9~~$290.5 million increase in fully tax equivalent interest income, more than offset by a ~~$5.7~~$319.3 million increase in interest expense.

The increase in interest income primarily resulted from a $25.1 million increase in interest income on loans and a $3.9 million increase in interest income on investment securities. The increase in loan volume during 2017 generated $36.7 million of additional interest income, while a 29 basis point decline in yield resulted in a $11.7 million decrease in interest income. The increase in loan volume was primarily due to our acquisitions. $943,000 of the increase in interest income on investment securities was due to volume increases while $2.9 million was a result of an increase in yield on the security portfolio.

~~For the nine months ended September 30, 2017 and 2016, interest income included $12.1 million and $17.7 million, respectively, for the yield accretion recognized on loans acquired.~~

~~The $5.7 million increase in interest expense is primarily from the growth in deposit accounts related to the acquisitions and the increase in other debt.~~

~~Net Interest Margin~~

Our net interest margin decreased 17 basis points to 3.91% for the three month period ended September 30, 2017, when compared to 4.08% for the same period in 2016. For the nine month period ended September 30, 2017, net interest margin decreased 22 basis points to 3.99% when compared to 4.21% for the same period in 2016. The most significant factor in the decreasing margin during the nine month period ended September 30, ~~2017 is the impact of the lower accretable yield adjustments discussed. Normalized for all accretion~~2023 resulted from increases in interest income on loans ~~acquired,~~and investments as a result of rising market interest rates. The increase in interest income on loans of $250.9 million reflects an increase in loan volume of $103.1 million coupled with a 127 basis point rise in loan yield that resulted in a $147.8 million increase. The increase in our ~~core~~loan volume during the first nine months of 2023 was due to the Spirit acquisition in the second quarter of 2022, combined with solid organic loan growth over the comparative period. The increase of $35.4 million in interest income on investment securities reflects an increase of $48.6 million in interest income on investment securities due to yield increases over the period of 125 basis points and 14 basis points for our taxable and non-taxable investment security portfolios, respectively. The increase in interest income on investment securities due to yield increases was mitigated by a $13.2 million decrease due to the decline in our investment portfolio average balances which decreased by $915.2 million or 11.0%, as our portfolio experienced pay downs and maturities over the period, which was reinvested into our loan portfolio.

The $319.3 million increase in interest expense is mainly due to the increase in our deposit account rates over the period, combined with the additional deposit base from the Spirit acquisition and change in deposit mix as the market experiences a shift in consumer sentiment given the attractiveness of higher yielding time deposits in the current higher interest rate environment. Interest expense increased $259.8 million due to the increase in rate of 222 basis points on interest-bearing deposit accounts and increased $27.2 million due to the increase in deposit volume over the period. Further, an increase of $28.2 million to interest expense was related to an increase in other borrowings during the same period. The rate increase of 338 basis points in other borrowings resulted in an increase of $29.3 million, that was partially offset by a $1.1 million decrease in volume over the period. We continually monitor and look for opportunities to fairly reprice our deposits while remaining competitive in this current challenging rate environment.

Net Interest Margin

Our net interest margin aton a fully tax equivalent basis was 2.61% and 2.82% for the three and nine month periods ended September 30, ~~2017~~2023, as compared to 2.76% and ~~2016~~3.12% for the three months ended June 30, 2023 and the nine months ended September 30, 2022, respectively. The decrease of 15 basis points in the net interest margin during the three months ended September 30, 2023 compared to the three months ended June 30, 2023 was ~~3.79%~~primarily due to the rising deposit rate pressure from increased market competition and ~~3.86%, respectively. We expect that increases~~consumer migration toward higher rate deposits. The decrease of 30 basis points in the net interest margin during the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022 was due to the rising deposit rate pressure and change in deposit ~~costs will continue to offset short-term increases~~mix previously discussed, mitigated by the overall increase in ~~rates on~~our earning ~~assets. These increases are a result of increased competition for deposits and~~assets average balances over the ~~recent Federal Reserve~~comparative periods which has improved interest income in the rising rate ~~hikes. See Reconciliation of Non-GAAP Measures for additional discussion of non-GAAP measures.~~

environment.

57

Net Interest Income Tables

Tables 1 and 2 reflect an analysis of net interest income on a fully taxable equivalent basis for the three months ended September 30, 2023 and June 30, 2023 and the nine months ended September 30, ~~2017~~2023 and ~~2016, respectively, as well as changes in fully taxable equivalent net interest margin for the three and nine months ended September 30, 2017 versus September 30, 2016.~~

2022, respectively.

Table 1: Analysis of Net Interest Margin

(FTE = Fully Taxable Equivalent)

Three Months Ended
September 30, Nine Months Ended
September 30,
(In thousands) 2017 2016 2017 2016

Interest income $ 87,484 $ 73,418 $ 249,809 $ 220,940
FTE adjustment 1,751 1,969 5,799 5,728
Interest income – FTE 89,235 75,387 255,608 226,668
Interest expense 8,665 5,355 21,798 16,062
Net interest income – FTE $ 80,570 $ 70,032 $ 233,810 $ 210,606
��
Yield on earning assets – FTE 4.33 % 4.39 % 4.36 % 4.53 %
Cost of interest bearing liabilities 0.55 % 0.41 % 0.49 % 0.42 %
Net interest spread – FTE 3.78 % 3.98 % 3.87 % 4.11 %
Net interest margin – FTE 3.91 % 4.08 % 3.99 % 4.21 %

(FTE = Fully Taxable Equivalent using an effective tax rate of 26.135%)


	Three Months Ended						Nine Months Ended
	September 30,			June 30,			September 30,			September 30,
(In thousands)	2023			2023			2023			2022
Interest income	$	310,286		$	297,220		$	886,643		$	597,151
FTE adjustment	6,515			6,106			18,932			17,901
Interest income – FTE	316,801			303,326			905,575			615,052
Interest expense	156,853			133,990			392,145			72,861
Net interest income – FTE	$	159,948		$	169,336		$	513,430		$	542,191

Yield on earning assets – FTE	5.16		%	4.95		%	4.97		%	3.54		%
Cost of interest bearing liabilities	3.29		%	2.85		%	2.81		%	0.57		%
Net interest spread – FTE	1.87		%	2.10		%	2.16		%	2.97		%
Net interest margin – FTE	2.61		%	2.76		%	2.82		%	3.12		%

Table 2: Changes in Fully Taxable Equivalent Net Interest Margin

(In thousands) Three Months Ended
September 30,
2017 vs. 2016 Nine Months Ended
September 30,
2017 vs. 2016

Increase due to change in earning assets $ 14,647 $ 37,099
Decrease due to change in earning asset yields (799 ) (8,159 )
Decrease due to change in interest bearing liabilities (1,850 ) (4,235 )
Decrease due to change in interest rates paid on interest bearing liabilities (1,460 ) (1,501 )
Increase in net interest income $ 10,538 $ 23,204


	Three Months Ended		Nine Months Ended
(In thousands)	September 30, 2023 compared to June 30, 2023		September 30, 2023 compared to September 30, 2022
Increase (decrease) due to change in earning assets	$	(1,297)	$	85,904
Increase due to change in earning asset yields	14,772		204,619
Decrease due to change in interest bearing liabilities	(1,480)		(24,390)
Decrease due to change in interest rates paid on interest bearing liabilities	(21,383)		(294,894)
Decrease in net interest income	$	(9,388)	$	(28,761)

58

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, 2023 and June 30, 2023 and the nine months ended September 30, ~~2017~~2023 and ~~2016.~~2022, 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.

Table 3: Average Balance Sheets and Net Interest Income Analysis

Three Months Ended September 30,
2017 2016
Average Income/ Yield/ Average Income/ Yield/
($ in thousands) Balance Expense Rate (%) Balance Expense Rate (%)

ASSETS
Earning assets:
Interest bearing balances due from banks and federal funds sold $ 269,111 $ 650 0.96 $ 253,249 $ 263 0.41
Investment securities - taxable 1,313,333 6,574 1.99 1,038,437 4,775 1.83
Investment securities - non-taxable 324,901 4,341 5.30 391,495 4,926 5.01
Mortgage loans held for sale 13,388 159 4.71 31,256 299 3.81
Assets held in trading accounts 52 -- -- 5,108 4 0.31
Loans 6,261,507 77,511 4.91 5,105,474 65,120 5.07
Total interest earning assets 8,182,292 89,235 4.33 6,825,019 75,387 4.39
Non-earning assets 993,315 878,818
Total assets $ 9,175,607 $ 7,703,837

LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Interest bearing liabilities
Interest bearing transaction and savings accounts $ 4,227,567 $ 3,920 0.37 $ 3,645,414 $ 1,965 0.21
Time deposits 1,330,889 2,110 0.63 1,213,895 1,767 0.58
Total interest bearing deposits 5,558,456 6,030 0.43 4,859,309 3,732 0.31
Federal funds purchased and securities sold under agreement to repurchase 115,583 83 0.28 105,576 59 0.22
Other borrowings 502,972 1,875 1.48 192,453 1,048 2.17
Subordinated debentures 67,367 677 3.99 60,238 516 3.41
Total interest bearing liabilities 6,244,378 8,665 0.55 5,217,576 5,355 0.41
Non-interest bearing liabilities:
Non-interest bearing deposits 1,613,248 1,322,818
Other liabilities 62,287 49,191
Total liabilities 7,919,913 6,589,585
Stockholders’ equity 1,255,694 1,114,252
Total liabilities and stockholders’ equity $ 9,175,607 $ 7,703,837
Net interest spread 3.78 3.98
Net interest margin $ 80,570 3.91 $ 70,032 4.08

(FTE = Fully Taxable Equivalent using an effective tax rate of 26.135%)

Nine Months Ended September 30,
2017 2016
Average Income/ Yield/ Average Income/ Yield/
($ in thousands) Balance Expense Rate(%) Balance Expense Rate(%)

ASSETS
Earning assets:
Interest bearing balances due from banks and federal funds sold $ 186,423 $ 986 0.71 $ 183,718 $ 511 1.37
Investment securities - taxable 1,326,680 19,925 2.01 1,064,670 16,025 2.01
Investment securities - non-taxable 336,988 14,343 5.69 415,296 14,378 4.62
Mortgage loans held for sale 12,371 430 4.65 28,905 872 4.03
Assets held in trading accounts 50 -- -- 5,745 13 0.30
Loans 5,967,036 219,924 4.93 4,984,349 194,869 5.22
Total interest earning assets 7,829,548 255,608 4.36 �� 6,682,683 226,668 4.53
Non-earning assets 971,127 892,370
Total assets $ 8,800,675 $ 7,575,053

LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Interest bearing liabilities
Interest bearing transaction and savings accounts $ 4,082,157 $ 9,350 0.31 $ 3,552,088 $ 6,018 0.23
Time deposits 1,290,218 5,700 0.59 1,253,437 5,144 0.55
Total interest bearing deposits 5,372,375 15,050 0.37 4,805,525 11,162 0.31
Federal funds purchased and securities sold under agreement to repurchase 114,054 250 0.29 107,932 183 0.23
Other borrowings 427,741 4,628 1.45 182,908 3,114 2.27
Subordinated debentures 63,946 1,870 3.91 60,160 1,603 3.56
Total interest bearing liabilities 5,978,116 21,798 0.49 5,156,525 16,062 0.42
Non-interest bearing liabilities:
Non-interest bearing deposits 1,559,093 1,273,337
Other liabilities 52,979 53,304
Total liabilities 7,590,188 6,483,166
Stockholders’ equity 1,210,487 1,091,887
Total liabilities and stockholders’ equity $ 8,800,675 $ 7,575,053
Net interest spread 3.87 4.11
Net interest margin $ 233,810 3.99 $ 210,606 4.21


	Three Months Ended
	September 30, 2023					June 30, 2023
	Average		Income/		Yield/	Average		Income/		Yield/
(In thousands)	Balance		Expense		Rate (%)	Balance		Expense		Rate (%)
ASSETS
Earning assets:
Interest bearing balances due from banks and federal funds sold	$	331,444	$	3,569	4.27	$	404,639	$	4,023	3.99
Investment securities - taxable	4,638,486		34,734		2.97	4,821,231		32,745		2.72
Investment securities - non-taxable	2,617,152		21,563		3.27	2,627,192		21,253		3.24
Mortgage loans held for sale	9,542		178		7.40	9,560		154		6.46
Loans - including fees	16,758,597		256,757		6.08	16,702,403		245,151		5.89
Total interest earning assets	24,355,221		316,801		5.16	24,565,025		303,326		4.95
Non-earning assets	3,239,390					3,201,114
Total assets	$	27,594,611				$	27,766,139

LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Interest bearing liabilities:
Interest bearing transaction and savings deposits	$	10,682,767	$	65,095	2.42	$	11,011,746	$	54,485	1.98
Time deposits	6,558,110		68,062		4.12	5,911,139		53,879		3.66
Total interest bearing deposits	17,240,877		133,157		3.06	16,922,885		108,364		2.57
Federal funds purchased and securities sold under agreements to repurchase	89,769		277		1.22	119,985		318		1.06
Other borrowings	1,222,557		16,450		5.34	1,449,403		18,612		5.15
Subordinated debt and debentures	366,085		6,969		7.55	366,047		6,696		7.34
Total interest bearing liabilities	18,919,288		156,853		3.29	18,858,320		133,990		2.85

Noninterest bearing liabilities:
Noninterest bearing deposits	5,032,631					5,276,267
Other liabilities	271,014					272,628
Total liabilities	24,222,933					24,407,215
Stockholders’ equity	3,371,678					3,358,924
Total liabilities and stockholders’ equity	$	27,594,611				$	27,766,139
Net interest spread – FTE					1.87					2.10
Net interest margin – FTE			$	159,948	2.61			$	169,336	2.76

59


	Nine Months Ended
	September 30, 2023					September 30, 2022
	Average		Income/		Yield/	Average		Income/		Yield/
(In thousands)	Balance		Expense		Rate (%)	Balance		Expense		Rate (%)
ASSETS
Earning assets:
Interest bearing balances due from banks and federal funds sold	$	350,523	$	10,375	3.96	$	939,411	$	2,907	0.41
Investment securities - taxable	4,795,820		100,283		2.80	5,589,298		64,791		1.55
Investment securities - non-taxable	2,622,967		64,338		3.28	2,744,644		64,474		3.14
Mortgage loans held for sale	8,205		414		6.75	19,309		568		3.93
Other loans held for sale	—		—		—	10,552		3,061		38.78
Loans - including fees	16,598,492		730,165		5.88	13,910,831		479,251		4.61
Total interest earning assets	24,376,007		905,575		4.97	23,214,045		615,052		3.54
Non-earning assets	3,240,875					2,948,091
Total assets	$	27,616,882				$	26,162,136

LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Interest bearing liabilities:
Interest bearing transaction and savings deposits	$	11,135,226	$	167,570	2.01	$	12,385,888	$	28,418	0.31
Time deposits	5,879,908		161,479		3.67	2,718,145		13,582		0.67
Total interest bearing deposits	17,015,134		329,049		2.59	15,104,033		42,000		0.37
Federal funds purchased and securities sold under agreements to repurchase	119,259		918		1.03	208,090		492		0.32
Other borrowings	1,154,840		43,910		5.08	1,233,534		15,671		1.70
Subordinated debt and debentures	366,047		18,268		6.67	404,609		14,698		4.86
Total interest bearing liabilities	18,655,280		392,145		2.81	16,950,266		72,861		0.57

Noninterest bearing liabilities:
Noninterest bearing deposits	5,314,988					5,714,412
Other liabilities	279,526					222,715
Total liabilities	24,249,794					22,887,393
Stockholders’ equity	3,367,088					3,274,743
Total liabilities and stockholders’ equity	$	27,616,882				$	26,162,136
Net interest spread – FTE					2.16					2.97
Net interest margin – FTE			$	513,430	2.82			$	542,191	3.12

60

Table 4 shows changes in interest income and interest expense resulting from changes in both volume and ~~changes in~~ interest rates for the three ~~and nine month periods~~months ended September 30, ~~2017,~~2023 as compared to the ~~same periods of~~three months ended June 30, 2023 and the ~~prior year.~~nine months ended September 30, 2023 and 2022, 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.

Table 4: Volume/Rate Analysis

Three Months Ended
September 30, Nine Months Ended
September 30,
2017 over 2016 2017 over 2016
(In thousands, on a fully Yield/ Yield/
taxable equivalent basis) Volume Rate Total Volume Rate Total

Increase (decrease) in:

Interest income:
Interest bearing balances due from banks and federal funds sold $ 17 $ 370 $ 387 $ 8 $ 467 $ 475
Investment securities - taxable 1,348 451 1,799 3,935 (35 ) 3,900
Investment securities - non-taxable (876 ) 291 (585 ) (2,992 ) 2,957 (35 )
Mortgage loans held for sale (200 ) 60 (140 ) (559 ) 117 (442 )
Assets held in trading accounts (2 ) (2 ) (4 ) (7 ) (6 ) (13 )
Loans 14,360 (1,969 ) 12,391 36,714 (11,659 ) 25,055
Total 14,647 (799 ) 13,848 37,099 (8,159 ) 28,940

Interest expense:
Interest bearing transaction and savings accounts 355 1,600 1,955 992 2,340 3,332
Time deposits 178 165 343 154 402 556
Federal funds purchased and securities sold under agreements to repurchase 7 17 24 10 57 67
Other borrowings 1,245 (418 ) 827 2,974 (1,460 ) 1,514
Subordinated debentures 65 96 161 105 162 267
Total 1,850 1,460 3,310 4,235 1,501 5,736
Increase (decrease) in net interest income $ 12,797 $ (2,259 ) $ 10,538 $ 32,864 $ (9,660 ) $ 23,204

Three Months Ended Nine Months Ended
September 30, 2023 compared to June 30, 2023 September 30, 2023 compared to September 30, 2022
(In thousands, on a fully taxable equivalent basis) Volume Yield/
Rate Total Volume Yield/
Rate Total
Increase (decrease) in:
Interest income:
Interest bearing balances due from banks and federal funds sold $ (769) $ 315 $ (454) $ (2,886) $ 10,354 $ 7,468
Investment securities - taxable (1,275) 3,264 1,989 (10,308) 45,800 35,492
Investment securities - non-taxable (81) 391 310 (2,921) 2,785 (136)
Mortgage loans held for sale — 24 24 (431) 277 (154)
Other loans held for sale — — — (680) (2,381) (3,061)
Loans - including fees 828 10,778 11,606 103,130 147,784 250,914
Total (1,297) 14,772 13,475 85,904 204,619 290,523
Interest expense:
Interest bearing transaction and savings accounts (1,671) 12,281 10,610 (3,155) 142,307 139,152
Time deposits 6,257 7,926 14,183 30,399 117,498 147,897
Federal funds purchased and securities sold under agreements to repurchase (88) 47 (41) (285) 711 426
Other borrowings (3,019) 857 (2,162) (1,062) 29,301 28,239
Subordinated notes and debentures 1 272 273 (1,507) 5,077 3,570
Total 1,480 21,383 22,863 24,390 294,894 319,284
(Decrease) increase in net interest income $ (2,777) $ (6,611) $ (9,388) $ 61,514 $ (90,275) $ (28,761)

61

PROVISION FOR ~~LOAN~~CREDIT LOSSES

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

The provision for ~~loan~~credit losses for the three months ended September 30, 2023 was $7.7 million as compared to $61,000 for the three months ended June 30, 2023. The change for the three month period ended September 30, ~~2017, was $5.5 million,~~2023 as compared to ~~$8.3~~the preceding quarter is primarily due to a $20.2 million ~~for the three month period ended September 30, 2016, a decrease of $2.8 million. The provision for loan losses for the nine month period ended September 30, 2017, was $16.8 million, compared~~expense related to ~~$15.7 million for the nine month period ended September 30, 2016, an increase of $1.1 million. See Allowance for Loan Losses section for additional information.~~

~~The provision increase was necessary in order to maintain an appropriate allowance for loan losses for the company’s growing legacy portfolio. Significant loan growth in our markets, both from new~~ loans and ~~from loans acquired migrating to legacy,~~reflected loan growth, as well as ~~increases~~the impact of updated economic assumptions, which was partially offset by the recapture of $11.3 million reflecting the continued decline in ~~specific reserves on certain impaired loans, required an allowance to be established for those loans through a provision.~~

~~Finally, a loan provision~~unfunded commitments and the recapture of ~~$1.5~~$1.2 million ~~was recorded on loans acquired during~~based upon improvements in the value of select corporate bonds in the investment securities portfolio.

For the nine months ended September 30, ~~2017~~2023, our provision for credit losses was $32.0 million as ~~a result of an estimated shortage in our credit mark on certain purchased credit impaired loans. The estimated shortage in credit mark was due~~compared to ~~subsequent deterioration in the loans after purchase.~~

~~NON-INTEREST INCOME~~

~~Total non-interest income was $36.3~~$14.0 million for the ~~three month~~same period ended September 30, ~~2017, a decrease of $544,000, or 1.5%,~~2022. The change for the nine months ended September 30, 2023 as compared to the same period ~~in 2016. Total non-interest income was $102.1 million for the nine month period~~ ended September 30, ~~2017, a decrease~~2022 is primarily due to the impacts described above, coupled with prior decreases in the value of ~~$1.1 million, or 1.1%, compared~~select corporate bonds in the investment securities portfolio, while the nine months ended September 30, 2022 reflected the adjustments due to ~~$103.3 million~~the Spirit Day 2 provision expense for the ~~same period in 2016.~~

~~Non-interest~~acquired loans and additional unfunded commitments added to our portfolio, offset by improved credit quality metrics and improved macroeconomic factors during the period.

NONINTEREST INCOME

Noninterest income is principally derived from recurring fee income, which includes service charges, ~~trust~~wealth management fees and debit and credit card fees. ~~Non-interest~~Noninterest income also includes income on the sale of mortgage ~~and SBA~~ loans, ~~investment banking income,~~ income from the increase in cash surrender values of bank owned life insurance and gains (losses) from sales of securities.

~~The decrease in non-interest income was due to gains recorded on~~

For the ~~sale of securities that totaled $2.3 million during the nine~~three month period ended September 30, ~~2017~~2023, total noninterest income was $42.8 million, a decrease of approximately $2.2 million or 4.9%, compared to ~~$4.4~~the three month period ended June 30, 2023. The sequential decrease was primarily driven by the fair value adjustments related to Small Business Investment Company (“SBIC”) investments and death benefits from bank owned life insurance totaling $3.5 million recognized during the period ended June 30, 2023, and was partially offset by an incremental increase in bank owned life insurance income during the three month period ended September 30, 2023.

Noninterest income for the nine months ended September 30, 2023 increased by approximately $8.2 million or 6.5% as compared to the nine months ended September 30, 2022. The increase as compared to the same period in ~~2016. In addition, non-interest income~~2022 was primarily due to the Spirit acquisition and attributable increased consumer base, coupled with a legal reserve recapture of $4.0 million previously disclosed and the fair value adjustments related to SBIC investments and death benefits from ~~mortgage and SBA lending~~bank owned life insurance totaling $3.5 million discussed above. The increase was ~~$2.3 million less than the same period in 2016. These decreases were~~ partially offset by a $3.3 million decrease in mortgage lending income due to the ~~$3.7 million gain on~~rising interest rate environment and softening market conditions over the ~~sale of~~period, which slowed the ~~property and casualty insurance lines of business and increases in trust income, service charges, and debit and credit card fees.~~

demand for mortgage loans compared to the demand associated with the previous lower interest rate environment.

62

Table 5 ~~presents the changes in non-interest~~shows noninterest income for the three ~~and nine~~ month periods ended September 30, ~~2017~~2023 and ~~2016, respectively.~~

June 30, 2023 and the nine months ended September 30, 2023 and 2022, respectively, as well as changes between periods.

Table 5: ~~Non-Interest~~Noninterest Income

Three Months 2017 Nine Months 2017
Ended September 30 Change from Ended September 30 Change from
(In thousands) 2017 2016 2016 2017 2016 2016
Trust income $ 4,225 $ 3,873 $ 352 9.09 % $ 12,550 $ 11,160 $ 1,390 12.46 %
Service charges on deposit accounts 8,907 8,771 136 1.55 25,492 23,748 1,744 7.34
Other service charges and fees 2,433 3,261 (828 ) -25.39 7,145 8,846 (1,701 ) -19.23
Mortgage and SBA lending income 3,219 4,339 (1,120 ) -25.81 9,603 11,903 (2,300 ) -19.32
Investment banking income 680 1,131 (451 ) -39.88 2,007 2,999 (992 ) -33.08
Debit and credit card fees 8,864 7,825 1,039 13.28 25,457 22,713 2,744 12.08
Bank owned life insurance income 725 606 119 19.64 2,402 2,429 (27 ) -1.11
Gain on sale of securities, net 3 315 (312 ) -99.05 2,302 4,403 (2,101 ) -47.72
Net (loss) gain on sale of premises held for sale (325 ) 175 (500 ) * 264 175 89 50.86
Net gain on sale of insurance lines of business 3,708 -- 3,708 * 3,708 -- 3,708 *
Other income 3,893 6,580 (2,687 ) -40.84 11,206 14,891 (3,685 ) -24.75
Total non-interest income $ 36,332 $ 36,876 $ (544 ) -1.48 % $ 102,136 $ 103,267 $ (1,131 ) -1.10 %

~~______________________~~


	Three Months Ended							Nine Months Ended
	Sept. 30,		June 30,		Change			Sept. 30,		Sept. 30,		Change
(Dollars in thousands)	2023		2023		$		%	2023		2022		$		%
Service charges on deposit accounts	$	12,429	$	12,882	$	(453)	(3.5)%	$	37,748	$	34,635	$	3,113	9.0%
Debit and credit card fees	7,712		7,986		(274)		(3.4)	23,650		23,358		292		1.3
Wealth management fees	7,719		7,440		279		3.8	22,524		23,744		(1,220)		(5.1)
Mortgage lending income	2,157		2,403		(246)		(10.2)	6,130		9,383		(3,253)		(34.7)
Bank owned life insurance income	3,095		2,555		540		21.1	8,623		8,171		452		5.5
Other service charges and fees	2,232		2,262		(30)		(1.3)	6,776		5,593		1,183		21.2
Loss on sale of securities, net	—		(391)		391		*	(391)		(226)		(165)		(73.0)
Loss on sale of branches	—		—		—		—	—		(153)		153		100.0
Other income	7,433		9,843		(2,410)		(24.5)	28,532		20,914		7,618		36.4
Total noninterest income	$	42,777	$	44,980	$	(2,203)	(4.9)%	$	133,592	$	125,419	$	8,173	6.5%

*Not meaningful

Recurring fee income ~~(service~~(total service charges, ~~trust~~wealth management fees, debit and credit card fees) for the three month period ended September 30, ~~2017,~~2023 was ~~$24.4~~$30.1 million, ~~an increase~~a decrease of ~~$699,000 from~~$478,000 as compared to the three month period ended ~~September~~June 30, 2016. Trust income increased by $352,000 or 9.1%, service charges and fees decreased by $692,000 or 5.8% and debit and credit card fees increased by $1.0 million, or 13.3%. The increase in debit and credit card fees is related to a higher volume of debit and credit card transactions2023 due to certain insufficient funds fee structure changes for consumer deposit accounts that were implemented during the ~~additions~~third quarter of ~~accounts from the Hardeman and Citizen acquisitions and continued positive growth in our trust department.~~

~~Mortgage and SBA lending~~2023. Recurring fee income ~~decreased by $2.3 million~~ for the nine ~~months~~month period ended September 30, ~~2017 compared to last year,~~2023 was $90.7 million, an increase of $3.4 million from the nine month period ended September 30, 2022 and was primarily due to the ~~seasonal nature~~increased consumer base provided by the Spirit acquisition. We expect service charges to moderate through the end of ~~the mortgage volume as well as the timing of selling the guaranteed portion of SBA loans. Investment banking income decreased $992,000 during the nine months ended September 30, 2017 compared~~2023 and into early 2024 due to the ~~same period last year as a result~~elimination of ~~the closure of our Institutional Division and exit from its lines of business in the third quarter of 2016.~~

returned item fees for consumer deposit accounts with insufficient funds.

~~NON-INTEREST~~

NONINTEREST EXPENSE

~~Non-interest~~

Noninterest expense consists of salaries and employee benefits, occupancy, equipment, foreclosure losses and other expenses necessary for ~~the operation of the Company.~~our operations. Management remains committed to controlling the level of ~~non-interest~~noninterest expense through the continued use of expense control ~~measures that have been installed.~~measures. We utilize an extensive profit planning and reporting system involving all subsidiaries. Based on a needs assessment of the business plan for the upcoming year, monthly and annual profit plans are developed, including manpower and capital expenditure budgets. These profit plans are subject to extensive initial reviews and monitored by management ~~on a monthly basis.~~monthly. Variances from the plan are reviewed monthly and, when required, management takes corrective action intended to ensure financial goals are met. We also regularly monitor staffing levels at each subsidiary to ensure productivity and overhead are in line with existing workload requirements.

~~Non-interest~~

Noninterest expense was $132.0 million for the three month period ended September 30, 2023, as compared to noninterest expense of $139.7 million for the three month period ended June 30, 2023, representing a decrease of $7.7 million, or 5.5%, as compared to the preceding quarter. Adjusted noninterest expense, which excludes branch right sizing, merger related costs and early retirement program costs, for the three months ended September 30, ~~2017 was $66.2 million, an increase of $3.7~~2023, decreased $6.1 million, or ~~6.0%~~4.5%, ~~from the same period in 2016. Normalizing for the non-core merger related costs and branch right sizing expenses, non-interest expense for~~as compared to the three months ended ~~September~~June 30, 2017 increased $4.6 million, or 7.5%, from the same period in 2016, primarily due to the incremental operating expenses of the acquired franchises and increased professional fees associated with preparation to pass $10 billion in assets.

~~Non-interest~~2023.

Noninterest expense for the nine months ended September 30, ~~2017 was $203.9 million, an increase of $15.5~~2023 decreased by approximately $9.3 million or ~~8.2%, from the same period in 2016. The most significant impacts~~2.2% as compared to ~~non-interest expense were the following non-core items.~~

~~First, we saw a $5.9 million increase in merger related costs from last year. Included in~~ the nine months ended September 30, ~~2017 were $7.9 million in~~2022. Adjusted noninterest expense, which excludes branch right sizing, merger related costs, ~~primarily from our Hardeman transaction~~donation to Simmons First Foundation, and ~~recently completed acquisitions.~~

~~Second, branch right sizing expense~~early retirement program costs, for the nine months ended September 30, ~~2017 decreased by $3.1~~2023, increased $9.1 million, ~~from the same period in 2016. We had $3.5 million of branch right sizing expense in 2016 from our ten branch closings. We continue~~or 2.3%, as compared to ~~monitor branch operations and profitability as well as changing customer habits.~~

~~Normalizing for the non-core merger related costs and branch right sizing, non-interest expense for~~ the nine months ended September 30, ~~2017 increased $12.7~~2022.

The $7.3 million ~~or 7.0%, from~~decrease in salaries and employee benefits expense during the ~~same~~three month period ~~in 2016,~~ended September 30, 2023 as compared to the preceding sequential quarter is primarily due to the ~~incremental operating expenses~~successful execution of ~~the acquired franchises.~~

~~Salaries~~programs as part of our Better Bank Initiative. Adjusted salaries and employee benefits ~~increased by $3.5 million~~expense, which excludes early retirement program costs, for the three months ended September 30, ~~2017~~2023, decreased $5.3 million, or 7.4%, as compared to the three months ended June 30, 2023. Salaries and employee benefits expense increased $5.2 million during the nine month period ended September 30, 2023 when compared to the same period in ~~2016. Salaries~~the prior year, primarily due to the impact from the Spirit acquisition.

63

Deposit insurance expense for the three and ~~employee benefits~~nine months ended September 30, 2023 as compared to the three months ended June 30, 2023 and nine months ended September 30, 2022 decreased by $529,000 and increased by ~~$5.4~~$6.8 million, respectively. The year-over-year increase was largely due to an increased base rate related to changes in the mix of deposits, coupled with the increase in deposits from the Spirit acquisition.

Table 6 below shows noninterest expense for the three month periods ended September 30, 2023 and June 30, 2023 and the nine months ended September 30, ~~2017 primarily related to the Hardeman acquisition which occurred during May 2017.~~

~~The increases in several other operating expense categories during the periods were a result of the 2017~~2023 and 2016 acquisitions. Professional services increased by $664,000 for the three months ended September 30, 2017 from the same period in 2016. Professional services increased by $3.4 million for the nine months ended September 30, 2017 from the same period in 2016 related to exam fees, auditing and accounting services and general consulting expenses.

~~Table 6 below shows non-interest expense for the three and nine month periods ended September 30, 2017 and 2016,~~2022, respectively, as well as changes ~~in 2017 from 2016.~~

between periods.

Table 6: ~~Non-Interest~~Noninterest Expense

Three Months 2017 Nine Months 2017
Ended September 30 Change from Ended September 30 Change from
(In thousands) 2017 2016 2016 2017 2016 2016
Salaries and employee benefits $ 35,285 $ 31,784 $ 3,501 11.01 % $ 105,026 $ 99,660 $ 5,366 5.38 %
Occupancy expense, net 4,928 4,690 238 5.07 14,459 14,151 308 2.18
Furniture and equipment expense 4,840 4,272 568 13.30 13,833 12,296 1,537 12.50
Other real estate and foreclosure expense 1,071 1,849 (778 ) -42.08 2,177 3,782 (1,605 ) -42.44
Deposit insurance 1,020 1,136 (116 ) -10.21 2,480 3,380 (900 ) -26.63
Merger related costs 752 1,524 (772 ) -50.66 7,879 1,989 5,890 --
Other operating expenses:
   Professional services 3,946 3,282 664 20.23 13,079 9,678 3,401 35.14
   Postage 1,091 1,150 (59 ) -5.13 3,427 3,458 (31 ) -0.90
   Telephone 943 912 31 3.40 3,003 3,014 (11 ) -0.36
   Credit card expenses 3,137 2,947 190 6.45 9,081 8,319 762 9.16
  Marketing 1,219 1,525 (306 ) -20.07 4,253 4,647 (394 ) -8.48
   Operating supplies 592 457 135 29.54 1,406 1,273 133 10.45
   Amortization of intangibles 1,724 1,503 221 14.70 4,828 4,411 417 9.45
  Branch right sizing expense 153 218 (65 ) -29.82 370 3,451 (3,081 ) -89.28
   Other expense 5,458 5,185 273 5.27 18,588 14,851 3,737 25.16
       Total non-interest expense $ 66,159 $ 62,434 $ 3,725 5.97 % $ 203,889 $ 188,360 $ 15,529 8.24 %

Three Months Ended Nine Months Ended
Sept. 30, June 30, Change Sept. 30, Sept. 30, Change
(Dollars in thousands) 2023 2023 $ % 2023 2022 $ %
Salaries and employee benefits $ 67,374 $ 74,723 $ (7,349) (9.8)% $ 219,135 $ 213,964 $ 5,171 2.4%
Occupancy expense, net 12,020 11,410 610 5.4 35,008 32,701 2,307 7.1
Furniture and equipment expense 5,117 5,128 (11) (0.2) 15,296 15,273 23 0.2
Other real estate and foreclosure expense 228 289 (61) (21.1) 703 653 50 7.7
Deposit insurance 4,672 5,201 (529) (10.2) 14,766 7,928 6,838 86.3
Merger related costs 5 19 (14) * 1,420 22,441 (21,021) *
Other operating expenses:
Professional services 4,801 5,233 (432) (8.3) 14,443 13,987 456 3.3
Postage 2,283 2,366 (83) (3.5) 6,973 6,728 245 3.6
Telephone 1,750 1,701 49 2.9 5,182 4,921 261 5.3
Debit and credit card 3,356 3,444 (88) (2.6) 9,989 8,892 1,097 12.3
Marketing 5,787 6,044 (257) (4.3) 18,041 21,556 (3,515) (16.3)
Software and technology 10,707 10,236 471 4.6 31,299 30,565 734 2.4
Operating supplies 474 683 (209) (30.6) 1,762 1,852 (90) (4.9)
Amortization of intangibles 4,097 4,098 (1) — 12,291 11,807 484 4.1
Branch right sizing 547 95 452 * 1,621 2,371 (750) (31.6)
Other 8,780 9,026 (246) (2.7) 26,993 28,534 (1,541) (5.4)
Total noninterest expense $ 131,998 $ 139,696 $ (7,698) (5.5)% $ 414,922 $ 424,173 $ (9,251) (2.2)%

* Not meaningful

INVESTMENTS AND SECURITIES

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 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.

HTM and AFS investment securities were $3.74 billion and $3.36 billion, respectively, at September 30, 2023, compared to the HTM amount of $3.76 billion and AFS amount of $3.85 billion at December 31, 2022. We will continue to look for opportunities to maximize the value of the investment portfolio.

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 $131.2 million in accumulated other comprehensive income (loss) as of September 30, 2023 will be amortized over the remaining life of the securities. No gains or losses on these securities were recognized at the time of transfer.

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

64

Furthermore, as of September 30, 2023, we have the ability to hold the securities classified as AFS for a period of time sufficient for a recovery of amortized cost, we do not have an immediate intent to sell the securities classified as AFS, and we believe the accounting standard of “more likely than not” has not been met regarding whether we would be required to sell any of the AFS securities before recovery of amortized cost. The unrealized losses are largely due to increases in market interest rates over the yields available at the time the underlying securities were purchased. The fair value is expected to recover as the bonds approach their maturity date or repricing date or if market yields for such investments decline. During the third quarter of 2023, management reduced the allowance for credit loss related to isolated corporate bonds within the AFS investment securities portfolio by $1.2 million due to price recovery on the impaired bonds. As of September 30, 2023, two nonperforming corporate bonds remained in the portfolio, and with the exception of these two bonds, management does not believe any of the securities are impaired due to reasons of credit quality.

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 $1.0 billion of fixed rate callable municipal securities held in the AFS portfolio. These swap agreements consist of a two year forward start date and involve the payment of fixed interest rates with a weighted average of 1.21% in exchange for variable interest rates based on federal funds rates, which became effective during late third quarter of 2023. Securities within these swap agreements have maturity dates varying between 2028 and 2029.

LOAN PORTFOLIO

Our ~~legacy~~ loan portfolio ~~excluding loans acquired,~~ averaged ~~$4.778~~$16.60 billion and ~~$3.515~~$13.91 billion during the first nine months of ~~2017~~2023 and ~~2016,~~2022, respectively. As of September 30, ~~2017,~~2023, total loans ~~excluding loans acquired,~~ were ~~$5.211~~$16.77 billion, an increase of ~~$884.1~~$629.8 million from December 31, ~~2016.~~2022. The increase in the average loan balance during the first nine months of 2023 when compared to the same period in 2022 is primarily due to the acquisition of Spirit which provided $2.29 billion in total loans after purchase accounting discounts, coupled with continued widespread organic loan growth throughout our geographic markets over the comparative period. The most significant components of the loan portfolio were loans to businesses (commercial loans, commercial real estate loans and agricultural loans) and individuals (consumer loans, credit card loans and single-family residential real estate loans).

The growth in the legacy portfolio is primarily attributable to very strong growth in the majority of our market areas in which we operate. We continue to actively recruit and hire new associates in our growth markets in an effort to make quality loans. In addition, $48 million of the increase was related to loan participations with First Texas BHC, Inc.

Also contributing to our legacy loan growth are loans acquired that have migrated to legacy loans. When we make a credit decision on an acquired loan as a result of the loan maturing or renewing, the outstanding balance of that loan migrates from loans acquired to legacy loans. Our legacy loan growth from December 31, 2016 to September 30, 2017 included $148.7 million in balances that migrated from loans acquired during the period. These migrated loan balances are included in the legacy loan balances as of September 30, 2017.

We seek to manage our credit risk by diversifying our loan portfolio, determining that borrowers have adequate sources of cash flow for loan repayment without liquidation of collateral, obtaining and monitoring collateral, providing an appropriate allowance for ~~loan~~credit losses and regularly reviewing loans through the internal loan review process. The loan portfolio is diversified by borrower, purpose, ~~and~~ industry and ~~in the case of credit card loans, which are unsecured, by~~ geographic region. We seek to use diversification within the loan portfolio to reduce credit risk, thereby minimizing the adverse impact on the portfolio, if weaknesses develop in either the economy or a particular segment of borrowers. Collateral requirements are based on credit assessments of borrowers and may be used to recover the debt in case of default. We use the allowance for ~~loan~~credit losses as a method to value the loan portfolio at its estimated collectible amount. Loans are regularly reviewed to facilitate the identification and monitoring of deteriorating credits.

65

The balances of loans outstanding ~~excluding loans acquired,~~ at the indicated dates are reflected in Table 7, according to type of loan.

Table 7: Loan Portfolio

(In thousands) September 30,
2017 December 31,
2016

Consumer:
Credit cards $ 176,316 $ 184,591
Other consumer 317,946 303,972
Total consumer 494,262 488,563
Real estate:
Construction 515,274 336,759
Single family residential 1,048,403 904,245
Other commercial 2,231,223 1,787,075
Total real estate 3,794,900 3,028,079
Commercial:
Commercial 688,960 639,525
Agricultural 207,849 150,378
Total commercial 896,809 789,903
Other 25,341 20,662
Total loans, excluding loans acquired, before allowance for loan losses $ 5,211,312 $ 4,327,207


	September 30,		December 31,
(In thousands)	2023		2022
Consumer:
Credit cards	$	191,550	$	196,928
Other consumer	112,832		152,882
Total consumer	304,382		349,810
Real estate:
Construction and development	3,022,321		2,566,649
Single family residential	2,657,879		2,546,115
Other commercial	7,565,008		7,468,498
Total real estate	13,245,208		12,581,262
Commercial:
Commercial	2,477,077		2,632,290
Agricultural	296,912		205,623
Total commercial	2,773,989		2,837,913
Other	448,309		373,139
Total loans before allowance for credit losses	$	16,771,888	$	16,142,124

Consumer loans consist of credit card loans and other consumer loans. Consumer loans were ~~$494.3~~$304.4 million at September 30, ~~2017,~~2023, or ~~9.5%~~1.8% of total loans, compared to ~~$488.6~~$349.8 million, or ~~11.3%~~2.2% of total loans at December 31, ~~2016.~~2022. The ~~increase~~decrease in consumer loans from December 31, ~~2016,~~2022, to September 30, ~~2017,~~2023, was primarily due to ~~growth in direct~~loan payoffs and pay downs within the other consumer ~~loans offset by~~portfolio during the ~~expected seasonal decrease in our credit card portfolio.~~

period.

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 ~~$3.795~~$13.25 billion at September 30, ~~2017,~~2023, or ~~72.8%~~79.0% of total loans, compared to ~~the $3.028~~$12.58 billion, or ~~70.0%~~77.9%, of total loans at December 31, ~~2016,~~2022, an increase of ~~$766.8 million.~~

$663.9 million, or 5.3%. Our C&D loans increased by $455.7 million, or 17.8%, single family residential loans increased by $111.8 million, or 4.4%, and CRE loans increased by $96.5 million, or 1.3%. The increases were due to diversified organic growth by type and geographic market during the first nine months of 2023. We expect to continue to manage our C&D and CRE portfolio concentration by developing deeper relationships with our customers.

Commercial loans consist of non-real estate loans related to business and agricultural loans. ~~Commercial~~Total commercial loans were ~~$896.8 million~~$2.77 billion at September 30, ~~2017,~~2023, or ~~17.2%~~16.5% of total loans, compared to ~~$789.9 million,~~$2.84 billion, or ~~18.3%~~17.6% of total loans at December 31, ~~2016, an~~2022, a decrease of $63.9 million, or 2.3%. The decrease in non-real estate loans related to business of $155.2 million, or 5.9%, was partially offset by the increase in agricultural loans of ~~$106.9 million. Non-agricultural commercial loans increased to $689.0~~$91.3 million, ~~a $49.4 million increase,~~ or ~~7.7%, growth from December 31, 2016. Agricultural loans increased to $207.8 million, a $57.5 million increase, or 38.2%~~44.4%, primarily due to seasonality of the portfolio, which normally peaks in the third quarter.

Other loans mainly consist of mortgage warehouse lending and municipal loans. Mortgage volume experienced an increase in demand during the first nine months of 2023 as compared to December 31, 2022, and was coupled with continued organic growth in our municipal loans during the quarter, leading to an increase of $75.2 million in other loans.

While loan growth was widespread throughout our geographic markets and iswas generally broad-based by loan type during the first nine months of 2023, loan growth during the third quarter of 2023 reflected moderating demand and increased payoff activity, as we focus on maintaining disciplined pricing and conservative underwriting standards given the current economic environment. Our commercial loan pipeline consisting of all commercial loan opportunities was $877.3 million at ~~its lowest point~~September 30, 2023 compared to $1.12 billion at December 31, 2022. Loans approved and ready to close at the end of the ~~first quarter.~~

~~LOANS ACQUIRED~~

On September 9, 2016, we completed the acquisition of Citizens and issued 835,741 shares of the Company’s common stock valued at approximately $41.3 million as of September 9, 2016, plus $35.0 million in cash in exchange for all outstanding shares of Citizens common stock. Included in the acquisition were loans with a fair value of $340.8quarter totaled $432.9 million.

On May 15, 2017, we completed the acquisition of Hardeman and issued 799,970 shares of the Company’s common stock valued at approximately $42.6 million as of May 15, 2017, plus $30.0 million in cash in exchange for all outstanding shares of Hardeman common stock. Included in the acquisition were loans with a fair value of $251.6 million.

~~Table 8 reflects the carrying value of all loans acquired as of September 30, 2017 and December 31, 2016.~~

~~Table 8: Loans Acquired~~

(In thousands) September 30,
2017 December 31,
2016

Consumer:
Other consumer $ 29,662 $ 49,677
Total consumer 29,662 49,677
Real estate:
Construction 48,520 57,587
Single family residential 363,796 423,176
Other commercial 565,993 690,108
Total real estate 978,309 1,170,871
Commercial:
Commercial 70,620 81,837
Agricultural 13,448 3,298
Total commercial 84,068 85,135
Total loans acquired⁽¹⁾ $ 1,092,039 $ 1,305,683

~~______________________~~

~~(1)~~

~~Loans acquired are reported net of a $391,000 and $954,000 allowance at September 30, 2017 and December 31, 2016, respectively.~~

~~The majority of the loans acquired in the Citizens and Hardeman acquisitions were evaluated and are being accounted for in accordance with ASC Topic 310-20,~~~~Nonrefundable Fees and Other Costs~~~~. The fair value discount is being accreted into interest income over the weighted average life of the loans using a constant yield method. These loans are not considered to be impaired loans.~~

~~We evaluated the remaining loans purchased in conjunction with the acquisitions of Citizens and Hardeman for impairment in accordance with the provisions of ASC Topic 310-30,~~~~Loans and Debt Securities Acquired with Deteriorated Credit Quality~~~~. Purchased loans are considered impaired if there is evidence of credit deterioration since origination and if it is probable that not all contractually required payments will be collected.~~

Some purchased impaired loans were determined to have experienced additional impairment upon disposition or foreclosure in 2017. During the nine months ended September 30, 2017, we recorded $1.5 million of provision for these loans and charge-offs of $2.0 million, resulting in an allowance for loan losses for purchased impaired loans at September 30, 2017 of $391,000. See Note 2 and Note 6 of the Notes to Consolidated Financial Statements for further discussion of loans acquired.

66

ASSET QUALITY

A loan is considered impaired when it is probable that we will not receive all amounts due according to the contractual terms of the loans. Impaired loans include non-performing loans (loans past due 90 days or more and nonaccrual loans) and certain other loans identified by management that are still performing.

Non-performing loans are comprised of (a) nonaccrual loans, (b) loans that are contractually past due 90 days and (c) other loans for which terms have been restructured to provide a reduction or deferral of interest or principal, because of deterioration in the financial position of the borrower. Simmons Bank recognizes income principally on the accrual basis of accounting. When loans are classified as nonaccrual, generally, the accrued interest is charged off and no further interest is accrued. Loans, excluding credit card loans, are placed on a nonaccrual basis either: (1) when there are serious doubts regarding the collectability of principal or interest or (2) when payment of interest or principal is 90 days or more past due and either (i) not fully secured or (ii) not in the process of collection. If a loan is determined by management to be uncollectible, the portion of the loan determined to be uncollectible is then charged to the allowance for ~~loan~~credit losses.

~~Credit~~

When credit card loans ~~are classified as impaired when payment of interest or principal is 90 days past due. When accounts~~ reach 90 days past due and there are attachable assets, the accounts are considered for litigation. Credit card loans are generally charged off when payment of interest or principal exceeds 150 days past due. The credit card recovery group pursues account holders until it is determined, on a case-by-case basis, to be uncollectible.

Total non-performing assets ~~excluding all loans acquired,~~ increased ~~by $20.0~~$24.7 million from December 31, ~~2016~~2022 to September 30, ~~2017. Foreclosed~~2023. Nonaccrual loans increased by $22.7 million during the period and foreclosed assets held for sale and other real estate owned increased ~~by $4.6 million. During the period, $6.7 million~~$922,000 as compared to December 31, 2022. The increase in ~~former bank branches previously classified as premises held for sale or fixed~~nonaccrual assets ~~were transferred to other real estate owned. As part of the First South Bank conversion 5 branches were closed during the third quarter.~~

~~Nonaccrual loans increased by $15.3 million~~ during the period was primarily ~~CRE loans.~~ due to an increase in nonaccrual loans within our commercial loan portfolio.

Non-performing assets, including ~~trouble~~modifications to borrowers experiencing financial difficulty (“FDMs”, formerly known as troubled debt restructurings, ~~(“TDRs”)~~or TDRs) and acquired foreclosed assets, as a percent of total assets were ~~1.01%~~0.44% at September 30, ~~2017,~~2023, compared to ~~0.93%~~0.23% at December 31, ~~2016. The increase in the non-performing ratio from the fourth quarter is primarily the result of two credit relationships totaling $11.0 million in the Wichita market.~~

In June 2017, we executed a sale of thirty-five classified loans with a discounted principal balance of $13.8 million, which included $7.3 million of legacy loans and $6.5 million of loans acquired. The loans acquired portion of the sale resulted in a benefit of $1.4 million in accretion income and $714,000 increase in provision expense for loans acquired, resulting in a net benefit of approximately $700,000.

~~In February 2017, we executed a sale of eleven substandard loans, which were primarily loans acquired, with a net principal balance of $11 million. We recognized a loss of $676,000 on this sale.~~

2022. From time to time, certain borrowers ~~of all types are experiencing~~experience declines in income and cash flow. As a result, ~~many~~these borrowers ~~are seeking~~seek to reduce contractual cash outlays, the most prominent being debt payments. In an effort to preserve our net interest margin and earning assets, we are open to working with existing customers in order to maximize the collectability of the debt.

~~When we restructure a~~

We have internal loan ~~to a borrower that is~~modification programs for borrowers experiencing financial difficulty and grant a concession that we would not otherwise consider, a “troubled debt restructuring” results and the Company classifies the loan as a TDR. The Company grants various types of concessions,difficulties. Modifications to borrowers experiencing financial difficulties may include interest rate reductions, principal or interest forgiveness and/or term extensions. We primarily use interest rate reduction and/or payment modifications or extensions, with an occasional forgiveness of principal.

~~Under ASC Topic 310-10-35 –~~~~Subsequent Measurement~~, During the three months ended September 30, 2023, there were two commercial loans modified for borrowers experiencing financial difficulties, with a ~~TDR is considered to be impaired, and an impairment analysis must be performed. We assess~~combined period-end balance of $85,000. During the ~~exposure~~nine months ended September 30, 2023, there were three commercial loans modified for ~~each modification, either by collateral discounting or by calculation~~borrowers experiencing financial difficulties, with a combined period-end balance of $736,000. The financial effects of the ~~present value of future cash flows, and determine if a specific allocation~~loan modifications made to borrowers experiencing financial difficulty, specifically related to the ~~allowance for loan losses is needed.~~

~~Once an obligation has been restructured because of such credit problems, it continues to be considered a TDR until paid in full; or, if an obligation yields a market interest rate~~commercial portfolio, was not significant during the three and no longer has any concession regarding payment amount or amortization, then it is not considered a TDR at the beginning of the calendar year after the year in which the improvement takes place. Our TDR balance increased to $17.4 million atnine month periods ended September 30, ~~2017, compared to $14.2 million at December 31, 2016.~~2023. During the three and nine month periods ending September 30, 2023, there was one other CRE loan modified for a borrower experiencing financial difficulties, with a period-end balance of $30.6 million. The ~~majority~~modification allowed for two months of ~~our TDRs remain in the CRE portfolio~~interest only payments with the ~~largest increase comprised of two relationships.~~

~~We return TDRs to accrual status only if (1) all contractual amounts~~remaining balance due ~~can reasonably be expected to be repaid within a prudent period, and (2) repayment has been in accordance with the contract for a sustained period, typically~~ at ~~least six months.~~

maturity.

We continue to maintain good asset ~~quality.~~quality compared to the industry and strong asset quality remains a primary focus of our strategy. The allowance for ~~loan~~credit losses as a percent of total loans was ~~0.82%~~1.30% as of September 30, ~~2017.~~2023. Non-performing loans equaled ~~1.05%~~0.49% of total ~~loans,~~loans. Non-performing assets were 0.32% of total assets, a 149 basis point increase from December 31, ~~2016 and a 10 basis point increase from September 30, 2016. Non-performing assets were 0.91% of total assets.~~2022. The allowance for ~~loan~~credit losses was ~~78%~~267% of non-performing loans. Our annualized net charge-offs to average total loans ratio for the first nine months of ~~2017~~2023 was ~~0.25%. Excluding credit cards, the annualized net charge-offs to total loans for the same period was 0.20%~~0.12%. Annualized net credit card charge-offs to average total credit card loans were ~~1.65%,~~2.04% for the first nine months of 2023, compared to ~~1.28%~~1.49% during the full year ~~2016,~~2022, and ~~approximately 200~~134 basis points better than the most recently published industry average charge-off ratio as reported by the Federal Reserve for all banks.

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Table 98 presents information concerning non-performing assets, including nonaccrual loans at amortized cost and foreclosed assets ~~and other real estate owned (excluding all loans acquired).~~

held for sale.

Table 9:8: Non-performing Assets


	September 30,			December 31,			September 30,
(Dollars in thousands)	2023			2022			2022
Nonaccrual loans (1)	$	81,135		$	58,434		$	57,534
Loans past due 90 days or more (principal or interest payments)	806			507			242
Total non-performing loans	81,941			58,941			57,776
Other non-performing assets:
Foreclosed assets held for sale and other real estate owned	3,809			2,887			3,612
Other non-performing assets	1,417			644			1,146
Total other non-performing assets	5,226			3,531			4,758
Total non-performing assets	$	87,167		$	62,472		$	62,534

Performing FDMs (formerly TDRs)	$	33,723		$	1,849		$	1,869
Allowance for credit losses to non-performing loans	267		%	334		%	342		%
Non-performing loans to total loans	0.49		%	0.37		%	0.37		%
Non-performing assets (including performing FDMs (formerly TDRs)) to total assets	0.44		%	0.23		%	0.24		%
Non-performing assets to total assets	0.32		%	0.23		%	0.23		%

($ in thousands) September 30,
2017 December 31,
2016

Nonaccrual loans⁽¹⁾ $ 54,439 $ 39,104
Loans past due 90 days or more (principal or interest payments) 232 299
Total non-performing loans 54,671 39,403
Other non-performing assets:
Foreclosed assets and other real estate owned 31,477 26,895
Other non-performing assets 639 471
Total other non-performing assets 32,116 27,366
Total non-performing assets $ 86,787 $ 66,769

Performing TDRs $ 9,212 $ 10,998
Allowance for loan losses to non-performing loans 78 % 92 %
Non-performing loans to total loans 1.05 % 0.91 %
Non-performing assets to total assets⁽²⁾ 0.91 % 0.79 %

~~______________________~~

~~(1)~~

~~Includes nonaccrual TDRs of approximately $8.2 million at September 30, 2017 and $3.2 million at December 31, 2016.~~

~~(2)~~

~~Excludes all loans acquired, except for their inclusion in total assets.~~

~~Foreclosed assets and other real estate owned were $31.5 million and $26.9 million~~

(1)Includes nonaccrual FDMs (formerly known as TDRs) of approximately $209,000 at September 30, ~~2017~~2023 and $1.6 million at December 31, ~~2016, respectively. As~~2022. For additional information about our implementation of ~~September 30, 2017, these assets include closed bank branches, branch sites~~accounting for FDMs, which replaced the accounting for TDRs, see Note 5, Loans and ~~associate relocation real estate of $12.8 million, foreclosed assets-acquired of $11.1 million and foreclosed assets-legacy of $7.6 million.~~

~~There was no~~Allowance for Credit Losses.

The interest income on nonaccrual loans ~~recorded~~is not considered material for the three and nine month periods ended September 30, ~~2017~~2023 and ~~2016.~~

At September 30, 2017, impaired loans, net of government guarantees and loans acquired, were $51.8 million compared to $43.7 million at December 31, 2016. The increase in impaired loans is primarily related to the non-performing loans discussed above. On an ongoing basis, management evaluates the underlying collateral on all impaired loans and allocates specific reserves, where appropriate, in order to absorb potential losses if the collateral were ultimately foreclosed.

2022.

ALLOWANCE FOR ~~LOAN~~CREDIT LOSSES

~~Overview~~

The allowance for ~~loan~~credit losses is a reserve established through a provision for ~~loan~~credit losses charged to expense which represents management’s best estimate of ~~probable~~lifetime expected losses based on reasonable and supportable forecasts, quantitative factors, and other qualitative considerations.

Loans with similar risk characteristics such as loan type, collateral type, and internal risk ratings are aggregated for collective assessment. We use statistically-based models that ~~have been incurred~~leverage assumptions about current and future economic conditions throughout the contractual life of the loan. Expected credit losses are estimated by either lifetime loss rates or expected loss cash flows based on three key parameters: probability-of-default (“PD”), exposure-at-default (“EAD”), and loss-given-default (“LGD”). Future economic conditions are incorporated to the extent that they are reasonable and supportable. Beyond the reasonable and supportable periods, the economic variables revert to a historical equilibrium at a pace dependent on the state of the economy reflected within the existing portfolio of loans. The allowance, in the judgment of management, is necessary to reserve for estimated loan losses and risks inherent in the loan portfolio. The Company’s allowance for loan loss methodology includes allowance allocations calculated in accordance with ASC Topic 310-10,~~Receivables~~~~, and allowance allocations calculated in accordance with ASC Topic 450-20,~~~~Loss Contingencies~~~~. Accordingly, the methodology is based on our internal grading system, specific impairment analysis,~~economic scenarios. We also include qualitative ~~and quantitative factors.~~

~~As mentioned above, allocations~~adjustments to the allowance ~~for loan losses~~based on factors and considerations that have not otherwise been fully accounted for.

Loans that have unique risk characteristics are ~~categorized as either specific allocations or general allocations.~~

~~Specific Allocations~~

~~A loan is considered impaired when it is probable that we will not receive all amounts due according to the contractual terms of the loan, including scheduled principal and interest payments.~~evaluated on an individual basis. These evaluations are typically performed on loans with a deteriorated internal risk rating. For a ~~collateral dependent~~collateral-dependent loan, our evaluation process includes a valuation by appraisal or other collateral ~~analysis.~~analysis adjusted for selling costs, when appropriate. This valuation is compared to the remaining outstanding principal balance of the loan. If a loss is determined to be probable, the loss is included in the allowance for ~~loan~~credit losses as a specific allocation. ~~If the loan is not collateral dependent, the measurement of loss is based on the difference between the expected and contractual future cash flows of the loan.~~

66

~~General Allocations~~

The general allocation is calculated monthly based on management’s assessment of several factors such as (1) historical loss experience based on volumes and types, (2) volume and trends in delinquencies and nonaccruals, (3) lending policies and procedures including those for loan losses, collections and recoveries, (4) national, state and local economic trends and conditions, (5) external factors and pressure from competition, (6) the experience, ability and depth of lending management and staff, (7) seasoning of new products obtained and new markets entered through acquisition and (8) other factors and trends that will affect specific loans and categories of loans. We established general allocations for each major loan category. This category also includes allocations to loans which are collectively evaluated for loss such as credit cards, one-to-four family owner occupied residential real estate loans and other consumer loans.

~~Reserve for Unfunded Commitments~~

In addition to the allowance for loan losses, we have established a reserve for unfunded commitments, classified in other liabilities. This reserve is maintained at a level sufficient to absorb losses arising from unfunded loan commitments. The adequacy of the reserve for unfunded commitments is determined monthly based on methodology similar to our methodology for determining the allowance for loan losses. Net adjustments to the reserve for unfunded commitments are included in other non-interest expense.

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An analysis of the allowance for ~~loan~~credit losses on loans is shown in Table ~~10.~~

9.

Table ~~10:~~9: Allowance for ~~Loan~~Credit Losses

(In thousands) 2017 2016

Balance, beginning of year $ 36,286 $ 31,351
Loans charged off:
Credit card 2,962 2,260
Other consumer 2,986 1,482
Real estate 3,264 7,350
Commercial 3,083 3,043
Total loans charged off 12,295 14,135
Recoveries of loans previously charged off:
Credit card 788 694
Other consumer 1,771 358
Real estate 757 278
Commercial 83 337
Total recoveries 3,399 1,667
Net loans charged off 8,896 12,468
Provision for loan losses⁽¹⁾ 15,327 15,211
Balance, September 30⁽³⁾ $ 42,717 34,094
Loans charged off:
Credit card 935
Other consumer 493
Real estate 167
Commercial 913
Total loans charged off 2,508
Recoveries of loans previously charged off:
Credit card 213
Other consumer 158
Real estate 73
Commercial 28
Total recoveries 472
Net loans charged off 2,036
Provision for loan losses⁽²⁾ 4,228
Balance, end of year⁽³⁾ $ 36,286

~~______________________~~

~~(1)~~

Provision for loan losses of $1,464,000 attributable to loans acquired, was excluded from this table for 2017 (total year-to-date provision for loan losses is $16,792,000) and $522,000 was excluded from this table for 2016 (total 2016 provision for loan losses is $15,733,000). Charge offs of $2.0 million on loans acquired were excluded from this table for 2017 (total net loan charged off is $10.9 million.)

~~(2)~~

~~Provision for loan losses of $626,000 attributable to loans acquired, was excluded from this table for 2016 (total 2016 provision for loan losses is $20,065,000).~~

~~(3)~~

Allowance for loan losses at September 30, 2017 includes $391,000 allowance for loans acquired (not shown in the table above) and December 31, 2016 and September 30, 2016 includes $954,000 allowance for loans acquired (not shown in the table above). The total allowance for loan losses at September 30, 2017 was $43,108,000 and the total allowance for loan losses at December 31, 2016 and September 30, 2016 was $37,240,000 and $35,048,000 respectively.


(In thousands)	2023		2022
Balance, beginning of year	$	196,955	$	205,332

Loans charged off:
Credit card	3,803		2,827
Other consumer	1,755		1,438
Real estate	11,362		730
Commercial	2,857		8,880
Total loans charged off	19,777		13,875
Recoveries of loans previously charged off:
Credit card	766		773
Other consumer	1,020		967
Real estate	1,601		2,799
Commercial	1,783		1,898
Total recoveries	5,170		6,437
Net loans charged off	14,607		7,438
Provision for credit losses	36,199		(5,405)
Acquisition adjustment for PCD loans	—		5,100
Balance, September 30,	$	218,547	$	197,589

Loans charged off:
Credit card			1,035
Other consumer			438
Real estate			3,392
Commercial			5,390
Total loans charged off			10,255
Recoveries of loans previously charged off:
Credit card			251
Other consumer			230
Real estate			4,117
Commercial			475
Total recoveries			5,073
Net loans charged off			5,182
Provision for credit losses			26
Acquisition adjustment for PCD loans			4,522
Balance, end of year			$	196,955

Provision for ~~Loan~~Credit Losses

The amount of provision added to or released from the allowance during the three and nine months ended September 30, ~~2017~~2023 and ~~2016,~~2022, and for the year ended December 31, ~~2016,~~2022, was based on ~~management's~~management’s judgment, with consideration given to the composition and asset quality of the portfolio, historical loan loss experience, and assessment of current and expected economic ~~conditions, past due~~forecasts and ~~non-performing loans and net loss experience.~~conditions. It is ~~management's~~management’s practice to review the allowance on a monthly basis, and after considering the factors previously noted, to determine the level of provision made to the allowance.

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69

Allowance for Credit Losses Allocation

~~Allowance for Loan Losses Allocation~~

As of September 30, ~~2017,~~2023, the allowance for ~~loan~~credit losses ~~reflects~~reflected an increase of approximately ~~$6.4~~$21.6 million from December 31, ~~2016,~~2022 while total loans ~~excluding loans acquired,~~ increased by ~~$884.1~~$629.8 million over the same nine month period. The allocation in each category within the allowance generally reflects the overall changes in the loan portfolio mix.

The increase in the allowance for credit losses during the first nine months of 2023 was primarily due to the loan growth experienced during the first three quarters of the year, as well as refreshed economic forecasts. Our allowance for credit losses at September 30, 2023 was considered appropriate given the current economic environment and other related factors.

The following table sets forth the sum of the amounts of the allowance for ~~loan~~credit losses attributable to individual loans within each category, or loan categories in general. The table also reflects the percentage of loans in each category to the total loan portfolio ~~excluding loans acquired,~~ for each of the periods indicated. ~~These~~The allowance ~~amounts have been computed using the Company’s internal grading system,~~for credit losses by loan category is determined by i) our estimated reserve factors by category including applicable qualitative adjustments and ii) any specific ~~impairment analysis, qualitative and quantitative factor allocations.~~allowance allocations that are identified on individually evaluated loans. The amounts shown are not necessarily indicative of the actual future losses that may occur within individual categories.

Table ~~11:~~10: Allocation of Allowance for ~~Loan~~Credit Losses


	September 30, 2023					December 31, 2022
(Dollars in thousands)	Allowance Amount			% of loans (1)		Allowance Amount			% of loans (1)
Credit cards	$	5,950		1.1	%	$	5,140		1.2	%
Other consumer	5,444			3.3	%	6,614			3.2	%
Real estate	173,047			79.0	%	150,795			78.0	%
Commercial	34,106			16.6	%	34,406			17.6	%
Total	$	218,547		100.0	%	$	196,955		100.0	%

Allowance for credit losses to period-end loans	1.30		%			1.22		%

September 30, 2017 December 31, 2016
Allowance % of Allowance % of
($ in thousands) Amount loans⁽¹⁾ Amount loans⁽¹⁾

Credit cards $ 3,773 3.4 % $ 3,779 4.3 %
Other consumer 3,457 6.1 % 2,796 7.0 %
Real estate 27,294 72.8 % 21,817 70.0 %
Commercial 7,994 17.2 % 7,739 18.2 %
Other 199 0.5 % 155 0.5 %
Total⁽²⁾ $ 42,717 100.0 % $ 36,286 100.0 %

~~______________________~~

~~(1)~~

~~Percentage of loans in each category to total loans, excluding loans acquired.~~

~~(2)~~

Allowance for loan losses at September 30, 2017 and December 31, 2016 includes $391,000 and $954,000, respectively, of allowance for loans acquired (not shown in the table above). The total allowance for loan losses at September 30, 2017 and December 31, 2016 was $43,108,000 and $37,240,000, respectively

(1)Percentage of loans in each category to total loans.

DEPOSITS

Deposits are our primary source of funding for earning assets and are primarily developed through our network of ~~over 156~~232 financial ~~centers.~~centers as of September 30, 2023. We offer a variety of products designed to attract and retain customers with a continuing focus on developing core deposits. Our core deposits consist of all deposits excluding time deposits of ~~$100,000~~$250,000 or more and brokered deposits. As of September 30, ~~2017,~~2023, core deposits comprised ~~90.9%~~77.8% of our total deposits.

We continually monitor the funding requirements along with competitive interest rates in the markets we serve. Because of our community banking philosophy, our executives in the local markets, with oversight by the Chief Deposit Officer, Asset Liability Committee and the Bank’s Treasury Department, establish the interest rates offered on both core and non-core deposits. This approach ensures that the interest rates being paid are competitively priced for each particular deposit product and structured to meet the funding requirements. We believe we are paying a competitive rate when compared with pricing in those markets.

We manage our interest expense through deposit ~~pricing and do not anticipate a significant change in total deposits.~~pricing. We believe that additional funds can be attracted and deposit growth can be accelerated through deposit pricing if we experience increased loan demand or other liquidity needs. We can also utilize brokered deposits as an additional source of funding to meet liquidity needs.

We are continually monitoring and looking for opportunities to fairly reprice our deposits while remaining competitive in this current challenging rate environment.

70

Our total deposits as of September 30, ~~2017,~~2023, were ~~$7.326~~$22.23 billion, ~~an increase~~compared to $22.55 billion as of ~~$590.4 million from~~ December 31, ~~2016. We have continued our strategy to move more volatile time deposits to less expensive, revenue enhancing transaction accounts. Non-interest~~2022. Noninterest bearing transaction accounts, interest bearing transaction accounts and savings accounts totaled ~~$6.015~~$15.56 billion at September 30, ~~2017,~~2023, compared to ~~$5.448~~$17.78 billion at December 31, ~~2016,~~2022, a ~~$566.5 million increase.~~decrease of $2.22 billion. Total time deposits increased ~~$23.9 million~~$1.90 billion to ~~$1.311~~$6.67 billion at September 30, ~~2017,~~2023, from ~~$1.287~~$4.77 billion at December 31, ~~2016.~~2022. We had ~~$27.3 million~~$3.26 billion and ~~$7.0 million~~$2.75 billion of brokered deposits at September 30, ~~2017~~2023, and December 31, ~~2016,~~2022, respectively.

The change in the mix of deposits at September 30, 2023 as compared to December 31, 2022 reflects increased market competition and consumer migration toward higher rate deposits, principally certificates of deposit, given the rapid increase in interest rates that has occurred over the past year. We are continuing to refine our product offerings to give customers flexibility of choice while maintaining the ability to adjust interest rates timely in the current rate environment.

OTHER BORROWINGS AND SUBORDINATED NOTES AND DEBENTURES

Our total debt was ~~$590.0 million~~$1.71 billion and ~~$333.6 million~~$1.23 billion at September 30, ~~2017~~2023 and December 31, ~~2016,~~2022, respectively. The outstanding balance for September 30, ~~2017~~2023 includes ~~$442.0~~$1.33 billion in FHLB advances; $366.1 million in subordinated notes and unamortized debt issuance costs; and $19.6 million of other long-term debt. FHLB advances outstanding at September 30, 2023, which increased as compared to December 31, 2022 due to a strategic decision to utilize short-term borrowings to elevate our liquidity position given the macroeconomic environment during the period, are primarily fixed rate, fixed term advances, ~~$36.0~~which are due less than one year from origination and therefore are classified as short-term advances.

In March 2018, we issued $330.0 million in ~~FHLB long-term advances, $44.6~~aggregate principal amount of 5.00% Fixed-to-Floating Rate Subordinated Notes (“Notes”) at a public offering price equal to 100% of the aggregate principal amount of the Notes. We incurred $3.6 million in ~~notes payable~~debt issuance costs related to the offering. The Notes will mature on April 1, 2028 and ~~$67.4 million~~are subordinated in right of ~~trust preferred securities.~~payment to the payment of our other existing and future senior indebtedness, including all our general creditors. The ~~outstanding balance for December 31, 2016 included $180.0~~Notes are obligations of the Company only and are not obligations of, and are not guaranteed by, any of its subsidiaries.

We assumed Fixed-to-Floating Rate Subordinated Notes in an aggregate principal amount, net of premium adjustments, of $37.4 million in ~~FHLB short-term advances, $45.3 million~~connection with the Spirit acquisition in ~~FHLB long-term advances, $47.9 million in notes payable~~April 2022 (the “Spirit Notes”). The Spirit Notes will mature on July 31, 2030, and ~~$60.4 million of trust preferred securities.~~

~~The $44.6 million notes payable is unsecured debt from correspondent banks~~initially bear interest at a fixed annual rate of ~~3.85% with~~6.00%, payable quarterly, ~~principal~~in arrears, to, but excluding, July 31, 2025. From and including July 31, 2025, to, but excluding, the maturity date or earlier redemption date, the interest ~~payments. The debt has~~rate will reset quarterly to an interest rate per annum equal to a ~~10 year amortization with a 5 year balloon payment due in October 2020.~~

~~During~~benchmark rate, which is expected to be the ~~nine months ended September 30, 2017, we increased total debt by $256.4 million from December 31, 2016 primarily due to the $262.0 million increase in FHLB short-term advances partially offset~~then-current three-month Secured Overnight Financing Rate, as published by the ~~maturity~~Federal Reserve Bank of ~~$9.3 million of FHLB long-term advances.~~

New York (provided, that in the event the benchmark rate is less than zero, the benchmark rate will be deemed to be zero) plus 592 basis points, payable quarterly, in arrears.

CAPITAL

Overview

At September 30, ~~2017,~~2023, total capital was ~~$1.257~~$3.29 billion. Capital represents shareholder ownership in the Company – the book value of assets in excess of liabilities. At September 30, ~~2017,~~2023, our common equity to ~~assets~~asset ratio was ~~13.2%, down 52 basis points from~~11.92% compared to 11.91% at year-end ~~2016.~~

2022.

Capital Stock

On February 27, 2009, at a special meeting, our shareholders approved an amendment to the Articles of Incorporation to establish 40,040,000 authorized shares of preferred stock, $0.01 par value. ~~The~~On April 27, 2022, our shareholders approved amendments to our Articles of Incorporation to remove an $80.0 million cap on the aggregate liquidation preference associated with the preferred stock and increase the number of ~~all~~authorized shares of ~~preferred~~our Class A common stock ~~cannot exceed $80,000,000.~~

from 175,000,000 to 350,000,000.

On ~~February 27, 2015, as part~~October 29, 2019, we filed Amended and Restated Articles of Incorporation (“October Amended Articles”) with the ~~acquisition~~Arkansas Secretary of ~~Community First, the Company issued 30,852 shares of Senior Non-Cumulative Perpetual~~State. The October Amended Articles classified and designated Series D Preferred Stock, Par Value $0.01 Per Share (“Series ~~A (“Simmons Series A~~D Preferred Stock”) ~~in exchange for the outstanding shares~~, out of ~~Community First Senior Non-Cumulative Perpetual Preferred Stock, Series C (“Community First Series C Preferred Stock”). The~~our authorized preferred stock was held by the United States Department of the Treasury (“Treasury”) as the Community First Series C Preferred Stock was issued when Community First entered into a Small Business Lending Fund Securities Purchase Agreement with the Treasury. The Simmons Series A Preferred Stock qualified as Tier 1 capital and paid quarterly dividends.stock. On ~~January 29, 2016, the Company~~November 30, 2021, we redeemed all of the ~~Simmons~~ Series AD Preferred Stock, including accrued and unpaid dividends.

~~Stock Repurchase~~

~~During 2007,~~ On April 27, 2022, our shareholders approved an amendment to our Articles of Incorporation to remove the ~~Company approved a stock repurchase program which authorized~~classification and designation for the ~~repurchase~~Series D Preferred Stock. As of ~~up to 700,000~~September 30, 2023, there were no shares of ~~common stock. On~~preferred stock issued or outstanding.

71

Stock Repurchase Program

Effective July 23, ~~2012, we announced the substantial completion of the existing stock repurchase program and the adoption by~~2021, our Board of Directors approved an amendment to our stock repurchase program originally approved in October 2019 (“2019 Program”) that increased the amount of our common stock that could be repurchased under the 2019 Program from a maximum of $180.0 million to a maximum of $276.5 million and extended the term of the 2019 Program from October 31, 2021, to October 31, 2022.

During January 2022, we substantially exhausted the remaining capacity under the 2019 Program, and our Board of Directors authorized a new stock repurchase ~~program. The current~~ program ~~authorizes the~~(the “2022 Program”) under which we may repurchase of up to ~~850,000 additional shares~~$175.0 million of our Class A common stock ~~or approximately 5% of the shares~~currently issued and outstanding. The 2022 Program replaced the 2019 Program and will terminate on January 31, 2024 (unless terminated sooner).

During the three and nine month periods ended September 30, 2023, we repurchased 1,128,962 shares ~~are to be purchased from time to time~~ at ~~prevailing market prices,~~an average price per share of $17.69 and 2,257,049 shares at an average price of $17.72 per share, respectively, under the 2022 Program. During the three month period ended September 30, 2022, the Company repurchased 1,883,713 shares at an average price of $23.91 per share under the 2022 Program. During the nine month period ended September 30, 2022, the Company repurchased 513,725 shares at an average price of $31.25 per share under the 2019 Program and 3,919,037 shares at an average price of $24.26 per share under the 2022 Program.

Under the 2022 Program, we may repurchase shares of our common stock through open market ~~or unsolicited~~and privately negotiated transactions ~~depending upon~~or otherwise. The timing, pricing, and amount of any repurchases under the 2022 Program will be determined by management at its discretion based on a variety of factors, including, but not limited to, trading volume and market ~~conditions. Under the~~price of our common stock, corporate considerations, our working capital and investment requirements, general market and economic conditions, and legal requirements. The 2022 Program does not obligate us to repurchase ~~program, there is no time limit for the~~any common stock ~~repurchases, nor is there a minimum number of shares that we intend to repurchase. We~~and may ~~discontinue purchases~~be modified, discontinued, or suspended at any time ~~that management determines additional purchases are not warranted.~~without prior notice. We ~~intend~~anticipate funding for this 2022 Program to ~~use the repurchased shares to satisfy stock option exercises, payment~~come from available sources of liquidity, including cash on hand and future ~~stock awards and dividends and general corporate purposes. We had no stock repurchases during 2016 or 2017.~~

cash flow.

Cash Dividends

We declared cash dividends on our common stock of ~~$0.75~~$0.60 per share for the first nine months of ~~2017~~2023 compared to ~~$0.72~~$0.57 per share for the first nine months of ~~2016,~~2022, an increase of $0.03, or ~~4.2%~~5%. The timing and amount of future dividends are at the discretion of our Board of Directors and will depend upon our consolidated earnings, financial condition, liquidity and capital requirements, the amount of cash dividends paid to us by our subsidiaries, applicable government regulations and policies and other factors considered relevant by our Board of Directors. Our Board of Directors anticipates that we will continue to pay quarterly dividends in amounts determined based on the factors discussed above. However, there can be no assurance that we will continue to pay dividends on our common stock at the current levels or at all.

Parent Company Liquidity

The primary liquidity needs of the Parent Company are the payment of dividends to shareholders, ~~and~~ the funding of debt ~~obligations.~~obligations and cash needs for acquisitions. The primary sources for meeting these liquidity needs are the current cash on hand at the parent company and the future dividends received from Simmons Bank. Payment of dividends by ~~the subsidiary bank~~Simmons Bank is subject to various regulatory limitations. ~~See~~For additional information regarding the parent company’s liquidity, see “Liquidity” and “Market Risk Management ~~discussions of~~” in Item 3 – Quantitative and Qualitative ~~Disclosure~~Disclosures About Market Risk ~~for additional information regarding~~of this Quarterly Report on Form 10-Q. We continually assess our capital and liquidity needs and the ~~parent company’s liquidity.~~

best way to meet them, including, without limitation, through capital raising in the market via stock or debt offerings.

72

Risk Based Capital

~~Our bank subsidiary is~~

The Company and Simmons Bank are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on our financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, we must meet specific capital guidelines that involve quantitative measures of our assets, liabilities and certain off-balance-sheet items as calculated under regulatory accounting practices. Our capital amounts and classifications are also subject to qualitative judgments by the regulators about components, risk weightings and other factors.

The Company and Simmons Bank must hold a capital conservation buffer composed of common equity Tier 1 capital above its minimum risk-based capital requirements. Failure to meet this capital conservation buffer would result in additional limits on dividends, other distributions and discretionary bonuses.

Quantitative measures established by regulation to ensure capital adequacy require us to maintain minimum amounts and ratios (set forth in the table below) of total, Tier 1 and common equity Tier 1 capital (as defined in the regulations) to risk-weighted assets (as defined) and of Tier 1 capital (as defined) to average assets (as defined). Management believes that, as of September 30, ~~2017,~~2023, we meet all capital adequacy requirements to which we are subject.

As of the most recent notification from regulatory agencies, ~~the subsidiary~~Simmons Bank was well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, the Company and ~~the~~Simmons Bank must maintain minimum total risk-based, Tier 1 risk-based, common equity Tier 1 risk-based and Tier 1 leverage ratios as set forth in the table. There are no conditions or events since that notification that management believes have changed the ~~institutions’~~institution’s categories.

71

Our risk-based capital ratios at September 30, ~~2017~~2023 and December 31, ~~2016~~2022 are presented in Table 1211 below:

Table ~~12:~~11: Risk-Based Capital

September 30, December 31,
($ in thousands) 2017 2016

Tier 1 capital:
Stockholders’ equity $ 1,257,199 $ 1,151,111
Trust preferred securities 67,418 60,397
Goodwill and other intangible assets, net of deferred taxes (401,419 ) (354,028 )
Unrealized gain on available-for-sale securities, net of income taxes 10,651 15,212
Other -- 15
Total Tier 1 capital 933,849 872,707
Tier 2 capital:
Qualifying unrealized gain on available-for-sale equity securities 1 --
Qualifying allowance for loan losses 46,709 40,241
Total Tier 2 capital 46,710 40,241
Total risk-based capital $ 980,559 $ 912,948

Risk weighted assets $ 7,239,923 $ 6,039,034

Assets for leverage ratio $ 8,789,175 $ 7,966,681

Ratios at end of period:
Common equity Tier 1 ratio (CET1) 11.97 % 13.45 %
Tier 1 leverage ratio 10.62 % 10.95 %
Tier 1 risk-based capital ratio 12.90 % 14.45 %
Total risk-based capital ratio 13.54 % 15.12 %
Minimum guidelines:
Common equity Tier 1 ratio 4.50 % 4.50 %
Tier 1 leverage ratio 4.00 % 4.00 %
Tier 1 risk-based capital ratio 6.00 % 6.00 %
Total risk-based capital ratio 8.00 % 8.00 %
Well capitalized guidelines:
Common equity Tier 1 ratio 6.50 % 6.50 %
Tier 1 leverage ratio 5.00 % 5.00 %
Tier 1 risk-based capital ratio 8.00 % 8.00 %
Total risk-based capital ratio 10.00 % 10.00 %

September 30, December 31,
(Dollars in thousands) 2023 2022
Tier 1 capital:
Stockholders’ equity $ 3,285,555 $ 3,269,362
CECL transition provision 61,746 92,619
Goodwill and other intangible assets (1,402,682) (1,412,667)
Unrealized loss on available-for-sale securities, net of income taxes 544,380 517,560
Total Tier 1 capital 2,488,999 2,466,874
Tier 2 capital:
Subordinated notes and debentures 366,103 365,989
Subordinated debt phase out (66,000) —
Qualifying allowance for credit losses and reserve for unfunded commitments 165,490 115,627
Total Tier 2 capital 465,593 481,616
Total risk-based capital $ 2,954,592 $ 2,948,490
Risk weighted assets $ 20,703,669 $ 20,738,727
Assets for leverage ratio $ 26,733,658 $ 26,407,061
Ratios at end of period:
Common equity Tier 1 ratio (CET1) 12.02 % 11.90 %
Tier 1 leverage ratio 9.31 % 9.34 %
Tier 1 risk-based capital ratio 12.02 % 11.90 %
Total risk-based capital ratio 14.27 % 14.22 %
Minimum guidelines:
Common equity Tier 1 ratio (CET1) 4.50 % 4.50 %
Tier 1 leverage ratio 4.00 % 4.00 %
Tier 1 risk-based capital ratio 6.00 % 6.00 %
Total risk-based capital ratio 8.00 % 8.00 %

73

Regulatory Capital Changes

In ~~July 2013, the Company’s primary federal regulator,~~December 2018, the Federal Reserve, ~~published~~Office of the Comptroller of the Currency and Federal Deposit Insurance Corporation (“FDIC”) (collectively, the “agencies”) issued a final rule revising regulatory capital rules in anticipation of the adoption of ASU 2016-13 that provided an option to phase in over a three year period on a straight line basis the day-one impact of the adoption on earnings and Tier 1 capital (the ~~“Basel III Capital Rules”~~“CECL Transition Provision”) ~~establishing~~.

In March 2020 and in response to the COVID-19 pandemic, the agencies issued a new ~~comprehensive~~regulatory capital ~~framework~~rule revising the CECL Transition Provision to delay the estimated impact on regulatory capital stemming from the implementation of ASU 2016-13. The rule provides banking organizations that implement CECL before the end of 2020 the option to delay for ~~U.S. banks.~~two years an estimate of CECL’s effect on regulatory capital, followed by a three-year transition period (the “2020 CECL Transition Provision”). The ~~rules implement~~Company elected to apply the Basel Committee’s December 2010 framework known as “Basel III” for strengthening international capital standards. The Basel III Capital Rules substantially revised the risk-based capital requirements applicable to bank holding companies and depository institutions compared to the then current U.S. risk-based capital rules.

2020 CECL Transition Provision.

The Basel III Capital Rules define the components of capital and address other issues affecting the numerator in banking institutions’ regulatory capital ratios. The rules also address risk weights and other issues affecting the denominator in banking institutions’ regulatory capital ratios ~~and replace the existing risk-weighting approach~~ with a more risk-sensitive approach.

The Basel III Capital Rules ~~expand the~~established risk-weighting ~~categories from the four Basel I-derived categories (0%, 20%, 50% and 100%) to a much larger and more risk-sensitive number of~~ categories depending on the nature of the assets, generally ranging from 0% for U.S. government and agency securities, to 600% for certain equity ~~exposures, and resulting in higher risk weights for a variety of asset categories, including many residential mortgages and certain commercial real estate.~~

exposures.

The final rules ~~include~~included a new common equity Tier 1 capital to risk-weighted assets ratio of 4.5% and a common equity Tier 1 capital conservation buffer of 2.5% of risk-weighted assets. The rules also ~~raise~~raised the minimum ratio of Tier 1 capital to risk-weighted assets ~~from 4.0%~~ to 6.0% and require a minimum leverage ratio of 4.0%. The Basel III Capital Rules became effective for the Company and its subsidiary bank on January 1, 2015, with full compliance with all of the final rule’s requirements phased in over a multi-year schedule. Management believes that, as of September 30,

Prior to December 31, 2017, ~~the Company and Simmons Bank would meet all capital adequacy requirements under the Basel III Capital Rules on a fully phased-in basis if such requirements were currently effective.~~

Tier 1 capital ~~includes~~included common equity ~~tier~~Tier 1 capital and certain additional ~~tier~~Tier 1 items as provided under the Basel III Capital Rules. The ~~tier~~Tier 1 capital for the Company ~~consists~~consisted of common equity ~~tier~~Tier 1 capital and ~~$67.4 million of~~ trust preferred securities. The Basel III Capital Rules include certain provisions that ~~would~~ require trust preferred securities to be phased out of qualifying ~~tier~~Tier 1 ~~capital. Currently, the Company’s trust preferred securities are grandfathered under the Basel III Rules and will continue to be included as tier 1 capital. However, should~~capital when assets surpass $15 billion. As of December 31, 2017, the Company ~~exceed~~exceeded $15 billion in total assets and the grandfather provisions applicable to its trust preferred securities ~~would~~ no longer apply and ~~such~~ trust preferred securities ~~would~~were no longer be included as ~~tier~~Tier 1 ~~capital, but would continue to be~~capital. All of the Company’s trust preferred securities were redeemed during the third quarter 2022. Qualifying subordinated debt of $300.1 million is included as Tier 2 and total ~~capital.~~

capital as of September 30, 2023.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

See the ~~section titled~~Recently Issued Accounting ~~Pronouncements~~Standards section in Note 1, ~~Basis~~Preparation of ~~Presentation,~~Interim Financial Statements, in the accompanying Condensed Notes to Consolidated Financial Statements included elsewhere in this report for details of recently issued accounting pronouncements and their expected impact on the Company’s ongoing financial position and results of operation.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements contained in this quarterly report may not be based on historical facts and ~~are~~should be considered “forward-looking statements” within the meaning of ~~Section 27A of~~ the Private Securities Litigation Reform Act of ~~1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.~~1995. These forward-looking statements may be identified by reference to a future period(s) or by the use of forward-looking terminology, such as “anticipate,” “believe,” “budget,” “contemplate,” “continue,” “estimate,” “expect,” “foresee,” ~~“believe,~~“intend,” “indicate,” “target,” “plan,” positions,” “prospects,” “project,” “predict,” or “potential,” by future conditional verbs such as “could,” “may,” “might,” “should,” “will,” or “would,” ~~“could”~~ or ~~“intend,” future or conditional verb tenses, and~~by variations ~~or negatives~~ of such ~~terms.~~words or by similar expressions. These forward-looking statements include, without limitation, those relating to the Company’s future growth, completed acquisitions, revenue, expenses, assets, asset quality, profitability, ~~and~~earnings, accretion, dividends, customer service, lending capacity and lending activity, investment in digital channels, critical accounting policies and estimates, net interest margin, ~~non-interest~~noninterest revenue, noninterest expense, market conditions related to and the impact of the Company’s stock repurchase program, consumer behavior and liquidity, the adequacy of the allowance for ~~loan~~credit losses, ~~the effect of certain new accounting standards on the Company’s financial statements,~~ income tax deductions, credit quality, the level of credit losses from lending commitments, net interest revenue, interest rate sensitivity, repricing of loans and time deposits, loan loss experience, liquidity, the Company’s expectations regarding actions by the FHLB and other agencies, capital resources, market risk, ~~earnings,~~plans for future and current investments in securities and investment portfolio strategies, effect of pending and future litigation, including the results of the overdraft fee litigation against the Company that is described in this quarterly report, staffing initiatives, estimated cost savings associated with the Company’s early retirement program and Better Bank Initiative, acquisition strategy ~~efficiency initiatives,~~and activity, legal and regulatory limitations and compliance and competition.

74

These forward-looking statements are based on various assumptions and involve inherent risks and uncertainties, and may not be realized due to a variety of factors, including, without limitation: changes in the Company’s operating, acquisition, or expansion strategy; the effects of future economic conditions (including unemployment levels and slowdowns in economic growth), governmental monetary and fiscal policies, including policies of the Federal Reserve, as well as legislative and regulatory changes; ~~the risks of~~changes in real estate values; changes in interest rates and ~~their effects on~~related governmental policies; inflation; changes in the level and composition of deposits, loan demand, deposit flows, credit quality and the values of loan collateral, securities and interest sensitive assets and liabilities; actions taken by the Company to manage its investment securities portfolio; changes in the securities markets generally or the price of the Company’s common stock; developments in information technology affecting the financial industry; changes in customer behaviors, including consumer spending, borrowing and saving habits; cyber threats, attacks or events, including at third-parties with which we rely on for key services; reliance on third parties for the provision of key services; further changes in accounting principles relating to loan loss recognition; uncertainty and disruption following the sunsetting of the London Inter-Bank Offered Rate in June 2023; the costs of evaluating possible acquisitions and the risks inherent in integrating acquisitions; possible adverse rulings, judgements, settlements, fines and other outcomes of pending or future litigation or government actions; market disruptions, including pandemics or significant health hazards, severe weather conditions, natural disasters, terrorist activities, financial crises, political crises, war and other military conflicts (including the ongoing military conflict between Russia and Ukraine and between Israel and Hamas) or other major events, or the prospect of these events; soundness of other financial institutions and indirect exposure related to the closings of Silicon Valley Bank (SVB), Signature Bank, First Republic Bank and Silvergate Bank in the first quarter of 2023 and their impact on the broader market through other customers, suppliers and partners (or that the conditions which resulted in the liquidity concerns with SVB, First Republic Bank, Signature Bank and Silvergate Bank may also adversely impact, directly or indirectly, other financial institutions and market participants with which the Company has commercial or deposit relationships); the loss of key employees; increased unemployment; labor shortages; changes in accounting principles relating to loan loss recognition (current expected credit losses); the Company’s ability to manage and successfully integrate its mergers and acquisitions and to fully realize cost savings and other benefits associated with those transactions; the effects of government legislation; the effects of competition from other commercial banks, thrifts, mortgage banking firms, consumer finance companies, credit unions, securities brokerage firms, insurance companies, money market and other mutual funds and other financial institutions operating in our market area and elsewhere, including institutions operating regionally, nationally and internationally, together with such competitors offering banking products and services by mail, cell phone/tablet, telephone, computer and the Internet; the failure of assumptions underlying the establishment of reserves for possible ~~loan losses; and those factors set forth under Item 1A. Risk-Factors of this report~~credit losses, fair value for loans, OREO, and other cautionary statements set forth elsewhere in this report. Additional information on factors that might affect the Company’s financial results is included in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of this quarterly report, the Company’s annual report on Form 10-K for the year ended December 31, 2022, and the Company’s quarterly report on Form 10-Q for the quarter ended March 31, 2023, and related disclosures in other filings, which have been filed with the SEC and are available on the SEC’s website at www.sec.gov. Many of these factors are beyond our ability to predict or ~~control.~~control, and actual results could differ materially from those in the forward-looking statements due to these factors and others. In addition, as a result of these and other factors, our past financial performance should not be relied upon as an indication of future performance.

We believe the assumptions and expectations that underlie or are reflected in our forward-looking statements are reasonable, based on information available to us on the date hereof. However, given the described uncertainties and risks, we cannot guarantee our future performance or results of operations or whether our future performance will differ materially from the performance reflected in or implied by our forward-looking statements, and you should not place undue reliance on these forward-looking statements. WeAny forward-looking statement speaks only as of the date hereof, and we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, and all written or oral forward-looking statements attributable to us are expressly qualified in their entirety by this section.

75

GAAP RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

The tables below present computations of ~~core~~adjusted earnings (net income excluding ~~non-core~~certain items ~~{gain~~{net branch right sizing costs, merger related costs, donation to Simmons First Foundation, loss from early retirement of ~~trust preferred securities, merger related costs~~TruPS, gain on sale of intellectual property and ~~branch right sizing expenses}~~early retirement program costs}) (non-GAAP), and adjusted diluted ~~core~~ earnings per share (non-GAAP) as well as a ~~reconciliation~~computation of tangible book value per share (non-GAAP), tangible common equity to tangible ~~equity~~assets (non-GAAP), adjusted noninterest income (non-GAAP), adjusted noninterest expense (non-GAAP), adjusted salaries and employee benefits expense (non-GAAP) and the ~~core net interest margin~~coverage ratio of uninsured, non-collateralized deposits (non-GAAP). ~~Non-core~~Adjusted items are included in financial results presented in accordance with generally accepted accounting principles ~~(“GAAP”)~~(US GAAP).

~~The Company believes~~

We believe the exclusion of these ~~non-core~~certain items in expressing earnings and certain other financial measures, including ~~“core earnings”,~~“adjusted earnings,” provides a meaningful ~~base~~basis for period-to-period and company-to-company comparisons, which management believes will assist investors and analysts in analyzing the ~~core~~adjusted financial measures of the Company and predicting future performance. These non-GAAP financial measures are also used by management to assess the performance of the Company’s business because management does not consider these ~~non-core~~certain items to be relevant to ongoing financial performance. Management and the Board of Directors utilize ~~“core~~“adjusted earnings” (non-GAAP) for the following purposes:

•		~~Preparation of the Company’s operating budgets~~
•		~~Monthly financial performance reporting~~
•		~~Monthly “flash” reporting of consolidated results (management only)~~
•		• Preparation of the Company’s operating budgets • Monthly financial performance reporting • Monthly “flash” reporting of consolidated results (management only) • Investor presentations of ~~Company performance~~

~~The~~ Company ~~believes~~performance

We believe the presentation of ~~“core~~“adjusted earnings” on a diluted per share basis ~~“diluted core earnings per share”~~ (non-GAAP) ~~and core net interest margin (non-GAAP),~~ provides a meaningful ~~base~~basis for period-to-period and company-to-company comparisons, which management believes will assist investors and analysts in analyzing the ~~core~~adjusted financial measures of the Company and predicting future performance. These non-GAAP financial measures are also used by management to assess the performance of the Company’s business, because management does not consider these ~~non-core~~certain items to be relevant to ongoing financial performance on a per share basis. Management and the Board of Directors utilize ~~“diluted core~~“adjusted diluted earnings per share” (non-GAAP) for the following purposes:

•		~~Calculation of annual performance-based incentives for certain executives~~
•		~~Calculation of long-term performance-based incentives for certain executives~~
•		~~Investor presentations of Company performance~~

• Calculation of annual performance-based incentives for certain executives

• Calculation of long-term performance-based incentives for certain executives

• Investor presentations of Company performance

We have ~~$431.2 million~~$1.437 billion and ~~$401.5 million~~$1.449 billion total goodwill and other intangible assets atfor the periods ended September 30, ~~2017~~2023 and December 31, ~~2016,~~2022, respectively. Because of our acquisition strategy has resulted in a high level of intangible assets, management believes a useful ~~calculation is return on~~calculations include tangible book value per share (non-GAAP) and tangible common equity to tangible assets (non-GAAP).

~~The Company believes~~

We believe that presenting these non-GAAP financial measures will permit investors and analysts to assess the performance of the Company on the same basis as that is applied by management and the Board of Directors.

Non-GAAP financial measures have inherent limitations, are not required to be uniformly applied and are not audited. To mitigate these limitations, ~~the Company has~~we have procedures in place to identify and approve each item that qualifies as ~~non-core~~adjusted to ensure that the Company’s ~~“core”~~“adjusted” results are properly reflected for period-to-period comparisons. Although these non-GAAP financial measures are frequently used by stakeholders in the evaluation of a ~~Company,~~company, they have limitations as analytical tools and should not be considered in isolation or as a substitute for analyses of results as reported under GAAP. In particular, a measure of earnings that excludes ~~non-core~~certain items does not represent the amount that effectively accrues directly to stockholders (i.e., ~~non-core~~certain items are included in earnings and stockholders’ equity).

Additionally, similarly titled non-GAAP financial measures used by other companies may not be computed in the same or similar fashion.

76

See Table 12 below for the reconciliation of non-GAAP financial measures, which exclude certain items for the periods presented.

Table 12: Reconciliation of Adjusted Earnings (non-GAAP)


	Three Months Ended				Nine Months Ended
	September 30,		June 30,		September 30,		September 30,
(In thousands, except per share data)	2023		2023		2023		2022
Net income available to common stockholders	$	47,247	$	58,314	$	151,150	$	173,152
Certain items:
Loss from early retirement of TruPS	—		—		—		365
Gain on sale of intellectual property	—		—		—		(750)
Donation to Simmons First Foundation	—		—		—		1,738
Merger related costs	5		19		1,420		22,441
Early retirement program	1,557		3,609		5,166		—
Branch right sizing (net)	547		95		1,621		2,524
Day 2 CECL Provision	—		—		—		33,779
Tax effect (1)	(552)		(972)		(2,145)		(15,707)
Certain items, net of tax	1,557		2,751		6,062		44,390
Adjusted earnings (non-GAAP)	$	48,804	$	61,065	$	157,212	$	217,542

Diluted earnings per share(2)	$	0.37	$	0.46	$	1.19	$	1.40
Certain items:
Loss from early retirement of TruPS	—		—		—		—
Gain on sale of intellectual property	—		—		—		(0.01)
Donation to Simmons First Foundation	—		—		—		0.01
Merger related costs	—		—		0.01		0.18
Early retirement program	0.01		0.03		0.04		—
Branch right sizing (net)	0.01		—		0.02		0.02
Day 2 CECL Provision	—		—		—		0.28
Tax effect (1)	—		(0.01)		(0.02)		(0.12)
Certain items, net of tax	0.02		0.02		0.05		0.36
Adjusted diluted earnings per share (non-GAAP)	$	0.39	$	0.48	$	1.24	$	1.76

(1)Effective tax rate of 26.135%.

(2)See Note 17, Earnings Per Share (“EPS”), for number of shares used to determine EPS.

77

See Table 13 below for the reconciliation of ~~core earnings, which exclude non-core items~~adjusted noninterest income, adjusted noninterest expense and adjusted salaries and employee benefits expense for the periods presented.

Table 13: Reconciliation of ~~Core Earnings~~Adjusted Noninterest Income (non-GAAP)

Three Months Ended Nine Months Ended
September 30, September 30,
($ in thousands) 2017 2016 2017 2016

Net income $ 28,852 $ 23,429 $ 74,037 $ 69,819
Non-core items:
Gain on sale of insurance lines of business (3,708 ) -- (3,708 ) --
Gain from early retirement of trust preferred securities -- -- -- (594 )
Merger related costs 752 1,524 7,879 1,989
Branch right sizing 435 43 53 3,276
Tax effect⁽¹⁾ 1,415 (614 ) (1,230 ) (1,832 )
Net non-core items (1,106 ) 953 2,994 2,839
Core earnings (non-GAAP) $ 27,746 $ 24,382 $ 77,031 $ 72,658

Diluted earnings per share $ 0.89 $ 0.76 $ 2.31 $ 2.28
Non-core items:
Gain on sale of insurance lines of business (0.11 ) -- (0.11 ) --
Gain from early retirement of trust preferred securities -- -- -- (0.02 )
Merger related costs 0.02 0.05 0.25 0.06
Branch right sizing 0.01 -- -- 0.11
Tax effect⁽¹⁾ 0.05 (0.02 ) (0.04 ) (0.06 )
Net non-core items (0.03 ) 0.03 0.10 0.09
Diluted core earnings per share (non-GAAP) $ 0.86 $ 0.79 $ 2.41 $ 2.37

~~______________________~~

~~(1)~~

~~Effective tax rate of 39.225%, adjusted for non-deductible merger related costs and deferred tax adjustments related to the sale of insurance lines of business.~~

, Adjusted Noninterest Expense (non-GAAP) and Adjusted Salaries and Employee Benefits Expense (non-GAAP)


	Three Months Ended				Nine Months Ended
	September 30,		June 30,		September 30,		September 30,
(In thousands)	2023		2023		2023		2022
Noninterest income	$	42,777	$	44,980	$	133,592	$	125,419
Certain items:
Loss from early retirement of TruPS	—		—		—		365
Gain on sale of intellectual property	—		—		—		(750)
Branch right sizing	—		—		—		153
Total certain items	—		—		—		(232)
Adjusted noninterest income (non-GAAP)	$	42,777	$	44,980	$	133,592	$	125,187

Noninterest expense	$	131,998	$	139,696	$	414,922	$	424,173
Certain items:
Merger related costs	(5)		(19)		(1,420)		(22,441)
Early retirement program	(1,557)		(3,609)		(5,166)		—
Donation to Simmons First Foundation	—		—		—		(1,738)
Branch right sizing	(547)		(95)		(1,621)		(2,371)
Total certain items	(2,109)		(3,723)		(8,207)		(26,550)
Adjusted noninterest expense (non-GAAP)	$	129,889	$	135,973	$	406,715	$	397,623

Salaries and employee benefits expense	$	67,374	$	74,723	$	219,135	$	213,964
Early retirement program costs	(1,557)		(3,609)		(5,166)		—
Adjusted salaries and employee benefits expense (non-GAAP)	$	65,817	$	71,114	$	213,969	$	213,964

See Table 14 below for the reconciliation of tangible book value per common share.

Table 14: Reconciliation of Tangible Book Value per Common Share (non-GAAP)

(In thousands, except per share data) September 30,
2017 December 31,
2016

Total common stockholders’ equity $ 1,257,199 $ 1,151,111
Intangible assets:
Goodwill (375,731 ) (348,505 )
Other intangible assets (55,501 ) (52,959 )
Total intangibles (431,232 ) (401,464 )
Tangible common stockholders’ equity $ 825,967 $ 749,647
Shares of common stock outstanding 32,212,242 31,277,723

Book value per common share $ 39.03 $ 36.80

Tangible book value per common share (non-GAAP) $ 25.64 $ 23.97


	September 30,		December 31,
(In thousands, except per share data)	2023		2022
Total common stockholders’ equity	$	3,285,555	$	3,269,362
Intangible assets:
Goodwill	(1,320,799)		(1,319,598)
Other intangible assets	(116,660)		(128,951)
Total intangibles	(1,437,459)		(1,448,549)
Tangible common stockholders’ equity	$	1,848,096	$	1,820,813
Shares of common stock outstanding	125,133,281		127,046,654

Book value per common share	$	26.26	$	25.73

Tangible book value per common share (non-GAAP)	$	14.77	$	14.33

78

See Table 15 below for the calculation of tangible common equity and the reconciliation of tangible common equity to tangible ~~assets as of September 30, 2017 and December 31, 2016.~~

assets.

Table 15: Reconciliation of Tangible Common Equity and the Ratio of Tangible Common Equity to Tangible Assets (non-GAAP)

(In thousands, except per share data) September 30,
2017 December 31,
2016

Total common stockholders’ equity $ 1,257,199 $ 1,151,111
Intangible assets:
Goodwill (375,731 ) (348,505 )
Other intangible assets (55,501 ) (52,959 )
Total intangibles (431,232 ) (401,464 )
Tangible common stockholders’ equity $ 825,967 $ 749,647

Total assets $ 9,535,370 $ 8,400,056
Intangible assets:
Goodwill (375,731 ) (348,505 )
Other intangible assets (55,501 ) (52,959 )
Total intangibles (431,232 ) (401,464 )
Tangible assets $ 9,104,138 $ 7,998,592

Ratio of equity to assets 13.18 % 13.70 %
Ratio of tangible common equity to tangible assets (non-GAAP) 9.07 % 9.37 %


	September 30,			December 31,
(Dollars in thousands)	2023			2022
Total common stockholders’ equity	$	3,285,555		$	3,269,362
Intangible assets:
Goodwill	(1,320,799)			(1,319,598)
Other intangible assets	(116,660)			(128,951)
Total intangibles	(1,437,459)			(1,448,549)
Tangible common stockholders’ equity	$	1,848,096		$	1,820,813

Total assets	$	27,564,325		$	27,461,061
Intangible assets:
Goodwill	(1,320,799)			(1,319,598)
Other intangible assets	(116,660)			(128,951)
Total intangibles	(1,437,459)			(1,448,549)
Tangible assets	$	26,126,866		$	26,012,512

Ratio of common equity to assets	11.92		%	11.91		%
Ratio of tangible common equity to tangible assets (non-GAAP)	7.07		%	7.00		%

See Table 16 below for the calculation of ~~core net interest margin for the periods presented.~~

uninsured, non-collateralized deposit coverage ratio.

Table 16: ~~Reconciliation~~Calculation of ~~Core Net Interest Margin~~Uninsured, Non-Collateralized Deposit Coverage Ratio (non-GAAP)

Three Months Ended Nine Months Ended
September 30, September 30,
($ in thousands) 2017 2016 2017 2016

Net interest income $ 78,819 $ 68,063 $ 228,011 $ 204,878
FTE adjustment 1,751 1,969 5,798 5,728
Fully tax equivalent net interest income 80,570 70,032 233,809 210,606
Total accretable yield (2,890 ) (4,928 ) (12,109 ) (17,705 )
Core net interest income $ 77,680 $ 65,104 $ 221,700 $ 192,901

Average earning assets – quarter-to-date $ 8,182,292 $ 6,825,019 $ 7,829,548 $ 6,682,683

Net interest margin 3.95 4.08 3.99 4.21
Core net interest margin (non-GAAP) 3.81 3.79 3.79 3.86


	September 30,		December 31,
(In thousands)	2023		2022
Uninsured deposits at Simmons Bank	$	8,143,200	$	8,913,990
Less: Collateralized deposits (excluding portion that is FDIC insured)	2,835,405		2,759,248
Less: Intercompany eliminations	676,840		529,042
Total uninsured, non-collateralized deposits	$	4,630,955	$	5,625,700

FHLB borrowing availability	$	5,372,000	$	5,442,000
Unpledged securities	4,124,000		3,180,000
Fed funds lines, Fed discount window and Bank Term Funding Program	1,951,000		1,982,000
Additional liquidity sources	$	11,447,000	$	10,604,000

Uninsured, non-collateralized deposit coverage ratio	2.5x		1.9x

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~~Item 3.~~

~~Quantitative and Qualitative Disclosure About Market Risk~~

~~Parent Company~~

Item 3. Quantitative and Qualitative Disclosures About Market Risk

The Company has leveraged its investment in its subsidiary bank and depends upon the dividends paid to it, as the sole shareholder of the subsidiary bank, as a principal source of funds for dividends to shareholders, stock ~~repurchase~~repurchases and debt service requirements. At September 30, ~~2017,~~2023, undivided profits of ~~the Company's subsidiary bank was~~Simmons Bank were approximately ~~$274.5~~$687.9 million, of which approximately ~~$1.8~~$238.0 million was available for the payment of dividends to the Company without regulatory approval. In addition to dividends, other sources of liquidity for the Company are the sale of equity securities and the borrowing of funds.

76

Subsidiary Bank

Generally speaking, ~~our~~the Company’s subsidiary bank relies upon net inflows of cash from financing activities, supplemented by net inflows of cash from operating activities, to provide cash used in investing activities. Typical of most banking companies, significant financing activities include: deposit gathering; use of short-term borrowing facilities, such as federal funds purchased and repurchase agreements; and the issuance of long-term debt. The ~~Bank’s~~subsidiary bank’s primary investing activities include loan originations and purchases of investment securities, offset by loan payoffs and investment cash flows and maturities.

Liquidity represents an ~~institution's~~institution’s ability to provide funds to satisfy demands from depositors and borrowers by either converting assets into cash or accessing new or existing sources of incremental funds. A major responsibility of management is to maximize net interest income within prudent liquidity constraints. Internal corporate guidelines have been established to constantly measure liquid assets as well as relevant ratios concerning earning asset levels and purchased funds. The management and ~~board~~Board of ~~directors~~Directors of the subsidiary bank ~~monitor~~monitors these same indicators and makes adjustments as needed.

Liquidity Management

The objective of our liquidity management is to access adequate sources of funding to ensure that cash flow requirements of depositors and borrowers are met in an orderly and timely manner. Sources of liquidity are managed so that reliance on any one funding source is kept to a minimum. Our liquidity sources are prioritized for both availability and time to activation.

Our liquidity is a primary consideration in determining funding needs and is an integral part of asset/liability management. Pricing of the liability side is a major component of interest margin and spread management. Adequate liquidity is a necessity in addressing this critical task. There are ~~five~~seven primary and secondary sources of liquidity available to the Company. The particular liquidity need and timeframe determine the use of these sources.

The first source of liquidity available to the Company is ~~Federal~~federal funds. Federal funds are available on a daily basis and are used to meet the normal fluctuations of a dynamic balance sheet. ~~The Company and our subsidiary bank have~~As of September 30, 2023, the Bank had approximately ~~$285~~$510 million in ~~Federal~~federal funds lines of credit from upstream correspondent banks that can be accessed, if and when needed. In order to ensure availability of these upstream funds we test these borrowing lines at least annually. Historical monitoring of these funds has made it possible for us to project seasonal fluctuations and structure our funding requirements on a month-to-month basis.

Second, Simmons Bank has ~~a line~~lines of credit available with the Federal Home Loan Bank. While we use portions of ~~this line~~those lines to match off longer-term mortgage loans, we also use ~~this line~~those lines to meet liquidity needs. Approximately ~~$1.1~~$5.37 billion of ~~this line~~these lines of credit isare currently available, if needed, for liquidity.

A third source of liquidity is that we have the ability to access large wholesale deposits from both the public and private sector to fund short-term liquidity needs.

A fourth source of liquidity is the retail deposits available through our network of financial centers throughout Arkansas, ~~Colorado,~~ Kansas, Missouri, Oklahoma, Tennessee and Texas. Although this method can be a somewhat more expensive alternative to supplying liquidity, this source can be used to meet intermediate term liquidity needs.

Fifth, we use a laddered investment portfolio that ensures there is a steady source of intermediate term liquidity. These funds can be used to meet seasonal loan patterns and other intermediate term balance sheet fluctuations. Approximately ~~76.4% of~~47.3% of the investment portfolio is classified as ~~available-for-sale.~~available-for-sale, and we may generate additional liquidity through opportunistic sales of investment securities. We also use securities held in the securities portfolio to pledge when obtaining public funds.

Sixth, we have a network of downstream correspondent banks from which we can access debt to meet liquidity ~~needs, as was demonstrated by the $52.3 million of unsecured debt issued in the fourth quarter of 2015.~~

needs.

Finally, we have the ability to access funds through the Federal Reserve Bank Discount Window.

80

We believe the various sources available are ample liquidity for short-term, intermediate-term and long-term liquidity.

Market Risk Management

Market risk arises from changes in interest rates. We have risk management policies to monitor and limit exposure to market risk. In asset and liability management activities, policies designed to minimize structural interest rate risk are in place. The measurement of market risk associated with financial instruments is meaningful only when all related and offsetting on- and off-balance-sheet transactions are aggregated, and the resulting net positions are identified.

Interest Rate Sensitivity

Interest rate risk represents the potential impact of interest rate changes on net income and capital resulting from mismatches in repricing opportunities of assets and liabilities over a period of time. A number of tools are used to monitor and manage interest rate risk, including simulation models and interest sensitivity gap analysis. Management uses simulation models to estimate the effects of changing interest rates and various balance sheet strategies on the level of the Company’s net income and capital. As a means of limiting interest rate risk to an acceptable level, management may alter the mix of floating and fixed-rate assets and liabilities, change pricing schedules and manage investment maturities during future security ~~purchases.~~

purchases, or enter into derivative contracts such as interest rate swaps.

The simulation model incorporates management’s assumptions regarding the level of interest rates or balance changes for indeterminate maturity deposits for a given level of market rate changes. These assumptions have been developed through anticipated pricing behavior. Key assumptions in the simulation models include the relative timing of prepayments, cash flows and maturities. These assumptions are inherently uncertain and, as a result, the model cannot precisely estimate net interest income or precisely predict the impact of a change in interest rates on net income or capital. Actual results will differ from simulated results due to the timing, magnitude and frequency of interest rate changes and changes in market conditions and management strategies, among other factors.

As of September 30, ~~2017,~~2023, the model simulations projected that 100 and 200 basis point increases in interest rates would result in a ~~positive~~negative variance in net interest income of ~~0.97%~~0.87% and ~~1.68%~~1.76%, respectively, relative to the base case over the next 12 months due to our current liability sensitive balance sheet driven by the change in deposit mix in exposure to higher rate scenarios and increase in FHLB short-term advances, while decreases in interest rates of 100 basis points would result in a ~~negative~~positive variance in net interest income of ~~-3.55%~~0.80% relative to the base case over the next 12 months. The likelihood of a decrease in interest rates in excess of 50 basis points as of September 30, 2017 is considered remote given current interest rate levels and the recent rate increase by the Federal Reserve. These are good faith estimates and assume that the composition of our interest sensitive assets and liabilities existing at each ~~year-end~~period-end will remain constant over the relevant twelve month measurement period and that changes in market interest rates are instantaneous and sustained across the yield curve regardless of duration of pricing characteristics of specific assets or liabilities. Also, this analysis does not contemplate any actions that we might undertake in response to changes in market interest rates. We believe these estimates are not necessarily indicative of what actually could occur in the event of immediate interest rate increases or decreases of this magnitude. As interest-bearing assets and liabilities reprice in different time frames and proportions to market interest rate movements, various assumptions must be made based on historical relationships of these variables in reaching any conclusion. Since these correlations are based on competitive and market conditions, we anticipate that our future results will likely be different from the foregoing estimates, and such differences could be material.

The table below presents our sensitivity to net interest income at September 30, ~~2017:~~

2023:

Table 17:Net Interest Income Sensitivity


Interest Rate Scenario		% Change from Base

Up 200 basis points	~~1.68%~~(1.76)%
Up 100 basis points		~~0.97%~~(0.87)%
Down 100 basis points		~~-3.55%~~0.80%
Down 200 basis points		1.28%

81

Item 4.

~~Controls and Procedures~~

~~Evaluation of Disclosure~~ Controls and Procedures

~~The Company's~~

Management, under the supervision and with the participation of the Company’s Chief Executive Officer, ~~and~~ Chief Financial Officer ~~have~~and Chief Accounting Officer, has reviewed and evaluated the effectiveness of the ~~Company's~~Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) or Rule 15d-15(e) under the Securities Exchange ~~Act)~~Act of 1934, as amended (“Exchange Act”)) as of the end of the period covered by this report. Based upon that evaluation, the Chief Executive Officer, Chief Financial Officer and Chief ~~Financial~~Accounting Officer have concluded that the ~~Company's~~Company’s current disclosure controls and procedures were effective ~~for~~at the ~~period.~~

reasonable assurance levels as of the end of the period covered by this report to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and that such information is accumulated and communicated to management, including the Company’s Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer, as appropriate to allow timely decisions regarding required disclosure. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that the Company’s disclosure controls and procedures will detect or uncover every situation involving the failure of persons within the Company or its subsidiary to disclose material information required to be set forth in the Company’s periodic reports.

Changes in Internal Control over Financial Reporting

There were no changes in the Company’s internal controls over financial reporting during the quarter ended September 30, ~~2017,~~2023, which materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

~~Part II:~~

~~Other Information~~

Part II: Other Information

Item 1. Legal Proceedings

The information contained in Note 13, Contingent Liabilities, of the Condensed Notes to Consolidated Financial Statements in Part I, Item 1 of this report is incorporated herein by reference.

~~Item 1A.~~

~~Risk Factors~~

~~Management is not aware of any~~

Item 1A. Risk Factors

There have been no material changes toin the risk factors ~~discussed~~faced by the Company from those disclosed in ~~Part 1, Item 1A of our~~the Company’s Annual Report on Form 10-K for the year ended December 31, 2016. In addition to the other information set forth in this report, you should carefully consider the risk factors discussed in Part I, Item 1A of our Form 10-K, which could materially and adversely affect2022, as supplemented by the Company’s ~~business, ongoing financial condition~~Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2023.

82

Item 2. Unregistered Sales of Equity Securities, Use of Proceeds and results of operations. The risks described are not the only risks facing the Company. Additional risks and uncertainties not presently known to management or that management currently believes to be immaterial may also adversely affect our business, ongoing financial condition or results of operations.

~~Item 2.~~

~~Unregistered Sales of Equity Securities and Use of Proceeds~~

~~(c)~~ Issuer Purchases of Equity ~~Securities.~~Securities

Effective July 23, 2021, the Company’s Board of Directors approved an amendment to the 2019 Program that increased the amount of the Company’s Class A common stock that may be repurchased under the 2019 Program from a maximum of $180 million to a maximum of $276.5 million and extended the term of the 2019 Program from October 31, 2021, to October 31, 2022 (unless terminated sooner). The 2019 Program was originally approved on October 17, 2019 and first amended in March 2020. During January 2022, the Company ~~made no~~substantially exhausted the remaining capacity under the 2019 Program, and as a result, the Company’s Board of Directors authorized a new stock repurchase program (the “2022 Program”), which replaced the 2019 Program and under which the Company may repurchase up to $175.0 million of its Class A common stock currently issued and outstanding. The timing, pricing, and amount of any repurchases under the 2022 Program will be determined by the Company’s management at its discretion based on a variety of factors, including, but not limited to, trading volume and market price of the Company’s common stock, corporate considerations, the Company’s working capital and investment requirements, general market and economic conditions, and legal requirements.

Information concerning our purchases of ~~its~~ common stock during the quarter ended September 30, 2023 is as follows:


Period	Total Number of Shares Purchased (1)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
July 1, 2023 - July 31, 2023	—	$	—	—	$	59,899,000
August 1, 2023 - August 31, 2023	567,100	18.26		567,100	$	49,541,000
September 1, 2023 - September 30, 2023	561,862	17.12		561,862	$	39,922,000
Total	1,128,962	$	17.69	1,128,962

(1)No shares of restricted stock were purchased in connection with employee tax withholding obligations under employee compensation plans, which are not purchases under any publicly announced plan.

Item 5. Other Information

During the three months ended September 30, ~~2017.~~

2023, none of our directors or officers (as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934, as amended) adopted, modified or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (as such terms are defined in Item 408 of Regulation S-K of the Securities Act of 1933).

83

Item 6. Exhibits

~~Item 6.~~

~~Exhibits~~

Exhibit No.

Description

2.1

Purchase and Assumption Agreement Whole Bank All Deposits, among Federal Insurance Deposit Corporation, Receiver of Truman Bank, St. Louis, Missouri, Federal Deposit Insurance Corporation, and Simmons First National Bank, Pine Bluff, Arkansas, dated as of September 14, 2012 (incorporated by reference to Exhibit 2.1 to Simmons First National Corporation’s Current Report on Form 8-K, as amended, for September 20, 2012 (File No. 000-06253)).

~~2.2~~

Loan Sale Agreement, by and between Federal Deposit Insurance Corporation, as Receiver for Truman Bank, St. Louis, Missouri, and Simmons First National Bank, Pine Bluff, Arkansas, dated as of September 14, 2012 (incorporated by reference to Exhibit 2.2 to Simmons First National Corporation’s Current Report on Form 8-K, as amended, for September 20, 2012 (File No. 000-06253)).

~~2.3~~

Purchase and Assumption Agreement Whole Bank All Deposits, among Federal Insurance Deposit Corporation, Receiver of Excel Bank, Sedalia, Missouri, Federal Deposit Insurance Corporation, and Simmons First National Bank, Pine Bluff, Arkansas, dated as of October 19, 2012 (incorporated by reference to Exhibit 2.1 to Simmons First National Corporation’s Current Report on Form 8-K, as amended, for October 25, 2012 (File No. 000-06253)).

~~2.4~~

Stock Purchase Agreement by and between Simmons First National Corporation and Rogers Bancshares, Inc., dated as of September 10, 2013 (incorporated by reference to Exhibit 10.1 to Simmons First National Corporation’s Current Report on Form 8-K for September 12, 2013 (File No. 000-06253)).

~~2.5~~

Agreement and Plan of Merger, dated as of March 24, 2014, by and between Simmons First National Corporation and Delta Trust & Banking Corporation(incorporated by reference to Annex A to the Joint Proxy Statement/Prospectus filed by Simmons First National Corporation on July 23, 2014 (File No. 000-06253)).

~~2.6~~

Agreement and Plan of Merger, dated as of May 6, 2014, by and between Simmons First National Corporation and Community First Bancshares, Inc., as amended on September 11, 2014 (incorporated by reference to Annex A to the Joint Proxy Statement/Prospectus filed by Simmons First National Corporation on October 8, 2014 (File No. 000-06253)).

~~2.7~~

Agreement and Plan of Merger, dated as of May 27, 2014, by and between Simmons First National Corporation and Liberty Bancshares, Inc., as amended on September 11, 2014 (incorporated by reference to Annex B to the Joint Proxy Statement/Prospectus filed by Simmons First National Corporation on October 8, 2014 (File No. 000-06253)).

~~2.8~~

Agreement and Plan of Merger, dated as of April 28, 2015, by and between Simmons First National Corporation and Ozark Trust & Investment Corporation (incorporated by reference to Exhibit 10.1 to Simmons First National Corporation’s Current Report on Form 8-K for April 29, 2015 (File No. 000-06253)).

~~2.9~~

Stock Purchase Agreement by and among Citizens National Bank, Citizens National Bancorp, Inc. and Simmons First National Corporation, dated as of May 18, 2016 (incorporated by reference to Exhibit 2.1 to Simmons First National Corporation’s Current Report on Form 8-K for May 18, 2016 (File No. 000-06253)).

~~2.10~~

Agreement and Plan of Merger, dated as of November ~~17, 2016,~~18, 2021, by and ~~between~~among Simmons First National Corporation and ~~Hardeman County Investment Company,~~Spirit of Texas Bancshares, Inc. (incorporated by reference to ~~Exhibit 2.1~~Annex A to ~~Simmons First National Corporation’s Current Report~~the Registration Statement on Form ~~8-K for November 17, 2016 (File No. 000-06253)).~~

~~2.11~~	~~Agreement and Plan~~S-4 filed under the Securities Act of ~~Merger, dated as of December 14, 2016,~~1933 by ~~and between~~ Simmons First National Corporation on January 18, 2022 (File No. 333-261842)).
3.1		Amended and ~~Southwest Bancorp, Inc.,~~Restated Articles of Incorporation of Simmons First National Corporation, as amended on July ~~19, 2017~~14, 2021 (incorporated by reference to Exhibit ~~2.11~~3.1 to the Registration Statement on Form S-4 filed under the Securities Act of 1933 by Simmons First National Corporation on July 21, 2021 (File No. 333-258059)).
3.2		Articles of Amendment to the Amended and Restated Articles of Incorporation of Simmons First National Corporation, dated August 3, 2022 (incorporated by reference to Exhibit 3.2 to Simmons First National Corporation’s Quarterly Report on Form 10-Q10-Q for the ~~Quarter~~quarter ended ~~June~~September 30, ~~2017~~2022 (File No. 000-06253)).

~~2.12~~3.3

~~Agreement~~Amended and Plan of Merger, dated as of January 23, 2017, by and between Simmons First National Corporation and First Texas, BHC, Inc., as amended on July 19, 2017 (incorporated by reference to Exhibit 2.12 to Simmons First National Corporation’s Quarterly Report on Form 10-~~Q for the Quarter ended June 30, 2017 (File No. 000-06253)).~~

~~3.1~~

Restated ~~Articles of Incorporation~~By-Laws of Simmons First National Corporation (incorporated by reference to Exhibit 3.1 to Simmons First National Corporation’s ~~Quarterly Report on Form 10~~-~~Q for the Quarter ended March 31, 2009 (File No. 000-06253)).~~

~~3.2~~

~~Amended By-Laws of Simmons First National Corporation (incorporated by reference to Exhibit 3.2 to Simmons First National Corporation’s Quarterly Report on Form 10~~-~~Q for the Quarter ended June 30, 2017 (File No. 000-06253)).~~

~~3.3~~

Certificate of Designation of Senior Non-Cumulative Perpetual Preferred Stock, Series A of Simmons First National Corporation, dated February 27, 2015 (incorporated by reference to Exhibit 3.1 to Simmons First National Corporation’s Current Report on Form 8-K onfiled February ~~27, 2015~~18, 2022 (File No. 000-06253)).

4.1

Instruments defining the rights of security holders, including indentures. Simmons First National Corporation hereby agrees to furnish copies of instruments defining the rights of holders of long-term debt of the Corporation and its consolidated subsidiaries to the U.S. Securities and Exchange Commission upon request. No issuance of debt exceeds ten percent of the total assets of the Corporation and its subsidiaries on a consolidated basis.

~~12.1~~10.1

~~Computation of Ratios of Earnings~~Separation Agreement and Release among Simmons First National Corporation, Simmons Bank, and Matthew Reddin dated July 26, 2023 (incorporated by reference to Combined Fixed Charges and Preferred Dividend.*Exhibit 10.1 to Simmons First National Corporation’s Current Report on Form 8-K filed on July 28, 2023 (File No. 000-06253)).

10.2			Indemnification Agreement for Dean Bass dated July 27, 2023 (incorporated by reference to Exhibit 10.5 to Simmons First National Corporation’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2023 (File No. 000-06253)).
14.1			Amended and Restated Simmons First National Corporation Code of Ethics ~~dated March 22, 2017~~(as amended and restated on July 23, 2020) (incorporated by reference to Exhibit 14.1 to Simmons First National Corporation’s Current Report on Form 8-K filed ~~March 22, 2017~~July 28, 2020 (File No. 000-06253)).

~~14.2~~

Finance Group Code of Ethics, dated December 2003 (incorporated by reference to Exhibit 14 to Simmons First National Corporation’s Annual Report on Form 10-K for the Year ended December 31, 2003 (File No. 000-06253)).

15.1

Awareness Letter of ~~BKD,~~FORVIS, LLP.*

31.1

Rule 13a-15(e) and 15d-15(e) Certification – George A. Makris, Jr., Chairman and Chief Executive Officer.*

~~31.2~~	Rule 13a-15(e) and 15d-15(e) Certification – Robert A. Fehlman, ~~Senior~~Chief Executive ~~Vice~~Officer.*
31.2			Rule 13a-15(e) and 15d-15(e) Certification – James M. Brogdon, President and Chief Financial ~~Officer and Treasurer.~~Officer.*

31.3

Rule 13a-15(e) and 15d-15(e) Certification – David W. Garner, Executive Vice President ~~Controller~~ and Chief Accounting Officer.*

32.1

Certification Pursuant to 18 U.S.C. Sections 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 – George A. Makris, Jr., Chairman and Chief Executive Officer.*

~~32.2~~	Certification Pursuant to 18 U.S.C. Sections 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 – Robert A. Fehlman, ~~Senior~~Chief Executive ~~Vice~~Officer.*
32.2			Certification Pursuant to 18 U.S.C. Sections 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 – James M. Brogdon, President and Chief Financial ~~Officer and Treasurer.~~Officer.*

32.3			Certification Pursuant to 18 U.S.C. Sections 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 – David W. Garner, Executive Vice President ~~Controller~~ and Chief Accounting Officer.*
101.INS			XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.*
101.SCH			Inline XBRL Taxonomy Extension Schema.*
101.CAL			Inline XBRL Taxonomy Extension Calculation Linkbase.*
101.DEF			Inline XBRL Taxonomy Extension Definition Linkbase.*
101.LAB			Inline XBRL Taxonomy Extension Labels Linkbase.*
101.PRE			Inline XBRL Taxonomy Extension Presentation Linkbase.*
104			Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

101.INS XBRL Instance Document.**

101.SCH XBRL Taxonomy Extension Schema.**

101.CAL XBRL Taxonomy Extension Calculation Linkbase.**

101.DEF XBRL Taxonomy Extension Definition Linkbase.**

101.LAB XBRL Taxonomy Extension Labels Linkbase.**

101.PRE XBRL Taxonomy Extension Presentation Linkbase.**

* Filed herewith

** Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities Act of 1934, as amended, and otherwise are not subject to liability under those sections.

84

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

SIMMONS FIRST NATIONAL CORPORATION

(Registrant)


Date:		November 6, ~~2017~~ 2023	~~/s/ George A. Makris, Jr.~~
	~~George A. Makris, Jr.~~
	~~Chairman and Chief Executive Officer~~



~~Date:~~ ~~November 6, 2017~~	/s/ Robert A. Fehlman
			Robert A. Fehlman
		~~Senior~~	Chief Executive ~~Vice President,~~Officer
			(Principal Executive Officer)


Date:		November 6, 2023	/s/ James M. Brogdon
			James M. Brogdon
			President and Chief Financial Officer ~~and Treasurer~~
			(Principal Financial Officer)


Date:		November 6, ~~2017~~ 2023	/s/ David W. Garner
			David W. Garner
			Executive Vice President ~~Controller~~
	and Chief Accounting Officer
			(Principal Accounting Officer)

85

~~For Quarter EndedSeptember 30, 2017~~	~~Commission File Number000-06253~~
☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

~~Arkansas~~	~~71-0407808~~
Arkansas		71-0407808
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

501 Main Street ~~Pine Bluff, Arkansas~~		71601
~~(Address~~Pine Bluff		(Zip Code)
Arkansas
(Address of principal executive offices)		~~(Zip Code)~~

~~Part I:~~	~~Financial Information~~
~~Item I.~~	~~Financial Statements (Unaudited)~~


								September 30,		December 31,
(In thousands, except share data)	September 30, 2017			December 31, 2016			(In thousands, except share data)	2023		2022
	(Unaudited)							(Unaudited)
ASSETS							ASSETS
Cash and non-interest bearing balances due from banks	$	108,675		$	117,007
Cash and noninterest bearing balances due from banks							Cash and noninterest bearing balances due from banks	$	181,822	$	200,616
Interest bearing balances due from banks and federal funds sold		323,615			168,652		Interest bearing balances due from banks and federal funds sold	423,826		481,506
Cash and cash equivalents		432,290			285,659		Cash and cash equivalents	605,648		682,122
Interest bearing balances due from banks - time		4,059			4,563		Interest bearing balances due from banks - time	100		795
Investment securities:							Investment securities:
Held-to-maturity		406,033			462,096
Available-for-sale		1,317,420			1,157,354
Held-to-maturity, net of allowance for credit losses of $3,214 and $1,388 at September 30, 2023 and December 31, 2022, respectively							Held-to-maturity, net of allowance for credit losses of $3,214 and $1,388 at September 30, 2023 and December 31, 2022, respectively	3,742,292		3,759,706
Available-for-sale, net of allowance for credit losses of $1,196 at September 30, 2023 (amortized cost of $3,890,910 and $4,331,413 at September 30, 2023 and December 31, 2022, respectively)							Available-for-sale, net of allowance for credit losses of $1,196 at September 30, 2023 (amortized cost of $3,890,910 and $4,331,413 at September 30, 2023 and December 31, 2022, respectively)	3,358,421		3,852,854
Total investments		1,723,453			1,619,450		Total investments	7,100,713		7,612,560
Mortgage loans held for sale		12,614			27,788		Mortgage loans held for sale	11,690		3,486
Assets held in trading accounts		49			41
Other assets held for sale		182,378			--
Loans:
Legacy loans		5,211,312			4,327,207
Allowance for loan losses		(42,717	)		(36,286	)
Loans acquired, net of discount and allowance		1,092,039			1,305,683
Loans							Loans	16,771,888		16,142,124
Allowance for credit losses on loans							Allowance for credit losses on loans	(218,547)		(196,955)
Net loans		6,260,634			5,596,604		Net loans	16,553,341		15,945,169
Premises and equipment		224,376			199,359		Premises and equipment	567,167		548,741
Premises held for sale		--			6,052
Foreclosed assets and other real estate owned		31,477			26,895		Foreclosed assets and other real estate owned	3,809		2,887
Interest receivable		30,749			27,788		Interest receivable	110,361		102,892
Bank owned life insurance		148,984			138,620		Bank owned life insurance	497,465		491,340
Goodwill		375,731			348,505		Goodwill	1,320,799		1,319,598
Other intangible assets		55,501			52,959		Other intangible assets	116,660		128,951
Other assets		53,075			65,773		Other assets	676,572		622,520
Total assets	$	9,535,370		$	8,400,056		Total assets	$	27,564,325	$	27,461,061

LIABILITIES AND STOCKHOLDERS’ EQUITY							LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits:							Deposits:
Non-interest bearing transaction accounts	$	1,669,860		$	1,491,676
Noninterest bearing transaction accounts							Noninterest bearing transaction accounts	$	4,991,034	$	6,016,651
Interest bearing transaction accounts and savings deposits		4,344,779			3,956,483		Interest bearing transaction accounts and savings deposits	10,571,807		11,762,885
Time deposits		1,310,951			1,287,060		Time deposits	6,668,370		4,768,558
Total deposits		7,325,590			6,735,219		Total deposits	22,231,211		22,548,094
Federal funds purchased and securities sold under agreements to repurchase		121,687			115,029		Federal funds purchased and securities sold under agreements to repurchase	74,482		160,403
Other borrowings		522,541			273,159		Other borrowings	1,347,855		859,296
Subordinated debentures		67,418			60,397
Other liabilities held for sale		176,964			--
Subordinated notes and debentures							Subordinated notes and debentures	366,103		365,989
Accrued interest and other liabilities		63,971			65,141		Accrued interest and other liabilities	259,119		257,917
Total liabilities		8,278,171			7,248,945		Total liabilities	24,278,770		24,191,699

Stockholders’ equity:							Stockholders’ equity:
Common stock, Class A, $0.01 par value; 120,000,000 shares authorized; 32,212,242 and 31,277,723 shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively		322			313
Common stock, Class A, $0.01 par value; 350,000,000 shares authorized at September 30, 2023 and December 31, 2022; 125,133,281 and 127,046,654 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively							Common stock, Class A, $0.01 par value; 350,000,000 shares authorized at September 30, 2023 and December 31, 2022; 125,133,281 and 127,046,654 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively	1,251		1,270
Surplus		763,443			711,976		Surplus	2,497,874		2,530,066
Undivided profits		504,085			454,034		Undivided profits	1,330,810		1,255,586
Accumulated other comprehensive loss		(10,651	)		(15,212	)	Accumulated other comprehensive loss	(544,380)		(517,560)
Total stockholders’ equity		1,257,199			1,151,111		Total stockholders’ equity	3,285,555		3,269,362
Total liabilities and stockholders’ equity	$	9,535,370		$	8,400,056		Total liabilities and stockholders’ equity	$	27,564,325	$	27,461,061

	Three Months Ended September 30,					Nine Months Ended September 30,
(In thousands, except per share data)	2017		2016			2017		2016
	(Unaudited)					(Unaudited)

NET INCOME	$	28,852	$	23,429		$	74,037	$	69,843

OTHER COMPREHENSIVE INCOME
Unrealized holding gains (losses) arising during the period on available-for-sale securities		1,107		(3,175	)		9,807		12,271
Less: Reclassification adjustment for realized gains included in net income		3		315			2,302		4,403
Other comprehensive gain (loss), before tax effect		1,104		(3,490	)		7,505		7,868

Less: Tax effect of other comprehensive gain (loss)		433		(1,369	)		2,944		3,086

TOTAL OTHER COMPREHENSIVE INCOME (LOSS)		671		(2,121	)		4,561		4,782

COMPREHENSIVE INCOME	$	29,523	$	21,308		$	78,598	$	74,625


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	~~Page~~
~~Part I:~~		~~Financial Information~~	Page
Part I:		Financial Information
Item 1.		Financial Statements (Unaudited)
		Consolidated Balance Sheets	3
		Consolidated Statements of Income	4
		Consolidated Statements of Comprehensive Income (Loss)	5
		Consolidated Statements of Cash Flows	6
		Consolidated Statements of Stockholders' Equity	7
		Condensed Notes to Consolidated Financial Statements	~~8-49~~9
		Report of Independent Registered Public Accounting Firm	5052
Item 2.		Management's Discussion and Analysis of Financial Condition and Results of Operations	~~51-76~~53
Item 3.		Quantitative and Qualitative ~~Disclosure~~Disclosures About Market Risk	~~76-78~~80
Item 4.		Controls and Procedures	7982

Part II:		Other Information
Item 1.		Legal Proceedings	82
Item 1A.		Risk Factors	7982
Item 2.		Unregistered Sales of Equity Securities, ~~and~~ Use of Proceeds and Issuer Purchases of Equity Securities	7983
Item 3.		Defaults Upon Senior Securities	*
Item 4.		Mine Safety Disclosures	*
Item 5.		Other Information	83
Item 6.		Exhibits	~~79-81~~84

Signatures			8285

	Three Months Ended September30,				Nine Months Ended September 30,
(In thousands, except per share data)	2017		2016		2017		2016
	(Unaudited)				(Unaudited)
INTEREST INCOME
Loans	$	77,457	$	65,078	$	219,734	$	194,765
Interest bearing balances due from banks and federal funds sold		650		263		986		511
Investment securities		9,218		7,774		28,659		24,779
Mortgage loans held for sale		159		299		430		872
Assets held in trading accounts		--		4		--		13
TOTAL INTEREST INCOME		87,484		73,418		249,809		220,940

INTEREST EXPENSE
Deposits		6,030		3,732		15,050		11,162
Federal funds purchased and securities sold under agreements to repurchase		83		59		250		183
Other borrowings		1,875		1,048		4,628		3,114
Subordinated debentures		677		516		1,870		1,603
TOTAL INTEREST EXPENSE		8,665		5,355		21,798		16,062

NET INTEREST INCOME		78,819		68,063		228,011		204,878
Provision for loan losses		5,462		8,294		16,792		15,733

NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES		73,357		59,769		211,219		189,145

NON-INTEREST INCOME
Trust income		4,225		3,873		12,550		11,160
Service charges on deposit accounts		8,907		8,771		25,492		23,748
Other service charges and fees		2,433		3,261		7,145		8,846
Mortgage and SBA lending income		3,219		4,339		9,603		11,903
Investment banking income		680		1,131		2,007		2,999
Debit and credit card fees		8,864		7,825		25,457		22,713
Bank owned life insurance income		725		606		2,402		2,429
Gain on sale of securities		3		315		2,302		4,403
Other income		7,276		6,755		15,178		15,066
TOTAL NON-INTEREST INCOME		36,332		36,876		102,136		103,267

NON-INTEREST EXPENSE
Salaries and employee benefits		35,285		31,784		105,026		99,660
Occupancy expense, net		4,928		4,690		14,459		14,151
Furniture and equipment expense		4,840		4,272		13,833		12,296
Other real estate and foreclosure expense		1,071		1,849		2,177		3,782
Deposit insurance		1,020		1,136		2,480		3,380
Merger related costs		752		1,524		7,879		1,989
Other operating expenses		18,263		17,179		58,035		53,102
TOTAL NON-INTEREST EXPENSE		66,159		62,434		203,889		188,360

INCOME BEFORE INCOME TAXES		43,530		34,211		109,466		104,052
Provision for income taxes		14,678		10,782		35,429		34,209

NET INCOME		28,852		23,429		74,037		69,843
Preferred stock dividends		--		--		--		24
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS	$	28,852	$	23,429	$	74,037	$	69,819
BASIC EARNINGS PER SHARE	$	0.90	$	0.77	$	2.33	$	2.29
DILUTED EARNINGS PER SHARE	$	0.89	$	0.76	$	2.31	$	2.28


(In thousands)	September 30, 2017			September 30, 2016			(In thousands)	September 30, 2023		September 30, 2022
	(Unaudited)							(Unaudited)
OPERATING ACTIVITIES							OPERATING ACTIVITIES
Net income	$	74,037		$	69,843		Net income	$	151,150	$	173,152
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Adjustments to reconcile net income to net cash (used in) provided by operating activities:							Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Depreciation and amortization		14,589			12,229		Depreciation and amortization	35,933		36,660
Provision for loan losses		16,792			15,733
Gain on sale of investments		(2,302	)		(4,403	)
Net accretion of investment securities and assets		(19,472	)		(22,863	)
Provision for credit losses							Provision for credit losses	31,999		14,048
Loss on sale of investments							Loss on sale of investments	391		226
Net amortization (accretion) of investment securities and assets							Net amortization (accretion) of investment securities and assets	10,647		(32,531)
Net amortization on borrowings		319			314		Net amortization on borrowings	114		274
Stock-based compensation expense		5,675			2,679		Stock-based compensation expense	9,617		11,475
Gain on sale of premises and equipment, net of impairment		(615	)		(159	)
Gain on sale of foreclosed assets and other real estate owned		(801	)		(1,731	)	Gain on sale of foreclosed assets and other real estate owned	(193)		(424)
Gain on sale of mortgage loans held for sale		(8,809	)		(11,150	)	Gain on sale of mortgage loans held for sale	(5,711)		(7,187)
Fair value write-down of closed branches		325			3,000
Gain on sale of loans							Gain on sale of loans	—		(282)
Deferred income taxes		4,962			1,070		Deferred income taxes	4,202		2,924
Increase in cash surrender value of bank owned life insurance		(2,402	)		(2,429	)
Income from bank owned life insurance							Income from bank owned life insurance	(9,811)		(8,189)
Loss from early retirement of TruPS							Loss from early retirement of TruPS	—		365
Originations of mortgage loans held for sale		(353,714	)		(472,902	)	Originations of mortgage loans held for sale	(207,822)		(436,477)
Proceeds from sale of mortgage loans held for sale		377,697			486,248		Proceeds from sale of mortgage loans held for sale	205,329		467,261
Changes in assets and liabilities:							Changes in assets and liabilities:
Interest receivable		(1,129	)		(799	)	Interest receivable	(7,469)		(5,852)
Assets held in trading accounts		(8	)		1,453
Other assets		8,249			16,680		Other assets	(99,325)		(18,712)
Accrued interest and other liabilities		(9,738	)		(13,950	)	Accrued interest and other liabilities	5,115		34,850
Income taxes payable		4,819			(2,286	)	Income taxes payable	(3,730)		(5,373)
Net cash provided by operating activities		108,474			76,577		Net cash provided by operating activities	120,436		226,208

INVESTING ACTIVITIES							INVESTING ACTIVITIES
Net originations of loans		(427,789	)		(140,240	)
Decrease in due from banks - time		2,488			9,714
Net change in loans							Net change in loans	(709,735)		(1,344,441)
Proceeds from sale of loans							Proceeds from sale of loans	69,760		51,856
Net change in due from banks - time							Net change in due from banks - time	695		592
Purchases of premises and equipment, net		(28,971	)		(8,840	)	Purchases of premises and equipment, net	(26,556)		(25,757)
Proceeds from sale of premises and equipment		3,475			890
Purchases of other real estate owned		(1,021	)		--
Proceeds from sale of foreclosed assets and other real estate owned		11,401			24,095		Proceeds from sale of foreclosed assets and other real estate owned	1,867		3,476
Proceeds from sale of available-for-sale securities		327,218			249,079
Proceeds from maturities of available-for-sale securities		76,615			137,832		Proceeds from maturities of available-for-sale securities	494,388		974,625
Purchases of available-for-sale securities		(380,308	)		(498,011	)	Purchases of available-for-sale securities	(2,286)		(261,375)
Proceeds from maturities of held-to-maturity securities		57,896			215,846		Proceeds from maturities of held-to-maturity securities	65,786		60,215
Purchases of held-to-maturity securities		(860	)		(6,162	)	Purchases of held-to-maturity securities	(62,885)		(329,660)
Proceeds from bank owned life insurance death benefits		--			2,043		Proceeds from bank owned life insurance death benefits	3,686		1,873
Purchases of bank owned life insurance		(143	)		(143	)
Proceeds from the sale of insurance lines of business		3,707			--
Cash paid in business combinations, net of cash received		(22,000	)		--
Cash received in business combinations, net of cash paid		--			106,419
Net cash (used in) provided by investing activities		(378,292	)		92,522
Purchase of Spirit of Texas Bancshares, Inc.							Purchase of Spirit of Texas Bancshares, Inc.	—		276,396
Net cash used in investing activities							Net cash used in investing activities	(165,280)		(592,200)

FINANCING ACTIVITIES							FINANCING ACTIVITIES
Net change in deposits		201,395			21,428		Net change in deposits	(316,514)		63,128
Repayments of subordinated debentures		--			(594	)
Dividends paid on preferred stock		--			(24	)
Repayments of TruPS							Repayments of TruPS	—		(56,189)
Dividends paid on common stock		(23,986	)		(21,227	)	Dividends paid on common stock	(75,926)		(69,963)
Net change in other borrowed funds		246,382			48,940		Net change in other borrowed funds	488,559		(411,250)
Net change in federal funds purchased and securities sold under agreements to repurchase		(10,505	)		11,658		Net change in federal funds purchased and securities sold under agreements to repurchase	(85,921)		(16,890)
Net shares issued under stock compensation plans		2,545			3,247
Net shares cancelled under stock compensation plans							Net shares cancelled under stock compensation plans	(2,662)		(4,105)
Shares issued under employee stock purchase plan		618			586		Shares issued under employee stock purchase plan	833		1,151
Redemption of preferred stock		--			(30,852	)
Net cash provided by financing activities		416,449			33,162
INCREASE IN CASH AND CASH EQUIVALENTS		146,631			202,261
Repurchases of common stock							Repurchases of common stock	(39,999)		(111,133)
Net cash used in financing activities							Net cash used in financing activities	(31,630)		(605,251)

DECREASE IN CASH AND CASH EQUIVALENTS							DECREASE IN CASH AND CASH EQUIVALENTS	(76,474)		(971,243)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		285,659			252,262		CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD	682,122		1,650,653

CASH AND CASH EQUIVALENTS, END OF PERIOD	$	432,290		$	454,523		CASH AND CASH EQUIVALENTS, END OF PERIOD	$	605,648	$	679,410

(In thousands, except share data)	Preferred Stock			Common Stock		Surplus		Accumulated Other Comprehensive Income (Loss)			Undivided Profits			Total

Balance, December 31, 2015	$	30,852		$	303	$	662,378	$	(2,665	)	$	385,987		$	1,076,855

Comprehensive income		--			--		--		4,782			69,843			74,625
Stock issued for employee stock purchase plan – 15,735 shares		--			--		586		--			--			586
Stock-based compensation plans, net – 137,706 shares		--			2		5,924		--			--			5,926
Stock issued for Citizens National acquisition – 835,741 common shares		--			8		41,244		--			--			41,252
Preferred stock redeemed		(30,852	)		--		--		--			--			(30,852	)
Dividends on preferred stock		--			--		--		--			(24	)		(24	)
Dividends on common stock – $0.72 per share		--			--		--		--			(21,227	)		(21,227	)

Balance, September 30, 2016 (Unaudited)		--			313		710,132		2,117			434,579			1,147,141

Comprehensive income		--			--		--		(17,329	)		26,971			9,642
Stock-based compensation plans, net – 10,109 shares		--			--		1,844		--			--			1,844
Cash dividends – $0.24 per share		--			--		--		--			(7,516	)		(7,516	)

Balance, December 31, 2016		--			313		711,976		(15,212	)		454,034			1,151,111

Comprehensive income		--			--		--		4,561			74,037			78,598
Stock issued for employee stock purchase plan – 13,001 shares		--			--		618		--			--			618
Stock-based compensation plans, net – 121,548 shares		--			1		8,219		--			--			8,220
Stock issued for Hardeman acquisition – 799,970 common shares		--			8		42,630		--			--			42,638
Dividends on common stock – $0.75 per share		--			--		--		--			(23,986	)		(23,986	)

Balance, September 30, 2017 (Unaudited)	$	--		$	322	$	763,443	$	(10,651	)	$	504,085		$	1,257,199


(In thousands)	Acquired from Hardeman			Fair Value Adjustments			Fair Value		(In thousands)	Acquired from Spirit		Fair Value Adjustments		Fair Value

Assets Acquired									Assets Acquired
Cash and due from banks	$	8,001		$	--		$	8,001	Cash and due from banks	$	277,790	$	—	$	277,790
Interest bearing balances due from banks - time		1,984			--			1,984
Investment securities		170,654			(316	)		170,338	Investment securities	362,088		(13,401)		348,687
Loans acquired		257,641			(5,992	)		251,649	Loans acquired	2,314,085		(19,925)		2,294,160
Allowance for loan losses		(2,382	)		2,382			--
Foreclosed assets		1,083			(452	)		631
Allowance for credit losses on loans									Allowance for credit losses on loans	(17,005)		7,382		(9,623)
Premises and equipment		9,905			1,258			11,163	Premises and equipment	84,135		(19,074)		65,061
Bank owned life insurance		7,819			--			7,819	Bank owned life insurance	36,890		—		36,890
Goodwill		11,485			(11,485	)		--	Goodwill	77,681		(77,681)		—
Core deposit intangible		--			7,840			7,840
Other intangibles		--			830			830
Core deposit and other intangible assets									Core deposit and other intangible assets	6,245		32,386		38,631
Other assets		2,639			(1	)		2,638	Other assets	58,403		(3,411)		54,992
Total assets acquired	$	468,829		$	(5,936	)	$	462,893	Total assets acquired	$	3,200,312	$	(93,724)	$	3,106,588

Liabilities Assumed									Liabilities Assumed
Deposits:									Deposits:
Non-interest bearing transaction accounts	$	76,555		$	--		$	76,555
Noninterest bearing transaction accounts									Noninterest bearing transaction accounts	$	825,228	$	(534)	$	824,694
Interest bearing transaction accounts and savings deposits		214,872			--			214,872	Interest bearing transaction accounts and savings deposits	1,383,663		—		1,383,663
Time deposits		97,917			(368	)		97,549	Time deposits	509,209		1,081		510,290
Total deposits		389,344			(368	)		388,976	Total deposits	2,718,100		547		2,718,647
Securities sold under agreement to repurchase		17,163			--			17,163
Other borrowings		3,000			--			3,000	Other borrowings	37,547		503		38,050
Subordinated debentures		6,702			--			6,702	Subordinated debentures	36,491		879		37,370
Accrued interest and other liabilities		1,891			1,924			3,815	Accrued interest and other liabilities	23,667		(3,311)		20,356
Total liabilities assumed		418,100			1,556			419,656	Total liabilities assumed	2,815,805		(1,382)		2,814,423
Equity		50,729			(50,729	)		--	Equity	384,507		(384,507)		—
Total equity assumed		50,729			(50,729	)		--	Total equity assumed	384,507		(384,507)		—
Total liabilities and equity assumed	$	468,829		$	(49,173	)	$	419,656	Total liabilities and equity assumed	$	3,200,312	$	(385,889)	$	2,814,423
Net assets acquired								43,237	Net assets acquired					292,165
Purchase price								72,639	Purchase price					466,311
Goodwill							$	29,402	Goodwill					$	174,146


(In thousands, except per share data)	2022		2021
Revenue(1)	$	912,631	$	927,061
Net income	$	264,522	$	307,752
Diluted earnings per share	$	2.04	$	2.40

(In thousands)	Acquired from Citizens			Fair Value Adjustments			Fair Value

Assets Acquired
Cash and due from banks	$	131,467		$	(351	)	$	131,116
Federal funds sold		10,000			--			10,000
Investment securities		61,987			1			61,988
Loans acquired		350,361			(9,511	)		340,850
Allowance for loan losses		(4,313	)		4,313			--
Foreclosed assets		4,960			(1,518	)		3,442
Premises and equipment		6,746			1,339			8,085
Bank owned life insurance		6,632			--			6,632
Core deposit intangible		--			5,075			5,075
Other intangibles		--			591			591
Other assets		17,364			6			17,370
Total assets acquired	$	585,204		$	(55	)	$	585,149

Liabilities Assumed
Deposits:
Non-interest bearing transaction accounts	$	109,281		$	--		$	109,281
Interest bearing transaction accounts and savings deposits		204,912			--			204,912
Time deposits		195,664			--			195,664
Total deposits		509,857			--			509,857
Securities sold under agreement to repurchase		13,233			--			13,233
FHLB borrowings		4,000			47			4,047
Accrued interest and other liabilities		3,558			1,530			5,088
Total liabilities assumed		530,648			1,577			532,225
Equity		54,556			(54,556	)		--
Total equity assumed		54,556			(54,556	)		--
Total liabilities and equity assumed	$	585,204		$	(52,979	)	$	532,225
Net assets acquired								52,924
Purchase price								76,300
Goodwill							$	23,376

	September 30, 2017									December 31, 2016
(In thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Estimated Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Estimated Fair Value
Held-to-Maturity
U.S. Government agencies	$	66,928	$	40	$	(140	)	$	66,828	$	76,875	$	107	$	(182	)	$	76,800
Mortgage-backed securities		16,972		56		(191	)		16,837		19,773		63		(249	)		19,587
State and political subdivisions		320,116		6,397		(55	)		326,458		362,532		4,967		(842	)		366,657
Other securities		2,017		--		--			2,017		2,916		--		--			2,916
Total HTM	$	406,033	$	6,493	$	(386	)	$	412,140	$	462,096	$	5,137	$	(1,273	)	$	465,960

Available-for-Sale
U.S. Treasury	$	--	$	--	$	--		$	--	$	300	$	--	$	--		$	300
U.S. Government agencies		210,004		273		(2,057	)		208,220		140,005		67		(2,301	)		137,771
Mortgage-backed securities		973,111		120		(13,533	)		959,698		885,783		178		(17,637	)		868,324
State and political subdivisions		87,405		161		(2,744	)		84,822		108,374		38		(5,469	)		102,943
Other securities		63,295		1,385		--			64,680		47,022		996		(2	)		48,016
Total AFS	$	1,333,815	$	1,939	$	(18,334	)	$	1,317,420	$	1,181,484	$	1,279	$	(25,409	)	$	1,157,354


(In thousands)	Amortized Cost		Allowance for Credit Losses		Net Carrying Amount		Gross Unrealized Gains		Gross Unrealized (Losses)		Estimated Fair Value
Held-to-maturity

September 30, 2023
U.S. Government agencies	$	452,428	$	—	$	452,428	$	—	$	(117,530)	$	334,898
Mortgage-backed securities	1,178,324		—		1,178,324		—		(172,976)		1,005,348
State and political subdivisions	1,859,172		(1,520)		1,857,652		26		(564,366)		1,293,312
Other securities	255,582		(1,694)		253,888		—		(39,235)		214,653
Total HTM	$	3,745,506	$	(3,214)	$	3,742,292	$	26	$	(894,107)	$	2,848,211

December 31, 2022
U.S. Government agencies	$	448,012	$	—	$	448,012	$	—	$	(102,558)	$	345,454
Mortgage-backed securities	1,190,781		—		1,190,781		227		(118,960)		1,072,048
State and political subdivisions	1,861,102		(110)		1,860,992		56		(446,198)		1,414,850
Other securities	261,199		(1,278)		259,921		—		(29,040)		230,881
Total HTM	$	3,761,094	$	(1,388)	$	3,759,706	$	283	$	(696,756)	$	3,063,233


	State and Political Subdivisions
(In thousands)	Not Guaranteed or Pre-Refunded		Other Credit Enhancement or Insurance		Pre-Refunded		Total		Other Securities
Aaa/AAA	$	179,897	$	299,873	$	—	$	479,770	$	—
Aa/AA	636,466		523,018		—		1,159,484		—
A	46,948		161,580		—		208,528		102,179
Baa/BBB	—		4,374		—		4,374		153,403
Not Rated	7,016		—		—		7,016		—
Total	$	870,327	$	988,845	$	—	$	1,859,172	$	255,582


	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2023		2022		2023		2022
Taxable:
Held-to-maturity	$	11,062	$	10,679	$	33,133	$	23,169
Available-for-sale	23,672		14,169		67,150		41,622

Non-taxable:
Held-to-maturity	10,137		10,181		30,488		26,371
Available-for-sale	5,767		5,925		17,392		21,352
Total	$	50,638	$	40,954	$	148,163	$	112,514


	Less Than 12 Months				12 Months or More				Total
(In thousands)	Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses
Available-for-sale
U.S. Treasury	$	—	$	—	$	2,224	$	(54)	$	2,224	$	(54)
U.S. Government agencies	9,161		(21)		158,972		(6,903)		168,133		(6,924)
Mortgage-backed securities	9,924		(140)		2,147,168		(287,571)		2,157,092		(287,711)
State and political subdivisions	11,170		(502)		771,404		(208,638)		782,574		(209,140)
Other securities	15,169		(3,505)		202,990		(22,919)		218,159		(26,424)
Total AFS	$	45,424	$	(4,168)	$	3,282,758	$	(526,085)	$	3,328,182	$	(530,253)


(In thousands)	State and Political Subdivisions		Other Securities		Total
Three Months Ended September 30, 2023
Held-to-maturity
Beginning balance, July 1, 2023	$	934	$	2,280	$	3,214
Provision for credit loss expense	—		—		—
Net increase (decrease) in allowance on previously impaired securities	586		(586)		—
Ending balance, September 30, 2023	$	1,520	$	1,694	$	3,214

Available-for-sale
Beginning balance, July 1, 2023	$	—	$	2,396	$	2,396
Provision for credit loss expense	—		—		—
Net decrease in allowance on previously impaired securities	—		(1,200)		(1,200)
Ending balance, September 30, 2023	$	—	$	1,196	$	1,196

Nine Months Ended September 30, 2023
Held-to-maturity
Beginning balance, January 1, 2023	$	110	$	1,278	$	1,388
Provision for credit loss expense	824		1,002		1,826
Net increase (decrease) in allowance on previously impaired securities	586		(586)		—
Ending balance, September 30, 2023	$	1,520	$	1,694	$	3,214

Available-for-sale
Beginning balance, January 1, 2023	$	—	$	—	$	—
Provision for credit loss expense	—		12,800		12,800
Reduction due to sales	—		(2,078)		(2,078)
Net decrease in allowance on previously impaired securities	—		(2,526)		(2,526)
Securities charged-off	—		(7,000)		(7,000)
Ending balance, September 30, 2023	$	—	$	1,196	$	1,196


(In thousands)	Gross 30-89 Days Past Due		90 Days or More Past Due		Total Past Due		Current		Total Loans		90 Days Past Due & Accruing		(In thousands)	Gross 30-89 Days Past Due		90 Days or More Past Due		Total Past Due		Current		Total Loans		90 Days Past Due & Accruing

September 30, 2017
September 30, 2023													September 30, 2023
Consumer:													Consumer:
Credit cards	$	655	$	492	$	1,147	$	175,169	$	176,316	$	218	Credit cards	$	1,973	$	672	$	2,645	$	188,905	$	191,550	$	588
Other consumer		4,870		2,570		7,440		310,506		317,946		4	Other consumer	1,114		252		1,366		111,466		112,832		—
Total consumer		5,525		3,062		8,587		485,675		494,262		222	Total consumer	3,087		924		4,011		300,371		304,382		588
Real estate:													Real estate:
Construction		440		1,478		1,918		513,356		515,274		--
Construction and development													Construction and development	481		2,742		3,223		3,019,098		3,022,321		—
Single family residential		5,516		4,785		10,301		1,038,102		1,048,403		--	Single family residential	13,255		11,846		25,101		2,632,778		2,657,879		121
Other commercial		3,032		8,945		11,977		2,219,246		2,231,223		--	Other commercial	5,575		2,767		8,342		7,556,666		7,565,008		—
Total real estate		8,988		15,208		24,196		3,770,704		3,794,900		--	Total real estate	19,311		17,355		36,666		13,208,542		13,245,208		121
Commercial:													Commercial:
Commercial		991		10,745		11,736		677,224		688,960		10	Commercial	5,911		20,492		26,403		2,450,674		2,477,077		97
Agricultural		469		1,793		2,262		205,587		207,849		--	Agricultural	76		126		202		296,710		296,912		—
Total commercial		1,460		12,538		13,998		882,811		896,809		10	Total commercial	5,987		20,618		26,605		2,747,384		2,773,989		97
Other		--		--		--		25,341		25,341		--	Other	—		3		3		448,306		448,309		—
Total	$	15,973	$	30,808	$	46,781	$	5,164,531	$	5,211,312	$	232	Total	$	28,385	$	38,900	$	67,285	$	16,704,603	$	16,771,888	$	806

December 31, 2016
December 31, 2022													December 31, 2022
Consumer:													Consumer:
Credit cards	$	716	$	275	$	991	$	183,600	$	184,591	$	275	Credit cards	$	1,297	$	409	$	1,706	$	195,222	$	196,928	$	225
Other consumer		3,786		1,027		4,813		299,159		303,972		11	Other consumer	852		214		1,066		151,816		152,882		—
Total consumer		4,502		1,302		5,804		482,759		488,563		286	Total consumer	2,149		623		2,772		347,038		349,810		225
Real estate:													Real estate:
Construction		1,420		1,246		2,666		334,093		336,759		--
Construction and development													Construction and development	4,677		443		5,120		2,561,529		2,566,649		—
Single family residential		6,310		5,927		12,237		892,008		904,245		14	Single family residential	23,625		11,075		34,700		2,511,415		2,546,115		106
Other commercial		4,212		6,722		10,934		1,776,141		1,787,075		--	Other commercial	2,759		7,100		9,859		7,458,639		7,468,498		—
Total real estate		11,942		13,895		25,837		3,002,242		3,028,079		14	Total real estate	31,061		18,618		49,679		12,531,583		12,581,262		106
Commercial:													Commercial:
Commercial		2,040		5,296		7,336		632,189		639,525		--	Commercial	5,034		7,575		12,609		2,619,681		2,632,290		176
Agricultural		121		1,215		1,336		149,042		150,378		--	Agricultural	111		67		178		205,445		205,623		—
Total commercial		2,161		6,511		8,672		781,231		789,903		--	Total commercial	5,145		7,642		12,787		2,825,126		2,837,913		176
Other		--		--		--		20,662		20,662		--	Other	61		3		64		373,075		373,139		—
Total	$	18,605	$	21,708	$	40,313	$	4,286,894	$	4,327,207	$	300	Total	$	38,416	$	26,886	$	65,302	$	16,076,822	$	16,142,124	$	507

(In thousands)	Unpaid Contractual Principal Balance		Recorded Investment With No Allowance		Recorded Investment With Allowance		Total Recorded Investment		Related Allowance		Average Investment in Impaired Loans		Interest Income Recognized		Average Investment in Impaired Loans		Interest Income Recognized
September 30, 2017											Three Months Ended September 30, 2017				Nine Months Ended September 30, 2017
Consumer:
Credit cards	$	273	$	273	$	--	$	273	$	--	$	283	$	12	$	292	$	23
Other consumer		4,022		3,880		--		3,880		--		3,314		23		2,711		53
Total consumer		4,295		4,153		--		4,153		--		3,597		35		3,003		76
Real estate:
Construction		2,652		1,496		907		2,403		220		2,582		17		2,828		56
Single family residential		13,782		12,450		584		13,034		53		12,878		85		12,772		251
Other commercial		19,065		7,260		10,983		18,243		2,052		19,306		121		19,313		380
Total real estate		35,499		21,206		12,474		33,680		2,325		34,766		223		34,913		687
Commercial:
Commercial		13,774		4,805		8,112		12,917		3,996		14,543		84		12,943		255
Agricultural		2,184		1,059		--		1,059		--		1,562		8		1,645		32
Total commercial		15,958		5,864		8,112		13,976		3,996		16,105		92		14,588		287
Total	$	55,752	$	31,223	$	20,586	$	51,809	$	6,321	$	54,468	$	350	$	52,504	$	1,050

December 31, 2016											Three Months Ended September 30, 2016				Nine Months Ended September 30, 2016
Consumer:
Credit cards	$	373	$	373	$	--	$	373	$	--	$	439	$	--	$	340	$	10
Other consumer		1,836		1,797		3		1,800		1		1,324		14		882		32
Total consumer		2,209		2,170		3		2,173		1		1,763		14		1,222		42
Real estate:
Construction		4,275		1,038		2,374		3,412		156		4,474		44		4,692		170
Single family residential		12,970		10,630		1,753		12,383		162		10,897		119		8,762		317
Other commercial		20,993		6,891		7,315		14,206		99		18,981		178		15,113		547
Total real estate		38,238		18,559		11,442		30,001		417		34,352		341		28,567		1,034
Commercial:
Commercial		11,848		2,734		7,573		10,307		262		4,402		59		3,256		118
Agricultural		2,226		1,215		--		1,215		--		1,604		16		1,003		36
Total commercial		14,074		3,949		7,573		11,522		262		6,006		75		4,259		154
Total	$	54,521	$	24,678	$	19,018	$	43,696	$	680	$	42,121	$	430	$	34,048	$	1,230


			Percent of
			Total Class
(Dollars in thousands)	Term Extension		of Loans
Three months ended September 30, 2023
Real estate:
Other commercial	$	30,617	0.40	%
Total real estate	30,617
Commercial:
Commercial	85		—	%
Total commercial	85
Total	$	30,702

Nine months ended September 30, 2023
Real estate:
Other commercial	$	30,617	0.40	%
Total real estate	30,617
Commercial:
Commercial	736		0.03	%
Total commercial	736
Total	$	31,353

	Accruing TDR Loans				Nonaccrual TDR Loans				Total TDR Loans
(Dollars in thousands)	Number		Balance		Number		Balance		Number		Balance

September 30, 2017
Real estate:
Construction		--	$	--		1	$	432		1	$	432
Single-family residential		4		144		14		838		18		982
Other commercial		5		6,877		3		6,152		8		13,029
Total real estate		9		7,021		18		7,422		27		14,443
Commercial:
Commercial		7		2,191		6		749		13		2,940
Total commercial		7		2,191		6		749		13		2,940
Total		16	$	9,212		24	$	8,171		40	$	17,383

December 31, 2016
Consumer:
Other consumer		--	$	--		1	$	3		1	$	3
Total consumer		--		--		1		3		1		3
Real estate:
Construction		--		--		1		18		1		18
Single-family residential		3		167		29		2,078		32		2,245
Other commercial		23		9,048		2		780		25		9,828
Total real estate		26		9,215		32		2,876		58		12,091
Commercial:
Commercial		15		1,783		5		297		20		2,080
Total commercial		15		1,783		5		297		20		2,080
Total		41	$	10,998		38	$	3,176		79	$	14,174

							Modification Type
(Dollars in thousands)	Number of Loans		Balance Prior to TDR		Balance at September 30		Change in Maturity Date		Change in Rate		Financial Impact on Date of Restructure

Three Months Ended September 30, 2017
Commercial:
Commercial		1	$	608	$	607	$	607	$	--	$	--
Total commercial		1		608		607		607		--		--
Total		1	$	608	$	607	$	607	$	--	$	--

Three Months Ended September 30, 2016
Consumer:
Other consumer		1	$	47	$	8	$	8	$	--	$	--
Total consumer		1		47		8		8		--		--
Real Estate:
Single-family residential		13		742		694		694		--		--
Other commercial		2		835		834		66		768		--
Total real estate		15		1,577		1,528		760		768		--
Commercial:
Commercial		5		1,387		1,387		1,387		--		--
Total commercial		5		1,387		1,387		1,387		--		--
Total		21	$	3,011	$	2,923	$	2,155	$	768	$	--

Nine Months Ended September 30, 2017
Real estate:
Construction		1	$	456	$	456	$	456	$	--	$	--
Other commercial		2		7,362		7,362		7,362		--		33
Total real estate		3		7,818		7,818		7,818		--		33
Commercial:
Commercial		10		1,419		1,407		1,368		39		--
Total commercial		10		1,419		1,407		1,368		39		--
Total		13	$	9,237	$	9,225	$	9,186	$	39	$	33

Nine Months Ended September 30, 2016
Consumer:
Other consumer		2	$	50	$	11	$	11	$	--	$	--
Total consumer		2		50		11		11		--		--
Real estate:
Single-family residential		22		1,538		1,487		933		554		--
Other commercial		27		9,797		9,765		8,633		1,132		--
Total real estate		49		11,335		11,252		9,566		1,686		--
Commercial:
Commercial		16		1,987		1,959		1,959		--		--
Total commercial		16		1,987		1,959		1,959		--		--
Total		67	$	13,372	$	13,222	$	11,536	$	1,686	$	--


(Dollars in thousands)	Number of loans	Balance Prior to TDR		Balance at September 30,		Change in Maturity Date		Change in Rate		Financial Impact on Date of Restructure
Three Months Ended September 30, 2022
Real estate:
Other commercial	3	$	747	$	727	$	—	$	727	$	—
Total real estate	3	$	747	$	727	$	—	$	727	$	—

Nine Months Ended September 30, 2022
Real estate:
Other commercial	4	$	760	$	740	$	—	$	740	$	—
Total real estate	4	$	760	$	740	$	—	$	740	$	—

(In thousands)	Risk Rate 1-4		Risk Rate 5		Risk Rate 6		Risk Rate 7		Risk Rate 8		Total

September 30, 2017
Consumer:
Credit cards	$	176,316	$	--	$	--	$	--	$	--	$	176,316
Other consumer		313,725		--		4,221		--		--		317,946
Total consumer		490,041		--		4,221		--		--		494,262
Real estate:
Construction		507,128		2,085		6,045		16		--		515,274
Single family residential		1,022,886		2,553		22,675		289		--		1,048,403
Other commercial		2,175,968		11,729		43,526		--		--		2,231,223
Total real estate		3,705,982		16,367		72,246		305		--		3,794,900
Commercial:
Commercial		661,635		6,267		21,057		1		--		688,960
Agricultural		205,524		26		2,276		23		--		207,849
Total commercial		867,159		6,293		23,333		24		--		896,809
Other		25,341		--		--		--		--		25,341
Loans acquired		1,051,889		9,673		29,862		615		--		1,092,039
Total	$	6,140,412	$	32,333	$	129,662	$	944	$	--	$	6,303,351


	Term Loans Amortized Cost Basis by Origination Year
(In thousands)	2023 (YTD)		2022		2021		2020		2019		2018 and Prior		Lines of Credit (“LOC”) Amortized Cost Basis		LOC Converted to Term Loans Amortized Cost Basis		Total
Consumer - credit cards
Delinquency:
Current	$	—	$	—	$	—	$	—	$	—	$	—	$	188,905	$	—	$	188,905
30-89 days past due	—		—		—		—		—		—		1,973		—		1,973
90+ days past due	—		—		—		—		—		—		672		—		672
Total consumer - credit cards	—		—		—		—		—		—		191,550		—		191,550
Current-period consumer - credit cards gross charge-offs	—		—		—		—		—		—		3,803		—		3,803
Consumer - other
Delinquency:
Current	29,356		43,251		15,022		4,515		2,029		1,557		15,736		—		111,466
30-89 days past due	190		535		192		37		27		42		91		—		1,114
90+ days past due	27		160		50		4		9		—		2		—		252
Total consumer - other	29,573		43,946		15,264		4,556		2,065		1,599		15,829		—		112,832
Current-period consumer - other gross charge-offs	133		606		398		65		29		126		291		—		1,648
Real estate - C&D
Risk rating:
Pass	87,306		170,979		55,250		44,198		12,915		22,780		2,623,588		—		3,017,016
Special mention	—		—		—		—		—		401		—		—		401
Substandard	—		57		60		—		—		263		4,524		—		4,904
Doubtful and loss	—		—		—		—		—		—		—		—		—
Total real estate - C&D	87,306		171,036		55,310		44,198		12,915		23,444		2,628,112		—		3,022,321
Current-period real estate - C&D gross charge-offs	—		1,148		—		—		—		8		—		—		1,156
Real estate - SF residential
Delinquency:
Current	301,165		645,020		366,070		227,692		135,278		576,964		380,016		573		2,632,778
30-89 days past due	220		1,872		2,243		1,826		424		4,579		2,091		—		13,255
90+ days past due	—		2,201		1,558		549		219		6,086		1,233		—		11,846
Total real estate - SF residential	301,385		649,093		369,871		230,067		135,921		587,629		383,340		573		2,657,879
Current-period real estate - SF residential gross charge-offs	—		44		—		36		—		121		232		—		433
Real estate - other commercial
Risk rating:
Pass	412,274		1,743,049		1,346,771		547,764		244,322		630,657		2,257,149		—		7,181,986
Special mention	27,973		8,527		12,310		6,038		1,369		26,631		94,853		—		177,701
Substandard	4,324		6,364		17,613		9,712		8,406		22,574		136,328		—		205,321
Doubtful and loss	—		—		—		—		—		—		—		—		—
Total real estate - other commercial	444,571		1,757,940		1,376,694		563,514		254,097		679,862		2,488,330		—		7,565,008
Current-period real estate - other commercial gross charge-offs	—		—		—		7		—		35		9,731		—		9,773


(In thousands)	Real Estate Collateral		Other Collateral		Total
September 30, 2023
Construction and development	$	3,502	$	—	$	3,502
Single family residential	1,442		—		1,442
Other commercial real estate	102,384		—		102,384
Commercial	—		22,164		22,164
Total	$	107,328	$	22,164	$	129,492

December 31, 2022
Construction and development	$	2,156	$	—	$	2,156
Single family residential	—		—		—
Other commercial real estate	65,450		—		65,450
Commercial	—		3,320		3,320
Total	$	67,606	$	3,320	$	70,926

(In thousands)	Commercial			Real Estate			Credit Card			Other Consumer and Other			Total

Three Months Ended September 30, 2017
Balance, beginning of period⁽²⁾	$	8,105		$	25,731		$	3,754		$	3,789		$	41,379
Provision for loan losses⁽¹⁾		2,310			2,150			761			241			5,462
Charge-offs		(2,442	)		(896	)		(1,017	)		(819	)		(5,174	)
Recoveries		21			309			275			445			1,050
Net charge-offs		(2,421	)		(587	)		(742	)		(374	)		(4,124	)
Balance, September 30, 2017⁽²⁾	$	7,994		$	27,294		$	3,773		$	3,656		$	42,717

Nine Months Ended September 30, 2017
Balance, beginning of period⁽²⁾	$	7,739		$	21,817		$	3,779		$	2,951		$	36,286
Provision for loan losses⁽¹⁾		3,255			7,984			2,168			1,920			15,327
Charge-offs		(3,083	)		(3,264	)		(2,962	)		(2,986	)		(12,295	)
Recoveries		83			757			788			1,771			3,399
Net charge-offs		(3,000	)		(2,507	)		(2,174	)		(1,215	)		(8,896	)
Balance, September 30, 2017⁽²⁾	$	7,994		$	27,294		$	3,773		$	3,656		$	42,717

Period-end amount allocated to:
Loans individually evaluated for impairment	$	3,996		$	2,325		$	--		$	--		$	6,321
Loans collectively evaluated for impairment		3,998			24,969			3,773			3,656			36,396
Balance, September 30, 2017⁽²⁾	$	7,994		$	27,294		$	3,773		$	3,656		$	42,717

Year	(In thousands)
Remainder of 2017	$	1,665
2018		6,557
2019		6,247
2020		6,234
2021		6,172
Thereafter		28,626
Total	$	55,501


(In thousands)	Year	Amortization Expense
	Remainder of 2023	$	4,015
	2024	15,403
	2025	12,819
	2026	12,346
	2027	12,218
	Thereafter	59,859
	Total	$	116,660

	Remaining Contractual Maturity of the Agreements
(In thousands)	Overnight and Continuous		Up to 30 Days		30-90 Days		Greater than 90 Days		Total
September 30, 2017
Repurchase agreements:
U.S. Government agencies	$	121,352	$	--	$	--	$	--	$	121,352

December 31, 2016
Repurchase agreements:
U.S. Government agencies	$	101,647	$	--	$	--	$	757	$	102,404

	Stock Options Outstanding					Stock Awards Outstanding					Stock Units Outstanding
	Number of Shares (000)			Weighted Average Exercise Price		Number of Shares (000)			Weighted Average Exercise Price		Number of Shares (000)			Weighted Average Exercise Price

Balance, January 1, 2017		473		$	42.85		139		$	40.96		113		$	45.40
Granted		--			--		--			--		185			58.18
Stock Options Exercised		(39	)		32.16		--			--		--			--
Stock Awards/Units Vested		--			--		(34	)		36.45		(124	)		52.71
Forfeited/Expired		(3	)		44.68		(12	)		43.83		(13	)		51.72

Balance, September 30, 2017		431		$	43.82		93		$	42.21		161		$	53.97

Exercisable, September 30, 2017		325		$	43.23

			Options Outstanding						Options Exercisable
Range of Exercise Prices			Number of Shares		Weighted Average Remaining Contractual Life (Years)		Weighted Average Exercise Price		Number of Shares		Weighted Average Exercise Price
$17.55	-	$21.13		3,950		2.76	$	19.38		3,950	$	19.38
21.29	-	21.29		3,700		5.30		21.29		2,500		21.29
21.51	-	21.51		1,250		2.30		21.51		1,250		21.51
30.31	-	30.31		22,180		0.63		30.31		22,180		30.31
40.57	-	40.57		40,490		7.25		40.57		40,490		40.57
40.72	-	40.72		1,500		7.13		40.72		600		40.72
44.40	-	44.40		49,870		7.25		44.40		37,144		44.40
45.50	-	45.50		246,485		7.62		45.50		193,025		45.50
47.02	-	47.02		58,090		7.79		47.02		20,838		47.02
48.13	-	48.13		3,305		7.96		48.13		2,645		48.13
$17.55	-	$48.13		430,820		7.12	$	43.82		324,622	$	43.23

			Fair Value Measurements Using
(In thousands)	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)

September 30, 2017
ASSETS
Available-for-sale securities
U.S. Government agencies	$	208,220	$	--	$	208,220	$	--
Mortgage-backed securities		959,698		--		959,698		--
State and political subdivisions		84,822		--		84,822		--
Other securities		64,680		--		64,680		--
Assets held in trading accounts		49		--		49		--

December 31, 2016
ASSETS
Available-for-sale securities
U.S. Treasury	$	300	$	300	$	--	$	--
U.S. Government agencies		137,771		--		137,771		--
Mortgage-backed securities		868,324		--		868,324		--
States and political subdivisions		102,943		--		102,943		--
Other securities		48,016		--		48,016		--
Assets held in trading accounts		41		--		41		--

	Carrying		Fair Value Measurements
(In thousands)	Amount		Level 1		Level 2		Level 3		Total

September 30, 2017
Financial assets:
Cash and cash equivalents	$	432,290	$	432,290	$	--	$	--	$	432,290
Interest bearing balances due from banks - time		4,059		--		4,059		--		4,059
Held-to-maturity securities		406,033		--		412,140		--		412,140
Mortgage loans held for sale		12,614		--		--		12,614		12,614
Interest receivable		30,749		--		30,749		--		30,749
Legacy loans (net of allowance)		5,168,595		--		--		5,140,768		5,140,768
Loans acquired (net of allowance)		1,092,039		--		--		1,086,160		1,086,160

Financial liabilities:
Non-interest bearing transaction accounts		1,669,860		--		1,669,860		--		1,669,860
Interest bearing transaction accounts and savings deposits		4,344,779		--		4,344,779		--		4,344,779
Time deposits		1,310,951		--		--		1,301,451		1,301,451
Federal funds purchased and securities sold under agreements to repurchase		121,687		--		121,687		--		121,687
Other borrowings		522,541		--		526,266		--		526,266
Subordinated debentures		67,418		--		62,142		--		62,142
Interest payable		2,043		--		2,043		--		2,043

December 31, 2016
Financial assets:
Cash and cash equivalents	$	285,659	$	285,659	$	--	$	--	$	285,659
Interest bearing balances due from banks - time		4,563		--		4,563		--		4,563
Held-to-maturity securities		462,096		--		465,960		--		465,960
Mortgage loans held for sale		27,788		--		--		27,788		27,788
Interest receivable		27,788		--		27,788		--		27,788
Legacy loans (net of allowance)		4,290,921		--		--		4,305,165		4,305,165
Loans acquired (net of allowance)		1,305,683		--		--		1,310,017		1,310,017

Financial liabilities:
Non-interest bearing transaction accounts		1,491,676		--		1,491,676		--		1,491,676
Interest bearing transaction accounts and savings deposits		3,956,483		--		3,956,483		--		3,956,483
Time deposits		1,287,060		--		--		1,278,339		1,278,339
Federal funds purchased and securities sold under agreements to repurchase		115,029		--		115,029		--		115,029
Other borrowings		273,159		--		292,367		--		292,367
Subordinated debentures		60,397		--		55,318		--		55,318
Interest payable		1,668		--		1,668		--		1,668